Bafang — Annual Report 2021

Nov 15, 2021

Stock code: 2753

Bafang Yunji International Co., Ltd.

Parent Company Only Financial Statements for the Years Ended December 31, 2021 and 2020 and Independent Auditor’s Report

Address: 18th Floor, No. 27, Section 2, Zhongzheng East Road, Danshui District, New Taipei City TEL: (02)8809-8898

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§Table of Contents§

§Table of Contents§
Item Page I. Cover 1 II. Table of Contents 2 III. Independent Auditor’s Report 3～6 IV. Parent Company Only Balance Sheets 7 V. Parent Company Only Statements of Comprehensive Income 8～9 VI. Parent Company Only Statements of Changes in Equity 10 VII. Parent Company Only Statements of Cash Flows 11～12 VIII. Notes to Parent Company Only financial statements (I) Company History 13 (II) Date and Procedure for Approval of Financial Statements 13 (III) Application of New and Revised Standards and Interpretation 13～17 (IV) Summary of Significant Accounting Policies 17～28 (V) Significant Accounting Judgments and Estimations, and Main Sources of Assumption Uncertainties 28～29 (VI) Summary of Significant Accounting Items 29～61 (VII) Related party transactions 61～66 (VIII) Pledged assets 66 (IX) Significant Contingent Liabilities and Unrecognized Contract Commitments 66～67 (X) Significant Subsequent Events 67 (XI) Information on foreign currency assets and liabilities with significant effect 67～68 (XII) Additional Disclosure 68～75 1. Information on Significant Transactions 68，70～72 2. Information on Investees 68，73 3. Information on investment in Mainland China 68～69，74 4. Information on major shareholders 69，75 (XIII) Segment information 69 IX. Schedule of Significant Accounting Items 76～97	Number of
	notes to financial statements - - - - - - - 1 2 3 4 5 6~30 31 32 33 34 35 36 36 36 36 36 -

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Independent Auditor’s Report

The Board of Directors and shareholders

Bafang Yunji International Co., Ltd.

Audit Opinion

We have audited the accompanying parent company only balance sheet of Bafang Yunji International Co., Ltd. (the “Company”) as of December 31, 2021 and 2020, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2021 and 2020, and the notes to the parent company only financial statements, including the summary of significant accounting policies.

In our opinion, the parent company only financial statements referred to above present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2021 and 2020, and its parent company only financial performance and cash flows for the years then ended, in conformity with the requirements of Regulations Governing the Preparation of Financial Reports by Securities Issuers.

The basis for opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards. Our responsibilities under those standards are further described in the responsibilities of auditors for the audit of the parent company only financial statements. We are independent of the Company in accordance with The Norms of Professional Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31,2021. These matters were addressed in the content of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide separate opinions on those matters.

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Key audit matters of the 2021 parent company only financial statements for the ended December 31, 2021 is stated as follows:

Authenticity of sales revenues from shipments to specific customers

The Company is principally engaged in food processing, food ingredients trading and providing food and restaurant services. Based on the materiality and the presumption of significant risk in revenue recognition in the Statement of Auditing Standards; Therefore, we believe that the authenticity of sales revenues from shipments to specific customers recognized by the Company has a significant impact on the financial statements. Therefore, the authenticity of the sales revenues from shipments to specific customers is listed as a key audit matter of this year. For a description of the revenue recognition policy, please refer to Note 4(11).

We conducted the following audit procedures:

1. Understand and test the design and implementation of internal control relevant to revenue recognition for specific customers.

2. Review a selected sample of the revenue details of the specific customers, review the supporting documentation and test the collection status to confirm that the sales transaction occurred.

3. Review whether significant sales returns and discounts have occurred for the specific customers since the balance sheet date to confirm whether there is any material misstatement of revenues.

Responsibilities of Management and Those in Charge with Governance of the parent company only Financial Statements

The responsibility of management is to prepare fairly presented parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and maintain necessary internal control related to the preparation of parent company only financial statements in order to ensure material misstatement caused by fraud or error does not exist in the parent company only financial statements.

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

Those in charge of governance (including member of The Audit Committee) are responsible for overseeing the reporting process of the financial statements of the Company.

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Auditor’s Responsibilities for the Audit of the parent company only Financial Statements

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

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

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

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

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

4. Conclude the appropriateness of the use of the going concern basis of accounting by the management, 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 to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosure is inappropriate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease as a going concern.

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

6. Obtain sufficient and appropriate audit evidence regarding the financial information or the entities or business activities of the Company to express

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an opinion on the parent company only financial statements. We are responsible for the direction, supervision, and performance of the audit of the Company. 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 in charge of governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to affect on our independence, and other matters (including related protective measures).

From the matters communicated with those in charge of governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor’s 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.

Deloitte Taiwan CPA Kuo, Nai-Hua CPA Chen, Hui-Ming Financial Supervisory Commission Securities and Futures Commission approval approval document document Jin-Guan-Zheng-Shen-Zi No. Tai-Cai-Zheng (6) Zi No. 1070323246 0920123784

Date: March 22, 2022

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Bafang Yunji International Co., Ltd.

Parent Company Only Balance Sheets December 31, 2021 and 2020

Unit: In thousands of NT$

Code 1100 1110 1141 1170 1180 1200 1210 130X 1410 1470 11XX 1550 1600 1755 1801 1840 1915 1990 15XX 1XXX Code 2100 2150 2170 2180 2200 2220 2280 2230 2322 2399 21XX 2540 2580 2570 2640 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3XXX	Assets Current assets Cash and cash equivalents (Notes 4, 6, and 30) Financial assets at fair value through profit or loss - current (Notes 4, 7, and 30) Financial assets measured at amortized cost - current (Notes 4, 8, 9, 30 and 32) Accounts receivable - unrelated parties (Notes 4, 10, 23 and 30) Accounts receivable - related parties (Notes 4, 10, 23, 30 and 31) Other receivables (Notes 4, 10, and 30) Other receivables - related parties (Notes 4, 10, 30 and 31) Inventories (Notes 4 and 11) Prepayments (Note 16) Other current assets (Note 17) Total current assets Non-current assets Investments accounted for using the equity method (Notes 4, 12 and 31) Property, plant and equipment (Notes 4, 13, 31 and 32) Right-of-use assets (Notes 4, 14 and 31) Intangible assets (Notes 4 and 15) Deferred income tax assets (Notes 4 and 25) Prepayments for equipment (Note 17) Other non-current assets (Notes 17 and 30) Total non-current assets Total assets Liabilities and equity Current liabilities Short-term loans (Notes 18, 30 and 32) Notes payable (Notes 19 and 30) Accounts payable - unrelated parties (Notes 19 and 30) Accounts payable - related parties (Notes 19, 30 and 31) Other payables - unrelated parties (Notes 20 and 30) Other payables - related parties (Notes 20, 30 and 31) Lease liabilities - current (Notes 4, 14, 30 and 31) Current income tax liabilities (Notes 4 and 25) Long-term loans due within one year (Notes 18, 30 and 32) Other current liabilities (Note 20) Total current liabilities Non-current liabilities Long-term loans (Notes 18, 30 and 32) Lease liabilities - non-current (Notes 4, 14, 30 and 31) Deferred income tax liabilities (Notes 4 and 25) Net defined benefit liabilities - non-current (Notes 4 and 21) Deposits received (Note 30) Total non-current liabilities Total liabilities Equity (Notes 22 and 27) Common stock Capital surplus Retained earnings Legal reserve Special reserve Undistributed earnings Total retained earnings Other equity Total equity Total liabilities and equity		December 31,2021 Amount ％ $ 790,679 21 94,302 2 400,374 10 70,088 2 29,658 1 2,566 - 29,406 1 168,426 4 69,083 2 8,674 - 1,663,256 43 820,136 21 1,019,787 27 243,976 6 5,920 - 30,830 1 39,690 1 42,856 1 2,203,195 57 $ 3,866,451 100 $ 27,000 1 1,000 - 162,388 4 3,101 - 336,940 9 10,942 - 53,838 2 62,697 2 9,996 - 6,254 - 674,156 18 25,823 1 167,042 4 594 - 4,974 - 1,500 - 199,933 5 874,089 23 660,448 17 970,319 25 348,629 9 48,589 1 1,018,632 27 1,415,850 37 54,255) ( 2) 2,992,362 77 $ 3,866,451 100	December 31,2021 Amount ％ $ 790,679 21 94,302 2 400,374 10 70,088 2 29,658 1 2,566 - 29,406 1 168,426 4 69,083 2 8,674 - 1,663,256 43 820,136 21 1,019,787 27 243,976 6 5,920 - 30,830 1 39,690 1 42,856 1 2,203,195 57 $ 3,866,451 100 $ 27,000 1 1,000 - 162,388 4 3,101 - 336,940 9 10,942 - 53,838 2 62,697 2 9,996 - 6,254 - 674,156 18 25,823 1 167,042 4 594 - 4,974 - 1,500 - 199,933 5 874,089 23 660,448 17 970,319 25 348,629 9 48,589 1 1,018,632 27 1,415,850 37 54,255) ( 2) 2,992,362 77 $ 3,866,451 100		December 31,2020	December 31,2020	December 31,2020
			Amount $ 790,679 94,302 400,374 70,088 29,658 2,566 29,406 168,426 69,083 8,674 1,663,256 820,136 1,019,787 243,976 5,920 30,830 39,690 42,856 2,203,195 $ 3,866,451 $ 27,000 1,000 162,388 3,101 336,940 10,942 53,838 62,697 9,996 6,254 674,156 25,823 167,042 594 4,974 1,500 199,933 874,089 660,448 970,319 348,629 48,589 1,018,632 1,415,850 54,255) 2,992,362 $ 3,866,451			Amount $ 342,921 - 372 63,749 32,918 1,284 33,004 144,164 52,865 99 671,376 803,685 1,002,018 206,923 4,228 40,173 45,462 37,096 2,139,585 $ 2,810,961 $ 70,000 - 140,278 3,602 195,448 10,759 43,366 80,868 59,996 2,101 606,418 35,819 146,121 500 5,498 260 188,198 794,616 600,448 34,649 257,154 27,261 1,136,438 1,420,853 39,605) 2,016,345 $ 2,810,961		％
		(		(	(		(	12 - - 3 1 - 1 5 2 - 24 29 36 7 - 1 2 1 76 100 2 - 5 - 7 - 2 3 2 - 21 2 5 - - - 7 28 21 1 9 1 41 51 1) 72 100

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

President: Chang, Jui-Lien

Accounting Officer: Huang, Lee-Chi

Chairperson: Lin, Hsin-Yi

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Bafang Yunji International Co., Ltd. Parent Company Only Statements of Comprehensive Income For the Years Ended December 31, 2021 and 2020

Unit: In thousands of NT$ But earnings per share are in NT$

Code 4000 Operating revenues (Notes 4, 23 and 31) 5000 Operating costs (Notes 4, 11, 24 and 31) 5900 Gross profit Operating expenses (Notes 21, 24, 27 and 31) 6100 Selling and marketing 6200 General andadministrative 6300 Research and development 6000 Total operating expenses 6900 Net operating profit Non-operating income and expenses (Notes 12, 24 and 31) 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Financial costs 7070 Share of profits of subsidiaries and associates 7000 Total non-operating income and expenses 7900 Net profit before tax 7950 Income tax expense (Notes 4 and 25) 8200 Net profit for the year Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement of defined benefit plans (Notes 4 and 21)		2021

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Code 8349 Income tax related to items that will not be reclassified to profit or loss (Notes 4 and 25) 8360 Items that may subsequently be reclassified to profits or loss 8361 Exchange differences arisingon translation of foreign operations (Note 22) 8399 Income tax related to items that may subsequently be reclassified (Notes 4, 22 and 25) 8300 Total other comprehensive income (net) 8500 Total comprehensive income for the year Earnings per share (Note 26) 9710 Basic 9810 Diluted	2021		％ - - - - 13	2020
	Amount ( $ 3 ) ( 18,314 ) 3,664 ( 14,635) $ 526,706 $ 8.74 $ 8.68			Amount $ 355 ( 15,431 ) 3,087 ( 13,766) $ 619,845 $ 10.55 $ 10.53	％
					- ( 1 ) - ( 1) 17

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

Chairperson: Lin, Hsin-Yi

President: Chang, Jui-Lien

Accounting Officer: Huang, Lee-Chi

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Bafang Yunji International Co., Ltd.

Parent Company Only Statements of Changes in Equity For the Years Ended December 31, 2021 and 2020

Unit: In thousands of NT$, unless otherwise specified

Code A1 Balance as of January 1, 2020 Appropriation and distribution of earnings B1 Legal reserve B3 Special reserve B5 Shareholders' cash dividends N1 Share-based payment transaction D1 Net profit for 2020 D3 Other comprehensive income after tax for 2020 D5 Total comprehensive income for 2020 Z1 Balance as of December 31, 2020 Appropriation and distribution of earnings B1 Legal reserve B3 Special reserve B5 Shareholders' cash dividends E1 Cash capital increase N1 Share-based payment transaction M7 Actual acquisition of partial interests in a subsidiary D1 Net profits for 2021 D3 Other comprehensive income after tax for 2021 D5 Total comprehensive income for 2021 Z1 Balance as of December 31, 2021	Share capital Number of shares (in thousands of shares) Amount 60,045 $ 600,448 - - - - - - - - - - - - - - 60,045 600,448 - - - - - - 6,000 60,000 - - - - - - - - - - 66,045 $ 660,448	Share capital Number of shares (in thousands of shares) Amount 60,045 $ 600,448 - - - - - - - - - - - - - - 60,045 600,448 - - - - - - 6,000 60,000 - - - - - - - - - - 66,045 $ 660,448	Capital surplus $ 28,895 - - - 5,754 - - - 34,649 - - - 912,967 25,628 ( 2,925 ) - - - $ 970,319			Retained earnings	Undistributed earnings $ 723,433 ( 24,747 ) ( 14,303 ) ( 180,134 ) - 633,611 ( 1,422) 632,189 1,136,438 ( 91,475 ) ( 21,328 ) ( 540,403 ) - - ( 5,956 ) 541,341 15 541,356 $ 1,018,632	Other equity Exchange differences arising on translation of foreign operations ( $ 27,261 ) - - - - - ( 12,344) ( 12,344) ( 39,605 ) - - - - - - - ( 14,650) ( 14,650) ($ 54,255)		Total equity
	Number of shares (in thousands of shares) 60,045 - - - - - - - 60,045 - - - 6,000 - - - - - 66,045				Legal reserve $ 232,407 24,747 - - - - - - 257,154 91,475 - - - - - - - - $ 348,629	Special reserve $ 12,958 - 14,303 - - - - - 27,261 - 21,328 - - - - - - - $ 48,589
			(				( ( ( ( ( ( ( (	( ( ( ( ( ( (	( ( ( ( (	$ 1,570,880 - - 180,134 ) 5,754 633,611 13,766) 619,845 2,016,345 - - 540,403 ) 972,967 25,628 8,881 ) 541,341 14,635) 526,706 $ 2,992,362

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

Chairperson: Lin, Hsin-Yi

President: Chang, Jui-Lien

Accounting Officer: Huang, Lee-Chi

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Bafang Yunji International Co., Ltd.

Parent Company Only Statements of Cash Flows For the Years Ended December 31, 2021 and 2020

Unit: In thousands of NT$

Code Cash flows from operating activities A10000 Net profit before tax from continuing operations A20010 Adjustments for A20100 Depreciation expenses A20200 Amortization expenses A20400 Net losses on financial assets and liabilities measured at fair value through profit or loss A22400 Share of profits of subsidiaries, affiliates and joint ventures accounted for using the equity method A20900 Financial costs A21200 Interest income A21900 Share-based compensation A22500 Loss on disposal of property, plant and equipment A23700 Loss on decline in value and obsolescence of inventories A29900 Lease modification losses A30000 Net change in operating assets and liabilities A31150 Accounts receivable A31160 Accounts receivable - related parties A31180 Other receivables A31190 Other receivables - related parties A31200 Inventories A31230 Prepayments A31240 Other current assets A32130 Notes payable A32160 Accounts payable - related parties A32150 Accounts payable A32180 Other payables A32190 Other payables - related parties A32230 Other current liabilities A32240 Net defined benefit liabilities A33000 Cash inflows from operations A33100 Interest received A33300 Interest paid A33500 Income tax paid AAAA Net cash inflows from operating activities	2021 $ 684,345 149,944 1,726 66 ( 60,906 ) 4,133 ( 834 ) 25,628 316 - - ( 6,339 ) 3,260 ( 1,282 ) ( 1,402 ) ( 24,262 ) ( 16,218 ) ( 212 ) 1,000 22,110 ( 501 ) ( 6,510 ) 183 4,153 ( 506) 777,892 834 ( 1,159 ) ( 148,077) 629,490	2020
		$ 785,042 128,059 1,711 - ( 88,317 ) 3,832 ( 361 ) 5,754 283 5,295 55 ( 1,613 ) ( 26,874 ) 2,253 ( 2,746 ) ( 15,799 ) ( 4,934 ) ( 22 ) ( 1,514 ) ( 4,867 ) 29,380 26,736 1,730 79 ( 475) 842,687 361 ( 1,870 ) ( 123,037) 718,141

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(Continued from previous page)

Code Cash flows from investing activities B00100 Purchase of financial assets at fair value through profit or loss B00200 Proceeds from disposal of financial assets at fair value through profit or loss B00040 Purchase of financial assets measured at amortized cost B01800 Increase in long-term equity investments accounted for using the equity method B02700 Payment for property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B03800 Increase in refundable deposits B04300 Increase in other receivables - related parties B04400 Decrease in other receivables - related parties B04500 Payments of intangible assets B05350 Acquisition of right-of-use assets. B06500 Increase in other financial assets B07100 Increase in prepayments for equipment B07600 Receipt of dividends from subsidiaries B09900 Refund of share price for capital reduction by subsidiaries BBBB Net cash outflows from investing activities Cash flows from financing activities C00200 Decrease in short-term loans C01700 Repayment of long-term loans C03000 Increase in deposits received C04020 Repayment of lease principals C04500 Distribution of cash dividends C04600 Cash capital increase CCCC Net cash inflows (outflows) from financing activities EEEE Increase (decrease) in cash and cash equivalents E00100 Cash and cash equivalents at the beginning of the year E00200 Cash and cash equivalents at the end of the year	2021 ( $ 138,924 ) 44,556 ( 400,002 ) ( 21,216 ) ( 92,908 ) 43 ( 5,760 ) - 5,000 ( 3,418 ) ( 6,996 ) ( 8,363 ) ( 17,464 ) 38,476 - ( 606,976) ( 43,000 ) ( 59,996 ) 1,240 ( 55,676 ) ( 390,291 ) 972,967 425,244 447,758 342,921 $ 790,679	2020
		$ - - ( 2 ) ( 169,818 ) ( 57,152 ) 4,498 ( 10,384 ) ( 30,000 ) - ( 1,822 ) - - ( 79,098 ) 12,555 38,095 ( 293,128) - ( 9,996 ) 260 ( 59,237 ) ( 360,268 ) - ( 429,241) ( 4,228 ) 347,149 $ 342,921

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

Chairperson: Lin, Hsin-Yi President: Chang, Jui-Lien Accounting Officer: Huang, Lee-Chi

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Bafang Yunji International Co., Ltd. Notes to parent company only financial statements For the Years Ended December 31, 2021 and 2020

(Amounts in New Taiwan dollars thousands unless otherwise stated)

1. Company History

Bafang Yunji International Co., Ltd. (hereinafter referred to as "the Company") was established on January 19, 2000, and is currently engaged in restaurant business, wholesale of food and groceries, retail of beverages, manufacturing of processed bean products, and manufacturing of baked and steamed food products.

The Company's shares have been listed and traded on the Taiwan Stock Exchange since September 2021.

The parent company only financial statements are presented in NTD, which is the functional currency of the Company.

2. Date and Procedure for Approval of Financial Statements

The parent company only financial statements were approved by the Board of Directors on March 22, 2022.

3. Application of New and Revised Standards and Interpretation

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

The application of the amendments to the IFRSs endorsed and issued into effect by the FSC will not result in significant changes in the Company's accounting policies.

• (2) Amendments to the IFRSs issued by International Accounting Standards Board (IASB) and endorsed by the FSC with effective date starting 2022.

starting 2022.
New, Amended or Revised Standards and Interpretations Annual Improvements to IFRS Standard 2018-2020 Amendment to IFRS 3 “Reference to the Conceptual Framework” Amendment to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use ” Amendment to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contracts”	Effective Date Issued by IASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

Note 1: The amendment to IFRS 9 will be applied to swaps or changes in the terms of financial liabilities that occur in annual reporting periods beginning after January 1, 2022; the

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amendment to IAS 41, “Agriculture”, will be applied to fair value measurements in annual reporting periods beginning after January 1, 2022; and the amendment to IFRS 1, “First-time Adopeions of IFRSs”, will be applied retrospectively to annual reporting periods beginning after January 1, 2022.

• Note 2: This amendment applies to business combinations for which the acquisition date falls within the annual reporting period after January 1, 2022.

• Note 3: This amendment applies to plant, property and equipment that begins to operate in the manner such as location and condition expected by management after January 1, 2021.

• Note 4: This amendment applies to contracts with unfulfilled obligations as of January 1, 2022.

The Company will continue to evaluate the effect of the amendment to other IFRSs on the financial positions and performance of the Company to the date the parent company only financial statements are approved and released, and will make appropriate disclosure after the evaluation.

• (3) The IFRSs issued by IASB but not yet endorsed and issued into effect by the FSC

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

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

• Note 2: This amendment will be applicable for annual reporting periods beginning after January 1, 2023.

• Note 3: This amendment applies to changes in accounting estimates and changes in accounting policies that occur in annual reporting periods beginning after January 1, 2023.

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Note 4: The amendment applies to transactions occurring after January 1, 2022, except for the recognition of deferred income taxes on temporary differences for lease and ex-service obligations as of January 1, 2022.

• A. Amendment to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associatee or Joint Venture”

The amendment provides that if the Company sells or contributes an asset to an affiliated party (or joint venture), or if the Company loses control of a subsidiary but retains significant influence (or joint control) over the subsidiary, the Company recognizes all of the gains or losses resulting from such transactions if the aforementioned asset or former subsidiary meets the definition of "business combinations" for "business" under IFRS 3.

In addition, if the Company sells or contributes assets to affiliated companies (or joint ventures), or the Company losses the control over a subsidiary but retains significant influence on the subsidiaries (or joint control), and if the aforementioned assets or subsidiary not in compliance with the definition of IFRS 3 “Business,” the Company is to recognize the profit and loss of the transactions only within the equity scope of the affiliated companies (or joint ventures) irrelevant to the investors, in other words, the profit and loss attributable to the Company should be offset.

B. Amendment to IAS 1 “Classification of Liabilities as Current or Noncurrent”

The amendment aims to clarify whether a liability is classified as noncurrent; the Company should assess whether it has the right to defer settlement at the end of the reporting period for at least 12 months after the reporting period. If the Company has such a right as of the end of the reporting period, the liability is classifi ed as noncurrent whether or not the Company exercises its right to defer settlement of a liability. The amendment aims to clarify if the Company is required to comply with certain conditions in order to have the right to defer settlement of a liability. The Company must have complied with specific conditions as of the end of the reporting period, even if the lender tests whether the Company has complied with those conditions at a later date.

The amendment provides the purpose to clarify that settlement refers to the transfer to the counterparty of cash, other economic resources or equity instruments of the Company that results in the extinguishment of the liability. However, if the terms of the liability may result in transferring the Company’s equity instruments at the option of the counterparty, and if the option is separately recognized in equity in accordance with IAS 32, “Financial Instruments: Presentation” the above-mentioned provisions do not affect the classification of the liability.

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C. Amendment to IAS 1 “Disclosure of Accounting Policies”

The amendment specifies that the Company shall determine the material accounting policy information to be disclosed based on the definition of materiality. Accounting policy information is considered material if it could reasonably be expected to affect the decisions of the primary users of the general-purpose financial statements based on those financial statements. The amendment also clarifies:

• Accounting policy information related to immaterial transactions, other events or circumstances is immaterial and the Company is not required to disclose such information.

• • The Company may determine that related accounting policy information is material because of the nature of the transactions, other events or circumstances, even if the amount is not material.

• Not all accounting policy information related to significant transactions, other events or circumstances is material.

In addition, the amendment provides examples of accounting policy information that may be material if it relates to significant transactions, other events or circumstances and under the following circumstances, the information may be material:

• a. A change in the Company's accounting policy during the reporting period that results in a material change in financial statement information;

• b. The Company selects applicable accounting policies from among the options permitted by the standards.

• c. Due to the lack of specific standards, the Company establishes accounting policies in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”;

• d. The Company discloses the relevant accounting policies that require the application of significant judgments or assumptions; or

• e. that it involves complex accounting requirements when users of financial statements rely on such information to understand such significant transactions, other events or circumstances.

• D. Amendment to IAS 8 “Definition of Accounting Estimates”

The amendment explicitly specifies that accounting estimate represents the monetary amounts in the financial statements that are subject to measurement uncertainty. In applying accounting policies, the Company may need to measure financial statement items using monetary amounts that are not directly observable but must be estimated, and therefore measurement techniques and input values are required to create accounting estimates for this

• 16 -

purpose. The effect of changes in measurement techniques or input values on accounting estimates that are not corrections of prior period errors are accounted for as changes in accounting estimates.

Except for the above impact, as of the date the parent company only financial statements are approved and released, the Company will continue to evaluate the effect of the amendment to other IFRSs on the financial positions and performance of the Company, and will make appropriate disclosure after the evaluation.

4. Summary of Significant Accounting Policies

• (1) Statement of Compliance

These parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and relevant laws and regulations.

• (2) Basis of preparation

Except for the financial instruments on the basis of fair value and the recognition of net defined benefit liabilities on the basis of the present value of net defined benefit obligation net of the fair value of planned assets, the parent company only financial statements were compiled on the basis of historical cost.

The evaluation of fair value could be classified into Level 1 to Level 3 by the observable intensity and importance of related input value:

• A. Level 1 input value: refers to the quotation of the same asset or liability in an active market as of the evaluation (before adjustment).

• B. Level 2 input value: refers to the direct (the price) or indirect (inference of price) observable input value of asset or liability further to the quotation of Level 1.

• C. Level 3 input value: the unobservable input value of asset or liability.

In preparing its financial statements, the Company uses the equity method to account for its investment in subsidiaries and affiliates. In order to make the same the current profit or loss, other comprehensive income and equity in the parent company only financial statements as the current year’s profit or loss, other comprehensive income and equity attributable to shareholders of the Company in the consolidated financial statements, certain accounting differences between the parent company only basis and consolidated basis are adjusted for “investments accounted for using the equity method”, “profit or loss share of subsidiaries, affiliates and joint ventures accounted for using the equity method”, “other comprehensive income share of subsidiaries, affiliates and joint ventures accounted for using the equity m ethod” and related equity items.

• 17 -

• (3) Standards in differentiating current and noncurrent assets and liabilities

Current assets include:

• A. Assets held primarily for trading purposes;

• B. Assets expected to be realized within 12 months of the balance sheet date; and

• C. Cash and cash equivalents (excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date).

• Current liabilities include:

• A. Liabilities held primarily for trading purposes;

• B. Liabilities due for settlement within 12 months after the balance sheet date (current liabilities even if a long-term refinancing or rescheduling agreement is completed after the balance sheet date and before the financial statements are authorized for issuance), and

• C. Liabilities whose settlement deadline cannot be unconditionally deferred until at least 12 months after the balance sheet date. If the terms of the liability, at the option of the counterparty, result in the settlement of the liability by the issuance of equity instruments, the classification is not affected.

Those that are not current assets or liabilities above are classified as noncurrent assets or liabilities.

• (4) Foreign currency

For the transactions conducted in a currency other than the Company’s functional currency (foreign currency), it is to be translated to the functional currency in accordance with the exchange rate on the transaction date when the Company prepares its financial statements.

Foreign currency monetary items are translated at the closing rate on each balance sheet date. The exchange differences arising from the settlement of monetary items or translating monetary items are recognized in profit or loss in the period in which they occur.

The foreign non-currency items measured at fair value are translated in accordance with the exchange rate on the fair value determination date and the exchange difference is booked as profit or loss in the period. However, for the changes in fair value recognized in other comprehensive income, the exchange difference is recorded in other comprehensive income.

The foreign non-currency items measured at historical cost are translated in accordance with the exchange rate on the transaction date without the need for a retranslation.

Upon preparation of the parent company only financial reports, the assets and liabilities of overseas operating institutions (including the subsidiaries or affiliates in the countries of business operation or those

• 18 -

using currencies different from the Company’s) were converted to NTD based on the exchange rate quoted on every balance sheet date. Income and expense items are translated at the average exchange rate for the period and the exchange differences are booked in other comprehensive income

• (5) Inventories

Inventories include raw materials, supplies, semi-finished goods, finished goods, and merchandises. Inventories are valued in accordance with the lower of cost or net cash value. When comparing cost and net cash value, except for the homogeneous inventories, it is based on the itemized lower of cost or net cash value. Net realizable value refers to the estimated sale price under normal circumstances net of the estimated cost needed to complete the project and the estimated expenses needed to complete the sale. The cost of inventories is calculated using the weighted-average method.

• (6) Investment in subsidiaries

The Company adopts the equity method for investment in subsidiaries.

A subsidiary is an entity over which the Company has control.

Under the equity method, investments in the subsidiaries were originally recognized at cost; the book value after the acquisition date fluctuates along with the distribution of profit or loss from the subsidiaries and other comprehensive profit or loss by the Company. Additionally, the change in the interests the Company holds in subsidiaries is recognized pro rata to the shareholding percentages.

When a change in the Company's ownership interest in a subsidiary does not result in a loss of control, it is treated as an equity transaction. The difference between the carrying amount of the investment and the fair value of the consideration paid or received is recognized directly in equity

The Company assesses impairment based on the cash-generating units as a whole in the financial statements and compares their recoverable amounts with their carrying amounts. If the amount of recoverable assets increased in the future, the reversal of impairment shall be recognized as income. The book value of the reversal of impaired assets shall not exceed the book value before recognition for impairment net of amortization. Impairment losses attributable to goodwill must not be reversed in subsequent periods.

When control over a subsidiary is lost, the Company measures its remaining investment in the subsidiary at fair value at the date of loss of control. The difference between the fair value of the remaining investment and the carrying amount of the investment at the date of loss of control, if any, is recognized in profit or loss for the peri od. In addition, all amounts recognized in other comprehensive income related to the subsidiary are accounted for on the same basis as if the Company had directly disposed of the related assets or liabilities.

• 19 -

Unrealized gains or losses on downstream transactions with subsidiaries are eliminated in the parent company only financial statements. Gains or losses from upstream and side-stream transactions with subsidiaries are recognized in the parent company only financial statements only to the extent that they are not related to the Company's equity interest in the subsidiary.

• (7) Property, plant and equipment

Property, plant, and equipment shall be recognized based on cost. Subsequent costing shall be measured on the cost net of accumulated depreciations and accumulated impairments.

Those real estate, plant buildings, equipment & facilities under construction were recognized at the amount of the costs after deducting the loss in the accumulated impairment. Costs include professional service expanses and loan costs that meet the capitalization conditions. When such assets are completed and reach expected use status, such assets will be classified to proper items under real property, plant and equipment and the provision of depreciation shall begin.

Property, plant and equipment are depreciated separately over their useful lives on a straight-line basis for each significant component. If the lease period is shorter than the useful life, depreciation is provided over the lease period. The Company reviews the estimated useful lives, residual values and depreciation methods at least at the end of each year and defers the effect of changes in applicable accounting estimates.

In removing property, plant, and equipment from book, the difference between the net proceeds of disposition and the book value shall be recognized as profit or loss.

• (8) Intangible assets

A. Acquired separately

The intangible asset with limited useful life acquired separately was originally measured at cost and subsequently measured at cost, net of accumulated amortization and accumulated impairment losses. Depreciation is recognized using the straight-line method for intangible asset. The Company reviews the estimated useful lives, residual values and depreciation methods at least at the end of each year and defers the effect of changes in applicable accounting estimates. Intangible asset with indefinite useful lives is measured at cost net of accumulated impairment losses.

B. Derecognition

In removing intangible assets from book, the difference between the net proceeds of disposition and the book value shall be recognized as profit or loss for the period.

• 20 -

• (9) Impairment of property, plant and equipment, right-of-use assets, intangible assets (except for goodwill) and assets related to contract costs

The Company at each balance sheet date is to assess whether there is any indication of the impairment occurring to the tangible and intangible assets. If there is any indication of impairment occurring, the recoverable amount of the asset should be estimated. If the recoverable amount of an individual asset cannot be estimated, the Company is to estimate the recoverable amount of the respective cash-generating unit. Shared assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis.

The recoverable amount is the fair value net of cost or the value in use whichever is higher. When the recoverable amount of an individual asset or cash-generating unit is less than its carrying amount, the carrying amount of the asset or cash-generating unit should be reduced to its recoverable amount. The impairment loss is recognized in the profit or loss.

The intangible asset with indefinite useful lives and not yet available for use should be tested for impairment at least annually or should be tested when there is an indication of impairment.

An impairment loss is recognized for inventory, property, plant and equipment and intangible assets recognized under customer contracts in accordance with the inventory impairment rules and the above rules. Then, an impairment loss is recognized for the amount by which the carrying amount of the contract cost-related assets exceeds the remaining balance of the consideration expected to be received for the provision of the related goods or services, less directly related costs. Next, the carrying amount of the contract cost-related assets is included in the respective cash-generating unit for the purpose of assessing the impairment of the cash-generating unit.

When the impairment loss was reversed subsequently, the carrying amount of the asset or cash-generating unit is increased to the adjusted recoverable amount, but the increased carrying amount may not exceed the carrying amount of the asset or cash-generating unit without recognizing the impairment loss in prior periods (net of amortization or depreciation). The reversed impairment loss is recognized in the profit or loss.

• (10) Financial instrument

When the Company has become a party to the instrument contract, the financial assets and financial liabilities are to be recognized in the consolidated balance sheet.

For the initial recognition of the financial assets and financial liabilities, if the financial assets or financial liabilities are not measured at fair value through profit or loss, it is measured at fair value plus transaction cost that is directly attributable to the acquisition or issuance of financial assets or financial liabilities. The transaction cost directly attributable to the acquisition or issuance of

• 21 -

financial assets or financial liabilities that are measured at fair value through profit or loss is immediately recognized in the profit or loss.

A. Financial assets

The regular way of purchase or sale of financial assets are recognized and derecognized based on the accounting on the transaction date.

• a. Types of measurement

The types of financial assets held by the Company are financial assets at fair value through profit or loss and financial assets at measured amortized cost.

• I. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets that are mandatorily measured at fair value through profit or loss and those designated as at fair value through profit or loss. Financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments investments not designated by the Consolidated Company as being measured at fair value through other comprehensive income, and investments in debt instruments not qualified for classification as being measured at amortized cost or at fair value through other comprehensive income.

Financial assets at fair value through profit or loss are measured at fair value, while dividends, interests and gains or losses arising from remeasurement are recognized in other gains and losses. Please refer to Note 7 for the determination of fair value.

• II. Financial assets measured at amortized cost

The Company's financial assets, if meeting both of the following conditions, are classified as financial assets at amortized cost:

• i. The financial assets held under a particular mode of operation and the purpose of holding is for the collection of contractual cash flows; and

• ii. The terms of the contracts give rise to cash flows at specified dates that are solely for the payment of principal and interest on the outstanding principal amount.

Financial assets (including cash and cash equivalents, accounts receivable measured at amortized cost), after initial recognition, are measured at their total carrying amount determined using the effective interest method, less amortized cost of any impairment loss, with any foreign currency exchange gain or loss recognized in profit or loss.

• 22 -

Interest income is calculated by multiplying the effective interest rate by the total carrying amount of the financial assets, except for the following two cases.

• i. Interest income on financial assets that are credit-impaired upon acquisition or creation is calculated using the credit-adjusted effective interest rate multiplied by the amortized cost of the financial assets.

• ii. Interest income on financial assets that are not credit-impaired upon acquisition or creation but become credit-impaired subsequently is calculated using the effective interest rate multiplied by the amortized cost of the financial assets from the next reporting period after the impairment.

Cash equivalents include time deposits that are highly liquid, readily convertible into fixed amount of cash with minimal risk of changes in value within 3 months from the acquisition date and are used to meet short-term cash commitments.

b. Impairment of financial assets and contract assets

The Company at each balance sheet date assesses the impairment loss of financial assets (including accounts receivable) at amortized cost and contract assets according to the expected credit loss.

An allowance is recognized for losses on accounts receivable and contract assets based on the expected credit losses over the duration other financial assets are first evaluated to determine whether there is a significant increase in credit risk since initial recognition. If there is no significant increase, an allowance for loss is recognized based on the expected credit loss over 12 months, and if there is a significant increase, an allowance for loss is recognized based on the expected credit loss over the duration.

Expected credit loss is a weighted average credit loss based on the risk of default. Expected credit loss in a 12-month period represents the expected credit loss arising from possible defaults of the financial instruments within 12 months after the reporting date, and the ongoing expected credit loss represents the expected credit loss arising from all possible defaults of the financial instruments during the expected duration of the financial instruments.

The carrying amount of all financial assets is reduced through an allowance account, except for the allowance for losses on investments in debt instruments measured at fair value through other comprehensive income, which is recognized in other comprehensive income and does not reduce the carrying amount.

• 23 -

c. Derecognition of financial assets

The difference between the carrying amount of a financial asset carried at amortized cost and the consideration received is recognized in profit or loss when the financial asset is derecognized as a whole. When investments in debt instruments measured at fair value through other comprehensive income are derecognized as a whole, the difference between its carrying amount and the sum of the consideration received plus any cumulative gain or loss recognized in other comprehensive income is recognized in profit or loss. When an investment in an equity instrument that is measured at fair value through other comprehensive income is derecognized as a whole, the cumulative gain or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

B. Equity instruments

The debt and equity instruments issued by the Company are classified as financial liabilities or equity pursuant to the contractual agreements and the definition of financial liabilities and equity instruments.

Equity instruments issued by the Company are recognized for an amount after deducting the direct issuing cost from the proceeds collected.

The retrieval of the Company's own equity instruments is recognized and deducted under equity. The Company’s equity purchased, sold, issued, or cancelled is not recognized in the profit or loss.

C. Financial liabilities

• a. Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

b. Derecognition of financial liabilities

When derecognizing financial liabilities, the difference between the carrying amount and the consideration paid (including any transferred non-cash assets or assumed liabilities) is recognized as profit or loss.

• (11) Recognition of revenue

The Company, after identifying the performance obligations, had the transaction price amortized to each performance obli gation and recognized as income when the performance obligations were fulfilled.

• A. Revenue from merchandise sales

Revenue from merchandise sales is derived from sales of food ingredients to franchisees, etc.

• 24 -

The Company recognizes revenue and accounts receivable at the point of delivery of the franchisee's food ingredients to the franchisee's designated location, when the franchisee has the right to set the price and use the merchandise and has the primary responsibility for the merchandise at the time of sale, and bears the risk of obsolescence of the merchandise.

B. Licensing revenue

The Company’s licensing revenue is generated from the licensing of franchisee chain. The business practice of the Company is to continuously analyze consumers' preferences for products in order to launch new products, conduct pricing analysis and marketing activities, while the franchisee is required to launch new products. Since the aforementioned business practices do not transfer merchandises or services to the franchisee, the nature of the license is to provide the franchisee with access to intellectual property existing during the license period, and the original license fee is recognized as licensing revenue on a straight-line basis over the license period.

(12) Leases

The Company assesses whether or not the arrangement is (or includes) a lease arrangement on the agreement date

A. The Company is the lessor

A lease is classified as a capital lease when the terms of the lease transfer substantially all the risks and rewards incidental to the ownership of the asset to the lessee. All other leases are classified as operating leases.

When the Company subleases a right-of-use asset, the classification of the sublease is determined by the right-of-use asset (not the subject asset). If the primary lease is a short-term lease to which the Company applies the recognition exemption, the sublease is classified as an operating lease.

Lease payments for operating leases upon deduction of lease incentives are recognized as income on a straight-line basis in relevant lease periods. Initial direct costs generated in the acquisition of operating leases are added to the underlying asset carrying amount and recognized as expenses on a straight-line basis in lease periods.

B. The Company is the lessee

Right-of-use assets and lease liabilities are recognized at the lease inception date, except for leases of low-value underlying assets to which the recognition exemption applies and short -term leases for which lease payments are recognized as expenses on a straight-line basis over the lease period.

Right-of-use assets are measured initially at cost (consisting of the original measurement amount of the lease liability, lease

• 25 -

payments made before the inception date of the lease less lease incentives received, original direct cost and estimated cost of restoration of the subject asset) and subsequently at cost less accumulated depreciation and accumulated impairment, and the remeasurement of the lease liability is adjusted.

The right-of-use assets are depreciated on a straight-line basis over the period starting from the lease inception date to the end of their useful lives or the expiration of the lease period, whichever is sooner. If ownership of the subject asset will be acquired at the end of the lease period, or if the cost of the right-of-use asset reflects the exercise of a purchase option, depreciation is provided from the lease commencement date to the end of the useful life of the subject asset.

Lease liabilities are measured initially at the present value of lease payments (including fixed payments, effective fixed payments, variable lease payments dependent on indices or rates, and lease termination penalties reflected in the lease period, net of lease incentives received). If the implicit interest rate of the l ease is readily determinable, the lease payments are discounted using that rate. If that rate is not readily determinable, the lessee's incremental borrowing rate is used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, and interest expense is amortized over the lease period. If there is a change in future lease payments due to changes in the lease period, the Company remeasures the lease liability and adjusts the right-of-use asset accordingly. However, if the carrying amount of the right-of-use asset is reduced to zero, the remaining remeasurement amount is recognized in profit or loss. The lease liabilities are expressed separately in the balance sheet.

Rentals under leases that do not depend on changes in indices or rates are recognized as expense in the period in which they are incurred.

(13) Borrowing costs

Borrowing costs directly belonging to acquiring, building or producing assets that meet the requirements are part of the costs of such assets until the completion of all necessary activities that the assets reaching the status of expected use or sale.

The income of a temporary investment with a specific loan that has not yet met the essential requirement of capital expenditure is deducted from the loan cost that meets the essential requirement of capitalization.

In addition to the transaction stated in the preceding paragraph, all other loan costs are recognized as profit and loss upon occurring.

(14) Employee benefits

• A. Short-term employee benefits

• 26 -

Liabilities related to short-term employee benefits are measured at the non-discounted amount expected to be paid in exchange for employee services.

B. Retirement benefits

Under defined contribution pension plan, the pension amount appropriated during the service years of the employees is recognized as an expense.

The defined benefit cost (including service cost, net interest and remeasurement) of defined benefit pension plan is actuarially determined using the projected unit credit method. Service cost (including current and prior service cost) and net interest on net defined benefit liabilities (assets) are recognized as employee benefit expense as incurred. Remeasurements (including actuarial gains and losses and return on plan assets, net of interest) are recognized in other comprehensive income and included in retained earnings as incurred and are not reclassified to profit or loss in subsequent periods.

The net defined benefit liability (asset) represents the deficit (remaining) of the defined benefit pension plan appropriation. The net defined benefit asset may not exceed the present value of refunds of appropriations from the plan or reductions in future appropriations.

• (15) Share-based payment agreement

- Equity Settled Share based Payment Agreement to Employees

For equity-settled share-based payment agreement, expenses are recognized on a straight-line basis over the vesting period based on the fair value of the equity instruments at the date of grant and the best estimate of the number of shares expected to be vested, with a simultaneous adjustment to capital surplus - employee stock options. If gain is realized as of the day of transfer, recognize as expenses in full amount as of the transfer day. The equity-settled share-based payment agreements granted to employees are recognized on the grant date when the number of shares subscribed by employees is determined.

• (16) Income tax

Income tax expense is the sum of the current income tax and deferred income tax.

A. Current income tax

Additional income tax on unappropriated earnings is calculated in accordance with the provisions of the Income Tax Act of the Republic of China, to be recognized in the year of the shareholder resolution meeting.

The adjustment to prior period income tax payable is booked as current income tax.

• B. Deferred income tax

• 27 -

Deferred income tax is computed in accordance with the temporary differences between the book value of assets and liabilities and the tax bases of taxable income.

Deferred income tax liabilities are generally recognized in accordance with all taxable temporary differences. Deferred income tax assets are recognized when there are likely to have taxable income available for deductible temporary difference

All taxable provisional differences relevant to the investment in subsidiaries and affiliates were recognized as deferred income tax liabilities, except an event while the Consolidated Company’ could control the time point of recovery of the control over the provisional difference or while the said provisional difference would be very likely not recoverable in the foreseeable future. The deductible temporary differences related to such investments are recognized as deferred income tax assets when there is likely a sufficient taxable income available for realizing a temporary difference and within the expected reverse in the foreseeable future.

The carrying amount of deferred income tax asset must be reviewed at each balance sheet date. The carrying amount of those that no longer have any sufficient taxable income to recover all or part of the asset, should be adjusted down. Those that are not originally recognized as deferred income tax assets should also be reexamined at each balance sheet date. The carrying amount of those that are likely to generate taxable income in the future for the recovery of all or part of its assets should be adjusted up.

Deferred income tax assets and liabilities are measured in accordance with the expected liability liquidation or the tax rate in the period when the asset is realized. The tax rate is based on the tax rate and tax laws that are legislated or substantively legislated at the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax consequence resulted from the book value of the assets or liabilities expected to be recovered or liquidated on the balance sheet date.

C. Current and deferred income tax

Current and deferred income taxes are recognized in the profit or loss, except for the current and deferred income taxes related to the items recognized in other comprehensive profit or loss or directly included in the equity are recognized in the other comprehensive profit or loss or directly included in the equity.

5. Significant Accounting Judgments and Estimations, and Main Sources of Assumption Uncertainties

When adopting accounting policies, the Company’s management is required to make judgments, estimates and assumptions that are based on historical experience and other factors that are not readily apparent from other sources Actual results may differ from estimates.

• 28 -

The Company included the economic impact of the COVID-19 outbreak in the consideration of significant accounting estimates, and management will review the estimates and underlying assumptions on an ongoing basis. If a revision of an estimate affects only the current period, it is recognized in the period in which the estimate is revised; if a revision of an accounting estimate affects both the current and future periods, it is recognized in the period in which the estimate is revised and in the future period.

Estimations, and Main Sources of Assumption Uncertainties Useful lives of property, plant and equipment

As described in Note 13, the Consolidated Company reviews the estimated useful lives of property, plant and equipment at each balance sheet date.

6. Cash and cash equivalents

Cash on hand and working capital Bank checking and demand deposits Cash equivalents (investments with original maturity of less than 3 months) Bonds with repurchase agreement Bank time deposit	December 31,2021 $ 518 332,481 257,680 200,000 $ 790,679	December 31,2020	December 31,2020
			$ 738 342,183 - - $ 342,921

The interest rate ranges at the balance sheet date for bank deposits and bonds with repurchase are as follows:

Bank deposits Bonds with repurchase agreement	December 31,2021 0.001%~0.03% 0.26%~0.3%	December 31,2020
		0.001%~0.03% -

7. Financial instruments at fair value through profit or loss

Mandatorily measured at fair value through profit or loss Mixed financial assets - Structured deposits	December 31,2021 $ 94,302	December 31,2020	December 31,2020
			$ -

In 2021, the Company entered into structured time deposit contracts with financial institutions. The structured time deposit includes an embedded derivative that is not closely related to the host contract. As the host contract included in the hybrid contract is an IFRS 9 asset, it is

• 29 -

assessed as a mandatory classification at fair value through profit or loss for the entire hybrid contract.

8. Financial assets measured at amortized cost

Current Time deposits with original maturity over 3 months	December 31,2021 $ 400,374	December 31,2020	December 31,2020
			$ 372

As of December 31, 2021 and 2020, the interest rate ranges for time deposits with original maturity over 3 months were 0.33% to 0.59% and 0.41% per annum, respectively. The Company set pledge as loan guarantee, please refer to Note 32.

9. Credit risk management of investments in debt instruments

The Company's investments in debt instruments are classified as financial assets at amortized cost.

December 31, 2021

The Company's investments in debt instruments financial assets at amortized cost. December 31, 2021	are classified as	are classified as
Total carrying amount Allowance for losses Amortized cost December 31, 2020 Total carrying amount Allowance for losses Amortized cost	Measured at amortized cost
	$ 400,374 - $ 400,374 Measured at amortized cost
		$ 372 - $ 372

The credit risk of the Company's bank deposits and other financial instruments is measured and monitored by the Company's finance department. Since the Company's trade counterpart and performing party are banks, financial institutions with investment grade or higher, and corporate organizations with good credit ratings, there is no significant doubt about the performance of the contracts and therefore no significant credit risk.

The Company's current credit risk rating mechanism and the total carrying amounts of investments in debt instruments of each credit rating are as follows:

• 30 -

Credit rating	Definition	Recognition basis for expected credit loss	Expected credit loss rate	Total carrying amount as of December 31, 2021 Total carrying amount as of December 31, 2020	Total carrying amount as of December 31, 2021 Total carrying amount as of December 31, 2020	Total carrying amount as of December 31, 2021 Total carrying amount as of December 31, 2020
Normal	Debtors have low credit risk and sufficient ability to repay contractual cash flow obligations	12-month expected credit loss rate	0%~ 0.01%		$ 400,374	$ 372

10. Notes receivable, accounts receivable and other receivables

Accounts receivable Measured at amortized cost Total carrying amount - non-related parties Less: Allowance for losses Total carrying amount - related parties (Note 31) Other receivables Non-related parties (3) Related parties (Note 31) Loan receivable - fixed interest rate (2) Others	December 31,2021 $ 70,565 ( 477) $ 70,088 $ 29,658 $ 2,566 $ 25,000 4,406 $ 29,406	December 31,2020	December 31,2020
	(	(	$ 64,226 477) $ 63,749 $ 32,918 $ 1,284 $ 30,000 3,004 $ 33,004

• (1) Accounts and notes receivable

The Company's sales of merchandises to customers are based on the credit period agreed upon by both parties, and the credit period is 3 to 15 days. In determining the collectability of accounts receivable, the Company considers any changes in the credit quality of accounts receivable from the original credit date to the balance sheet date.

To mitigate credit risk, the Company's management assigns a dedicated team to determine credit limits, approve credit facilities and other monitoring procedures to ensure that appropriate actions are taken to collect overdue receivables. In addition, the Company reviews the recoverable amounts of receivables on a case-by-case basis at the balance sheet date to ensure that appropriate impairment losses have been provided for uncollectible receivables. Accordingly, the Company's management believes that the credit risk of the Company has been significantly reduced.

The Company uses the simplified IFRS 9 method to recognize an allowance for losses on accounts receivable based on expected credit losses over the duration of the receivables. The expected credit losses

• 31 -

for the duration are calculated using an allowance matrix, which takes into account the customer's past default history and current financial condition, the economic situation of the industry, as well as the GDP forecast and industry outlook. Since the credit loss history of the Company shows that there is no significant difference in the loss patterns of different customer groups, the allowance matrix does not further differentiate between customer groups and only uses the number of days to establish accounts receivable to determine the expected credit loss rate.

If there is evidence that the counterparty is in serious financial difficulty and the Company cannot reasonably expect to recover the amount, for example, if the counterparty is in liquidation or the debt has been outstanding for more than 120 days, the Company direct ly writes off the related receivables, but continues the recovery activities, and the amount recovered from the recovery is recognized in profit or loss.

The Company measures the allowance for losses on accounts receivable based on the allowance matrix as follows:

December 31, 2021

0～30 days Expected credit loss rate 0.18% Total carrying amount $ 99,888 Allowance for losses ( Lifetimes ECLs) ( 145) Amortized cost $ 99,743 December 31, 2020 0～30 days Expected credit loss rate 0.01% Total carrying amount $ 96,961 Allowance for losses ( Lifetimes ECLs) ( 394) Amortized cost $ 96,567	0～30 days Expected credit loss rate 0.18% Total carrying amount $ 99,888 Allowance for losses ( Lifetimes ECLs) ( 145) Amortized cost $ 99,743 December 31, 2020 0～30 days Expected credit loss rate 0.01% Total carrying amount $ 96,961 Allowance for losses ( Lifetimes ECLs) ( 394) Amortized cost $ 96,567		31～60 days 30.4% $ 6 3) $ 3 31～60 days 10.08% $ 110 10) $ 100		61～90 days 65.39% $ 180 180) $ - 61～90 days 100% $ - - $ -		91～120 days 76.66% $ 90 90) $ - 91～120 days 100% $ - - $ -	120 days or more 100% $ 59 ( 59) $ - 120 days or more 100% $ 73 ( 73) $ -		Total
		(		(		(			(	$100,223 477) $ 99,746 Total
Expected credit loss rate Total carrying amount Allowance for losses ( Lifetimes ECLs) Amortized cost
	(	(						(	(	$ 97,144 477) $ 96,667

The above is an aging analysis based on the posting date

The changes in the allowance for losses on accounts receivable were as follows:

• 32 -

Balance at the beginning of the year Balance at the end of the year		Year ended December 31,	Year ended December 31,	Year ended December 31,
		2021 $ 477 $ 477		2020
				$ 477 $ 477

• (2) Other receivables - loan receivables

The interest rate exposure and contract maturities of the Company's loan receivables are as follows:

Loan receivables No more than 1 year	December 31,2021 $ 25,000	December 31,2020	December 31,2020
			$ 30,000

The following is the content of the loan receivables.

Loans receivable of NT$30,000 thousand Loans receivable of NT$25,000 thousand	Maturitydate May 4, 2021 April 19, 2022	Collaterals None None	Effective interest rate - -	December 31, 2021 $ - 25,000 $ 25,000	December 31, 2020	December 31, 2020
						$ 30,000 - $ 30,000

(3) Other receivables

To mitigate credit risk, the Company's management assigns a dedicated team to determine credit limits, approve credit facilities and other monitoring procedures to ensure that appropriate actions are taken to collect overdue receivables. In addition, the Company reviews the recoverable amounts of other receivables on a case-by-case basis at the balance sheet date to ensure that appropriate impairment losses have been provided for uncollectible other receivables.

11. Inventories

Raw materials Semi-finished products Finished goods Merchandise inventories	December 31,2021 $ 126,786 9,939 15,011 16,690 $ 168,426	December 31,2020	December 31,2020
			$ 115,283 4,927 11,780 12,174 $ 144,164

The nature of cost of goods sold is as follows:

Cost of inventories sold Loss on decline in value of inventories		Year ended December 31,	Year ended December 31,	Year ended December 31,
		2021 $ 2,763,440 - $ 2,763,440		2020
				$ 2,326,576 5,295 $ 2,331,871

• 33 -

12. Investments accounted for using equity method

Investment in subsidiaries Investment in subsidiaries Bafang Yunji Restaurant Co., Ltd. Bafang Yunji (Samoa) International Co., Ltd. Fang Sin International Trading Co., Ltd. Bafang Co., Ltd. Bafang Yunji International (USA) Limited Dante Coffee & Foods Co., Ltd. Name of subsidiary Bafang Yunji Restaurant Co., Ltd. Bafang Yunji (Samoa) International Co., Ltd. Fang Sin International Trading Co., Ltd. Bafang Co., Ltd. Bafang Yunji International (USA) Limited Dante Coffee & Foods Co., Ltd.	December 31,2021 December 31,2020 $ 820,136 $ 803,685 December 31,2021 December 31,2020 $ 192,468 $ 203,024 420,472 352,733 43,960 41,857 59,035 68,906 59,896 71,064 44,305 66,101 $ 820,136 $ 803,685 Percentage of ownershipand votingrights	December 31,2020
		$ 803,685 December 31,2020
	December 31,2021 100% 100% 100% 100% 100% 85.29%	December 31,2020
		100% 100% 100% 100% 100% 69.02%

Investments accounted for using the equity method and the calculation of the Company’s share of profit or loss and other comprehensive income of the investments are based on the financi al statements of each of the subsidiaries for the same period attested by CPAs

In 2020, the Company increased capital of its 100%-owned Fang Sin International Trading Co., Ltd. by cash for a total of $30,000 thousand.

In December 2020, the Company invested $74,114 thousand by cash in Bafang Yunji International (USA) Limited, which is 100% owned by the Company.

On November 3, 2020, the Company acquired 69.02% of the shares of Dante Coffee & Foods Co., Ltd. with $65,704 thousand. On July 15, 2021, the Company acquired 16.27% of the equity for $21,216 thousand. Please refer to Notes 33 and 34 to the Company's consolidated financial statements for 2021.

For the details of the indirect investment in subsidiaries, please refer to Notes 36, Exhibits 4 and 5.

• 34 -

13. Property, plant and equipment

Self-use

December 31, 2021 December 31, 2020 $ 1,019,787 $ 1,002,018

Self-use

Self-use
Cost Balance at January 1, 2021 Addition Reclassification Disposal Balance at December 31, 2021 Accumulated depreciation Balance at January 1, 2021 Depreciation expenses Reclassification Disposal Balance at December 31, 2021 Net amount at December 31, 2021 Cost Balance at January 1, 2020 Addition Reclassification Disposal Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expenses Reclassification Disposal Balance at December 31, 2020 Net amount at December 31, 2020		Land		Building and construction		Machinery equipment		Office equipment		Transportation equipment		Leasehold improvements	O	ther equipment	c	Unfinished onstruction and equipment pending acceptance	Total
		$ 368,741 - - - $ 368,741 $ - - - - $ - $ 368,741 $ 368,741 - - - $ 368,741 $ - - - - $ - $ 368,741		$ 356,039 7,867 53,770 - $ 417,676 $ 58,069 18,775 - - $ 76,844 $ 340,832 $ 337,913 1,004 17,122 - $ 356,039 $ 40,623 17,446 - - $ 58,069 $ 297,970	( ( ( (	$ 365,089 41,663 19,982 2,345) $ 424,389 $ 156,066 50,391 - 2,277) $ 204,180 $ 220,209 $ 314,159 6,911 49,212 5,193) $ 365,089 $ 112,632 43,879 - 445) $ 156,066 $ 209,023		$ 34,284 7,652 2,344 ( 1,357) $ 42,923 $ 21,925 5,886 - ( 1,311) $ 26,500 $ 16,423 $ 29,332 2,156 3,126 ( 330) $ 34,284 $ 16,675 5,547 - ( 297) $ 21,925 $ 12,359		$ 31,939 245 - - $ 32,184 $ 11,806 4,787 - - $ 16,593 $ 15,591 $ 29,643 94 2,438 ( 236) $ 31,939 $ 7,593 4,449 - ( 236) $ 11,806 $ 20,133	(	$ 34,184 5,648 847 715) $ 39,964 $ 23,559 6,482 - ( 673) $ 29,368 $ 10,596 $ 32,231 628 1,325 - $ 34,184 $ 18,122 5,437 - - $ 23,559 $ 10,625	( ( ( (	$ 68,331 2,928 2,034 1,498) $ 71,795 $ 29,003 9,585 - 1,295) $ 37,293 $ 34,502 $ 63,045 3,711 1,813 238) $ 68,331 $ 20,435 8,806 - 238) $ 29,003 $ 39,328	( (	$ 43,839 24,795 55,741 ) - $ 12,893 $ - - - - $ - $ 12,893 $ 16,682 41,763 14,606 ) - $ 43,839 $ - - - - $ - $ 43,839	$ 1,302,446 90,798 23,236 ( 5,915) $ 1,410,565 $ 300,428 95,906 - ( 5,556) $ 390,778 $ 1,019,787 $ 1,191,746 56,267 60,430 ( 5,997) $ 1,302,446 $ 216,080 85,564 - ( 1,216) $ 300,428 $ 1,002,018

There was no indication of impairment of property, plant and equipment listed above in 2021 and 2020 as assessed by management.

Depreciation expense is provided on a straight-line basis over the following useful lives:

preciation expense is provided on a ng useful lives:	straight-line basi
Building and construction
Plant main building	22 to 50 years
Wastewater treatment equipment	10 years
Renovation construction	4 to 5 years
Machinery equipment	1 to 7 years
Office equipment	1 to 10 years
Transportation equipment	1 to 7 years
Leasehold improvements	2 to 7 years
Other equipment	3 to 15 years

For property, plant and equipment pledged as collateral for loans by the Company, please refer to Note 32.

14. Lease agreements

• (1) Right-of-use assets

• 35 -

December 31, 2021

December 31, 2020

Carrying amount of right-of-use assets Land Building Transportation equipment Addition of right-of-use assets. Land Building Transportation equipment Depreciation expenses of right-of-use assets Land Building Transportation equipment		$ 58,186 $ 36,079 60,681 65,829 125,109 105,015 $ 243,976 $ 206,923 Year ended December 31,	$ 58,186 $ 36,079 60,681 65,829 125,109 105,015 $ 243,976 $ 206,923 Year ended December 31,	$ 58,186 $ 36,079 60,681 65,829 125,109 105,015 $ 243,976 $ 206,923 Year ended December 31,
		2021 $ 24,515 8,054 58,522 $ 91,091 $ 2,408 13,202 38,428 $ 54,038		2020
				$ 36,536 7,845 70,268 $ 114,649 $ 457 11,778 30,260 $ 42,495

• (2) Lease liabilities

Lease liabilities
Carry amount of lease liabilities Current Non-current	December 31,2021 $ 53,838 $ 167,042	December 31,2020
			$ 43,366 $ 146,121

The discount rate range for lease liabilities is as follows

Land Building Transportation equipment	December 31,2021 1.42% 1.25%~1.7% 1.25%~1.7%	December 31,2020
		1.42% 1.25%~1.7% 1.25%~1.7%

• (3) Significant lease activities and terms

The Company leases certain land and buildings as plants and offices with lease periods from 2011 to 2041, upon termination of which, the Company has no bargain purchase option for the leased buildings.

• (4) Information on other leases

buildings. Information on other leases
Lease expenses for low-value assets Total cash (outflows) from leases		Year ended December 31,
		2021 $ 275 $ 55,951)		2020
	(		(	$ 647 $ 59,884)

• 36 -

The Company elected to apply the exemption from recognition to certain office equipment leases that qualify as low-value asset leases and did not recognize the related right-of-use assets and lease liabilities for these leases.

All lease commitments with lease periods beginning after the balance sheet date are as follows:

December 31, 2021 December 31, 2020 Lease commitments $ 121,800 $ -

15. Other intangible assets

Cost Balance at the beginning of the year Acquired separately Disposal Balance at the end of the year Accumulated depreciations Balance at the beginning of the year Amortization expenses Disposal Balance at the end of the year Net amount at the end of the year		Year ended December 31,	Year ended December 31,	Year ended December 31,
		2021 $ 14,127 3,418 7) $ 17,538 $ 9,899 1,726 7) $ 11,618 $ 5,920		2020
	( (		( (	$ 12,365 1,822 60) $ 14,127 $ 8,248 1,711 60) $ 9,899 $ 4,228

Amortization expense is provided on a straight-line basis over the following useful lives:

Computer software costs

5 to 10 years

16. Prepayments

epayments
Prepaid rental Prepayments for goods Prepaid insurance Others	December 31,2021 $ 468 56,158 920 11,537 $ 69,083	December 31,2020
			$ 466 38,864 1,073 12,462 $ 52,865

1. Other assets

2. 37 -

Current Other financial assets (1) Temporary payments Payments for others Non-current Prepayments for equipment (2) Refundable deposits (3)	December 31,2021 $ 8,363 252 59 $ 8,674 $ 39,690 $ 42,856	December 31,2020	December 31,2020
			$ - 93 6 $ 99 $ 45,462 $ 37,096

• (1) Other financial assets - restricted bank deposits

The Company's other financial assets-restricted bank demand deposits are mainly trust lodgments for gift certificates, as described in Note 32.

• (2) Prepayments for equipment

The Company’s prepayments for equipment are advanced payments for the purchase of property, plant and equipment used in the production of products or services.

• (3) Refundable deposits

The refundable deposits are cash pledges provided by the Company under lease agreements.

1. Short-term loans

2. (1) Short-term loans

Short-term loans
Secured loans (Note 32) Bank loans	December 31,2021 $ 27,000	December 31,2020
			$ 70,000

The bank loans were secured by pledges of the Company's own land and buildings, with effective interest rates ranging from 1.16% and 1.2% per annum respectively as of December 31, 2021 and 2020. T he amount drawn was used for short-term operating turnover and material purchases.

• (2) Long-term loans

Long-term loans
Secured loans (Note 32) Bank of Taiwan Mortgaged loans	Maturity date 2019.4.1- 2021.4.1	Material terms The total borrowing amount is $50,000 thousand. The principal is repayable in one lump sum upon maturity and interest is charged monthly.	Effective interest rate 1.2%	December 31, 2021 $ -	December 31, 2020
					$ 50,000

(Continued on next page)

• 38 -

(Continued from previous page)

Mega International Commercial Bank Mortgaged loans Less: current portion Long-term bank loans	Maturity date 2018.7.5- 2025.7.4	Material terms The total borrowing amount is $70,000 thousand and the principal is repayable in 84 equal installments from the date of borrowing (2018.7.5), with interest charged monthly.	Effective interest rate 1.17%	December 31, 2021 $ 35,819 ( 9,996) $ 25,823	December 31, 2020	December 31, 2020
				(	(	$ 45,815 59,996) $ 35,819

Bank loans are secured by pledges of the Company's own land, buildings and construction and equipment.

19. Notes payable and accounts payable

Notes payable Incurred as a result of operations - non-related parties Accounts payable Incurred as a result of operations - non-related parties Incurred as a result of operations - related parties	December 31,2021 $ 1,000 $ 162,388 3,101 $ 165,489	December 31,2020	December 31,2020
			$ - $ 140,278 3,602 $ 143,880

The average credit period for the purchase of raw materials is 30 to 60 days.

20. Other liabilities

Current Other payables Salaries payable and bonus Remuneration payable to employees and directors and supervisors Insurance premiums payable Retirement benefits payable Equipment payables Business tax payable Service expenses payable	December 31,2021 $ 110,432 15,000 7,745 4,898 4,529 18,398 1,242	December 31,2020
		$ 110,784 19,200 7,336 4,610 6,639 17,609 1,157

(Continued on next page)

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(Continued from previous page)

ed from previous page)
Dividends payable Others Other payables - related parties Marketing and advertising expenses payable Others Other liabilities - current Financial liabilities Advanced receipts Temporary receipts Receipts under custody	December 31,2021 $ 150,112 24,584 $ 336,940 $ 8,474 2,468 $ 10,942 $ 2,575 11 1,082 2,586 $ 6,254	December 31,2020
			$ - 28,113 $ 195,448 $ 9,419 1,340 $ 10,759 $ - - 15 2,086 $ 2,101

21. Retirement benefit plans

• (1) Defined contribution plan

The Company’s pension plan under the Labor Pension Act is a government-administered defined contribution pension plan, which requires the Company to contribute 6% of employees' monthly salaries to the individual accounts of the Bureau of Labor Insurance. The Company recognized pension costs of $19,310 thousand and $16,964 thousand for 2021 and 2020, respectively.

(2) Defined benefit plan

The pension plan of the Company under the Labor Standards Act of the ROC is a government-administered defined benefit pension plan. Employees' pension payments are based on the average salary for the six months before the date of retirement. The Company contributes 4% of the employees' monthly salaries to the pension fund, which is deposited in the name of the Supervisory Committee of Labor Retirement Reserve in a dedicated account in the Bank of Taiwan. Before the end of the year, if the estimated balance in the accoun t is not sufficient to pay the employees who are expected to meet the retirement criteria in the following year, the difference will be made up in one lump sum by the end of March of the following year. The Company does not have the right to influence the investment management strategy as the dedicated account is entrusted to be administered by the Bureau of Labor Funds of the Ministry of Labor.

The amounts of defined benefit plan included in the parent company only balance sheet are shown as follows:

• 40 -

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31,2021 $ 13,034 ( 8,060) $ 4,974	December 31,2020	December 31,2020
	(	(	$ 12,896 7,398) $ 5,498

Changes in net defined benefit liabilities are as follows:

January 1, 2020 Service costs Interest expenses (income) Recognized in profit or loss Remeasurement Actuarial gains (losses) from changes in demographic assumptions Return on planned assets (other than the amount included in net interest) Actuarial gains - changes in financial assumptions Actuarial gains - adjustments through experience Recognized in other comprehensive income Contribution from the employer December 31, 2020 January 1, 2021 Service costs Interest expenses (income) Recognized in profit or loss Remeasurement Actuarial gains (losses) from changes in demographic assumptions Return on planned assets (other than the amount included in net interest) Actuarial gains - changes in financial assumptions Actuarial gains - adjustments through experience (Continued on next page)	Present value of defined benefit obligations $ 10,819 108 108 111 - 965 893 1,969 - $ 12,896 $ 12,896 64 64 440 - ( 767 ) 401	Fair value of plan assets ($ 6,623) ( 69) ( 69) - ( 192 ) - - ( 192) ( 514) ($ 7,398) ($ 7,398) ( 38) ( 38) - ( 92 ) - -	Net defined benefit liabilities
			$ 4,196 39 39 111 ( 192 ) 965 893 1,777 ( 514) $ 5,498 $ 5,498 26 26 440 ( 92 ) ( 767 ) 401

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(Continued from previous page)

Recognized in other comprehensive income Contribution from the employer December 31, 2021	Present value of defined benefit obligations $ 74 - $ 13,034	Fair value of plan assets ($ 92) ( 532) ($ 8,060)	Net defined benefit liabilities	Net defined benefit liabilities
		( ( (	( (	$ 18) 532) $ 4,974

The amounts recognized in profit or loss for defined benefit plan are summarized by function as follows:

Operating expenses		Year ended December 31,	Year ended December 31,	Year ended December 31,
		2021 $ 26		2020
				$ 39

The Company is exposed to the following risks as a result of the pension system under the “Labor Standards Act”:

• A. Investment risk: The Bureau of Labor Funds, Ministry of Labor invests the labor pension fund in domestic and foreign equity securities, debt securities, and bank deposits through its own management or entrusted third parties, but the amount allo cated to the Company's plan assets is based on the income at a rate no less than the local bank's 2-year time deposit rate.

• B. Interest rate risk: A decrease in interest rates on government bonds will increase the present value of the defined benefit obligation, but the return on debt investment in plan assets will also increase, which will have a partially offsetting effect on the net defined benefit obligation.

• C. Salary Risk: The present value of the defined benefit obligation is calculated by reference to the future salary of the plan member. Therefore, increases in plan member’s salary will result in an increase in the present value of the defined benefit obligation.

The present value of the Company's defined benefit obligation was actuarially determined by a qualified actuary and the significant assumptions at the measurement date were as follows.

Discount rate Expected rate of salary increase	December 31,2021 0.875% 3%	December 31,2020
		0.5% 3%

The amount by which the present value of the defined benefit obligation would increase (decrease) if there are reasonable possible changes in significant actuarial assumptions, with all other assumptions held constant, is as follows:

• 42 -

Discount rate Increase by 0.25% Decrease by 0.25% Expected rate of salary increase Increase by 0.25% Decrease by 0.25%	December 31,2021 ($ 486) $ 513 $ 494 ($ 472)	December 31,2020	December 31,2020
	( (	( (	$ 495) $ 522 $ 501 $ 479)

The sensitivity analysis above may not reflect actual changes in the present value of the defined benefit obligation because the actuarial assumptions may be correlated and changes in only one assumption are not feasible.

not feasible.
The expected contributions to the plan for the next year Average duration to maturity of defined benefit obligations	December 31,2021 $ 550 17.6 years	December 31,2020
			$ 539 15.7 years

22. Equity

• (1) Share capital Common stock

Share capital Common stock
Authorized number of shares (in thousands) Authorized share capital Number of issued and fully paid shares (in thousands) Issued share capital	December 31,2021 100,000 $ 1,000,000 66,045 $ 660,448	December 31,2020
			100,000 $ 1,000,000 60,045 $ 600,448

The issued common stock has a par value of $10 per share and each share has one voting right and is entitled to receive dividends.

On July 20, 2021, the Board of Directors resolved to increase capital by cash with issuance of 6,000 thousand shares of common stock at a par value of $10 per share and at a premium of $155 per share, resulting in a paid-in capital of NT$660,448 thousand after the capital increase. The registration of the aforementioned cash capital increase was approved into effect by the Taiwan Stock Exchange Corporation on August 4, 2021, and the Board of Directors authoriz ed the Chairperson to decide on September 7, 2021 as the base date for the capital increase and the change registration was approved by the Department of Commerce, Ministry of Economic Affairs on September 30, 2021.

• 43 -

(2) Capital surplus

December 31, 2021

December 31, 2020

For loss make-up, payment in cash or capitalization as equity (A) Share issue premium Difference between the actual acquisition price and the book value of the subsidiary Employee share-based payment remuneration costs Lapsed employee stock options Not for any purpose Employee stock options	$ 924,436 - 22,735 132 947,303 23,016 $ 970,319	$ 3,235 2,925 22,735 - 28,895 5,754 $ 34,649

• A. Such capital surplus may be used to make up for losses or, when the Company has no losses, to distribute cash or to capitalize equity, provided that the capitalization is limited to a certain percentage of the paid-in capital each year.

• (3) Retained Earnings and Dividend Policy

In accordance with the earnings distribution policy of the Company’s Articles of Incorporation, the surplus earning distribution or losses make-up proposal may be made after the end of each semi-annual fiscal year. The Board of Directors shall resolve the distribution of earnings in cash, and the shareholders' meeting shall resolve the distribution of earnings by issuing new shares.

In accordance with the earnings distribution policy of the Company's Articles of Incorporation, if there are any surplus earnings as indicated in the final accounting results, the Company shall first pay tax and make up for the accumulated losses, and then set aside 10% as legal reserve, except when the accumulated legal reserve has reached the amount of the Company's paid-in capital, and the rest shall be set aside as special reserve or offset by reversal of special reserve as required by law; If there are still remaining earnings, the Board of Directors shall prepare a proposal for the distribution of the remainder together with the accumulated undistributed earnings, and submit it to the shareholders’ meeting for resolution on the distribution of dividends to shareholders In accordance with the earnings distribution policy of the Company’s Articles of Incorporation, the Board of Directors is authorized to distribute dividends and bonuses, or all or part of the legal reserve and capital surplus as provided in paragraph 1, Article 241 of the Company Act, to shareholders in cash by a resolution with the attendance of a majority of the directors and the approval of at least two-thirds of the directors present and report to the shareholders' meeting.

• 44 -

The Company's policy on the distribution of remuneration to employees and remuneration to directors as stipulated in the Company's Articles of Incorporation is described in Note 24(7) Remuneration to Employees, Directors and Supervisors

The Company is in a growth stage and its dividend policy is based on the different stages of Company's business development, profitability, medium- and long-term financial capital budget planning, and shareholders' interests, and other factors. Dividends are paid in the form of stock dividends or cash dividends as appropriate. No less than 20% of the available-for-distribution earnings is appropriated annually as stockholders' dividends, of which no less than 20% of the total dividends should be in cash.

The legal reserve should be appropriated until the balance reaches the total paid-in capital of the Company. The legal reserve may be used to make up for losses If the Company has no losses, the excess of legal reserve over 25% of the paid-in capital may be capitalized as equity or distributed in cash

The Company has provided and reversed the special reserve in accordance with the letter Jin-Guan-Zheng-Fa-Zi No. 1010012865 and the provisions of the "Questions and Answers on the Application of International Financial Reporting Standards (IFRSs) to the Provision of Special Reserve". Prior to the amendment of the Articles of Incorporation, the Company provided for special reserve from undistributed earnings from prior periods in accordance with the law.

The Board of Directors resolved the earnings distribution for 2021 and 2020 as follows:

and 2020 as follows:
Board of Directors' resolution date Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	January 1 to June 30,2021 August 10, 2021 $ 28,256 $ 8,984 $ 150,112 $ 2.27	July 1 to December 31, 2020 April 13, 2021 $ 63,219 $ 12,344 $ 390,291 $ 6.50	January 1 to June 30,20210
			August 13, 2020 $ - $ - $ - $ -

The Board of Directors' meeting on March 22, 2022 proposed the following earnings distribution for the second half of 2021.

following earnings distribution for the second half of	2021.	2021.
Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	July 1 to December 31,2021
		$ 25,284 $ 5,666 $ 279,179 $ 4.23

• 45 -

The above cash dividends have been approved by the Board of Directors, and the rest are subject to the resolution of the shareholders' meeting scheduled to be held on June 15, 2022

• (4) Special reserve

Special reserve
Balance at the beginning of the year Provision for special reserve Provision for deductions to other equity items Balance at the end of the year		Year ended December 31,
		2021 $ 27,261 21,328 $ 48,589		2020
				$ 12,958 14,303 $ 27,261

• (5) Other equity items

Exchange differences on translation of financial statements of foreign operations

operations
		Year ended December 31,
		2021		2020
Balance at the beginning of the
year	( $	39,605 )	( $ 27,261 )
Exchange differences on
translation of financial
statements of foreign operations	(	18,314 )	(	15,431 )
Income tax related to translation of
financial statements of foreign
operations		3,664		3,087
Balance at the end of the year	($	54,255)	($ 39,605)
The translation differences	arising from the translation of the
financial statements of foreign operations from			their	functional
currencies to the Company's presentation currency (i.e.,				NTD) are
recognized directly in the exchange		differences on translation of
financial statements of foreign operations under other comprehensive
income.

23. Revenue

income. venue
Revenue from customer contracts Revenue from merchandise sales Licensing revenue		Year ended December 31,
		2021 $ 4,004,912 11,032 $ 4,015,944		2020
				$ 3,551,270 3,049 $ 3,554,319

(1) Description of customer contracts

A. Revenue from merchandise sales

The revenue from merchandise sales is derived from the sale of food ingredients used by franchisees to manufacture and sell related products. The Company recognizes revenue and accounts

• 46 -

receivable at the point when the products and the food ingredients delivered to the franchisee's designated location, as the customer has the right to set the price and use the merchandise and has the primary responsibility for the merchandise at the time of resale, and bears the risk of obsolescence of the merchandise. Revenue from merchandise sales is based on contract agreements with fixed prices.

B. Licensing revenue

Licensing revenue is the licensing revenue received by the Company from franchisees. The nature of licensing is to provide franchisees with access to intellectual property that exists during the licensing period.

• (2) Contract balance

Contract balance
Notes receivable and accounts receivable (Note 10)	December 31, 2021 $ 99,746	December 31, 2020 $ 96,667	January1,2020
				$ 68,180

• (3) Disaggregation of revenue from contracts with customers

Revenue from customer contracts Revenue from merchandise sales Licensing revenue		Year ended December 31,	Year ended December 31,	Year ended December 31,
		2021 $ 4,004,912 11,032 $ 4,015,944		2020
				$ 3,551,270 3,049 $ 3,554,319

24. Net profit from continuing operations

• (1) Interest income

Interest income
Bank deposits		Year ended December 31,
		2021 $ 834		2020
				$ 361

• (2) Other income

Other income
Rental income Other operating Rental Manpower dispatch income Others		Year ended December 31,
		2021 $ 940 3,872 12,563 $ 17,375		2020
				$ 708 1,215 10,595 $ 12,518

• 47 -

• (3) Other gains and losses

Other gains and losses
Loss on disposal of property, plant and equipment Net foreign currency exchange loss Lease modification losses Loss on financial assets at fair value through profit or loss Others	Year ended December 31,
	2021 ( $ 316 ) ( 548 ) - ( 66 ) ( 215) ($ 1,145)	2020
		( $ 283 ) ( 48 ) ( 55 ) - ( 1,501) ($ 1,887)

(4) Financial costs

Financial costs
Interest on bank loans Interest on lease liabilities		Year ended December 31,
		2021 $ 1,159 2,974 $ 4,133		2020
				$ 1,870 1,962 $ 3,832

No interest was capitalized in 2021 and 2020 of the Company.

• (5) Depreciation and amortization

Depreciation and amortization
Depreciation expenses summarized by function Operating costs Operating expenses Amortization expenses summarized by function Operating costs Selling expenses Administrative expenses		Year ended December 31,
		2021 $ 89,731 60,213 $ 149,944 113 34 1,579 $ 1,726		2020
				$ 80,525 47,534 $ 128,059 116 89 1,506 $ 1,711

• (6) Employee benefit expenses

Employee benefit expenses
Short-term employee benefits Retirement benefits (Note 21) Defined contribution plan Defined benefit plan Share-based payment Equity settlement Total employee benefit expenses		Year ended December 31,
		2021 $ 537,180 19,310 26 25,628 $ 582,144		2020
				$ 494,720 16,964 39 5,754 $ 517,477

• 48 -

Summarized by function Operating costs Operating expenses		Year ended December 31,	Year ended December 31,	Year ended December 31,
		2021 $ 246,955 335,189 $ 582,144		2020
				$ 215,153 302,324 $ 517,477

• (7) Remuneration to employees, directors and supervisors

In accordance with the provision of the Articles of Incorporation, the Company shall use the current year's pre-tax profit before the distribution of the remuneration to employees and directors to make up for the accumulated loss, and if there is any remaining balance, the Company shall appropriate not less than 1% as employees' remuneration and not more than 1% as directors' remuneration The remuneration to employees , directors and supervisors for 2021 and 2020 were resolved by the Board of Directors on March 22, 2022 and April 8, 2021, respectively, as follows

Estimated percentage

Estimated percentage
Remuneration to employees Remuneration to directors and supervisors	Year ended December 31,
	2021 1.43% 0.71%	2020
		1.57% 0.82%

Amount

Amount
Remuneration to employees Remuneration to directors and supervisors	Year ended December 31,
	2021 Cash $ 10,000 5,000	2020
		Cash
		$ 12,600 6,600

If there is any change in the amount after the publication of the annual parent company only financial statements, it will be handled as a change in accounting estimate and the adjustment will be posted in the next year.

The actual amounts of remuneration to employees, directors and supervisors in 2020 and 2019 did not differ from the amounts recognized in the financial statements in 2020 and 2019.

For information on remuneration to employees, directors and supervisors resolved by the Board of Directors, please visit the Market Observation Post System.

25. Income tax for continuing operations

• (1) Major components of income tax expense recognized in profit or loss

• 49 -

Year ended December 31, 2021 2020 Income tax for the current year Generated in the current year $ 124,594 $ 140,277 Surtax on undistributed earnings 8,317 3,428 Adjustments to prior years ( 3,005) ( 376) 129,906 143,329 Deferred income tax Generated in the current year 13,098 8,102 Income tax expense recognized in profit or loss $ 143,004 $ 151,431 The reconciliation of accounting income to income tax expense is as follows: Year ended December 31, 2021 2020 Net income before tax from continuing operations $ 684,345 $ 785,042 Income tax expense at statutory tax rate on net profit before tax $ 136,869 $ 157,008 Non-taxable income 823 ( 8,629 ) Surtax on undistributed earnings 8,317 3,428 Current income tax expense of prior years is adjusted in the current year. ( 3,005) ( 376) Income tax expense recognized in profit or loss $ 143,004 $ 151,431 Income tax recognized in other comprehensive income Year ended December 31, 2021 2020 Deferred income tax Generated in the current year - Exchange differences from foreign operations $ 3,664 $ 3,087 - Remeasurement of defined benefit plan ( 3) 355 Income tax recognized in other comprehensive income $ 3,661 $ 3,442		Year ended December 31,	Year ended December 31,	Year ended December 31,
				2020
		2021 $ 3,664 3) $ 3,661		2020
	(			$ 3,087 355 $ 3,442

The reconciliation of accounting income to income tax expense is as follows:

• (2) Income tax recognized in other comprehensive income

• (3) Current income tax assets and liabilities

• 50 -

Current income tax liabilities Income tax payable	December 31,2021 $ 62,697	December 31,2020	December 31,2020
			$ 80,868

• (4) Deferred income tax assets and liabilities

Changes in deferred income tax assets and liabilities are as follows:

For the year ended December 31, 2021

Deferred income tax assets Temporary differences Unrealized loss on decline in value of inventories Unrealized doubtful accounts expense Undistributed earnings of subsidiaries Exchange differences from foreign operations Defined benefit plan Deferred income tax liabilities Temporary differences Payment differences of defined contribution plan Unrealized exchange gains	Balance at the beginning of theyear $ 1,714 22 27,218 9,902 1,317 $ 40,173 ( $ 464 ) ( 36) ($ 500)	Recognized in profit or loss $ - - ( 13,004 ) - - ($ 13,004) ( $ 102 ) 8 ($ 94 )	Recognized in other comprehensive income $ - - - 3,664 ( 3) $ 3,661 $ - - $ -	Balance at the end of theyear	Balance at the end of theyear
	( ( (	( ( ( (	(	( ( (	$ 1,714 22 14,214 13,566 1,314 $ 30,830 $ 566 ) 28) $ 594)

For the year ended December 31, 2020

Deferred income tax assets Temporary differences Unrealized loss on decline in value of inventories Unrealized doubtful accounts expense Undistributed earnings of subsidiaries Exchange differences from foreign operations Defined benefit plan	Balance at the beginning of theyear $ 655 22 36,253 6,815 962 $ 44,707	Recognized in profit or loss $ 1,059 - ( 9,035 ) - - ($ 7,976)	Recognized in other comprehensive income $ - - - 3,087 355 $ 3,442	Balance at the end of theyear	Balance at the end of theyear
		( (			$ 1,714 22 27,218 9,902 1,317 $ 40,173

(Continued on next page)

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(Continued from previous page)

Deferred income tax liabilities Temporary differences Payment differences of defined contribution plan Unrealized exchange gains	Balance at the beginning of theyear ( $ 369 ) ( 5) ($ 374)	Recognized in profit or loss ( $ 95 ) ( 31) ($ 126)	Recognized in other comprehensive income $ - - $ -	Balance at the end of theyear	Balance at the end of theyear
	( ( (	( ( (		( ( (	$ 464 ) 36) $ 500)

(5) Income tax assessment status

The income tax returns of the Company had been assessed by the tax authorities through 2019.

26. Earnings per share (EPS)

rnings per share (EPS)
Basic earnings per share Diluted earnings per share		Unit: NT$ per share Year ended December 31,
		2021 $ 8.74 $ 8.68		2020
				$ 10.55 $ 10.53

Earnings and the weighted-average number of shares of common stock used to calculate earnings per share were as follows:

Net profit for the year

Net profit for the year
Net profit used to calculate diluted earnings per share Impact of potential common stock with dilutive effect: Remuneration to employees Net profit used to calculate diluted earnings per share		Year ended December 31,
		2021 $ 541,341 - $ 541,341		2020
				$ 633,611 - $ 633,611

Number of shares

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Weighted-average number of shares of common stock used to calculate basic earnings per share Impact of potential common stock with dilutive effect: Remuneration to employees Employee stock options Weighted-average number of shares of common stock used to calculate diluted earnings per share		Unit: In thousands of shares Year ended December 31, 2021 2020 61,952 60,045 98 155 302 - 62,352 60,200	Unit: In thousands of shares Year ended December 31, 2021 2020 61,952 60,045 98 155 302 - 62,352 60,200
		2021 61,952 98 302 62,352

If the Company has the option to pay remuneration to employees in stock or cash, the calculation of diluted earnings per share will adopt the assumption that employee remuneration will be paid in stock and is included in the weighted-average number of shares of common shares outstanding for the purpose of calculating diluted earnings per share when the potential common shares have a dilutive effect. The dilutive effect of these potential common shares will continue to be considered in the calculation of diluted earnings per share prior to the issuance of shares in the following year's resolution for remuneration to employees.

27. Share-based payment agreement

(1) The Company’s employee stock option plan

In September 2020, the Company granted 600 thousand units of stock options to employees, each unit of which is entitled to one share of common stock. The grant was made to employees of the Company and its subsidiaries who meet certain criteria. The stock options are granted for a duration of 5 years, and the holders of the stock options can exercise a certain percentage of the stock options granted after 2 years from the date of grant. The exercise price of the stock options is the closing price of the Company's common stock on the date of issuance. In the event of a change in the Company's common stock after the issuance of the stock options, the exercise price of the stock options shall be adjusted in accordance with the prescribed formula.

Information on employee stock options is as follows:

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Employee stock options Outstanding at the beginning of the year Granted in the year Outstanding at the end of the year Exercisable at the end of the year Weighted average fair value of options granted in the year (NT$)			Year ended December 31,	Year ended December 31,	Year ended December 31,	Year ended December 31,
					2020
		Unit: (In thousands) 600 - 600 - $ 72.12			Unit: (In thousands) - 600 600 - $ 72.12	Weighted average exercise price (NT$)
						$ - 30

Information on employee stock options outstanding is as follows:

Range of exercise price (NT$) Weighted average remaining contract period (years)	December 31,2021 $ 30 3.67 years	December 31,2020
		$ 30 4.67 years

The Company used the Black-Scholes valuation model for all employee stock options granted in September 2020, and the input values used in the valuation model were as follows:

Share price on grant date Exercise price Expected volatility Duration Expected dividend yield Risk-free interest rate	September 2020
	124.2 years NT$30 19.74-20.76% 3.5/4/4.5 years 5.14% 0.24%/0.27%/0.29%

The Company recognized remuneration costs of $17,262 thousand and $5,754 thousand in 2021 and 2020, respectively, for share -based payment agreements.

• (2) Cash capital increase reserved for employee stock options in 2021

On July 20, 2021, the Board of Directors resolved to increase capital by cash with issuance of 6,000 thousand shares of common stock at $10 per share, amounting to $60,000 thousand. The employee stock options for the cash capital increase were granted on August 26, 2021. According to Article 267 of the Company Law, 15% of the stock options were reserved for employee stock options, with a total of 900 thousand shares and a recognized remuneration cost of $8,366 thousand.

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28. Non-cash transaction

• (1) Non-cash transaction

• A. The Company entered into the following non-cash transactions of investing activities in 2021 and 2020.

Acquisition of property, plant and equipment Increase in property, plant and equipment Add: Equipment payables at the beginning of the period Less: Equipment payables at the end of the period Cash paid		Year ended December 31,	Year ended December 31,	Year ended December 31,
		2021 $ 90,798 6,639 4,529) $ 92,908		2020
	(		(	$ 56,267 7,524 6,639) $ 57,152

• B. The Company reclassified prepayments for equipment to property, plant and equipment of $23,236 thousand and $60,430 thousand in 2021 and 2020, respectively.

• (2) Changes in liabilities from financing activities

For the year ended December 31, 2021

Short-term loans Long-term loans Lease liabilities		January 1, 2021 $ 70,000 95,815 189,487 $ 355,302		Cash flow $ 43,000 ) 59,996 ) 55,676) $ 158,672)	Non-cash changes New/amended contracts Interest expenses $ - $ - - - 84,095 2,974 $ 84,095 $ 2,974	Non-cash changes New/amended contracts Interest expenses $ - $ - - - 84,095 2,974 $ 84,095 $ 2,974	December 31, 2021	December 31, 2021
					New/amended contracts $ - - 84,095 $ 84,095
			( ( ( (					$ 27,000 35,819 220,880 $ 283,699

For the year ended December 31, 2020

Short-term loans Long-term loans Lease liabilities		January 1, 2020 $ 70,000 105,811 132,507 $ 308,318		Cash flow $ - 9,996 ) 59,237) $ 69,233)	Non-cash changes New/amended contracts Interest expenses $ - $ - - - 114,255 1,962 $ 114,255 $ 1,962	Non-cash changes New/amended contracts Interest expenses $ - $ - - - 114,255 1,962 $ 114,255 $ 1,962	December 31, 2020	December 31, 2020
					New/amended contracts $ - - 114,255 $ 114,255
			( ( (					$ 70,000 95,815 189,487 $ 355,302

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29. Capital risk management

The Company conducts capital management to ensure it is able to maximize shareholder returns by optimizing debt and equity balances while continuing to operate.

The Company's capital structure consists of the Company's net debt (i.e., borrowings less cash and cash equivalents) and equity (i.e., share capital, capital surplus, and retained earnings).

The Company is not subject to other external capital requirements.

The Group's capital structure is reviewed annually by the Company's key management, which includes consideration of the cost of each type of capital and the related risks. The Company will balance its overall capital structure by paying dividends, issuing new shares, buying back shares and issuing new debt or paying off old debt, as recommended by key management.

30. Financial instrument

• (1) Fair value information - financial instruments not measured at fair value

The Company's management considers that the carrying amounts of financial assets and liabilities that are not measured at fair value approximate their fair values.

• (2) Fair value information - financial instruments measured at fair value on a repeated basis

The Company did not hold any financial instruments measured at fair value as of December 31, 2021 and 2020.

• (3) Type of financial instruments

Type of financial instruments
Financial assets Measured at amortized cost (Note 1) Measured at fair value through profit or loss Financial liabilities Measured at amortized cost (Note 2)	December 31,2021 $ 1,365,627 94,302 578,690	December 31,2020
		$ 511,344 - 516,162

• Note 1: The balances include financial assets measured at amortized cost such as cash and cash equivalents, accounts receivable, financial assets at amortized cost, other receivables, and refundable deposits.

• Note 2: The balances include financial liabilities measured at amortized cost such as short-term loans, notes payable,

• 56 -

accounts payable, other payables, long-term loans and deposits received.

• (4) Financial risk management objectives and policies

The Company's major financial instruments include equity investments, accounts receivable and accounts payable. The Company's financial management department provides services to each business unit, coordinates access to domestic and international financial markets, and monitors and manages the financial risks associated with the Company's operations through internal risk reports that analyze the risk of violence according to the level and breadth of risk. These risks include market risk (including exchange rate risk and interest rate risk), credit risk and liquidity risk.

A. Market risk

The Company's major financial risks arising from its operating activities are foreign currency exchange rate risk (see a. below) and interest rate risk (see b. below).

a. Exchange rate risk

The Company engages in foreign currency-denominated import transactions that result in monetary assets (bank deposits) and monetary liabilities that are not in a functional currency, which expose the Company to exchange rate fluctuations.

The carrying amounts of monetary assets and monetary liabilities denominated in non-functional currencies as of the balance sheet date are disclosed in Note 35.

Sensitivity analysis

The Company is mainly affected by the fluctuation of the USD exchange rate.

The following table details the sensitivity analysis of the Company when the exchange rate of the New Taiwan dollar (functional currency) changes 1% against each relevant foreign currency. 1% is the sensitivity ratio used by the Company for internal reporting of exchange rate risk to key management and represents management's assessment of the reasonably possible range of changes in foreign currency exchange rates. The positive numbers below represent the increase in net profit before tax if the NTD depreciates by 1% against the respective currencies, and the negative number for the same amount if the NTD appreciates by 1% against the respective currencies.

Profit or loss	Impact of USD	Impact of USD
	Year ended December 31,
	2021 $ 800	2020
		$ 5

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b. Interest rate risk

Interest rate risk arises because the Company borrow funds at both fixed and floating interest rates and maintain bank deposits. However, because interest rates do not fluctuate significantly, the impact of changes in market interest rates on the Company's revenue and operating cash flows is limited.

flows is limited.	flows is limited.
The carrying amounts		of the Company's financial assets
and liabilities exposed	to	interest rate risk	as of	the balance
sheet date were as follows
	December 31,2021		December 31,2020
Fair value interest rate
risk
- Financial assets		$ 952,356	$	372
Cash flow interest rate
risk
- Financial assets		332,481		342,183
- Financial liabilities		62,819		165,815

Sensitivity analysis

The following sensitivity analysis is based on the interest rate risk of derivative and non-derivative instruments as of the balance sheet date. For floating rate liabilities, the analysis assumes that the amount of the liability outstanding at the balance sheet date is outstanding at the reporting date. The rate of change used in reporting interest rates internally to key management of the Company is an increase or decrease in interest rates by 1%, which represents management's assessment of the range of reasonably possible changes in interest rates.

If interest rates had increased or decreased by 1%, with all other variables held constant, the Company's net profit before tax would have increased/decreased by $2,697 thousand and $1,764 thousand for fiscal years 2021 and 2020, respectively, mainly due to the exposure to changes in interest rates on the Company's floating-rate bank deposits and loans.

B. Credit risk

Credit risk refers to the risk of financial loss resulting from the default of contractual obligations by the counterparties. As of the balance sheet date, the maximum exposure to credit risk of the Company to financial loss due to non-performance of counterparties' obligations and financial guarantees provided by the Company mainly arises from the carrying amount of financial assets recognized in the Consolidated Balance Sheet.

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The Company's policy is to transact only with creditworthy counterparties and to obtain adequate guarantees, if necessary, to mitigate the risk of financial loss arising from default. The Company continuously monitors credit risk and the creditworthiness of counterparties, and controls credit risk through credit limits on counterparties that are reviewed and approved by management on an annual basis. In addition, the Company reviews the recoverable amounts of receivables on a case-by-case basis at the balance sheet date to ensure that appropriate impairment losses have been provided for uncollectible receivables.

The Company's customer base is large and unrelated, so the concentration of credit risk is not high.

• C. Liquidity risk

The Company manages and maintains sufficient cash and cash equivalents to support the Group's operations and mitigate the impact of cash flow fluctuations. The Company's management monitors the use of bank financing facilities and ensures compliance with the terms of the loan agreements.

The ultimate responsibility for liquidity risk management rests with the Company's Board of Directors, which has established an appropriate liquidity risk management framework to address the Company's short-, medium- and long-term funding and liquidity management needs.

Bank loans are an important source of liquidity for the Company. As of December 31, 2021 and 2020, the Company had unutilized financing facilities, as described in (2) Financing Facilities below.

• a. Liquidity and interest rate risk of non-derivative financial liabilities

The analysis of the remaining contract maturities of non-derivative financial liabilities was prepared based on the undiscounted cash flows (including principal and estimated interest) of the financial liabilities based on the earliest possible date on which the Company could be required to make repayment. Accordingly, the Company's bank loans that may be required to be repaid immediately are listed in the table below at the earliest possible date, without considering the probability that the bank will immediately enforce the right; the maturity analysis of other non-derivative financial liabilities is prepared based on the contractual repayment dates.

The undiscounted interest amount of interest cash flows paid at floating interest rates is derived from the yield rate at the balance sheet date.

December 31, 2021

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Less than 1 year Floating interest rate instrument Short-term loans $ 27,021 Long-term loans 10,113 Lease liabilities 56,578 No interest-bearing liabilities Notes payable 1,000 Accounts payable 165,489 Other payables 347,882 $ 608,083 Further information on liabilities is as follows: Less than 1 year 1～5years Lease liabilities $ 56,578 $ 137,514 December 31, 2020 Less than 1 year Floating interest rate instrument Short-term loans $ 70,288 Long-term loans 61,070 Lease liabilities 46,112 No interest-bearing liabilities Accounts payable 143,880 Other payables 206,207 $ 527,557	Less than 1 year Floating interest rate instrument Short-term loans $ 27,021 Long-term loans 10,113 Lease liabilities 56,578 No interest-bearing liabilities Notes payable 1,000 Accounts payable 165,489 Other payables 347,882 $ 608,083 Further information on liabilities is as follows: Less than 1 year 1～5years Lease liabilities $ 56,578 $ 137,514 December 31, 2020 Less than 1 year Floating interest rate instrument Short-term loans $ 70,288 Long-term loans 61,070 Lease liabilities 46,112 No interest-bearing liabilities Accounts payable 143,880 Other payables 206,207 $ 527,557	Less than 1 year Floating interest rate instrument Short-term loans $ 27,021 Long-term loans 10,113 Lease liabilities 56,578 No interest-bearing liabilities Notes payable 1,000 Accounts payable 165,489 Other payables 347,882 $ 608,083 Further information on liabilities is as follows: Less than 1 year 1～5years Lease liabilities $ 56,578 $ 137,514 December 31, 2020 Less than 1 year Floating interest rate instrument Short-term loans $ 70,288 Long-term loans 61,070 Lease liabilities 46,112 No interest-bearing liabilities Accounts payable 143,880 Other payables 206,207 $ 527,557	Less than 1 year Floating interest rate instrument Short-term loans $ 27,021 Long-term loans 10,113 Lease liabilities 56,578 No interest-bearing liabilities Notes payable 1,000 Accounts payable 165,489 Other payables 347,882 $ 608,083 Further information on liabilities is as follows: Less than 1 year 1～5years Lease liabilities $ 56,578 $ 137,514 December 31, 2020 Less than 1 year Floating interest rate instrument Short-term loans $ 70,288 Long-term loans 61,070 Lease liabilities 46,112 No interest-bearing liabilities Accounts payable 143,880 Other payables 206,207 $ 527,557	1 to 2years 2 to 5years $ - $ - 20,226 5,899 54,209 83,305 - - - - - - $ 74,435 $ 89,204 the maturity analysis 5～10 years 10～15 years 15～20 years $ 20,561 $ 11,274 $ 7,763 1 to 2years 2 to 5years $ - $ - 10,457 26,076 40,313 77,984 - - - - $ 50,770 $ 104,060		5 years or more
						$ - - 39,598 - - - $ 39,598 of lease 20 years or more $ - 5 years or more
Floating interest rate instrument Short-term loans Long-term loans Lease liabilities No interest-bearing liabilities Accounts payable Other payables
		$ 70,288 61,070 46,112 143,880 206,207 $ 527,557				$ - - 33,318 - - $ 33,318

Further information on the maturity analysis of lease liabilities is as follows:

Further information on the maturity analysis of lease liabilities is as follows:

Lease liabilities	Less than 1 year	Less than 1 year	1～5years $ 118,297	1～5years $ 118,297		5～10 years		10～15 years		15～20 years $ 5,026	20 years or more
		$ 46,112		$ 118,297		$ 22,009		$ 6,283			$ -

The above non-derivative financial assets and liabilities with floating rate instruments are subject to change because the floating rate differs from the interest rate estimated at the balance sheet date.

b. Financing Facilities

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December 31, 2021 December 31, 2020

Bank short-term loan facilities (renewable by mutual consent) - Amount drawn - Amount undrawn Bank long-term loan facilities - Amount drawn - Amount undrawn	$ 27,000 40,000 $ 67,000 $ 35,819 100,000 $ 135,819	$ 70,000 12,000 $ 82,000 $ 95,815 50,000 $ 145,815

1. Related party transactions

Except as disclosed in other notes, the transactions between the Company and its related parties are as follows.

• (1) Name of related party and the relationship

Name of related party Bafang Yunji Restaurant Co., Ltd. (Bafang Restaurant Company) Fang Sin International Trading Co., Ltd. (Fang Sin Company) Dante Coffee & Foods Co., Ltd. (Dante Company) Bafang Yunji International (USA) Limited Meide Eatery Taiyuan Eatery Chengde Eatery Wuhua Eatery Taimanhan Diner Taimanji Diner Yutingyuan Enterprise Su, Hsiao-Chi Lung, Chia-Hui New Taipei City Private Bafang Yunji Social Welfare Charitable Foundation (hereinafter referred to as Bafang Yunji Foundation)

Relationship with the Company Subsidiary

Subsidiary

Subsidiary

Subsidiary Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party

• (2) Operating revenue

Account Operating revenue	Type of relatedparty/Name Subsidiary Bafang Restaurant Company Fang Sin Company		2021 $ 567,074 1,071 568,145		2020
					$ 406,758 812 407,570

(Continued on next page)

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(Continued from previous page)

Account	Type of relatedparty/Name Substantive related party Others		2021 $ 40,083 $ 608,228		2020
					$ 26,107 $ 433,677

The Company's sales price and collection period to related parties are the same as those to regular customers.

(3) Purchases

Purchases
Type of relatedparty/Name Subsidiary Fang Sin Company Bafang Restaurant Company Dante Company		2021 $ 239,490 788 10 $ 240,288		2020
				$ 182,992 502 - $ 183,494

The Company's purchase price and payment period to related parties are the same as those to regular vendors

• (4) Manufacturing expenses and operating expenses

Account Manufacturing expenses Meal expenses, etc. Operating expenses Training expenses Advertising expenses Miscellaneous expense Others Miscellaneous expense Others Service expenses Donation	Type of related party/Name Subsidiary Bafang Restaurant Company Dante Company Subsidiary Bafang Restaurant Company Bafang Restaurant Company Bafang Restaurant Company Bafang Restaurant Company Fang Sin Company Dante Company Substantive related party Others Bafang Yunji Foundation		2021 $ 1,216 1 $ 1,217 $ 21,005 43,099 39,704 900 - 138 104,846 3,090 3,000 6,090 $ 110,936		2020
					$ 1,746 - $ 1,746 $ 13,693 51,045 28,507 1,142 61 - 94,448 1,330 3,000 4,330 $ 98,778

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(5) Receivable from related parties (excluding loans to related parties)

Account Accounts receivable Other receivables	Type of related party/Name Subsidiary Bafang Restaurant Company Fang Sin Company Substantive related party Others Subsidiary Bafang Restaurant Company Fang Sin Company Dante Company Bafang Yunji International (USA) Limited Substantive related party Others	December 31, 2021 $ 28,411 107 28,518 1,140 $ 29,658 $ 675 56 291 3,383 4,405 1 $ 4,406	December 31, 2020	December 31, 2020
				$ 31,734 107 31,841 1,077 $ 32,918 $ - 112 5 2,854 2,971 33 $ 3,004

The outstanding receivables due from related parties were not guaranteed. No impairment loss on receivables due from related parties was recognized in 2021 and 2020.

(6) Payable to related parties

Account Accounts payable Other payables	Type of related party/Name Subsidiary Bafang Restaurant Company Fang Sin Company Subsidiary Bafang Restaurant Company Dante Company Substantive related party Others	December 31, 2021 $ 29 3,072 $ 3,101 $ 10,676 6 10,682 260 $ 10,942	December 31, 2020	December 31, 2020
				$ 20 3,582 $ 3,602 $ 10,619 - 10,619 140 $ 10,759

The outstanding payables due to related parties were not guaranteed.

(7) Price for acquisition of property, plant and equipment

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Type of relatedparty/Name Subsidiary Bafang Restaurant Company		Acquisitionprice	Acquisitionprice	Acquisitionprice
		2021 $ -		2020
				$ 29

• (8) Disposal of property, plant and equipment

Type of related party/Name Subsidiary Bafang Restaurant Company		Disposalprice 2021 2020 $ - $ 28	Disposalprice 2021 2020 $ - $ 28		Loss on disposal	Loss on disposal	Loss on disposal
		2021			2021 $ -		2020
		$ -					$ -

• (9) Lease agreement - the Consolidated Company is lessee

Account Lease liabilities	Type of relatedparty Subsidiary Bafang Restaurant Company	December 31, 2021 $ 17,869	December 31, 2020	December 31, 2020
				$ 20,810

		2021
Type of related party Subsidiary Bafang Restaurant Company	Lease subject matter No. 153, Cihui 3rd Street, Zhongli City, Taoyuan County 2nd Floor, No. 205, Jieshou Village, Nangan Township, Lianjiang County 2nd and 3rd Floor, No. 355, Boai Street, Zhubei City, Hsinchu County 2F, No. 242, Wujia 2nd Road, Fengshan District, Kaohsiung City	Leaseperiod 2018.12.20~2023. 12.19 2018.10.1~2025.9. 30 2016.8.1~2021.7.3 1 2016.1.1~2030.12. 31	Rental determination Bargain " " "	Monthlyrental
				$ 50 57 20 118

		2020
Type of related party Subsidiary Bafang Restaurant Company	Lease subject matter No. 153, Cihui 3rd Street, Zhongli City, Taoyuan County 2nd Floor, No. 205, Jieshou Village, Nangan Township, Lianjiang County 2nd and 3rd Floor, No. 355, Boai Street, Zhubei City, Hsinchu County 2F, No. 242, Wujia 2nd Road, Fengshan District, Kaohsiung City	Leaseperiod 2018.12.20~2023. 12.19 2018.10.1~2025.9. 30 2016.8.1~2021.7.3 1 2016.1.1~2030.12. 31	Rental determination Bargain " " "	Monthlyrental
				$ 50 57 20 118

• 64 -

• (10) Lease agreement - the Consolidated Company is lessor

Operating lease

The Company leases its assets under operating leases. As of December 31, 2021 and 2020, the total amount of future lease payments to be received was $7,737 thousand and $8,677 thousand, respect ively. The lease income recognized in 2021 and 2020 were as follows:

Account Rental income	Type of relatedparty/Name Subsidiary Bafang Restaurant Company Fang Sin Company Dante Company Substantive related party Others		2021 $ 103 60 720 883 57 $ 940		2020
					$ 471 60 120 651 57 $ 708

• (11) Loans to related parties

Loans to related parties
Type of relatedparty Other receivables Subsidiary Fang Sin Company		2021 $ 25,000		2020
				$ 30,000

The Company's funds lent to subsidiaries are all unsecured loans with 0% interest rate.

• (12) Other income

Other income
Account Other income Other related Account Using the equity method Investments - cash dividends received	Type of relatedparty/Name Subsidiary Bafang Restaurant Company Fang Sin Company Dante Company Substantive related party Others party transactions Type of relatedparty Subsidiary Bafang Restaurant Company Fang Sin Company		2021 $ 784 84 71 8 $ 947 2021 $ 37,754 722 $ 38,476		2020
					$ 244 1,236 33 1 $ 1,514 2020
					$ 9,576 2,979 $ 12,555

• (13) Other related party transactions

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Account Using the equity method Investments - cash Capital increase	Type of relatedparty Subsidiary Fang Sin Company Bafang Yunji International (USA) Limited		2021 $ - - $ -		2020
					$ 30,000 74,114 $ 104,114

• (14) Remuneration to key management

Short-term employee benefits Retirement benefits Defined contribution plan Share-based payment Equity settlement		2021 $ 70,954 1,085 9,254 $ 81,293		2020
				$ 54,657 720 2,877 $ 58,254

Salary and remuneration to directors and other key management is determined by the Remuneration Committee based on individual performance and market trends.

32. Pledged assets

The following assets of the Company have been pledged as collaterals for loans from financial institutions, payments for Taipei Agricultural Products Marketing Corporation, and the issuance of gift certificates, with the book value of each account as follows:

Financial assets measured at amortized cost - current Bank time deposit Other financial assets - current Property, plant and equipment Land Building and construction Machinery equipment	December 31,2021 $ 374 8,363 230,500 149,335 - $ 388,572	December 31,2020	December 31,2020
			$ 372 - 230,500 154,551 46,690 $ 432,113

33. Significant Contingent Liabilities and Unrecognized Contract Commitments

In addition to those described in other notes, the Company had the following significant commitments and contingencies as of the balance sheet date.

• (1) As a result of the plant expansion plan approved by the Board of Directors in September 2021, the Company entered into contracts for

• 66 -

the construction and purchase of related plant and equipment for a total amount of $64,289 thousand as of December 31, 2021, and paid $5,637 thousand

• (2) Except for the plant expansion plan, the Company had the following unrecognized contractual commitments:

December 31, 2021 December 31, 2020 Purchase of property, plant and equipment $ 12,319 $ 63,350

1. Significant Subsequent Events : None.

2. Information on foreign currency assets and liabilities with significant effect

The following information is presented in foreign currencies other than the functional currency of the Company, and the exchange rates disclosed are the rates at which the foreign currencies were translated into the functional currency. Information on foreign currency assets and liabilities with significant effect as follows:

December 31, 2021

December 31, 2021
Foreign currency assets Monetary items CNY (RMB) USD Monetary items Subsidiary accounted for using the equity method USD JPY	Foreign currency (in thousands) $ 45 2,891 2,164 245,470	Exchange rate 4.344 (CNY: NTD) 27.68 (USD: NTD) 27.68 (USD: NTD) 0.2405 (JPY: NTD)	Carryingamount
				$ 195 80,009 $ 80,204 $ 59,896 59,035 $ 118,931

• 67 -

December 31, 2020

December 31, 2020
Foreign currency assets Monetary items CNY (RMB) USD EUR Monetary items Subsidiary accounted for using the equity method USD JPY	Foreign currency (in thousands) $ 45 16 134 14,880 249,388	Exchange rate 4.377 (CNY: NTD) 28.48 (USD: NTD) 35.02 (EUR: NTD) 28.48 (USD: NTD) 0.2763 (JPY: NTD)	Carryingamount
				$ 198 480 4,708 $ 5,386 $ 423,797 68,906 $ 492,703

The Company's realized and unrealized foreign currency exchange gain or loss for 2021 and 2020 were exchange loss of $548 thousand and $48 thousand, respectively.

36. Additional Disclosure

• (1) Information on Significant Transactions

• A. Financing provided to others. (Exhibit 1)

• B. Endorsements/guarantees to others. (None)

• C. Marketable securities held at the end of the period. (Note 2)

• D. Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital. (None)

• E. Acquisition of real estate amounting to NT$300 million or 20% of the paid-in capital. (None)

• F. Disposal of real estate amounting to NT$300 million or 20% of the paid-in capital. (None)

• G. Purchase or sale of goods from or to related parties amounting to NT100 million or 20% of the paid-in capital. (Exhibit 3)

• H. Receivables due from related parties amounting to NT$100 million or 20% of the paid-in capital. (None)

• I. Trading in derivative instruments. (Note 7)

• (2) Information on Investees (Exhibit 4)

• (3) Information on investment in Mainland China:

• 68 -

• A. The name of the investees in Mainland China, principal business, paid-in capital, investment methods, capital outward and inward remittances, shareholding percentage, profit or loss for the period and investment income and loss recognized, investment carrying amount at the end of the period, repatriated investment income and losses, and investment limit for Mainland China. (Exhibit 5)

• B. Significant transactions with Mainland China investees directly or indirectly through third regions, as well as their prices, payment terms, and unrealized profits or losses: (Exhibit 5)

  • a. The amount and percentage of purchases and the related ending balance and percentage of payables.

  • b. The amount and percentage of sales and the related ending balance and percentage of receivables.

  • c. The amount of property transactions and the amount of resulting gains or losses.

  • d. The ending balance of endorsement guarantee of notes or the provision of collateral and its purpose.

  • e. The maximum balance, ending balance, interest rate range and total current interest amount of financial accommodation (Exhibit 1)

  • f. Other transactions that have a significant effect on the current profit or loss or financial position, such as the provision or receipt of services.

• (4) Information on major shareholders: Name, number and percentage of shares held by shareholders with 5% or more of the shares. (Exhibit 6)

37. Segment information

The Company has made the required disclosures of operating segment financial information in the consolidated financial statements for 2021.

• 69 -

Bafang Yunji International Co., Ltd. Financing provided to others For the year ended December 31, 2021

Exhibit 1

Unit: In thousands of NT$/foreign currency

No. (Note 1)	Lender	Borrower	Financial statement account	Related party or not	Maximum amount for the period	Ended Balance	Actual amount drawn	Interest rate range	Nature of Financing (Note 2)	Amount of business transactions	Reasons for short-term financing	allowance for doubtful accounts	Collaterals	Collaterals	Financing limit for each borrower (Note 3)	Aggregate financing limit (Note 3)	Note
													Irem	Value
0 0 1 2	Bafang Yunji International Co., Ltd. Bafang Yunji International Co., Ltd. Bafang Yunji International Company Limited Fujian Bafang Yunji Foods Co., Ltd.	Fang Sin International Trading Co., Ltd. Dante Coffee & Foods Co., Ltd. Bafang Yunji Foods (Shenzhen) Co., Ltd. Fujian Bafang YunjiI Restaurant & Management Co., Ltd.	Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties	Yes Yes Yes Yes	$ 60,000 50,000 4,223 HKD 1,150,752 6,725 RMB 1,540,722	$ 30,000 50,000 - 3,976 RMB 915,918	$ 25,000 - - 3,976 RMB 915,918	0% 1.165% 0% 0%	the need for short-term financing the need for short-term financing the need for short-term financing the need for short-term financing	$ - - - -	Operating turnover Operating turnover Operating turnover Operating turnover	$ - - - -	－ － － －	$ - - - -	$ 598,472 598,472 151,141 17,965	$ 598,472 598,472 151,141 17,965

• Note 1: The number column is filled out as follows:

• (1) Fill in 0 for the issuer.

• (2) Each invested company is numbered in sequential order starting from 1.

• Note 2: For nature of funds lending, fill in if it is for business transaction or there is a need for short -term financial accommodation

• Note 3: The limit of funds lent to individual recipients is $2,992,362 thousand * 20% of the net worth of the company that lends fund s (Bafang Yunji International Co., Ltd.) = $598,472 thousand; the total limit of funds lent is $2,992,362 thousand * 20% of the net worth of the company that lends fu nds (Bafang Yunji International Co., Ltd.) = $598,472 thousand.

The limit of funds lent to individual recipients is $377,852 thou sand * 40% of the net worth of the company that lends funds ( Bafang Yunji International Company Limited) = $151,141 thousand; the total limit of funds lent is $377,852 thousand * 40% of the net worth of the company that lends funds ( Bafang Yunji International Company Limited) = $151,141 thousand.

The limit of funds lent to individual recipients is $44,913 thousand * 40% of the net worth of the company that lends funds ( Fujian Bafang Yunji Foods Co., Ltd.) = $17,965 thousand; the total limit of funds lending is $44,913 thousand * 40% of the net worth of the company that lends funds ( Fujian Bafang Yunji Foods Co., Ltd.) = $17,965 thousand.

• 70 -

Bafang Yunji International Co., Ltd. Marketable securities held at the end of the period December 31, 2021

Exhibit 2

Unit: In thousands of NT$, unless otherwise specified

Holding company name	Type and name of marketable securities	Relationship with the issuers of the marketable securities	Financial statement Account		End of theperiod	End of theperiod	End of theperiod			Note
				Number of shares	Carrying amount		Shareholding percentage		Fair value
Bafang Yunji International Co., Ltd. Fang Sin International Trading Co., Ltd.	Structured deposits President DSU USD 100% Capital Protected Structured Instrument President DSU NTD 100% Capital Protected Structured Instrument Bonds with repurchase agreement Reliance Industries India Formosa Chemicals And Fibre Corporation EVA Air Highwealth Construction Corp. Formosa Plastics SUPCON Group Chinese Petroleum Corporation Nan Ya Plastics Corporation Fubon Financial Holding HSBC Bank Taipower Cathay Financial Holding Stocks of domestic non-listed companies Fresh Information Co., Ltd.	- - - - - - - - - - - - - - -	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Financial assets at fair value through other comprehensive income - non-current	- - - - - - - - - - - - - - 150,000		$ 44,297 50,005 $ 94,302 $ 27,680 60,000 32,000 6,000 20,000 14,000 17,000 14,600 15,400 14,400 24,100 12,500 $ 257,680 $ 3,750	- - - - - - - - - - - - - - - - 3.7%		$ 44,297 50,005 $ 94,302 $ 27,680 60,000 32,000 6,000 20,000 14,000 17,000 14,600 15,400 14,400 24,100 12,500 $ 257,680 $ 3,750

Note: For information on investment in subsidiaries, affiliates and joint venture interests, please refer to Exhibits 4 and 5 .

• 71 -

Bafang Yunji International Co., Ltd.

Purchase or sale of goods from or to related parties amounting to NT1 00 million or 20% of the paid-in capital For the year ended December 31, 2021

Unit: In thousands of NT$, unless otherwise specified

Exhibit 3							Unit: In thousands of NT$, unless otherwise specified
Purchaser/Seller	Counterparty	Relationship		Transaction			Difference in transaction terms compared to thirdpartytransactions		Notes and accounts receivable (payable)		Note
			purchases (sales)	Amount	percentage of total purchases (sales)	Credit period	Unit price	Credit period	Balance	percentage of total notes and accounts receivable (payable)
Bafang Yunji International Co., Ltd. Bafang Yunji International Co., Ltd.	Bafang Yunji Restaurant Co., Ltd. Fang Sin International Trading Co., Ltd.	subsidiary subsidiary	Sales Purchases	$ 567,074 239,490	14.12% 10.20%	Semi-monthly settlement Semi-monthly settlement	Same transaction price as with regular customers Same transaction price as with regular vendors	Same credit term as with regular customers Same payment terms as with regular vendors	$ 28,411 ( 3,072 )	28.48% 1.85%	Note 1 Note 1

Note 1: The above transactions have been eliminated in the consolidated financial statements.

• 72 -

Bafang Yunji International Co., Ltd . Information on investees, loca tions, etc For the year ended December 31, 2021

Exhibit 4									Unit: In thousands of NT$, unless otherwise specified Profit or loss of investee for the period Investment income or loss recognized in the period Note $ 75,305 USD 2,688,599 $ 75,305 USD 2,688,599 Note 1 27,198 27,198 Note 1 2,825 2,825 Note 1 ( 1,001 ) ( JPY 3,918,386 ) ( 1,001 ) ( JPY 3,918,386 ) Note 1 ( 9,281 ) ( USD 331,353 ) ( 9,281 ) ( USD 331,353 ) Note 1 ( 43,836 ) ( 34,140 ) Note 1 ( 9,000 ) ( USD 321,335 ) ( 9,000 ) ( USD 321,335 ) Note 1 - - Note 1 87,151 HKD 24,188,367 87,151 HKD 24,188,367 Note 1 ( 1,764 ) ( RMB 406,295 ) ( 1,764 ) ( RMB 406,295 ) Notes 1, 2 ( 2,779 ) ( RMB 640,089 ) ( 2,779 ) ( RMB 640,089 ) Notes 1, 2 ( 298 ) ( RMB 68,566 ) ( 298 ) ( RMB 68,566 ) Notes 1, 2 ( 1 ) (RMB 196 ) ( 1 ) (RMB 196 ) Notes 1, 2 139 RMB 31,993 139 RMB 31,993 Notes 1, 2 10,765 HKD 2,987,761 10,765 HKD 2,987,761 Note 1 13,564 HKD 3,764,516 13,564 HKD 3,764,516 Note 1 612 HKD 169,935 612 HKD 169,935 Note 1 ( 43 ) ( HKD 11,956 ) ( 43 ) ( HKD 11,956 ) Note 1 - - Note 1 - - Notes 1, 2 ( 8,626 ) ( USD 308,020 ) ( 5,176 ) ( USD 184,812 ) Note 1 ( 6,617 ) ( USD 236,245 ) ( 3,970 ) ( USD 141,747 ) Note 1 ( 211 ) ( 211 ) Note 1 491 USD 17,536 349 USD 12,451 Note 1 ( 99 ) ( 99 ) Note 1 491 RMB 113,131 491 RMB 113,131 Notes 1, 2	Unit: In thousands of NT$, unless otherwise specified Profit or loss of investee for the period Investment income or loss recognized in the period Note $ 75,305 USD 2,688,599 $ 75,305 USD 2,688,599 Note 1 27,198 27,198 Note 1 2,825 2,825 Note 1 ( 1,001 ) ( JPY 3,918,386 ) ( 1,001 ) ( JPY 3,918,386 ) Note 1 ( 9,281 ) ( USD 331,353 ) ( 9,281 ) ( USD 331,353 ) Note 1 ( 43,836 ) ( 34,140 ) Note 1 ( 9,000 ) ( USD 321,335 ) ( 9,000 ) ( USD 321,335 ) Note 1 - - Note 1 87,151 HKD 24,188,367 87,151 HKD 24,188,367 Note 1 ( 1,764 ) ( RMB 406,295 ) ( 1,764 ) ( RMB 406,295 ) Notes 1, 2 ( 2,779 ) ( RMB 640,089 ) ( 2,779 ) ( RMB 640,089 ) Notes 1, 2 ( 298 ) ( RMB 68,566 ) ( 298 ) ( RMB 68,566 ) Notes 1, 2 ( 1 ) (RMB 196 ) ( 1 ) (RMB 196 ) Notes 1, 2 139 RMB 31,993 139 RMB 31,993 Notes 1, 2 10,765 HKD 2,987,761 10,765 HKD 2,987,761 Note 1 13,564 HKD 3,764,516 13,564 HKD 3,764,516 Note 1 612 HKD 169,935 612 HKD 169,935 Note 1 ( 43 ) ( HKD 11,956 ) ( 43 ) ( HKD 11,956 ) Note 1 - - Note 1 - - Notes 1, 2 ( 8,626 ) ( USD 308,020 ) ( 5,176 ) ( USD 184,812 ) Note 1 ( 6,617 ) ( USD 236,245 ) ( 3,970 ) ( USD 141,747 ) Note 1 ( 211 ) ( 211 ) Note 1 491 USD 17,536 349 USD 12,451 Note 1 ( 99 ) ( 99 ) Note 1 491 RMB 113,131 491 RMB 113,131 Notes 1, 2	Unit: In thousands of NT$, unless otherwise specified Profit or loss of investee for the period Investment income or loss recognized in the period Note $ 75,305 USD 2,688,599 $ 75,305 USD 2,688,599 Note 1 27,198 27,198 Note 1 2,825 2,825 Note 1 ( 1,001 ) ( JPY 3,918,386 ) ( 1,001 ) ( JPY 3,918,386 ) Note 1 ( 9,281 ) ( USD 331,353 ) ( 9,281 ) ( USD 331,353 ) Note 1 ( 43,836 ) ( 34,140 ) Note 1 ( 9,000 ) ( USD 321,335 ) ( 9,000 ) ( USD 321,335 ) Note 1 - - Note 1 87,151 HKD 24,188,367 87,151 HKD 24,188,367 Note 1 ( 1,764 ) ( RMB 406,295 ) ( 1,764 ) ( RMB 406,295 ) Notes 1, 2 ( 2,779 ) ( RMB 640,089 ) ( 2,779 ) ( RMB 640,089 ) Notes 1, 2 ( 298 ) ( RMB 68,566 ) ( 298 ) ( RMB 68,566 ) Notes 1, 2 ( 1 ) (RMB 196 ) ( 1 ) (RMB 196 ) Notes 1, 2 139 RMB 31,993 139 RMB 31,993 Notes 1, 2 10,765 HKD 2,987,761 10,765 HKD 2,987,761 Note 1 13,564 HKD 3,764,516 13,564 HKD 3,764,516 Note 1 612 HKD 169,935 612 HKD 169,935 Note 1 ( 43 ) ( HKD 11,956 ) ( 43 ) ( HKD 11,956 ) Note 1 - - Note 1 - - Notes 1, 2 ( 8,626 ) ( USD 308,020 ) ( 5,176 ) ( USD 184,812 ) Note 1 ( 6,617 ) ( USD 236,245 ) ( 3,970 ) ( USD 141,747 ) Note 1 ( 211 ) ( 211 ) Note 1 491 USD 17,536 349 USD 12,451 Note 1 ( 99 ) ( 99 ) Note 1 491 RMB 113,131 491 RMB 113,131 Notes 1, 2
Name of investor	Name of investee	Location	Principal business	Original investment amount		Holdingat the end of theperiod			Profit or loss of investee for the period	Investment income or loss recognized in the period	Note
				End of the period	End of last year	Number of shares	Ratio	Carrying amount
Bafang Yunji International Co., Ltd. Bafang Yunji (Samoa) International Co., Ltd. Bafang Yunji Restaurant Group Limited Bafang Yunji International Company Limited Jiashide Limited Bafang Yunji International (USA) Limited Dante Coffee & Foods Co., Ltd. Sound Sino Group Limited	Bafang Yunji (Samoa) International Co., Ltd. Bafang Yunji Restaurant Co., Ltd. Fang Sin International Trading Co., Ltd. Bafang Co., Ltd. Bafang Yunji International (USA) Limited Dante Coffee & Foods Co., Ltd. Bafang Yunji Restaurant Group Limited Bafang Yunji (Samoa) Investment Company Limited Bafang Yunji International Company Limited Fujian Bafang Yunji Foods Co., Ltd. Fujian Bafang YunjiI Restaurant & Management Co., Ltd. Zhejiang Fuyu Restaurant & Management Co., Ltd. Xiamen Fuyu Bafang Equity Investment Co., Ltd. Bafang Yunji Foods (Shenzhen) Co., Ltd. Hsin Chiao International Co. Limited Long Success (HK) Industrial Limited Rich Grade Limited Wise Success Enterprise Limited Jiashide Limited Heng Yue Feng Trading (Shenzhen) Co., Ltd. Bafang Yunji Foods LLC Bafang Yunji Restaurant Group LLC Shichang Interior Design Co., Ltd Sound Sino Group Limited Dante Creative CO., LTD. Shanghai Dante Coffee Co., Ltd	Samoa Taiwan Taiwan Japan United States Taiwan Hong Kong Samoa Hong Kong Mainland China Mainland China Mainland China Mainland China Mainland China Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Mainland China United States United States Taiwan Samoa Taiwan Mainland China	Investment management Food and beverage services Food trading Food processing and food and beverage services Investment management Food and beverage services Investment management Investment management Food processing and food and beverage services Food processing Food and beverage services Food and beverage services Investment management Food processing Transportation Food and beverage services Food and beverage services Transportation Investment management Food trading Food processing Food and beverage services Interior design Investment management Food processing Food and beverage services	$ 522,568 USD 16,691,980 150,727 40,000 81,621 JPY 300,000,000 74,114 USD 2,500,000 86,920 408,301 USD 13,290,438 - 140,000 USD 4,280,035 105,941 USD 3,500,000 113,129 USD 3,700,000 - - - - HKD 1 - HKD 1 - HKD 1 - HKD 1 6,891 RMB 1,500,000 6,891 RMB 1,500,000 35,575 USD 1,200,000 26,681 USD 900,000 - 23,034 USD 710,000 30,000 43,797 USD 1,350,000	$ 522,568 USD 16,691,980 150,727 40,000 81,621 JPY 300,000,000 74,114 USD 2,500,000 65,704 408,301 USD 13,290,438 - 140,000 USD 4,280,035 105,941 USD 3,500,000 113,129 USD 3,700,000 92,305 USD 3,000,000 63,878 RMB 13,700,000 27,062 HKD 7,000,000 - HKD 1 - HKD 1 - HKD 1 - HKD 1 6,891 RMB 1,500,000 6,891 RMB 1,500,000 35,575 USD 1,200,000 26,681 USD 900,000 1,000 23,034 USD 710,000 - 43,797 USD 1,350,000	16,691,980 15,000,000 4,000,000 30,000 500 8,120,000 5,250,000 - 17,500,000 - - - - - 1 1 1 1 10,000 - - - - 710,000 3,000,000 -	100 100 100 100 100 85.29 100 100 100 100 100 - - - 100 100 100 100 100 100 60 60 - 71 100 100	$ 420,472 USD 15,190,475 192,468 43,960 59,035 JPY 245,469,985 59,896 USD 2,163,863 44,305 42,310 USD 1,528,528 - 377,852 HKD 106,467,444 44,913 RMB 10,345,118 ( 14,389 ) ( RMB 3,314,278 ) - - - 12,850 HKD 3,620,686 50,259 HKD 14,161,554 9,046 HKD 2,548,879 685 HKD 193,133 - - 27,997 USD 1,011,462 20,959 USD 757,195 - ( 267 ) ( USD 9,653 ) 29,901 67 RMB 15,434	$ 75,305 USD 2,688,599 27,198 2,825 ( 1,001 ) ( JPY 3,918,386 ) ( 9,281 ) ( USD 331,353 ) ( 43,836 ) ( 9,000 ) ( USD 321,335 ) - 87,151 HKD 24,188,367 ( 1,764 ) ( RMB 406,295 ) ( 2,779 ) ( RMB 640,089 ) ( 298 ) ( RMB 68,566 ) ( 1 ) (RMB 196 ) 139 RMB 31,993 10,765 HKD 2,987,761 13,564 HKD 3,764,516 612 HKD 169,935 ( 43 ) ( HKD 11,956 ) - - ( 8,626 ) ( USD 308,020 ) ( 6,617 ) ( USD 236,245 ) ( 211 ) 491 USD 17,536 ( 99 ) 491 RMB 113,131	$ 75,305 USD 2,688,599 27,198 2,825 ( 1,001 ) ( JPY 3,918,386 ) ( 9,281 ) ( USD 331,353 ) ( 34,140 ) ( 9,000 ) ( USD 321,335 ) - 87,151 HKD 24,188,367 ( 1,764 ) ( RMB 406,295 ) ( 2,779 ) ( RMB 640,089 ) ( 298 ) ( RMB 68,566 ) ( 1 ) (RMB 196 ) 139 RMB 31,993 10,765 HKD 2,987,761 13,564 HKD 3,764,516 612 HKD 169,935 ( 43 ) ( HKD 11,956 ) - - ( 5,176 ) ( USD 184,812 ) ( 3,970 ) ( USD 141,747 ) ( 211 ) 349 USD 12,451 ( 99 ) 491 RMB 113,131	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Notes 1, 2 Notes 1, 2 Notes 1, 2 Notes 1, 2 Notes 1, 2 Note 1 Note 1 Note 1 Note 1 Note 1 Notes 1, 2 Note 1 Note 1 Note 1 Note 1 Note 1 Notes 1, 2

Note 1: The above investment income or loss of the investee for 2021 was recognized base d on the investee's financial statements for the same period audited by CPAs. Note 2: Please refer to Exhibit 5 for the information on investees in Mainland China.

• 73 -

Unit: In thousands of NT$, unless otherwise specified

Bafang Yunji International Co., Ltd. Information on investment in Mainland China For the year ended December 31, 2021

Exhibit 5

1. The name of the investees in Mainland China, main business, paid -in capital, investment methods, capital outward and inward remittances, shareholding, investme nt income and losses, investment book value, rep atriated investment income and loss.

Name of investee in Mainland China	Main business	Paid-in capital	Investment method (Note 1)	Accumulated investment amount remitted from Taiwan at the beginning of the period	Amount of investment remitted or recovered duringtheperiod	Amount of investment remitted or recovered duringtheperiod	Accumulated investment amount remitted from Taiwan at the end of the period	Profit or loss of investee for the period	Shareholdi ng percentage of the Company's direct or indirect investment	Investment income or loss recognized in the period	Carrying amount of investments at the end of the period	Investment income remitted back as of the end of the period	Note
					Remittance	Recovery
Fujian Bafang Yunji Foods Co., Ltd. Fujian Bafang YunjiI Restaurant & Management Co., Ltd. Zhejiang Fuyu Restaurant & Management Co., Ltd. Xiamen Fuyu Bafang Equity Investment Co., Ltd. Bafang Yunji Foods (Shenzhen) Co., Ltd. Heng Yue Feng Trading (Shenzhen) Co., Ltd. Shanghai Dante Coffee Co., Ltd.	Food processing Food and beverage services Food and beverage services Investment management Food processing Food trading Food and beverage services	$ 105,941 113,129 92,305 63,878 27,062 6,891 43,797	(2) (2) (2) (2) (2) (2) (2)	$ 105,941 USD 3,500,000 113,129 USD 3,700,000 92,305 USD 3,000,000 63,878 RMB 13,700,000 27,062 HKD 7,000,000 6,891 RMB 1,500,000 31,096 USD 958,500	$ - - - - - - -	$ - - - - - - -	$ 105,941 USD 3,500,000 113,129 USD 3,700,000 - - - 6,891 RMB 1,500,000 31,096 USD 958,500	( $ 1,764 ) ( RMB 406,295 ) ( 2,779 ) ( RMB 640,089 ) ( 298 ) ( RMB 68,566 ) ( 1 ) (RMB 196 ) 139 RMB 31,993 - 491 RMB 113,131	100 100 - - - 100 71	( $ 1,764 ) ( RMB 406,295 ) ( 2,779 ) ( RMB 640,089 ) ( 298 ) ( RMB 68,566 ) ( 1 ) (RMB 196 ) 139 RMB 31,993 - 349 RMB 80,323	$ 44,913 RMB 10,345,118 ( 14,389 ) ( RMB 3,314,278 ) - - - - 48 RMB 10,958	$ - - - - - - -

1. Investment q uota for Mainland China.

Investmentquota for Mainland China.
Accumulated amount of investment from Taiwan to mainland China at the end of theperiod	Amount of investment approved by the Investment Commission,MOEA	Investment quota for mainland China as stipulated by the Investment Commission,MOEA
$ 502,428 (USD 16,341,534)	$ 502,428 (USD 16,341,534)	$ 1,819,519

• Note 1: The investment methods can be divided into the following three types, and just indicat e as such.

• (1) Invest in mainland China directly.

• (2) Invest in Mainland China through companies in third regions. (Please specify the investment company of the third region).

• (3) Other methods

• Note 2: In the column of investment income or loss recognized in the current period.

• (1) If the investment is under preparation and there is no investment income or loss, it should be noted.

• (2) The basis for recognizing investment income or losses is divided into the following three categories, which should be speci fied.

A. The financial statements have been audited by an international CPA firm with which CPA firms in the ROC. has a cooperative re lationship.

B. The financial statements have been audited by the attesting CPA of the parent company in Taiwan.

• C. Others

• Note 3: In accordance with the "Regulations Governing the Examination of Investment or Technical Cooperation in Mainland China" of th e Investment Commission dated 2008.8.29, the higher of 60% of the net worth of the investor company or the consolidated net worth shall be the limit.

Note 4: Including the deregistration of Zhejiang Fuyu Foods Co., Ltd. in July 2020, Xiamen Fuyu Bafang Equity Investment Co., Ltd. in February 2021, and Zhejiang Fuyu Foods Co., Ltd. and Zhejiang Fuyu Restaurant & Management Co., Ltd. in March 2021, the accumulated investment amount of $253,433 thousand remitted from Taiwan was not repatriated back.

1. Significant transactions with investees in Mainland China directly or indirectly through third -region businesses: None.

2. Endorsement, guarantee or provision of collaterals provided to investees in Mainland China directly or indirectly through third -region businesses: None.

3. For financial accommodation provided to investees in Mainland China directly or indirectly through third -region businesses, please see Exhibit 1 for details of the relevant circumstances.

4. Other transactions that have a significant effect on the current profit or loss or financial position: None.

5. 74 -

Bafang Yunji International Co., Ltd. Information on major shareholders December 31, 2021

Exhibit 6

Name of major shareholders	Shares	Shares
	Shareholding	Shareholding percentage
Fu Yu Investment Co., Ltd. Lin, Chia-Yu Su, Shu-Hsin Dedicated account for the investment in Adept Capital Holdings Limited entrusted to Cathay United Bank for custody	9,304,966 5,095,963 4,031,784 3,323,000	14.08% 7.71% 6.10% 5.03%

• Note 1: The information on major shareholders in this Exhibit is compiled by Taiwan Depository & Clearing Corporation based on the last business day of the quarter in which the shareholders held 5% or more of the Company's common shares and preferred shares whose registration and delivery have been completed in non-physical form (including treasury shares). The number of shares recorded in the Company's consolidated financial statements and the actual number of shares registered and delivered in non-physical form may differ depending on the basis of preparation of the calculations.

• Note 2: If a shareholder delivers his or her shares to a trust, the above information shall be disclosed by the individual trustor account opened by the trustee. As for the shareholder’s declaration of insider’s equity in accordance with the Securities and Exchange Act, the shareholding of the shareholder includes his or her own shares plus the shares that he or she has delivered to a trust and has the right to decide the use of the trust property, etc. Please refer to the Market Observation Post System for information on insider's equity declaration.

• 75 -

§Table of Contents for Schedule of Significant Accounting Items§

Item Schedule of assets, liabilities and equity items Schedule of cash and cash equivalents Schedule of changes in financial assets at fair value through profit or loss - current Schedule of financial assets measured at amortized cost - current Schedule of accounts receivable Schedule of inventories Schedule of prepayments Schedule of other current assets Schedule of investments accounted for using the equity method Schedule of changes in property, plant and equipment Schedule of changes in right-of-use assets Schedule of changes in accumulated depreciation of right-of-use assets Schedule of changes in intangible assets Schedule of other non-current assets Notes payable Schedule of accounts payable Schedule of other payables Schedule of other current liabilities Schedule of lease liabilities Schedule of deferred income tax liabilities Schedule of profit or loss items Schedule of operating revenue Schedule of operating costs Schedule of operating expenses Schedule of employee benefits, depreciation and amortization expenses incurred in the period summarized by function Schedule of other income and expenses

Number/Index

Schedule 1 Schedule 2 Schedule 3 Schedule 4 Schedule 5 Note 15 Schedule 6 Schedule 7 Note 12 Schedule 8 Schedule 9 Note 14 Schedule 10 Schedule 11 Schedule 12 Schedule 13 Schedule 14 Schedule 15 Note 24 Schedule 16 Schedule 17 Schedule 18 Schedule 20 Schedule 19

• 76 -

Bafang Yunji International Co., Ltd. Schedule of cash and cash equivalents December 31, 2021

Unit: In thousands of NT$

	December 31, 2021
Schedule 1 Item Cash on hand Checking deposits Demand deposits Foreign currency deposits Cash equivalents Bonds with repurchase agreement Time deposit	Unit: In Summary Bank A Bank A Bank B Bank C Others Bank A (including USD 139,000@27.68, etc.) Bank B (including USD 1,034,000@27.68, etc.) Others Bank C	thousands of NT$ Amount
			$ 518 1,000 121,682 43,838 132,512 501 3,852 28,622 474 257,680 200,000 $ 790,679

• 77 -

Bafang Yunji International Co., Ltd.

Schedule of changes in financial assets at fair value through profit or loss - current For the year ended December 31, 2021

Unit: In thousands of NT$, unless otherwise specified

Schedule 2 Name of financial instruments President DSU USD 100% Capital Protected Structured Instrument President DSU NTD 100% Capital Protected Structured Instrument	Beginningof theperiod Number of shares or board lots Fair value - $ - - - $ -		Increase in	theperiod Amount $ 88,924 50,000 $ 138,924	Decrease in theperiod Number of shares or board lots Amount - ( $ 44,556 ) - - ($ 44,556)	Unit: In thousands of NT$, unless otherwise specified End of theperiod Provision of guarantee or pledge Valuation amount Number of shares or board lots Fair value Remarks ( $ 71 ) - $ 44,297 None 5 - 50,005 None ($ 66) $ 94,302
	Number of shares or board lots - -		Number of shares or board lots - -		Number of shares or board lots - -

• 78 -

Bafang Yunji International Co., Ltd. Schedule of financial assets measured at amortized cost - current December 31, 2021

			December	31, 2021
Schedule 3 Name Bank time deposit with Taipei Fubon Bank Bank time deposit with Welcome To Sunny Bank Pledged time deposits with Hua Nan Commercial Bank	Number of board lots - - -	Par value - - -	Total amount $ 300,000 100,000 374 $ 400,374	Interest rate 0.33% 0.59% 0.41%	Carrying amount $ 300,000 100,000 374 $ 400,374	Unit: In thousands of NT$ Accumulated impairment Remarks $ - － - － - Please refer to Note 32 for pledges. $ -

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Bafang Yunji International Co., Ltd. Schedule of accounts receivable December 31, 2021

Unit: In thousands of NT$

Schedule 4 Customer name Franchisee accounts receivable Less: Allowance for losses Subtotal Accounts receivable - related parties Total	Unit: In thousands of NT$ Summary Amount Food ingredients receivable $ 70,565 ( 477) 70,088 Food ingredients receivable 29,658 $ 99,746
		(	$ 70,565 477) 70,088 29,658 $ 99,746

Note: The balance of each customer does not exceed 5% of the balance of this account.

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Bafang Yunji International Co., Ltd. Schedule of inventories December 31, 2021

Schedule 5 Item Raw materials Semi-finished products Finished products Merchandise Less: Allowance for loss on decline in value and obsolescence of inventories	Summary Meat, other food ingredients, etc. Defrosted meat, etc. Stuffing, marinated meat, etc. Store supplies, etc.	Unit: In thousands of NT$ Book value Marketprice $ 134,263 $ 131,077 9,956 10,216 15,200 21,179 17,579 21,031 ( 8,572) - $ 168,426 $ 183,503
		(

Note: Market price is calculated based on net realizable value.

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Bafang Yunji International Co., Ltd. Schedule of other current assets December 31, 2021

Schedule 6 Item Other financial assets (1) Temporary payments Payments for others	Unit: In thousands of NT$ Summary Amount Restricted bank demand deposits $ 8,363 252 59 $ 8,674	Unit: In thousands of NT$ Summary Amount Restricted bank demand deposits $ 8,363 252 59 $ 8,674	Unit: In thousands of NT$ Summary Amount Restricted bank demand deposits $ 8,363 252 59 $ 8,674
			$ 8,363 252 59 $ 8,674

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Bafang Yunji International Co., Ltd.

Schedule of changes in long-term equity investments accounted for usi ng the equity method For the year ended December 31, 2021

Schedule 7

Unit: In thousands of NT$

Non-listed companies valued using the equity method (Note 1) Bafang Yunji Restaurant Co., Ltd. Bafang Yunji (Samoa) International Co.,LTD. Fang Sin International Trading Co., Ltd. Bafang Co., Ltd. Bafang Yunji International (USA) Limited Dante Coffee & Foods Co., Ltd.	Amount at the beginning of the period Number of shares Amount 15,000,000 $ 203,024 16,691,980 352,733 4,000,000 41,857 30,000 68,906 500 71,064 6,570,400 66,101 $ 803,685	Amount at the beginning of the period Number of shares Amount 15,000,000 $ 203,024 16,691,980 352,733 4,000,000 41,857 30,000 68,906 500 71,064 6,570,400 66,101 $ 803,685	Increase in theperiod(Note 4) Number of shares Amount - $ - - - - - - - - - 1,549,600 12,335 $ 12,335	Increase in theperiod(Note 4) Number of shares Amount - $ - - - - - - - - - 1,549,600 12,335 $ 12,335	Decrease in theperiod(Note 3) Number of shares Amount - ( $ 37,754 ) - - - ( 722 ) - - - - - - ($ 38,476)	Investment income(loss) $ 27,198 75,305 2,825 ( 1,001 ) ( 9,281 ) ( 34,140) $ 60,906	Cumulative translation adjustments $ - ( 7,566 ) - ( 8,870 ) ( 1,887 ) 9 ($ 18,314)	Balance at the end of theperiod Number of shares Shareholding % Amount 15,000,000 100 $ 192,468 16,691,980 100 420,472 4,000,000 100 43,960 30,000 100 59,035 500 100 59,896 8,120,000 85.29 44,305 $ 820,136	Balance at the end of theperiod Number of shares Shareholding % Amount 15,000,000 100 $ 192,468 16,691,980 100 420,472 4,000,000 100 43,960 30,000 100 59,035 500 100 59,896 8,120,000 85.29 44,305 $ 820,136	Balance at the end of theperiod Number of shares Shareholding % Amount 15,000,000 100 $ 192,468 16,691,980 100 420,472 4,000,000 100 43,960 30,000 100 59,035 500 100 59,896 8,120,000 85.29 44,305 $ 820,136	Market price or equity net worth (Note 2) Unit price (NT$) Totalprice 12.83 $ 192,468 25.19 420,472 10.99 43,960 1,967.83 59,035 119,792 59,896 5.46 44,305 $ 820,136	Market price or equity net worth (Note 2) Unit price (NT$) Totalprice 12.83 $ 192,468 25.19 420,472 10.99 43,960 1,967.83 59,035 119,792 59,896 5.46 44,305 $ 820,136	Valuation basis Equity method Equity method Equity method Equity method Equity method Equity method	Provision of guarantee or pledge
	Number of shares 15,000,000 16,691,980 4,000,000 30,000 500 6,570,400		Number of shares - - - - - 1,549,600		Number of shares - - - - - -			Number of shares 15,000,000 16,691,980 4,000,000 30,000 500 8,120,000	Shareholding % 100 100 100 100 100 85.29		Unit price (NT$) 12.83 25.19 10.99 1,967.83 119,792 5.46
														None None None None None None

Note 1: The calculation is based on the financial statements audited by CPAs for the same period. Note 2: The calculation of equity net worth is based on the investee's financial statements and the Company's shareholding percentage Note 3: Details of the decrease for the period are as follows :

Note 3: Details of the decrease for the period are as follows :
Item Receipt of cash dividends from subsidiaries Note 4: Details of the decrease for the period are as follows: Item Actual acquisition price of equity in Dante Coffee & Foods Co., Ltd. Capital surplus - difference between the acquisition price and book value of equity in Dante Coffee & Foods Co., Ltd. Undistributed earnings - difference between the acquisition price and book value of equity in Dante Coffee & Foods Co., Ltd.			Amount
		(	$ 38,476) Amount
	( (	$ 21,216 2,925 ) 5,956) $ 12,335

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Bafang Yunji International Co., Ltd. Schedule of changes in right-of-use assets For the year ended December 31, 2021

Schedule 8

Unit: In thousands of NT$

Item Land Building Transportation equipment	Balance at the beginning of theperiod $ 36,536 87,913 143,775 $ 268,224		Increase in the period $ 24,515 8,054 58,522 $ 91,091	Decrease in the period $ - ( 7,135 ) ( 8,019) ($ 15,154)	Balance at the end of the period	Balance at the end of the period
						$ 61,051 88,832 194,278 $ 344,161

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Bafang Yunji International Co., Ltd. Schedule of changes in accumulated depreciation of right-of-use assets For the year ended December 31, 2021

Schedule 9

Unit: In thousands of NT$

Item Land Building Transportation equipment	Balance at the beginning of theperiod $ 457 22,084 38,760 $ 61,301		Increase in the period $ 2,408 13,202 38,428 $ 54,038	Decrease in the period $ - ( 7,135 ) ( 8,019) ($ 15,154)	Balance at the end of the period	Balance at the end of the period
						$ 2,865 28,151 69,169 $ 100,185

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Bafang Yunji International Co., Ltd. Schedule of other non-current assets December 31, 2021

	December 31, 2021
Schedule 10 Item Prepayments for equipment Refundable deposits	Unit: In Summary Payment for plant and equipment Lease deposits, etc.	thousands of NT$ Amount $ 39,690 42,856 $ 82,546

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Bafang Yunji International Co., Ltd. Schedule of notes payable December 31, 2021

Schedule 11 Customer name Shung Ye	Summary Deposits		Unit: In thousands of NT$ Amount Remarks $ 1,000 －	Unit: In thousands of NT$ Amount Remarks $ 1,000 －
				－

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Bafang Yunji International Co., Ltd. Schedule of accounts payable December 31, 2021

Schedule 12 Vendor name New Cheng Master Channels Corporation Others (Note) Related party	Unit: In thousands of NT$ Summary Amount Payment for goods $ 8,260 〃 15,636 〃 138,492 3,101 $ 165,489	Unit: In thousands of NT$ Summary Amount Payment for goods $ 8,260 〃 15,636 〃 138,492 3,101 $ 165,489	Unit: In thousands of NT$ Summary Amount Payment for goods $ 8,260 〃 15,636 〃 138,492 3,101 $ 165,489
			$ 8,260 15,636 138,492 3,101 $ 165,489

Note: The balance of each vendor does not exceed 5% of the balance of this account.

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Bafang Yunji International Co., Ltd. Schedule of other payables December 31, 2021

Unit: In thousands of NT$

	December 31, 2021	December 31, 2021	December 31, 2021
Schedule 13 Item Other payables Related party	Unit: In thousands of NT$ Summary Amount Dividends payable $ 150,112 Salaries payable and bonus 110,432 Remuneration payable to employees and directors and supervisors 15,000 Insurance premiums payable 7,745 Retirement benefits payable 4,898 Equipment payables 4,529 Business tax payable 18,398 Service expenses payable 1,242 Other expenses payable (Note) 24,584 336,940 Marketing and advertising expenses payable 8,474 Others (Note) 2,468 10,942 $ 347,882
			$ 150,112 110,432 15,000 7,745 4,898 4,529 18,398 1,242 24,584 336,940 8,474 2,468 10,942 $ 347,882

Note: The balance of each vendor does not exceed 5% of the balance of this account.

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Bafang Yunji International Co., Ltd. Schedule of other current liabilities December 31, 2021

Unit: In thousands of NT$

	December 31, 2021	December 31, 2021	December 31, 2021
Schedule 14 Item Receipts under custody Financial liabilities Advanced receipts Temporary receipts	Unit: In thousands of NT$ Summary Amount Income tax withholding, etc $ 2,586 2,575 11 1,082 $ 6,254
			$ 2,586 2,575 11 1,082 $ 6,254

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Bafang Yunji International Co., Ltd. Schedule of lease liabilities December 31, 2021

Schedule 15 Item Land Building Transportation equipment Less: Recorded as current liabilities Lease liabilities - non-current	Leaseperiod 19~20 years 1~12 years 3~5 years	Unit: In thousands of NT$ Discount rate Amount 1.42% $ 36,334 1.25%～1.7% 49,623 1.25%~1.7% 134,923 ( 53,838) $ 167,042	Unit: In thousands of NT$ Discount rate Amount 1.42% $ 36,334 1.25%～1.7% 49,623 1.25%~1.7% 134,923 ( 53,838) $ 167,042	Unit: In thousands of NT$ Discount rate Amount 1.42% $ 36,334 1.25%～1.7% 49,623 1.25%~1.7% 134,923 ( 53,838) $ 167,042
			(	$ 36,334 49,623 134,923 53,838) $ 167,042

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Bafang Yunji International Co., Ltd. Schedule of operating revenue For the year ended December 31, 2021

Bafang Yunji International Co., Ltd. Schedule of operating revenue For the year ended December 31, 2021	Bafang Yunji International Co., Ltd. Schedule of operating revenue For the year ended December 31, 2021	Bafang Yunji International Co., Ltd. Schedule of operating revenue For the year ended December 31, 2021
Schedule 16 Unit: In thousands of NT$ Name Amount Food processing $ 3,293,098 Merchandise trading 711,814 Licensing revenue 11,032 $ 4,015,944
		$ 3,293,098 711,814 11,032 $ 4,015,944

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Bafang Yunji International Co., Ltd. Schedule of operating costs For the year ended December 31, 2021

Schedule 17

Unit: In thousands of NT$

Item Merchandise Inventories at the beginning of the period Purchases in the period (net) Inventories at the end of the period Less: Merchandise cycle count loss Less: Merchandise scrapping loss Less: Others Cost of merchandise sold Raw materials Raw materials at the beginning of the period Purchases in the period Raw materials at the end of the period Add: Others Less: Raw materials cycle count loss Less: Raw materials scrapping Less: Raw materials sold Direct raw material consumption Supplies Supplies at the beginning of the period Purchases in the period Supplies at the end of the period Less: Supplies cycle count loss Less: Transferred to other expenses and others Indirect material consumption Direct labors Manufacturing expenses Manufacturing costs Semi-finished products Semi-finished products at the beginning of the period Purchases in the period Semi-finished products at the end of the period Less: Semi-finished product cycle count loss Less: Semi-finished product scrapping Less: Others Cost of finished products Finished products Costs of finished products at the beginning of the period Purchases in the period Costs of finished products at the end of the period Less: Finished product cycle count loss Less: Finished product scrapping Less: Transferred to other expenses and others Production and selling costs Costs of raw materials sold Operating costs of semi-finished products Inventory cycle count loss Inventory scrapping Other operating costs		Amount
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 12,975 562,897 17,579 ) 40 ) 420 ) 635) 557,198 118,386 1,729,693 130,082 ) 779 2,030 ) 1,138 ) 55,304) 1,660,304 3,570 54,461 4,181 ) 2 ) 53,848) - 155,040 341,220 2,713,762 5,798 13 9,956 ) 438 ) 50 ) 948) 5,581) 2,708,181 12,007 13 15,200 ) $ 778 ) 4,026 ) 188) 8,172) 2,700,009 55,304 433 3,288 5,634 1,228) $ 2,763,440

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Bafang Yunji International Co., Ltd. Schedule of operating expenses For the year ended December 31, 2021

Schedule 18 Item Salary expenses Advertising expenses Insurance expenses Pension Depreciation expenses Various allocations Training expenses Other expenses		Selling and marketing $ 162,872 84,714 16,262 7,620 41,843 34 1,674 47,131 $ 362,150	General and administrative $ 123,248 52 7,275 3,599 16,393 1,579 21,379 93,417 $ 266,942	Unit: In thousands of NT$ Research and development Total $ 6,237 $ 292,357 - 84,766 331 23,868 216 11,435 1,977 60,213 - 1,613 - 23,053 4,143 144,691 $ 12,904 $ 641,996	Unit: In thousands of NT$ Research and development Total $ 6,237 $ 292,357 - 84,766 331 23,868 216 11,435 1,977 60,213 - 1,613 - 23,053 4,143 144,691 $ 12,904 $ 641,996	Unit: In thousands of NT$ Research and development Total $ 6,237 $ 292,357 - 84,766 331 23,868 216 11,435 1,977 60,213 - 1,613 - 23,053 4,143 144,691 $ 12,904 $ 641,996
						$ 292,357 84,766 23,868 11,435 60,213 1,613 23,053 144,691 $ 641,996

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Bafang Yunji International Co., Ltd. Schedule of other income and expenses For the year ended December 31, 2021

Unit: In thousands of NT$

Schedule 19 Item Loss on disposal of property, plant and equipment Net foreign currency exchange loss Loss on financial assets at fair value through profit or loss Others	Unit: In thousands of NT$ Summary Amount ( $ 316 ) ( 548 ) ( 66 ) ( 215) ($ 1,145)
		( $ 316 ) ( 548 ) ( 66 ) ( 215) ($ 1,145)

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Bafang Yunji International Co., Ltd.

Schedule of employee benefits, depreciation and amortization expenses incurred in the period summarized by function For the years ended December 31, 2021 and 2020

Schedule 20

Unit: In thousands of NT$

Employee benefit expenses Salary expenses Labor and health insurance expenses Pension expenses Remuneration to directors Other employee benefit expenses Depreciation expenses Amortization expenses		2021		Total $ 482,813 40,993 19,336 19,116 19,886 $ 582,144 $ 149,945 $ 1,726		2020
	For operatingcosts $ 209,572 19,101 7,901 - 10,381 $ 246,955 $ 89,731 $ 113	For operating expenses $ 273,241 21,892 11,435 19,116 9,505 $ 335,189 $ 60,214 $ 1,613			For operatingcosts $ 183,502 15,729 6,930 - 8,992 $ 215,153 $ 80,525 $ 116	For operating expenses $ 235,507 18,557 10,073 16,254 8,297 $ 288,688 $ 47,534 $ 1,595		Total
								$ 419,009 34,286 17,003 16,254 17,289 $ 503,841 $ 128,059 $ 1,711

Note:

1. The number of employees in the current and previous years was 524 and 477, respectively, of which the number of directors who were not also emplo yees was 8.

2. (1) The average employee benefit expense for the current year was $1,091 thousand ("Total employee benefit expense f or the current year - total directors' remuneration " / "Number of employees for the current year - number of directors who are not also employees").

   • The average employee benefit expense for the previous year was $1,040 thousand ("Total employee benefit ex pense for the previous year - total directors' remuneration " / "Number of employees for the previous year - number of directors who are not also employees").

3. (2) The average employee salary expense for the current year was $936 thousand ("Total employee s alary expense for the current year" / "Number of employees for the current year - number of directors who are not also employees").

   • The average employee salary expense for the previous year was $893 thousand ("Total employee salary expense for the previous year" / "Number of employees for the previous year - number of directors who are not also employees").

4. (3) Increase of 4.82% in the adjustment of average employee salary expense ("Average employee salary expense for the current year - Average employee salary expense for the

   • previous year" / Average employee salary expense for the previous year).

5. (4) Supervisors' remuneration for the current year and the previous year: The Audit Committee was established in June 2020, s o there was no supervisor; the supervisors' remuneration for the previous year was $1,100 thousand.

6. (5) The Company’s salary and remuneration policy (including directors, managers and employees)

   • A. Salary and remuneration of the Company's directors is determined in accordance with the "Regula tions Governing the Salary and Remuneration of Directors and Functional Members", which includes remuneration, retirement pension, business execution related expenses and other remunerat ion ; their remuneration is reasonably paid in accordance with the regulations; the remuneration of directors is determined in accordance with Article 18 of the Company's Articles of Incorporatio n, and no more than 1% of the Company's annual profit shall be appropriated as remuneration to directors; retirement pension and bu siness execution expenses are determined in accordance with the relevant regulations. Salary and remuneration of directors is reviewed by the Remuneration Committee and the Board of Directors, and the salary and remuneration system is reviewed from time to time depending on the actual operating conditions.

   • B. Remuneration of the president, vice president and managerial officers includes salary remuneration, retirement pension, emplo yee remuneration and business execution related expenses. Remuneration is determined by reference to industry standards, taking into account the position, rank, education and experience, professional ability and contribution to the Company, and the Company’s operating results In accordance with Article 18 of the Company's Article s of Incorporation, not less than 1% of the Company's annual profit, if any, shall be provided as employee remuneration; retirement pension and business execution expens es shall be handled in accordance with the relevant regulations. The relevant salary and remuneration to employees are submitted to the Remuneration Committee for consideration and distribution after the Board of Directors' approval.

7. 96 -

8. C. Remuneration of the regular employees includes salary remuneration, retirement pension, employee remunera tion and business execution related expenses. Salary is determined by reference to industry standards, taking into account the position, rank, education and experience, professional ability; Bonuses and related incentives are paid based on individual performance, achievement of departmental goals, and consideration of the Company's operating results. In accordance with Article 1 8 of the Company's Articles of Incorporation, not less than 1% of the Company's annual profit, if any, shall be provided as employe e remuneration.

9. 97 -