FEDS - Annual Report 2020 | FinancialReports.eu

Far Eastern Department Stores, Ltd. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2020 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standards No. 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

FAR EASTERN DEPARTMENT STORES, LTD.

DOUGLAS HSU Chairman

March 23, 2021

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Far Eastern Department Stores, Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Far Eastern Department Stores, Ltd. and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

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

Basis for Opinion

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

Key Audit Matters

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

The key audit matter identified in the Group’s consolidated financial statements for the year ended December 31, 2020 is stated as follows:

Fair Value Evaluation of Investment Properties

As of December 31, 2020, the carrying amount of investment properties was NT$9,021,607 thousand, accounting for 7% of consolidated total assets and is material to the consolidated financial statements. The Group’s investment properties are subsequently measured using the fair value model. The fair value evaluation involved management’s significant accounting estimates and judgments. Therefore, the fair value evaluation of investment property was considered to be a key audit matter. Refer to Notes 4(i), 5 and 16 to the accompanying consolidated financial statements for the relevant detailed information.

The main audit procedures that we performed in respect of the fair value of investment properties were as follows:

We evaluated the expertise, competency and independence of external valuation specialists appointed by management. We verified the qualification of valuation specialists to ensure that their objectivity and scope of work were not influenced or restricted, and confirmed that the methodology adopted was in compliance with relevant regulations.
We reviewed significant lease contracts and compared relevant market rental prices to assess the reasonableness of future cash flow forecasts.
We assessed the reasonableness of the assumptions and methods used in the valuation.

Others Matter

We have also audited the parent company only financial statements of Far Eastern Department Stores, Ltd. as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion.

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

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

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

Those charged with governance, including members of the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Shu-Chuan Yeh and Ming-Hsing Cho.

Deloitte & Touche Taipei, Taiwan Republic of China

March 23, 2021

Notice to Readers

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

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

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at fair value through other comprehensive income - current (Notes 8 and 34) Financial assets at amortized cost - current (Notes 9 and 34) Notes receivable (Note 10) Trade receivables (Note 10) Trade receivables from related parties (Notes 10 and 33) Other receivables (Notes 10 and 33) Current tax assets (Note 27) Inventories (Note 11) Prepayments (Notes 18 and 33) Other current assets (Notes 19 and 33) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 8 and 34) Financial assets at amortized cost - non-current (Notes 9 and 34) Investments accounted for using the equity method (Notes 13 and 34) Property, plant and equipment (Notes 14, 33 and 34) Right-of-use assets (Note 15) Investment properties (Notes 16 and 34) Intangible assets (Notes 17 and 34) Deferred tax assets (Note 27) Net defined benefit assets (Note 23) Long-term prepayments for lease (Notes 18, 33 and 34) Other non-current assets (Notes 19 and 33) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 20, 33 and 34) Short-term bills payable (Notes 20 and 34) Contract liabilities - current (Notes 25 and 33) Notes payable Trade payables Trade payables to related parties (Note 33) Other payables (Notes 21, 24 and 33) Current tax liabilities (Note 27) Provisions - current (Note 22) Lease liabilities - current (Notes 15 and 33) Advance receipts (Note 33) Current portion of long-term borrowings (Notes 20 and 34) Other current liabilities (Notes 21 and 33) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 20 and 34) Provisions - non-current (Note 22) Deferred tax liabilities (Note 27) Lease liabilities - non-current (Notes 15 and 33) Net defined benefit liabilities (Note 23) Other non-current liabilities (Notes 21 and 33) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL		2020 Amount % $ 14,791,434 12 450,046 - 278,539 - 1,171,058 1 1,864 - 600,242 - 124,738 - 1,007,684 1 1,063 - 2,374,459 2 211,102 - 103,887 - 21,116,116 16 4,659,302 4 24,000 - 10,164,724 8 33,945,566 26 42,712,637 33 9,021,607 7 2,581,127 2 572,186 1 205,863 - 1,517,865 1 1,902,776 2 107,307,653 84 $ 128,423,769 100 $ 9,045,746 7 3,729,003 3 8,121,734 6 6,626 - 15,844,472 12 68,101 - 3,721,330 3 485,553 1 3,000 - 3,473,928 3 510,474 1 299,933 - 373,784 - 45,683,684 36 15,139,828 12 25,047 - 2,348,055 2 24,335,088 19 737,454 - 366,325 - 42,951,797 33 88,635,481 69 14,169,406 11 3,338,791 2 3,424,615 3 2,709,263 2 2,695,084 2 8,828,962 7 4,953,871 4 (97,110) - 31,193,920 24 8,594,368 7 39,788,288 31 $ 128,423,769 100		2019
				Amount % $ 13,424,223 10 457,256 1 297,456 - 1,443,974 1 1,132 - 744,436 1 161,935 - 915,309 1 10,812 - 2,780,889 2 398,558 - 110,095 - 20,746,075 16 5,030,564 4 146,000 - 10,107,165 8 34,323,257 26 44,764,810 34 9,086,641 7 2,477,815 2 589,225 - 234,035 - 1,060,658 1 1,944,860 2 109,765,030 84 $ 130,511,105 100 $ 9,630,896 7 3,622,993 3 7,770,828 6 3,184 - 15,120,910 11 93,455 - 3,971,660 3 772,780 1 3,000 - 3,381,049 3 440,970 - 2,540,000 2 315,976 - 47,667,701 36 14,999,757 12 24,823 - 2,312,954 2 25,406,473 19 738,431 1 457,159 - 43,939,597 34 91,607,298 70 14,169,406 11 3,327,466 3 3,298,695 3 2,865,351 2 1,931,429 1 8,095,475 6 5,295,169 4 (97,110) - 30,790,406 24 8,113,401 6 38,903,807 30 $ 130,511,105 100

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

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 25 and 33) OPERATING COSTS (Notes 11, 26 and 33) GROSS PROFIT OPERATING EXPENSES (Notes 23, 26 and 33) Selling and marketing expenses General and administrative expenses Expected credit (gain) loss Total operating expenses OPERATING PROFIT NON-OPERATING INCOME AND EXPENSES Interest income (Note 26) Other income (Note 26) Other losses (Notes 14, 17, 26 and 33) Finance costs (Notes 26 and 33) Share of profit of associates accounted for using the equity method Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 27) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 23, 24 and 27) Items that will not be reclassified subsequently to profit or loss: Unrealized (loss) gain on investments in equity instruments at fair value through other comprehensive income Remeasurement of defined benefit plans Share of other comprehensive income (loss) of associates accounted for using the equity method Income tax relating to items that will not be reclassified subsequently to profit or loss		2020 Amount % $ 37,287,949 100 18,580,671 50 18,707,278 50 987,735 3 13,639,718 36 (5,139) - 14,622,314 39 4,084,964 11 66,244 - 312,581 1 (651,295) (2) (851,591) (2) 39,868 - (1,084,193) (3) 3,000,771 8 455,874 1 2,544,897 7 (384,300) (1) (96,805) - 31,283 - 19,377 - (430,445) (1)		2019
				Amount % $ 37,896,062 100 18,253,449 48 19,642,613 52 891,625 2 14,211,781 38 556 - 15,103,962 40 4,538,651 12 90,449 - 286,299 1 (1,035,197) (3) (835,329) (2) 58,065 - (1,435,713) (4) 3,102,938 8 950,669 2 2,152,269 6 1,118,564 3 230,902 - (61,630) - (46,260) - 1,241,576 3 (Continued)

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Share of other comprehensive income (loss) of associates accounted for using the equity method Other comprehensive (loss) income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company Non-controlling interests EARNINGS PER SHARE (Note 28) Basic Diluted		2020 Amount % $ (25,068) - 25,525 - 457 - (429,988) (1)) $ 2,114,909 6 $ 1,939,139 5 605,758 2 $ 2,544,897 7 $ 1,525,741 4 589,168 2 $ 2,114,909 6 $1.38 $1.37		2019
				Amount % $ 53,578 - (57,504) - (3,926) - 1,237,650 3 $ 3,389,919 9 $ 1,781,843 5 370,426 1 $ 2,152,269 6 $ 3,044,048 8 345,871 1 $ 3,389,919 9 $1.26 $1.26

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

(Concluded)

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company
Share Capital (Note 24) Capital Surplus (Note 24) $ 14,169,406 $ 3,315,420 - - 14,169,406 3,315,420 - - - - - - - - - - - - - - - - - - - 12,046 14,169,406 3,327,466 - - - - - - - - - - - - - - - - - 11,325 - - $ 14,169,406 $ 3,338,791	Retained Earnings (Note 24) Legal Reserve Special Reserve Unappropriated Earnings $ 3,166,880 $ 2,656,286 $ 2,081,772 - - (585,446) 3,166,880 2,656,286 1,496,326 - 135,735 (135,735) 131,815 - (131,815 ) - 73,330 (73,330 ) - - (1,204,400 ) - - - 131,815 73,330 (1,409,545) - - 1,781,843 - - 198,288 - - 1,980,131 - - 252 3,298,695 2,865,351 1,931,429 125,920 - (125,920 ) - (156,088 ) 156,088 - - (1,133,552 ) - - - 125,920 (156,088) (1,103,384) - - 1,939,139 - - (71,064) - - 1,868,075 - - - - - (1,036) $ 3,424,615 $ 2,709,263 $ 2,695,084	Other Equity (Note 24) Exchange Differences on Translating the Financial Statements of Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Gain on Foreign Operations Comprehensive Income Property Revaluation Treasury Shares (Note 24) $ 90,654 $ 1,969,628 $ 2,170,970 $ (97,110 ) - - - - 90,654 1,969,628 2,170,970 (97,110) - - - - - - - - - - - - - - - - - - - - - - - - - - - - (25,329) 1,089,246 - - (25,329) 1,089,246 - - - - - - 65,325 3,058,874 2,170,970 (97,110) - - - - - - - - - - - - - - - - - - - - - - - - 3,225 (345,559) - - 3,225 (345,559)) - - - - - - - 1,036 - - $ 68,550 $ 2,714,351 $ 2,170,970 $ (97,110)
		Exchange Differences on Translating the Financial Statements of Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Foreign Operations Comprehensive Income $ 90,654 $ 1,969,628 - - 90,654 1,969,628 - - - - - - - - - - - - - - (25,329) 1,089,246 (25,329) 1,089,246 - - 65,325 3,058,874 - - - - - - - - - - - - 3,225 (345,559) 3,225 (345,559)) - - - 1,036 $ 68,550 $ 2,714,351

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

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss (reversed) recognized on receivables Loss (gain) on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of profit of associates accounted for using the equity method Loss on disposal of property, plant and equipment Loss on disposal of intangible assets Gain on lease modifications Gain on disposal of investments Impairment loss recognized on intangible assets Impairment loss recognized on property, plant and equipment Impairment loss recognized on right-of-use assets Unrealized gain on physical and slow-moving inventories Loss on changes in fair value of investment properties Amortization of prepayments Concession on lease liabilities Reversal of unrealized purchase discounts Net changes in operating assets and liabilities Increase in financial assets mandatorily classified as at fair value through profit or loss Notes receivable Trade receivables Trade receivables from related parties Other receivables Inventories Prepayments Other current assets Contract liabilities - current Notes payable Trade payables Trade payables to related parties Other payables Provisions Advance receipts Other current liabilities Net defined benefit liabilities Cash generated from operations Dividends received Interest paid	2020 $ 3,000,771 5,790,171 83,971 (5,139) 11,520 851,591 (66,244) (312,581) (39,868) 17,035 - (5,935) (553) 6,384 16,853 613,770 (32) 71,617 39,674 (280,698) (210) (15,360) (732) 144,075 38,282 (120,004) 406,672 188,606 6,208 350,906 3,442 723,562 (25,354) (58,840) - 239,964 57,808 (53,507) 11,677,825 431,307 (796,027)	2019 $ 3,102,938 5,555,195 60,149 556 (691) 835,329 (90,449) (286,299) (58,065) 84,473 1,435 (678) (291) 1,095,884 - - (9,418) 151,597 12,544 - (400) (18,527) 1,155 836,753 (3,995) 8,008 (41,837) 90,044 (24,297) 245,360 (499) (2,458,543) (11,544) (519,160) (4,050) 226,939 (4,971) (125,339) 8,649,306 317,922 (854,447) (Continued)

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FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Interest received Income tax returned Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets amortized at cost Proceeds from sale of financial assets at amortized cost Acquisition of investments accounted for using the equity method Proceeds from sale of financial assets at fair value through profit or loss Decrease in prepaid long-term investments Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in other receivables Payments for intangible assets Proceeds from disposal of intangible assets Acquisition of right-of-use assets Acquisition of investment properties Increase in other non-current assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from short-term bills payable Repayments of short-term bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Repayment of the principal portion of lease liabilities Decrease in other non-current liabilities Dividends paid to owners of the Company Dividends paid to non-controlling interests Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	2020 $ 62,228 2,801 (690,968) 10,687,166 (41,279) 46,717 (1,305,880) 1,706,277 - 11,603 - (2,011,132) 1,473 - (193,635) - (110,833) (6,583) (509,118) (2,412,390) 115,681,868 (116,326,590) 35,197,389 (35,091,379) 103,720,004 (105,820,000) (2,957,964) (90,834) (1,131,061) (117,859) (6,936,426) 28,861	2019 $ 109,832 2,191 (337,318) 7,887,486 (4,744) - (2,147,035) 2,857,542 (1,605,034) - 25,383 (1,801,799) 39,189 1,225,948 (173,406) 139 - (8,015) (1,924,566) (3,516,398) 139,427,113 (142,602,371) 36,935,184 (36,792,556) 79,279,757 (76,830,000) (3,386,357) (36,410) (1,202,733) (198,624) (5,406,997) (134,715) (Continued)

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FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

2020 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 1,367,211 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 13,424,223 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 14,791,434 The accompanying notes are an integral part of the consolidated financial statements.	2019 $ (1,170,624) 14,594,847 $ 13,424,223 (Concluded)

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FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Far Eastern Department Stores, Ltd. (the “Company” or “FEDS”) was incorporated in the Republic of China (ROC) in August 31, 1967, and operates a nationwide chain of department stores. The Company’s shares have been listed on the Taiwan Stock Exchange since October 11, 1978.

The consolidated financial statements of the Company and its subsidiaries, collectively referred to as the “Group”, are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on March 23, 2021.

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

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

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies:

Amendments to IFRS 16 “COVID-19 - Related Rent Concessions”

The Group elected to apply the practical relief for the rent negotiation with the lessor that is directly related to the COVID-19. Please refer to Note 4 for the related accounting policy. Before applying these amendments, the Group shall determine whether the amended lease provisions are applicable to the aforementioned rent negotiation.

The Group began to apply the amendments since January 1, 2020. Since the aforementioned rent negotiation only affects fiscal year 2020, the retrospective application of the amendments does not affect the retained earnings on January 1, 2020.

b. The IFRSs endorsed by the FSC for application starting from 2021

New IFRSs Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform - Phase 2”	Effective Date Announced by IASB
	Effective immediately upon promulgation by the IASB January 1, 2021

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As of the date the consolidated financial statements were authorized for issue, the Group assesses the possible impacts that the application of the aforementioned amendments and the related amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers will have on the Group’s financial position and financial performance and will disclose these other impacts when the assessment is completed.

c. IFRSs that have been issued by the International Accounting Standards Board (IASB) but not yet endorsed and issued into effect by the FSC

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”	Effective Date Announced by IASB (Note 1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) To be determined by IASB January 1, 2023 (Note 6) January 1, 2023 January 1, 2023 January 1, 2023 (Note 7) January 1, 2023 (Note 8) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

New IFRSs
“Annual Improvements to IFRS Standards 2018-2020”

Amendments to IFRS 3 “Reference to the Conceptual Framework”

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

Amendments to IAS 1 “Disclosure of Accounting Policies”

Amendments to IAS 8 “Definition of Accounting Estimates”

Amendments to IAS 16 “Property, Plant and Equipment - Proceeds
before Intended Use”

Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a
Contract”

Effective Date
Announced by IASB (Note 1)

January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
To be determined by IASB
January 1, 2023 (Note 6)
January 1, 2023
January 1, 2023
January 1, 2023 (Note 7)
January 1, 2023 (Note 8)
January 1, 2022 (Note 4)
January 1, 2022 (Note 5)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments to IFRS 9 applicable to the exchange of financial liabilities or clause amendments effective from the reporting period starting January 1, 2022; the amendments to IAS 41 “Agriculture” are applicable to the fair value measurement effective from the reporting period starting January 1, 2022; the amendments to IFRS 1 “First-time Adoption of IFRSs” are retrospectively applicable effective from the reporting period starting January 1, 2022.
Note 3: These amendments apply to business mergers with the acquisition date falling in annual reporting period after January 1, 2022.
Note 4: These amendments apply to plant, property and equipment that reach the necessary locations and conditions for the management's expected operating mode after January 1, 2021.
Note 5: These amendments apply to contracts that have not been fulfilled on January 1, 2022.
Note 6: On March 17, 2020, IASB made the decision to postpone the effective date of IFRS 17 to March 1, 2023. However, the amendments to IFRS 17 were announced formally in the third quarter of 2020.
Note 7: The Company shall apply these amendments prospectively for annual reporting periods starting January 1, 2023.
Note 8: The Company shall apply these amendments prospectively for changes in accounting estimates and policies effective from annual reporting periods starting January 1, 2023.
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1) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments are to clarify that when determining whether a liability is classified as non-current, it should be assessed whether at the end of the reporting period the Group has the right to defer the settlement period for at least 12 months after the reporting period. If the Group has the right at the end of the reporting period, regardless of whether the Group expects to exercise the right, the liability is classified as non-current. The amendments also clarify that if the Group must comply with certain conditions before it possesses the right to defer settlement of liabilities, the Group must comply with these conditions by the end of the reporting period, despite the fact that the lender may perform a test on the Group to check if it has complied with these conditions at a later date.

The amendments stipulate that for the purpose of classification of liabilities, the aforementioned settlement refers to the elimination of liabilities by transferring cash, other economic resources or equity instruments of the Group to the counterparty. However, terms of the liability that could, at the option of the counterparty, result in its settlement by the transfer of the Group’s equity instruments (and if the option is separately recognized as an equity in accordance with IAS 32 “Financial Instruments: Presentation”), such terms do not affect the classification of the liability.

2) Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendment stipulates that an entity should comply with the definition of material to determine the disclosure of material accounting policies. An accounting policy is material if information about that accounting policy could reasonably be expected to influence decisions that the primary users with general purposes make based on those financial statements. The amendments clarify that:

Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed.
Accounting policy information may be material because of the nature of the transactions, other events or conditions, even if the amounts are immaterial.
Not all accounting policy information related to material transactions, other events or conditions are themselves material.

Further, the amendments also cite examples to illustrate that accounting policy information may be considered material if it relates to material transactions, other events or conditions and that the accounting policies:

a) Have changed during the period, giving rise to a material change in the information of the financial statements;
b) Were chosen from alternatives permitted by IFRS Standards;
c) Were developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS Standard that specifically applies;
d) Relate to an area for which the entity is required to make significant judgments and assumptions; or
e) Relate to complex accounting and users of the entity’s financial statements would otherwise not understand the relating transactions, other events or conditions.
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3) Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments stipulate that accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty.” The accounting policies may require such items to be measured at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, an entity develops an accounting estimate to achieve the objective set out by the accounting policies. The effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result in the correction of prior period errors.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

b. Basis of preparation

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

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

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.
c. Classification of current and non-current assets and liabilities

Current assets include:

Assets held primarily for the purpose of trading;
Assets expected to be realized within 12 months after the reporting period; and
Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

Liabilities held primarily for the purpose of trading;
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Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorized for issue; and
Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

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

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Group and the entities controlled by the Group (i.e., its subsidiaries). When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to shareholders of the parent.

See Note 12 and Table 7 for details on subsidiaries, including the percentages of their ownership and main businesses.

Refer to Table 1 for the diagram of intercompany relationships of the consolidated financial statements for the year ended December 31, 2020.

e. Foreign currencies

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

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

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

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

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For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including the subsidiaries and associates in other countries or subsidiaries which use currencies that are different from the Group) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income (as appropriate attributed to owners of the Group and non-controlling interests, respectively).

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

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

f. Inventories

Inventories are stated at the lower of cost or net realizable value, using the retail method. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

g. Investment in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. The Group uses the equity method of accounting to recognize its investments in associates.

Under the equity method, an investment in an associate is initially recognized at cost and is adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the Group’s share of the equity of associates attributable to the Group.

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

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

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The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

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

When the Group transact with its associate, profits and losses resulting from the transactions with the associate are recognized in the Group’s consolidated financial statements only to the extent of interests in the associate that are not related to the Group.

h. Property, plant and equipment

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

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

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

On derecognition of the property, plant and equipment, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss for the year.

i. Investment properties

Investment properties are properties held to earn rental and/or for capital appreciation. Investment properties include right-of-use assets and properties under construction that meet the definition of investment properties. Investment properties also include land held for a currently undetermined future use.

Freehold investment properties are measured initially at cost, including transaction costs. Investment properties acquired through leases are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. All investment properties are subsequently measured using the fair value model. Changes in the fair value of investment properties are included in profit or loss for the period in which they arise.

Investment properties under construction, of which the fair value is not reliably measurable, are measured at cost less accumulated impairment loss until such time as either the fair value becomes reliably measurable or construction is completed (whichever comes earlier).

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For a transfer of classification from investment properties to property, plant and equipment, the deemed cost of an item of property for subsequent accounting is its fair value at the commencement of owner-occupation.

For a transfer of classification from property, plant and equipment to investment properties at the end of owner-occupation, any difference between the fair value of an item of property at the transfer date and its previous carrying amount is recognized in other comprehensive income.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

j. Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributable goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

If goodwill has been allocated to a cash-generating unit and the entity disposes of an operation within that unit, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal, and is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

k. Intangible assets

1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis during their expected useful life. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis.

When the Group has a right to charge for the usage of concession infrastructure (as a consideration for providing construction services in a service concession arrangement), it recognizes this as an intangible asset. The intangible asset is subsequently measured at cost less accumulated amortization and any accumulated impairment loss.

2) Derecognition of intangible assets

On derecognition of the intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss for the year.

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l. Impairment of property, plant and equipment, right-of-use assets and intangible assets (except for goodwill)

At the end of each reporting period, the Group reviews for any indication of impairment loss pertaining to the property, plant and equipment, right-of-use assets and intangible assets (except for goodwill). If any such indication exists, the recoverable amount of the asset is estimated. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

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

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

m. Financial instruments

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

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

1) Financial assets

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

a) Measurement categories

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

i. Financial assets at FVTPL

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

Financial assets at FVTPL are subsequently measured at fair value, any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 32: Financial Instruments.

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ii. Financial assets at amortized cost

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

i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade receivables at amortized cost and refundable deposits, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss. Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset.

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

iii. Investments in equity instruments at FVTOCI

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

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

b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

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

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

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Without taking the collateral held into consideration, pertinent to the objectives of the credit risk management, the Group determines that a default has occurred for a financial asset when internal or external information indicates that the borrower can no longer repay the liability, unless there is reasonable and substantiated information to recognize the default at a later time.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

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

2) Financial liabilities

a) Subsequent measurement

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

b) Derecognition of financial liabilities

When derecognizing financial liability, the difference between the carrying amount of the financial liability de-recognized and the consideration paid (including the transfer of any non-cash asset or liability undertaken) is recognized in profit or loss.

n. Provisions

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

o. Revenue recognition

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

Revenue from the sale of goods are recognized as revenue when the goods are shipped or delivered because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently.

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When other party participates providing in goods or services to customers, the Group obtains control of the specified goods or services before they are transferred to the customers and, therefore, is acting as a principal in the transaction. On the contrary, the other party is acting as an agent. As the principal, the total amount of the consideration that is expected to be obtained in exchange for the transfer of goods or services is recognized as income. As an agent, the amount of any fees or commissions that the other party expected to obtain in exchange for the provision of goods or services, recognized as income. The charge or commission of the Group may be the net amount of the consideration. The income retained by the Group in exchange for goods or services is the amount retained after payment to the other party.

The Group offers award credits which can be used for future purchases when the customer shops (customer loyalty program). The award credits provide a material right to the customer. The transaction price allocated to the award credits is recognized as a contract liability when collected and will be recognized as revenue when the award credits are redeemed or have expired.

p. Leases

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

1) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When the Group subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. However, if the head lease is a short-term lease that the Group, as a lessee, has accounted for applying recognition exemption, the sublease is classified as an operating lease.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

Variable lease payments that do not depend on an index or a rate are recognized as income in the periods in which they are incurred.

When a lease includes both land and building elements, the Group assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the lessee. The lease payments are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of a contract. If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

2) The Group as lessee

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

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any

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lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets, except for those that meet the definition of investment properties. With respect to the recognition and measurement of right-of-use assets that meet the definition of investment properties, refer to Note 9 for the accounting policies for investment properties.

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

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

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

The Group and the lessor conducted rent negotiations directly related to COVID-19, and adjusted the rent due before December 31, 2021, resulting in a decrease in rent. As these negotiations did not significantly change other lease terms, the Group chooses to adopt a practical and expedient approach to all rent negotiations that meet the aforementioned conditions. It does not assess whether the negotiation is a lease modification, but recognizes a reduction of lease payment in the profit or loss when the concession event or situation occurs (booked as a deduction in variable lease payments) and reduces the lease liability accordingly.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

q. Borrowing costs

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

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

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

r. Government subsidies

The government subsidies are recognized when there is reasonable assurance that the Group will comply with the conditions attached to the subsidies, and the grants will be received.

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The government subsidies that are related to profit making and aim to compensate the Group are recognized as current income on a systematic basis for the period in which the related costs are booked as expenses.

If the nature of the government subsidies is to compensate for the expenses incurred by the Group or as a form of financial support to the Group and not related to the related future expenses, the government subsidies shall be recognized in the profit or loss when received.

s. Retirement benefit costs

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and past service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expenses when the plan amendment or curtailment occurs. Remeasurement, comprising actuarial gains and losses (the effect of the changes to the asset ceiling) and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income (loss) is reflected immediately in retained earnings and will not be reclassified subsequently to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Group’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

t. Taxation

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

1) Current tax

The current payable (recoverable) income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in the country where the Group operates and generates taxable income (loss).

According to the Income Tax Law of the ROC, the recognition of annual unappropriated earnings that are taxable, is subject to the resolution passed in the shareholders’ meeting.

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

2) Deferred tax

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

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

26 -

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

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

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

3) Current and deferred tax for the year

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

When current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The Group incorporates the economic impact caused by COVID-19 into the consideration of significant accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Key Sources of Estimation and Uncertainty

Fair value measurements and valuation processes of the investment properties

Third-party qualified valuers were engaged to perform the fair value evaluation of the Group’s investment properties using the appropriate valuation techniques for fair value measurements.

27 -

The valuers of the Group determined the appropriate inputs by referring to the analyses of the financial position and the operation results of investees, recent transaction prices and prices of the same equity instruments not quoted in active markets in the vicinity of the Group’s investment properties. If there are changes in the actual inputs in the future which differ from expectation, the fair value might vary accordingly. The Group updates inputs every quarter to confirm the appropriateness of the fair value measurement.

Information on the valuation techniques and inputs used in determining the fair value of investment properties is disclosed in Note 16.

6. CASH AND CASH EQUIVALENTS

Cash on hand and revolving funds Checking accounts and demand deposits Cash equivalents (investments with original maturities of less than 3 months) Time deposits Repurchase agreements Triple stimulus vouchers Commercial papers		December 31	December 31
		2020 $ 174,161 6,321,368 7,845,295 399,727 50,883 - $ 14,791,434	2019 $ 176,112 4,334,916 3,856,673 - - 5,056,522 $ 13,424,223

The market rate intervals of deposits in bank and commercial papers at the end of the reporting period were as follows:

Deposits in bank Repurchase agreements Commercial papers	December 31
	2020 2019 0.001%-2.025% 0.001%-2.500% 0.230%-0.240% - - 0.540%-0.590%

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT

Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Beneficiary certificates Listed and over-the-counter (OTC) shares		December 31	December 31
		2020 $ 336,200 113,846 $ 450,046	2019 $ 346,330 110,926 $ 457,256

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8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments at FVTOCI Domestic investments Listed and OTC shares Unlisted shares Foreign investments Unlisted shares Current Non-current		December 31	December 31
		2020 $ 4,352,973 568,317 4,921,290 16,551 $ 4,937,841 $ 278,539 4,659,302 $ 4,937,841	2019 $ 4,736,737 574,766 5,311,503 16,517 $ 5,328,020 $ 297,456 5,030,564 $ 5,328,020

a. These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.
b. Refer to Note 34 for information relating to investments in equity instruments at FVTOCI pledged as security.

9. FINANCIAL ASSETS AT AMORTIZED COST

Time deposits with original maturities of more than 3 months Pledged deposits Current Non-current Gross carrying amount Less: Allowance for impairment loss Amortized cost		December 31	December 31
		2020 $ 1,008,058 187,000 $ 1,195,058 $ 1,171,058 24,000 $ 1,195,058 $ 1,195,058 - $ 1,195,058	2019 $ 1,390,974 199,000 $ 1,589,974 $ 1,443,974 146,000 $ 1,589,974 $ 1,589,974 - $ 1,589,974

a. The credit risk of financial instruments such as bank deposits is measured and monitored by the accounting department. The counterparties are creditworthy banks and financial institutions with good credit rating.
b. As of December 31, 2020, and 2019, the interest rates for financial assets at amortized cost were 0.30% and 2.40%, respectively.
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c. Refer to Note 34 for information relating to investments in financial assets at amortized cost pledged as security.

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES (INCLUDING RELATED PARTIES)

a. Notes receivable

Operating Non-operating Less: Allowance for impairment loss		December	31
		2020 $ 657 3,001 (1,794) $ 1,864	2019 $ 1,132 1,794 (1,794) $ 1,132

December 31, 2020

Not Past Due Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days Expected credit loss rate 0.0000% 0.0000% 0.0000% 0.0000% 100% Gross carrying amount $ 1,864 $ - $ - $ - $ 1,794 Loss allowance (Lifetime ECLs) - - - - (1,794) Amortized cost $ 1,864 $ - $ - $ - $ -	Total $ 3,658 (1,794) $ 1,864

December 31, 2019

Not Past Due Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days Expected credit loss rate 0.0600% 0.0000% 0.0000% 0.0000% 100% Gross carrying amount $ 1,129 $ 3 $ - $ - $ 1,794 Loss allowance (Lifetime ECLs) - - - - (1,794) Amortized cost $ 1,129 $ 3 $ - $ - $ -	Total $ 2,926 (1,794) $ 1,132

b. Trade receivables

At amortized cost Gross carrying amount Less: Allowance for impairment loss		December 31	December 31
		2020 $ 852,642 (127,662) $ 724,980	2019 $1,034,999 (128,628) $ 906,371

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The Group’s trade receivables pertained to revenue on credit cards and gift certificates. The average credit period for revenue from credit cards and gift certificates was 2 to 3 days and 15 days, respectively.

In determining the recoverability of a trade receivable, the Group considered any change in the credit quality of the trade receivable since the date credit was initially granted to the end of the reporting period. Allowances for impairment loss were recognized against trade receivables based on estimated irrecoverable amounts determined with reference to past default experience of the counterparties and an analysis of their current financial position.

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

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

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

December 31, 2020

Not Past Due Expected credit loss rate 0.0000% Gross carrying amount $ 721,706 Loss allowance (Lifetime ECLs) - Amortized cost $ 721,706	Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days 2.0800% 6.6200% 7.7600% 100% $ 3,070 $ 241 $ - $ 127,625 (21) (16) - (127,625) $ 3,049 $ 225 $ - $ -	Total $ 852,642 (127,662) $ 724,980

December 31, 2019

Not Past Due Expected credit loss rate 0.0700% Gross carrying amount $ 880,024 Loss allowance (Lifetime ECLs) (168) Amortized cost $ 879,856	Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days 2.1600% 6.7200% 8.8200% 100% $ 25,259 $ 1,685 $ 84 $ 127,947 (499) (7) (7) (127,947) $ 24,760 $ 1,678 $ 77 $ -	Total $ 1,034,999 (128,628) $ 906,371

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The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Less: Impairment losses reversed Less: Amounts written off Balance at December 31	2020 $ 128,628 (966) - $ 127,662	2019 $ 129,572 (914) (30) $ 128,628

c. Other receivables

At amortized cost Gross carrying amount Others Less: Allowance for impairment loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,289,489 (281,805) $ 1,007,684	2019 $ 1,199,138 (283,829) $ 915,309

FEDS Development agreed to offer a one-year loan to FENC (China) with a credit line of RMB20,890 thousand and also provided an unsecured and interest-free loan to YDEC (Shanghai) with a credit line of RMB22,377 thousand. Revolving lines of credit are allowed. As of December 31, 2019, the whole amount of loans had been repaid.

The Group postulated that the potential benefits of the investment will exceed the prospective interest income arising from the loan. Thus, the loan’s terms of conditions were not regarded only as an independent transaction; the prospective benefits of the Group’s investment plans were also taken into consideration. Moreover, as the ultimate parent company of the borrowers is Far Eastern New Century Ltd. (FENC), the Group believes that the borrowers are able to repay the debts without offering pledges in terms of their financial positions.

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

December 31, 2020

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Not Past Due 0.0000% $ 1,007,527 - $ 1,007,527	Less than 30 Days 0.0000% $ 132 - $ 132	31 to 60 Days 4.4000% $ 26 (1) $ 25	61 to 90 Days 6.2100% $ - - $ -	Over 90 Days 100% $ 281,804 (281,804) $ -	Total $ 1,289,489 (281,805) $ 1,007,684

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December 31, 2019

Not Past Due Expected credit loss rate 0.0600% Gross carrying amount $ 915,188 Loss allowance (Lifetime ECLs) (7) Amortized cost $ 915,181 Balance at January 1 Add: Impairment losses recognized Less: Impairment losses reversed Less: Amounts written off Foreign exchange gains and losses Balance at December 31	Less than 30 Days 1.4700% $ 130 (2) $ 128	31 to 60 Days 5.2800% $ - - $ -	61 to 90 Days Over 90 Days 7.1300% 100% $ - $ 283,820 - (283,820) $ - $ - 2020 $ 283,829 $ - (4,173) (1,553) 3,702 $ 281,805 $	Total $ 1,199,138 (283,829) $ 915,309 2019 294,642 1,470 - (2,504) (9,779) 283,829
			$

11. INVENTORIES

Merchandise Allowance for inventory write-down Allowance for losses on physical inventory Allowance for unrealized purchase discounts The cost of goods sold includes: Cost of goods sold Reversed unrealized loss on physical inventory and slow-moving inventory Reversed unrealized purchase discounts		December 31	December 31	December 31
				2019
		2020 $ 18,216,356 32 210 $ 18,216,598		2019 $ 17,891,176 9,418 400 $ 17,900,994

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12. SUBSIDIARIES

a. Subsidiaries included in the consolidated financial statements

The detailed information of the subsidiaries at the end of reporting period are as follows:

Investor
Investee
Main Businesses
Far Eastern Department Stores,
Far Eastern Ai Mai Co., Ltd.
Hypermarket
Ltd.
Bai Yang Investment Co., Ltd.
Investment
Bai Ding Investment Co., Ltd.
Investment
Yu Ming Advertising Agency Co., Ltd.
Advertising and importation
of certain merchandise
Far Eastern Hon Li Do Co., Ltd.
Building rental
FEDS Development Ltd.
Investment
Ya Tung Department Stores, Ltd.
Department store
Far Eastern CitySuper Co., Ltd.
Hypermarket
Pacific Liu Tong Investment Co., Ltd.
Investment
Asians Merchandise Company
Trading
Bai Yang Investment Co., Ltd.
Pacific Liu Tong Investment Co., Ltd.
Investment
FEDS Asia Pacific Development Co., Ltd. Shopping mall
Bai Ding Investment Co., Ltd.
Investment
FEDS New Century Development Co.,
Ltd.
Shopping mall
FEDS Development Ltd.
Investment
Pacific China Holdings (HK) Limited
Investment
Far Eastern Big City Shopping Malls Co.,
Ltd.
Department store
Bai Ding Investment Co., Ltd.
Pacific Liu Tong Investment Co., Ltd.
Investment
Pacific Sogo Department Stores Co., Ltd. Department store
Far Eastern Hon Li Do Co., Ltd.
Building rental
Far Eastern CitySuper Co., Ltd.
Hypermarket
Yu Ming Advertising Agency Co.,
Ltd.
Pacific Liu Tong Investment Co., Ltd.
Investment
Far Eastern Hon Li Do Co., Ltd.
Pacific Liu Tong Investment Co., Ltd.
Investment
FEDS Development Ltd.
Shanghai Bai Ding Consultant &
Management Co., Ltd.
Consulting service
Chongqing FEDS Co., Ltd.
Department store
Ya Tung Department Stores, Ltd.
Pacific Liu Tong Investment Co., Ltd.
Investment
FEDS Asia Pacific Development
Co., Ltd.
Pacific Liu Tong Investment Co., Ltd.
Investment
FEDS New Century Development Pacific Liu Tong Investment Co., Ltd.
Investment
Co., Ltd.
Chubei New Century Shopping Mall Co.,
Ltd.
Department store
Pacific Liu Tong Investment Co.,
Ltd.
Pacific Sogo Department Stores Co., Ltd. Department store
Pacific Sogo Department Stores
Pacific China Holdings (HK) Limited
Investment
Co., Ltd.
Far Eastern Big City Shopping Malls Co.,
Ltd.
Department store
Pacific China Holdings (HK)
Limited
Pacific China Holdings Ltd.
Investment
Pacific China Holdings Ltd.
Shanghai Pacific Department Stores Co.,
Ltd.
Department store
Chengdu Quanxing Mansion Pacific
Department Store Co., Ltd.
Department store
Chongqing Metropolitan Plaza Pacific
Department Store Co., Ltd.
Department store
Chongqing Pacific Consultant &
Management Co., Ltd.
Consulting service
Bai Fa China Holdings (HK) Ltd.
Investment
Pacific (China) Investment Co., Ltd.
Investment
Pacific (China) Investment Co.,
Chengdu FEDS Co., Ltd.
Department store
Ltd.
Dalian Pacific Department Store Co., Ltd. Department store

Proportion of Ownership
(%)
December 31
2020
2019
Remark
100
100
100
100
67
67
100
100
56
56
54
54
100
100
96
96
35
35
100
100
2
2
70
70
33
33
100
100
1)
46
46
40
40
40
40
13
13
1
1
44
44
-
-
-
-
-
-
100
100
100
100
1
1
2
2
2
2
100
100
1)
79
79
60
60
60
60
100
100
73
73
100
100
2)
100
100
100
100
100
100
3)
100
100
100
100
4)
100
100

1) As of December 31, 2020, they were still in the startup period.
2) The board of directors resolved to discontinue operations starting from April 2019 and the entity was liquidated on December 29, 2020.
3) As there was no further business planning for the entity, the operation was suspended in June 2017.
4) Due to an oversupply of department stores in the market, Chengdu FEDS Co., Ltd. (hereinafter referred to as “Chengdu FEDS”) decided to reconstruct the operational plan and transform the business management to improve the overall effectiveness. As such, the operation was discontinued since December 23, 2017.
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b. Subsidiaries excluded from the consolidated financial statements

Investor Investee Main Businesses Pacific Sogo Department Stores Co., Ltd. Lian Ching Investment Co., Ltd. Investment	Proportion of Ownership (%) December 31 2020 2019 Remark 50 50

The amount of Lian Ching Investment Co., Ltd. had been written off to zero, no liabilities were undertaken by the Group and the accounts are not disclosed in the consolidated financial statements.

13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in Associates

Associates that are not individually material		December 31	December 31
		2020 $ 10,164,724	2019 $ 10,107,165

Aggregate information of associates that are not individually material:

The Group’s share of: Profit from continuing operations Other comprehensive income (loss) Total comprehensive income (loss) for the year	For the Year Ended	For the Year Ended	December 31
		2020 $ 39,868 56,808 $ 96,676	2019 $ 58,065 (119,134) $ (61,069)

FEDS Development Ltd., Far Eastern New Century (China) Investment Co., Ltd. (FENCI (China)) (subsidiary of FENC) and Oriental Holdings Co., Ltd. (subsidiary of Asia Cement Corporation) jointly invested in Yuan Ding Enterprise (Shanghai) Limited (YDEL (Shanghai)) in order to hold and undertake the real estate development and construction of a commercial building in the Shanghai World Expo district. The investment agreement was already signed.

In February and December 2019, respectively, Yuan Ding Enterprise (Shanghai) Limited (YDEL (Shanghai)) undertook the registration of a capital increase, which resulted in an increase of RMB250,000 thousand (NT$1,138,000 thousand) and RMB107,880 thousand (NT$467,034 thousand), respectively, in the Group’s investment account in YDEL (Shanghai). In addition, the proportion of ownership is 20%, with a total investment amount of $1,605,034 thousand.

October 2020 and July 2019, Yuan Hsin Digital Payment Co., Ltd. undertook a capital reduction to offset the deficit, which resulted in a decrease of the Group’s shareholding in Yuan Hsin Digital Payment Co., Ltd. that corresponded to the existing ownership percentage by 6,850 thousand shares and 7,324 thousand shares, respectively.

The annual general shareholders’ meeting of Oriental Securities Corporation in 2020 passed a resolution for the capitalization of retained earnings. The Group acquired 2,849 thousand shares according to its existing ownership percentage.

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Chongqing Pacific Consultant & Management Co., Ltd. (CPCM) invested its equity of RMB75,000 thousand and acquired 33% shareholding in Chengdu Baiyang Industry Co., Ltd. (CDBI). To secure a stable and long-term cooperation, CPCM entered into a contract with Chengdu Department Emporium Group Co., Ltd. (CDEG, a joint venture partner in Mainland China), whereby CPCM agreed to provide funding to CDBI of RMB425,000 thousand. The earnings distribution shall be conducted as per the percentage provided in the cooperation contract and not as per their respective percentages of ownership. The contract further states that where CDBI is not under liquidation or CPCM decides to transfer its shareholding, the aforementioned funding of RMB425,000 thousand shall be capitalized in stages and become the equity of CDBI. As such, the funding is recognized as a long-term investment prepayment. However, if CDEG requires an earnings distribution percentage that exceeds the contractual agreement, CPCM may simultaneously request to recover 50% of the earnings distribution exceeding the agreement and the aforementioned security deposit. As of December 31, 2020, CDBI had paid back a total amount of RMB108,308 thousand to CPCM.

The investments in associates accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments were based on the associates’ financial statements audited for the same years by other auditors.

Refer to Note 34 for the information on the carrying amounts of investments in associates accounted for using the equity method that were pledged as security.

14. PROPERTY, PLANT AND EQUIPMENT

qui Fin $	Con $	$
$	$	$
$ -	$	$
$		$
$		$
$	$	$
$	$	$
$	$	$
-
$		$
$		$

36 -

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

Buildings 17-56 years Buildings and facilities 5-20 years Equipment under finance leases 2-20 years Plant, transportation, and miscellaneous equipment 3-12 years

For the year ended December 31, 2020, Chongqing Metropolitan Plaza Pacific Department Store Co., Ltd. had assessed the future profitability and recognized an impairment loss of $16,853 thousand after performing impairment test to assess the recoverable amount of property, plant and equipment.

Refer to Note 34 for the information on the carrying amounts of property, plant and equipment that were pledged as collateral for long/short-term borrowings.

15. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Land Buildings Plant, transportation, and miscellaneous equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Plant, transportation, and miscellaneous equipment		December 31	December 31
	2020 2019 $ 10,961,544 $ 11,367,407 31,744,713 33,396,243 6,380 1,160 $ 42,712,637 $ 44,764,810 For the Year Ended December 31
		2020 $ 2,494,328 $ 466,005 3,360,186 1,488 $ 3,827,679	2019 $ 2,101,626 $ 344,220 3,318,910 1,228 $ 3,664,358

b. Lease liabilities

Carrying amounts Current Non-current		December 31	December 31
		2020 $ 3,473,928 $ 24,335,088	2019 $ 3,381,049 $ 25,406,473

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Range of discount rate for lease liabilities was as follows:

Land Buildings Plant, transportation, and miscellaneous equipment	December 31
	2020 2019 1.09%-1.75% 1.09%-1.75% 0.86%-4.35% 0.90%-4.35% 0.88%-1.09% 0.92%-1.15%

After assessing the future profitability, the Group found that the recoverable amount was lower than the carrying value. As such, from January 1 to December 31, 2020, an impairment loss of $613,770 thousand was recognized. The Group adopts value in use as the recoverable amount, and the discount rates were between 6.0% and 9.3%. The impairment loss was recognized under other gains and losses in the consolidated statements of comprehensive income.

Apart from the aforementioned additions, depreciation and impairment charges, the right-of-use assets of the Group from January 1 to December 31, 2020 and 2019 had not been subleased to a third party.

The land in Taoyuan leased to the Group has been subleased to a third party as an operating lease. For the right-of-use assets listed as investment properties, please see Note 16 on investment properties. The aforementioned right-of-use assets exclude right-of-use assets qualified as investment properties.

c. Material lease-in activities and terms

In 2020, due to the COVID-19 pandemic that severely affected the global market economy, the Group entered into lease negotiation with some of the lessors. The lessors agreed to reduce the rents from January 1 to December 31, 2020.

In 2020, the Group recognized the aforementioned rent reductions of $280,698 thousand (as a deduction in operating expenses).

The Group leases certain property and equipment for its retail business with a lease term of 1 to 50 years. In addition to fixed payments, a part of the lease contract also specifies variable lease payments with different conditions. Some stores are leased by acquiring land use rights to build buildings and transfer buildings to lessor unconditionally at the end of the lease terms.

In 2020, the Group entered into a lease agreement with Far Eastern Construction Co., Ltd. The property is used for operation of hypermarket, retails and other businesses. In September 2020, the Branch Far Eastern Ai Mai Co., Ltd. was established in Shuinan, Taichung.

d. Other lease information

Expenses relating to short-term leases Expenses relating to low-value asset leases Expenses relating to variable lease payments not included in the measurement of lease liabilities Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 52,166 $ 64,626 $ (143,427) $ (4,224,076)	2019 $ 182,955 $ 69,461 $ (227,668) $ (5,898,217)

The Group has elected to apply the recognition exemption for short-term leases and low-value assets leases and, thus, did not recognize right-of-use assets and lease liabilities for these leases.

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16. INVESTMENT PROPERTIES

Balance at January 1, 2020 Additions Gain (loss) on changes in the fair value of investment properties Balance at December 31, 2020 Balance at January 1, 2019 Adjustments on initial application of IFRS 16 Balance at January 1, 2019 (restated) Additions Reclassification Loss on changes in the fair value of investment properties Balance at December 31, 2019	Land Buildings and Facilities Investment Properties under Construction $ 5,720,778 $ 2,866,154 $ 10,124 - 2,453 4,130 36,017 (75,853) - $ 5,756,795 $ 2,792,754 $ 14,254 $ 5,754,846 $ 2,935,794 $ - - - - 5,754,846 2,935,794 - - 45 7,970 - - 2,154 (34,068) (69,685) - $ 5,720,778 $ 2,866,154 $ 10,124	Right-of-use Assets $ 489,585 - (31,781) $ 457,804 $ - 537,429 537,429 - - (47,844) $ 489,585	Total $ 9,086,641 6,583 (71,617) $ 9,021,607 $ 8,690,640 537,429 9,228,069 8,015 2,154 (151,597) $ 9,086,641

Right-of-use assets included in investment properties which are units of office spaces located in Taoyuan and subleased under operating leases to others.

Some of the Group’s investment properties were leased out for 2 to 20 years. The lessees do not have bargain purchase options to acquire the investment properties at the expiry of the lease periods.

Except for the minimum lease payments, some of the lease contracts also indicate that the lessees should make variable payments which shall be determined on the basis of the consumer price index.

In 2020, due to the COVID-19 pandemic that severely affected the global market economy, the Group agreed to reduce the rent from January 1 to December 31, 2020.

The maturity analysis of lease payments receivable under operating leases of investment properties at December 31, 2020 is as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 onwards		December 31	December 31
		2020 $ 833,396 686,945 623,572 570,700 554,832 4,041,713 $ 7,311,158	2019 $ 955,598 739,951 603,043 539,542 532,780 4,563,664 $ 7,934,578

The fair values of the investment properties as of December 31, 2020 and 2019 were based on the valuations carried out at those dates, on a recurring basis by independent qualified professional valuers, Hong-Kai Chang, Yi-Chih Chang, Yu-Fen Yeh and Kuang-Ping Tai from Savills Real Estate Appraiser Office, a member of certified ROC real estate appraisers.

Except for undeveloped lands, the fair values of investment properties were measured using the income approach and the significant assumptions used are the increase in the estimated future net cash inflows, or the decrease in discount rates that would result in increases in the fair values.

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Expected future cash inflows Expected future cash outflows Expected future cash inflows, net Discount rate		December 31
	2020 2019 $ 20,904,803 $ 21,454,628 3,011,028 3,020,664 $ 17,893,775 $ 18,433,964 3.595%-4.345% 3.845%-4.345%

The market rentals in the area where the investment properties are located were between $1 thousand and $2 thousand per ping (i.e., per 3.3 square meters). The market rentals for comparable properties were between $1 thousand and $4 thousand per ping (i.e., per 3.3 square meters).

The expected future cash inflows generated by investment properties include rental income, interest income on rental deposits and disposal proceeds at the end of the period. The rental income was extrapolated using the annual rental growth rate, based on the existing lease contracts of the Group and comparative market rentals. The income analysis covers a period between 5 and 10 years. The interest income on rental deposits was extrapolated using the one-year average deposit interest rate, while the disposal proceeds was determined using the direct capitalization method under the income approach. The expected future cash outflows on investment properties include expenditures such as property tax, land value tax, insurance premiums, management fees, maintenance costs and replacement allowances. These expenditures were extrapolated based on the current level of expenditures, while taking into account the construction cost indices, future adjustments to land value announced, the tax rate promulgated under the House Tax Act and construction costs.

The discount rate was determined with reference to the interest rate for two-year time deposits of Chunghwa Post Co., Ltd. plus 0.75% and the risk premium of investment properties of 2%-2.5%.

Part of the land located in the east of Taiwan that is owned by the Group, is yet to be developed. The fair value of the undeveloped land was measured using the land development analysis approach. The significant assumptions used are such that an increase in total estimated sales, an increase in rate of return, or a decrease in the overall capital interest rate would result in an increase in the fair value.

Estimated total sales price Rate of return Overall capital interest rate		December 31	December 31
		2020 $ 1,647,633 18%-20% 1.34%-2.72%	2019 $ 1,511,974 18%-20% 1.56%-3.08%

The total sales price is estimated on the basis of the most effective use of land or property available for sale after development is completed, taking into account the related regulations, optimism of domestic macroeconomic prospects, local land use, and comparable market prices.

Refer to Note 34 for the information on the carrying amounts of investment properties pledged as collateral for borrowings.

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17. INTANGIBLE ASSETS

Cost Balance at January 1, 2020 Additions Disposals Reclassification Effect of exchange differences Balance at December 31, 2020 Accumulated amortization and impairment Balance at January 1, 2020 Impairment losses recognized Amortization expenses Disposals Effect of exchange differences Balance at December 31, 2020 Carrying amounts at December 31, 2020 Cost Balance at January 1, 2019 Additions Disposals Reclassification Effect of exchange differences Balance at December 31, 2019 Accumulated amortization and impairment Balance at January 1, 2019 Impairment losses recognized Amortization expenses Disposals Effect of exchange differences Balance at December 31, 2019 Carrying amounts at December 31, 2019	Goodwill $ 7,631,973 - - - - $ 7,631,973 $ (5,425,075) - - - - $ (5,425,075) $ 2,206,898 $ 7,631,973 - - - - $ 7,631,973 $ (4,329,191) (1,095,884) - - - $ (5,425,075) $ 2,206,898	Computer Software $ 432,020 59,789 (4,125) 43,819 883 $ 532,386 $ (314,935) (6,384) (83,971) 4,125 (851) $ (402,016) $ 130,370 $ 414,878 48,516 (42,047) 12,919 (2,246) $ 432,020 $ (297,344) - (60,149) 40,473 2,085 $ (314,935) $ 117,085	Franchise $ 153,832 90,027 - - - $ 243,859 $ - - - - - $ - $ 243,859 $ 28,942 124,890 - - - $ 153,832 $ - - - - - $ - $ 153,832	Total $ 8,217,825 149,816 (4,125) 43,819 883 $ 8,408,218 $ (5,740,010) (6,384) (83,971) 4,125 (851) $ (5,827,091) $ 2,581,127 $ 8,075,793 173,406 (42,047) 12,919 (2,246) $ 8,217,825 $ (4,626,535) (1,095,884) (60,149) 40,473 2,085 $ (5,740,010) $ 2,477,815

Goodwill arising on mergers or the acquisition of majority interests in companies is the acquisition cost in excess of the fair value of the identifiable net assets acquired.

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At the reporting date, the Group shall conduct an impairment test to assess the recoverable amount of the goodwill. The value in use shall serve as the computation basis for the recoverable amount. The computation of value in use is based on the cash flow projections generated by cash-generating units in the financial budget. In 2020, the discount rate used for computation was 4.52% per annum. After assessing the recoverable amount of the goodwill, the Group recognized no impairment loss on goodwill for 2020. In 2019, the discount rate used for computation was 11.8% per annum. After assessing the recoverable amount of the goodwill, the Group recognized an impairment loss on goodwill of $1,095,884 thousand for the business segment in mainland China.

Cash flows of the financial forecast is prepared and based on estimates of annual revenues, gross profit, capital expenditures and other operating costs. Management believed that any reasonably possible change in the key assumptions on which the recoverable amount was based would not cause the aggregate carrying amount of the cash-generating unit to exceed its aggregate recoverable amount.

For intangible assets pledged as collateral for loans, please see Note 34.

The following intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Computer software 1-10 years Franchise 45 years

18. PRE-PAYMENTS FOR LEASES

	December 31	December 31
	2020 $ 1,517,865	2019 $ 1,060,658

On July 8, 2015, Chubei New Century Shopping Mall Co., Ltd. signed with Hsinchu County Government the “Build-Operate-Transfer Agreement for Tingba Carpark of Hsinchu County” with Hsinchu County Government. As of December 31, 2020, the carpark is not yet open for operation. However, the lease payments and construction expenditure incurred had amounted to $1,517,865 thousand. Pursuant to the agreement, the lease period starting from the transfer of superficies includes the construction and operation period and lasts for 50 years.

For long-term prepayment for lease pledged as collateral of loans, please see Note 34.

19. OTHER ASSETS

Refundable deposits Lease incentives Others Current Non-current		December 31	December 31
		2020 $ 1,358,481 376,067 272,115 $ 2,006,663 $ 103,887 1,902,776 $ 2,006,663	2019 $ 1,347,547 339,350 368,058 $ 2,054,955 $ 110,095 1,944,860 $ 2,054,955

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20. BORROWINGS

a. Short-term borrowings

Credit loans Secured loans (Note 34) Interest rate intervals are as follows: Credit loans Secured loans		December 31
	2020 2019 $ 7,973,651 $ 8,814,863 1,072,095 816,033 $ 9,045,746 $ 9,630,896 0.8100%-3.9500 % 0.9000%-4.5675 % 0.8600%-3.9900 % 0.9200%-4.1325 %

b. Short-term bills payable

Commercial papers Less: Unamortized discount on short-term bills payable		December 31	December 31
		2020 $ 3,730,000 997 $ 3,729,003	2019 $ 3,624,000 1,007 $ 3,622,993

Outstanding short-term bills payable are as follows:

December 31, 2020

Promissory Institutions Commercial papers Mega Bills Finance China Bills Finance Shanghai Bank Grand Finance Ta Ching Bill Finance International Bills Finance Taiwan Bills Finance Taiwan Cooperative Bills Finance	Nominal Amount $ 1,050,000 900,000 500,000 400,000 280,000 200,000 200,000 200,000 $ 3,730,000	Discount Amount $ 249 258 196 48 68 65 99 14 $ 997	Carrying Amount Interest Rate Collateral $ 1,049,751 0.602%-0.620% Shares 899,742 0.250% Shares 499,804 0.332% - 399,952 0.650%-0.682% - 279,932 0.610%-0.710% - 199,935 0.510% - 199,901 0.600% - 199,986 0.700% - $ 3,729,003	Carrying Amount of Collateral $ 677,678 108,000 - - - - - -
				$ 785,678

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December 31, 2019

Promissory Institutions Commercial papers Mega Bills Finance China Bills Finance Shanghai Bank Grand Finance International Bills Finance Taiwan Bills Finance Ta Ching Bill Finance Taiwan Cooperative Bills Finance	Nominal Amount $ 924,000 850,000 500,000 400,000 350,000 200,000 200,000 200,000 $ 3,624,000	Discount Amount $ 203 94 251 119 223 5 38 74 $ 1,007	Carrying Amount Interest Rate Collateral $ 923,797 0.730%-1.070% Shares 849,906 0.500%-1.070% Shares 499,749 0.482% - 399,881 0.900%-1.068% - 349,777 0.700%-1.078% Shares 199,995 0.700% - 199,962 0.740%-1.060% - 199,926 0.830% - $ 3,622,993	Carrying Amount of Collateral $ 678,380 119,875 - - 129,465 - - -
				$ 927,720

c. Long-term borrowings

Secured loans Credit loans Syndicated loan (1) Revolving commercial papers Less: Current portion		December 31	December 31
		2020 $ 10,400,000 3,510,000 630,000 899,761 15,439,761 299,933 $ 15,139,828	2019 $ 10,100,000 6,240,000 - 1,199,757 17,539,757 2,540,000 $ 14,999,757

Loan expiry date and interest rate intervals are as follows:

loan maturity Interest rate intervals	December 31
	2020 2019 September 2021 to November 2023 January 2021 to December 2022 0.281%-1.895% 0.399%-1.720%

1) To support the development costs required for the “Build–Operate–Transfer Agreement for Tingba Carpark of Hsinchu County” (hereinafter referred to as the “Project”) in February 2016, Chubei New Century Shopping Mall Co., Ltd. entered into a medium-term syndicated loan agreement with Hua Nan Bank (lead bank), Taipei Fubon Bank, Chang Hwa Bank (three arrangers) and seven other banks for a loan of $3,700,000 thousand. The Company serves as the joint guarantor.

The credit period lasts for five years starting from the first drawdown of the facility. The first drawdown is deemed to have been made two years after the loan agreement is signed even if there is no actual drawdown. During the credit period, the drawdown of the loan may be made multiple times. However, it shall not be drawn in a revolving basis. When the drawdown period expires, the unused credit facility is terminated automatically and cannot be drawn again.

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According to the syndicated loan agreement, before the first drawdown, Chubei New Century Shopping Mall Co., Ltd. shall pledge the superficies of the Project as the first mortgage in terms of the line of credit mortgage to the lead bank. After the construction is completed, the buildings and peripheral facilities are pledged as the first mortgage in terms of the line of credit mortgage to the lead bank. Furthermore, during the syndicated loan period, the Company shall maintain a direct or indirect shareholding of 50% or more and controlling interest in Chubei New Century Shopping Mall Co., Ltd.

As of December 31, 2020, Chubei New Century Shopping Mall Co., Ltd. had drawn a total of $630,000 thousand. The loan period starts from June 5, 2020 and ends on February 26, 2023. The interest rate is 1.895% per annum, and the interest payment is made on a monthly basis. The principal and interest are expected to be settled when the credit period expires.

21. OTHER LIABILITIES

Other payables Payables for purchases of equipment Payables for salaries and bonuses Payables for rent Others Other liabilities Deposits received Others Current Other payables Other liabilities Non-current Other liabilities		December 31	December 31
		2020 $ 866,484 830,651 35,581 1,988,614 $ 3,721,330 $ 339,379 400,730 $ 740,109 $ 3,721,330 $ 373,784 $ 366,325	2019 $ 1,151,893 818,122 36,445 1,965,200 $ 3,971,660 $ 429,928 343,207 $ 773,135 $ 3,971,660 $ 315,976 $ 457,159

22. PROVISIONS

Dismantling obligation Current Non-current		December	31
		2020 $ 28,047 $ 3,000 25,047 $ 28,047	2019 $ 27,823 $ 3,000 24,823 $ 27,823

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	Dismantling
	Obligation
Balance at January 1, 2020	$ 27,823
Unwinding of discount	224
Balance at December 31, 2020	$ 28,047

23. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Group in ROC of the Group adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The employees of the Group’s subsidiaries in mainland China are members of a state-managed retirement benefit plan operated by the local government of mainland China. The Group in mainland China are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

b. Defined benefit plans

The defined benefit plan adopted by Yu Ming Advertising Agency Co., Ltd. (YMAC), Far Eastern Hon Li Do Co., Ltd. (FEHLD), FEDS, AIMAI, Ya Tung Department Stores, Ltd. (YTDS) and SOGO of the Group in accordance with the Labor Standards Law is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company and aforementioned subsidiaries contribute amounts equal to 2%-6% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy.

The pension costs of YMAC amounted to $13 thousand and $12 thousand in 2020 and 2019, respectively, and the accrued pension liabilities on December 31, 2020 and 2019 amounted to $486 thousand for both years.

FEHLD terminated its trading business on July 1, 2000. Its employees were transferred to AIMAI. The length of services of the employees at FEHLD was carried forward and will serve as the calculation basis of the defined benefit plans at AIMAI. If the employees retire, the calculation of pension costs would include the length of service at FEHLD. The accrued pension liabilities on December 31, 2020 and 2019 amounted to $201 thousand and $479 thousand, respectively. These accrued pension liabilities were provisions for the aforementioned pension.

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

December 31, 2020 Present value of defined benefit obligation Fair value of the plan assets Net defined benefit (assets) liabilities December 31, 2019 Present value of defined benefit obligation Fair value of the plan assets Net defined benefit (assets) liabilities	FEDS $ 691,522 (897,385) $ (205,863) $ 690,534 (924,569) $ (234,035)	AIMAI $ 259,741 (31,071) $ 228,670 $ 263,309 (29,769) $ 233,540	YTDS $ 10,132 (9,945) $ 187 $ 11,215 (10,105) $ 1,110	SOGO $ 671,639 (163,729) $ 507,910 $ 664,251 (161,435) $ 502,816

Movements in net defined benefit liabilities are as follows:

Balance at January 1, 2019 Service cost Current service cost Net interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in demographic assumptions - changes in financial assumptions - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Payments made from the Company Balance at December 31, 2019 Service cost Current service cost Service costs of prior periods Net interest expense (income) Recognized in profit or loss	FEDS	Net Defined Benefit (Assets) Liabilities $ 89,001 5,581 969 6,550 (332,601 ) 10,011 25,992 8,496 (288,102) (41,449 ) - (35) (234,035 ) 5,044 - (1,776) 3,268	AIMAI
	Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets $ 667,816 $ (578,815 ) 5,581 - 7,513 (6,544) 13,094 (6,544) - (332,601 ) 10,011 - 25,992 - 8,496 - 44,499 (332,601) - (41,449 ) (34,840 ) 34,840 (35) - 690,534 (924,569 ) 5,044 - - - 5,179 (6,955) 10,223 (6,955)		Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Net Defined Benefit Liabilities $ 267,662 $ (29,626 ) $ 238,036 1,527 - 1,527 3,011 (360) 2,651 4,538 (360) 4,178 - (1,036 ) (1,036 ) 4,567 - 4,567 10,766 - 10,766 6,800 - 6,800 22,133 (1,036) 21,097 - (27,491 ) (27,491 ) (28,744 ) 28,744 - (2,280) - (2,280) 263,309 (29,769 ) 233,540 1,249 - 1,249 1,975 - 1,975 - (240) (240) 3,224 (240) 2,984 (Continued)

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Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in demographic assumptions - changes in financial assumptions - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Company account paid Balance at December 31, 2020	FEDS	Net Defined Benefit (Assets) Liabilities $ 40,112 2,462 16,849 11,630 71,053 (46,149 ) - - $ (205,863)	AIMAI
	Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets $ - $ 40,112 2,462 - 16,849 - 11,630 - 30,941 40,112 - (46,149 ) (40,176 ) 40,176 - - $ 691,522 $ (897,385)		Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Net Defined Benefit Liabilities $ - $ (1,106 ) $ (1,106 ) 2,043 - 2,043 6,948 - 6,948 334 - 334 9,325 (1,106) 8,219 - (15,289 ) (15,289 ) (15,333 ) 15,333 - (784) - (784) $ 259,741 $ (31,071) $ 228,670 (Concluded)

Balance at January 1, 2019 Service cost Current service cost Net interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in demographic assumptions - changes in financial assumptions - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Company account paid Balance at December 31, 2019 Service cost Current service cost Net interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in demographic assumptions - changes in financial assumptions - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Company account paid Balance at December 31, 2020	YTDS	Net Defined Benefit Liabilities $ 1,820 90 18 108 (334 ) 1 243 488 398 (158 ) - (1,058) 1,110 92 8 100 (326 ) - 217 34 (75) (131 ) - (817) $ 187	SOGO
	Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets $ 11,337 $ (9,517 ) 90 - 114 (96) 204 (96) - (334 ) 1 - 243 - 488 - 732 (334) - (158 ) - - (1,058) - 11,215 (10,105 ) 92 - 84 (76) 176 (76) - (326 ) - - 217 - 34 - 251 (326) - (131 ) (693 ) 693 (817) - $ 10,132 $ (9,945)		Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets $ 636,263 $ (157,904 ) 3,618 - 7,159 (1,893) 10,777 (1,893) - (5,738 ) 4,221 - 28,266 - 8,956 - 41,443 (5,738) - (20,132 ) (24,232 ) 24,232 - - 664,251 (161,435 ) 3,281 - 4,982 (1,286) 8,263 (1,286) - (5,270 ) 10,988 - 18,491 - (6,601) - 22,878 (5,270) - (19,491 ) (23,753 ) 23,753 - - $ 671,639 $ (163,729)	Net Defined Benefit Liabilities $ 478,359 3,618 5,266 8,884 (5,738 ) 4,221 28,266 8,956 35,705 (20,132 ) - - 502,816 3,281 3,696 6,977 (5,270 ) 10,988 18,491 (6,601) 17,608 (19,491 ) - - $ 507,910

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

1) Investment risk: The plan assets are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments of the plan assets.
3) Salary risk: The present value of the defined benefit obligation is calculated with reference to the future salaries of plan participants. As such, an increase in the salaries of the plan participants will increase the present value of the defined benefit obligation.

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

	FEDS	AIMAI	YTDS	SOGO
December 31, 2020
Discount rates	0.500%	0.500%	0.500%	0.500%
Expected rates of salary increase	2.000%	1.000%	2.000%	2.250%
December 31, 2019
Discount rates	0.750%	0.750%	0.750%	0.750%
Expected rates of salary increase	2.000%	1.000%	2.000%	2.250%

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

December 31, 2020 Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease December 31, 2019 Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease	FEDS $ (16,862) $ 17,485 $ 16,923 $ (16,409) $ (17,601) $ 18,275 $ 17,730 $ (17,168)	AIMAI $ (6,967) $ 7,247 $ 7,076 $ (6,838) $ (7,310) $ 7,611 $ 7,451 $ (7,192)	YTDS $ (217) $ 225 $ 218 $ (212) $ (243) $ 252 $ 245 $ (237)	SOGO $ (18,698) $ 19,447 $ 18,780 $ (18,158) $ (19,059) $ 19,838 $ 19,201 $ (18,549)

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

December 31, 2020 The expected contributions to the plans for the next year The average duration of the defined benefit obligation December 31, 2019 The expected contributions to the plans for the next year The average duration of the defined benefit obligation	FEDS $ 5,356 9.9 years $ 5,417 10.4 years	AIMAI $ 4,240 10.8 years $ 4,422 11.2 years	YTDS $ 120 8.6 years $ 144 8.7 years	SOGO $ 19,534 11.3 years $ 20,115 11.6 years

24. EQUITY

a. Share capital

Ordinary shares

Shares authorized (in thousands) Shares authorized Shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2020 1,750,000 $ 17,500,000 1,416,941 $ 14,169,406	2019 1,750,000 $ 17,500,000 1,416,941 $ 14,169,406

Fully paid ordinary shares, which have a par value of $10, are entitled to one vote and a right to receive dividends per share.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note) Issuance in excess of ordinary shares Treasury share transactions May only be used to offset a deficit Changes in percentage of ownership interest in associates		December 31	December 31
		2020 $ 2,142,074 1,173,346 23,371 $ 3,338,791	2019 $ 2,142,074 1,173,346 12,046 $ 3,327,466

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Note: Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year ).

c. Retained earnings and dividend policy

According to the Articles of Incorporation, where the Company makes profit in a fiscal year, the profit shall be first utilized to make its business income tax payments and offset deficits. From any remaining profit, out of the profit after tax for the current period plus other profit items adjusted to the current year’s undistributed earnings other than profit after tax for the period, 10% will be appropriated as a legal reserve. After appropriating to the special reserve as required by government regulations, the remaining amount, along with any prior years’ undistributed earnings, may be utilized for earnings distribution in the form of dividend based on shareholding percentage. However, the Company may retain a certain portion depending on the operating needs. In case of a capital increase during the year, dividend appropriated to new shareholders is subject to the resolution passed in the shareholders’ meeting. For policies of compensation of employees and remuneration of directors stipulated by the Articles of Incorporation, please see Note 26(i).

The Company’s distribution of dividends would be in consideration of on economic conditions, tax obligations, and operating requirements for cash. For an orderly system of dividend distribution, the dividends are distributed in accordance with the Articles of Incorporation. In addition, improvements of the financial structure and support for investment, capacity expansion or other major capital expenditures are needed. The cash dividends to be distributed should not be below 50% than the current year’s post-tax net profit deduction, offsetting losses of previous years, the statutory surplus reserve and the special surplus reserve, except for the improvement of financial structure and the transfer of funds, capacity expansion or other major capital expenditures. The cash dividends to be distributed should not be below 10% of the total cash and share dividends for the current accounting year.

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

Under Order No. 1010012865, Order No. 1010047490 and Order No. 1030006415 issued by the FSC and the directive titled Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs, the Company should appropriate or reverse to a special reserve.

The appropriations of earnings for 2019 and 2018, which were approved in the shareholders’ meetings on June 24, 2020 and June 25, 2019, respectively, are as follows:

Legal reserve Special reserve Cash dividends Dividends per share (NT$)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ 125,920 $ (156,088) $ 1,133,552 $ 0.80	2018 $ 131,815 $ 73,330 $ 1,204,400 $ 0.85

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The appropriation of the earnings for 2020 was proposed by the board of directors on March 23, 2021. The appropriations and dividends per share are as follows:

	For the Year	For the Year
		Ended
	December 31,
		2020
Legal reserve	$	186,704
Special reserve	$	(89,694)
Cash dividends	$	1,558,635
Dividends per share (NT$)	$	1.10

The appropriation of earnings for 2020 is subject to the resolution of the shareholders in their meeting to be held on June 29, 2021.

d. Special reserve

Beginning at January 1 Appropriation in respect of Initial application of IFRS 16 Net increases in the fair value of investment properties Reversals of special reserve Reversal of fair value of investment properties Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,865,351 - - (156,088) $ 2,709,263	2019 $ 2,656,286 135,735 73,330 - $ 2,865,351

On the initial application of the fair value model to investment properties and on the initial application of IFRS 16, the Group appropriated for a special reserve at an amount equal to the net increase arising from fair value measurement and which was subsequently transferred to retained earnings. The additional special reserve should be appropriated for subsequent net increases in fair value. The amount appropriated may be reversed to the extent that the cumulative net increases in fair value decrease or on the disposal of investment properties. If investment properties were reclassified to property, plant and equipment, the associated special reserve would be reversed in accordance to the subsequent depreciation expense of property, plant and equipment.

e. Other equity items

1) Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Exchange differences on translating the financial statements of foreign operations Share from associates accounted for using the equity method Balance, at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 65,325 (16,845) 20,070 $ 68,550	2019 $ 90,654 35,266 (60,595) $ 65,325

Translation adjustments arising from net assets of foreign operations that are translated from the functional currency to New Taiwan dollars were recognized as other comprehensive income under exchange differences on translating foreign operations.

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2) Unrealized gain (loss) on financial assets at FVTOCI

Balance at January 1 Recognized for the year Unrealized (loss) gain - equity instruments Share from associates accounted for using the equity method Other comprehensive income recognized for the year Cumulative unrealized gain of equity instruments transferred to retained earnings due to disposal Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 3,058,874 (386,877) 41,318 2,713,315 1,036 $ 2,714,351	2019 $ 1,969,628 1,117,155 (27,909) 3,058,874 - $ 3,058,874

f. Non-controlling interests

Balance at January 1 Adjustments on initial application of IFRS 16 Balance at January 1 (restated) Share in profit for the year Other comprehensive income (loss) during the year Cash dividends distributed by subsidiaries Exchange differences on translating the financial statements of foreign operations Unrealized gain on financial assets at FVTOCI Remeasurement of defined benefit plans Related income tax Share of other comprehensive income of associates accounted for using the equity method Adjustments relating to changes in associates accounted for using the equity method Balance, at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 8,113,401 - 8,113,401 605,758 (117,859) (8,223) 2,577 (9,638) 1,928 (3,234) 9,658 $ 8,594,368	2019 $ 8,166,484 (159,751) 8,006,733 370,426 (239,203) 18,312 1,409 (19,543) 3,909 (28,642) - $ 8,113,401

g. Treasury shares

The shares that the subsidiaries held were acquired before the Company Act was amended in 2001. The Company’s shares held by its subsidiaries at the end of the reporting period are as follows:

December 31, 2020

Name of Subsidiary Number of Shares Held (In Thousands of Shares) Bai Ding Investment Co., Ltd. 8,207	Carrying Amount Market Price $ 97,110 $ 196,949

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December 31, 2019

Name of Subsidiary Number of Shares Held (In Thousands of Shares) Bai Ding Investment Co., Ltd. 8,207	Carrying Amount Market Price $ 97,110 $ 213,771

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as the rights to dividends and to vote. The subsidiaries holding treasury shares, however, retain shareholders’ rights, except the rights to participate in any share issuances for cash and to vote.

25. REVENUE

Sales of goods (Note) Commissions from concessionaires’ sales (Note) Maintenance and promotion fee income Rental income Investment properties (Note 14) Variable lease payments that do not depend on an index or a rate and contingent rentals Other lease payments Other operating leases Variable lease payments that do not depend on an index or a rate Other lease payments Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 23,070,901 11,023,289 794,739 - 302,214 302,214 141,057 1,170,107 1,311,164 1,613,378 785,642 $ 37,287,949	2019 $ 22,794,827 11,803,340 803,134 13,264 262,704 275,968 136,898 1,243,937 1,380,835 1,656,803 837,958 $ 37,896,062

Note: Gross revenue is presented as follows:

Concessionaires’ sales Sale of goods	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 87,374,524 23,576,576 $ 110,951,100	2019 $ 87,142,195 23,264,348 $ 110,406,543

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Contract Balances

	December 31,	December 31,	December 31,	December 31,
		2020		2019	January 1, 2019
Notes receivable (Note 10)	$	1,864	$	1,132	$	2,287
Accounts receivable (Note 10)	$	724,980	$	906,371	$	1,738,215
Contract liabilities - current
Sale of goods	$	8,039,334	$	7,669,255	$	7,435,814
Customer loyalty programs		76,226		95,772		84,802
Others		6,174		5,801		4,852
	$	8,121,734	$	7,770,828	$	7,525,468

Refer to Note 10 for the information of notes receivables and trade receivables.

The changes in the balance of contract liabilities primarily result from the timing difference between the Group’s performance and the respective customer’s payment.

Revenue of the reporting period recognized from the beginning contract liabilities which were satisfied in the previous periods is as follows:

From contract liabilities at the start of the year Sale of goods Customer loyalty programs	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 5,872,964 34,768 $ 5,907,732	2019 $ 5,836,924 49,954 $ 5,886,878

26. NET PROFIT FOR THE YEAR

Net profit for the year includes the following items:

a. Operating costs

Operating costs Cost of sales Rental costs Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 18,216,598 327,294 36,779 $ 18,580,671	2019 $ 17,900,994 316,826 35,629 $ 18,253,449

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b. Interest income

For the Year Ended	For the Year Ended	December 31
2020 $ 59,386 6,858 $ 66,244 For the Year Ended		2019 $ 82,585 7,864 $ 90,449 December 31
2020 $ 312,581 For the Year Ended		2019 $ 286,299 December 31
	2020 $ (11,520) (71,617) 2,367 (17,035) 553 (6,384) (16,853) (613,770) 172,445 (89,481) $ (651,295)	2019 $ 691 (151,597) 16,046 (84,473) 291 (1,095,884) - - 330,879 51,150 $(1,035,197)

e. Finance costs

For the Year Ended	December 31	December 31
2020 $ 476,888 359,531 20,639 857,058 (5,691) 851,367 224 $ 851,591	$	2019 477,029 412,677 19,475 909,181 (74,481) 834,700 629 835,329


	$

56 -

Information about capitalized interest is as follows:

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
2020 2019 $ 5,691 $ 74,481 1.895% 0.980%-1.020% For the Year Ended December 31
2020 2019 $ 2,132,772 $ 2,030,727 3,827,679 3,664,358 (170,280) (139,890) 5,790,171 5,555,195 83,971 60,149 $ 5,874,142 $ 5,615,344 $ 228,913 $ 225,668 5,561,258 5,329,527 $ 5,790,171 $ 5,555,195 $ 1,391 $ - 82,580 60,149 $ 83,971 $ 60,149 For the Year Ended December 31
	2020 $ 77,914 33,312 $ 111,226	2019 $ 65,378 41,426 $ 106,804

57 -

Post-employment benefits (Note 23) Defined contribution plan Defined benefit plan Other employee benefits Total employee benefits expenses An analysis of employee benefits expenses by function Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 144,908 13,342 158,250 3,971,642 $ 4,129,892 $ 4,129,892	2019 $ 179,323 19,732 199,055 4,156,707 $ 4,355,762 $ 4,355,762

h. Compensation of employees and remuneration of directors

According to the Company’s Articles, the Company accrues compensation of employees and remuneration of directors at a rate of 2% to 3.5% and no less than 2.5%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and remuneration of directors for the years ended December 31, 2020 and 2019, which were approved by the Company’s board of directors on March 23, 2021 and March 27, 2020, respectively, are as follows:

Accrual rate

Compensation of employees Remuneration of directors Amount	For the Year Ended December 31
	2020 2019 3.2% 3.2% 2.4% 2.4%

Compensation of employees Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2020 Cash $ 75,603 56,702	2019
		Cash $ 74,392 55,794

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

There is no difference between the actual compensation of employees and remuneration of directors paid and the amounts recognized in the financial statements for the years ended December 31, 2019 and 2018.

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

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27. INCOME TAX

a. Income tax recognized in profit or loss

Major components of income tax expense (benefit) are as follows:

For the Year Ended December 31 2020 2019 Current tax In respect of the current year $ 644,936 $ 769,421 Income tax on unappropriated earnings 16 442 Adjustments for the prior years (257,069) (38,818) 387,883 731,045 Deferred tax In respect of the current year 66,567 195,609 Adjustments to deferred tax attributable to changes in tax rates and laws (7,147) 25,570 Adjustments for the prior years 8,571 (1,555) 67,991 219,624 Income tax expense recognized in profit or loss $ 455,874 $ 950,669 A reconciliation of accounting profit and income tax expenses are as follows: For the Year Ended December 31 2020 2019 Profit before income tax from continuing operations $ 3,000,771 $ 3,102,938 Income tax expense calculated at the statutory rate $ 625,591 $ 883,130 Nondeductible expenses in determining taxable income 12,365 17,516 Deferred tax effect of earnings of subsidiaries (20,840) 40,032 Tax-exempt income (102,407) (73,524) Income tax on unappropriated earnings 16 442 Land value increment tax (4,039) (9,238) Unrecognized loss carryforwards 135,301 138,127 Unrecognized deductible temporary differences (6,211) (12,783) Adjustments for prior years’ income tax (248,498) (40,373) Others 64,596 7,340 Income tax expense recognized in profit or loss $ 455,874 $ 950,669	For the Year Ended	For the Year Ended	For the Year Ended	December 31
				2019 $ 769,421 442 (38,818) 731,045 195,609 25,570 (1,555) 219,624 $ 950,669 December 31
		2020 $ 3,000,771 $ 625,591 12,365 (20,840) (102,407) 16 (4,039) 135,301 (6,211) (248,498) 64,596 $ 455,874	2019 $ 3,102,938 $ 883,130 17,516 40,032 (73,524) 442 (9,238) 138,127 (12,783) (40,373) 7,340 $ 950,669

In July 2019, the Statute for Industrial Innovation was announced, stipulating that the construction or purchase of specific assets or technologies with undistributed earnings from fiscal year 2018 onward may be included as a deduction for calculating undistributed earnings. When the Group calculates undistributed earnings tax, it only deducts the amount of capital expenditure from actual reinvestments.

59 -

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year Remeasurement on defined benefit plans	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 19,377	2019 $ (46,260)

c. Current tax assets and liabilities

Current tax assets Tax refund receivable Benefits of tax losses to be carried back to recover taxes paid in prior periods Current tax liabilities Income tax payable		December 31	December 31
		2020 $ 1,063 - $ 1,063 $ 485,553	2019 $ 10,291 521 $ 10,812 $ 772,780

d. Deferred tax assets and liabilities

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

For the year ended December 31, 2020

Deferred tax assets Temporary differences Right-of-use assets Differences of pension in determining taxable income Investments in subsidiaries Others Loss carryforwards	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 172,450 $ (95,046) $ - 140,406 (4,965) 5,166 1,611 9,166 - 131,784 77,801 - 446,251 (13,044) 5,166 142,974 (9,459) - $ 589,225 $ (22,503) $ 5,166	Exchange Differences Closing Balance $ 213 $ 77,617 - 140,607 - 10,777 85 209,670 298 438,671 - 133,515 $ 298 $ 572,186

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Deferred tax liabilities Temporary differences Depreciation Reserve for land revaluation increment tax Investment properties Investments in subsidiaries Differences of pension in determining taxable Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehen- sive Income $ 922,711 $ 40,464 $ - 508,719 - - 352,232 (4,038 ) - 233,970 (951 ) - 46,807 - - 248,515 10,013 (14,211) $ 2,312,954 $ 45,488 $ (14,211)	Exchange Differences $ - - - 3,824 - - $ 3,824	Others $ - - - - - - $ -	Closing Balance $ 963,175 508,719 348,194 236,843 46,807 244,317 $ 2,348,055

For the year ended December 31, 2019	For the year ended December 31, 2019	For the year ended December 31, 2019	For the year ended December 31, 2019
									Recognized		in
									Other
			Opening		Recognized in				Comprehensive					Exchange
			Balance		Profit or			Loss	Income					Differences				Closing Balance
Deferred tax assets
Temporary differences
Right-of-use assets		$	197,475		$	(24,016)			$		-		$		(1,009)			$	172,450
Differences of pension in
determining taxable
income			153,858				5,741			(19,193)							-		140,406
Investments in
subsidiaries			104,161			(102,550)					-						-		1,611
Others			148,447			(16,448)					-					(215)			131,784
			603,941			(137,273)				(19,193)					(1,224)				446,251
Loss carryforwards			168,159			(25,225)					-					40			142,974
		$	772,100		$	(162,498)			$	(19,193)			$		(1,184)			$	589,225
								Recognized in
									Other
		Opening		Recognized in				Comprehen-		Exchange									Closing
		Balance		Profit or Loss				sive Income		Differences						Others			Balance
Deferred tax liabilities
Temporary differences
Depreciation	$		914,436	$		8,275		$	-	$			-		$		-	$	922,711
Reserve for land revaluation
increment tax			508,719			-			-				-				-		508,719
Investment properties			361,470		(9,238		)		-				-				-		352,232
Investments in subsidiaries			230,326		15,858				-			(12,214		)			-		233,970
Differences of pension in
determining taxable
income			-		19,740				27,067				-				-		46,807
Others			99,411		22,491				-				(2	)		126,615			248,515
	$	2,114,362		$	57,126			$	27,067	$		(12,216		)	$	126,615		$	2,312,954

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e. Deductible temporary differences and unused loss carryforwards for which no deferred tax assets were recognized in the consolidated balance sheets

Loss carryforwards Expiry in 2030 Expiry in 2029 Expiry in 2028 Expiry in 2027 Expiry in 2026 Expiry in 2025 Expiry in 2024 Expiry in 2023 Expiry in 2022 Expiry in 2021 Expiry in 2020 Deductible temporary differences		December 31	December 31
		2020 $ 482,780 644,357 989,901 2,014,173 1,171,097 82,078 83,290 120,897 186,093 157,297 - $ 5,931,963 $ 1,385,443	2019 $ - 518,468 1,383,262 1,990,891 1,008,932 784,762 83,290 129,329 195,449 164,662 174,022 $ 6,433,067 $ 1,419,548

f. Information about unused loss carryforwards

As of December 31, 2020, information about loss carryforwards is as follows:

	Remaining Creditable Amount Expiry Year $ 518,518 2030 776,024 2029 1,228,190 2028 2,021,755 2027 1,385,940 2026 89,688 2025 83,290 2024 129,329 2023 195,449 2022 171,355 2021 $ 6,599,538

g. Income tax assessments

Income tax returns of the entities in the Group in the ROC through 2018 have been assessed by the tax authorities.

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28. EARNINGS PER SHARE

Unit: NT$ Per Share

Basic earnings per share Diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1.38 $ 1.37	2019 $ 1.26 $ 1.26

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

Net profit for the year

Profit for the year attributable to owners of the Company Effect of potentially dilutive ordinary shares: Compensation of employees Earnings used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,939,139 - $ 1,939,139	2019 $ 1,781,843 - $ 1,781,843

(In Thousands of Shares)

Weighted average number of ordinary shares outstanding used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Weighted average number of ordinary shares outstanding used in the computation of dilutive earnings per share	For the Year Ended	For the Year Ended	December 31
		2020 1,408,734 4,499 1,413,233	2019 1,408,734 4,031 1,412,765

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

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29. GOVERNMENT SUBSIDIES

In 2020, the Group received a subsidy for salaries and working capital totaling $88,693 thousand in accordance with Article 5 of “Relief Measures from Ministry of Economic Affairs for Severely Affected Industries due to COVID-19”, a wage subsidy of $3,902 thousand (RMB911 thousand) from the Human Resources and Social Security Bureau of Chongqing City, a loan interest expense subsidy for SME businesses of $2,570 thousand (RMB600 thousand) from the Commerce Committee of Chongqing City, a production subsidy for SME businesses of $472 thousand (RMB110 thousand) from the district government of Zhongshan, Dalian, and a capital subsidy of $300 thousand (RMB70 thousand) from Yuzhong district’s special project of Chongqing Municipal People’s Government, all of which are classified either as a deduction of operating expenses or as non-operating income and expenses.

30. CASH FLOW INFORMATION

a. Non-cash transactions

For the years ended December 31, 2020 and 2019, the Group entered into the following non-cash investing activities which were not reflected in the consolidated statements of cash flows:

For the years ended December 31, 2020 and 2019, the prepayment for equipment reclassified to property, plant and equipment amounted to $58,886 thousand and $127,464 thousand, respectively (please see Note 14).

b. Changes in liabilities arising from financing activities

For the year ended December 31, 2020

Short-term borrowings Short-term bills payable Long-term borrowings (including current portion) Lease liabilities Other non-current liabilities	Opening Balance $ 9,630,896 3,622,993 17,539,757 28,787,522 457,159 $ 60,038,327	Cash Flows $ (644,722 ) 106,010 (2,099,996 ) (2,957,964 ) (90,834) $ (5,687,506)		Non-cash Changes New Leases Change in Exchange Rate $ - $ 59,572 - - - - 2,274,812 22,601 - - $ 2,274,812 $ 82,173	Others $ - - - (317,955 ) - $ (317,955)	Closing Balance $ 9,045,746 3,729,003 15,439,761 27,809,016 366,325

						$ 56,389,851

For the year ended December 31, 2019

Short-term borrowings Short-term bills payable Long-term borrowings Bonds payable Other non-current liabilities	Opening Balance $ 12,957,612 3,480,365 15,090,000 30,357,752 493,569 $ 62,379,298	Cash Flows $ (3,175,258 ) 142,628 2,449,757 (3,386,357 ) (36,410) $ (4,005,640)		Non-cash Changes New Leases Change in Exchange Rate $ - $ (151,458 ) - - - - 2,002,699 (88,641 ) - - $ 2,002,699 $ (240,099)	Others $ - - - (97,931 ) - $ (97,931)	Closing Balance $ 9,630,896 3,622,993 17,539,757 28,787,522 457,159

						$ 60,038,327

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31. CAPITAL MANAGEMENT

Under its operating development schemes and related government rules, the Group manages its capital to ensure it can continue to operate as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance.

The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Group (comprising share capital, capital surplus, retained earnings and other equity). The Group’s capital management concerns the capital expenditures for capital structure and relative risks to ensure the optimal capital structure; the Group may adjust the amount of dividends paid to shareholders, the number of new shares issued and the proceeds from borrowings and repayments of borrowings, in order to balance the overall capital structure.

32. FINANCIAL INSTRUMENTS

a. Fair value information - financial instruments not measured at fair value

The financial instruments not measured at fair value are either those with due dates in the near future or those with a future collection value which approximately equals it carrying amount. Thus, the fair value of these financial instruments is estimated at their carrying amounts on the financial reporting date.

b. Fair value information - financial instruments measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2020 Financial assets at FVTPL Beneficiary certificates Domestic listed ordinary shares Financial assets at FVTOCI Domestic listed ordinary shares Unlisted shares	Level 1 $ 336,200 113,846 $ 450,046 $ 4,352,973 - $ 4,352,973	Level 2 $ - - $ - $ - - $ -	Level 3 $ - - $ - $ - 584,868 $ 584,868	Total $ 336,200 113,846 $ 450,046 $ 4,352,973 584,868 $ 4,937,841

65 -

December 31, 2019

Financial assets at FVTPL Beneficiary certificates Domestic listed ordinary shares Financial assets at FVTOCI Domestic listed ordinary shares Unlisted shares	Level 1 $ 346,330 110,926 $ 457,256 $ 4,736,737 - $ 4,736,737	Level 2 $ - - $ - $ - - $ -	Level 3 $ - - $ - $ - 591,283 $ 591,283	Total $ 346,330 110,926 $ 457,256 $ 4,736,737 591,283 $ 5,328,020

There were no transfers between Level 1 and 2 in both 2020 and 2019.

2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2020

		Investment in
		Equity
		Instruments at
	Financial Assets	FVTOCI
Balance at January 1, 2020		$ 591,283
Recognized in profit or loss (included in other gains and losses)		(441)
Recognized in other comprehensive income (included in unrealized valuation
gain (loss) on financial assets	at FVTOCI)	(5,974)
Balance at December 31, 2020		$ 584,868

For the year ended December 31, 2019

		Investment in
		Equity
		Instruments at
	Financial Assets	FVTOCI
Balance at January 1, 2019		$ 573,146
Recognized in profit or loss (included in other gains and losses)		(87)
Recognized in other comprehensive income (included in unrealized valuation
gain (loss) on financial assets	at FVTOCI)	18,224
Balance at December 31, 2019		$ 591,283

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

Financial Instruments Unlisted shares	Valuation Techniques and Inputs
	a) Asset-based approach. Valuation based on the fair value of an investee, calculated through each investment of the investee using the income approach, market approach or a combination of the two approaches, while also taking the liquidity premium into consideration.

b) Transaction method of market approach. The approach is a valuation strategy based on market ratios of companies with similar profitability at the end of the reporting period, while taking the liquidity premium into consideration.
c. Categories of financial instruments

Financial assets FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (1) FVTOCI Equity instruments Financial liabilities Amortized cost (2)	December 31
	2020 2019 $ 450,046 $ 457,256 19,065,317 18,170,249 4,937,841 5,328,020 48,194,418 50,412,783

1) The balances included the carrying amount of cash and cash equivalents, notes receivable and trade receivables (including related parties), other receivables and refundable deposits, which are measured at amortized cost.
2) The balances included the carrying amount of short-term borrowings, short-term bills payable, notes payable and trade payables (including related parties), other payables, long-term borrowings including the current portion and deposits received, which are measured at amortized cost.
d. Financial risk management objectives and policies

The Group’s major financial instruments include equity instruments, accounts receivable, accounts payable, lease liabilities and borrowings. The objective of the financial risk management is to mitigate the market risks (including foreign exchange risk, interest rate risk and other price risks), credit risk, liquidity risk and other financial risks that may impact the management and operating activities of the Group. The financial management department of the Group is committed to analyze and evaluate various financial risk factors that are market-related, provide and execute the corresponding mitigating strategies to reduce the risk impact of market fluctuation.

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The main financial activities of the Group are governed by the Group’s internal management and approved by the board of directors. The financial schemes, which include fund raising plans should be carried out in compliance with the Group’s policies.

1) Market risk

a) Exchange rate risk

The Group was exposed to exchange rate risk for holding assets and liabilities denominated in foreign currencies.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period are as follows:

Assets USD Liabilities USD Sensitivity analysis		In Thousands of U.S. Dollars December 31	In Thousands of U.S. Dollars December 31
		2020 $ 5,218 $ 13,772	2019 $ 14,409 $ 3,900

The Group was mainly affected by the floating exchange rates of USD denominated assets and liabilities. The sensitivity analyses below were determined based on the Group’s exposure to exchange rates for non-derivative instruments at the end of the reporting period. The change of exchange rates reported to the senior management of the Group was based on a 1% increase or decrease in exchange rate which also denotes the management’s assessment for the reasonableness of the fluctuation of exchange rates.

If exchange rates increase/decrease by 1% and all variables remained unchanged, the profit before tax for the years ended December 31, 2020 and 2019 would decrease/increase by $2,436 thousand and $3,151 thousand, respectively.

b) Interest rate risk

The Group was exposed to interest rate risk because the entities in the Group borrowed funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings.

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The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period are as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities Sensitivity analysis	December 31
	2020 2019 $ 9,490,963 $ 10,503,168 28,361,111 31,388,615 4,701,632 2,662,905 27,662,415 28,192,553

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for financial assets and financial liabilities at the end of the reporting period. For sensitivity analysis purposes, the sensitivity rate was adjusted as a result of the volatile financial markets. The measurement of the increase or decrease in the interest rates is based on 100 basis points, which is reported to the senior management denoting the management’s assessment for the reasonableness of the fluctuation of the interest rates.

If interest rates increase/decrease by 100 basis points, all variables remained unchanged, the profit before tax for the years ended December 31, 2020 and 2019 would decrease/increase by $229,608 thousand and $255,296 thousand, respectively.

c) Other price risks

The Group was exposed to equity price risks involving equity investments in listed companies and beneficial certificates. The Group’s investments in listed companies and beneficial certificates should be in compliance with the rule made by the board of directors in order to achieve the goal of risk management and maximize the returns on investments.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period. For sensitivity analysis purposes, the sensitivity rate was adjusted as a result of the volatile financial market.

If equity prices increase/decrease by 5%, the profit before tax for the years ended December 31, 2020 and 2019 would increase/decrease by $22,502 thousand and $22,863 thousand, respectively due to the change in fair value of financial assets measured at fair value through profit or loss. The pre-tax other comprehensive income for the years ended December 31, 2020 and 2019 would increase/decrease by $246,892 thousand and $266,401 thousand, respectively due to the change in fair value of financial assets measured at fair value through other comprehensive income.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. At the end of the reporting period, the Group’s credit risk was mainly from trade receivables in operating activities, bank deposits and financial instruments in financial activities.

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To maintain the quality of trade receivables, the Group manages credit risk by assessing customers’ credit elements, such as financial status, historical transactions, etc., and obtains an adequate amount of collaterals as guarantees from the customers with high credit risk. In addition, the Group reviews the recoverable amount of each trade debt at the end of the reporting period to ensure that adequate allowances are made for irrecoverable amounts. On the credit risk management of bank deposits and other financial instruments, the Group trades with the counterparties comprising banks with high credit ratings.

3) Liquidity risk

Liquidity risk is a risk in which the Group cannot pay cash or use other financial assets to settle the financial liabilities. The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the use of bank borrowings and ensures compliance with loan covenants and it will not damage to the Group’s reputation.

On the demand for capital payments for a particular purpose, the Group maintains adequate cash by the way of the long-term finance/borrowings. For the management of cash shortage, the Group monitors cash management and allocates cash appropriately to maintain financial flexibility and ensure the mitigation of liquidity risk.

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables are drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group may be required to pay. The tables include both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause are included in the earliest time band regardless of the probability of the banks’ choice to exercise their rights. The maturity dates for other non-derivative financial liabilities are based on the agreed repayment periods.

December 31, 2020

	On	Demand or
	Not Later than											Later than
		1 Year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5 Years		Total
Non-derivative financial liabilities
Short-term borrowings	$	9,045,746	$	-	$	-	$	-	$	-	$	-	$	9,045,746
Short-term bills payable		3,729,003		-		-		-		-		-		3,729,003
Notes payable		6,626		-		-		-		-		-		6,626
Trade payables		15,844,472		-		-		-		-		-		15,844,472
Trade payables to related parties		68,101		-		-		-		-		-		68,101
Other payables		3,721,330		-		-		-		-		-		3,721,330
Lease liabilities		3,621,829		3,299,652		3,058,594		2,457,945		2,215,733		16,965,339		31,619,092
Long-term borrowings (including
current portion)		299,933		11,069,828		4,070,000		-		-		-		15,439,761
Deposits received		76,637		215,788		6,099		7,248		19,200		14,407		339,379

Additional information about the maturity analysis for lease liabilities:

Lease liabilities	Less than 1 Year $ 3,621,829	1-5 Years $11,031,924	5-10 Years $ 7,378,711	10-15 Years $ 4,003,498	15-20 Years $ 2,934,742	20+ Years $ 2,648,388

70 -

December 31, 2019

	On	Demand or
	Not Later than											Later than
		1 Year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5 Years		Total
Non-derivative financial liabilities
Short-term borrowings	$	9,630,896	$	-	$	-	$	-	$	-	$	-	$	9,630,896
Short-term bills payable		3,622,993		-		-		-		-		-		3,622,993
Notes payable		3,184		-		-		-		-		-		3,184
Trade payables		15,120,910		-		-		-		-		-		15,120,910
Trade payables to related parties		93,455		-		-		-		-		-		93,455
Other payables		3,971,660		-		-		-		-		-		3,971,660
Lease liabilities		3,576,206		3,407,678		3,048,551		2,830,422		2,258,753		17,399,623		32,521,233
Long-term borrowings (including
current portion)		2,540,000		14,739,757		260,000		-		-		-		17,539,757
Deposits received		43,128		283,148		33,400		7,666		7,492		55,094		429,928

Additional information about the maturity analysis for lease liabilities:

Less than 1 Year 1-5 Years 5-10 Years 10-15 Years 15-20 Years 20+ Years Lease liabilities $ 3,576,206 $11,545,404 $ 7,830,261 $ 3,980,745 $ 2,487,879 $ 3,100,738

The amounts of variable interest rate instruments for both non-derivative financial liabilities mentioned above are subject to change if the changes in variable interest rates differ from those estimates of interest rates determined at the end of the year.

33. TRANSACTIONS WITH RELATED PARTIES

In addition to disclosure in other notes, the transactions between the Company and related parties are summarized as follows.

a. The Group’s related parties and their relationships

Related Party Relationship with the Group

Ding Ding Integrated Marketing Service Co., Ltd. Associate (DDIM) Chengdu Baiyang Industry Co., Ltd. (CDBI) Associate Yuan Hsin Digital Payment Co., Ltd. (YHDP) Associate Oriental Securities Corporation (OSC) Associate Pacific Department Store Co., Ltd. Associate Sogo Department Stores Co., Ltd. Associate Far Eastern International Leasing Corp. (FEIL) Associate Yuan Ding Enterprise (Shanghai) Limited. (YDEL Associate (Shanghai)) Yuan Shi Digital Technology Co., Ltd. (YSDT)

Associate Associate Associate Associate Associate Associate Associate

Yuan Shi Digital Technology Co., Ltd. (YSDT) Associate of investor with significant influence over the Group (the subsidiary of FENC) Far EasTone Telecommunications Co., Ltd. (FET) Associate of investor with significant influence over the Group (the subsidiary of FENC) Far Eastern Electronic Toll Collection Co., Ltd. Associate of investor with significant influence over the Group (the subsidiary of FENC) Yuan Tone Investment Co., Ltd. Associate of investor with significant influence over the Group (the subsidiary of FENC) New Century InfoComm Tech Co., Ltd. Associate of investor with significant influence over the Group (the subsidiary of FENC) (Continued)

71 -

Relationship with the Group

Related Party

Yuan Ding Co., Ltd.

Yuan Ding Investment Co., Ltd.

Ding Ding Hotel Co., Ltd.

Far East Resources Development Co., Ltd.

Yuan Ding Integrated Information Service (Shanghai) Inc. Far Eastern Construction Co., Ltd. (FECC)

Far Eastern Apparel Co., Ltd.

YDT Technology International Co., Ltd.

Far Eastern New Century (China) Investment Co., Ltd. (FENCI (China))

Far Eastern General Contractor Inc. (FEG)

Yuan Cing Co., Ltd.

Prime EcoPower Co., Ltd.

Asia Cement Corporation (ACC)

Far Eastern Technical Consultants Co., Ltd.

Yadong Ready Mixed Concrete Co., Ltd.

Everest Textile Co., Ltd.

Far Eastern New Century Corporation (FENC)

Yuan-Ze University Far Eastern Medical Foundation (FEMF) U-Ming Marine Transport Corp. Mr. Xuyuan Zhi Memorial Foundation Hong-Tong Developing Co., Ltd. Sogo New Life Foundation Pacific Sogo Social Welfare Foundation Ding&Ding Management Consultants Co., Ltd. Far Eastern International Bank (FEIB)

CitySuper (Hong Kong) Ltd.

CitySuper (Labuan) Ltd.

Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the subsidiary of FENC)
Associate of investor with significant influence over the Group (the associate of FENC)
Associate of investor with significant influence over the Group (the associate of FENC)
Associate of investor with significant influence over the Group (the associate of FENC)
Associate of investor with significant influence over the Group (the associate of FENC)
Investor with significant influence over the Group (the investor of FEDS accounted for using the equity method)

Other related party (the same chairman) Other related party (the same chairman) Other related party (the same chairman) Other related party (related party in substance) Other related party (related party in substance) Other related party (related party in substance) Other related party (related party in substance) Other related party (related party in substance) Other related party (the chairman of the Company is its vice chairman)

Other related party (related party in substance of subsidiary, Far Eastern CitySuper Co., Ltd.) Other related party (investor accounting for subsidiary, Far Eastern CitySuper Co., Ltd. using equity method)

(Continued)

72 -

Related Party CitySuper Ltd. Yuanbo Asset Management Company Chengdu Tai Bai Consultant and Management Co., Ltd. Shanghai Xujiahui Centre Group Fu Ming Transport Corporation Arcoa Communication Co., Ltd.	Relationship with the Group
	Other related party (parent company of CitySuper (Labuan) Ltd.) Other related party (subsidiary of Far Eastern International Leasing Corporation) Other related party (collaborative enterprise in mainland China) Other related party (collaborative enterprise in mainland China) Other related party (the subsidiary of ACC) Other related party (the subsidiary of ACC) (Concluded)

b. Operating revenue

Line Item Related Party Category/Name Sales of goods (Note) Associates of investor with significant influence over the Group Other related parties Investor with significant influence over the Group Associates Other operating revenue Other related parties Associates of investor with significant influence over the Group Associates	For the Year Ended	For the Year Ended	December 31
		2020 $ 51,764 5,498 1,043 8 $ 58,313 $ 64,984 29,118 1,322 $ 95,424	2019 $ 56,135 5,017 1,261 256 $ 62,669 $ 68,745 31,942 2,304 $ 102,991

Note: Sales to related parties and unrelated parties were made under normal terms.

c. Purchases

Line Item Related Party Category/Name Operating costs (Note) Associates of investor with significant influence over the Group Other related parties Investor with significant influence over the Group	For the Year Ended	For the Year Ended	December 31
		2020 $ 55,945 12,428 45 $ 68,418	2019 $ 131,547 16,379 61 $ 147,987

Note: Purchases from related parties and unrelated parties were made under normal terms.

73 -
d. Receivables from related parties

Line Item Related Party Category/Name Trade receivable Associates of investor with significant influence over the Group Other related parties Associates (Note 1) Investor with significant influence over the Group Other receivables Other related parties Shanghai Xujiahui Commercial Co., Ltd. (Note 2) Others (Note 3) Associates Chengdu Department Emporium Group CO., Ltd. (Note 4) Others Associates of investor with significant influence over the Group Investor with significant influence over the Group		December 31	December 31
		2020 $ 54,098 41,387 21,373 7,880 $ 124,738 $ 189,778 7,127 196,905 97,444 8,931 106,375 12,666 1,354 $ 317,300	2019 $ 75,791 51,892 30,434 3,818 $ 161,935 $ - 9,223 9,223 128,173 20,228 148,401 17,999 292 $ 175,915

Note 1: As of December 31, 2020, and 2019, provision for loss allowance amounted to $121,952 thousand and $123,037 thousand, respectively.
Note 2: As of December 31, 2020, other receivables from Shanghai Xujiahui Commercial Co., Ltd. included a loan to related party of $187,250 thousand.
Note 3: As of December 31, 2020, and 2019, provision for loss allowance amounted to $16,181 thousand for both years.
Note 4: As of December 31, 2020, and 2019, other receivables from Chengdu Department Emporium Group Co., Ltd. included dividend receivable of $26,625 thousand and $58,446 thousand, respectively.
74 -

e. Other current assets

Line Item Related Party Category/Name Prepayments Other related parties Associates of investor with significant influence over the Group Associates Others Associates Associates of investor with significant influence over the Group f. Other non-current assets Line Item Related Party Category/Name Lease incentives Associates of investor with significant influence over the Group Other related parties Refundable deposits Associates Associates of investor with significant influence over the Group g. Payables to related parties Line Item Related Party Category/Name Trade payable Associates of investor with significant influence over the Group Other related parties Investor with significant influence over the Group Other payables Associates of investor with significant influence over the Group Associates Investor with significant influence over the Group Other related parties		December 31	December 31
		2020 2019 $ 4,255 $ 2,888 309 15 60 - $ 4,624 $ 2,903 $ 570 $ 570 - 66 $ 570 $ 636 December 31
		2020 2019 $ 18,741 $ 13,768 863 1,134 $ 19,604 $ 14,902 $ 131,941 $ 129,189 44,816 44,817 $ 176,757 $ 174.006 December 31
		2020 $ 63,634 4,461 6 $ 68,101 $ 422,029 133,055 54,385 28,667 $ 638,136	2019 $ 92,039 1,416 - $ 93,455 $ 420,325 144,513 50,728 22,348 $ 637,914

75 -

h. Contract liabilities

		December 31	December 31	December 31
		2020 2019 $ 484 $ 484 December 31
		2020 2019 $ 6,134 $ 3,150 2,868 4,275 399 149 $ 9,401 $ 7,574 $ 1,356 $ 2,285 135 1,315 56 112 $ 1,547 $ 3,712 December 31
2020 $ 57,880 613 58,493 1,032 $ 59,525 $ 28,997 For the Year Ended				2019 $ 48,676 593 49,269 1,032 $ 50,301 $ 29,251 December 31
	2020 $ 1,343,691 5,337 $ 1,349,028		2019 $ - - $ -

76 -

Line Item Related Party Category/Name Lease liabilities (Note) Associates of investor with significant influence over the Group Far Eastern Construction Co., Ltd. Asia Cement Corporation Far Eastern Resources Development Co., Ltd. Others Other related parties Associates		December 31	December 31
		2020 $ 4,873,162 1,064,567 1,049,386 167,935 7,155,050 9,615 4,988 $ 7,169,653	2019 $ 3,790,369 1,164,096 1,119,194 279,487 6,353,146 10,897 - $ 6,364,043

Note: The rental pertaining to related parties is based on agreement and is received or paid monthly or yearly.

Related Party Category/Name Interest expense Associates of investor with significant influence over the Group Far Eastern Construction Co., Ltd. Others Other related parties Associates	For the Year Ended	For the Year Ended	December 31
		2020 $ 81,387 26,692 108,079 175 15 $ 108,269	2019 $ 66,464 30,102 96,566 1,914 - $ 98,480

l. Construction projects

The construction projects of the Group were as follows:

Associates of investor with significant influence over the Group Other related parties	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 194,642 17,744 $ 212,386	2019 $ 1,101,164 5,775 $ 1,106,939

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m. Loans to related parties

Related Party Category/Name Shanghai Xujiahui Commercial Co., Ltd. Interest income Related Party Category/Name Shanghai Xujiahui Commercial Co., Ltd.		December 31	December 31
	2020 $ 187,250 For the Year Ended		2019 $ - December 31
		2020 $ 2,480	2019 $ -

The loan to other related party by the Group is secured with promissory notes. The interest is computed using the agreed upon interest rate. The loan is expected to be settled within one year. There were no expected credit losses after assessment.

n. Loans from other related parties

	December 31	December 31
2020 $ - For the Year Ended		2019 $ - December 31
2020 $ 639 For the Year Ended		2019 $ 765 December 31
	2020 $ 226,529 220,427 159,633 132,347 $ 738,936	2019 $ 167,478 218,390 162,739 126,630 $ 675,237 (Continued)

o. Transactions with other related parties
78 -

Line Item Related Party Category/Name Other gains and losses - gains Associates of investor with significant influence over the Group Asia Cement Corporation Others Other related parties Far Eastern International Bank Ltd. Others Associates Far Eastern International Leasing Corporation Others Investor with significant influence over the Group Other gains and losses - Associates losses Oriental Securities Corporation Associates of investor with significant influence over the Group Investor with significant influence over the Group	For the Year Ended	For the Year Ended	December 31
		2020 $ 22,000 5,818 27,818 19,500 65 19,565 567 2,078 2,645 100 $ 50,128 $ 7,054 7 6 $ 7,067	2019 $ 20,000 2,939 22,939 18,122 - 18,122 129,889 733 130,622 464 $ 172,147 $ 7,132 - 1 $ 7,133

(Concluded)

Note: The rental pertaining to related parties is based on agreement and is received or paid monthly or yearly.

p. Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended	For the Year Ended	December 31
		2020 $ 132,080 22,635 $ 154,715	2019 $ 139,920 523 $ 140,443

The remuneration of directors and other key management personnel was determined by the compensation committee in accordance with the individual performance and the market trends.

79 -

34. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for goods purchases, long/short-term borrowings, short-term bills payable and administrative proceedings:

Financial assets at amortized cost Investments accounted for using the equity method Financial assets at FVTOCI Property, plant and equipment Investment properties Prepayments for leases Intangible assets		December 31	December 31
		2020 $ 187,000 3,582,976 2,170,890 17,027,200 623,925 31,968 7,046 $ 23,631,005	2019 $ 199,000 3,569,838 2,375,340 17,213,913 624,887 - - $ 23,982,978

35. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant contingencies and unrecognized commitments of the Group as of December 31, 2020 and 2019 are as follows:

Significant Unrecognized Commitments

The amount of unrecognized commitments are as follows:

Construction of property, plant and equipment		December 31	December 31
		2020 $ 1,594,635	2019 $ 2,469,345

36. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

On March 22, 2021, the board of directors of Far Eastern Ai Mai Co., Ltd. resolved to enter into a supplementary lease agreement with Far Eastern Construction Co., Ltd. due to operating needs.

80 -

37. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Group and the exchange rates between foreign currencies and respective functional currencies are disclosed. The significant assets and liabilities denominated in foreign currencies are as follows:

December 31, 2020

Foreign
Currency
(In Thousands)
Exchange Rate
Financial assets
Monetary items

USD
$ 5,056
28.4800 (USD:NTD)
USD
162
6.5249 (USD:RMB)
RMB
1,335
4.3648 (RMB:NTD)

Non-monetary items
Associates accounted for using the equity
method
RMB
715,903
4.3648 (RMB:NTD)
Financial assets at FVTPL
USD
294
28.4800 (USD:NTD)

Financial liabilities
Monetary items
USD
114
28.4800 (USD:NTD)
USD
13,658
6.5249 (USD:RMB)
RMB
401
4.3648 (RMB:NTD)

Carrying
Amount
$ 143,992

4,614

5,825
$ 154,431
$ 3,124,773

8,375
$ 3,133,148
$ 3,255

388,991

1,752
$ 393,998

81 -

December 31, 2019

Foreign
Currency
(In Thousands)
Exchange Rate
Financial assets
Monetary items

USD
$ 10,047
29.9800 (USD:NTD)
USD
4,362
6.9762 (USD:RMB)
RMB
91,800
4.2975 (RMB:NTD)

Non-monetary items
Associates accounted for using the equity
method
RMB
720,532
4.2975 (RMB:NTD)
Financial assets at FVTPL
USD
294
29.9800 (USD:NTD)

Financial liabilities
Monetary items
USD
324
29.9800 (USD:NTD)
USD
3,576
6.9762 (USD:RMB)
RMB
401
4.2975 (RMB:NTD)

Carrying
Amount
$ 301,210

130,774

394,509
$ 826,493
$ 3,096,485

8,816
$ 3,105,301
$ 9,712

107,221

1,725
$ 118,658

The Group is mainly exposed to RMB. The following information was aggregated by the functional currencies of the Group, and the exchange rates between respective functional currencies and the presentation currency are disclosed. The significant realized and unrealized foreign exchange gains are as follows:

Functional Currency NTD RMB	For the Year Ended December 31	For the Year Ended December 31
	2020 Exchange Rate Net Foreign Exchange Gain 1.0000 (NTD:NTD) $ (31,641) 4.2827 (RMB:NTD) 34,008 $ 2,367	2019
		Exchange Rate Net Foreign Exchange Gain 1.0000 (NTD:NTD) $ 15,467 4.4821 (RMB:NTD) 579 $ 16,046

82 -

38. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and investees:
1) Financing provided to others (Table 2)
2) Endorsements/guarantees provided (Table 3)
3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures) (Table 4)
4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (None)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None)
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None)
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (None)
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 5)
9) Trading in derivative instruments (None)
10) Intercompany relationships and significant intercompany transactions (Table 6)
b. Information on investees: Table 7.
c Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 8)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year (None)
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year (None)
- c) The amount of property transactions and the amount of the resultant gains or losses (None)
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes (Table 3)
83 -
e) The highest balance, the ending balance, the interest rate range, and total current period interest with respect to the financing of funds (Table 2)
f) Other transactions that have a material effect on the profit or loss or the financial position for the year, such as the rendering of services or receipt of payments (None)
d Major shareholders: For names, number of shares held and shareholding percentage of shareholders with a stake of 5% or more (Table 9)

39. SEGMENT INFORMATION

The Group belongs to a single industry of department stores and supermarkets. Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on geographical information as management structure. The Group’s reportable segments under IFRS 8 “Operating Segments” includes ROC and China.

a. Segment revenue and results

ROC China Total for continuing operations Interest income Dividend income Foreign exchange gain, net (Loss) gain arising on financial assets mandatorily classified as at FVTPL Loss on disposal of property, plant and equipment, net Gain on disposal of investment Loss on changes in fair value of investment properties, net Finance costs Share of profits of associates accounted for using the equity method Impairment loss on intangible assets Impairment loss on property, plant and equipment Impairment loss of right-of-use assets Other gains Other losses Profit before income tax		Segment Revenue For the Year Ended December 31 2020 2019 $ 35,165,390 $ 35,037,293 2,122,559 2,858,769 $ 37,287,949 $ 37,896,062		Segment Profit	Segment Profit
				For the Year Ended December 31
		2020 $ 35,165,390 2,122,559 $ 37,287,949		2020 $ 4,336,183 (251,219) 4,084,964 66,244 312,581 2,367 (11,520) (17,035) 553 (71,617) (851,591) 39,868 (6,384) (16,853) (613,770) 172,445 (89,481) $ 3,000,771	2019 $ 4,686,642 (147,991) 4,538,651 90,449 286,299 16,046 691 (84,473) 291 (151,597) (835,329) 58,065 (1,095,884) - - 330,879 (51,150) $ 3,102,938

Segment revenue reported above represents revenue generated from external customers. There were no intersegment sales in 2020 and 2019.

84 -

b. Total segment assets and liabilities

Segment assets ROC China Total consolidated assets Segment liabilities ROC China Total consolidated liabilities		December 31	December 31
		2020 $ 122,111,142 6,312,627 $ 128,423,769 $ 82,807,749 5,827,732 $ 88,635,481	2019 $ 122,960,061 7,551,044 $ 130,511,105 $ 84,528,379 7,078,919 $ 91,607,298

c. Revenue from major products

The Group’s revenue from its major products and services are as follows:

Retail sales revenue Other operating revenue	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 34,094,190 3,193,759 $ 37,287,949	2019 $ 34,598,167 3,297,895 $ 37,896,062

d. Geographical information

The Group operates in two principal geographical areas - ROC and China. The Group’s revenue from external customers by geographical location and information about its non-current assets by geographical location are detailed below.

Revenue from External Customers	Revenue from External Customers	Non-current Assets	Non-current Assets
For the Year Ended December 31
		December 31
2020 $ 35,165,390 2,122,559 $ 37,287,949	2019 $ 35,037,293 2,858,769 $ 37,896,062	2020 $ 89,837,923 692,859 $ 90,530,782	2019 $ 91,240,775 1,304,799 $ 92,545,574

Non-current assets exclude those classified as non-current assets held for sale, financial instruments, and deferred tax assets.

e. Information about major customers

There was no revenue from any single customer comprising 10% or more of the Group’s gross revenue for 2020 and 2019.

85 -

TABLE 1

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

DIAGRAM OF INTERCOMPANY RELATIONSHIPS DECEMBER 31, 2020

==> picture [1019 x 592] intentionally omitted <==

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

35.13% Far Eastern Department Stores, Ltd.
(the ”Company”)
0.57%
100% 67% 100% 56% 100% 100% 54% 96%
Far Eastern Ai Mai Co., Bai Ding Investment Co., Bai Yang Investment Ya Tung Department Far Eastern Hon Li Do Co., Asians Merchandise Yu Ming Advertising FEDS Development Ltd. Far Eastern CitySuper
Ltd. (Ai Mai) Ltd. (Bai Ding) Co., Ltd. (Bai Yang) Stores, Ltd. (YTDS) Ltd. (FEHLD) Company (AMC) Agency Co., Ltd. (BVI) Co., Ltd.
(Yu Ming)
46%
44%
33%
12.50%
100% 70%
FEDS New Century FEDS Asia Pacific Development
Development Co., Ltd. (FENCD) Co., Ltd. (FEAPD) 100% 100%
2.47% 2.47% 2.47% Shanghai Bai Ding Chongqing FEDS Co.,
0.02% Consultant & Ltd.
1.37% 0.17% Management Co., Ltd.
Pacific Liu Tong Investment Co.,
Ltd. ( “ PLT ” )
100%
0.1% 78.60%
Chubei New Century Pacific Sogo Department Stores 1.36%
Shopping Mall Co., Ltd.
Co., Ltd. (SOGO)
(CBNC)
40%
60%
50% 60%
Lian Ching Investment Pacific China Holdings Far Eastern Big City Shopping
Co., Ltd. (Note) (HK) Limited Malls Co., Ltd.
100%
Pacific China Holdings
Ltd.
100% 100% 73% 100% 100% 100%
Pacific (China) Bai Fa China Holdings Shanghai Pacific Chengdu Quanxing Chongqing Metropolitan Chongqing Pacific
Investment Co., Ltd. (HK), Limited Department Store Co., Pacific Department Plaza Pacific Department Consultant & Management
Ltd. Store Co., Ltd. Store Co., Ltd. Co., Ltd.
100% 100%
Chengdu FEDS Co., Ltd. Dalian Pacific Department
Store Co., Ltd.
----- End of picture text -----

Note: The amount of Lian Ching Investment Co., Ltd. had been written off to zero, no liabilities were be undertaken by the Group and the accounts are not disclosed in the consolidated financial statement.

86 -

TABLE 2

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020

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

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Amounts	Reason for Short-term Financing	Allowance for Impairment Loss	Colla	teral	Financing Limit for Each Borrower	Aggregate Financing Limits
													Item	Value
1	Pacific Sogo Department Stores Co., Ltd.	Pacific China Holding Ltd.	Other receivables	Y	$ 2,000,000	$ 2,000,000	$ -	-	(Note A)	$ -	Transaction	$ -	-	$ -	$ 4,705,699 (Note B)	$ 4,705,699 (Note B)
2	Chongqing FEDS Co., Ltd.	Chongqing Pacific Consultant and Management Co., Ltd. Dalian Pacific Department Store Co., Ltd. Chengdu FEDS Co., Ltd Chengdu Quanxing Building Pacific Department Store Co., Ltd. Shanghai Bai Ding Consultant and Management Co., Ltd. Chongqing Metropolitan Plaza Pacific Department Store Co., Ltd.	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Y Y Y Y Y Y	742,016 (RMB 170,000 thousand ) 436,480 (RMB 100,000 thousand ) 654,720 (RMB 150,000 thousand ) 654,720 (RMB 150,000 thousand ) 43,648 (RMB 10,000 thousand ) 218,240 (RMB 50,000 thousand )	742,016 (RMB 170,000 thousand ) 218,240 (RMB 50,000 thousand ) 654,720 (RMB 150,000 thousand ) 218,240 (RMB 50,000 thousand ) 43,648 (RMB 10,000 thousand ) 218,240 (RMB 50,000 thousand )	679,599 (RMB 155,700 thousand) - 196,416 (RMB 45,000 thousand ) 17,459 (RMB 4,000 thousand ) - -	1.504523%- 4.129436% (Note F) 1.504523%- 4.129436% (Note G) 1.504523%- 4.129436% (Note H) 1.504523%- 4.129436% (Note I) - -	(Note A) (Note A) (Note A) (Note A) (Note A) (Note A)	- - - - - -	Transaction Transaction Transaction Transaction Transaction Transaction	- - - - - -	- - - - - -	- - - - - -	12,477,568 (Note D) 12,477,568 (Note D) 12,477,568 (Note D) 12,477,568 (Note D) 12,477,568 (Note D) 12,477,568 (Note D)	12,477,568 (Note D) 12,477,568 (Note D) 12,477,568 (Note D) 12,477,568 (Note D) 12,477,568 (Note D) 12,477,568 (Note D)
3	Chongqing Metropolitan Plaza Pacific Department Store Co., Ltd.	Chongqing FEDS Co., Ltd.	Other receivables	Y	305,536 (RMB 70,000 thousand )	305,536 (RMB 70,000 thousand )	-	1.41%-3.87% (Note J)	(Note A)	-	Transaction	-	-	-	12,477,568 (Note D)	12,477,568 (Note D)
4	Pacific China Holdings (HK) Limited	Pacific China Holding Ltd.	Other receivables	Y	284,800 (US$ 10,000 thousand)	284,800 (US$ 10,000 thousand )	102,528 (US$ 3,600 thousand)	1.74%-3.32% (Note K)	(Note A)	-	Transaction	-	-	-	12,477,568 (Note D)	12,477,568 (Note D)
5	Pacific (China) Investment Co., Ltd.	Chongqing FEDS Co., Ltd.	Other receivables	Y	43,648 (RMB 10,000 thousand )	43,648 (RMB 10,000 thousand )	-	1.41%-3.66% (Note L)	(Note A)	-	Transaction	-	-	-	12,477,568 (Note D)	12,477,568 (Note D)
6	Shanghai Pacific Department Store Co., Ltd.	Shanghai Xujiahui Centre Group	Other receivables	Y	187,250 (RMB 42,900 thousand )	187,250 (RMB 42,900 thousand )	187,250 (RMB 42,900 thousand )	1.35% (Note M)	(Note A)	-	Transaction	-	-	-	267,191 (Note B)	267,191 (Note B)
7	FEDS Development Ltd.	Yuan Ding Enterprise (Shanghai) Co., Ltd. Far Eastern New Century (China) Investment Co., Ltd.	Other receivables Other receivables	Y Y	97,669 (RMB 22,377 thousand ) 91,181 (RMB 20,890 thousand )	- -	- -	- -	(Note A) (Note A)	- -	Transaction Transaction	- -	- -	- -	6,238,784 (Note C) 6,238,784 (Note C)	12,477,568 (Note D) 12,477,568 (Note D)

Note A: Short-term financing.

Note B: 40% of the financing company’s net assets.

Note C: The amount of the collateral/guarantees is based on 20% of the net value of the ultimate parent company, Far Eastern Department Stores Co., Ltd per its latest financial statements.

Note D: The amount of the collateral/guarantees is based on 40% of the net value of the ultimate parent company, Far Eastern Department Stores Co., Ltd per its latest financial statements.

Note E: As the amount of the investee, Lian Ching Investment Co., Ltd. had been written off to zero and the Company has not undertaken any liabilities, no disclosure pertaining to the investee is made.

Note F: The interest for the period amounted to RMB3,944 thousand.

Note G: The interest for the period amounted to RMB45 thousand.

Note H: The interest for the period amounted to RMB1,176 thousand.

Note I: The interest for the period amounted to RMB182 thousand.

Note J: The interest for the period amounted to RMB459 thousand.

Note K: The interest for the period amounted to US$78 thousand.

Note L: The interest for the period amounted to RMB30 thousand.

Note M: The interest for the period amounted to RMB579 thousand.

87 -

TABLE 3

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement/ Guarantee Given on Behalf of Each Party	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Maximum Endorsement/ Guarantee Amounts Allowable	Endorsement/ Guarantee Provided by Parent Company	Endorsement/ Guarantee Provided by A Subsidiary	Endorsement/ Guarantee Provided to Mainland China
		Name	Nature of Relationship (Note F)
0	Far Eastern Department Stores, Ltd.	FEDS New Century Development Co., Ltd. Bai Yang Investment Co., Ltd. Bai Ding Investment Co., Ltd. FEDS Development Ltd. Chubei New Century Shopping Mall Co., Ltd. Far Eastern CitySuper Co., Ltd Pacific Sogo Department Stores Co., Ltd.	2 2 2 2 2 2 2	$ 18,716,352 (Note A) 18,716,352 (Note A) 18,716,352 (Note A) 18,716,352 (Note A) 18,716,352 (Note A) 18,716,352 (Note A) 18,716,352 (Note A)	$ 30,000 100,000 1,150,000 1,424,000 (US$ 50,000 thousand) 3,700,000 80,000 4,889,496	$ - - 1,150,000 284,800 (US$ 10,000 thousand) 3,700,000 80,000 4,882,843	$ - - 450,000 - 630,000 - 4,882,843	$ - - - - - - -	- - 4 1 12 - 16	$ 31,193,920 (Note B) 31,193,920 (Note B) 31,193,920 (Note B) 31,193,920 (Note B) 31,193,920 (Note B) 31,193,920 (Note B) 31,193,920 (Note B)	Y Y Y Y Y Y Y	- - - - - - -	- - - - - - -
1	Pacific Sogo Department Stores Co., Ltd.	Far Eastern Department Stores, Ltd. Pacific China Holding Ltd. Dalian Pacific Department Store Co., Ltd. Chongqing Metropolitan Plaza Pacific Department Store Co., Ltd.	3 2 2 2	18,716,352 (Note C) 18,716,352 (Note C) 18,716,352 (Note C) 18,716,352 (Note C)	3,224,420 10,153,856 (US$ 341,200 thousand) (RMB 100,000 thousand) 340,454 (RMB 78,000 thousand) (NoteG) 514,496 (US$ 15,000 thousand) (RMB 20,000 thousand) (NoteG)	3,221,064 7,404,800 (US$ 260,000 thousand) (RMB 0 thousand) 340,454 (RMB 78,000 thousand) (NoteG) 514,496 (US$ 15,000 thousand) (RMB 20,000 thousand) (NoteG)	3,221,064 3,465,651 (US$ 0 thousand (RMB 794,000 thousand) 87,296 (RMB 20,000 thousand) 284,800 (US$ 10,000 thousand) (RMB 0 thousand)	- - - -	10 24 1 2	31,193,920 (Note D) 31,193,920 (Note D) 31,193,920 (Note D) 31,193,920 (Note D)	- - - -	Y - - -	- - Y Y
2	Far Eastern Big City Shopping Malls Co., Ltd.	Pacific Sogo Department Stores Co., Ltd.	3	393,416 (Note A)	154,325	153,202	153,202	-	-	655,693 (Note B)	-	-	-

Note A: The amount is 60% of net assets based on the latest financial statements of the endorser/guarantor.

Note B: The amount is 100% of net assets based on the latest financial statements of the endorser/guarantor.

Note C: The amount of the collateral/guarantees is based on 60% of the net value of the ultimate parent company, Far Eastern Department Stores Co., Ltd per its latest financial statements.

Note D: The amount of the collateral/guarantees is based on 100% of the net value of the ultimate parent company, Far Eastern Department Stores Co., Ltd per its latest financial statements.

(Continued)

88 -

(Concluded)

Note F: Relationships between the endorsement/guarantee provider and the guaranteed party:
Trading partner.
The direct and indirect shareholding of the Company amounts to more than 50%.
The companies that directly and indirectly hold more than 50% of the Company’s voting rights.
The Company that directly and indirectly holds more than 90% of the voting shares.
Guaranteed by the Company according to the construction contract.
An investee company. The guarantees were provided based on the Company’s proportionate share in the investee company.
Companies in the same industry provide among themselves joint and several securities for as performance guarantees of sales contracts for pre-construction homes pursuant to the Consumer Protection Act.

Note G: Pacific Sogo Department Stores Co., Ltd. acts as the guarantor for a credit limit application to the bank to cater to the operating capital need.

89 -

TABLE 4

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2020

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

Holding Company	Type and Name of Marketable Securities	Relationship with Issuer of Securities	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
Far Eastern Department Stores, Ltd. Bai Ding Investment Co., Ltd. Bai Yang Investment Co., Ltd.	Shares Asia Cement Corporation Far Eastern New Century Corporation Kaohsiung Rapid Transit Corporation Yuan Ding Leasing Corp. Yuan Ding Co., Ltd Yuan Shi Digital Technology Co., Ltd. Shares Far Eastern Department Stores, Ltd. Asia Cement Corporation Far Eastern New Century Corporation Chung-Nan Textile Co., Ltd. Ding Ding Management Consultants Co., Ltd. Yue Ding Industry Co., Ltd. Oriental Securities Investment Advisory Co., Ltd. Ding Sheng Investment Co., Ltd. Shares Far Eastern International Bank Ltd. Asia Cement Corporation U-Ming Marine Transport Corporation Oriental Securities Investment Advisory Co., Ltd.	4 3 - - 4 4 2 7 6 - 8 7 8 - 8 7 8 8	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	50,000 19,964 6,286 7,309 3 312 8,207 14,814 15,812 2,984 421 2,752 1 40,329 23,312 3,849 200 1	$ 2,160,021 577,969 35,391 71,658 10 571 196,968 639,982 457,744 95,856 9,877 48,177 10 306,757 252,934 166,297 7,380 10	1 - 2 9 - - 1 - - 5 5 2 - 18 1 - - -	$ 2,160,021 577,969 35,391 71,658 10 571 196,968 639,982 457,744 95,856 9,877 48,177 10 306,757 252,934 166,297 7,380 10	35,000 thousand shares of Asia Cement Corporation pledged for loans and commercial papers issued of the investor company 5,200 thousand shares of Asia Cement Corporation pledged for commercial papers issued of the investor company 15,000 thousand shares of Far Eastern New Century Corporation pledged for loans of the investor company

(Continued)

90 -

Holding Company	Type and Name of Marketable Securities	Relationship with Issuer of Securities	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
Yu Ming Advertising Agency Co., Ltd. FEDS New Century Development Co., Ltd. FEDS Development Ltd. Pacific Sogo Department Stores Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Far Eastern Big City Shopping Malls Co., Ltd. Pacific China Holding Ltd.	Beneficiary certificate DWS Taiwan Money Market Fund Shares Asia Cement Corporation Beneficiary certificate DWS Taiwan Money Market Fund Shares Kowloon Cement Corp., Ltd. Shares CMC Magnetics Corp. Quanta Computer Inc. Pacific Construction Co., Ltd. DBTEL Inc. Oriental Union Chemical Corp. U-Ming Marine Transport Corporation Pacific Liu Tong Investment Co., Ltd. E-Shou Hi-tech Co., Ltd. Tian Yuan Investment Co., Ltd. PURETEK Corp. Pacific 88 Co., Ltd. Yuan Shi Digital Technology Co., Ltd. Beneficiary certificate DWS Taiwan Money Market Fund Shares Asia Cement Corporation Oriental Union Chemical Corp. Shares Overseas Development Corp. Taiwan Ocean Farming Corp.	- 7 - 7 - - - - 8 8 1 - - - - 7 - 7 8 - -	Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss- non-current	2,730 1,506 8,503 46 200 1 7,931 10 716 300 800 18,300 98,000 119 16 312 17,273 742 40 2,250 2,250	$ 32,203 65,041 100,278 16,551 1,895 58 78,992 34 14,535 11,070 4,019 - - - - - 203,719 32,055 812 - -	- - - 2 - - 2 - - - - 15 20 - 1 1 - - - 15 15	$ 32,203 65,041 100,278 16,551 1,895 58 78,992 34 14,535 11,070 4,019 - - - - - 203,719 32,055 812 - -

(Continued)

91 -

(Concluded)

Note A: 1. Subsidiary of FEDS.
Parent company.
Investor with significant influence over the Company.
Associate of investor with significant influence over the Company. 5. Other related party.
Investor with significant influence over FEDS.
Associate of investor with significant influence over FEDS.
Other related party of FEDS.
92 -

TABLE 5

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
Pacific Sogo Department Stores Co., Ltd. Pacific China Holdings (HK) Limited and Pacific China Holding Ltd. Chongqing FEDS Co., Ltd. Chongqing FEDS Co., Ltd. Shanghai Pacific Department Store Co., Ltd.	Sogo Department Store Co., Ltd. Pacific China Holdings (B.V.I) Limited and Pacific China Holding Ltd. Chongqing Pacific Consultant and Management Co., Ltd. Chengdu FEDS Co., Ltd. Shanghai Xujiahui Centre Group	Associate Subsidiary Same ultimate parent company Same ultimate parent company Other related party	$ 121,952 103,014 (Note A) 680,480 (Note A) 196,670 (Note A) 189,778 (Note A)	- - - - -	$ 121,952 - - - -	Collection expedited - - - -	$ 332 - - - -	$ 121,952 - - - -

Note A: This balance refers to fund lending.

93 -

TABLE 6

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Number	Transacting Company	Counter party	Flow of Transaction (Note A)			Status
				Account	Amount (Note C)	Condition	Ratio to Consolidated Operating Revenue or Assets (Note B)
0	Pacific Sogo Department Stores Co., Ltd.	Far Eastern Big City Shopping Malls Co., Ltd.	3	Operating revenue	$ (323,237)	Rent was based on market rates and collected monthly.	1
1	Far Eastern Big City Shopping Malls Co., Ltd.	Pacific Sogo Department Stores Co., Ltd.	3	Operating costs and expenses	323,237	Rent was based on market rates and paid monthly.	1

Note A: Flow of transaction:

From the Company to the subsidiary.
From the subsidiary to the Company. 3. Between subsidiaries.
Note B: If the account of the intercompany transaction is shown in the balance sheet, the ratio is the percentage of the year-end account balance to the total consolidated assets; if the account of the intercompany transaction is shown in the statement of comprehensive income, the ratio is the percentage of the accumulated amount during the year to the total consolidated operating revenue.
Note C: Only an intercompany transaction amounting to more than 1% of total consolidated operating revenue or total consolidated assets is disclosed in this table.
94 -

TABLE 7

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2020	Balance as of December 31, 2020	Balance as of December 31, 2020	Net Income (Loss) of the Investee	Share of (Loss) Profit	Note A
				December 31, 2020	December 31, 2019	Shares (In Thousands)	Percentage of Ownership (%)	Carrying Amount
Far Eastern Department Stores Co., Ltd Bai Ding Investment Co., Ltd. FEDS Asia Pacific Development Co., Ltd. FEDS New Century Development Co., Ltd. Bai Yang Investment Co., Ltd. Ya Tung Department Stores, Ltd. Yu Ming Advertising Agency Co., Ltd. Far Eastern Hon Li Do Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Sogo Department Stores Co., Ltd. Pacific China Holdings (HK) Limited Pacific China Holding Ltd.	Bai Yang Investment Co., Ltd. Oriental Securities Corporation Pacific Liu Tong Investment Co., Ltd. Bai Ding Investment Co., Ltd. Far Eastern Ai Mai Co., Ltd. FEDS Development Ltd. Yu Ming Advertising Agency Co., Ltd. Ya Tung Department Stores, Ltd. Ding Ding Integrated Marketing Service Co., Ltd. Asians Merchandise Company Far Eastern Hon Li Do Co., Ltd. Far Eastern CitySuper Co., Ltd. Yuan Hsin Digital Payment Co., Ltd. Oriental Securities Corporation Pacific Liu Tong Investment Co., Ltd. Far Eastern International Leasing Corporation Pacific Sogo Department Stores Co., Ltd. Yue Ming Trading Co., Ltd. Far Eastern Hon Li Do Co., Ltd. Far Eastern CitySuper Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Chubei New Century Shopping Mall Co., Ltd. FEDS Asia Pacific Development Co., Ltd. Far Eastern International Leasing Corporation Bai Ding Investment Co., Ltd. FEDS New Century Development Co., Ltd. Pacific Liu Tong Investment Co., Ltd. FEDS Development Ltd. Pacific China Holdings (HK) Limited Far Eastern Big City Shopping Malls Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Sogo Department Stores Co., Ltd. Pacific Department Store Co., Ltd. Pacific China Holdings (HK) Limited Pacific Department Store Co., Ltd. Lian Ching Investment Co., Ltd. (Note C) Pacific Venture Investment Ltd. Sogo Department Store Co., Ltd. Ding Ding Integrated Marketing Service Co., Ltd. Far Eastern Big City Shopping Malls Co., Ltd. Yuan Hsin Digital Payment Co., Ltd. Pacific China Holding Ltd. Bai Fa China Holdings (HK) Ltd.	Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Island Taiwan Taiwan Taiwan US Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Island Hong Kong Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Hong Kong Taiwan Taiwan Hong Kong Taiwan Taiwan Taiwan Taiwan British Virgin Island Hong Kong	Investment Securities investment Investment Investment Retail Investment Advertising and import agent Department store Marketing Trading Building leasing Retail Other financing and supporting services Securities investment Investment Leasing Department store Import and export trading and distribution Building leasing Retail Investment Investment Shopping mall Shopping mall Leasing Investment Shopping mall Investment Investment Investment Department store Investment Investment Investment Department store Department store Investment Department store Investment Investment Credit card business Marketing Department store Other financing and supporting services Investment Investment	$ 8,922,181 143,652 1,764,210 33,357 1,535,538 125,058 33,000 919,292 64,500 5,316 40,278 478,269 238,292 163,563 658,129 301,125 33,490 21,291 28,672 - 99,000 99,000 2,000,000 1,522,761 1,555,590 577,457 2,245,272 99,000 723,946 3,853,976 200,000 55,000 1,200 8,400 4,469,904 62,480 6,117,447 599,000 270,641 357,050 32,984 64,500 300,000 238,292 4,414,400 46	$ 8,922,181 143,652 1,764,210 33,357 1,535,538 125,058 33,000 919,292 64,500 5,316 40,278 478,269 238,292 163,563 658,129 301,125 33,490 21,291 28,672 - 99,000 99,000 2,000,000 1,522,761 1,555,590 577,457 2,245,272 99,000 723,946 3,853,976 200,000 55,000 1,200 8,400 4,469,904 62,480 6,117,447 599,000 270,641 357,050 32,984 64,500 300,000 238,292 4,414,400 46	924,991 141,980 281,734 119,981 87,744 218 3,500 41,000 3,631 950 1,571 47,827 8,226 98,281 100,250 22,203 11,254 4,901 1,259 2 19,800 19,800 200,000 149,100 132,388 60,019 232,000 19,800 185 44,080 20,000 11,000 200 1,400 650,817 6,840 66,120 60,296 26,764 100,000 7,120 3,631 30,000 8,226 130,200 2	100 20 35 67 100 54 100 100 10 100 56 96 11 14 13 5 1 47 44 - 2 2 100 70 30 33 100 2 46 40 40 1 - - 79 3 60 29 50 48 34 10 60 11 100 100	$ 9,108,584 2,016,983 4,024,497 2,321,818 (Note B) 1,222,011 1,427,279 118,535 85,689 25,787 4,367 13,283 68,097 61,713 1,396,294 1,445,737 327,680 159,994 68,833 13,872 1 302,756 302,756 1,991,269 1,779,226 1,690,092 1,176,926 2,403,784 302,756 1,215,339 (1,133,042 ) 281,241 167,942 2,860 19,373 10,838,804 139,390 (1,699,563 ) 1,019,110 - - - 25,787 421,862 61,713 (2,936,789 ) 46	$ 68,637 97,350 814,794 226,601 (59,253 ) (6,820 ) 14,246 (45,828 ) (15,685 ) 100 1,312 33,128 (186,922 ) 97,350 814,794 173,611 1,060,261 588 1,312 33,128 814,794 814,794 (1,383 ) 109,694 173,611 226,601 19,094 814,794 (6,820 ) (652,744 ) 147,148 814,794 814,794 814,794 1,060,261 83,449 (652,744 ) 83,449 - - - (15,685 ) 147,148 (186,922 ) (577,790 ) -	$ 68,668 19,136 286,236 151,269 (59,253 ) (2,569 ) 14,246 (45,828 ) (1,352 ) 100 846 31,690 (28,037 )	Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Subsidiary Subsidiary Subsidiary Associate Associate Subsidiary Associate Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Subsidiary Associate Subsidiary Associate Associate Associate Subsidiary Associate Subsidiary Subsidiary

(Continued)

95 -

(Concluded)

Note A: The foreign-currency investments were translated at the rate of US$1:NT$28.48 prevailing on December 31, 2020.

Note B: The amount is the investment accounted for using the equity method to $2,418,928 thousand deduct the parent company shares reclassification to treasury shares of $97,110 thousand.

Note C: The amount of Lian Ching Investment Co., Ltd. had been written off to zero, no liabilities were undertaken by the Group and the accounts are not disclosed in the financial statement.

96 -

TABLE 8

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital (Note A)	Method of Investment (Note F)	Accumulated Outflow of Investment from Taiwan as of January 1, 2020 (Note A)	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2020 (Note A)	Net Income (Loss) of the Investee (Note D)	% Ownership of Direct or Indirect Investment	Share of (Loss) Profit (Note D)	Carrying Amount as of December 31, 2020	Accumulated Repatriation of Investment Income as of December 31, 2020
					Outflow	Inflow
Shanghai Pacific Department Store Co., Ltd. Chengdu Quanxing Building Pacific Department Store Co., Ltd. Chongqing Metropolitan Plaza Pacific Department Store Co., Ltd. Chongqing Pacific Consultant and Management Co., Ltd. Shanghai Pacific Consultant and Management Co., Ltd. Shanghai Bai Ding Consultant and Management Co., Ltd. Chongqing FEDS Co., Ltd. Chengdu Department Emporium Group Co., Ltd. Dalian Pacific Department Store Co., Ltd. Pacific (China) Investment Co., Ltd. Chengdu FEDS Co., Ltd Yuan Ding Enterprise (Shanghai) Co., Ltd.	Department store Department store Department store Consulting services Consulting services Consulting services Department store Department store, logistics and storehouse Department store Investment Department store Wholesale of equipment and consulting services	$ 504,096 626,275 85,440 2,079,040 9,968 2,848 79,744 982,084 69,837 6,151,680 3,816,320 7,696,997	(2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2)	$ 365,470 (Note B) 28,195 (Note B) 85,440 (Note B) 5,696 (Note B) 4,884 (Note B) - - - - - - -	$ - - - - - - - - - - - -	$ - - - - - - - - - - - -	$ 365,470 (Note B) 28,195 (Note B) 85,440 (Note B) 5,696 (Note B) 4,884 (Note B) - - - - - - -	$ (66,649) (17,865) (238,746) (15,572) 264 (8,105) 28,077 32,025 (11,232) (48,525) (43,535) (99,768)	49 67 67 67 33 100 100 22 67 67 67 20	$ (48,307) (11,999) (160,352) (10,459) 87 (8,105) 28,077 - (7,544) (31,970) (29,240) (19,954)	$ 122,967 (72,656) (353,530) 757,735 6,182 2,924 977,841 1,148,607 4,519 (45,915) (112,540) 1,542,009	$ - - - - - - - - - - - -

(Continued)

97 -

Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2020	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$ - (Note C)	$225,362 (US$7,913 thousand) (Notes A and C)	$ - (Note E)

Note A: Translated at the rate of US$1:NT$28.48 and RMB1:NT$4.3648 prevailing on December 31, 2020.

Note B: The payment was made by Pacific Construction Co., Ltd. (the former shareholder).

Note C: The payment made by the Company and the investment amount approved by the Investment Commission, except for the payment made by subsidiary and the subsidiary’s investment amount approved by the Investment Commission.

Note D: The financial report was audited by an international accounting firm with a cooperative working relationship.

Note E: There is no upper limit, as stated in the Principles Governing the Review of Investment or Technical Corporation in Mainland China (No. 10720421530), which was issued by the Industrial Development Bureau, Ministry of Economic Affairs, ROC. Note F: Three investment types are as follows:

The Company made the investment directly.
The Company made the investment through companies registered in a third region. The companies registered in a third region were FEDS Development Ltd. and Pacific China Holding Ltd.
Others.

(Concluded)

98 -

TABLE 9

FAR EASTERN DEPARTMENT STORES, LTD.

INFORMATION OF MAJOR SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2020

Major Shareholder	Shareholding	Shareholding
	Share	Percentage
Far Eastern New Century Corporation Yuan Ding Investment Corporation Asia Cement Corporation Land Union Investment Limited	241,769,702 139,785,985 80,052,950 77,135,000	17.06 9.86 5.64 5.44

Note 1: The information on major shareholders above is extracted as of the last business day of the current quarter. The shareholders are holding non-physical ordinary and preference shares (including treasury stocks) of 5% or more. The share capital in the consolidated financial statements of the Company and the actual registration of non-physical shares may differ due to a difference in computation basis.
Note 2: For the above information, if the shares are entrusted to a trustee by the shareholder, it is disclosed by account of settlor. In accordance with the Securities Exchange Act, shareholder who has acquired a 10% shares or more has to disclose his insider ownerships, including the shares held and shares entrusted to a trust, in which the shareholder possesses the right to use on the trusted assets. For information on insider ownership declaration, please see the Market Observation Post System website.
99 -

	December 31	December 31
2020 $ - For the Year Ended		2019 $ - December 31
2020 $ 639 For the Year Ended		2019 $ 765 December 31
	2020 $ 226,529 220,427 159,633 132,347 $ 738,936	2019 $ 167,478 218,390 162,739 126,630 $ 675,237 (Continued)

AI assistant

FEDS — Annual Report 2020

52225_rns_2020-11-13_271e1f81-fde1-4eb1-b069-8f1ca9d87bdd.pdf

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Others Matter

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

d. Basis of consolidation

e. Foreign currencies

f. Inventories

g. Investment in associates

h. Property, plant and equipment

k. Intangible assets

1) Intangible assets acquired separately

m. Financial instruments

1) Financial assets

a) Measurement categories

2) Financial liabilities

a) Subsequent measurement

b) Derecognition of financial liabilities

n. Provisions

o. Revenue recognition

p. Leases

1) The Group as lessor

2) The Group as lessee

q. Borrowing costs

t. Taxation

1) Current tax

2) Deferred tax

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Key Sources of Estimation and Uncertainty

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES (INCLUDING RELATED PARTIES)

December 31, 2020

December 31, 2019

December 31, 2020

c. Other receivables

December 31, 2020

December 31, 2019

11. INVENTORIES

12. SUBSIDIARIES

a. Subsidiaries included in the consolidated financial statements

13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in Associates

14. PROPERTY, PLANT AND EQUIPMENT

15. LEASE ARRANGEMENTS

c. Material lease-in activities and terms

d. Other lease information

16. INVESTMENT PROPERTIES

17. INTANGIBLE ASSETS

18. PRE-PAYMENTS FOR LEASES

19. OTHER ASSETS

20. BORROWINGS

FEDS Annual Report 2020