S.C.P.C — Audit Report / Information 2020

Nov 4, 2020

STANDARD CHEM. & PHARM. CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2020 AND 2019

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of STANDARD CHEM. & PHARM. CO., LTD.

Opinion

We have audited the accompanying parent company only balance sheets of STANDARD CHEM. & PHARM. CO., LTD. (the “Company”) as of December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other independent accountants, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters of the parent company only financial statements of the current period are as follows:

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Valuation of inventories

Description

Refer to Note 4(10) for accounting policies on the valuation of inventories, Note 5(2) for the uncertainty of significant accounting estimations and assumptions relating to valuation of inventories, and Note 6(5) for the details of allowance for inventory valuation loss. As of December 31, 2020, the carrying amount of inventories and allowance for inventory valuation loss are $557,342 thousand and $9,033 thousand, respectively.

The Company is primarily engaged in the manufacture and sales of human medicine. Due to the influence of market demand and short expiration date of medicines, there is a risk of market price decline and obsolescence of inventories. The Company measures inventories at the lower of cost and net realisable value. The net realisable values of obsolete inventories are determined based on the historical information on the selling price.

Given that the valuation of inventories is subject to uncertainty of assumptions and the accounting estimations will have significant influence on the inventory values, we consider the valuation of inventories a key audit matter.

How our audit addressed the matter

We performed the following key audit procedures on the above key audit matter:

1. Assessed the reasonableness of policies on allowance for inventory valuation loss.

2. Assessed the effectiveness of the management’s inventory control, based on our understanding of the operations of the warehouse management, inspected the annual inventory taking plan and performed our observation.

3. Tested whether the basis of inventory aging used in calculating the net realisable value of inventory is consistent with the Company’s policy.

4. Validated the net realisable value of inventories and the adequacy of allowance for inventory valuation loss.

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Existence of domestic sales revenue from human medicines

Description

Refer to Note 4(27) for accounting policies on revenue recognition. Revenue is recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

The Company is primarily engaged in the manufacturing and sales of human medicines. The Company’s sales is mainly domestic-based and its customers are numerous, including hospitals, clinics, pharmacies and drug administrations all over the country. Since the sales transactions are numerous and would require a longer period for verification, we consider the existence of domestic sales revenue from human medicines a key audit matter.

How our audit addressed the matter

We performed the following key audit procedures for the above matter:

1. Assessed the consistency and effectiveness of internal control relevant to sales recognition.

2. Assessed basic information of the major customers, including the details of chairman and major shareholders, registered address, principal place of business, capital and main business activities, etc.

3. Selected samples of sales transactions and checked against related supporting documentation, including unit prices, quantities, reasonableness of sales allowance recognition, waybill and subsequent cash collection.

Other matter –Reference to the audits of other independent accountants

We did not audit the financial statements of certain investments accounted for under the equity method. These investments amounted to $216,761 thousand and $134,573 thousand, constituting 3.97% and 2.45% of total assets as of December 31, 2020 and 2019, respectively, and the share of profit or loss of subsidiaries, associates and joint ventures accounted for under the equity method was $14,008 thousand and $1,323 thousand, constituting 2.97% and 0.38% of total comprehensive income for the years then ended, respectively. The financial statements of these investee companies were audited by other independent accountants whose reports thereon have been furnished to us and our opinion expressed herein, insofar as it relates to the amounts included in the parent company only financial statements and information disclosed relative to these investments, is based solely on the reports of other independent accountants.

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Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including supervisors, are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS 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 parent company only financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform 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.

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

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

3. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only 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 auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

5. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the 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 parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless

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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.

Tien, Chung-Yu Independent Accountants

Lin, Tzu-Shu

PricewaterhouseCoopers, Taiwan Republic of China March 16, 2021

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The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

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STANDARD CHEM. & PHARM. CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Assets	Notes 6(1) 6(1) 6(4), 7 and 12 6(4), 7 and 12 7 5(2) and 6(5) 5(2) and 6(2) 5(2) and 6(3) 6(6) and 7 6(7) and 8 6(8) and 7 6(9) 6(10) 6(25) 6(7)	December 31, 2020 AMOUNT % $ 462,332 8 284,800 5 88,582 2 525,240 10 22,772 - 1,826 - 548,309 10 33,632 1 1,232 - 1,968,725 36 9,741 - 350,150 7 1,818,599 33 1,013,896 19 22,057 - 46,320 1 6,110 - 98,935 2 43,950 1 20,967 - 54,647 1 3,485,372 64 $ 5,454,097 100	December 31, 2019	December 31, 2019
		AMOUNT $ 462,332 284,800 88,582 525,240 22,772 1,826 548,309 33,632 1,232 1,968,725 9,741 350,150 1,818,599 1,013,896 22,057 46,320 6,110 98,935 43,950 20,967 54,647 3,485,372 $ 5,454,097	AMOUNT $ 762,990 74,950 86,747 477,381 16,663 92,940 574,519 36,094 3,081 2,125,365 10,241 350,050 1,693,353 1,069,039 8,098 46,433 10,911 102,429 18,424 28,006 19,355 3,356,339 $ 5,481,704	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets at amortised cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1210 Other receivables - related parties 130X Inventories 1410 Prepayments 1479 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non- current 1550 Investments accounted for under the equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1915 Prepayments for equipment 1920 Guarantee deposits paid 1990 Other non-current assets 15XX Total non-current assets 1XXX TOTAL ASSETS				14 1 2 9 - 2 10 1 -
				39
				- 6 31 20 - 1 - 2 - 1 -
				61
				100

(Continued)

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STANDARD CHEM. & PHARM. CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity	Notes 6(11) and 8 6(12) 6(18) 7 7 6(25) 6(8) and 7 6(25) 6(8) and 7 6(13) 6(14) 6(15)(27) 6(16) 6(3)(6)(17) 7 and 9 11	December 31, 2020 AMOUNT % $ 490,000 9 - - 93,239 2 113,486 2 - - 136,191 3 273,017 5 70,965 1 4,206 - 518 - 1,181,622 22 61,992 1 17,967 - 226,384 4 200 - 306,543 5 1,488,165 27 1,786,961 33 203,274 4 658,657 12 1,287,735 23 29,305 1 3,965,932 73 $ 5,454,097 100	December 31, 2019	December 31, 2019
		AMOUNT $ 490,000 - 93,239 113,486 - 136,191 273,017 70,965 4,206 518 1,181,622 61,992 17,967 226,384 200 306,543 1,488,165 1,786,961 203,274 658,657 1,287,735 29,305 3,965,932 $ 5,454,097	AMOUNT $ 565,000 300,000 54,476 103,420 26,361 97,434 245,111 13,098 3,005 615 1,408,520 61,992 5,064 241,710 206 308,972 1,717,492 1,786,961 204,514 622,365 1,079,851 70,521 3,764,212 $ 5,481,704	%
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Contract liabilities - current 2150 Notes payable 2160 Notes payable - related parties 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Lease liabilities - current 2310 Receipts in advance 21XX Total current liabilities Non-current liabilities 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2640 Net defined benefit liability - non- current 2645 Guarantee deposits received 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant event after blance sheet date 3X2X TOTAL LIABILITIES AND EQUITY				10 6 1 2 1 2 4 - - -
				26
				1 - 4 -
				5
				31
				33 4 11 20 1
				69
				100

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

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STANDARD CHEM. & PHARM. CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items

For the years ended December 31, 2020 2019 Notes AMOUNT % AMOUNT % 6(18) and 7 $ 2,738,561 100 $ 2,403,678 100 6(5)(8)(10)(13)(23) (24) and 7 ( 1,441,724)( 53)( 1,318,348)( 55) 1,296,837 47 1,085,330 45 6(8)(10)(13)(23)(2 4) and 7 ( 444,593) ( 16) ( 429,302) ( 18) ( 157,958) ( 5) ( 159,274) ( 7) ( 158,793) ( 6) ( 149,216) ( 6) 12 4,714 - 2,615 - ( 756,630)( 27)( 735,177)( 31) 540,207 20 350,153 14 6(19) and 7 10,151 - 15,230 1 6(3)(9)(20) and 7 85,206 3 60,453 3 6(2)(21) and 12 ( 38,192) ( 1) ( 37,491) ( 2) 6(7)(8)(22) and 7 ( 4,861) - ( 6,657) - 6(6) 31,302 1 58,318 2 83,606 3 89,853 4 623,813 23 440,006 18 6(25) ( 99,641)( 4)( 63,524)( 2) $ 524,172 19 $ 376,482 16 6(13) ($ 14,637) - ($ 7,270) - 6(3)(17) ( 17,991) ( 1) 17,152 1 6(6)(17) ( 21,223) ( 1) ( 31,841) ( 2) 6(25) 2,927 - 1,454 - 6(6)(17) ( 2,244) - ( 4,691) - ($ 53,168)( 2)($ 25,196)( 1) $ 471,004 17 $ 351,286 15 6(26) $ 2.93 $ 2.11 $ 2.93 $ 2.10

4000 Operating revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Selling expenses 6200 General & administrative expenses 6300 Research and development expenses 6450 Expected credit gains 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of subsidiaries, associates and joint ventures accounted for under the equity method, net 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Remeasurment of defined benefit plan 8316 Unrealised (losses) gains from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive loss of associates and joint ventures accounted for under the equity method 8349 Income tax related to components of other comprehensive income Components of other comprehensive loss that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8300 Total other comprehensive loss for the year 8500 Total comprehensive income for the year Earnings per share (in dollars) 9750 Basic 9850 Diluted

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

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STANDARD CHEM. & PHARM. CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the year ended December 31, 2019 Balance at January 1, 2019 Effect of retrospective application Adjusted balance at January 1, 2019 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) for the year Difference between proceeds from acquisition of subsidiaries and book value Cash dividends payable expired Appropriations of 2018 earnings: Legal reserve Cash dividends Balance at December 31, 2019 For the year ended December 31, 2020 Balance at January 1, 2020 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) for the year Difference between proceeds from acquisition of subsidiaries and book value Adjustments to non-proportional acquisition of associates and joint ventures accounted for under the equity method Appropriations of 2019 earnings: Legal reserve Cash dividends Balance at December 31, 2020	Notes		Commonstock				Capital	R	eserves			Retain	Retain	edEarnings	Other EquityInterest	Other EquityInterest	Other EquityInterest	Totalequity
					Additional paid- incapital		Difference between the price for acquisition or disposal of subsidiaries and carrying amount		Change in net equity of associates and joint ventures accounted for using the equity method		others	Legal reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations		Unrealised gains or losses from financial assets measured at fair value through other comprehensive income
	6(6) 6(17) 6(6)(27) 6(15) 6(16) 6(17) 6(6)(27) 6(6)(15) 6(16)		$ 1,786,961 - 1,786,961 - - - - - - - $1,786,961 $1,786,961 - - - - - - - $1,786,961		$ 143,353 - 143,353 - - - - - - - $143,353 $143,353 - - - - - - - $143,353	$ 50,453 - 50,453 - - - 7,054 - - - $ 57,507 $ 57,507 - - - ( 53 ) - - - $ 57,454		$ 3,460 - 3,460 - - - - - - - $ 3,460 $ 3,460 - - - - ( 1,187 ) - - $ 2,273			$ 49 - 49 - - - - 145 - - $ 194 $ 194 - - - - - - - $ 194		$ 584,929 - 584,929 - - - - - 37,436 - $622,365 $622,365 - - - - - 36,292 - $658,657	$ 1,022,410 ( 7,454 ) 1,014,956 376,482 ( 6,107 ) 370,375 - - ( 37,436 ) ( 268,044 ) $ 1,079,851 $ 1,079,851 524,172 ( 11,952 ) 512,220 - - ( 36,292 ) ( 268,044 ) $ 1,287,735	($ 9,853 ) - ( 9,853 ) - ( 4,691 ) ( 4,691 ) - - - - ($ 14,544 ) ($ 14,544 ) - ( 2,244 ) ( 2,244 ) - - - - ($ 16,788 )	$ 99,463 - 99,463 - ( 14,398 ) ( 14,398 ) - - - - $ 85,065 $ 85,065 - ( 38,972 ) ( 38,972 ) - - - - $ 46,093		$ 3,681,225 ( 7,454 ) 3,673,771 376,482 ( 25,196 ) 351,286 7,054 145 - ( 268,044 ) $3,764,212 $3,764,212 524,172 ( 53,168 ) 471,004 ( 53 ) ( 1,187 ) - ( 268,044 ) $3,965,932

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

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STANDARD CHEM. & PHARM. CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Net loss (gain) on financial assets at fair value through profit and loss Expected credit gain Reverse of allowance for loss on inventory market price decline Share of profit or loss of subsidiaries, associates and joint ventures accounted for using the equity method Depreciation Net (gain) loss on disposal of property, plant and equipment Amortisation Dividend income Interest income Interest expense Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit and loss Notes receivable Accounts receivable Other receivables Other receivables - related parties Inventories Prepayments Other current assets Changes in operating liabilities Contract liabilities - current Notes payable Notes payable - related parties Accounts payable Other payables Receipts in advance Net defined benefit liability - non-current Cash inflow generated from operations Dividend received Interest received Interest paid Income tax paid Net cash flows from operating activities

For the years ended December 31, Notes 2020 2019 $ 623,813 $ 440,006 6(2)(21) 500 ( 926 ) 12 ( 4,714 ) ( 2,615 ) 6(5) ( 673 ) ( 10,833 ) 6(6) ( 31,302 ) ( 58,318 ) 6(7)(8)(9)(23) 116,160 125,699 6(21) ( 100 ) 545 6(23) 21,999 19,718 6(20) ( 12,864 ) ( 13,957 ) 6(19) ( 10,151 ) ( 15,230 ) 6(22) 4,861 6,657 - ( 117 ) ( 1,835 ) 13,087 ( 43,145 ) ( 1,661 ) ( 6,741 ) 1,240 1,174 ( 2,807 ) 26,883 ( 53,655 ) 2,462 2,724 1,849 ( 381 ) 38,763 13,950 9,318 ( 19,220 ) ( 26,361 ) ( 1,202 ) 38,757 37,640 20,118 30,485 ( 97 ) ( 119 ) ( 29,963) ( 34,981) 738,711 475,729 6(6)(20) 50,818 41,257 10,783 15,486 ( 4,961 ) ( 6,700 ) ( 35,353) ( 113,150) 759,998 412,622

(Continued)

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STANDARD CHEM. & PHARM. CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES Increase in financial assets at amortised cost - current Decrease in other receivables - related parties Acquisition of financial assets at fair value through other comprehensive income - non-current Acquisition of investments accounted for under the equity method Cash paid for acquisition of property, plant and equipment Interest paid for acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in prepayment for equipment Decrease (increase) in guarantee deposits paid Increase in other non-current assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings (Decrease) increase in short-term notes and bills payable Payments of lease liabilities Decrease in long-term borrowings Decrease in guarantee deposit received Cash dividends payable expired Payment of cash dividends Net cash flows used in financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

For the years ended December 31, Notes 2020 2019 ($ 209,850 ) ($ 44,230 ) 3,270 2,220 ( 18,091 ) ( 19,138 ) 6(28) ( 69,935 ) ( 256,316 ) 6(28) ( 30,648 ) ( 32,045 ) 6(7)(22)(28) ( 192 ) ( 113 ) 184 - 6(10) ( 155 ) ( 858 ) ( 42,457 ) ( 37,188 ) 7,039 ( 7,492 ) ( 52,335) ( 19,818) ( 413,170) ( 414,978) 6(29) 190,000 365,000 6(29) ( 265,000 ) ( 220,000 ) 6(29) ( 300,000 ) 50,000 6(29) ( 4,436 ) ( 4,357 ) 6(29) - ( 100,000 ) 6(29) ( 6 ) ( 3,651 ) 6(15) - 145 6(16) ( 268,044) ( 268,044) ( 647,486) ( 180,907) ( 300,658 ) ( 183,263 ) 6(1) 762,990 946,253 6(1) $ 462,332 $ 762,990

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

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STANDARD CHEM. & PHARM. CO., LTD. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANISATION

(1) Standard Chem. & Pharm. Co., Ltd. (the ‘Company’) was incorporated on June 30, 1967 under the provisions of the Company Act of the Republic of China (R.O.C.) and other regulations. The Company is primarily engaged in the manufacturing and sales of Chinese and western medicine, cosmetics, beverage, normal instruments and medical instruments.

(2) The Company has been listed on the Taiwan Stock Exchange starting from December 1995.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorised for issuance by the Board of Directors on March 16, 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting

Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC effective from 2020 are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board ("IASB")
Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-releted rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Note: Earler application from January 1, 2020 is allowed by FSC.

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

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New Standards,Interpretations and Amendments	Effective date by IASB
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’	January 1, 2021 January 1, 2021

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

IFRSs issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by IASB but not as endorsed by the FSC are as follows:	yet included in the IFR
New Standards,Interpretations and Amendments	Effective date by IASB
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between and investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendment to IAS 1, ‘Disclosure of accounting policies’ Amendment to IAS 8, ‘Definition of accounting policies’ Amendment to IAS 16, ‘Property, plant and equipment	: proceeds before intended use’ Amendment to IAS 37, ‘Onerous contracts－cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018-2020

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of preparation

• A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:

• (a) Financial assets at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

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• (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “ IFRSs ” ) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5. Critical accounting judgements, estimates and key sources of assumption uncertainty.

• (3) Foreign currency translation

• Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional and presentation currency.

Foreign currency transactions and balances

• A. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

• B. Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon retranslation at the balance sheet date are recognised in profit or loss.

• C. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are retranslated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• D. All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within other gains and losses.

• (4) Classification of current and non-current items

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

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

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• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realised within twelve months from the balance sheet date;

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

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be paid off within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be paid off within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

• (5) Cash equivalents

• A. Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

• B. Time deposits and repurchase bonds that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

• D. The Company recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(7) Financial assets at amortised cost

• A. Financial assets at a mortised cost are those that meet all of the following criteria:

• (a)The objective of the Company’s business model is achieved by collecting contractual cash flows.

• (b)The assets’ contractual cash flows represent solely payments of principal and interest.

• B. The Company’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

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• (8) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:

  • The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

• (9) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(10) Inventories

• Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in process comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses. If the cost exceeds net realisable value, valuation loss is accrued and recognised in operating costs. If the net realisable value reverses, valuation is eliminated within credit balance and is recognised as deduction of operating costs.

• (11) Impairment of financial assets

For financial assets at amortised cost, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

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(12) Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

• －

• (13) Leasing arrangements (lessor) operating leases

• Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(14) Investments accounted for using equity method / subsidiaries and associates

• A. Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

• B. Unrealised profit (loss) occurred from the transactions between the Company and subsidiaries have been offset. The accounting policies of the subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.

• D. If changes in the Company’s shares in subsidiaries do not result in loss in control (transactions with non-controlling interest), transactions shall be considered as equity transactions, which are transactions between owners. Difference of adjustment of non-controlling interest and fair value of consideration paid or received is recognised in equity.

• E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for under the equity method and are initially recognised at cost.

• F. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate (including any other unsecured receivables), the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• G. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognises the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• H. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless

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the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• I. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• J. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• K. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

• L. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

• (15) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are

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depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

re as follows:
Assets	Useful Life
Buildings (including auxiliary equipment)	2 ～	60 years
Machinery and equipment	2 ～	15 years
Utility equipment	3 ～	20 years
Transportation equipment	2 ～	15 years
Office equipment	3 ～	9 years
Other equipment	2 ～	15 years

(16) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable. The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability; and

• (b) Any lease payments made at or before the commencement date.

• The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and

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recognise the difference between remeasured lease liability in profit or loss.

(17) Investment property

• An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 60 years.

(18) Intangible assets

• A. Patents

• Patents is stated at cost and amortised on a straight-line basis over its estimated useful life of 5 to 10 years.

• B. Computer software

• Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3 to 10 years.

(19) Impairment of non-financial assets

• A. The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

• B. The recoverable amounts of goodwill has not yet been available for use are evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(20) Borrowings

• Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

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(21) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(22) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(23) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expenses in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plan

For defined contribution plan, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plan

  • i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds of a currency and term consistent with the currency and term of the employment benefit obligations.

  • ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

• C. Employees’ compensation and directors’ and supervisors’ remuneration

• Employees’ remuneration and directors’ and supervisors’ remuneration are recognised as expenses and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the amounts as resolved by the stockholders at the stockholders’ meeting and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

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(24) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously

• F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from research and development expenditures, etc., to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

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(25) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

(26) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance. The distribution of cash dividends of 2019 and after earnings will be recognised as liabilities after boards approval.

• (27) Revenue recognition

• A. Sales of goods

  • (a) The Company manufactures and sells human pharmaceuticals, etc. Revenue is recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

  • (b) Goods are often sold with discounts and allowances based on the price spread given by the National Health Insurance. Revenue is recognised based on the price specified in the contract, net of the estimated sales discounts and allowances, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. Reversal of accounts receivable is recognised for expected sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. The terms of sales transactions are set individually with each clients and usually are made with cash payment in 2 months after billings, or to obtain cheques with a maturity of 4~6 months upon billings. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money.

  • (c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Rendering of services

  • (a) The Company provides processing services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed price contracts, revenue is recognised based on the actual service provided to the end of the balance sheet date as a proportion of the total services to be provided.

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• (b) The Company’s estimate about revenue, costs and progress towards complete satisfaction of a performance obligation is subject to a revision whenever there is a change in circumstances. Any increase or decrease in revenue or costs due to an estimate revision is reflected in profit or loss during the period when the management become aware of the changes in circumstances.

• C. Incremental costs of obtaining a contract

• Given that the contractual period lasts less than one year, the Company recognises the incremental costs of obtaining a contract as an expense when incurred although the Company expects to recover those costs.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Company’s accounting policies

None.

(2) Critical accounting estimates and assumptions

• A. Evaluation of inventories

• (a) As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the influence of different market demand and expiration date, etc., the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

• (b) As of December 31, 2020, the carrying amount of inventories was $548,309.

• B. Financial assets-fair value measurement of unlisted stocks without active market

• (a) The fair value of unlisted stocks held by the Company that are not traded in an active market is determined considering those companies’ recent fund raising activities and technical development status, fair value assessment of other companies of the same type, market conditions and other economic indicators existing on balance sheet date. Any changes in these judgements and estimates will impact the fair value measurement of these unlisted stocks. Please refer to Note 12(3) for the fair value estimation for the financial instruments fair value information.

• (b) As of December 31, 2020, the carrying amount of unlisted stocks without active market was $101,110.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash: Revolving funds and petty cash Checking accounts and demand deposits Cash equivalents: Time deposits Repurchase bonds	December31,2020 5,632 $ 162,631 168,263 78,815 215,254 294,069 462,332 $	December31,2019
		4,849 $ 278,466
		283,315
		403,969 75,706
		479,675
		762,990 $

• A. The Company associates with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. As of December 31, 2020 and 2019, the carrying amount of more than 3-month time deposits (shown as “Financial assets at amortised cost - current”) was $284,800 and $74,950, respectively.

• C. As of December 31, 2020 and 2019, the Company has no cash and cash equivalents pledged to others.

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

Financial assets at fair value through profit or loss
Current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks Valuation adjustment Non-current items: Financial assets mandatorily measured at fair value through profit or loss Emerging stocks Unlisted stocks Valuation adjustment	December31,2020	December31,2019
	12,000 $ 12,000) ( - $ 1,603 $ 11,300 12,903 3,162) ( 9,741 $	12,000 $ 12,000) ( - $ 1,603 $ 11,300 12,903 2,662) ( 10,241 $

• A. The Company recognised net loss (shown as “other gains and losses”) of $500 and $560 for the years ended December 31, 2020 and 2019, respectively.

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• B. As of December 31, 2020 and 2019, the Company has no financial assets at fair value through profit or loss pledged to others.

• C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2), ‘Financial Instruments’.

(3) Financial assets at fair value through other comprehensive income – non-current

Equity instrument: Listed stocks Unlisted stocks Valuation adjustment	December31,2020 119,168 $ 63,295 182,463 167,687 350,150 $	December31,2019
		101,077 $ 63,295
		164,372 185,678
		350,050 $

• A. The Company has elected to classify equity instruments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. Without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the fin ancial assets at fair value through other comprehensive income held by the Company was its book value.

• B. The Company recognised ($17,991) and $17,152 in other comprehensive income for fair value change for the years ended December 31, 2020 and 2019, respectively.

• C. The Company recognised $12,446 and $13,721 as dividend income in profit or loss (shown as ‘other income’) in relation to the financial assets at fair value through other comprehensive income for the years ended December 31, 2020 and 2019, respectively.

• D. As of December 31, 2020 and 2019, the Company has no financial assets at fair value through other comprehensive income pledged to others.

• E. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2), ‘Financial Instruments’.

(4) Notes and accounts receivable

Notes and accounts receivable
	December	31,2020	December	31,2019
Notes receivable	$	88,582	$	86,747
Accounts receivable	$	529,957	$	486,826
Less: Allowance for bad debts	(	4,717)	(	9,445)
	$	525,240	$	477,381

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A.The ageing analysis of notes and accounts receivable is as follows:

Notes receivable: During the credit period Accounts receivable: During the credit period Overdue up to 90 days Overdue 91 to 180 days Overdue 181 to 270 days	December31,2020 88,582 $ 507,029 $ 22,512 416 - 529,957 $	December31,2019
		86,747 $
		419,459 $ 49,495 17,865 7
		486,826 $

The above ageing analysis was based on days overdue.

• B. As of December 31, 2020 and 2019, notes and accounts receivable were all from contracts with customers. And as of January 1, 2019, the balance of receivables from contracts with customers amounted to $584,999.

• C. Without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s notes and accounts receivable were its book value.

• D. As of December 31, 2020 and 2019, the Company has no notes and accounts receivable pledged to others.

• E. Information relating to credit risk of notes and accounts receivable is provided in Note 12(2), ‘Financial instruments’.

(5) Inventories

‘Financial instruments’. Inventories
Merchandise Raw materials Supplies Work in process Finished goods		December31,2020
	Allowance for Cost valuation loss 38,074 $ 88) ($ 166,535 2,636) ( 32,476 327) ( 51,805 - 268,452 5,982) ( 557,342 $ 9,033) ($		Book value
			37,986 $ 163,899 32,149 51,805 262,470
			548,309 $

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Merchandise Raw materials Supplies Work in process Finished goods		December31,2019
	Allowance for Cost valuation loss 32,000 $ 218) ($ 231,149 5,392) ( 35,159 794) ( 58,501 718) ( 227,416 2,584) ( 584,225 $ 9,706) ($		Bookvalue 31,782 $ 225,757 34,365 57,783 224,832 574,519 $

A. The cost of inventories recognised as expenses for the year:

			For theyears ended	For theyears ended	December31,
			2020		2019
Cost of goods sold		$	1,407,954	$	1,265,713
Loss on scrapped inventories			35,039		63,891
Reversal of allowance on inventory
market price decline (Note)	(		673)	(	10,833)
Gain on physical inventory	(		596)	(	423)
		$	1,441,724	$	1,318,348

(Note) For the years ended December 31, 2020 and 2019, the Company reversed a previous inventory write-down which was accounted for as reduction of operating costs as these items were subsequently sold or disposed.

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(6) Investments accounted for under the equity method

A. Movements of investments accounted for under the equity method:

		For theyears ended December31,	For theyears ended December31,	For theyears ended December31,
		2020		2019
At January 1 before adjustments	$	1,693,353	$	1,442,951
Effects on retrospective application		-	(	7,454)
At January 1 after adjustments		1,693,353		1,435,497
Acquisition of investments accounted for under
the equity method		156,605		256,316
Share of profit or loss of investments accounted
for under the equity method		31,302		58,318
Earnings distribution of investments accounted
for under the equity method	(	37,954)	(	27,300)
Capital surplus－Difference between
the price for acquisition or disposal of
subsidiaries and carrying amount	(	53)		7,054
Capital surplus－Adjustment to non-proportional
acquisition of associates and joint ventures
accounted for using equity method	(	1,187)		-
Other equity interest－Financial statements
translation differences of foreign operations	(	2,244)	(	4,691)
Other equity interest－Unrealised gain or loss
on valuation of financial assets	(	20,981)	(	31,550)
Other equity interest－Actuarial losses of
defined benefit plan	(	242)	(	291)
At December 31	$	1,818,599	$	1,693,353
	December31,2020		December31,2019
Subsidiaries	$	1,577,359	$	1,525,728
Associates		241,240		167,625
	$	1,818,599	$	1,693,353

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B. Details of investments accounted for under the equity method are as follows:

Standard Pharmaceutical Co., Ltd. Chia Scheng Investment Co., Ltd. STANDARD CHEM. & PHARM. PHILIPPINES, INC. Inforight Technology Co., Ltd. Souriree Biotech & Pharm. Co., Ltd. Multipower Enterprise Corp. Advpharma Inc. Syngen Biotech Co., Ltd. WE CAN MEDICINES CO., LTD. Taiwan Biosim Co., Ltd.	December31,2020 199,340 $ 10,955 1,276 4,313 26,981 307,667 284,967 741,860 216,761 24,479 1,818,599 $	December31,2019
		117,760 $ 29,072 2,191 4,681 25,976 374,778 292,089 679,181 134,573 33,052
		1,693,353 $

• C. Information on the Company's subsidiaries is provided in Note 4(3) of the Company's 2020 consolidated financial statements.

• D. Associate:

• (a) The basic information of the associate that is material to the Company is as follows:

Company name WE CAN MEDICINES CO., LTD.	Principal place of business Taiwan	Shareholdingratio	Shareholdingratio
		December31,
		2020 33.61%	2019
			33.10%

• (b) The summarised financial information of the associate that is material to the Company is as follows:

• i. Balance sheet

lows: Balance sheet
	December	31,2020	December	31,2019
Current assets	$	938,513	$	704,171
Non-current assets		827,725		717,856
Current liabilities	(	592,745)	(	556,972)
Non-current liabilities	(	527,969)	(	458,489)
Total net assets	$	645,524	$	406,566
Share in associate's net assets	$	216,961	$	134,573
Carrying amount of the associate	$	216,761	$	134,573

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ii. Statement of comprehensive income

Statement of comprehensive income
Revenue Net income for the year Total comprehensive income for the year	For theyears ended	December31,
	2020 2,666,748 $ 42,708 $ 41,744 $	2019
		2,287,208 $
		4,176 $
		3,380 $

• (c) As of December 31, 2020 and 2019, the carrying amount of the Company’s individually immaterial associates amounted to $24,479and $33,052, respectively. The share in associate’s financial performance is as follows:

financial performance is as follows:
		For theyears ended December 31,
		2020		2019
Net loss for the year	($	8,573)	($	1,846)
Total comprehensive loss for the year	($	8,573)	($	1,846)

• E. For the years ended December 31, 2020 and 2019, the details of the Company’s equity transactions are provided in Note 7, ” Related party transactions”.

• F. As of December 31, 2020 and 2019, the Company has no shares pledged to others.

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(7) Property, plant and equipment

AtJanuary1,2020 Cost Accumulated depreciation 2020 At January 1 Additions-cost Transfer-cost (Note) Transfer-accumulated depreciation Depreciation Disposals-cost Disposals-accumulated depreciation At December 31 AtDecember31,2020 Cost Accumulated depreciation	Utility Transportation Office Other Land Buildings Machinery equipment equipment equipment equipment 314,060 $ 922,969 $ 864,221 $ 142,396 $ 19,241 $ 29,065 $ 298,593 $ - 537,180) ( 633,095) ( 105,211) ( 13,135) ( 25,349) ( 207,536) ( 314,060 $ 385,789 $ 231,126 $ 37,185 $ 6,106 $ 3,716 $ 91,057 $ 314,060 $ 385,789 $ 231,126 $ 37,185 $ 6,106 $ 3,716 $ 91,057 $ - 2,904 7,938 3,254 1,009 303 17,709 - - 629 4,641 1 23) ( 11,683 - - 23) ( - - 23 - - 35,629) ( 48,514) ( 6,207) ( 1,230) ( 1,549) ( 18,337) ( - 595) ( 4,545) ( - 296) ( 338) ( 10,188) ( - 595 4,545 - 218 338 10,182 314,060 $ 353,064 $ 191,156 $ 38,873 $ 5,808 $ 2,470 $ 102,106 $ 314,060 $ 925,278 $ 868,243 $ 150,291 $ 19,955 $ 29,007 $ 317,797 $ - 572,214) ( 677,087) ( 111,418) ( 14,147) ( 26,537) ( 215,691) ( 314,060 $ 353,064 $ 191,156 $ 38,873 $ 5,808 $ 2,470 $ 102,106 $	Construction in process Total - $ 2,590,545 $ - 1,521,506) ( - $ 1,069,039 $ - $ 1,069,039 $ 6,359 39,476 - 16,931 - - - 111,466) ( - 15,962) ( - 15,878 6,359 $ 1,013,896 $ 6,359 $ 2,630,990 $ - 1,617,094) ( 6,359 $ 1,013,896 $

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At January1,2019 Cost Accumulated depreciation 2019 At January 1 Additions-cost Transfer-cost (Note) Transfer-accumulated depreciation Depreciation Disposals-cost Disposals-accumulated depreciation At December 31 AtDecember31,2019 Cost Accumulated depreciation

Utility Transportation Office Other Land Buildings Machinery equipment equipment equipment equipment Total 314,060 $ 559,150 $ 632,460 $ 132,634 $ - $ - $ 912,714 $ 2,551,018 $ - 226,237) ( 450,661) ( 91,932) ( - - 640,964) ( 1,409,794) ( 314,060 $ 332,913 $ 181,799 $ 40,702 $ - $ - $ 271,750 $ 1,141,224 $ 314,060 $ 332,913 $ 181,799 $ 40,702 $ - $ - $ 271,750 $ 1,141,224 $ - 6,337 7,943 1,067 460 1,884 7,243 24,934 - 359,199 227,586 9,451 18,781 27,590 618,128) ( 24,479 - 273,363) ( 140,707) ( 7,903) ( 12,185) ( 24,921) ( 459,079 - - 38,852) ( 45,395) ( 6,132) ( 950) ( 837) ( 28,887) ( 121,053) ( - 1,717) ( 3,768) ( 756) ( - 409) ( 3,236) ( 9,886) ( - 1,272 3,668 756 - 409 3,236 9,341 314,060 $ 385,789 $ 231,126 $ 37,185 $ 6,106 $ 3,716 $ 91,057 $ 1,069,039 $ 314,060 $ 922,969 $ 864,221 $ 142,396 $ 19,241 $ 29,065 $ 298,593 $ 2,590,545 $ - 537,180) ( 633,095) ( 105,211) ( 13,135) ( 25,349) ( 207,536) ( 1,521,506) ( 314,060 $ 385,789 $ 231,126 $ 37,185 $ 6,106 $ 3,716 $ 91,057 $ 1,069,039 $

(Note) Transferred from ” Prepayment for equipment”.

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• A. As of December 31, 2020 and 2019, the carrying amount of buildings and other equipment held for operating leases are as follows:

for operating leases are as follows:
	December31,2020	December31,2019
Buildings	89 $	92 $
Other equipment	565 $	685 $
B. Amount of borrowing costs capitalised as part of property, plant and equipment and the interest
rates for such capitalisation for the years ended December 31, 2020 and		2019 are as follows:
	For theyears ended December31,
	2020	2019
Capitalised interest payments	192 $	113 $
Interest rate	0.75%～0.80%	0.83%～0.86%

• C. Information about the property, plant and equipment that were pledged to others as collateral as of December 31, 2020 and 2019 is provided in Note 8,’Pledged Assets’.

• －

• (8) Leasing arrangements lessee

• A. The Company leases various assets including land and buildings. Rental contracts are typically made for periods of 2 to 11 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Land Buildings	December31,2020 December31,2020 Carrying amount Carrying amount 4,398 $ 5,147 $ 17,659 2,951 22,057 $ 8,098 $ For theyears ended December31,	December31,2020
		Carrying amount
	2020 Depreciation charge 994 $ 3,587 4,581 $	2019
		Depreciation charge
		1,000 $ 3,533 4,533 $

• C. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $18,540 and $1,613, respectively.

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D. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Exepnse on short-term lease contract Expense on leases of low-value assets	Forthe years endedDecember31,	Forthe years endedDecember31,
	2020 157 $ 648 64 869 $	2019
		112 $ - 170
		282 $

• E. For the years ended December 31, 2020 and 2019, the Company’s total cash outflow for leases was $5,305 and $4,639, respectively.

(9) Investment property, net

AtJanuary1,2020 Cost Accumulated depreciation 2020 At January 1 Depreciation At December 31 At December31,2020 Cost Accumulated depreciation	Land Buildings Total 43,295 $ 6,776 $ 50,071 $ - 3,638) ( 3,638) ( 43,295 $ 3,138 $ 46,433 $ 43,295 $ 3,138 $ 46,433 $ - 113) ( 113) ( 43,295 $ 3,025 $ 46,320 $ 43,295 $ 6,776 $ 50,071 $ - 3,751) ( 3,751) ( 43,295 $ 3,025 $ 46,320 $

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At January1,2019 Cost Accumulated depreciation 2019 At January 1 Depreciation At December 31 At December31,2019 Cost Accumulated depreciation	Land Buildings Total 43,295 $ 6,776 $ 50,071 $ - 3,525) ( 3,525) ( 43,295 $ 3,251 $ 46,546 $ 43,295 $ 3,251 $ 46,546 $ - 113) ( 113) ( 43,295 $ 3,138 $ 46,433 $ 43,295 $ 6,776 $ 50,071 $ - 3,638) ( 3,638) ( 43,295 $ 3,138 $ 46,433 $

• A. Rental income from investment property (shown as “Other income”) and direct operating expenses arising from investment property are as follows:

Rental income from investment property Direct operating expenses of investment properties with rental income	For theyears ended	December31,
	2020 4,585 $ 113 $	2019
		4,078 $
		113 $

• B. The fair value of the investment property held by the Company as at December 31, 2020 and 2019 was $67,474 and $67,016, respectively, which was valued from the actual real estate price registered on the Department of Land Administration website. The valuation is categorised within Level 2 in the fair value hierarchy.

• C. No borrowing costs were capitalised as part of investment property for the years ended December 31, 2020 and 2019.

• D. As of December 31, 2020 and 2019 the Company has no investment property pledged to others.

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(10) Intangible assets

ntangible assets
			Patents			Software			Total
AtJanuary1,2020
Cost		$	11,602		$	39,774		$	51,376
Accumulated amortisation	(		8,377)	(		32,088)	(		40,465)
		$	3,225		$	7,686		$	10,911
2020
At January 1		$	3,225		$	7,686		$	10,911
Additions-acquired separately			-			155			155
Amortisation	(		867)	(		4,089)	(		4,956)
Disposals-cost			-	(		14,913)	(		14,913)
Disposals-accumulated amortisation			-			14,913			14,913
At December 31		$	2,358		$	3,752		$	6,110
AtDecember31,2020
Cost		$	11,602		$	25,016		$	36,618
Accumulated amortisation	(		9,244)	(		21,264)	(		30,508)
		$	2,358		$	3,752		$	6,110
			Patents			Software			Total
AtJanuary1,2019
Cost	$		11,602	$		38,916	$		50,518
Accumulated amortisation	(		7,235)	(		28,020)	(		35,255)
	$		4,367	$		10,896	$		15,263
2019
At January 1	$		4,367	$		10,896	$		15,263
Additions-acquired separately			-			858			858
Amortisation	(		1,142)	(		4,068)	(		5,210)
At December 31	$		3,225	$		7,686	$		10,911
AtDecember31,2019
Cost	$		11,602	$		39,774	$		51,376
Accumulated amortisation	(		8,377)	(		32,088)	(		40,465)
	$		3,225	$		7,686	$		10,911

A. No borrowing costs were capitalised as part of intangible assets for the years ended December 31, 2020 and 2019.

~39~

B. Details of amortisation on intangible assets are as follows:

Operating costs Selling expenses General and administrative expenses Research and development expenses	For theyears ended	December31,
	2020 2,050 $ 915 1,561 430 4,956 $	2019
		2,200 $ 915 1,583 512
		5,210 $

• C. As of December 31, 2020 and 2019, the Company has no intangible assets pledged to others.

(11) Short-term borrowings

Type ofborrowings Unsecured bank borrowings Bank secured borrowings Type of borrowings Unsecured bank borrowings Bank secured borrowings	December31,2020 315,000 $ 175,000 490,000 $ December31,2019 340,000 $ 225,000 565,000 $	Interestraterange Collateral 0.70%～0.81% None 0.81%～0.84% Land and buildings Interest rate range Collateral 1.00%～1.05% None 1.00% Land and buildings

For more information regarding interest expenses recognised in profit or loss by the Company for the years ended December 31, 2020 and 2019, please refer to Note 6(22), ‘Finance costs’.

(12) Short-term notes and bills payable

December 31, 2019 Interest rate range Collateral Commercial papers payable $ 300,000 0.58%～0.68% None

As of December 31, 2020, the Company has no short-term notes and bills payable.

• A. The above commercial papers payable are issued and secured by Mega Bills Finance Corporation and other financial institutions.

• B. For more information regarding interest expenses recognised in profit or loss by the Company for the years ended December 31, 2020 and 2019, please refer to Note 6(22), ‘Finance costs’.

(13) Pensions

• A. The Company has a defined benefit pension plan in accordance with the Labour Standards Law, covering all regular employees’ service years prior to the enforcement of the Labour Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 5% of the employees’ monthly salaries and wages to the

~40~

retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labour pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March. Related information of pension paid under aforementioned plan is as follows:

(a) The amounts recognised in the balance sheet are as follows:

	December	31,2020	December	31,2019
Present value of defined benefit obligations	($	521,134)	($	503,101)
Fair value of plan assets		294,750		261,391
Net defined benefit liability–non-current	($	226,384)	($	241,710)

~41~

(b) Movements in defined benefit liability are as follows:

		Present value of	Present value of
		defined benefit				Fair value of		Net defined
			obligation			planassets	benefitliability
2020
At January 1	($		503,101)		$	261,391	($	241,710)
Current service cost	(		4,161)			-	(	4,161)
Interest (expense) income	(		3,728)			1,954	(	1,774)
	(		510,990)			263,345	(	247,645)
Remeasurements:
Return on plan assets			-			8,599		8,599
Change in demographic
assumptions	(		8)			-	(	8)
Change in financial assumptions	(		22,857)			-	(	22,857)
Experience adjustments	(		371)			-	(	371)
	(		23,236)			8,599	(	14,637)
Pension fund contribution			-			35,898		35,898
Paid pension			13,092	(		13,092)		-
At December 31	($		521,134)		$	294,750	($	226,384)
	Present value of
		defined benefit				Fair value of		Net defined
			obligation			plan assets	benefit liability
2019
At January 1	($		492,483)	$		223,062	($	269,421)
Current service cost	(		4,813)			-	(	4,813)
Interest (expense) income	(		4,850)			2,207	(	2,643)
	(		502,146)			225,269	(	276,877)
Remeasurements:
Return on plan assets			-			7,932		7,932
Change in demographic
assumptions	(		8)			-	(	8)
Change in financial assumptions	(		12,822)			-	(	12,822)
Experience adjustments	(		2,372)			-	(	2,372)
	(		15,202)			7,932	(	7,270)
Pension fund contribution			-			42,437		42,437
Paid pension			14,247	(		14,247)		-
At December 31	($		503,101)	$		261,391	($	241,710)

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(c) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labour Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labour Retirement Fund Utilisation Report announced by the government.

• (d) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	For theyears ended December31,	For theyears ended December31,
	2020 0.30% 2.50%	2019
		0.75%
		2.50%

Assumptions regarding future mortality rate are set based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31,2020 Effect on present value of defined benefit obligation December31,2019 Effect on present value of defined benefit obligation	Increase0.25% Decrease0.25% Increase0.25% Decrease0.25% 12,878) ($ 13,345 $ 13,022 $ 12,637) ($ 12,823) ($ 13,299 $ 13,036 $ 12,638) ($ Discountrate Future salaryincreases

The sensitivity analysis above was arrived at based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

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The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (e) Expected contributions to the defined benefit pension plan of the Company for the year ended December 31, 2021 will be $10,354.

• (f) As of December 31, 2020, the weighted average duration of that retirement plan is 10 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 2-5 years Over 5 years	15,157 $ 89,306 430,042
	534,505 $

• B. Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labour Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labour Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2020 and 2019 were $23,252 and $22,115, respectively.

(14) Share capital – common stock

• A. Movements in the number of the Company’s ordinary shares outstanding are as follows (in thousands of shares):

thousands of shares):
Beginning and ending balance	Forthe years endedDecember31,
	2020 178,696	2019
		178,696

• B. As of December 31, 2020, the Company’s authorised capital was $2,000,000, and the paid-in capital was $1,786,961, consisting of 178,696 thousand shares of ordinary share, with a par value of $10 (in dollars) per share. Shares can be issued several times. All proceeds from shares issued have been collected.

(15) Capital surplus

• A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

• B. For the year ended December 31, 2019, pursuant to the Business letter No. 10602420200 issued by the Ministry of Economic Affairs in September 2017, the Company reclassified dividends

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payable of $145, which was expired and not collected by the shareholders, to capital surplus.

• C. For more information regarding changes of capital surplus due to transactions with noncontrolling interest, please refer to Note 6(27), ‘Transactions with non-controlling interest’.

• D. In November 2020, the associate of the Company, WE CAN MEDICINES CO., LTD., increased its capital by issuing new shares. The Company did not acquire shares proportionally to its interest. The change of the transaction resulted in a decrease in the equity attributable to owners of parent by $1,187 and is recorded under capital surplus.

(16) Retained earnings

• A. Within the limit, except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in-capital.

• B. Under the amended Company’s Articles of Incorporation resolved by the shareholders on June 19, 2019, as the Company operates in a volatile business environment and is in the stable growth stage, the Board of Directors takes into consideration the Company’s future capital needs, longterm financial planning and shareholders’ needs for cash inflow. The Company’s earnings, if any, are distributed in the following order:

• (a) Pay all taxes.

• (b) Cover accumulated deficit.

• (c) Appropriate 10% as legal reserve.

• (d) Appropriate or reverse special reserve in accordance with regulations.

• (e) At least 10% of the remainder and previous unappropriated retained earnings as stockholders’ bonus and cash dividends shall account for at least 20% of total dividends distributed. If the cash dividend is below $0.5 (in dollars) per share, the Company can distribute stock dividends instead of cash dividends upon resolution of the shareholders.

• When the shareholders bonus is distributed in stock dividend, it shall be allocated according to the resolutions of the shareholders’ meeting. The company authorised the Board of Directors to process resolution resolved by a majority vote at the meeting attended by two-thirds of the total number of directors: all or part of distributed dividends and bonus, and capital reserve/legal surplus reserve shall be distributed by cash. The result shall be reported to the shareholders’ meeting.

• C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• D. As resolved by the shareholders on June 19, 2019, the Company recognised cash dividends distributed to owners amounting to $268,044 ($1.5 (in dollars) per share) for the appropriations

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of 2018 earnings. As of March 16, 2021, the proposal for appropriations of 2020 earning has not yet adopted a resolution by the Board of Directors. Information about the distribution of dividends by the Company as proposed by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(17) Other equity

)Other equity
At January 1 Currency translation differences - Company Valuation adjustment - Company - Subsidiaries At December 31 At January 1 Currency translation differences - Company Valuation adjustment - Company - Subsidiaries At December 31	For theyear ended December 31,2020
	Currency translation		Unrealised gain on valuation of financial assets	Total
		Currency translation	Unrealised gain on valuation of financial assets		Total
	9,853) ($ 4,691) ( - - 14,544) ($		99,463 $ - 17,152 31,550) ( 85,065 $	89,610 $ 4,691) ( 17,152 31,550) ( 70,521 $

(18) Operating revenue

A. The Company derives revenue from the transfer of goods at a point in time and of services over time in the following major product categories and geographical regions:

Revenue from sales of medicine Revenue from sales of dietary supplement Revenue form rendering of services Others		For theyear ended December 31,2020	For theyear ended December 31,2020	For theyear ended December 31,2020	For theyear ended December 31,2020	For theyear ended December 31,2020
		Domestic		International		Total
		1,938,767 $ 111,585 3,192 105,750 2,159,294 $		455,847 $ 24 - 123,396 579,267 $		2,394,614 $ 111,609 3,192 229,146 2,738,561 $

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Revenue from sales of medicine Revenue from sales of dietary supplement Revenue form rendering of services Others		For theyear ended December 31,2019	For theyear ended December 31,2019	For theyear ended December 31,2019	For theyear ended December 31,2019	For theyear ended December 31,2019
		Domestic		International		Total
		1,773,881 $ 98,725 4,837 82,443 1,959,886 $		320,024 $ 22 - 123,746 443,792 $		2,093,905 $ 98,747 4,837 206,189 2,403,678 $

B. The Company has recognised the following revenue-related contract liabilities:

Contract liabilities – sales of medicine	December 31, 2020 93,239 $	December 31, 2019 54,476 $	January 1, 2019 40,526 $

Revenue recognised that was included in the contract liability balance at the beginning of the years ended December 31, 2020 and 2019 were $48,233 and $40,340, respectively.

(19) Interest income

Interest income
Interest income from bank deposit Interest income from loan to others	Forthe years endedDecember31,
	2020 8,312 $ 1,839 10,151 $	2019
		12,915 $ 2,315
		15,230 $

(20) Other income

Other income
Dividend income Rental income Royalty income Technology transfer income Research income Other income	For theyears ended December31,
	2020 12,864 $ 5,689 11,250 10,039 3,612 41,752 85,206 $	2019
		13,957 $ 5,071 - 11,803 10,061 19,561
		60,453 $

~47~

(21) Other gains and losses

Other gains and losses
		For theyears ended		December	31,
		2020		2019
Net currency exchange loss	($	37,579)	($	22,652)
Net gain (loss) on disposal of property, plant and
equipment		100	(		545)
Net loss on current financial assets at fair value
through profit or loss	(	500)	(		560)
Indemnity loss		-	(	11,880)
Other losses	(	213)	(		1,854)
	($	38,192)	($	37,491)

(22) Finance costs

inance costs
		Forthe years endedDecember		31,
		2020	2019
Interest expense
Bank borrowings	$	4,896	$	6,658
Lease liabilities		157		112
		5,053		6,770
Less: Capitalisation of qualifying assets	(	192)	(	113)
	$	4,861	$	6,657

(23) Expenses by nature

Employee benefit expenses Depreciation on property, plant and equipment Depreciation on right-of-use assets Amortisation Employee benefit expenses Depreciation on property, plant and equipment Depreciation on right-of-use assets Amortisation	Forthe yearendedDecember	Forthe yearendedDecember	31,2020
	Recognised in Recognised in operatingcosts operatingexpenses 316,370 $ 413,938 $ 94,464 17,002 - 4,581 6,458 15,541 417,292 $ 451,062 $ For theyear ended December		Total
			730,308 $ 111,466 4,581 21,999
			868,354 $
			31,2019
	Recognised in operating costs 285,114 $ 102,028 - 6,588 393,730 $	Recognised in operating expenses 368,264 $ 19,025 4,533 13,130 404,952 $	Total
			653,378 $ 121,053 4,533 19,718
			798,682 $

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(24) Employee benefit expenses

Employee benefit expenses
Wages and salaries Labour and health insurance expenses Pension costs Director's remuneration Other personnel expenses Wages and salaries Labour and health insurance expenses Pension costs Director's remuneration Other personnel expenses	Forthe yearendedDecember		31,2020
	Recognised in Recognised in operatingcosts operatingexpenses 264,804 $ 354,272 $ 24,887 26,949 13,905 15,282 - 5,130 12,774 12,305 316,370 $ 413,938 $ Forthe yearendedDecember		Total
			619,076 $ 51,836 29,187 5,130 25,079
			730,308 $
			31,2019
	Recognised in operatingcosts 235,124 $ 23,638 13,983 - 12,369 285,114 $	Recognised in operatingexpenses 300,761 $ 26,625 15,588 11,965 13,325 368,264 $	Total
			535,885 $ 50,263 29,571 11,965 25,694
			653,378 $

• A. For the years ended December 31, 2020 and 2019, the average number of employees were 815 and 804 employees, respectively, which included 4 non-employee directors for both years.

• B. For the years ended December 31, 2020 and 2019, the average employee benefit expense were $894 and $802, respectively, while average wages and salaries were $763 and $670, respectively. The average wages and salaries increased by 13.9% compared to prior year.

• C. For the years ended December 31, 2020 and 2019, supervisors’ remunerations were $330 and $325, respectively.

• D. Directors’ and supervisors’ remuneration were reviewed by the Compensation Committee (the Committee) based on the degree of their participation, the value contributed to the company’s operation, and the average level of the industry. Compensation for executive officers were reviewed by the Committee and resolved by the Board of Directors based on executive officers’ job title, function, contribution, performance, and in consideration of the Company’s future risk, etc. Employee compensation is decided based on individual’s performance, contribution to the Company, performance, the market value of the position, and in consideration of the Company’s future operating risk.

• E. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year (pre-tax profit before deducting employees’ compensation and directors’ and supervisors’ remuneration), after covering accumulated losses, shall be distributed as employees' compensation and directors’ and supervisors’ remuneration. The ratio shall be 1%~10% for

~49~

employees’ compensation and shall not be higher than 3% for directors’ and supervisors’ remuneration. Employees’ compensation will be distributed in the form of shares or cash. Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, are entitled to receive aforementioned stock or cash. The Company may, by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation distributed in the form of shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders during their meeting.

• F. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $6,306 and $4,471, respectively; while directors’ and supervisors’ remuneration was accrued at $2,000 and $8,942, respectively. The aforementioned amounts were recognised in salary expenses that were estimated and accrued based on the distributable net profit of current year calculated by the percentage prescribed under the Company’s Articles of Incorporation. As resolved by the Board of Directors on March 16, 2021, the employees’ compensation and directors’ and supervisors’ remuneration were $6,323 and $2,213, respectively, and the employees’ compensation will be distributed in the form of cash. The employees’ compensation and directors’ and supervisors’ remuneration for 2019 as resolved by the Board of Directors was $13,608. The difference between the aforementioned amount and the amount of $13,413 recognised in the 2019 financial statements by $195, mainly caused by estimation differences, had been adjusted in the profit or loss for 2020. Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the Board of Directors and shareholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(25) Income tax

A. Income tax expense:

(a) Components of income tax expense:

		Forthe years endedDecember	Forthe years endedDecember	Forthe years endedDecember	31,
		2020		2019
Current tax:
Current tax on profits for the year	$	97,892	$	56,348
Tax on undistributed earnings		1,118			415
(Over) under provision of prior year's
income tax	(	5,790)		15,164
		93,220		71,927
Deferred tax:
Origination and reversal of temporary
differences		6,421	(		8,403)
Income tax expense	$	99,641	$	63,524
The income tax relating to components of other	comprehensive income is as follows:
		For theyears ended December			31,
		2020		2019
Remeasurement of defined benefit obligation	($	2,927)	($		1,454)

(b) The income tax relating to components of other comprehensive income is as follows:

B. Reconciliation between income tax expense and accounting profit:

		Forthe years ended	Forthe years ended	December31,
		2020		2019
Tax calculated based on profit before tax and
statutory tax rate	$	124,763	$	88,001
Effect of amount not allowed to recognise under
regulations	(	9,408)	(	18,331)
Effect from tax-exempt income	(	11,042)	(	1,971)
Tax on undistributed earnings		1,118		415
(Over) under provision of prior year's income tax	(	5,790)		15,164
Effect from realised loss on investments		-	(	19,754)
Income tax expense	$	99,641	$	63,524

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B. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

For the year ended December 31, 2020

						Recognised	Recognised
							in other
			Recognised in			comprehensive
	January1			profit	or loss		income	December31
Deferred tax assets
Temporary differences:
Bad debts	$	3,969	($		1,035)	$	-	$	2,934
Unrealised loss on inventories
from market value decline		1,941	(		135)		-		1,806
Unrealised exchange loss		4,672			4,902		-		9,574
Investment loss		35,991			674		-		36,665
Unrealised sales return and
allowance		5,778	(		3,788)		-		1,990
Unused compensated absences		4,963			342		-		5,305
Pensions		41,351	(		5,993)		2,927		38,285
Unrealised loss on scrapped
inventories		1,385	(		1,385)		-		-
Unrealised loss on indemnity		2,376			-		-		2,376
Lease expenditure		3	(		3)		-		-
	$	102,429	($		6,421)	$	2,927	$	98,935
Deferred tax liabilities
Temporary differences:
Provision for land value
increment tax	($	61,992)	$		-	$	-	($	61,992)
	$	40,437	($		6,421)	$	2,927	$	36,943

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For the year ended December 31, 2019

						Recognised	Recognised
							in other
				Recognised in		comprehensive
		January1		profit	or loss		income	December31
Deferred tax assets
Temporary differences:
Bad debts	$		4,469	($	500)	$	-	$	3,969
Unrealised loss on inventories
from market value decline			4,108	(	2,167)		-		1,941
Unrealised exchange loss			-		4,672		-		4,672
Investment loss			32,384		3,607		-		35,991
Unrealised sales return and
allowance			4,381		1,397		-		5,778
Unused compensated absences			4,719		244		-		4,963
Pensions			46,893	(	6,996)		1,454		41,351
Unrealised loss on scrapped
inventories			1,345		40		-		1,385
Unrealised loss on indemnity			-		2,376		-		2,376
Lease expenditure			-		3		-		3
Unrealised loss on financial
assets through profit or loss			250	(	250)		-		-
	$		98,549	$	2,426	$	1,454	$	102,429
Deferred tax liabilities
Temporary differences:
Provision for land value
increment tax	($		61,992)	$	-	$	-	($	61,992)
Unrealised exchange gain	(		5,415)		5,415		-		-
Others	(		562)		562		-		-
	($		67,969)	$	5,977	$	-	($	61,992)
	$		30,580	$	8,403	$	1,454	$	40,437

D. The Company qualifies for “Regulations for Encouraging Manufacturing Enterprises and Technical Service Enterprises in the Newly Emerging, Important and Strategic Industries” and is entitled to income tax exemption for 5 consecutive years starting from 2017.

• E. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority. The Company does not have any administrative remedy as of March 16, 2021.

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(26) Earnings per share

arnings per share
Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares	For theyear ended December			31,2020
	Weighted average number of ordinary shares outstanding Amount after tax (shares in thousands) 524,172 $ 178,696 524,172 $ 178,696 - 192 524,172 $ 178,888 For theyear ended December			Earnings per share(in dollars)
				2.93 $ 2.93 $ 31,2019
	Amount after tax 376,482 $ 376,482 $ - 376,482 $		Weighted average number of ordinary shares outstanding (shares in thousands) 178,696 178,696 156 178,852	Earnings per share(in dollars)
				2.11 $
				2.10 $

~54~

(27) Transactions with non-controlling interest

• A. From May 2019 to August 2019, the Company acquired part of shares of its subsidiary Advpharma Inc. for a total cash consideration of $18,136. The carrying amount was $13,404 at the acquisition date. This transaction resulted in a decrease in the equity attributable to owners of the parent by $4,732.

• B. In October 2019, the subsidiary of the Company, Syngen Biotech Co., Ltd., increased its capital by issuing new shares. The Group did not acquire shares proportionally to its interest. The transaction resulted in an increase in the equity attributable to owners of parent by $11,786 and a decrease in non-controlling interest by $11,786.

• C. In April 2020, the Company acquired part of shares of its subsidiary Advpharma Inc. for a total cash consideration of $203. The carrying amount was $150 at the acquisition date. This transaction resulted in a decrease in the equity attributable to owners of the parent by $53.

• D. Based on the above transactions, the details of changes in capital surplus due to transactions with non-controlling interest for the years ended December 31, 2020 and 2019 are as follows:

Effect on acquisition of equity interest in subsidiaries

For theyears ended December31,	For theyears ended December31,
2020 ($ 53)	2019 $ 7,054

(28) Supplemental cash flow information

• A. Investing activities with partial cash payments:

pplemental cash flow information Investing activities with partial cash payments:
		Forthe years endedDecember				31,
		2020			2019
(1) Purchases of property, plant and equipment	$	39,476	$		24,934
Add: Opening balance of notes payable		705				500
Opening balance of payable on
equipment (shown as “Other payables”)		3,804			11,233
Less: Ending balance of notes payable	(	1,453)	(			705)
Ending balance of payable on equipment
(shown as “Other payables”)	(	11,692)	(			3,804)
Capitalised interest	(	192)	(			113)
Cash paid for acquisition of property, plant
and equipment	$	30,648		$	32,045
(2) Acquisition of investments accounted for
under the equity method	$	156,605	$		256,316
Less: Loan to others and monetary claims
(shown as "Other receivables-related
parties")	(	86,670)				-
Cash paid for acquisition of investments
accounted for under the equity method	$	69,935	$		256,316

~55~

B. Operating and investing activities with no cash flow effects:

(1) Elimination of allowance for losses

(2) Prepayments for equipment transferred to property, plant and equipment

Forthe years endedDecember31,	Forthe years endedDecember31,
2020 14 $ 16,931 $	2019
	- $
	24,479 $

(29) Changes in liabilities from financing activities

At January 1, 2020 Changes in cash flow from financing activities Changes in other non-cash items At December 31, 2020	Short-term borrowings	Short-term notes and bills payable	Lease liabilities 8,069 $ 4,436) ( 18,540 22,173 $	Guarantee deposits received	Total
	565,000 $ 75,000) ( - 490,000 $	300,000 $ 300,000) ( - - $		206 $ 6) ( - 200 $	873,275 $ 379,442) ( 18,540 512,373 $

At January 1, 2019 Effect of retrospective application Changes in cash flow from financing activities Changes in other non-cash items At December 31, 2019		Short-term borrowings	Short-term notes and bills payable	Short-term notes and bills payable	Lease liabilities	Long-term borrowings (including current portion)	Guarantee deposits received		Total
		420,000 $ - 145,000 - 565,000 $		250,000 $ - 50,000 - 300,000 $	- $ 11,513 4,357) ( 913 8,069 $	100,000 $ - 100,000) ( - - $	3,857 $ - 3,651) ( - 206 $		773,857 $ 11,513 86,992 913 873,275 $

~56~

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Company Standard Pharmaceutical Co., Ltd. (Standard P) Subsidiary Chia Scheng Investment Co., Ltd. (Chia Scheng) Subsidiary STANDARD CHEM. & PHARM. Subsidiary PHILIPPINES, INC. (PHL) Inforight Technology Co., Ltd. (Inforight) Subsidiary Souriree Biotech & Pharm. Co., Ltd. (Souriree) Subsidiary Multipower Enterprise Corp. (Multipower) Subsidiary Advpharma Inc. (Adv) Subsidiary Syngen Biotech Co., Ltd. (Syngen) Subsidiary Jiangsu Standard Biotech Subsidiary Pharmaceutical Co., Ltd. (Jiangsu Standard) WE CAN MEDICINES CO., LTD. Associate (WE CAN) Taiwan Biosim Co., Ltd. (Biosim) Associate SUN YOU BIOTECH PHARM CO., LTD. Other related party (The manager of (SUN YOU) the Company is SUN YOU's director) SYN-TECH CHEM & PHARM CO., LTD. Other related party (The Company is (SYN-TECH) SYN-TECH's corporate director) Fan Dao Nan Foundation Other related party (The corporate director of the Company) Chen, Wei-Jen Other related party (The executive of the Company)

(2) Significant related party transactions

A. Sales of goods

gnificant related party transactions Sales of goods hen, Wei-Jen	director of the Company) Other related party (The executive of the Company)	director of the Company) Other related party (The executive of the Company)
Subsidiaries Associates Other related parties	For theyears ended December31,
	2020 6,595 $ 6,831 19,679 33,105 $	2019
		6,761 $ 5,602 17,686
		30,049 $

Prices of goods sold to related parties are determined each time when delivering goods. The payment term of the subsidiaries is to obtain cheques due in 3~4 months. For other related parties, terms of transactions are similar with those to third parties, which is cash payment in 2 months after billing, or to obtain cheques with a maturity of 4~6 months upon billing.

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B. Purchases of goods

Purchases of goods
Subsidiaries Otherrelated parties	For theyears ended December31,
	2020 112,467 $ 66,448 178,915 $	2019
		96,185 $ 64,532
		160,717 $

Goods are purchased based on the price lists in force and terms that would be available to regular suppliers. Payment terms are cheques with a maturity of 3~4 months after inspection has passed.

C. Equity transactions

• (a) The Company participated in the cash capital increase of the associate, WE CAN, by investing $69,732 in November 2020.

• (b)The Company participated in the cash capital increase of the subsidiary, Standard P, by investing $86,670 (USD3,000 thousands) in November 2020. The payment was made by converting loan to Standard P in exchange to its shares.

• (c)The Company acquired shares of its subsidiary, Adv, for $1,125 from other related party, Chen, Wei-Jen, in July 2019.

• (d) The Company participated in the cash capital increase of the subsidiary, Syngen, by investing $207,741 in October 2019.

• (e) The Company participated in the cash capital increase of the subsidiary, Chia Scheng, by investing $500 in November 2019.

• (f) The Company participated in the cash capital increase of the associate, Biosim, by investing $29,940 in November 2019.

D. Other expenses

For the years ended December 31,

Advertisement expenses: Subsidiaries Associates Other related parties Research and development expenses: Subsidiaries Other related parties Professional service fees: Subsidiaries	2020 162 $ 808 - 970 $ 90 $ 82 172 $ 2,307 $	2019
		348 $ 231 731
		1,310 $
		242 $ 102
		344 $
		2,185 $

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For the years ended December 31,

Miscellaneous expenses: Subsidiaries Associates Other related parties	2020 1,328 $ 46 16 1,390 $	2019
		361 $ 16 -
		377 $

E. Rental income

Rental income
Other income Ending balance of goods sold Leased assets Rent collection Subsidiaries Land, Buildings and other equipments Monthly Subsidiaries Associates Other related parties Receivables from related parties: Subsidiaries Associates Other related parties	For theyears ended December31,
	2020 2019 5,128 $ 5,042 $ For theyears ended December31,	2019
		5,042 $
	2020 8,307 $ 12,371 714 21,392 $ December31,2020 2,365 $ 513 7,332 10,210 $	2019
		5,299 $ 2,812 776
		8,887 $
		December31,2019
		671 $ 584 8,807
		10,062 $

F. Other income

G. Ending balance of goods sold

The receivables from related parties arise mainly from sale transactions. The receivables are unsecured in nature and bear no interest. There are no provisions held against receivables from related parties.

H. Ending balance of payment on behalf of others (Shown as ‘Other receivables-related parties’)

Receivables from related parties: Associates Subsidiaries	December 31,2020 1,170 $ 656 1,826 $	December 31,2019
		- $ 3,000
		3,000 $

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I. Ending balance of goods purchased

Ending balance of goods purchased
Payables to related parties: Subsidiaries Other related parties	December31,2020 32,085 $ 19,108 51,193 $	December31,2019
		21,737 $ 23,971
		45,708 $

The payables to related parties arise mainly from purchase transactions. The payables bear no interest.

• －

• J. Lease transactions lessee

• (a) The Company leases land from other related party, Fan Dao Nan. Rental contracts are made for the periods from October 1, 2016 to September 30, 2027. Rents are paid quarterly.

• (b) On January 1, 2019 (the date of initial application of IFRS 16), the Company increased ‘rightof-use asset’ by $5,247. As of December 31, 2020 and 2019, the carrying amount of ‘right-ofuse asset’ were $4,048 and $4,647, respectively.

• (c) As of December 31, 2020 and 2019, the carrying amount of lease liability were $4,095 and $4,674, respectively. For the years ended December 31, 2020 and 2019, the Company recognised interest expenses amounting to $51 and $57, respectively (Shown as ‘Finance costs’).

K. Financing (Shown as ‘Other receivables-related parties’)

costs’). Financing(Shown	as ‘Other receivables-related parties’)	as ‘Other receivables-related parties’)	as ‘Other receivables-related parties’)	as ‘Other receivables-related parties’)
Standard P Standard P	For theyear ended December31,2020
	Date of Maximum Ending Annual maximum balance balance balance rate 2020.12.31 85,440 $ - $ 2.5% Date of Maximum Ending Annual maximum balance balance balance rate 2019.12.31 89,940 $ 89,940 $ 2.5% For theyear ended December31,2019				Interest income
					1,839 $
		Maximum balance 89,940 $	Ending balance 89,940 $	Annual rate 2.5%	Interest income
					2,315 $

L. Endorsements and guarantees provided to related parties

Endorser/ guarantor Endorsee/guarantee December 31, 2020 December 31, 2019 Purpose Secured The Company Standard P $ 85,440 $ 89,940 borrowings

As of December 31, 2020 and 2019, the actual endorsement/guarantee amount provided by the － Company for its subsidiary, Standard P, amounted to $ and $89,940, respectively.

(3) Key management compensation

Salaries and other short-term employee benefits

For theyears ended December31,	For theyears ended December31,
2020 20,443 $	2019
	20,299 $

~60~

8. PLEDGED ASSETS

The Company’s assets pledged as collateral are as follows:

Pledged asset Land (Note) Buildings-net (Note)	December31,2020 December31,2019 Purposes 288,489 $ 288,489 $ Short-term and long-term borrowings 103,945 108,202 Short-term and long-term borrowings 392,434 $ 396,691 $ Bookvalue
	December31,2020 288,489 $ 103,945 392,434 $

(Note) Shown as ‘Property, plant and equipment’.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

As of December 31, 2020 and 2019, except for the information provided in Note 7 on the related party transactions, the Company’s significant contingent liabilities and unrecognised contract commitments are as follows:

The balances for contracts that the Company entered into for the purchase of property, plant and equipment, but not yet due were $60,893 and $30,281, respectively.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENT AFTER THE BALANCE SHEET DATE

The Company implements its work-division and resource integration, to enhance competitiveness and － business performance by dividing its synthesis department to related party Syn-Tech CHEM & PHARM CO., LTD. (Syn-Tech) after the resolution by the Board of Directors on March 16, 2021. According to the appraised value of $341,000 for the department to be transferred, the Company will acquire 4,532 thousand shares of Syn-Tech newly issued common stock as consideration. The effective date is to be set on October 1, 2021.

12. OTHERS

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

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(2) Financial instruments

A. Financial instruments by category

ncial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Guarantee deposits received Lease liabilities	December31,2020		December31,2019
		9,741 $ 350,150 $ 462,332 $ 284,800 88,582 525,240 24,598 20,967 1,406,519 $ 490,000 $ - 113,486 136,191 273,017 200 1,012,894 $ 22,173 $		10,241 $ 350,050 $ 762,990 $ 74,950 86,747 477,381 109,603 28,006 1,539,677 $ 565,000 $ 300,000 129,781 97,434 245,111 206 1,337,532 $ 8,069 $

B. Risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Company, derivative financial instruments may be used to hedge certain risk.

• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments.

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• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Company operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company used in various functional currency, primarily with respect to the USD, JPY and RMB. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.

• ii. The Company has certain sales and purchases denominated in USD and other foreign currencies. Changes in market exchange rates would affect the fair value. However, the payment and collection periods of asset and liability positions in foreign currencies are close, thus, market risk can be offset. The Company does not expect significant interest rate risk.

• iii. The Company has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. However, the net investments of foreign operations are strategic investments, thus the Company does not hedge the investments.

• iv. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD: NTD JPY: NTD RMB: NTD Investments accounted for under the equity method USD: NTD PHP: NTD Financial liabilities Monetary items USD: NTD	December31,2020	December31,2020
	Foreign currency amount (In thousands) 27,507 $ 4,780 15,928 6,999 2,178 2,074	Exchange rate 28.48 0.2763 4.377 28.48 0.5861 28.48	Bookvalue
			783,399 $ 1,321 69,717 199,340 1,276 59,068

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(Foreign currency: functional currency) Financial assets Monetary items USD: NTD JPY: NTD RMB: NTD Investments accounted for under the equity method USD: NTD PHP: NTD	(Foreign currency: functional currency) Financial assets Monetary items USD: NTD JPY: NTD RMB: NTD Investments accounted for under the equity method USD: NTD PHP: NTD	December31,2019	December31,2019
		Foreign currency amount (Inthousands) 30,388 $ 139,002 14,285 3,928 3,748	Exchangerate 29.98 0.276 4.305 29.98 0.5847	Bookvalue
				911,032 $ 38,365 61,497 117,760 2,191

With regard to sensitivity analysis of foreign currency exchange rate risk, if the exchange rates of NTD to all foreign currencies had appreciated/depreciated by 1%, with all other factors remaining constant, the Company’s net income for the years ended December 31, 2020 and 2019 would have increased/decreased by $7,968 and $9,049, respectively.

• v. Total exchange loss, including realized and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019 amounted to $37,579 and $22,652, respectively.

Price risk

• i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• ii. The Company’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $249, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $1,825 and $1,644, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

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Cash flow and fair value interest rate risk

• i.The Company’s main interest rate risk arises from long-term and short-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During the years ended December 31, 2020 and 2019, the Company’s borrowings at variable rate were denominated in the NTD.

• ii. With regard to sensitivity analysis of interest rate risk, if interest rates on borrowings at that date had been 1% higher/lower with all other variables held constant, post-tax profit for the years ended December 31, 2020 and 2019 would have been $38 and $52 lower/higher, respectively, mainly as a result of higher/lower interest expense on floating rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.

• ii. The Company manages their credit risk taking into consideration the entire company’s concern. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilization of credit limits is regularly monitored.

• iii. In line with credit risk management procedure, payment reminders are sent as the contract payments are past due, whereby the default occurs when the contract payments are past due over certain period of time, and recourse procedures are initiated. However, the Company will continue executing the recourse procedures to secure their rights.

• iv. The Company classifies customer’s notes and accounts receivable in accordance with credit rating of customer. The Company applies the modified approach using provision matrix to estimate expected credit loss under the provision matrix basis. The Company used the forecast ability of conditions to adjust historical and timely information to assess the default possibility of notes and accounts receivable, whereby rate ranging from 0.01% to 100% are applied to the provision matrix. Movements in relation to the Company applying the modified approach to provide loss allowance for notes and accounts receivable are as follows:

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Beginning balance Reversal of impairment Write-offs during the year Ending balance Beginning balance Reversal of impairment Ending balance	Notesreceivable Accountsreceivable Total - $ 9,445 $ 9,445 $ - 4,714) ( 4,714) ( - 14) ( 14) ( - $ 4,717 $ 4,717 $ For theyear ended December31,2020 Notes receivable Accounts receivable Total 55 $ 12,005 $ 12,060 $ 55) ( 2,560) ( 2,615) ( - $ 9,445 $ 9,445 $ For theyear ended December31,2019

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities.

• ii. Surplus cash held by the Company over and above balance required for working capital management are transferred to the Company treasury. Company treasury invests surplus cash in interest bearing current accounts, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts.

• iii. The Company has the following undrawn borrowing facilities:

Floating rate: Expiring within one year Expiring beyond one year		December31,2020		December31,2019
		871,400 $ - 871,400 $		284,900 $ 100,000 384,900 $

• iv. The table below analyses the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date:

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December31,2020 Short-term borrowings Notes payable Accounts payable Other payables Lease liabilities Guarantee deposits received December31,2019 Short-term borrowings Short-term notes and bills payable Notes payable Notes payable-related parties Accounts payable Other payables Lease liabilities Guarantee deposits received	Within 1year 490,258 $ 113,486 136,191 273,017 4,437 - Within 1year 565,764 $ 300,000 103,420 26,361 97,434 245,111 3,076 -	Between 1 and2years - $ - - - 4,039 200 Between 1 and 2years - $ - - - - - 1,523 206	Between 2 and 5 years - $ - - - 11,455 - Between 2 and5 years - $ - - - - - 1,973 -	Over 5 years
				- $ - - - 2,962 - Over 5 years
				- $ - - - - - 1,732 -

     - v. For non-derivative financial liabilities, the Company’s non-derivative financial liabilities do not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

• (3)Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

  • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and emerging stocks with active market is included.

  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly.

  • Level 3: Unobservable inputs for the asset or liability. The Company’s investment in partial equity instruments without active market is included.

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• B. The carrying amounts of the Company’s financial instruments not measured at fair value (including cash and cash equivalents, financial assets at amortised cost - current, notes receivable, accounts receivable, other receivables, guarantee deposits paid, short-term borrowings, short-term notes and bills payable, notes payable, accounts payable, other payables, lease liabilities, and guarantee deposits received) are approximate to their fair values.

• C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets is as follows: (a) The related information of nature of the assets is as follows:

December 31,2020 Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Financial assets at fair value through other comprehensive income Equity securities December 31,2020 Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Financial assets at fair value through other comprehensive income Equity securities	Level 1 - $ 228,781 228,781 $ Level 1 - $ 254,792 254,792 $	Level 2 - $ - - $ Level 2 - $ - - $	Level3 9,741 $ 91,369 101,110 $ Level3 10,241 $ 95,258 105,499 $	Total
				9,741 $ 320,150
				329,891 $
				Total
				10,241 $ 350,050 360,291 $

• (b) The methods and assumptions the Company used to measure fair value are as follows:

• i. The instruments that the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed stocks Unlisted stocks Market quoted price Closing price Latest closing price on the balance sheet date

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics

~68~

in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the parent company only balance sheet date.

• iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Company’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments in the parent company only balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• D. There was no transfer between Level 1 and Level 2 in 2020 and 2019.

• E. The following table presents the changes in Level 3 instruments in 2020 and 2019:

			For theyears ended	For theyears ended	December31,
			2020		2019
At January 1		$	105,499	$	93,893
Purchase			-		9,389
Recognised in profit or loss (Note 1)	(		500)	(	560)
Recognised in other comprehensive loss (Note 2)	(		3,889)		2,777
At December 31		$	101,110	$	105,499

(Note 1) Shown as “Other gains and losses”.

• (Note 2) Shown as “Unrealised gain or loss on financial assets at fair value through other comprehensive income”.

• F.FFor the year ended December 31, 2020 and 2019, there were no transfer into or out from Level 3.

• G. Financial segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement.

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Significant Fair value at Valuation unobservable December 31,2020 technique input Non-derivative equity instrument: Unlisted stocks 101,110 $ Market comparable companies Discount for lack of marketability Significant Fair value at Valuation unobservable December 31,2019 technique input Non-derivative equity instrument: Unlisted stocks 105,499 $ Market comparable companies Discount for lack of marketability	Range Relationship (weighted of inputs to average) fair value 30% The higher the discount for lack of marketability, the lower the fair value Range Relationship (weighted of inputs to average) fair value 30% The higher the discount for lack of marketability, the lower the fair value	Relationship of inputs to fair value

• I. The Company has carefully assessed the valuation models and assumptions used to measure fair value; therefore, the fair value measurement is reasonable. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets categorised within Level 3 if the inputs used to valuation models have changed:

Input Financial assets Equity instrument Discount for lack of marketability Input Financial assets Equity instrument Discount for lack of marketability	Input Financial assets Equity instrument Discount for lack of marketability Input Financial assets Equity instrument Discount for lack of marketability	Favourable Unfavourable Favourable Unfavourable Change change change change change ± 3% 417 $ 417) ($ 3,916 $ 3,916) ($ December 31,2020 Recognised inprofit or loss Recognised in other comprehensive income Favourable Unfavourable Favourable Unfavourable Change change change change change ± 3% 439 $ 439) ($ 4,082 $ 4,082) ($ December 31,2019 Recognised inprofit or loss Recognised in other comprehensive income
		±
	Discount for lack of marketability

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13. SUPPLEMENTARY DISCLOSURES

(Only 2020 information is disclosed in accordance with the current regulatory requirements.)

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the year (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 5.

• (2) Information on investees

• Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 6.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

(4) Main stockholders information

Main stockholders information: Please refer to table 8.

14. SEGMENT INFORMATION

Not applicable.

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STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount
Cash: Revolving funds and petty cash Demand deposits-New Taiwan Dollar Demand deposits-Foreign currency Cash equivalents: Time deposits-Foreign currency Repurchase bonds-Foreign currency	Including USD 2,491 thousand @28.48 IncludingEUR 2 thousand @35.02 IncludingJPY 3,850 thousand @0.2763 IncludingCNY 536 thousand @4.377 Including CNY 11,500 thousand @4.377 due on 2021/1/22~2021/3/21, interest rate at 2.35%~2.50% Including USD 1,000 thousand @28.48 due on 2021/1/20, interest rate at 0.30% Including USD 7,558 thousand @28.48 due on 2021/1/6~2021/3/9, interest rate at 0.43%~0.55%		5,632 $ 88,197 70,956 70 1,064 2,344 50,335 28,480 215,254 462,332 $

~72~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF FINANCIAL ASSETS MEASURED AT AMORTISED COST - CURRENT DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount
Time deposits	USD 10,000 thousand @28.48; from 2020/7/20 to 2021/3/10; interest rate at 0.43%~0.62%		284,800 $

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STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF NOTES RECEIVABLE (NET) DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Client Name	Description		Amount	Note
Non-related parties: others (less than 5%) Related parties: SUN YOU BIOTECH PHARM CO., LTD. Syngen Biotech Co., Ltd. Souriree Biotech & Pharm. Co., LTD. SYN-TECH CHEM & PHARM CO., LTD.	Notes receivable Notes receivable Notes receivable Notes receivable Notes receivable		83,630 $ 3,267 984 645 56 4,952 88,582 $	－ － － － －

~74~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF ACCOUNTS RECEIVABLES (NET) DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Client Name	Description		Amount	Note
Non-related parties: Company A Others (less than 5%) Less: Allowance for doubtful accounts Related parties: SUN YOU BIOTECH PHARM CO., Syngen Biotech Co., Ltd. WE CAN MEDICINES CO., LTD.	Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable	134,023 $ 390,676 524,699 4,717) ( 519,982 4,009 736 513 5,258 525,240 $		－ － － － － －

~75~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF INVENTORIES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Amount	Amount	Note
			Cost	NetRealisable Value
Merchandise Raw materials Supplies Work in progress Finished goods Less: Allowance for inventory valuation losses	－ － － － －	38,074 $ 166,535 32,476 51,805 268,452 557,342 9,033) ( 548,309 $			67,569 $ 166,606 32,380 51,805 578,177 896,537 $	(Note) (Note) (Note) (Note) (Note)

(Note)Please refer to Note 4(10) for the method to determine the net realisable value.

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STANDARD CHEM. & PHARM. CO., LTD.

STATEMENT OF FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Name	Beginning	Beginning	Beginning	Balance	Addition	Addition	Addition	Addition	Valuation Adjustments		EndingBalance	EndingBalance	EndingBalance	Collateral	Note
	Shares (in thousands)			Fair Value	Shares (in thousands)			Amount	Amount		(in thousands)		Fair Value
Listed stocks: SYN-TECH CHEM & PHARM CO., LTD. Rossmax International Ltd. Unlisted stocks: HER-SING CO., LTD. SUN YOU BIOTECH PHARM CO., LTD. Green Management International Co., Ltd. Kenda Pharmacentical Co., Ltd.		3,073 - 3,055 3,378 110 5,000 14,616		254,792 $ - 43,167 42,833 1,629 7,629 350,050 $		115 600 - - - - 715		8,731 $ 9,360 - - 18,091 $	17,372) ($ 3,270 2,841) ( 777 32 1,857) ( 17,991) ($		3,188 600 3,055 3,378 110 5,000 15,331		246,151 $ 12,630 40,326 43,610 1,661 5,772 350,150 $	None None None None None None	－ － － － － －

~77~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Name	BeginningBalance	BeginningBalance	Addition	Addition	Decrease	Decrease		EndingBalance		Market Value or Net Assets Value	Market Value or Net Assets Value	Collateral Note
	Shares (inthousands)	Amount	Shares (inthousands)	Amount	Shares (inthousands)	Amount	Shares (inthousands)	Percentage of Ownership	Amount	UnitPrice	Total Amount
Standard Pharmaceutical Co., Ltd. Chia Scheng Investment Co., Ltd. Standard CHEM. & PHARM. PHILIPPINES, INC. Inforight Technology Co., Ltd. Souriree Biotech & Pharm. Co., Ltd. Multipower Enterprise Corp. Advpharma Inc. Syngen Biotech Co., Ltd. WE CAN MEDICINES CO., LTD. Taiwan Biosim Co., Ltd.	10,000 14,553 192 500 5,649 19,841 53,165 12,651 10,273 3,493 130,317	117,760 $ 29,072 2,191 4,681 25,976 374,778 292,089 679,181 134,573 33,052 1,693,353 $	3,000 - - - - - 27 - 3,170 - 6,197	86,670 $ - 10 - 1,098 - 203 100,691 83,740 - 272,412 $	- - - - -	5,090) ($ 18,117) ( 925) ( 368) ( 93) ( 67,111) ( 7,325) ( 38,012) ( 1,552) ( 8,573) ( 147,166) ($	13,000 14,553 192 500 5,649 19,841 53,192 12,651 13,443 3,493 136,514	100% 100% 100% 100% 93.17% 90.72% 88.65% 46.68% 33.61% 49.90%	199,340 $ 10,955 1,276 4,313 26,981 307,667 284,967 741,860 216,761 24,479 1,818,599 $	15.33 $ 0.75 6.65 8.63 9.88 12.04 5.49 108.00 16.14 7.01	199,340 $ 10,955 1,276 4,313 55,784 238,889 291,906 1,366,324 216,961 24,479 2,410,227 $	None － None － None － None － None － None － None － None － None － None －

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STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(7) for the information related to property, plant and equipment.

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STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(7) for the information related to property, plant and equipment and Note 4(15) for the method to determine depreciation and useful lives for assets.

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STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF DEFERRED TAX ASSETS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(25) for the information related to income tax.

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STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF OTHER NON-CURRENT ASSETS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Long-term prepaid royalty fee Others (less than 5%)	－ －		47,294 $ 7,353 54,647 $	－ －

~82~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF SHORT-TERM BORROWINGS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Nature	Description		Ending Balance	ContractPeriod	Interest Rate	CreditLine	Collateral
Unsecured bank borrowings Bank secured borrowings	Citibank Taiwan Ltd. E.SUN COMMERCIAL BANK, LTD. E.SUN COMMERCIAL BANK, LTD. First Commercial Bank First Commercial Bank Bank of Taiwan Bank of Taiwan		140,000 $ 130,000 20,000 25,000 75,000 70,000 30,000 490,000 $	2020.12.25~2021.1.25 2020.10.14~2021.1.13 2020.10.21~2021.1.13 2020.12.17~2021.1.15 2020.12.11~2021.1.11 2020.12.28~2021.1.28 2020.10.13~2021.1.11	0.70% 0.73% 0.73% 0.81% 0.81% 0.81% 0.84%	USD 5,000 thousand 150,000 150,000 25,000 125,000 100,000 100,000	None None None None Land and buildings Land and buildings Land and buildings

~83~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF CONTRACT LIABILITIES - CURRENT DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Company A Others (less than 5%)	Advanced receipt Advanced receipt		56,587 $ 36,652 93,239 $	－ －

~84~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF NOTES PAYABLE DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Client Name	Description		Amount	Note
Company B Others (less than 5%)	Notes payable Notes payable		8,512 $ 104,974 113,486 $	－ －

~85~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF ACCOUNTS PAYABLES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

ClientName	Description		Amount	Note
Non-related parties: Company C Company D Company E Company F Others (less than 5%) Related parties: Syngen Biotech Co., Ltd. SYN-TECH CHEM & PHARM CO., LTD. Souriree Biotech & Pharm. Co., Ltd. SUN YOU BIOTECH PHARM CO., LTD.	Accounts payable Accounts payable Accounts payable Accounts payable Accounts payable Accounts payable Accounts payable Accounts payable Accounts payable		6,232 $ 5,765 5,725 4,868 62,408 84,998 23,054 17,944 9,031 1,164 51,193 136,191 $	－ － － － － － － － －

~86~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF OTHER PAYABLES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Wages and salaries payable Provisions for employee benefits Pollution prevention cost payable Others (less than 5%)	－ － － －		123,943 $ 26,526 14,500 108,048 273,017 $	－ － － －

~87~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF INCOME TAX LIABILITIES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Corporate income tax payable Tax payable on undistributed earnings	－ －		69,847 $ 1,118 70,965 $	－ －

~88~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF DEFERRED TAX LIABILITIES FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(25) for the information related to income tax.

~89~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF CHANGES IN DEFINED BENEFIT LIABILITY - NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(13) for the information related to pensions.

~90~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Volume		Subtotal		Total	Note
			1,646,904 $ 349,731 223,046 241,378 45,977	2,507,036 $ 114,637 3,192 333,659 2,958,524 219,963) ( 2,738,561 $		－ － － － － － － － －

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STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item		Amount
Merchandise at January 1, 2020	$	32,000
Add : Merchandise purchased		191,493
Less : Transferred to expenses	(	793)
Disposal	(	828)
Merchandise at December 31, 2020	(	38,074)
Merchandise sold during this period		183,798
Raw materials and materials at January 1, 2020		231,149
Add : Raw materials purchased		494,313
Finished goods transfer in		45,791
Supplies transfer in		112
Gain on physical inventory		476
Less: Transferred to expenses	(	6,416)
Disposal	(	1,355)
Raw materials sold	(	173)
Raw materials and materials at December 31, 2020	(	166,535)
Raw materials used during this period		597,362
Supplies at January 1, 2020		35,159
Add : Supplies purchased		183,408
Gain on physical inventory		139
Less: Transferred to expenses	(	2,340)
Transferred to raw materials	(	112)
Disposal	(	930)
Supplies sold	(	93)
Supplies at December 31, 2020	(	32,476)
Supplies used during this period		182,755
Direct labour		152,230
Manufacturing overhead		413,890
Manufacturing cost		1,346,237

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STANDARD CHEM. & PHARM. CO., LTD. STATEMENY OF OPERATING COSTS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item		Amount
Work in process at January 1, 2020	$	58,501
Less: Transferred to expenses	(	112)
Loss on physical inventory	(	17)
Disposal	(	4,092)
Work in process at December 31, 2020	(	51,805)
Cost of finished goods		1,348,712
Finished goods at January 1, 2020		227,416
Less: Transferred to expenses	(	10,159)
Transferred to raw materials	(	45,791)
Loss on physical inventory	(	2)
Disposal	(	27,834)
Finished goods at December 31, 2020	(	268,452)
Cost of production and marketing		1,223,890
Cost of finished goods sold		1,407,688
Cost of raw materials sold		173
Cost of supplies sold		93
Cost of inventory sold		1,407,954
Losses on scrapped inventory		35,039
Reversal of allowance for loss on inventory market price decline	(	673)
Gain on physical inventory	(	596)
Operating costs	$	1,441,724

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STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF MANUFACTURING OVERHEAD FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Wages and salaries Repair and maintenance Utilities Depreciation Others (less than 5%)	－ － － － －		144,816 $ 23,818 36,090 94,464 114,702 413,890 $	－ － － － －

~94~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF SELLING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Wages and salaries Commission Professional service fees Others (less than 5%)	－ － － －		211,409 $ 63,820 22,952 146,412 444,593 $	－ － － －

~95~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Wages and salaries Insurance Professional service fees Others (less than 5%)	－ － － －		95,939 $ 11,317 9,781 40,921 157,958 $	－ － － －

~96~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Wages and salaries Depreciation Research expenses Others (less than 5%)	－ － － －		67,336 $ 9,607 57,774 24,076 158,793 $	－ － － －

~97~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF INTEREST INCOME FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(19) for the information related to interest income.

~98~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF OTHER INCOME FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(20) for the information related to other income.

~99~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF NET AMOUNT OF OTHER GAINS AND LOSSES FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(21) for the information related to other gains or losses.

~100~

STANDARD CHEM. & PHARM. CO., LTD. STATEMENT OF FINANCE COST FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(22) for the information related to finance costs.

~101~

STANDARD CHEM. & PHARM. CO., LTD. SUMMARY STATEMENT OF SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTISATION EXPENSES IN CURRENT PERIOD FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Please refer to Note 6(23) for the additional information related to expenses

and Note 6(24) for the information related to employee benefits.

~102~

Loans to others

For the year ended December 31, 2020

Table 1

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD.

Number	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance	Ending balance (Note 2)	Actual amount drawn down	Interest rate	Nature of loan (Note 1)	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loans granted	Note
													Item	Value
0 1 2	Standard Chem & Pharm. Co., Ltd. Standard Pharmaceutical Co., Ltd. Jiangsu Standard Biotech Pharmaceutical Co., Ltd.	Standard Pharmaceutical Co., Ltd. Jiangsu Standard Biotech Pharmaceutical Co., Ltd. Jiangsu Standard-Dia Biopharma Co., Ltd.	Other receivables Yes Other receivables Yes Other receivables Yes		85,440 $ 85,440 4,596	- $ 85,440 4,596	- $ 85,440 4,596	2.50% 2.50% 2.50%	2 2 2	- $ - -	Operating capital - $ Operating capital - Operating capital -		－ － －	- $ - -	198,297 $ 398,680 20,283	396,593 $ 398,680 24,340	(Notes 3) (Notes 3) (Notes 3)

Note 1: The code represents the nature of financing activities as follows:

• (1) Trading partner.

• (2) Short-term financing.

Note 2: The ending balance is the credit limit approved by the Board of Directors.

Note 3: Calculation of limit on loans granted to a single party and ceiling on total loans granted:

• (1) Limit on loans granted to a single party:

• (a) For the companies having business relationship with the Company, limit on loans granted to a single party is the higher value of purchasing and selling during current or latest year on the year of financing.

• (b) For short-term financing, limit on loans granted to a single party is 5% of the Company’s net assets based on the latest audited consolidated financial statements.

• (c) Limit on loans granted by Standard Pharmaceutical Co., Ltd. to a single party is 200% of the creditor’s net assets based on the latest audited or reviewed consolidated financial statements.

• (d) Limit on loans granted by Jiangsu Standard Biotech Pharmaceutical to a single party is 25% of the creditor’s net assets based on the latest audited or reviewed consolidated financial statements.

• (2) Ceiling on total loans granted to a single party:

• (a) Ceiling on total loans granted by the Company to single party is 10% of the Company’s net assets.

• (b) Ceiling on total loans granted by Standard Pharmaceutical Co., Ltd. to single party is 200% of the creditor’s net assets.

• (c) Ceiling on total loans granted by Jiangsu Standard Biotech Pharmaceutical to single party is 30% of the creditor’s net assets.

• (3) For short-term financing, ceiling on total loans granted to all direct or indirect wholly-owned domestic and foreign subsidiaries of the Company is not limited to 40% of the creditors’ net assets.

Note 4: Foreign currencies were translated into New Taiwan Dollars with exchange rate as of December 31, 2020 as follows: USD: NTD 1:28.48 and RMB: NTD 1:4.377.

Table 1 page 1

Table 2

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD.

Provision of endorsements and guarantees to others For the year ended December 31, 2020

Number	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 1)	Maximum outstanding endorsement/ guarantee amount	Outstanding endorsement/ guarantee amount	Actual amount drawn down	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 1)	Provision of endorsements/ guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Note
		Companyname	Relationship with the endorser/guarantor
0	Standard Chem & Pharm. Co., Ltd.	Standard Pharmaceutical. Co., Ltd.	Subsidiary	793,186 $	85,440 $	85,440 $	- $	- $	2%	1,982,966 $	Y	N	N	-

Note 1: Under “Procedures for Provision of Endorsements and Guarantees”, the total endorsement and guarantee provided shall not exceed 50% of the Company’s net assets; the amount provided for each counterparty shall not exceed 20% of the Company's net assets.

Note 2: Foreign currencies were translated into New Taiwan Dollars with exchange rate as of December 31, 2020 as follows: USD: NTD 1:28.48.

Table 2 page 1

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD.

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2020

Table 3

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	As	of December 31, 2020	of December 31, 2020	Note
					Bookvalue	Ownership (%)	Fairvalue
Standard Chem & Pharm. Co., Ltd Bonds with repurchase agreement: China Bills Finance Corporation Mega Bills Finance Co., Ltd. International Bills Finance Corporation Stocks (investment certificate): Original BioMedicals Co., Ltd. NCKU Venture Capital Co., Ltd. NTU Innovation & Incubation Co., Ltd. TaiwanJ Pharmaceuticals Co., Ltd. SYN-TECH CHEM & PHARM CO., LTD. HER-SING CO., LTD. SUN YOU BIOTECH PHARM CO., LTD. Green Management International Co., Ltd. Kenda Pharmacentiocal Co., Ltd. Rossmax International Ltd. Chia Scheng Investment Co., Ltd. Beneficiary certificates: Taishin Ta-Chong Money Market Fund Taishin 1699 Money Market Fund Stocks: SUN YOU BIOTECH PHARM CO., LTD. Stason Pharmaceuticals, Inc. Advpharma Inc. Beneficiary certificates: Taiwan Cooperative Bank Money Market Fund Mega Diamond Money Market Fund FSITC Taiwan Money Market Fund Taishin 1699 Money Market Fund		－ － － － － － － The Company is SYN-TECH CHEM & PHARM Co., Ltd.'s corporate director The Company is HER-SING Co., Ltd.'s corporate director The manager of the Company is SUN YOU BIOTECH PHARM CO., LTD.'s director － － － － － The manager of the Company is SUN YOU BIOTECH PHARM CO., LTD.'s director － － － － －	1 1 1 2 3 3 3 4 4 4 4 4 4 2 2 4 4 2 2 2 2	－ － － 200,000 650,000 480,000 258,133 3,188,484 3,055,000 3,378,006 109,672 5,000,000 600,000 368,142 50,000 240,846 4,000,000 2,000,000 3,166,588 1,652,490 1,473,047	85,440 $ 72,355 57,459 - 2,704 3,591 3,446 246,151 40,326 43,610 1,661 5,772 12,630 5,272 682 3,109 - 20,475 40,057 25,504 20,101	- - - 0.70% 4.17% 3.76% 0.34% 10.61% 17.71% 18.13% 5.14% 19.42% 0.76% - - 1.29% 13.02% - - - -	85,440 $ 72,355 57,459 - 2,704 3,591 3,446 246,151 40,326 43,610 1,661 5,772 12,630 5,272 682 3,109 - 20,475 40,057 25,504 20,101	- - - - - - - - - - - - - - - - - - - - -

Table 3 page 1

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	As	of December 31, 2020	of December 31, 2020	Note
					Bookvalue	Ownership (%)	Fairvalue
Advpharma Inc. Syngen Biotech Co,. Ltd.	UPAMC James Bond Money Market Fund Shin Kong US Harvest Balanced TWD A Cathay Senior Secured High Yield Bond Shin Kong Chi-Shin Money-Market Fund Capital Money Market Fund Shin Kong Emergin Wealthy Nations Bond Fund A Stocks: Der Yang Biotechnology Venture Capital Co., Ltd. TaiwanJ Pharmaceuticals Co., Ltd. SYN-TECH CHEM & PHARM CO., Ltd. Stocks: NCKU Venture Capital Co., Ltd.	－ － － － － － － － The Company is SYN-TECH CHEM & PHARM Co., Ltd.'s corporate director	2 2 2 2 2 2 3 3 4 3	477,020 245,916 271,919 128,638 431,305 195,290 117,997 25,203 667,000 650,000	8,033 $ 2,629 2,800 2,008 7,015 1,987 1,266 336 51,493 2,704	- - - - - - 3.70% 0.03% 2.22% 4.17%	8,033 $ 2,629 2,800 2,008 7,015 1,987 1,266 336 51,493 2,704	- - - - - - - - - -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. Note 2: The general ledger account is classified into the following four categories:

1. Cash and cash equivalents

2. Financial assets at fair value through profit or loss - current

3. Financial assets at fair value through profit or loss - non-current

4. Financial assets at fair value through other comprehensive income - non-current Note 3: Foreign currencies were translated into New Taiwan Dollars with exchange rate as of December 31, 2020 as follows: USD: NTD 1:28.48.

Table 3 page 2

Table 4

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD.

Purchase or sales transactions with related parties amounting to $100,000 or 20 percent of the contributed capital For the year ended December 31, 2020

Purchases / Sales company	Name of the counter-party	Relationship		Description of transaction	Description of transaction		Desceiption and reasons for difference in transaction terms compared to non- relatedparty	Desceiption and reasons for difference in transaction terms compared to non- relatedparty	Notes or accounts receivable / (Payable)	Notes or accounts receivable / (Payable)	Note
			Purchases /(Sales)	Amount	Percentage of net purchases/(sales)	Creditperiod	Unit Price	Credit Period	Amount	Percentage of notes or accounts receivable/(payable)
Standard Chem & Pharm. Co., Ltd.	WE CAN MEDICINES CO., LTD.	Associate	Sales	($ 100,024)	(4%)	Closes its accounts 60 days after the end of each month	$ -	-	$ 24,657	5%	－

Table 4 page 1

• Significant inter company transactions during the reporting period For the year ended December 31, 2020

Table 5

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD.

Transaction

Number (Note 2)	Companyname	Counterparty	Relationship (Note3)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operatingrevenues or total assets(Note 4)
0 1	Standard Chem & Pharm. Co., Ltd. Standard Pharmaceutical Co., Ltd.	Standard Pharmaceutical Co., Ltd. Syngen Biotech Co,. Ltd. Souriree Biotech & Pharm. Co., Ltd. Jiangsu Standard Biotech Pharmaceutical Co., Ltd.	1 1 1 1 3	Endorsements and guarantees Purchases Account payables Purchases Other receivables	$ 85,440 61,884 ( 23,054) 50,583 85,660	－ Pay cheques with a maturity of 3~4 months after inspection had passed － Pay cheques with a maturity of 3~4 months after inspection had passed －	1% 1% － 1% 1%

Note 1: As the amounts and counterparties of significant inter-company transactions are the same from the opposite transaction sides, no disclosure is required. Only transactions amounting to more than $10,000 are disclosed. Note 2: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• (1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 3: Relationship between transaction company and counterparty is classified into the following three categories:

• (1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

Note 4: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on ending balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the year to consolidated total operating revenues for statement of comprehensive income accounts.

Note 5: Foreign currencies were translated into New Taiwan Dollars with exchange rate as of December 31, 2020 as follows: USD: NTD 1:28.48.

Table 5 page 1

Information on investees

For the year ended December 31, 2020

Table 6

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD.

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December31,2020	as at December31,2020	Net profit (loss) of the investee for the year ended December31,2020	Investment income (loss) recognised for the year ended December31,2020	Note
				Balance as at December 31, 2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Bookvalue
Standard Chem & Pharm. Co., Ltd.	Standard Pharmaceutical Co., Ltd. Chia Scheng Investment Co., Ltd. STANDARD CHEM. & PHARM. PHILIPPINES, INC. Inforight Technology Co., Ltd. Souriree Biotech & Pharm. Co., Ltd Multipower Enterprise Corp. Advpharma Inc. Syngen Biotech Co., Ltd	Samoa Taiwan Philippines Taiwan Taiwan Taiwan Taiwan Taiwan	Research and development, trading, investment and other business of medical products General investment Import and export of various medical products, medicine, supplements Wholesale of multi-function printers and information software Manufacturing of western medicine and retail and wholesale of various medicines Import and export of western medicine, nourishment and function food, processing, manufacturing and sale of food Research and development, manufacturing and sale of various medicine Research and development, manufacturing and sale of APIs, biopesticide, fertiliser and biochemical nutrition, sale of preventive medicine	396,953 $ 161,356 6,762 5,000 41,549 293,063 525,671 330,203	310,283 $ 161,356 6,762 5,000 41,549 293,063 525,468 330,203	13,000,000 14,553,000 192,195 500,000 5,649,126 19,840,600 53,191,806 12,651,146	100.00 100.00 100.00 100.00 93.17 90.72 88.65 46.68	199,340 $ 10,955 1,276 4,313 26,981 307,667 284,967 741,860	3,368) ($ 213) ( 925) ( 369) ( 4,213 72,318) ( 4,231) ( 215,550	3,368) ($ 213) ( 925) ( 369) ( 1,098 67,112) ( 3,707) ( 100,463	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary (Note 1)

Table 6 page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December31,2020	as at December31,2020	Net profit (loss) of the investee for the year ended December31,2020	Investment income (loss) recognised for the year ended December31,2020	Note
				Balance as at December 31, 2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Bookvalue
Standard Chem & Pharm. Co., Ltd. Syngen Biotech Co., Ltd Advpharma Inc.	WE CAN MEDICINES CO., LTD. Taiwan Biosim, Co., Ltd. SYNGEN BIOTECH INTERNATIONAL SDN. BHD. CNH TECHNOLOGIES INC.	Taiwan Taiwan Malaysia America	Wholesale of various medicine Research and developmentof various medicine Research and development, manufacturing and sale of APIs and biochemical nutrition, sale of preventive medicine Inspection of medicine, retail and wholesale of various chemistry	282,868 $ 34,930 7,322 13,734	213,136 $ 34,930 7,322 13,734	13,442,909 3,493,000 1,000,000 400,000	33.61 49.90 100.00 35.60	216,761 $ 24,479 2,680 9,453	42,708 $ 17,181) ( 1,096) ( 6,706) (	14,008 $ 8,573) ( - -	- - Subsidiary (Note 2) Subsidiary (Note 2)

Note 1: In September 2016, the subsidiary, Syngen Biotech Co., Ltd. ("Syngen"), filed for an initial public offering with Taipei Exchange. As part of the public trading process, the Company allowed its underwriter to exercise the overallotment option, which decreased the Company's ownership percentage in Syngen to below 50%. However, the Company did not lose control over Syngen.

Note 2: Not required to disclose income (loss) recognised. Note 3: Foreign currencies were translated into New Taiwan Dollars with exchange rate as of December 31, 2020 as follows: USD: NTD 1:28.48.

Table 6 page 2

STANDARD CHEM & PHARM. CO., LTD.

Information on investments in Mainland China

For the year ended December 31, 2020

Table 7

Expressed in thousands of NTD

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2020	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020	Net income (loss) of investee for the year ended December 31, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised for the year ended December 31, 2020	Book value of investments in Mainland China as of December 31,2020	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020	Note
					Remitted to Mainland China	Remitted back to Taiwan
Jiangsu Standard Biotech Pharmaceutical Co., Ltd. Jiangsu Standard-Dia Biopharma Co., Ltd. Companyname	Research and development, technical consulting and technical services of medicine Research and development, manufacturing and sale of various medicine Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2019	256,320 $ 185,563 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	(Note 1) (Note 2) Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA (Note 4)	256,037 $ -	- $ -	- $ -	256,037 $ -	4,277) ($ 14,725) (	100.00 55.00	4,277) ($ 8,015) (	80,908 $ 8,546	- $ -	(Note 3) (Note 3)
Standard Chem & Pharm. Co., Ltd.	256,037 $	256,320 $	2,943,501 $

Note 1: Indirect investment in Mainland China through an existing company (Standard Pharmaceutical Co., Ltd.) located in the third area. Note 2: Indirect investment in Mainland China through an existing company (Jiangsu Standard Biotech Pharmaceutical Co., Ltd.) located in Mainland China. Note 3: Recognition is based on investees' financial statements audited and attested by independent accountants. Note 4: Ceiling is the higher of net assets or 60% of consolidated equity. Note 5: Foreign currencies were translated into New Taiwan Dollars with exchange rate as of December 31, 2020 as follows: USD: NTD 1:28.48 and RMB: NTD 1:4.377.

Table 7 page 1

Table 8

STANDARD CHEM & PHARM. CO., LTD.

Major Shareholder's Information

December 31, 2020

Major Shareholder's Name	Shares	Shares
	Number of shares	Percentage
Chin-Tsai, Fan Tzu-Pin, Fan Mei-Rong, Fan Hung Tzu-Tin, Fan Sen-Hao, Cheng Tsuey-Wen, Yeh	20,789,813 19,518,084 14,584,781 11,766,604 9,405,888 9,124,669	12% 11% 8% 7% 5% 5%

Note 1: The information of major shareholders in this table is calculated by TDCC on the last business day at the end of each quarter to calculate that the shareholder-holding company has completed

• the book-entry delivery (including treasury stocks) of common stocks and special stocks totaling more than 5%. As for the share capital recorded in the company’s financial report and the company’s actual number of shares registered and delivered may be different due to the calculation bases.

Note 2: If shareholder has his/hers shares been entrusted, it shall disclosed in the trustee's individual accounts. As for shareholder's declareation of shares held by insiders with more than 10%, for shareholding that includes shares on hand and those have been entrusted, and the right to their entrust property, etc., please refer to MOPS's website.

Table 8 page 1