S.C.P.C — Audit Report / Information 2021

Nov 3, 2021

STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2021 AND 2020

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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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STANDARD CHEM. & PHARM CO., LTD. AND SUBSIDIARIES Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2021 pursuant to Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises, the companies that are required to be included in the consolidated financial statements of affiliates, are the same as those required to be included in the consolidated financial statements under International Financial Reporting Standards 10 Consolidated Financial Statements. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. As a result, STANDARD CHEM. & PHARM CO., LTD. and subsidiaries are not required to prepare consolidated financial statements of affiliates.

Hereby declare

STANDARD CHEM. & PHARM CO., LTD. March 15, 2022

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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 consolidated balance sheets of STANDARD CHEM. & PHARM. CO., LTD. and its subsidiaries (collectively referred herein as the “Group”) as of December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other independent auditors, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

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. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group’s 2021 consolidated financial statements. These matters were addressed in the context

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of our audit of the consolidated 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 Group’s 2021 consolidated financial statements are as follows:

Valuation of inventories

Description

Refer to Note 4(11) 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, 2021, the carrying amount of inventories and allowance for inventory valuation loss are $1,272,861 thousands and $55,333 thousands, respectively.

The Group is primarily engaged in the manufacture and sales of human medicine and dietary supplement. 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 Group 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 considered 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 Group’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 and dietary supplements

Description

Refer to Note 4(28) 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 Group is primarily engaged in the manufacturing and sales of human medicines and dietary supplements. The Group’s sales is mainly domestic-based and its customers are numerous, including hospitals, clinics, pharmacies, food and drug administrations all over the country. Since the sales transactions are numerous and would require a longer period for verification, we considered the existence of domestic sales revenue from human medicines and dietary supplements 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 auditors

We did not audit the financial statements of certain investments accounted for under equity method. These investments amounted to $205,362 thousands and $216,761 thousands, constituting 2.03% and 3.07% of consolidated total assets as of December 31, 2021 and 2020, respectively, and the share of profit or loss of associates and joint ventures accounted for under equity method was ($11,473) thousands and $14,008 thousands, constituting (1.39%) and 2.45% of consolidated total comprehensive income for the years then ended, respectively. The financial statements of these investee companies were audited by other independent auditors whose reports thereon have been furnished to us and our opinion expressed herein, insofar as it relates to the amounts included in the consolidated financial statements and information disclosed relative to these investments, is based solely on the reports of other

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independent auditors.

Other matter – Parent company only financial reports

We have audited and expressed an unmodified opinion on the parent company only financial statements of STANDARD CHEM. & PHARM. CO., LTD. as of and for the years ended December 31, 2021 and 2020.

Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

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

Auditors’ responsibilities for the audit of the consolidated financial statements

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

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

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

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

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5.

6.

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

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

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

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

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

Tien, Chung-Yu

Independent Accountants

Lin, Tzu-Shu

PricewaterhouseCoopers, Taiwan

Republic of China

March 15, 2022

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated 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 consolidated financial statements and independent auditors’ report 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.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Assets	Notes 6(1) 6(2) 6(1) and 8 6(4), 7 and 12 6(4), 7 and 12 5(2), 7 and 10 6(27) 5(2), 6(5)(8) and 10 6(6)(8) and 7 5(2) and 6(2) 5(2), 6(3)(30) 6(6)(7) and 7 6(6)(8), 8 and 10 6(9) and 7 6(10)(11)(30) 6(27) 6(8) 6(15)	December 31, 2021 AMOUNT % $ 2,564,395 25 134,907 1 289,932 3 277,426 3 880,823 9 331,809 3 13 - 1,217,528 12 86,621 1 - - 797 - 5,784,251 57 15,152 - 228,345 2 525,839 5 2,658,198 26 297,147 3 232,600 2 141,445 2 139,240 1 42,710 1 39,094 1 4,319,770 43 $ 10,104,021 100	December 31, 2020	December 31, 2020
		AMOUNT $ 2,564,395 134,907 289,932 277,426 880,823 331,809 13 1,217,528 86,621 - 797 5,784,251 15,152 228,345 525,839 2,658,198 297,147 232,600 141,445 139,240 42,710 39,094 4,319,770 $ 10,104,021	AMOUNT $ 1,036,183 136,563 308,540 169,902 772,939 24,413 - 893,512 93,157 165,110 1,276 3,601,595 14,047 404,752 250,693 2,125,207 264,074 88,963 138,588 58,071 25,209 78,248 3,447,852 $ 7,049,447	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortised cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories 1410 Prepayments 1460 Non-current assets held for sale, net 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 equity method 1600 Property, plant and equipment 1755 Right-of-use assets 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				15 2 4 3 11 - - 13 1 2 -
				51
				- 6 4 30 4 1 2 1 - 1
				49
				100

(Continued)

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STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity	December 31, 2021 Notes AMOUNT % 6(12) and 8 $ 1,067,989 11 6(13) 290,000 3 6(20) 79,115 1 7 301,940 3 7 322,406 3 454,443 4 6(27) 164,066 2 6(9) and 7 20,351 - 1,013 - 6(20) 14,774 - 2,716,097 27 6(14) and 8 50,000 1 6(27) 92,827 1 6(9) and 7 239,637 2 6(15) 205,314 2 532 - 588,310 6 3,304,407 33 6(16) 1,786,961 18 6(7)(17)(29) 204,313 2 6(3)(18)(19) 709,879 7 1,751,052 17 6(3)(7)(19) ( 110,329) ( 1) 4,341,876 43 4(3), 6(29)(30) 2,457,738 24 6,799,614 67 9 10 $ 10,104,021 100	December 31, 2020	December 31, 2020
		AMOUNT $ 566,000 - 135,662 228,002 210,569 393,726 99,088 17,540 29 - 1,650,616 - 61,992 201,655 227,978 1,371 492,996 2,143,612 1,786,961 203,274 658,657 1,287,735 29,305 3,965,932 939,903 4,905,835 $ 7,049,447	%
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Lease liabilities - current 2310 Receipts in advance 2365 Current refund liabilities 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 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 attributable to owners of parent Share capital 3110 Common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3350 Unappropriated retained earnings 3400 Other equity interest 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant disaster loss 3X2X TOTAL LIABILITIES AND EQUITY			8 - 2 3 3 6 1 - - -
			23
			- 1 3 3 -
			7
			30
			25 3 9 18 1
			56
			14
			70
			100

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

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STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(20) and 7 $ 4,604,082 100 $ 4,305,400 100 6(5)(10)(15)(25)( 26) and 7 ( 2,536,209) ( 55) ( 2,385,562) ( 55) 2,067,873 45 1,919,838 45 6(8)(10)(15)(25)( 26) and 7 ( 675,925) ( 15) ( 708,480) ( 16) ( 272,547) ( 6) ( 283,997) ( 7) ( 241,788) ( 5) ( 227,211) ( 5) 12 ( 931) - 6,437 - ( 1,191,191) ( 26) ( 1,213,251) ( 28) 876,682 19 706,587 17 6(21) 4,247 - 11,203 1 5(2), 6(3)(22), 7 and 10 170,182 4 92,985 2 6(2)(5)(6)(8)(10) (11)(23), 7, 10 and 12 ( 23,954) ( 1) ( 33,323) ( 1) 6(8)(9)(24) and 7( 7,250) - ( 7,572) - 6(6)(7) ( 6,157) - 3,047 - 137,068 3 66,340 2 1,013,750 22 772,927 19 6(27) ( 176,948) ( 4) ( 147,367) ( 4) $ 836,802 18 $ 625,560 15

4000 Operating revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 (Expected credit losses) 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 7060 Share of (loss) profit of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year

(Continued)

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STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(15) $ 19,657 - ($ 14,169) - 6(3)(19) ( 21,903) - ( 39,372) ( 1) 6(7) 73 - ( 365) - 6(27) ( 3,931) - 2,834 - 6(19) ( 1,283) - ( 1,757) - 6(7) ( 2,661) - ( 534) - ($ 10,048) - ($ 53,363) ( 1) $ 826,754 18 $ 572,197 14 $ 706,734 15 $ 524,172 12 130,068 3 101,388 3 $ 836,802 18 $ 625,560 15 $ 696,558 15 $ 471,004 12 130,196 3 101,193 2 $ 826,754 18 $ 572,197 14 6(28) $ 3.95 $ 2.93 $ 3.95 $ 2.93

Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Remeasurement of defined benefit plans 8316 Unrealised losses from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income (loss) of associates and joint ventures accounted for under equity method 8349 Income tax related to components of other comprehensive (loss) income Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8370 Share of other comprehensive loss of associates and joint ventures accounted for under equity method 8300 Total other comprehensive loss for the year 8500 Total comprehensive income for the year Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Total comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Earnings per share 9750 Basic 9850 Diluted

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

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STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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 Adjustment to non-proportional acquisition of associates and joint ventures accounted for under equity method Appropriations of 2019 earnings: Legal reserve Cash dividends Change in non-controlling interest Balance at December 31, 2020 For the year ended December 31, 2021 Balance at January 1, 2021 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) for the year Difference between proceeds from acquisition of subsidiaries and book value Adjustment to non-proportional acquisition of associates and joint ventures accounted for under equity method Overdue cash dividends payable Disposal of financial assets at fair value through other comprehensive income Appropriations of 2020 earnings: Legal reserve Cash dividends Effect on business combinations Change in non-controlling interest Balance at December 31, 2021	Notes				Equityattributable to	Equityattributable to	owners of theparent				Total	Non-controlling interest		Total equity
		Common stock		Capital	Surplus	Others	Retained	Earnings Unappropriated retained earnings	Other EquityInterest Financial statements translation differences of foreign operations Unrealised gains or losses from financial assets measured at fair value through other comprehensive income
			Additional paid- in capital	Difference between the price for acquisition or disposal of subsidiaries and book amount	Change in net equity of associates and joint ventures accounted for under equity method		Legal reserve		Financial statements translation differences of foreign operations
	6(19) 6(29) 6(7)(17) 6(18) 6(19) 6(29) 6(7)(17) 6(17) 6(3)(19) 6(18) 6(30)	$ 1,786,961 - - - - - - - - $ 1,786,961 $ 1,786,961 - - - - - - - - - - - $ 1,786,961	$ 143,353 - - - - - - - - $ 143,353 $ 143,353 - - - - - - - - - - - $ 143,353	$ 57,507 - - - ( 53) - - - - $ 57,454 $ 57,454 - - - ( 77) - - - - - - - $ 57,377	$ 3,460 - - - - ( 1,187) - - - $ 2,273 $ 2,273 - - - - 1,068 - - - - - - $ 3,341	$ 194 - - - - - - - - $ 194 $ 194 - - - - - 48 - - - - - $ 242	$ 622,365 - - - - - 36,292 - - $ 658,657 $ 658,657 - - - - - - - 51,222 - - - $ 709,879	$ 1,079,851 524,172 ( 11,952) 512,220 - - ( 36,292) ( 268,044) - $ 1,287,735 $ 1,287,735 706,734 15,100 721,834 - - - 114,358 ( 51,222) ( 321,653) - - $ 1,751,052	($ 14,544 ) - ( 2,244 ) ( 2,244 ) - - - - - ($ 16,788 ) ($ 16,788 ) - ( 4,186 ) ( 4,186 ) - - - - - - - - ($ 20,974 )	$ 85,065 - ( 38,972) ( 38,972) - - - - - $ 46,093 $ 46,093 - ( 21,090) ( 21,090) - - - ( 114,358) - - - - ( $ 89,355)	$ 3,764,212 524,172 ( 53,168) 471,004 ( 53) ( 1,187) - ( 268,044) - $ 3,965,932 $ 3,965,932 706,734 ( 10,176) 696,558 ( 77) 1,068 48 - - ( 321,653) - - $ 4,341,876	$ 882,209 101,388 ( 195) 101,193 ( 150) - - - ( 43,349) $ 939,903 $ 939,903 130,068 128 130,196 ( 185) 1,219 - - - - 1,437,179 ( 50,574) $ 2,457,738		$ 4,646,421 625,560 ( 53,363) 572,197 ( 203) ( 1,187) - ( 268,044) ( 43,349) $ 4,905,835 $ 4,905,835 836,802 ( 10,048) 826,754 ( 262) 2,287 48 - - ( 321,653) 1,437,179 ( 50,574) $ 6,799,614

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

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STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Net (gain) loss on financial assets at fair value through profit or loss Expected credit losses (gains) Provision for loss on inventory market price decline Fire loss - inventories Gain on disposal of non-current assets held for sale, net Share of loss (profit) of associates and joint ventures accounted for under equity method Depreciation Net loss on disposal of property, plant and equipment Property, plant and equipment transferred to expenses Net loss on disposal of other non-current assets Amortisation Impairment loss on non-financial assets Interest income Dividends income Interest expense Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Other non-current assets Changes in operating liabilities Contract liabilities - current Notes payable Accounts payable Other payables Receipts in advance Current refund liabilities Net defined benefit liability - non-current Cash inflow generated from operations Dividends received Interest received Interest paid Income tax received Income tax paid Net cash flows from operating activities

For theyears ended December 31, Notes 2021 2020 $ 1,013,750 $ 772,927 ( 1,449 ) 535 12 931 ( 6,437 ) 6(5) 7,658 3,153 6(5) and 10 4,608 - 6(6)(23) ( 80,498 ) - 6(7) 6,157 ( 3,047 ) 6(8)(9)(25) 200,758 208,671 6(23) 846 79 6(8) 963 1,639 6(23) 5,872 - 6(25) 20,306 25,115 6(10)(11)(23) 1,810 - 6(21) ( 4,247 ) ( 11,203 ) 6(22) ( 20,738 ) ( 15,315 ) 6(24) 7,250 7,572 2,000 ( 544 ) ( 97,161 ) 37,722 ( 42,003 ) ( 82,219 ) ( 67,931 ) ( 5,935 ) ( 41,143 ) 3,242 17,914 ( 6,601 ) 765 3,015 ( 2,195 ) ( 7,035 ) ( 56,576 ) 41,635 ( 29,305 ) ( 12,145 ) 105,314 45,772 2,029 16,673 984 23 ( 111 ) - ( 11,837 ) ( 30,824 ) 944,721 986,468 6(7)(22) 21,735 15,315 4,303 11,839 ( 7,242 ) ( 6,012 ) - 5,352 ( 136,483 ) ( 90,382 ) 827,034 922,580

(Continued)

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STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES Decrease (increase) in financial assets at amortised cost - current Cash received from withdrawal of capital on financial assets at fair value through profit or loss- non-current Acquisition of financial assets at fair value through profit or loss - non-current Acquisition of investments accounted for under equity method Proceeds from disposal of financial assets at fair value through other comprehensive income Cash paid for aquisition of property, plant and equipment Interest paid for acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Proceeds from disposal of non-current assets held for sale, net Acquisition of intangible assets Increase in prepayments for equipment (Increase) decrease in guarantee deposits paid Increase in other non-current assets Cash received from business combinations Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Decrease in short-term notes and bills payable Payments of lease liabilities Increase in long-term borrowings Decrease in guarantee deposit received Overdue cash dividends payable Payments of cash dividends Cash paid for transaction with non-controlling interests Decrease in non-controlling interests Net cash flows used in financing activities Effects due to changes in exchange rate Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

For theyears ended December 31, Notes 2021 2020 $ 181,625 ( $ 224,090 ) 6(2) and 12(3) - 506 ( 121,205 ) ( 19,757 ) 6(7) ( 288,810 ) ( 69,732 ) 6(3) 18,921 - 6(31) ( 126,817 ) ( 307,126 ) 6(8)(24)(31) ( 369 ) ( 192 ) 88 214 6(6) 245,553 - 6(10) ( 4,808 ) ( 161 ) ( 86,291 ) ( 45,200 ) ( 17,496 ) 7,706 ( 9,734 ) ( 52,335 ) 6(30) 1,028,466 - 819,123 ( 710,167 ) 6(32) 390,213 451,000 6(32) ( 165,992 ) ( 450,000 ) 6(32) - ( 300,000 ) 6(32) ( 18,482 ) ( 16,352 ) 6(32) 50,000 - 6(32) ( 839 ) ( 17,028 ) 6(17) 48 - 6(18) ( 321,653 ) ( 268,044 ) 6(29) ( 262 ) ( 203 ) ( 50,574 ) ( 43,349 ) ( 117,541 ) ( 643,976 ) ( 404 ) ( 4,156 ) 1,528,212 ( 435,719 ) 6(1) 1,036,183 1,471,902 6(1) $ 2,564,395 $ 1,036,183

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

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STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, 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. Please refer to Note 4(3) ‘ Basis of consolidation’ for the main business activities of the Company’s subsidiaries.

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

• THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on March 15, 2022.

1. 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 the FSC effective from 2021 are as follows:

	Effective date by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board (“IASB”)
Amendments to IFRS 4, ‘Extension of the temporary exemption	January 1, 2021
from applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,	January 1, 2021
‘Interest Rate Benchmark Reform - Phase 2’
Amendment to IFRS 16, ‘Covid-19-related rent concessions	April 1, 2021 (Note)
beyond 30 June 2021’

Note: Earlier application from January 1, 2021 is allowed by the FSC.

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

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

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2022 are as follows:

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Effective date by
New Standards, Interpretations and Amendments IASB
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New Standards,Interpretations andAmendments	Effective date by IASB
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IAS 16, ‘Property, plant and equipment:	January 1, 2022
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts - cost of fulfilling a contract’	January 1, 2022
Annual improvements to IFRS Standards 2018-2020	January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’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:

endorsed by the FSC are as follows:
New Standards,Interpretations and Amendments	Effective date by IASB
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, 'Insurance contracts' Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 - comparative information' Amendments to IAS 1, ‘Classification of liabilities as current or non- current Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

The above standards and interpretations have no significant impact to the Group’s financial condition

and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC

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Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

• (2) Basis of preparation

• A. Except for the following items, the consolidated 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.

  • (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 IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5. ‘ CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY’.

• (3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

  • (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group 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. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

  • (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

  • (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

  • (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

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• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. The fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. Subsidiaries included in the consolidated financial statements:

Name Main business Name of investors of subsidiaries activities Standard Chem & Pharm. Co., Ltd. Standard Pharmaceutical Co., Ltd. Research and development, trading, investment and other business of medical products Standard Chem & Pharm. Co., Ltd. Chia Scheng Investment Co., Ltd. General investment Standard Chem & Pharm. Co., Ltd. STANDARD CHEM. & PHARM. PHILIPPINES, INC. Import and export of various medical products, medicine, supplements Standard Chem & Pharm. Co., Ltd. Inforight Technology Co., Ltd. Wholesale of multi- function printers and information software Standard Chem & Pharm. Co., Ltd. Souriree Biotech & Pharm. Co., Ltd. Manufacturing of western medicine and retail and wholesale of various medicine	December31,2021 December31,2020 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 93.17 93.17 Ownership (%)	Description
	December31,2021 100.00 100.00 100.00 100.00 93.17
		－ － － － －

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Name Main business Ownership (%)
Name of investors of subsidiaries activities December 31, 2021 December 31, 2020 Description
----- End of picture text -----

Standard Chem &	Multipower	Import and	90.72	90.72	－
Pharm. Co., Ltd.	Enterprise Corp.	export of
		western
		medicine,
		nourishment
		and function
		food,
		processing,
		manufacturing
		and sale of
		food
Standard Chem &	Advpharma Inc.	Research and	88.71	88.65	－
Pharm. Co., Ltd.		development,
		manufacturing
		and sale of
		various
		medicines
Standard Chem &	Syngen Biotech Co.,	Research and	46.68	46.68	(Note 1)
Pharm. Co., Ltd.	Ltd.	development,
		manufacturing
		and sale of
		APIs,
		biopesticide,
		fertiliser and
		biochemical
		nutrition, sale
		of preventive
		medicines
Standard Chem &	SYN-TECH CHEM.	Manufacturing	20.33	-	(Note 2)
Pharm. Co., Ltd.	& PHARM. CO.,	and sale of
	LTD.	APIs, reagent,
		surfactant,
		Chinese and
		western
		medicine and
		veterinary
		medicie
Standard	Jiangsu Standard	Research and	100.00	100.00	－
Pharmaceutical	Biotech	development,
Co., Ltd.	Pharmaceutical	technical
	Co., Ltd.	consulting
		and technical
		services of
		medicines

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Name Main business Ownership (%)
Name of investors of subsidiaries activities December 31, 2021 December 31, 2020 Description
----- End of picture text -----

Advpharma Inc.	CNH Technologies	Research and	35.60		(Note 3)
	Inc	development
		of various
		medicine
Syngen Biotech	SYNGEN	Research and	100.00	100.00	－
Co., Ltd.	BIOTECH	development,
	INTERNATIONAL	manufacturing
	SDN. BHD.	and sale of
		APIs and
		biochemical
		nutrition,
		sale of
		preventive
		medicines
SYN-TECH CHEM. &	Advpharma Inc.	Research and	2.49	－	－
PHARM. CO., LTD.		development,
		manufacturing
		and sale of
		various
		medicine
SYN-TECH CHEM. &	CNH Technologies	Research and	47.62	－	(Note 3)
PHARM. CO., LTD.	Inc	development
		of various
		medicine
Jiangsu Standard	Jiangsu	Research and	55.00	55.00	－
Biotech	Standard-Dia	development,
Pharmaceutical	Biopharma	manufacturing
Co., Ltd.	Co., Ltd.	and sale of
		various
		medicines

• Note 1 : The subsidiary, Syngen Biotech Co., Ltd. ("Syngen Biotech"), filed for an initial public offering with the Taipei Exchange. As part of the public trading process, the Group allowed its underwriter to exercise the overallotment option, which decreased the Group's ownership percentage in Syngen Biotech down to below 50%. The Group still has control over Syngen Biotech and accordingly, Syngen Biotech was included in the consolidated financial statements.

• Note 2: On December 8, 2021, the Group participated in cash capital increase of SYN-TECH CHEM. & PHARM. CO., LTD. (“SYN-TECH”) and became SYN-TECH’s single largest corporate shareholder. Through comprehensive assessment and together with another major shareholder, the Group obtained substantial control over SYN-TECH from the date.

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• Note 3: As the Group obtained control over SYN-TECH on December 8, 2021, the Group’s shareholding in CNH TECHNOLOGIES, INC. (”CNH”) increased to 83.22% and, accordingly, obtained substantial control over CNH.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group:

• (1) As of December 31, 2021 and 2020, the non-controlling interest amounted to $2,457,738 and

  • $939,903, respectively. The information on non-controlling interest and respective subsidiaries is as follows:

Name of subsidiary	Principal place ofbusiness Taiwan Taiwan	Non-controlling interest	Non-controlling interest	Ownership (%) Description 53.32% － 31,2020
		Amount Ownership (%) 944,125 $ 53.32% 1,447,432 $ 79,67% December31,2021	December
		Amount 944,125 $ 1,447,432 $	Amount 866,671 $
Syngen Biotech Co., Ltd. SYN-TECH CHEM & PHARM. CO., LTD.

• (2) Summarised financial information of the subsidiaries:

• A. Syngen Biotech Co., Ltd.:

• (a) Balance sheets

Syngen Biotech Co., Ltd.: )Balance sheets
		December31,2021		December31,2020
Current assets		1,018,090	$	1,016,831
Non-current assets		1,397,435		1,110,011
Current liabilities	(	418,611)	(	311,996)
Non-current liabilities	(	225,551)	(	188,745)
Total net assets	$	1,771,363	$	1,626,101

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(b) Statements of comprehensive income

		Forthe years endedDecember31,	Forthe years endedDecember31,
		2021	2020
Revenue	$	1,471,266	1,311,436 $
Profit before income tax	$	295,493	263,375 $
Income tax expense	(	57,723)	47,825) (
Net income for the year	$	237,770	215,550 $
Total comprehensive income
for the year	$	237,828	215,914 $
Comprehensive income
attributable to non-controlling
interest	$	128,323	115,281 $

(c) Statements of cash flows

		Forthe years ended	Forthe years ended	December31,
		2021		2020
Net cash flows provided by
operating activities	$	336,498	$	220,200
Net cash flows used in investing
activities	(	336,075)	(	272,061)
Net cash flows used in financing
activities	(	108,875)	(	43,992)
Net exchange differences	(	164)	(	123)
Net decrease in cash and cash
equivalents	(	108,616)	(	95,976)
Cash and cash equivalents at
beginning of the year		423,417		519,393
Cash and cash equivalents at
end of the year	$	314,801	$	423,417

B. SYN-TECH CHEM & PHARM. CO., LTD.

(a) Balance sheet

Balance sheet
			December31,2021
Current assets	$		2,015,209
Non-current assets			691,541
Current liabilities	(		802,946)
Non-current liabilities	(		71,726)
Total net assets		$	1,832,078

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(b) Statement of comprehensive income

Statement of comprehensive income
		For the year ended
		December31,2021
Revenue	$	746,603
Profit before income tax	$	126,904
Income tax expense	(	23,069)
Net income for the year	$	103,835
Total comprehensive income
for the year	$	103,882
Comprehensive income
attributable to non-controlling
interest	$	102,338
Statement of cash flows
		For the year ended
		December 31, 2021
Net cash flows provided by
operating activities	$	120,426
Net cash flows used in investing
activities	(	354,913)
Net cash flows provided by financing
activities		845,197
Net increase in cash and cash
equivalents		610,710
Cash and cash equivalents at
beginning of the year		619,149
Cash and cash equivalents at
end of the year	$	1,229,859

(c) Statement of cash flows

(4) Foreign currency translation

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

A. 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.

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  - (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation 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 re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary 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.

• B. Translation of foreign operations

  • (a) The operating results and financial position of all the group entities and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

    • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

    • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

    • iii. All resulting exchange differences are recognised in other comprehensive income.

  • (b) When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group retains partial interest in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.

  • (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, if the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

• (5) 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 12 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 12 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.

• (6) 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.

• (7) 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 amortised 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 recognised and derecognised using trade date accounting.

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

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

(8) Financial assets at amortised cost

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

• (a) The objective of the Group’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 Group’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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(9) 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 Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive.

• 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 Group measures the financial assets at fair value plus transaction costs. The Group 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 Group and the amount of the dividend can be measured reliably.

• (10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group 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.

(11) 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.

(12) Non-current assets held for sale

Non-current assets are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use, and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.

(13) Impairment of financial assets

• For financial assets at amortised cost, at each reporting date, the Group 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

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receivable that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(14) Derecognition of financial assets

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

－ (15) Leasing arrangements (lessor) operating leases

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

(16) Investments accounted for using equity method / associates

• A. Associates are all entities over which the Group 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.

• B. The Group’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 Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. 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 Group’s ownership percentage of the associate, the Group recognises the Group’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

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

• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for using 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 Group’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.

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• F. When the Group 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.

• G. When the Group 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.

• (17) 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 Group 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 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:

are as follows:
Assets	Useful Life
Buildings (including auxiliary equipment)	2 ～	60 years
Machinery and equipment	2 ～	50 years
Utility equipment	3 ～	20 years
Transportation equipment	2 ～	15 years
Office equipment	2 ～	9 years
Other equipment	2 ～	35 years

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(18) 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 Group. For short-term leases or leases of lowvalue 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 incentive receivable. The Group 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 recognise the difference between remeasured lease liability in profit or loss.

(19) Intangible assets

• A. Goodwill

Goodwill arises in a business combination accounted for by applying the acquisition method.

• B. Computer software

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3 ~ 20 years.

• C. Patents

Patents is stated at cost and amortised on a straight-line basis over its estimated useful life of 5 ~ 20 years.

• D. Other intangible assets

Technical skill transfer fee, royalty paid for acquisition of techniques and distribution rights, trademarks and property rights and human resource value arises in business combination are stated at cost, with exception of technical skill transfer fee, the rest other intangible assets are amortised on a straight-line basis over its estimated useful life of 2 ~ 10 years. The technical skill transfer fee is regarded as having an indefinite useful life as it was assessed to generate continuous net cash inflow in the foreseeable future. Therefore it is not amortised, but is tested annually for impairment.

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(20) Impairment of non-financial assets

• A. The Group 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 and intangible asset with uncertain useful life have 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.

• (21) 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 amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(22) 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.

(23) 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.

(24) 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.

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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 Group 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 resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employees’ compensation is distributed by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(25) 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 recognized 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 domestic 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.

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• 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 consolidated 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 Group 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.

• (26) 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.

• (27) Dividends

Cash dividends are recorded as liabilities in the Company’s financial statements in the period in which they are resolved by the Board of Directors. Stock dividends are recorded as stock dividends to be distributed in which they are resolved by the Company’s shareholders and are reclassified to ordinary shares on the effective date of new shares issuance.

(28) Revenue recognition

• A. Sales of goods

• (a) The Group manufactures and sells human pharmaceuticals and dietary supplements, 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

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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 Group 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 Group 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 Group 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.

• (b) The Group’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 Group recognises the incremental costs of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

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(29) Business combinations

  - A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

  - B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognised directly in profit or loss on the acquisition date.

• (30) Operating segments

  • Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Group’s chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

• CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’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 Group’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 Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates.

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Due to the influence of different market demand and expiration date, etc., the Group 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, 2021, the carrying amount of inventories was $1,217,528.

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

• (a) The fair value of unlisted stocks held by the Group 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, 2021, the carrying amount of unlisted stocks without active market was $108,808.

• C. Estimation of insurance claims for significant fire losses

• (a) The Group obtains insurance for its property, plant and equipment based on replacement cost. Due to the high uncertainty of the actual insurance claims, the Group recognises insurance claim income when it is virtually certain to be received.

• (b) Affected by the spread of the fire incident from nearby subsidiary (SYN-TECH CHEM. & PHARM. CO., LTD.), certain property of the Company was damaged and impaired. For the year ended December 31, 2021, the Company assessed the minimum damage indemnity based on the actual loss and replacement cost, obtained available information from a third-party notary public through its on-site inspection and investigation, and recognised insurance claim income of $66,301 (listed as “ Other income”) which does not exceed the fire losses of each asset.

• (c) As a result of fire incident, certain properties of the subsidiary, SYN-TECH CHEM. & PHARM. CO., LTD. ( “ SYN-TECH”) were damaged. For the year ended December 31, 2021, SYNTECH assessed the minimum damage indemnity based on the actual loss and replacement cost, obtained available information from a third-party notary public through its on-site inspection and investigation, and recognised insurance claim income of $171,191 (listed as “ Other income”) which does not exceed the fire losses of each asset. As of December 31, 2021, the insurance company is still in the process of disaster identification and the total amount of insurance claims can be confirmed when the process finished. The detail information please refer to Note 10, ‘SIGNIFICANT DISASTER LOSS’.

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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	December31,2021 8,354 $ 1,052,089 1,060,443 600,794 903,158 1,503,952 2,564,395 $	December31,2020 6,733 $ 639,647 646,380
		174,549 215,254 389,803
		1,036,183 $

• A. The Group 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, 2021 and 2020, the carrying amount of more than 3-month time deposits (listed as “Financial assets at amortised cost - current”) was $57,840 and $308,540, respectively.

• C. As of December 31, 2021, cash and cash equivalents amounting to $232,092 were pledged to others as collateral for short-term borrowings (listed as “Financial assets at amortised cost - current”). The detail information please refer to Note 8, ‘Pledged assets’. As of December 31, 2020, the Group had 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 Beneficiary certificates Unlisted stocks Valuation adjustment Non-current items: Financial assets mandatorily measured at fair value through profit or loss Emerging stocks Unlisted stocks Valuation adjustment		December31,2021	December31,2020
	131,424 $ 12,000 143,424 8,517) ( 134,907 $ 1,759 $ 18,980 20,739 5,587) ( 15,152 $		133,424 $ 12,000 145,424 8,861) ( 136,563 $ 1,759 $ 18,980 20,739 6,692) ( 14,047 $

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• A. The Group recognised net gain (listed as “Other gains and losses”) of $1,458 and $203 for the years ended December 31, 2021 and 2020, respectively.

• B. The Group’s financial assets at fair value through profit or loss - non-current, Der Yang Biotechnology Venture Capital, conducted a capital reduction in August 2020. The Group has reversed 51 thousand shares at the initial investment price of $506 proportionately.

• C. As of December 31, 2021 and 2020, the Group has no financial assets at fair value through profit or loss pledged to others.

• D. 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 instruments Listed stocks Unlisted stocks Valuation adjustment	December31,2021 120,704 $ 196,997 317,701 89,356) ( 228,345 $	December 31, 2020
		160,510 $ 196,997 357,507 $ 47,245 404,752 $

• A. The Group 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 financial assets at fair value through other comprehensive income held by the Group was its book value.

• B. The Group participated in cash capital increase of SYN-TECH CHEM. & PHARM. CO., LTD. (SYN-TECH) by investing cash of $256,939, and obtained a total of 4,282 thousand shares on December 8, 2021, which resulted in the increase of consolidated shareholding from 12.60% to 20.14% and becoming SYN-TECH’s single largest corporate shareholder. Through comprehensive assessment and together with another major shareholder, the Group has the ability to direct SYN-TECH’s relevant activities, and accordingly, obtained substantial control over SYN-TECH from the date. Based on the aforementioned transaction, the Group transferred financial assets at fair value through other comprehensive income – non-current in the amount of $256,788 to the acquisition price, and reclassified unrealised gain amounting to $105,185 to retained earnings.

• C. The Group disposed financial assets at fair value through other comprehensive income in the amount of $18,921 for the year ended December 31, 2021. This resulted in cumulative gain on disposal amounting to $9,513, which was reclassified to retained earnings for the year ended December 31, 2021.

• D. The Group recognised ($21,903) and ($39,372) in other comprehensive income for fair value change for the years ended December 31, 2021 and 2020, respectively.

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• E. The Group recognised dividend income of $20,635 and $14,898 in profit or loss (listed as “Other income”) in relation to the financial assets at fair value through other comprehensive income for the years ended December 31, 2021 and 2020, respectively.

• F. As of December 31, 2021 and 2020, the Group has no financial assets at fair value through other comprehensive income pledged to others.

• G. 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, 2021	December	31, 2020
Notes receivable	$	277,786	$	170,117
Less: Allowance for uncollectible accounts	(	360)	(	215)
	$	277,426	$	169,902
Accounts receivable	$	887,381	$	778,711
Less: Allowance for uncollectible accounts	(	6,558)	(	5,772)
	$	880,823	$	772,939

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

Notes receivable: During the credit period Overdue up to 90 days Accounts receivable: During the credit period Overdue up to 90 days Overdue 91 to 180 days Overdue 181 to 270 days Overdue over 271 days	December31,2021 277,331 $ 455 277,786 $ 836,449 $ 39,102 11,751 - 79 887,381 $	December 31, 2020
		169,100 $ 1,017 170,117 $ 743,933 $ 34,283 429 66 - 778,711 $

The above aging analysis was based on days overdue.

• B. As of December 31, 2021 and 2020, notes and accounts receivable were all from contracts with customers. As of January 1, 2020, the balance of receivables from contracts with customers amounted to $904,345.

• 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 Group’s notes and accounts receivable was its book value.

• D. As of December 31, 2021 and 2020, the Group has no notes and accounts receivable pledged to others.

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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 Merchandise Raw materials Supplies Work in process Finished goods		December31,2021	Bookvalue 101,143 $ 427,403 71,058 156,533 461,391 1,217,528 $
	Allowance for Cost valuation loss 103,716 $ 2,573) ($ 450,407 23,004) ( 78,489 7,431) ( 159,739 3,206) ( 480,510 19,119) ( 1,272,861 $ 55,333) ($ Allowance for Cost valuation loss 104,256 $ 5,658) ($ 244,201 10,754) ( 72,623 5,919) ( 108,363 701) ( 398,087 10,986) ( 927,530 $ 34,018) ($ December 31, 2020
		Allowance for valuation loss 5,658) ($ 10,754) ( 5,919) ( 701) ( 10,986) ( 34,018) ($	Bookvalue 98,598 $ 233,447 66,704 107,662 387,101 893,512 $

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

		Forthe years ended	Forthe years ended	December	31,
		2021		2020
Cost of goods sold	$	2,489,380	$	2,333,177
Loss on scrapped inventories		14,343		38,940
Loss on decline in market value		7,658			3,153
Underapplied fixed manufacturing overhead		13,702			3,140
Gain on physical inventory	(	680)	(		938)
	$	2,524,403	$	2,377,472
Fire losses (listed as “Other gains and losses”)
(Note)	$	4,608			-

(Note) Please refer to Note 10, ‘SIGNIFICANT DISASTER LOSS’.

(6) Non-current assets held for sale

A. Part of land, buildings and machinery of the subsidiary of the Company, Multipower Enterprise Corp. (hereinafter referred to as “ Multipower”) have been reclassified as held for sale following the approval of Multipower’s Board of Directors on November 9, 2020, with the purpose of raising working capital and increasing the efficiency of capital utilisation. The aforementioned assets

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amounted to $165,110. Multipower signed a contract with the buyer (the associate of the Company, WE CAN MEDICINES CO., LTD.) in January 2021 at an agreed transaction price of $245,602. Except for machinery amounting to $53 that was not sold and eventually back to property, plant and equipment and adjustment of agreement in May 2021, the transfer of remaining non-current assets held for sale was completed in March 2021.

• B. In May 2021, the buyer had reached an amended adjusted agreement with Multipower to adjust sold items and reduce sale price to $245,553 and transferring the unsold machinery and equipment amounting to $2 back to property, plant and equipment.

• C. For the year ended December 31, 2021, the Group recoginsed gain of $80,498 (listed as "Other gains and losses") from the above transactions. However, since the counterparty of the transactions was the Group's associate, the unrealised gain was eliminated in proportion to the Group's shareholding in its associate and was recognised as deduction of "investments accounted for under equity method" and "share of profits and losses of investments accounted for under equity method", both in the amount of $24,545.

• (7) Investments accounted for under equity method

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

		For	theyears ended December	theyears ended December	theyears ended December	31,
			2021		2020
At January 1	$		250,693	$	180,000
Acquisition of investments accounted for under
equity method			288,810		69,732
Share of profit or loss of investments accounted
for under equity method	(		6,157)		3,047
Earnings distribution of investments accounted for
under equity method	(		997)			-
Changes in net equity of accounted for under
equity method			2,287			-
Capital surplus－Adjustment to non-proportional
acquisition of associates and joint ventures
accounted for under equity method			-	(	1,187)
Other equity interest－Actuarial losses of
defined benefit plan			73	(		365)
Other equity interest－Financial statements
translation differences of foreign operations	(		2,661)	(		534)
Effects on business combinations	(		6,209)			-
At December 31	$		525,839	$	250,693

(Note) In January 2021, the Group participated in a private placement of common stock issued by GENEFERM BIOTECHNOLOGY CO., LTD. by investing $273,840. Restriction of rights and conditions for further transfer of these securities are specified in Article 43-8 of the Securities and Exchange Act. There was no such transaction in 2020.

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

WE CAN MEDICINES CO., LTD. GENEFERM BIOTECHNOLOGY CO., LTD. CNH TECHNOLOGIES, INC. (Note) Taiwan Biosim Co., Ltd.	December31,2021 205,362 $ 289,865 - 30,612 525,839 $	December31,2020 216,761 $ - 9,453 24,479 250,693 $

(Note) Refer to Note 4(3),” Basis of consolidation”.

• C. Associates:

• (a) The basic information of the associates that are material to the Group is as follows:

		Shareholding	Shareholding
Company	Principal place	December	31,
name	of business	2021	2020
WE CAN MEDICINES CO., LTD.	Taiwan	33.61%	33.61%
GENEFERM BIOTECHNOLOGY	Taiwan	29.42%	－

CO., LTD.

• (b) The summarised financial information of the associates that are material to the Group is as follows:

i. Balance sheets

(i) WE CAN MEDICINES CO., LTD.

s: ance sheets WE CAN MEDICINES CO., LTD.
	December31,2021		December	31,2020
Current assets	$	994,918	$	938,513
Non-current assets		1,215,304		827,725
Current liabilities	(	776,113)	(	592,745)
Non-current liabilities	(	749,573)	(	527,969)
Total net assets	$	684,536	$	645,524
Share in associate's net assets	$	230,073	$	216,961
Unrealised loss from transctions
with associates	(	24,711)	(	200)
Carrying amount of the associate	$	205,362	$	216,761

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(ii) GENEFERM BIOTECHNOLOGY CO., LTD.

		December	31,2021
Current assets	$		741,253
Non-current assets			573,683
Current liabilities	(		429,236)
Non-current liabilities	(		138,041)
Total net assets	$		747,659
Share in associate's net assets	$		219,961
Goodwill			70,651
Unrealised loss from transactions
with associate	(		747)
Carrying amount of the associate	$		289,865

ii. Statements of comprehensive income

• (i) WE CAN MEDICINES CO., LTD.

tements of comprehensive income WE CAN MEDICINES CO., LTD. with associate Carrying amount of the associate	747) ( 289,865 $
Revenue Net income for the year Total comprehensive income for the year	For the years ended	December 31,
	2021 2,794,071 $ 38,794 $ 39,012 $	2020
		2,666,748 $
		42,708 $
		41,744 $

(ii) GENEFERM BIOTECHNOLOGY CO., LTD.

Revenue Net income for the year Total comprehensive income for the year	For the year ended December31,2021
	522,194 $ 57,413 $ 57,218 $

(c) As of December 31, 2021 and 2020, the carrying amount of the Group’s individually immaterial associates amounted to $30,612 and $33,932, respectively. The share in associates’ financial performance is as follows:

financial performance is as follows:
		Forthe years endedDecember31,
		2021		2020
Net loss for the year	($	8,837)	($	10,961)
Total comprehensive loss for the year	($	8,837)	($	10,961)

(d) As of December 31, 2021, the fair value of the Group's investment accounted for under equity method, GENEFERM BIOTECHNOLOGY CO., LTD. (hereinafter referred to as "GENEFERM ") was $532,200.

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• (e) The subsidiary of the Company, SYNGEN BIOTECH CO., LTD, holds 29.42% ownership of GENEFERM and is GENEFERM’s single largest corporate shareholder. However, the Group does not hold more than 50 percent of voting rights during shareholders' meetings and has no agreement with other shareholders to negotiate or jointly make decisions, which indicates that the Group does not have the ability to direct the relevant activities. Therefore, the Group concluded that it has no control or significant influence over GENEFERM.

• D. For the years ended December 31, 2021 and 2020, the details of the Group’s equity transactions are provided in Note 7, ”Related party transactions”.

• E. As of December 31, 2021 and 2020, the Group has no investment accounted for under the equity method pledged to others.

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(8) Property, plant and equipment

AtJanuary1,2021 Cost Accumulated depreciation For the year ended December31,2021 At January 1 Additions-cost Transfers (Note 1) -cost -accumulated depreciation Acquisition from business combinations Depreciation Fire loss-cost (Note 2) Transfer-accumulated depreciation Disposals-cost Disposals-accumulated depreciation Net exchange differences At December 31 At December 31,2021 Cost Accumulated depreciation

Construction in progress and Utility Transportation Office Other equipment to Land Buildings Machinery equipment equipment equipment equipment be inspected Total 420,370 $ 1,671,082 $ 1,376,498 $ 218,392 $ 22,541 $ 34,887 $ 516,181 $ 86,338 $ 4,346,289 $ - 719,855) ( 941,778) ( 167,903) ( 16,591) ( 31,414) ( 343,541) ( - 2,221,082) ( 420,370 $ 951,227 $ 434,720 $ 50,489 $ 5,950 $ 3,473 $ 172,640 $ 86,338 $ 2,125,207 $ 420,370 $ 951,227 $ 434,720 $ 50,489 $ 5,950 $ 3,473 $ 172,640 $ 86,338 $ 2,125,207 $ - 7,101 35,089 1,520 1,783 5,169 37,265 81,315 169,242 - 1,796 42,123 551 375 2,935 9,357 1,384) ( 55,753 - - 607) ( - - 20) ( 291 - 336) ( 75,972 145,086 166,256 28,389 - - 130,476 5,084 551,263 - 40,980) ( 89,453) ( 8,433) ( 1,446) ( 2,036) ( 37,309) ( - 179,657) ( - 39,274) ( 71,743) ( 3,762) ( - 1,808) ( 2,210) ( - 118,797) ( - 24,460 27,819 1,486 - 1,808 1,531 - 57,104 - - 4,007) ( 3,411) ( - 532) ( 4,507) ( - 12,457) ( - - 3,512 3,215 - 485 4,311 - 11,523 - 524) ( 75) ( - 1) ( 2) ( 45) ( - 647) ( 496,342 $ 1,048,892 $ 543,634 $ 70,044 $ 6,661 $ 9,472 $ 311,800 $ 171,353 $ 2,658,198 $ 496,342 $ 1,818,836 $ 1,661,738 $ 250,123 $ 24,689 $ 41,396 $ 759,754 $ 171,353 $ 5,224,231 $ - 769,944) ( 1,118,104) ( 180,079) ( 18,028) ( 31,924) ( 447,954) ( - 2,566,033) ( 496,342 $ 1,048,892 $ 543,634 $ 70,044 $ 6,661 $ 9,472 $ 311,800 $ 171,353 $ 2,658,198 $

~45~

																		Construction in	Construction in
																		progress and
										Utility	Transportation				Office		Other	equipment to
			Land			Buildings		Machinery	equipment			equipment		equipment		equipment		be	inspected		Total
At January1,2020
Cost		$	515,143		$	1,571,452	$	1,292,635	$	210,271	$	21,799		$	51,945	$	497,658	$	33,198	$	4,194,101
Accumulated depreciation			-	(		675,548)	(	861,272)	(	159,804)	(	15,522)	(		41,293)	(	324,018)		-	(	2,077,457)
		$	515,143		$	895,904	$	431,363	$	50,467	$	6,277		$	10,652	$	173,640	$	33,198	$	2,116,644
For the year ended
December31,2020
At January 1		$	515,143		$	895,904	$	431,363	$	50,467	$	6,277		$	10,652	$	173,640	$	33,198	$	2,116,644
Additions-cost			-			9,846		56,046		3,480		1,009			573		24,660		199,291		294,905
Transfers-cost (Note 3)	(		94,773)			88,086		32,073		4,641		1	(		17,324)		7,168	(	146,152)	(	126,280)
Transfer-accumulated
depreciation
(Note 3)			-			8,649		3,886		-		-			13,281		2,891		-		28,707
Depreciation			-	(		52,849)	(	88,764)	(	8,099)	(	1,260)	(		3,709)	(	35,596)		-	(	190,277)
Disposals-cost			-	(		595)	(	4,905)		-	(	296)	(		338)	(	12,232)		-	(	18,366)
Disposals -accumulated
depreciation			-			595		4,824		-		218			338		12,098		-		18,073
Net exchange differences			-			1,591		197		-		1			-		11		1		1,801
At December 31		$	420,370		$	951,227	$	434,720	$	50,489	$	5,950		$	3,473	$	172,640	$	86,338	$	2,125,207
At December31,2020
Cost		$	420,370		$	1,671,082	$	1,376,498	$	218,392	$	22,541		$	34,887	$	516,181	$	86,338	$	4,346,289
Accumulated depreciation			-	(		719,855)	(	941,778)	(	167,903)	(	16,591)	(		31,414)	(	343,541)		-	(	2,221,082)
		$	420,370		$	951,227	$	434,720	$	50,489	$	5,950		$	3,473	$	172,640	$	86,338	$	2,125,207

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• (Note 1) Including transfer of $6,603 from ‘Inventories’; transfer of $49,722 from ‘Prepayment for equipment’; transfer of $55 from ‘Non-current assets held for sale, net’ and transfer of $963 to expenses.

• (Note 2) Refer to Note 10, ‘SIGNIFICANT DISASTER LOSS’.

• (Note 3) Including transfer of $14,722 from ‘Inventories’; transfer of $54,454 from ‘Prepayment for equipment’; transfer of $165,110 to ‘Non-current assets held for sale, net’ and transfer of $1,639 to expenses.

• A. As of December 31, 2021 and 2020, the carrying amount of land, buildings and other equipment held for operating leases are as follows:

held for operating leases are as follows:
Land Buildings Other equipment	December 31, 2021 5,264 $ 11,399 $ 3,057 $	December 31, 2020
		5,264 $
		11,798 $
		3,917 $

• 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, 2021 and 2020 are as follows:

Capitalised interest payments Interest rate	2021 2020 369 $ 192 $ 0.70%～0.77% 0.75%～0.80% For the years ended December 31,	2021 2020 369 $ 192 $ 0.70%～0.77% 0.75%～0.80% For the years ended December 31,
		2020
		192 $ 0.75%～0.80%

• C. Information about the property, plant and equipment that were pledged to others as collateral as of December 31, 2021 and 2020 is provided in Note 8, ‘PLEDGED ASSETS’.

• －

• (9) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings and transportation equipment. Rental contracts are typically made for periods of 2 ~ 50 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 Transportation equipment	December31,2021		December31,2020
	Carrying amount		Carrying amount
	266,183 $ 22,013 8,951 297,147 $		230,464 $ 23,852 9,758 264,074 $

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		Forthe years ended	Forthe years ended	December31,
		2021		2020
	Depreciation charge		Depreciation charge
Land	$	12,979	$	11,118
Buildings		7,315		6,468
Transportation equipment		807		808
	$	21,101	$	18,394

• C. The additions to right-of-use assets were $6,481 and $78,468 for the years ended December 31, 2021 and 2020, respectively. The amount of right-of-use assets due to business combinations was $48,404 for the year ended December 31, 2021.

• 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 Expense on short-term lease contract Expense on leases of low-value assets	Forthe years endedDecember31,	Forthe years endedDecember31,
	2021 2,729 $ 2,353 476 5,558 $	2020
		2,283 $ 2,440 276
		4,999 $

• E. The Group’s total cash outflow for leases were $24,040 and $21,351 for the years ended December 31, 2021 and 2020, respectively.

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(10) Intangible assets

Intangible assets
		Goodwill			Software			Patents		Others		Total
At January1,2021
Cost	$	70,513		$	32,628		$	18,107	$	84,058	$	205,306
Accumulated amortisation	(	248)	(		28,043)	(		13,591)	(	60,740)	(	102,622)
Accumulated impairment		-			-			-	(	13,924)	(	13,924)
Net exchange differences		-	(		16)			219		-		203
	$	70,265		$	4,569		$	4,735	$	9,394	$	88,963
For the year ended
December31,2021
At January 1	$	70,265		$	4,569		$	4,735	$	9,394	$	88,963
Additions - acquired		-			4,808			-		-		4,808
separately
Additions - business		56,043			422			45,891		44,911		147,267
combinations
Amortisation		-	(		3,655)	(		1,496)	(	1,477)	(	6,628)
Loss on impairment		-			-			-	(	1,810)	(	1,810)
At December 31	$	126,308		$	6,144		$	49,130	$	51,018	$	232,600
At December31,2021
Cost	$	126,556		$	37,858		$	63,998	$	128,969	$	357,381
Accumulated amortisation	(	248)	(		31,698)	(		15,087)	(	62,217)	(	109,250)
Accumulated impairment		-			-			-	(	15,734)	(	15,734)
Net exchange differences		-	(		16)			219		-		203
	$	126,308		$	6,144		$	49,130	$	51,018	$	232,600

~49~

		Goodwill		Software		Patents		Others		Total
At January1,2020
Cost	$	70,513	$	47,380	$	18,107	$	84,058	$	220,058
Accumulated amortisation	(	248)	(	38,154)	(	12,095)	(	59,251)	(	109,748)
Accumulated impairment		-		-		-	(	13,924)	(	13,924)
Net exchange differences		-	(	19)		219		-		200
	$	70,265	$	9,207	$	6,231	$	10,883	$	96,586
For the year ended
December31,2020
At January 1	$	70,265	$	9,207	$	6,231	$	10,883	$	96,586
Additions - acquired		-		161		-		-		161
separately
Amortisation		-	(	4,802)	(	1,496)	(	1,489)	(	7,787)
Disposal - cost		-	(	14,913)		-		-	(	14,913)
Disposal- accumulated				14,913		-		-		14,913
amortisation
Net exchange differences		-		3		-		-		3
At December 31	$	70,265	$	4,569	$	4,735	$	9,394	$	88,963
AtDecember31,2020
Cost	$	70,513	$	32,628	$	18,107	$	84,058	$	205,306
Accumulated amortisation	(	248)	(	28,043)	(	13,591)	(	60,740)	(	102,622)
Accumulated impairment		-		-		-	(	13,924)	(	13,924)
Net exchange differences		-	(	16)		219		-		203
	$	70,265	$	4,569	$	4,735	$	9,394	$	88,963

• A. No borrowing costs were capitalised as part of intangible assets for the years ended December 31, 2021 and 2020.

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

Operating costs Selling expenses General and administrative expenses Research and development expenses	Forthe years ended	December31,
	2021 2,842 $ 979 2,401 406 6,628 $	2020
		4,293 $ 1,237 1,727 530
		7,787 $

• C. The Group acquired intangible assets through business combinations in December 2021. The detail information please refer to Note 6(30), ‘Business combinations’.

~50~

• D. The Group applied value in use method when calculating recoverable amount of goodwill and determined the recoverable amount to be greater than the carrying amount; thus, no impairment was identified. Goodwill distributed to cash generating unit according to operating segment is shown below:

December 31, 2021 December 31, 2020 Multipower Enterprise Corp. $ 70,265 $ 70,265 - SYN-TECH CHEM. & PHARM. CO., LTD. $ 56,043 $

• E. Impairment information about the intangible assets is provided in Note 6(11), “ Impairment of non-financial assets”.

• F. As of December 31, 2021 and 2020, the Company has no intangible assets pledged to others.

• (11) Impairment of non-financial assets

• A. Goodwill is tested annually for impairment. Goodwill is allocated to the Group’s cash-generating unit identified according to operating segment. The recoverable amount of all cash-generating units has been determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by the cash-generating unit. Cash flow of financial budgets is prepared based on forecasts of growth of future annual revenue, profit and capital expenditure. Management determined budgeted gross margin based on past performance and its expectation of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant operating segments.

• B. The recoverable amount of all cash-generating units calculated using the value-in-use exceeded their carrying amount, so goodwill was not impaired for the years ended December 31, 2021 and 2020.

• C. The Group wrote down the carrying amount of the assets based on the recoverable amount and recognised an impairment loss of $1,810 according to revaluation report from external expert. The key assumptions used for value-in-use calculations are as follows:

Royalty ratio Growth rate Discount rate		For the year ended December31,2021
		4.50% 1.52% 15.00%

• D. As of December 31, 2021 and 2020, the carrying amount of accumulated impairment of nonfinancial assets was $15,734 and $13,924, respectively.

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(12) Short-term borrowings

Type ofborrowings Unsecured bank borrowings Bank secured borrowings Type of borrowings Unsecured bank borrowings Bank secured borrowings	December31,2021 787,989 $ 280,000 1,067,989 $ December31,2020 391,000 $ 175,000 566,000 $	Interestraterange Collateral 0.57%～0.90% None 0.80%～1.15% Time deposits, land and buildings Interest rate range Collateral 0.63%～0.86% None 0.81%～0.84% Land and buildings

Please refer to Note 6(24), ‘Finance costs’ for more information regarding interest expenses recognised in profit or loss by the Group for the years ended December 31, 2021 and 2020.

(13) Short-term notes and bills payable

==> picture [466 x 31] intentionally omitted <==

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

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

• B. Please refer to Note 6(24), ‘Finance costs’ for more information regarding interest expenses recognised in profit or loss by the Group for the years ended December 31, 2021 and 2020.

• (14) Long term borrowings

Type of borrowings Maturity date December 31, 2021 Interest rate Collateral Note Bank secured borrowings 2026.1.15 $ 50,000 0.90% Constuction in progress (Note)

• (Note) The principal has a grace period of 35 months. After the grace period expires, the principal and interest are payable in 25 installments.

• A. As of December 31, 2020, the Group has no long-term borrowings.

• B. Please refer to Note 6(24), ‘Finance costs’ for more information regarding interest expenses recognised in profit or loss by the Group for the years ended December 31, 2021 and 2020, refer to Note 6(24), ‘Finance costs’.

(15) Pensions

• A. The Company and its domestic subsidiaries have 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

~52~

months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2%~5% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labour pension reserve account by December 31, every year. If the account balances are not enough to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contribution for the deficit by next year. In accordance with defined benefit pension plan, the Company and its domestic subsidiaries disclose the related information as follows:

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

	December	31,2021	December	31, 2020
Present value of defined benefit obligations	($	579,620)	($	536,100)
Fair value of plan assets		391,648		322,160
	($	187,972)	($	213,940)
Net defined benefit liability in the balance
sheet (Note 1)	($	205,314)	($	227,978)
Net defined benefit asset in the balance
sheet (Note 2)		17,342		14,038
	($	187,972)	($	213,940)

(Note 1) Listed as ‘Net defined benefit liability-non-current’.

(Note 2) Listed as ‘Other non-current assets’.

~53~

(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
For the year ended
December31,2021
At January 1	($		536,100)		$	322,160	($		213,940)
Current service cost	(		4,227)			-	(		4,227)
Interest (expense) income	(		1,597)			985	(		612)
Effects of pension plan
curtailment			811			-			811
	(		541,113)			323,145	(		217,968)
Remeasurements:
Return on plan assets			-			5,513			5,513
Change in demographic
assumptions	(		1,219)			-	(		1,219)
Change in financial assumptions			3,076			-			3,076
Experience adjustments			12,287			-			12,287
			14,144			5,513			19,657
Pension fund contribution			-			18,466			18,466
Paid pension			16,916	(		16,581)			335
Effects of business combinations	(		69,567)			61,105	(		8,462)
At December 31	($		579,620)		$	391,648	($		187,972)

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==> picture [437 x 323] intentionally omitted <==

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

Present value of
defined benefit Fair value of Net defined
obligation plan assets benefit liability
For the year ended
December 31, 2020
At January 1 ($ 518,127) $ 284,872 ($ 233,255)
-
Current service cost ( 4,242) ( 4,242)
Interest (expense) income ( 3,839) 2,131 ( 1,708)
( 526,208) 287,003 ( 239,205)
Remeasurements:
-
Return on plan assets 9,335 9,335
Change in demographic
-
assumptions ( 11) ( 11)
-
Change in financial assumptions ( 23,469) ( 23,469)
-
Experience adjustments ( 24) ( 24)
( 23,504) 9,335 ( 14,169)
-
Pension fund contribution 39,434 39,434
-
Paid pension 13,612 ( 13,612)
At December 31 ($ 536,100) $ 322,160 ($ 213,940)
----- End of picture text -----

(c) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and its domestic subsidiaries’ 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 and its domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and its domestic subsidiaries are 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, 2021 and 2020 is given in the Annual Labour Retirement Fund Utilisation Report announced by the government.

~55~

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

	Forthe years endedDecember31,	Forthe years endedDecember31,
	2021	2020
Discount rate	0.70%	0.30%～0.40%
Future salary increases	2.00%～3.00%	2.00%～2.50%

For the years ended December 31, 2021 and 2020, assumptions regarding future mortality rate are set based on the 6th and 5th Taiwan Standard Ordinary Experience Mortality Table, respectively.

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

Discount rate Future salary increases Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25% December 31, 2021 Effect on present value of defined benefit obligation ($ 13,411) $ 13,874 $ 13,567 ($ 13,188) December 31, 2020

Effect on present value of defined benefit obligation ($ 13,305) $ 13,789 $ 13,483 ($ 13,084) 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.

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 Group for the year ended December 31, 2022 amount to $11,068.

• (f) As of December 31, 2021, the weighted average duration of that retirement plan is 8~10 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	18,398 $ 113,407 483,520
	615,325 $

• B. Effective July 1, 2005, the Company and its domestic subsidiaries have 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 and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly

~56~

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 Group’s subsidiaries, Jiangsu Standard Biotech Pharmaceutical Co., Ltd. and Jiangsu Standard-Dia Biopharma Co., Ltd., in Mainland China are subject to the government sponsored defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage of employees’ monthly salaries and wages. For the years ended December 31, 2021 and 2020, the contribution rates are from 19% to 30%. Other than the monthly contributions, the Group has no further obligations. The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2021 and 2020 were $40,965 and $40,881, respectively.

(16) Share capital – common stock

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

For the years ended December 31, 2021 2020 Beginning and ending balance 178,696 178,696

• B. As of December 31, 2021, 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.

(17) 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. 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 share 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.

• C. In January 2021, the subsidiary of the Company participated in a private placement of common stock issued by GENEFERM BIOTECHNOLOGY CO., LTD., causing decrease in the equity attributable to owners of parent by $2,287 and is recorded under capital surplus.

~57~

• D. For the year ended December 31, 2021, pursuant to the Business letter No. 10602420200 issued by the Ministry of Economic Affairs in September 2017, the Company reclassified dividends payable of $48, which was expired and not collected by the shareholders, to capital surplus.

• E. Please refer to Note 6(29), ‘Transactions with non-controlling interest’ for more information regarding changes of capital surplus due to transactions with non-controlling interest.

• (18) 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 Company’s Articles of Incorporation, 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, long-term 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, until such legal reserve amounts to the total paid-in capital.

  • (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 during their 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.

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• D. As resolved by the Board of Directors on March 24, 2020 and May 4, 2021, the Company recognised cash dividends distributed to owners amounting to $268,044 ($1.5 (in dollars) per share) and $321,653 ($1.8 (in dollars) per share) for the appropriations of 2019 and 2020 earnings, respectively. On March 15, 2022, the Board of Directors resolved for the distribution of dividends from 2021 earnings of $446,740 ($2.5 (in dollars) per share). 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.

(19) Other equity

At January 1 Currency translation differences - Company Valuation adjustment - Company - Subsidiaries Valuation adjustment transferred to retained earnings - Company - Subsidiaries At December 31 At January 1 Currency translation differences - Company Valuation adjustment - Company - Subsidiaries At December 31	For theyear ended December 31,2021	For theyear ended December 31,2021	For theyear ended December 31,2021
	Currency translation	Unrealised gain on valuation of financial assets	Total
	Currency translation	Unrealised gain on valuation of financial assets	Total
	14,544) ($ 2,244) ( - - 16,788) ($	85,065 $ - 17,991) ( 20,981) ( 46,093 $	70,521 $ 2,244) ( 17,991) ( 20,981) ( 29,305 $

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(20) Operating revenue

• A. The Group 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 from rendering of services Others	Domestic International Total 1,995,862 $ 529,263 $ 2,525,125 $ 1,430,808 144,750 1,575,558 12,049 - 12,049 277,666 213,684 491,350 3,716,385 $ 887,697 $ 4,604,082 $ For theyear ended December 31,2021	Domestic International Total 1,995,862 $ 529,263 $ 2,525,125 $ 1,430,808 144,750 1,575,558 12,049 - 12,049 277,666 213,684 491,350 3,716,385 $ 887,697 $ 4,604,082 $ For theyear ended December 31,2021
		2,525,125 $ 1,575,558 12,049 491,350 4,604,082 $

The Group has recognised the following revenue-related contract liabilities: Domestic International Total Revenue from sales of medicine 1,944,550 $ 455,847 $ 2,400,397 $ Revenue from sales of dietary supplement 1,277,916 82,085 1,360,001 Revenue from rendering of services 7,678 - 7,678 Others 306,393 230,931 537,324 3,536,537 $ 768,863 $ 4,305,400 $ For the year ended December 31, 2020 December 31, 2021 December 31, 2020 January 1, 2020 Contract liabilities – sales of medicine 40,569 $ 93,239 $ 54,476 $ Contract liabilities – sales of dietary supplement 26,197 28,675 37,688 Contract liabilities – others 12,349 13,748 1,863 79,115 $ 135,662 $ 94,027 $		For the year ended December 31, 2020	For the year ended December 31, 2020	For the year ended December 31, 2020
				Total
				2,400,397 $ 1,360,001 7,678 537,324 4,305,400 $ January 1, 2020 54,476 $ 37,688 1,863 94,027 $

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

(a) Due to changes in nature of transactions, some of the Group's contract liabilities were repaid during 2021, and the remaining $14,774 was listed as “ Current refund liabilities”.

(b) Revenue recognised that was included in the contract liability balance at the beginning of the years ended December 31, 2021 and 2020 were $101,584 and $57,409, respectively.

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(21) Interest income

(21)	Interest income
(22)	Other income Interest income Dividend income Rental income Fire insurance claim income (Note) Technology transfer income Research income Royalty income Other income	2021 2020 4,247 $ 11,203 $ For theyears ended December31, Forthe years endedDecember31,
		2021 20,738 $ 2,069 66,301 8,674 20,848 11,250 40,302 170,182 $	2020
			15,315 $ 2,163 - 16,097 3,612 11,250 44,548 92,985 $

(Note) Refer to Note 10, ‘SIGNIFICANT DISASTER LOSS’.

(23) Other gains and losses

Other gains and losses
		Forthe years ended		December	31,
		2021		2020
Net gain on current financial assets at fair	$	1,458	$		203
value through profit or loss
Fire losses (Note)	(	66,301)			-
Net gain on disposal of non-current assets
held for sale		80,498			-
Net loss on disposal of property, plant and
equipment	(	846)	(		79)
Net loss on disposal of other non-current assets	(	5,872)			-
Net currency exchange loss	(	25,595)	(	33,068)
Impairment loss on non-financial assets	(	1,810)			-
Other losses	(	5,486)	(		379)
	($	23,954)	($	33,323)

(Note) Refer to Note 10, ‘SIGNIFICANT FIRE LOSS’.

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(24) Finance costs

Finance costs
				For	the years endedDecember31,
				2021			2020
Interest expense
Bank borrowings			$		4,890 $		5,481
Lease liabilities					2,729		2,283
					7,619		7,764
Less: Capitalisation of qualifying	assets		(		369) (		192)
			$		7,250 $		7,572
Expenses by nature
			Forthe yearendedDecember			31,2021
		Recognised in			Recognised in
	operating costs			operating expenses			Total
Employee benefit expenses	$		518,424	$	611,538	$	1,129,962
Depreciation			154,122		46,636		200,758
Amortisation			7,464		12,842		20,306
	$		680,010	$	671,016	$	1,351,026
			Forthe yearendedDecember31,2020
		Recognised in			Recognised in
	operating costs			operating expenses			Total
Employee benefit expenses	$		486,400	$	627,119	$	1,113,519
Depreciation			159,754		48,917		208,671
Amortisation			8,702		16,413		25,115
	$		654,856	$	692,449	$	1,347,305

(25) Expenses by nature

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(26) Employee benefit expenses

Employee benefit expenses
Wages and salaries Labour and health insurance expenses Pension costs Other personnel expenses Wages and salaries Labour and health insurance expenses Pension costs Other personnel expenses	Recognised in Recognised in operating costs operating expenses Total 430,345 $ 522,523 $ 952,868 $ 43,942 46,522 90,464 21,437 23,556 44,993 22,700 18,937 41,637 518,424 $ 611,538 $ 1,129,962 $ Recognised in Recognised in operating costs operating expenses Total 406,358 $ 536,070 $ 942,428 $ 38,733 42,721 81,454 20,258 26,573 46,831 21,051 21,755 42,806 486,400 $ 627,119 $ 1,113,519 $ For theyear ended December31,2021 For the year ended December 31, 2020
	Recognised in operating costs 406,358 $ 38,733 20,258 21,051 486,400 $	Recognised in operating expenses 536,070 $ 42,721 26,573 21,755 627,119 $

• A. 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 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.

• B. Employees’ compensation was accrued at $8,339 and $6,306 for the years ended December 31, 2021 and 2020, respectively; while directors’ and supervisors’ remuneration was accrued at $3,000 and $2,000, 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 15, 2022, the employees’ compensation and directors’ and supervisors’ remuneration were $8,341 and $3,003, respectively, and the employees’ compensation will be distributed in the form of cash. The employees’ compensation

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and directors’ and supervisors’ remuneration for 2020 as resolved by the Board of Directors was $8,536, and the employees’ compensation will be distributed in the form of cash. The difference of $230 between the aforementioned amount and the amount of $8,306 recognised in the 2020 financial statements, mainly caused by estimation differences, had been adjusted in the profit or loss of 2021. 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.

(27) Income tax

• A. Income tax expense:

• (a) Components of income tax expense:

For the years ended December 31,

		2021		2020
Current tax:
Current tax on profits for the year	$	180,877	$	150,340
Tax on undistributed earnings		7,325		1,118
Over provision of prior year's
income tax	(	10,460)	(	9,920)
		177,742		141,538
Deferred tax:
Origination and reversal of temporary
differences	(	794)		5,829
Total income tax expense	$	176,948	$	147,367

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

			For theyears ended	For theyears ended	December	31,
			2021		2020
Remeasurement of defined benefit obligation	$		3,931	($		2,834)
Reconciliation between income tax expense and	accounting profit:
			Forthe years ended		December	31,
			2021		2020
Tax calculated based on profit before tax and
statutory tax rate		$	233,709	$	178,312
Effect of amount not allowed to be recognised
under regulations	(		39,110)	(	10,428)
Effect from tax-exempt income	(		14,576)	(	11,042)
Effect from net operating loss carryfoward	(		973)	(		673)
Tax on undistributed earnings			7,325			1,118
Separate taxation			1,033			-
Provision of prior year's income tax	(		10,460)	(		9,920)
Income tax expense		$	176,948	$	147,367

B. Reconciliation between income tax expense and accounting profit:

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C. Amounts of deferred tax assets or liabilities as a result of temporary differences, investment tax credit and loss carryforward are as follows:

						For theyear ended December	For theyear ended December	For theyear ended December	For theyear ended December	For theyear ended December	31,2021
										Recognised
											in other
					Business		Recognised in		comprehensive
		January1		combinations			profit	or loss			income	December31
Deferred tax assets
Temporary differences:
Bad debts		$	2,933	$		-	$	19	$		-	$	2,952
Unrealised loss on
inventories from
market value decline			6,804			2,731		1,532			-		11,067
Unrealised exchange loss			10,180			168		4,284			-		14,632
Investment loss			37,568			-		1,948			-		39,516
Unrealised impairment loss
on intangible assets			2,785			-		362			-		3,147
Unrealised sales returns and
allowance			4,166			-	(	1,054)			-		3,112
Unused compensated
absences			6,717			408		380			-		7,505
Pensions			36,883			3,023	(	3,045)	(		3,931)		32,930
indemnity			2,376			-	(	2,376)			-		-
Employee benefits			3			-		-			-		3
Investment tax credits
Deferred investment tax
credits			1,426			-	(	1,426)			-		-
Loss carryforward			26,747			-	(	166)			-		26,581
		138,588 $		$		6,330	$	458	($		3,931)	$	141,445
Deferred tax liabilities
Temporary differences:
Gain on investment		$	-	($		336)	$	336	$		-	$	-
Intangible assets identified
from business
combinations			-	(		18,161)		-			-	(	18,161)
Provision for land value
increment tax	(		61,992)	(		12,674)		-			-	(	74,666)
	($		61,992)	($		31,171)	$	336	$		-	($	92,827)
		$	76,596	($		24,841)	$	794	($		3,931)	$	48,618

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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	($	1,036)	$	-	$	2,933
Unrealised loss on inventories
from market value decline		6,173		631		-		6,804
Unrealised exchange loss		5,510		4,670		-		10,180
Investment loss		36,675		893		-		37,568
Unrealised impairment loss
on intangible assets		2,785		-		-		2,785
Unrealised sales returns and
allowance		7,594	(	3,428)		-		4,166
Unused compensated absences		6,163		554		-		6,717
Pensions		40,737	(	6,688)		2,834		36,883
Unrealised loss on scrapped
inventories		1,385	(	1,385)		-		-
Unrealised loss on indemnity		2,376		-		-		2,376
Lease expenses		13	(	13)		-		-
Employee benefits		-		3		-		3
Investment tax credits
Deferred investment tax
credits		1,428	(	2)		-		1,426
Loss carryforward		26,775	(	28)		-		26,747
	$	141,583	($	5,829)	$	2,834	$	138,588
Deferred tax liabilities
Temporary differences:
Provision for land value
increment tax	($	61,992)	$	-	$	-	($	61,992)
	$	79,591	($	5,829)	$	2,834	$	76,596

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.

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• E. Expiration dates of loss carryforward and amounts of unrecognised deferred tax assets are as follows:

follows:
		December31,2021
Year incurred 2012～2021	Amount filed/ approved 307,492 $	Unrecognised Unused amount deferred tax assets 298,452 $ 165,546 $ December31,2020		Usable untilyear
				2022～2031
Year incurred 2011～2020	Amount filed/ approved 338,207 $	Unused amount 329,167 $	Unrecognised deferred taxassets 195,431 $	Usable untilyear
				2021～2030

• F. 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 15, 2022.

• (28) Earnings per share

Authority. The Company does not have any administrative remedy as of March 15, 2022. Earnings per share	ve any administrative remedy as of March 15, 2022.	ve any administrative remedy as of March 15, 2022.	ve any administrative remedy as of March 15, 2022.	ve any administrative remedy as of March 15, 2022.
Weighted average number of ordinary shares outstanding Earnings per Amount after tax (shares in thousands) share(in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent 706,734 $ 178,696 3.95 $ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 706,734 $ 178,696 Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 222 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 706,734 $ 178,918 3.95 $ For theyear ended December31,2021	For theyear ended December31,2021
			Weighted average number of ordinary shares outstanding (shares in thousands) 178,696 178,696 222 178,918	Earnings per share(in dollars)
				3.95 $ 3.95 $

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

For the year ended December 31, 2020
Weighted average
number of ordinary
shares outstanding Earnings per
Amount after tax (shares in thousands) share (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent $ 524,172 178,686 $ 2.93
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent $ 524,172 178,686
Assumed conversion of all dilutive
potential ordinary shares
-
Employees’ compensation 192
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares $ 524,172 178,878 $ 2.93
----- End of picture text -----

(29) Transactions with non-controlling interest

• A. In September 2021, the Group acquired part of shares of its subsidiary—Advpharma Inc. for a total cash consideration of $262. The carrying amount was $185 at the acquisition date. This transaction resulted in a decrease in the equity attributable to owners of the parent by $77.

• B. In April 2020, the Group 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.

(30) Business combinations

• A. In order to enhance competitiveness through resources integration and in line with the Group’s business development strategy, the Group participated in the cash capital increase of SYN-TECH CHEM. & PHARM. CO., LTD. (SYN-TECH) in December 2021 by investing $256,939 in cash and investment in equity securities previously owned amounting to $256,788 (listed as ‘Financial assets at fair value through other comprehensive income – non-current’). The Group had the ability to direct relevant activities together with other large stockholders. As a result, the Group obtained substantial control over SYN-TECH. Refer to Note 4(3)(b) for the details of SYNTECH’s main business operations.

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• B. The following table summarises the consideration paid for SYN-TECH and the fair values of the assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the noncontrolling interest at the acquisition date:

controlling interest at the acquisition date:
	December8,2021
Purchase price
Cash paid	$	256,939
Equity instruments		256,788
Fair value of the non-controlling interest (Note)		1,431,689
	$	1,945,416
Fair value of the identifiable assets acquired and liabilities	assumed
Cash	$	1,280,919
Other current assets		670,898
Property, plant and equipment		551,263
Identifiable intangible assets		91,224
Other non-current assets		118,396
Current liabilities	(	730,421)
Non-current liabilities	(	92,906)
Total identifiable net assets	$	1,889,373
Goodwill	$	56,043

• (Note) Consideration of the purchase price of the stock equities and deduction of implicit cost of the controlling interest has been taken when evaluating the fair value of the noncontrolling interest.

• C. While obtaining substantial control over SYN-TECH, the Group also gained control over CNH TECHNOLOGIES, INC. (CNH), which was previously listed under ‘Investments accounted for under equity method’. The following table summarises the fair values of the assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the non-controlling interest at the acquisition date:

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	December8,2021	December8,2021
Purchase price
Investments accounted for under equity method -	$	6,209
shareholding previously owned by the Group
Investments accounted for under equity method -		12,594
shareholding owned by SYN-TECH
Fair value of the non-controlling interest		5,490
	$	24,293
Fair value of the identifiable assets acquired and liabilities	assumed
Cash	$	4,486
Other current assets		22,164
Current liabilities	(	2,357)
Total identifiable net assets	$	24,293

• D. Since December 8, 2021, the acquisition date of SYN-TECH and CNH, the operating revenue and income before income tax attributed by SYN-TECH and CNH was $38,740 and $2,203, respectively. Assuming that SYN-TECH and CNH had been consolidated since January 1, 2021, the operating revenue and income before income tax attributed by the Group for the year ended December 31, 2021 would have been $5,266,307 and $1,136,920, respectively.

(31) 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,
		2021			2020
Acquisition of property, plant and equipment	$	169,242	$		294,905
Add: Beginning balance of notes payable		2,607			19,239
Beginning balance of payable on		13,002				8,783
equipment (listed as “Other payables”)
Less: Ending balance of notes payable	(	37,743)	(			2,607)
Ending balance of payable on equipment	(	19,922)	(		13,002)
(listed as “Other payables”)
Capitalised interest	(	369)	(			192)
Cash paid for acquisition of property, plant
and equipment	$	126,817		$	307,126

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

(1) Elimination of allowance for uncollectible accounts (2) Receivables from disposal of other non- current assets (listed as “Other receivables”) (3) Receivables for fire insurance claims (4) Inventories transferred to property, plant and equipment (5) Prepayments for equipment transferred to property, plant and equipment (6) Non-current assets held for sale, net transferred to property, plant and equipmen, net (7) Property, plant and equipment transferred to non-current assets held for sale, net	2021 2020 - $ 14 $ 38,364 $ - $ 61,693 $ - $ 6,603 $ 14,722 $ 49,722 $ 54,454 $ 55 $ - $ - $ 165,110 $ Forthe years endedDecember31,	2021 2020 - $ 14 $ 38,364 $ - $ 61,693 $ - $ 6,603 $ 14,722 $ 49,722 $ 54,454 $ 55 $ - $ - $ 165,110 $ Forthe years endedDecember31,
		- $
		- $
		14,722 $
		54,454 $
		- $
		165,110 $

• C. Please refer to Note 6(30), ‘Business combinations’ for the information of the cash acquired from business combinations.

(32) Changes in liabilities from financing activities

At January 1, 2021 Changes in cash flow from financing activities Effect of business combinations Changes in other non-cash items At December 31, 2021		Short-term borrowings	Short-term notes and bills payable	Short-term notes and bills payable	Lease liabilities		Long-term borrowings	Guarantee deposits received 1,371 $ 839) ( - - 532 $	Total
		566,000 $ 224,221 277,768 - 1,067,989 $		- $ - 290,000 - 290,000 $	219,195 $ 18,482) ( 53,273 6,002 259,988 $		- $ 50,000 - - 50,000 $		786,566 $ 254,900 621,041 6,002 1,668,509 $

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	Leaseliabilities	Guarantee depositsreceived	Total
		565,000 $ 1,000 - 566,000 $	300,000 $ 300,000) ( - - $	157,460 $ 16,352) ( 78,087 219,195 $	18,399 $ 17,028) ( - 1,371 $	1,040,859 $ 332,380) ( 78,087 786,566 $

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

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

Names of related parties Relationship with the Group
----- End of picture text -----

Names of related parties	Relationship withthe Group
WE CAN MEDICINES CO., LTD.	Associate
(WE CAN)
Taiwan Biosim Co., Ltd. (Biosim)	Associate
GENEFERM BIOTECHNOLOGY CO., LTD.	Associate
SUN YOU BIOTECH PHARM CO., LTD.	Other related party (The manager of
(SUN YOU)	the Company is SUN YOU's
	corporate director)
SYN-TECH CHEM & PHARM CO., LTD.	Other related party (The Company is
(SYN-TECH)	SYN-TECH's corporate director) (Note)
Fan Dao Nan Foundation (Fan Dao Nan)	Other related party (The corporate
	director of the Company)

(Note) The Company participated in the cash capital increase of SYN-TECH and therefore obtained substantial control over it on December 8, 2021. SYN-TECH has changed from other related party to the Company’s subsidiary from the date. Below disclosure transactions was before the said date.

(2) Significant related party transactions

A. Sales of goods

the said date. nificant related party transactions Sales of goods
Associates Other related parties	For the years ended December 31,
	2021 111,934 $ 21,261 133,195 $	2020
		100,024 $ 20,439 120,463 $

Prices of goods sold to related parties are determined each time when delivering goods. 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.

B. Purchases of goods

Purchases of goods
Otherrelated parties Associates	For theyears ended December31,
	2021 52,405 $ 41,810 94,215 $	2020
		69,418 $ 164 69,582 $

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. Property transactions

In March 2021, the Group disposed of its non-current assets held for sale, net to its related party,

WE CAN, for a price of $245,553 based on the valuation report and recognized gains on disposal

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of non-current assets held for sale, net of $80,498 (listed as ‘ other gains and losses’).

D. Equity transactions

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

• (b) The Group participated in the cash capital increase of the associate, Biosim, by investing $14,970 in August 2021.

E. Other expenses

$14,970 in August 2021. Other expenses
Advertisement expenses: Associates Research and development expenses: Other related parties Associates Donations: Other related parties Miscellaneous expenses: Associates Other related parties	2021 2020 2,247 $ 2,946 $ 144 $ 82 $ 69 - 213 $ 82 $ 7,000 $ - $ 12,300 $ 219 $ 209 20 12,509 $ 239 $ Forthe years endedDecember31,
		82 $ -
		82 $
		- $
		219 $ 20
		239 $

F. Other income

Other income
Other income: Associates Other related parties	Forthe years endedDecember31,
	2021 11,750 $ 3,641 15,391 $	2020
		12,564 $ 734 13,298 $

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G. Ending balance of goods sold

Receivables from related parties: Associates Other related parties	December31,2021 36,722 $ 6,317 43,039 $	December31,2020 24,657 $ 7,403 32,060 $

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

H. Other receivables

Ending balance of goods purchased Receivables from related parties: Associates Other related parties Payables to related parties: Other related parties Associates	December 31, 2021 1,355 $ - 1,355 $ December 31, 2021 543 $ 24,277 24,820 $	December 31, 2020 1,170 $ 4 1,174 $ December 31, 2020 19,137 $ 22 19,159 $

I. Ending balance of goods purchased

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

• －

• J. Lease transactions lessee

• (a) The Group leases land from other related parties, Fan Dao Nan and WE CAN. Rental contracts are made for the periods from October 1, 2016 to September 30, 2027 and April 1, 2021 to March 31, 2022, respectively. Rents are paid quarterly and monthly.

• (b) As of December 31, 2021 and 2020, the carrying amount of ‘right-of-use assets’ are $8,364 and $4,048, respectively.

• (c) As of December 31, 2021 and 2020, the carrying amount of lease liability are $8,452 and $4,095, respectively. The Group recognised interest expense of $103 and $51 for the years ended December 31, 2021 and 2020, respectively (listed as ‘Finance costs’).

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits	For theyears ended December31,
	2021 28,195 $	2020
		33,924 $

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8. PLEDGED ASSETS

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

==> picture [494 x 219] intentionally omitted <==

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Book value
Pledged asset December 31, 2021 December 31, 2020 Purposes
-
Pledged time deposits (Note 1) $ 232,092 $ Short-term borrowings
Land (Note 2) 46,406 288,489 Short-term and long-term
borrowings
Buildings-net (Note 2) 176,239 282,695 Short-term and long-term
borrowings
Machinery and equipment 23,031 28,552 Long-term borrowings
-net (Note 2)
Other equipment-net 118 168 Long-term borrowings
(Note 2)
Construction in progress 108,733 77,213 Long-term borrowings
(Note 2)
$ 586,619 $ 677,117
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(Note 1) Listed as ‘Financial assets at amortised cost -current’.

(Note 2) Listed as ‘Property, plant and equipment’.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

As of December 31, 2021 and 2020, the Group’s significant contingent liabilities and unrecognised contract commitments are as follows:

• (1) The balances for contracts that the Group entered into for the purchase of property, plant and equipment, but not yet due were $291,800 and $126,923, respectively.

• －

• (2) The amounts of the letter of credit that the Group issued but not yet negotiated were $ and $2,262, respectively.

• (3) Endorsements/guarantees for financing within the Group are as follows:

Endorsor/guarantor Endorsee/guarantee December 31, 2021 December 31, 2020 Standard Chem. & Standard Pharmaceutical Pharm. Co., Ltd. Co., Ltd. $ 83,040 $ 85,440

The actual endorsement/guarantee amount provided by the Group for the above subsidiaries were both $ － .

• (4) The Company has implemented its work-division and resource integration, to enhance competitiveness and business performance through spin-off of its synthesis department to the related －

• party SYN-TECH CHEM & PHARM CO., LTD. (SYN-TECH) after the resolution by the Board of Directors on March 16, 2021. Based on the appraised value of $341,000 for the department to be spun-off, the Company will receive 4,532 thousand shares of SYN-TECH newly issued common stock as consideration. The effective date was set on October 1, 2021. However, there was a significant fire incident on May 20, 2021, causing severe damage to certain property, plant and

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equipment that was part of the spin-off. The Company evaluated that there was no significant difference between the fair value of the plant and equipment recovered and their previous appraisal value; therefore the effective date was postponed to July 1, 2022, as resolved by the Board of Directors on August 24, 2021.

10. SIGNIFICANT DISASTER LOSS

(1) The parent company:

The Company was affected by the fire incident in the neighbouring company on May 20, 2021, which resulted in the damage of certain property, plant and equipment, and inventories and therefore interrupting part of the operations. The Company had derecognised some damaged property, plant and equipment and inventories amounting to $61,693 and $4,608 respectively. The total loss as a result of the fire incident was $66,301 (listed as ‘Other gains and losses’).

The Company had obtained property insurance for its property, plant and equipment. The insurance company is currently handling the follow-up indemnity and claim procedures with the assistance of its commissioned third-party notaries. The Company has inspected some purchasing contract of the assets and after consideration of Consumer Price Index, calculated the replacement cost that could be covered by the insurance based on external information. The Company recognized indemnity income at $66,301 (listed as ‘Other income’) limited to the loss of each property. For the year ended December 31, 2021, since the insurance company had checked part of the damaged property, the Company received insurance claim of $4,608, with the remaining of $61,693 (listed as ‘Other receivables’) awaiting further settlement of the insurance company. As the assessment of the amount of insurance claims requires further confirmation by the insurance company and involves a certain degree of uncertainty, there might be a material difference from the estimated amount.

• (2) Subsidiary:

The subsidiary, SYN-TECH CHEM. & PHARM. CO., LTD., suffered from a fire incident on May 20, 2021, which resulted in the damage of certain property, plant and equipment and inventories and therefore interrupting part of the operations. SYN-TECH had disposed some damaged property, plant and equipment and inventories amounting to $130,434 and $40,757, respectively. The total loss of the fire incident was $171,191 (listed as ‘Other gains and losses’).

SYN-TECH had obtained property insurance for its property, plant and equipment. Currently, the insurance company is handling the follow-up indemnity and claim procedures with the assistance of its commissioned third-party notaries. SYN-TECH has inspected some purchasing contract of the assets and after consideration of Consumer Price Index, calculated the replacement cost that could be covered by the insurance based on the document made by a third-party notary through onsite investigation and accessible information. SYN-TECH recognized indemnity income at $171,191 limited to the loss of each property for the period ended June 30, 2021. For the year ended December 31, 2021, since the insurance company had checked part of the damaged property, SYNTECH received insurance claim of $35,035, with the remaining of $136,156 (listed as ‘Other receivables’) awaiting further settlement of the insurance company. As the assessment of the amount

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of insurance claims requires further confirmation by the insurance company and involves a certain degree of uncertainty, there might be a material difference from the estimated amount.

11. SIGNIFICANT EVENT AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’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 Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

(2) Financial instruments

A. 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 instruments Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid	December31,2021	December31,2021	December31,2020	December31,2020
		150,059 $ 228,345 $ 2,564,395 $ 289,932 277,426 880,823 331,809 42,710 4,387,095 $		150,610 $ 404,752 $ 1,036,183 $ 308,540 169,902 772,939 24,413 25,209 2,337,186 $

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December 31, 2021 December 31, 2020

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Financial liabilities
Financial liabilities at amortised cost
Short-term borrowings $ 1,067,989 $ 566,000
-
Short-term notes and bills payable 290,000
Notes payable 301,940 228,002
Accounts payable 322,406 210,569
Other payables 454,443 393,726
Current refund liabilities 14,774 -
-
Long-term borrowings 50,000
Guarantee deposits received 532 1,371
$ 2,502,084 $ 1,399,668
Lease liabilities $ 259,988 $ 219,195
----- End of picture text -----

• B. Risk management policies

• (a) The Group’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 Group, derivative financial instruments may be used to hedge certain risk.

• (b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’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.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

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

• ii. The Group 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, market risk can be offset. The Group does not expect significant interest rate risk.

• iii. The Group 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 Group does not hedge the investments.

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

fluctuations is as follows:
(Foreign currency: functional currency) Financial assets Monetary items USD: NTD EUR: NTD JPY: NTD RMB: NTD Financial liabilities Monetary items USD: NTD EUR: NTD JPY: NTD (Foreign currency: functional currency) Financial assets Monetary items USD: NTD EUR: NTD JPY: NTD RMB: NTD Financial liabilities Monetary items USD: NTD EUR: NTD	December31,2021
	Foreign currency amount (In thousands) Exchange rate 60,217 $ 27.68 955 31.32 361,015 0.2405 23,671 4.344 307 27.68 29 31.32 232,915 0.2405 December31,2020		Bookvalue
			1,666,807 $ 29,911 86,824 102,827 8,498 908 56,016
	Foreign currency amount (In thousands) 31,201 $ 314 25,001 39,045 2,136 15	Exchange rate 28.48 35.02 0.2763 4.377 28.48 35.02	Bookvalue
			888,604 $ 10,996 6,908 170,900 60,833 525

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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 Group’s net income for the years ended December 31, 2021 and 2020 would have increased/decreased by $14,550 and $8,095, respectively.

• v. Total exchange loss, including realized and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2021 and 2020 amounted to $25,595 and $33,068, respectively.

Price risk

• i. The Group’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 Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group’s investments in equity securities comprise shares and open-end funds 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, 2021 and 2020 would have increased/decreased by $1,642 and $1,662, respectively, 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 $3,177 and $3,575, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Group’s main interest rate risk arises from long-term and short-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. During the years ended December 31, 2021 and 2020, the Group’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, 2021 and 2020 would have been $58 and $61 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 Group 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 Group manages its credit risk taking into consideration the entire company’s concern. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard

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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 Group will continue executing the recourse procedures to secure their rights.

• iv. The Group classifies customer’s notes and accounts receivable in accordance with credit rating of customer. The Group applies the modified approach using provision matrix to estimate expected credit loss under the provision matrix basis. The Group used the forecastability of conditions to adjust historical and timely information to assess the default possibility of notes and accounts receivable, whereby rate ranging from 0.03% to 100% are applied to the provision matrix. Movements in relation to the Group applying the modified approach to provide loss allowance for notes and accounts receivable are as follows:

Beginning balance Provision for impairment Ending balance Beginning balance Provision for (reversal of) impairment Write-offs during the year Ending balance	Notes receivable Accounts receivable Total 215 $ 5,772 $ 5,987 $ 145 786 931 360 $ 6,558 $ 6,918 $ For theyear ended December31,2021 Notesreceivable Accountsreceivable Total 171 $ 12,267 $ 12,438 $ 44 6,481) ( 6,437) ( - 14) ( 14) ( 215 $ 5,772 $ 5,987 $ Forthe yearendedDecember31,2020

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’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 Group does not breach borrowing limits or covenants on any of its borrowing facilities.

• ii. Surplus cash held by the Group over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts, time deposits and marketable securities, choosing

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instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts.

iii. The Group has the following undrawn borrowing facilities:

Floating rate: Expiring within one year Expiring beyond one year		December31,2021		December31,2020
		2,130,771 $ 588 2,131,359 $		1,246,298 $ 867,568 2,113,866 $

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

==> picture [423 x 30] intentionally omitted <==

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

Within Between 1 Between 2 Over 5
December 31, 2021 1 year and 2 years and 5 years years
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Non-derivative financial
liabilities:
Short-term borrowings	$	1,069,221		$		-	$		-	$		-
Short-term notes and			290,000			-			-			-
bills payable
Notes payable			301,940			-			-			-
Accounts payable			322,406			-			-			-
Other payables			454,443			-			-			-
Reimbursement			14,774			-			-			-
Lease liabilities			22,811			20,588			57,554		178,450
Long-term borrowings			447			447			50,486			-
Guarantee deposits			-			532			-			-
received
			Within		Between 1			Between 2				Over 5
December31,2020			1year		and2years			and 5 years				years
Non-derivative financial
liabilities:
Short-term borrowings		$	566,643		$	-		$	-		$	-
Notes payable			228,002			-			-			-
Accounts payable			210,569			-			-			-
Other payables			393,726			-			-			-
Lease liabilities			20,152			19,254			49,725			151,916
Guarantee deposits			-			1,371			-			-
received

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     - v. For non-derivative financial liabilities, the Group’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 Group’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 Group’s investment in partial equity instruments without active market is included.

• B. The carrying amounts of the Group’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, current refund liabilities, long-term borrowings and guarantee deposits received) are approximate to their fair values.

• C. The related information on 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 the nature of the assets is as follows:

December31,2021 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 1 134,907 $ 134,689 269,596 $	Level 2 - $ - - $	Level3 15,152 $ 93,656 108,808 $	Total
				150,059 $ 228,345
				378,404 $

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

December 31, 2020 Level 1 Level 2 Level 3 Total
Recurring fair value measurements
Financial assets at fair value
through profit or loss
-
Equity securities $ 136,563 $ $ 14,047 $ 150,610
Financial assets at fair value
through other comprehensive
income
-
Equity securities 310,274 94,478 404,752
-
$ 446,837 $ $ 108,525 $ 555,362
----- End of picture text -----

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

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

Listed stocks Open-end fund Unlisted stocks Market quoted price Closing price Net asset value 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 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 Group’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 Group’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 at 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 2021 and 2020.

• E. The following table presents the changes in Level 3 instruments in 2021 and 2020:

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			Forthe years ended	Forthe years ended	December31,
			2021		2020
At January 1		$	108,525	$	131,561
Capital reduction and return of shares			-	(	506)
Recognised in profit or loss (Note 1)			1,105	(	738)
Recognised in other comprehensive loss (Note 2)	(		822)	(	21,792)
At December 31		$	108,808	$	108,525

(Note 1) Listed as “Other income or loss”.

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

• F. For the years ended December 31, 2021 and 2020, there was no transfer from or to Level 3.

• G.5Financial 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.

• I. 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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Non-derivative equity instrument: Unlisted stocks Non-derivative equity instrument: Unlisted stocks	Fair value at Valuation Significant December31,2021 technique unobservableinput $ 108,808 Market comparable companies Discount for lack of marketability Fair value at Valuation Significant December31,2020 technique unobservableinput $ 108,525 Market comparable companies Discount for lack of marketability	Range (weighted Relationship of average) inputs tofairvalue 30% The higher the discount for lack of marketability, the lower the fair value Range (weighted Relationship of average) inputs tofairvalue 30% The higher the discount for lack of marketability, the lower the fair value	Relationship of inputs tofairvalue

• J. The Group 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 on profit or loss or on other comprehensive income from financial assets categorised within Level 3 if the inputs used to valuation models have changed:

Financial assets Equity instrument Financial assets Equity instrument	Input Discount for lack of marketability Input Discount for lack of marketability	Change ± 3% Change ± 3%	December31,2021	December31,2021	December31,2021	December31,2021
			Favourable Unfavourable Favourable Unfavourable change change change change 649 $ 649) ($ 4,014 $ 4,014) ($ Recognised in profit or loss Recognised in other comprehensive income Favourable Unfavourable Favourable Unfavourable change change change change 602 $ 602) ($ 4,049 $ 4,049) ($ December31,2020 Recognised inprofit or loss Recognised in other comprehensive income		Recognised in other comprehensive income
			Favourable change 649 $			Unfavourable change
			Recognised in	Unfavourable change 602) $ profit or loss
			Favourable change 602 $ (		Favourable change 4,049 $ (

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(4) Other information

Due to the spread of the COVID-19 and the government’s promotion of various anti-epidemic measures, the Group has adopted relevant measures such as workplace hygiene management and continued to manage related matters in accordance with the ‘Guidelines for Continued Operation of Enterprises in Response to Server Specialized Infectious Pneumonia Epidemic’. All factories are operated in an alternate mode, and there is no material adverse impact on all operation.

13. SUPPLEMENTARY DISCLOSURES

(Only 2021 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: Please refer to table 4.

• 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: None.

• 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) Major stockholders’ information

Major stockholders’ information: Please refer to table 8.

14. SEGMENT INFORMATION

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the chief operating decision-maker that are used to make strategic decisions. There is change in the basis for formation of entities and division of segments in the Group or in the measurement basis for segment information during this year in accordance with global marketing expansion of the Group.

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(2) Measurement of segment information

The chief operating decision maker evaluates the performance of operating segments based on pretax income. Accounting policies applied on the operating segments are consistent with the significant accounting policies applied in the preparation of the consolidated financial statements set out in Note 4.

(3) Information about segment profit or loss, assets and liabilities

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

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

For the year ended December 31, 2021
Business
Medicine Dietary supplement combinations Others Total
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			Medicine	D	iet	ary supplement		c	ombinations		Others			Total
Segment revenue		$	2,589,306		$	1,663,711		$	-	$	527,559		$	4,780,576
Revenue from internal
customers	(		64,181)	(		88,153)			-	(	24,160)	(		176,494)
Revenue from
external			2,525,125			1,575,558			-		503,399			4,604,082
Inter-segment profit
before income tax			740,811			320,895			-		214,636			1,276,342
Segment assets			3,491,968			2,877,993			2,795,393		938,667		10,104,021
Segment liabilities			1,459,931			703,498			825,684		315,294			3,304,407
				For		the yearendedDecember31,2020
			Medicine	Dietary supplement					Others		Total
Segment revenue	$		2,458,032	$		1,421,596	$		563,233	$	4,442,861
Revenue from internal
customers	(		57,635)	(		61,595)	(		18,231)	(	137,461)
Revenue from
external			2,400,397			1,360,001			545,002		4,305,400
Inter-segment profit
before income tax			552,536			150,174			100,542		803,252
Segment assets			3,484,614			2,367,952			1,196,881		7,049,447
Segment liabilities			1,297,275			581,983			264,354		2,143,612

(4) Reconciliation for segment income (loss), assets and liabilities

A. Sales between segments are carried out at arm’s length. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income. A reconciliation of reportable segment income before income tax to the profit before income tax is provided as follows:

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		Forthe years endedDecember31,	Forthe years endedDecember31,	Forthe years endedDecember31,
		2021		2020
Reportable segment income before income tax	$	1,061,706	$	702,710
Other segments profit before income tax		214,636		100,542
Including inter-segment loss	(	262,592)	(	30,325)
Profit before income tax	$	1,013,750	$	772,927

• B. The amounts provided to the chief operating decision-maker with respect to total assets and total liabilities are measured in a manner consistent with that of the financial statements. No reconciliation is needed.

(5) Information on product and service

Revenue from external customers is mainly from manufacturing, research and development, sale and wholesale of various medicine, food and medical products. Details of revenue are as follows:

Revenue from sales of medicine Revenue from sales of dietary supplement Revenue from rendering of services Others	2021 2020 2,525,125 $ 2,400,397 $ 1,575,558 1,360,001 12,049 7,678 491,350 537,324 4,604,082 $ 4,305,400 $ Forthe years endedDecember31,	2021 2020 2,525,125 $ 2,400,397 $ 1,575,558 1,360,001 12,049 7,678 491,350 537,324 4,604,082 $ 4,305,400 $ Forthe years endedDecember31,
		2,400,397 $ 1,360,001 7,678 537,324
		4,305,400 $

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(6) Geographical information

Geographical information for the years ended December 31, 2021 and 2020 is as follows:

Taiwan Mainland China Vietnam Japan South Korea Philippines Singapore Thailand Egypt America Others

Revenue (Note1) Non-current assets (Note2) Revenue (Note1) Non-current assets (Note2) 3,716,385 $ 3,191,126 $ 3,536,537 $ 2,430,410 $ 357,375 157,429 225,978 169,067 97,606 - 98,799 - 59,330 - 51,289 - 65,820 - 44,860 - 43,057 - 60,540 - 38,597 - 24,412 - 37,118 - 37,815 - 22,143 - 37,010 - 19,810 - 32,724 - 146,841 381 155,436 1,048 4,604,082 $ 3,348,936 $ 4,305,400 $ 2,600,525 $ For theyears ended December31, 2021 2020

(Note 1) Revenue is based on where the clients are located.

(Note 2) Non-current assets include property, plant and equipment, right-of-use assets, intangible

assets, prepayments for equipment, and partial other non-current assets.

(7) Major customer information

Major customer information of the Group (revenue accounted for more than 10% revenue ) for the years ended December 31, 2021 and 2020 is as follows:

Company A	For theyears ended December31,	For theyears ended December31,
	2021 459,454 $	2020
		440,813 $

~90~

Table 1

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD. AND SUBSIDIARIES

Loans to others

For the year ended December 31, 2021

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
1 2	Standard Pharmaceutical Co., Ltd. Jiangsu Standard Biotech Pharmaceutical Co., Ltd.	Jiangsu Standard Biotech Pharmaceutical Co., Ltd. Jiangsu Standard-Dia Biopharma Co., Ltd.	Other receivables Yes Other receivables Yes		83,040 $ 4,561	83,040 $ 4,561	83,040 $ 4,561	1.20% 1.20%	2 2	- $ -	Operating capital - $ Operating capital -		－ －	- $ -	369,630 $ 17,151	369,630 $ 20,582	(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, 2021 as follows: USD: NTD 1:27.68 and RMB: NTD 1:4.344.

Table 1 page 1

Table 2

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD. AND SUBSIDIARIES

Provision of endorsements and guarantees to others

For the year ended December 31, 2021

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	868,375 $	83,040 $	- $	- $	- $	2%	2,170,938 $	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, 2021 as follows: USD: NTD 1:27.68.

Table 2 page 1

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD. AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2021

Table 3

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	As	of December 31, 2021	of December 31, 2021	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: Original BioMedicals Co., Ltd. NCKU Venture Capital Co., Ltd. NTU Innovation & Incubation Co., Ltd. TaiwanJ Pharmaceuticals Co., Ltd. HER-SING CO., LTD. SUN YOU BIOTECH PHARM CO., LTD. Green Management International Co., Ltd. Kenda Pharmacentiocal Co., Ltd. Rossmax International Ltd. EASYWELL BIOMEDICALS, INC. 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. MULTIPOWER ENTERPRISE CORP. Bonds with repurchase agreement: International Bills Finance Corporation Mega Bills Finance Co., Ltd. China Bills Finance Corporation 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 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 1 1 1 2 2 2 2	－ － － 200,000 650,000 480,000 258,133 3,055,000 3,378,006 109,672 5,000,000 899,000 7,278,000 368,142 50,000 240,846 4,000,000 － － － 2,000,000 3,166,588 1,652,490 1,473,047	83,380 $ 56,521 55,976 - 3,685 3,557 2,607 42,312 43,069 1,754 3,450 18,969 115,720 5,283 684 3,071 - 150,000 20,000 20,000 20,510 40,145 25,566 20,149	- - - 0.43% 4.17% 3.76% 0.34% 17.71% 18.13% 5.14% 19.42% 1.07% 4.45% - - 1.29% 13.02% - - - - - - -	83,380 $ 56,521 55,976 - 3,685 3,557 2,607 42,312 43,069 1,754 3,450 18,969 115,720 5,283 684 3,071 - 150,000 20,000 20,000 20,510 40,145 25,566 20,149	- - - - - - - - - - - - - - - - - - - - - - - -

Table 3 page 1

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	As	of December 31, 2021	of December 31, 2021	Note
					Bookvalue	Ownership (%)	Fairvalue
Advpharma Inc. Syngen Biotech Co,. Ltd. SYN-TECH CHEM & PHARM CO., LTD.	UPAMC James Bond Money Market Fund Shin Kong US Harvest Balanced TWD A Cathay Senior Secured High Yield Bond Capital Money Market Fund Shin Kong Emergin Wealthy Nations Bond Fund A Stocks: Der Yang Biotechnology Venture Capital Co., Ltd. TaiwanJ Pharmaceuticals Co., Ltd. Bonds with repurchase agreement: Mega Bills Finance Co., Ltd. Stocks: NCKU Venture Capital Co., Ltd. Bonds with repurchase agreement: China Bills Finance Corporation	－ － － － － － － － － －	2 2 2 2 2 3 3 1 3 1	477,020 245,916 271,919 431,305 195,290 117,997 25,203 － 650,000 －	8,048 $ 2,725 2,850 7,029 1,918 1,363 255 66,432 3,685 450,849	- - - - - 3.70% 0.03% - 4.17% -	8,048 $ 2,725 2,850 7,029 1,918 1,363 255 66,432 3,685 450,849	- - - - - - - - - -

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, 2021 as follows: USD: NTD 1:27.68.

Table 3 page 2

Investor Table 4	Type and name of securities	General ledger account	Name of the counterparty	Acquisition or sale of the sam	Acquisition or sale of the sam	Acquisition or sale of the sam	Acquisition or sale of the sam	Acquisition or sale of the sam	Acquisition or sale of the sam	Acquisition or sale of the sam	Acquisition or sale of the sam	Acquisition or sale of the sam	Acquisition or sale of the sam		Other increase(decrease)	Other increase(decrease)	Expressed in thousands of NTD Endingbalance	Expressed in thousands of NTD Endingbalance
							e security with
					Relationship	For the year ended December 31, 2021 Beginningbalance(Note) Addition
						Number of shares (in thousands)		Amount	Number of shares (in thousands)	Amount	Number of shares (in thousands)	Sale Price	Book Value	Gain (loss) on disposal	Number of shares (in thousands)	Amount	Number of shares (in thousands)	Amount
Standard Chem & Pharm. Co., Ltd.	Stock: SYN-TECH CHEM & PHARM CO.,	Investment accounted for under the equity method	Cash capital increase and Advpharma Inc.		Subsidiary	3,188		246,151 $	4,956	300,280 $	-	- $	- $	- $	-	32,464) ($	8,144	513,967 $

(Note) Listed as “Financial assets at fair value through other comprehensive income - non-current ”, the detail information please refer to Note 6(3),‘ Financial assets at fair value through other comprehensive income - non-current’ for more information.

Table 4 Page 1

• Significant inter company transactions during the reporting period For the year ended December 31, 2021

Table 5

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD. AND SUBSIDIARIES

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.	Syngen Biotech Co,. Ltd. Souriree Biotech & Pharm. Co., Ltd. Jiangsu Standard Biotech Pharmaceutical Co., Ltd.	1 1 1 3	Purchases Accounts payable Purchases Other receivables	$ 69,526 ( 22,498) 59,091 83,142	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 －	2% － 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, 2021 as follows: USD: NTD 1:27.68 and RMB: NTD 1:4.344.

Table 5 page 1

Information on investees

For the year ended December 31, 2021

Table 6

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD. AND SUBSIDIARIES

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December31,2021	as at December31,2021	Net profit (loss) of the investee for the year ended December31,2021	Investment income (loss) recognised for the year ended December31,2021	Note
				Balance as at December 31, 2021	Balance as at December 31, 2020	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. SYN-TECH CHEM. & PHARM. CO., LTD.	Samoa Taiwan Philippines Taiwan 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 Manufacturing and sale of APIs, reagent, surfactant, Chinese, western, and veterinary medicinal products	396,953 $ 161,356 6,762 5,000 41,549 293,063 525,933 330,203 512,314	396,953 $ 161,356 6,762 5,000 41,549 293,063 525,671 330,203 -	13,000,000 14,553,000 192,195 500,000 5,649,126 19,840,600 53,226,806 12,651,146 8,143,796	100.00 100.00 100.00 100.00 93.17 90.72 88.71 46.68 20.33	184,815 $ 10,835 530 3,697 32,080 347,322 275,805 808,183 513,967	10,750) ($ 82) ( 666) ( 616) ( 4,894 43,980 3,127) ( 237,770 103,835	10,750) ($ 82) ( 666) ( 616) ( 5,076 39,656 2,698) ( 109,478 1,534	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary (Note 1) Subsidiary (Note 2)

Table 6 page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December31,2021	as at December31,2021	Net profit (loss) of the investee for the year ended December31,2021	Investment income (loss) recognised for the year ended December31,2021	Note
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue
Standard Chem & Pharm. Co., Ltd. Syngen Biotech Co., Ltd Advpharma Inc. SYN-TECH CHEM. & PHARM. CO., LTD.	WE CAN MEDICINES CO., LTD. Taiwan Biosim, Co., Ltd. SYNGEN BIOTECH INTERNATIONAL SDN. BHD. GENEFERM BIOTECHNOLOGY CO., LTD. CNH TECHNOLOGIES INC. Advpharma Inc. CNH TECHNOLOGIES INC.	Taiwan Taiwan Malaysia Taiwan America Taiwan 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 Research and development, design, quantification, manufacturing and sale of microbial and edible mushroom medicine fermentation, herbal and vegetal functional products, fruit and vegetable fermentation concentrates and protein products, management of the aforementioned trade business, technological consultancy, etc. Inspection of medicine, retail and wholesale of various chemistry Research and development, manufacturing and sale of various medicine Inspection of medicine, retail and wholesale of various chemistry	282,868 $ 49,900 7,322 273,840 13,734 9,626 21,092	282,868 $ 34,930 7,322 - 13,734 9,626 21,092	13,442,909 4,990,000 1,000,000 12,000,000 400,000 1,495,414 535,050	33.61 49.90 100.00 29.42 35.60 2.49 47.62	205,362 $ 30,612 1,703 289,865 8,649 7,942 17,942	38,794 $ 17,709) ( 811) ( 57,413 1,532) ( 3,127) ( 1,532) (	11,473) ($ 8,837) ( - - - - -	Associate Associate Subsidiary (Note 3) Associate (Note 3) (Note 3) (Note 3) (Note 3)

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: The company participated in the cash captial increase of SYN-TECH CHEM. & PHARM. CO., LTD., which results in becoming SYN-TECH's single largest corporate shareholder and having substantial control over it. Note 3: Not required to disclose income (loss) recognised.

Note 4: Foreign currencies were translated into New Taiwan Dollars with exchange rate as of December 31, 2021 as follows: USD: NTD 1:27.68.

Table 6 page 2

Information on investments in Mainland China

For the year ended December 31, 20201

Table 7

Expressed in thousands of NTD

STANDARD CHEM & PHARM. CO., LTD. AND SUBSIDIARIES

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2021	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Net income (loss) of investee for the year ended December 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised for the year ended December 31, 2021	Book value of investments in Mainland China as of December 31,2021	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2021	Note
					Remitted to Mainland China	Remitted back to Taiwan
Jiangsu Standard Biotech Pharmaceutical Co., Ltd. Jiangsu Standard-Dia Biopharma Co., Ltd.	Research and development, technical consulting and technical services of medicine Research and development, manufacturing and sale of various medicine	249,120 $ 184,164	(Note 1) (Note 2)	248,844 $ -	- $ -	- $ -	248,844 $ -	11,905) ($ 13,704) (	100.00 55.00	11,905) ($ 7,437) (	68,568 $ 1,038	- $ -	(Note 3) (Note 3)

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA (Note 4)
Standard Chem & Pharm. Co., Ltd.	248,844 $	249,120 $	4,079,768 $

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, 2021 as follows: USD: NTD 1:27.68 and RMB: NTD 1:4.344.

Table 7 page 1

Table 8

STANDARD CHEM & PHARM. CO., LTD. AND SUBSIDIARIES Major Shareholders Information

December 31, 2021

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	20,786,813 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