SFC - Annual Report 2019 | FinancialReports.eu

Standard Foods Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2019 and 2018 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2019 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standards No. 10, “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we have not prepared a separate set of consolidated financial statements of affiliates.

Very truly yours,

STANDARD FOODS CORPORATION

TER-FUNG TSAO Chairman

March 18, 2020

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Standard Foods Corporation

Opinion

We have audited the accompanying consolidated financial statements of Standard Foods Corporation and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2019 and 2018, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of the consolidated financial statements for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission of the Republic of China on February 25, 2020, and auditing standards generally accepted in the Republic of China. We conducted our audit of the consolidated financial statements for the year ended December 31, 2018 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter identified in the Group’s consolidated financial statements for the year ended December 31, 2019 is stated as follows:

Evaluation of Inventory

The products of the Group mainly include nutritional food, edible oils, dairy products, and beverages. Management estimated the allowance for impairment loss of inventory of various products based on the current market condition and historical sales experience. Refer to Notes 4, 5, and 12 to the consolidated financial statements for detailed information related to assessment of inventory. Because the assessment of impairment loss of inventory involves management’s critical accounting estimates and judgments, we considered the assessment of the allowance for impairment loss of inventory to be a key audit matter.

The audit procedures that we performed in response to the abovementioned key audit matter included obtaining information pertaining to the lower of cost or net realizable value (LCNRV), sampling the projected pricing information to the most recent sales record to assess the reasonableness of the judgment on LCNRV, and collecting the related documentations on obsolete inventory to assess the appropriateness of methodology adopted in the calculation of the impairment loss of inventory.

Other Matter

We have also audited the parent company only financial statements of Standard Foods Corporation as of and for the years ended December 31, 2019 and 2018 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, 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 the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Tza-Li Gung and Ching-Cheng Yang.

Deloitte & Touche Taipei, Taiwan Republic of China March 18, 2020

Notice to Readers

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

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

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at fair value through other comprehensive income - current (Note 8) Financial assets at amortized cost - current (Note 9) Notes receivable (Notes 10 and 26) Trade receivables (Notes 10 and 26) Lease receivables - current (Note 11) Finance lease receivables - current (Note 11) Other receivables (Note 10) Current tax assets (Note 28) Inventories (Note 12) Prepayments (Note 13) Other current assets (Notes 20 and 36) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Note 7) Financial assets at fair value through other comprehensive income - non-current (Note 8) Property, plant and equipment (Notes 15 and 36) Right-of-use assets (Note 16) Investment properties (Notes 17 and 36) Goodwill Other intangible assets (Note 18) Deferred tax assets (Note 28) Lease receivables - non-current (Note 11) Finance lease receivables - non-current (Note 11) Net defined benefit assets Long-term prepayments for leases (Note 19) Other non-current assets (Notes 20 and 36) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 21 and 36) Short-term bills payable (Note 21) Contract liabilities - current (Note 26) Notes payable (Note 22) Trade payables (Note 22) Trade payables to related parties (Note 35) Other payables (Note 23) Current tax liabilities (Note 28) Lease liabilities - current (Note 16) Current portion of long-term borrowings (Notes 21 and 36) Finance lease payables - current Other current liabilities (Note 23) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 21 and 36) Deferred tax liabilities (Note 28) Lease liabilities - non-current (Note 16) Finance lease payables - non-current Net defined benefit liabilities Other non-current liabilities (Note 23) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 25) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS (Note 25) Total equity TOTAL		2019 Amount % $ 3,705,903 15 667,673 3 186,711 1 2,206,805 9 2,977 - 6,439,550 25 - - 2,775 - 193,083 1 46,114 - 3,646,984 14 1,385,226 5 29,384 - 18,513,185 73 7,575 - 189,695 1 5,125,312 20 699,679 3 122,492 - 818 - 67,269 - 473,398 2 - - 26,948 - 919 - - - 260,975 1 6,975,080 27 $ 25,488,265 100 $ 1,382,955 6 99,968 1 326,644 1 316,444 1 2,014,619 8 26,141 - 2,850,674 11 547,018 2 83,119 - 6,000 - - - 28,501 - 7,682,083 30 - - 268,813 1 264,496 1 - - 299,204 2 22,978 - 855,491 4 8,537,574 34 9,150,897 36 109,718 - 2,945,412 11 330,945 1 4,739,831 19 8,016,188 31 (577,494) (2) (21,182) - 16,678,127 65 272,564 1 16,950,691 66 $ 25,488,265 100		2018
				Amount % $ 2,589,952 11 617,790 2 154,439 1 1,505,913 6 2,887 - 6,161,079 26 2,640 - - - 222,129 1 13,349 - 4,199,286 17 1,615,672 7 21,911 - 17,107,047 71 7,315 - 167,260 1 5,478,238 23 - - 110,776 - 818 - 72,232 - 400,746 2 29,724 - - - 2,564 - 381,081 2 239,855 1 6,890,609 29 $ 23,997,656 100 $ 1,731,478 7 119,904 - 360,115 2 131,916 1 2,162,745 9 8,602 - 2,609,886 11 337,835 1 - - 12,000 - 2,137 - 34,316 - 7,510,934 31 15,000 - 136,123 1 - - 4,809 - 265,770 1 24,695 - 446,397 2 7,957,331 33 9,150,897 38 93,045 - 2,650,503 11 260,426 1 4,004,182 17 6,915,111 29 (330,945) (1) (21,182) - 15,806,926 66 233,399 1 16,040,325 67 $ 23,997,656 100

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

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE Sales (Note 26) OPERATING COSTS Cost of goods sold (Notes 12, 27 and 35) GROSS PROFIT OPERATING EXPENSES (Note 27) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Other income (Note 27) Other gains (Notes 19 and 27) Finance costs (Note 27) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 28) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 28) Total items that will not be reclassified subsequently to profit or loss		2019 Amount % $ 31,266,232 100 21,635,219 69 9,631,013 31 3,967,158 13 1,078,836 4 148,384 - 12,762 - 5,207,140 17 4,423,873 14 110,737 1 60,803 - (46,879) - 124,661 1 4,548,534 15 1,093,698 4 3,454,836 11 (36,667) - 54,764 - 7,671 - 25,768 -		2018
				Amount % $ 27,340,587 100 19,086,242 70 8,254,345 30 4,010,005 15 921,459 3 167,794 - 5,251 - 5,104,509 18 3,149,836 12 71,957 - 535,184 2 (80,745) - 526,396 2 3,676,232 14 707,925 3 2,968,307 11 (6,336) - (36,460) - 11,060 - (31,736) - (Continued)

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Income tax relating to the items that may be reclassified subsequently to profit or loss (Note 28) Total items that may be reclassified subsequently to profit or loss Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company Non-controlling interests EARNINGS PER SHARE (Note 29) Basic Diluted		2019 Amount % $ (351,999) (1) 70,042 - (281,957) (1) (256,189) (1) $ 3,198,647 10 $ 3,416,097 11 38,739 - $ 3,454,836 11 $ 3,142,252 10 56,395 - $ 3,198,647 10 $ 3.76 $ 3.76		2018
				Amount % $ (147,177) (1) 40,164 - (107,013) (1) (138,749) (1) $ 2,829,558 10 $ 2,949,089 11 19,218 - $ 2,968,307 11 $ 2,813,107 10 16,451 - $ 2,829,558 10 $ 3.25 $ 3.24

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

(Concluded)

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

		Equity Attrib	able to Owners of the	Company
Ordinary Shares Capital Surplus $ 9,150,897 $ 83,124 - - 9,150,897 83,124 - - - - - - - 13,339 - (3,418) - - - - - - - - - - 9,150,897 93,045 - - - - - - - 16,673 - - - - - - - - $ 9,150,897 $ 109,718	Retained Earnings	Total $ 5,833,327 2,014 5,835,341 - - (1,830,179) - (44,494) - 2,949,089 5,040 2,954,129 314 6,915,111 - - (2,287,724) - - 3,416,097 (27,296) 3,388,801 $ 8,016,188		Other Equity		Total Treasury Shares $ (260,426 ) $ (21,182 ) 22,584 - (237,842) (21,182) - - - - - - - - 48,233 - - - - - (141,022) - (141,022) - (314) - (330,945) (21,182) - - - - - - - - - - - - (246,549) - (246,549) - $ (577,494) $ (21,182)
			Exchange Differences on Translating the Financial Statements of Foreign Operations $ (307,846 ) - (307,846) - - - - 1,263 - - (106,286) (106,286) - (412,869) - - - - - - (280,169) (280,169) $ (693,038)	Unrealized Gain (Loss) on Available-for- Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other sale Financial Assets Comprehensive Income $ 94,390 $ - (94,390) 116,974 - 116,974 - - - - - - - - - - - - - - - (34,736) - (34,736) - (314) - 81,924 - - - - - - - - - - - - - 33,620 - 33,620 $ - $ 115,544	Other $ (46,970 ) - (46,970) - - - - 46,970 - - - - - - - - - - - - - - $ -
	Legal Reserve Special Reserve Unappropriated Earnings $ 2,433,199 $ 81,797 $ 3,318,331 - - 2,014 2,433,199 81,797 3,320,345 217,304 - (217,304) - 178,629 (178,629) - - (1,830,179) - - - - - (44,494) - - - - - 2,949,089 - - 5,040 - - 2,954,129 - - 314 2,650,503 260,426 4,004,182 294,909 - (294,909) - 70,519 (70,519) - - (2,287,724) - - - - - - - - 3,416,097 - - (27,296) - - 3,388,801 $ 2,945,412 $ 330,945 $ 4,739,831

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

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized on trade receivables Net gain loss on fair value changes of financial assets and financial liabilities at fair value through profit or loss Finance costs Interest income Dividend income Loss on disposal of property, plant and equipment Loss (gain) on disposal of investment properties Impairment losses recognized on property, plant and equipment Others Changes in operating assets and liabilities Financial assets mandatorily classified as fair value through profit or loss Notes receivable Trade receivables Other receivables Inventories Prepayments Other current assets Accrued pension assets Contract liabilities Notes payable Trade payables Trade payables - related parties Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Interest received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Refund of financial assets at amortized cost Payments for property, plant and equipment	2019 $ 4,548,534 574,798 54,237 12,762 (7,812) 46,879 (74,819) (11,231) 37,346 4,268 - (19) (42,330) (204) (418,070) 30,739 490,995 185,019 (7,472) 1,645 (21,368) 196,093 (121,831) 17,540 298,026 (5,242) (3,124) 5,785,359 72,781 (50,799) (780,867) 5,026,474 - (3,588,919) 2,879,221 (405,804)	2018 $ 3,676,232 473,373 53,528 5,251 (22,339) 80,745 (39,917) (10,584) 8,243 (369,427) 18,035 - (561,425) 1,920 (1,134,594) (62,972) 326,026 38,204 454 (1,134) 154,687 34,401 666,896 5,332 234,594 (146,238) (113,121) 3,316,170 36,998 (78,814) (635,107) 2,639,247 2,621 (1,512,643) 820,126 (386,244) (Continued)

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STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Proceeds from disposal of property, plant and equipment Proceeds from disposal of investment properties Payments for intangible assets Increase in finance lease receivables Decrease in finance lease receivables Increase in other financial assets Decrease in other financial assets Increase in other non-current assets Decrease in other non-current assets Other dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Increase in short-term bills payable Decrease in short-term bills payable Payments for long-term borrowings Increase in finance lease payables Repayment of the principal portion of lease liabilities Increase in other financial liabilities Decrease in other financial liabilities Decrease in other non-current liabilities Dividends paid to owners of the Company Acquisition of subsidiaries Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2019 $ 20,095 - (7,564) - 2,640 (13,000) - - 2,296 11,006 (1,100,029) (301,316) - (19,936) (21,000) - (73,714) 705 - (1,757) (2,288,281) - (2,705,299) (105,195) 1,115,951 2,589,952 $ 3,705,903	2018 $ 13,913 495,580 (5,572) (36,290) 38,701 - 21,101 (22,340) - 10,584 (560,463) (555,347) 19,951 - (12,000) 4,067 - - (28,458) (687) (1,845,558) (59,682) (2,477,714) (163,800) (562,730) 3,152,682 $ 2,589,952

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

(Concluded)

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STANDARD FOODS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Standard Foods Corporation (the “Company”) was incorporated on June 6, 1986. The Company mainly manufactures and sells nutritious foods, edible oils, dairy products and beverages.

The Company’s shares have been listed on the Taiwan Stock Exchange since April 1994.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on March 18, 2020.

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

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

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

1) IFRS 16 “Leases”

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and lessor. It supersedes IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, and a number of related interpretations. Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

The Group elects to apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 are not be reassessed and are accounted for in accordance with the transitional provisions under IFRS 16.

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The Group as lessee

The Group recognizes right-of-use assets or investment properties if the right-of-use assets meet the definition of investment properties, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value asset and short-term leases are recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, the Group presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within financing activities. Prior to the application of IFRS 16, payments under operating lease contracts were recognized as expenses on a straight-line basis. Cash flows for operating leases were classified within operating activities on the consolidated statements of cash flows. Leased assets and finance lease payables were recognized on the consolidated balance sheets for contracts classified as finance leases.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at either amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments.

For as an operating lease under IAS 17, a lease liability measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Part of right-of-use assets are presented as prepaid lease or lease payments. The Company applies IAS 36 to all right-of-use assets.

The Group also applies the following practical expedients:

a) The Group applies a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.
b) The Group accounts for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.
c) The Group excludes initial direct costs from the measurement of right-of-use assets on January 1, 2019.
d) The Group uses hindsight, such as in determining lease terms, to measure lease liabilities.

The lessee’s weighted incremental borrowing rate applied to lease liabilities recognized on January 1, 2019 is 1.07%-12.04%. The difference between the lease liabilities recognized and operating lease commitments disclosed under IAS 17 on December 31, 2018 is explained as follows:

The future minimum lease payments of non-cancellable operating lease commitments on December 31, 2018 Less: Recognition exemption for short-term leases Undiscounted amounts on January 1, 2019 Discounted amounts using the incremental borrowing rate on January 1, 2019 Add: Finance lease liabilities on December 31, 2018 Lease liabilities recognized on January 1, 2019	$ 155,631 (21,890) $ 133,741 $ 132,164 6,946 $ 139,110

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The Group as lessor

The Group does not make any adjustments for leases in which it is a lessor, and it accounts for those leases with the application of IFRS 16 starting from January 1, 2019.

The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is set out as follows:

			Adjustments	Adjustments
	As	Originally	Arising from
	Stated on			Initial	Restated on
	January 1, 2019		Application		January 1, 2019
Finance lease receivables - current	$	-	$	2,640	$	2,640
Lease receivables - non-current		29,724		(29,724)		-
Finance lease receivables - non-current		-		29,724		29,724
Lease receivables - current		2,640		(2,640)		-
Property, plant and equipment		5,889		(5,889)		-
Prepayments for leases - non-current		381,081		(381,081)		-
Right-of-use assets		-		519,134		519,134
Total effect on assets	$	419,334	$	132,164	$	551,498
Lease liabilities	$	-	$	139,110	$	139,110
Finance lease payables - current		2,137		(2,137)		-
Finance lease payables - non-current		4,809		(4,809)		-
Total effect on liabilities	$	6,946	$	132,164	$	139,110

The amendments stipulate that, if a plan amendment, curtailment or settlement occurs, the current service cost and the net interest for the remainder of the annual reporting period are determined using the actuarial assumptions used for the remeasurement of the net defined benefit liabilities (assets). In addition, the amendments clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. The Group applied the above amendments prospectively.

b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2020

New IFRSs Amendments to IFRS 3 “Definition of a Business” Amendments to IAS 1 and IAS 8 “Definition of Material”	Effective Date Announced by IASB
	January 1, 2020 (Note 1) January 1, 2020 (Note 2)

Note 1: The Group shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.
Note 2: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.
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1) Amendments to IFRS 3 “Definition of a Business”

The amendments clarify that, to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process applied to the input that together significantly contribute to the ability to create outputs. The amendments narrow the definitions of outputs by focusing on goods and services provided to customers, and the reference to an ability to reduce costs is removed. Moreover, the amendments remove the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs. In addition, the amendments introduce an optional concentration test that permits a simplified assessment of whether or not an acquired set of activities and assets is a business.

2) Amendments to IAS 1 and IAS 8 “Definition of material”

The amendments are intended to make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRSs. The concept of “obscuring” material information with immaterial information has been included as part of the new definition. The threshold for materiality influencing users has been changed from “could influence” to “could reasonably be expected to influence”.

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

c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”	Effective Date Announced by IASB (Note)
	To be determined by IASB January 1, 2022

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

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

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

b. Basis of preparation

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

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

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

Current assets include:

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

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within twelve months after the reporting period; and
3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

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

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

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

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Refer to Note 14, Tables 7 and 8 for the detailed information on subsidiaries (including the percentages of ownership and main businesses).

e. Foreign currencies

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

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

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

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purpose of presenting consolidated financial statements, the functional currencies of the Company and the group entities (including subsidiaries that use currencies which are different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

f. Inventories

Inventories consist of raw materials, work in progress, finished goods and merchandise and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

g. Property, plant and equipment

Property, plant and equipment (including assets held under finance leases) are stated at cost, less recognized accumulated depreciation and accumulated impairment loss.

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

Depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. If the lease term is shorter than the useful lives, assets are depreciated over the lease term. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

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On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

h. Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

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

i. Goodwill

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

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

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

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

j. Intangible assets
1) Intangible assets acquired separately

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

2) Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

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3) Derecognition of intangible assets

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

k. Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

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

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

l. Financial instruments

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

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

1) Financial assets

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

a) Measurement category

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

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i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. Fair value is determined in the manner described in Note 34.

ii. Financial assets at amortized cost

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

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

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, notes receivable, trade receivables, investments in debt instruments, other receivables and other financial assets that measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and
ii) Financial assets that are not credit impaired on purchase or origination but have subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

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

iii. Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

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

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

b) Impairment of financial assets

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

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

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

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

c) Derecognition of financial assets

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

Before 2018, on derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. Starting from 2018, on derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

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

Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

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The repurchase of the Group’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments.

m. Revenue recognition

The Group identifies contracts with customers and recognizes revenue when performance obligations are satisfied.

For contracts where the period between the date on which the Group transfers a promised good to a customer and the date on which the customer pays for that good is one year or less, the Group does not adjust the promised amount of consideration for the effects of a significant financing component.

Revenue from the sale of goods

Revenue from the sale of goods comes from sales of nutritious foods, cooking products, electronic goods and cosmetics. Sales of goods are recognized as revenue when the goods are delivered to the customer’s specific location because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables and contract assets are recognized concurrently. Any amounts previously recognized as contract assets are reclassified to trade receivables when the remaining obligations are performed. When the customer initially purchases the goods, the transaction price received is recognized as a contract liability until the goods have been delivered to the customer.

n. Leases

2019

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

1) The Group as lessor

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

Under finance leases, the lease payments comprise fixed payments, residual value guarantees. The net investment in a lease is measured at (a) the present value of the sum of the lease payments receivable by a lessor and any unguaranteed residual value accrued to the lessor plus (b) initial direct costs and is presented as a finance lease receivable. Finance lease income is allocated to the relevant accounting periods so as to reflect a constant, periodic rate of return on the Group’s net investment outstanding in respect of leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

2) The Group as lessee

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

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Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

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

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and in-substance fixed payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

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

2018

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

1) The Group as lessor

Amounts due from lessees under finance leases are recognized as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

2) The Group as lessee

Assets held under finance leases are initially recognized as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated balance sheets as a finance lease obligation.

Finance expenses implicit in lease payments for each period are recognized immediately in profit or loss, unless they are directly attributable to qualifying assets; in which case, they are capitalized.

Operating lease payments are recognized as expenses on a straight-line basis over the lease term.

o. Borrowing costs

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

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

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

p. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to the grants and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

q. Employee benefits
1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

2) Retirement benefits

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

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

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

3) Termination benefits

A liability for a termination benefit is recognized at the earlier of when the Group can no longer withdraw the offer of the termination benefit and when the Group recognizes any related restructuring costs.

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r. Taxation

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

1) Current tax

According to the Income Tax Law, an additional tax at 10% of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain the earnings.

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

2) Deferred tax

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

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

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

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

3) Current tax and deferred taxes for the year

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions based on historical experience and other factors that are considered to be relevant which related to information that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

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Write-down of Inventory

Net realizable value of inventory is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The estimation of net realizable value was based on current market conditions and the historical experience of selling products of a similar nature. Changes in market conditions may have a material impact on the estimation of net realizable value.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents (investments with original maturities of less than 3 months) Time deposits Repurchase agreements collateralized by bonds		December 31	December 31
		2019 $ 2,940 3,198,093 184,478 320,392 $ 3,705,903	2018 $ 2,757 2,096,223 490,972 - $ 2,589,952

The market rate intervals of cash in bank at the end of the reporting period were as follows:

Bank deposits Repurchase agreements collateralized by bonds	December 31
	2019 2018 0.001%-3.220% 0.001%-3.600% 0.550%-0.560% -

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds Financial assets at FVTPL-non-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Domestic unlisted shares		December 31	December 31
		2019 $ 667,673 $ 7,575	2018 $ 617,790 $ 7,315

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8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Current Investments in equity instruments at FVTOCI Non-current Investments in equity instruments at FVTOCI a. Investments in equity instruments at FVTOCI Current Listed shares and emerging market shares Ordinary shares - Far Eastern International Bank Ordinary shares - Chunghwa Telecom Co., Ltd Ordinary shares - Formosa Plastics Corporation Ordinary shares - China Steel Corporation Ordinary shares - Polytronics Technology Corp. Ordinary shares - Taiwan Semiconductor Manufacturing Co., Ltd. Non-current Listed shares and emerging market shares Ordinary shares - GeneFerm Biotechnology Co., Ltd. Unlisted shares Ordinary shares - Dah Chung Bills Finance Corp. Ordinary shares - InnoComm Mobile Technology Corp. Ordinary shares - AsiaVest Liquidation Co.		December 31	December 31
		2019 2018 $ 186,711 $ 154,439 $ 189,695 $ 167,260 December 31
		2019 $ 16,479 5,346 9,126 19,198 106,772 29,790 $ 186,711 $ 65,640 15,702 107,424 929 $ 189,695	2018 $ 13,434 5,492 9,236 19,479 86,503 20,295 $ 154,439 $ 90,095 12,805 63,360 1,000 $ 167,260

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

In January 2018, the Group sold its shares in Company F in order to manage credit concentration risk. The shares sold had a fair value of $798 thousand and its related unrealized valuation gain of $578 thousand was transferred from other equity to retained earnings.

Dividends of $11,231 thousand and $10,584 thousand were recognized during 2019 and 2018, respectively.

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9. FINANCIAL ASSETS AT AMORTIZED COST - 2019 AND 2018

Current Time deposits with original maturities of more than 3 months		December 31	December 31
		2019 $ 2,206,805	2018 $ 1,505,913

The ranges of interest rates for time deposits with original maturities of more than 3 months were approximately 0.65%-2.85% and 0.79%-3.20% per annum as of December 31, 2019 and 2018, respectively.

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

Notes receivable Operating Trade receivables At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Accrued interest Payments on behalf of others Others		December 31	December 31
		2019 $ 2,977 $ 6,460,483 (20,933) $ 6,439,550 $ 8,912 595 183,576 $ 193,083	2018 $ 2,887 $ 6,169,871 (8,792) $ 6,161,079 $ 6,767 491 214,871 $ 222,129

The average credit period of receivables from sales of goods was 30-90 days. In order to minimize credit risk, the management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date.

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

28 -

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

December 31, 2019

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Not Past Due 0.01% $ 6,340,444 (733) $ 6,339,712	Less than 30 Days 1.68% $ 54,029 (906) $ 53,124	31 to 90 Days 91 to 180 Days Over 180 Days 3.36% 38.44% 61.05% $ 36,932 $ 6,717 $ 25,338 (1,242) (2,582) (15,470) $ 35,689 $ 4,135 $ 9,867	Total $ 6,463,460 (20,933) $ 6,442,527

December 31, 2018

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Not Past Due 0.00% $ 5,637,795 (45) $ 5,637,750	Less than 30 Days 0.10% $ 319,103 (325) $ 318,778	31 to 90 Days 91 to 180 Days Over 180 Days 0.14% 2.37% 100.00% $ 192,296 $ 15,789 $ 7,775 (273) (374) (7,775) $ 192,023 $ 15,415 $ -	Total $ 6,172,758 (8,792) $ 6,163,966

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

Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written off Foreign exchange translation gains and losses Balance at December 31	For the Year Ended December 31 2019 2018 $ 8,792 $ 5,392 12,762 5,251 - (1,733) (621) (118) $ 20,933 $ 8,792	For the Year Ended December 31 2019 2018 $ 8,792 $ 5,392 12,762 5,251 - (1,733) (621) (118) $ 20,933 $ 8,792	For the Year Ended December 31 2019 2018 $ 8,792 $ 5,392 12,762 5,251 - (1,733) (621) (118) $ 20,933 $ 8,792
		2019 $ 8,792 12,762 - (621) $ 20,933	2018 $ 5,392 5,251 (1,733) (118) $ 8,792

11. FINANCE LEASE RECEIVABLES

2019

	December 31,	December 31,
		2019
Undiscounted lease payments
Year 1	$	4,200
Year 2		4,200
Year 3		4,700
Year 4		4,800
Year 5		4,800
Year 6 onwards		13,400
Less: Unearned finance income		(6,377)
Net investment in leases presented as finance lease receivables	$	29,723

29 -

2018

	December 31,	December 31,
		2018
Gross investments in leases
Not later than 1 year	$	4,200
Later than 1 year and not later than 5 years		17,900
Later than 5 years		18,200
		40,300
Less: Unearned finance income		(7,936)
Present value of minimum lease payments	$	32,364
Lease receivables
Not later than 1 year	$	2,640
Later than 1 year and not later than 5 years		13,133
Later than 5 years		16,591
Lease receivables	$	32,364

The Group entered into finance lease arrangements for biological assets with annual fixed lease payments of $350 thousand. All leases were denominated in New Taiwan dollars. The term of finance leases entered into was 10 years.

The interest rates inherent in leases are fixed at the contract dates for the entire term of the lease. The average effective interest rates contracted were approximately 5.01% as of December 31, 2019 and 2018.

As of December 31, 2019, no finance lease receivable was past due. The Group has not recognized a loss allowance for finance lease receivables after taking into consideration the historical default experience and the future prospects of the industries in which the lessees operate, together with the value of collateral held over these finance lease receivables.

12. INVENTORIES

Merchandise Finished goods Work in progress Raw materials Packing materials		December 31	December 31
		2019 $ 578,324 1,544,663 344,702 1,111,234 68,061 $ 3,646,984	2018 $ 589,695 1,679,573 402,693 1,442,850 84,475 $ 4,199,286

The cost of inventories recognized as cost of goods sold for the year ended December 31, 2019 included loss on write-down of inventories of $2,307 thousand and loss on abandoned inventories of $46,508 thousand. The cost of inventories recognized as cost of goods sold for the year ended December 31, 2018 included reversals of inventory write-downs of $4,047 thousand and loss on abandoned inventories of $59,736 thousand.

30 -

13. PREPAYMENTS

Prepayments for purchases Prepayments for rent Prepayments for insurance Excess business tax paid Prepayments for advertisements Others		December 31	December 31
		2019 $ 884,193 6,215 1,139 255,952 13,578 224,149 $ 1,385,226	2018 $ 966,879 8,673 14,632 252,592 241,060 131,836 $ 1,615,672

14. SUBSIDIARIES

Subsidiaries included in consolidated financial statements.

Investor
Investee
Main Business
The Company
Standard Dairy Products Taiwan
Limited (“Standard Dairy
Products”)
Manufacture and sale of dairy
products and beverages
The Company
Charng Hui Ltd. (“Charng Hui”)
Investing
The Company
Domex Technology Corporation
(“Domex Technology”)
Manufacture and sale of
computer peripherals and
computer appliances
The Company
Standard Beverage Company
Limited (“Standard Beverage”)
Manufacture and sale of
beverages
The Company
Accession Limited
Investing
The Company
Standard Investment (“Cayman”)
Limited (“Cayman Standard”)
Investing
The Company
Le Bonta Wellness International
Corporation (“Le Bonta
Wellness”)
Sale of health food
Accession Limited
Shanghai Standard Foods Co.,
Ltd. (“Shanghai Standard”)
Manufacture and sale of edible
oils and nutritious foods
Accession Limited
Shanghai Le Ben De Health
Technology Co., Ltd.
(“Shanghai Le Ben De”)
Technical consultant on health
technology, technical
transfer and technical
service
Accession Limited
Dermalab S.A. (“Dermalab”)
Development and sale of
cosmetics
Dermalab
Swissdema SL (“Swissdema”)
Sale of cosmetics
Cayman Standard
Standard Corporation (Hong
Kong) Limited (“Hong Kong
Standard”)
Investing
Hong Kong Standard
Standard Investment (China) Co.,
Ltd. (“China Standard
Investment”)
Investing and sale of edible
oils and nutritious foods
Hong Kong Standard
Shanghai Le Ming Industrial Co.,
Ltd. (“Shanghai Le Ming”)
Management of properties
Hong Kong Standard
Shanghai Le Ho Industrial Co.,
Ltd. (“Shanghai Le Ho”)
Management of properties
China Standard
Investment
Standard Foods (China) Co., Ltd.
(“China Standard Foods”)
Manufacture and sale of edible
oils and nutritious foods
China Standard
Investment
Shanghai Dermalab Corporation
(“Shanghai Dermalab”)
Sale of nutritional foods,
cosmetic and engage in
import and export business
The Company and
China Standard
Investment
Shanghai Le Ben Tuo Health
Technology Co., Ltd.
(“Shanghai Le Ben Tuo”)
Sale of nutritional foods and
engage in import and export
business
China Standard
Investment
Standard Foods (Xiamen) Co.,
Ltd. (“Xiamen Standard")
Manufacture and sale of edible
oils and nutritious foods

Proportion of Ownership
December 31
2019
2018
Remark
100.0
100.0
-
100.0
100.0
-
52.0
52.0
-
100.0
100.0
-
100.0
100.0
-
100.0
100.0
In September 2018, the Company
invested RMB437 thousand in
Cayman Standard.
100.0
100.0
-
100.0
100.0
-
100.0
100.0
-
100.0
100.0
In May 2018, Accession Limited bought
20% equity from non-controlling
interests, and the Company’s
percentage of shareholding increased
from 80% to 100%, refer to Note 31.
100.0
100.0
-
100.0
100.0
In September 2018, Cayman Standard
invested RMB259 thousand in Hong
Kong Standard.
99.0
99.0
-
100.0
100.0
-
100.0
100.0
-
100.0
100.0
-
100.0
100.0
-
100.0
100.0
-
100.0
100.0
-

31 -

15. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2018 Additions Disposals Reclassified Effects of foreign currency exchange differences Balance at December 31, 2018 Accumulated depreciation and impairment Balance at January 1, 2018 Disposals Depreciation expenses Impairment losses recognized Effects of foreign currency exchange differences Balance at December 31, 2018 Carrying amount at December 31, 2018 Cost Balance at January 1, 2019 Adjustments on initial application of IFRS 16 Balance at January 1, 2019 (restated) Additions Disposals Reclassified Transfers to investment properties Effects of foreign currency exchange differences Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Adjustments on initial application of IFRS 16 Balance at January 1, 2019 (restated) Disposals Depreciation expenses Transfers to investment properties Effects of foreign currency exchange differences Balance at December 31, 2019 Carrying amount at December 31, 2019	Freehold Land $ 702,405 - - - - $ 702,405 $ - - - - - $ - $ 702,405 $ 702,405 - 702,405 - - - - - $ 702,405 $ - - - - - - - $ - $ 702,405	Buildings $ 3,378,166 - (40,088 ) 149,726 (40,616) $ 3,447,188 $ 1,126,492 (39,513 ) 148,160 7,288 (8,185) $ 1,234,242 $ 2,212,946 $ 3,447,188 - 3,447,188 - (49,378 ) 871,706 (129,033 ) (62,333) $ 4,078,150 $ 1,234,242 - 1,234,242 (35,189 ) 169,112 (115,644 ) 17,158 $ 1,269,679 $ 2,808,471	Equipment $ 4,017,731 1,657 (99,012 ) 320,982 (88,150) $ 4,153,208 $ 2,562,300 (80,695 ) 267,506 10,747 (11,178) $ 2,748,680 $ 1,404,528 $ 4,153,208 - 4,153,208 846 (315,990 ) 279,875 - (48,741) $ 4,069,198 $ 2,748,680 - 2,748,680 (277,760 ) 279,868 - (20,571) $ 2,730,217 $ 1,338,981	Other Equipment $ 555,165 1,738 15,617 38,504 (366) $ 610,658 $ 400,639 18,882 55,387 - (2,895) $ 472,013 $ 138,645 $ 610,658 (9,752) 600,906 2,429 (53,531 ) 124,342 - (112,208) $ 561,938 $ 472,013 (3,863) 468,150 (48,675 ) 46,359 - (40,463) $ 425,371 $ 136,567	Property in Construction $ 1,112,048 382,849 - (523,543 ) 48,360 $ 1,019,714 $ - - - - - $ - $ 1,019,714 $ 1,019,714 - 1,019,714 402,529 (166 ) (1,275,904 ) (7,285) $ 138,888 $ - - - - - - - $ - $ 138,888	Total $ 9,765,515 386,244 (123,483 ) (14,331 ) (80,772) $ 9,933,173 $ 4,089,431 (101,326 ) 471,053 18,035 (22,258) $ 4,454,935 $ 5,478,238 $ 9,933,173 (9,752) 9,923,421 405,804 (419,065 ) 19 (129,033 ) (230,567) $ 9,550,579 $ 4,454,935 (3,863) 4,451,072 (361,624 ) 495,339 (115,644 ) (43,876) $ 4,425,267 $ 5,125,312

No impairment assessment was performed for the year ended December 31, 2019 as there was no indication of impairment.

The above items of property, plant and equipment are depreciated on a straight-line basis over the following estimated useful lives of the assets:

Building Main buildings 20-51 years Electrical and mechanical equipment 8-20 years Engineering 3-39 years Others 3-20 years Equipment Main equipment 2-20 years Engineering 3-20 years Others 3-15 years Other equipment 2-15 years

Refer to Note 36 for the carrying amount of property, plant and equipment pledged by the Group to secure borrowings granted to the Group.

32 -

16. LEASE ARRANGEMENTS

a. Right-of-use assets - 2019

	December 31,	December 31,
		2019
Carrying amounts
Land	$	404,964
Buildings		286,147
Office equipment		390
Transportation equipment		8,178
	$	699,679
	For the Year
		Ended
	December 31,
		2019
Additions to right-of-use assets	$	176,972
Depreciation charge for right-of-use assets
Land	$	12,381
Buildings		61,539
Office equipment		29
Transportation equipment		2,975
	$	76,924
Lease liabilities - 2019
	December 31,
		2019
Carrying amounts
Current	$	83,119
Non-current	$	264,496
Range of discount rate for lease liabilities was as follows:
	December 31,
		2019
Land	1.07%-1.49%
Buildings	1.07%-4.35%
Office equipment		1.07%
Transportation equipment	1.07%-12.04%

b. Lease liabilities - 2019
33 -
c. Material lease-in activities and terms

The Group also leases land, buildings and transportation equipment for the use of plants, offices and business cars with lease terms of 1 to 50 years. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

d. Other lease information

Lease arrangements under operating leases for leasing out the investment properties are set out in Note 17. Lease arrangements for leasing out the assets under finance leases are set out in Note 11.

2019

	For the Year	For the Year
		Ended
	December 31,
		2019
Expenses relating to short-term leases	$	96,334
Expenses relating to low-value asset leases	$	881
Expenses relating to variable lease payments not included in the
measurement of lease liabilities	$	-
Total cash outflow for leases	$	(178,717)

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

2018

The future minimum lease payments of non-cancellable operating lease commitments are as follows:

	December 31,	December 31,
		2018
Not later than 1 year	$	55,887
Later than 1 year and not later than 5 years		99,744
	$	155,631

The lease payments and sublease payments recognized in profit or loss were as follows:

	For the Year
	Ended
	December 31,
	2018
Minimum lease payments	$ 131,944

34 -

17. INVESTMENT PROPERTIES

Completed
Investment
Properties
Right-of-use
Assets
Cost
Balance at January 1, 2018
$ 298,579
$ -

Disposals
(141,270)

-

Balance at December 31, 2018
$ 157,309
$ -

Accumulated depreciation and impairment
Balance at January 1, 2018
$ 59,330
$ -

Depreciation expenses
2,320
-
Disposals

(15,117)

-

Balance at December 31, 2018
$ 46,533
$ -

Carrying amount at December 31, 2018
$ 110,776
$ -

Cost
Balance at January 1, 2019
$ 157,309
$ -

Transfers from right-of-use assets
-
5,898
Transfers from property, plant and equipment
129,033
-
Disposals
(41,592)
-
Effects of foreign currency exchange differences
(3,039)

(350)

Balance at December 31, 2019
$ 241,711
$ 5,548

Accumulated depreciation and impairment
Balance at January 1, 2019
$ 46,533
$ -

Depreciation expenses
2,310
225
Disposals
(37,324)
-
Transfers from right-of-use assets
-
123
Transfers from property, plant and equipment
115,644
-
Effects of foreign currency exchange differences
(2,729)

(15)

Balance at December 31, 2019
$ 124,434
$ 333

Carrying amount at December 31, 2019
$ 117,277
$ 5,215

Total
$ 298,579
(141,270)
$ 157,309
$ 59,330
2,320
(15,117)
$ 46,533
$ 110,776
$ 157,309
5,898
129,033
(41,592)
(3,389)
$ 247,259
$ 46,533
2,535
(37,324)
123
115,644
(2,744)
$ 124,767
$ 122,492

The investment properties held by the Group are depreciated using the straight-line method over the following estimated useful lives:

Building Main buildings 35-51 years Electrical and mechanical equipment 24-25 years Engineering 28 years Right-of-use assets 49 years Others 24 years

35 -

The maturity analysis of lease payments receivable under operating leases of investment properties as of December 31, 2019 was as follows:

		December 31,
		2019
Year	1	$ 29,280
Year	2	15,769
		$ 45,049

The future minimum lease payments of non-cancellable operating lease commitments as of December 31, 2018 are as follows:

	December 31,
	2018
Not later than 1 year	$ 18,986
Later than 1 year and not later than 5 years	18,943
	$ 37,929
The investment properties held by the Group are depreciated using the straight-line method over the
following estimated useful lives:
Building
Main buildings	35-51 years
Electrical and mechanical equipment	24-25 years
Engineering	28 years
Right-of-use assets	49 years
Others	24 years

The investment properties held by the Group are depreciated using the straight-line method over the following estimated useful lives:

The fair values of the investment properties were $212,653 thousand and $214,323 thousand as of December 31, 2019 and 2018, respectively. The management of the Group determined the fair value with reference to market transaction prices of similar properties.

On May 8, 2018, the Company entered into a property sale agreement with Pei Chen Co., Ltd. for a property located in Wugu District, New Taipei City. The selling price was $508,620 thousand (which included business tax), and the gain on disposal of property was $369,427 thousand (which was included in the statements of comprehensive income under other gains and losses). The transaction was accomplished at the third quarter of September 2018.

All of the Group’s investment properties are held under freehold interests. The carrying amounts of investment properties pledged by the Group to secure borrowings granted to the Group are disclosed in Note 36.

36 -

18. OTHER INTANGIBLE ASSETS

Trademark Cost Balance at January 1, 2018 $ 91,195 Additions - Effects of foreign currency exchange differences 115,844 Balance at December 31, 2018 $ 207,039 Accumulated amortization and impairment Balance at January 1, 2018 $ 17,531 Amortization expenses 5,048 Effects of foreign currency exchange differences 114,690 Balance at December 31, 2018 $ 137,269 Carrying amount at December 31, 2018 $ 69,770 Cost Balance at January 1, 2019 $ 207,039 Additions - Transfers from prepayments 34 Effects of foreign currency exchange differences 20,187 Balance at December 31, 2019 $ 227,260 Accumulated amortization and impairment Balance at January 1, 2019 $ 137,269 Amortization expenses 5,081 Effects of foreign currency exchange differences 21,092 Balance at December 31, 2019 $ 163,442 Carrying amount at December 31, 2019 $ 63,818	Computer Software $ 228,195 5,572 (498) $ 233,269 $ 224,610 6,684 (487) $ 230,807 $ 2,462 $ 233,269 7,564 - (1,120) $ 239,713 $ 230,807 6,551 (1,096) $ 236,262 $ 3,451	Total $ 319,390 5,572 115,346 $ 440,308 $ 242,141 11,732 114,203 $ 368,076 $ 72,232 $ 440,308 7,564 34 19,067 $ 466,973 $ 368,076 11,632 19,996 $ 399,704 $ 67,269

The above items of other intangible assets are amortized on a straight-line basis over the following estimated lives:

Trademark 10-20 years Computer software 2-3 years

19. LONG-TERM PREPAYMENTS FOR LEASES

The long-term prepayments for leases are land use rights located in mainland China. As of December 31, 2018, long-term prepayments for leases amounted to $381,081 thousand.

37 -

20. OTHER ASSETS

Current Pledge time deposits (Note 36) Advances to officers Temporary payments Others Non-current Prepayments for equipment Refundable deposits Pledge time deposits (Note 36) Others		December 31	December 31
		2019 $ 4,013 15,570 9,683 118 $ 29,384 $ 6,984 53,615 85,950 114,426 $ 260,975	2018 $ 1,010 20,901 - - $ 21,911 $ 31,565 41,720 89,506 77,064 $ 239,855

21. BORROWINGS

a. Short-term borrowings

Secured borrowings (Note 36) Bank loans Unsecured borrowings Bank loans		December 31	December 31
		2019 $ 150,000 1,232,955 $ 1,382,955	2018 $ 90,000 1,641,478 $ 1,731,478

The range of interest rates on bank loans was 1.05%-4.35% and 1.05%-4.35% per annum as of December 31, 2019 and 2018, respectively.

b. Short-term bills payable

Commercial paper Less: Unamortized discount on bills payable		December 31	December 31
		2019 $ 100,000 (32) $ 99,968	2018 $ 120,000 (96) $ 119,904

38 -

Outstanding short-term bills payable were as follows:

December 31, 2019

Financial Institutions Commercial paper Mega Bills Finance Co., Ltd. International Bills Finance Corp. December 31, 2018 Financial Institutions Commercial paper Mega Bills Finance Co., Ltd. International Bills Finance Corp. Taiwan Bills Finance Corp.	Nominal Amount $ 50,000 50,000 $ 100,000 Nominal Amount $ 50,000 50,000 20,000 $ 120,000	Discount Amount $ (3) (29) $ (32) Discount Amount $ (13) (63) (20) $ (96)	Carrying Amount Interest Rate Collateral $ 49,997 1.36% - 49,971 1.34% - $ 99,968 Carrying Amount Interest Rate Collateral $ 49,987 1.34% - 49,937 1.34% - 19,980 1.34% - $ 119,904	Carrying Amount of Collateral $ - - $ - Carrying Amount of Collateral $ - - - $ -

c. Long-term borrowings

Secured borrowings (Note 36) Bank loans* Less: Current portions Long-term borrowings		December	31
		2019 $ 6,000 (6,000) $ -	2018 $ 27,000 (12,000) $ 15,000

As of December 31, 2019, the interest rate of the bank borrowings secured by the Group’s equipment (see Note 36) was 1.91% per annum. The bank borrowings will be repayable quarterly from March 2018 to March 2021.
39 -

22. NOTES PAYABLE AND TRADE PAYABLES

Notes payable Operating Trade payables Operating		December 31	December 31
		2019 $ 316,444 $ 2,014,619	2018 $ 131,916 $ 2,162,745

The average credit period of payables for purchases of goods was 30-90 days. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

23. OTHER LIABILITIES

Current Other payables Payable for salaries or bonuses Payable for compensation of employees Payable for remuneration to directors Payable for commission and rebates Advertisement payable Payable for royalties Payable for freight Payable for equipment Others Other liabilities Advance receipts from customers Refund liability Others Non-current Other liabilities Guarantee deposits Others		December 31	December 31
		2019 $ 306,728 52,013 25,073 963,712 199,232 25,668 100,658 113,698 1,063,892 $ 2,850,674 $ 1,337 13,055 14,109 $ 28,501 $ 20,044 2,934 $ 22,978	2018 $ 282,514 31,723 20,960 840,152 285,122 23,806 101,140 158,266 866,203 $ 2,609,886 $ 1,147 15,231 17,938 $ 34,316 $ 19,961 4,734 $ 24,695

40 -

24. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company and domestic subsidiaries of the Group adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages. The foreign subsidiaries also make contributions to defined contribution plan in accordance with the local regulations.

b. Defined benefit plans

The defined benefit plan of the Company and domestic subsidiaries of the Group are operated by the government of the Republic of China (“ROC”) in accordance with the Labor Standards Law. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company and domestic subsidiaries of the Group make monthly contributions to their respective pension funds administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy.

Dermalab of the Group also adopted a defined benefit plan.

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

December 31 2019 2018 Present value of funded defined benefit obligation $ 719,306 $ 700,665 Fair value of plan assets (421,021) (437,458) Net defined benefit liabilities $ 298,285 $ 263,207 Movements in net defined benefit liabilities (assets) were as follows: Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Net Defined Benefit Liabilities (Assets) Balance at January 1, 2018 $ 705,155 $ (334,366) $ 370,789 Service cost Current service cost 10,904 - 10,904 Past service cost and loss on settlements 1,305 - 1,305 Net interest expense (income) 7,901 (3,789) 4,112 Recognized in profit or loss 20,110 (3,789) 16,321 Remeasurement Return on plan assets (excluding amounts included in net interest) - (6,758) (6,758) (Continued)		December 31

41 -

	Present Value	Present Value			Net Defined	Net Defined
	of the Defined					Benefit
		Benefit	Fair Value of		Liabilities
	Obligation		the	Plan Assets		(Assets)
Actuarial loss - changes in demographic
assumptions	$	4,531	$	-	$	4,531
Actuarial gain - changes in financial
assumptions		(1,022)		-		(1,022)
Actuarial loss - experience adjustments		9,586		-		9,586
Recognized in other comprehensive income		13,095		(6,758)		6,337
Contributions from the employer		-		(130,576)		(130,576)
Contributions from plan participants		2,475		(2,475)		-
Benefits paid		(41,468)		41,468		-
Exchange differences		1,298		(962)		336
Balance at December 31, 2018		700,665		(437,458)		263,207
Service cost
Current service cost		9,845		-		9,845
Net interest expense (income)		7,701		(4,918)		2,783
Recognized in profit or loss		17,546		(4,918)		12,628
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-		(14,227)		(14,227)
Actuarial loss - changes in demographic
assumptions		4,877		-		4,877
Actuarial gain - changes in financial
assumptions		30,164		-		30,164
Actuarial loss - experience adjustments		15,853		-		15,853
Recognized in other comprehensive income		50,894		(14,227)		36,667
Contributions from the employer		-		(14,102)		(14,102)
Contributions from plan participants		2,279		(2,279)		-
Benefits paid		(41,409)		41,409		-
Exchange differences		(479)		364		(115)
Others		(10,190)		10,190		-
Balance at December 31, 2019	$	719,306	$	(421,021)	$	298,285
						(Concluded)

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

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

Discount rates Expected rates of salary increase	December 31
	2019 2018 0.300%-0.800% 0.875%-1.250% 0.500%-3.000% 0.500%-3.000%

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

Discount rates 0.250% increase 0.250% decrease Expected rates of salary increase 0.250% increase 0.250% decrease		December	31
		2019 $ (21,945) $ 22,800 $ 20,102 $ (19,758)	2018 $ (21,406) $ 22,249 $ 19,815 $ (19,341)

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

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December	31
	2019 2018 $ 22,248 $ 33,078 19-16.5 years 2.8-15.1 years

25. EQUITY

a. Share capital
1) Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2019 920,000 $ 9,200,000 915,089 $ 9,150,897	2018 920,000 $ 9,200,000 915,089 $ 9,150,897

2) Global depositary receipts

As of December 31, 2019, a total of 6,908.4 units of Global Depositary Receipts (GDRs) (representing 34,542 shares of the Company’s ordinary shares), where each GDR representing five shares of the Company’s ordinary shares, were traded on the Euro MTF Market of the Luxembourg Stock Exchange. Holders of the GDRs may request at any time that the shares represented by the GDRs be transferred to them.

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b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Recognized from the difference between consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition May be used to offset a deficit Changes in percentage of ownership interests in subsidiaries (2) Recognized from treasury share transactions		December 31	December 31
		2019 $ 1 466 109,251 $ 109,718	2018 $ 1 466 92,578 $ 93,045

1) Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and to once a year).
2) Such capital surplus arises from the effect of changes in ownership interests in subsidiaries that result from equity transactions other than actual disposals or acquisitions, or from changes in capital surplus of subsidiaries accounted for using the equity method.
c. Retained earnings and dividend policy

Under the dividend policy as set forth in the amended Articles, where the Company made profit in a fiscal year, the profit shall be appropriated from (less any paying taxes and deficit):

1) 10% thereof as legal reserve;
2) Special reserve provided or reversed in accordance with the regulations;
3) 30% to 100% of this the sum of the remainder and prior years’ unappropriated earnings as dividends.

The Company’s Articles of Incorporation also prescribe that 30% to 100%of dividends shall be paid in cash; however, if the Company has major investment plans for which external funds are not available, the percentage may be lowered to 5% to 20%. The distribution plan shall be proposed by the Company’s board of directors and resolved in the shareholders’ meeting for distribution of dividends and bonus to shareholders. For the policies on distribution of the compensation of employees and remuneration of directors after amendment, refer to Note 27(h) “employees’ compensation and remuneration of directors”.

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

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Items referred to under Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company.

Except for non-ROC resident shareholders, all shareholders receiving the dividends are allowed a tax credit equal to their proportionate share of the income tax paid by the Company.

The appropriations of earnings 2018 and 2017 approved in the shareholders’ meetings on June 13, 2019 and June 15, 2018, respectively, were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings
	For the Year Ended December 31
	2018 2017 $ 294,909 $ 217,304 70,519 178,629 2,287,724 1,830,179 2.5 2.0

The appropriations of earnings for 2019 had been proposed by the Company’s board of directors on March 18, 2020. The appropriations and dividends per share were as follows:

	Appropriation	Appropriation	Dividends Per	Dividends Per
	of	Earnings	Share	(NT$)
Legal reserve	$	341,610
Special reserve		246,549
Cash dividends		2,424,987	$	2.65

The appropriations of earnings for 2019 are subject to the resolution of the shareholders in their meeting to be held on June 16, 2020.

d. Special reserve

Beginning at January 1 Appropriation in respect of: Debit to other equity items Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2019 $ 260,426 70,519 $ 330,945	2018 $ 81,797 178,629 $ 260,426

Appropriation for special reserve should be made in the amount equal to the net debit balance of other equity. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and, thereafter, distributed.

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e. Other equity items

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

For the Year Ended December 31 2019 2018 Balance at January 1 $ (412,869) $ (307,846) Effect of change in tax rate - 11,127 Recognized for the year Exchange differences on translating the financial statements of foreign operations (280,169) (117,413) Other comprehensive income recognized for the year (280,169) (106,286) Acquisition of further interests in subsidiaries - 1,263 Balance at December 31 $ (693,038) $ (412,869) 2) Unrealized gain (loss) on financial assets at FVTOCI For the Year Ended December 31 2019 2018 Balance at January 1 $ 81,924 $ 116,974 Recognized for the year Unrealized gain (loss) - equity instruments 33,620 (34,736) Other comprehensive income recognized for the year 33,620 (34,736) Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal - (314) Balance at December 31 $ 115,544 $ 81,924 3) Other equity items - other (recognized from put option of equity instruments from disposal of subsidiaries) For the Year Ended December 31 2019 2018 Balance at January 1 $ - $ (46,970) Exercised the put option of equity instruments from disposal of subsidiaries - 46,970 Balance at December 31 $ - $ - f. Non-controlling interests For the Year Ended December 31 2019 2018 Balance at January 1 $ 233,399 $ 257,157 Share in profit for the year 38,739 19,218 Other comprehensive income (loss) during the year Effect of change in tax rate - 89 Exchange difference on translating the financial statements of foreign operations (1,788) (728) Unrealized gain (loss) on financial assets at FVTOCI 21,147 (1,641) (Continued)	For the Year Ended	December 31
	2019 $ (412,869) - (280,169) (280,169) - $ (693,038) For the Year Ended	2018 $ (307,846) 11,127 (117,413) (106,286) 1,263 $ (412,869) December 31
	2019 2018 $ - $ (46,970) - 46,970 $ - $ - For the Year Ended December 31
	2019 2018 $ 233,399 $ 257,157 38,739 19,218 - 89 (1,788) (728) 21,147 (1,641) (Continued)

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Remeasurement on defined benefit plans Related income tax Acquisition of non-controlling interests in subsidiaries Cash dividends distributed by subsidiaries to non-controlling interests Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2019 $ (2,129) 426 - (17,230) $ 272,564	2018 $ (609) 122 (11,491) (28,718) $ 233,399 (Concluded)

g. Treasury shares

	Shares Held by
	Subsidiaries (In
	Thousands of
Purpose of Buy-back	Shares)
Number of shares at January 1, 2019	6,669
Number of shares at December 31, 2019	6,669
Number of shares at January 1, 2018	6,669
Number of shares at December 31, 2018	6,669

For the purpose of maintaining the Company’s credit and shareholders’ equity, the Company’s shares held by its subsidiaries at the end of the reporting periods were as follows:

Name of Subsidiary Number of Shares Held (In Thousands of Shares) December 31, 2019 Chang Hui 6,669 December 31, 2018 Chang Hui 6,669	Carrying Amount Market Price $ 21,182 $ 464,195 $ 21,182 $ 331,473

The Company’s shares held by subsidiaries were treated as treasury shares, aside from the rights to participate in any share issuance for cash and to vote, the rest were similar to general shareholder’s rights.

26. REVENUE

Revenue from contracts with customers Revenue from sale of goods	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ 31,266,232	2018 $ 27,340,587

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a. Contract balances

Notes receivable (Note 10) Trade receivables (Note 10) Contract liabilities - current Sale of goods Disaggregation of revenue For the year ended December 31, 2019 Types of goods or services Sale of goods For the year ended December 31, 2018 Types of goods or services Sale of goods		December 31, 2019 December 31, 2018 January 1, 2018 $ 2,977 $ 2,887 $ 4,846 $ 6,439,550 $ 6,161,079 $ 5,079,140 $ 326,644 $ 360,115 $ 210,540 Reportable Segments Nutritious Foods Cooking Products Others Total $ 11,984,151 $ 15,551,432 $ 3,730,649 $ 31,266,232 $ 10,929,907 $ 13,817,285 $ 2,593,395 $ 27,340,587	December 31, 2019 December 31, 2018 January 1, 2018 $ 2,977 $ 2,887 $ 4,846 $ 6,439,550 $ 6,161,079 $ 5,079,140 $ 326,644 $ 360,115 $ 210,540 Reportable Segments Nutritious Foods Cooking Products Others Total $ 11,984,151 $ 15,551,432 $ 3,730,649 $ 31,266,232 $ 10,929,907 $ 13,817,285 $ 2,593,395 $ 27,340,587
		Nutritious Foods $ 11,984,151 $ 10,929,907	Cooking Products $ 15,551,432 $ 13,817,285

b. Disaggregation of revenue

27. NET PROFIT

Net profit includes: a. Other income Rental income Operating lease rental income Investment properties Others Interest income Bank deposits Financial assets at amortized cost Repurchase agreements collateralized by bonds Others Dividends Investments in equity instruments at FVTOCI	For the Year Ended	For the Year Ended	December 31
		2019 $ 23,824 863 24,687 51,405 21,459 569 1,386 74,819 11,231 $ 110,737	2018 $ 20,878 578 21,456 29,541 8,701 150 1,525 39,917 10,584 $ 71,957

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b. Other gains and losses

For the Year Ended	For the Year Ended	December 31
2019 $ 7,812 - (26,043) (41,828) - - 65,423 55,439 $ 60,803 For the Year Ended		2018 $ 13,031 9,308 10,478 (8,243) 369,427 (18,035) 107,359 51,859 $ 535,184 December 31
2019 $ 37,982 1,060 - 7,788 49 $ 46,879 For the Year Ended		2018 $ 79,564 96 718 - 367 $ 80,745 December 31
2019 $ 12,762 $ 2,307 $ - For the Year Ended		2018 $ 5,251 $ (4,047) $ 18,035 December 31
	2019 $ 399,640 172,623 2,535 $ 574,798 $ 20,977 33,260 $ 54,237	2018 $ 381,355 89,698 2,320 $ 473,373 $ 23,794 29,734 $ 53,528

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f. Operating expenses directly related to investment properties

Direct operating expenses of investment properties that generated rental income Direct operating expenses of investment properties that did not generated rental income	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ 702 572 $ 1,274	2018 $ 751 581 $ 1,332

g. Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans (see Note 24) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ 127,502 12,628 140,130 2,338,177 $ 2,478,307 $ 846,191 1,632,116 $ 2,478,307	2018 $ 124,208 16,321 140,529 2,126,065 $ 2,266,594 $ 828,990 1,437,604 $ 2,266,594

h. Employees’ compensation and remuneration of directors

The Company accrued compensation of employees and remuneration of directors at the rates of no less than 0.5% and no higher than 0.75%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and remuneration of directors for the years ended December 31, 2019 and 2018, which were approved by the Company’s board of directors on March 18, 2020 and March 22, 2019, respectively, were as follows:

Accrual rate

Compensation of employees Remuneration of directors Amount	For the Year Ended December 31
	2019 2018 1.22% 0.90% 0.59% 0.59%

Compensation of employees Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2019 Cash $ 52,013 25,073	2018
		Cash $ 31,723 20,960

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

There was no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2018 and 2017.

Information on the compensation of employees and remuneration of directors resolved by the Company’s board of directors in 2020 and 2019 is available on the Market Observation Post System website of the Taiwan Stock Exchange.

i. Gain or loss on foreign currency exchange

Foreign exchange gains Foreign exchange losses Net gains (losses)	For the Year Ended	For the Year Ended	December 31
		2019 $ 75,308 (101,351) $ (26,043)	2018 $ 76,847 (66,369) $ 10,478

28. INCOME TAXES

a. Major components of tax expense recognized in profit or loss

Current tax In respect of the current year Land value increment tax Income tax on unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year Effect of tax rate changes Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ 1,057,020 - 12,941 (37,010) 1,032,951 60,747 - 60,747 $ 1,093,698	2018 $ 639,471 27,947 - (14,407) 653,011 77,051 (22,137) 54,914 $ 707,925

A reconciliation of accounting profit and income tax expenses is as follows:

Profit before tax Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Tax-exempt income Unrecognized deductible temporary differences and loss carryforwards	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ 4,548,534 $ 1,193,055 24,491 (118,486) 52,053	2018 $ 3,676,232 $ 887,299 23,150 (174,944) 2,459 (Continued)

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Investment credits Income tax on unappropriated earnings Land value increment tax Effect of tax rate changes Adjustments for prior years’ tax Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ (33,346) 12,941 - - (37,010) $ 1,093,698	2018 $ (21,442) - 27,947 (22,137) (14,407) $ 707,925 (Concluded)

The Income Tax Act in the ROC was amended in 2018, and the corporate income tax rate was adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings was reduced from 10% to 5%. The applicable tax rate used by subsidiaries in China is 25%. Tax rates used by other group entities operating in other jurisdictions are based on the tax laws in those jurisdictions.

b. Income tax recognized in other comprehensive income

Deferred tax Effect of tax rate changes In respect of the current year Exchange differences on translating the financial statements of foreign operations Fair value changes of financial assets at FVTOCI Remeasurement of defined benefit plans Total income tax recognized in other comprehensive income	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ - (70,042) (3) (7,668) $ (77,713)	2018 $ (21,055) (29,037) (83) (1,049) $ (51,224)

c. Current tax assets and liabilities

Current tax assets Tax refund receivable Current tax liabilities Income tax payable		December 31	December 31
		2019 $ 46,114 $ 547,018	2018 $ 13,349 $ 337,835

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d. Deferred tax assets and liabilities

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

For the year ended December 31, 2019

Deferred tax assets Temporary differences Investments accounted for using the equity method Exchange differences on translating the financial statements of foreign operations Defined benefit plans Advertisement payable Deferred sales returns and allowances Allowance for inventory loss Financial assets measured at cost Others Loss carryforwards Deferred tax liabilities Temporary differences Investments accounted for using the equity method Reserve for land value increment tax Defined benefit plans Others	Opening Balance R $ 91,100 103,216 76,490 54,776 6,767 10,071 43,886 14,345 400,651 95 $ 400,746 $ 100,460 33,685 740 1,238 $ 136,123	Effect of Tax ate Changes Recognized in Profit or Loss Recognized in Other Comprehensive Income $ - $ (9,014 ) $ - - - 70,042 - 237 7,410 - - - - 2,007 - - (11 ) - - - 3 - 4,279 - - (2,502 ) 77,455 - (95) - $ - $ (2,597) $ 77,455 $ - $ 131,725 $ - - - - - 1,781 (258 ) - (560) - $ - $ 132,946 $ (258)	Exchange Differences Closing Balance $ - $ 82,086 - 173,258 (19 ) 84,118 (2,176 ) 52,600 - 8,774 - 10,060 - 43,889 (11) 18,613 (2,206 ) 473,398 - - $ (2,206) $ 473,398 $ - $ 232,185 - 33,685 - 2,263 2 680 $ 2 $ 268,813

For the year ended December 31, 2018

Deferred tax assets Temporary differences Investments accounted for using the equity method Exchange differences on translating the financial statements of foreign operations Defined benefit plans Advertisement payable Deferred sales returns and allowances Allowance for inventory loss Financial assets measured at cost Others Loss carryforwards Deferred tax liabilities Temporary differences Investments accounted for using the equity method Reserve for land value increment tax Defined benefit plans Others	Opening Balance R $ 92,479 63,052 63,789 55,745 19,129 7,326 41,930 18,652 362,102 81 $ 362,183 $ 53,736 33,685 332 5,226 $ 92,979	Effect of Tax ate Changes Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 16,330 $ (17,709 ) $ - 11,127 - 29,037 10,855 551 1,229 - - - 3,376 (15,738 ) - 1,332 1,413 - 7,400 (5,527 ) 83 3,010 (7,342) - 53,430 (44,352 ) 30,349 14 - - $ 53,444 $ (44,352) $ 30,349 $ 9,483 $ 37,241 $ - - - - 228 - 180 541 (4,542) - $ 10,252 $ 32,699 $ 180	Exchange Differences Closing Balance $ - $ 91,100 - 103,216 66 76,490 (969 ) 54,776 - 6,767 - 10,071 - 43,886 25 14,345 (878 ) 400,651 - 95 $ (878) $ 400,746 $ - $ 100,460 - 33,685 - 740 13 1,238 $ 13 $ 136,123

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

Loss carryforwards Expiry in 2019 Expiry in 2020 Expiry in 2021 Expiry in 2022 Expiry in 2023 Expiry in 2024 Deductible temporary differences		December 31	December 31
		2019 $ - 10,400 24,285 41,636 68,909 227,559 $ 372,789 $ 23,720	2018 $ 580 11,268 25,402 41,636 69,645 - $ 148,531 $ 50,272

f. Income tax assessments

The income tax returns of Domex Technology for the year ended December 31, 2016 had been assessed by the tax authorities.

The income tax returns of the Company, Standard Dairy Products, Charng Hui, Standard Beverage and Le Bonta Wellness for the year ended December 31, 2017 had been assessed by the tax authorities.

29. EARNINGS PER SHARE

Basic earnings per share Diluted earnings per share	For	Unit: NT$ Per Share the Year Ended December 31	Unit: NT$ Per Share the Year Ended December 31
		2019 $ 3.76 $ 3.76	2018 $ 3.25 $ 3.24

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Net Profit for the Year

Earnings used in the computation of basic earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ 3,416,097	2018 $ 2,949,089

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Weighted average number of ordinary shares outstanding (in thousands of shares):

Weighted average number of ordinary shares used in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 908,420 709 909,129	2018 908,420 742 909,162

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

30. GOVERNMENT GRANTS

The Group received government grants, and recognized $65,423 thousand and $107,359 thousand as other gains during 2019 and 2018, respectively.

31. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

On May 18, 2018, the Group subscribed for shares of non-controlling interests at a percentage of 20%, which increased its continuing interest from 80% to 100%.

The above transactions were accounted for as equity transactions, since the Group did not cease to have control over these subsidiaries.

	Dermalab
Cash consideration received	$ (59,682)
The transfer of capital premium’s stock warrants	48,512
The equity instrument’s put option of the financial liability of the subsidiary transferred
to non-controlling interests	3,418
The proportionate share of the carrying amount of the net assets of the subsidiary
transferred to non-controlling interests	11,491
Reattribution of other equity from non-controlling interests
Exchange differences on translating the financial statements of foreign operation
(Note 25)	(1,263)
Others	(46,970)
Differences recognized from equity transactions	$ (44,494)
Line items adjusted for equity transactions
Capital surplus - changes in percentage of ownership interests in subsidiaries	$ (44,494)

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32. CASH FLOWS INFORMATION

Changes in liabilities arising from financing activities:

For the year ended December 31, 2019

Short-term borrowings Short-term bills payable Long-term borrowings Lease liabilities Guarantee deposits received Other non-current liabilities For the year ended December 31, 2018	Opening Balance $ 1,731,478 119,904 27,000 139,110 19,961 4,734 $ 2,042,187 Opening Balance $ 2,312,473 99,953 39,000 2,833 48,769 5,305 $ 2,508,333	Cash Flows $ (301,316) (19,936) (21,000) (73,714) 705 (1,757) $ (417,018) Cash Flows $ (555,347) 19,951 (12,000) 4,067 (28,458) (687) $ (572,474)		Non-cash Changes Exchanging Rate Adjustments $ (47,207) - - 282,219 (622) (43) $ 234,347 Non-cash Changes Exchanging Rate Adjustments $ (25,648) - - 46 (350) 116 $ (25,836)	Closing Balance $ 1,382,955 99,968 6,000 347,615 20,044 2,934 $ 1,859,516 Closing Balance $ 1,731,478 119,904 27,000 6,946 19,961 4,734 $ 1,910,023

Short-term borrowings Short-term bills payable Long-term borrowings Finance lease payables Guarantee deposits received Other non-current liabilities

33. CAPITAL MANAGEMENT

The Group’s capital management objective is to ensure financial resources are available and operating plans are in place for working capital, capital expenditures, research and development expenses, refund liabilities and dividend disbursement, etc. in the next twelve months. The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance.

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34. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2019 Financial assets at FVTPL Unlisted shares Mutual fund beneficiary certification Financial assets at FVTOCI Investments in equity instruments at FVTOCI Listed shares and emerging market shares Unlisted shares December 31, 2018 Financial assets at FVTPL Unlisted shares Mutual fund beneficiary certification Financial assets at FVTOCI Investments in equity instruments at FVTOCI Listed shares and emerging market shares Unlisted shares	Level 1 $ - 667,673 $ 667,673 $ 252,351 - $ 252,351 Level 1 $ - 617,790 $ 617,790 $ 244,534 - $ 244,534	Level 2 $ - - $ - $ - - $ - Level 2 $ - - $ - $ - - $ -	Level 3 $ 7,575 - $ 7,575 $ - 124,055 $ 124,055 Level 3 $ 7,315 - $ 7,315 $ - 77,165 $ 77,165	Total $ 7,575 667,673 $ 675,248 $ 252,351 124,055 $ 376,406 Total $ 7,315 617,790 $ 625,105 $ 244,534 77,165 $ 321,699

There were no transfers between Levels 1 and 2 for the years ended December 31, 2019 and 2018.

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

For the year ended December 31, 2019

Financial Assets Balance at January 1, 2019 Recognized in profit or loss (included in other gains and losses) Recognized in other comprehensive income (included in unrealized gain (loss) on financial assets at FVTOCI) Impact of exchange rates Balance at December 31, 2019 Recognized in other gains and losses - unrealized For the year ended December 31, 2018	Financial Assets at FVTPL Equity Instruments $ 7,315 260 - - $ 7,575 $ 260	Financial Assets at FVTOCI Equity Instruments $ 77,165 - 46,928 (38) $ 124,055	Total $ 84,480 260 46,928 (38) $ 131,630 $ 260

Financial Assets Balance at January 1, 2018 Recognized in profit or loss (included in other gains and losses) Recognized in other comprehensive income (included in unrealized gain (loss) on financial assets at FVTOCI) Sales/settlements Transfers out of Level 3 Impact of exchange rates Balance at December 31, 2018 Recognized in other gains and losses - unrealized	Financial Assets at FVTPL Equity Instruments $ 6,368 3,125 - (1,978) (200) - $ 7,315 $ 1,147	Financial Assets at FVTOCI Equity Instruments $ 83,754 - (4,749) (1,823) - (17) $ 77,165	Total $ 90,122 3,125 (4,749) (3,801) (200) (17) $ 84,480 $ 1,147

3) The valuation techniques of unlisted shares with no active market are mainly applicable for market and asset valuation methods.

The market method is mainly used to value the fair value of investment objects’ market prices and environments.

The asset method is mainly utilized to value the fair value of investment objects’ net asset values.

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b. Categories of financial instruments

Financial assets Financial assets at FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at amortized cost (2)	December 31
	2019 2018 $ 675,248 $ 625,105 12,691,896 10,614,196 376,406 321,699 3,983,402 4,367,443

1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, debt investments, and notes receivable and trade receivables. Those reclassified to held-for-sale disposal groups are also included.
2) The balances include financial liabilities at amortized cost, which comprise short-term and long-term loans, short-term bills payable, trade and other payables, and bonds issued. Those reclassified to held-for-sale disposal groups are also included.
c. Financial risk management objectives and policies

The Group’s major financial instruments include cash and cash equivalents, equity and debt investments, mutual funds, trade receivables, trade payables and loans. The Group’s Financial Department provides services to the business, coordinates access to financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

a) Foreign currency risk

The Group’s foreign currency risk arises from its foreign currency monetary assets and liabilities. The Group watches out for the fluctuation of market exchange rate, and takes appropriate actions to manage the exchange rate risk.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period are set out in Note 38.

59 -

Sensitivity analysis

The Group was mainly exposed to the RMB, USD, EUR, AUD, CHF and SGD.

The following table details the Group’s sensitivity to a 3% increase or decrease in the functional currency against the relevant foreign currencies. A change of 3% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis used the outstanding foreign currency denominated monetary items at the end of the reporting period and assumed the exchange rates at the end of the reporting period changed by 3% increase of decrease. The amount below indicates an increase (decrease) in pre-tax profit associated with the functional currency weakening 3% against the relevant currency. For a 3% strengthening of the functional currency against the relevant currency, there would be an equal and opposite impact on pre-tax profit and the balances below would be negative.

Profit or loss Profit or loss Profit or loss	RMB Impact For the Year Ended December 31 2019 2018 $ 1,310 (i) $ 834 (i) EUR Impact For the Year Ended December 31 2019 2018 $ 2,349 (iii) $ 1,378 (iii) CHF Impact For the Year Ended December 31 2019 2018 $ 1,792 (v) $ 2,735 (v)	USD Impact
		For the Year Ended December 31
		2019 2018 $ 28,367 (ii) $ 18,939 (ii) AUD Impact
		For the Year Ended December 31
		2019 2018 $ 817 (iv) $ 2,707 (iv) SGD Impact
		For the Year Ended December 31
		2019 2018 $ (348) (vi) $ (338) (vi)

i. This was mainly attributable to the exposure of outstanding RMB bank deposits which were not hedged at the end of the reporting period.
ii. This was mainly attributable to the exposure of outstanding USD bank deposits, debt investments with no active market, receivables and payables which were not hedged at the end of the reporting period.
iii. This was mainly attributable to the exposure on bank deposits and payables in EUR which were not hedged at the end of the reporting period.
iv. This was mainly attributable to the exposure of bank deposits and payables in AUD which were not hedged at the end of the reporting period.
v. This was mainly attributable to the exposure of bank deposits and payables in CHF which were not hedged at the end of the reporting period.
vi. This was mainly attributable to the exposure of bank deposits and payables in SGD which were not hedged at the end of the reporting period.
60 -

b) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at both fixed and floating interest rates. The Group pays attention to the fluctuations of exchange rates in the market, and takes appropriate actions to manage the exchange rate risk.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting periods were as follows.

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities Sensitivity analysis	December 31
	2019 2018 $ 1,658,861 $ 955,885 1,791,538 1,806,328 1,172,500 1,163,880 45,000 79,000

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate assets and liabilities, the analysis was prepared assuming the amount of the asset and liability outstanding at the end of the reporting period was outstanding for the whole year. A 1% basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 1% higher and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2019 and 2018 would increase (decrease) by $11,275 thousand and $10,849 thousand, respectively.

The Group’s sensitivity to interest rates decreased during the current year mainly due to the decrease in variable rate debt instruments.

c) Other price risk

The Group was exposed to equity price risk due to its investments in listed equity securities and mutual funds. The Group has appointed a special team to monitor the price risk and will consider hedging the risk exposure should the need arise.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 1% higher/lower, pre-tax profit for the year ended December 31, 2019 would have increased/decreased by $6,752 thousand, as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income for the year ended December 31, 2019 would have increased/decreased by $3,764 thousand, as a result of the changes in fair value of financial assets at FVTOCI.

61 -

If equity prices had been 1% higher/lower, pre-tax profit for the year ended December 31, 2018 would have increased/decreased by $6,251 thousand, as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income for the year ended December 31, 2018 would have increased/decreased by $3,217 thousand, as a result of the changes in fair value of financial assets at FVTOCI.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation could be the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets.

In order to minimize credit risk, management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade receivable at the end of the reporting period to ensure that adequate allowances are made for irrecoverable amounts.

The table below analyzes the collaterals held as security and other credit enhancements, and their financial effect in respect of the financial assets recognized in the Group’s consolidated balance sheets:

December 31, 2019

Carrying Amount Receivables $ 6,442,527 December 31, 2018	Maximum Exposure to Credit Risk Mitigated by
	Collateral Other Credit Enhancements Total $ 76,270 $ 391 $ 76,661

Carrying Amount Receivables $ 6,163,966	Maximum Exposure to Credit Risk Mitigated by
	Collateral Other Credit Enhancements Total $ 94,755 $ 11,189 $ 105,944

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2019 and 2018, the Group had available unutilized bank loan facilities in the amounts of $5,186,434 thousand and $8,454,225 thousand, respectively.

62 -
Liquidity and interest rate risk table for non-derivative financial liabilities

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

December 31, 2019

Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities Contract liabilities December 31, 2018 Non-derivative financial liabilities Non-interest bearing Finance lease liabilities Variable interest rate liabilities Fixed interest rate liabilities Contract liabilities	On Demand or Less than 1 Month $ 793,371 25,466 - 612,591 108,881 $ 1,540,309 On Demand or Less than 1 Month $ 260,158 222 30,067 644,922 120,038 $ 1,055,407	1-3 Months $ 1,592,308 14,902 - 788,292 217,763 $ 2,613,265 1-3 Months $ 603,234 445 3,086 627,795 240,077 $ 1,474,637	3 Months to 1 Year $ 86,769 52,197 45,003 48,461 - $ 232,430 3 Months to 1 Year $ 1,599,695 2,002 31,304 509,072 - $ 2,142,073	1-5 Years $ 20,044 283,028 - - - $ 303,072 1-5 Years $ 19,961 5,164 15,215 37,371 - $ 77,711

The amounts included above for variable interest rate instruments for non-derivative financial liabilities was subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

63 -

35. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Besides as disclosed elsewhere in other notes, details of transactions between the Group and other related parties are disclosed below.

a. Related parties and relationships

Name of Related Party Relationship with the Group GeneFerm Biotechnology Co., Ltd. (“GeneFerm”) The Company is one of the directors

b. Purchases of goods

Related Party Category/Name The Company is one of the directors GeneFerm	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ 48,186	2018 $ 25,529

Purchases from related parties were conducted on normal commercial terms.

c. Payables to related parties

Line Items Related Party Category/Name Trade payables The Company is one of the directors GeneFerm		December	31
		2019 $ 26,141	2018 $ 8,602

The outstanding payables from related parties were unsecured.

d. Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2019 $ 45,293 522 $ 45,815	2018 $ 40,280 533 $ 40,813

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

64 -

36. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, issuance of bank acceptances, performance guaranty, and bond for customs clearance:

Pledge time deposits (included in other current assets) Pledge time deposits (included in other non-current assets) Property, plant and equipment, net Investment properties, net		December 31	December 31
		2019 $ 4,013 85,950 137,554 56,909 $ 284,426	2018 $ 1,010 89,506 153,868 58,697 $ 303,081

37. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

a. The Company has entered into a license agreement with The Quaker Oats Company (Quaker) for a period ending July 11, 2029. The agreement provides that the Company may use Quaker’s trademark, and process, manufacture, market and sell Quaker baby cereal, oatmeal, fruit cereal, ready-to-eat cereal, sesame paste, milk powder and other cereal products in the ROC. In consideration of the above, the Company shall pay Quaker royalties at an agreed percentage of net sales (as defined).
b. Unused letters of credit of approximately US$2,075 thousand.
c. Unrecognized commitments for acquisition of property, plant and equipment of approximately $122,010 thousand.
d. Unrecognized commitments for acquiring approximately 46,391 tons of colostrum from dairymen.

38. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The significant assets and liabilities denominated in foreign currencies other than functional currencies of the Group entities and the exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2019

		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	26,052	29.98 (USD:NTD) $	781,058
USD		6,480	6.98 (USD:RMB)	194,612
EUR		2,331	33.59 (EUR:NTD)	78,298
RMB		10,142	4.31(RMB:NTD)	43,658
AUD		2,058	21.01 (AUD:NTD)	43,228
				(Continued)

65 -

Foreign
Currencies
Exchange Rate
CHF
$ 1,341
30.93 (CHF:NTD)
CHF
591
7.18 (CHF:RMB)

Financial liabilities

Monetary items

USD
1,003
29.98 (USD:NTD)
AUD
762
20.01 (AUD:NTD)
SGD
520
22.28 (SGD:NTD)

December 31, 2018
Foreign
Currencies
Exchange Rate
Financial assets
Monetary items
USD
$ 12,753
30.72 (USD:NTD)
USD
14,631
6.86 (USD:RMB)
EUR
1,661
35.20 (EUR:NTD)
RMB
6,219
4.47 (RMB:NTD)
AUD
4,717
21.67 (AUD:NTD)
CHF
2,923
6.97 (CHF:RMB)

Non-monetary items

USD
33
6.86 (USD:RMB)
CHF
1,379
6.97 (CHF:RMB)

Financial liabilities

Monetary items

USD
771
30.72 (USD:NTD)
USD
6,045
6.86 (USD:RMB)
EUR
356
35.20 (EUR:NTD)
AUD
551
21.67 (AUD:NTD)
SGD
501
22.48 (SGD:NTD)

Carrying
Amount
$ 41,470

18,272
$ 1,200,596
$ 30,087

16,006

11,586
$ 57,679
(Concluded)
Carrying
Amount
$ 391,681

449,371

58,453

27,810

102,184

91,155
$ 1,120,654
$ 1,000

43,007
$ 44,007
$ 23,666

185,681

12,535

11,944

11,262
$ 245,088

66 -

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

For the Year Ended December 31

Foreign Currencies NTD RMB CHF	2019 Exchange Rate Net Foreign Exchange Gains (Losses) 1 (NTD:NTD) $ (27,536) 4.45 (RMB:NTD) 1,483 30.93 (CHF:NTD) 10 $ (26,043)	2018
		Exchange Rate Net Foreign Exchange Gains (Losses) 1 (NTD:NTD) $ 5,483 4.55 (RMB:NTD) 5,136 31.19 (CHF:NTD) (141) $ 10,478

39. SEPARATELY DISCLOSED ITEMS

a. Financings provided: See Table 1 attached.
b. Endorsement/guarantee provided: See Table 2 attached.
c. Marketable securities held (excluding investments in subsidiaries): See Table 3 attached.
d. Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None.
e. Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.
f. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.
g. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 4 attached.
h. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 5 attached.
i. Trading in derivative instruments: None.
j. Others: Intercompany relationships and significant intercompany transactions: See Table 6 attached.
k. Information on investees (excluding investees of mainland China): See Table 7 attached.
l. Information on investment in mainland China
1) The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: See Table 8 attached.
2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss: None.
67 -

40. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on types of corporation. Specifically, the Group’s reportable segments were as follows:

Standard Foods segment - the Company
Standard Dairy Products segment - Standard Dairy Products
China Standard segment - Shanghai Standard, China Standard Investment, China Standard Foods and Xiamen Standard
Other segments - other than the above corporation
a. Operating segment information

For the year ended December 31, 2019 Sales from external customers Sales among intersegments Total sales Interest income Financial cost Depreciation expense Amortization expense Operating segment income (loss) Unallocated amount Income before income tax For the year ended December 31, 2018 Sales from external customers Sales among intersegments Total sales Interest income Financial cost Depreciation expense Amortization expense Other important non-cash items Impairment loss on assets Operating segment income (loss) Unallocated amount Income before income tax	Standard Foods Segment $ 11,668,690 1,471,254 $ 13,139,944 $ 22,823 $ 1,339 $ 222,087 $ 11,998 $ 2,992,111 $ 10,675,041 1,512,866 $ 12,187,907 $ 15,502 $ 686 $ 187,440 $ 10,324 $ 18,035 $ 2,778,553	Standard Dairy Products Segment $ 2,657,213 917,346 $ 3,574,559 $ 4,946 $ 12 $ 44,583 $ 2,428 $ 564,292 $ 2,615,642 739,330 $ 3,354,972 $ 4,109 $ - $ 34,733 $ 2,029 $ - $ 540,305	China Standard Segment $ 14,334,709 412 $ 14,335,121 $ 42,255 $ 37,186 $ 234,190 $ 29,117 $ 999,415 $ 12,171,356 2,378 $ 12,173,734 $ 18,074 $ 76,371 $ 213,340 $ 34,612 $ - $ 348,732	Other Segments $ 2,605,620 14,273 $ 2,619,893 $ 9,667 $ 13,214 $ 78,508 $ 10,694 $ 35,557 $ 1,878,548 10,813 $ 1,889,361 $ 7,541 $ 8,997 $ 37,859 $ 6,563 $ - $ 10,204	Adjustments and Eliminations $ - (2,403,285) $ (2,403,285) $ (4,872) $ (4,872) $ (4,570) $ - $ (42,841) $ - (2,265,387) $ (2,265,387) $ (5,308) $ (5,308) $ - $ - $ - $ (1,563)	Consolidated $ 31,266,232 - $ 31,266,232 $ 74,819 $ 46,879 $ 574,798 $ 54,237 $ 4,548,534 - $ 4,548,534 $ 27,340,587 - $ 27,340,587 $ 39,917 $ 80,745 $ 473,373 $ 53,528 $ 18,035 $ 3,676,232 - $ 3,676,232

b. Geographical information:

The Group operates in two principal geographical areas - Taiwan and mainland China.

68 -

The Group’s revenue from external customers by location of operations and information about its non-current assets by location of asset are detailed below.

Revenue from External Customers	Revenue from External Customers	Revenue from External Customers
For the Year Ended December 31
	2019 2018 $ 16,675,005 $ 14,977,018 14,470,605 12,247,648 120,622 115,921 $ 31,266,232 $ 27,340,587 Non-current Assets
	December 31
	2019 $ 2,269,496 3,711,638 32,538 $ 6,013,672	2018 $ 2,198,922 3,812,887 28,373 $ 6,040,182

Non-current assets exclude financial instruments, deferred tax assets and net defined benefit assets.

69 -

TABLE 1

STANDARD FOODS CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate	Nature of Financing (Note 2)	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 3)	Aggregate Financing Limits (Note 3)	Note
													Item	Value
0	Standard Foods Corporation	Dermalab S.A.	Financing receivables - related parties	Y	$ 47,783	$ 46,387	$ -	-	b	$ -	Need for operation	$ -	-	$ -	$ 6,350,870 (Note 3)	$ 6,350,870 (Note 3)	Note 11
1	Standard Investment (China) Co., Ltd.	Shanghai Dermalab Corporation Standard Foods (Xiamen) Co., Ltd. Standard Foods (China) Co., Ltd. Shanghai Le Ben Tuo Health Technology Co., Ltd.	Financing receivables - related parties Financing receivables - related parties Financing receivables - related parties Financing receivables - related parties	Y Y Y Y	92,048 736,384 460,240 92,048	85,950 687,600 429,750 85,950	79,891 238,507 348,188 85,950	2.50% 2.50% 2.50% 2.50%	b. b. b. b.	- - - -	Need for operation Need for operation Need for operation Need for operation	- - - -	- - - -	- - - -	1,664,013 (Note 4) 1,664,013 (Note 4) 1,664,013 (Note 4) 1,664,013 (Note 4)	1,664,013 (Note 4) 1,664,013 (Note 4) 1,664,013 (Note 4) 1,664,013 (Note 4)	Note 11 Note 11 Note 11 Note 11
2	Shanghai Standard Foods Co., Ltd.	Standard Foods (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd.	Financing receivables - related parties Financing receivables - related parties Financing receivables - related parties	Y Y Y	483,252 667,348 474,390	- 623,138 451,238	- 116,299 451,238	2.50% 2.50% 2.50%	b. b. b.	- - -	Need for operation Need for operation Need for operation	- - -	- - -	- - -	1,227,427 (Note 5) 1,227,427 (Note 5) 1,227,427 (Note 5)	1,227,427 (Note 5) 1,227,427 (Note 5) 1,227,427 (Note 5)	Note 11 Note 11 Note 11
3	Accession Limited	Shanghai Standard Foods Co., Ltd. Dermalab S.A.	Financing receivables - related parties Financing receivables - related parties	Y Y	185,730 70,081	- -	- -	0.00% 1.90%	b. b.	- -	Need for operation Need for operation	- -	- -	- -	3,492,091 (Note 6) 3,492,091 (Note 6)	3,492,091 (Note 6) 3,492,091 (Note 6)	Note 11 Note 11
4	Shanghai Le Ben Tuo Health Technology Co., Ltd.	Standard Investment (China) Co., Ltd.	Financing receivables - related parties	Y	23,012	21,488	-	2.50%	b.	-	Need for operation	-	-	-	88,844 (Note 7)	88,844 (Note 7)	Note 11
5	Shanghai Le Ben De Health Technology Co., Ltd.	Standard Investment (China) Co., Ltd.	Financing receivables - related parties	Y	9,205	8,595	-	2.50%	b.	-	Need for operation	-	-	-	11,640 (Note 8)	11,640 (Note 8)	Note 11
6	Shanghai Le Ho Industrial Co., Ltd.	Standard Investment (China) Co., Ltd.	Financing receivables - related parties	Y	184,096	171,900	658	2.50%	b.	-	Need for operation	-	-	-	210,049 (Note 9)	210,049 (Note 9)	Note 11
7	Shanghai Le Min Industrial Co., Ltd.	Standard Investment (China) Co., Ltd.	Financing receivables - related parties	Y	92,048	85,950	597	2.50%	b.	-	Need for operation	-	-	-	131,101 (Note 10)	131,101 (Note 10)	Note 11

(Continued)

70 -

(Concluded)

Note 1: “0” for the Company, subsidiaries are numbered from “1”.

Note 2: Reasons for financing are as follows:

a. Need for operation.

b. Need for short-term financing.

Note 3: The total amount shall not exceed 40% of net value of Standard Foods Corporation, which was calculated to be $6,350,870 thousand (the net value per financial statements of $15,877,175 thousand x 40% as of September 30, 2019). Note 4: The total amount shall not exceed 40% of net value of Standard Investment (China) Co., Ltd., which was calculated to be $1,664,013 thousand (the net value per financial statements of $4,160,032 thousand x 40% as of September 30, 2019).

Note 5: The total amount shall not exceed 40% of net value of Shanghai Standard Foods Co., Ltd., which was calculated to be $1,227,427 thousand (the net value per financial statements of $3,068,568 thousand x 40% as of September 30, 2019). Note 6: The total amount shall not exceed 100% of net value of Accession Limited, which was calculated to be $3,492,091 thousand (the net value per financial statements of $3,492,091 thousand x 100% as of September 30, 2019). Note 7: The total amount shall not exceed 40% of net value of Shanghai Le Ben Tuo Health Technology Co., Ltd., which was calculated to be $88,844 thousand (the net value per financial statements of $222,111 thousand x 40% as of September 30, 2019). Note 8: The total amount shall not exceed 40% of net value of Shanghai Le Ben De Health Technology Co., Ltd., which was calculated to be $11,640 thousand (the net value per financial statements of $29,101 thousand x 40% as of September 30, 2019). Note 9: The total amount shall not exceed 40% of net value of Shanghai Le Ho Industrial Co., Ltd., which was calculated to be $210,049 thousand (the net value per financial statements of $525,122 thousand x 40% as of September 30, 2019). Note 10: The total amount shall not exceed 40% of net value of Shanghai Le Min Industrial Co., Ltd., which was calculated to be $131,101 thousand (the net value per financial statements of $327,753 thousand x 40% as of September 30, 2019). Note 11: The amount was eliminated upon consolidation.

71 -

TABLE 2

STANDARD FOODS CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

No. (Note 1)	Endorsement/Guarantee Provider	Guaranteed Party	Guaranteed Party	Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity Per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount	Guarantee Provided by Parent Company (Note 9)	Guarantee Provided by Subsidiary (Note 9)	Guarantee Provided to Subsidiaries in Mainland China (Note 9)	Note
		Name	Nature of Relationship (Note 2)
0	Standard Foods Corporation	Accession Limited Standard Beverage Company Limited	b. b.	$ 12,701,740 (Note 3) 12,701,740 (Note 3)	$ 184,620 158,000	29,980 149,900	$ - 20,000	$ - -	0.19% 0.94%	$ 15,877,175 (Note 4) 15,877,175 (Note 4)	Y Y	- -	- -

Note 1: “0” for the Company, subsidiaries are numbered from “1”.
Note 2: Relationships between the endorsement/guarantee provider and the guaranteed party:
a. Trading partner.
b. Majority owned subsidiary.
c. The Company and subsidiary owns over 50% ownership of the investee company.
d. A subsidiary jointly owned by the Company and company’s directly-owned subsidiary.
e. Guaranteed by the Company according to construction contract.
f. Investee company. The guarantees were provided based on the Company’s proportionate share in an investee company.
Note 3: The total amount shall not exceed 80% of the net value in the financial statements of Standard Foods Corporation; the amount was calculated at $12,701,740 thousand (the net value per financial statements of $15,877,175 thousand x 80% as of September 30, 2019).

Note 4: The total amount shall not exceed 100% of the net value in the financial statements of Standard Foods Corporation; the amount was calculated at $15,877,175 thousand (the net value per financial statements of $15,877,175 thousand x 100% as of September 30, 2019).

Note 5: Guarantee provided by the listed parent company, guarantee provided by the subsidiary or guarantee provided to subsidiaries in mainland China, coded “Y”.

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TABLE 3

STANDARD FOODS CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2019	December 31, 2019		Note
				Shares	Carrying Amount	Percentage of Ownership	Fair Value (Note 2)
Standard Foods Corporation	Shares Far Eastern International Commercial Bank Co., Ltd. Chunghwa Telecom Co., Ltd. GeneFerm Biotechnology Co., Ltd. Dah Chung Bills Finance Corp. Mutual funds Taishin 1699 Money Market Fund Jih Sun Money Market Fund Mega Diamond Money Market FSITC Taiwan Money Market Fund Walden VC 2, L.P. Shares Techgains Pan-Pacific Corporation Authenex, Inc. Global Strategic Investment Co., Ltd. Paradigm Venture Capital Corporation U-Teck Environment Corporation, Ltd. Octamer, Inc. - Series E Preferred Stock Octamer, Inc. - Series F Preferred Stock	The Company is one of the directors	Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current	1,379,027 48,600 2,145,110 1,243,213 2,430,814 14,196,913 21,453,425 2,736,051 Note 1 500,000 2,424,242 850,500 180,376 11,200 800,000 107,815	$ 16,479 5,346 65,640 15,702 33,021 211,216 270,122 42,034 - - - 4,619 2,956 - - -	- - 7.8 0.3 - - - - 1.9 0.9 5.5 1.9 7.0 0.2 7.8 1.0	$ 16,479 5,346 65,640 15,702 33,021 211,216 270,122 42,034 - - - 4,619 2,956 - - -

(Continued)

73 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2019	December 31, 2019		Note
				Shares	Carrying Amount	Percentage of Ownership	Fair Value (Note 2)
Standard Dairy Products Taiwan Limited Charng Hui Ltd.	Fortemedia, Inc. - Series D Preferred Stock Fortemedia, Inc. - Series E Preferred Stock Fortemedia, Inc. - Series F Preferred Stock Fortemedia, Inc. - Series G Preferred Stock Fortemedia, Inc. - Series I Preferred Stock Fortemedia, Inc. - Series - Common Stock Mutual funds Jih Sun Money Market Fund FSITC Taiwan Money Market Fund Shares Standard Foods Corporation Formosa Plastics Corporation China Steel Corporation Polytronics Technology Corp. Taiwan Semiconductor Manufacturing Co., Ltd. Mutual funds Fuh Hwa Global Strategic Allocation FoF Franklin Templeton SinoAm Franklin Templeton Global Bond Fund of Funds-Accu. Shares Hong Da Leasing & Finance Co., Ltd. CNEX Co., Ltd.	Parent of Charng Hui Ltd. Charng Hui Ltd. is one of the directors Charng Hui Ltd. is one of the directors	Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current	3,455 71,397 29,173 31,135 29,102 12,938 3,034,955 1,953,197 6,669,471 91,440 803,258 1,596,000 90,000 1,000,000 1,453,360 8,297,000 1,000,000	$ - - - - - - 45,153 30,007 464,195 9,126 19,198 106,772 29,790 11,270 18,958 - -	1.2 1.2 1.2 1.3 1.3 1.2 - - 0.7 - - 2.0 - - - 23.7 6.0	$ - - - - - - 45,153 30,007 464,195 9,126 19,198 106,772 29,790 11,270 18,958 - -	Note 2

(Continued)

74 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2019	December 31, 2019		Note
				Shares	Carrying Amount	Percentage of Ownership	Fair Value (Note 2)
Standard Beverage Company Limited Domex Technology Corporation Accession Limited	Mutual funds Fuh Hwa Greater China Mid & Small Cap Franklin Templeton SinoAm Global Bd Acc Shares InnoComm Mobile Technology Corp. Shares AsiaVest Liquidation Co.		Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	225,000 282,988 3,600,000 200	$ 2,201 3,691 107,424 929	- - 13.4 0.7	$ 2,201 3,691 107,424 929

Note 1: No number of units of the Fund.

Note 2: The amount was eliminated upon consolidation.

(Concluded)

75 -

TABLE 4

STANDARD FOODS CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationships		Transaction	Transaction	Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Payable (Receivable)	Notes/Accounts Payable (Receivable)	Note
			Purchases (Sales)	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Standard Foods Corporation Standard Dairy Products Taiwan Limited Shanghai Standard Foods Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Investment (China) Co., Ltd.	Standard Dairy Products Taiwan Limited Standard Foods Corporation Standard Investment (China) Co., Ltd. Shanghai Standard Foods Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd.	The Company’s subsidiary Parent company of Standard Dairy Products Taiwan Limited Brother company of Shanghai Standard Foods Co., Ltd. Brother company of Standard Investment (China) Co., Ltd. Parent company of Standard Foods (China) Co., Ltd. Standard Investment (China) Co., Ltd.’s subsidiary Parent company of Standard Foods (China) Co., Ltd. Parent company of Standard Foods (Xiamen) Co., Ltd. Standard Investment (China) Co., Ltd.’s subsidiary Standard Investment (China) Co., Ltd.’s subsidiary	Sales Purchases Purchases Sales Sales Purchases Purchases Sales Sales Purchases Purchases Sales Sales Purchases	$ (1,470,332) 917,346 1,470,332 (917,346) (1,735,989) 397,459 1,735,989 (397,459) (5,160,756) 5,160,756 411,285 (411,285) (3,589,545) 3,589,545	11.19 12.24 59.38 25.66 78.07 21.46 16.51 2.95 98.62 49.16 8.78 8.64 75.44 34.20	55 days after month end closing (net of receivables and payables) 55 days after month end closing (net of receivables and payables) 55 days after month end closing (net of receivables and payables) 55 days after month end closing (net of receivables and payables) 60 days after month-end closing 60 days after month-end closing 60 days after month-end closing 60 days after month-end closing 55 days after month-end closing 60 days after month-end closing 60 days after month-end closing 60 days after month-end closing 60 days after month-end closing 60 days after month-end closing	- - - - - - - - - - - - -	- - - - - - - - - - - - -	$ 141,484 - (141,484) - 491,530 (161,842) (491,530) 161,842 1,665,818 (1,665,818) (222,633) 222,633 1,099,150 (1,099,150)	6.17 - 40.45 - 96.61 64.38 15.00 4.94 99.65 50.82 38.08 16.84 83.15 33.54	Note Note Note Note Note Note Note Note Note Note Note Note Note Note

Note: The amounts presented above were eliminated upon consolidation.

76 -

TABLE 5

STANDARD FOODS CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationships	Ending Balance for Account Receivable - Related Parties	Ending Balance for Account Receivable - Related Parties	Turnover Rate		Overdue	Overdue		Amounts Received in Subsequent Period	Allowance for Bad Debts	Allowance for Bad Debts	Note
							Amount	Actions Taken
Standard Foods Corporation Shanghai Standard Foods Co., Ltd. Standard Foods (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd.	Standard Dairy Products Taiwan Limited Standard Investment (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Investment (China) Co., Ltd. Shanghai Standard Foods Co., Ltd. Standard Foods (China) Co., Ltd.	The Company’s subsidiary Brother company of Shanghai Standard Foods Co., Ltd. Brother company of Shanghai Standard Foods Co., Ltd. Brother company of Shanghai Standard Foods Co., Ltd. Parent company of Standard Foods (China) Co., Ltd. Standard Investment (China) Co., Ltd.’s subsidiary Standard Investment (China) Co., Ltd.’s subsidiary Parent company of Standard Foods (Xiamen) Co., Ltd. Brother company of Standard Investment (China) Co., Ltd. Brother company of Standard Foods (Xiamen) Co., Ltd.	Trade receivables Other receivables Trade receivables Financing receivables Other receivables Trade receivables Financing receivables Other receivables Trade receivables Other receivables Trade receivables Other receivables Trade receivables Financing receivables Other receivables Trade receivables Financing receivables Other receivables Trade receivables Other receivables Trade receivables Other receivables Trade receivables	$ 141,484 3,127 $ 144,611 $ 491,530 116,299 59,364 $ 667,193 $ 6,647 451,238 6,549 $ 464,434 $ 8,456 618 $ 9,074 $ 1,665,818 34,798 $ 1,700,616 $ 93 348,188 14,179 $ 362,460 $ 28 238,507 12,284 $ 250,819 $ 1,099,150 13,165 $ 1,112,315 $ 161,842 40,698 $ 202,540 $ 222,633	9.31 3.39 3.51 3.69 3.06 4.07 22.72 5.81 4.91 1.80		$ - - $ - $ - - - $ - $ - - - $ - $ - - $ - $ - - $ - $ - - - $ - $ - - - $ - $ - - $ - $ - - $ - $ -			$ 141,484 (Note 1) 3,127(Note 1) $ 144,611(Note 1) $ 202,729 (Note 1) - (Note 1) - (Note 1) $ 202,729(Note 1) $ 6,647 (Note 1) - (Note 1) - (Note 1) $ 6,647(Note 1) $ 8,456 (Note 1) - (Note 1) $ 8,456(Note 1) $ 816,964 (Note 1) 34,798(Note 1) $ 851,762(Note 1) $ 93 (Note 1) - (Note 1) - (Note 1) $ 93(Note 1) $ 28 (Note 1) - (Note 1) - (Note 1) $ 28(Note 1) $ 952,155 (Note 1) 10,869(Note 1) $ 963,024(Note 1) $ 101,261 (Note 1) - (Note 1) $ 101,261(Note 1) $ 222,633(Note 1)		$ - - $ - $ - - - $ - $ - - - $ - $ - - $ - $ - - $ - $ - - - $ - $ - - - $ - $ - - $ - $ - - $ - $ -	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

Note 1: Amounts received before March 18, 2020.

Note 2: The amounts presented above were eliminated upon consolidation.

77 -

TABLE 6

STANDARD FOODS CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Investee Company	Counterparty	Relationship (Note 2)		Transactions Details	Transactions Details
				Financial Statement Accounts	Amount (Note 4)	Payment Terms	% to Total Sales or Assets (Note 3)
0	Standard Foods Corporation	Standard Dairy Products Taiwan Limited Standard Dairy Products Taiwan Limited Standard Dairy Products Taiwan Limited Standard Dairy Products Taiwan Limited Standard Dairy Products Taiwan Limited Standard Beverage Company Limited Standard Beverage Company Limited Standard Beverage Company Limited Standard Investment (China) Co., Ltd.	a. a. a. a. a. a. a. a. a.	Trade receivables - related parties Other receivables - related parties Sales Purchases Royalty revenue Other receivables - related parties Purchases Service revenue Sales	$ 141,484 3,127 1,470,332 917,346 9,146 115 1,756 1,320 922	According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions	0.6 - 4.7 2.9 - - - - -
1	Accession Limited	Dermalab	a.	Interest income	627	Interest rate 1.900%	-
2	Shanghai Standard Foods Co., Ltd.	Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd.	c. c. c. c. c. c. c. c. c. c. c. c. c. c. c. c. c. c. c. c. c. c.	Trade payables - related parties Other payables - related parties Sales Trade receivables - related parties Other receivables - related parties Financing receivables - related parties Other expenses Interest income Purchases Research and development expenses Trade payables - related parties Sales Purchases Trade receivables - related parties Other payables - related parties Interest income Sales Purchases Trade receivables - related parties Other payables - related parties Financing receivables - related parties Interest income	161,842 40,698 1,735,989 491,530 59,364 116,299 610 42,165 397,459 8,425 5,126 23,967 16,465 8,456 618 5,029 18,297 825 6,647 6,549 451,238 6,785	According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions Interest rate 2.500% According to the general conditions Interest rate 2.500% According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions Interest rate 2.500% According to the general conditions According to the general conditions According to the general conditions According to the general conditions Interest rate 2.500% Interest rate 2.500%	0.6 0.2 5.6 1.9 0.2 0.5 - 0.1 1.3 - - 0.1 0.1 - - - 0.1 - - - 1.8 -
3	Standard Investment (China) Co., Ltd.	Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd.	a. a. a. a.	Trade receivables - related parties Other receivables - related parties Trade payables - related parties Other payables - related parties	93 14,179 1,665,818 34,798	According to the general conditions According to the general conditions According to the general conditions According to the general conditions	- 0.1 6.5 0.1

(Continued)

78 -

No. (Note 1)	Investee Company	Counterparty	Relationship (Note 2)		Transactions Details	Transactions Details
				Financial Statement Accounts	Amount (Note 4)	Payment Terms	% to Total Sales or Assets (Note 3)
		Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Shanghai Dermalab Corporation Shanghai Dermalab Corporation Shanghai Dermalab Corporation Shanghai Dermalab Corporation Shanghai Dermalab Corporation Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Ben De Co., Ltd. Shanghai Le Ben De Co., Ltd.	a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. a. c. c. c. c. c. c. c. c.	Sales Purchases Rental expenses Financing receivables - related parties Other revenue Interest income Other receivables - related parties Expense Advance payable Financing receivables - related parties Interest income Trade receivables - related parties Other receivables - related parties Trade payables - related parties Other payables - related parties Sales Purchases Financing receivables - related parties Other revenue Interest income Other receivables - related parties Trade payables - related parties Sales Purchases Financing receivables - related parties Advance payable Interest income Other payables - related parties Financing payables - related parties Interest expenses Other payables - related parties Financing payables - related parties Interest expenses Trade payables - related parties Purchases	$ 537 5,160,756 97 348,188 13,835 2,660 3,617 618 3,438 79,891 2,584 28 12,284 1,099,150 13,165 659 3,589,545 238,507 11,986 15,653 1,355 542 20 8,318 85,950 2,248 2,238 66 658 19 93 597 32 1,027 3,560	According to the general conditions According to the general conditions According to the general conditions Interest rate 2.500% According to the general conditions Interest rate 2.500% According to the general conditions According to the general conditions According to the general conditions Interest rate 2.500% Interest rate 2.500% According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions Interest rate 2.500% According to the general conditions Interest rate 2.500% According to the general conditions According to the general conditions According to the general conditions According to the general conditions Interest rate 2.500% According to the general conditions Interest rate 2.500% According to the general conditions Interest rate 2.500% Interest rate 2.500% According to the general conditions Interest rate 2.500% Interest rate 2.500% According to the general conditions According to the general conditions	- 16.5 - 1.4 - - - - - 0.3 - - - 4.3 0.1 - 11.5 0.9 - 0.1 - - - - 0.3 - - - - - - - - - -
4	Shanghai Dermalab Corporation	Dermalab Dermalab Shanghai Le Ben Tuo Co., Ltd.	c. c. c.	Purchases Trade payables - related parties Purchases	56,720 7,808 7,216	According to the general conditions According to the general conditions According to the general conditions	0.2 - -
5	Standard Foods (China) Co., Ltd.	Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Shanghai Le Ben Tuo Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd.	c. c. c. c. c. c. c. c.	Sales Other expense Rental revenue Other receivables - related parties Purchases Trade payables - related parties Sales Purchases	392 4,211 4,571 793 21 222,633 3,449 411,285	According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions According to the general conditions	- - - - - 0.9 - 1.3

(Continued)

79 -

No. (Note 1)	Investee Company	Counterparty	Relationship (Note 2)		Transactions Details	Transactions Details
				Financial Statement Accounts	Amount (Note 4)	Payment Terms	% to Total Sales or Assets (Note 3)
6	Shanghai Le Ben Tuo Co., Ltd.	Shanghai Le Ben De Co., Ltd. Shanghai Le Ben De Co., Ltd.	c. c.	Sales Trade receivables - related parties	$ 3,521 1,018	According to the general conditions According to the general conditions	- -

Note 1: The parent company and its subsidiaries do business with each other. Information shall be stated separately and numbered as follows:

a. Parent company is 0.
b. Subsidiaries, sequentially numbered by Arabic numerals from 1.

Note 2: The related parties have the following three relationships:

a. Parent company to its subsidiaries.
b. Subsidiaries to its parent company.
c. Subsidiaries to subsidiaries.

Note 3: Amounts of balance sheet accounts are calculated as percentage of consolidated total assets; amounts of income statement accounts are calculated as percentage of consolidated total revenues.

Note 4: The amount was eliminated upon consolidation.

(Concluded)

80 -

TABLE 7

STANDARD FOODS CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31,	As of December 31,	2019	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2019	December 31, 2018	Shares	%	Carrying Amount
Standard Foods Corporation Accession Limited Dermalab S.A. Standard Investment (Cayman) Limited	Accession Limited Standard Investment (Cayman) Limited Standard Dairy Products Taiwan Limited Charng Hui Ltd. Domex Technology Corporation Standard Beverage Company Limited Le Bonta Wellness International Corporation Dermalab S.A. Swissderma SL Standard Corporation (Hong Kong) Limited	Tortola, British Virgin Islands Grand Cayman, Cayman Islands Taipei, Taiwan Taipei, Taiwan Hsinchu, Taiwan Taipei, Taiwan Yilan, Taiwan Switzerland Spain Hong Kong	Investment business Investment business Manufacture and sale of dairy products and beverages Investment business Manufacture and sale of computer peripherals and computer and information products Manufacture and sale of beverages Sale of health foods Development and sale of cosmetics Sale of cosmetics Investment business	$ 3,936,267 4,710,865 300,853 230,000 114,116 79,072 14,350 266,587 96 4,708,566	$ 3,936,267 4,710,865 300,853 230,000 114,116 79,072 14,350 266,587 96 4,708,566	123,600,000 150,124,815 30,000,000 24,100,000 10,374,399 7,907,000 Note 4 2,600 3,000 150,050,815	100 100 100 100 52 100 100 100 100 100	$ 3,381,908 5,220,048 1,000,126 290,480 247,879 82,342 8,781 174,559 - 5,219,208	$ 74,585 658,622 447,084 22,157 66,347 2,350 (2,979) 7,694 - 658,817	$ 67,374 (Note 1) 658,622 449,425 (Note 2) 5,483 34,507 1,847 (Note 3) (2,979)	Subsidiary (Note 5) Subsidiary (Note 5) Subsidiary (Note 5) Subsidiary (Note 5) Subsidiary (Note 5) Subsidiary (Note 5) Subsidiary (Note 5) Indirect subsidiary (Note 5) Indirect subsidiary (Note 5) Indirect subsidiary (Note 5)

Note 1: This amount was the share of profit of the investee of $74,585 thousand minus the unrealized gain on sidestream transactions of $7,211 thousand.

Note 2: This amount was the share of profit of the investee of $447,084 thousand minus the unrealized gain on sidestream transactions of $2,341 thousand.

Note 3: This amount was the share of profit of the investee of $2,350 thousand plus the realized gain on upstream transactions of $503 thousand.

Note 4: This is a limited company with no issued shares.

Note 5: The amount was eliminated upon consolidation.

81 -

TABLE 8

STANDARD FOODS CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2019	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2019	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 2)	Carrying Amount as of December 31, 2019	Accumulated Repatriation of Investment Income as of December 31, 2019	Note
					Outward	Inward
Shanghai Standard Foods Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (China) Co., Ltd. Shanghai Dermalab Corporation Shanghai Le Ben Tuo Health Technology Co., Ltd. Shanghai Le Ben De Health Technology Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Min Industrial Co., Ltd.	Manufacture and sale of edible oil products and nutritional foods Investment and sales of edible oil products and nutritional foods Manufacture and sale of edible oil products and nutritional foods Sale of nutritional foods, cosmetics and international trading Sale of nutritional foods and international trading Sale of nutritional foods and international trading Manufacture and sale of edible oil products and nutritional foods Property management Property management	$ 3,949,575 3,755,530 1,631,668 57,205 380,418 31,220 1,307,582 607,717 378,009	b. (Note 3) b. (Note 5) c. (Note 6) c. (Note 6) 1 and c. (Note 7) c. (Note 4 and 8) c. (Note 6) b. (Note 5) b. (Note 5)	$ 3,949,575 (Note 4) 3,718,677 (Note 5) - (Note 6) - (Note 6) 181,048 (Note 7) 31,220 (Note 4) - (Note 6) 607,717 (Note 5) 378,009 (Note 5)	$ - - - - - - - - -	$ - - - - - - - - -	$ 3,949,575 (Note 4) 3,718,677 (Note 5) - (Note 6) - (Note 6) 181,048 (Note 7) 31,220 (Note 4) - (Note 6) 607,717 (Note 5) 378,009 (Note 5)	$ 69,321 689,913 162,562 (8,057) (43,680) 706 175,986 (14,666) (9,392)	100.0 99.0 99.0 99.0 99.5 100.0 99.0 100.0 100.0	$ 65,798 (Note 9) 683,014 (Note 9) 149,001 (Note 9) (7,976) (Note 9) (43,466) (Note 9) 706 (Note 9) 165,369 (Note 9) (14,666) (Note 9) (9,392) (Note 9)	$ 2,992,501 4,391,390 1,834,068 (10,779) 211,188 28,649 1,328,982 509,309 317,638	$ - - - - - - - - -	Note 11 Note 11 Note 11 Note 11 Note 11 Note 11 Note 11 Note 11 Note 11

Accumulated Outward Remittance for Investment in Mainland China as of	Investment Amounts Authorized by	Upper Limit on the Amount of Investment Stipulated by Investment
December 31, 2019	Investment Commission, MOEA	Commission, MOEA
$8,919,525	$8,919,525	Unlimited amount of investment (Note 10)

Note 1: The methods for engaging in investment in mainland China include the following:
a. Direct investment in mainland China.
b. Indirect investment in mainland China through companies registered in a third region. c. Other methods.

(Continued)

82 -

Note 2: For the investment income (loss) recognized in the current period:

a. There was no investment income (loss) recognized due to the investment still being in the development stage.
b. The investment income (loss) was determined based on the following basis:
- 1) The financial report was audited and certified by an international accounting firm in cooperation with an ROC accounting firm.
- 2) The financial statements audited by the CPA of the parent company in Taiwan.
- 3) Others.
Note 3: Accession Limited is the investor company in third region.

Note 4: There was no difference between the beginning balance and the ending balance of the accumulated amount invested from Taiwan for the year ended December 31, 2018; the investment remained at $4,034,074 thousand. Of the $4,034,074 thousand, $53,279 thousand has been retained in Accession Limited. The remaining balance of thereof, amounting to $3,980,795 thousand, was originally the outward remittance of the investment of Shanghai Standard Foods Co., Ltd. in 2015. However, as of July 2015, of the $3,980,795 thousand, $31,220 thousand was invested in Shanghai Le Ben De Health Technology Co., Ltd. by Shanghai Standard Foods Co., Ltd. In aggregate, the outward remittance of the investments of Shanghai Standard Foods Co., Ltd. and Shanghai Le Ben De Health Technology Co., Ltd. was $3,949,575 thousand and $31,220 thousand, respectively.

Note 5: Standard Corporation (Hong Kong) Limited is the investor company in third region.

Note 6: The company in mainland China was reinvested through a company registered in mainland China, namely Standard Investment (China) Co., Ltd.

Note 7: The company in mainland China was invested directly by Standard Foods Corporation and was reinvested through a company registered in mainland China, namely Standard Investment (China) Co., Ltd. The amount invested directly was $181,048 thousand.
Note 8: This company was spun off from Shanghai Standard Foods Co., Ltd; it is the investor company in third region.
Note 9: Recognition of investment income (loss) was based on Note 2, b.2).
Note 10: The Industrial Development Bureau of the MOEA issued the proofing document of operational headquarters to the Company; the document is still valid within the audit period. Hence, according to the Investment Commission of the MOEA, there is no upper limit on the amount of investment.

Note 11: The amount was eliminated upon consolidation.

(Concluded)

83 -

AI assistant

SFC — Annual Report 2019

51753_rns_2019-11-14_fd32a114-616a-4a08-b7f0-87d437a122b3.pdf

Standard Foods Corporation and Subsidiaries

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Evaluation of Inventory

Other Matter

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

STANDARD FOODS CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

1) IFRS 16 “Leases”

The Group as lessee

The Group as lessor

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

e. Foreign currencies

3) Derecognition of intangible assets

l. Financial instruments

1) Financial assets

iii. Investments in equity instruments at FVTOCI

2) Equity instruments

2019

1) The Group as lessor

2018

1) The Group as lessor

2) The Group as lessee

o. Borrowing costs

p. Government grants

2) Retirement benefits

r. Taxation

1) Current tax

2) Deferred tax

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Write-down of Inventory

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST - 2019 AND 2018

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

December 31, 2019

December 31, 2018

11. FINANCE LEASE RECEIVABLES

2019

12. INVENTORIES

13. PREPAYMENTS

14. SUBSIDIARIES

15. PROPERTY, PLANT AND EQUIPMENT

16. LEASE ARRANGEMENTS

a. Right-of-use assets - 2019

d. Other lease information

2019

2018

17. INVESTMENT PROPERTIES

18. OTHER INTANGIBLE ASSETS

19. LONG-TERM PREPAYMENTS FOR LEASES

20. OTHER ASSETS

21. BORROWINGS

a. Short-term borrowings

b. Short-term bills payable

December 31, 2019

22. NOTES PAYABLE AND TRADE PAYABLES

SFC Annual Report 2019