SFC — Annual Report 2020

Nov 13, 2020

Standard Foods Corporation and Subsidiaries

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

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

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

Very truly yours,

STANDARD FOODS CORPORATION

By

TER-FUNG TSAO Chairman

March 22, 2021

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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, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

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

Basis for Opinion

We conducted our audit of the consolidated financial statements for the year ended December 31, 2020 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. 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. 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.

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Key Audit Matters

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

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

Estimate of Return Liability

Standard Foods Corporation and its subsidiaries which are located in China mainly manufactures and sells nutritious foods, edible oils, dairy products and beverages. Taking into account the historical experience of its sales in the past, the Company estimates the probable amount of each product’s return liability. Refer to Notes 5 and 22 to the consolidated financial statements for detailed information related to return liability. Because the assessment of return liability involves management’s critical accounting estimates and judgments, we considered the assessment of return liability to be a key audit matter.

The key audit procedures that we performed in respect of the estimate of return liability included the following:

1. We obtained an understanding and tested the design and operating effectiveness of the key controls over the estimates of the return liability.

2. We selected samples from the sales return transactions and inspected the correctness of the sales returns in current year.

3. We obtained the relevant reports of estimates of sales return liability, and we recalculated and reviewed that the assessment results were adequate.

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, 2020 and 2019, on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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.

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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:

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

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

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

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

5. 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.

6. 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.

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

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

The engagement partners on the audits resulting in this independent auditors’ report are Tza-Li Gung and Zhi-Yuan Chen.

Deloitte & Touche Taipei, Taiwan Republic of China

March 22, 2021

Notice to Readers

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

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

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STANDARD FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at fair value through other comprehensive income - current (Note 8) Financial assets at amortized cost - current (Note 9) Notes receivable (Notes 10 and 25) Trade receivables (Notes 10 and 25) Trade receivable from related parties (Notes 25 and 33) Finance lease receivables - current (Note 11) Other receivables (Note 10) Current tax assets (Note 27) Inventories (Note 12) Prepayments (Note 13) Other current assets (Notes 19 and 34) 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 34) Right-of-use assets (Note 16) Investment properties (Notes 17 and 34) Goodwill Other intangible assets (Note 18) Deferred tax assets (Note 27) Finance lease receivables - non-current (Note 11) Net defined benefit assets - non-current (Note 23) Other non-current assets (Notes 19 and 34) Total non-current assets LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 20 and 34) Short-term bills payable (Note 20) Contract liabilities - current (Note 25) Notes payable (Note 21) Trade payables (Note 21) Trade payables to related parties (Note 33) Other payables (Note 22) Current tax liabilities (Note 27) Lease liabilities - current (Note 16) Current portion of long-term borrowings (Notes 20 and 34) Other current liabilities (Note 5 and 22) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Note 27) Lease liabilities - non-current (Note 16) Net defined benefit liabilities - non-current (Note 23) Other non-current liabilities (Note 22) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 24) 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 24) Total equity TOTAL		2020 Amount % $ 4,332,018 16 1,490,336 5 249,485 1 1,728,070 6 3,154 - 6,295,581 23 9,011 - 2,917 - 224,370 1 23,063 - 5,124,648 18 1,579,289 6 63,844 - 21,125,786 76 10,666 - 267,178 1 4,201,645 15 626,440 2 844,797 3 817 - 105,391 - 417,127 2 24,031 - 3,521 - 196,463 1 6,698,076 24 $ 27,823,862 100 $ 1,846,767 7 129,869 1 748,044 3 90,333 - 2,107,188 8 20,526 - 3,442,258 12 399,020 1 77,782 - - - 94,108 - 8,955,895 32 351,328 1 200,191 1 280,701 1 20,120 - 852,340 3 9,808,235 35 9,150,897 33 127,392 - 3,287,022 12 577,494 2 4,918,357 18 8,782,873 32 (355,492) (1) (21,182) - 17,684,488 64 331,139 1 18,015,627 65 $ 27,823,862 100		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

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

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STANDARD FOODS CORPORATION AND SUBSIDIARIES

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

OPERATING REVENUE Sales (Notes 25 and 33) OPERATING COSTS Cost of goods sold (Notes 12, 26 and 33) GROSS PROFIT OPERATING EXPENSES (Note 26) 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 Interest income (Note 26) Other income (Note 26) Other gains (Notes 26 and 29) Finance costs (Note 26) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 27) 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 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 27) Total items that will not be reclassified subsequently to profit or loss		2020 Amount % $ 34,466,244 100 24,856,790 72 9,609,454 28 4,232,068 12 1,152,067 3 166,035 1 15,105 - 5,565,275 16 4,044,179 12 119,907 - 39,862 - 136,100 1 (51,337) - 244,532 1 4,288,711 13 1,032,881 3 3,255,830 10 (26,831) - 140,235 - 5,347 - 118,751 -		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 74,819 - 35,918 - 60,803 - (46,879) - 124,661 - 4,548,534 14 1,093,698 3 3,454,836 11 (36,667) - 54,764 - 7,671 - 25,768 - (Continued)

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STANDARD FOODS CORPORATION AND SUBSIDIARIES

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

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Income tax relating to the items that may be reclassified subsequently to profit or loss (Note 27) Total items that may be reclassified subsequently to profit or loss Other comprehensive income (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 28) Basic Diluted		2020 Amount % $ 151,809 - (30,209) - 121,600 - 240,351 - $ 3,496,181 10 $ 3,212,801 10 43,029 - $ 3,255,830 10 $ 3,413,674 10 82,507 - $ 3,496,181 10 $ 3.54 $ 3.53		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

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

(Concluded)

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STANDARD FOODS CORPORATION AND SUBSIDIARIES

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

BALANCE AT JANUARY 1, 2019 Appropriation of 2018 earnings Legal reserve Special reserve Cash dividends to shareholders Adjustment of capital surplus for the Company's cash dividends received by subsidiaries Decrease in non-controlling interests Net profit for the year ended December 31, 2019 Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax Total comprehensive income (loss) for the year ended December 31, 2019 BALANCE AT DECEMBER 31, 2019 Appropriation of 2019 earnings Legal reserve Special reserve Cash dividends to shareholders Adjustment of capital surplus for the Company's cash dividends received by subsidiaries Decrease in non-controlling interests Net profit for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020, net of income tax Total comprehensive income for the year ended December 31, 2020 BALANCE AT DECEMBER 31, 2020			**Equity Attributable to Owners of **	**Equity Attributable to Owners of **	the Company	the Company		Total Non-controlling Interests $ 15,806,926 $ 233,399 - - - - (2,287,724) - 16,673 - - (17,230) 3,416,097 38,739 (273,845) 17,656 3,142,252 56,395 16,678,127 272,564 - - - - (2,424,987) - 17,674 - - (23,932) 3,212,801 43,029 200,873 39,478 3,413,674 82,507 $ 17,684,488 $ 331,139	Total Equity $ 16,040,325 - - (2,287,724) 16,673 (17,230) 3,454,836 (256,189) 3,198,647 16,950,691 - - (2,424,987) 17,674 (23,932) 3,255,830 240,351 3,496,181 $ 18,015,627
	Ordinary Shares Capital Surplus $ 9,150,897 $ 93,045 - - - - - - - 16,673 - - - - - - - - 9,150,897 109,718 - - - - - - - 17,674 - - - - - - - - $ 9,150,897 $ 127,392			Total $ 6,915,111 - - (2,287,724) - - 3,416,097 (27,296) 3,388,801 8,016,188 - - (2,424,987) - - 3,212,801 (21,129) 3,191,672 $ 8,782,873		Other Equity	Total Treasury Shares $ (330,945) $ (21,182) - - - - - - - - - - - - (246,549) - (246,549) - (577,494) (21,182) - - - - - - - - - - - - 222,002 - 222,002 - $ (355,492) $ (21,182)
						Exchange Differences on Translation of the Financial Statements of Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Foreign Operations Comprehensive Income $ (412,869) $ 81,924 - - - - - - - - - - - - (280,169) 33,620 (280,169) 33,620 (693,038) 115,544 - - - - - - - - - - - - 120,832 101,170 120,832 101,170 $ (572,206) $ 216,714
			Legal Reserve Special Reserve Unappropriated Earnings $ 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 4,739,831 341,610 - (341,610) - 246,549 (246,549) - - (2,424,987) - - - - - - - - 3,212,801 - - (21,129) - - 3,191,672 $ 3,287,022 $ 577,494 $ 4,918,357

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

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STANDARD FOODS CORPORATION AND SUBSIDIARIES

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

CASH FLOWS FROM OPERATING ACTIVITIES 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 on disposal of investment properties Others Changes in operating assets and liabilities Financial assets mandatorily classified as fair value through profit or loss Notes receivable Trade receivables Trade receivables from related parties 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 Purchase of financial assets at amortized cost Refund of financial assets at amortized cost Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Payments for intangible assets	2020 $ 4,288,711 596,990 65,479 15,105 (929) 51,337 (119,907) (9,809) 2,959 - - (823,078) (134) 172,746 (9,011) (21,040) (1,427,914) (172,766) (34,073) (2,602) 409,533 (227,045) 85,049 (5,615) 562,724 64,643 (46,228) 3,415,125 110,023 (51,777) (1,043,196) 2,430,175 (3,929,027) 4,412,156 (281,891) 20,943 (42,768)	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) 20,095 (7,564) (Continued)

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STANDARD FOODS CORPORATION AND SUBSIDIARIES

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

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 generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term bills payable Decrease in short-term bills payable Payments for long-term borrowings 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 Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE 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	2020 $ 2,775 - 83,674 (73,606) - 9,809 202,065 440,344 - 29,901 - (6,000) (88,207) - (286) (2,851) (2,431,245) (2,058,344) 52,219 626,115 3,705,903 $ 4,332,018	2019 $ 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

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, 2020 AND 2019 (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 22, 2021.

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

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

Except for the following, the initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies:

1) Amendments to IFRS 3 “Definition of a Business”

The Group applies the amendments to IFRS 3 to transactions that occur on or after January 1, 2020. 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 that together significantly contribute to the ability to create outputs. To determine whether an acquired process is substantive, different criteria apply, depending on whether there are outputs at the acquisition date. 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 Group adopted the amendments starting from January 1, 2020. The threshold of materiality that could influence users has been changed to “could reasonably be expected to influence”. Accordingly, disclosures in the consolidated financial statements do not include immaterial information that may obscure material information.

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• b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2021

New IFRSs Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform - Phase 2” Amendment to IFRS 16 “Covid-19 - Related Rent Concessions”	Effective Date Announced by IASB
	Effective immediately upon promulgation by the IASB January 1, 2021 June 1, 2020

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 “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”

Effective Date Announced by IASB (Note 1)

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

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

• Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

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• Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

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.

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

• 14 -

• 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.

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

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

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when 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.

• 15 -

For the purpose of presenting consolidated financial statements, the functional currencies of the Company and the entities in the Group (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.

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

Investment properties are initially measured 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.

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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.

• 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 property, plant and equipment, right-of-use asset, intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset 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. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

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

• 17 -

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset, 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 on the asset, 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.

• 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 32.

• 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, 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.

• 18 -

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.

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.

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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.

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.

3) Financial liabilities

• a) Subsequent measurement

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

• b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

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.

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• Revenue from the sale of goods

Revenue from the sale of goods comes from sales of nutritious foods, cooking products. 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

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.

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.

• 21 -

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.

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.

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 services.

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.

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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.

• r. Taxation

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

• 1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain 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.

• 23 -

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.

Estimate of Return Liability

The sales of goods are recognized upon completion of the profit-making process, on the conditions set out in Note 4. Management estimates the return liability based on market condition and the historical return rates. The sales return allowance are recorded as the deduction of sales, and management periodically reviews the reasonableness of accounting estimates.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents (investments with original maturities of 3 months or less) Time deposits Repurchase agreements collateralized by bonds		December 31	December 31
		2020 $ 2,336 4,258,398 71,284 - $ 4,332,018	2019 $ 2,940 3,198,093 184,478 320,392 $ 3,705,903

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

Bank balance Repurchase agreements collateralized by bonds	December 31
	2020 2019 0.001%-3.220% 0.001%-3.220% - 0.550%-0.560%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at fair value through profit or loss (FVTPL)-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds Note cash		December 31	December 31
		2020 $ 1,461,304 29,032 $ 1,490,336	2019 $ 667,673 - $ 667,673 (Continued)

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Financial assets at FVTPL-non-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Domestic unlisted shares		**December 31 **	**December 31 **
		2020 $ 10,666	2019 $ 7,575 (Concluded)

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Current Investments in equity instruments at fair value through other comprehensive income (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
		2020 2019 $ 249,485 $ 186,711 $ 267,178 $ 189,695 December 31
		2020 $ 15,374 5,297 8,815 19,881 152,418 47,700 $ 249,485 $ 62,423 14,918 188,784 1,053 $ 267,178	2019 $ 16,479 5,346 9,126 19,198 106,772 29,790 $ 186,711 $ 65,640 15,702 107,424 929 $ 189,695

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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.

Dividends of $9,809 thousand and $11,231 thousand were recognized during 2020 and 2019, respectively.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Time deposits with original maturities of more than 3 months		December 31	December 31
		2020 $ 1,728,070	2019 $ 2,206,805

The ranges of interest rates for time deposits with original maturities of more than 3 months were approximately 0.35%-4.13% and 0.65%-2.85% per annum as of December 31, 2020 and 2019, 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 Subsidy receivable Others		**December 31 **	**December 31 **
		2020 $ 3,154 $ 6,328,068 (32,487) $ 6,295,581 $ 19,033 3,259 19,543 182,535 $ 224,370	2019 $ 2,977 $ 6,460,483 (20,933) $ 6,439,550 $ 8,912 595 3,118 180,458 $ 193,083

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.

• 26 -

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 approach considering 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.

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

December 31, 2020

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost December 31, 2019 Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Not Past Due 0.01% $ 5,855,491 (537) $ 5,854,954 Not Past Due 0.01% $ 6,340,444 (733) $ 6,339,712	Less than 30 Days 0.44% $ 353,466 (1,549) $ 351,917 Less than 30 Days 1.68% $ 54,029 (906) $ 53,124	31 to 90 Days 91 to 180 Days Over 180 Days 2.97% 51.56% 96.04% $ 74,259 $ 40,270 $ 7,736 (2,207) (20,764) (7,430) $ 72,052 $ 19,506 $ 306 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 $ 6,331,222 (32,487) $ 6,298,735 Total $ 6,463,460 (20,933) $ 6,442,527

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 2020 2019 $ 20,933 $ 8,792 15,105 12,762 (4,206) - 655 (621) $ 32,487 $ 20,933	For the Year Ended December 31 2020 2019 $ 20,933 $ 8,792 15,105 12,762 (4,206) - 655 (621) $ 32,487 $ 20,933	For the Year Ended December 31 2020 2019 $ 20,933 $ 8,792 15,105 12,762 (4,206) - 655 (621) $ 32,487 $ 20,933
		2020 $ 20,933 15,105 (4,206) 655 $ 32,487	2019 $ 8,792 12,762 - (621) $ 20,933

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11. FINANCE LEASE RECEIVABLES

Undiscounted lease payments Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 onwards Less: Unearned finance income Net investment in leases presented as finance lease receivables		December	31
		2020 $ 4,200 4,700 4,800 4,800 4,800 8,600 31,900 (4,952) $ 26,948	2019 $ 4,200 4,200 4,700 4,800 4,800 13,400 36,100 (6,377) $ 29,723

As of December 31, 2020, 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 **
		2020 $ 640,373 1,977,416 350,629 2,092,141 64,089 $ 5,124,648	2019 $ 578,324 1,544,663 354,748 1,101,188 68,061 $ 3,646,984

The cost of inventories recognized as cost of goods sold for the year ended December 31, 2020 included reversals of inventory writ-downs of $12,132 thousand and loss on abandoned inventories of $44,415 thousand. 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.

13. PREPAYMENTS

Prepayments for purchases Prepayments for rent Prepayments for insurance Excess business tax paid Prepayments for advertisements Others		December 31	December 31
		2020 $ 1,025,145 5,274 980 212,798 19,490 315,602 $ 1,579,289	2019 $ 884,193 6,215 1,139 255,952 13,578 224,149 $ 1,385,226

• 28 -

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 The Company Standard Foods, LLC. 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 Le Bonta Wellness Co., Ltd. (“Shanghai Le Bonta”) 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 2020 2019 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 - 100.0 100.0 - 100.0 - In June 2020, the Company invested US$300 thousand and established Standard Foods, LLC. 100.0 100.0 - 100.0 100.0 - 100.0 100.0 - 100.0 100.0 - 100.0 100.0 - 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 -

15. PROPERTY, PLANT AND EQUIPMENT

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	Freehold Land $ 702,405 - 702,405 - - - - - $ 702,405	Buildings $ 3,447,188 - 3,447,188 - (49,378 ) 871,706 (129,033 ) (62,333) $ 4,078,150	Equipment $ 4,153,208 - 4,153,208 846 (315,990 ) 279,875 - (48,741) $ 4,069,198	Other Equipment $ 610,658 (9,752) 600,906 2,429 (53,531 ) 124,342 - (112,208) $ 561,938	Property in Construction Total $ 1,019,714 $ 9,933,173 - (9,752) 1,019,714 9,923,421 402,529 405,804 (166 ) (419,065 ) (1,275,904 ) 19 (129,033 ) (7,285) (230,567) $ 138,888 $ 9,550,579 (Continued)

• 29 -

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 Cost Balance at January 1, 2020 Additions Disposals Reclassified Transfers to investment properties Effects of foreign currency exchange differences Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Disposals Depreciation expenses Transfers to investment properties Effects of foreign currency exchange differences Balance at December 31, 2020 Carrying amount at December 31, 2020	Freehold Land $ - - - - - - - $ - $ 702,405 $ 702,405 - - 2,940 - - $ 705,345 $ - - - - - $ - $ 705,345	Buildings $ 1,234,242 - 1,234,242 (35,189 ) 169,112 (115,644 ) 17,158 $ 1,269,679 $ 2,808,471 $ 4,078,150 324 (9,510 ) 48,874 (748,948 ) 23,825 $ 3,392,715 $ 1,269,679 (9,171 ) 171,841 (29,475 ) 7,891 $ 1,410,765 $ 1,981,950	Equipment $ 2,748,680 - 2,748,680 (277,760 ) 279,868 - (20,571) $ 2,730,217 $ 1,338,981 $ 4,069,198 16,303 (104,134 ) 167,842 - 18,984 $ 4,168,193 $ 2,730,217 (95,763 ) 271,391 - 8,908 $ 2,914,753 $ 1,253,440	Other Equipment $ 472,013 (3,863) 468,150 (48,675 ) 46,359 - (40,463) $ 425,371 $ 136,567 $ 561,938 4,434 (34,845 ) 39,470 - 3,831 $ 574,828 $ 425,371 (33,165 ) 46,004 - 2,711 $ 440,921 $ 133,907	Property in Construction Total $ - $ 4,454,935 - (3,863) - 4,451,072 - (361,624 ) - 495,339 - (115,644 ) - (43,876) $ - $ 4,425,267 $ 138,888 $ 5,125,312 $ 138,888 $ 9,550,579 260,830 281,891 (13,512 ) (162,001 ) (259,126 ) - - (748,948 ) (77) 46,563 $ 127,003 $ 8,968,084 $ - $ 4,425,267 - (138,099 ) - 489,236 - (29,475 ) - 19,510 $ - $ 4,766,439 $ 127,003 $ 4,201,645 (Concluded)

No impairment assessment was performed for the years ended December 31, 2020 and 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 34 for the carrying amount of property, plant and equipment pledged by the Group to secure borrowings granted to the Group.

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16. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Land Buildings Office equipment Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Office equipment Transportation equipment		**December 31 **	**December 31 **
	2020 $ 399,166 218,696 444 8,134 $ 626,440 For the Year Ended		2019 $ 404,964 286,147 390 8,178 $ 699,679 December 31
		2020 $ 15,812 $ 12,314 77,501 76 3,633 $ 93,524	2019 $ 176,972 $ 12,381 61,539 29 2,975 $ 76,924

b. Lease liabilities

Carrying amounts Current Non-current		December 31	December 31
		2020 $ 77,782 $ 200,191	2019 $ 83,119 $ 264,496

Range of discount rates for lease liabilities was as follows:

Land Buildings Office equipment Transportation equipment	December 31
	2020 2019 1.07%-1.49% 1.07%-1.49% 1.07%-4.35% 1.07%-4.35% 1.07% 1.07% 1.07%-3.77% 1.07%-12.04%

• 31 -

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.

Expenses relating to short-term leases Expenses relating to low-value asset leases Expenses relating to variable lease payments not included in the measurement of lease liabilities Total cash outflow for leases	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2020 $ 92,994 $ 1,144 $ 77 $ (192,131)	2019 $ 96,334 $ 881 $ - $ (178,717)

The Group’s leases of certain office equipment 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.

17. INVESTMENT PROPERTIES

Cost Balance at January 1, 2019 Transfers from right-of-use assets Transfers from property, plant and equipment Disposals Effects of foreign currency exchange differences Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Depreciation expenses Disposals Transfers from right-of-use assets Transfers from property, plant and equipment Effects of foreign currency exchange differences Balance at December 31, 2019 Carrying amount at December 31, 2019	Completed Investment Properties $ 157,309 - 129,033 (41,592) (3,039) $ 241,711 $ 46,533 2,310 (37,324) - 115,644 (2,729) $ 124,434 $ 117,277	Right-of-use Assets $ - 5,898 - - (350) $ 5,548 $ - 225 - 123 - (15) $ 333 $ 5,215	Total $ 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

(Continued)

• 32 -

Cost Balance at January 1, 2020 Transfers from property, plant and equipment Effects of foreign currency exchange differences Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expenses Transfers from property, plant and equipment Effects of foreign currency exchange differences Balance at December 31, 2020 Carrying amount at December 31, 2020	Completed Investment Properties $ 241,711 748,948 19,081 $ 1,009,740 $ 124,434 13,796 29,475 2,092 $ 169,797 $ 839,943	Right-of-use Assets $ 5,548 - 87 $ 5,635 $ 333 434 - 14 $ 781 $ 4,854	Total $ 247,259 748,948 19,168 $ 1,015,375 $ 124,767 14,230 29,475 2,106 $ 170,578 $ 844,797 (Concluded)

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 fair values of the investment properties were $1,146,959 thousand and $212,653 thousand as of December 31, 2020 and 2019, respectively. The management of the Group determined the fair value with reference to market transaction prices of similar properties.

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 34.

18. INTANGIBLE ASSETS

Trademark 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	Computer Software $ 233,269 7,564 - (1,120) $ 239,713	Total $ 440,308 7,564 34 19,067 $ 466,973

(Continued)

• 33 -

Trademark 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 Cost Balance at January 1, 2020 $ 227,260 Additions 28,747 Disposals - Effects of foreign currency exchange differences 5,730 Balance at December 31, 2020 $ 261,737 Accumulated amortization and impairment Balance at January 1, 2020 $ 163,442 Disposals - Amortization expenses 4,822 Effects of foreign currency exchange differences 2,401 Balance at December 31, 2020 $ 170,665 Carrying amount at December 31, 2020 $ 91,072	Computer Software $ 230,807 6,551 (1,096) $ 236,262 $ 3,451 $ 239,713 14,021 (28,456) (39) $ 225,239 $ 236,262 (28,456) 3,158 (44) $ 210,920 $ 14,319	Total $ 368,076 11,632 19,996 $ 399,704 $ 67,269 $ 466,973 42,768 (28,456) 5,691 $ 486,976 $ 399,704 (28,456) 7,980 2,357 $ 381,585 $ 105,391

(Concluded)

No impairment assessment was performed for the year ended December 31, 2020 and 2019 as there was no indication of impairment.

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

• 34 -

19. OTHER ASSETS

Current Pledge time deposits (Note 34) Advances to officers Temporary payments Right to recover a product Others Non-current Prepayments for equipment Refundable deposits Pledge time deposits (Note 34) Others		December 31	December 31
		2020 $ 4,016 24,291 10,094 25,320 123 $ 63,844 $ 24,737 56,259 - 115,467 $ 196,463	2019 $ 4,013 15,570 9,683 - 118 $ 29,384 $ 6,984 53,615 85,950 114,426 $ 260,975

20. BORROWINGS

• a. Short-term borrowings

Secured borrowings (Note 34) Bank loans Unsecured borrowings Bank loans Others		December 31	December 31
		2020 $ 180,000 1,650,614 16,153 $ 1,846,767	2019 $ 150,000 1,232,955 - $ 1,382,955

The range of interest rates on bank loans was 0.95%-3.20% and 1.05%-4.35% per annum as of December 31, 2020 and 2019, respectively.

• b. Short-term bills payable

Commercial paper Less: Unamortized discount on bills payable		December 31	December 31
		2020 $ 130,000 (131) $ 129,869	2019 $ 100,000 (32) $ 99,968

• 35 -

Outstanding short-term bills payable were as follows:

December 31, 2020

Financial Institutions Commercial paper Mega Bills Finance Co., Ltd. International Bills Finance Corp. Taiwan Bills Finance Corp. December 31, 2019 Financial Institutions Commercial paper Mega Bills Finance Co., Ltd. International Bills Finance Corp.	Nominal Amount $ 30,000 50,000 50,000 $ 130,000 Nominal Amount $ 50,000 50,000 $ 100,000	Discount Amount $ (39) (49) (43) $ (131) Discount Amount $ (3) (29) $ (32)	Carrying Amount Interest Rate Collateral $ 29,961 1.24% - 49,951 1.19% - 49,957 1.29% - $ 129,869 Carrying Amount Interest Rate Collateral $ 49,997 1.36% - 49,971 1.34% - $ 99,968	Carrying Amount of Collateral $ - - - $ - Carrying Amount of Collateral $ - - $ -

• c. Long-term borrowings

Secured borrowings (Note 34) Bank loans* Less: Current portions Long-term borrowings		**December **	**31 **
		2020 $ - - $ -	2019 $ 6,000 (6,000) $ -

• As of December 31, 2020, the interest rate of the bank borrowings secured by the Group’s equipment (see Note 34) was 1.91% per annum. The bank borrowings will be repayable quarterly from March 2018. The bank borrowing was repayable at the end of February 2020.

• 36 -

21. NOTES PAYABLE AND TRADE PAYABLES

Notes payable Operating Non-operating Trade payables Operating		December 31	December 31
		2020 $ 90,288 45 $ 90,333 $ 2,107,188	2019 $ 316,444 - $ 316,444 $ 2,014,619

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.

22. OTHER LIABILITIES

Current Other payables Payable for salaries or bonuses Payable for compensation of employees Payable for remuneration of directors Payable for commission and rebates Advertisement payable Payable for royalties Payable for freight Payable for equipment Others Other liabilities Advance receipts from customers Return liability Others Non-current Other liabilities Guarantee deposits Others		December 31	December 31
		2020 $ 368,144 49,921 21,965 1,234,532 226,393 23,682 116,854 86,794 1,313,973 $ 3,442,258 $ 2,430 41,596 50,082 $ 94,108 $ 19,990 130 $ 20,120	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

• 37 -

In accordance with business practices, the Group accepts the returns of goods sold. Taking into account the historical experience in the past, the Company estimates the return rate with the most probable amount, and recognizes the return liability, which accounts for other current liabilities, and related product rights to be returned, which accounts for other current assets.

23. 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 Act. 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:

Present value of funded defined benefit obligation Fair value of plan assets Net defined benefit liabilities		December 31	December 31
		2020 $ 719,471 (442,291) $ 277,180	2019 $ 719,306 (421,021) $ 298,285

• 38 -

Movements in net defined benefit liabilities (assets) were as follows:

	Present Value		Net Defined
	of the Defined		Benefit
	Benefit	Fair Value of	Liabilities
	Obligation	the Plan Assets	(Assets)
Balance at January 1, 2019	$ 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
Service cost
Current service cost	10,442	-	10,442
Net interest expense (income)	5,126	(3,002)	2,124
Recognized in profit or loss	15,568	(3,002)	12,566
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(14,827)	(14,827)
Actuarial loss - changes in demographic
assumptions	3,162	-	3,162
Actuarial gain - changes in financial
assumptions	24,179	-	24,179
Actuarial loss - experience adjustments	14,317	-	14,317
Recognized in other comprehensive income	41,658	(14,827)	26,831
Contributions from the employer	-	(61,367)	(61,367)
Contributions from plan participants	2,590	(2,590)	-
Benefits paid	(62,523)	62,523	-
Exchange differences	2,872	(2,007)	865
Balance at December 31, 2020	$ 719,471	$ (442,291)	$ 277,180

Through the defined benefit plans under the Labor Standards Act, 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.

• 39 -

• 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.

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
	2020 2019 0.150%-0.500% 0.300%-0.800% 0.500%-3.000% 0.500%-3.000%

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

Discount rates 0.250% increase 0.250% decrease Expected rates of salary increase 0.250% increase 0.250% decrease		December	31
		2020 $ (21,920) $ 22,771 $ 19,705 $ (19,192)	2019 $ (21,945) $ 22,800 $ 20,102 $ (19,758)

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 **
	2020 2019 $ 46,456 $ 22,248 1.0-16.7 years 19-16.5 years

24. 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 **
		2020 920,000 $ 9,200,000 915,089 $ 9,150,897	2019 920,000 $ 9,200,000 915,089 $ 9,150,897

• 40 -

2) Global depositary receipts

As of December 31, 2020, 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.

• 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 Recognized from treasury share transactions May be used to offset a deficit Changes in percentage of ownership interests in subsidiaries (2)		**December 31 **	**December 31 **
		2020 $ 1 126,925 466 $ 127,392	2019 $ 1 109,251 466 $ 109,718

• 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 26(i) compensation of employees and remuneration of directors”.

• 41 -

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.

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 2019 and 2018 approved in the shareholders’ meetings on June 16, 2020 and June 13, 2019, respectively, were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended December 31
		2019 $ 341,610 $ 246,549 $ 2,424,987 $2.65	2018 $ 294,909 $ 70,519 $ 2,287,724 $2.50

The appropriations of earnings for 2020 had been proposed by the Company’s board of directors on March 22, 2021. The appropriations and dividends per share were as follows:

	For the Year	For the Year
		Ended
	December 31,
		2020
Legal reserve	$	319,167
Special reserve	$	2,287,724
Cash dividends		$2.50

The appropriations of earnings for 2020 are subject to the resolution of the shareholders in their meeting to be held on June 11, 2021.

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
		2020 $ 330,945 246,549 $ 577,494	2019 $ 260,426 70,519 $ 330,945

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.

• 42 -

e. Other equity items

• 1) Exchange differences on translation of the financial statements of foreign operations

Balance at January 1 Recognized for the year Exchange differences on translation of the financial statements of foreign operations Other comprehensive income recognized for the year Balance at December 31 2) Unrealized gain (loss) on financial assets at FVTOCI Balance at January 1 Recognized for the year Unrealized gain (loss) - equity instruments Other comprehensive income recognized for the year Balance at December 31 f. Non-controlling interests Balance at January 1 Share in profit for the year Other comprehensive income (loss) during the year Exchange difference on translation of the financial statements of foreign operations Unrealized gain (loss) on financial assets at FVTOCI Remeasurement on defined benefit plans Related income tax Cash dividends distributed by subsidiaries to non-controlling interests Balance at December 31 g. Treasury shares Purpose of Buy-back Number of shares at December 31, 2019 and January 1, 2019 Number of shares at December 31, 2020 and January 1, 2020	**For the Year Ended **	**For the Year Ended **	**December 31 **
	2020 $ (693,038) 120,832 120,832 $ (572,206) For the Year Ended		2019 $ (412,869) (280,169) (280,169) $ (693,038) December 31
	2020 $ 115,544 101,170 101,170 $ 216,714 For the Year Ended		2019 $ 81,924 33,620 33,620 $ 115,544 December 31
		2020 2019 $ 272,564 $ 233,399 43,029 38,739 768 (1,788) 39,045 21,147 (419) (2,129) 84 426 (23,932) (17,230) $ 331,139 $ 272,564 Shares Held by Subsidiaries (In Thousands of Shares) 6,669 6,669

• 43 -

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, 2020 Chang Hui 6,669 December 31, 2019 Chang Hui 6,669	Carrying Amount Market Price $ 21,182 $ 408,839 $ 21,182 $ 464,195

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.

25. REVENUE

				**For **	**For **	**the Year Ended December 31 **	**the Year Ended December 31 **	**the Year Ended December 31 **	**the Year Ended December 31 **
						2020		2019
Revenue from contracts with customers
Revenue from sale of goods				$	34,466,244		$	31,266,232
a. Contract balances
		December 31,		December 31,
			2020			2019	January 1, 2019
Notes receivable (Note 10)		$	3,154	$		2,977	$	2,887
Trade receivables (Note 10)		$	6,295,581	$		6,439,550	$	6,161,079
Trade receivables from related	parties
(Note 10)		$	9,011	$		-	$		-
Contract liabilities - current
Sale of goods		$	748,044	$		326,644	$	360,115
b. Disaggregation of revenue
		Reportable Segments
		Nutritious	Cooking
		Foods	Products			Others		Total
For the year ended
December 31, 2020
Types of goods or services
Sale of goods	$	11,968,867	$ 18,479,507		$	4,017,870	$	34,466,244
For the year ended
December 31, 2019
Types of goods or services
Sale of goods	$	11,984,151	$ 15,551,432		$	3,730,649	$	31,266,232

• 44 -

26. NET PROFIT

Net profit includes:

a. Interest income

Bank deposits Financial assets at amortized cost Repurchase agreements collateralized by bonds Others	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2020 $ 68,516 49,530 515 1,346 $ 119,907	2019 $ 51,405 21,459 569 1,386 $ 74,819

b. Other income

Rental income Operating lease rental income Investment properties Others Dividends Investments in equity instruments at FVTOCI	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2020 $ 28,978 1,075 30,053 9,809 $ 39,862	2019 $ 23,824 863 24,687 11,231 $ 35,918

c. Other gains and losses

Fair value changes of financial assets and financial liabilities Financial assets held for trading Net foreign exchange gains (losses) Net loss on disposal of property, plant and equipment Government grants Others	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2020 $ 929 (3,753) (2,959) 110,649 31,234 $ 136,100	2019 $ 7,812 (26,043) (41,828) 65,423 55,439 $ 60,803

d. Finance costs

Interest on bank loans Interest on short-term bills payable Interest on lease liabilities Other interest expense	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 40,535 1,044 9,709 49 $ 51,337	2019 $ 37,982 1,060 7,788 49 $ 46,879

• 45 -

e. Impairment losses recognized (reversed)

Trade receivables Inventories (included in operating costs) f. Depreciation and amortization An analysis of depreciation by function Operating costs Operating expenses Non-operating revenue and expenses An analysis of amortization by function Operating costs Operating expenses g. 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 h. Employee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans (see Note 23) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	For the Year Ended	December 31
	2020 $ 15,105 $ (12,132) For the Year Ended			2019 $ 12,762 $ 2,307 December 31
	2020 $ 397,766 184,994 14,230 $ 596,990 $ 20,311 45,168 $ 65,479 For the Year Ended			2019 $ 399,640 172,623 2,535 $ 574,798 $ 20,977 33,260 $ 54,237 December 31
	2020 $ 705 576 $ 1,281 For the Year Ended			2019 $ 702 572 $ 1,274 December 31
		2020 $ 59,992 12,566 72,558 2,719,686 $ 2,792,244 $ 799,830 1,992,414 $ 2,792,244	2019 $ 127,502 12,628 140,130 2,338,177 $ 2,478,307 $ 846,191 1,632,116 $ 2,478,307

• 46 -

• i. Compensation of employees 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, 2020 and 2019, which were approved by the Company’s board of directors on March 22, 2021 and March 18, 2020, respectively, were as follows:

Accrual rate

Compensation of employees Remuneration of directors Amount Compensation of employees Remuneration of directors	**For the Year Ended December 31 **	**For the Year Ended December 31 **
	2020 2019 1.25% 1.22% 0.55% 0.59% For the Year Ended December 31
	2020 Cash $ 49,921 21,965	2019
		Cash $ 52,013 25,073

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

There 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 years ended December 31, 2019 and 2018.

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

• j. 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 **
		2020 $ 143,729 (147,482) $ (3,753)	2019 $ 75,308 (101,351) $ (26,043)

• 47 -

27. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year 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 **
		2020 $ 907,556 19,115 (8,697) 917,974 114,907 $ 1,032,881	2019 $ 982,224 12,941 (37,010) 958,155 135,543 $ 1,093,698

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 Income tax on unappropriated earnings 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
		2020 $ 4,288,711 $ 1,098,861 21,721 (212,783) 114,664 19,115 (8,697) $ 1,032,881	2019 $ 4,548,534 $ 1,193,055 24,491 (161,430) 61,651 12,941 (37,010) $ 1,093,698

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year Translation 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
		2020 $ 30,209 20 (5,367) $ 24,862	2019 $ (70,042) (3) (7,668) $ (77,713)

• 48 -

c. Current tax assets and liabilities

Current tax assets Tax refund receivable Current tax liabilities Income tax payable		December 31	December 31
		2020 $ 23,063 $ 399,020	2019 $ 46,114 $ 547,018

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, 2020

			Recognized in	Recognized in	Recognized in
				Other
		Recognized in	Comprehensive			Exchange
	Opening Balance	Profit or Loss		Income		Differences		Closing Balance
Deferred tax assets
Temporary differences
Investments accounted for using
the equity method	$ 82,086	$ (32,205 )	$		-	$	-	$ 49,881
Exchange differences on
translation of the financial
statements of foreign
operations	173,258	-		(30,209 )			-	143,049
Defined benefit plans	84,118	(423 )		5,390			166	89,251
Advertisement payable	52,600	-			-		825	53,425
Deferred sales returns and
allowances	8,774	2,451			-		-	11,225
Allowance for inventory loss	10,060	(1,490 )			-		-	8,570
Financial assets measured at cost	43,889	-		(20 )			-	43,869
Others	18,613	(788)			-		32	17,857
	$ 473,398	$ (32,455)	$	(24,839)		$	1,023	$ 417,127
Deferred tax liabilities
Temporary differences
Investments accounted for using
the equity method	$ 232,185	$ 75,435	$		-	$	-	$ 307,620
Reserve for land value increment
tax	33,685	-			-		-	33,685
Defined benefit plans	2,263	598		23			-	2,884
Others	680	6,419			-		40	7,139
	$ 268,813	$ 82,452	$	23		$	40	$ 351,328

• 49 -

For the year ended December 31, 2019

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

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
		2020 $ - 23,686 37,139 63,361 74,401 94,067 $ 292,654 $ 657,317	2019 $ 10,400 24,285 38,080 65,118 78,603 - $ 216,846 $ 317,448

• f. Income tax assessments

The income tax returns of the Company, Standard Dairy Products, Charng Hui, Standard Beverage, Le Bonta Wellness and Domex Technology for the year ended December 31, 2018 had been assessed by the tax authorities.

• 50 -

28. EARNINGS PER SHARE

Unit: NT$ Per Share

Basic earnings per share Diluted earnings per share	**For **	the Year Ended December 31	the Year Ended December 31
		2020 $ 3.54 $ 3.53	2019 $ 3.76 $ 3.76

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 **
		2020 $ 3,212,801	2019 $ 3,416,097

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 Effects 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 **
		2020 908,420 1,070 909,490	2019 908,420 709 909,129

The Company may settle compensation paid to employees in cash or shares; therefore, the Company assumes that the entire amount of the compensation will be settled in shares and the resulting potential shares are 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.

29. GOVERNMENT GRANTS

The Group received government grants, and recognized $110,649 thousand and $65,423 thousand as other gains during 2020 and 2019, respectively.

• 51 -

30. CASH FLOWS INFORMATION

Changes in liabilities from financing activities:

For the year ended December 31, 2020

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, 2019	Opening Balance $ 1,382,955 99,968 6,000 347,615 20,044 2,934 $ 1,859,516 Opening Balance $ 1,731,478 119,904 27,000 139,110 19,961 4,734 $ 2,042,187	Cash Flows $ 440,344 29,901 (6,000) (88,207) (286) (2,851) $ 372,901 Cash Flows $ (301,316) (19,936) (21,000) (73,714) 705 (1,757) $ (417,018)		Non-cash Changes Exchanging Rate Adjustments $ 23,468 - - 18,565 232 47 $ 42,312 Non-cash Changes Exchanging Rate Adjustments $ (47,207) - - 282,219 (622) (43) $ 234,347	Closing Balance $ 1,846,767 129,869 - 277,973 19,990 130 $ 2,274,729 Closing Balance $ 1,382,955 99,968 6,000 347,615 20,044 2,934 $ 1,859,516
Short-term borrowings Short-term bills payable Long-term borrowings Lease liabilities Guarantee deposits received Other non-current liabilities

31. 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.

• 52 -

32. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments that are measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2020 Financial assets at FVTPL Unlisted shares Mutual fund beneficiary certification Note cash Financial assets at FVTOCI Investments in equity instruments at FVTOCI Listed shares and emerging market shares Unlisted shares 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	Level 1 $ - 1,461,304 - $ 1,461,304 $ 311,908 - $ 311,908 Level 1 $ - 667,673 $ 667,673 $ 252,351 - $ 252,351	Level 2 $ - - 29,032 $ 29,032 $ - - $ - Level 2 $ - - $ - $ - - $ -	Level 3 $ 10,666 - - $ 10,666 $ - 204,755 $ 204,755 Level 3 $ 7,575 - $ 7,575 $ - 124,055 $ 124,055	Total $ 10,666 1,461,304 29,032 $ 1,501,002 $ 311,908 204,755 $ 516,663 Total $ 7,575 667,673 $ 675,248 $ 252,351 124,055 $ 376,406

There were no transfers between Levels 1 and 2 for the years ended December 31, 2020 and 2019.

• 53 -

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

For the year ended December 31, 2020

Financial Assets Balance at January 1, 2020 Acquisition 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, 2020 Recognized in other gains and losses - unrealized 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	Financial Assets at FVTPL Equity Instruments $ 7,575 3,993 (902) - - $ 10,666 $ (621) Financial Assets at FVTPL Equity Instruments $ 7,315 260 - - $ 7,575 $ 260	Financial Assets at FVTOCI Equity Instruments $ 124,055 - - 80,684 16 $ 204,755 Financial Assets at FVTOCI Equity Instruments $ 77,165 - 46,928 (38) $ 124,055	Total $ 131,630 3,993 (902) 80,684 16 $ 215,421 $ (621) Total $ 84,480 260 46,928 (38) $ 131,630 $ 260

• 3) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instrument Valuation Technique and Inputs Note cash Discounted cash flow.

Future cash flows are discounted at a rate that reflects current borrowing interest rates of the bond issuers at the end of the year.

• 54 -

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

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

• 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 **
	2020 2019 $ 1,501,002 $ 675,248 12,652,479 12,691,896 516,663 376,406 4,304,650 3,983,402

• 1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents 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.

• 55 -

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 36.

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 2020 2019 $ 27,134 (i) $ 1,310 (i) EUR Impact For the Year Ended December 31 2020 2019 $ - (iii) $ 2,349 (iii) CHF Impact For the Year Ended December 31 2020 2019 $ 1,083 (v) $ 1,792 (v)	USD Impact
		For the Year Ended December 31
		2020 2019 $ 10,875 (ii) $ 28,367 (ii) AUD Impact
		For the Year Ended **December 31 **
		2020 2019 $ 1,038 (iv) $ 817 (iv) SGD Impact
		For the Year Ended **December 31 **
		2020 2019 $ - (vi) $ (348) (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 in EUR which were not hedged at the end of the reporting period.

• iv. This was mainly attributable to the exposure of bank deposits 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.

• 56 -

• 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.

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	**December 31 **
	2020 2019 $ 1,136,118 $ 1,658,861 2,147,609 1,791,538 694,200 1,172,500 107,000 45,000

Sensitivity analysis

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, 2020 and 2019 would have increased (decreased) by $5,872 thousand and $11,275 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, 2020 would have increased/decreased by $15,010 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, 2020 would have increased/decreased by $5,167 thousand, as a result of the changes in fair value of financial assets at FVTOCI.

• 57 -

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.

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, 2020

Carrying Amount Receivables $ 6,298,735 December 31, 2019 Carrying Amount Receivables $ 6,442,527	Maximum Exposure to Credit Risk Mitigated by
	Collateral Other Credit Enhancements Total $ 57,655 $ 2,632 $ 60,287 Maximum Exposure to Credit Risk Mitigated by
	Collateral Other Credit Enhancements Total $ 76,270 $ 391 $ 76,661

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, 2020 and 2019, the Group had available unutilized bank loan facilities in the amounts of $5,296,868 thousand and $5,186,434 thousand, respectively.

• 58 -

• 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, 2020

Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities Contract liabilities December 31, 2019 Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities Contract liabilities	On Demand or Less than 1 Month $ 741,613 23,864 - 721,695 249,348 $ 1,736,520 On Demand or Less than 1 Month $ 793,371 25,466 - 612,591 108,881 $ 1,540,309	1-3 Months $ 1,498,132 12,939 33,911 961,677 498,696 $ 3,005,355 1-3 Months $ 1,592,308 14,902 - 788,292 217,763 $ 2,613,265	3 Months to 1 Year $ 66,711 47,976 73,126 193,263 - $ 381,076 3 Months to 1 Year $ 86,769 52,197 45,003 48,461 - $ 232,430	1-5 Years $ 19,990 212,012 - - - $ 232,002 1-5 Years $ 20,044 283,028 - - - $ 303,072

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.

33. 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

• 59 -

b. Sales 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
		2020 $ 26,058	2019 $ -

The sale of goods from related parties were conducted on normal commercial terms.

• c. 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
		2020 $ 72,095	2019 $ 48,186

Purchases from related parties were conducted on normal commercial terms.

• d. Receivables from related parties

Line Items Related Party Category/Name Trade receivables The Company is one of the directors GeneFerm		**December **	**31 **
		2020 $ 9,011	2019 $ -

The outstanding trade receivables from related parties are unsecured. For the years ended December 31, 2020 and 2019, no impairment losses were recognized for trade receivables from related parties.

• e. Payables to related parties

Line Items Related Party Category/Name Trade payables The Company is one of the directors GeneFerm		December	31
		2020 $ 20,526	2019 $ 26,141

The outstanding payables from related parties were unsecured.

• f. 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
		2020 $ 40,383 326 $ 40,709	2019 $ 45,293 522 $ 45,815

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

• 60 -

34. 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
		2020 $ 4,016 - 121,362 55,122 $ 180,500	2019 $ 4,013 85,950 137,554 56,909 $ 284,426

35. 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, 2020 were as follows:

• a. The Company has entered into a license agreement with The Quaker Oats Company (Quaker) for a period ending July 11, 2034. 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$1,344 thousand.

• c. Unrecognized commitments for acquisition of property, plant and equipment of approximately $216,721 thousand.

• d. Unrecognized commitments for acquiring approximately 30,666 tons of colostrum from dairymen.

36. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

December 31, 2020 Foreign Currencies Exchange Rate Financial assets Monetary items USD $ 12,230 28.48 (USD:NTD) USD 2,785 6.52 (USD:RMB) RMB 206,642 4.38(RMB:NTD) AUD 1,576 21.95 (AUD:NTD) CHF 1,450 32.31 (CHF:NTD) CHF 754 7.38 (CHF:RMB)	Carrying Amount $ 348,298 79,539 904,473 34,585 46,842 24,355 $ 1,438,092 (Continued)

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Foreign Currencies Exchange Rate Financial liabilities Monetary items USD $ 2,294 28.48 (USD:NTD) CHF 1,086 7.38 (CHF:RMB) December 31, 2019 Foreign Currencies Exchange Rate Financial assets Monetary items USD $ 26,052 29.98 (USD:NTD) USD 6,480 6.98 (USD:RMB) EUR 2,331 33.59 (EUR:NTD) RMB 10,142 4.31(RMB:NTD) AUD 2,058 21.01 (AUD:NTD) 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 21.01 (AUD:NTD) SGD 520 22.28 (SGD:NTD)

Carrying Amount $ 65,335 35,089 $ 100,424 (Concluded) Carrying Amount $ 781,058 194,612 78,298 43,658 43,228 41,470 18,272 $ 1,200,596 $ 30,087 16,006 11,586 $ 57,679

The Group is mainly exposed to RMB and USD. The following information was aggregated by the functional currencies of the entities in the Group, 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	2020 Exchange Rate Net Foreign Exchange Gains (Losses) 1 (NTD:NTD) $ 2,855 4.28 (RMB:NTD) (6,161) 31.47 (CHF:NTD) (447) $ (3,753)	2019
		Exchange Rate Net Foreign Exchange Gains (Losses) 1 (NTD:NTD) $ (27,536) 4.48 (RMB:NTD) 1,483 31.10 (CHF:NTD) 10 $ (26,043)

• 62 -

37. 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.

• m. Information of major shareholders: list all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 9)

38. 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

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• 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, 2020 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, 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	Standard Foods Segment $ 11,742,523 1,442,012 $ 13,184,535 $ 21,974 $ 1,084 $ 225,981 $ 8,105 $ 2,930,569 $ 11,668,690 1,471,254 $ 13,139,944 $ 22,823 $ 1,339 $ 222,087 $ 11,998 $ 2,992,110	Standard Dairy Products Segment $ 2,628,594 900,852 $ 3,529,446 $ 5,876 $ 28 $ 48,967 $ 3,580 $ 506,002 $ 2,657,213 917,346 $ 3,574,559 $ 4,946 $ 12 $ 44,583 $ 2,428 $ 564,292	China Standard Segment $ 16,550,135 286 $ 16,550,421 $ 93,002 $ 48,410 $ 232,684 $ 39,492 $ 873,173 $ 14,334,709 412 $ 14,335,121 $ 42,255 $ 37,186 $ 234,190 $ 29,117 $ 999,415	Other Segments $ 3,544,992 11,871 $ 3,556,863 $ 7,913 $ 10,673 $ 92,900 $ 14,302 $ 22,171 $ 2,605,620 14,273 $ 2,619,893 $ 9,667 $ 13,214 $ 78,508 $ 10,694 $ 35,557	Adjustments and Eliminations $ - (2,355,021) $ (2,355,021) $ (8,858) $ (8,858) $ (3,542) $ - $ (43,204) $ - (2,403,285) $ (2,403,285) $ (4,872) $ (4,872) $ (4,570) $ - $ (42,840)	Consolidated $ 34,466,244 - $ 34,466,244 $ 119,907 $ 51,337 $ 596,990 $ 65,479 $ 4,288,711 - $ 4,288,711 $ 31,266,232 - $ 31,266,232 $ 74,819 $ 46,879 $ 574,798 $ 54,237 $ 4,548,534 - $ 4,548,534

• b. Geographical information:

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

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.

Taiwan Mainland China Others	Revenue from External Customers	Revenue from External Customers	Revenue from External Customers
	For the Year Ended December 31
		2020 $ 17,660,448 16,697,133 108,663 $ 34,466,244	2019 $ 16,675,005 14,470,605 120,622 $ 31,266,232

• 64 -

Taiwan Mainland China Others		Non-current Assets	Non-current Assets
		December 31
		2020 $ 2,207,407 2,806,758 59,516 $ 5,073,681	2019 $ 2,269,496 3,711,638 32,538 $ 6,013,672

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

• 65 -

TABLE 1

STANDARD FOODS CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (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	Aggregate Financing Limits	Note
													Item	Value
0	Standard Foods Corporation	Dermalab S.A. Standard Foods (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Beverage Company Limited	Financing receivables - related parties Financing receivables - related parties Financing receivables - related parties Financing receivables - related parties	Y Y Y Y	$ 48,893 350,368 525,552 50,000	$ 48,458 349,184 523,776 50,000	$ 46,842 349,184 523,776 20,000	1.000% 1.000% 1.000% 0.950%	b. b. b. b.	$ - - - -	Need for operation Need for operation Need for operation Need for operation	$ - - - -	- - - -	$ - - - -	$ 6,717,380 (Note 3) 3,358,690 (Note 4) 3,358,690 (Note 4) 6,717,380 (Note 3)	$ 6,717,380 (Note 3) 6,717,380 (Note 5) 6,717,380 (Note 5) 6,717,380 (Note 3)	Note 12 Note 12 Note 12 Note 12
1	Standard Investment (China) Co., Ltd.	Shanghai Dermalab Corporation Le Bonta Wellness Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (China) Co., Ltd.	Financing receivables - related parties Financing receivables - related parties Financing receivables - related parties Financing receivables - related parties	Y Y Y Y	175,184 175,184 701,312 438,320	174,592 174,592 523,776 436,480	43,827 21,553 189,904 408,065	2.500% 2.500% 2.500% 2.500%	b. b. b. b.	- - - -	Need for operation Need for operation Need for operation Need for operation	- - - -	- - - -	- - - -	1,909,350 (Note 6) 1,909,350 (Note 6) 1,909,350 (Note 6) 1,909,350 (Note 6)	1,909,350 (Note 6) 1,909,350 (Note 6) 1,909,350 (Note 6) 1,909,350 (Note 6)	Note 12 Note 12 Note 12 Note 12
2	Shanghai Standard Foods Co., Ltd.	Standard Investment (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd.	Financing receivables - related parties Financing receivables - related parties	Y Y	635,564 460,236	611,072 458,304	79,413 458,304	2.500% 1.000%	b. b.	- -	Need for operation Need for operation	- -	- -	- -	1,246,764 (Note 7) 1,246,764 (Note 7)	1,246,764 (Note 7) 1,246,764 (Note 7)	Note 12 Note 12
3	Le Bonta Wellness Co., Ltd.	Standard Investment (China) Co., Ltd.	Financing receivables - related parties	Y	21,916	-	-	2.500%	b.	-	Need for operation	-	-	-	74,696 (Note 8)	74,696 (Note 8)	Note 12
4	Shanghai Le Ben De Health Technology Co., Ltd.	Standard Investment (China) Co., Ltd.	Financing receivables - related parties	Y	10,949	10,912	10,912	1.000%	b.	-	Need for operation	-	-	-	11,618 (Note 9)	11,618 (Note 9)	Note 12
5	Shanghai Le Ho Industrial Co., Ltd.	Standard Investment (China) Co., Ltd.	Financing receivables - related parties	Y	175,328	8,730	5,063	2.500%	b.	-	Need for operation	-	-	-	195,848 (Note 10)	195,848 (Note 10)	Note 12
6	Shanghai Le Min Industrial Co., Ltd.	Standard Investment (China) Co., Ltd.	Financing receivables - related parties	Y	87,664	8,730	4,775	2.500%	b.	-	Need for operation	-	-	-	122,266 (Note 11)	122,266 (Note 11)	Note 12

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 $6,717,380 thousand (the net value per financial statements of $16,793,451 thousand x 40% as of September 30, 2020).

Note 4: The total amount shall not exceed 20% of net value of Standard Foods Corporation, which was calculated to be $3,358,690 thousand (the net value per financial statements of $16,793,451 thousand x 20% as of September 30, 2020).

Note 5: The total amount shall not exceed 40% of net value of Standard Foods Corporation, which was calculated to be $6,717,380 thousand (the net value per financial statements of $16,793,451 thousand x 40% as of September 30, 2020).

Note 6: The total amount shall not exceed 40% of net value of Standard Investment (China) Co., Ltd., which was calculated to be $1,909,350 thousand (the net value per financial statements of $4,773,375 thousand x 40% as of September 30, 2020).

Note 7: The total amount shall not exceed 40% of net value of Shanghai Standard Foods Co., Ltd., which was calculated to be $1,246,764 thousand (the net value per financial statements of $3,116,909 thousand x 40% as of September 30, 2020).

Note 8: The total amount shall not exceed 40% of net value of Le Bonta Wellness Co., Ltd., which was calculated to be $74,696 thousand (the net value per financial statements of $186,739 thousand x 40% as of September 30, 2020).

Note 9: The total amount shall not exceed 40% of net value of Shanghai Le Ben De Health Technology Co., Ltd., which was calculated to be $11,618 thousand (the net value per financial statements of $29,045 thousand x 40% as of September 30, 2020).

(Continued)

• 66 -

(Concluded)

Note 10: The total amount shall not exceed 40% of net value of Shanghai Le Ho Industrial Co., Ltd., which was calculated to be $195,848 thousand (the net value per financial statements of $489,619 thousand x 40% as of September 30, 2020).

Note 11:

Note 12:

The total amount shall not exceed 40% of net value of Shanghai Le Min Industrial Co., Ltd., which was calculated to be $122,266 thousand (the net value per financial statements of $305,665 thousand x 40% as of September 30, 2020).

The amounts presented above were eliminated upon consolidation.

• 67 -

TABLE 2

STANDARD FOODS CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (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 5)	Guarantee Provided by Subsidiary (Note 5)	Guarantee Provided to Subsidiaries in Mainland China (Note 5)	Note
		Name	Nature of Relationship (Note 2)
0	Standard Foods Corporation	Standard Beverage Company Limited	b.	$ 13,434,761 (Note 3)	$ 208,150	$ 202,400	$ -	$ -	1.21%	$ 16,793,451 (Note 4)	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.

• g. Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

• 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 $13,434,761 thousand (the net value per financial statements of $16,793,451 thousand x 80% as of September 30, 2020).

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 $16,793,451 thousand (the net value per financial statements of $16,793,451 thousand x 100% as of September 30, 2020).

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

• 68 -

TABLE 3

STANDARD FOODS CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2020 (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, 2020	December 31, 2020		Note
				Shares	Carrying Amount	Percentage of Ownership	Fair Value
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 Mega Diamond Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund CTBC Hua Win Money Market Fund FSITC Taiwan Money Market Fund Note cash CODEIS Smart Cash Note Shares Techgains Pan-Pacific Corporation Authenex, Inc. Paradigm Venture Capital Corporation U-Teck Environment Corporation, Ltd.	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 - 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	1,416,950 48,600 2,145,110 1,243,213 12,512,356 4,019,723 21,258,392 9,276,464 30,989,574 10,000 500,000 2,424,242 180,376 11,200	$ 15,374 5,297 62,423 14,918 158,280 60,095 290,090 103,038 478,278 29,032 - - 1,894 -	- - 7.7 0.3 - - - - - - 0.9 5.5 7.0 0.2	$ 15,374 5,297 62,423 14,918 158,280 60,095 290,090 103,038 478,278 29,032 - - 1,894 -

(Continued)

• 69 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Shares	Carrying Amount	Percentage of Ownership	Fair Value
Standard Dairy Products Taiwan Limited Charng Hui Ltd.	Octamer, Inc. - Series E Preference Shares Octamer, Inc. - Series F Preference Shares Fortemedia, Inc. - Series D Preference Shares Fortemedia, Inc. - Series E Preference Shares Fortemedia, Inc. - Series F Preference Shares Fortemedia, Inc. - Series G Preference Shares Fortemedia, Inc. - Series I Preference Shares Fortemedia, Inc. - Series - Ordinary Shares Mutual funds Mega Diamond Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund FSITC Diamond Money Market 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. Taishin 1699 Money Market Fund	Parent of Charng Hui Ltd. 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 - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - 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 - current	800,000 107,815 3,455 71,397 29,173 31,135 29,102 12,938 3,963,725 5,866,056 5,091,164 1,594,265 6,669,471 91,440 803,258 1,596,000 90,000 1,000,000 1,453,360 73,310	$ - - - - - - - - 50,141 87,698 69,473 24,605 408,839 8,815 19,881 152,418 47,700 12,280 19,034 1,000	7.8 1.0 1.2 1.2 1.2 1.3 1.3 1.2 - - - - 0.7 - - 2.0 - - - -	$ - - - - - - - - 50,141 87,698 69,473 24,605 408,839 8,815 19,881 152,418 47,700 12,280 19,034 1,000	Note

(Continued)

• 70 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Shares	Carrying Amount	Percentage of Ownership	Fair Value
Standard Beverage Company Limited Domex Technology Corporation Accession Limited	Shares Global Strategic Investment Co., Ltd. Hong Da Leasing & Finance Co., Ltd. CNEX Co., Ltd. Amphastar Pharmaceuticals Inc. (AMPH) Mutual funds Fuh Hwa Greater China Mid & Small Cap Franklin Templeton SinoAm Global Bd Acc Shares InnoComm Mobile Technology Corp. Shares AsiaVest Liquidation Co. Mutual funds Term Liquidity Fund	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 - 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 Financial assets at fair value through profit or loss - current	850,500 8,297,000 1,000,000 7,742 225,000 282,988 3,600,000 200 33,453	$ 4,338 - - 4,434 3,625 3,706 188,784 1,053 99,961	1.9 23.7 6.0 - - - 13.4 0.7 -	$ 4,338 - - 4,434 3,625 3,706 188,784 1,053 99,961

Note: The amounts presented above were eliminated upon consolidation.

(Concluded)

• 71 -

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, 2020

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	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	$ (1,442,012) 900,852 1,442,012 (900,852) (2,014,629) 447,874 2,014,629 (447,874) (6,492,434) 6,492,434 558,960 (558,960) (4,753,380) 4,753,380	10.94 12.35 57.34 25.52 72.98 18.11 15.18 2.91 99.64 48.90 9.00 8.99 76.42 35.80	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 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 60 days after month-end closing	- - - - - - - - - - - - -	- - - - - - - - - - - - -	$ 127,574 - (127,574) - 551,912 (56,376) (551,912) 56,376 1,683,690 (1,683,690) (183,694) 183,694 1,288,201 (1,288,201)	6.02 - 37.40 - 98.91 56.17 15.57 1.96 99.95 47.50 36.46 12.48 87.52 36.34	Note Note Note Note Note Note Note Note Note Note Note Note Note Note

Note: The amounts presented above were eliminated upon consolidation.

• 72 -

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, 2020

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	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 Dairy Products Taiwan Limited Standard Foods (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Shanghai Standard Foods Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (China) Co., Ltd.	The Company’s subsidiary The Company’s subsidiary The Company’s subsidiary 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 Brother company of Standard Investment (China) Co., Ltd. Parent company of Standard Foods (Xiamen) Co., Ltd. Brother company of Standard Foods (Xiamen) Co., Ltd.	Trade receivables Other receivables Financing receivables Other receivables Financing receivables Other receivables Trade receivables Financing receivables Other receivables Trade receivables Financing 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 Other receivables	$ 127,574 2,761 $ 130,335 $ 349,184 2,162 $ 351,346 $ 523,776 2,703 $ 526,479 $ 551,912 79,413 17,123 $ 648,448 $ - 458,304 11,750 $ 470,054 $ 1,683,690 22,323 $ 1,706,013 $ 5 408,065 14,381 $ 422,451 $ 3 189,904 9,894 $ 199,801 $ 56,376 47,592 $ 103,968 $ 1,288,201 6,363 $ 1,294,564 $ 183,694 2,303 $ 185,997	10.72 3.86 1.61 3.88 10.18 23.68 4.10 3.98 2.75		$ - - $ - $ - - $ - $ - - $ - $ - - - $ - $ - - - $ - $ - - $ - $ - - - $ - $ - - - $ - $ - - $ - $ - - $ - $ - - $ -			$ 127,574 (Note 1) 2,761(Note 1) $ 130,335(Note 1) $ - (Note 1) - (Note 1) $ - (Note 1) $ - (Note 1) - (Note 1) $ - (Note 1) $ 551,912 (Note 1) - (Note 1) 17,123(Note 1) $ 569,035(Note 1) $ - (Note 1) - (Note 1) 11,649(Note 1) $ 11,649(Note 1) $ 1,683,690 (Note 1) 22,323(Note 1) $ 1,706,013(Note 1) $ 5 (Note 1) - (Note 1) 14,381(Note 1) $ 14,386(Note 1) $ 3 (Note 1) - (Note 1) 9,894(Note 1) $ 9,897(Note 1) $ 56,369 (Note 1) 47,592(Note 1) $ 103,961(Note 1) $ 1,288,201 (Note 1) 6,363(Note 1) $ 1,294,564(Note 1) $ 183,694 (Note 1) - (Note 1) $ 183,694(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 2) (Note 2) (Note 2)

Note 1: Amounts received before March 22, 2021.

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

• 73 -

TABLE 6

STANDARD FOODS CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2020

(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 Beverage Company Limited Standard Beverage Company Limited Dermalab Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd. Standard Foods (Xiamen) Co., Ltd.	a a a a a a a a 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 Financing receivables - related parties Purchases Interest income Service revenue Financing receivables - related parties Other receivables - related parties Financing receivables - related parties Interest income Other receivables - related parties Financing receivables - related parties Interest income	$ 127,574 2,761 1,442,012 900,852 9,577 116 20,000 1,015 15 1,320 46,842 2,162 349,184 2,128 2,703 523,776 2,669	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 0.950% According to the general conditions Interest rate 0.950% According to the general conditions Interest rate 1.000% According to the general conditions Interest rate 1.000% Interest rate 1.000% According to the general conditions Interest rate 1.000% Interest rate 1.000%	0.5 - 4.2 2.6 - - 0.1 - - - 0.2 - 1.3 - - 1.9 -
1	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 Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Standard Foods (China) Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness 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	Trade receivables - related parties Financing receivables - related parties Other receivables - related parties Trade payables - related parties Other payables - related parties Sales Purchases Interest income Other expenses Research and development expenses Trade receivables - related parties Sales Purchases Trade receivables - related parties Purchases Other expenses Other receivables - related parties Financing receivables - related parties Sales Interest income	551,912 79,413 17,123 56,376 47,592 2,014,629 447,874 2,546 327 7,337 6,044 26,906 13,933 6 513 10 11,750 458,304 5,343 11,295	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 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 According to the general conditions According to the general conditions Interest rate1.000% According to the general conditions Interest rate1.000%	2.0 0.3 0.1 0.2 0.2 5.8 1.3 - - - - 0.1 - - - - - 1.6 - -
							(Continued)

• 74 -

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)
2	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. 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 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. Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Ho Industrial Co., Ltd. Shanghai Le Min Industrial Co., Ltd. Shanghai Le Min Industrial Co., Ltd. Shanghai Le Min Industrial Co., Ltd. Shanghai Le Ben De Co., Ltd. Shanghai Le Ben De 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 a a c c c c c c c c c c	Trade receivables - related parties Other receivables - related parties Financing receivables - related parties Trade payables - related parties Other payables - related parties Sales Purchases Interest income Other revenue Rental expenses Other receivables - related parties Financing receivables - related parties Interest income Expense Trade receivables - related parties Other receivables - related parties Financing receivables - related parties Trade payables - related parties Other payables - related parties Sales Purchases Interest income Other revenue Other receivables - related parties Financing receivables - related parties Trade payables - related parties Sales Purchases Interest income Other payables - related parties Financing payables - related parties Interest expenses Other payables - related parties Financing payables - related parties Interest expenses Other payables - related parties Financing payables - related parties Purchases Interest expenses	$ 5 14,381 408,065 1,683,690 22,323 499 6,492,434 3,832 14,133 94 2,092 43,827 2,065 56 3 9,894 189,904 1,288,201 6,363 367 4,753,380 17,608 9,725 1,669 21,553 2,049 8 8,223 1,673 89 5,063 87 91 4,775 89 2 10,912 1,063 132	According to the general conditions According to the general conditions Interest rate2.500% According to the general conditions According to the general conditions According to the general conditions According to the general conditions Interest rate2.500% According to the general conditions According to the general conditions According to the general conditions Interest rate2.500% Interest rate2.500% According to the general conditions According to the general conditions According to the general conditions Interest rate2.500% According to the general conditions According to the general conditions According to the general conditions According to the general conditions Interest rate2.500% According to the general conditions According to the general conditions Interest rate2.500% According to the general conditions According to the general conditions According to the general conditions Interest rate2.500% According to the general conditions Interest rate2.500% Interest rate2.500% According to the general conditions Interest rate2.500% Interest rate2.500% According to the general conditions Interest rate1.000% According to the general conditions Interest rate1.000%	- 0.1 1.5 6.1 0.1 - 18.8 - - - - 0.2 - - - - 0.7 4.6 - - 13.8 0.1 - - 0.1 - - - - - - - - - - - - - -
3	Shanghai Dermalab Corporation	Dermalab Dermalab Le Bonta Wellness Co., Ltd.	c c c	Trade payables - related parties Purchases Sales	35,090 76,384 14	According to the general conditions According to the general conditions According to the general conditions	0.1 0.2 -
							(Continued)

• 75 -

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)
4	Standard Foods (China) Co., Ltd.	Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness Co., Ltd. Le Bonta Wellness 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	Trade receivables - related parties Other receivables - related parties Sales Purchases Rental revenue Other expenses Trade payables - related parties Other payables - related parties Sales Purchases	$ 130 1,205 278 13 3,542 4,304 183,694 2,303 43 558,960	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 According to the general conditions	- - - - - - 0.7 - - 1.6
5	Le Bonta Wellness Co., Ltd.	Shanghai Le Ben De Co., Ltd. Shanghai Le Ben De Co., Ltd. Shanghai Le Ben De Co., Ltd. Standard Foods (Xiamen) Co., Ltd.	c c c c	Trade payables - related parties Sales Purchases Sales	435 1,878 953 9	According to the general conditions According to the general conditions 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)

• 76 -

TABLE 7

STANDARD FOODS CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31,	As of December 31,	2020	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2020	December 31, 2019	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 Standard Foods, LLC. 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 Taipei, Taiwan U.S.A. 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 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 9,056 335,215 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 5 Note 5 2,600 3,000 150,050,815	100 100 100 100 52 100 100 100 100 100 100	$ 3,623,593 5,685,589 1,006,590 354,881 305,990 83,597 8,958 8,544 188,116 - 5,685,017	$ 189,679 377,175 405,319 20,415 80,935 3,356 177 - 10,103 - 377,452	$ 180,564 (Note 1) 377,175 404,208 (Note 2) 2,741 (Note 3) 42,095 3,380 (Note 4) 177 - - - -	Subsidiary (Note 6) Subsidiary (Note 6) Subsidiary (Note 6) Subsidiary (Note 6) Subsidiary (Note 6) Subsidiary (Note 6) Subsidiary (Note 6) Subsidiary (Note 6) Indirect subsidiary (Note 6) Indirect subsidiary (Note 6) Indirect subsidiary (Note 6)

Note 1: This amount was the share of profit of the investee of $189,679 thousand minus the unrealized gain on sidestream transactions of $9,115 thousand.

Note 2: This amount was the share of profit of the investee of $405,319 thousand minus the unrealized gain on sidestream transactions of $1,111 thousand.

Note 3: This amount was the share of profit of the investee of $20,415 thousand minus the Standard Foods Corporation Cash dividends paid of $17,674 thousand.

Note 4: This amount was the share of profit of the investee of $3,356 thousand plus the unrealized gain on upstream transactions of $23 thousand.

Note 5: This is a limited company with no issued shares.

Note 6: The amounts presented above were eliminated upon consolidation.

• 77 -

TABLE 8

STANDARD FOODS CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Method of Investment (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 2)	Carrying Amount as of December 31, 2020	Accumulated Repatriation of Investment Income as of December 31, 2020	Note
						Outward	Inward
Shanghai Standard Foods Co., Ltd. Standard Investment (China) Co., Ltd. Standard Foods (China) Co., Ltd. Shanghai Dermalab Corporation Le Bonta Wellness 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 93,989 380,418 31,220 1,307,582 607,717 378,009	b. (Note 3) b. (Note 5) c. (Note 6) c. (Note 6) a. 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)	$ 197,080 418,759 143,748 (17,342) (38,271) 719 112,671 (22,828) (14,000)	100.0 99.0 99.0 99.0 99.5 100.0 99.0 100.0 100.0	$ 194,031 (Note 9) 414,571 (Note 9) 134,895 (Note 9) (17,169) (Note 9) (38,084) (Note 9) 719 (Note 9) 103,630 (Note 9) (22,828) (Note 9) (14,000) (Note 9)	$ 3,236,959 4,882,005 2,000,127 8,311 175,748 29,830 1,455,322 494,056 308,367	$ - - - - - - - - -	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 Commission,
December 31, 2020		Investment Commission, MOEA		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)

• 78 -

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, 2019; 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 amounts presented above were eliminated upon consolidation.

(Concluded)

• 79 -

TABLE 9

STANDARD FOODS CORPORATION AND SUBSIDIARIES

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Mu Te Investment Co., Ltd. Trust Property Account Chia Yun Investment Co., Ltd. Trust Property Account Chia Chieh Investment Co., Ltd. Trust Property Account	157,008,400 133,125,408 108,503,160	17.15 14.54 11.85

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preference shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual truster who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to Market Observation Post System.

• 80 -