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SFC Interim / Quarterly Report 2020

Nov 13, 2020

51753_rns_2020-11-13_379cfd9b-ec45-427a-9524-b35ea188aca7.pdf

Interim / Quarterly Report

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Stock code: 1227

Standard Foods Corporation and Subsidiaries

Consolidated Financial Statements and Independent Auditors' Report For the Nine Months Ended September 30, 2020 and 2019

Address: 5F., No. 136, Sec. 3, Renai Rd., Daan Dist., Taipei City 106, Taiwan (R.O.C.) Tel: (02)27092323

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 period ended September 30, 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

November 12, 2020

  • 2 -

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders Standard Foods Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of Standard Foods Corporation and its subsidiaries (the “Group”) as of September 30, 2020 and 2019 and the related consolidated statements of comprehensive income for the three months ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019, the consolidated statements of changes in equity and cash flows for the nine months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies "(collectively referred to as 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 Accounting Standard 34, “Interim Financial Reporting,” endorsed and issues into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As disclosed in Note 14 to the consolidated financial statements, the financial statements of non-significant subsidiaries included in the consolidated financial statements referred to in the first paragraph were not reviewed. As of September 30, 2020 and 2019, combined total assets of these non-significant subsidiaries were NT$8,467,405 thousand and NT$7,250,016 thousand, respectively, representing 33% and 31%, respectively, of the consolidated total assets, and combined total liabilities of these subsidiaries were NT$3,291,028 thousand NT$2,524,844 thousand, respectively, representing 40% and 34%, respectively, of the consolidated total liabilities; for the three-month periods ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019, the amounts of combined comprehensive income of these subsidiaries were NT$208,390 thousand, NT$226,479 thousand, NT$359,818 thousand and NT$523,222 thousand, respectively, representing 18%, 26%, 14% and 22%, respectively, of the consolidated total comprehensive income. As disclosed in Note 37 to the consolidated financial statements, the information on these subsidiaries were not reviewed.

  • 3 -

Qualified Conclusion

Based on our reviews, except for the adjustments, if any, as might have been determined to be necessary had the financial statements of the non-significant subsidiaries as described in the preceding paragraph been reviewed, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of September 30, 2020 and 2019, its consolidated financial performance for the three months ended September 30, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the nine months ended September 30, 2020 and 2019 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting,” endorsed and issues into effect by the Financial Supervisory Commission of the Republic of China.

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

Deloitte & Touche Taipei, Taiwan Republic of China November 12, 2020

Notice to Readers

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

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

  • 4 -

Standard Foods Corporation and Subsidiaries

Consolidated Balance Sheets

September 30, 2020, December 31, 2019, and September 30, 2019

Code

1100
1110
1120
1136
1150
1172
1180
1197
1200
1220
130X
1410
1470
11XX

1510
1517
1600
1755
1760
1805
1821
1840
194D
1975
1990
15XX
1XXX

Code

2100
2110
2130
2150
2170
2180
2200
2230
2280
2320
2399
21XX

2570
2580
2640
2670
25XX
2XXX

3110
3200
3310
3320
3350
3300
3400
3500
31XX
36XX

3XXX
 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 receivables from related parties (Notes 33)
Finance lease receivables - current (Note 11)
Other receivables (Note 10)
Current tax assets
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
Finance lease receivables - non-current (Note 11)
Net defined benefit assets - non-current
Other non-current assets (Notes 19 and 34)

Total non-current assets

TOTAL

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
Lease liabilities - current (Note 16)
Current portion of long-term borrowings (Notes 20 and 34)
Other current liabilities (Note 22)

Total current liabilities

NON-CURRENT LIABILITIES
Deferred tax liabilities
Lease liabilities - non-current (Note 16)
Net defined benefit liabilities - non-current
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 liabilities and equity
 September 30, 2020
(Reviewed)
Amount
%
$ 2,701,347
11

709,982
3
210,557
1
2,428,864
10
15,566
-
6,134,100
24
9,088
-
2,881
-
269,746
1
841
-
4,792,340
19
1,286,297
5

57,213

-


18,618,822
74


6,239
-
205,078
1
4,211,020
16
637,600
3
838,638
3
817
-
104,322
-
458,809
2
24,774
-
3,430
-

188,130

1


6,678,857
26

$ 25,297,679
100

$ 1,277,117
5

149,832
1
245,792
1
371,043
1
1,973,379
8
11,452
-
2,894,867
12
281,409
1
80,170
-
-
-

100,512

-


7,385,573
29

336,088
1
210,817
1
256,008
1

24,196

-


827,109

3


8,212,682
32


9,150,897
36


127,392

1

3,287,022
13
577,494
2

4,263,521
17


8,128,037
32


591,693)
(
2)


21,182)

-

16,793,451
67

291,546

1


17,084,997
68

$ 25,297,679
100
 (In Thousands of New Taiwan Dollars)
December 31, 2019
(Audited)
September 30, 2019
(Reviewed)
Amount
%
Amount
%
$ 3,705,903
15
$ 2,897,342
12
667,673
3
300,399
1
186,711
1
180,950
1
2,206,805
9
2,101,491
9
2,977
-
8,812
-
6,439,550
25
5,679,370
24
-
-
-
-
2,775
-
2,741
-
193,083
1
240,400
1
46,114
-
5,879
-
3,646,984
14
3,831,988
16
1,385,226
5
1,165,250
6

29,384

-

21,140

-

18,513,185
73

16,435,762
70
7,575
-
8,433
-
189,695
1
198,647
1
5,125,312
20
5,249,687
22
699,679
3
728,733
3
122,492
-
127,682
1
818
-
817
-
67,269
-
68,539
-
473,398
2
423,556
2
26,948
-
27,655
-
919
-
4,616
-

260,975

1

254,866

1

6,975,080
27

7,093,231
30
$ 25,488,265
100
$ 23,528,993
100
$ 1,382,955
6
$ 943,373
4
99,968
1
89,895
-
326,644
1
241,974
1
316,444
1
307,077
1
2,014,619
8
1,756,209
8
26,141
-
10,263
-
2,850,674
11
2,782,436
12
547,018
2
368,660
2
83,119
-
79,002
-
6,000
-
12,000
-

28,501

-

31,906

-

7,682,083
30

6,622,795
28
268,813
1
196,350
1
264,496
1
281,404
1
299,204
2
266,019
1

22,978

-

23,186

-

855,491

4

766,959

3

8,537,574
34

7,389,754
31

9,150,897
36

9,150,897
39

109,718

-

109,718

-
2,945,412
11
2,945,412
13
330,945
1
330,945
2

4,739,831
19

3,791,009
16

8,016,188
31

7,067,366
31

577,494)
(
2)
(
429,624)
(
2)

21,182)

-
(
21,182)

-
16,678,127
65
15,877,175
68

272,564

1

262,064

1

16,950,691
66

16,139,239
69
$ 25,488,265
100
$ 23,528,993
100		 (In Thousands of New Taiwan Dollars)
December 31, 2019
(Audited)
September 30, 2019
(Reviewed)
Amount
%
Amount
%
$ 3,705,903
15
$ 2,897,342
12
667,673
3
300,399
1
186,711
1
180,950
1
2,206,805
9
2,101,491
9
2,977
-
8,812
-
6,439,550
25
5,679,370
24
-
-
-
-
2,775
-
2,741
-
193,083
1
240,400
1
46,114
-
5,879
-
3,646,984
14
3,831,988
16
1,385,226
5
1,165,250
6

29,384

-

21,140

-

18,513,185
73

16,435,762
70
7,575
-
8,433
-
189,695
1
198,647
1
5,125,312
20
5,249,687
22
699,679
3
728,733
3
122,492
-
127,682
1
818
-
817
-
67,269
-
68,539
-
473,398
2
423,556
2
26,948
-
27,655
-
919
-
4,616
-

260,975

1

254,866

1

6,975,080
27

7,093,231
30
$ 25,488,265
100
$ 23,528,993
100
$ 1,382,955
6
$ 943,373
4
99,968
1
89,895
-
326,644
1
241,974
1
316,444
1
307,077
1
2,014,619
8
1,756,209
8
26,141
-
10,263
-
2,850,674
11
2,782,436
12
547,018
2
368,660
2
83,119
-
79,002
-
6,000
-
12,000
-

28,501

-

31,906

-

7,682,083
30

6,622,795
28
268,813
1
196,350
1
264,496
1
281,404
1
299,204
2
266,019
1

22,978

-

23,186

-

855,491

4

766,959

3

8,537,574
34

7,389,754
31

9,150,897
36

9,150,897
39

109,718

-

109,718

-
2,945,412
11
2,945,412
13
330,945
1
330,945
2

4,739,831
19

3,791,009
16

8,016,188
31

7,067,366
31

577,494)
(
2)
(
429,624)
(
2)

21,182)

-
(
21,182)

-
16,678,127
65
15,877,175
68

272,564

1

262,064

1

16,950,691
66

16,139,239
69
$ 25,488,265
100
$ 23,528,993
100		 (In Thousands of New Taiwan Dollars)
December 31, 2019
(Audited)
September 30, 2019
(Reviewed)
Amount
%
Amount
%
$ 3,705,903
15
$ 2,897,342
12
667,673
3
300,399
1
186,711
1
180,950
1
2,206,805
9
2,101,491
9
2,977
-
8,812
-
6,439,550
25
5,679,370
24
-
-
-
-
2,775
-
2,741
-
193,083
1
240,400
1
46,114
-
5,879
-
3,646,984
14
3,831,988
16
1,385,226
5
1,165,250
6

29,384

-

21,140

-

18,513,185
73

16,435,762
70
7,575
-
8,433
-
189,695
1
198,647
1
5,125,312
20
5,249,687
22
699,679
3
728,733
3
122,492
-
127,682
1
818
-
817
-
67,269
-
68,539
-
473,398
2
423,556
2
26,948
-
27,655
-
919
-
4,616
-

260,975

1

254,866

1

6,975,080
27

7,093,231
30
$ 25,488,265
100
$ 23,528,993
100
$ 1,382,955
6
$ 943,373
4
99,968
1
89,895
-
326,644
1
241,974
1
316,444
1
307,077
1
2,014,619
8
1,756,209
8
26,141
-
10,263
-
2,850,674
11
2,782,436
12
547,018
2
368,660
2
83,119
-
79,002
-
6,000
-
12,000
-

28,501

-

31,906

-

7,682,083
30

6,622,795
28
268,813
1
196,350
1
264,496
1
281,404
1
299,204
2
266,019
1

22,978

-

23,186

-

855,491

4

766,959

3

8,537,574
34

7,389,754
31

9,150,897
36

9,150,897
39

109,718

-

109,718

-
2,945,412
11
2,945,412
13
330,945
1
330,945
2

4,739,831
19

3,791,009
16

8,016,188
31

7,067,366
31

577,494)
(
2)
(
429,624)
(
2)

21,182)

-
(
21,182)

-
16,678,127
65
15,877,175
68

272,564

1

262,064

1

16,950,691
66

16,139,239
69
$ 25,488,265
100
$ 23,528,993
100		 (In Thousands of New Taiwan Dollars)
December 31, 2019
(Audited)
September 30, 2019
(Reviewed)
Amount
%
Amount
%
$ 3,705,903
15
$ 2,897,342
12
667,673
3
300,399
1
186,711
1
180,950
1
2,206,805
9
2,101,491
9
2,977
-
8,812
-
6,439,550
25
5,679,370
24
-
-
-
-
2,775
-
2,741
-
193,083
1
240,400
1
46,114
-
5,879
-
3,646,984
14
3,831,988
16
1,385,226
5
1,165,250
6

29,384

-

21,140

-

18,513,185
73

16,435,762
70
7,575
-
8,433
-
189,695
1
198,647
1
5,125,312
20
5,249,687
22
699,679
3
728,733
3
122,492
-
127,682
1
818
-
817
-
67,269
-
68,539
-
473,398
2
423,556
2
26,948
-
27,655
-
919
-
4,616
-

260,975

1

254,866

1

6,975,080
27

7,093,231
30
$ 25,488,265
100
$ 23,528,993
100
$ 1,382,955
6
$ 943,373
4
99,968
1
89,895
-
326,644
1
241,974
1
316,444
1
307,077
1
2,014,619
8
1,756,209
8
26,141
-
10,263
-
2,850,674
11
2,782,436
12
547,018
2
368,660
2
83,119
-
79,002
-
6,000
-
12,000
-

28,501

-

31,906

-

7,682,083
30

6,622,795
28
268,813
1
196,350
1
264,496
1
281,404
1
299,204
2
266,019
1

22,978

-

23,186

-

855,491

4

766,959

3

8,537,574
34

7,389,754
31

9,150,897
36

9,150,897
39

109,718

-

109,718

-
2,945,412
11
2,945,412
13
330,945
1
330,945
2

4,739,831
19

3,791,009
16

8,016,188
31

7,067,366
31

577,494)
(
2)
(
429,624)
(
2)

21,182)

-
(
21,182)

-
16,678,127
65
15,877,175
68

272,564

1

262,064

1

16,950,691
66

16,139,239
69
$ 25,488,265
100
$ 23,528,993
100
Amount
$ 2,701,347

709,982
210,557
2,428,864

15,566
6,134,100

9,088
2,881
269,746
841
4,792,340

1,286,297

57,213


18,618,822


6,239
205,078
4,211,020

637,600
838,638
817
104,322
458,809
24,774
3,430

188,130


6,678,857

$ 25,297,679

$ 1,277,117
149,832
245,792
371,043
1,973,379
11,452
2,894,867

281,409
80,170
-

100,512


7,385,573

336,088
210,817
256,008

24,196


827,109


8,212,682


9,150,897


127,392

3,287,022

577,494

4,263,521


8,128,037


591,693)


21,182)

16,793,451


291,546


17,084,997

$ 25,297,679
 Amount
$ 3,705,903

667,673
186,711
2,206,805
2,977
6,439,550

-
2,775
193,083
46,114
3,646,984

1,385,226

29,384


18,513,185

7,575
189,695
5,125,312

699,679
122,492
818
67,269
473,398
26,948
919

260,975


6,975,080

$ 25,488,265

$ 1,382,955
99,968
326,644
316,444
2,014,619
26,141
2,850,674

547,018
83,119
6,000

28,501


7,682,083

268,813
264,496
299,204

22,978


855,491


8,537,574


9,150,897


109,718

2,945,412

330,945

4,739,831


8,016,188


577,494)


21,182)

16,678,127


272,564


16,950,691

$ 25,488,265
 Amount
$ 2,897,342

300,399
180,950
2,101,491
8,812
5,679,370

-
2,741
240,400
5,879
3,831,988

1,165,250

21,140


16,435,762

8,433
198,647
5,249,687

728,733
127,682
817
68,539
423,556
27,655
4,616

254,866


7,093,231

$ 23,528,993

$ 943,373
89,895
241,974
307,077
1,756,209
10,263
2,782,436

368,660
79,002
12,000

31,906


6,622,795

196,350
281,404
266,019

23,186


766,959


7,389,754


9,150,897


109,718

2,945,412

330,945

3,791,009


7,067,366


429,624)


21,182)

15,877,175


262,064


16,139,239

$ 23,528,993
 %

















(
(















(
(















(
(


 12
1
1
9
-
24
-
-
1
-
16
6

-
70
-
1
22
3
1
-
-
2
-
-

1
30
100
4
-
1
1
8
-
12
2
-
-

-
28
1
1
1

-

3
31
39

-
13
2
16
31
(
2)

-
68

1
69
100

The accompanying notes are an integral part of the consolidated financial statements. (Please refer to the Independent Auditors' Report of Deloitte & Touche on November 12, 2020.)

  • 5 -

Standard Foods Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three-month and Nine-month Periods Ended September 30, 2020 and 2019

(Reviewed, not Audited)

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

July 1, 2020 to September July 1, 2020 to September July 1, 2020 to September July 1, 2019 to September July 1, 2019 to September July 1, 2019 to September July 1, 2019 to September January 1, 2020 to January 1, 2020 to January 1, 2019 to January 1, 2019 to January 1, 2019 to
30, 2020 30, 2019 September 30, 2020 September 30, 2019
Code Amount % Amount % Amount % Amount %
OPERATING REVENUE
4110 Sales (Note 25 and 33) $ 9,600,461 100 $ 7,997,276 100 $ 24,224,530 100 $ 21,404,896 100
OPERATING COSTS
5110 Cost of goods sold (Note 12, 23, 26,
and 33) 6,800,345 71 5,355,204 66 17,063,107 70 14,674,715 68
5900 GROSS PROFIT 2,800,116 29 2,642,072 34 7,161,423 30 6,730,181 32
OPERATING EXPENSES (Note 23 and 26)
6100 Selling and marketing expenses 1,231,506 13 1,048,898 12 3,029,318 13 2,772,612 13
6200 General and administrative expenses 274,235 3 262,515 3 775,043 3 783,366 4
6300 Research and development expenses 39,885 - 40,500 1 111,631 - 112,766 1
6450 Expected credit impairment loss (gain) 630 - ( 23,159) - 8,734 - 10,591 -
6000 Total operating expenses 1,546,256 16 1,328,754 16 3,924,726 16 3,679,335 18
6900 OPERATING INCOME 1,253,860 13 1,313,318 18 3,236,697 14 3,050,846 14
NON-OPERATING INCOME AND
EXPENSES (Note 26)
7100 Interest income 24,366 - 21,988 - 91,312 - 53,909 -
7010 Other income 9,414 - 16,795 - 31,655 - 28,359 -
7020 Other gains and losses 41,011 - 71,309 1 75,456 - 120,164 1
7050 Financial cost ( 9,224) - ( 12,402) - ( 40,541) - ( 33,804) -
7000 Total non-operating income and
expenses 65,567 - 97,690 1 157,882 - 168,628 1
7900 Income before income tax 1,319,427 13 1,411,008 19 3,394,579 14 3,219,474 15
7950 INCOME TAX EXPENSE (Note 27) 350,727 3 360,125 6 832,812 3 753,327 4
8200 Net profit for the period 968,700 10 1,050,883 13 2,561,767 11 2,466,147 11
OTHER COMPREHENSIVE INCOME
(LOSS)
8310 Items that will not be reclassified
subsequently to profit or loss:
8316 Unrealized gain (loss) on
investments in equity
instruments at fair value through
other comprehensive income 54,205 - 33,187 - 39,236 - 57,926 1
8349 Income tax relating to items that
will not be reclassified
subsequently to profit or loss
(Note 27) 6 - ( 5) - 3 - ( 1) -
54,211 - 33,182 - 39,239 - 57,925 1
8360 Items that may be reclassified
subsequently to profit or loss:
8361 Exchange difference on
translating the financial
statements of foreign operation 183,429 2 ( 252,488 ) (
3 )		 ( 44,257 ) - ( 170,883 ) (
1 )
8399 Income tax relating to the items
that may be reclassified
subsequently to profit or loss
(Note 27) ( 36,497) - 50,252 1 8,802 - 34,006 -
146,932 2 ( 202,236) ( 2) ( 35,455) - ( 136,877) ( 1)
8300 Other comprehensive loss for the
period, net of income tax 201,143 2 ( 169,054) ( 2) 3,784 - ( 78,952) -
8500 TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD $ 1,169,843 12 $ 881,829 11 $ 2,565,551 11 $ 2,387,195 11
NET PROFIT ATTRIBUTABLE TO:
8610 Owners of the Company $ 951,165 10 $ 1,040,184 13 $ 2,536,836 11 $ 2,439,979 11
8620 Non-controlling Interests 17,535 - 10,699 - 24,931 - 26,168 -
8600 $ 968,700 10 $ 1,050,883 13 $ 2,561,767 11 $ 2,466,147 11
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
8710 Owners of the Company $ 1,136,594 12 $ 861,522 11 $ 2,522,637 11 $ 2,341,300 11
8720 Non-controlling Interests 33,249 - 20,307 - 42,914 - 45,895 -
8700 $ 1,169,843 12 $ 881,829 11 $ 2,565,551 11 $ 2,387,195 11
EARNINGS PER SHARE (Note 28)
9710 Basic $ 1.05 $ 1.15 $ 2.79 $ 2.69
9810 Diluted $ 1.05 $ 1.14 $ 2.79 $ 2.68

The accompanying notes are an integral part of the consolidated financial statements. (Please refer to the Independent Auditors' Report of Deloitte & Touche on November 12, 2020.)

  • 6 -

Standard Foods Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Nine Months Ended September 30, 2020 and 2019

(Reviewed, not Audited)

(In Thousands of New Taiwan Dollars)

Code

A1
Balance as of January 1, 2019

Appropriations and distribution of 2018
earnings
B1
Legal reserve
B3
Special reserve
B5
Cash dividends
M1
Adjustment to surplus reserve from
dividends paid to subsidiary
O1
Decrease in non-controlling interests

D1
Net income for the nine months ended
September 30, 2019
D3
Other comprehensive income for the nine
months ended September 30, 2019

D5
Total comprehensive income for the nine
months ended September 30, 2019

Z1
Balance as of September 30, 2019

A1
Balance as of January 1, 2020

Appropriations and distribution of 2019
earnings
B1
Legal reserve
B3
Special reserve
B5
Cash dividends
M1
Adjustment to surplus reserve from
dividends paid to subsidiary
O1
Decrease in non-controlling interests

D1
Net income for the nine months ended
September 30, 2020
D3
Other comprehensive income for the nine
months ended September 30, 2020

D5
Total comprehensive income for the nine
months ended September 30, 2020

Z1
Balance as of September 30, 2020
 Equity Attributable to Owners of the Company Equity Attributable to Owners of the Company Equity Attributable to Owners of the Company Equity Attributable to Owners of the Company Total
$ 15,806,926

-

-
(
2,287,724 )

16,673

-


2,439,979
(
98,679)


2,341,300

$ 15,877,175

$ 16,678,127

-

-
(
2,424,987 )

17,674

-


2,536,836
(
14,199)


2,522,637

$ 16,793,451
 Non-controlling
Interests
$ 233,399

-

-

-

-
(
17,230)


26,168

19,727


45,895

$ 262,064

$ 272,564

-

-

-

-
(
23,932)


24,931

17,983


42,914

$ 291,546
 Total Equity
Ordinary shares
$ 9,150,897
-
-
-
-

-

-

-


-

$ 9,150,897

$ 9,150,897
-
-
-
-

-

-

-


-

$ 9,150,897
 Capital surplus
$ 93,045

-

-

-

16,673

-


-

-


-

$ 109,718

$ 109,718

-

-

-

17,674

-


-

-


-

$ 127,392
 Retained earnings Total
$ 6,915,111

-

-
(
2,287,724 )

-

-


2,439,979

-


2,439,979

$ 7,067,366

$ 8,016,188

-

-
(
2,424,987 )

-

-


2,536,836

-


2,536,836

$ 8,128,037
 Other Equity Total

( $ 330,945 )

-

-

-

-

-


-
(
98,679)

(
98,679)

($ 429,624)

( $ 577,494 )

-

-

-

-

-


-
(
14,199)

(
14,199)

($ 591,693)
 Treasury shares
( $ 21,182 )

-

-

-

-

-


-

-


-

($ 21,182)

( $ 21,182 )

-

-

-

-

-


-

-


-

($ 21,182)
Legal reserve

$ 2,650,503

294,909

-

-

-

-


-

-


-

$ 2,945,412

$ 2,945,412

341,610

-

-

-

-


-

-


-

$ 3,287,022
 Special reserve
$ 260,426

-

70,519

-

-

-


-

-


-

$ 330,945

$ 330,945

-

246,549

-

-

-


-

-


-

$ 577,494
 Unappropriated
earnings
$ 4,004,182
(
294,909 )
(
70,519 )
(
2,287,724 )

-

-


2,439,979

-


2,439,979

$ 3,791,009

$ 4,739,831
(
341,610 )
(
246,549 )
(
2,424,987 )

-

-


2,536,836

-


2,536,836

$ 4,263,521
 Exchange
difference on
translating the
financial
statements of
foreign operation
( $ 412,869 )

-

-

-

-

-


-
(
136,027)

(
136,027)

($ 548,896)

( $ 693,038 )

-

-

-

-

-


-
(
35,211)

(
35,211)

($ 728,249)
 Unrealized gain
(loss) on
financial assets
at FVTOCI
$ 81,924
-
-
-
-

-

-

37,348


37,348

$ 119,272

$ 115,544
-
-
-
-

-

-

21,012


21,012

$ 136,556
















































































(









(



 $ 16,040,325

-

-
(
2,287,724 )

16,673
(
17,230)

2,466,147
(
78,952)

2,387,195
$ 16,139,239
$ 16,950,691

-

-
(
2,424,987 )

17,674
(
23,932)

2,561,767

3,784

2,565,551
$ 17,084,997

The accompanying notes are an integral part of the consolidated financial statements. (Please refer to the Independent Auditors' Report of Deloitte & Touche on November 12, 2020.)

  • 7 -

Standard Foods Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 2020 and 2019 (Reviewed, not Audited)

(In Thousands of New Taiwan Dollars)

Code
CASH FLOWS FROM OPERATING ACTIVITIES
A10000
Income before income tax

A20010
Adjustments for:
A20100
Depreciation expenses
A20200
Amortization expense
A20300
Expected credit loss recognized on trade
receivables
A20400
Net gain recognized on financial assets
and liabilities measured at FVTPL
A20900
Financial cost
A21200
Interest income

A21300
Dividend income

A22500
Loss on disposal of property, plant and
equipment, net
A29900
Others
A30000
Net changes in operating assets and liabilities
A31115
Financial assets mandatorily classified as
FVTPL
A31130
Notes receivable

A31150
Trade receivables - related parties
A31160
Trade receivables from related parties

A31180
Other receivables - related parties

A31200
Inventories

A31230
Prepayments
A31240
Other current assets

A31990
Net defined benefit assets

A32125
Contract liabilities

A32130
Notes payable
A32150
Trade payables - related parties

A32160
Trade payables to related parties

A32180
Other payables - related parties
A32230
Other current liabilities
A32240
Net defined benefit liabilities

A33000
Cash generated from operations
A33100
Interest received
A33300
Interest paid

A33500
Income tax paid

AAAA
Net cash generated from operating
activities		 January 1, 2020 to
September 30,
2020

$ 3,394,579

443,858
45,767
8,734
(
1,412 )

40,541
(
91,312 )

(
9,584 )

2,744
-

(
39,294 )
(
12,577 )

278,123
(
9,088 )
(
71,564 )

(
1,149,783 )
92,938
(
27,748 )
(
2,512 )

(
79,089 )

56,282
(
36,982 )

(
14,690 )
52,445
71,934

(
43,553)

2,898,757
86,152
(
41,703 )

(
962,664)


1,980,542
 January 1, 2019 to
September 30,
2019		 January 1, 2019 to
September 30,
2019


(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(

(
(
 $ 3,219,474
423,427
39,350
10,591

7,535 )
33,804

53,909 )

11,006 )
3,000

19 )
323,809

6,150 )
422,925
-

18,406 )
340,366
435,574
771

2,052 )

114,792 )
182,680

401,434 )
1,661
194,858

1,925 )
213
5,015,275
53,858

37,996 )
642,432)
4,388,705

(Continued on the next page)

  • 8 -

(Continued from the previous page)

(Continued from the previous page)
Code
CASH FLOWS FROM INVESTING ACTIVITIES
B00040
Purchase of financial assets at amortized cost

B00060
Refund of financial assets at amortized cost
B02700
Payments for property, plant and equipment

B02800
Proceeds from disposal of property, plant and
equipment
B04500
Payments for intangible assets

B06100
Decrease in finance lease receivables
B06500
Increase in other financial assets
B06600
Decrease in other financial assets
B06700
Increase in other non-current assets

B07600
Dividends received

BBBB
Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
C00200
Decrease in short-term borrowings

C00500
Increase in short-term notes and bills payable
C00600
Decrease in short-term bills payable
C01700
Payments for long-term borrowings

C04020
Payments for principal portion of lease
liabilities
C04100
Increase in other financial liabilities
C04200
Decrease in other financial liabilities
C04300
Increase in other non-current liabilities
C04400
Decrease in other non-current liabilities

C04500
Cash dividend paid

CCCC
CASH FLOWS FROM FINANCING
ACTIVITIES
DDDD
EFFECTS OF EXCHANGE RATE CHANGES ON
THE BALANCE OF CASH HELD IN FOREIGN
CURRENCIES
EEEE
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
E00100 CASH AND CASH EQUIVALENTS, BEGINNING
OF THE PERIOD
E00200 CASH AND CASH EQUIVALENTS, END OF THE
PERIOD		 January 1, 2020 to
September 30,
2020
( $ 3,248,766 )

3,028,071
(
212,235 )

14,718
(
41,236 )

2,068
-

82,757
(
50,742 )


9,584

(
415,781)


(
99,136 )

49,864
-

(
6,000 )

(
67,517 )

1,812
-

-
(
566 )
(
2,431,245)

(
2,552,788)

(
16,529)

(
1,004,556 )

3,705,903

$ 2,701,347
 January 1, 2019 to
September 30,
2019
(
(
(
(

(

(
(
(
(
(
(
(
(

 (
(
(
(
(

(
(
(
(
(
(
(
(
(

 $ 2,918,051 )
2,319,538

257,868 )
7,454

5,037 )
1,968

12,575 )
-

11,339 )
10,826
865,084)

781,802 )
-

30,009 )

15,000 )

55,888 )
-

1,688 )
410
-
2,288,281)
3,172,258)
43,973)
307,390
2,589,952
$ 2,897,342

The accompanying notes are an integral part of the consolidated financial statements. (Please refer to the Independent Auditors' Report of Deloitte & Touche on November 12, 2020.)

  • 9 -

Standard Foods Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2020 and 2019 (Reviewed, not Audited)

(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 Board of Directors on November 12, 2020.

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

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

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

  • 1) Amendment to IFRS 3 "Definition of a Business"

This amendment applies to transactions occurring to the Group after January 1, 2020. The amendment requires that business at least include inputs and material processes, both of which make a significant contribution to the ability to create output. The determination of the materiality of the "process of acquisition" will depend on if there is any output on the acquisition date. In addition, a concentration test that permits a simplified assessment of whether an acquired set of activities and assets is a business is added. Enterprises may elect whether or not to adopt the test.

  • 2) Amendment to IAS 1 and IAS 8 "Definition of Materiality"

The Group has applied the amendment since January 1, 2020, and adopted "can be reasonably expected to affect users" as the threshold of materiality, and adjusted the disclosure of the consolidated financial report while deleting the immaterial information that may obscure material information.

  • 10 -

  • b. IFRSs issued by the International Accounting Standards Board (IASB) but not yet endorsed and issued into effect by the FSC:

Effective Date Announced New/Amended/Revised Standards and Interpretations by IASB (Note 1) "Annual Improvements to IFRSs 2018-2020 Cycle" January 1, 2022 (Note 2) Amendments to IFRS 3 "Updating the Reference to the Conceptual Framework" January 1, 2022 (Note 3) Amendments to IFRS 10 and IAS 28 "Sale or Contribution of To be determined Assets between an Investor and its Associate or Joint Venture" Amendments to IAS 1 "Classification of Liabilities as Current or January 1, 2023 Non-current"

  • Note 1: Unless stated otherwise, the above New/Amended/Revised Standards and Interpretations are effective for annual reporting periods beginning on or after their respective effective dates.

  • Note 2: The amendments to IFRS 9 are applicable to the exchange or term revisions of financial liabilities occurring in annual reporting periods beginning on or after January 1, 2022; the amendments to IAS 41 "Agriculture" are applicable to fair value measurements in annual reporting periods beginning on or after January 1, 2022; the amendments to IFRS 1 "First-Time Adoption of IFRSs" are applied retrospectively to annual reporting periods beginning on or after January 1, 2022.

  • Note 3: The amendments are applicable to business combinations with acquisition dates in annual reporting periods beginning on or after January 1, 2022.

Except for the impact above, as of the date the consolidated financial report was 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 report was formulated in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and IAS 34 "Interim Financial Reporting" endorsed and issued into effect by the FSC. The consolidated financial statements do not include all IFRSs disclosure information required by the annual financial report.

  • 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.

  • 11 -

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 on the measurement date;

  • 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 (current liabilities include completed long term re-financing and rearranged payment agreement that took place between the date of balance sheet and publication of financial statements); and

  • 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

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

  • d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries). Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements of 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 Group. 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.

  • 12 -

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 and Tables 7 and 8 for the detailed information on subsidiaries (including the percentages of ownership and main businesses).

  • e. Other significant accounting policies

Except for the following, please refer to the summary of material accounting policies in the 2019 consolidated financial statements.

  • 1) Pension benefit in defined benefit plan

  • The pension cost for the interim period is calculated based on the actuarial cost ratio determined by the actuarial calculation at the end of the previous year. Calculation term is from the beginning of the period to the end of the period, and adjustments are made for major market fluctuations in the current period, major amendments to plans, settlement, or other significant one-time matters.

  • 2) Other long-term employee benefits

Other long-term employee benefits have the same accounting treatment as the pension benefit in defined benefit plan, except that the relevant remeasurements are recognized in profit or loss.

  • 3) Income tax

Income tax expenses are the sum of current income tax and deferred income tax. The interim income tax is evaluated on an annual basis and the interim profit before tax is applied with the tax rate applicable to the expected total annual earnings for calculations.

5. Key Sources of Significant Accounting Judgment, Estimate, and Assumption Uncertainty

  • In the application of the Group's accounting policies, the 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 management will continue to review the estimates and the basic assumptions. 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.

  • 13 -

Write-down of Inventory

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

6. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash on hand

Checking accounts and demand
deposits
Cash equivalents (investments with
original maturities of less than 3
months)
Time deposits
Repurchase agreements
collateralized by bonds
 September 30,
2020
$ 2,424

2,649,404

49,519

-

$ 2,701,347
 December 31,
2019
$ 2,940
3,198,093
184,478

320,392

$ 3,705,903
 September 30,
2019










$ 2,953
2,434,289

330,290
129,810
$ 2,897,342

The ranges of annual interest rate of cash in bank at the end of the reporting period were as follows:

follows:
Bank deposits

Repurchase agreements collateralized
by bonds		 September 30,
2020
0.001%-3.500%
-
 December 31,
2019
0.001%-3.220%
0.550%-0.560%		 September 30,
2019
0.001%-3.350%
0.550%-0.560%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)

Financial assets at FVTPL-current
Mandatorily measured at FVTPL
Non-derivative financial assets
Mutual funds

Bonds

Financial assets at FVTPL-
non-current
Mandatorily measured at FVTPL
Non-derivative financial assets
Unlisted shares
 September 30,
2020
$ 680,326

$ 29,656

$ 6,239
 December 31,
2019
$ 667,673

$ -

$ 7,575
 September 30,
2019		 September 30,
2019






$ 300,399
$ -
$ 8,433
  • 14 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

(FVTOCI)

(FVTOCI)
Current
Equity instruments

Non-current
Equity instruments

Equity instruments
Current
Listed shares and emerging market shares
Ordinary shares - Far Eastern
International Bank

Ordinary shares - Chunghwa Telecom
Co., Ltd.
Ordinary shares - Formosa Plastics
Corp.
Ordinary shares - China Steel Corp.
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.

 September 30,
2020
$ 210,557

$ 205,078

September 30,
2020

$ 14,135

5,200
7,187
16,427
128,638


38,970

$ 210,557


$ 44,297

14,471
145,404


906

$ 205,078
 December 31,
2019
$ 186,711

$ 189,695

December 31,
2019
$ 16,479

5,346
9,126
19,198
106,772


29,790

$ 186,711

$ 65,640

15,702
107,424


929

$ 189,695
 September 30,
2019
$ 180,950
$ 198,647
September 30,
2019























$ 16,548
5,395
8,641
18,475
107,411
24,480
$ 180,950
$ 76,366
15,068
106,236
977
$ 198,647

These investments by the Group are held for medium- to long-term strategic purposes and the Group expects to profit from long-term investments. 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.

  • 15 -

9. FINANCIAL ASSETS AT AMORTIZED COST

Current
Time deposits with original maturities of
more than 3 months
 September 30,
2020
$ 2,428,864
 December 31,
2019
$ 2,206,805
 September 30,
2019		 September 30,
2019
$ 2,101,491

The ranges of interest rates for time deposits with original maturities of more than 3 months were 0.25%-4.13%, 0.65%-2.85%, and 0.79%-2.92% per annum as of September 30, 2020, December 31, 2019, and September 30, 2019, respectively.

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

Notes receivable
Operating
Trade receivables-related parties
At amortized cost
Gross carrying amount
Less: Allowance for impairment loss
Other receivables-related parties
Accrued income
Receivables from payments on behalf of others
Others		 September 30,
2020		 September 30,
2020		 December 31,
2019		 December 31,
2019		 September 30,
2019		 September 30,
2019


(




 $ 15,566
$ 6,163,542

29,442)
$ 6,134,100
$ 14,073

460
255,213
$ 269,746

(



 $ 2,977
$ 6,460,483

20,933)
$ 6,439,550
$ 8,912
595
183,576
$ 193,083

(



 $ 8,812
$5,698,496

19,126)
$ 5,679,370
$ 6,988
804
232,608
$ 240,400

The average collection period of receivables from sales of goods was 30-90 days. In order to control credit risk, the Group has established a department dedicated to credit risk management. The department is responsible for determining the credit limits of customers, credit approvals, and other monitoring procedures to ensure the collection of receivables. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts.

The Group adopts the simplified approach of IFRS 9 to measures the loss allowance for trade receivables at an amount equal to lifetime expected credit losses (ECLs). The Group performs assessment using the three forward-looking factors, i.e., industrial index of the customer, GDP growth rate and unemployment rate, as the ECL rate.

When there is evidence indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, the credit risk management department of the Group would continue to engage in enforcement activity in compliance with laws and regulations. The trade receivable will be written off when the amount due is collected.

The following table details the loss allowance of notes and trade receivables of the Group.

  • 16 -

September 30, 2020

September 30, 2020

ECL rate
Gross carrying amount
Loss allowance (Lifetime ECL)
Amortized cost
December 31, 2019

ECL rate
Gross carrying amount
Loss allowance (Lifetime ECL)
Amortized cost
September 30, 2019

ECL rate
Gross carrying amount
Loss allowance (Lifetime ECL)
Amortized cost		 NotPastDue Less than 30
Days
 31to 90Days
4.46%
$ 82,185

(
3,668)

$ 78,517

31 to 90 Days
3.36%
$ 36,932

(
1,242)

$ 35,689

31 to 90 Days
1.81%
$ 53,343

(
964)

$ 52,379
 91to180Days Over 180Days
53.26%
$ 15,508

(
8,260)

$ 7,248

Over 180 Days		 Total

(

 0.03%
$ 5,854,548


1,748)

$ 5,852,800

Not Past Due
(
 1.57%
$ 213,723


3,345)

$ 210,378

Less than 30
Days
 94.50%
$ 13,144

(
12,421)

$ 723

91 to 180 Days
(
 $ 6,179,108

29,442)
$ 6,149,666
Total

(

 0.01%
$ 6,340,444


733)

$ 6,339,712

Not Past Due
(
 1.68%
$ 54,029


906)

$ 53,124

Less than 30
Days
 38.44%
$ 6,717

(
2,582)

$ 4,135

91 to 180 Days		 61.05%
$ 25,338

(
15,470)

$ 9,867

Over 180 Days
(
 $ 6,463,460

20,933)
$ 6,442,527
Total

(
 0.01%
$ 5,467,191


608)

$ 5,466,583
(
 1.07%
$ 138,884


1,492)

$ 137,392
(
(
 15.73%
$ 35,885


5,644)

$ 30,241
(
 86.78%
$ 12,005


10,418)

$ 1,587
(
 $ 5,707,308

19,126)
$ 5,688,182

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

Balance as of January 1
Add: Net remeasurement of loss allowance
Minus: Actual write-off for the current period
Foreign exchange translation gains and losses
Balance as of September 30		 January 1, 2020 to
September 30, 2020
$ 20,933
8,734
(
195 )
(
30)
$ 29,442		 January 1, 2019 to
September 30, 2019		 January 1, 2019 to
September 30, 2019

(
 $ 8,792
10,591
-
257)
$ 19,126

11. FINANCE LEASE RECEIVABLES

The composition of finance lease receivables was as follows:

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		 September 30,
2020

$ 4,200

4,550
4,800
4,800
4,800

9,800

32,950
(
5,295)

$ 27,655		 December 31,
2019
$ 4,200

4,200
4,700
4,800
4,800

13,400

36,100
(
6,377)

$ 29,723
 December 31,
2019
$ 4,200

4,200
4,700
4,800
4,800

13,400

36,100
(
6,377)

$ 29,723
 September 30,
2019
$ 4,200
4,200
4,550
4,800
4,800

14,600
37,150
(
6,754)
$ 30,396		 September 30,
2019
$ 4,200
4,200
4,550
4,800
4,800

14,600
37,150
(
6,754)
$ 30,396


(
 $ 4,200

4,200
4,700
4,800
4,800
13,400

36,100

6,377)

$ 29,723
 $ 4,200
4,200
4,550
4,800
4,800
14,600
37,150

6,754)
$ 30,396

As of September 30, 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.

  • 17 -

12. INVENTORIES

INVENTORIES
Merchandise

Finished goods

Work in progress
Raw materials

Packing materials

 September 30,
2020
$ 692,893
1,272,451
589,335
2,181,017

56,644

$ 4,792,340
 December 31,
2019
$ 578,324
1,544,663

344,702
1,111,234

68,061

$ 3,646,984
 September 30,
2019














$ 625,513
1,220,444

568,088
1,352,868
65,075
$ 3,831,988

The cost of goods sold, including inventory valuation losses (gains on inventory value recoveries), from the three-month periods ended September 30, 2020 and 2019 and the nine-month periods ended September 30, 2020 and 2019 was NT$7,739 thousand, NT$(2,778) thousand , NT$8,488 thousand, and NT$4,989 thousand, respectively, while the loss on abandoned inventories was NT$14,439 thousand, NT$8,570 thousand, NT$32,236 thousand, and NT$38,107 thousand, respectively,

13. PREPAYMENTS

Prepayments for purchases

Prepayments for rent
Prepayments for insurance
Excess business tax paid
Prepayments for advertisements
Others

 September 30,
2020
$ 743,522
8,770
5,877
277,710
13,391

237,027

$ 1,286,297
 December 31,
2019
$ 884,193

6,215

1,139

255,952

13,578

224,149

$ 1,385,226
 September 30,
2019		 September 30,
2019














$ 540,194

5,460

5,700

332,737

15,004
266,155
$ 1,165,250

14. SUBSIDIARIES

Subsidiaries included in consolidated financial statements.

Entities of the consolidated financial statements were as follows:

Investor Company Name of Subsidiary Main Business ProportionofOwnership ProportionofOwnership ProportionofOwnership
Remark
September
30,2020		 December
31,2019		 September
30,2019
The Company

The Company

The Company

The Company

The Company

The Company

The Company

The Company

Accession Ltd.
 Standard Dairy Products Taiwan Ltd.
(Standard Dairy Products)

Charng Hui Ltd
(Charng Hui)

Domex Technology Corporation
(Domex Technology)

Standard Beverage Company Ltd.
(Standard Beverage)

Accession Ltd

Standard Investment (Cayman) Ltd.
(Cayman Standard)

Le Bonta Wellness International
Corporation (Le Bonta Wellness)

Standard Foods, LLC.

Shanghai Standard Foods Co., Ltd.
(Shanghai Standard)
 Manufacture and sale of dairy
products and beverages
Investing
Manufacture and sale of
computer peripherals and
computer appliances
Manufacture and sale of
beverages
Investing
Investing
Sale of health food
Sale of health food
Manufacture and sale of edible
oils and nutritious foods		 100.0%
100.0%
52.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%		 100.0%

100.0%

52.0%
100.0%

100.0%

100.0%

100.0%

-
100.0%
 100.0%
100.0%
52.0%
100.0%
100.0%
100.0%
100.0%
-

100.0%		 －
－
－
－
－
－
－
The Company
invested US$300
thousand and set up
Standard Foods,
LLC. in June 2020.
－

(Continued on the next page)

  • 18 -

(Continued from the previous page)

InvestorCompany Name ofSubsidiary
Shanghai Le Ben De Health
Technology Co., Ltd. (Shanghai Le
Ben De)

Dermalab S.A. (Dermalab)

Swissderma SL (Swissderma)

Standard Corporation (Hong Kong)
Ltd. (Hong Kong Standard)

Standard Investment (China) Ltd.
(China Standard Investment)

Shanghai Le Min Industrial Co., Ltd.
(Shanghai Le Min)

Shanghai Le Ho Industrial Co., Ltd.
(Shanghai Le Ho)

Standard Foods (China) Co., Ltd.
(China Standard Foods)

Shanghai Dermalab Corporation
(Shanghai Dermalab)

Le Bonta Wellness Co., Ltd. (Shanghai
Le Bonta Wellness)

Standard Foods (Xiamen) Co., Ltd.
(Xiamen Standard)
 Main Business ProportionofOwnership ProportionofOwnership ProportionofOwnership Remark
September
30,2020		 December
31,2019		 September
30,2019
Accession Ltd.

Accession Ltd.

Dermalab

Cayman Standard

Hong Kong Standard

Hong Kong Standard

Hong Kong Standard

China Standard Investment
China Standard Investment
The Company and China
Standard Investment

China Standard Investment		 Technical consultant on health
technology, technical
transfer and technical service
Development and sale of
cosmetics
Sale of cosmetics
Investing
Investing and sale of edible oils
and nutritious foods
Management of properties
Management of properties
Manufacture and sale of edible
oils and nutritious foods
Sale of nutritional foods,
cosmetic and engage in
import and export business
Sale of nutritional foods and
engage in import and export
business
Manufacture and sale of edible
oils and nutritious foods		 100.0%
100.0%
100.0%
100.0%
99.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%		 100.0%

100.0%

100.0%

100.0%

99.0%
100.0%

100.0%

100.0%

100.0%

100.0%

100.0%
 100.0%
100.0%
100.0%
100.0%
99.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%		 －
－
－
－
－
－
－
－
－
－
－
  • It is a non-significant subsidiary, and its financial statements have not been reviewed by any CPA.

15. PROPERTY, PLANT AND EQUIPMENT

Cost
Balance as of January 1, 2019

Impact of retrospective application of IFRS 9

Balance as of January 1, 2019 (restated)
Additions
Disposals
Reclassified
Reclassified as investment properties
Effects of foreign currency exchange differences
Balance as of September 30, 2019

Accumulated depreciation and impairment
Balance as of January 1, 2019

Impact of retrospective application of IFRS 9

Balance as of January 1, 2019 (restated)
Disposals
Depreciation expenses
Reclassified as investment properties
Effects of foreign currency exchange differences
Balance as of September 30, 2019

Balance as of September 30, 2019

Cost
Balance as of January 1, 2020

Additions
Disposals
Reclassified
Reclassified as investment properties
Effects of foreign currency exchange differences
Balance as of September 30, 2020

Accumulated depreciation and impairment
Balance as of January 1, 2020

Disposals
Depreciation expenses
Reclassified as investment properties
Effects of foreign currency exchange differences
Balance as of September 30, 2020

Carrying amount as of December 31, 2019 and
January 1, 2020
Carrying amount as of September.30, 2020
 FreeholdLand Buildings Equipment
















$ 702,405
-
702,405
-
-
-
-
-
$ 702,405
$ -
-
-
-
-
-
-
$ -
$ 702,405
$ 702,405
-
-
2,940
-
-
$ 705,345
$ -
-
-
-
-
$ -
$ 702,405
$ 705,345		 $ 3,447,188


-

3,447,188
-
(
15,814 )
716,204
(
130,848 )

111,372

$ 4,128,102

$ 1,234,242


-

1,234,242
(
15,789 )
126,384
(
117,272 )

26,837

$ 1,254,402

$ 2,873,700

$ 4,078,150

322
(
8,378 )
28,248
(
748,948 )
(
16,636)

$ 3,332,758

$ 1,269,679

(
8,110 )
131,925
(
29,475 )
(
2,288)

$ 1,361,731

$ 2,808,471

$ 1,971,027
 $ 4,153,208


-

4,153,208
590
(
51,786 )
223,480

-
(
27,512)

$ 4,297,980

$ 2,748,680


-

2,748,680
(
43,741 )
209,859

-
(
13,895)

$ 2,900,903

$ 1,397,077

$ 4,069,198

16,303
(
92,133 )
98,470

-
(
6,444)

$ 4,085,394

$ 2,730,217

(
87,434 )
203,695

-
(
2,605)

$ 2,843,873

$ 1,338,981

$ 1,241,521
  • 19 -

No impairment assessment was performed for the nine-month periods ended September 30, 2020 and 2019 as there was no indication of impairment.

Depreciation expenses were recognized on a straight-line basis over the following estimated useful lives of the assets:

e 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.

16. LEASE ARRANGEMENTS

a. Right-of-use assets

ASE ARRANGEMENTS
Right-of-use assets
Carrying amounts
Land

Buildings
Office equipment
Transportation equipment

 September 30,
2020

$ 393,750
235,399
338

8,113

$ 637,600
 December 31,
2019
$ 404,964

286,147

390

8,178

$ 699,679
 September 30,
2019










$ 415,560

306,922

408
5,843
$ 728,733
Additions to right-of-use assets
Depreciation charge for
right-of-use assets
Land

Building
Office equipment
Transportation equipment

b. Lease liabilities
Carrying amounts
Current
Non-current		 July 1, 2020 to
September 30, 2020
$ 2,440

$ 3,069

18,259
17

861

$ 22,206


 July 1, 2019 to
September 30, 2019
$ 58,588

$ 3,403

17,683
12

900

$ 21,998

September 30,
2020

$ 80,170

$ 210,817
 July 1, 2019 to
September 30, 2019
$ 58,588

$ 3,403

17,683
12

900

$ 21,998

September 30,
2020

$ 80,170

$ 210,817
 January 1, 2020 to
September 30, 2020
$ 11,789

$ 9,200

56,591
52

2,462

$ 68,305

December 31,
2019
$ 83,119

$ 264,496
 January 1, 2020 to
September 30, 2020
$ 11,789

$ 9,200

56,591
52

2,462

$ 68,305

December 31,
2019
$ 83,119

$ 264,496
 January 1, 2019 to
September 30, 2019		 January 1, 2019 to
September 30, 2019










$ 117,102
$ 9,327
39,127
12

2,697
$ 51,163
September 30,
2019





$ 79,002
$ 281,404
  • 20 -

Range of discount rate for lease liabilities was as follows:

Land
Building
Office equipment
Transportation equipment
 September 30,
2020

1.07%~1.49%
1.07%~4.35%
1.07%
1.07%~ 12.04%		 December 31,
2019
1.07%~1.49%
1.07%~4.35%
1.07%
1.07%~ 12.04%		 September 30,
2019
1.07%~1.49%
1.07%~4.35%
1.07%
1.07%~ 12.04%
  • c. Material leasing activities and terms

The Group 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.

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		 July 1, 2020 to
September 30,
2020
$ 25,993

$ 322

$ 19
 July 1, 2019 to
September 30,
2019
$ 24,919

$ 120

$ 102

 January 1, 2020
to September 30,
2020
$ 68,244

$ 860

$ 57

($ 144,080)
 January 1, 2019
to September 30,
2019







(


(		 $ 84,887
$ 270
$ 102
$ 145,874)

The Group leases certain office equipment, production assets, and sale premises that qualify as short-term 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.

  • 21 -

17. INVESTMENT PROPERTIES

17. INVESTMENT PROPERTIES
Cost
Balance as of January 1, 2019
From right-of-use assets
From property, plant and equipment
Effects of foreign currency exchange
differences
Balance as of September 30, 2019
Accumulated depreciation and impairment
Balance as of January 1, 2019
Depreciation expenses
From right-of-use assets
From property, plant and equipment
Effects of foreign currency exchange
differences
Balance as of September 30, 2019
Balance as of September 30, 2019
Cost
Balance as of January 1, 2020
From property, plant and equipment
Effects of foreign currency exchange
differences
Balance as of September 30, 2020
Accumulated depreciation and impairment
Balance as of January 1, 2020
Depreciation expenses
From property, plant and equipment
Effects of foreign currency exchange
differences
Balance as of September 30, 2020
Carrying amount as of December 31, 2019
and January 1, 2020
Carrying amount as of September 30, 2020		 Completed
Investment
Properties
$ 157,309
-
130,848

3,660)
$ 284,497

$ 46,533
1,731
-
117,272

3,284)
$ 162,252

$ 122,245

$ 241,711
748,948
1,173
$ 991,832

$ 124,434
4,503
29,475

357)
$ 158,055

$ 117,277
$ 833,777
 Right-of-use
assets
$ -

5,898

-
232)
$ 5,666

$ -

115

123

-
9)
$ 229

$ 5,437

$ 5,548

-
31)
$ 5,517

$ 333

324

-
1)
$ 656

$ 5,215
$ 4,861
 Total

(


(






(


(





(




(




(


(





(









(


 $ 157,309

5,898

130,848
3,892)
$ 290,163
$ 46,533

1,846

123

117,272
3,293)
$ 162,481
$ 127,682
$ 247,259

748,948
1,142
$ 997,349
$ 124,767

4,827

29,475
358)
$ 158,711
$ 122,492
$ 838,638

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

ng 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
  • 22 -

The Group's fair values of the investment properties were NT$1,125,601 thousand, NT$212,653 thousand, and NT$210,545 thousand as of September 30, 2020, December 31, 2019, and September 30, 2019, respectively. In the absence of independent appraiser recruited, 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. OTHER INTANGIBLE ASSETS

Cost
Balance as of January 1, 2019

Additions
Transferred from prepayments
Effects of foreign currency exchange
differences
Balance as of September 30, 2019

Accumulated amortization and impairment
Balance as of January 1, 2019

Amortization expense
Effects of foreign currency exchange
differences
Balance as of September 30, 2019

Balance as of September 30, 2019

Cost
Balance as of January 1, 2020

Additions
Disposals
Effects of foreign currency exchange
differences
Balance as of September 30, 2020

Accumulated amortization and impairment
Balance as of January 1, 2020

Disposals
Amortization expense
Effects of foreign currency exchange
differences
Balance as of September 30, 2020

Carrying amount as of December 31, 2019
and January 1, 2020
Carrying amount as of September 30, 2020		 Trademark
$ 207,039

-
34

24,395

$ 231,468

$ 137,269

3,874

24,431

$ 165,574

$ 65,894

$ 227,260

31,240
-


440

$ 258,940

$ 163,442

-

3,809
(
1,093)

$ 166,158

$ 63,818

$ 92,782











(
  • 23 -

The above intangible assets with definite useful are amortized on a straight-line basis over the following estimated lives:

Trademark right 10-20 years Computer software 2-3 years

19. OTHER ASSETS

Current
Pledged time deposits (Note 34)

Advances to officers
Temporary payments
Right of products to be returned
Others


Non-current
Prepayments for equipment

Refundable deposits
Pledged time deposits (Note 34)
Others


BORROWINGS
a. Short-term borrowings
Secured borrowings (Note 34)
Bank loans

Unsecured borrowings
Bank loans

Other loans

 September 30,
2020
$ 4,013

12,745
1,739
38,228

488

$ 57,213

$ 15,441

56,000
-
116,689

$ 188,130

September 30,
2020
$ 180,000

1,081,324


15,793

$ 1,277,117
 December 31,
2019
$ 4,013

15,570
9,683
-

118

$ 29,384

$ 6,984

53,615
85,950
114,426

$ 260,975

December 31,
2019
$ 150,000

1,232,955

-

$ 1,382,955
 September 30,
2019		 September 30,
2019
$ 4,010
16,839
-
-

291
$ 21,140
$ 22,470
53,696
87,772

90,928
$ 254,866
September 30,
2019








$ 150,000
793,373
-
$ 943,373

20. BORROWINGS

  • a. Short-term borrowings

The range of interest rates on short-term borrowings or financing was 0.95%-3.20%, 1.05%-4.35%, and 1.35%-4.35% per annum as of September 30, 2020, December 31, 2019, and September 30, 2019, respectively.

b. Short-term notes and bills payable

Commercial paper payable
Less: Discount on short-term bills
payable		 September 30,
2020		 September 30,
2020		 December 31,
2019		 December 31,
2019		 September 30,
2019
$ 90,000
(
105)
$ 89,895		 September 30,
2019
$ 90,000
(
105)
$ 89,895

(
 $ 150,000

168)
$ 149,832
(
 $ 100,000

32)
$ 99,968		 $ 90,000

105)
$ 89,895

The range of interest rates on commercial paper payable was 1.19%-1.29%, 1.34%-1.36%, and 1.34%-1.36% per annum as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively.

  • 24 -

c. Long-term borrowings

Long-term borrowings
Secured borrowings (Note 34)
Bank loans (1)

Less: Current portions

Long-term borrowings
 September 30,
2020
$ -


-

$ -
 December 31,
2019
$ 6,000

(
6,000)

$ -
 September 30,
2019



(

$ 12,000
(
12,000)
$ -

As of December 31, 2019 and September 30, 2019, the interest rate of the bank borrowings secured by the Group's equipment (see Note 34) was 1.91% per annum. The bank borrowings were repayable quarterly from March 2018 and were paid off in February 2020.

21. NOTES PAYABLE AND TRADE PAYABLES

Notes payable
Operating

Trade payables-related parties
Operating
 September 30,
2020
$ 371,043

$ 1,973,379
 December 31,
2019
$ 316,444

$ 2,014,619
 September 30,
2019		 September 30,
2019



$ 307,077
$ 1,756,209

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

OTHER LIABILITIES
Current
Other payables - related parties
Payable for salaries or bonuses

Payable for compensation of employees
Payable for remuneration to directors
Payable for commission and rebates
Advertisement payable
Payable for royalties
Payable for freight
Payable for equipment
Others


Other liabilities
Advance receipts from customers

Refund liability
Others


Non-current
Other liabilities
Guarantee deposits

Others

 September 30,
2020
$ 290,913


28,381
18,529
992,184
135,207
24,201
91,782
94,495
1,219,175

$ 2 ,894,867

$ 1,058

75,171

24,283

$ 100,512

$ 21,774


2,422

$ 24,196
 December 31,
2019
$ 306,728

52,013
25,073
963,712
199,232
25,668
100,658
113,698
1,063,892

$ 2,850,674

$ 1,337

13,055

14,109

$ 28,501

$ 20,044


2,934

$ 22,978
 September 30,
2019

























$ 267,322
27,181
17,969
880,034
121,899
23,730
87,078
115,738
1,241,485
$ 2,782,436
$ 2,891
12,984
16,031
$ 31,906
$ 18,028
5,158
$ 23,186
  • 25 -

23. RETIREMENT BENEFIT PLANS

For the three-month and nine-month periods ended September 30, 2020 and 2019, the pension expenses of defined benefit plans were NT$2,899 thousand, NT$2,989 thousand, NT$8,638 thousand, and NT$8,951 thousand, respectively, and these were calculated based on the pension cost rate determined by the actuarial calculation on December 31, 2019 and 2018, respectively.

24. EQUITY

  • a. Share capital

  • 1) Ordinary shares

TY
re capital
Ordinary shares
Number of shares authorized (in
thousands)

Shares authorized

Number of shares issued and
fully paid (in thousands)

Shares issued
 September 30,
2020

920,000

$ 9,200,000


915,089

$ 9,150,897
 December 31,
2019

920,000

$ 9,200,000


915,089

$ 9,150,897
 September 30,
2019









920,000
$ 9,200,000
915,089
$ 9,150,897

2) Global depositary receipts

As of September 30, 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 5 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 to have their GDRs be converted into corresponding ordinary shares.

b. Capital surplus

May be used to offset a deficit,
distributed as cash dividends, or
transferred to share capital (1)
Difference between consideration
received or paid and the carrying
amount of the subsidiaries' net
assets during actual disposal or
acquisition

Treasury share transactions

May only be used to offset a deficit
Changes in percentage of ownership
interests in subsidiaries (2)

 September 30,
2020
$ 1

126,925


466

$ 127,392
 December 31,
2019
$ 1

109,251


466

$ 109,718
 September 30,
2019		 September 30,
2019









$ 1
109,251
466
$ 109,718

  • 26 -

  • 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 Articles of Incorporation, where the Company made profit in a fiscal year, the profit shall be appropriated, less any paying taxes and deficit, 10% thereof as legal reserve, special reserve provided or reversed in accordance with the regulations, and 30% to 100% of 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 in the Articles of Incorporation, please refer to Note 26(i) "employees' compensation and remuneration of directors."

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

The Company appropriates or reserves special reserve in accordance with Letter No. 1010012865 and Letter No. 1010047490 issued by the FSC and the directive titled "Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs."

The appropriations of earnings for 2019 and 2018 that were 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$)		 2019
$ 341,610
$ 246,549
$ 2,424,987
$ 2.65		 2018






$ 294,909
$ 70,519
$ 2,287,724
$ 2.5
  • 27 -

d. Special reserve

Special reserve
Balance as of January 1
Appropriation of special reserve
Appropriation for deductions in other
equity items
Balance as of September 30		 January 1, 2020 to
September 30, 2020
$ 330,945
246,549
$ 577,494		 January 1, 2019 to
September 30, 2019
$ 260,426

70,519
$ 330,945


$ 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 at the end of the reporting period. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and, thereafter, distributed.

  • e. Other equity items

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

Balance as of January 1
In respect of the current year
Exchange differences on translating the
financial statements of foreign operations
Other comprehensive income for the period
Balance as of September 30		 January 1, 2020 to
September 30, 2020
( $ 693,038 )

(
35,211)

(
35,211)
($ 728,249)		 January 1, 2019 to
September 30, 2019
( $ 412,869 )
(136,027)
(136,027)
($ 548,896)
  • 2) Unrealized gain (loss) on financial assets at FVTOCI
Balance as of January 1
In respect of the current year
Unrealized gain (loss)
Equity instruments
Other comprehensive income for the period
Balance as of September 30		 January 1, 2020 to
September 30, 2020
$ 115,544

21,012


21,012
$ 136,556		 January 1, 2019 to
September 30, 2019		 January 1, 2019 to
September 30, 2019







$ 81,924
37,348
37,348
$ 119,272
  • f. Non-controlling interests
Non-controlling interests
Balance as of January 1
Net profit for the period
Other comprehensive income for the period
Exchange difference on translating the
financial statements of foreign operation
Unrealized gain (loss) on financial assets at
FVTOCI
Cash dividends distributed by subsidiaries to
non-controlling interests
Balance as of September 30		 January 1, 2020 to
September 30, 2020
$ 272,564
24,931

(
244 )
18,227
(
23,932)
$ 291,546		 January 1, 2019 to
September 30, 2019
$ 233,399
26,168
(
850 )
20,577
(
17,230)
$ 262,064
  • 28 -

g. Treasury stock

Treasury stock
Purpose of Buy-back
Number of shares as of January 1, 2019 and
September 30, 2019
Number of shares as of January 1, 2020 and
September 30, 2020		 Shares Held by
Subsidiaries (In
Thousands of Shares)

6,669
6,669

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

Name of Subsidiary
September 30, 2020
Charng Hui
December 31, 2019
Charng Hui
September 30, 2019
Charng Hui		 Number of
shares held
(thousand shares)
6,669

6,669

6,669
 Carrying
Amount		 Market Price Market Price


$ 21,182

$ 21,182

$ 21,182

$ 405,504
$ 464,195
$ 414,174

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

REVENUE
Revenue from contracts with
customers
Revenue from sale of goods

a. Contract balance
Notes receivable (Note 10)

Trade receivables (Note 10)

Trade receivables from related
parties (Notes 33)
Contract liabilities - current
Sale of goods
 July 1, 2020 to
September 30,
2020
$ 9,600,461

September 30,
2020
$ 15,566

$ 6,134,100

$ 9,088

$ 245,792
 July 1, 2019 to
September 30,
2019
$ 7,997,276

December 31,
2019
$ 2,977

$ 6,439,550

$ -

$ 326,644
 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019



$ 24,224,530

September 30,
2019
 $ 21,404,896
January 1, 2019









$ 8,812

$ 5,679,370

$ -

$ 241,974


$ 2,887
$ 6,161,079
$ -
$ 360,115

a. Contract balance

  • 29 -

b. Disaggregation of contract revenue

January 1, 2020 to September 30, 2020

Types of goods or services
Revenue from sale of goods

January 1, 2019 to September		 Reportable Segments Reportable Segments Reportable Segments Reportable Segments Total
Others
$ 2,432,843

 $ 24,224,530
Total

Types of goods or services
Revenue from sale of goods
Nutritious
Foods
$ 8,757,652
 Condiments
$ 9,995,435
 Others
$ 2,651,809
 $ 21,404,896

January 1, 2019 to September 30, 2019

26. NET PROFIT

Net profit includes:

  • a. Interest income
Interest income
Bank deposits

Financial assets at amortized
cost
Repurchase agreements
collateralized by bonds
Others


Other income
Operating lease rental income
Investment properties (Note 17)
Others


Dividend income
Investments in equity
instruments at FVTOCI

 July 1, 2020 to
September 30,
2020

$ 6,609

17,393
36

328

$ 24,366

July 1, 2020 to
September 30,
2020

$ 7,137


397


7,534


1,880

$ 9,414
 July 1, 2019 to
September 30,
2019

$ 16,380

5,022
227

359

$ 21,988

July 1, 2019 to
September 30,
2019

$ 4,720


2,684


7,404


9,391

$ 16,795
 January 1, 2020
to September 30,
2020		 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019		 January 1, 2019
to September 30,
2019
$ 43,210

46,581
507

1,014

$ 91,312

January 1, 2020
to September 30,
2020		 $ 39,266
13,163
445

1,035
$ 53,909
January 1, 2019
to September 30,
2019












$ 21,139

932

22,071

9,584

$ 31,655



$ 14,162
3,191
17,353
11,006
$ 28,359

b. Other income

  • 30 -

c. Other gains and losses

Other gains and losses
Gains and losses of financial
assets and financial liabilities
Financial assets mandatorily
classified as FVTPL

Net foreign exchange gains
(losses)
Net gains (losses) from disposal
of property, plant and
equipment

Government grants
Others

 July 1, 2020 to
September 30,
2020


$ 345

5,910

(
3,328 )

15,561

22,523

$ 41,011
 July 1, 2019 to
September 30,
2019

$ 2,133

(
3,688 )
(
684 )
51,664

21,884

$ 71,309
 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019


(
(
(
(
(

 $ 1,412


1,828 )

2,744 )

57,987
20,629

$ 75,456
(

 $ 7,535
5,880

3,000 )
58,829
50,920
$ 120,164

d. Finance costs

Finance costs
Interest on bank loans

Interest on short-term bills payable
Interest on lease liabilities
Other interest expenses

 July 1, 2020 to
September 30,
2020

$ 6,499


394
2,319

12

$ 9,224
 July 1, 2019 to
September 30,
2019

$ 9,452

199
2,739

12

$ 12,402
 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019







$ 32,351

751
7,402
37

$ 40,541

$ 28,309
731
4,727
37
$ 33,804

e. Impairment losses recognized (reversed)

Impairment losses recognized (reversed)
Trade receivables - related parties
Inventories (included in operating
costs)
 July 1, 2020 to
September 30,
2020

$ 630

$ 7,739
 July 1, 2019 to
September 30,
2019

($ 23,159)

($ 2,778)
 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019

(
(
$ 8,734

$ 8,488
$ 10,591
$ 4,989

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

 July 1, 2020 to
September 30,
2020

$ 99,069

46,416

3,540

$ 149,025

$ 4,642


13,099

$ 17,741
 July 1, 2019 to
September 30,
2019

$ 103,947

46,062


797

$ 150,806

$ 6,032


7,561

$ 13,593
 January 1, 2020
to September 30,
2020		 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019		 January 1, 2019
to September 30,
2019
















$ 297,774

141,257

4,827

$ 443,858

$ 14,374

31,393

$ 45,767





$ 299,136
122,445
1,846
$ 423,427
$ 15,400
23,950
$ 39,350
  • 31 -

g. Operating expenses directly related to investment properties

Direct operating expenses of
investment properties
Direct operating expenses of
investment properties that
generated rental income

Direct operating expenses of
investment properties that did
not generated rental income

 July 1, 2020 to
September 30,
2020

$ 177


141

$ 318
 July 1, 2019 to
September 30,
2019

$ 178


146

$ 324
 January 1, 2020
to September 30,
2020		 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019		 January 1, 2019
to September 30,
2019






$ 528

427

$ 955

$ 525
429
$ 954

h. Employee benefit expenses

Employee benefit expenses
Post-employment benefits
Defined contribution plans

Defined benefit plans (see
Note 23)

Other employee benefits

Total employee benefit expenses
An analysis of employee benefit
expenses by function
Operating costs

Operating expenses

 July 1, 2020 to
September 30,
2020
$ 11,240


2,899

14,139

732,714

$ 746,853

$ 237,213


509,640

$ 746,853
 July 1, 2019 to
September 30,
2019
$ 33,277


2,989

36,266

597,795

$ 634,061

$ 218,783


415,278

$ 634,061
 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019


















$ 44,720

8,638

53,358
1,973,518

$ 2,026,876

$ 672,111

1,354,765

$ 2,026,876





$ 95,569
8,951
104,520
1,749,254
$ 1,853,774
$ 628,156
1,225,618
$ 1,853,774
  • i. Employees' compensation and remuneration of directors

According to the Company's Articles, the Company accrued employees' compensation and remuneration of directors at rates of no less than 0.5% and no higher than 0.75%, respectively, of net profit before income tax, employees' compensation, and remuneration of directors. Compensation to employees and remuneration to directors in the three-month period ended September 30, 2020 and 2019, and in the nine-month periods ended September 30, 2020 and 2019 are as follows:

Accrual rate

Accrual rate
Compensation of employees
Remuneration of directors
Amount
Compensation of employees

Remuneration of directors
 January 1, 2020 to
September 30, 2020
January 1, 2019 to
September 30, 2019
0.90%
0.90%
0.59%
0.59%
July 1, 2020 to
September 30,
2020
July 1, 2019 to
September 30,
2019
January 1, 2020
to September 30,
2020
January 1, 2019
to September 30,
2019
$ 10,562
$ 11,507
$ 28,381
$ 27,181
$ 6,836
$ 7,621
$ 18,529
$ 17,969		 January 1, 2019 to
September 30, 2019
0.90%
0.59%
July 1, 2019 to
September 30,
2019
 0.90%
0.59%
January 1, 2019
to September 30,
2019


$ 11,507

$ 7,621
$ 28,381

$ 18,529
$ 27,181
$ 17,969
  • 32 -

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

The appropriations of compensation of employees and remuneration of directors for 2019 and 2018 that were resolved by the board of directors on March 18, 2020 and March 22, 2019, respectively, are as shown below:

2019, respectively, are as shown below:
Compensation of employees
Remuneration of directors		 2019
Cash
$ 52,013
25,073		 2018
Cash
$ 31,723
20,960

There was no difference between the actual amounts of 2019 and 2018 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 compensation to employees and remuneration to directors approved by the Board of Directors is available at the Market Observation Post System website of Taiwan Stock Exchange.

  • j. Gain or loss on foreign currency exchange
Foreign exchange gains

Foreign exchange losses

Net gains (losses)
 July 1, 2020 to
September 30,
2020

$ 33,440

(
27,530)

$ 5,910
 July 1, 2019 to
September 30,
2019
 July 1, 2019 to
September 30,
2019
 January 1, 2020
to September 30,
2020		 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019		 January 1, 2019
to September 30,
2019

(
(
 $ 17,081

20,769)

$ 3,688
(
(		 $ 78,426

80,254)

$ 1,828)
(
 $ 49,849
43,969)
$ 5,880

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

Additional tax on undistributed
earnings
Adjustments from previous
years


Deferred tax
In respect of the current year

Income tax expense recognized in
profit or loss
 July 1, 2020 to
September 30,
2020

$ 260,862

-

5,089

265,951


84,776

$ 350,727
 July 1, 2019 to
September 30,
2019
 July 1, 2019 to
September 30,
2019
 January 1, 2020
to September 30,
2020		 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019		 January 1, 2019
to September 30,
2019





(


 $ 341,229

-
490)

340,739

19,386

$ 360,125
(


 $ 738,846

18,783
6,455)

751,174

81,638

$ 832,812
(


 $704,526
12,941
505)
716,962
36,365
$ 753,327
  • 33 -

b. Income tax recognized in other comprehensive income

Deferred tax
In respect of the current year
Exchange differences on
translating the financial
statements of foreign
operations

Unrealized gain (loss) on
financial assets at FVTOCI
Total income tax recognized in
other comprehensive income
 July 1, 2020 to
September 30,
2020

$ 36,497

(
6)

$ 36,491
 July 1, 2019 to
September 30,
2019

( $ 50,252 )

5

($ 50,247)
 January 1, 2020
to September 30,
2020
( $ 8,802 )

(
3)

($ 8,805)
 January 1, 2019
to September 30,
2019		 January 1, 2019
to September 30,
2019

(
 (

(		 (
(
(		 (

(		 $ 34,006 )
1
$ 34,005)

c. Income tax assessments

The income tax returns of the Company for the year ended December 31, 2017 had been assessed by the tax authorities.

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

28. EARNINGS PER SHARE

EARNINGS PER SHARE
Basic earnings per share

Diluted earnings per share
 July 1, 2020 to
September 30,
2020
$ 1.05

$ 1.05
 July 1, 2019 to
September 30,
2019
$ 1.15

$ 1.14
 January 1, 2020
to September 30,
2020
$ 2.79

$ 2.79
 January 1, 2019
to September 30,
2019




$ 2.69
$ 2.68

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

Net profit for the period

The earnings and weighted average number of ordinary shares outstanding in the computation of
earnings per share were as follows:
Net profit for the period		 The earnings and weighted average number of ordinary shares outstanding in the computation of
earnings per share were as follows:
Net profit for the period		 The earnings and weighted average number of ordinary shares outstanding in the computation of
earnings per share were as follows:
Net profit for the period		 tstanding in the tstanding in the computation of computation of
July 1, 2020 to
September 30,
2020
July 1, 2019 to
September 30,
2019
January 1, 2020
to September 30,
2020
January 1, 2019
to September 30,
2019
Earnings used in the computation of
basic and diluted earnings per share
$ 951,165
$ 1,040,184
$ 2,536,836
$ 2,439,979
Weighted average number of ordinary shares outstanding (in thousands of shares):
July 1, 2020 to
September 30,
2020
July 1, 2019 to
September 30,
2019
January 1, 2020
to September 30,
2020
January 1, 2019
to September 30,
2019
Weighted average number of ordinary
shares used in computation of
basic earnings per share
908,420
908,420
908,420
908,420
Effect of potentially dilutive ordinary
shares:
Compensation of employees

488

456

781

644
Weighted average number of ordinary
shares used in the computation of
diluted earnings per share
908,908
908,876
909,201
909,064		 January 1, 2020
to September 30,
2020		 January 1, 2019
to September 30,
2019

Weighted average number of ordinary
shares used in computation of
basic earnings per share
Effect of potentially dilutive ordinary
shares:
Compensation of employees

Weighted average number of ordinary
shares used in the computation of
diluted earnings per share
July 1, 2020 to
September 30,
2020

908,420


488

908,908
July 1, 2019 to
September 30,
2019

908,420


456

908,876
January 1, 2020
to September 30,
2020






908,420

781

909,201

908,420

644
909,064
  • 34 -

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

29. GOVERNMENT GRANTS

The Group received government grants in the amounts of NT$15,561 thousand, NT$51,664 thousand, NT$57,987 thousand, and NT$58,829 thousand recognized in government grants under other gains and losses for the three-month and nine-month periods ended September 30, 2020 and 2019, respectively.

30. CASH FLOWS INFORMATION

Changes in liabilities arising from financing activities: January 1, 2020 to September 30, 2020

Short-term borrowings

Short-term bills payable
Long-term borrowings
Guarantee deposits
Lease liabilities
Other non-current liabilities

 January 1,
2020
$ 1,382,955

99,968
6,000

20,044
347,615

2,934

$ 1,859,516
 Cash Flows
( $ 99,136 )
49,864
(
6,000 )
1,812
(
67,517 )
(
566)

($ 121,543)
 Non-cash flow
September 30,
2020
September 30,
2020


( $ 6,702 )

-

-
(
82 )

10,889

54

$ 4,159



$ 1,277,117
149,832
-

21,774

290,987
2,422
$ 1,742,132

January 1, 2019 to September 30, 2019


Short-term borrowings

Short-term bills payable
Long-term borrowings
Guarantee deposits
Lease liabilities
Other non-current liabilities

 January1,2019
$ 1,731,478

119,904

27,000

19,961

139,110


4,734

$ 2,042,187
 Cash Flows
( $ 781,802 )
(
30,009 )
(
15,000 )
(
1,688 )
(
55,888 )

410

($ 883,977)
 Non-cash
Changes
Exchanging Rate
Adjustments		 September 30,
2019		 September 30,
2019


( $ 6,303 )


-

-
(
245 )

277,184

14

$ 270,650

$ 943,373
89,895
12,000
18,028
360,406
5,158
$ 1,428,860

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, repay liabilities and dividend disbursement, etc. in the next 12 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 debt and equity balance.

  • 35 -

32. FINANCIAL INSTRUMENTS

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

  • 1) Fair value hierarchy

September 30, 2020

Fair valuehierarchy
September 30, 2020
Financial assets at FVTPL
Unlisted shares

Mutual fund beneficiary certification
Bonds

Total

Financial assets at FVTOCI
Equity instruments
Listed shares and emerging
market shares

Unlisted shares


December 31, 2019
Financial assets at FVTPL
Unlisted shares

Mutual fund beneficiary certification
Total

Financial assets at FVTOCI
Equity instruments
Listed shares and emerging
market shares

Unlisted shares


September 30, 2019
Financial assets at FVTPL
Unlisted shares

Mutual fund beneficiary certification
Total

Financial assets at FVTOCI
Equity instruments
Listed shares and emerging
market shares

Unlisted shares

 Level 1
$ -


680,326
-

$ 680,326

$ 254,854
-

$ 254,854

Level 1
$ -

667,673

$ 667,673

$ 252,351
-

$ 252,351

Level 1
$ -

300,399

$ 300,399

$ 257,316
-

$ 257,316
 Level 2 Level 3
$ 6,239

-
-

$ 6,239

$ -

160,781

$ 160,781

Level 3
$ 7,575

-

$ 7,575

$ -

124,055

$ 124,055

Level 3
$ 8,433

-

$ 8,433

$ -

122,281

$ 122,281
 Total











$ -

-
29,656

$ 29,656

$ -


-

$ -

Level 2









$ 6,239
680,326
29,656
$ 716,221
$ 254,854
160,781
$ 415,635
Total










$ -

-

$ -

$ -


-

$ -

Level 2









$ 7,575
667,673
$ 675,248
$ 252,351
124,055
$ 376,406
Total










$ -

-

$ -

$ -


-

$ -









$ 8,433
300,399
$ 308,832
$ 257,316
122,281
$ 379,597

There were no transfers between Levels 1 and 2 for the nine-month period ended September 30, 2020 and 2019.

  • 36 -

2) Reconciliation of financial instruments at Level 3 fair value measurement

January 1, 2020 to September 30, 2020

January 1, 2020 to September 30, 2020
Financial assets
Balance as of January 1

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 as of September 30

Recognized in other gains and losses -
unrealized

January 1, 2019 to September 30, 2019
Financial assets
Balance as of January 1

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 as of September 30

Recognized in other gains and losses -
unrealized
 Financial
Assets at
FVTPL Equity
Instruments
$ 7,575

(
1,336 )
-

-

$ 6,239

($ 1,055)

Financial
Assets at
FVTPL Equity
Instruments
$ 7,315

1,118
-

-

$ 8,433

$ 1,118
 Financial Assets
at FVTOCI
Equity
Instruments
$ 124,055


-

36,732
(
6)

$ 160,781

$ -

Financial Assets
at FVTOCI
Equity
Instruments
$ 77,165

-
45,136
(
20)

$ 122,281

$ -
 Total

(
(

(		 $ 131,630

1,336 )
36,732
6)
$ 167,020
$ 1,055)
Total




(
(

 $ 84,480
1,118
45,136
20)
$ 130,714
$ 1,118
  • 3) Valuation techniques and inputs applied for Level 2 fair value measurement
Valuation techniques and inputs applied for Level 2 fair value measurement
Financial Instrument
Bonds
 Valuation Technique and Inputs
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 reporting period.
  • 4) Valuation techniques and inputs applied for Level 3 fair value measurement

The valuation techniques of unlisted shares with no active market are mostly the market and asset valuation methods.

The market method takes into account the market prices and status of object similar to the investment objects to measure the latter's fair value.

The asset method mainly takes into account the investment objects' net asset values for fair value measurement.

  • 37 -

b. Categories of financial instruments

Categories of financial instruments
Financial assets
Financial assets at FVTPL
Mandatorily classified as at
FVTPL

Financial assets at amortized cost
(Note 1)

Financial assets at FVTOCI
Equity instruments
Financial liabilities
Financial liabilities at amortized
cost (Note 2)		 September 30,
2020
$ 716,221
11,618,724
415,635
3,901,485		 December 31,
2019
$ 675,248

12,691,896


376,406

3,983,402		 September 30,
2019
$ 308,832
11,072,893
379,597
3,255,969

  • Note 1: The balances include financial assets at amortized cost, which comprise cash and cash equivalents, debt investments, notes receivable, trade receivables, other receivables and other financial assets.

  • Note 2: The balances include financial liabilities at amortized cost, which comprise short-term borrowings, short-term bills payable, notes payables, long-term borrowings, and other financial liabilities.

  • 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 borrowings. 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 foreign 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 has monetary assets and monetary liabilities denominated in currencies other than the functional currency, which expose it to foreign currency risk. The Group monitors exchange rate fluctuations, and takes appropriate actions to manage the exchange rate risk.

The carrying amounts of the Group's monetary assets and monetary liabilities denominated in currencies other than the functional currency (including those eliminated on consolidation) at the end of the reporting period are set out in Note 36.

  • 38 -

Sensitivity analysis

The Group is mainly exposed to the fluctuation of RMB, USD, EUR, AUD and CHF. 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%. The amount below indicates an increase (decrease) in pre-tax profit associated with the functional currency weakening by 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.

negative.
Profit or loss

Profit or loss

Profit or loss
 RMB Impact USD Impact
January 1, 2020
to September
30, 2020		 January 1, 2019
to September
30, 2019		 January 1, 2020
to September
30, 2020		 January 1, 2019
to September
30, 2019
January 1, 2020
to September
30, 2020		 January 1, 2019
to September
30, 2019		 January 1, 2020
to September
30, 2020		 January 1, 2019
to September
30, 2019
( $ 354)(iv) $ 1,677(iv)
January 1, 2020
to September
30, 2020		 January 1, 2019
to September
30, 2019
$ 1,099(v)
 $ 1,895(v)

  • i. This was mainly attributable to the outstanding RMB bank deposits which were not hedged at the end of the reporting period.

  • ii. This was mainly attributable to the outstanding USD bank deposits, receivables and payables which were not hedged at the end of the reporting period.

  • iii. This was mainly attributable to the outstanding EUR bank deposits and payables which were not hedged at the end of the reporting period.

  • iv. This was mainly attributable to the outstanding AUD bank deposits and payables which were not hedged at the end of the reporting period.

  • v. This was mainly attributable to the outstanding CHF bank deposits and payables which were not hedged at the end of the reporting period.

  • 39 -

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 interest rates in the market, and takes appropriate actions to manage the interest rate risk.

The carrying amounts of the Group's financial assets and financial liabilities with exposure to interest rate risk 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		 September 30,
2020
$ 1,866,051

1,621,936
644,000
96,000		 December 31,
2019
$ 1,658,861

1,791,538
1,172,500
45,000		 September 30,
2019
$ 1,421,445
1,360,674
1,262,324
45,000

Sensitivity analysis

The sensitivity analyses below were determined based on the Group's exposure to interest rate risk 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 reporting period. 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 the interest rate increases by 1% and all other variables remain unchanged, the Group’s pre-tax profit for the nine-month period ended September 30, 2020 and 2019 would increase (decrease) by NT$4,110 thousand and NT$9,130 thousand, respectively; if the interest rate decreases by 1%, its impact on the pre-tax profit will be the negative of the same amount.

  • 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 designated personnel 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.

For the nine-month period ended September 30, 2020, if equity prices rise/fall by 1%, the pre-tax profit would increase/decrease by NT$7,162 thousand due to the increase/decrease in the fair value of financial assets at FVTPL, while other comprehensive income before tax would increase/decrease by NT$4,156 thousand due to the increase/decrease in the fair value of financial assets at FVTOCI.

  • 40 -

For the nine-month period ended September 30, 2019, if equity prices rise/fall by 1%, the pre-tax profit would increase/decrease by NT$3,088 thousand due to the increase/decrease in the fair value of financial assets at FVTPL, while other comprehensive income before tax would increase/decrease by NT$3,796 thousand due to the increase/decrease in the 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 (the maximum irrevocable amount exposed at risk) which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation (without considering collaterals or other credit enhancement tools) was the carrying amount of financial assets recognized in the consolidated balance sheets.

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

September 30, 2020

September 30, 2020
Credit-impaired financial
instruments applicable based on
IFRS 9
Receivables

December 31, 2019
Credit-impaired financial
instruments applicable based on
IFRS 9
Receivables

September 30, 2019
Credit-impaired financial
instruments applicable based on
IFRS 9
Receivables
 Carrying
Amount
$ 6,149,666

Carrying
Amount
$ 6,442,527

Carrying
Amount
$ 5,688,182
 Maximum Exposure to Credit Risk Mitigated by
Collateral
Other Credit
Enhancements
Total
$ 53,443
$ 1,276
$ 54,719
Maximum Exposure to Credit Risk Mitigated by		 Total
Collateral
Other Credit
Enhancements
Total
$ 76,270
$ 391
$ 76,661
Maximum Exposure to Credit Risk Mitigated by		 Total
Collateral
$ 78,266
 Other Credit
Enhancements
$ 3,622
 Total
$ 81,888

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, the Group's 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 September 30, 2020, December 31, and September 30, 2019, the Group had available bank loan facilities in the amounts of NT$4,187,810 thousand, NT$5,186,434 thousand, and NT$8,326,878 thousand, respectively.

  • 41 -

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 may 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.

September 30, 2020

September 30, 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


September 30, 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
$ 790,516

5,751
-
739,295

81,931

$ 1,617,493

On Demand or
Less than 1 Month
$ 793,371

25,466
-
612,591

108,881

$ 1,540,309

On Demand or
Less than 1 Month
$ 702,768

6,587
-
641,356

80,658

$ 1,431,369
 1-3 Months
$ 1,588,981

16,646
51,515
580,443
163,861

$ 2,401,446

1-3 Months
$ 1,592,308

14,902
-
788,292
217,763

$ 2,613,265

1-3 Months
$ 1,399,715

11,750
10,004
352,370
161,316

$ 1,935,155
 3 Months to 1
Year
$ 72,454

65,253
44,511
15,793

-

$ 198,011

3 Months to 1
Year
$ 86,769

52,197
45,003
48,461

-

$ 232,430

3 Months to 1
Year
$ 88,367

70,919
35,006
9,049

-

$ 203,341
 1-5 Years




$ 21,774
224,028
-
-
-
$ 245,802
1-5 Years




$ 20,044
283,028
-
-
-
$ 303,072
1-5 Years








$ 18,028
302,324
-
-
-
$ 320,352

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

  • 42 -

33. TRANSACTIONS WITH RELATED PARTIES

Transactions, balances, income and expenses 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. Names and relationships of related parties

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

  • b. Sales of goods
Sales of goods
Related Party Category July 1, 2020 to
September 30,
2020		 July 1, 2019 to
September 30,
2019		 January 1, 2020
to September
30, 2020		 January 1, 2019
to September
30, 2019
The Company is one of the directors $ 8,656
 $ -
 $ 15,238
 $ -

Sales from related parties were conducted on normal commercial terms.

  • c. Purchases of goods
Purchases of goods
Related Party Category July 1, 2020 to
September 30,
2020		 July 1, 2019 to
September 30,
2019		 January 1, 2020
to September
30, 2020		 January 1, 2019
to September
30, 2019
The Company is one of the directors $ 11,854
 $ 9,774
 $ 46,796
 $ 23,406

Purchases from related parties were conducted on normal commercial terms.

  • d. Receivables from Related Parties
Line Item Name of
Related Party
September 30,
2020
September 30,
2020		 December 31,
2019		 December 31,
2019		 September 30,
2019		 September 30,
2019
Trade receivables from related parties GeneFerm
 $ 9,088
 $ -
 $ -

The outstanding receivables from related parties were unsecured. No loss allowance is provided for the amount receivables from related parties due between January 1 and September 30, 2020 and 2019.

  • e. Payables to related parties
September 30, 2020 and 2019.
Payables to related parties
Line Item Name of
Related Party
September 30,
2020		 December 31,
2019		 September 30,
2019
Trade payables to related parties
 GeneFerm
 $ 11,452
 $ 26,141
 $ 10,263

The outstanding payables to related parties were unsecured.

  • f. Compensation of key management personnel
Short-term employee benefits

Post-employment benefits

 July 1, 2020 to
September 30,
2020		 July 1, 2020 to
September 30,
2020		 July 1, 2019 to
September 30,
2019		 July 1, 2019 to
September 30,
2019		 January 1, 2020
to September
30, 2020		 January 1, 2020
to September
30, 2020		 January 1, 2019
to September
30, 2019		 January 1, 2019
to September
30, 2019


$ 9,442

70

$ 9,512

$ 11,224

129

$ 11,353

$ 32,845

256

$ 33,101

$ 34,482
389
$ 34,871

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

  • 43 -

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

 September 30,
2020
$ 4,013

-
125,494


55,569

$ 185,076
 December 31,
2019
$ 4,013

85,950
137,554


56,909

$ 284,426
 September 30,
2019		 September 30,
2019









$ 4,010
87,772
141,572
57,356
$ 290,710

35. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of September 30, 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 was approximately US$431 thousand.

  • c. Unrecognized commitments for acquisition of property, plant, and equipment were approximately NT$126,363 thousand.

  • d. Unrecognized commitments for acquiring colostrum from dairymen were approximately 34,448 tons.

  • 44 -

36. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information is aggregated in foreign currencies other than the functional currency of the Group. The exchange rate disclosed is the exchange rate of the foreign currency into the functional currency. Foreign currency assets and liabilities with significant influences are as follows:

September 30, 2020

follows:
September 30, 2020

Financial assets
Monetary items
USD

USD
EUR
RMB
CHF
CHF
Financial liabilities
Monetary items
USD
AUD
CHF		 Foreign Currencies
$ 13,564

2,669
252

202,131
1,450

780
1,921

570

1,070
Exchange Rate

29.10 (USD: NTD)
6.81 (USD: RMB)
34.15 (USD: NTD)
4.27 (RMB:NTD)
31.59 (CHF: NTD)
7.40 (CHF: RMB)

29.10 (USD: NTD)
20.72 (AUD: NTD)
7.40 (CHF: RMB)
 Carrying Amount










$ 394,722

77,583

8,602

862,897

45,798
24,623
$ 1,414,225
$ 55,900

11,805
33,793
$ 101,498

December 31, 2019

December 31, 2019

Financial assets
Monetary items
USD

USD
EUR
RMB
AUD
CHF
CHF
Financial liabilities
Monetary items
USD
AUD
SGD		 Foreign Currencies
$ 26,052

6,480
2,331

10,142
2,058

1,341

591
1,003

762

520
Exchange Rate

29.98 (USD:NTD)
6.98 (USD:RMB)
33.59 (EUR:NTD)
4.31 (RMB:NTD)
21.01 (AUD:NTD)
30.93 (CHF:NTD)
7.18 (CHF:RMB)

29.98 (USD:NTD)
21.01 (AUD:NTD)
22.28 (SGD:NTD)
 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
  • 45 -

September 30, 2019

September 30, 2019

Financial assets
Monetary items
USD

USD
EUR
RMB
AUD
CHF
CHF
Financial liabilities
Monetary items
USD
EUR		 Foreign Currencies
Exchange Rate

31.04 (USD:NTD)
7.07 (USD: RMB)
33.95 (EUR:NTD)
4.35 (RMB:NTD)
20.97 (AUD: NTD)
31.27 (CHF:NTD)
7.19 (CHF: RMB)

31.04 (USD:NTD)
33.95 (EUR:NTD)
 Carrying Amount
$ 19,035

6,458
4,516

18,888
2,666

1,404

616
1,789

673









$ 590,823

200,485

153,335

82,164

55,890

43,907
19,260
$ 1,145,864
$ 55,525
22,847
$ 78,372

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

Functional Currencies July 1, 2020 to September 30, 2020
Exchange Rate
Net Foreign
Exchange
Gains (Losses)
1
(NTD:NTD) $ 10,630
4.26 (RMB:NTD) (
4,501 )
32.01 (CHF:NTD) (
219)

$ 5,910
January 1, 2020 to September 30, 2020
Exchange Rate
Net Foreign
Exchange
Gains (Losses)
1
(NTD:NTD) $ 663
4.26 (RMB:NTD) (
2,280 )
31.36 (CHF:NTD) (
211)

($ 1,828)		 July 1, 2020 to September 30, 2020
Exchange Rate
Net Foreign
Exchange
Gains (Losses)
1
(NTD:NTD) $ 10,630
4.26 (RMB:NTD) (
4,501 )
32.01 (CHF:NTD) (
219)

$ 5,910
January 1, 2020 to September 30, 2020
Exchange Rate
Net Foreign
Exchange
Gains (Losses)
1
(NTD:NTD) $ 663
4.26 (RMB:NTD) (
2,280 )
31.36 (CHF:NTD) (
211)

($ 1,828)		 July 1, 2019 to September 30, 2019 July 1, 2019 to September 30, 2019 July 1, 2019 to September 30, 2019
Exchange Rate Net Foreign
Exchange Gains
(Losses)
NTD

RMB

CHF


Functional Currencies
Exchange Rate
1
(NTD:NTD)
4.26 (RMB:NTD)
31.36 (CHF:NTD)
 Exchange Rate Net Foreign
Exchange Gains
(Losses)
NTD

RMB

CHF
(
(
(		 1
(NTD:NTD)

4.51 (RMB:NTD)
31.27 (CHF:NTD)

 (

 $ 1,338 )
7,090
128
$ 5,880
  • 46 -

37. SEPARATELY DISCLOSED ITEMS

  • a. Information on (I) significant transactions and (II) investees is as follows:

  • 1) Financing provided to others: See Table 1 attached.

  • 2) Endorsements/guarantees provided to others: See Table 2 attached.

  • 3) Marketable securities held at the end of the period (excluding investments in subsidiaries): See Table 3 attached.

  • 4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None.

  • 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.

  • 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.

  • 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 4 attached.

  • 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 5 attached.

  • 9) Trading in derivative instruments: None.

  • 10) Others: Intercompany relationships and significant intercompany transactions: See Table 6 attached.

  • 11) Information on investees (excluding investees of mainland China): See Table 7 attached.

  • c. Information on investments in mainland China:

  • 1) The name of the investee in mainland China, the main businesses and products, its issued capital, the method of investment, information on inflow or outflow of capital, percentage of ownership, investment income (losses), ending balance of investment, amount repatriated as dividends from the investee, and the limit of investment on investee: See Table 8 attached.

  • 2) Significant direct or indirect (through a third region) transactions with the investee, its prices and terms of payment, unrealized gain or loss: None.

  • d. Information on major stockholders: names of stockholders with a holding ratio of 5% or more as well as the number and proportion of shares held: See Table 9 attached.

  • 47 -

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. Accordingly, the Group's reportable segments were as follows:

Standard Foods segment - the Company

Standard Dairy Products segment - Standard Dairy Products

China Standard segment - Shanghai Standard, China Standard Investment, China Standard Foods,

and Xiamen Standard

Other segments - other than the above subsidiaries

The following was an analysis of the Group's revenue and results from continuing operations by reportable segments:

reportable segments:
January 1, 2020 to September 30, 2020
Sales from external customers

Sales among intersegments

Total sales

Interest income

Financial cost

Depreciation expenses

Amortization expense

Operating segment income (loss)

Unallocated amount
Income before income tax
January 1, 2019 to September 30, 2019
Sales from external customers

Sales among intersegments

Total sales

Interest income

Financial cost

Depreciation expenses

Amortization expense

Operating segment income (loss)

Unallocated amount
Income before income tax		 Standard Foods
Segment		 P Standard Dairy
roducts Segment		 C hina Standard
Segment
 O therSegments Adjustments and
Eliminations		 Total















$ 8,791,096

1,111,765

$ 9,902,861

$ 17,544

$ 869

$ 169,790

$ 5,554

$ 2,298,593

$ 8,528,625

1,121,759

$ 9,650,384

$ 16,497

$ 1,018

$ 164,475

$ 8,654

$ 2,256,484














$ 2,036,685

640,132

$ 2,676,817

$ 5,072

$ 19

$ 36,571

$ 2,468

$ 394,144

$ 2,018,412

672,646

$ 2,691,058

$ 3,958

$ 12

$ 32,277

$ 1,809

$ 426,602














$ 11,362,697
170

$ 11,362,867

$ 67,757

$ 37,932

$ 174,024

$ 27,905

$ 707,881

$ 9,115,202
412

$ 9,115,614

$ 30,119

$ 26,804

$ 174,384

$ 20,725

$ 544,552














$ 2,034,052

8,317

$ 2,042,369

$ 6,968

$ 7,750

$ 66,113

$ 9,840

$ 11,813

$ 1,742,657

11,274

$ 1,753,931

$ 7,025

$ 9,660

$ 56,000

$ 8,162

$ 35,823
(
(
(
(
(

(

(
(
(
(
(

(		 $ -

1,760,384)

$ 1,760,384)

$ 6,029)

$ 6,029)

$ 2,640)

$ -

$ 17,852)



$ -

1,806,091)

$ 1,806,091)

$ 3,690)

$ 3,690)

$ 3,709)

$ -

$ 43,987)


















$ 24,224,530
-
$ 24,224,530
$ 91,312
$ 40,541
$ 443,858
$ 45,767
$ 3,394,579
-
$ 3,394,579
$ 21,404,896
-
$ 21,404,896
$ 53,909
$ 33,804
$ 423,427
$ 39,350
$ 3,219,474
-
$ 3,219,474
  • 48 -

TABLE 1

Standard Foods Corporation and Subsidiaries

FINANCING PROVIDED TO OTHERS For the nine-month period ended September 30, 2020 (In Thousands of New Taiwan Dollars)

No.
(Note 1)
Lender		 Borrower Financial Statement
Account		 Related
Parties		 Highest Balance
for the Period		 Balance as of
September 30		 Actual Borrowing
Amount		 Interest
Rate		 Nature of
Financing
(Note 2)		 Business
Transaction
Amounts		 Reasons for
Short-term Financing
Allowance for Bad
Debts		 Collateral Collateral Financing Limit for
Each Borrowing
Company
Financing
Amount Limit		 Note
Item Value
0
0
0
1
1
1
1
2
2
3
4
5
6		 Standard Foods
Corporation
Standard Foods
Corporation
Standard Foods
Corporation
Standard
Investment
(China) Ltd.
Standard
Investment
(China) Ltd.
Standard
Investment
(China) Ltd.
Standard
Investment
(China) Ltd.
Shanghai Standard
Foods Co., Ltd.
Shanghai Standard
Foods Co., Ltd.
Le Bonta Wellness
Co., Ltd.
Shanghai Le Ben
De Health
Technology Co.,
Ltd.
Shanghai Le Ho
Industrial Co.,
Ltd.
Shanghai Le Min
Industrial Co.,
Ltd.		 Dermalab S.A.
Standard Foods
(China) Co., Ltd.
Standard Foods
(Xiamen) Co.,
Ltd.
Shanghai Dermalab
Corporation
Standard Foods
(Xiamen) Co.,
Ltd.
Standard Foods
(China) Co., Ltd.
Le Bonta Wellness
Co., Ltd.
Standard
Investment
(China) Ltd.
Standard Foods
(Xiamen) Co.,
Ltd.
Standard Investment
(China) Ltd.
Standard
Investment
(China) Ltd.
Standard
Investment
(China) Ltd.
Standard
Investment
(China) Ltd.		 Financing receivables
- related parties
Financing receivables
- related parties
Financing receivables
- related parties
Financing receivables
- related parties
Financing receivables
- related parties
Financing receivables
- related parties
Financing receivables
- related parties
Financing receivables
- related parties
Financing receivables
- related parties

Financing receivables
- related parties
Financing receivables
- related parties
Financing receivables
- related parties
Financing receivables
- related parties
Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y		 $ 48,893
343,880
515,820
171,940
701,312
438,320
171,940
635,564
460,236
21,916
10,746
175,328
87,664		 $ 47,378

341,848

512,772

170,924

512,772

427,310

170,924

598,234

448,676

-

10,683

8,546

8,546		 $ 45,798

341,848

512,772

43,188

400,424

395,270

17,674

115,827

448,676

-

10,683

6,948

5,901		 1.000%
1.000%
1.000%
2.500%
2.500%
2.500%
2.500%
2.500%
2.500%
2.500%
2.500%
2.500%
2.500%		 2
2
2
2
2
2
2
2
2
2
2
2
2		 $ -
-
-
-
-
-
-
-
-
-
-
-
-		 Need for operation
Need for operation
Need for operation
Need for operation
Need for operation
Need for operation
Need for operation
Need for operation
Need for operation
Need for operation
Need for operation
Need for operation
Need for operation		 $ -

-

-

-

-

-

-

-

-

-

-

-

-		 －
－
－
－
－
－
－
－
－
－
－
－
－		 $ -
-
-
-
-
-
-
-
-
-
-
-
-		 $ 6,255,673
(Note 3)
3,127,837
(Note 4)
3,127,837
(Note 4)
1,791,563
(Note 6)
1,791,563
(Note 6)
1,791,563
(Note 6)
1,791,563
(Note 6)
1,201,709
(Note 7)
1,201,709
(Note 7)
76,942
(Note 8)
11,261
(Note 9)
194,587
(Note 10)
121,496
(Note 11)		 $ 6,255,673
(Note 3)
6,255,673
(Note 5)
6,255,673
(Note 5)
1,791,563
(Note 6)
1,791,563
(Note 6)
1,791,563
(Note 6)
1,791,563
(Note 6)
1,201,709
(Note 7)
1,201,709
(Note 7)
76,942
(Note 8)
11,261
(Note 9)
194,587
(Note 10)
121,496
(Note 11)		 Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12

Note 1: "0" for the Company. Subsidiaries are numbered in order from "1."

Note 2: Reasons for financing are as follows:

a. Please fill in 1 for need for operation.

b. Please fill in 2 for short-term financing.

Note 3: The individual and total amount shall not exceed 40% of the net value of Standard Foods Corporation per the latest financial statements, which was calculated to be NT$6,255,673 thousand (the net value of NT$15,639,183 thousand per financial statements as of June 30, 2020 multiplied by 40%). Note 4: The individual amount shall not exceed 20% of the net value of Standard Foods Corporation per the latest financial statements, which was calculated to be NT$3,127,837 thousand (the net value of NT$15,639,183 thousand per financial statements as of June 30, 2020 multiplied by 20%). Note 5: The total amount shall not exceed 40% of the net value Standard Foods Corporation per the latest financial statements, which was calculated to be NT$6,255,673 thousand (the net value of NT$15,639,183 thousand per financial statements as of June 30, 2020 multiplied by 40%). Note 6: The individual and total amount shall not exceed 40% of the net value of Standard Investment (China) Ltd. per the latest financial statements, which was calculated to be NT$1,791,563 thousand (the net value of NT$4,478,908 thousand per financial statements as of June 30, 2020 multiplied by 40%). Note 7: The individual and total amount shall not exceed 40% of the net value of Shanghai Standard Foods Co., Ltd. per the latest financial statements, which was calculated to be NT$1,201,709 thousand (the net value of NT$3,004,273 thousand per financial statements as of June 30, 2020 multiplied by 40%). Note 8: The individual and total amount shall not exceed 40% of the net value of Le Bonta Wellness Co., Ltd. per the latest financial statements, which was calculated to be NT$76,942 thousand (the net value of NT$192,356 thousand per financial statements as of June 30, 2020 multiplied by 40%). Note 9: The individual and total amount shall not exceed 40% of the net value of Shanghai Le Ben De Health Technology Co., Ltd. per the latest financial statements, which was calculated to be NT$11,261 thousand (the net value of NT$28,153 thousand per financial statements as of June 30, 2020 multiplied by 40%). Note 10: The individual and total amount shall not exceed 40% of the net value of Shanghai Le Ho Industrial Co., Ltd. per the latest financial statements, which was calculated to be NT$194,587 thousand (the net value of NT$486,468 thousand per financial statements as of June 30, 2020 multiplied by 40%). Note 11: The individual and total amount shall not exceed 40% of the net value of Shanghai Le Min Industrial Co., Ltd. per the latest financial statements, which was calculated to be NT$121,496 thousand (the net value of NT$303,741 thousand per financial statements as of June 30, 2020 multiplied by 40%).

Note 12: The amount was eliminated upon consolidation.

  • 49 -

TABLE 2

Standard Foods Corporation and Subsidiaries

ENDORSEMENTS/GUARANTEES PROVIDED For the nine-month period ended September 30, 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		 Actual Borrowing
Amount		 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		 Relationship
(Note 2)
0 Standard Foods
Corporation		 Standard
Beverage Ltd.		 (2) $ 12,511,346
(Note 3)		 $ 208,150 $ 205,500 $ 56,400 $ -
1.31%		 $ 15,639,183
(Note 4)		 Y - -

  • Note 1: "0" for the Company. Subsidiaries are numbered in order from "1."

  • Note 2: There are seven types of relationships between the guaranteed party and the Company:

  • a. Trading partner.

  • b. The Company directly or indirectly holds more than 50 percent of the voting rights of the investee company.

  • c. A company that directly or indirectly holds more than 50 percent of the voting rights of the Company.

  • d. The Company directly or indirectly holds more than 90 percent of the voting rights of the investee company.

  • e. Guaranteed by construction contracts formed due to the need of construction projects, in which the companies in the same industry or joint builders provide endorsement/guarantee to one another.

  • f. The guarantees were provided by shareholders based on their proportionate share in a jointly invested company.

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

  • Note 3: The individual amount shall not exceed 80% of the net value of Standard Foods Corporation per the latest financial statements, which was calculated to be NT$12,511,346 thousand (the net value of NT$15,639,183 thousand per financial statements as of June 30, 2020 multiplied by 80%).

  • Note 4: The total amount shall not exceed 100% of the net value of Standard Foods Corporation per the latest financial statements, which was calculated to be NT$15,639,183 thousand (the net value of NT$15,639,183 thousand per financial statements as of June 30, 2020 multiplied by 100%).

Note 5: Guarantee provided by the listed parent company to a subsidiary, guarantee provided by the subsidiary to the listed parent company, and guarantee provided to subsidiaries in mainland China are coded "Y."

  • 50 -

TABLE 3

Standard Foods Corporation and Subsidiaries

MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENTS IN SUBSIDIARIES) September 30, 2020

(In Thousands of New Taiwan Dollars)

Holding Company Name Type of
Marketable
Securities		 Name of Marketable Securities Relationship with the
Holding Company		 Financial Statement Account September 30, 2020 September 30, 2020 Note
Number of
Shares/Units		 Carrying Amount Percentage of
Ownership		 Fair Value
Standard Foods Corporation
Shares
Shares
Shares
Shares
Mutual funds
Mutual funds
Mutual funds
Bonds
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares		 Far Eastern International Commercial Bank
Co., Ltd.
Chunghwa Telecom Co., Ltd.
GeneFerm Biotechnology Co., Ltd.
Dah Chung Bills Finance Corp.
Jih Sun Money Market Fund
Mega Diamond Money Market Fund
FSITC Taiwan Money Market Fund
CODEIS Smart Cash Note
Techgains Pan-Pacific Corporation
Authenex, Inc.
Paradigm Venture Capital Corporation
U-Teck Environment Corporation, Ltd.
Octamer, Inc. - Series E Preferred Stock
Octamer, Inc. - Series F Preferred Stock
Fortemedia, Inc. - Series D Preferred Stock
Fortemedia, Inc. - Series E Preferred Stock		 The Company is one of
the directors		 Financial assets at FVTOCI -
current
Financial assets at FVTOCI -
current
Financial assets at FVTOCI -
non-current
Financial assets at FVTOCI -
non-current
Financial assets at FVTPL -
current
Financial assets at FVTPL -
current
Financial assets at FVTPL -
current
Financial assets at FVTPL -
current
Financial assets at FVTPL -
non-current
Financial assets at FVTPL -
non-current
Financial assets at FVTPL -
non-current
Financial assets at FVTPL -
non-current
Financial assets at FVTPL -
non-current
Financial assets at FVTPL -
non-current
Financial assets at FVTPL -
non-current
Financial assets at FVTPL -
non-current		 1,379,027
48,600
2,145,110
1,243,213
4,019,723
12,512,356
8,564,804
10,000
500,000
2,424,242
180,376
11,200
800,000
107,815
3,455
71,397		 $ 14,135
5,200
44,297
14,471
60,034
158,136
132,064
29,656
-
-
1,901
-
-
-
-
-		 -
-
7.7%
0.3%
-
-
-
-
0.9%
5.5%
7.0%
0.2%
7.8%
1.0%
1.2%
1.2%		 $ 14,135
5,200
44,297
14,471
60,034
158,136
132,064
29,656
-
-
1,901
-
-
-
-
-

(Continued on the next page)

  • 51 -

(Continued from the previous page)

Holding Company Name Type of
Marketable
Securities		 Name of Marketable Security Relationship with the
Holding Company		 Financial Statement
Account		 September30,2020 September30,2020 Note
Number of
Shares/Units		 Carrying Amount Percentage of
Ownership		 Fair Value
Standard Dairy Products
Taiwan Ltd.
Charng Hui Ltd		 Shares
Shares
Shares
Shares
Mutual funds
Mutual funds
Mutual funds
Shares
Shares
Shares
Shares
Shares
Mutual funds
Mutual funds
Mutual funds
Shares
Shares
Shares		 Fortemedia, Inc. - Series F Preferred Stock
Fortemedia, Inc. - Series G Preferred Stock
Fortemedia, Inc. - Series I Preferred Stock
Fortemedia, Inc. - Common Stock
Mega Diamond Money Market Fund
Jih Sun Money Market Fund
Taishin 1699 Money Market Fund
Standard Foods Corporation
Formosa Plastics Corporation
China Steel Corporation
Polytronics Technology Corporation
Taiwan Semiconductor Manufacturing Co., Ltd.
Fuh Hwa Global Strategic Alloc FoF
Franklin Templeton SinoAm Franklin Templeton
Global Bond Fund of Funds
Taishin 1699 Money Market Fund
Global Strategic Investment Co., Ltd.
Hong Da Leasing & Finance Co., Ltd.
CNEX Co., Ltd.		 Parent of Charng Hui Ltd.
Charng Hui Ltd. is one of
the directors

Charng Hui Ltd. is one of
the directors		 Financial assets at
FVTPL - non-current
Financial assets at
FVTPL - non-current
Financial assets at
FVTPL - non-current
Financial assets at
FVTPL - non-current
Financial assets at
FVTPL - current
Financial assets at
FVTPL - current
Financial assets at
FVTPL - current
Financial assets at
FVTOCI - current
Financial assets at
FVTOCI - current
Financial assets at
FVTOCI - current
Financial assets at
FVTOCI - current
Financial assets at
FVTOCI - current
Financial assets at
FVTPL - current
Financial assets at
FVTPL - current
Financial assets at
FVTPL - current
Financial assets at
FVTPL - non-current
Financial assets at
FVTPL - non-current
Financial assets at
FVTPL-non-current		 29,173
31,135
29,102
12,938
3,963,725
5,866,056
3,917,908
6,669,471
91,440
803,258
1,596,000
90,000
1,000,000
1,453,360
59,321
850,500
8,297,000
1,000,000		 $ -
-
-
-
50,095
87,609
53,416
405,504
7,187
16,427
128,638
38,970
11,270
18,395
809
4,338
-
-		 1.2%
1.3%
1.3%
1.2%
-
-
-
0.7%
-
-
2.0%
-
-
-
-
1.9%
23.7%
6.0%		 $ -
-
-
-
50,095
87,609
53,416
405,504
7,187
16,427
128,638
38,970
11,270
18,395
809
4,338
-
-		 Note 1

(Continued on the next page)

  • 52 -

(Continued from the previous page)

Holding Company Name Type of
Marketable
Securities		 Name of Marketable Securities Relationship with the
Holding Company		 Financial Statement
Account		 September30,2020 September30,2020 Note
Number of
Shares/Units		 Carrying Amount Percentage of
Ownership		 Fair Value
Standard Beverage Ltd.
Domex Technology
Corporation
Accession Ltd.		 Mutual funds
Mutual funds
Shares
Shares
Mutual funds		 Fuh Hwa Greater China Mid & Small Cap Fund
Franklin Templeton SinoAm Franklin Templeton
Global Bond Fund of Funds - Accu.
InnoComm Mobile Technology Corp.
AsiaVest Liquidation Co.
Term Deposit Fund		 Financial assets at
FVTPL - current
Financial assets at
FVTPL - current
Financial assets at
FVTOCI - non-current
Financial assets at
FVTOCI - non-current
Financial assets at
FVTPL -current		 225,000
282,988
3,600,000
200
33,453		 $ 2,943
3,582
145,404
906
101,973		 -
-
13.4%
0.7%
-		 $ 2,943
3,582
145,404
906
101,973

Note 1: The amount was eliminated upon consolidation.

  • 53 -

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 nine-month period ended September 30, 2020

(In Thousands of New Taiwan Dollars)

Company Name Related Party Nature of Relationships Transaction Details Transaction Details Abnormal Transaction Abnormal Transaction Notes/Trade Receivable (Payable) Notes/Trade Receivable (Payable) Note
Purchases
(Sales)		 Amount % to Total Payment Terms Unit Price Payment Terms Ending Balance % to Total
Standard Foods
Corporation
Standard Dairy Products
Taiwan Ltd.
Shanghai Standard
Foods Co., Ltd.
Standard Investment
(China) Ltd.
Standard Foods (China)
Co., Ltd.
Standard Investment
(China) Ltd.
Standard Foods
(Xiamen) Co., Ltd.
Standard Investment
(China) Ltd.
Standard Foods
(Xiamen) Co., Ltd.
Standard Foods (China)
Co., Ltd.		 Standard Dairy
Products Taiwan
Ltd.

Standard Foods
Corporation
Standard Investment
(China) Ltd.
Shanghai Standard
Foods Co., Ltd.
Standard Investment
(China) Ltd.
Standard Foods
(China) Co., Ltd.
Standard Investment
(China) Ltd.
Standard Foods
(Xiamen) Co., Ltd.
Standard Foods
(China) Co., Ltd.
Standard Foods
(Xiamen) Co., Ltd.		 The Company's subsidiary
Parent company of Standard
Dairy Products Taiwan Ltd.
Brother company of Shanghai
Standard Foods Co., Ltd.
Brother company of Standard
Investment (China) Ltd.
Parent company of Standard
Foods (China) Co., Ltd.
Standard Investment (China)
Ltd.'s subsidiary
Parent company of Standard
Foods (Xiamen) Co., Ltd.

Standard Investment (China)
Ltd.'s subsidiary
Brother company of Standard
Foods (Xiamen) Co., Ltd.

Brother company of Standard
Foods (China) Co., Ltd.		 Sales
Purchases
Purchases
Sales
Sales
Purchases
Purchases
Sales
Sales
Purchases
Sales
Purchases
Sales
Purchases		 ( $ 1,111,765 )

640,132

1,111,765
(
640,132 )
(
1,351,206 )

297,309

1,351,206
(
297,309 )
(
4,152,368 )

4,152,368
(
2,815,513 )

2,815,513
(
340,046 )

340,046
11.23%
11.70%
57.59%

23.91%

72.32%
16.40%
16.23%

2.82%

99.61%
49.84%

74.42%
33.80%

8.99%
8.35%		 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		 －
－
－
－
－
－
－
－
－
－
－
－
－
－		 －
－
－
－
－
－
－
－
－
－
－
－
－
－		 $ 192,746
-
(
192,746 )
-
454,229
(
57,845 )
(
454,229 )
57,845
1,344,427
(
1,344,427 )
667,335
(
667,335 )
145,172
(
145,172 )		 8.75%
-

48.49%
-
93.34%

60.35%

18.33%

2.29%
99.97%

54.25%
82.13%

26.93%
17.87%

39.79%		 Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note

Note: The amounts presented above were eliminated upon consolidation.

  • 54 -

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 September 30, 2020

(In Thousands of New Taiwan Dollars)

Company Name Related Party Nature of Relationships Ending Balance for Trade Receivable -
Related Parties		 Ending Balance for Trade Receivable -
Related Parties		 Turnover Rate Overdue Overdue Overdue Amounts Received in
Subsequent Period		 Allowance for Bad Debts
Note
Amount Actions Taken
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Shanghai Standard Foods Co., Ltd.
Shanghai Standard Foods Co., Ltd.
Standard Foods (China) Co., Ltd.
Standard Investment (China) Ltd.
Standard Investment (China) Ltd.
Standard Foods (Xiamen) Co., Ltd.
Standard Foods (Xiamen) Co., Ltd.		 Standard Dairy Products Taiwan Ltd.
Standard Foods (China) Co., Ltd.
Standard Foods (Xiamen) Co., Ltd.
Standard Investment (China) Ltd.
Standard Foods (Xiamen) Co., Ltd.
Standard Investment (China) Ltd.
Standard Foods (China) Co., Ltd.
Standard Foods (Xiamen) Co., Ltd.
Standard Investment (China) 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) Ltd.'s subsidiary
Standard Investment (China) Ltd.'s subsidiary
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


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
 $ 192,746

3,570		 8.87
3.81
2.13
3.68
5.82
8.54
4.25
2.47		 $ -
-
$ -
$ -
-
$ -
$ -
-
$ -
$ -
-
-
$ -
$ -
-
$ -
$ -
-
$ -
$ -
-
-
$ -
$ -
-
-
$ -
$ -
-
$ -
$ -










$ 53,431（Note 1）

3,570（Note 1）
$ 57,001（Note 1）
$ -（Note 1）

- （Note 1）
$ - （Note 1）
$ -（Note 1）

- （Note 1）
$ - （Note 1）
$ 202,958（Note 1）
-（Note 1）

6,830（Note 1）
$ 209,788（Note 1）
$ -（Note 1）

- （Note 1）
$ - （Note 1）
$ 542,989（Note 1）

16,669（Note 1）
$ 559,658（Note 1）
$ 5（Note 1）
-（Note 1）

- （Note 1）
$ 5（Note 1）
$ -（Note 1）
-（Note 1）

- （Note 1）
$ - （Note 1）
$ 163,602（Note 1）

13,103（Note 1）
$ 176,705（Note 1）
$ 111,387（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)

$ 196,316

$ 341,848

1,255

$ 343,103

$ 512,772

1,353

$ 514,125

$ 454,229

115,827

17,372

$ 587,428

$ 448,676

8,786

$ 457,462

$ 1,344,427

24,774

$ 1,369,201

$ 76

395,270

9,723

$ 405,069

$ 85

400,424

19,604

$ 420,113

$ 667,335

23,750

$ 691,085

$ 145,172

Note 1: Amount received as of November 12, 2020.

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

  • 55 -

TABLE 6

Standard Foods Corporation and Subsidiaries

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS For the nine-month period ended September 30, 2020 (In Thousands of New Taiwan Dollars)

No.
(Note 1)		 Name of Company Counterparty Relationship
(Note 2)		 Transactions Details Transactions Details
Financial Statement Accounts Amount (Note 4) Payment Terms % to Consolidated
Total Sales or Assets
(Note 3)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1		 Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Standard Foods Corporation
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard		 Standard Dairy Products
Standard Dairy Products
Standard Dairy Products
Standard Dairy Products
Standard Dairy Products
Standard Beverage
Standard Beverage
Standard Beverage
Standard Beverage
Dermalab
China Standard Foods
China Standard Foods
China Standard Foods
Xiamen Standard
Xiamen Standard
Xiamen Standard
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Foods
China Standard Foods
China Standard Foods
Le Bonta Wellness
Le Bonta Wellness		 1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3		 Trade receivables - related parties
Other receivables - related parties
Sales
Purchases
Royalty revenue
Other receivables - related parties
Trade payables - related parties
Service revenue (recognized under sundry revenue)
Purchases
Financing receivables - related parties
Financing receivables - related parties
Other receivables - related parties
Interest income
Financing receivables - related parties
Other receivables - related parties
Interest income
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 payables - related parties
Other expenses		 $ 192,746
3,570
1,111,765
640,132
7,273
166
451

990
1,015
45,798
341,848
1,255
1,251
512,772
1,353
1,355
454,229
115,827
17,372
57,845
12,174
1,351,206
297,309
1,609
317
5,554
8,166
18,136
13,849
12
10		 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 rate 1.000% per annum
Interest rate 1.000% per annum
According to the general conditions
Interest rate 1.000% per annum
Interest rate 1.000% per annum
According to the general conditions
Interest rate 1.000% per annum
According to the general conditions
Interest rate 2.500% per annum
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% per annum
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		 0.8%
-
4.6%
2.6%
-
-
-
-
-
0.2%
1.4%
-
-
2.0%
-
-
1.8%
0.5%
0.1%
0.2%
-
5.6%
1.2%
-
-
-
-
0.1%
0.1%
-
-

(Continued on the next page)

  • 56 -

(Continued from the previous page)

No.
(Note 1)		 Name of Company Counterparty Relationship
(Note 2)		 Transactions Details Transactions Details
Financial Statement Accounts Amount (Note 4) Payment Terms % to Consolidated
Total Sales or Assets
(Note 3)
1
1
1
1
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2		 Shanghai Standard
Shanghai Standard
Shanghai Standard
Shanghai Standard
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment		 Xiamen Standard
Xiamen Standard
Xiamen Standard
Xiamen Standard
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
Shanghai Dermalab
Shanghai Dermalab
Shanghai Dermalab
Shanghai Dermalab
Xiamen Standard
Xiamen Standard
Xiamen Standard
Xiamen Standard
Xiamen Standard
Xiamen Standard
Xiamen Standard
Xiamen Standard
Xiamen Standard
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Shanghai Le Ho Industrial
Co., Ltd.
Shanghai Le Ho Industrial
Co., Ltd.
Shanghai Le Ho Industrial
Co., Ltd.		 3
3
3
3
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
3
3
3		 Financing receivables - related parties
Other receivables - related parties
Sales
Interest income
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 income
Rental expenses
Financing receivables - related parties
Other receivables - related parties
Interest income
Expenses (social expenses and other expenses)
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 income
Financing receivables - related parties
Other receivables - related parties
Trade payables - related parties
Sales
Purchases
Interest income
Financing payables - related parties
Other payables - related parties
Interest expenses		 $ 448,676
8,786
5,310
8,515
76
395,270
9,723
1,344,427
24,774
369
4,152,368
2,465
9,700
70
43,188
1,717
1,712
26
85
400,424
19,604
667,335
23,750
362
2,815,513
12,503
7,057
17,674
1,548
1,296
7
5,996
1,547
6,948
46
46		 Interest rate 2.500% per annum
According to the general conditions
According to the general conditions
Interest rate 2.500% per annum
According to the general conditions
Interest rate 2.500% per annum
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% per annum
According to the general conditions
According to the general conditions
Interest rate 2.500% per annum
According to the general conditions
Interest rate 2.500% per annum
According to the general conditions
According to the general conditions
Interest rate 2.500% per annum
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% per annum
According to the general conditions
Interest rate 2.500% per annum
According to the general conditions
According to the general conditions
According to the general conditions
According to the general conditions
Interest rate 2.500% per annum
Interest rate 2.500% per annum
According to the general conditions
Interest rate 2.500% per annum		 1.8%
-
-
-
-
1.6%
-
5.3%
0.1%
-
17.1%
-
-
-
0.2%
-
-
-
-
1.6%
-
2.6%
-
-
11.6%
0.1%
-
0.1%
-
-
-
-
-
-
-
-

(Continued on the next page)

  • 57 -

(Continued from the previous page)

No.
(Note 1)		 Name of Company Counterparty Relationship
(Note 2)		 Transactions Details Transactions Details
Financial Statement Accounts Amount (Note 4) Payment Terms % to Consolidated
Total Sales or Assets
(Note 3)
2
2
2
2
2
2
2
3
3
4
4
4
4
4
4
4
4
4
4
5
5
5
5
5
5		 China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
China Standard Investment
Shanghai Dermalab
Shanghai Dermalab
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
China Standard Foods
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness		 Shanghai Le Min Industrial
Co., Ltd.
Shanghai Le Min Industrial
Co., Ltd.
Shanghai Le Min Industrial
Co., Ltd.
Shanghai Le Ben De
Shanghai Le Ben De
Shanghai Le Ben De
Shanghai Le Ben De
Dermalab
Dermalab
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Le Bonta Wellness
Xiamen Standard
Xiamen Standard
Xiamen Standard
Xiamen Standard
Shanghai Le Ben De
Shanghai Le Ben De
Shanghai Le Ben De
Shanghai Le Ben De
Xiamen Standard
Xiamen Standard		 3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3		 Financing payables - related parties
Other payables - related parties
Interest expenses
Financing payables - related parties
Other payables - related parties
Purchases
Interest expenses
Trade payables - related parties
Purchases
Other receivables - related parties
Trade payables - related parties
Sales
Purchases
Rental income
Other expenses
Trade receivables - related parties
Trade payables - related parties
Sales
Purchases
Trade receivables - related parties
Trade payables - related parties
Sales
Purchases
Trade receivables - related parties
Sales		 $ 5,901
53
52
10,683
67
1,056
67
33,793
52,542
1,184
15
164
13
2,640
3,185
39
145,172
43
340,046
171
215
1,198
190
11
9		 Interest rate 2.500% per annum
According to the general conditions
Interest rate 2.500% per annum
Interest rate 2.500% per annum
According to the general conditions
According to the general conditions
Interest rate 2.500% per annum
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
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		 -
-
-
-
-
-
-
0.1%
0.2%
-
-
-
-
-
-
-
0.6%
-
1.4%
-
-
-
-
-
-
  • Note 1: Where the parent company and its subsidiaries do business with each other, information shall be stated separately in the "No." column and numbered as follows: a. Parent company is 0.

b. Subsidiaries are numbered in order 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: For the calculation of the percentage of the transaction amount to the consolidated total revenue or total assets, if it is a balance sheet account, it is measured as the ending balance to the consolidated total assets; if it is an income statement account, it is measured as the cumulative amount for the period to consolidated total revenue.

Note 4: The amount was eliminated upon consolidation.

  • 58 -

TABLE 7

Standard Foods Corporation and Subsidiaries

INFORMATION ON INVESTEES (EXCLUDING INVESTEES OF MAINLAND CHINA) For the nine-month period ended September 30, 2020 (In Thousands of New Taiwan Dollars)

Investor Company Investee Company Location Main Businesses and Products Original Investment Amount Original Investment Amount As of September 30, 2020 September 30, 2020 Net Income (Loss)
of the Investee		 Share of Profits
(Loss)		 Note
September 30, 2020 December 31, 2019 Shares % Carrying Amount
Standard Foods
Corporation
Accession Ltd.
Dermalab S.A.
Standard Investment
(Cayman) Ltd.		 Accession Ltd.
Standard Investment
(Cayman) Ltd.
Standard Dairy Products
Taiwan Ltd.
Charng Hui Ltd
Domex Technology
Corporation
Standard Beverage Ltd.
Le Bonta Wellness
International Corporation
Standard Foods, LLC.
Dermalab S.A.
Swissderma SL
Standard Corporation
(Hong Kong) Ltd.		 Tortola, British
Virgin Islands
Grand Cayman,
Cayman Islands
Taipei City
Taipei City
Hsinchu City
Taipei City
Taipei City
U.S.A.
Switzerland
Spain
Hong Kong		 Investing
Investing
Manufacture and sale of dairy
products and beverages
Investing
Manufacture and sale of computer
peripherals and computer
appliances
Manufacture and sale of beverages
Sale of health food
Sale of health food
Development and sale of cosmetics
Sale of cosmetics
Investing		 $ 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 4
Note 4
2,600
3,000
150,050,815
100%

100%

100%

100%

52%

100%

100%

100%

100%

100%

100%
$ 3,506,855

5,522,219

922,347

316,829

264,793

82,401

8,820

8,730

188,388

-

5,521,570		 $ 141,504
331,079
315,996
19,954
44,407
2,250
38
-
12,729
-
331,265		 $ 139,098
(Note 1)
331,079
316,382
(Note 2)
2,280
23,096
$2,276
(Note 3)
38
-		 Subsidiary (Note 5)
Subsidiary (Note 5)
Subsidiary (Note 5)
Subsidiary (Note 5)
Subsidiary (Note 5)
Subsidiary (Note 5)
Subsidiary (Note 5)
Subsidiary (Note 5)
Sub-subsidiary
(Note 5)
Sub-sub-subsidiary
(Note 5)
Sub-subsidiary
(Note 5)

Note 1: This amount was the share of profit from the investee of NT$141,504 thousand minus the unrealized gain on sidestream transactions of NT$2,406 thousand.

Note 2: This amount was the share of profit from the investee of NT$315,996 thousand plus the realized gain on upstream transactions of NT$386 thousand.

Note 3: This amount was the share of profit from the investee of NT$2,250 thousand plus the unrealized gain on upstream transactions of NT$26 thousand. Note 4: This is a limited company with no issued shares.

Note 5: The amount was eliminated upon consolidation.

  • 59 -

TABLE 8

Standard Foods Corporation and Subsidiaries

INFORMATION ON INVESTMENTS IN MAINLAND CHINA For the nine-month period ended September 30, 2020 (In Thousands of New Taiwan Dollars)

Investee Company in
Mainland China
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		 Accumulated
Outward
Remittance for
Investment from
Taiwan as of
January 1, 2020		 Remittance or Recovery of Funds Remittance or Recovery of Funds Accumulated
Outward
Remittance for
Investment from
Taiwan as of
September 30, 2020
Net Income
(Loss) of the
Investee		 % of Ownership of
Direct or Indirect
Investment
Investment Gain
(Loss) (Note 2)		 Carrying Amount as
of September 30,
2020
Accumulated
Repatriation of
Investment
Income as of
September 30,
2020		 Note
Outward Inward
Shanghai Standard
Foods Co., Ltd.
Standard Investment
(China) 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
IndustrialCo.,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,
cosmetic and engage in
import and export
business
Sale of nutritional foods and
engage in import and
export business

Sale of nutritional foods and
engagement in export
business

Manufacture and sale of
edible oil products and
nutritional foods

Management of properties
Management of properties		 $ 3,949,575
3,755,530
1,631,668
93,989

380,418

31,220
1,307,582
607,717
378,009		 (2)
(Note 3)
(2)
(Note 5)
(3)
(Note 6)
(3)
(Note 6)
(1) and (3)
(Note 7)
(3)
(Notes 4
and 8)
(3)
(Note 6)
(2)
(Note 5)
(2)
(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)		 $ 137,448
362,015
16,767
(
15,977 )
(
24,252 )
557
(
18,627 )
(
16,762 )
(
10,148 )		 100.0%
99.0%
99.0%
99.0%
99.5%
100.0%
99.0%
100.0%
100.0%		 $ 137,360
(Note 9)
358,395
(Note 9)
17,000
(Note 9)
(
15,817 )
(Note 10)
(
24,133 )
(Note 10)
557
(Note 10)
(
17,026 )
(Note 10)
(
16,762 )
(Note 10)
(
10,148 )
(Note10)		 $ 3,113,211
4,725,641
1,840,688
9,388
185,805
29,045
1,304,358
489,619
305,665		 $ -
-
-
-
-
-
-
-
-		 Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Note 12
Accumulated Outward Remittance for
Investment in Mainland China as of September
30, 2020		 Investment Amounts Authorized by Investment
Commission, MOEA		 Upper Limit on the Amount of Investment
Stipulated by Investment Commission, MOEA
$8,919,525 $8,919,525 Unlimited amount of investment (Note 11)

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. (Please specify the investor company in third region.)

  • c. Other methods.

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 statements were audited and certified by an international accounting firm in cooperation with an ROC accounting firm.

  • 2) The financial statements were audited by the CPA of the parent company in Taiwan.

  • 3) Others.

  • 60 -

Note 3: Accession Ltd. 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 nine-month period ended September 30, 2020. The investment remained at $4,034,074 thousand. Of the $4,034,074 thousand, $53,279 thousand has been retained in Accession Ltd. The remaining balance 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 in 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) Ltd. 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) 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) Ltd. The amount invested directly was $181,048 thousand.

  • Note 8: This company was spun off from Shanghai Standard Foods Co., Ltd. Accession Ltd. is the investor company in third region.

  • Note 9: Recognition of investment income (loss) is based on the financial statements of the investee reviewed by CPAs of the parent company in Taiwan during the same period, as described in Note 2(b)3. Note 10: The recognition of investment income (loss) is based on the financial statements of the investee not reviewed by CPAs during the same period, as described in Note 2(b)3

  • Note 11: The Industrial Development Bureau of the MOEA issued the proofing document of operational headquarters to the Company; the document is still valid within the review period. Hence, according to the Investment Commission of the MOEA, there is no upper limit on the amount of investment.

Note 12: The amount was eliminated upon consolidation.

  • 61 -

Standard Foods Corporation

INFORMATION OF MAJOR SHAREHOLDERS

September 30, 2020

TABLE 9

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 major shareholders in this table are shareholders holding more than 5% of the ordinary and preference shares that have completed delivery without physical registration (including treasury shares) on the last business day of each quarter calculated by the Taiwan Depository & Clearing Corporation. The share capital recorded in the Company's consolidated financial report and the number of shares actually delivered by the Company without physical registration may differ due to calculation basis.

  • Note 2: If the shares above are entrusted by the shareholders, the information thereto shall be disclosed by the individual trust account opened by the trustees. For information on shareholders, who declare to be insiders holding more than 10% of shares in accordance with the Securities and Exchange Act, and their shareholdings including their shareholdings plus their delivery of trust and shares with the right to make decisions on trust property, please refer to MOPS.

  • 62 -

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