SPT - Interim / Quarterly Report 2020

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT JUNE 30, 2020 AND 2019

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

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INDEPENDENT AUDITORS' REVIEW REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of ScinoPharm Taiwan, Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of ScinoPharm Taiwan, Ltd. and subsidiaries (the “Group”) as at June 30, 2020 and 2019, and the related consolidated statements of comprehensive income for the three-month and six-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the six-month periods then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these 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” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. 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 explained in Note 4(3), the financial statements of certain insignificant consolidated subsidiaries and supplementary disclosures in Note 13 were not reviewed by independent auditors. Those statements reflect total assets of $911,582 thousand and $738,404 thousand, constituting 8% and 5% of the consolidated total assets, and total liabilities of $64,972 thousand and $58,682 thousand, constituting 4% and 2% of the consolidated total liabilities as at June 30, 2020 and 2019, respectively, and total comprehensive loss of ($50,160) thousand, ($54,748) thousand, ($99,748) thousand and ($95,129) thousand, constituting (11%), 506%, (30%) and (35%) of the consolidated total comprehensive income

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for the three-month and six-month periods then ended, respectively.

Qualified Conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain insignificant subsidiaries and supplementary disclosures in Note 13 been reviewed by independent auditors, that we might have become aware of had it not been for the situation described above, based on our reviews, nothing has come to our attention that causes 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 at June 30, 2020 and 2019, and its consolidated financial performance for the three-month and six-month periods then ended and its consolidated cash flows for the six-month periods then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Lin, Yung-Chih

Independent Accountants

Liu, Tzu-Meng

PricewaterhouseCoopers, Taiwan Republic of China August 11, 2020

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

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

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SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of June 30, 2020 and 2019 are reviewed, not audited)

Assets	Notes	June 30, 2020 AMOUNT % `$` `3,803,140 31` `405` `-` `-` `-` `553,999` `4` `71,398` `1` `8,968` `-` `1,299,449 11` `132,711` `1` `5,870,070 48` `572,742` `5` `4,255,393 35` `631,583` `5` `10,322` `-` `614,900` `5` `117,807` `1` `6,292` `-` `29,270` `1` `6,238,309 52` `$` `12,108,379 100` (Continued)	December 31, 2019 AMOUNT % `$` `3,304,978` `28` `2,920` `-` `172,220` `1` `590,336` `5` `71,149` `1` `8,968` `-` `1,124,332` `10` `131,681` `1` `5,406,584` `46` `415,210` `4` `4,433,860` `38` `673,087` `6` `14,068` `-` `606,123` `5` `85,361` `1` `11,001` `-` `29,270` `-` `6,267,980` `54` `$` `11,674,564` `100`	June 30, 2019	June 30, 2019
		AMOUNT `$` `3,803,140` `405` `-` `553,999` `71,398` `8,968` `1,299,449` `132,711` `5,870,070` `572,742` `4,255,393` `631,583` `10,322` `614,900` `117,807` `6,292` `29,270` `6,238,309` `$` `12,108,379` (Continued)	AMOUNT `$` `3,304,978` `2,920` `172,220` `590,336` `71,149` `8,968` `1,124,332` `131,681` `5,406,584` `415,210` `4,433,860` `673,087` `14,068` `606,123` `85,361` `11,001` `29,270` `6,267,980` `$` `11,674,564`	AMOUNT `$` `4,533,737` `1,602` `180,929` `434,024` `91,105` `-` `1,294,003` `141,344` `6,676,744` `589,354` `4,596,851` `966,657` `18,626` `603,288` `108,688` `11,285` `29,270` `6,924,019` `$` `13,600,763`	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortised cost - current 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories 1410 Prepayments 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non-current 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1915 Prepayments for equipment 1920 Guarantee deposits paid 1980 Other financial assets - non- current 15XX Total non-current assets 1XXX Total assets	6(1) 6(2) 6(3) 6(4) and 12 6(26) 5 and 6(5) 6(6) 6(7)(9) 6(8) 5 and 6(26) 8				`33` `-` `1` `3` `1` `-` `10` `1`
					`49`
					`4` `34` `7` `-` `5` `1` `-` `-`
					`51`
					`100`

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SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of June 30, 2020 and 2019 are reviewed, not audited)

Liabilities and Equity	Notes	June 30, 2020 December 31, 2019 AMOUNT % AMOUNT % `$` `33,437` `-` `$` `89,766` `1` `63,406` `1` `55,985` `-` `1,803` `-` `1,353` `-` `132,853` `1` `101,018` `1` `554,618` `5` `333,376` `3` `61,940` `-` `1` `-` `15,144` `-` `16,014` `-` `227,923` `2` `144,234` `1` `1,091,124` `9` `741,747` `6` `-` `-` `-` `-` `81` `-` `584` `-` `553,678` `4` `590,020` `5` `81,880` `1` `82,182` `1` `-` `-` `87` `-` `635,639` `5` `672,873` `6` `1,726,763` `14` `1,414,620` `12` `7,907,392` `65` `7,907,392` `68` `1,294,988` `10` `1,294,605` `12` `634,265` `5` `612,600` `5` `67,825` `1` `22,829` `-` `418,790` `4` `490,344` `4` `58,356` `1 (` `67,826) (` `1)` `10,381,616` `86` `10,259,944` `88` `$` `12,108,379` `100` `$` `11,674,564` `100`	June 30, 2019	June 30, 2019
		AMOUNT `$` `33,437` `63,406` `1,803` `132,853` `554,618` `61,940` `15,144` `227,923` `1,091,124` `-` `81` `553,678` `81,880` `-` `635,639` `1,726,763` `7,907,392` `1,294,988` `634,265` `67,825` `418,790` `58,356` `10,381,616` `$` `12,108,379`	AMOUNT `$` `282,019` `25,668` `1,810` `102,520` `671,044` `38,384` `23,433` `-` `1,144,878` `1,085,571` `876` `870,136` `76,537` `1,709` `2,034,829` `3,179,707` `7,907,392` `1,293,857` `612,600` `22,829` `412,178` `172,200` `10,421,056` `$` `13,600,763`	%
Current liabilities 2100 Short-term borrowings 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Lease liabilities - current 2320 Long-term liabilities, current portion 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2640 Net defined benefit liabilities 2645 Guarantee deposits received 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings 3400 Other equity interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments 3X2X Total liabilities and equity	6(10) 6(19) 6(11) 6(26) 6(12) and 9 6(12) and 9 6(26) 6(13) 6(14) 6(15)(16) 6(17) 6(18) 9			`2` `-` `-` `1` `5` `-` `-` `-`
				`8`
				`8` `-` `6` `1` `-`
				`15`
				`23`
				`58` `9` `5` `-` `3` `2`
				`77`
				`100`

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

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SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

(Reviewed, not audited)

					Three months ended June 30	Three months ended June 30	Three months ended June 30	Three months ended June 30			Six months ended June 30	Six months ended June 30	Six months ended June 30	Six months ended June 30
					2020			2019			2020			2019
	Items	Notes			AMOUNT	%	AMOUNT		%		AMOUNT	%	AMOUNT		%
4000	Operating revenue	6(19)		`$`	`908,080`	`100`	`$`	`617,573`	`100`	`$`	`1,450,603`	`100`	`$`	`1,389,618`	`100`
5000	Operating costs	6(5)(24)(25)	`(`		`469,938 ) (`	`52) (`		`343,592 ) (`	`56) (`		`768,109 ) (`	`53) (`		`785,887) (`	`56 )`
5900	Net operating margin				`438,142`	`48`		`273,981`	`44`		`682,494`	`47`		`603,731`	`44`
	Operating expenses	6(24)(25), 7
		and 12
6100	Selling expenses		`(`		`55,994 ) (`	`6) (`		`34,813 ) (`	`5) (`		`90,045 ) (`	`6) (`		`70,131) (`	`5 )`
6200	General and administrative
	expenses		`(`		`129,779 ) (`	`14) (`		`128,819 ) (`	`21) (`		`246,984 ) (`	`17) (`		`255,487) (`	`19 )`
6300	Research and development
	expenses		`(`		`45,910 ) (`	`5) (`		`48,798 ) (`	`8) (`		`93,197 ) (`	`6) (`		`99,108) (`	`7 )`
6450	Gain on reversal of expected
	credit losses				`1,308`	`-`		`45`	`-`		`157`	`-`		`15`	`-`
6000	Total operating expenses		`(`		`230,375 ) (`	`25) (`		`212,385 ) (`	`34) (`		`430,069 ) (`	`29) (`		`424,711) (`	`31 )`
6900	Operating profit				`207,767`	`23`		`61,596`	`10`		`252,425`	`18`		`179,020`	`13`
	Non-operating income and
	expenses
7100	Interest income	6(3)(20)			`6,654`	`1`		`11,034`	`2`		`14,846`	`1`		`19,349`	`1`
7010	Other income	6(21)			`2,232`	`-`		`32,649`	`5`		`4,376`	`-`		`34,450`	`3`
7020	Other gains and losses	6(2)(9)(22)
		and 12	`(`		`9,280 ) (`	`1) (`		`23,138 ) (`	`4) (`		`11,141 ) (`	`1) (`		`28,024) (`	`2 )`
7050	Finance costs	6(23)	`(`		`4,332 ) (`	`1) (`		`18,948 ) (`	`3) (`		`8,595 )`	`- (`		`37,625) (`	`3 )`
7000	Total non-operating income
	and expenses		`(`		`4,726 ) (`	`1)`		`1,597`	`- (`		`514 )`	`- (`		`11,850) (`	`1 )`
7900	Profit before income tax				`203,041`	`22`		`63,193`	`10`		`251,911`	`18`		`167,170`	`12`
7950	Income tax expense	6(26)	`(`		`40,942 ) (`	`4) (`		`6,054 ) (`	`1) (`		`54,456 ) (`	`4) (`		`31,570) (`	`2 )`
8200	Profit for the period			`$`	`162,099`	`18`	`$`	`57,139`	`9`	`$`	`197,455`	`14`	`$`	`135,600`	`10`
	Other comprehensive income
	Components of other
	comprehensive income (loss)
	that will not be reclassified to
	profit or loss
8316	Unrealised gains (losses) from	6(6)(19)
	equity instrument measured at
	fair value through other
	comprehensive income			`$`	`324,833`	`36 ($`		`56,871 ) (`	`9)`	`$`	`184,065`	`12`	`$`	`121,237`	`8`
	Components of other
	comprehensive (loss) income
	that will be reclassified to profit
	or loss
8361	Financial statements	6(18)
	translation differences of
	foreign operations		`(`		`30,977 ) (`	`4) (`		`11,082 ) (`	`2) (`		`46,731 ) (`	`3)`		`11,347`	`1`
8300	Total other comprehensive
	income (loss) for the period			`$`	`293,856`	`32 ($`		`67,953 ) (`	`11)`	`$`	`137,334`	`9`	`$`	`132,584`	`9`
8500	Total comprehensive income
	(loss) for the period			`$`	`455,955`	`50 ($`		`10,814 ) (`	`2)`	`$`	`334,789`	`23`	`$`	`268,184`	`19`
	Profit attributable to:
8610	Owners of the parent			`$`	`162,099`	`18`	`$`	`57,139`	`9`	`$`	`197,455`	`14`	`$`	`135,600`	`10`
	Comprehensive income (loss)
	attributable to:
8710	Owners of the parent			`$`	`455,955`	`50 ($`		`10,814 ) (`	`2)`	`$`	`334,789`	`23`	`$`	`268,184`	`19`
	Earnings per share (in dollars)	6(27)
9750	Basic			`$`		`0.20`	`$`		`0.07`	`$`		`0.25`	`$`		`0.17`
9850	Diluted			`$`		`0.20`	`$`		`0.07`	`$`		`0.25`	`$`		`0.17`

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

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SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

Notes				Equity	tributable to owners of	the parent
	S	hare capital - common stock	Capital reserve		Retained Earnings		Other equityinterest
				Legal reserve	Special reserve	Unappropriated earnings	Financial statements translation differences of foreign operations	Unrealised gains from financial assets measured at fair value through other comprehensive income
6(6)(18) 6(17) 6(15)(16) 6(6)(18) 6(17) 6(15)(16) 6(6)(18)		`$` `7,907,392` `-` `-` `-` `-` `-` `-` `$` `7,907,392` `$` `7,907,392` `-` `-` `-` `-` `-` `-` `-` `-` `$` `7,907,392`	`$` `1,292,555` `-` `-` `-` `-` `-` `1,302` `$` `1,293,857` `$` `1,294,605` `-` `-` `-` `-` `-` `-` `383` `-` `$` `1,294,988`	`$` `568,302` `-` `-` `-` `44,298` `-` `-` `$` `612,600` `$` `612,600` `-` `-` `-` `21,665` `-` `-` `-` `-` `$` `634,265`	`$` `22,829` `-` `-` `-` `-` `-` `-` `$` `22,829` `$` `22,829` `-` `-` `-` `-` `44,996` `-` `-` `-` `$` `67,825`	`$` `708,338` `135,600` `-` `135,600` `(` `44,298 )` `(` `387,462 )` `-` `$` `412,178` `$` `490,344` `197,455` `-` `197,455` `(` `21,665 )` `(` `44,996 )` `(` `213,500 )` `-` `11,152` `$` `418,790`	`($` `41,252` `)` `-` `11,347` `11,347` `-` `-` `-` `($` `29,905` `)` `($` `98,117` `)` `-` `(` `46,731` `)` `(` `46,731` `)` `-` `-` `-` `-` `-` `($` `144,848` `)`	`$` `80,868` `-` `121,237` `121,237` `-` `-` `-` `$` `202,105` `$` `30,291` `-` `184,065` `184,065` `-` `-` `-` `-` `(` `11,152 )` `$` `203,204`	`$` `10,539,032` `135,600` `132,584` `268,184` `-` `(` `387,462` `)` `1,302` `$` `10,421,056` `$` `10,259,944` `197,455` `137,334` `334,789` `-` `-` `(` `213,500` `)` `383` `-` `$` `10,381,616`

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

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SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars) (Reviewed, not audited)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Loss (gain) on valuation of financial assets and
liabilities
Gain on reversal of expected credit losses

Loss on (reversal of allowance for) inventory
market price decline

Provision for obsolescence of supplies
Depreciation of property, plant and equipment

Depreciation of right-of-use assets

Property, plant and equipment transferred to
loss

Gain on disposal of property, plant and
equipment

Gain on reversal of impairment loss

Amortisation

Prepayments for equipment transferred to loss
Employee stock option compensation cost

Interest income

Interest expense

Changes in operating assets and liabilities
Changes in operating assets
Accounts receivable
Other receivables
Inventories
Prepayments
Changes in operating liabilities
Contract liabilities - current
Notes payable
Accounts payable
Other payables
Net defined benefit liabilities - non-current
Cash inflow generated from operations
Interest received
Interest paid
Income tax paid
Net cash flows from operating activities For the six-month periods ended June 30,
Notes
2020
2019
$
251,911 $
167,170
2,515 (
1,193 )
12
(
157 ) (
15 )
6(5)
11,211 (
29,351 )
3,654
5,195
6(7)(24)
185,392
190,703
6(8)(24)
7,398
9,933
6(7)
-
22,726
6(22)
(
123 ) (
61 )
6(7)(9)(22)
(
29 )
-
6(24)
5,317
6,583
-
1,967
6(15)(16)
383
1,302
6(20)
(
14,846 ) (
19,349 )
6(23)
8,595
37,625
36,494
124,941
(
3,548 )
14,337
(
184,255 )
97,395
(
5,177 ) (
49,303 )
7,421 (
4,949 )
450
662
31,835
13,127
15,568 (
54,259 )
(
302 ) (
326 )
359,707
534,860
18,147
17,928
(
8,131 ) (
40,443 )
(
1,797 ) (
67,950 )
367,926
444,395

(Continued)

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SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in financial assets at amortised cost -
current
Proceeds from disposal of financial assets at
amortised cost - current
Proceeds from disposal of financial assets at fair
value through other comprehensive income

Cash paid for acquisition of property, plant and
equipment

Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets
Increase in prepayment for equipment
Decrease (increase) in guarantee deposits paid
Net cash flows from (used in) investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term borrowings

Repayment of the principal portion of lease
liabilities

Increase in long-term borrowings

Decrease in long-term borrowings

Decrease in guarantee deposits received

Net cash flows from (used in) financing
activities
Effect of foreign exchange rate changes
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period For the six-month periods ended June 30,
Notes
2020
2019
($
172,488 ) ($
456,587 )
344,977
456,587
6(6)
26,533
-
6(28)
(
26,074 ) (
16,235 )
135
172
(
1,667 ) (
1,827 )
(
53,282 ) (
31,875 )
4,709 (
4,400 )
122,843 (
54,165 )
6(29)
(
54,906 )
47,410
6(29)
(
4,932 ) (
6,719 )
6(29)
88,906
1,094,640
6(29)
- (
1,203,744 )
6(29)
(
87 )
-
28,981 (
68,413 )
(
21,588 )
8,582
498,162
330,399
6(1)
3,304,978
4,203,338
6(1)
$
3,803,140 $
4,533,737

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

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SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(Reviewed, not audited)

1. HISTORY AND ORGANISATION

(1) ScinoPharm Taiwan, Ltd. (the Company) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) on November 11, 1997. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the manufacture of western medicines and other chemical materials, biological technology services, intellectual property rights, international trade and research, development and manufacture of Active Pharmaceutical Ingredients (“API”), albumin medicines, oligonucleotide medicines, peptide medicines, injections and new small molecule drugs, as well as the provision of related consulting and technical services.
(2) The common shares of the Company have been listed on the Taiwan Stock Exchange since September 2011.
(3) Uni-President Enterprises Corp., the Company’s ultimate parent company, holds 37.94% equity interest in the Company.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were reported to the Board of Directors on August 11, 2020.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)
New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

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

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

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

the Group

None.

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

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

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Effective date by
New Standards, Interpretations and Amendments IASB
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endorsed by the FSC are as follows: New Standards,Interpretations andAmendments	Effective date by IASB
Amendments to IFRS 4, ‘Extension of the temporary exemption from	January 1, 2021
applying IFRS 9’
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	IASB
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2023
current’
Amendments to IAS 16, ‘Property, plant and equipment: proceeds	January 1, 2022
before intended use’
Amendments to IAS 37, ‘Onerous contracts-cost of fulfilling a contract’	January 1, 2022
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the

“Regulations Governing the Preparation of Financial Reports by Securities Issuers”, and IAS 34, ‘Interim Financial Reporting’ as endorsed by the FSC.

(2) Basis of preparation

A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

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B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
(3) Basis of consolidation
A. Basis for preparation of consolidated financial statements:
- (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
- (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
- (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
- (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.
- (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

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B. Subsidiaries included in the consolidated financial statements:

Name of Investors	Name of Subsidiaries	Business June 30, December 31, June 30, activities 2020 2019 2019 Professional investment 100.00 100.00 100.00 Professional investment 100.00 100.00 100.00 Research, development and manufacture API and new drugs, etc. 100.00 100.00 100.00 Research, development and manufacture of API and new drugs, sale of self-produced products, etc. 100.00 100.00 100.00 Import, export and sales of API and intermediates, etc. 100.00 100.00 100.00 Percentage owned by the Company	Note
ScinoPharm Taiwan, Ltd. ScinoPharm Taiwan, Ltd. SPT International, Ltd. SPT International, Ltd. SPT International, Ltd.	SPT International, Ltd. ScinoPharm Singapore Pte Ltd. SciAnda (Kunshan) Biochemical Technology Ltd. SciAnda (Changshu) Pharmaceuticals, Ltd. SciAnda Shanghai Biochemical Technology, Ltd.		(Note 1) (Note 1) (Note 1) (Note 2) (Note 1) (Note 2) (Note 1)

Note 1: The financial statements of the entity as of and for the six-month periods ended June 30,

2020 and 2019 were not reviewed by independent auditors as the entity did not meet the definition of a significant subsidiary.

Note 2: In order to integrate the Group’s resources and improve management efficiency, on November 1, 2019, the Company’s Board of Directors has resolved to conduct an organisational restructuring through the short form merger of SciAnda (Changshu) Pharmaceuticals, Ltd. and SciAnda (Kunshan) Biochemical Technology, Ltd., with SciAnda (Changshu) Pharmaceuticals, Ltd. as the surviving company, and SciAnda (Kunshan) Biochemical Technology, Ltd. as the dissolved company. The scheduled completion date is subject to approval by the competent authority.

The financial statements of certain non-significant subsidiaries were consolidated based on their unreviewed financial statements as of and for the six-month periods ended June 30, 2020 and 2019. Total assets of these subsidiaries amounted to $911,582 and $738,404, representing 8% and 5% of the related consolidated totals, and total liabilities amounted to $64,972 and $58,682, representing 4% and 2% of the related consolidated totals, as of June 30, 2020 and 2019,

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respectively. Total comprehensive loss of these subsidiaries amounted to ($50,160), ($54,748), ($99,748) and ($95,129), constituting (11%), 506%, (30%) and (35%) of the related consolidated totals for the three-month and six-month periods ended June 30, 2020 and 2019, respectively.

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.
(4) Foreign currency translation

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

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses are presented in the statement of comprehensive income within “other gains and losses”.
B. Translation of foreign operations
(a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

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

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

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

(5) Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
- (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
- (b) Assets held mainly for trading purposes;
- (c) Assets that are expected to be realised within twelve months from the balance sheet date;
- (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
- (a) Liabilities that are expected to be paid off within the normal operating cycle;
- (b) Liabilities arising mainly from trading activities;
- (c) Liabilities that are to be paid off within twelve months from the balance sheet date;
- (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

A. Cash equivalents refer to short-term highly liquid investments that are readily convertible to known amount of cash and subject to an insignificant risk of changes in value.
B. Time deposits and bills under repurchase agreements that meet the above criteria and are held for the purpose of meeting short-term cash commitment in operations are classified as cash equivalents.

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

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

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B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.
D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(8) Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(9) Financial assets at amortised cost
A. Financial assets at amortised cost are those that meet all of the following criteria:
- (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.
- (b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.
D. The Group’s structured deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial. Time deposits pledged to others as collateral conform to financial assets at amortised cost definition, and were classified as other financial assets.

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(10) Accounts and notes receivable

A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(11) Impairment of financial assets

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

(12) Derecognition of financial assets

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

(13) Inventories

The standard cost method is applied, and cost is determined using the weighted-average cost method. The cost of finished goods and work in process comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses. When the cost of inventories exceeds the realisable value, the amount of any write-down of inventories is recognised as cost of sales during the period and the amount of any reversal of inventory write-down is recognised as a reduction in the cost sales during the period.

(14) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Except for land, other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. If each component of property, plant and equipment is significant, it is depreciated separately.

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

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Assets Estimated useful lives
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Assets	Est	imate	d use	ful lives
Buildings and structures	2	`～`	35	years
Machinery and equipment	2	`～`	12	years
Transportation equipment	2	`～`	5	years
Office equipment	2	`～`	9	years
Other equipment	2	`～`	19	years

(15) Intangible assets

Professional skills and computer software, etc. are stated at cost and amortised on a straight-line basis over their estimated useful lives of 3 ~ 5 years.

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

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are fixed payments less any lease incentives receivable. The Group subsequently measures the lease liabilities at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.
C. At the commencement date, the right-of-use asset is stated at cost under the amount of the initial measurement of lease liability. The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.
D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of right-of use assets to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

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(17) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss shall be reversed to the extent of the loss previously recognised in profit or loss. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.
(18) Borrowings
Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(19) Financial liabilities at fair value through profit or loss

A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges or financial liabilities at fair value through profit or loss. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss at initial recognition:
- (a) Hybrid (combined) contracts; or
- (b) They eliminate or significantly reduce a measurement or recognition inconsistency; or
- (c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management policy.
B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.
(20) Notes and accounts payable
A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Derecognition of financial liabilities

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

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(22) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(23) Employee benefits

A. Short-term employee benefits

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

B. Pensions
(a) Defined contribution plans

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

(b) Defined benefit plans
- i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.
- ii.Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise, and recorded as retained earnings.
- iii.Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed accordingly.
C. Employees’ compensation and directors’ remuneration Employees’ compensation and directors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employees’ compensation is distributed by shares, the Group calculates the number of shares based on the closing market price at the previous day of the board meeting resolution.

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- (24) Employee share based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and nonmarket vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

(25) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
D. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognised and recognised deferred income tax assets are reassessed.

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E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.
F. The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

(26) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
(27) Dividends

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

(28) Revenue recognition
A. Sales of goods
- (a) The Group manufactures and sells API, intermediates, etc. Sales are recognised when control of the products has transferred, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.
- (b) Revenue is recognised based on the price specified in the contract, net of the sales returns and discounts. Accumulated experience is used to estimate and provide for the sales returns and discounts, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.
- (c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

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B. Sales of services

(a) The Group provides technology development and consultation services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the service rendered up to the end of the reporting period as a proportion of the total services to be provided. The customer pays at the time specified in the payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.
(b) The Group’s estimate about revenue, costs and progress towards complete satisfaction of a performance obligation is subject to a revision whenever there is a change in circumstances. Any increase or decrease in revenue or costs due to an estimate revision is reflected in profit or loss during the period when the management becomes aware of the changes in circumstances.
C. Incremental costs of obtaining a contract
Given that the contractual period lasts less than one year, the Group recognises the incremental costs (mainly comprised of sales commissions) of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

(29) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Chief Operating Decision-Maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

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

(1) Critical judgments in applying the Group’s accounting policies

None.

(2) Critical accounting estimates and assumptions

A. Evaluation of inventories
(a) As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. As the manufacturing process is relatively complicated and time consuming, materials require longer lead time, the waiting period for product registration is long, and the timing of product launch may be deferred, the Group evaluates the amounts of normal inventory consumption,

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obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Since the calculation of net realisable value involves subjective judgement and the ending balance of inventory is material to the financial statements, there might be material changes to the evaluation.

(b) As of June 30, 2020, the carrying amount of inventories was $1,299,449.
B. Realisability of deferred income tax assets
(a) Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. Assessment of the realisability of deferred income tax assets involves critical accounting judgments and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, tax exempt duration, available tax credits, tax planning, etc. Any variations in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred income tax assets.
(b) As of June 30, 2020, the Group recognised deferred income tax assets amounting to $614,900.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) CASH AND CASH EQUIVALENTS

TAILS OF SIGNIFICANT ACCOUNTS CASH AND CASH EQUIVALENTS
Cash: Cash on hand Checking accounts and demand deposits Cash equivalents: Time deposits Bill under repurchase agreements	June 30,2020 117 $ 574,684 574,801 2,943,500 284,839 3,228,339 3,803,140 $	December31,2019 159 $ 414,571 414,730 2,620,500 269,748 2,890,248 3,304,978 $	June 30,2019 137 $ 319,305 319,442 3,994,396 219,899
			4,214,295
			4,533,737 $

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. Details of the Group’s time deposits pledged to others as collateral (listed as “Other financial assets
non-current”) as of June 30, 2020, December 31, 2019 and June 30, 2019 are provided in Note 8.

~24~

(2) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

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Items June 30, 2020 December 31, 2019 June 30, 2019
Current items:
Financial assets (liabilities) mandatorily
measured at fair value through profit or loss
Derivatives $ 405 $ 2,920 $ 1,602
Non-current items:
Financial assets mandatorily measured at fair
value through profit or loss
Unlisted stocks $ 4,620 $ 4,620 $ 4,620
Valuation adjustment ( 4,620) ( 4,620) ( 4,620)
- - -
$ $ $
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A. The Group recognised net gain (loss) of $1,966, ($2,980), ($1,345) and ($6,233) on financial assets at fair value through profit or loss (listed as “ Other gains and losses”) for the three-month and six-month periods ended June 30, 2020 and 2019, respectively.
B. The Group entered into contracts relating to derivative financial liabilities which were not accounted for under hedge accounting. The information is listed below (Units in thousands of currencies indicated):

currencies indicated):
Items Forward foreign exchange contracts Items Forward foreign exchange contracts Items Forward foreign exchange contracts	June 30, 2020
	Contract amount Contract period USD 6,170 5.2020~9.2020 December31,2019
	Contract amount USD 13,553 June 30,	Contract period 10.2019~3.2020 2019
	Contract amount USD 5,535	Contract period 5.2019~8.2019

The Group entered into forward foreign exchange contracts to hedge exchange rate risk of operating activities. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

C. The Group has no financial assets at fair value through profit or loss pledged to others as of June 30, 2020, December 31, 2019 and June 30, 2019.

(3) FINANCIAL ASSETS AT AMORTISED COST - CURRENT

Items Structured deposits	June 30,2020 - $	December31,2019 172,220 $	June 30,2019
			180,929 $

~25~

A. The Group entered into structured deposits, which are guaranteed yield financial products, with financial institutions.
－
B. The Group recognised interest income of $ , $1,486, $1,344 and $3,231 from financial assets at amortised cost for the three-month and six-month periods ended June 30, 2020 and 2019, respectively.
C. The Group has no financial assets at amortised cost pledged to others as of June 30, 2020, December 31, 2019 and June 30, 2019.
D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

(4) ACCOUNTS RECEIVABLE, NET

			June 30,2020		December	31,2019			June 30, 2019
Accounts receivable		$	554,100		$	590,594		$	434,054
Less: Loss allowance	(		101)	(		258)	(		30)
		$	553,999		$	590,336		$	434,024
A. The ageing analysis of accounts receivable is as follows:
			June 30,2020		December	31,2019			June 30,2019
Not past due	$		447,234		$	456,776	$		393,331
Less than 30 days			102,774			82,787			38,097
Between 31 to 90 days			4,092			51,031			2,626
	$		554,100		$	590,594	$		434,054

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

The above ageing analysis is based on past due date.

B. As of June 30, 2020, December 31, 2019 and June 30, 2019, accounts receivable arose from contracts with customers. As of January 1, 2019, the balance of receivables from contracts with customers amounted to $558,995.
C. As of June 30, 2020, December 31, 2019 and June 30, 2019, the Group does not hold any collateral as security.
D. As at June 30, 2020, December 31, 2019 and June 30, 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable is the book value.
E. Information relating to credit risk of accounts receivable is provided in Note 12(2).

(5) INVENTORIES

NVENTORIES
Raw materials Supplies Work in process Finished goods		June 30,2020
	Allowance for Cost marketprice decline 410,626 $ 59,898) ($ 31,046 5,268) ( 518,766 84,044) ( 819,267 331,046) ( 1,779,705 $ 480,256) ($		Bookvalue
			350,728 $ 25,778 434,722 488,221
			1,299,449 $

~26~

December 31, 2019

Allowance for
Cost
market price decline
Raw materials
330,368
$ 62,829)
($ Supplies
29,009

3,347)
(
Work in process
355,393
77,847)
(
Finished goods
880,680
327,095)
(
1,595,450
$ 471,118)
($ Allowance for
Cost
market price decline
Raw materials
350,345
$ 66,734)
($ Supplies
38,339

4,802)
(
Work in process
498,427
110,429)
(
Finished goods
904,789
315,932)
(
1,791,900
$ 497,897)
($ June 30, 2019

Bookvalue
267,539
$ 25,662
277,546
553,585
1,124,332
$ Bookvalue
283,611
$ 33,537

387,998
588,857
1,294,003
$

The Group recognised expense and loss of inventories for the period:

			For the three-monthperiods endedJune30,	For the three-monthperiods endedJune30,	For the three-monthperiods endedJune30,	For the three-monthperiods endedJune30,
			2020			2019
Cost of goods sold		$	385,896		$	258,326
Loss on physical inventory			213			456
Loss on inventory scrap			-			90
Under applied manufacturing overhead			62,121			84,464
Loss on (reversal of allowance for) inventory
market price decline (Note)			10,251	(		15,830)
Revenue from sale of scraps	(		524)	(		515)
Total cost of goods sold		$	457,957		$	326,991
			Forthe six-monthperiods ended June 30,
			2020			2019
Cost of goods sold		$	600,944		$	599,368
(Gain) loss on physical inventory	(		113)			648
Loss on inventory scrap			310			90
Under applied manufacturing overhead			136,273			172,775
Loss on (reversal of allowance for) inventory
market price decline (Note)			11,211	(		29,351)
Revenue from sale of scraps	(		834)	(		7,444)
Total cost of goods sold		$	747,791		$	736,086

~27~

Note: The Group reversed a previous inventory write-down which was accounted for as reduction of cost of goods sold because certain inventory which were previously provided with allowance were again utilised in production for the three-month and six-month periods ended June 30, 2019.

(6) FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME -

NON-CURRENT

NON-CURRENT
Items Equity instruments Listed stocks Unlisted stocks Valuation adjustment	June 30, 2020 201,865 $ 167,673 369,538 203,204 572,742 $	December31,2019 217,246 $ 167,673 384,919 30,291 415,210 $	June 30,2019 219,576 $ 167,673
			387,249 202,105 589,354 $

A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments is the book value as at June 30, 2020, December 31, 2019 and June 30, 2019.
B. Due to the change in investment strategies, the Group sold $26,533 of equity instruments at fair value resulting in cumulative gain on disposal of $11,152 which was reclassified to retained earnings during the six-month period ended June 30, 2020.
C. Amounts recognised in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other		Forthe three-monthperiods ended June 30,	Forthe three-monthperiods ended June 30,	Forthe three-monthperiods ended June 30,
comprehensive income		2020		2019
Fair value change recognised in other
comprehensive income	$	324,833	($	56,871)
Cumulative gains reclassified to
retained earnings due to derecognition	($	11,152)	$	-
Equity instruments at fair value through other		Forthe six-monthperiods ended June 30,
comprehensiveincome		2020		2019
Fair value change recognised in other
comprehensive income	$	184,065	$	121,237
Cumulative gains reclassified to
retained earnings due to derecognition	($	11,152)	$	-

D. The Group has no financial assets at fair value through other comprehensive income pledged to others as of June 30, 2020, December 31, 2019 and June 30, 2019.

~28~

(7) PROPERTY, PLANT AND EQUIPMENT

Machinery and
Transportation
Office
Other
January 1, 2020
Buildings
equipment
equipment
equipment
equipment
Cost
3,495,743
$ 5,186,449
$ 25,505
$ 229,037
$ 147,692
$ Accumulated depreciation
1,243,381)
(
4,080,498)
(
24,412)
(
186,532)
(
120,138)
(
Accumulated impairment
-
9,284)
(
-
15)
(
14)
(
2,252,362
$ 1,096,667
$ 1,093
$ 42,490
$ 27,540
$ June 30, 2020
At January 1
2,252,362
$ 1,096,667
$ 1,093
$ 42,490
$ 27,540
$ Additions
-
970
-
91
-
Reclassified from prepayments
for equipment
-
-
-
-
-
Reclassified upon completion
4,168
18,190
-
6,881
224
Depreciation charge
71,953)
(
102,234)
(
106)
(
8,302)
(
2,797)
(
Disposals－Cost
-
23,471)
(
-
18,191)
(
88)
(
' －Accumulated depreciation
-
23,471
-
18,188
79
Reversal of impairment loss
-
-
-
15
14
Net currency exchange differences
20,794)
(
9,741)
(
17)
(
223)
(
627)
(
At June 30
2,163,783
$ 1,003,852
$ 970
$ 40,949
$ 24,345
$ June 30, 2020
Cost
3,474,506
$ 5,165,768
$ 25,332
$ 216,302
$ 144,093
$ Accumulated depreciation
1,310,723)
(
4,152,632)
(
24,362)
(
175,353)
(
119,748)
(
Accumulated impairment
-
9,284)
(
-
-
-
2,163,783
$ 1,003,852
$ 970
$ 40,949
$ 24,345
$ For the six-month period ended

~29~

												Construction
											in progress and
											equipment before
			Machinery and		Transportation			Office		Other		acceptance
January 1, 2019		Buildings		equipment		equipment		equipment		equipment		inspection		Total
Cost	$	3,521,175	$	5,147,057	$	26,668	$	219,135	$	152,211	$	1,056,179	$	10,122,425
Accumulated depreciation	(	1,103,014)	(	3,922,795)	(	24,393)	(	186,675)	(	118,076)		-	(	5,354,953)
Accumulated impairment		-	(	8,577)		-	(	34)	(	15)		-	(	8,626)
	$	2,418,161	$	1,215,685	$	2,275	$	32,426	$	34,120	$	1,056,179	$	4,758,846
For the six-month period ended
June 30, 2019
At January 1	$	2,418,161	$	1,215,685	$	2,275	$	32,426	$	34,120	$	1,056,179	$	4,758,846
Additions		1,450		721		-		926		-		6,477		9,574
Reclassified from prepayments
for equipment		-		-		-		-		-		30,283		30,283
Reclassified upon completion		6,590		42,803		-		4,806		-	(	54,199)		-
Transferred to intangible assets		-		-		-		-		-	(	6,500)	(	6,500)
Transferred to loss (Note)		-		-		-		-		-	(	22,726)	(	22,726)
Depreciation charge	(	73,758)	(	106,216)	(	837)	(	6,479)	(	3,413)		-	(	190,703)
Disposals`－`Cost		-	(	11,461)	(	936)	(	11,891)	(	23)		-	(	24,311)
' `－`Accumulated depreciation		-		11,461		843		11,860		21		-		24,185
' `－`Accumulated impairment		-		-		-		15		-		-		15
Net currency exchange differences		11,573		6,060		10		105		447	(	7)		18,188
At June 30	$	2,364,016	$	1,159,053	$	1,355	$	31,768	$	31,152	$	1,009,507	$	4,596,851
June 30, 2019
Cost	$	3,542,305	$	5,187,340	$	25,842	$	213,712	$	154,109	$	1,009,507	$	10,132,815
Accumulated depreciation	(	1,178,289)	(	4,019,710)	(	24,487)	(	181,925)	(	122,942)		-	(	5,527,353)
Accumulated impairment		-	(	8,577)		-	(	19)	(	15)		-	(	8,611)
	$	2,364,016	$	1,159,053	$	1,355	$	31,768	$	31,152	$	1,009,507	$	4,596,851

~30~

Note: The Group did not accept the customized equipment ordered from the vendor as its format and efficiency did not meet expectations. In April 2019, the two sides reached a consensus. The vendor refunded and terminated the purchase of equipment and the Group will transfer the balance of the related construction in progress and equipment before acceptance inspection to loss.
- A. The Group has not capitalised borrowing costs as part of property, plant and equipment for the three-month and six-month periods ended June 30, 2020 and 2019.
- B. The Group’s property, plant and equipment were owner-occupied for the six-month periods ended June 30, 2020 and 2019.
- C. Information about impairment loss and reversal of impairment on property, plant and equipment is provided in Note 6(9).
- D. As of June 30, 2020, Decmeber 31, 2019 and June 30, 2019, the Group has not pledged any property, plant and equipment as collateral.
－
(8) LEASING ARRANGEMENTS LESSEE
- A. The Group leases land. Rental contracts are typically made for periods of 50 years (including the option to extend the leases). Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
- B. Short-term leases with a lease term of 12 months or less pertain to office premises and low-value assets pertain to computers.
- C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Land Land	June 30,2020 Carryingamount 631,583 $	December31,2019 June 30,2019 Carryingamount Carryingamount 673,087 $ 966,657 $ For the three-monthperiods endedJune30,	June 30,2019
			Carryingamount
			966,657 $
		2020 2019 Depreciationcharge Depreciationcharge 3,694 $ 4,966 $ Forthe six-monthperiods ended June 30,	2019
			Depreciationcharge
			4,966 $
		2020 Depreciationcharge 7,398 $	2019
			Depreciationcharge
			9,933 $

~31~

D. The information on income and expense accounts relating to lease contracts is as follows:

The information on income and expense	accounts relating to lease contracts is as follows:	accounts relating to lease contracts is as follows:	accounts relating to lease contracts is as follows:
	Forthe three-monthperiods ended June 30,
	2020	2019
Items affecting profit or loss
Interest expense on lease liabilities	$	1,809 $	2,531
Expense on short-term lease contracts		467	1,315
Expense on leases of low-value assets		344	227
	Forthe six-monthperiods ended June 30,
	2020	2019
Items affecting profit or loss
Interest expense on lease liabilities	$	3,625 $	5,071
Expense on short-term lease contracts		1,017	2,622
Expense on leases of low-value assets		600	442

E. For the six-month periods ended June 30, 2020 and 2019, the Group’s total cash outflow for leases were $10,174 and $14,854, respectively.

(9) IMPAIRMENT OF NON-FINANCIAL ASSETS

－－
A. The Group recognised the reversal of impairment loss amounting to $ , $15, $29 and $ for the three-month and six-month periods ended June 30, 2020 and 2019, respectively (listed as “Other gains and losses”) as some of the idle machineries were again utilised in production. For details of accumulated impairment, please refer to Note 6(7).
B. The reversal of impairment loss reported by operating segments is as follows:

Segments	Recognised in other Recognised in other Recognised in comprehensive Recognised in comprehensive profit or loss income profit or loss income - $ - $ 15 $ - $ Recognised in other Recognised in other Recognised in comprehensive Recognised in comprehensive profit or loss income profit or loss income 29 $ - $ - $ - $ Forthe three-monthperiods ended June 30, 2020 2019 Forthe six-monthperiods ended June 30, 2020 2019
SciAnda (Changshu) Segments
	Recognised in other Recognised in comprehensive profit or loss income 29 $ - $ 2020
SciAnda (Changshu)

~32~

(10) SHORT-TERM BORROWINGS

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

Type of borrowings June 30, 2020 Interest rate Collateral
Bank loans
Unsecured loans $ 33,437 3.8% None
Type of borrowings December 31, 2019 Interest rate Collateral
Bank loans
Unsecured loans $ 89,766 4.35% None
Type of borrowings June 30, 2019 Interest rate Collateral
Bank loans
Unsecured loans $ 282,019 4.35% None
Please refer to Note 6(23) for interest expense recognised in profit or loss for the three-month and
six-month periods ended June 30, 2020 and 2019.
OTHER PAYABLES
June 30, 2020 December 31, 2019 June 30, 2019
Accrued salaries and bonuses $ 73,072 $ 75,963 $ 69,478
Accrued employees' compensation
and directors' remuneration 32,468 28,493 18,974
Payables on equipment 39,858 48,148 34,756
-
Cash dividends payable 213,500 387,462
Others 195,720 180,772 160,374
$ 554,618 $ 333,376 $ 671,044
----- End of picture text -----

Please refer to Note 6(23) for interest expense recognised in profit or loss for the three-month and six-month periods ended June 30, 2020 and 2019.

(11) OTHER PAYABLES

(12) LONG-TERM BORROWINGS

Type ofborrowings	Borrowing period June 30,2020 CNY 54,349 thousand 227,923 $ 9.30.2019`～` 5.16.2021 227,923) ( - $	Interestrate Collateral 3.85% Guaranteed by the Company
Long-term bank loans Secured bank loans Less: Current portion

~33~

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

Type of borrowings Borrowing period December 31, 2019 Interest rate Collateral
Long-term bank loans
S ecured bank loans CNY 33,500 $ 144,234 4.25% Guaranteed by
thousand the Company
9.30.2019 ～
10.29.2020
Less: Current portion ( 144,234)
-
$
Type of borrowings Borrowing period June 30, 2019 Interest rate Collateral
Long-term bank loans
S ecured bank loans CNY 240,000 Guaranteed by
thousand $ 1,085,571 4.35% the Company
6.13.2019 ～
7.12.2020
----- End of picture text -----

Please refer to Note 6(23) for interest expense recognised in profit or loss for the three-month and six-month periods ended June 30, 2020 and 2019.

(13) PENSIONS

A. The Company has set up a defined benefit pension plan in accordance with the Labor Standards Law, which applies to all regular employees’ service years prior to the enforcement of the Labor Pension Act (the “Act”) on July 1, 2005 and service years thereafter of employees who chose to continue to be covered under the pension scheme of the Labor Standards Law after the enforcement of the Act. In accordance with the Company's retirement plan, an employee may retire when the employee either (i) attains the age of 55 with 15 years of service, (ii) has more than 25 years of service, (iii) has reached the age of 65, or (iv) is incapacitated to work (compulsory retirement). The employees earn two units for each year of service for the first 15 years, and one unit for each additional year thereafter up to a maximum of 45 units. Any fraction of a year equal to or more than six months shall be counted as one year of service, and any fraction of a year less than six months shall be counted as half a year. According to the provisions, employees who retired due to their duties shall get additional 20%. Pension payments are based on the number of units earned and the average salary of the last six months prior to retirement. Calculation of average salary is in accordance with the Labor Standards Law of the R.O.C. The Company contributes monthly an amount equal to 2% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is not enough to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contribution for the deficit by end of March next year.

~34~

(a) The pension costs under the aforementioned defined benefit pension plan of the Company for the three-month and six-month periods ended June 30, 2020 and 2019 were $567, $587, $1,135 and $1,174, respectively.
(b) As of June 30, 2020, the Company’s expected contributions to the pension plan for the next annual reporting period amounted to $2,890.
B. As a result of the enforcement of the Act, the Company set up a defined contribution pension plan which took effect on July 1, 2005. The local employees are eligible for the defined contribution plan. For employees who choose to be covered under the pension scheme of the Act, the Company contributes monthly an amount of not less than 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. Pensions are paid by monthly installments or in lump sum based on the accumulated balances of the employees’ individual pension accounts. The subsidiaries in Mainland China (SciAnda (Kunshan) Biochemical Technology, Ltd., SciAnda (Changshu) Pharmaceuticals, Ltd., and SciAnda Shanghai Biochemical Technology, Ltd.) are subject to a government sponsored defined contribution plan. In accordance with the related Laws of the People’s Republic of China, the subsidiaries in Mainland China contribute monthly 18% of the employees’ monthly salaries and wages to an independent fund administered by the government. Other than the monthly contributions, these subsidiaries do not have further obligations. The other subsidiaries, SPT International, Ltd. and ScinoPharm Singapore Pte Ltd., had no employees. For the three-month and six-month periods ended June 30, 2020 and 2019, the pension costs recognised under the aforementioned defined contribution pension plans were $5,810, $7,664, $13,004 and $15,382, respectively.

(14) SHARE CAPITAL

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

thousands of shares):
At January 1 and June 30	For the six-monthperiods endedJune30,
	2020 790,739	2019
		790,739

B. As of June 30, 2020, the Company’s authorised capital was $10,000,000 and the paid-in capital was $7,907,392 (790,739 thousand shares) with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

~35~

(15) CAPITAL RESERVES

A. Pursuant to the R.O.C. Company Act, capital reserve arising from paid-in capital in excess of par value on issuance of common stocks and donations shall be exclusively used to cover accumulated deficit or, distribute cash or stocks in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the capital reserve to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital reserve should not be used to cover accumulated deficit unless the legal reserve is insufficient.
B. Movements on the Company’s capital reserve are as follows:

Share premium Stockoptions Total 1,245,682 $ 48,923 $ 1,294,605 $ - 383 383 1,245,682 $ 49,306 $ 1,294,988 $ Forthe six-monthperiod ended June 30,2020 For the six-month period ended June 30, 2019	Share premium Stockoptions Total 1,245,682 $ 48,923 $ 1,294,605 $ - 383 383 1,245,682 $ 49,306 $ 1,294,988 $ Forthe six-monthperiod ended June 30,2020 For the six-month period ended June 30, 2019	Share premium Stockoptions Total 1,245,682 $ 48,923 $ 1,294,605 $ - 383 383 1,245,682 $ 49,306 $ 1,294,988 $ Forthe six-monthperiod ended June 30,2020 For the six-month period ended June 30, 2019
Share premium 1,237,787 $ - 1,237,787 $	Stock options 54,768 $ 1,302 56,070 $	Total
		1,292,555 $ 1,302
		1,293,857 $

(16) SHARE-BASED PAYMENT

A. The Company issued 1 million units, 1.5 million units and 1.5 million units of employee stock options on December 3, 2013, November 6, 2015 and October 14, 2016, respectively (the ‘Grant Date’). The exercise price of the options was set at $91.70 (in dollars), $41.65 (in dollars) and $40.55 (in dollars), respectively, which was based on the closing market price of the Company's common shares on the Grant Dates. Each option gives the holder the right to purchase one share of the Company's common stocks. The exercise price is subject to further adjustments when there is a change in the number of shares of the Company's common stocks after the Grant Date. (As of June 30, 2020, for the issued 1 million units, 1.5 million units and 1.5 million units of employee stock options, the exercise price was adjusted based on the specific formula to $74.50 (in dollars) per share, $37.20 (in dollars) per share and $37.70 (in dollars) per share, respectively.) Contract period of the employee stock option plans is 10 years, and options are exercisable in 2 years after the Grant Date. The Group recognised compensation costs relating to the employee stock options plan of $193, $654, $383 and $1,302 for the three-month and six-month periods ended June 30, 2020 and 2019, respectively.

~36~

B. Details of the share-based payment arrangements are as follows:

			Forthe six-monthperiod ended June 30,	Forthe six-monthperiod ended June 30,	2020
				Weighted-average
			Number of options	exercise price
			(inthousand units)	(in dollars)
Options	outstanding at beginning of the period		2,205	$	45.05
Options	forfeited	(	8)		74.50
Options	outstanding at end of the period		2,197		44.94
Options	exercisable at end of the period		1,994		45.68
			For the six-month period ended June 30,		2019
				Weighted-average
			Number of options	exercise price
			(inthousand units)	(in dollars)
Options	outstanding at beginning of the period		2,725	$	46.08
Options	forfeited	(	139)		51.10
Options	outstanding at end of the period		2,586		45.81

Options	exercisable at end of the period		1,796		53.90

C. The expiry date, exercisable shares and exercise prices of the employee stock options at balance sheet date are as follows:

Grant date 12.3.2013 11.6.2015 10.14.2016	No. of stocks Exercise price Expiry date (unitinthousands) (indollars) 12.2.2023 443 74.50 $ 11.5.2025 802 37.20 10.13.2026 749 37.70 June 30,2020	No. of stocks Exercise price (unitinthousands) (indollars) 451 74.50 $ 802 37.20 714 37.70 December31,2019

Grant date 12.3.2013 11.6.2015 10.14.2016	Expiry date 12.2.2023 11.5.2025 10.13.2026	No. of stocks Exercise price (unitinthousands) (indollars) 524 75.90 $ 721 37.90 551 38.40 June 30,2019

D. The fair value of the Group’s employee stock options on Grant Date was evaluated using the combination of Hull & White and the Ritchken trinomial option valuation model. Related information is as follows:

~37~

Stock Type of price arrangement Grant date (in dollars) Employee 12.3.2013 91.70 $ stock options Employee 11.6.2015 41.65 stock options Employee 10.14.2016 40.55 stock options	Exercise price (in dollars)	Price Option volatility life 28.50% 10 years (Note) 37.63% 10 years (Note) 37.20% 10 years (Note)	Fair value Expected Interest per unit dividends rate (in dollars) 1.5% 1.7145% 26.045 $ 1.5% 1.2936% 13.799 1.5% 0.9223% 13.171
	91.70 $ 41.65 40.55

Note: According to daily returns of the Company's stock for the previous year, the annualized volatility is 28.50%, 37.63% and 37.20%, respectively.

(17) RETAINED EARNINGS

A. Pursuant to the amended Articles of Incorporation, the current year's after-tax earnings should be used initially to cover any accumulated deficit; thereafter 10% of the remaining earnings should be set aside as legal reserve until the balance of legal reserve is equal to that of paid-in capital. The legal reserve shall be exclusively used to cover accumulated deficit, to issue new stocks, or to distribute cash to shareholders in proportion to their share ownership. The use of legal reserve for the issuance of stocks or cash dividends to shareholders in proportion to their share ownership is permitted provided that the distribution of the reserve is limited to the portion in exceeds 25% of the Company’s paid-in capital.
B. Since the Company is in a changeable industry environment and the life cycle of the Company is in a stable growth, the appropriation of earnings should consider fund requirements and capital budget to decide how much earnings will be kept or distributed and how much cash dividends will be distributed. According to the Company’s Articles of Incorporation, 10% of the annual net income, after offsetting any loss of prior years and paying all taxes and dues, shall be set aside as legal reserve. The remaining net income and the unappropriated retained earnings from prior years can be distributed in accordance with a resolution passed during a meeting of the Board of Directors and approved at the stockholders' meeting. Of the amount to be distributed by the Company, stockholders’ dividends shall comprise 50% to 100% of the unappropriated retained earnings, and the percentage of cash dividends shall not be less than 30% of dividends distributed.
C. In accordance with the regulations, the Company shall set aside special reserve for the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings. The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently.

~38~

D. The Company recognised cash dividends distributed to owners amounting to $387,462 ($0.49 (in dollars) per share) for the year ended December 31, 2019. On June 30, 2020, the Company’s stockholders approved the distribution of cash dividends of $213,500 ($0.27 (in dollars) per share) for the year 2019.

(18) OTHER EQUITY ITEMS

for the year 2019. OTHER EQUITY ITEMS
			For the six-month			period endedJune30,			2020
				Unrealised gain (loss)
		Currency translation				onvaluation			Total
At January 1	($		98,117)		$	30,291	($		67,826)
Revaluation			-			184,065			184,065
Revaluation transferred to
retained earnings			-	(		11,152)	(		11,152)
Currency translation differences
- Group	(		46,731)			-	(		46,731)
At June 30	($		144,848)		$	203,204		$	58,356
			For the six-month			period ended June 30,			2019
				Unrealised gain (loss)
		Currency translation				onvaluation			Total
At January 1	($		41,252)		$	80,868		$	39,616
Revaluation			-			121,237			121,237
Currency translation differences
- Group			11,347			-			11,347
At June 30	($		29,905)		$	202,105		$	172,200

(19) OPERATING REVENUE

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines:

time in the following major product	lines:
For the three-month period ended June 30,2020 Timing of revenue recognition: At a point in time Over time	API Revenue 874,439 $ - 874,439 $	Technical Servical Revenue - $ 25,607 25,607 $	Other Operating Revenue - $ 8,034 8,034 $	Total
				874,439 $ 33,641
				908,080 $

~39~

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Technical Other
For the three-month period ended API Servical Operating
June 30, 2019 Revenue Revenue Revenue Total
Timing of revenue
recognition:
- -
At a point in time $ 575,266 $ $ $ 575,266
Over time - 37,126 5,181 42,307
$ 575,266 $ 37,126 $ 5,181 $ 617,573
Technical Other
For the six-month period ended API Servical Operating
June 30, 2020 Revenue Revenue Revenue Total
Timing of revenue
recognition:
- -
At a point in time $ 1,392,576 $ $ $ 1,392,576
Over time - 44,990 13,037 58,027
$ 1,392,576 $ 44,990 $ 13,037 $ 1,450,603
Technical Other
For the six-month period ended API Servical Operating
June 30, 2019 Revenue Revenue Revenue Total
Timing of revenue
recognition:
- -
At a point in time $ 1,309,115 $ $ $ 1,309,115
Over time - 57,504 22,999 80,503
$ 1,309,115 $ 57,504 $ 22,999 $ 1,389,618
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B. The Group has recognised contract liabilities related to the contract revenue from advance customer payment of $63,406, $55,985, $25,668 and $30,617 as of June 30, 2020, December 31, 2019, June 30, 2019 and January 1, 2019, respectively.
C. The revenue recognised that was included in the contract liability balance at the beginning of the period amounted to $27,856, $5,580, $35,129 and $15,234 for the three-month and six-month periods ended June 30, 2020 and 2019, respectively.

~40~

(20) INTEREST INCOME

For the three-month periods ended June 30,

NTEREST INCOME	Forthe three-monthperiods ended June 30,	ods ended June 30,
Interest income from bank deposits Interest income from financial assets measured at amortised cost Interest income from bank deposits Interest income from financial assets measured at amortised cost	2020 2019 6,654 $ 9,548 $ - 1,486 6,654 $ 11,034 $ 2020 2019 13,502 $ 16,118 $ 1,344 3,231 14,846 $ 19,349 $ For the six-month periods ended June 30,	2019 9,548 $ 1,486
		16,118 $ 3,231
		19,349 $

(21) OTHER INCOME

For the three-month periods ended June 30,

OTHER INCOME	For the three-month periods ended June 30,	For the three-month periods ended June 30,
Other income, others Other income, others	2020 2019 2,232 $ 32,649 $ 2020 2019 4,376 $ 34,450 $ For the six-monthperiods endedJune30,
		34,450 $

(22) OTHER GAINS AND LOSSES

For the three-month periods ended June 30,


Net gain (loss) on financial assets/liabilities
at fair value through profit or loss		$	1,966	($	2,980)
Gain (loss) on disposal of property,
plant and equipment			126	(	45)
Gain on reversal of impairment loss			-		15
Net currency exchange (loss) gain	(		9,833)		8,829
Miscellaneous	(		1,539)	(	28,957)
	($		9,280)	($	23,138)

~41~

For the six-month periods ended June 30,

Net loss on financial assets/liabilities at fair value through profit or loss Gain on disposal of property, plant and equipment Gain on reversal of impairment loss Net currency exchange (loss) gain Miscellaneous

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2020 2019
($ 1,345) ($ 6,233)
123 61
29 -
( 5,759) 9,855
( 4,189) ( 31,707)
($ 11,141) ($ 28,024)
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(23) FINANCE COSTS

Interest expense: Bank loans Interest on lease liabilities Interest expense: Bank loans Interest on lease liabilities

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

For the three-month periods ended June 30,
2020 2019
$ 2,523 $ 16,417
1,809 2,531
$ 4,332 $ 18,948
For the six-month periods ended June 30,
2020 2019
$ 4,970 $ 32,554
3,625 5,071
$ 8,595 $ 37,625
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(24) EXPENSES BY NATURE

EXPENSES BY NATURE
Employee benefit expenses Depreciation of property, plant and equipment Depreciation of right-of-use assets Amortisation	Forthe three-monthperiod ended June 30,2020
	Operatingcosts 118,350 $ 65,693 - 987 185,030 $	Operatingexpenses 88,644 $ 26,433 3,694 1,634 120,405 $	Total
			206,994 $ 92,126 3,694 2,621
			305,435 $

~42~

Operatingcosts Operatingexpenses Total 107,708 $ 75,556 $ 183,264 $ 69,022 26,228 95,250 - 4,966 4,966 1,081 2,186 3,267 177,811 $ 108,936 $ 286,747 $ Forthe three-monthperiod ended June 30,2019 Forthe six-monthperiod ended June 30,2020	Operatingcosts Operatingexpenses Total 107,708 $ 75,556 $ 183,264 $ 69,022 26,228 95,250 - 4,966 4,966 1,081 2,186 3,267 177,811 $ 108,936 $ 286,747 $ Forthe three-monthperiod ended June 30,2019 Forthe six-monthperiod ended June 30,2020	Operatingcosts Operatingexpenses Total 107,708 $ 75,556 $ 183,264 $ 69,022 26,228 95,250 - 4,966 4,966 1,081 2,186 3,267 177,811 $ 108,936 $ 286,747 $ Forthe three-monthperiod ended June 30,2019 Forthe six-monthperiod ended June 30,2020
Operating costs Operating expenses Total 225,238 $ 164,145 $ 389,383 $ 132,330 53,062 185,392 - 7,398 7,398 2,061 3,256 5,317 359,629 $ 227,861 $ 587,490 $ Forthe six-monthperiod ended June 30,2019		Total
		389,383 $ 185,392 7,398 5,317
		587,490 $
Operating costs Operating expenses Total 212,442 $ 156,937 $ 369,379 $ 137,372 53,331 190,703 - 9,933 9,933 2,186 4,397 6,583 352,000 $ 224,598 $ 576,598 $ Operatingcosts Operatingexpenses Total 103,200 $ 76,883 $ 180,083 $ 7,401 4,966 12,367 3,685 2,692 6,377 4,064 4,103 8,167 118,350 $ 88,644 $ 206,994 $ Operating costs Operating expenses Total 90,511 $ 63,423 $ 153,934 $ 8,119 5,250 13,369 5,173 3,078 8,251 3,905 3,805 7,710 107,708 $ 75,556 $ 183,264 $ Forthe three-monthperiod ended June 30,2020 Forthe three-monthperiod ended June 30,2019		Total
		369,379 $ 190,703 9,933 6,583
		576,598 $
Operating costs 90,511 $ 8,119 5,173 3,905 107,708 $	Operating expenses 63,423 $ 5,250 3,078 3,805 75,556 $

(25) EMPLOYEE BENEFIT EXPENSES

~43~

Salaries and wages
Labor and health insurance expenses
Pension costs
Other personnel expenses
Salaries and wages
Labor and health insurance expenses
Pension costs
Other personnel expenses

Operating costs
Operating expenses
Total
193,805
$ 140,234
$ 334,039
$ 15,169

10,076

25,245
8,412

5,727

14,139
7,852

8,108

15,960
225,238
$ 164,145
$ 389,383
$ Operating costs
Operating expenses
Total
178,347
$ 129,991
$ 308,338
$ 15,980
9,967

25,947
10,359
6,197
16,556
7,756
10,782
18,538
212,442
$ 156,937
$ 369,379
$ Forthe six-monthperiod ended June 30,2020
Forthe six-monthperiod ended June 30,2019

A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 2% for employees’ compensation and shall not be higher than 2% for directors’ remuneration.
B. For the three-month and six-month periods ended June 30, 2020 and 2019, the employees’ compensation was accrued at $20,263, $6,217, $25,072 and $16,533, respectively, while the directors’ remuneration was accrued at $2,918, $1,029, $3,554 and $2,441, respectively. The aforementioned amounts were recognised in salary expenses. The expenses recognised for each year was accrued based on the earnings of current year and the percentage specified in the Articles of Incorporation of the Company. The actual amount approved at the Board of Directors’ meeting for employees’ compensation and directors’ remuneration for 2019 was $27,593 which was the diffirent from the estimated amount of $28,493 recognised in the 2019 financial statements by $900. Such difference mainly resulted from estimation, and will be recognised in profit or loss in September 2020. The employees’ compensation will be distributed in the form of cash for 2019. The directors’ remuneration have not yet been distributed for 2019. Information about the appropriation of employees’ compensation and directors’ remuneration by the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

~44~

(26) INCOME TAX

A. Income tax expense

Components of income tax expense:

			Forthe three-monthperiods ended June 30,	Forthe three-monthperiods ended June 30,	Forthe three-monthperiods ended June 30,	Forthe three-monthperiods ended June 30,
			2020			2019
Current income tax:
Income tax in current period		$	43,708		$	9,038
Tax on undistributed surplus earnings			-			227
Under (over) provision of prior year's
income tax			1,297	(		3,902)
Total current tax			45,005			5,363
Deferred income tax:
Origination and reversal of temporary
differences	(		4,063)			691
Total deferred tax	(		4,063)			691
Income tax expense		$	40,942		$	6,054
			Forthe six-monthperiods ended June 30,
			2020			2019
Current income tax:
Income tax in current period		$	59,332		$	41,017
Tax on undistributed surplus earnings			-			227
Under (over) provision of prior year's
income tax			4,404	(		284)
Total current tax			63,736			40,960
Deferred income tax:
Origination and reversal of temporary
differences	(		9,280)	(		9,390)
Total deferred tax	(		9,280)	(		9,390)
Income tax expense		$	54,456		$	31,570

B. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority, and there were no disputes existing between the Company and the Authority as of August 11, 2020.

~45~

(27) EARNINGS PER SHARE (“EPS”)

EARNINGS PER SHARE (“EPS”)
Basic earnings per share Profit attributable to ordinary stockholders of the parent Diluted earnings per share Profit attributable to ordinary stockholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees' stock options Employees' compensation Profit attributable to ordinary stockholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary stockholders of the parent Diluted earnings per share Profit attributable to ordinary stockholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees' stock options Employees' compensation Profit attributable to ordinary stockholders of the parent plus assumed conversion of all dilutive potential ordinary shares	For the three-monthperiod endedJune30,2020
	Weighted average number of shares outstanding EPS Amount after tax (shares in thousands) (in dollars) 162,099 $ 790,739 0.20 $ 162,099 $ 790,739 - - - 670 162,099 $ 791,409 0.20 $ For the three-monthperiod endedJune30,2019	EPS (in dollars)
		0.20 $
		0.20 $
	Weighted average number of shares outstanding Amount after tax (shares in thousands) 57,139 $ 790,739 57,139 $ 790,739 - - - 598 57,139 $ 791,337	EPS (in dollars)
		0.07 $
		0.07 $

~46~

Basic earnings per share Profit attributable to ordinary stockholders of the parent Diluted earnings per share Profit attributable to ordinary stockholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees' stock options Employees' compensation Profit attributable to ordinary stockholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary stockholders of the parent Diluted earnings per share Profit attributable to ordinary stockholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees' stock options Employees' compensation Profit attributable to ordinary stockholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Forthe six-monthperiod ended June 30,	2020
	Weighted average number of shares outstanding Amount aftertax (sharesinthousands) 197,455 $ 790,739 197,455 $ 790,739 - - - 1,126 197,455 $ 791,865 Forthe six-monthperiod ended June 30,	EPS (indollars)
		0.25 $
		0.25 $
		2019
	Weighted average number of shares outstanding Amount aftertax (sharesinthousands) 135,600 $ 790,739 135,600 $ 790,739 - - - 2,258 135,600 $ 792,997	EPS (indollars)
		0.17 $
		0.17 $

~47~

For the three-month and six-month periods ended June 30, 2020 and 2019, some abovementioned stock options issued are anti-dilutive; therefore they were not included in the diluted EPS calculation.

(28) SUPPLEMENTAL CASH FLOW INFORMATION

A. Investing activities with partial cash payments:

		Forthe six-monthperiods ended June 30,	Forthe six-monthperiods ended June 30,	Forthe six-monthperiods ended June 30,	Forthe six-monthperiods ended June 30,
		2020			2019
Purchase of property, plant and equipment	$	17,784		$	9,574
Add: Beginning balance of payable on
equipment (listed as “Other payables”)		48,148			41,417
Less: Ending balance of payable on
equipment (listed as “Other payables”)	(	39,858)	(		34,756)
Cash paid for acquisition of property, plant
and equipment	$	26,074		$	16,235
Investing activities and financing activities with no cash flow effects:
		Forthe six-monthperiods ended June 30,
		2020			2019
(a) Prepayments for equipment reclassified to
property, plant and equipment	$	20,533	$		30,283
(b) Property, plant and equipment reclassified
to intangible assets	$	-	$		6,500
(c) Cash dividends distribution	$	213,500	$		387,462

B. Investing activities and financing activities with no cash flow effects:

(29) CHANGES IN LIABILITIES FROM FINANCING ACTIVITIES

										Guarantee	Guarantee	Liabilities from	Liabilities from
		Short-term				Lease		Long-term		deposits			financing
		borrowings			liabilities			borrowings		received		activities-gross
At January 1, 2020		$	89,766		$	606,034		$	144,234	$	87	$	840,121
Changes in cash flow
from financing activities	(		54,906)	(		4,932)			88,906	(	87)		28,981
Changes in other
non-cash items	(		1,423)	(		32,280)	(		5,217)		-	(	38,920)
At June 30, 2020		$	33,437		$	568,822		$	227,923	$	-	$	830,182

~48~

At January 1, 2019 Effect on retrospective application and restatement Changes in cash flow from financing activities Changes in other non-cash items At June 30, 2019	Guarantee Liabilities from Short-term Lease Long-term deposits financing borrowings liabilities borrowings received activities-gross 233,290 $ - $ 1,178,503 $ 1,708 $ 1,413,501 $ - 900,288 - - 900,288 47,410 6,719) ( 109,104) ( - 68,413) ( 1,319 - 16,172 1 17,492 282,019 $ 893,569 $ 1,085,571 $ 1,709 $ 2,262,868 $

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

The ultimate parent and ultimate controlling party of the Company is Uni-President Enterprises Corp.

(2) Names of related parties and relationship

Names of related parties Relationship with the Company Uni-President Enterprises Corp. Ultimate parent company President Securities Corp. Associate of ultimate parent company

(3) Significant transactions and balances with related parties

Other expenses

Other expenses
Management service fees: `－`Ultimate parent company `－`Associate of ultimate parent company Management service fees: `－`Ultimate parent company `－`Associate of ultimate parent company	Forthe three-monthperiods ended June 30,
	2020 2019 1,168 $ 3,563 $ 364 357 1,532 $ 3,920 $ Forthe six-monthperiods ended June 30,	2019
		3,563 $ 357
		3,920 $
	2020 2,438 $ 879 3,317 $	2019
		4,801 $ 887
		5,688 $

~49~

(4) Key management compensation

Key management compensation
Salaries and other short-term employee benefits Share-based payments Post-employment benefits Termination benefits Salaries and other short-term employee benefits Share-based payments Post-employment benefits Termination benefits	2020 2019 14,989 $ 10,716 $ 39 113 180 179 368 368 15,576 $ 11,376 $ 2020 2019 25,268 $ 21,790 $ 78 225 360 333 735 735 26,441 $ 23,083 $ For the three-monthperiods endedJune30, Forthe six-monthperiods ended June 30,
		21,790 $ 225 333 735
		23,083 $

8. PLEDGED ASSETS

Details of the Group’s assets pledged as collateral are as follows:

Assets June 30, 2020 December 31, 2019 June 30, 2019 Purpose of collateral Time deposits (Note) $ 29,270 $ 29,270 $ 29,270 Customs duty and performance guarantee

Note: Listed as “Other financial assets - non-current”.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) As of June 30, 2020, December 31, 2019 and June 30, 2019, the Group’s unused letters of credit －－
amounted to $ , $7,707 and $ , respectively.
(2) As of June 30, 2020, December 31, 2019 and June 30, 2019, the Group’s remaining balance due for construction in progress and prepayments for equipment was $60,839, $62,997 and $44,394, respectively.
(3) The amounts of endorsements and guarantees for subsidiaries were as follows:

Nature June 30, 2020 December 31, 2019 June 30, 2019 SciAnda (Changshu) Guarantee for Pharmaceuticals, financing amount $ 1,011,968 $ 2,063,467 $ 3,413,542

As of June 30, 2020, December 31, 2019 and June 30, 2019, the actual amount drawn down for endorsements and guarantees to subsidiaries was $227,923, $144,234 and $1,085,571, respectively.

~50~

10. SIGNIFICANT DISASTER LOSS: None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE: None.

12. OTHERS

(1) Capital management

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

(2) Financial instruments

A. Financial instruments

For details of the Group’s financial instruments by category, please refer to Note 6.

B. Risk management policies
(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk.
(b) The Group’s treasury identifies, evaluates and hedges financial risks closely with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as use of derivative financial instruments and investment of excess liquidity.
(c) Information about derivative financial instruments that are used to hedge financial risk are provided in Note 6(2).
C. Significant financial risks and degrees of financial risks
(a) Market risk
I. Foreign exchange rate risk
- (i) The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.
- (ii) To manage their foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the Group are required to hedge their foreign exchange risk exposure using forward foreign exchange contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Note 6(2).

~51~

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

fluctuations is as follows:
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD Financial liabilities Monetary items USD:NTD EUR:NTD CNY:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD EUR:NTD CNY:NTD Financial liabilities Monetary items USD:NTD EUR:NTD CNY:NTD	June 30,2020		Book value (NTD)
	Foreign currency amount (inthousands) Exchangerate 21,825 $ 29.63 1,519 29.63 41 33.27 446 4.194 December31,2019
			646,675 $ 45,008 1,364 1,870 Book value (NTD)
	Foreign currency amount (inthousands) 23,570 $ 32 85 2,227 447 479	Exchangerate 29.98 33.59 4.305 29.98 33.59 4.305
			706,629 $ 1,075 366 66,765 15,015 2,062

~52~

		June 30,2019	June 30,2019	June 30,2019
		Foreign currency				Book value
	amount (inthousands)		Exchangerate			(NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	$	27,600		31.06	$	857,256
CNY:NTD		122		4.523		552
Financial liabilities
Monetary items
USD:NTD		3,346		31.06		103,927
EUR:NTD		57		35.38		2,017
CNY:NTD		555		4.523		2,510

(iv) As of June 30, 2020 and 2019, if the NTD:USD exchange rate appreciates/depreciates by 5% with all other factors remaining constant, the Group’s net profit after tax for the six-month periods ended June 30, 2020 and 2019 would increase/decrease by $24,066 and $30,133, respectively. If the NTD:EUR and NTD:CNY exchange rate appreciates/depreciates by 5% with all other factors remaining constant, the effect on the Group’s net profit after tax for the six-month periods ended June 30, 2020 and 2019 is immaterial.
(v)Total exchange gain including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Group for the three-month and six-month periods ended June 30, 2020 and 2019 amounted to ($9,833), $8,829, ($5,759) and $9,855, respectively.
II. Price risk

The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio and set stop-loss amounts for these instruments. The Group expects no significant market risk.

III. Cash flow and fair value interest rate risk
(i)The Group’s main interest rate risk arises from short-term and long-term borrowings with variable rates and exposes the Group to cash flow interest rate risk. During the six-month periods ended June 30, 2020 and 2019, the Group’s borrowings at variable rate were denominated in USD and CNY.
(ii)The Group’s borrowings are measured at amortised cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

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(iii)If the borrowing interest rates had increased/decreased by 10% with all other variables held constant, post-tax profit for the six-month periods ended June 30, 2020 and 2019 is immaterial.

(b) Credit risk

I. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.
II. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.
III. The Group adopts the following assumption under IFRS 9: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
IV. The Group manages its credit risk, whereby if the contract payments are past due over 180 days based on the terms, there has been impairment.
V. The Group classifies customers’ accounts receivable in accordance with credit rating of customer and credit risk on trade. The Group applies the simplified approach using provision matrix to estimate expected credit loss, and use the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

eceivable are as follows:
			For the six-monthperiods endedJune30,
			2020	2019
At January 1		$	258	$	45
Gain on reversal of expected credit losses	(		157)	(	15)
At June 30		$	101	$	30

(c) Liquidity risk

I. Cash flow forecasting is performed by the Group’s treasury department which monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

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II. The Group has undrawn borrowing facilities amounting to $5,469,004, $5,400,333 and $6,615,259 as of June 30, 2020, December 31, 2019 and June 30, 2019, respectively.
III. The following table comprises the Group’s non-derivative financial liabilities and derivative financial liabilities with gross-amount settlement that are grouped by their maturity. Nonderivative financial liabilities are analysed from the balance sheet date to the contract maturity date, and derivative financial liabilities are analysed from the balance sheet date to the expected maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

undiscounted cash flows.
June 30,2020 Short-term borrowings Notes payable Accounts payable Other payables Long-term borrowings Leased liabilities December31,2019 Short-term borrowings Notes payable Accounts payable Other payables Long-term borrowings Leased liabilities Guarantee deposits received June 30,2019 Short-term borrowings Notes payable Accounts payable Other payables Long-term borrowings Leased liabilities Guarantee deposits received Non-derivative financial liabilities: Non-derivative financial liabilities: Non-derivative financial liabilities:	Less than 1year 34,487 $ 1,803 132,853 554,618 232,190 15,393 Less than 1year 90,312 $ 1,353 101,018 333,376 149,342 16,112 - Less than 1year 290,480 $ 1,810 102,520 671,044 - 23,577 -	Between 1 and2years - $ - - - - 15,237 Between 1 and2years - $ - - - - 16,112 87 Between 1 and2years - $ - - - 1,137,385 23,577 1,709	Between 2 and 5 years - $ - - - - 45,712 Between 2 and 5 years - $ - - - - 48,337 - Between 2 and 5 years - $ - - - - 70,731 -	More than 5 years
				- $ - - - - 662,819 More than 5 years
				- $ - - - - 708,937 - More than 5 years
				- $ - - - - 1,049,181 -

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(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in foreign exchange contracts is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.
B. Financial instruments not measured at fair value
The carrying amounts of cash and cash equivalents, financial assets at amortised cost - current, accounts receivable, other receivables, guarantee deposits paid, other financial assets - noncurrent, short-term borrowings, notes payable, accounts payable, other payables, long-term borrowings (including current portion) and guarantee deposits received are approximate to their fair values.
C. The related information on financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

June 30,2020		Level 1		Level 2		Level3		Total
Assets:
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Derivative instruments	$	-	$	405	$	-	$	405
Financial assets at fair value through
other comprehensive income
Equity securities	$	419,267	$	-	$	153,475	$	572,742
December31,2019		Level 1		Level 2		Level3		Total
Assets:
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Derivative instruments	$	-	$	2,920	$	-	$	2,920
Financial assets at fair value through
other comprehensive income
Equity securities	$	271,752	$	-	$	143,458	$	415,210

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==> picture [446 x 138] intentionally omitted <==

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

June 30, 2019 Level 1 Level 2 Level 3 Total
Assets:
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Derivative instruments $ - $ 1,602 $ - $ 1,602
Financial assets at fair value through
other comprehensive income
Equity securities $ 355,230 $ - $ 234,124 $ 589,354
----- End of picture text -----

D. The methods and assumptions the Group used to measure fair value are as follows:
(a) The instruments the Group used market quoted prices as its fair values (that is, Level 1) is listed below by characteristics:

Market quoted price

Listed shares Closing price

(b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.
(c) When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
(d) Forward foreign exchange contracts are usually valued based on the current forward exchange rate.
E. For the six-month periods ended June 30, 2020 and 2019, there was no transfer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the six-month periods ended June 30, 2020 and 2019:

and 2019:
At January 1 Gain recognised in other comprehensive income At June 30	Forthe six-monthperiods ended June 30,
	2020 Equityinstrument 143,458 $ 10,017 153,475 $	2019
		Equityinstrument
		200,046 $ 34,078
		234,124 $

G. The Group’s valuation procedures for fair value measurements is categorised within Level 3,

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which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently assess to make any other necessary adjustments to the fair value.

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

Fair value at June 30,2020	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
153,475 $ Fair value at December31,2019	Net asset value Valuation technique	Not applicable Significant unobservable input	－ Range (weighted average)	The higher the net asset value, the higher the fair value Relationship of inputs to fairvalue
143,458 $ Fair value at June 30,2019	Net asset value Valuation technique	Not applicable Significant unobservable input	－ Range (weighted average)	The higher the net asset value, the higher the fair value Relationship of inputs to fairvalue
234,124 $	Net asset value	Not applicable	－	The higher the net asset value, the higher the fair value

I. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. If the net assets value increased or decreased by 1% for Level 3, however, the effect on other comprehensive income for the six-month periods ended June 30, 2020 and 2019 is immaterial.

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13. SUPPLEMENTARY DISCLOSURES

According to the current regulatory requirements, the Group is only required to disclose the information for the six-month period ended June 30, 2020.

(1) Significant transactions information

A. Loans to others: Please refer to table 1.
B. Provision of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to table 4.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(2).
J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 8.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 2 and table 5.

(4) Major shareholders information

Major shareholders information: Please refer to table 9.

14. SEGMENT INFORMATION

(1) General information

The management of the Group has identified the operating segments based on how the Company’s Chief Operating Decision-Maker regularly reviews information in order to make decisions. The Chief Operating Decision-Maker manages the Group’s business from geographical and functional perspectives. Geographically, the Group focuses on its sales business in the U.S., Europe and Asia. In addition, the Group categorized its business units into manufacture, sales, research and development and investment management functions, and combines its segments that meet the disclosure threshold as “Others”.

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(2) Segment information

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

segments is as follows:
Segment revenue Revenue from internal customers Revenue from external customers Interest income Depreciation and amortisation Interest expense Income (loss) from segment before income tax Segment assets Other acquisition of non-current assets Segment liabilities Segment revenue Revenue from internal customers Revenue from external customers Interest income Depreciation and amortisation Interest expense Income (loss) from segment before income tax Segment assets Other acquisition of non-current assets Segment liabilities	ScinoPharm SciAnda (Changshu) Taiwan,Ltd. Pharmaceuticals,Ltd. Others 1,443,795 $ 186,848 $ 9,883 $ 17,921 167,331 4,671 1,425,874 19,517 5,212 10,955 314 3,577 144,366 53,663 78 3,625 4,970 - 303,733 36,422) ( 4,711 10,118,654 1,684,965 432,870 61,012 11,567 154 1,400,500 372,520 1,013 Forthe six-monthperiod ended June 30, Forthe six-monthperiod ended June 30,	Total 1,640,526 $ 189,923 1,450,603 14,846 198,107 8,595 272,022 12,236,489 72,733 1,774,033 2020 2019
	ScinoPharm SciAnda (Changshu) Taiwan,Ltd. Pharmaceuticals,Ltd. Others 1,353,966 $ 220,233 $ 13,300 $ 4,944 184,928 8,009 1,349,022 35,305 5,291 15,190 182 3,977 149,296 57,903 20 5,092 32,533 - 271,793 102,658) ( 3,646 11,587,672 1,881,036 453,327 33,443 9,526 307 1,817,049 1,614,558 2,252	Total
		1,587,499 $ 197,881 1,389,618 19,349 207,219 37,625 172,781 13,922,035 43,276 3,433,859

(3) Reconciliation for segment

A. The sales between segments were at arms’ length. The external revenues reported to the Chief Operating Decision-Maker adopt the same measurement basis for revenues in the statement of comprehensive income. The reconciliations of pre-tax income between reportable segments and continuing operations were as follows :

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			Forthe six-monthperiods	Forthe six-monthperiods	Forthe six-monthperiods	ended June 30,
			2020			2019
Reportable segments profit before
income tax		$	267,311		$	169,135
Other segments income before
income tax			4,711			3,646
Internal segments transaction elimination	(		20,111)	(		5,611)
Profit before income tax		$	251,911		$	167,170

B. The amount of total assets provided to the Chief Operating Decision-Maker adopts the same measurement for assets in the Group's financial statements. A reconciliation of assets of reportable segments and total assets is as follows:

			June 30, 2020			June 30,2019
Assets of reportable segments		$	11,803,619		$	13,468,708
Assets of other operating segments			432,870			453,327
Internal segment transaction elimination	(		128,110)	(		321,272)
Total assets		$	12,108,379		$	13,600,763

C. The amount of total liabilities provided to the Chief Operating Decision-Maker adopts the same measurement for liabilities in the Group's financial statements. A reconciliation of liabilities of reportable segments and total liabilities is as follows:

			June30,2020			June30,2019
Liabilities of reportable segments		$	1,773,020		$	3,431,607
Liabilities of other operating segments			1,013			2,252
Internal segment transaction elimination	(		47,270)	(		254,152)
Total liabilities		$	1,726,763		$	3,179,707

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Table 1

Expressed in thousands of NTD

ScinoPharm Taiwan, Ltd. and Subsidiaries

Loans to others

For the six-month period ended June 30, 2020

Number	Name	Name of counterparty	Account	Related parties	Maximum balance	Ending balance	Actual amount drawndown	Interest rate	Nature of financial activity (Note1)	Total transaction amount	Reason for financing	Allowance for doubtful accounts	Assets pledged	Assets pledged	Loan limit per entity (Note2)	Maximum amount available for loan (Note2)	Footnote
													Item	Value
1	SciAnda (Kunshan) Biochemical Technology, Ltd.	SciAnda (Changshu) Pharmaceuticals, Ltd.	Other receivables	Y	87,369 $	- $	- $	3.0%	2	- $	Additional operating capital and loan repayment	- $	`－`	- $	409,256 $	409,256 $	`－`

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

1. Trading partner.

2. Short-term financing.

Note 2: (1) For trading partner: the maximum amount for individual trading partner shall not exceed the higher of purchase or sales amount of the most recent year or the current year, the maximum amount for total loan is 20% of its net worth. (2) For short-term financing: the maximum amount for individual is 20% of its net worth, the maximum amount for total loan is 40% of its net worth. If the Company loans to foreign subsidiaries, which the Company holds 100% ownership directly or indirectly, the maximum amount for the subsidiary is 100% of the Company's net worth.

Note 3: The numbers in the table that involves foreign currencies are expressed in New Taiwan Dollars according to the exchange rate posted on the date of the consolidated financial statements (CNY:NTD 1:4.194).

Table 1, Page 1

Expressed in thousands of NTD

ScinoPharm Taiwan, Ltd. and Subsidiaries

Provision of endorsements and guarantees to others

For the six-month period ended June 30, 2020

Table 2

Number	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party （Note 2）	Maximum outstanding endorsement/ guarantee as of June 30,2020	Outstanding endorsement/ guarantee amount at June 30,2020	Actual amount drawn down	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided （Note 2）	Provision of endorsements/ guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser/ guarantor （Note 1）
0	ScinoPharm Taiwan, Ltd.	SciAnda (Changshu) Pharmaceuticals, Ltd.	1	10,381,616 $	2,089,077 $	1,011,968 $	227,923 $	- $	9.75%	10,381,616 $	Y	N	Y	`－`

Note 1: The following code represents the relationship with the Company:

A company in which the Company directly and indirectly holds 50% of the voting shares.
Note 2: 1. The limit of total amount of endorsement is 50% of the Company's net worth, for 100% directly or indirectly owned subsidiaries, the maximum amount is 100% of its net worth. The limit of total amount of the Group's endorsement and guarantee is 100% of the Group's net worth.
For any endorsement or guarantee provided by the Company due to business dealings, the amount of endorsement or guarantees shall be limited to the business dealing amount of the most recent year or the current year. The business dealing amount is product purchase or sale amount between the entities, whichever is higher.

Table 2, Page 1

ScinoPharm Taiwan, Ltd. and Subsidiaries

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

June 30, 2020

Table 3 Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As ofJune30,2020	As ofJune30,2020	Fairvalue Footnote Expressed in thousands of NTD	Fairvalue Footnote Expressed in thousands of NTD
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
ScinoPharm Taiwan, Ltd.	Stocks: Tanvex Biologics, Inc. Foresee Pharmaceuticals Co., Ltd. SYNGEN, INC.	The Company is a director of Tanvex Biologics, Inc. `－` `－`	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - non-current	28,800,000 4,331,269 245,000	153,475 $ 419,267 -	16.84% 4.31% 7.40%	153,475 $ 419,267 -	`－` `－` `－`

Table 3, Page 1

ScinoPharm Taiwan, Ltd. and Subsidiaries

' - Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Companys paid in capital For the six-month period ended June 30, 2020

Table 4

Expressed in thousands of NTD

Investor	Type of securities	General ledger account	Name of the counterparty	Relationship	Beginningbalance	Beginningbalance	Addition	Addition		Disposal	Disposal		Other increase	(decrease)	Endingbalance	Endingbalance
					Number of shares (in thousands)	Amount	Number of shares (in thousands)	Amount	Number of shares (in thousands)	Saleprice	Book value	Gain on disposal	Number of shares (in thousands)	Amount	Number of shares (in thousands)	Amount
SciAnda (Kunshan) Biochemical Technology, Ltd.	Fubon Bank (China) Co., Ltd. Structured Products Structured Products:	Financial assets at amortised cost - current	`－`	`－`	-	172,220 $	-	172,488 $	-	347,368 $	(344,977) $	2,391 $	-	269 $	- $	-

Table 4, Page 1

Table 5

Expressed in thousands of NTD

ScinoPharm Taiwan, Ltd. and Subsidiaries

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid in capital or more For the six-month period ended June 30, 2020

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases(sales)	Amount	Percentage of total purchases(sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
ScinoPharmTaiwan, Ltd. SciAnda (Changshu) Pharmaceuticals, Ltd.	SciAnda (Changshu) Pharmaceuticals, Ltd. ScinoPharm Taiwan, Ltd.	Subsidary The Company	Purchases (Sales)	166,725 $ 166,725) (	34% (89%)	Closes its accounts 90 days from the end of each month Closes its accounts 90 days from the end of each month	$ - -	`－` `－`	39,869) ($ 39,869	(31%) 71%	`－` `－`

Table 5, Page 1

Table 6

Expressed in thousands of NTD

ScinoPharm Taiwan, Ltd. and Subsidiaries

- Significant inter company transactions during the reporting period

For the six-month period ended June 30, 2020

Number (Note 2)	Companyname	Counterparty	Relationship (Note3)		Transactions	Transactions
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 4)
0 0 0	ScinoPharm Taiwan, Ltd. ScinoPharm Taiwan, Ltd. ScinoPharm Taiwan, Ltd.	SciAnda (Changshu) Pharmaceuticals, Ltd. SciAnda (Changshu) Pharmaceuticals, Ltd. SciAnda (Changshu) Pharmaceuticals, Ltd.	1 1 1	Purchases Accounts payable Endorsements and guarantees	166,725 $ 39,869 1,011,968	Closes its accounts 90 days from the end of each month `－` `－`	11% `－` 8%

Note 1: Significant inter-company transactions during the reporting periods are not disclosed since these were corresponding transactions. Only transactions over NT$10 million are material.

Note 2: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is ‘0’.
(2) The subsidiaries are numbered in order starting from ‘1’.
Note 3: Relationship between transaction company and counterparty is classified into the following three categories:
(1) Parent company to subsidiary.
(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

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

Note 5: The numbers in the table that involves foreign currencies are expressed in New Taiwan Dollars according to the exchange rate posted on the date of the consolidated financial statements (CNY:NTD 1:4.194 ； USD:NTD 1:29.63).

Table 6, Page 1

ScinoPharm Taiwan, Ltd. and Subsidiaries

Table 7

Expressed in thousands of NTD

Names, locations and other information of investee companies ( not including investees in Mainland China) For the six-month period ended June 30, 2020

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at June 30,2020	Shares held as at June 30,2020	Shares held as at June 30,2020	Net profit (loss) of the investee for the six-month period ended June 30,2020	Investment income (loss) recognised by the Company for the six-month period ended June 30,2020	Footnote
				Balance as at June 30,2020	Balance as at December 31,2019	Number of shares	Ownership (%)	Book value
ScinoPharm Taiwan, Ltd. ScinoPharm Taiwan, Ltd.	SPT International, Ltd. ScinoPharm Singapore Pte Ltd.	Tortola, British Virgin Islands Singapore	Professional investment Professional investment	3,511,885 $ -	3,511,885 $ -	118,524,644 2	100.00 100.00	1,663,344 $ 117	32,909) ($ 5	53,021) ($ 5	Subsidiary Subsidiary

Note : Initial investment amount in the table that involves foreign currencies are expressed in New Taiwan Dollars according to exchange rate posted on the date of consolidated financial statements (USD: NTD 1:29.63).

Table 7, Page 1

ScinoPharm Taiwan, Ltd. and Subsidiaries

Expressed in thousands of NTD

Information on investments in Mainland China `－` Basic information

For the six-month period ended June 30, 2020

Table 8

Investee in Mainland China	Main business activities	Paid-in capital	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the six-month period ended June 30,2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the six-month period ended June 30,2020	Accumulated amount of remittance from Taiwan to Mainland China as of June 30,2020	Net income of investee for the six-month period ended June 30,2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the six-month period ended June 30, 2020 `（`Note 2`）`	Book value of investments in Mainland China as of June 30,2020	Accumulated amount of investment income remitted back to Taiwan as of June 30,2020	Footnote
				Remitted to Mainland China	Remitted back to Taiwan
SciAnda (Kunshan) Biochemical Technology, Ltd. SciAnda (Changshu) Pharmaceuticals, Ltd. SciAnda Shanghai Biochemical Technology, Ltd. Companyname	Research, development, and manufacture of API and new drugs, etc. Research, development, and manufacture of API and new drugs, sale produced products, etc. Import, export and sales of API and intermediates, etc. Accumulated amount of remittance from Taiwan to Mainland China as of June 30,2020	118,520 $ `（`Note 1`）` 3,333,375 `（`Note 1`）` 35,556 `（`Note 1`）` Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	110,355 $ - $ 3,333,375 - 35,556 - Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA(Note 3)		- $ - -	110,355 $ 3,333,375 35,556	3,392 $ 36,422) ( 189	100% 100% 100%	3,392 $ 36,422) ( 189	412,593 $ 1,312,445 15,727	- $ - -	Subsidary Subsidary Subsidary
ScinoPharm Taiwan, Ltd.	$ 3,515,555	3,515,555 $	6,228,970 $

Note 1: Indirect investment in Mainland China through a company set up in a third region, SPT International, Ltd.

Note 2: The investment income (loss) recognised by the Company for the six-month period ended June 30, 2020 was based on unreviewed financial statements of investee companies as of and for six-month period ended June 30, 2020. Note 3: The ceiling amount is 60% of the higher of net worth or consolidated net worth.

Note 4: The numbers in the table that involves foreign currencies are expressed in New Taiwan Dollars according to the exchange rate posted on the date of the consolidated financial statements (USD:NTD 1:29.63).

Table 8, Page 1

ScinoPharm Taiwan, Ltd. and Subsidiaries Major shareholders information

June 30, 2020

	June 30,	2020
Name of the keyshareholder Table 9	Number of	shares	Ownership (%)	Footnote Expressed in shares
	Common stock	Preferred stock
Uni-President Enterprises Cprp. National Development Fund, Executive Yuan	`299,968,639` `109,539,014`	`－` `－`	`37.94%` `13.85%`	`－` `－`

Note: The major shareholders information was derived from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation.

The share capital which was recorded in the financial statements is different from the actual number of shares issued in dematerialised form because of the difference in the calculation basis.

Table 9 Page 1

AI assistant

SPT — Interim / Quarterly Report 2020

51922_rns_2020-12-30_ed091d32-ab30-449b-aa64-b54e26392a0c.pdf

INDEPENDENT AUDITORS' REVIEW REPORT TRANSLATED FROM CHINESE

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

1. HISTORY AND ORGANISATION

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

None.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

B. Subsidiaries included in the consolidated financial statements:

(6) Cash equivalents

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

(10) Accounts and notes receivable

(11) Impairment of financial assets

(12) Derecognition of financial assets

(13) Inventories

(14) Property, plant and equipment

(15) Intangible assets

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

(17) Impairment of non-financial assets

(19) Financial liabilities at fair value through profit or loss

(21) Derecognition of financial liabilities

(22) Offsetting financial instruments

(23) Employee benefits

- (24) Employee share based payment

(25) Income tax

(26) Share capital

B. Sales of services

(29) Operating segments

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

(1) Critical judgments in applying the Group’s accounting policies

(2) Critical accounting estimates and assumptions

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) CASH AND CASH EQUIVALENTS

(2) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

(3) FINANCIAL ASSETS AT AMORTISED COST - CURRENT

(4) ACCOUNTS RECEIVABLE, NET

(5) INVENTORIES

December 31, 2019

(6) FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME -

NON-CURRENT

(7) PROPERTY, PLANT AND EQUIPMENT

D. The information on income and expense accounts relating to lease contracts is as follows:

(9) IMPAIRMENT OF NON-FINANCIAL ASSETS

(10) SHORT-TERM BORROWINGS

(11) OTHER PAYABLES

(12) LONG-TERM BORROWINGS

(13) PENSIONS

(14) SHARE CAPITAL

(15) CAPITAL RESERVES

(16) SHARE-BASED PAYMENT

B. Details of the share-based payment arrangements are as follows:

(17) RETAINED EARNINGS

(18) OTHER EQUITY ITEMS

(19) OPERATING REVENUE

(20) INTEREST INCOME

For the three-month periods ended June 30,

(21) OTHER INCOME

(22) OTHER GAINS AND LOSSES

(23) FINANCE COSTS

(24) EXPENSES BY NATURE

(26) INCOME TAX

A. Income tax expense

SPT Interim / Quarterly Report 2020

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

Information on investments in Mainland China `－` Basic information