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WEI CHUAN AGM Information 2021

Sep 9, 2021

51742_rns_2021-09-09_230b9a3c-6e34-4e8c-ad36-8d95c45ebc6e.pdf

AGM Information

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WEI CHUAN FOODS Corp.

2021 Annual Shareholders ’ Meeting

Meeting Agenda

June 23, 2021

1

Table of Contents

Meeting Agenda

Report Items

  • I. 2020 Business Report

  • II. 2020 Audit Committee's Review Report

  • III. Report on Communication among the Audit Committee, Independent Directors and the Internal Audit Supervisor

  • IV. 2020 Report on Endorsement and Guarantee

  • V. 2020 Report on Employees’ and Directors’ Remuneration

  • VI. 2020 Report on the Distribution of Earnings as Cash Dividends

Proposals

  • I. Adoption of the Company's 2020 Business Report and Financial Statements and subsidiaries' consolidated financial statements.

  • II. Adoption of the proposal for distribution of 2020 earnings of the Company.

Discussions

  • I. The amendment to some provisions of the "Rules for Procedure for Shareholders' Meetings" is submitted for decision.

  • II. The amendment to some provisions of the "Measures for Election of Directors" is submitted for decision.

Appendices

  • I. Articles of Association

  • II. Rules of Procedure for Shareholders' Meetings

  • III. Measures for Election of Directors

  • IV. Impact of the Free Allotment of Shares on the Company's Business Performance, Earnings per Share and Return on Investment of Shareholders

  • V. Shareholding Status of All Directors

2

Meeting Agenda

Meeting time: Jun. 23 2021 (Wednesday) 9:00 a.m.

Meeting venue: Lecture Hall, Floor 1, Importers and Exporters Association of Taipei (No. 350 Songjiang Road, Taipei)

  • Chapter 1. Calling the meeting to order

  • Chapter 2. Chairman's speech

  • Chapter 3. Report items

  • I. 2020 Business Report

  • II. 2020 Audit Committee's Review Report

  • III. Report on Communication among the Audit Committee, Independent Directors and the Internal Audit Supervisor

  • IV. 2020 Report on Endorsement and Guarantee

  • V. 2020 Report on Employees’ and Directors’ Remuneration

  • VI. 2020 Report on the Distribution of Earnings as Cash Dividends

  • Chapter 4. Proposals

  • I. Adoption of the Company's 2020 Business Report and Financial Statements and subsidiaries' consolidated financial statements.

  • II. Adoption of the proposal for distribution of 2020 earnings of the Company.

  • Chapter 5. Discussions

  • I. The amendment to some provisions of the "Rules for Procedure for Shareholders' Meetings" is submitted for decision.

  • II. II. The amendment to some provisions of the "Measures for Election of Directors" is submitted for decision.

  • Chapter 6. Motions

  • Chapter 7. Adjournment

3

Report Items

4

Report item I. 2020 Business Report

2020 Business Report of Wei Chuan Foods Corporation

Looking back to the overall economic environment in 2020, the global economy declined by 3.5% under the influence of the COVID-19 pandemic. However, driven by effective control of the pandemic, and steady growth of the government and private investments, the domestic economy increased by 3.11%. Looking ahead to the global economy in 2021, with the wide introduction of vaccines for COVID-19 and policy support of large economies, IMF estimates that the global economy is expected to recover and grow by 5.5%. According to data from the Chief Statistics Office of the Executive Yuan, the economy of Taiwan will see growth at a rate of 4.64%.

In the context of the food industry in Taiwan, the output value of Taiwan’s food industry in 2020 was about NT$ 635.5 billion, with a growth of 0.83%. The overall revenue of the listed/ OTC/ public food companies was NT$ 772.5 billion, with a growth of 0.2%. Facing with the increase in consumption, alternative/ diversified consumption patterns and demands, and intensifying competition of markets/ channels, we must continue making breakthroughs, transform toward high-end development of higher quality and more value-added, and optimize operation systems, process, marketing and management mode, so as to respond to middle-term and long-term competitive development of the industry and market.

In 2020, Wei Chuan achieved consolidated revenue of NT$ 18,650,871 thousand, declined by 7.8% on a year-on-year basis; the consolidated operating profits were NT$ 595,053 thousand, increased by NT$ 50,447 compared with that in 2019; net profits attributable to the parent company were NT$ 535,196 thousand; due to disposal of assets in 2019, proceeds from the disposal of assets were reduced by NT$814,789 thousand compared with that in 2019; the earning per share was NT$ 1.06, declined by NT$1.61 on a year-on-year basis. With respect to the financial performance of the parent company, the operating revenue was NT$ 7,802,514 thousand, increased by 2.1% compared with that in 2019; operating profits were NT$122,964 thousand, with earnings of NT$ 383,457 after the turn from loss in 2019. The Company achieved significant results in the operation of food.

Taiwan Business:

In 2020, the Company turned losses into gains, and achieved substantial improvement for operating profits or losses thanks to the strategies of “boosting sales”, “adjusting

5

the portfolio to improve gross profits”, “rationalizing expenses”, “rebuilding brand assets” and “deepening business promotion strength” under the operation policies of “Brand/Category Focus” and “Brand Asset Rebuilding”. With respect to operation management, in addition to continuous improvement for food safety and core competitiveness, the Company also masters the demands of the consumers and creates valued services for customers so as to promote better operation mode, and improves efficiency of operation management system and process to establish a more health and virtuous cycle development direction for the Company.

Mainland China Business:

In 2019, under the influence of the COVID-19 pandemic, the performance was not as good as expected. However, thanks to the established planning policies and strategies, the Company still successfully sized a new market share in Mainland China in face of adversity, and alleviated the impact of the external adverse environment. In the future, the Company will continue deepening the regional development of the chilled foods business and promote the brand/category/channel strategies. With respect to regional operation, the Company continues to keep moving in Eastern China, and seek rapid development in Northern China and Southern China. The Company will make further breakthroughs in brand/ category operation and new channel operation development, to make remarkable achievements.

Looking forward to the future, with the long-term support and care of our shareholders, consumers and the general public, we are moving towards the 68th Anniversary. Under the strategies of “keeping a foothold in Taiwan and developing Mainland markets” and the business orientation of “food manufacturing, brand marketing and channel management”, the operation team will uphold the Company’s food operation philosophy, fulfill the Company’s social responsibilities. The Company is committed to strengthening the integration of cross-Strait resources, continues to deepen brand management, intensifies the root of the key core technologies of the products, optimizes the systematic process benefit and efficiency of the supply chain and operation management system, and promotes rapid development of the cross-strait markets with more positive attitudes and efforts, so as to lay a solid foundation for the Company’s sustainable management and core market competitiveness. The Company will do its best to make operation achievements, and create remarkable results, so as to establish the brand reputation in the cross-strait market.

Chairman: General Manager: Accounting Manager: Chen, Hung-Yu Chang, Chiao-Hua Huang, Chih-Yu

6

Report item II. 2020 Audit Committee's Review Report

Wei Chuan Foods Corp.

Audit Committee's Review Report

The Board of Directors has prepared the Company’s 2020 Business Report, Financial Statements and proposal for earnings distribution. The CPA firm of PricewaterhouseCoopers was retained to audit Wei Chuan’s Financial Statements and has issued an audit report relating to the Financial Statement. The Business Report, Financial Statements and proposal for earnings distribution have been reviewed and determined to be correct and accurate by the Audit Committee members of Wei Chuan Foods Corp. According to relevant requirements of the Securities and Exchange Act and the Company Law, we hereby submit this report.

2021 Annual Shareholders’ Meeting of Wei Chuan Foods Corp.

Chairman of the Audit Committee : Li, Zhi-Ping March 29,2021

7

Report item III. Report on Communication among the Audit Committee, Independent Directors and the Internal Audit Supervisor

The Audit Committee and Independent Directors have communicated well with the Internal Audit Supervisor in recent years. The Internal Audit Supervisor has attended meetings of the Audit Committee and made internal audit reports, the audit unit has submitted the internal audit reports to Independent Directors and the Internal Audit Supervisor have discussed the Company's internal control and internal audit operating condition by phone, by email or by means of meetings as required.

Key points of communication at meetings of the Audit Committee in recent years are as follows:

lows:

Key points of communication with		 Key points of communication with the
Meeting date

CPAs		 Audit Supervisor
Audit
Reviewing the Internal Auditors’report.
Committee, (N/A)

(from October to December, 2019)
Jan. 17, 2020
CPAs have explained the
Audit
condition of review on
Committee, consolidated and individual Reviewing the Internal Auditors’report.
Mar. 30, financial reports of the year
(from January to February, 2020)
2020
2019, and communicated with
independent directors.
CPAs have explained the condition
Audit

of review on consolidated financial
Committee, Reviewing the Internal Auditors’report.
reports of the first quarter of 2020,
May 11,
(from March to April, 2020)

and communicated with

2020
independent directors.
CPAs have explained the condition
Audit

of review on consolidated financial
Committee, Reviewing the Internal Auditors’report (from
reports of the second quarter of
Aug. 10,
May to June, 2020).

2020, and communicated with

2020
independent directors.
Audit
Committee,
(N/A) (N/A)
Sep. 30,

2020
CPAs have explained the condition

of review on consolidated financial
Audit Reviewing the Internal Auditors’report (from
reports of the third quarter of 2020
Committee,
July to September, 2020).


and the plan for review on financial
Nov. 9, 2020


reports of 2021, and communicated

with independent directors.

8

Audit
Reviewing the Internal Auditors’report (from
Committee, (N/A)

October to December, 2020).
Feb. 2, 2021
CPAs have explained the

consolidated and individual
auditors' reports of 2020 and
Audit

communicated with independent
Committee, Reviewing the Internal Auditors’report (from

directors.
Mar. 29,
January to February, 2021).
Discussion of findings in and
2021

suggestions for the review of financial

statements of 2020 and response of

themanagement (private sessions).

Note: All the above matters have been examined or approved by the Audit Committee and Independent Directors have no objections.

9

Report item IV. 2020 Report on Endorsement and Guarantee

  • I. As the total amount of endorsement and guarantee is limited to the net value of the Company, the total amount of endorsement and guarantee of the Company as of the end of December, 2020 is NT$1,507,700,000, far below the net value of the Company, NT$6,847,705,000, meeting provisions of the Company's operational procedures for making endorsement and guarantee.

  • II. The top limit for the amount of endorsement and guarantee of a single enterprise is US$30,000,000 of Concourse Trading Co., Ltd., converted into NT$854,400,000, which does not exceeding one third of the total amount of endorsement and guarantee and meets provisions of the operational procedures for making endorsement and guarantee.

  • III. The amount of endorsement and guarantee of each affiliated enterprise is as shown in the attached table.

Detailed statement of endorsement and guarantee of affiliated enterprises as of the end of December, 2020

Unit: NT$ thousand, US$ thousand or RMB thousand

Company Name Limit for
Endorsement/Guarantee		 Actual Amount Drawn
Concourse TradingCo.,Ltd. US$30,000 US$2,466
Subtotal
Equivalent of NT$		 US$30,000
854,400		 US$2,466
70,228
Hangzhou Wei-chuan
BiotechnologyFoods Co.,Ltd.		 RMB 50,000 RMB 31,000
Subtotal
Equivalent of NT$		 RMB 50,000
218,300		 RMB 31,000
135,346
Shengshun Farm Co.,Ltd. NT$435,000 NT$435,000
Total 1,507,700 640,574

10

Report item V. 2020 Report on Employees’ and Directors’ Remuneration

  • I. Draw and distribute the remuneration for employees and directors according to the provisions of Article 27 of the Articles of Association.

  • II. The amount of remuneration for employees of the Company in 2020 is NT$6,510,275, that for directors is NT$6,300,000, and the remuneration is distributed in cash.

11

Report item VI. 2020 Report on the Distribution of Earnings as Cash Dividends

  • I. According to the provisions of Article 27-1 of the Articles of Association, the Board of Directors shall decide on the distribution of all or part of dividends payable in the form of cash and report to the board of shareholders.

  • II. The value of cash dividends payable of the Company in 2020 is NT$0.53 per share and the total amount is NT$268,213,344.

  • III. The cash dividends to be distributed are rounded off to the nearest NT dollar, with the decimal places removed. The part to be distributed to each shareholder, which is less than NT$1 will be transferred to the non-operating income.

  • IV. This proposal has been approved by the Board of Directors and the Chairman of the Board of Directors is authorized to set an ex-dividend base date separately.

12

Proposals

13

Proposal I.

Proposed by the Board of Directors

  • Proposal: Adoption of the Company's 2020 Business Report and Financial Statements and subsidiaries' consolidated financial statements.

  • Explanation: Final accounting of the Company in 2020 has been completed, and the Company's Business Report and Financial Statements and subsidiaries' consolidated financial statements have been prepared and audited by WuYu Lung and Huang-Shih Chun, CPAs of PricewaterhouseCoopers, Taiwan, and an unqualified audit report has been issued and placed on record. (See Pages 5 to 6 of this handbook for the Business Report, Pages 15 to 40 of this handbook for the Independent Auditors' Report and Financial Statements.)

Resolution:

14

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 20000255

To the Board of Directors and Shareholders of Wei Chuan Foods Corporation

Opinion

We have audited the accompanying consolidated balance sheets of Wei Chuan Foods Corporation and subsidiaries (the “Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for opinion

We conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China; and in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, “Rule No. Financial-Supervisory-Securities-Auditing-1090360805 issued by the Financial Supervisory Commission on February 25, 2020” and generally accepted auditing standards in the Republic of China for our audit of the consolidated financial statements as of and for the year ended December 31, 2019. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in

15

accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

Key audit matters for the Group’s 2020 consolidated financial statements are stated as follows:

Estimation of sales incentives

Description

Refer to Note 4(31) for accounting policy on revenue, Note 5(2) for the uncertainty of accounting judgments, assumptions and estimates in relation to revenue recognition and Note 6(23) for details of revenue.

The Group enters into different sales incentive agreements with different sales customers due to the nature of the industry. The Group pays incentives to sales customers if they meet the sales targets at various reward and promotion activities that the Group launches over a number of periods for cooperating with customers and distributors to promote products. International Financial Reporting Standards require that if sales incentives are substantively linked to operating revenue, the Group shall combine the two transactions and record the sales incentives as a deduction item to operating revenue.

The Group calculates and estimates the sales incentive amounts based on the actual sales amounts and the contract terms negotiated with sales customers. Given that the aforementioned process to recognise sales incentives usually involves management judgment and the calculations are relatively complicated, we consider the estimation of sales incentives a key audit matter.

16

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  1. Obtained an understanding of the Group’s internal control designed for sales incentives and tested the effectiveness of the control, such as ascertained whether the calculations and estimates of each main sales incentive were reviewed by an authorised supervisor.

  2. Obtained the reports derived from the Group’s system and the relevant proofs of delivery, and then sampled and verified the actual sales volumes and unit prices.

  3. Obtained the sales agreements of the Group’s main sales customers. Used the actual sales amounts to recalculate the incentives based on the terms specified in the agreement.

  4. Performed tests of subsequent deductions and write-offs for the balances of incentives payable that are material on the balance sheet date.

Evaluation of inventories

Description

Refer to Note 4(12) for accounting policy on inventory evaluation, Note 5(2) for critical judgement in relation to inventory evaluation, and Note 6(4) for details of inventories.

The Group is primarily engaged in the manufacture and sale of dairy products, beverages and soy sauce. Due to the high competitiveness of similar products in the food market, the growing consumer awareness of food safety in recent years and the short shelf-life of most dairy products, there is a higher risk of inventories losing value or becoming obsolete if the products are not selling as expected.

The Group applies judgments and estimates in determining the net realisable value of inventories on balance sheet date and then writes down the inventory costs to the net realisable value. Given that the inventories are the main operating assets for the Group, the evaluation of inventories involves management judgments and evaluation amounts are material to the financial statements, we consider the evaluation of inventories a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  1. Obtained the policies for inventory valuation and determined whether the policies

17

applied in provision of allowance for inventory valuation losses in the different periods are in agreement.

  1. Observed physical inventory count at the end of period to identify whether there are obsolete, damaged or unsalable inventories.

  2. Obtained aging statements of each kind of inventory and tested the changes in ages of inventory. Selected samples with inventory number and verified the date of manufacture, checked the accuracy of classification range of inventory ages.

  3. Obtained net realizable value statement of each kind of inventory and checked the applied calculation logic. Tested relevant parameters, including: sales or purchases data, reasonableness of marketing to sales ratio calculation, and relevant estimate document. Checked and compared allowance for valuation losses that the Group should provision at the lower of cost and net realizable value.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Wei Chuan Food Corporation as at and for the years ended December 31, 2020 and 2019.

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

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

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

18

alternative but to do so.

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

Auditors’ responsibilities for the audit of the consolidated financial statements

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

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

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

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

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

19

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

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

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

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

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

20

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

Wu, Yu-Lung Huang, Shih-Chun

For and on behalf of PricewaterhouseCoopers, Taiwan March 29, 2021

----------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

21

WEI CHUAN FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets Notes
6(1) and 8
6(3)
6(3)
6(3) and 7(2)
7(2)
6(4)
7(2)
6(2)
6(5)
6(6) and 8
6(7)
6(8) and 8
6(9)
6(10)
6(30)
6(11) and 8		 December31, %
11
-
13
1
-
-
7
1
-
33
-
-
52
3
1
1
1
7
2
67
100
2020		 December31, 2019
Amount
1,905,431
$ 21,996
2,277,509
213,946
82,476
4,241
1,204,996
158,563
6,198
5,875,356
33,452
17,686
9,426,888
629,264
131,801
174,911
121,744
1,348,994
271,425
12,156,165
18,031,521
$		 Amount
2,221,758
$ 26,308
2,363,467
274,378
101,985
5,351
1,266,774
267,267
9,226
6,536,514
33,443
18,306
9,780,396
662,640
133,733
149,594
104,519
1,407,368
270,430
12,560,429
19,096,943
$		 %
Current assets
1100
Cash and cash equivalents
1150
Notes receivable, net
1170
Accounts receivable, net
1180
Accounts receivable due from related parties, net
1200
Other receivables
1220
Current tax assets
130X
Inventories
1410
Prepayments
1470
Other current assets
11XX
Total current assets
Non-current assets
1510
Non-current financial assets at fair value through profit or loss
1550
Investments accounted for using the equity method
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Investment property, net
1780
Intangible assets
1830
Non-current biological assets
1840
Deferred tax assets
1900
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets		 12
-
12
1
1
-
7
1
-
34
-
-
51
4
1
1
1
7
1
66
100

(Continued)

22

WEI CHUAN FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity Notes
6(13)
6(14)
6(23)
7(2)
6(15) and 9(1)
6(16)
6(16)
6(30)
6(17)
6(19)
6(20)
6(21)
6(22)

9
11		 December31, %
10
2
1
-
8
-
12
-
-
1
34
20
4
1
3
28
62
28
-
4
2
6
2)
(

38
-
38
100
2020		 December31, 2019
Amount
1,770,429
$ 349,939
90,909
299
1,485,952
65,716
2,076,044
54,051
78,278
133,826
6,105,443
3,549,532
831,224
161,093
528,441
5,070,290
11,175,733
5,060,629
36,113
682,715
302,706
1,018,043
252,501)
(

6,847,705
8,083
6,855,788
18,031,521
$		 Amount
3,159,229
$ 40,000
70,944
6,602
1,507,668
60,108
1,998,678
153,534
108,922
184,766
7,290,451
3,130,080
987,384
154,431
590,802
4,862,697
12,153,148
5,060,629
36,103
551,470
-
1,590,372
302,706)
(

6,935,868
7,927
6,943,795
19,096,943
$		 %
Current liabilities
2100
Short-term borrowings
2110
Short-term notes and bills payable
2130
Current contract liabilities
2150
Notes payable
2170
Accounts payable
2180
Accounts payable to related parties
2200
Other payables
2230
Current tax liabilities
2280
Current lease liabilities
2300
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2540
Long-term borrowings
2570
Deferred tax liabilities
2580
Non-current lease liabilities
2600
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Ordinary share
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
31XX
Total equity attributable to owners of parent
36XX
Non-controlling interests
3XXX
Total equity
Significant contingent liabilities and unrecognised contract
commitments
Significant events after the balance sheet date
3X2X
Total liabilities and equity		 17
-
-
-
8
-
10
1
1
1
38
17
5
1
3
26
64
27
-
3
-
8
2)
(
36
-
36
100

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

23

WEI CHUAN FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Items Notes Year ended December 31 Year ended December 31
2020 2019
%
4000
Operating revenue
5000
Operating costs
5950
Gross profit from operations
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6450
Expected credit losses
6000
Total operating expenses
6900
Operating profit (loss)
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Share of loss (profit) of associates and joint ventures accounted
for using the equity method
7000
Total non-operating income and expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year

(Continued)

24

WEI CHUAN FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Items Notes Year ended December 31 Year ended December 31 Year ended December 31
2020 %
Amount
%
-
37,524)
($ -
-
37,524)
(
-
-
165,756)
(
1)
(
-
1,727
-
-
164,029)
(
1)
(
-
201,553)
($ 1)
(
3
1,149,326
$ 6
3
1,349,985
$ 7
-
894
-
3
1,350,879
$ 7
3
1,148,516
$ 6
-
810
-
3
1,149,326
$ 6
2019
1.06
2.67
$ 1.06
2.67
$		 2019
%
Components of other comprehensive income (loss) that will
not be reclassified to profit or loss
8311
Gains (losses) on remeasurements of defined benefit plans
8310
Components of other comprehensive income that will not be
reclassified to profit or loss
Components of other comprehensive income that will be
reclassified to profit or loss
8361
Exchange differences on translation
8399
Income tax related to components of other comprehensive
income(loss)
that will be reclassified to profit or loss
8360
Components of other comprehensive income (loss) that will be
reclassified to profit or loss
8300
Other comprehensive income (loss)
8500
Total comprehensive income
Profit, attributable to:
8610
Owners of parent
8620
Non-controlling interests
Profit for the year
Comprehensive income attributable to:
8710
Owners of parent
8720
Non-controlling interests
Total comprehensive income
Basic earnings per share
9750
Profit for the year
Diluted earnings per share
9850
Profit for the year		 -
-
6
7
-
7
6
-
6
2.67
$ $ 2.67

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

25

WEI CHUAN FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Year ended December 31,2019 Notes Equitya ttributable to owners o fparent
Ordinaryshare
5,060,629
$ -
-
-
-
-
-
-
5,060,629
$ 5,060,629
$ -
-
-
-
-
-
-
-
5,060,629
$		 Capital surplus
31,936
$ -
-
-
-
-
4,167
-
36,103
$ 36,103
$ -
-
-
-
-
-
10
-
36,113
$		 Retained earnings
Legal reserve
475,607
$ -
-
-
75,863
-
-
-
551,470
$ 551,470
$ -
-
-
131,245
-
-
-
-
682,715
$
6(22)
6(21)
6(21)
4(3)
6(22)
6(21)
6(21)
6(21)
4(3)
Balance at January 1, 2019
Profit for the year
Other comprehensive loss for the year
Total comprehensive income (loss) for the year
Appropriation and distribution of 2018 retained
earnings
Legal reserve appropriated
Cash dividends
Capital surplus - dividends unclaimed by
shareholders
Changes in non-controlling interests
Balance at December 31, 2019
Year ended December 31,2020
Balance at January 1, 2020
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Appropriation and distribution of 2019 retained
earnings
Legal reserve appropriated
Special reserve appropriated
Cash dividends
Capital surplus - dividends unclaimed by
shareholders
Changes in non-controlling interests
Balance at December 31, 2020

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

26

WEI CHUAN FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense
Amortisation expense
Expected credit loss
Interest expense
Interest income
Net gain on financial assets or liabilities at fair value through profit
or loss
Proceeds from disposal of non-current assets classified as held for sale
Share of profit (loss) of associates accounted for using the equity method
Losses on disposal of property, plant and equipment and biological assets
(Reversal of) impairment loss on property, plant and equipment
Changes in operating assets and liabilities
Changes in operating assets
Financial assets and liabilities at fair value through profit or loss
Notes receivable
Accounts receivable
Accounts receivable due from related parties
Other receivables
Inventories
Prepayments
Other current assets
Other non-current assets
Changes in operating liabilities
Current contract liabilities
Notes payable
Accounts payable
Accounts payable to related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash (outflow) inflow generated from operations
Interest received
Interest paid
Income taxes paid
Net cash provided by operating activities		 Notes
2020
2019
542,888
$ 1,729,597
$ 6(28)
1,083,955
1,040,251
6(28)
21,123
19,469
12(2)
23,575)
(
35,814)
(
6(27)
150,224
192,079
6(24)
22,816)
(
44,720)
(
6(26)
9)
(
5)
(
6(26)
-
1,269,341)
(
6(5)
620
699)
(
6(26)
36,969
93,895
6(26)
9,720)
(
55,867)
(
-
13)
(
4,316
27,159
81,874
236,220
60,432
57,048)
(
47,575
88,120
61,778
4,920
108,704
28,700
3,028
414
1,035
1,085)
(
19,965
26,916
6,303)
(
777)
(
21,716)
(
108,139)
(
5,608
33,340)
(
120,101
272,592)
(
3,293)
(
587)
(
50,580)
(
100,144
2,212,183
1,707,857
22,816
44,720
156,864)
(
192,870)
(
204,516)
(
131,274)
(
1,873,619
1,428,433
Year ended December 31		 Year ended December 31 Year ended December 31
2019
1,428,433

(Continued)

27

WEI CHUAN FOODS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of non-current assets classified as held for sale
Proceeds from disposal of financial assets at fair value through profit or loss
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Acquisition of biological assets
Proceeds from disposal of biological assets
Increase in other non-current assets - prepayments for business facilities
Decrease (increase) in other non-current assets - guarantee deposits paid
Decrease (increase) in other non-current assets - restricted bank deposits
Income taxes paid
Net cash flows (used in) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings
Increase in short-term notes and bills payable
Payments of lease liabilities
Repayments of long-term borrowings
Proceeds from long-term borrowings
Decrease in other non-current liabilities - guarantee deposits received
Dividends paid
Changes in non-controlling interests
Proceeds from dividends unclaimed by shareholders
Net cash flows used in financing activities
Effect of exchange rate changes
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 Notes
2020
2019
-
$ 2,107,824
$ -
27,942
6(32)
493,109)
(
1,013,269)
(
7,416
47,165
6(9)
47,990)
(
34,788)
(
6(32)
63,331)
(
66,700)
(
17,634
33,790
54,139)
(
49,437)
(
6(11)
2,932
5,162)
(
6(11)
2,000
1,500)
(
-
471,152)
(
628,587)
(
574,713
6(33)
1,388,800)
(
1,067,846)
(
6(33)
310,000
110,000
6(33)
149,891)
(
155,269)
(
6(33)
1,139,045)
(
1,949,909)
(
6(33)
1,505,418
797,462
6(17)
11,774)
(
54,283)
(
6(21)
675,037)
(
404,850)
(
843)
(
5,270)
(
10
4,167
1,549,962)
(
2,725,798)
(
11,397)
(
45,165)
(
316,327)
(
767,817)
(
6(1)
2,221,758
2,989,575
6(1)
1,905,431
$ 2,221,758
$ Year ended December 31		 Year ended December 31 Year ended December 31
2019
2,221,758
$

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

28

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 20000374

To the Board of Directors and Shareholders of Wei Chuan Foods Corporation

Opinion

We have audited the accompanying parent company only balance sheets of Wei Chuan Foods Corporation (the “Company”) as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at December 31, 2020 and 2019, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

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

29

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s 2020 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company’s 2020 parent company only financial statements are stated as follows:

Estimation of sales incentives

Description

Refer to Note 4(27) for accounting policy on revenue, Note 5(2) for the uncertainty of accounting judgments, assumptions and estimates in relation to revenue recognition and Note 6(22) for details of revenue.

The Company enters into different sales incentive agreements with different sales customers due to the nature of the industry. The Company pays incentives to sales customers if they meet the sales targets at various reward and promotion activities that the Company launches over a number of periods for cooperating with customers and distributors to promote products. International Financial Reporting Standards require that if sales incentives are substantively linked to operating revenue, the Company shall combine the two transactions and record the sales incentives as a deduction item to operating revenue.

The Company calculates and estimates the sales incentive amounts based on the actual sales amounts and the contract terms negotiated with sales customers. Given that the aforementioned process to recognise sales incentives usually involves management judgment and the calculations are relatively complicated, we consider the estimation of sales incentives a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  1. Obtained an understanding of the Company’s internal control designed for sales incentives and tested the effectiveness of the control, such as ascertained whether the calculations and estimates of each main sales incentive were reviewed by an authorised supervisor.

30

  1. Obtained the reports derived from the Company’s system and the relevant proofs of delivery, and then sampled and verified the actual sales volumes and unit prices.

  2. Obtained the sales agreements of the Company’s main sales customers. Used the actual sales amounts to recalculate the incentives based on the terms specified in the agreement.

  3. Performed tests of subsequent deductions and write-offs for the balances of incentives payable that are material on the balance sheet date.

Evaluation of inventories

Description

Refer to Note 4(11) for accounting policy on inventory evaluation, Note 5(2) for critical judgement in relation to inventory evaluation, and Note 6(4) for details of inventories.

The Company is primarily engaged in the manufacture and sale of dairy products, beverages and soy sauce. Due to the high competitiveness of similar products in the food market, the growing consumer awareness of food safety in recent years and the short shelf-life of most dairy products, there is a higher risk of inventories losing value or becoming obsolete if the products are not selling as expected.

The Company applies judgments and estimates in determining the net realisable value of inventories on balance sheet date and then writes down the inventory costs to the net realisable value. Given that the inventories are the main operating assets for the Company, the evaluation of inventories involves management judgments and evaluation amounts are material to the financial statements, we consider the evaluation of inventories a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

  1. Obtained the policies for inventory valuation and determined whether the policies applied in provision of allowance for inventory valuation losses in the different periods are in agreement.

  2. Observed physical inventory count at the end of period to identify whether there are obsolete, damaged or unsalable inventories.

  3. Obtained aging statements of each kind of inventory and tested the changes in ages of inventory. Selected samples with inventory number and verified the date of manufacture, checked the accuracy of classification range of inventory ages.

31

  1. Obtained net realizable value statement of each kind of inventory and checked the applied calculation logic. Tested relevant parameters, including: sales or purchases data, reasonableness of marketing to sales ratio calculation, and relevant estimate document. Checked and compared allowance for valuation losses that the Group should provision at the lower of cost and net realizable value.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ responsibilities for the audit of the parent company only financial statements

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

32

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

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

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

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

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

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

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

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

33

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

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

Wu, Yu-Lung Huang, Shih-Chun For and on behalf of PricewaterhouseCoopers, Taiwan March 29, 2021

The accompanying parent company only 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 parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

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

34

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets Notes
6(1)
6(3)
6(3)
6(3) and 7(2)
7(2)
6(4)
6(2)
6(5)
6(6) and 8
6(7)
6(8) and 8
6(9)
6(28)
6(10) and 8		 December31, %
5
-
7
-
1
-
5
-
-
18
-
42
28
1
2
-
9
-
82
100
2020		 December31, 2019
Amount
704,926
$ 12,881
865,552
7,522
108,098
659
603,310
10,847
6,101
2,319,896
33,117
5,554,353
3,687,645
130,460
188,651
-
1,195,454
17,730
10,807,410
13,127,306
$		 Amount
556,706
$ 17,539
864,751
5,994
143,311
659
544,826
27,226
7,939
2,168,951
33,108
5,055,817
4,891,241
140,663
193,754
104,519
1,261,069
21,151
11,701,322
13,870,273
$		 %
Current assets
1100
Cash and cash equivalents
1150
Notes receivable, net
1170
Accounts receivable, net
1180
Accounts receivable due from related parties, net
1200
Other receivables
1220
Current tax assets
130X
Inventories
1410
Prepayments
1470
Other current assets
11XX
Total current assets
Non-current assets
1510
Non-current financial assets at fair value through profit or loss
1550
Investments accounted for using the equity method
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Investment property, net
1830
Non-current biological assets
1840
Deferred tax assets
1900
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets		 4
-
7
-
1
-
4
-
-
16
-
37
35
1
1
1
9
-
84
100

(Continued)

35

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity Notes
6(12)
6(13)
7(2)
6(14) and 9(1)
7(2)
6(15)
6(15)
6(28)
7(2)
6(5)(16)
6(18)
6(19)
6(20)
6(21)

9
11		 December31, %
5
2
-
4
1
5
-
-
-
17
22
6
1
2
31
48
39
-
5
2
8
2)
(

52
100
2020		 December31, 2019
Amount
600,000
$ 249,939
21
473,631
167,313
617,982
9,126
22,495
42,481
2,182,988
2,903,867
795,942
108,008
288,796
4,096,613
6,279,601
5,060,629
36,113
682,715
302,706
1,018,043
252,501)
(

6,847,705
13,127,306
$		 Amount
1,220,000
$ -
1,455
480,437
181,820
616,668
7,473
21,964
42,146
2,571,963
2,936,754
966,736
117,085
341,867
4,362,442
6,934,405
5,060,629
36,103
551,470
-
1,590,372
302,706)
(

6,935,868
13,870,273
$		 %
Current liabilities
2100
Short-term borrowings
2110
Short-term notes and bills payable
2150
Notes payable
2170
Accounts payable
2180
Accounts payable to related parties
2200
Other payables
2230
Current tax liabilities
2280
Current lease liabilities
2300
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2540
Long-term borrowings
2570
Deferred tax liabilities
2580
Non-current lease liabilities
2600
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Ordinary share
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3XXX
Total equity
Significant contingent liabilities and unrecognised contract
commitments
Significant events after the balance sheet date
3X2X
Total liabilities and equity		 9
-
-
4
1
5
-
-
-
19
21
7
1
2
31
50
37
-
4
-
11
2)
(
50
100

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

36

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Items Notes Year ended December 31 Year ended December 31
2020 2019
%
4000
Operating revenue
5000
Operating costs
5950
Gross profit from operations
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6450
Expected credit losses
6000
Total operating expenses
6900
Operating profit (loss)
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7070
Share of loss (profit) of subsidiaries, associates and joint ventures
accounted for using equity method, net
7000
Total non-operating income and expense
7900
Profit before income tax
7950
Income tax (income) expense
8000
Income from continuing operations
8200
Profit for the year
Components of other comprehensive income (loss) that will
not be reclassified to profit or loss
8311
Gains (losses) on remeasurements of defined benefit plans
8330
Share of other comprehensive income of associates
and joint ventures accounted for using equity method
8310
Components of other comprehensive income that will not be
reclassified to profit or loss
Components of other comprehensive income that will be
reclassified to profit or loss
8361
Exchange differences on translation
8360
Components of other comprehensive income that will be
reclassified to profit or loss
8300
Other comprehensive income (loss)
8500
Total comprehensive income
Basic earnings per share
9750
Profit for the year
Diluted earnings per share
9850
Profit for the year

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

37

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

YearendedDecember31,2019 Notes Ordinary share
5,060,629
$ -
-
-
-
-
-
5,060,629
$ 5,060,629
$ -
-
-
-
-
-
-
5,060,629
$		 Capitalsurplus
31,936
$ -
-
-
-
-
4,167
36,103
$ 36,103
$ -
-
-
-
-
-
10
36,113
$		 Retained earnings
Legal reserve
475,607
$ -
-
-
75,863
-
-
551,470
$ 551,470
$ -
-
-
131,245
-
-
-
682,715
$
6(21)
6(20)
6(20)
6(19)
6(21)
6(20)
6(20)
6(20)
6(19)
Balance at January 1, 2019
Profit for the year
Other comprehensive loss for the year
Total comprehensive income (loss) for the year
Appropriation and distribution of 2018 retained earnings
Legal reserve appropriated
Cash dividends
Capital surplus - dividends unclaimed by shareholders
Balance at December 31, 2019
YearendedDecember31,2020
Balance at January 1, 2020
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Appropriation and distribution of 2019 retained earnings
Legal reserve appropriated
Special reserve appropriated
Cash dividends
Capital surplus - dividends unclaimed by shareholders
Balance at December 31, 2020

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

38

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense
(Reversal of) impairment on expected credit loss
Interest expense
Interest income
Net gain on financial assets at fair value through profit or loss
Proceeds from disposal of non-current assets classified as held for sale
Share of loss (profit) of subsidiaries, associates and joint ventures
accounted for using the equity method
Losses on disposal of property, plant and equipment and biological assets
Reversal of impairment on property, plant and equipment
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable
Notes receivable due from related parties
Accounts receivable
Accounts receivable due from related parties
Other receivables
Inventories
Prepayments
Other current assets
Other non-current assets
Changes in operating liabilities
Notes payable
Accounts payable
Accounts payable to related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities		 Notes
2020
2019
449,785
$ 1,564,257
$ 6(26)
352,217
367,979
12(2)
22,668)
(
10,926
6(25)
58,609
66,168
8,056)
(
11,805)
(
6(24)
9)
(
-
6(24)
-
1,269,341)
(
6(5)
315,955)
(
668,924)
(
6(24)
37,336
72,192
6(24)
9,720)
(
-
4,662
16,559
-
3,378
1,463)
(
131,264
1,528)
(
83
52,693
30,785
65,485)
(
21,365)
(
15,705
33,408
1,838
1,532
-
21
1,434)
(
846)
(
10,363
16,186)
(
14,507)
(
5,790)
(
1,076
33,837)
(
962
2,049)
(
52,638)
(
61,749)
(
491,783
206,660
8,056
11,805
597,514
156,651
59,465)
(
67,100)
(
5,658)
(
4,660)
(
1,032,230
303,356
Year ended December 31		 Year ended December 31 Year ended December 31
2019
303,356

(Continued)

39

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of non-current assets classified as held for sale
Acquisition of investments accounted for using the equity method
Proceeds from capital reduction of subsidiaries
Proceeds from distribution of capital surplus by subsidiaries
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of biological assets
Proceeds from disposal of biological assets
Increase in prepayments for business facilities
Decrease in guarantee deposits paid
Decrease (increase) in restricted financial assets
Income taxes paid
Net cash flows from (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Acquisition of investments accounted for using the equity method
Decrease in short-term borrowings
Increase in short-term notes and bills payable
Payments of lease liabilities
Repayments of long-term borrowings
Proceeds from long-term borrowings
Increase (decrease) in guarantee deposits received
Dividends paid
Proceeds from dividends unclaimed by shareholders
Net cash flows used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 Notes
2020
2019
-
$ 2,107,824
$ 30,000)
(
-
6(5) and 7(2)
22,965
563,373
6(5) and 7(2)
-
109,648
6(30)
140,878)
(
208,938)
(
5,845
3,759
6(30)
63,331)
(
66,700)
(
17,634
33,790
850)
(
-
1,421
-
6(10)
2,000
1,500)
(
-
471,152)
(
185,194)
(
2,070,104
30,039)
(
-
6(31)
620,000)
(
700,000)
(
6(31)
250,000
120,000
6(31)
26,960)
(
29,723)
(
6(31)
1,003,000)
(
1,800,390)
(
6(31)
1,405,000
550,000
6(16)
1,210
9,941)
(
6(20)
675,037)
(
404,850)
(
10
4,167
698,816)
(
2,270,737)
(
148,220
102,723
6(1)
556,706
453,983
6(1)
704,926
$ 556,706
$ Year ended December 31		 Year ended December 31 Year ended December 31
2019
102,723
453,983
556,706
$

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

40

Proposal II.

Proposed by the Board of Directors

Proposal: Adoption of the proposal for distribution of 2020 earnings of the Company. Explanation: In 2020, the net profit after tax of the Company was NT$535,195,265, and an earnings distribution table would be prepared according to Article 27-1 of the Articles of Association. Please refer to the attached table on the next page.

Resolution:

41

Wei Chuan Foods Corporation Earnings Distribution Table 2020

2020 2020
Unit: NT$
Item Subtotal Total
Net Profit after Tax of 2020 535,195,265
Add: Included in the undistributed earnings of the
current year
Remeasurement of defined benefitplans
1,462,612
Subtotal 536,657,877
Less: Legal reserve appropriated (53,665,788)
Add: Special reserve reversed 50,205,376
Add: Undistributed earnings at beginningof theperiod 481,382,693
Distributable earnings 1,014,580,158
Less: Cash dividends distributed(NT$0.53per share) (268,213,344)
Undistributed earnings at the end of theperiod 746,366,814

Chairman: Chen, Hung-Yu

General Manager: Chang, Chiao-Hua Accounting Manager: Huang, Chih-Yu

42

Discussions

43

Discussion I.

Proposed by the Board of Directors

  • Proposal: The amendment to some provisions of the "Rules for Procedure for Shareholders' Meetings" is submitted for decision.

  • Explanation: In response to the reference models in TZZL Zi No. 1100001446 announcement of Taiwan Stock Exchange Corporation about the amendment to the "Rules for Procedure for Shareholders' Meetings of XX Co., Ltd." on Jan. 28, 2021 and business needs of the Company, it is proposed to amend the Rules for Procedure for Shareholders' Meetings of the Company partially. Please refer to the Comparison Table of Amended Provisions on the next page.

Resolution:

44

Comparison Table of Amended Provisions of the Rules for Procedure for Shareholders' Meetings of Wei Chuan Foods Corporation

Article No. Amended Provision Current Provision Description
Article 1-1 (Paragraphs 1, 2 and 3 are omitted.)
The election or dismissal of directors,
changes in the Articles of Association,
reduction of capital, application for
suspension of public offering,
permission for directors to compete
with the Company, increase of capital
by transferring earnings, increase of
capital by transferring public reserve
funds, dissolution, merger or division
of the Company, or all items in
Paragraph 1, Article 185 of the
Company Act, Article 26-1 and
Article 43-6 of the Securities and
Exchange Act, or items in Article 56-1
and Article 60-2 of the Regulations
Governing the Offering and Issuance
of Securities by Securities Issuers shall
be listed as reasons for convening the
meeting, with their main contents
specified, and shall not be raised as
extraordinary motions.
The reasons for convening the
shareholders' meeting have specified
the general re-election of directors and
the date of assumption of duty, and
upon completion of the re-election at
the shareholders' meeting, the date of
assumption of duty shall not be
changed by means of motions or other
means at the same meeting.
A shareholder holding one percent or
more of the total number of issued
shares shall submit a proposal with
only one matter to the Company at the
general shareholders' meeting, and if
more than one matter are mentioned in
the proposal, such proposal will be
excluded from the agenda. In addition,
if the proposal submitted by a
shareholder is in any of the
circumstances stated in any
subparagraph of Paragraph 4, Article
172-1 of the Company Act, the Board
of Directors will exclude it from the
agenda. Shareholders shall submit
proposals to urge the Company to
increasepublic interest or fulfill social		 (Paragraphs 1, 2 and 3 are omitted.)
The election or dismissal of directors,
changes in the Articles of Association,
dissolution, merger or division of the
Company, or all items in Paragraph 1,
Article 185 of the Company Act,
Article 26-1 and Article 43-6 of the
Securities and Exchange Act, or items
in Article 56-1 and Article 60-2 of the
Regulations Governing the Offering
and Issuance of Securities by
Securities Issuers shall be listed as
reasons for convening the meeting and
shall not be raised as extraordinary
motions.		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.

45

Article No. Amended Provision Current Provision Description
responsibilities. Only one matter shall
be mentioned in the proposal
according to relevant provisions of
Article 172-1 of the Company Act,
and if more than one matter are
mentioned in the proposal, such
proposal will be excluded from the
agenda.
Prior to the book closure date before a
general shareholders' meeting is held,
the Company shall publicly announce
shareholders' proposals accepted by it,
the written or electronic method of
submission of proposals, and the
location and time of submission the
period of submission shall not be less
than ten days.
The proposal submitted by a
shareholder is limited to 300 words,
and any proposal containing more
than 300 words will be excluded from
the agenda; the shareholder submitting
a proposal shall attend the general
shareholders' meeting in person or by
proxy, and participate in discussion of
the proposal.
Prior to the date of notification for
convening of a shareholders' meeting,
the Company shall inform the
shareholders submitting proposals of
the result of handling of proposals, and
list the proposals conforming to the
provisions of this articles in the
meeting notice. For shareholders'
proposals excluded from the agenda,
the Board of Directors shall explain
the reason for such exclusion at the
shareholders' meeting.

46

Comparison Table of Amended Provisions of the Rules for Procedure for Shareholders' Meetings of Wei Chuan Foods Corporation (Continued)

Article No. Amended Provision Current Provision Description
Article 1-2 For each shareholders'meeting, a
shareholder may appoint a proxy to
attend the meeting by providing the
proxy form issued by the Company
and stating the scope of the proxy's
authorization.
A shareholder may issue only one
proxy form and appoint only one
proxy for any given shareholders'
meeting, and shall deliver the proxy
form to the Company 5 days before the
date of the shareholders'meeting.
When duplicate proxy forms are
delivered, the one received earliest
shall prevail unless a declaration is
made to cancel the previous proxy
appointment.
After a proxy form has been delivered
to the Company, if the shareholder
intends to attend the meeting in person
or to exercise voting rights by
correspondence or electronically, a
written notice of proxy cancellation
shall be submitted to the Company 2
days before the meeting date. If the
cancellation notice is submitted after
that time, votes cast at the meeting by
the proxy shall prevail.		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.
Article 2 (Paragraphs 1 to 5 are omitted.)
The number of shares in attendance
shall be calculated according to the
shares indicated by the sign-in cards
handed in plus the number of shares
whose voting rights are exercisedby
correspondence orelectronically.		 (Paragraphs 1 to 5 are omitted.)
The number of shares in attendance
shall be calculated according to the
shares indicated by the sign-in cards
handed in plus the number of shares
whose voting rights are exercised
electronically.		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.
Article 5 The venue for a shareholders' meeting
shall be at the premises of the
Company, or a place easily accessible
to shareholders and suitable for a
shareholders' meeting. The meeting
shall begin no earlier than 9 a.m. and
no later than 3 p.m.,and opinions of
independent directors shall be taken
into full account with respect to the
place and time for convening a		 The venue for a shareholders' meeting
shall be at the premises of the
Company, or a place easily accessible
to shareholders and suitable for a
shareholders' meeting. The meeting
shall begin no earlier than 9 a.m. and
no later than 3 p.m.		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.

47

Article No. Amended Provision Current Provision Description
shareholders'meeting.
Article 8 If a shareholders' meeting is convened
by the Board of Directors, the agenda
shall be set by the Board of Directors,
relevant
proposals
(including
extraordinary
motions
and
amendments to original proposals)
shall be subject to voting one by one,
andthe meeting shall proceed in the
order set by the agenda, which may not
be changed without a resolution of the
shareholders' meeting.
The provisions of the preceding
paragraph apply mutatis mutandis
to
a
shareholders'
meeting
convened by a party with the power
to convene that is not the Board of
Directors.
The chair may not declare the meeting
adjourned prior to completion of
deliberation on the meeting agenda of
the
preceding
two
paragraphs
(including extraordinary motions),
except by a resolution of the
shareholders' meeting. If the chair
declares the meeting adjourned in
violation of the rules of procedure,the
other members of the Board of
Directors shall promptly assist the
attending shareholders in electing a
new chair according to statutory
procedures,by agreement of a
majority of the votes represented by
the attending shareholders, and then
continue the meeting.		 If a shareholders' meeting is convened
by the Board of Directors, the agenda
shall be set by the Board of Directors.
The meeting shall proceed in the order
set by the agenda, which may not be
changed without a resolution of the
shareholders' meeting.
The provisions of the preceding
paragraph apply mutatis mutandis
to
a
shareholders'
meeting
convened by a party with the power
to convene that is not the Board of
Directors.
The chair may not declare the meeting
adjourned prior to completion of
deliberation on the meeting agenda of
the
preceding
two
paragraphs
(including extraordinary motions),
except by a resolution of the
shareholders' meeting.
After adjournment of a meeting,
shareholders shall not elect a new
chair to continue the meeting at the
original venue or a new place.
However, if the chair declares the
meeting adjourned in violation of the
rules of procedure, a new chair shall
be elected by agreement of a majority
of the votes represented by the
attending shareholders to continue the
meeting.		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.

48

Comparison Table of Amended Provisions of the Rules for Procedure for Shareholders' Meetings of Wei Chuan Foods Corporation (Continued)

Article No. Amended Provision Current Provision Description
Article 9 The chair shall call the meeting to
order at the appointed meeting
time, and meanwhile, announce the
information about the number of
shares without voting rights and the
number of shares in attendance.
However, when the attending
shareholders do not represent a
majority of the total number of
issued shares, the chair may
announce
a
postponement,
provided that no more than two
such
postponements,
for
a
combined total of no more than one
hour, may be made. If the quorum
is not met after two postponements
and the attending shareholders still
represent less than one third of the
total number of issued shares, the
chair shall declare the meeting
adjourned.
(Omitted)		 The chair shall call the meeting to
order at the appointed meeting
time. However, when the attending
shareholders do not represent a
majority of the total number of
issued shares, the chair may
announce
a
postponement,
provided that no more than two
such
postponements,
for
a
combined total of no more than one
hour, may be made. If the quorum
is not met after two postponements
and the attending shareholders still
represent less than one third of the
total number of issued shares, the
chair shall declare the meeting
adjourned.
(Omitted)		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.
Article 13 The chair shall allow ample
opportunity during the meeting for
explanation and discussion of
proposals and of amendments or
extraordinary motions put forward
by the shareholders;when the chair
is of the opinion that a proposal has
been discussed sufficiently to put it
to a vote, the chair may announce
the discussion closed, call for a vote
and arrange sufficient voting time.		 When the chair is of the opinion
that a proposal has been discussed
sufficiently to put it to a vote, the
chair may announce the discussion
closed and call for a vote.		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.
Article 16 When the Company holds a
shareholders'meeting, it shall allow
the shareholders to exercise voting
rights
electronically
or
by
correspondence; when the voting
rights
are
exercised
by
correspondence
or
electronic
means, the method of exercise shall
be specified in the shareholders'
meeting notice.
A shareholder exercising voting
rights
by
correspondence
or
electronic means will be deemed to
have attended the shareholders'
meeting
in
person.
However,
his/her rights with respect to the
extraordinary
motions
and
amendments to original proposals
are deemed to have been waived,		 When voting rights are exercised by
electronic means in the voting for a
proposal, the method of exercise
shall
be
specified
in
the
shareholders'meeting notice.
A shareholder exercising voting
rights by electronic means will be
deemed to have attended the
shareholders' meeting in person.
However,
his/her
rights
with
respect to the extraordinary motions
and
amendments
to
original
proposals are deemed to have been
waived,
and
therefore,
the
Company shall avoid proposing
extraordinary
motions
and
amendments to original proposals.
A shareholder intending to exercise
voting rights by electronic means		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.

49

Article No. Amended Provision Current Provision Description
and therefore, the Company shall
avoid
proposing
extraordinary
motions
and
amendments
to
original proposals.
A shareholder intending to exercise
voting rights by correspondence or
electronic
means
under
the
preceding paragraph shall deliver a
written declaration of intent to the
Company 2 days before the date of
the shareholders' meeting. When
duplicate declarations of intent are
delivered, the one received earliest
shall prevail, except when a
declaration is made to cancel the
earlier declaration of intent.
After a shareholder has exercised
voting rights by correspondence or
electronic means, in the event that
the shareholder intends to attend
the shareholders' meeting in person,
a written declaration of intent to
retract the voting rights already
exercised under the preceding
paragraph shall be made known to
the Company, by the same means
by which the voting rights were
exercised, 2 days before the date of
the shareholders' meeting. If the
notice of retraction is submitted
after that time, the voting rights
already
exercised
by
correspondence
or
electronic
means shall prevail. When a
shareholder has exercised voting
rights both by correspondence or
electronic means and by appointing
a proxy to attend a shareholders'
meeting, the voting rights exercised
by the proxy in the meeting shall
prevail.
At the time of a vote, the chair or a
person designated by the chair shall
first announce the total number of
voting rights represented by the
attending shareholders case by
case, followed by a poll of the
shareholders case by case. After the
conclusion of the meeting, on the
same day it is held, the results for
each proposal, based on the number
of votes for and against and the
number of abstentions, shall be
entered
into
the
Market
Observation Post System.		 under the preceding paragraph shall
deliver a written declaration of
intent to the Company 2 days before
the date of the shareholders'
meeting.
When
duplicate
declarations of intent are delivered,
the one received earliest shall
prevail, except when a declaration
is made to cancel the earlier
declaration of intent.
After a shareholder has exercised
voting rights by electronic means,
in the event that the shareholder
intends to attend the shareholders'
meeting in person, a written
declaration of intent to retract the
voting rights already exercised
under the preceding paragraph shall
be made known to the Company, by
the same means by which the voting
rights were exercised, 2 days before
the date of the shareholders'
meeting. If the notice of retraction
is submitted after that time, the
voting rights already exercised by
electronic means shall prevail.
When a shareholder has exercised
voting rights both by electronic
means and by appointing a proxy to
attend a shareholders' meeting, the
voting rights exercised by the proxy
in the meeting shall prevail.
If no shareholder has any objection
after inquiry by the chair at the time
of a vote, and the shareholders
voting by electronic means have not
voted against or have no intent of
absention for a proposal, such
proposal will be deemed to have
been adopted with the same effect
as if it has been voted for.

50

Comparison Table of Amended Provisions of the Rules for Procedure for Shareholders' Meetings of Wei Chuan Foods Corporation (Continued)

Article No. Amended Provision Current Provision Description
Article 19 The election of directors at a
shareholders’ meeting shall be held in
accordance
with
the
applicable
election
and
appointment
rules
adopted by the Company, and the
voting results shall be announced on-
site immediately, including the names
of those elected as directors and the
number of weight of votes with which
they were elected as well as the names
of those failing to be elected as
directors and the number of weight of
votes with which they were elected.
(Omitted)		 The election of directors at a
shareholders’ meeting shall be held in
accordance
with
the
applicable
election
and
appointment
rules
adopted by the Company, and the
voting results shall be announced on-
site immediately, including the names
of those elected as directors and the
number of weight of votes with which
they were elected.
(Omitted)		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.
Article 20 (Paragraphs 1 and 2 are omitted.)
The
meeting
minutes
shall
accurately record the year, month,
day and place of the meeting, name
of the chair, method of resolution,
summary of the deliberations and
voting result (including the number
of statistical weight), and reveal the
number of weight of votes with
which each candidate was elected
in the event of election of directors.
The meeting minutes shallbe kept
for the duration of existence of the
Company.		 (Paragraphs 1 and 2 are omitted.)
The
meeting
minutes
shall
accurately record the year, month,
day and place of the meeting, name
of the chair, method of resolution,
summary
and
result
of
the
deliberations, and be kept for the
duration of existence of the
Company.		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.
Article 25 If a force majeure event occurs, the
chair
may
rule
the
meeting
temporarily
suspended
and
announce a time when, in view of
the circumstances, the meeting will
be resumed.
If the meeting venue is no longer
available for continued use and not all
of the items (including extraordinary		 If a force majeure event occurs, the
chair
may
rule
the
meeting
temporarily
suspended
and
announce a time when, in view of
the circumstances, the meeting will
be resumed.		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.

51

Article No. Amended Provision Current Provision Description
motions) on the meeting agenda have
been addressed, the shareholders'
meeting may adopt a resolution to
resume the meeting at another venue.
A resolution may be adopted at a
shareholders'meeting to defer or
resume the meeting within 5 days in
accordance with Article 182 of the
Company Act.

52

Discussion II.

Proposed by the Board of Directors

Proposal: The amendment to some provisions of the "Measures for Election of Directors" is submitted for decision.

  • Explanation: In response to the reference models in TZZL Zi No. 1090009468 announcement of Taiwan Stock Exchange Corporation about the amendment to the "Procedures for Election of Directors of XX Co., Ltd." on Jun. 3, 2020 and business needs of the Company, it is proposed to amend the Measures for Election of Directors of the Company partially. Please refer to the Comparison Table of Amended Provisions on the next page.

Resolution:

53

Comparison Table of Amended Provisions of the Measures for Election of Directors of Wei Chuan Foods Corporation

Article No. Amended Provision Current Provision Description
Article 5 Directors of the Company shall be
elected
by
the
board
of
shareholders from the competent
candidates, the voting rights of
independent and non-independent
directors
shall
be
calculated
separately according to the number
of positions stipulated in the
Articles of Association, the persons
having more voting rights shall be
elected as directors sequentially
and respectively, and when two or
more persons receive the same
number of weight of votes, thus
exceeding the specified number of
positions, they shall draw lots to
determine the winner. The chair
shall draw lots on behalf of any
absent persons.		 Directors of the Company shall be
elected
by
the
board
of
shareholders from the competent
candidates, the voting rights of
independent and non-independent
directors
shall
be
calculated
separately according to the number
of positions stipulated in the
Articles of Association, the persons
having more voting rights shall be
elected as directors sequentially
and respectively, and when two or
more persons receive the same
number of weight of votes, thus
exceeding the specified number of
positions, they shall draw lots to
determine the winner. The chair
shall draw lots on behalf of any
absent persons.
Any person who is simultaneously
elected as both director and
independent director according to
the preceding paragraph shall
determine whether to assume the
position of director or independent
director, and the vacancy shall be
filled by the candidate who receives
the second highest voting rights
originally.		 Amendments
shall be made in
accordance with
laws and the
Company's
business needs.
Article 7 (Deleted) For shareholder candidates, voters
shall fill in the candidates'name
and shareholder account number in
the"candidate column"in the ballot
paper;
for
non-shareholder
candidates, the candidates'name
and identification number shall be
filled in. However, when the
candidate
is
a
governmental
organization
or
juristic-person		 In
accordance
with JGZJ Zi
No.
1080311451
order issued by
the
Financial
Supervisory
Commission on
Apr. 25, 2019,
all TWSE and
TPEx
listed
companies shall

54

Article No. Amended Provision Current Provision Description
shareholder, the name of the
governmental
organization
or
juristic-person shareholder shall be
filled in the column for the
candidate's account name in the
ballot paper, or both the name of the
governmental
organization
or
juristic-person shareholder and the
name of its representative shall be
filled in. When there are multiple
representatives, the name of each
respective representative shall be
filled in.		 adopt
a
candidate
nomination
system for the
election
of
directors
and
supervisors
since 2021, and
shareholders
shall elect the
directors
and
supervisors
from among the
nominees listed
in the roster of
director
candidates.
Prior
to
the
shareholders'
meeting,
shareholders
may learn the
name, education
background and
other
relevant
information
about
the
candidates
via
the roster, and
verify
the
candidates'
identity through
the shareholder
account number
or
identity
certificate
number.
This
article
is
no
longer relevant
and
thus
is
deleted.

55

Comparison Table of Amended Provisions of the Measures for Election of Directors of Wei Chuan Foods Corporation (Continued)

Article No. Amended Provision Current Provision Description
Article 8 Ballots are invalid under any of the
following circumstances:
I. The ballot is not prepared by the
party with the power to convene
the meeting.
II.Blank ballots are cast into the ballot
box.
III. The writing is unclear and
indecipherable or has been
altered.
IV. The name of the candidate filled
in isfound not to match those
listed in the roster of candidates
for directors.
V. Other unwanted words are found
in the ballots, apart from the
number
of
voting
rights
allocated.		 Ballots are invalid under any of the
following circumstances:
I. The ballot is not prepared by the
Board of Directors.
II.For shareholder candidates, their
account name and shareholder
account number is inconsistent
with that on the shareholder
register; for non-shareholder
candidates, their name and
identity certificate number is
found to be inconsistent.
III. Blank ballots are cast into the
ballot box.
IV. The writing is unclear and
indecipherable or has been
altered.
V.The name of the candidate filled
in is identical to that of another
shareholder, but no shareholder
account number or identity
certificate number is provided
to identify such candidate, or
the shareholder account number
or identity certificate number is
found to be inconsistent.
VI. Other unwanted words are
found in the ballots, apart from
Thecandidate's account name
(name) or shareholder account
number
(identity
certificate
number) and number of voting
rights allocated.		 According
to
the provisions of
Article 173 of
the
Company
Act,
shareholders
may,
upon
approval from
the
competent
authority,
convene
a
meeting under
special
circumstances
(for
instance,
when a notice
that the Board of
Directors
will
not convene a
meeting
has
been received).
Paragraph 1 of
this article has
been amended
accordingly. In
addition,
in
accordance with
JGZJ Zi. No.
1080311451
order issued by
the
Financial
Supervisory
Commission on
Apr. 25, 2019,
all TWSE and
TPEx
listed
companies shall
adopt
a
candidate
nomination
system for the
election
of
directors
and
supervisors
since 2021, and
shareholders
shall elect the
directors
and
supervisors
from amongthe

56

nominees listed nominees listed nominees listed
in the roster of
director
candidates.
Accordingly,
Paragraphs 4
and 5 of this
article are
adjusted and
Paragraph 6 is
deleted.

57

Appendices

58

Appendix I

Articles of Association of Wei Chuan Foods Corporation

Chapter I General Provisions

  • Article 1 The Company is established in accordance with the provisions of the Company Act, with the name Wei Chuan Foods Corporation.

  • Article 2 The Company undertakes the following businesses:

  • I. A102080 Gardening services II. A401010 Animal farm operation III. A401020 Livestock and poultry rearing IV. C102010 Dairy products manufacturing V. C103050 Canned, frozen, dehydrated and pickled food manufacturing

  • VI. C104010 Candy making VII. C104020 Baked and steamed food manufacturing VIII. C105010 Edible fat and oil manufacturing IX. C106010 Flour milling X. C109010 Seasoning manufacturing XI. C110010 Beverage manufacturing XII. C114010 Food additives manufacturing XIII. C199010 Flour and noddle product manufacturing XIV. C199020 Edible ice manufacturing XV. C199030 Instant food manufacturing XVI. C199040 Bean processed food manufacturing XVII. C199990 Other unclassified food manufacturing XVIII. C201010 Feedstuff manufacturing XIX. F101990 Wholesale of other agricultural, animal and aquatic products

  • XX. F102020 Wholesale of edible fat and oil XXI. F102030 Wholesale of alcohol and tobacco XXII. F102040 Wholesale of beverage XXIII. F102170 Wholesale of food and miscellaneous goods XXIV. F103010 Wholesale of feedstuffs XXV. F121010 Wholesale of food additives XXVI. F201990 Retail of other agricultural, animal and aquatic products XXVII. F202010 Retail of feedstuffs

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XXVIII. F203010 Retail of food, miscellaneous goods and beverage

  • XXIX. F203020 Retail Sale of Tobacco and Alcoholic Drinks XXX. F203020 Retail of alcohol and tobacco

  • XXXI. F221010 Retail of food additives

XXXII. F301020 Supermarket

XXXIII. F399010 Convenience store

XXXIV. F399040 Non-store retailing

XXXV. F399990 Other comprehensive retail business

XXXVI. F401010 International trade

XXXVII.F501030 Beverage store

XXXVIII.F501060 Restaurant

XXXIX. H701010 Residence and building development, rental and sale

  • XL. H701020 Industrial plant development, rental and sale XLI. H701040 Special field development

  • XLII. H701050 Investment in public construction XLIII. J302010 Press release

  • XLIV. J303010 Magazine (periodical) publishing

  • XLV. J304010 Book publishing

  • XLVI. J601010 Art and cultural services

  • XLVII. J602010 Performance

  • XLVIII. J603010 Livehouse

  • XLIX. J701010 Video game places

  • L. J701020 Amusement park LI. J901020 Average hotel

  • LII. J901011 Tourist hotel

  • LIII. J904011 Tourism and recreation

  • LIV. A102041 Leisure agriculture

  • LV. C802041 Western medicine manufacturing

  • LVI. C802051 Chinese herbal medicine manufacturing LVII. F108011 Wholesale of Chinese herbal medicine

  • LVIII. F108021 Wholesale of western medicine LIX. F208011 Retail of Chinese herbal medicine

  • LX. F208021 Retail of western medicine LXI. ZZ99999 Businesses other than those prohibited or restricted by law, in addition to the approved businesses.

  • Article 2-1 The Company shall make guarantee for external parties. Such guarantee shall be made in accordance with the operational procedures for making endorsements/guarantees of the Company.

60

  • Article 2-2 The Company's total re-investment shall not be restricted by Article 13 of the Company Act.

  • Article 2-3 The Company's funds shall not be loaned to shareholders or others, unless in the following circumstances:

  • I. There are business transactions between the parent company and subsidiaries.

  • II. It is necessary to allocate funds between the patent company and subsidiaries in a short term.

  • The financing amount shall not exceed 40% of the Company's net value.

  • Article 3 The Company is established in Taipei City and may establish branches at home or abroad.

  • Article 4 The Company's public notice shall be in accordance with the provisions of Article 28 of the Company Act.

Chapter II Shareholding

  • Article 5 The total capital of the Company is NT$8 billion. It is divided as 800,000,000 shares, with a par value of NT$10 per share, and the Board of Directors is authorized to issue the shares. In the event of increase of capital by issuance of new shares, the shares shall be issued with a value exceeding the face amount.

  • Article 6 The Company's shares shall be registered shares. They shall be affixed with the signature or seal of the director representing the Company, and be duly certified or authenticated according to law before issuance thereof. The Company may be exempted from printing any stock certificate for the shares issued.

  • The Company shall appoint a centralized securities depository enterprise

  • to register the shares issued in accordance with the preceding paragraph.

  • Article 7 Shareholders shall fill in signature cards and submit them to the Company's shareholder services agent, and in the event of receiving of dividends and other benefits and exercise of stock rights in writing, the signature cards shall be used as evidence.

  • Article 8 The transfer, inheritance, bestowal, loss or damage of shares shall be handled in accordance with the Regulations Governing the Administration of Shareholder Services of Public Companies.

Chapter III Shareholders' Meeting

  • Article 9 The Company's shareholders' meetings comprise of two types: General shareholders' meeting and special shareholders' meeting. General

61

shareholders' meetings shall be convened once a year within six months from the end of each fiscal year. Special shareholders' meetings may be convened when necessary.

  • Article 10 A notice shall be given to each shareholder no later than 30 days prior to the general shareholders' meeting and no later than 15 days prior to the special shareholders' meeting, and the meeting date, meeting place and reason for convening shall be publicly announced and notified to shareholders.

  • Article 11 The Company shall stop registration for transfer of shares within 60 days before each general shareholders' meeting, 30 days before each special shareholders' meeting or 5 days before the base date for distribution of dividends or other benefits.

  • Article 12 Resolutions at a shareholders' meeting shall, unless otherwise provided for in the Company Act, be adopted by a majority vote of the shareholders present, who represent a majority of the total number of issued shares.

  • Article 13 Unless otherwise stated in the Company Act, a shareholder shall have one vote for each share held.

  • Article 14 The meeting minutes shall be made for resolutions made at a shareholders' meeting, be affixed with the signature or seal of the chairman of the board of shareholders, and distributed to shareholders within 20 days after the meeting. The Company may distribute the meeting minutes by means of a public announcement.

  • The meeting minutes mentioned in the preceding paragraph may be made and distributed electronically.

  • Article 15 The Chairman of the Board shall chair shareholders' meetings. In the event that the Chairman is on leave or unable to exercise his/her authority, the Vice Chairman, if available, shall act on his/her behalf. If the Vice Chairman is also on leave or unable to exercise his/her authority, the Chairman shall designate a director to act on his/her behalf. If none has been designated by the Chairman, a director shall be elected to act on the Chairman's behalf from among all directors.

  • For a shareholders' meeting convened by any person having the convening right other than the Board of Directors, such person shall act as the chairman of that meeting. However, if there are two or more persons having the convening right, the chairman of the meeting shall be elected from among themselves.

62

Chapter IV Board of Directors

  • Article 16 The Company shall have 9 to 13 directors who shall be elected by the board of shareholders from the competent candidates. At least three independent directors shall be set among the directors and the number of independent directors shall be no less than one fifth of the total number of directors.

  • The total shareholding ratio of all directors mentioned in the preceding paragraph shall be subject to relevant regulations of the competent authority.

  • Article 16-1 The election of directors (including independent directors) of the Company shall adopt the candidate nomination system, and the shareholders shall elect the directors from among the nominees listed in the roster of director candidates.

  • The method of nomination and election of director candidates shall be subject to the provisions of relevant laws. Independent and nonindependent directors shall be elected at the same time, but in separately calculated numbers.

  • Article 16-2 The Company shall establish an Audit Committee according to the provisions of Article 14-4 of the Securities and Exchange Act, the Audit Committee shall compose the entire number of independent directors, and the number of the Audit Committee shall be no less than three, among which one member acts as the convener and at east one member shall have expertise in accounting or finance.

  • Provisions on supervisors in the Securities and Exchange Act, Company Act and other laws shall apply mutatis mutandis to the Audit Committee set by the Company.

  • Article 17 The term of office of directors of the Company is 3 years, and the directors are eligible for re-election.

  • In the event that one third of the directors or more are vacant from their positions, the Board of Directors shall call for a special shareholders' meeting to fill the vacancy within 60 days.

  • The Board of Directors is authorized to determine the remuneration of directors based on the degree of the directors' involvement in and contribution to operations of the Company as well as the general remuneration standard of the industry. The traffic allowance shall be determined by the Board of Directors.

  • Article 18 The Board of Directors meeting shall be organized by directors, and a chairman shall be elected from among the directors by a majority vote at

63

a meeting attended by over two thirds of the directors, and a vice chairman shall be elected in the same manner.

  • The chairman of the Board of Directors shall internally chair the shareholders' meetings and meetings of the Board of Directors, and externally represent the Company and exercise his/her functions and powers according to law.

  • Article 19 The reasons for calling a Board of Directors meeting shall be notified to each director 7 days in advance. In emergency circumstances, however, a meeting may be called on shorter notice.

  • The notice on calling a Board of Directors meeting may be effected in writing, by email or by fax.

  • Article 20 The Board of Directors shall set various functional committees, each of which shall set its articles of organization, and the articles of organization shall be approved after resolution at the Board of Directors meeting. Functional committees shall be responsible towards the Board of Directors and submit their proposals to the Board of Directors.

  • Article 21 The Chairman of the Board shall chair meetings of the Board of Directors. In the event that the Chairman is on leave or unable to exercise his/her authority, the Vice Chairman, if available, shall act on his/her behalf. If the Vice Chairman is also on leave or unable to exercise his/her authority, the Chairman shall designate a director to act on his/her behalf. If none has been designated by the Chairman, a director shall be elected to act on the Chairman's behalf from among all directors.

  • Directors shall attend board meetings in person. However, if a director is unable to attend a board meeting for a particular reason, he/she may appoint another director to serve as proxy to attend the meeting, and only one proxy can be appointed.

  • If a board meeting is held by means of video conference, directors who attend the board meeting by such means shall be deemed to have attended such meeting in person.

  • Article 22 Except for the matters to be decided at shareholders' meetings as required by the Company Act or the Articles of Association, the execution of business of the Company shall be resolved by the Board of Directors. Except as otherwise stipulated by the Company Act, resolutions of the Board of Directors shall be adopted by a majority of the directors present at a meeting attended by a majority of the directors.

  • Article 22-1 The Company shall purchase liability insurance for directors with respect to the liability for damage to be assumed according to law when

64

performing their duties during the directors' term of office, so as to reduce and spread the risk of material damage to the Company and shareholders arising from the directors' wrongdoing or negligence.

The Board of Directors is authorized to decide on the matters related to purchase of the liability insurance for directors.

Chapter V Manager

  • Article 23 The Company shall have several managers, whose appointment, discharge and remuneration shall be handled in accordance with the provisions of Article 29 of the Company Act.

  • Article 24 The managers shall take full charge of all relevant businesses of the Company in accordance with instructions of their superiors.

Chapter VI Accounting

  • Article 25 The fiscal year of the Company shall begin on Jan. 1 and end on Dec. 31 of each year. At the end of December of each year, the accounts of the Company shall be closed.

  • Article 26 Upon closing of each fiscal year of the Company, the Board of Directors shall prepare the following statements and submit them to the general shareholders' meeting according to the statutory procedure:

  • (I) Business report.

  • (II) Financial statements

  • (III)Proposal for distribution of earnings or loss recovery.

  • Article 27 If the Company has gained profits within a fiscal year, no less than 1% of the profits shall be reserved as employees' remuneration including the employees of the Company's subsidiaries meeting certain conditions, and the remuneration shall be distributed in the form of shares or in cash. The Company may reserve at most 5% of the aforesaid profits as directors' remuneration, and the remuneration shall be distributed in cash.

  • Proposals for the distribution of the aforementioned employees' and directors' remuneration shall be adopted by agreement of a majority of directors present, who represent two thirds or more of the directors, and be submitted to the board of shareholders. In case of accumulated loss, the Company shall reserve a specific amount to make up for losses. It shall then distribute employees and directors’ remuneration according to aforementioned ratios.

  • Article 27-1 The Company is in a traditional delicate industry. If the Company has

65

earnings after the accounts are closed for a fiscal year, it shall first pay the business income tax according to law and make up for the previous year's losses, and then reserve 10% as statutory surplus reserve and reserve or reverse the rest as special surplus reserve. If there are still earnings left, they shall be combined with accumulated undistributed earnings of the previous year, and the Board of Directors will make proposals for distribution or retention of earnings and submit them to the board of shareholders for resolution. The distribution of dividends shall be based on the proportion of shares held by each shareholder.

The Company shall take into account investment and development, evaluation of the investment environment and shareholders' interests and distribute dividends of shareholders at a rate no less than 50% of the net profit of the current period. Only when the net profit of the current period is less than 50% of the total amount of paid-up capital, dividends may not be distributed; dividends shall be distributed to shareholders in cash or in the form of shares, and cash dividends shall not be less than 50% of the total number of stock dividends.

The Company may, by a resolution adopted by a majority of the directors present who represent two thirds or more of the total number of directors, distribute all or part of dividends distributable in cash, which shall be reported to the board of shareholders.

Chapter VII Supplementary Provisions

  • Article 28 The matters not covered in the Articles of Association shall be handled according to the provisions of the Company Act, Securities and Exchange Act and other relevant laws.

  • Article 29 The Articles of Association was established on Jul. 1, 1953. The 1st amendment was on Feb. 28, 1954. The 2nd amendment was on Nov. 21, 1954. The 3rd amendment was on Jul. 31, 1955. The 4th amendment was on Oct. 16, 1955. The 5th amendment was on Feb. 24, 1957. The 6th amendment was on Nov. 30, 1958. The 7th amendment was on Feb. 28, 1959. The 8th amendment was on Aug. 31, 1960. The 9th amendment was on Aug. 31, 1961. The 10th amendment was on Aug. 31, 1962. The 11th amendment was on Feb. 28, 1963. The 12th amendment was on Aug. 31, 1963. The 13th amendment was on Mar. 31, 1964. The 14th amendment was on Aug. 31, 1964. The 15th amendment was on Mar. 31, 1965. The 16th amendment was on Mar. 31, 1967. The 17th amendment was on Jun. 20, 1968. The 18th amendment was on May 20, 1969. The 19th

66

amendment was on Apr. 25, 1970. The 20th amendment was on Apr. 24, 1971. The 21st amendment was on Mar. 25, 1972. The 22nd amendment was on Mar. 24, 1973. The 23rd amendment was on Nov. 24, 1973. The 24th amendment was on Mar. 30, 1974. The 25th amendment was on Apr. 12, 1975. The 26th amendment was on Mar. 25, 1976. The 27th amendment was on Apr. 9, 1977. The 28th amendment was on Mar. 25, 1978. The 29th amendment was on Mar. 24, 1979. The 30th amendment was on Mar. 28, 1980. The 31st amendment was on Mar. 28, 1981. The 32nd amendment was on Apr. 3, 1982. The 33rd amendment was on Jun 14, 1983. The 34th amendment was on Apr. 7, 1984. The 35th amendment was on May 4, 1985. The 36th amendment was on Apr. 26, 1986. The 37th amendment was on Apr. 25, 1987. The 38th amendment was on Apr. 15, 1989. The 39th amendment was on Apr. 28, 1990. The 40th amendment was on Jun. 24, 1991. The 41st amendment was on Jun. 4, 1992. The 42nd amendment was May 21, 1993. The 43rd amendment was on Jun. 4, 1994. The 44th amendment was on Jun. 12, 1995. The 45th amendment was on Jun. 11, 1996. The 46th amendment was on Jun. 28, 1997. The 47th amendment was on May 30, 1998. The 48th amendment was on Jun. 25, 1999. The 49th amendment was on Jun. 21, 2000. The 50th amendment was on Jul. 26, 2001. The 51st amendment was on Jun. 27, 2002. The 52nd amendment was on Jun. 27, 2003. The 53rd amendment was on Jun. 25, 2008. The 54th amendment was on Jun. 26, 2009. The 55th amendment was on Jun. 17, 2010. The 56th amendment was on Jun. 22, 2012. The 57th amendment was on Jun. 26, 2014. The 58th amendment was on Jun. 24, 2015. The 59th amendment was on Jun. 28, 2016. The 60th amendment was on Jun. 27, 2019.

67

Appendix II

Rules of Procedure for Shareholders' Meetings of Wei Chuan Foods Corporation

Amended and approved at the general shareholders'

meeting on Jun. 28, 2016.

  • Article 1 The shareholders' meetings of the Company, except as otherwise provided by laws and regulations or the Articles of Association, shall be in accordance with these Rules.

  • Article 1-1 Unless otherwise provided by laws and regulations, the shareholders' meetings of the Company shall be convened by the Board of Directors. The Company shall prepare electronic versions of the shareholders' meeting notice, proxy forms, reasons and explanation data of relevant proposals for ratification, discussions or proposals for election or dismissal of directors, and send them to the Market Observation Post System. The Company shall prepare electronic versions of the meeting handbook and supplementary meeting materials and send them to the Market Observation Post System 21 days before the general shareholders' meeting or 15 days before the special shareholders' meeting. The Company shall prepare the meeting handbook and supplementary meeting materials 15 days before a shareholders' meeting and make them available for review by shareholders at any time, display them in the Company and the professional shareholder services agency appointed by the Company, and distribute them at the site of the shareholders' meeting.

  • The reason for convening a shareholders' meeting shall be indicated on the notice and announcement; the notice may be given electronically with the consent of the counterparty.

  • The election or dismissal of directors, changes in the Articles of Association, dissolution, merger or division of the Company, or all items in Paragraph 1, Article 185 of the Company Act, Article 26-1 and Article 43-6 of the Securities and Exchange Act, or items in Article 56-1 and Article 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be listed as reasons for convening the meeting and shall not be raised as extraordinary motions.

68

  • Article 2 The Company shall indicate on the meeting notice the check-in time and location and other matters for attention.

  • The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel shall be assigned to handle the registrations.

  • Shareholders and their proxies (hereafter collectively referred to as "shareholders") shall attend shareholders' meetings with attendance cards, sign-in cards, or other certificates of attendance. The Company shall not require arbitrarily providing other evidentiary documents for shareholders' attendance. Solicitors soliciting proxy forms shall also bring identification documents for verification.

  • The Company shall provide attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors, ballots shall also be furnished.

  • Attending shareholders shall hand in attendance cards. When necessary, the Company shall verify the identification documents of attending shareholders.

  • The number of shares in attendance shall be calculated according to the shares indicated by the sign-in cards handed in plus the number of shares whose voting rights are exercised electronically.

  • Article 3 Attendance and voting at a shareholders' meeting shall be calculated based on the number of shares.

  • Article 4 When a juristic person is appointed to attend a shareholders' meeting as proxy, it may designate only one person to represent it at the meeting. When a juristic person shareholder appoints two or more representatives to attend a shareholders' meeting, only one of the representatives so appointed may speak on the same proposal.

  • Article 5 The venue for a shareholders' meeting shall be at the premises of the Company, or a place easily accessible to shareholders and suitable for a shareholders' meeting. The meeting shall begin no earlier than 9 a.m. and no later than 3 p.m.

  • Article 6 The Company's shares shall be registered shares. They shall be affixed with the signature or seal of the director representing the Company, and be duly certified or authenticated according to law before issuance thereof. The Company may appoint its attorneys, certified public accountants

69

(CPA), or other related persons to attend a shareholders' meeting in a nonvoting capacity.

  • Article 7 The Chairman of the Board shall chair shareholders' meetings if the meetings are convened by the Board of Directors. In the event that the Chairman is on leave or unable to exercise his/her authority, the Vice Chairman, if available, shall act on his/her behalf. If the Vice Chairman is also on leave or unable to exercise his/her authority, the Chairman shall designate a director to act on his/her behalf. If none has been designated by the Chairman, a director shall be elected to act on the Chairman's behalf from among all directors.

  • Where a director is to chair the meeting as described in the preceding paragraph, such director shall have that position for at least six months and be familiar with the financial and business conditions of the Company. The same principle applies for representatives of juristic person directors.

  • Shareholders' meetings convened by the Board of Directors shall be chaired by the Chairman of the Board in person and attended by a majority of the directors in person and by at least one member of each functional committee, and the attendance details shall be recorded in the minutes of the shareholders' meeting.

  • For a shareholders' meeting convened by any person having the convening right other than the Board of Directors, such person shall act as the chairman of that meeting. However, if there are two or more persons having the convening right, the chairman of the meeting shall be elected from among themselves.

  • Article 8 If a shareholders' meeting is convened by the Board of Directors, the agenda shall be set by the Board of Directors, and the meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders' meeting.

  • The provisions of the preceding paragraph apply mutatis mutandis to a shareholders' meeting convened by a party with the power to convene that is not the Board of Directors.

  • The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders' meeting.

  • After adjournment of a meeting, shareholders shall not elect a new chair to continue the meeting at the original venue or a new place. However, if the chair declares the meeting adjourned in violation of the rules of procedure, a

70

new chair shall be elected by agreement of a majority of the votes represented by the attending shareholders to continue the meeting.

  • Article 9 The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned.

  • If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Paragraph 1, Article 175 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders' meeting shall be convened within one month.

  • When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders' meeting pursuant to Article 174 of the Company Act.

  • Article 10 Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number) and account name. The order in which shareholders speak will be set by the chair.

  • A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

  • When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation.

  • Article 11 Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes.

  • If the shareholder's speech violates the rules of the preceding paragraph or exceeds the scope of the agenda item, the chair may terminate the speech.

  • Article 12 After an attending shareholder has spoken, the chair may respond in person or designate a relevant member of personnel to respond.

71

Article 13 When the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call for a vote. Article 14 Unless otherwise provided for in the Company Act and the Articles of Associations, resolutions shall be adopted by a majority vote of the shareholders present. Article 15 A shareholder shall be entitled to one vote, except when the shares are restricted shares or are deemed non-voting shares under Paragraph 2, Article 179 of the Company Act.

When a shareholder appoints a proxy to attend the shareholders' meeting and one person is concurrently appointed as proxy by two or more shareholders, with the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, the voting rights represented by that proxy may not exceed 3% of the voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

Article 16 When voting rights are exercised by electronic means in the voting for a proposal, the method of exercise shall be specified in the shareholders' meeting notice.

A shareholder exercising voting rights by electronic means will be deemed to have attended the shareholders' meeting in person. However, his/her rights with respect to the extraordinary motions and amendments to original proposals are deemed to have been waived, and therefore, the Company shall avoid proposing extraordinary motions and amendments to original proposals.

A shareholder intending to exercise voting rights by electronic means under the preceding paragraph shall deliver a written declaration of intent to the Company 2 days before the date of the shareholders' meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent.

After a shareholder has exercised voting rights by electronic means, in the event that the shareholder intends to attend the shareholders' meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, 2 days before the date of the shareholders' meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by electronic

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means shall prevail. When a shareholder has exercised voting rights both by electronic means and by appointing a proxy to attend a shareholders' meeting, the voting rights exercised by the proxy in the meeting shall prevail.

  • If no shareholder has any objection after inquiry by the chair at the time of a vote, and the shareholders voting by electronic means have not voted against or have no intent of absention for a proposal, such proposal will be deemed to have been adopted with the same effect as if it has been voted for.

  • Article 17 When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

  • Article 18 Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company.

  • Vote counting for shareholders' meeting proposals or elections shall be conducted in public at the place of the shareholders' meeting. Immediately after vote counting has been completed, the results and the number of votes, including weights, shall be announced on-site immediately and recorded.

  • Article 19 The election of directors at a shareholders’ meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of weight of votes with which they were elected.

  • The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, it shall be retained until the conclusion of the litigation.

  • Article 20 The meeting minutes shall be made for resolutions made at a shareholders' meeting, be affixed with the signature or seal of the chairman of the board of shareholders, and distributed to shareholders within 20 days after the meeting. The meeting minutes may be made and distributed electronically. The Company may distributed the meeting minutes mentioned in the preceding paragraph by means of a public announcement made through the Market Observation Post System.

  • The meeting minutes shall accurately record the year, month, day and place of the meeting, name of the chair, method of resolution, summary and result

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  • of the deliberations, and be kept for the duration of existence of the Company.

  • Article 21 On the day when the shareholders' meeting is convened, the Company shall compile a statistical statement of the number of shares obtained by the solicitor and the number of shares represented by proxies, according to the stipulated format, and disclose the statistics clearly at the venue of the shareholders' meeting.

  • If the matters put to a resolution at the shareholders' meeting are material information under applicable laws or regulations and rules of Taiwan Stock Exchange Corporation regulations (GreTai Securities Market), the Company shall upload the content of such resolution to the Market Observation Post System within the stipulated time.

  • Article 22 When a meeting is in progress, the chair may announce a break based on time consideration.

  • Article 23 The Company shall make an uninterrupted audio and video recording of the shareholders' registration process, proceedings of the meeting and the voting and vote counting process, from the time when it accepts shareholder attendance registrations.

  • The recorded materials of the preceding paragraph shall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, it shall be retained until the conclusion of the litigation.

  • Article 24 The chair may direct the proctors (or security personnel) to help maintain order at the meeting place. When proctors (or security personnel) help maintain order at the meeting place, they shall wear armbands bearing the word "Proctor".

  • At the place of a shareholders' meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the chair may prevent the shareholder from so doing.

  • When a shareholder violates the rules of procedure and defies the chair's correction, obstructs the proceedings, and refuses to heed calls to stop, the chair may direct the proctors or security personnel to escort the shareholder out from the venue of the meeting.

  • Article 25 If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

  • Article 26 The Rules, and any amendments hereto, shall be implemented after adoption by shareholders' meetings.

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Appendix III

Measures for Election of Directors of Wei Chuan Foods Corporation

Amended and approved at the general shareholders' meeting on Jun. 28, 2016.

  • Article 1 The election of directors of the Company shall be in accordance with the provisions of these Measures.

  • Article 1-1 The qualifications of independent directors of the Company shall comply with the provisions of Articles 2, 3 and 4 of the "Measures for the Establishment of Independent Directors of Public Companies and Matters to Be Followed".

  • The election of independent directors of the Company shall be in accordance with the provisions of Articles 5 and 6 of the "Measures for the Establishment of Independent Directors of Public Companies and Matters to Be Followed" and Article 24 of the "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies".

  • Article 1-2 Election of directors of the Company adopts a candidate nomination system and shall be in accordance with the provisions of Article 192-1 of the Company Act.

  • Article 2 The registered cumulative voting system shall be adopted for election of directors of the Company. The attendance card number shall be printed on the ballots for registration of electors. In the election of directors of the Company, each share shall be entitled to the same voting rights as those represented by the number of directors to be elected, and one director may be elected intensively or several directors may be elected respectively.

  • Article 3 Before the election, the chairman shall designate a number of vote counting personnel and vote monitoring personnel who are also shareholders, to perform their duties accordingly.

  • Article 4 For the election of directors, the Board of Directors shall set ballot boxes, which shall be examined in public by the vote monitoring personnel before the ballots are cast.

  • Article 5 Directors of the Company shall be elected by the board of shareholders from the competent candidates, the voting rights of independent and nonindependent directors shall be calculated separately according to the number of positions stipulated in the Articles of Association, the persons having more voting rights shall be elected as directors sequentially and respectively, and when two or more persons receive the same number of weight of votes, thus exceeding the specified number of positions, they

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shall draw lots to determine the winner. The chair shall draw lots on behalf of any absent persons.

Any person who is simultaneously elected as both director and independent director according to the preceding paragraph shall determine whether to assume the position of director or independent director, and the vacancy shall be filled by the candidate who receives the second highest voting rights originally.

  • Article 6 The Board of Directors shall prepare ballots of the same number as that of directors to be elected, number the ballots according to the attendance certificate number, fill in the number of weight of voting rights, and distribute the ballots to shareholders attending the shareholders' meeting.

  • Article 7 For shareholder candidates, voters shall fill in the candidates' name and shareholder account number in the "candidate column" in the ballot paper; for non-shareholder candidates, the candidates' name and identification number shall be filled in. However, when the candidate is a governmental organization or juristic-person shareholder, the name of the governmental organization or juristic-person shareholder shall be filled in the column for the candidate's account name in the ballot paper, or both the name of the governmental organization or juristic-person shareholder and the name of its representative shall be filled in. When there are multiple representatives, the name of each respective representative shall be filled in.

  • Article 8 Ballots are invalid under any of the following circumstances:

  • I. The ballot is not prepared by the Board of Directors.

  • II. For shareholder candidates, their account name and shareholder account number is inconsistent with that on the shareholder register; for nonshareholder candidates, their name and identity certificate number is found to be inconsistent.

  • III. Blank ballots are cast into the ballot box.

  • IV. The writing is unclear and indecipherable or has been altered.

  • V. The name of the candidate filled in is identical to that of another shareholder, but no shareholder account number or identity certificate number is provided to identify such candidate, or the shareholder account number or identity certificate number is found to be inconsistent.

  • VI. Other unwanted words are found in the ballots, apart from The candidate's account name (name) or shareholder account number (identity certificate number) and number of voting rights allocated.

  • Article 9 After casting of ballots, the ballot box shall be opened to count the ballots on the spot, and the ballot counting result shall be announced by the chair

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or the personnel designated by the chair, including the names of those elected as directors and independent directors and the number of weight of votes with which they were elected.

  • The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, it shall be retained until the conclusion of the litigation.

  • Article 10 The Board of Directors shall send a notice of election to the persons elected as directors and independent directors.

  • Article 11 The matters not covered in the Measures shall be handled according to the Company Act and other relevant laws and regulations.

  • Article 12 The Measures, and any amendments hereto, shall be implemented after adoption by shareholders' meetings.

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Appendix IV

Impact of the free allotment of shares on the Company's business performance, earnings per share and return on investment of shareholders: None

Appendix V

Shareholding Status of All Directors of Wei Chuan Foods Corporation

  • I. The Company's paid-in capital is NT$5,060,629,140 and the number of issued shares is 506,062,914.

  • II. According to the provisions of Article 26 of the Securities and Exchange Act and the "Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies", all directors of the Company shall hold a minimum of 16,194,013 shares.

  • III. As of the book closure date of stock transfer for the 2021 general shareholders' meeting, the shareholding status of all directors recorded on the shareholders registry is as shown in the attached table.

  • IV. The total number of shares held by all directors of the Company has reached the statutory shareholding standard.

Detailed statement of directors' shareholding

Apr.25,2021
Number of Shares
Held
35,880,000
35,880,000
35,880,000
1,050,000
36,688,000
30,000
0
0
0
73,648,000
Job Title Name Number of Shares
Held
Chairman Kang QingCo.,Ltd. Representative: Chen-HungYu 35,880,000
Director Kang QingCo.,Ltd. Representative: Chien-Pei Hsiang 35,880,000
Director Kang QingCo.,Ltd. Representative: Lai-ChingPao 35,880,000
Director Kang QingCo.,Ltd. Representative: Hsien-Mon Chang 1,050,000
Director Kang QingCo.,Ltd. Representative: Lin-ChingTang 36,688,000
Director Hsueh-KuangChi 30,000
Independent
Director		 Chen-Shun Ping 0
Independent
Director		 Li-Zhi Ping 0
Independent
Director		 Song-Jun Ming 0
Total 73,648,000

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