WEI CHUAN - Audit Report / Information 2020

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2020 AND 2019

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

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INDEPENDENT AUDITORS’ 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.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 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:

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.

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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.
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.
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:

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

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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.

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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:

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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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.
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.
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.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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.

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WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	December31,	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)

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WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities andEquity	December31,	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.

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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	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.

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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
		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.

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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)

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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.

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WEI CHUAN FOODS CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

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

1. History and Organisation

(1) Wei Chuan Foods Corporation (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) and other related regulations in September 1953. The Company is primarily engaged in manufacturing, processing and sale of dairy products, beverages and instant foods.
(2) The Company’s shares have been listed on Taiwan Stock Exchange since February 1962.

2. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These parent company only financial statements were authorised for issuance by the Board of Directors on March 29, 2021.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

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

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

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

the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

follows:
	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from	January 1, 2021
applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest	January 1, 2021
Rate Benchmark Reform - Phase 2’

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

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

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

as endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments

Effective date by
International Accounting
Standards Board

Amendments to IFRS 3, ‘Reference to the conceptual framework’
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, ‘Insurance contracts’
Amendments to IAS 1, ‘Classification of liabilities as current or
non-current’
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 16, ‘Property, plant and equipment: proceeds
before intended use’
Amendments to IAS 37, ‘Onerous contracts-cost of fulfilling a contract’
Annual improvements to IFRS Standards 2018 - 2020

January 1, 2022
To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022
January 1, 2022
January 1, 2022

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The Company continually evaluates the impact of the above standards and interpretations to the Company’s financial condition and financial performance. The quantitative impact will be disclosed when the assessment is complete.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of preparation

A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(b) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.
B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Foreign currency translation

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional and presentation currency.

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

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(b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.
B. Translation of foreign operations
(a) The operating results and financial position of all the Company entities, associates and jointly controlled entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

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

(b) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(4) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realised within twelve months from the balance sheet date;

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

(5) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.
D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(7) Accounts and notes receivable

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

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(8) Impairment of financial assets

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

(9) Derecognition of financial assets

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

- (10) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(11) Inventories

The perpetual inventory system is adopted for inventory recognition. The cost is determined using the weighted-average method. The fixed production overheads are allocated based on the normal capacity of the production facilities. Normal capacity is the production expected to be achieved on average over a number of periods, taking into account the planned maintenance. The actual level of production may be used if it approximates normal capacity. Ending inventories are stated at the lower of cost and net realisable value. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the cost of completion and selling expenses.

(12) Investments accounted for using the equity method / subsidiaries and associates

A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
B. Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

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C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise the losses in proportion to the ownership.
D. Upon loss of significant influence over a subsidiary, the Company remeasures any investment retained in the former subsidiary at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Company loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.
F. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
G. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognises change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.
H. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
I. Pursuant to the “Regulations Governing the Preparation of Financial Statements by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the consolidated financial statements. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the consolidated financial statements.

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(13) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

and equipment are as follows:
Buildings and structures	5 ~ 60 years
Machinery and equipment	2 ~ 30 years
Office equipment	2 ~ 20 years
Transportation equipment	2 ~ 10 years
Others	2 ~ 30 years

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

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable.
The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured

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and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

(15) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 38 ~ 60 years.

(16) Biological assets

Biological assets are measured at fair value. However, biological assets may be measured at cost less accumulated depreciation if the fair value cannot be obtained from the active market, and the alternative estimation of the fair value is clearly not reliable. They are depreciated over the expected useful life using the straight-line method, which is primarily 5 years. In addition to acquisition cost, feeding costs are capitalised when incurred and are tested annually for impairment. Where there is objective evidence of impairment, an impairment loss is recognised.

(17) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

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(18) Borrowings

A. Borrowings comprise long-term and short-term bank borrowings and other long-term and short-term loans. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(19) Notes and accounts payable

A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(20) Derecognition of financial liabilities

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

(21) Offsetting financial instruments

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

(22) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

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(23) Employee benefits

A. Short-term employee benefits

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

B. Pensions
(a) Defined contribution plans

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

(b) Defined benefit plans
- i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.
- ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.
- iii. Past service costs are recognised immediately in profit or loss.
C. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Company recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

D. Employees’ compensation and directors’ remuneration
Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

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(24) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the balance sheet. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

(25) Share capital

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

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(26) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities.

(27) Revenue recognition

A. The Company manufactures and sells food products. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer. Delivery occurs when the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.
B. The products are often sold with volume discounts based on aggregate sales over a 12-month period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated sales discounts and allowances. Accumulated experience is used to estimate and provide for the sales discounts and allowances, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. No significant financing component is deemed present as the sales are made with a credit term of 15 to 90 days, which is consistent with market practice.
C. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(28) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognised as non-current liabilities and are amortised to profit or loss over the estimated useful lives of the related assets using the straight-line method.

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5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

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

(1) Critical judgements in applying the Company’s accounting policies

Based on the Company’s assessment, there is no significant uncertainty in the adoption of the accounting policies.

(2) Critical accounting estimates and assumptions

A. Revenue recognition

The Company estimates the incentives relating to the sales revenue based on the agreements. Provisions for such liabilities are recorded as a deduction item to sales revenues when the sales are recognised. The Company reassesses the reasonableness of estimates of incentives periodically.

B. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. The Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of December 31, 2020, the Company recognised inventories amounting to $603,310.

C. Impairment loss on property, plant and equipment

The Company assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of group strategy might cause material impairment on assets in the future.

As of December 31, 2020, the Company recognised impairment loss on property, plant and equipment amounting to $3,687,645.

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D. Realisability of deferred tax assets
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and unused tax losses can be utilised. Assessment of the realisability of deferred tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, available tax credits, tax planning, etc. Any variations in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred tax assets.
As of December 31, 2020, the Company recognised deferred tax assets amounting to $1,195,454.

6. Details of Significant Accounts

(1) Cash and cash equivalents

ils of Significant Accounts Cash and cash equivalents
Cash on hand Checking accounts and demand deposits Time deposits	December31,2020 2,333 $ 371,805 330,788 704,926 $	December31,2019
		3,051 $ 200,912 352,743
		556,706 $

A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. As of December 31, 2020 and 2019, the Company’s cash and cash equivalents amounting to $8,000 and $10,000, respectively, were restricted due to the guarantee deposit paid for the operational use and were reclassified as other non-current assets. Refer to Notes 6(10) and 8 for more details.

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

Non-current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks Valuation adjustment	December 31,2020 383,592 $ 350,475) ( 33,117 $	December 31, 2019 383,592 $ 350,484) ( 33,108 $

A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

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Year ended December 31 2020 2019 Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks $ 9 $ -

B. Information relating to credit risk is provided in Note 12(2).

(3) Notes and accounts receivable (including related parties)

		December	31, 2020		December	31,2019
Notes receivable		$	12,881		$	17,543
Less: Allowance for uncollectible accounts			-	(		4)
		$	12,881		$	17,539
Accounts receivable		$	866,338		$	865,003
Less: Allowance for uncollectible accounts	(		786)	(		252)
		$	865,552		$	864,751
Accounts receivable due from related parties		$	7,522		$	5,994

A. Information relating to ageing analysis and credit risk of accounts receivable and notes receivables (including related parties) is provided in Note 12(2).
B. As of December 31, 2020 and 2019, notes receivable and accounts receivable (including related parties) were all from contracts with customers. Also, as of January 1, 2019, the balance of receivables (including related parties) from contracts with customers amounted to $1,039,824.
C. The Company has no notes receivable and accounts receivable pledged to others.

(4) Inventories

Raw materials and supplies Work in progress Finished goods	December 31,2020
	Allowance for Cost valuation loss 189,243 $ 12,529) ($ 112,642 2) ( 332,064 18,108) ( 633,949 $ 30,639) ($	Book value
		176,714 $ 112,640 313,956
		603,310 $

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Raw materials and supplies Work in progress Finished goods	Allowance for Cost valuation loss Book value 187,326 $ 12,021) ($ 175,305 $ 91,002 14) ( 90,988 315,891 37,358) ( 278,533 594,219 $ 49,393) ($ 544,826 $ December 31,2019

A. The above inventories were not pledged as collateral.
B. The cost of inventories recognised as expense for the year.

		Year ended December 31	Year ended December 31	Year ended December 31
		2020		2019
Cost of goods sold	$	5,862,488	$	5,984,274
(Gain on reversal of) loss on decline in market value	(	18,754)		1,632
Scrap of inventories and gain or loss on physical inventory		180,501		197,413
Revenue from sales of scraps	(	3,227)	(	4,242)
Loss on excess capacity		27,622		34,984
	$	6,048,630	$	6,214,061

Gain on reversal of decline in market value was because of the sale of inventories previously written down which was charged to cost of goods sold.

(5) Investments accounted for using the equity method / Other non-current liabilities-others

		2020		2019
At January 1	$	5,047,544	$	5,371,948
Addition of investments accounted for using the equity method		753,035		-
Share of profit or loss of investments accounted for using the equity method		315,955		668,924
Cash dividends received	(	597,514)	(	156,651)
Proceeds from capital reduction	(	22,965)	(	563,373)
Proceeds from distribution of capital surplus		-	(	109,648)
Currency translation differences		50,205	(	163,938)
Others		263		282
At December 31	$	5,546,523	$	5,047,544

Note: To implement division of services and enhance competitiveness and operational performance, the Company invested $30,000 to establish a wholly-owned subsidiary, Cheng Shuen Nung Ranch Dairy Co., Ltd. (Cheng Shuen Nung), in April 2020.

The Board of Directors and the shareholders at their meeting on May 11, 2020 and June 23, 2020 resolved to spin off its business relating to the Linfengying Ranch to Cheng Shuen Nung in exchange for 54,929,989 new shares issued by Cheng Shuen Nung at a price of $10 (in

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dollars) per share at a consideration of $723,035. The ranch related business (including assets, liabilities and operation) was spun off from the Company to Cheng Shuen Nung. The effective date for the spin-off was set on December 31, 2020.

The nature of spin off was a group reorganisation, and based on IFRS and the letter of the Accounting Research And Development Foundation Interpretation 100-390, the accounting basis of Cheng Shuen Nung was the carrying amounts of assets and liabilities at the effective date for the spin-off.

date for the spin-off.
Investee companies (a)Presented under assets- Investments accounted for using the equity method: Subsidiary`：` KING CAN INDUSTRY CORPORATION CONCOURSE INTERNATIONAL INC. CHINA YOUTH CO., LTD. WEI-CHUAN INTERNATIONAL LIMITED WEI-CHUAN(BVI) CO., LTD KANG CHUAN ENGINEERING CO., LTD. WEI-CHUAN ASIAN INVESTMENT LIMITED CHENG SHUEN NUNG RANCH DAIRY CO., LTD. Associates`：` FU TING FOODS CO., LTD. Investee companies (b)Presented under liabilities- Other non-current liabilities-others: THAI WEI-CHUAN CO., LTD. WEI-CHUAN ASIAN INVESTMENT LIMITED	Year ended December 31
	2020 2019 Carryingamount Carrying amount 577,905 $ 563,837 $ 220,537 191,175 8,002 8,029 56,321 55,464 3,715,641 3,991,249 205,430 227,693 - 64 752,831 - 5,536,667 5,037,511 17,686 18,306 5,554,353 $ 5,055,817 $ Year ended December 31	2019
		Carrying amount
		563,837 $ 191,175 8,029 55,464 3,991,249 227,693 64 -
	2020 Carryingamount 7,829 $ 1 7,830 $	2019
		Carrying amount
		8,273 $ - 8,273 $

A. Subsidiaries

Refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2020 for other information about the Company’s subsidiaries.

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B. Associates

The carrying amount of the Company’s interests in all individually immaterial associates and the Company’s share of the operating results are summarised below:

As of December 31, 2020 and 2019, the carrying amount of the Company’s individually immaterial associates amounted to $17,686 and $18,306, respectively.

		Year ended December 31	Year ended December 31	Year ended December 31
		2020		2019
(Loss) profit for the year from continuing
operations	($	620)	$	699
Other comprehensive income, net of tax		-		-
Total comprehensive (loss) income	($	620)	$	699

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(6) Property, plant and equipment

Property, plant and equipment
At January 1 Cost Accumulated depreciation and impairment Opening net book amount as at January 1 Additions Disposals Reclassifications Depreciation expense Reversal of impairment loss Effect of corporate spin-off Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation and impairment	Land 2,686,532 $ 2,131) ( 2,684,401 $ 2,684,401 $ - - - - - 395,218) ( 2,289,183 $ 2,291,314 $ 2,131) ( 2,289,183 $	Buildings and structures 2,077,345 $ 1,229,775) ( 847,570 $ 847,570 $ 1,105 922) ( - 55,951) ( 728 268,315) ( 524,215 $ 1,642,262 $ 1,118,047) ( 524,215 $	Unfinished construction Machinery and Office Transportation and equipment equipment equipment equipment under acceptance 2,225,132 $ 616,509 $ 367,120 $ 24,197 $ 1,914,674) ( 546,317) ( 358,149) ( - 310,458 $ 70,192 $ 8,971 $ 24,197 $ 310,458 $ 70,192 $ 8,971 $ 24,197 $ 12,937 15,157 2,481 96,683 2,537) ( 34) ( - - 35,031 2,339 - 80,647) ( 95,395) ( 23,850) ( 6,645) ( - 2,431) ( - - - 16,178) ( 8,913) ( 1,170) ( - 241,885 $ 54,891 $ 3,637 $ 40,233 $ 2,083,046 $ 593,471 $ 338,504 $ 40,233 $ 1,841,161) ( 538,580) ( 334,867) ( - 241,885 $ 54,891 $ 3,637 $ 40,233 $ 2020	Others 3,004,399 $ 2,058,947) ( 945,452 $ 945,452 $ 26,349 14,582) ( 44,127 129,465) ( 11,423 349,703) ( 533,601 $ 2,358,723 $ 1,825,122) (	Total 11,001,234 $ 6,109,993) ( 4,891,241 $ 4,891,241 $ 154,712 18,075) ( 850 311,306) ( 9,720 1,039,497) ( 3,687,645 $ 9,347,553 $ 5,659,908) (
				533,601 $	3,687,645 $

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2019

At January 1 Cost Accumulated depreciation and impairment Opening net book amount as at January 1 Additions Disposals Reclassifications Depreciation expense Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation and impairment	Land 2,679,335 $ 2,131) ( 2,677,204 $ 2,677,204 $ - - 7,197 - 2,684,401 $ 2,686,532 $ 2,131) ( 2,684,401 $	Buildings and structures 2,051,632 $ 1,158,000) ( 893,632 $ 893,632 $ - - 12,180 58,242) ( 847,570 $ 2,077,345 $ 1,229,775) ( 847,570 $	Machinery and equipment 2,178,417 $ 1,858,758) ( 319,659 $ 319,659 $ 6,184 - 76,194 91,579) ( 310,458 $ 2,225,132 $ 1,914,674) ( 310,458 $	Office equipment 600,522 $ 541,159) ( 59,363 $ 59,363 $ 30,603 - 4,998 24,772) ( 70,192 $ 616,509 $ 546,317) ( 70,192 $	Transportation equipment 378,506 $ 358,328) ( 20,178 $ 20,178 $ 1,274 190) ( - 12,291) ( 8,971 $ 367,120 $ 358,149) ( 8,971 $	Unfinished construction and equipment under acceptance 54,832 $ - 54,832 $ 54,832 $ 145,501 - 176,136) ( - 24,197 $ 24,197 $ - 24,197 $	Others 2,946,036 $ 1,979,193) ( 966,843 $ 966,843 $ 14,683 - 94,340 130,414) ( 945,452 $ 3,004,399 $ 2,058,947) ( 945,452 $	Total
								10,889,280 $ 5,897,569) (
								4,991,711 $
								4,991,711 $ 198,245 190) ( 18,773 317,298) (
								4,891,241 $
								11,001,234 $ 6,109,993) (
								4,891,241 $

A. The Company’s property, plant and equipment are for its own use.
B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.
C. The above land items include $382 and $63,860 of farmland as of December 31, 2020 and 2019, respectively. The title to the farmland will be transferred to the Company following the change of land category. However, the land was pledged as collateral in the amounts of $20,000 and $86,300 to the Company in order to safeguard the interests of the Company.
D. The amounts of interest capitalised, which were calculated based on monthly average interest rates, for the years ended December 31, 2020 and 2019 were $223 and $428, respectively.
E. Information about the reversal of impairment loss on property, plant and equipment is provided in Note 6(11).

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(7) Leasing arrangements - lessee

A. The Company leases various assets including offices, warehouses and business vehicles. Rental contracts are typically made for periods of 1 to 17 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets cannot be subleased, lent, sold or granted in any different form to third parties without the consent of the lessor.
B. The carrying amount of right-of-use assets and the depreciation expense are as follows:

Buildings and structures Transportation equipment Buildings and structures Transportation equipment	December31,2020 December31,2019 Carrying amount Carrying amount 127,582 $ 136,140 $ 2,878 4,523 130,460 $ 140,663 $ Year ended December 31	December31,2020 December31,2019 Carrying amount Carrying amount 127,582 $ 136,140 $ 2,878 4,523 130,460 $ 140,663 $ Year ended December 31
	2020 Depreciation expense 26,973 $ 1,644 28,617 $	2019
		Depreciation expense
		27,287 $ 822
		28,109 $

C. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $18,414 and $38,845, respectively.
D. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts	Year ended December 31
	2020 2019 2,484 $ 2,791 $ 1,569 $ 1,221 $

E. Apart from the cash outflow for the interest expense on lease liabilities and expenses on short-term lease contracts as aforementioned in Note 6(7)D, the cash outflow resulting from payments of the principal portion of the lease liability amounted to $26,960 and $29,723 for the years ended December 31, 2020 and 2019, respectively.

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(8) Investment property, net

Investment property, net
				2020
				Buildings and
		Land		structures		Total
At January 1
Cost	$	49,998	$	211,637	$	261,635
Accumulated depreciation		-	(	61,919)	(	61,919)
Accumulated impairment	(	4,433)	(	1,529)	(	5,962)
	$	45,565	$	148,189	$	193,754
Opening net book amount as at
January 1	$	45,565	$	148,189	$	193,754
Depreciation expense		-	(	5,103)	(	5,103)
Closing net book amount as at
December 31	$	45,565	$	143,086	$	188,651
At December 31
Cost	$	49,998	$	211,637	$	261,635
Accumulated depreciation		-	(	67,022)	(	67,022)
Accumulated impairment	(	4,433)	(	1,529)	(	5,962)
	$	45,565	$	143,086	$	188,651

				2019
				Buildings and
		Land		structures		Total
At January 1
Cost	$	57,195	$	236,477	$	293,672
Accumulated depreciation		-	(	70,569)	(	70,569)
Accumulated impairment	(	4,433)	(	1,529)	(	5,962)
	$	52,762	$	164,379	$	217,141
Opening net book amount as at
January 1	$	52,762	$	164,379	$	217,141
Reclassifications	(	7,197)	(	10,974)	(	18,171)
Depreciation expense		-	(	5,216)	(	5,216)
Closing net book amount as at
December 31	$	45,565	$	148,189	$	193,754
At December 31
Cost	$	49,998	$	211,637	$	261,635
Accumulated depreciation		-	(	61,919)	(	61,919)
Accumulated impairment	(	4,433)	(	1,529)	(	5,962)
	$	45,565	$	148,189	$	193,754

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A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year	2020 2019 31,887 $ 32,462 $ 5,103 $ 5,216 $ Year ended December 31
		32,462 $
		5,216 $

B. The fair value of the investment property held by the Company as at December 31, 2020 and 2019 was $1,366,050 and $814,649, respectively, which was valued based on the transaction prices of similar property in the neighbouring areas. Valuations is categorised within Level 2 in the fair value hierarchy.
C. Information about the investment property that was pledged to others as collateral is provided in Note 8.

(9) Non-current biological assets

Non-current biological assets
						2020
						Immature
		Biological assets			biological assets			Total
At January 1
Cost	$		44,123	$		72,304	$	116,427
Accumulated depreciation	(		11,908)			-	(	11,908)
	$		32,215	$		72,304	$	104,519
Opening net book amount as at
January 1	$		32,215	$		72,304	$	104,519
Additions			-			67,156		67,156
Disposals	(		26,506)	(		16,234)	(	42,740)
Reclassifications			49,385	(		49,385)		-
Depreciation expense	(		7,191)			-	(	7,191)
Effect of corporate spin-off	(		47,903)	(		73,841)	(	121,744)
Closing net book amount as at
December 31	$		-	$		-	$	-
At December 31
Cost	$		-	$		-	$	-
Accumulated depreciation			-			-		-
	$		-	$		-	$	-

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						2019
						Immature
		Biological assets			biological assets			Total
At January 1
Cost	$		121,388	$		72,474	$	193,862
Accumulated depreciation	(		34,896)			-	(	34,896)
	$		86,492	$		72,474	$	158,966
Opening net book amount as at
January 1	$		86,492	$		72,474	$	158,966
Additions			5,760			66,700		72,460
Disposals	(		95,551)	(		14,000)	(	109,551)
Reclassifications			52,870	(		52,870)		-
Depreciation expense	(		17,356)			-	(	17,356)
Closing net book amount as at
December 31	$		32,215	$		72,304	$	104,519
At December 31
Cost	$		44,123	$		72,304	$	116,427
Accumulated depreciation	(		11,908)			-	(	11,908)
	$		32,215	$		72,304	$	104,519
)Other non-current assets

			December31,2020 December 31, 2019
Guarantee deposits paid			$			9,010 $		10,431
Restricted bank deposits						8,000		10,000
Prepayments for business facilities						720		720
			$			17,730 $		21,151

(10) Other non-current assets

(11) Impairment of non-financial assets

The Company takes into consideration the utilisation of assets to assess at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. The recoverable amounts are estimated based on value in use of those assets. Information on impairment loss recognised or reversed based on the value in use of aforementioned assets for the Company’s food segment is as follows:

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				Year ended	December31
		2020				2019
			Recognised					Recognised
				in other				in other
	Recognised in		comprehensive		Recognised	in	comprehensive
	profit	or loss		income	profit or loss			income
(Impairment loss)/gain on reversal of
impairment loss-buildings and structures	$	728	$	-	$	-	$	-
(Impairment loss)/gain on reversal of
impairment loss-machinery and equipment	(	2,431)		-		-		-
(Impairment loss)/gain on reversal of
impairment loss-other equipment		11,423		-		-		-
	$	9,720	$	-	$	-	$	-

(12) Short-term borrowings

Short-term borrowings
Bank borrowings Unsecured borrowings Secured borrowings Bank borrowings Unsecured borrowings Secured borrowings	December 31,2020 100,000 $ 500,000 600,000 $ December 31, 2019 500,000 $ 720,000 1,220,000 $	Interest rate range	Collateral
		1.05% 1.15%~1.20% Interest rate range	None Note 8 Collateral
		1.45% 1.34%~1.45%	None Note 8

Information on the interest expense recognised in profit or loss is provided in Note 6(25).

(13) Short-term notes and bills payable

Short-term notes and bills payable
		December	31,2020
			Interest
		Amount	rate range
Short-term notes and bills payable	$	250,000	1.08%~1.09%
Less: Unamortised discount	(	61)
	$	249,939

December 31, 2019: None.

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(14) Other payables

Wages and salaries and bonus payable Sales commission payable Freight payable Advertisement expense payable Machinery and equipment payable Others	December 31,2020 186,139 $ 171,637 66,235 31,765 30,968 131,238 617,982 $	December 31,2019 199,860 $ 141,826 69,707 17,931 26,872 160,472 616,668 $

- (15) Long term borrowings

Long-term borrowings
		December 31, 2020		December 31, 2019
Unsecured borrowings		$	119,867	$	119,754
Secured borrowings			2,817,000		2,850,000
			2,936,867		2,969,754
Less: Current portion (shown as other current
liabilities)	(		33,000)	(	33,000)
		$	2,903,867	$	2,936,754
Interest rate range			1.19%~1.38%		1.34%~1.55%

A. As of December 31, 2020, the Group has entered into the following loan facility agreements:
(a) A $1.7 billion loan facility agreement with United Overseas Bank that can be redrawn between May 9, 2020 and April 30, 2022.
(b) A $700 million loan facility agreement with Far Eastern International Bank that can be redrawn between September 9, 2020 and September 22, 2023.
(c) A $550 million loan facility agreement with Sunny Bank that was drawn once on December 30, 2019. The principal was repaid monthly and was settled on December 30, 2022.
(d) A $120 million loan facility agreement with China Bills Finance Corporation that can be redrawn between June 18, 2020 and June 17, 2022.
(e) A RMB 200 million loan facility agreement with China Merchants Bank that can be redrawn between May 30, 2019 and May 30, 2024.

The above agreements entered into with United Overseas Bank and Far Eastern International Bank contain default clauses. The banks have the right to terminate the facility, cancel the undrawn facility or require the Company to make immediate repayment of the principal amount of loan facility withdrawn and outstanding and the relevant expenses if any events of default occur.

The events of default mainly include: Breach of commitments (including financial covenants) and restrictions or special agreements, etc.

As of December 31, 2020, the Company has no event of default.

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B. Information on the pledged assets is provided in Note 8.
C. Information on the interest expense recognised in profit or loss is provided in Note 6(25).
(16) Other non-current liabilities

Other non-current liabilities
	December	31, 2020	December	31, 2019
Accrued pension liabilities	$	262,604	$	316,442
Guarantee deposits received		18,362		17,152
Other liabilities-others		7,830		8,273
	$	288,796	$	341,867

(17) Pensions

A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 15% of the employees’ monthly salaries and wages to the retirement fund deposited with Department of Trusts, Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.
(b) The amounts recognised in the balance sheet are as follows:

	December	31,2020	December	31,2019
Present value of defined benefit obligations	($	965,377)	($	996,395)
Fair value of plan assets		702,773		679,953
Net defined benefit liability	($	262,604)	($	316,442)

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(c) Movements in net defined benefit liabilities are as follows:

Present value of

		Present value of	Present value of
		defined benefit			Fair value of			Net defined
			obligations		Plan assets		benefit liability
2020
Balance at January 1	($		996,395)	$	679,953	($		316,442)
Current service cost	(		4,755)		-	(		4,755)
Interest (expense) income	(		7,656)		5,386	(		2,270)
	(		1,008,806)		685,339	(		323,467)
Remeasurements:
Return on plan assets (excluding net interest
from net defined benefit liabilities (assets))			-		22,225			22,225
Change in financial assumptions	(		25,835)		-	(		25,835)
Demographic assumptions adjustments			4,810		-			4,810
	(		21,025)		22,225			1,200
Pension fund contribution			-		59,663			59,663
Paid pension			64,454	(	64,454)			-
Balance at December 31	($		965,377)	$	702,773	($		262,604)
		Present value of
		defined benefit			Fair value of			Net defined
			obligations		Plan assets		benefit liability
2019
Balance at January 1	($		1,012,320)	$	671,942	($		340,378)
Current service cost	(		7,264)		-	(		7,264)
Interest (expense) income	(		12,094)		8,255	(		3,839)
	(		1,031,678)		680,197	(		351,481)
Remeasurements:
Return on plan assets (excluding net interest
from net defined benefit liabilities (assets))			-		22,052			22,052
Change in financial assumptions	(		30,500)		-	(		30,500)
Demographic assumptions adjustments			4,994		-			4,994
Experience adjustments	(		34,359)		-	(		34,359)
	(		59,865)		22,052	(		37,813)
Pension fund contribution			-		72,852			72,852
Paid pension			95,148	(	95,148)			-
Balance at December 31	($		996,395)	$	679,953	($		316,442)

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits

~42~

with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	2020 2019 0.40% 0.80% 1.00% 1.00% Year ended December 31	2020 2019 0.40% 0.80% 1.00% 1.00% Year ended December 31
		0.80%
		1.00%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

obligation is affected. The analysis was as follows:
Increase 0.5% Decrease0.5% December 31, 2020 Effect on present value of defined benefit obligation 32,112) ($ 34,011 $ December 31, 2019 Effect on present value of defined benefit obligation 33,792) ($ 35,836 $ Discount rate	Future salary increases
	Increase0.5% Decrease0.5% 33,642 $ 32,086) ($ 35,592 $ 33,896) ($	Decrease0.5%

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

(f) Expected contributions to the defined benefit pension plans of the Company for the following year amount to $61,849.
(g) As of December 31, 2020, the Company’s weighted average duration of the retirement plan

is 6.7 years. The analysis of timing of the future pension payment was as follows:

Within 1 year 1-2 year(s) 2-5 years 5-10 years	Amount
	76,921 $ 81,158 271,666 334,239
	763,984 $

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B. Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contribute monthly an amount 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under defined contribution pension plans of the Company for the years ended December 31, 2020 and 2019, were $40,280 and $37,740, respectively.

(18) Share capital

As of December 31, 2020, the Company’s authorised capital was $8,000,000 and the share capital was $5,060,629 with a par value of $10 (in dollars) per share. All the shares issued by the company are ordinary shares. The number of shares issued and outstanding was 506,063 thousand shares. All proceeds from shares issued have been collected.

(19) Capital surplus

A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.
B. The dividends unclaimed by shareholders for over 5 years shall be recognised as capital surplus in accordance with Order No. Jing-Shang-10602420200 issued in September 2017 by the Ministry of Economic Affairs, R.O.C.

(20) Retained earnings

A. According to the Articles of Incorporation of the Company, the appropriation of the earnings was as follows:
(a)Under the Company’s Articles of Incorporation which was amended and resolved by the shareholders on June 27, 2019, every year’s earnings, if any, shall first be used to pay business income tax and offset prior years’ deficits and then 10% of the remaining amount shall be set aside as legal reserve, and setting aside or reversal for special reserve in accordance with related laws, if any, the Board of Directors should propose the distribution or to retain the remaining earnings along with prior accumulated undistributed earnings for

~44~

the approval of the shareholders. The dividends shall be distributed in proportion to the number of shares held by each shareholder accordingly, and the dividends to shareholders every year shall account for at least 50% of net profit of the year. However, dividends are not distributed if the net profit of the year is lower than 5% of paid-in capital. Dividends can be distributed to shareholders in the forms of cash or stocks, provided the cash dividends shall not be less than 50% of the total dividends distributed.

The Company may, by a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors, have the earnings in whole or in part distributed in the form of cash; and in addition thereto a report of such distribution shall be submitted to the shareholders at the shareholders’ meeting.

(b)Under the Company’s Articles of Incorporation which was amended and resolved by the shareholders on June 27, 2019, every year’s earnings, if any, shall first be used to pay business income tax and offset prior years’ deficits and then 10% of the remaining amount shall be set aside as legal reserve, and setting aside or reversal for special reserve in accordance with related laws, the remaining shall be appropriated as dividends which was set at annual rate of 6%, however, the dividends shall not be paid with the capital. If any, earnings can be distributed with accumulated retained earnings of last year as special reserve or to be retained after being resolved by the shareholders, and the remaining can be distributed according to the proportion of each shareholder. Shareholders’ dividends and bonus can be distributed in cash or stocks. However, the ratio of cash dividend shall not be less than 20%.
B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
D. The appropriation of earnings by the Company
(a) The appropriation of 2018 earnings approved by the shareholders of the Company on June 27, 2019 is as follows:

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Legal reserve Cash dividends	Year ended December31,2018	Year ended December31,2018
	Amount 75,863 $ 404,850 $	Earnings per share(in dollars)
		0.80

(b) The appropriation of 2019 earnings approved by the shareholders of the Company on June 23, 2020 is as follows:

Legal reserve Special reserve Cash dividends	Earnings per Amount share (in dollars) 131,245 $ 302,706 $ 675,037 $ 1.3339 Year ended December 31,2019

(c)The appropriation of 2020 earnings proposed by the Board of Directors on March 29, 2021 but not yet resolved by the shareholders of the Company is as follows:

but not yet resolved by the shareholders	of the Company	is as follows:	is as follows:
		Year ended December 31,2020
			Earnings per
		Amount	share(in dollars)
Legal reserve	$	53,666
Reversal of special reserve	($	50,205)
Cash dividends	$	268,213	0.53

(21) Other equity items

Other equity items
		Year ended December31
		2020		2019
At January 1	($	302,706)	($	138,768)
Currency translation		50,205	(	163,938)
At December 31	($	252,501)	($	302,706)

(22) Operating revenue

Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods at a point in time in the following major product categories:

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(23)	2020 2019 Dairy products 4,857,611 $ 4,865,906 $ Beverages 1,408,416 1,298,723 Instant foods 910,244 856,538 Others 626,243 617,573 7,802,514 $ 7,638,740 $ Year ended December 31 Other income 2020 2019 Rent income 46,266 $ 46,959 $ Royalty income 21,052 19,039 Others 12,116 16,093 79,434 $ 82,091 $ Year ended December 31

(24) Other gains and losses

Other gains and losses
		Year ended December 31
		2020		2019
Losses on disposal of property, plant and
equipment and biological assets	($	37,336)	($	72,192)
Proceeds from disposal of non-current assets classified as
held for sale		-		1,269,341
Gains on financial assets at fair value through profit or loss		9		-
Reversal of impairment loss on property, plant and
equipment		9,720		-
Net foreign exchange (losses) gains		1,424	(	14,339)
Reversal of (impairment on) expected credit loss		23,184	(	11,000)
Others	(	15,016)	(	43,712)
	($	18,015)	$	1,128,098

Note:The Group entered into an agreement with SANLIH CINEMAS CO., LTD. to sell its assets, such as land, above-ground buildings and their auxiliary equipment, in the Pushin Ranch for a consideration of $2,663,000 following the approval of the Board of Directors on November 12, 2018. During the fourth quarter of 2018, the Group classified the aforementioned assets to ‘non-current asset held for sale’ and the related deferred tax liabilities to ‘liabilities directly relating to non-current assets held for sale’. On January 7, 2019, the Group completed the transfer of title to the aforementioned assets and recognised gain on disposal of non-current assets held for sale.

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(25) Finance costs

Finance costs
		Year ended	December31
		2020		2019
Interest expense on bank borrowings	$	56,125	$	63,377
Interest expense on lease liabilities		2,484		2,791
	$	58,609	$	66,168

(26) Expenses by nature

Expenses by nature
	Year ended	December 31
	2020		2019
Employee benefit expense	1,253,203 $	$	1,245,810
Depreciation expenses (Note)	347,114 $	$	362,763

Note: Including property, plant and equipment, right-of-use assets and depreciation expense of biological assets. Additionally, for the years ended December 31, 2020 and 2019, the amounts of depreciation expenses on investment property that were recorded under other gains and losses were $5,103 and $5,216, respectively.

(27) Employee benefit expense

Employee benefit expense
Wages and salaries Labour and health insurance fees Pension costs (Note 1) Directors’ remuneration Other personnel expenses (Note 2)	YearendedDecember31
	2020 1,039,320 $ 98,145 47,305 21,577 46,856 1,253,203 $	2019
		1,024,428 $ 95,802 48,693 21,601 55,286
		1,245,810 $

Note 1: It included $0 and $150 of pension costs, recorded under non-operating expenses, arising

from personnel transfer during the years ended December 31, 2020 and 2019, respectively.

Note 2: It included meal expenses, employee benefits/welfare, education training, severance pay and work uniforms, etc.
A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, shall be distributed as employees’ compensation and directors’ remuneration in the form of cash. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 5% for directors’ remuneration. The employees include the employees of the Company’s subsidiaries who meet certain specific requirements. If the Company incurs accumulated deficit, earnings should be reserved to cover losses prior to the appropriation of profit as employees’ compensation and directors’ remuneration according to the aforementioned ratios.

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B. The employees’ compensation and directors’ remuneration for the years ended December 31, 2020 and 2019 are accrued based on the ratio of pre-tax profit of the year before deducting any employees’ compensation and directors’ remuneration. The accrued amounts are as follows:

Employees’ compensation Directors’ remuneration	Year ended December 31	Year ended December 31
	2020 6,510 $ 6,300 $	2019
		22,005 $
		6,812 $

The aforementioned employees’ compensation and directors’ remuneration were recorded under wages and salaries and directors’ remuneration.

Employees’ compensation and directors’ remuneration for 2019 as resolved by the Board of Directors of the Company were in agreement with those amounts recognised in the 2019 parent company only financial statements. As the actual distributed amount of employees’ compensation for 2019 was $21,097, the difference of $908 between the amounts resolved at the Board meeting and the actual distributed amount had been adjusted in the profit or loss of 2020. There was no difference between the amount resolved at the Board meeting and the actual distributed amount of directors’ remuneration.

Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(28) Income tax

A. Income tax expense

(a)Components of income tax (benefit) expense:

omponents of income tax (benefit) expense:
			YearendedDecember31
			2020			2019
Current tax:
Land value increment tax for the year		$	-		$	471,152
Prior year income tax overestimation	(		5,326)			-
Tax on undistributed surplus earnings			9,880			8,596
Offshore income tax expense			2,757			3,787
Total current tax			7,311			483,535
Realised land value increment tax liabilities			-	(		323,488)
Deferred tax:
Origination and reversal of temporary differences	(		92,722)			54,225
Total deferred tax	(		92,722)			54,225
Income tax (benefit) expense	($		85,411)		$	214,272

(b)For the years ended December 31, 2020 and 2019, the Company had no income tax charged/(credited) to other comprehensive income and equity during the year.

~49~

B. Reconciliation between income tax (benefit) expense and accounting profit

					Year	ended	December 31	December 31	December 31	December 31
					2020				2019
Tax calculated based on profit before tax and statutory
tax rate				$	89,957			$		312,851
Items disallowed by tax regulation				(	39,801)			(		286,195)
Change in assessment of realisation of	deferred tax
assets and liabilities				(	142,878)					27,569
Effects from land value increment tax						-				147,664
Prior year income tax overestimation				(		5,326)				-
Tax on undistributed surplus earnings						9,880				8,596
Offshore income tax expense						2,757				3,787
Income tax (benefit) expense				($	85,411)			$		214,272
Amounts of deferred tax assets or liabilities as a result of temporary differences									and	tax losses
are as follows:
					2020
						Effect		of
				Recognised in		corporate
		January1		profit	or loss	spin-off			December 31
Deferred tax assets:
- Temporary differences:
Unrealised losses on overseas investments	$	89,721	($		749)	$		-	$	88,972
Unrealised accrued expenses		10,444			110			-		10,554
Unrealised impairment loss on assets		18,882		(	1,944)			-		16,938
Unrealised loss on obsolete and slow-moving
inventories		9,879		(	3,751)			-		6,128
Estimated unused compensated absences		3,296		(	367)			-		2,929
Unrealised foreign exchange loss		3,768		(	254)			-		3,514
Unrealised loss on doubtful debts		4,076		(	4,076)			-		-
-Tax losses		1,121,003		(	54,584)			-		1,066,419
	$	1,261,069	($		65,615)	$		-	$	1,195,454
Deferred tax liabilities:
- Temporary differences:
Reserve for land value increment tax	($	643,041)		$	81,141	$	12,457		($	549,443)
Unrealised gains on overseas investments	(	323,695)			77,196			-	(	246,499)
	($	966,736)		$	158,337	$	12,457		($	795,942)
	$	294,333		$	92,722	$	12,457		$	399,512

C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

~50~

2019

Recognised in
January1
profit or loss
Deferred tax assets:
- Temporary differences:
Unrealised losses on overseas investments
89,719
$ 2
$ Unrealised accrued expenses
5,387
5,057
Unrealised impairment loss on assets
18,882
-

Unrealised loss on obsolete and slow-moving
inventories
9,552
327
Estimated unused compensated absences
4,324
1,028)
(
Unrealised foreign exchange loss
348
3,420
Unrealised loss on doubtful debts
1,876
2,200
-Tax losses
1,070,847
50,156
1,200,935
$ 60,134
$ Deferred tax liabilities:
- Temporary differences:
Reserve for land value increment tax
643,041)
($ -
$ Unrealised gains on overseas investments
209,336)
(
114,359)
(
852,377)
($ 114,359)
($

Effect of
corporate
spin-off
December 31
-
$ 89,721
$ -
10,444
-
18,882
-
9,879
-

3,296
-

3,768
-

4,076
-
1,121,003
-
$ 1,261,069
$ -
$ 643,041)
($ -
323,695)
(
-
$ 966,736)
($

D. Expiration dates of the Company’s unused tax losses and amounts of unrecognised deferred tax assets are as follows:

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December 31, 2020
Amount filed/
Year incurred assessed Unused amount Deferred tax assets Expiry year
2014 ~ 2019 $ 6,985,370 $ 6,716,177 $ 1,384,080 2024 ~ 2029
December 31, 2019
Amount filed/
Year incurred assessed Unused amount Deferred tax assets Expiry year
2014 ~ 2019 $ 5,605,017 $ 5,605,017 $ - 2024 ~ 2029
----- End of picture text -----

E. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

(29) Earnings per share

Weighted average number of ordinary shares outstanding Earnings per Amount after tax (share in thousands) share (in dollars) Year ended December 31, 2020 Basic/Diluted earnings per share Profit attributable to ordinary shareholders of the parent $ 535,196 506,063 $ 1.06

~51~

Year ended December 31, 2019 Basic/Diluted earnings per share Profit attributable to ordinary shareholders of the parent

Weighted average number of ordinary shares outstanding Earnings per Amount after tax (share in thousands) share (in dollars) $ 1,349,985 506,063 $ 2.67

(30) Supplemental cash flow information

Investing activities with partial cash payments:

Investing activities with partial cash payments:
		Year ended December 31
		2020		2019
Purchase of property, plant and equipment and biological
assets	$	221,868	$	270,705
Add: Opening balance of payable on equipment		17,931		28,624
Less: Ending balance of payable on equipment	(	31,765)	(	17,931)
Write-off of other receivables	(	3,825)	(	5,760)
Cash paid during the year	$	204,209	$	275,638

~52~

(31) Changes in liabilities from financing activities

2020

At January 1

Changes in cash flow from financing activities Changes in other non-cash items At December 31

At January 1 Changes in cash flow from financing activities Changes in other non-cash items At December 31

									Long-term
	Short-term								borrowings
	notes and			Short-term					(including
	bills payable			borrowings		Lease liability		current portion)
$		-	$	1,220,000	$	139,049	$		2,969,754
	250,000		(	620,000)	(	26,960)			402,000
(	61)			-		18,414	(		434,887)
$	249,939		$	600,000	$	130,503	$		2,936,867

				2019					Long-term
	Short-term								borrowings
	notes and			Short-term					(including
	billspayable			borrowings		Lease liability		currentportion)
$		-	$	2,720,000	$	130,547	$		3,300,390
	120,000		(	700,000)	(	29,723)	(		1,250,390)
(	120,000)		(	800,000)		38,225			919,754
$		-	$	1,220,000	$	139,049	$		2,969,754

~53~

Related Party Transactions (1) Names of related parties and relationship Names of related parties Relationship with the Company KING CAN INDUSTRY CORPORATION A subsidiary of the Company (KING CAN INDUSTRY) KANG CHUAN ENGINEERING CO., LTD. A subsidiary of the Company (KANG CHUAN ENGINEERING) CONCOURSE INTERNATIONAL INC. A subsidiary of the Company (CONCOURSE INTERNATIONAL) Cheng Shuen Nung Ranch Dairy Co., Ltd. A subsidiary of the Company WEI-CHUAN (BVI) CO., LTD. (WEI-CHUAN A subsidiary of the Company (BVI)) LANGFANG WEI-CHUAN FOODS CO., LTD. A second-tier subsidiary of the Company (LANGFANG WEI-CHUAN) HANGZHOU WEI-CHUAN FOOD CO., LTD. A second-tier subsidiary of the Company (HANGZHOU WEI-CHUAN) Hangzhou Weichuan Biotechnology Foods Co., A second-tier subsidiary of the Company Ltd. (Hangzhou Weichuan Biotechnology) FU TING FOODS CO., LTD. An investee accounted for using the equity method by the Company TING HSIN (CAYMAN ISLANDS) HOLDING An investor with significant influence over the CORP.(TING HSIN (CAYMAN ISLANDS) Company HOLDING) TAIWAN TING QIAO RESTAURANT An entity controlled by the investor with MANAGEMENT CO. LTD. significant influence over the Company Hangzhou Kenko&Ting Foods Co., Ltd. An entity controlled by the investor with (Hangzhou Kenko&Ting) significant influence over the Company THE BREAD CO., LTD. An entity controlled by the investor with significant influence over the Company KANG CHENG CO., LTD. An entity controlled by the investor with significant influence over the Company RIKKEI TRADING CORP. A director of the Company is also the chairman of the entity TAIWAN STAR TELECOM CORPORATION A director of the Company is also the chairman LIMITED of the entity

~54~

Names of related parties Relationship with the Company All directors, general managers and main Key management personnel and governing management personnel bodies of the Company

(2) Significant related party transactions

A. Sales transactions

(a) Operating revenue

Details of operating revenue arising from goods sold by the Company to related parties are as follows:

follows:
Subsidiaries Other related parties	2020 2019 44,054 $ 31,253 $ 4,588 10,393 48,642 $ 41,646 $ YearendedDecember31
		31,253 $ 10,393
		41,646 $

The Company’s sales price, conditions and credit terms to related parties was approximately the same as those for third party customers. The credit terms for third party customers approximately ranged from 30 to 90 days after monthly billings.

(b) Accounts receivable

Details of accounts receivable arising from the aforementioned sales transactions to related parties are as follows:

parties are as follows:
Subsidiaries Other related parties	December 31, 2020 7,394 $ 128 7,522 $	December 31, 2019
		4,274 $ 1,720
		5,994 $

B. Purchase transactions

(a) Costs of goods purchased

Details of goods purchased by the Company from related parties are as follows:

Subsidiaries KING CAN INDUSTRY Others Associates Other related parties	Year ended December 31	Year ended December 31
	2020 448,176 $ 333,875 50,703 35,057 867,811 $	2019
		434,617 $ 260,731 178,317 -
		873,665 $

~55~

Goods purchased from related parties are based on the price lists in force and terms agreed upon by both parties. Payment terms have no major difference between related parties and third parties, which are 30 ~ 90 days end of month for general suppliers.

(b) Accounts payable

Details of accounts payable arising from the aforementioned goods purchased from related parties are as follows:

parties are as follows:
Subsidiaries KING CAN INDUSTRY CONCOURSE INTERNATIONAL Associates Other related parties	December31,2020 84,278 $ 72,147 9,425 1,463 167,313 $	December31,2019
		86,363 $ 71,711 23,746 -
		181,820 $

C. Leasing arrangements

(a) Rent income

The Company leases certain plants and offices (shown as investment property) to related parties, details are as follows:

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

Rent calculation Year ended December 31
Lessee Leased object and payment 2020 2019
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Rent calculation Lessee Leased object andpayment	2020 Year ended D	2019 ecember 31
Subsidiaries KING CAN INDUSTRY Plants and offices Semi-annually prepayment / Monthly payment Other Offices Monthly payment Associates Offices Monthly payment Other related parties Plants and offices Quarterly prepayment / Monthly payment	17,128 $ 217 55 6,191 23,591 $	17,128 $ 228 60 5,873
		23,289 $

As of December 31, 2020 and 2019, the balances of other receivables arising from aforementioned transactions were $1,444 and $1,386, respectively.

(b) Acquisition of right-of-use assets

On January 1, 2019 (the date of initial application of IFRS 16), the Company increased right-of-use assets acquired from related parties by $27,591.

~56~

(c) Lease liabilities / Finance costs

i. Details of lease liabilities arising from leasing offices from related parties by the Company are as follows:

re as follows:
Subsidiaries KING CAN INDUSTRY KANG CHUAN ENGINEERING	December31,2020 December31,2019 11,306 $ 13,445 $ 8,392 10,236 19,698 $ 23,681 $
	$	23,681

ii. Details of interest expense arising from leasing offices from related parties by the Company are as follows:

Company are as follows:
Subsidiaries KING CAN INDUSTRY KANG CHUAN ENGINEERING	December 31, 2020 232 $ 176 408 $	December31,2019
	$	271 $ 209 480 $
	$

D. Other transactions

(a) Manufacturing and operating expense

The amounts of manufacturing and operating expenses as well as related other payables as of and for the years ended December 31, 2020 and 2019 between the Company and related parties were immaterial. Thus, details are not disclosed.

(b) Other income

The amounts of other income and the related other receivables as of and for the years ended December 31, 2020 and 2019 between the Company and related parties were immaterial. Thus, details are not disclosed. In addition, the Company’s other receivables from service transactions in previous years are as follows:

Subsidiaries HANGZHOU WEI-CHUAN Other related parties Hangzhou Kenko&Ting Less: Allowance for uncollectible accounts	December31,2020 December31,2019 82,595 $ 86,801 $ - 22,770 - 22,770) ( 82,595 $ 86,801 $

~57~

(c) Investments accounted for using the equity method
i. Reduction items to investments accounted for using the equity method arising due to proceeds received from capital reduction of the Company’s subsidiaries are as follows:

Subsidiaries: KANG CHUAN ENGINEERING KING CAN INDUSTRY WEI-CHUAN (BVI)	2020 2019 22,965 $ - $ - 156,022 - 407,351 22,965 $ 563,373 $ YearendedDecember31
	$
	$

As of December 31, 2020 and 2019, the Company had no other receivables arising from the aforementioned transactions.

ii. Distribution of capital surplus received by the Company due to the investment in subsidiaries (shown as a deduction to the investments accounted for using the equity method) are as follows:

method) are as follows:
Subsidiaries: KING CAN INDUSTRY	YearendedDecember31
	2020 2019 - $ 109,648 $

As of December 31, 2020 and 2019, the Company had no other receivables arising from the aforementioned transactions.

iii. Cash dividends received by the Company due to the investment in subsidiaries are as follows:

follows:
		Year ended	December 31
		2020		2019
Subsidiaries
WEI-CHUAN (BVI)	$	513,959	$	-
KING CAN INDUSTRY		60,649		129,541
CONCOURSE INTERNATIONAL		22,906		27,110
	$	597,514	$	156,651

As of December 31, 2020 and 2019, the Company had no other receivables arising from the aforementioned transactions.

iv. Financial assets acquired from spinning off the cash and ranch related business (including assets, liabilities and operating) to subsidiaries were as follows:

Counterparty	Accounts	No. of shares(shares)	Objects Common shares of Cheng Shuen Nung	Year ended December31,2020
Cheng Shuen Nung	Investments accounted for using equity method	54,929,989		723,050 $

Year ended December 31, 2019: None.

~58~

E. Income from provision of endorsements and guarantees to related parties (shown as other income)

December 31, 2020 December 31, 2019 Subsidiaries $ 1,928 $ 2,631

As of December 31, 2020 and 2019, the amounts drawn down from the endorsements/guarantees provided by the Company to the above related parties were $640,574 and $502,987, respectively. The balance of receivables arising from these transactions were $521 and $846, respectively, (shown as other receivables).

F. Endorsements and guarantees provided to related parties

The Company’s other related party-TING HSIN (CAYMAN ISLANDS) HOLDING acted as a joint guarantor for the loan agreement entered into by the Company with United Overseas Bank in 2017. Such joint guarantee liabilities were removed when the loan was repaid in full in May 2019.

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits Post-employment benefits	Year ended December 31
	2020 41,325 $ 117 41,442 $	2019
		35,192 $ 116
		35,308 $

8. Pledged Assets

As of December 31, 2020 and 2019, the Company’s assets pledged as collateral are as follows:

Book value

Pledged asset Pledged time deposits (shown as other non-current assets) Land (shown as property, plant and equipment and investment property) Buildings and structures (shown as property, plant and equipment and investment property)	December 31,2020 8,000 $ 2,202,077 672,561 2,882,638 $	December 31, 2019 10,000 $ 2,597,295 1,002,030 3,609,325 $	Purpose
			Collateral for long-term material purchase Collateral for long-term and short-term borrowings Collateral for long-term and short-term borrowings

~59~

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

(1) Contingencies

Regarding the misuse of lard oil supplied by TING HSIN OIL & FAT INDUSTRIAL CO., LTD. and CHENG-I FOOD CO., LTD., the Company was sued by the Consumers' Foundation, Chinese Taipei to bear a joint and several liability for compensation. The case is currently pending with the High Court. As of December 31, 2020, the Company has accrued contingent compensation of $1,000 (shown as other payables). Any subsequent impact arising from the incident will be assessed and recognised by the Company and disclosed in the financial statements.

(2) Commitments

A. As of December 31, 2020 and 2019, the Company has a promissory note for credit facilities from banks in the amounts of $8,251,000 and $7,875,700, respectively
B. As of December 31, 2020 and 2019, the Company has entered into agreements to subcontract construction projects or purchase equipment. The future outstanding commitments for the construction and equipment payments, net of the prepayments, amounted to $28,391 and $28,339, respectively.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

Information on the appropriation of 2020 earnings proposed by the Board of Directors on March 19, 2021 but not yet resolved by the shareholders of the Company is provided in Note 6(20).

12. Other

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust to the optimal capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, or issue new shares. The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as total liabilities divided by total capital. Total liabilities are the total amount of liabilities as shown in the parent company only balance sheet. Total capital is calculated as ‘equity’ as shown in the parent company only balance sheet plus total liabilities. During the year ended December 31, 2020, the Company’s strategy was unchanged from 2019. As of December 31, 2020 and 2019, the gearing ratios were 48% and 50%, respectively.

~60~

(2) Financial instruments

A. Financial instruments by category

ancial instruments Financial instruments by category
	December31,2020		December31,2019
Financial assets
Financial assets at fair value through profit or loss
Non-current financial assets mandatorily
measured at fair value through profit or loss	$	33,117	$	33,108
Financial assets at amortised cost
Cash and cash equivalents		704,926		556,706
Notes receivable, net		12,881		17,539
Accounts receivable, net		865,552		864,751
Accounts receivable due from related parties,
net		7,522		5,994
Other receivables		108,098		143,311
Other non-current assets
- Guarantee deposits paid		9,010		10,431
- Other financial assets		8,000		10,000
	December31,2020		December 31, 2019
Financial liabilities
Financial liabilities at amortised cost
Short-term borrowings	$	600,000	$	1,220,000
Short-term notes and bills payable		249,939		-
Notes payable		21		1,455
Accounts payable		473,631		480,437
Accounts payable to related parties		167,313		181,820
Other payables		617,982		616,668
Long-term borrowings (including current
portion)		2,936,867		2,969,754
Other non-current liabilities-Guarantee
deposits received		18,362		17,152
Current lease liabilities		22,495		21,964
Non-current lease liabilities		108,008		117,085

B. Financial risk management policies

(a) The Company adopts a comprehensive risk management and control system to identify, evaluate and control all risks, including market risk (including exchange rate risk, interest rate risk and price risk), credit risk, liquidity risk, in order for the management to control these risks effectively.

~61~

(b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the managements. Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units. The management provide written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
C. Significant financial risks and degrees of financial risks
(a) Market risk
- i. Foreign exchange risk

Some of the Company’s sales and purchases are denominated in USD. The fair value changes according to the fluctuations in market exchange rates. As the Company offsets these market risks by matching the foreign currency assets and liabilities positions and their payment periods, it does not expect significant market risk.

The Company’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

December 31, 2020

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Long-term equity investments accounted for using the equity method USD:NTD Financial liabilities Monetary items RMB:NTD	Foreign currency amount (In thousands) 3,886 78,692 132,443 115	Exchange rate 28 4.37 28.48 4.37	Book value (NTD)
			110,673 $ 343,884 3,771,962 503 $

~62~

			December31,2019	December31,2019	December31,2019
	Foreign
	currency
	amount					Book value
	(In thousands)			Exchange rate		(NTD)
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD		5,371		29.98	$	161,023
RMB:NTD	79,234			4.30		340,706
Long-term equity investments
accounted for using the equity
method
USD:NTD	135,093			29.98		4,046,713
Financial liabilities
Monetary items
RMB:NTD		159		4.30	$		684
The total exchange gain (loss), including realised				and unrealised, arising			from
significant foreign exchange variation on the		monetary items held			by the Company
for the years ended December 31, 2020 and 2019, amounted to $1,424 and ($14,339),
respectively.
Analysis of foreign currency market risk arising from significant					foreign exchange
variation:
		Year	ended December		31,	2020
			Sensitivityanalysis
					Effect on other
	Degree of		Effect on profit		comprehensive
	variation			or loss	income or loss
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD	1%		$	1,107	$		-
RMB:NTD	1%			3,439			-
Financial liabilities
Monetary items
RMB:NTD	1%		($	5)	$		-

~63~

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

Year ended December 31, 2019
Sensitivity analysis
Effect on other
Degree of Effect on profit comprehensive
variation or loss income or loss
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD 1% $ 1,610 $ -
RMB:NTD 1% 3,407 -
Financial liabilities
Monetary items
RMB:NTD 1% ($ 7) $ -
----- End of picture text -----

B. Price risk

(i) The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss.
(ii) The Company’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, pre-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $331 and $331, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss.
C. Cash flow and fair value interest rate risk

The Company’s main interest rate risk arises from long-term and short-term borrowings as well as short-term notes and bills payable. Borrowings issued at variable rates expose the Company to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Company to fair value interest rate risk. The Company’s long-term and short-term borrowings as well as short-term notes and bills payable are with floating rates. During the years ended December 31, 2020 and 2019, the Company’s borrowings at variable rates were denominated in NTD and RMB.

As of December 31, 2020 and 2019, if the borrowing interest rate had increased/decreased by 0.1% with all other variables held constant, pre-tax profit for the years ended December 31, 2020 and 2019 would have decreased/increased by $3,787 and $4,190, respectively. The main factor is that floating-rate borrowings result in increase/decrease in interest expense.

~64~

(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the note and accounts receivable based on the agreed terms.
ii. The Company manages their credit risk taking into consideration the entire Company’s concern. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard credit terms and delivery conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the managements. The utilisation of credit limits is regularly monitored.
iii. The Company adopts assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition. If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
iv. The Company adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.
v. The Company classifies customers’ notes and accounts receivable in accordance with credit rating of customer, credit on trade and customer types. The Company applies the modified approach using a provision matrix based on the loss rate methodology to estimate the expected credit loss.
vi. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights. As of December 31, 2020 and 2019, the Group had no written-off financial assets that are still under recourse procedures.
vii. After the Company identifies customer risks on an individual basis, and it classifies them into Companys according to different credit risk characteristics, assesses the historical default rates, and uses the forecastability to adjust historical and timely information to assess the default possibility. The Company considers that in the financial industry, the default rate should not be lower than 0.03% for numerous and unidentifiable individual investors. However, in accordance with the policy, the Company traces the credit risk of customers at any time, the Company refers to the reference rate set by the financial industry as a basis of forecast adjustment, and adjusts

~65~

the expected loss rate referring to monitoring indicator and the nature of risk. The loss rate methodology is as follows:

December 31, 2020 Expected loss rate Total book value Loss allowance December 31, 2019 Expected loss rate Total book value Loss allowance	Not past due 0.06% 883,906 $ 786 $ Not past due 0.07% 886,478 $ 256 $	1~30 days past due 0.10% 1,511 $ - $ 1~30 days past due 0.10% 661 $ - $	31~90 days past due 0.13% 13 $ - $ 31~90 days past due 0.13% - $ - $	Over 90 days past due 100.00% 1,311 $ - $ Over 90 days past due 100.00% 1,401 $ -	Total
					886,741 $
					786 $
					Total
					888,540 $
					256

The above ageing analysis was based on past due date.

viii. Movements in relation to the Company’s loss allowance for accounts and notes receivable and other receivables are as follows:

At January 1 Expected credit loss (gain) Write-offs Effect of corporate spin-off At December 31 At January 1 Expected credit loss (gain) Reclassifications At December 31	Accounts Notes Other receivable receivable receivables Total 252 $ 4 $ 52,357 $ 52,613 $ 534 4) ( 23,198) ( 22,668) ( - - 16,331) ( 16,331) ( - - 11,000) ( 11,000) ( 786 $ - $ 1,828 $ 2,614 $ 2020 Accounts Notes Other receivable receivable receivables Total 2,541 $ 7 $ 39,139 $ 41,687 $ 69) ( 3) ( 10,998 10,926 2,220) ( - 2,220 - 252 $ 4 $ 52,357 $ 52,613 $ 2019

(c) Liquidity risk

i. The Company chooses the equity instruments with sufficient liquidity when investing in the equity financial instruments. Company management monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs, so it does not expect significant liquidity risk.
ii. Surplus cash held by the units over and above balance required for working capital management are transferred to the Company treasury. Company treasury invests surplus cash in interest bearing current accounts and time deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

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iii. As of December 31, 2020 and 2019, the amounts of undrawn available borrowing facilities were $4,431,000 and $3,685,700, respectively.
iv. The Company has no derivative financial liabilities. Except for the items disclosed in the following table, the Company’s non-derivative financial liabilities, which were classified by its maturity date, were due within one year and approximates the amounts which were shown in the balance sheets. The amounts disclosed in the table are the contractual undiscounted cash flows.

December 31, 2020 Non-derivative financial liabilities: Lease liability Long-term borrowings (including current portion) December 31, 2020 Non-derivative financial liabilities: Lease liability Long-term borrowings (including current portion)	Less than 1year 27,003 $ 38,892 Less than 1year 24,328 $ 76,434	Between 1 and 2year(s) 19,023 $ 2,359,225 Between 1 and 2year(s) 21,111 $ 2,491,669	Between 2 and5 years 41,716 $ 605,403 Between 2 and5 years 39,474 $ 491,056	Over5 years 56,667 $ - Over5 years 67,712 $ -	Total
					144,409 $ 3,003,520 Total
					152,625 $ 3,059,159

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market is included in Level 3.
B. Fair value information of investment property at cost is provided in Note 6(8).

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C. The carrying amounts of the Company’s financial instruments not measured at fair value, including cash and cash equivalents, notes receivable, accounts receivable (including related parties), other receivables (including related parties), other non-current assets-guarantee deposits paid, other non-current assets-restricted bank deposits, short-term borrowings, short-term notes and bills payable, notes payable, accounts payable (including related parties), other payables (including related parties), lease liability-current/non-current, long-term borrowings (including current portion) and other non-current liabilities-guarantee deposits received, are approximate to their fair values.
D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2020 and 2019 are as follows:

(a)	The related information of natures of the assets December 31, 2020 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities - $ December 31, 2019 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities - $	and liabilities is as follows: Level 2 Level3 - $ 33,117 $ Level 2 Level 3 - $ 33,108 $	Total
			33,117 $
			Total
			33,108 $
	Financial assets at fair value through profit or loss Equity securities

(b) The methods and assumptions the Company used to measure fair value are as follows:
i. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the balance sheet date.
ii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Company adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

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iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Company’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the parent company only balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.
E. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the years ended December 31, 2020 and 2019:

2019:
At January 1 Gains recognised in profit or loss At December 31	Non-derivative Non-derivative equityinstrument equityinstrument 33,108 $ 33,108 $ 9 - 33,117 $ 33,108 $ 2020
		33,108 $ - 33,108 $

G. For the years ended December 31, 2020 and 2019, there was no transfer into or out from Level 3.
H. Treasury segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. In addition to Level 3 fair value measurements applicable to the above valuation models, the Company also directly refers to fair value information provided by the financial institutions. Investment property is valuated regularly by the Company’s treasury segment based on the valuation methods and assumptions announced by the Financial Supervisory Commission, Securities and Futures Bureau or through outsourced appraisal performed by the external valuer.

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

value measurement:
Fair value at December 31, 2020 Non-derivative equity instrument: Unlisted shares- LI JIA CONSTRUCTION $ 5,617 Unlisted shares- CONNECTION INVESTMENT etc. 27,500 Fair value at December 31, 2019 Non-derivative equity instrument: Unlisted shares- LI JIA CONSTRUCTION $ 11,947 Unlisted shares- CONNECTION INVESTMENT etc. 21,161	Fair value at December 31, 2020	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
		Market approach-price-to- book ratio Net asset value Valuation technique	Discount for lack of marketability N/A Significant unobservable input	25% - Range (weighted average)	The higher the discount for lack of marketability, the lower the fair value N/A Relationship of inputs to fair value
		Market approach-price-to- book ratio Net asset value	Discount for lack of marketability N/A	25% -	The higher the discount for lack of marketability, the lower the fair value N/A

J. The Company has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. If net asset value from financial assets and liabilities categorised within Level 3 had increased or decreased by 1%, profit or loss would not have been significantly impacted as of December 31, 2020 and 2019.

(4) Others

A. The impact of oil incidents caused by the upstream suppliers on the Company since the fourth quarter of 2013 is as follows:
(a) The Company’s oil OEM supplier was suspected of misusing the oil adulterated with copper chlorophyllin by CHANG CHI FOODSTUFF FACTORY CO., LTD. (CHANG CHI). The Company recognised losses associated with product returns, inventory loss and related expenses in the amount of $179,337 as of 31 December, 2017 due to the impact of this incident.

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The Company was sued for violating the Act Governing Food Safety and Sanitation as a result of the oil and food safety incident casued by CHANG CHI. On April 27, 2017, the Intellectual Property Court rendered a decision in favour of the Company, but some representatives were charged with fraud for mislabeling oil. The court also confiscated $32,929 in revenue gained from the sales of these products. The Company has petitioned to the Council of Grand Justices for an interpretation on whether the confiscation was reasonable.

On November 27, 2019, the Taiwan Changhua District Court ruled that CHANG CHI, KAO, CHEN-LI, WEN, JUI-PIN and CHOU, KUN-MING are jointly liable to compensate the Company for $66,595 and related interests, for which the Company has obtained a certificate of the obligatory claim.

(b) Due to more problematic oil was announced by the government organisations between September 2014 and October 2014, the Company has taken countermeasures such as taking the initiative to remove the products from shelves as a precautionary measure, notifying the competent authorities and compensating customers for returned products. The Company recognised losses associated with returns of certain affected products and compensation in the amount of $226,017 during the period from 2014 to 2015.
(c) To safeguard the interests of the Company, the Company continually filed lawsuits for compensation against a number of suppliers supplying problematic oil depending upon each circumstance. The remaining cases, CHANG GUANN CO., LTD., TING HSIN OIL & FAT INDUSTRIAL CO., LTD. and CHENG-I FOOD CO., LTD are pending with the courts. In May 2019, the court advised LIHAO ENTERPRISE CO., LTD. a settlement to compensate the Company for $1,276, which was recognised by the Company. The Company’s management resolutely safeguards the rights and interests of the Company and shareholders and may take necessary legal actions in due course depending on the hearing process.
B. The Company’s subsidiary, WEI-CHUAN(BVI) CO., LTD, entered into a loan repayment agreement with WANG DE XING TEA COMPANY (an investee company whose 51% shares were originally held by the Group but sold in January 2016). The entity has been repaid the principal and interest in accordance with the agreement. However, in term of the last repayment of USD 2.965 million due on October 1, 2020, the Company agreed to amend the repayment schedule considering the impact of the COVID-19 pandemic on the entity’s operation, the enhancement of collateral provided and the good credit of the entity on the past repayments. The remaining payments will be repaid in three instalments over three years.
The Company has provided for a full loss allowance in accordance with generally accepted accounting principles for the aforementioned receivables in the previous year after considering the risk of default.

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13. Supplementary Disclosures

(1) Significant transactions information

A. Loans to others: Please refer to table 1.
B. Provision of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: Please refer to table 4.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 5.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 6.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 7.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Please refer to table 8.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 9.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 10.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 11.

(4) Major shareholders information

Major shareholders information: Please refer to table 12.

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AI assistant

WEI CHUAN — Audit Report / Information 2020

51742_rns_2020-11-10_d069237b-af66-4aaa-bcbc-c1c827b13e0f.pdf

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY FINANCIAL

REPORT

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Estimation of sales incentives

Description

How our audit addressed the matter

Evaluation of inventories

Description

How our audit addressed the matter

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

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

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2020 AND 2019

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2020 AND 2019

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

WEI CHUAN FOODS CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

WEI CHUAN FOODS CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

1. History and Organisation

2. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

3. Application of New Standards, Amendments and Interpretations

the Company

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

4. Summary of Significant Accounting Policies

(1) Compliance statement

(2) Basis of preparation

(3) Foreign currency translation

(4) Classification of current and non-current items

(5) Cash equivalents

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

(7) Accounts and notes receivable

(8) Impairment of financial assets

(9) Derecognition of financial assets

- (10) Leasing arrangements (lessor) operating leases

(11) Inventories

(12) Investments accounted for using the equity method / subsidiaries and associates

(13) Property, plant and equipment

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

(15) Investment property

(16) Biological assets

(17) Impairment of non-financial assets

(18) Borrowings

(19) Notes and accounts payable

(20) Derecognition of financial liabilities

(21) Offsetting financial instruments

(22) Provisions

(23) Employee benefits

A. Short-term employee benefits

(24) Income tax

(25) Share capital

(26) Dividends

(27) Revenue recognition

(28) Government grants

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

(1) Critical judgements in applying the Company’s accounting policies

(2) Critical accounting estimates and assumptions

6. Details of Significant Accounts

(1) Cash and cash equivalents

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

WEI CHUAN Audit Report / Information 2020