AMBH - Audit Report / Information 2021

THE AMBASSADOR HOTEL CO., LTD.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT AUDITORS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Address: No. 63, Sec. 2, Zhongshan N. Rd., Zhongshan Dist., Taipei City 104204, Taiwan (R.O.C.) Telephone: 886-2-2100-2100

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

Representation Letter Translated from Chinese

The companies that are required to be included in the combined financial statements of The Ambassador Hotel Co., Ltd. as of and for the year ended December 31, 2021 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No.10, “Consolidated Financial Statements”. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, The Ambassador Hotel Co., Ltd. and its subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

The Ambassador Hotel Co., Ltd.

EMMET HSU Chairman March 8, 2022

Independent Auditors’ Report Translated from Chinese

To The Ambassador Hotel Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of The Ambassador Hotel Co., Ltd. (“the Company”) and its subsidiaries as of December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2021 and 2020, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Matter – Making Reference to the Audits of Component Auditors section of our report), the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2021 and 2020, and their consolidated financial performance and cash flows for the years ended December 31, 2021 and 2020, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed and became effective by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2021 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue Recognition

Net sales recognized by the Company and its subsidiaries amounted to NT$ 1,518,343 thousand for the year ended December 31, 2021. As revenue included room revenue and food and beverage sales with large number of transactions, the appropriateness of timing of revenue recognition is material for the consolidated financial statements. Therefore, we considered this is a key audit matter. Our audit procedures included (but not limited to), assessing the appropriateness of the accounting policy of revenue recognition, performing walkthrough of room revenue and food and beverage sales to understand the internal control of sales process and the effectiveness of the design of internal controls, testing operating effectiveness of internal controls related to the timing of revenue recognition, selecting samples to perform cut-off testing and inspecting billing statements and invoices to verify proper cut-off of revenue. In addition, we evaluated the adequacy of disclosures of operating revenues. Please refer to Notes 4 and 6 to the consolidated financial statements.

Net defined benefit liabilities

The Company and its subsidiaries are labor-intensive industry. Employees are high in seniority and most of them chose defined benefits plan. As of December 31, 2021, the Company and its subsidiaries’ net defined benefit liabilities-noncurrent amounted to NT$43,232 thousand, representing 0.83% of consolidated total liabilities. The defined benefit costs were recognized as profit or loss amounted to NT$7,478 thousand, representing (8.98)% of consolidated income before tax for the year ended December 31, 2021. In addition, the valuation of the defined benefit plan involved making various assumptions. Change in assumptions may be significant for the consolidated financial statements. Therefore, we considered this is a key audit matter. Since the aforementioned amounts were recognized by the Company and its subsidiaries according to the actuarial report issued by an external actuary, we communicated with the external expert and assessed objectivity. We tested the accuracy and completeness of the underlying data used in the actuarial report, assessed the reasonableness of assumptions or principles and performed sensitivity analysis (including discount rate, turnover rate and expected rate of salary increases). In addition, we evaluated the adequacy of disclosures of net defined benefit liabilities. Please refer to Notes 4, 5 and 6 to the consolidated financial statements.

Other Matter – Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the audit reports of the other auditors. These associates and joint ventures under equity method amounted to NT$1,817,192 thousand and NT$1,729,322 thousand, representing 10.59% and 13.01% of consolidated total assets as of December 31, 2021 and 2020, respectively. The related shares of profits (losses) from the associates and joint ventures under the equity method amounted to NT$(12,918) thousand and NT$(28,029) thousand, representing 15.52 % and (535.52)% of the consolidated net income before tax for the years ended December 31 2021 and 2020, respectively, and the related shares of other comprehensive income from the associates and joint ventures under the equity method amounted to NT$50,276 thousand and NT$59,677 thousand, representing 5.91% and 12.19% of the consolidated other comprehensive income for the years ended December 31, 2021 and 2020, respectively.

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

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

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

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of the Company and its subsidiaries.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

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 internal control of the Company and its subsidiaries.
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 ability to continue as a going concern of the Company and its subsidiaries. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and its subsidiaries to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated 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 and its subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2021 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s 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.

Other

We have audited and expressed an unqualified opinion including an Other Matter Paragraph on the parent company only financial statements of the Company as of and for the years ended December 31, 2021 and 2020.

/s/Huang, Chien-Che

/s/Fuh, Wen-Fun

Ernst & Young, Taiwan March 8, 2022

Notice to Readers

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

Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young 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.

ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Assets	Notes		December 31,2021	December 31,2021	December 31,2021		December 31,2020	December 31,2020	December 31,2020
Contents			Amount		%		Amount		%
Current assets Cash and cash equivalents Financial assets at fair value through other comprehensive income, current Notes receivable, net Accounts receivable, net Other receivables Current tax assets Inventories Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss, non-current Financial assets at fair value through other comprehensive income, non-current Financial assets at amortised cost, non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred tax assets Other non-current assets Total non-current assets Total assets	4,6 4,6 4,6 4,6,7 7 4,6 7 4,5,6 4,6 4,6,8 4,6 4,6,8,9 4,5,6,8 4,5,6 4,5,6 7		$515,448 6,942,714 7 36,842 1,507 2,368 78,817 69,212 5,183 7,652,098 718,570 408,661 15,930 1,817,192 5,370,056 922,856 73,433 127,933 46,529 9,501,160 $17,153,258		3 41 - - - - 1 - - 45 4 2 - 11 32 5 - 1 - 55 100		$434,967 4,130,041 514 47,736 1,288 - 78,406 76,354 15,166 4,784,472 676,518 358,263 15,930 1,729,322 5,416,725 63,626 72,617 127,881 50,940 8,511,822 $13,296,294		3 31 - - - - 1 1 - 36 5 3 - 13 41 - 1 1 - 64 100

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

ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity	Notes		December 31,2021	December 31,2021	December 31,2021		December 31,2020	December 31,2020	December 31,2020
Contents			Amount		%		Amount		%
Current liabilities Short-term loans Short-term bills payables Contract liabilities, current Notes payable Accounts payable Other payables Current tax liabilities Lease liabilities, current Current portion of long-term liabilities Other current liabilities Total current liabilities Non-current liabilities Long-term loans Deferred tax liabilities Lease liabilities, non-current Net defined benefit liabilities, non-current Other non-current liabilities - others Total non-current liabilities Total liabilities Equity attributable to shareholders of the parent Capital stock Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other components of equity Non-controlling interests Total equity Total liabilities and equity	6,8 6,8 4,6 6 4,6,7 4,5,6 4,6,8 4,6 4,6,12 6,8 4,5,6 4,5,6 7 6 6 6 6		$2,870,000 400,000 200,471 533 110,370 410,621 1,171 48,499 13,333 12,272 4,067,270 100,000 97,964 891,584 43,232 10,364 1,143,144 5,210,414 3,669,234 2,943,143 769,536 195,815 1,844,803 2,810,154 2,515,691 4,622 11,942,844 $17,153,258		17 2 1 - 1 2 - - - - 23 1 1 5 1 - 8 31 21 17 4 1 11 16 15 - 69 100		$920,000 - 197,838 533 134,950 491,658 9,831 12,879 100,000 13,089 1,880,778 20,000 89,553 50,820 61,743 14,321 236,437 2,117,215 3,669,234 2,932,131 766,323 195,815 1,841,644 2,803,782 1,769,225 4,707 11,179,079 $13,296,294		7 - 1 - 1 4 - - 1 - 14 - 1 - 1 - 2 16 28 22 6 1 14 21 13 - 84 100

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

ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

Contents	Notes	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
		2021		2020
		Amount	%	Amount	%
Operating revenues Operating costs Gross profit Operating expenses Sales and marketing expenses General and administrative expenses Subtotal Operating income (loss) Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of profit or loss of associates and joint ventures accounted for using equity method Subtotal (Loss) income before income tax Income tax expense Net (loss) income Other comprehensive income (loss) Items that will not be reclassified subsequently to profit or loss Remeasurements of defined benefits plans Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income Income tax related to items that will not be reclassified subsequently Items that may be reclassified subsequently to profit or loss Share of other comprehensive income (loss) of associates and joint ventures which may be reclassified subsequently to profit or loss Total other comprehensive income (loss), net of income tax Total comprehensive income (loss) Net income attributable to: Shareholders of the parent Non-controlling interests Comprehensive income attributable to: Shareholders of the parent Non-controlling interests Earnings per share Basic earnings per share (NT$) Net Income Diluted earnings per share (NT$) Net Income	4,6,7 4,6,7 4,6,7 6 4,5,6 4,6 4,6	$1,518,343 (1,256,469) 261,874 (261,547) (373,137) (634,684) (372,810) 1,027 279,511 41,929 (19,970) (12,918) 289,579 (83,231) (4,952) (88,183) 2,079 799,183 (415) 50,276 851,123 $762,940 ($88,618) 435 $(88,183) $762,505 435 $762,940 ($0.24) ($0.24)	100 (83) 17 (17) (25) (42) (25) - 18 3 (1) (1) 19 (6) - (6) - 53 - 3 56 50	$2,008,699 (1,541,512) 467,187 (322,357) (420,841) (743,198) (276,011) 1,659 225,720 86,693 (4,798) (28,029) 281,245 5,234 (1,979) 3,255 21,209 413,038 (4,242) 59,677 489,682 $492,937 $2,608 647 $3,255 $492,290 647 $492,937 $0.01 $0.01	100 (77) 23 (16) (21) (37) (14) - 11 4 - (1) 14 - - - 1 21 - 3 25 25

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

ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Contents			EquityAttributable to Shareholders of the Parent	EquityAttributable to Shareholders of the Parent	EquityAttributable to Shareholders of the Parent	EquityAttributable to Shareholders of the Parent		Non- Controlling Interests	Total Equity
	Common Stock	Capital Surplus	Retained Earnings			Other Components of Equity	Total
			Legal Reserve	Special Reserve	Unappropriated Earnings	Unrealized Gains or Losses on Financial Assets Measured at Fair Value through Other Comprehensive Income
Balance as of January 1, 2020 Appropriation and distribution of 2019 retained earnings Legal reserve Other changes in capital surplus: Share of changes in net assets of associates and joint ventures accounted for using equity method Net income (loss) for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020 Total comprehensive income (loss) Changes in non-controlling interests Balance as of December 31, 2020 Balance as of January 1, 2021 Appropriation and distribution of 2020 retained earnings Legal reserve Other changes in capital surplus: Share of changes in net assets of associates and joint ventures accounted for using equity method Net income (loss) for the year ended December 31, 2021 Other comprehensive income (loss) for the year ended December 31, 2021 Total comprehensive income (loss) Changes in non-controlling interests Disposal of investments in equity instruments at fair value through other comprehensive income Balance as of December 31, 2021	$3,669,234 - - - -	$2,932,076 - 55 - -	$727,960 38,363 - - -	$195,815 - - - -	$1,847,874 (38,363) 12,558 2,608 16,967	$1,296,510 - - - 472,715	$10,669,469 - 12,613 2,608 489,682	$4,580 - - 647 -	$10,674,049 - 12,613 3,255 489,682
	-	-	-	-	19,575	472,715	492,290	647	492,937
	- $3,669,234	- $2,932,131	- $766,323	- $195,815	- $1,841,644	- $1,769,225	- $11,174,372	(520) $4,707	(520) $11,179,079
	$3,669,234 - - - -	$2,932,131 - 11,012 - -	$766,323 3,213 - - -	$195,815 - - - -	$1,841,644 (3,213) (9,667) (88,618) 1,664	$1,769,225 - - - 849,459	$11,174,372 - 1,345 (88,618) 851,123	$4,707 - - 435 -	$11,179,079 - 1,345 (88,183) 851,123
	-	-	-	-	(86,954)	849,459	762,505	435	762,940
	- - $3,669,234	- - $2,943,143	- - $769,536	- - $195,815	- 102,993 $1,844,803	- (102,993) $2,515,691	- - $11,938,222	(520) - $4,622	(520) - $11,942,844

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

ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Contents	For theyear ended December 31,	For theyear ended December 31,
	2021	2020
	Amount	Amount
Cash flows from operating activities: Net (loss) income before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Expected credit impairment losses (gains) Net gain from financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (porfit) of associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plant and equipment Expenses transferred from property, plant and equipment Loss (gain) on disposal of investments Changes in operating assets and liabilities: Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Increase (decrease) in contract liabilities Increase (decrease) in Notes payable Increase (decrease) in accounts payables Increase (decrease) in other payables Increase (decrease) in other current liabilities Increase (decrease) in net defined benefit liabilities Cash generated from operations Interest received Income taxes paid Net cash (used in) provided by operating activities Cash flows from investing activities: Refund received of capital reduction that financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in other non-current assets Dividends received Net cash used in investing activities Cash flows from financing activities: Increase (decrease) in short-term loans Increase (decrease) in short-term bills payable Repayments of long-term loans (current portion included) Cash payments for the principal portion of the lease liability Increase (decrease) in other non-current liabilities - others Interest paid (including capitalisation of interest) Changes in non-controlling interests Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year	$(83,231) 287,746 (35) (42,052) 19,970 (1,027) (208,681) 12,918 (478) 912 343 651 10,785 2,146 (411) 6,868 9,984 2,633 (1) (24,580) (79,067) (818) (13,591) (99,016) 1,030 (7,338) (105,324) - (2,332,980) 291,276 (80,000) (213,379) 528 4,412 208,681 (2,121,462) 1,950,000 400,000 (6,667) (15,162) (3,957) (16,427) (520) 2,307,267 80,481 434,967 $515,448	$5,234 266,049 (168) (87,402) 4,798 (1,659) (109,726) 28,029 619 (388) - 14,293 45,640 (97) 25,026 61 (11,226) (2,594) - (41,465) (52,915) 793 (10,392) 72,510 1,668 (3,383) 70,795 3,341 (654,115) 2 (80,000) (236,526) 98 (17,276) 109,726 (874,750) 700,000 - (11,000) (17,095) (1,530) (4,383) (520) 665,472 (138,483) 573,450 $434,967

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

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

1. History and organization

The Ambassador Hotel Co., Ltd. (“the Company”) was incorporated in November 1962 under the Company Act of the Republic of China (“R.O.C.”) and commenced operations in December 1964. The Ambassador Hotel Kaohsiung and The Ambassador Hotel Hsinchu was established and commenced operations in December 1981 and May 2001, respect ively. The main activities of the Company are international tourist hotels and attached restaurants, café, lounge bars and clubs. The Company’s common shares were publicly listed on the Taiwan Stock Exchange (TWSE) in November 1982. The Company’s registered office and the main business location is at No. 63, Section 2, Zhongshan North Road, Taipei, Republic of China (R.O.C.).

2. Date and procedures of authorization of financial statements for issue

The consolidated financial statements of the Company and its subsidiaries (“the Group”) for the years ended December 31, 2021 and 2020 were authorized for issue by the Board of Directors on March 8, 2022.

3. Newly issued or revised standards and interpretations

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after January 1, 2021. The adoption of these new standards and amendments had no material impact on the Group.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

Item	New, Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements	1 January 2022

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(a) Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements
A. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3)

The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.

B. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.

C. Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)

The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.

D. Annual Improvements to IFRS Standards 2018 - 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee’s leasehold improvements.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Amendment to IAS 41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

The abovementioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after 1 January 2022. The new or amended standards and interpretations have no material impact on the Group.

(3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
b	IFRS 17 “Insurance Contracts”	1 January2023
c	Classification of Liabilities as Current or Non-current – Amendments to IAS 1	1 January 2023
d	Disclosure Initiative - Accounting Policies – Amendments to IAS 1	1 January 2023
e	Definition of AccountingEstimates – Amendments to IAS 8	1 January2023
f	Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12	1 January 2023

(a) IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures , in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

(b) IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

(d) Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

(e) Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(f) Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. The new or amended standards and interpretations have no material impact on the Group.

4. Summary of significant accounting policies

(1) Statement of compliance

The consolidated financial statements of the Group for the years ended December 31, 2021 and 2020 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”) and International Financial Reporting Standards, International Accounting Standards, and interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by the FSC.

(2) Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Basis of consolidation

Preparation principle of consolidated financial statement

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Group loses control of a subsidiary, it:

(a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;
(b) derecognizes the carrying amount of any non-controlling interest;
(c) recognizes the fair value of the consideration received;
(d) recognizes the fair value of any investment retained;
(e) recognizes any surplus or deficit in profit or loss; and
(f) reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss.

The consolidated entities are listed as follows:

Investor	Subsidiary	Main businesses	Percentage of ownership (%)	Percentage of ownership (%)
			December 31, 2021	December 31, 2020
The Company The Company The Company The Company The Company The Company The Company Custom Investment Ltd. Custom Investment Ltd.	Ambassador Investment Ltd. Benz Investment Ltd. Custom Investment Ltd. Ambassador Premium Food Co., Ltd. Ambassador Bakery Corp. Ltd. Ambassador Real Estate Development Co., Ltd Ambassador Property Management and Maintenance Co., Ltd Custom Human Resources Management Ltd. Ambassador Property Management Co., Ltd.	General investing General investing General investing Wholesale of aquatic products, foods and groceries, etc. Bakery food manufacturing Real estate development and leasing Property management services Manpower services and consultancy Residential and building cleaning services	99.99% 99.99% 99.99% 100.00% 60.00% 100.00% 100.00% (Note 2) 100.00% 100.00%	99.99% 99.99% 99.99% 100.00% 60.00% 100.00% (Note 1) - 100.00% 100.00%

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Note 1: The Company established Ambassador Real Estate Development Co. with NT$5,000 thousand in June 2020. The holding share percentage maintain 100%. The main actvities are real estate development and leasing.
Note 2: The Company established Ambassador Property Management and Maintenance Co., Ltd with NT$10,000 thousand on March 31th, 2021. The holding share percentage maintain 100%. The main activities are building management services.
(4) Foreign currency transactions

The Group’s consolidated financial statements are presented in NT$, which is also the Group’s functional currency.

Transactions in foreign currencies are initially recorded by the Group at functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Nonmonetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

(a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
(b) Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.
(c) Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

(5) Current and non-current distinction

An asset is classified as current when:

(a) The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
(b) The Group holds the asset primarily for the purpose of trading
(c) The Group expects to realize the asset within twelve months after the reporting period
(d) The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

(a) The Group expects to settle the liability in its normal operating cycle
(b) The Group holds the liability primarily for the purpose of trading
(c) The liability is due to be settled within twelve months after the reporting period
(d) The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. 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.

All other liabilities are classified as non-current.

(6) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 12 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(7) Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

(a) Financial instruments: Recognition and Measurement

The Group accounts for regular way purchase or sales of financial assets on the trade date.

The Group classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

A. the Group’s business model for managing the financial assets and
B. the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables, financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

A. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
B. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

A. purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
B. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

A. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
B. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

A. A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
B. When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
C. Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:
i. Purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
ii. Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Group made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

(b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the balance sheet.

The Group measures expected credit losses of a financial instrument in a way that reflects:

A. an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
B. the time value of money; and
C. reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

The loss allowance is measures as follow:

A. At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Group measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.
B. At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.
C. For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.
D. For lease receivables arising from transactions within the scope of IFRS 16, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Group needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

A financial asset is derecognized when:

A. The rights to receive cash flows from the asset have expired
B. The Group has transferred the asset and substantially all the risks and rewards of the asset have been transferred
C. The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(d) Financial liabilities and equity

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. A financial liability is classified as held for trading if:

A. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
B. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of shortterm profit-taking; or
C. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

A. it eliminates or significantly reduces a measurement or recognition inconsistency; or
B. a group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(e) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(8) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(a) In the principal market for the asset or liability, or
(b) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(9) Inventories

Inventory costs include costs incurred in bringing each inventory to its present location and condition. Inventories are accounted for on a perpetual basis and stated at actual purchase costs, using weighted average method.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Inventories are valued at lower of cost and net realizable value item by item. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

(10) Investments accounted for using the equity method

The Group’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Group has significant influence.

Under the equity method, the investment in the associate is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate. After the interest in the associate is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. Unrealized gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the Group’s related interest in the associate.

When changes in the net assets of an associate occur and not those that are recognized in profit or loss or other comprehensive income and do not affects the Group’s percentage of ownership interests in the associate, the Group recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate on a prorata basis.

When the associate issues new stock, and the Group’s interest in an associate is reduced or increased as the Group fails to acquire shares newly issued in the associate proportionately to its original ownership interest, the increase or decrease in the interest in the associate is recognized in Additional Paid in Capital and Investment accounted for using the equity method. When the interest in the associate is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Group disposes the associate.

The financial statements of the associate are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures . If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets . In determining the value in use of the investment, the Group estimates:

(a) Its share of the present value of the estimated future cash flows expected to be generated by the associate, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or
(b) The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 Impairment of Assets .

Upon loss of significant influence over the associate, the Group measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss.

(11) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. 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 is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment . When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Machinery and equipment 3 ～ 40 years Transportation equipment 3 ～ 25 years Other equipment 2 ～ 50 years

“Significant components” of buildings primarily comprised the main buildings and mechanical parking equipments, which are depreciated based on their respective useful economic life of 50 to 56 years and 16 years, respectively.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

(12) Investment property

The Group’s owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal group that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations , investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as right-of-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings 51 years

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

The Group transfers properties to or from investment properties according to the actual use of the properties.

The Group transfers to or from investment properties when there is a change in use for these assets. Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

(13) Leases

The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group assesses whether, throughout the period of use, has both of the following:

(a) the right to obtain substantially all of the economic benefits from use of the identified asset; and
(b) the right to direct the use of the identified asset.

The Group elected not to reassess whether a contract is, or contains, a lease on January 1, 2020. The Group is permitted to apply IFRS 16 to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 but not to apply IFRS 16 to contracts that were not previously identified as containing a lease applying IAS 17 and IFRIC 4.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Group for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Group estimates the stand-alone price, maximising the use of observable information.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of those lease contracts.

At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

(a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;
(b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
(c) amounts expected to be payable by the lessee under residual value guarantees;
(d) the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
(e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Group measures the lease liability on an amortised cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Group measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

(a) the amount of the initial measurement of the lease liability;
(b) any lease payments made at or before the commencement date, less any lease incentives received;
(c) any initial direct costs incurred by the lessee; and
(d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-ofuse asset or the end of the lease term.

The Group applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Group accounted for as short-term leases or leases of lowvalue assets, the Group presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

Group as a lessor

At inception of a contract, the Group classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Group recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Group allocates the consideration in the contract applying IFRS 15.

The Group recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(14) Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cashgenerating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cashgenerating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(15) Revenue recognition

Operating revenue

The Group provides accommodations and foodservice related products, and sales revenue is recognized when services are rendered or goods are delivered to customers.

(a) Food and beverage sales are recognized when products are delivered to customers; meawhile, collecting the priceform customers.
(b) Room revenue is recognized when services are rendered to customers during the financial reporting periods. Customers pay the bills based on the agreed payment schedule.

Dividends

Revenue is recognized when the Group’s right to receive the dividends.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(16) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(17) Post-employment benefits

All regular employees of the Group are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Group. Therefore fund assets are not included in the Group’s consolidated financial statements.

For the defined contribution plan, the Group will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Group recognizes expenses for the defined contribution plan in the period in which the contribution becomes due.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Remeasurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur.

Past service costs are recognized in profit or loss on the earlier of:

(a) the date of the plan amendment or curtailment, and
(b) the date that the Group recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

(18) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

(a) Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
(b) In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

(a) Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
(b) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

5. Significant accounting judgements, estimates and assumptions

The preparation of the Group’s consolidated financial statements require management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

(1) Judgement

In the process of applying the Group’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the consolidated financial statements:

(a) Investment properties

Certain properties of the Group comprise a portion that is held to earn rentals or for capital appreciation and another portion that is owner-occupied. If these portions could be sold separately, the Group accounts for the portions separately as investment properties and property, plant and equipment. If the portions could not be sold separately, the property is classified as investment property in its entirety only if the portion that is owneroccupied is under 10% of the total property.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

－
(b) Operating lease commitment Group as the lessor

The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

(2) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flows model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

(b) Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate and changes of thefuture salary etc. The assumptions used for measuring pension cost and defined benefit obligation are disclosed in Note 6.

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective company's domicile.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Deferred tax assets are recognized for all carryforward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

6. Contents of significant accounts

(1) Cash and cash equivalents

Cash on hand Petty cash Savings and checking accounts Time deposits Cash equivalents Total	December 31, 2021	December 31, 2020
	$5,342 2,543 172,150 111,815 223,598	$2,661 3,981 120,185 135,896 172,244
	$515,448	$434,967

Cash equivalents comprise highly liquid commercial paper that is readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

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

Mandatorily measured at fair value through profit or loss: Beneficiary certificate Current Non-current Total	December 31, 2021	December 31, 2020
	$718,570	$676,518
	$- 718,570	$- 676,518
	$718,570	$676,518

Financial assets at fair value through profit or loss were not pledged.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(3) Financial assets at fair value through other comprehensive income

Equity instrument investments measured at fair value through other comprehensive income: Listed company stocks Unlisted company stocks Total Current Non-current Total	December 31, 2021	December 31, 2020
	$6,942,714 408,661	$4,130,041 358,263
	$7,351,375	$4,488,304
	$6,942,714 408,661	$4,130,041 358,263
	$7,351,375	$4,488,304

The Group’s dividend income related to equity instrument investments measured at fair value through other comprehensive income for the years ended December 31, 2021 and 2020 are NT$208,681 thousand and NT$109,726 thousand, respectively. And the dividend income is related to investments held at the end of the reporting period.

The Group classified certain of its financial assets as financial assets at fair value through other comprehensive income. Please refer to Note 8 for more details on financial assets at fair value through other comprehensive income under pledge.

(4) Financial assets measured at amortized cost

Demand deposits Current Non-current Total	December 31, 2021	December 31, 2020
	$15,930	$15,930
	$- 15,930	$- 15,930
	$15,930	$15,930

The Group classified certain financial assets as financial assets measured at amortized cost. Please refer to Note 8 for more details on financial assets measured at amortized cost under pledge.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(5) Notes receivables

Notes receivables arising from operating activities Less: loss allowance Total	December 31, 2021	December 31, 2020
	$167 (160)	$818 (304)
	$7	$514

Notes receivables were not pledged.

(6) Accounts receivable

Accounts receivable Less: loss allowance Total	December 31, 2021	December 31, 2020
	$38,330 (1,488)	$49,115 (1,379)
	$36,842	$47,736

(a) Accounts receivables were not pledged.
(b) Accounts receivables are generally on 60 to 90 day terms. The total carrying amount of accounts receivables and notes receivables are NT$38,497 thousand and NT$49,933 thousand as of December 31, 2021 and 2020, respectively.
(c) The Group measures the loss allowance of its accounts receivables and notes receivables at an amount equal to lifetime expected credit losses. The assessment of the Group’s loss allowance are considering the grouping of accounts receivables and notes receivables by counterparties’ credit rating, by geographical region and by industry sector.

The movement in the provision for impairment of accounts receivables and notes receivables during the years ended December 31, 2021 and 2020 is as follows: (Please refer to Note 12 for more details on credit risk.)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

As of January 1, 2021 Addition/(reversal) for the current period As of December 31, 2021 As of January 1, 2020 Addition/(reversal) for the current period As of December 31, 2020	Notes receivables and accounts receivables
	$1,683 (35)
	$1,648
	$1,851 (168)
	$1,683

(d) Accounts receivables are generally on 60 to 90 day terms. The aging analysis of net amount of accounts receivables is as follows:

Not yet due and not impaired Overdue but not impaired Total	December 31, 2021	December 31, 2020
	$36,842 -	$47,736 -
	$36,842	$47,736

(7) Inventories

Foods Beverages Cigarettes and others Total	December 31, 2021	December 31, 2020
	$38,753 38,956 1,108	$40,515 36,343 1,548
	$78,817	$78,406

(a) The cost of inventories recognized in expenses amounts to NT$461,155 thousand and NT$579,833 thousand for the years ended December 31, 2021 and 2020, respectively, and accounted for the cost of catering under operating costs.

(b) No inventories were pledged

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(8) Investments accounted for using the equity method
(a) The following table lists the investments in associates of the Group:

Investees	December 31,2021	December 31,2021	December 31,2020	December 31,2020
	Carrying amount	Percentage of ownership (%)	Carrying amount	Percentage of ownership (%)
Unlisted companies Qun Xin Properties Co., Ltd.(Note 1) Yu Der Investment Corp. Cheng Der Investment Corp. De Hong Investment Corp. Yu Hong Investment Corp. Yeangder Safety Management Consulting Corp. Ltd. Total	$- 210,536 170,479 700,675 734,622 880	- 37.34 33.49 31.41 30.69 10.00	$58,953 205,520 162,112 633,645 668,207 885	25.71 37.34 33.49 31.25 30.51 10.00
	$1,817,192		$1,729,322

Note 1: On October 29 2021, The Company elected not to participate in the cash capital increase of Qun Xin Properties Co., Ltd, the percentage of ownership is decrease from 25.71% to 12.41% lend to reclassify from investments accounted for using the equity method to FVOCI-non current.
(b) The percentage of ownership of some associates is less than 20%; however, the Group has significant influence by getting directors, and therefore accounts for the investment by using the equity method.
(c) The Group’s investments in associates are not individually material. The aggregate financial information of the Group’s investments in associates is as follows:

Profit or loss from continuing operations Other comprehensive income (post-tax) Total comprehensive income	For theyears ended December31,	For theyears ended December31,
	2021	2020
	$(12,918) 50,276	$(28,029) 59,677
	$37,358	$31,648

(d) The associates had no contingent liabilities or capital commitments as of December 31, 2021 and 2020. Investments in associates were not pledged.
(e) As of Decemeber 31, 2021 and 2020, the carrying amount of the Group’s equity investments are NT$1,817,192 thousand and NT$1,729,322 thousand, respectively ; the amount of the Group’s share of profit or loss of associates and joint ventures at equity method are NT$(12,918) thousand and NT$(28,029) thousand, respectively ; the amount of share of other comprehensive income or loss of associates and joint ventures are NT$50,276 thousand and NT$59,677 thousand.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(9) Property, plant and equipment

Owner occupied property, plant and equipment Land Buildings Machinery equipment Transportation and communication equipment Cost: As of January 1, 2021 $1,622,897 $9,074,143 $472,828 $132,646 Additions - 1,675 216 - Disposals - (154) (1,205) (1,333) Transfers and other changes - 144,158 12,444 4,385 As of December 31, 2021 $1,622,897 $9,219,822 $484,283 $135,698 As of January 1, 2020 $1,566,467 $8,824,704 $463,022 $121,969 Additions 56,430 1,742 248 - Disposals - (1,052) (1,481) (259) Transfers and other changes - 248,749 11,039 10,936 As of December 31, 2020 $1,622,897 $9,074,143 $472,828 $132,646 Depreciation and impairment: As of January 1, 2021 $- 5,685,433 $401,992 $108,899 Depreciation - 197,577 17,585 5,283 Disposals - (154) (1,205) (1,333) Transfers and other changes - 1,140 (1,563) - As of December 31, 2021 $- $5,883,996 $416,809 $112,849 As of January 1, 2020 $- $5,496,131 $386,453 $103,323 Depreciation - 189,846 17,021 5,835 Disposals - (544) (1,482) (259) Transfers and other changes - - - - As of December 31, 2020 $- $5,685,433 $401,992 $108,899 Net carrying amount as of: December 31, 2021 $1,622,897 $3,335,826 $67,474 $22,849 December 31, 2020 $1,622,897 $3,388,710 $70,836 $23,747	Owner occupied property, plant and equipment Land Buildings Machinery equipment Transportation and communication equipment Cost: As of January 1, 2021 $1,622,897 $9,074,143 $472,828 $132,646 Additions - 1,675 216 - Disposals - (154) (1,205) (1,333) Transfers and other changes - 144,158 12,444 4,385 As of December 31, 2021 $1,622,897 $9,219,822 $484,283 $135,698 As of January 1, 2020 $1,566,467 $8,824,704 $463,022 $121,969 Additions 56,430 1,742 248 - Disposals - (1,052) (1,481) (259) Transfers and other changes - 248,749 11,039 10,936 As of December 31, 2020 $1,622,897 $9,074,143 $472,828 $132,646 Depreciation and impairment: As of January 1, 2021 $- 5,685,433 $401,992 $108,899 Depreciation - 197,577 17,585 5,283 Disposals - (154) (1,205) (1,333) Transfers and other changes - 1,140 (1,563) - As of December 31, 2021 $- $5,883,996 $416,809 $112,849 As of January 1, 2020 $- $5,496,131 $386,453 $103,323 Depreciation - 189,846 17,021 5,835 Disposals - (544) (1,482) (259) Transfers and other changes - - - - As of December 31, 2020 $- $5,685,433 $401,992 $108,899 Net carrying amount as of: December 31, 2021 $1,622,897 $3,335,826 $67,474 $22,849 December 31, 2020 $1,622,897 $3,388,710 $70,836 $23,747	Owner occupied property, plant and equipment Land Buildings Machinery equipment Transportation and communication equipment Cost: As of January 1, 2021 $1,622,897 $9,074,143 $472,828 $132,646 Additions - 1,675 216 - Disposals - (154) (1,205) (1,333) Transfers and other changes - 144,158 12,444 4,385 As of December 31, 2021 $1,622,897 $9,219,822 $484,283 $135,698 As of January 1, 2020 $1,566,467 $8,824,704 $463,022 $121,969 Additions 56,430 1,742 248 - Disposals - (1,052) (1,481) (259) Transfers and other changes - 248,749 11,039 10,936 As of December 31, 2020 $1,622,897 $9,074,143 $472,828 $132,646 Depreciation and impairment: As of January 1, 2021 $- 5,685,433 $401,992 $108,899 Depreciation - 197,577 17,585 5,283 Disposals - (154) (1,205) (1,333) Transfers and other changes - 1,140 (1,563) - As of December 31, 2021 $- $5,883,996 $416,809 $112,849 As of January 1, 2020 $- $5,496,131 $386,453 $103,323 Depreciation - 189,846 17,021 5,835 Disposals - (544) (1,482) (259) Transfers and other changes - - - - As of December 31, 2020 $- $5,685,433 $401,992 $108,899 Net carrying amount as of: December 31, 2021 $1,622,897 $3,335,826 $67,474 $22,849 December 31, 2020 $1,622,897 $3,388,710 $70,836 $23,747	Owner occupied property, plant and equipment Land Buildings Machinery equipment Transportation and communication equipment Cost: As of January 1, 2021 $1,622,897 $9,074,143 $472,828 $132,646 Additions - 1,675 216 - Disposals - (154) (1,205) (1,333) Transfers and other changes - 144,158 12,444 4,385 As of December 31, 2021 $1,622,897 $9,219,822 $484,283 $135,698 As of January 1, 2020 $1,566,467 $8,824,704 $463,022 $121,969 Additions 56,430 1,742 248 - Disposals - (1,052) (1,481) (259) Transfers and other changes - 248,749 11,039 10,936 As of December 31, 2020 $1,622,897 $9,074,143 $472,828 $132,646 Depreciation and impairment: As of January 1, 2021 $- 5,685,433 $401,992 $108,899 Depreciation - 197,577 17,585 5,283 Disposals - (154) (1,205) (1,333) Transfers and other changes - 1,140 (1,563) - As of December 31, 2021 $- $5,883,996 $416,809 $112,849 As of January 1, 2020 $- $5,496,131 $386,453 $103,323 Depreciation - 189,846 17,021 5,835 Disposals - (544) (1,482) (259) Transfers and other changes - - - - As of December 31, 2020 $- $5,685,433 $401,992 $108,899 Net carrying amount as of: December 31, 2021 $1,622,897 $3,335,826 $67,474 $22,849 December 31, 2020 $1,622,897 $3,388,710 $70,836 $23,747	December 31, 2021 $5,370,056	December 31, 2021 $5,370,056	December 31, 2020	December 31, 2020
						$5,416,725
				Other equipment			Total
$1,622,897 - - -	$9,074,143 1,675 (154) 144,158	$472,828 216 (1,205) 12,444	$132,646 - (1,333) 4,385	$749,697 4,098 (4,198) 8,989	$160,681 207,390 - (173,291)		$12,212,892 213,379 (6,890) (3,315)
$1,622,897	$9,219,822	$484,283	$135,698	$758,586	$194,780		$12,416,066
$1,566,467 56,430 - -	$8,824,704 1,742 (1,052) 248,749	$463,022 248 (1,481) 11,039	$121,969 - (259) 10,936	$682,362 2,463 (8,257) 73,129	$328,503 175,643 - (343,465)		$11,987,027 236,526 (11,049) 388
$1,622,897	$9,074,143	$472,828	$132,646	$749,697	$160,681		$12,212,892
$- - - -	5,685,433 197,577 (154) 1,140	$401,992 17,585 (1,205) (1,563)	$108,899 5,283 (1,333) -	$599,843 37,430 (4,148) (769)	$- - - -		$6,796,167 257,875 (6,840) (1,192)
$-	$5,883,996	$416,809	$112,849	$632,356	$-		$7,046,010
$- - - -	$5,496,131 189,846 (544) -	$386,453 17,021 (1,482) -	$103,323 5,835 (259) -	$571,802 36,088 (8,047) -	$- - - -		$6,557,709 248,790 (10,332) -
$-	$5,685,433	$401,992	$108,899	$599,843	$-		$6,796,167
$1,622,897	$3,335,826	$67,474	$22,849	$126,230	$194,780		$5,370,056
$1,622,897	$3,388,710	$70,836	$23,747	$149,854	$160,681		$5,416,725

(a) There was no capitalization on interest expense to property, plant and equipment for the years ended December 31, 2021 and 2020.

(b) Please refer to Note 8 for more details on property, plant and equipment under pledge.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(10) Investment property

The Group has entered into commercial property leases on its owned investment properties with terms of 3 years. These leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The investment properties held by the Group as right-of-use assets with non-cancellable period of 3 years. These contracts provide the Group options to extend the leases.

Land	Buildings	Total
$62,418 - -	$12,842 - 2,057	$75,260 - 2,057
$62,418	$14,899	$77,317
$62,418 - -	$12,842 - -	$75,260 - -
$62,418	$12,842	$75,260
$- - -	$2,643 595 646	$2,643 595 646
$-	$3,884	$3,884
$- - -	$2,391 252 -	$2,391 252 -
$-	$2,643	$2,643
$62,418	$11,015	$73,433
$62,418	$10,199	$72,617

(a) Rental income from investment properties held by the Group is NT$1,080 thousand and NT$2,160 thousand for the years ended December 31, 2021 and 2020, respectively, recognized asnon-operating income. There was no significant direct operating expenses to investment property generating rental income except for depreciation expenses.

(b) No investment property was pledged.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(c) Investment properties held by the Group are not measured at fair value but for which the fair value is disclosed. The fair value measurements of the investment properties are categorized within Level 3. The fair value of investment properties located at Shilin district, Taipei is NT$193,300 thousand as of December 31, 2017. The fair value has been determined based on valuations performed by an independent valuer. The valuation methods used are comparison approach and income approach. The actual deals of the real estate nearby are the key assumption used in comparison approach. Considering the market annual rent and the capitalization rate, which is 1.84%, are the key assumptions used in income approach. The Group estimated the price per ping is NT$1,020 thousand as of December 31, 2017 by using the two valuation methods mentioned above.

The Group sold a portion of investment properties in April 2019 for NT$86,629 thousand and recognized income on disposal of investment properties in the amount of NT$14,264 thousand. The fair value of remaining investment properties is NT$104,266 thousand as of December 31, 2017 based on valuations performed by an independent valuer.

As of December 31, 2021 and 2020, the Group assessed the fair value of the investment properties according to the similar target’s recent transaction price and rental price of property transaction actual price query in Ministry of the Interior and websites of real estate agent. The results of the assessment are equivalent to the fair value determined based on valuations performed by an independent valuer.

(11) Short-term loans

Unsecured bank loans Secured bank loans Total	Interest Rates (%)	December 31, 2021	December 31, 2020
	0.75%~0.76% 0.75%~0.85%	$1,200,000 1,670,000	$600,000 320,000
		$2,870,000	$920,000

(a) Please refer to Note 6 (14) for the Group’s unused short-term lines of credits as of December 31, 2021 and 2020.
(b) Please refer to Note 8 for more details on assets pledged as security for short-term loans.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(12) Short-term bills payables

Guarantee Agency	Interest Rates(%)	December 31, 2021	December 31, 2020
Issued and guaranteed by financial institutions Less: Unamortized discount Net	0.81%~0.81%	$400,000 -	$- -
		$400,000	$-

(13) Other payables

Accrued employees’ bonuses Accrued employees’ compensation and remuneration to directors (excluding subsidiaries) Accrued unused vacation leave Payable for machinery and equipment Payable for house and land value tax Dividend payable (prior periods) Others (Note) Total	December 31, 2021	December 31, 2020
	$300,777 625 19,722 5,687 17,936 15,188 50,686	$319,410 30,625 27,351 21,620 16,379 15,337 60,936
	$410,621	$491,658

Note: Individual payables amount not exceeded NT$10,000 thousand were aggregated as others.

(14) Long-term loans

(a) Details of long-term loans as of December 31, 2021 and 2020 are as follows:

Lenders	December 31,2021	Interest Rate(%)	Maturitydate and terms of repayment
Bank of Taiwan – Secured loans The Export-Import Bank of the Republic of China – Unsecured loans Subtotal Less: current portion Total	$100,000 13,333	0.95% 0.93%	Effective from Feburary 19, 2021 to Feburary 19, 2023. Principal will be repaid upon maturity. Interest is paid monthly. Effective from November 29, 2019 to November 28, 2022. Principal will be repaid every 6 months after 24 months of borrowing. Interest is paid monthly.
	$113,333 (13,333)
	$100,000

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Lenders	December 31,2020	Interest Rate(%)	Maturity date and terms of repayment
Bank of Taiwan – Secured loans The Export-Import Bank of the Republic of China – unsecured loans Subtotal Less: current portion Total	$100,000 20,000	0.95% 0.93%	Effective from May 17, 2019 to Feburary 19, 2021. Principal will be repaid upon maturity. Interest is paid monthly. Effective from November 29, 2019 to November 28, 2022. Principal will be repaid upon maturity. Interest is paid monthly.
	120,000 (100,000)
	$20,000

(b) The Group’s unused short-term and long-term lines of credits amount to NT$3,529,000 thousand and NT$5,724,598 thousand as of December 31, 2021 and 2020, respectively.
(c) Please refer to Note 8 for more details on assets pledged as security for long-term loans.
(15) Post-employment benefits

Defined contribution plan

The Group adopted a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Group will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Group has made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Expenses under the defined contribution plan for the years ended 31 December 2021 and 2020 are NT$40,091 thousand and NT$33,105 thousand, respectively.

Defined benefits plan

The Group adopts a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Group contributes an amount equivalent to 4% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Group assesses the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the same year, the Group will make up the difference in one appropriation before the end of March the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under mandation, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from twoyear time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Group does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Group expects to contribute NT$3,120 thousand to its defined benefit plan during the 12 months beginning after December 31, 2021.

The average duration of the defined benefits plan obligation as of December 31, 2021 and 2020 are 10 years and 11 years.

Pension costs recognized in profit or loss are as follows:

Current period service costs Net interest of defined benefit liability (asset) Past service cost Settlements Subtotal Current period service costs`－`subsidiaries Total	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$2,447 348 (10,286) -	$3,723 905 - -
	(7,491)	4,628
	13	13
	$(7,478)	$4,641

Changes in the defined benefit obligation and fair value of plan assets are as follows:

December 31, 2021	December 31, 2020	January 1, 2020
$94,421 (51,697)	$125,706 (64,472)	$158,033 (65,198)
42,724 508	61,234 509	92,835 507
$43,232	$61,743	$93,342

Reconciliation of liability (asset) of the defined benefit plan is as follows:

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Defined benefit obligation	Fair value of plan assets	Net defined benefit liability (asset)
$158,033 3,723 1,563 -	$(65,198) - (658) -	$92,835 3,723 905 -
163,319 - (9,802) (9,371) -	(65,856) - - - (2,036)	97,463 - (9,802) (9,371) (2,036)
(19,173)	(2,036)	(21,209)
(18,440) - -	18,440 (15,020) -	- (15,020) -
125,706 2,447 754 (10,286)	(64,472) - (406) -	61,234 2,447 348 (10,286)
118,621 - (846) (493) -	(64,878) - - - (740)	53,743 - (846) (493) (740)
(1,339)	(740)	(2,079)
(22,861) - -	22,861 (8,940) -	- (8,940) -
$94,421	$ (51,697)	$42,724

The following significant actuarial assumptions are used to determine the present value of the

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

defined benefit obligation:

Discount rate Expected rate of salary increases	December 31, 2021	December 31, 2020
	0.734% 1.000%	0.390% 1.000%

A sensitivity analysis for significant assumptions is shown below:

For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
2021		2020
Increase in defined benefit obligation	Decrease in defined benefit obligation	Increase in defined benefit obligation	Decrease in defined benefit obligation
$- 2,853 2,795 -	$2,746 - - 2,697	$- 3,997 3,963 -	$3,836 - - 3,822

The sensitivity analysis above is based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analyses compared to the previous period.

(16) Equities

(a) Common stock

The Group’s issued capital as of December 31, 2021 and 2020 was NT$3,669,234 thousand, each at a par value of NT$10, divided into 366,923 thousand shares.

(b) Capital surplus

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Additional paid-in capital Treasury share transactions Changes in ownership interests in subsidiaries Gain on sale of assets Donated assets Share of changes in net assets of associates and joint ventures accounted for using the equity method Total	December 31, 2021	December 31, 2020
	$2,859,851 21,750 22,046 19,667 8,817 11,012	$2,859,851 21,750 20,618 19,667 8,817 1,428
	$2,943,143	$2,932,131

According to the Company Act, the capital surplus shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital surplus related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

(C) Retained earnings and dividend policies

According to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

A. Payment of all taxes and dues;
B. Offset prior years’ operation losses;
C. Set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve;
D. Set aside or reverse special reserve in accordance with law and regulations; and
E. The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting.

Considering the future fund requirements and to meet the shareholders’ demand for cash. If there is surplus after the Company’s annual final settlement, cash dividends distributed each year cannot be less than 10% of the gross amount of dividends. However, if the future funds are abundant, the distribution ratio may be increased.

According to the Company Act, the Company needs to set aside amount to legal reserve

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

unless where such legal reserve amounts to the total paid-in capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

Following the adoption of IFRS, the FSC on 6 April 2012 issued Order No. FinancialSupervisory-Securities-Corporate-1010012865, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside an equal amount of special reserve. Following a company’s adoption of the IFRS for the preparation of its financial reports, when distributing distributable earnings, it shall set aside to special reserve, from the profit/loss of the current period and the undistributed earnings from the previous period, an amount equal to “other net deductions from shareholders’ equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements in the preceding point, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

Details of the 2021 and 2020 earnings distribution and dividends per share as approved and resolved by the board of directors’ meeting and shareholders’ meeting on March 9, 2021 and June 9, 2021, respectively, are as follows:

Appropriation of earnings	Appropriation of earnings	Dividendper share(NT$)	Dividendper share(NT$)
2021	2020	2021	2020
$637 -	$3,213 -	$-	$-
$637	$3,213

Please refer to Note 6 (19) for details on employees’ compensation and remuneration to directors and supervisors.

(d) Non-controlling interests

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Beginning balance Profit (loss) attributable to non-controlling interests Changes in non-controlling interests Ending balance	For theyears ended December31,	For theyears ended December31,
	2021	2020
	$4,707 435 (520)	$4,580 647 (520)
	$4,622	$4,707

(17) Operating revenue

Revenue from contracts with customers Room revenue Food and beverage sales Other operating revenue Total	For theyears ended December31,	For theyears ended December31,
	2021	2020
	$267,597 1,232,146 18,600	$379,598 1,609,803 19,298
	$1,518,343	$2,008,699

For the years ended December 31, 2021 and 2020, , the impact of Covid-19 pandemic has been affecting global economic activities and certain industries, such as tourism and hospitality. The Company’s room and food and beverage sales were also affected by the significant reduction in the number of international tourist and business trip, which leads to the downturn of earnings and gross profits of current year. Although the domestic epidemic situation has slowed, the international Covid-19 pandemic situation remains severe and many countries are still under lockdown measures. The Company is not yet possible to reasonably assess the future impact on the business and financial status.

Analysis of revenue from contracts with customers during the years ended December 31, 2021 and 2020 are as follows:

(a) Disaggregation of revenue

For the year ended December 31, 2021:

Taipei	Hsinchu	Kaohsiung	Other	Total
$18,785 628,934 5,511	$86,208 295,425 3,684	$162,604 295,988 1,969	$- 11,799 7,436	$267,597 1,232,146 18,600
$653,230	$385,317	$460,561	$19,235	$1,518,343
$634,445 18,785	$299,109 86,208	$297,957 162,604	$19,235 -	$1,250,746 267,597
$653,230	$385,317	$460,561	$19,235	$1,518,343

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended December 31, 2020:

Taipei	Hsinchu	Kaohsiung	Other	Total
$89,681 835,949 5,690	$109,356 368,742 2,680	$180,561 391,907 2,710	$- 13,205 8,218	$379,598 1,609,803 19,298
$931,320	$480,778	$575,178	$21,423	$2,008,699
$841,639 89,681	$371,422 109,356	$394,617 180,561	$21,423 -	$1,629,101 379,598
$931,320	$480,778	$575,178	$21,423	$2,008,699

(b) Contract balances

Contract liabilities – current

Room revenue Food and beverage sales Other operating revenue Total	December 31, 2021	December 31, 2020	January 1, 2020
	$63,022 137,326 123	$65,933 131,832 73	$58,873 141,486 73
	$200,471	$197,838	$200,432

For the years ended December 31, 2021 and 2020, NT$197,838 and NT$200,432 are recognized as revenue, respectively, during the period that was included in the beginning balances of contract liabilities.

(18) Leases

(a) Group as a lessee

The Group leases various properties, including real estate (land and buildings) and transportation equipment. The lease terms range from 3 to 5 years.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

The Group’s leases effect on the financial position, financial performance and cash flows are as follow:

A. Amounts recognized in the balance sheet

i. Right-of-use assets

The carrying amount of right-of-use assets

The carrying amount of right-of-use assets
Land Buildings Transportation equipment Total	December 31, 2021	December 31, 2020
	$45,089 872,896 4,871	$50,099 6,895 6,632
	$922,856	$63,626

During the years ended December 31, 2021 and 2020, the Group’s additions to right-of-use assets amount to NT$888,506 thousand and NT$53,850 thousand, respectively.

ii. Lease liabilities

Lease liabilities Current Non-current	December 31, 2021	December 31, 2020
	$940,083	$63,699
	$48,499	$12,879
	$891,584	$50,820

Please refer to Note 6 (20) for the interest on lease liabilities recognized during the year ended December 31, 2021 and refer to Note 12 (5) Liquidity Risk Management for the maturity analysis for lease liabilities.

B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Land Buildings Transportation equipment Total	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$5,010 19,825 4,441	$4,987 6,155 5,865
	$29,276	$17,007

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

C. Income and costs relating to leasing activities

The expenses relating to short-term leases	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$14,524	$13,989

D. Cash outflow relating to leasing activities

During the years ended December 31, 2021 and 2020, the Group’s total cash outflows for leases amounting to NT$29,686 thousand and NT$31,084 thousand, respectively.

E. Other information relating to leasing activities

Extension and termination options

Some of the Group’s land, buildings and transportation equipment rental agreement contain extension and termination options. In determining the lease terms, the noncancellable period for which the Group has the right to use an underlying asset, together with both periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option. These options are used to maximize operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Group. After the commencement date, the Group reassesses the lease term upon the occurrence of a significant event or a significant change in circumstances that is within the control of the lessee and affects whether the Group is reasonably certain to exercise an option not previously included in its determination of the lease term, or not to exercise an option previously included in its determination of the lease term.

(19) Summary statement of employee benefits, depreciation and amortization expenses by function is as follows:

		For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
		2021			2020
	Operating costs	Operating expenses	Total amount	Operating costs	Operating expenses	Total amount
Employee benefits expense
Salaries	$483,855	$154,441	$638,296	$643,674	$180,385	$824,059
Labor and health insurance	49,488	14,991	64,479	56,562	14,928	71,490
Pension	23,798	8,815	32,613	28,960	8,786	37,746
Other employee benefits expense	25,183	8,357	33,540	30,612	7,936	38,548
Depreciation	209,373	78,373	287,746	197,507	68,542	266,049

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

According to the Articles of Incorporation, 1% to 8% of profit of the current year is distributable as employees’ compensation and no higher than 4% of profit of the current year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. Information on the Board of Directors’ resolution regarding the employees’ compensation and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

Company did not accrue employees’ compensation and renumeration to directors and supervisors became of the losses before income taxes for the years ended December 31, 2021.

No material differences exist between the estimated amount and the actual distribution of the employee compensation for the year ended December 31, 2020.

(20) Non-operating income and expenses

(a) Interest income

Financial assets measured at amortized cost	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$1,027	$1,659

(b) Other income

Rental income Dividend income Government grants Compensation income Others Total	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$1,594 208,681 60,098 46 9,092	$2,310 109,726 87,635 44 26,005
	$279,511	$225,720

In April 2020, June 2021 and September 2021, the Tourism Bureau of the Ministry of Transportation and Communications announced a bailout subsidy program to assist the operation of tourism industry affected by the impact of Covid-19 pandemic. In accordance with the operation directions for bailout subsidy, the Company applies government grants for employee salaries and necessary operating costs. The grant is recognized as other income over the period necessary to match the costs that it is intended to compensate.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(c) Other gains and losses

Gains (losses) on disposal of property, plant and equipment Foreign exchange (losses) gains, net Losses on disposal of investments Gains on financial assets at fair value through profit or loss (Note) Others Total	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$478 (1) (343) 42,052 (257)	$(619) 224 - 87,402 (314)
	$41,929	$86,693

Note: Balances were arising from financial assets mandatorily measured at fair value through profit or loss.

(d) Finance costs

Interest on borrowings from bank Interest on lease liabilities Imputed interest on deposits Total	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$16,726 3,234 10	$4,561 227 10
	$19,970	$4,798

(21) Components of other comprehensive income

For the year ended December 31, 2021:

Items that will not be reclassified subsequently to profit or loss: Remeasurements of defined benefit plans Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Share of other comprehensive income (loss) of associates and joint ventures accounted for using the equity method Total other comprehensive income (loss)	Arising during theperiod	Reclassification adjustments during the period	Other comprehensive income (loss), before tax	Income tax relating to components of other comprehensive income	Other comprehensive income (loss), net of tax
	$2,079 799,183 50,276	$- - -	$2,079 799,183 50,276	$(415) - -	$1,664 799,183 50,276
	$851,538	$-	$851,538	$(415)	$851,123

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended December 31, 2020:

Items that will not be reclassified subsequently to profit or loss: Remeasurements of defined benefit plans Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Share of other comprehensive income (loss) of associates and joint ventures accounted for using the equity method Total other comprehensive income (loss)	Arising during theperiod	Reclassification adjustments during the period	Other comprehensive income (loss), before tax	Income tax relating to components of other comprehensive income	Other comprehensive income (loss), net of tax
	$21,209 413,038 59,677	$- - -	$21,209 413,038 59,677	$(4,242) - -	$16,967 413,038 59,677
	$493,924	$-	$493,924	$(4,242)	$489,682

(22) Income tax

(a) The major components of income tax expense (benefit) for the years ended December 31, 2021 and 2020 are as follows:

Income tax expense (benefit) recognized in profit or loss

Current income tax expense (benefit): Current income tax (refund) charge Adjustments in respect of current income tax of prior periods Deferred tax expense (benefit): Deferred tax expense (benefit) relating to origination and reversal of temporary differences Total income tax expense (benefit)	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$(1,109) (1,883) 7,944	$9,852 2,987 (10,860)
	$4,952	$1,979

Income tax relating to components of other comprehensive income (loss)

Deferred tax expense (benefit): Remeasurements of defined benefits plans Income tax relating to components of other comprehensive income	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$(415)	$(4,242)
	$(415)	$(4,242)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(b) Reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

Accounting (loss) profit before tax from continuing operations Tax at the domestic rates applicable to profits in the country concerned Tax effect of revenues exempt from taxation Tax effect of expenses not deductible for tax purposes Pay the approved income tax Corporate income surtax on undistributed retained earnings Adjustments in respect of current income tax of prior periods Others Total income tax expense recognized in profit or loss	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$(83,231)	$5,234
	$(16,646) (60,205) 18 - (2,011) (1,883) 85,679	$1,047 (35,648) 185 8,623 8,640 2,987 16,145
	$4,952	$1,979

For the year December 31, 2021:

Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Endingbalance
$63,761 146 35,269 24,609 3,867 229 (55,383) (34,170)	$(1,302) - 3,167 (1,398) - - (8,411) -	$- - - - (415) - - -	$62,459 146 38,436 23,211 3,452 229 (63,794) (34,170)
	$(7,944)	$(415)
$38,328			$29,969
$127,881			$127,933
$(89,553)			$(97,964)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended December 31, 2020:

Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Ending balance
$65,198 146 3,414 26,687 8,109 229 (37,903) (34,170)	$(1,437) - 31,855 (2,078) - - (17,480) -	$- - - - (4,242) - - -	$63,761 146 35,269 24,609 3,867 229 (55,383) (34,170)
	$10,860	$(4,242)
$31,710			$38,328
$103,783			$127,881
$(72,073)			$(89,553)

(d) The following table contains information of the unused tax losses of the Group:

Year	Tax losses for theperiod	Unused tax	losses as of	Expiration year
		December 31, 2021	December 31, 2020
2013 2014 2015 2016 2017 2018 2019 2020	$4,883 1,555 1,762 5,474 8,577 3,873 3,131 136,254	$- - - - - 325 246 132,874	$- - - - 410 58 - -	2023 2024 2025 2026 2027 2028 2029 2030
		$133,445	$468

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(e) Unrecognized deferred tax assets

The Group's unrecognized deferred tax assets amounted to NT$26,688 thousand and NT$94 thousand as of December 31, 2021 and 2020, respectively.

(f) The assessment of income tax returns

As of December 31, 2021, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

The Company
Subsidiary－Benz Investment Ltd.
Subsidiary－Ambassador Investment Ltd.
Subsidiary－Custom Investment Ltd.
Subsidiary－Ambassador Premium Food Co., Ltd.
Subsidiary－Ambassador Bakery Corp. Ltd.
Subsidiary－Ambassador Real Estate
Development. Co
Subsidiary－Ambassador Property Management
and Maintenance Co., Ltd
Sub-subsidiary－Custom Human Resources
Management Ltd.
Sub-subsidiary－Ambassador Property
Management Co., Ltd. The assessment of income tax returns

Assessed and approved up to 2019
Assessed and approved up to 2020
Assessed and approved up to 2020
Assessed and approved up to 2020

Assessed and approved up to 2020
Assessed and approved up to 2020
Assessed and approved up to 2020
(Note 1)
Assessed and approved up to 2020
Assessed and approved up to 2020

Note 1: As of December 31, 2021 the income tax return of the Company is not yet assessed and approved as the Company was established in March 2021.

(23) Earnings per share

Basic earnings per share is calculated by dividing net profit for the year attributable to ordinary equity owners of the parent entity by the weighted average number of ordinary shares outstanding during the year.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity owners of the parent entity by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

A. Basic earnings per share Net income attributable to ordinary equity owners of the parent Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Basic earnings per share (NT$) B. Diluted earnings per share Net income attributable to ordinary equity owners of the parent Net income after dilution attributable to ordinary equity owners of the parent (in thousand NT$) Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Effect of dilution: Employee compensation`－`stock (in thousands) Weighted average number of ordinary shares outstanding after dilution (in thousands) Diluted earnings per share (NT$)	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$(88,618)	$2,608
	366,923	366,923
	$(0.24)	$0.01
	$(88,618)	$2,608
	$(88,618)	$2,608
	366,923 -	366,923 1
	366,923	366,924
	$(0.24)	$0.01

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of the financial statements were authorized for issue.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

7. Related party transactions

(1) Name and nature of relationship of the related parties

Information of the related parties that had transactions with the Group during the financial reporting period is as follows:

Name of the relatedparties	Nature of relationshipof the relatedparties
Shihlin Electric & Engineering Corporation HCT Logistics Co., Ltd. Charter Leisure Co., Ltd. Hsinchu Golf Country Club Co., Ltd. Shihlin Development Company Limited Qun Xin Properties Co., Ltd.	Entity with joint control or significant influence over the Group Other related party Other related party Other related party Other related party Associate

(2) Significant transactions with the related parties
(a) Sales

Entity with joint control or significant influence over the Group Other related parties Associates Total	For theyears ended December 31	For theyears ended December 31
	2021	2020
	$26,076 29,580 909	$20,210 34,892 1,003
	$56,565	$56,105

The sale price and trade credit terms were determined based on general trading terms.

(b) Purchases

Other related parties	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$24	$55

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(c) Accounts receivable, net

Entity with joint control or significant influence over the Group Other related parties Associates Total	As of December 31,	As of December 31,
	2021	2020
	$3,675 3,366 78	$4,336 3,600 76
	$7,119	$8,012

The outstanding receivables from a joint operating agreement with Charter Leisure Co., Ltd. in amount of NT$0 thousand and NT$4,866 thousand, as of December 31, 2021 and 2020, respectively, are the sales generated from the agreement less the operating expenses. Please refer to Note7 (3) for more details.

(d) Other receivable

Other related parties	As of December 31,	As of December 31,
	2021	2020
	$12	$-

(e) Lease - related parties
A. Right-of-use assets

Other related parties HCT Logistics Co., Ltd.	As of December 31,	As of December 31,
	2021	2020
	$50,099	$53,930

B. Lease liabilities

Other related parties HCT Logistics Co., Ltd.	As of December 31,	As of December 31,
	2021	2020
	$45,337	$50,099

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

C. Interest expenses

Other related parties HCT Logistics Co., Ltd. (f) Refundable deposits Other related parties (g) Accounts payable Entity with joint control or significant influence over the Group (h) Other payables Entity with joint control or significant influence over the Group Other related parties Associates Total (i) Operating expense Entity with joint control or significant influence over the Group Other related parties Associates Total	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$537	$79
	2021	2020
	$148 7,861 -	$234 6,225 4
	$8,009	$6,463

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(j) Property transaction

Purchase of property, plant and equipment`：` Entity with joint control or significant influence over the Group Shihlin Electric & Engineering Corporation	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$1,594	$3,585

(k) Key management personnel compensation

Short-term employee benefits Post-employment benefits Total	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$47,927 955	$53,673 1,062
	$48,882	$54,735

(3) The agreements with related parties are as follows `：`

(a) Lease

Since January 1, 1997, the Group leased the Land Lot No.567-2 of Central Section, Hsinchu City (approximately 595 pings) from HCT Logistics Co., Ltd. for developing the hotel and department store. The lease agreement will terminate untill December 31, 2030. At the end of the lease term, the Group has the right to apply for extension and bargain renewal options.

During the lease period, the Group has the right to require HCT Logistics Co., Ltd. to apply for the registration of superficies. The term of such acquired superficies is from June 2000 to June 2035. The Group pays the rental fee amounted NT$1,500 thousand to HCT Logistics Co., Ltd. before the date of registration of the superficies and adjusted based on the Wholesale Price Index every five years.

(b) Restaurant joint operating agreement

The Group entered into a restaurant joint operating agreement with Charter Leisure Co., Ltd. The agreement will terminate until December 31, 2021. Charter Leisure Co., Ltd. provides the operating site located at Landmark Club. The Group provides sales of goods and rendering of services. Charter Leisure Co., Ltd. is responsible for making collections of restaurant sales and claims agent fee based on sales of current month. At the end of each year, the agent fee is adjusted based on annual sales and annual rate according to the agreement between both parties.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

8. Assets pledged as security

The following table lists assets of the Group pledged as security:

Items	Carryingamount	Carryingamount	Secured liabilities
	December 31, 2021	December 31, 2020
Financial assets at fair value through other comprehensive income, current Financial assets measured at amortized cost, non-current Demand deposits Property, plant and equipment: Building for operation and administration in Hsinchu Building for operation in Kaohsiung Building for operation and administration in Taipei Subtotal Total	$- 15,930 3,303,862 534,118 1,036,918	$162,560 15,930 3,244,736 577,940 936,381	Loans Loans Loans and bank performance guarantee Loans Loans
	4,874,898	4,759,057
	$4,890,828	$4,937,547

9. Significant contingencies and unrecognized contractual commitments

(1) The Group signed a lease with HCT Logistics Co., Ltd., Please refer to Note 7 (3) for more details.
(2) The Group signed a restaurant joint operating agreement with Charter Leisure Co., Ltd. Please refer to Note 7 (3) for more details.
(3) The Group entered into several construction contracts and acquisition contracts of property, plant and equipment. As of December 31, 2021 and 2020, these contracts amounted to approximately NT$224,617 thousand and NT$126,393 thousand and the portion of the contracts not yet paid was approximately NT$87,490 thousand and NT$20,321 thousand, respectively.
(4) The Group entrusted financial institutes to open performance guarantee, mainly related to the operations, amounting to NT$60,792 thousand.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

12. Others

(1) Categories of financial instruments

Financial assets

Financial assets at fair value through profit or loss: Mandatorily measured at Fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost (Note) Total Financial liabilities Financial liabilities measured at amortized cost: Short-term loans Short-term bills payables Payables (other payables included) Lease liabilities Long-term loans (current portion included) Total	December 31, 2021	December 31, 2020
	$718,570 7,351,375 569,734	$676,518 4,488,304 500,435
	$8,639,679	$5,665,257
	December 31, 2021	December 31, 2020
	$2,870,000 400,000 521,524 940,083 113,333	$920,000 - 627,141 63,699 120,000
	$4,844,940	$1,730,840

Note: Includes cash and cash equivalents, financial assets measured at amortized cost, notes receivables, accounts receivables and other receivables.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Group’s identifies measures and manages the aforementioned risks based on the Group’s policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s debt instrument investments at variable interest rates, loans with fixed interest rates and variable interest rates.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including loans with variable interest rates. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit for the years ended December 31, 2021 and 2020 to decrease/increase by NT$3,383 thousand and NT$1,040 thousand, respectively.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Equity price risk

The fair value of the Group’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group’s listed and unlisted equity securities are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income. The Group manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a regular basis. The Group’s Board of Directors reviews and approves all equity investment decisions.

A change of 1% in the price of the listed and unlisted equity securities measured at fair value through profit or loss could increase/decrease the Group’s profit for the years ended December 31, 2021 and 2020 by NT$7,186 thousand and NT$6,765 thousand, respectively.

A change of 1% in the price of the listed companies stocks classified as equity instruments investments measured at fair value through other comprehensive income could have an impact of NT$69,427 thousand and NT$41,300 thousand on the equity attributable to the Group for the years ended December 31, 2021 and 2020, respectively.

Please refer to Note 12 (8) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for contract assets, trade and notes receivables, and lease receivables) and financing activities (primarily for bank deposits and other financial instruments).

The Group transacts with a large number of customers. The credit concentration risk of receivables is insignificant.

Credit risk from balances with banks and other financial instruments is managed by the Group’s treasury in accordance with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counter parties.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

The Group adopted IFRS 9 to assess the expected credit losses. Except for contract assets and account receivables, the remaining debt instrument investments which are not measured at fair value through profit or loss, low credit risk for these investments is a prerequisite upon acquisition and by using their credit risk as a basis for the distinction of categories.

(5) Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments and bank loans, etc. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial liabilities

As of December 31, 2021 Short-term loans Short-term bills payables Payables (other payables included) Lease liabilities (Note) Long-term loans As of December 31, 2020 Short-term loans Payables (other payables included) Lease liabilities (Note) Long-term loans	Less than 1 year	2 to 3years	4 to 5years	> 5years	Total
	$2,872,203 400,058 521,224 58,842 13,446 $920,381 627,141 13,500 100,130	$- - - 140,485 101,080 $- - 14,246 20,355	$- - - 135,554 - $- - 10,596 -	$- - - 686,649 - $- - 26,490 -	$2,872,203 400,058 521,224 1,021,530 114,526 $920,381 627,141 64,832 120,485

Note: Includes cash flows resulted from short-term leases or leases of low-value assets.

Derivative financial instruments

The Group does not hold any derivative financial instruments.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for the year ended December 31, 2021:

As of December 31, 2020 Cash flows Non-cash changes As of December 31, 2021	Short-term loans	Short-term billspayables	Long-term loans	Leases liabilities	Total liabilities from financing activities
	$920,000 1,950,000 -	$- 400,000 -	$120,000 (6,667) -	$63,699 (15,162) 891,546	$1,103,699 2,328,171 891,546
	$2,870,000	$400,000	$113,333	$940,083	$4,323,416

Reconciliation of liabilities for the year ended December 31, 2020:

As of December 31, 2019 Cash flows Non-cash changes As of December 31, 2020	Short-term loans	Long-term loans	Leases liabilities	Total liabilities from financing activities
	$220,000 700,000 -	$131,000 (11,000) -	$26,220 17,095 20,384	$377,220 706,095 20,384
	$920,000	$120,000	$63,699	$1,103,699

(7) Fair values of financial instruments
(a) The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

A. The carrying amount of cash and cash equivalents, receivables (including other receivables), payables (including other payables) approximate their fair value due to their short maturities.
B. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities, beneficiary certificates, bonds and futures, etc.) at the reporting date.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

C. Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).
D. Fair value of debt instruments without market quotations and bank loans are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the GreTai Securities Market, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)
(b) Fair value of financial instruments measured at amortized cost

The carrying amount of the Group’s financial assets and liabilities measured at amortized cost approximate their fair value.

Please refer to Note 12 (8) for fair value measurement hierarchy for financial instruments of the Company.

(8) Fair value measurement hierarchy

(a) Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date
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

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

(b) Fair value measurement hierarchy of the Group’s assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group’s assets and liabilities measured at fair value on a recurring basis is as follows:

As of December 31, 2021

Assets measured at fair value: Financial assets at fair value through profit or loss Offshore funds Financial assets at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income As of December 31, 2020 Assets measured at fair value: Financial assets at fair value through profit or loss Offshore funds Financial assets at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income	Level 1	Level 2	Level 3	Total
	$- 6,942,714 Level 1	$718,570 - Level 2	$- 408,661 Level 3	$718,570 7,351,375 Total
	$- 4,130,041	$676,518 -	$- 358,263	$676,518 4,488,304

As of December 31, 2020

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Transfers between Level 1 and Level 2 during the period

During the years ended December 31, 2021 and 2020, there were no transfers between Level 1 and Level 2 fair value measurements.

The detail movement of recurring fair value measurements in Level 3:

Reconciliation for recurring fair value measurements in Level 3 of the fair value hierarchy during the period is as follows:

hierarchy during the period is as follows:
As of January 1, 2021 Total gains (losses) recognized for the year ended December 31, 2021: Amount recognized in OCI (presented in “Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income”) Acquisition/issue for the year ended December 31, 2021 Disposal for the year ended December 31, 2021 As of December 31, 2021 As of January 1, 2020 Total gains (losses) recognized for the year ended December 31, 2020: Amount recognized in OCI (presented in “Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income”) Disposal for the year ended December 31, 2020 As of December 31, 2020	Equity securities
	$358,263 19,906 30,492 -
	$408,661
	$369,145 (7,539) (3,343)
	$358,263

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of December 31, 2021

Financial assets: Financial assets Stocks	Valuation technique	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivityof the input to fair value
	at fair value Market approach	through other comprehensive income discount for lack of marketability 10%		The higher the discount for lack of marketability, the lower the fair value of the stocks	1% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group’s equity by NT$4,087 thousand

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

As of December 31, 2020

Financial assets Financial assets Stocks	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivityof the input to fair value
	: at fair value Market approach	through other comprehensive income discount for lack of marketability 10% The higher the discount for lack of marketability, the lower the fair value of the stocks			1% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group’s equity by NT$3,583 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Group’s Finance Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s accounting policies at each reporting date to ensure the measurement or assessment are reasonable.

(c) Fair value measurement hierarchy of the Group’s assets and liabilities not measured at fair value but for which the fair value is disclosed

As of December 31, 2021:

Investment properties (Note) As of December 31, 2020: Investment properties (Note)	Level 1	Level 2	Level 3	Total
	$- Level 1	$- Level 2	$104,266 Level 3	$104,266 Total
	$-	$-	$104,266	$104,266

Note: Please refer to Note 6 (10).

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(9) Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

13. Additional disclosures

(1) Information at significant transactions

No.	Items	Attachment
1	Financing provided to others	None
2	Endorsement/Guaranteeprovided to others	None
3	Securities held as of December 31, 2021 (excluding investments in subsidiaries,associates andjoint ventures)	Attachment 1
4	Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock	Attachment 2
5	Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20percent of capital stock	None
6	Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20percent of capital stock	None
7	Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20percent of capital stock	Attachment 3
8	Receivables from related parties with amounts exceeding the lower of NT$100 million or 20percent of capital stock	None
9	Financial instruments and derivative transactions	None
10	Others: business relationships and significant transactions between parent companyand subsidiaryand amongsubsidiaries	Attachment 4

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Information on investees

Relevant information of investees over which the Company has direct or indirect control:

No.	Items	Attachment
1	Financing provided to others	None
2	Endorsement/Guaranteeprovided to others	None
3	Securities held as of December 31, 2021 (excluding investments in subsidiaries,associates andjoint ventures)	Attachment 1
4	Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock	Attachment 2
5	Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20percent of capital stock	None
6	Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20percent of capital stock	None
7	Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20percent of capital stock	Attachment 3
8	Receivables from related parties with amounts exceeding the lower of NT$100 million or 20percent of capital stock	None
9	Financial instruments and derivative transactions	None
10	Name,location and related information of investee	Attachment 5

(3) Information on investments in mainland China

None.

(4) Information on controlling shareholder

Refer to Attachment 6.

14. Segment information

For management purposes, the Group is organized into business units based on their products and services and has three reportable operating segments as follows:

The Taipei segment is responsible for the foodservice and accomodations in Taipei area (including restaurants outside the hotel in Taipei area).

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

The Hsinchu segment is responsible for the foodservice and accomodations in Hsinchu area.

The Kaohsiung segment is responsible for the foodservice and accomodations in Kaohsiung area.

No operating segments have been aggregated to form the above reportable operating segments. Other business activities that are not reported and related information of the operating segments are disclosed under the "Other operating segments".

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured based on accounting policies consistent with those in the consolidated financial statements. However, income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segment are on an arm’s length basis in a manner similar to transactions with third parties.

(1) The following table presents segments profit or loss, assets and liabilities of the Group’s operating segments:

For the year ended December 31, 2021

Taipei	Hsinchu	Kaohsiung	Subtotal	Other operating segments	Adjustment and elimination	Consolidated
$653,230 3,695 -	$385,317 - -	$460,561 - -	$1,499,108 3,695 -	$19,235 177,598 1,027	$- (181,293) -	$1,518,343 - 1,027
$656,925	$385,317	$460,561	$1,502,803	$197,860	$(181,293)	$1,519,370
1 97,655 $(79,805)	- 103,576 $(111,268)	9 61,045 $7,172	10 262,276 $(183,901)	19,960 25,470 $146,899	- - $(46,229)	19,970 287,746 $(83,231)
$- 5,817 $2,202,806	$- 28,839 $3,451,120	$- 5,598 $646,730	$- 40,254 $6,300,656	$4,995,819 173,125 $14,052,278	$(3,178,627) - $(3,199,676)	$1,817,192 213,379 $17,153,258
$123,664	$156,414	$103,513	$383,591	$4,847,871	$(21,048)	$5,210,414

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended December 31, 2020

Taipei	Hsinchu	Kaohsiung	Subtotal	Other operating segments	Adjustment and elimination	Consolidated
$931,320 3,868 -	$480,778 - -	$575,178 - -	$1,987,276 3,868 -	$21,423 214,105 1,659	$- (217,973) -	$2,008,699 - 1659
$935,188	$480,778	$575,178	$1,991,144	$237,187	$(217,973)	$2,010,358
- 86,105 $39,935	- 102,689 $(55,731)	- 64,776 $53,138	- 253,570 $37,342	4,798 12,479 $18,049	- - $(50,157)	4,798 266,049 $5,234
$- 118,245 $1,445,785	$- 15,655 $3,521,286	$- 27,012 $705,706	$- 160,912 $5,672,777	$4,719,717 75,614 $10,650,484	$(2,990,395) - $(3,016,456)	$1,729,322 236,526 $13,296,294
$157,420	$171,534	$113,909	$442,863	$1,700,413	$(26,061)	$2,117,215

(a) The segment profit is not included non-operating income and expenses, such as other income, other gains and losses, finance costs, share of profit or loss of associates and joint ventures accounted for using equity method. After adjustment and elimination, the aggregate amount of segment profit is the consolidated profit before tax from continuing operations.
(b) Inter-segment revenue are eliminated on consolidation and recorded under the “adjustment and elimination” column, all other adjustments and eliminations are disclosed below.
(2) The following table presents segments revenue, profit or loss, assets, liabilities and other major adjustments:
(a) Revenue

Reportable operating segments total revenue Other operating segments profit Adjustment and elimination Consolidated revenue	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$1,502,803 197,860 (181,293)	$1,991,144 237,187 (217,973)
	$1,519,370	$2,010,358

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(b) Profit or loss

Reportable operating segments total revenue Other operating segments profit Adjustment and elimination Profit before tax from continuing operations	For theyears ended December 31,	For theyears ended December 31,
	2021	2020
	$(183,901) 146,899 (46,229)	$37,342 18,049 (50,157)
	$(83,231)	$5,234

Reportable operating segments total assets Other operating segments assets Adjustment and elimination Consolidated assets	December 31, 2021	December 31, 2020
	$6,300,656 14,052,278 (3,199,676)	$5,672,777 10,639,973 (3,016,456)
	$17,153,258	$13,296,294

(d) Liabilities

Reportable operating segments total liabilities Other operating segments liabilities Adjustment and elimination Consolidated liabilities	December 31, 2021	December 31, 2020
	$383,591 4,847,871 (21,048)	$442,863 1,700,413 (26,061)
	$5,210,414	$2,117,215

(e) Other major items

For the year ended December 31, 2021

Interest income Interest expense Capital expenditure Depreciation	Reportable operating segments total	Other operating segments	Consolidated
	$- 10 40,254 262,276	$1,027 19,960 173,125 25,470	$1,027 19,970 213,379 287,746

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended December 31, 2020

Interest income Interest expense Capital expenditure Depreciation	Reportable operating segments total	Other operating segments	Consolidated
	$- - 160,912 253,570	$1,659 4,798 75,614 12,479	$1,659 4,798 236,526 266,049

(3) Geographical information:

The Group has no foreign operating organization

(4) Major customers:

There were no individual customers accounting for at least 10% of net sales.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Attachment 1: Securities held as of December 31, 2021 (excluding investments in subsidiaries, associates and joint ventures)

Held Company Name	Type and Name of Securities	Relationship	Financial Statement Account	Ending Balance	Ending Balance	Ending Balance	Ending Balance
				Units/Shares	Carrying Amount (Note 1)	Percentage of Ownership (%)	Fair Value
The Ambassador Hotel Co., Ltd.	Listed Stock/Shihlin Electric & Engineering Corporation	Same chairman/Entity with significant influence over the Company	Financial assets at fair value through other comprehensive income, current	44,285,175	$2,386,971	8.50	$2,386,971
	Listed Stock/CTBC Financial Holding Co.,Ltd.	-	Financial assets at fair value through other comprehensive income, current	119,948,000	3,112,651	0.60	3,112,651
	Listed Stock/Cathay Financial Holding Co., Ltd.	-	Financial assets at fair value through other comprehensive income, current	1,218,000	76,125	0.01	76,125
	Listed Stock/Fubon Financial Holding Co., Ltd.	-	Financial assets at fair value through other comprehensive income, current	1,800,000	137,340	0.01	137,340
	Beneficiary Certificate/Genesis Capital Appreciation Fund	-	Financial assets at fair value through profit or loss, non-current	293,968	186,084	-	186,084
	Beneficiary Certificate/Asian Value Fund	-	Financial assets at fair value through profit or loss, non-current	293,968	212,940	-	212,940
	Beneficiary Certificate/Ivy Sun Moon Fund	-	Financial assets at fair value through profit or loss, non-current	291,192	191,387	-	191,387
	Beneficiary Certificate/Caesar Balance Income Fund	-	Financial assets at fair value through profit or loss, non-current	297,072	128,159	-	128,159
	Stock/Cheng Der Investment Corp.	-	Financial assets at fair value through other comprehensive income, non-current	2,600,000	47,918	8.70	47,918
	Stock/Charter Leisure Co., Ltd.	Chairman of the company is a key management personnel of the Company	Financial assets at fair value through other comprehensive income, non-current	900,000	8,622	18.00	8,622
	Stock/Taiwan Creative Industry Development Co., Ltd.	-	Financial assets at fair value through other comprehensive income, non-current	2,500,000	34,825	12.50	34,825
	Stock/BaiNian International Technology Co., Ltd.	-	Financial assets at fair value through other comprehensive income, non-current	1,146	-	7.54	-
	Stock/Hsinchu Golf Country Club Co., Ltd.	Same chairman	Financial assets at fair value through other comprehensive income, non-current	13	52,650	1.53	52,650
	Stock/The Orient Linko Golf & Country Club	-	Financial assets at fair value through other comprehensive income, non-current	4	37,600	0.40	37,600
	Stock/Global Securities Finance Corporation	-	Financial assets at fair value through other comprehensive income, non-current	16,318	163	0.09	163
	Stock/Qun Xin Properties Co., Ltd.	-	Financial assets at fair value through other comprehensive income, non-current	3,600,000	30,168	12.41	30,168
Custom Investment Ltd.	Listed Stock/Shihlin Electric & Engineering Corporation	Same chairman/Entity with significant influence over the Company	Financial assets at fair value through other comprehensive income, current	3,730,000	201,046	0.72	201,046
	Stock/Chang Hong Investment Corp.	-	Financial assets at fair value through other comprehensive income, non-current	9,000,000	102,595	15.79	102,595
	Stock/Xin He Investment Corp.	-	Financial assets at fair value through other comprehensive income, non-current	4,000,000	44,168	5.95	44,168
Ambassador Investment Ltd.	Listed Stock/Shihlin Electric & Engineering Corporation	Same chairman/Entity with significant influence over the Company	Financial assets at fair value through other comprehensive income, current	7,047,000	379,833	1.35	379,833
	Listed Stock/Shihlin Development Company Limited	Director of the company is a key management personnel of the Company	Financial assets at fair value through other comprehensive income, current	5,781,850	55,390	2.55	55,390
	Stock/Asia Pacific Technology–3	-	Financial assets at fair value through other comprehensive income, non-current	700	-	1.67	-
	Stock/Charter Leisure Co., Ltd.	Chairman of the company is a key management personnel of the Company	Financial assets at fair value through other comprehensive income, non-current	83,333	781	1.67	781
Benz Investment Ltd.	Listed Stock/Shihlin Electric & Engineering Corporation	Same chairman/Entity with significant influence over the Company	Financial assets at fair value through other comprehensive income, current	10,083,000	543,474	1.94	543,474
	Listed Stock/Shihlin Development Company Limited	Director of the company is a key management personnel of the Company	Financial assets at fair value through other comprehensive income, current	5,207,066	49,884	2.30	49,884
	Stock/Asia Pacific Technology–2	-	Financial assets at fair value through other comprehensive income, non-current	268,250	-	2.30	-
	Stock/Cheng Der Investment Corp.	-	Financial assets at fair value through other comprehensive income, non-current	2,668,000	49,171	8.92	49,171

Note 1: For financial assets measured at fair value, the carrying aount should be the fair value deducted by the accumulated impairment loss. For financial assets not measured at fair value, the carrying amount should be the original cost or amortized cost deducted by the accumulated impairment loss. Note 2: If securities are restricted because of being used as collaterals, being pledged or other reasons, such restriction should be disclosed.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Attachment 2: Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock

Company Name	Type and Name of Securities (Note 1)	Financial Statement Account	Counter-Party (Note 2)	Relationship (Note 2)	Beginning Balance	Beginning Balance	Acquisition	Acquisition	Disposal	Disposal	Disposal	Disposal	Ending Balance	Ending Balance	Note
					Shares	Amount	Shares	Amount	Shares	Amount	Carrying amount	Gains (Losses) on disposal	Shares	Amount
The Ambassador Hotel Co., Ltd.	CTBC Financial Holding Co., Ltd.	Financial assets at fair value through other comprehensive income, current	-	-	33,000,000	$614,041	86,948,000	$1,968,116	-	$-	$-	$-	119,948,000	$2,582,157

Note 1: Securities are stocks, bonds, beneficiary certificates and securities derived from the aforementioned items within the scope of IFRS 9 Financial Instruments. Note 2: Only securities accounted for using the equity method are required to disclose such information.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Attachment 3: Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of capital stock

Company Name	Counter-party	Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Details of Abnormal Transaction	Details of Abnormal Transaction	Notes/Accounts Receivables (Payables)	Notes/Accounts Receivables (Payables)	Note
			Purchases (Sales)	Amount	Percentage of Total Purchases (Sales)(%)	Payment Term	Unit price	Payment Term	Ending Balance	Percentage of Total Notes/Accounts Receivables (Payables)(%)
The Ambassador Hotel Co., Ltd.	Ambassador Premium Food Co., Ltd.	Subsidiary	Purchases	$157,616	27.82	30 days	NA	NA	$(18,339)	16.54	Note 1
Ambassador Premium Food Co., Ltd.	The Ambassador Hotel Co., Ltd.	Parent Company	Sales	(157,616)	100.00	30 days	NA	NA	18,339	100.00	Note 1

Note 1: The amount was written-off in the consolidated financial statements

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Attachment 4: business relationships and significant transactions between parent company and subsidiary

Number (Note 1)	Company Name	Counter-Party	Relationship (Note 2)	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions
				Financial Statement Account	Amount	Payment Term	Percentage of Total Sales or Assets (Note 3)

0	The Ambassador Hotel Co., Ltd.	Ambassador Premium Food Co., Ltd.	1	Food and beverage costs	$157,616	Equivalent to general conditions	10.38%

Note 1: The parent company and its subsidiaries do business with each other. Information shall be stated separately and numbered are as follows:

The parent company is 0.
Subsidiaries, sequentially numbered by Arabic numerals from 1.

Note 2: The related parties have the following three relationships:

Parent company to subsidiary.
Subsidiary to parent company.
Subsidiary to subsidiary.

Note 3: Amounts of balance sheet accounts are calculated as percentage of consolidated total assets; amounts of income statement accounts are calculated as percentage of consolidated total revenues.

Note 4: Individual transaction amounts less than $10 million will not be disclosed; instead they will be disclosed as other assets or liabilities and income or expense , while the relative transactions will not be disclosed.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Attachment 5: Name, location and related information of investee (excluding investees in Mainland China)

Investor Company	Investee Company	Location	Main Businesses	Oringnal Investment Amount	Oringnal Investment Amount	Balance as of December 31, 2021	Balance as of December 31, 2021	Balance as of December 31, 2021	Net Income (Loss) of Investee	Investment Income (Loss) Recognized	Note
				Ending balance	Beginning balance	Shares	Percentage of Ownership	Carrying Amount
The Ambassador Hotel Co., Ltd.	Ambassador Premium Food Co., Ltd.	Republic of China	Wholesale of aquatic products, foods and groceries, etc.	$48,700	$48,700	4,870,000	100.00%	$56,538	$1,080	$1,080	Note 1`、`3
	Benz Investment Ltd.	Republic of China	General investing	507,988	427,988	50,798,841	99.99%	1,094,137	18,792	18,792	Note 1`、`3
	Custom Investment Ltd.	Republic of China	General investing	734,989	734,989	73,498,924	99.99%	1,181,170	12,042	12,042	Note 1`、`3
	Ambassador Investment Ltd.	Republic of China	General investing	480,989	480,989	48,098,939	99.99%	819,769	14,211	14,211	Note 1`、`3
	Qun Xin Properties Co., Ltd.	Republic of China	Hotels and motels	-	90,000	-	-	-	(109,766)	(28,118)	Note 2`、`4
	Cheng Der Investment Corp.	Republic of China	General investing	84,168	84,168	8,416,775	27.06%	137,747	6,859	1,856	Note 1
	Yu Der Investment Corp.	Republic of China	General investing	121,270	121,270	12,127,000	22.50%	126,863	1,224	276	Note 1
	Yeangder Safety Management Consulting Co., Ltd.	Republic of China	Investment consultancy	1,000	1,000	100,000	10.00%	880	(50)	(5)	Note 1
	Ambassador Bakery Corp. Ltd.	Republic of China	Bakery food manufacturing	6,000	6,000	600,000	60.00%	6,932	1,086	652	Note 2`、`3
	Ambassador Real Estate Development Co. Ltd	Republic of China	Real estate development and leasing	5,000	5,000	500,000	100.00%	5,435	135	135	Note 2`、`3
	Ambassador Apartment Building Management and Maintenance Co., Ltd	Republic of China	Building management services	10,000	-	1,000,000	100.00%	9,317	(684)	(684)	Note 1`、`3
Custom Investment Ltd.	Ambassador Property Management Co., Ltd.	Republic of China	Residence and buildings cleaning service	10,000	10,000	1,000,000	100.00%	18,039	1	1	Note 1`、`3
	Custom Human Resources Management Ltd.	Republic of China	Manpower services and consultancy	1,000	1,000	100,000	100.00%	17,591	6	6	Note 2`、`3
	De Hong Investment Corp.	Republic of China	General investing	250,000	250,000	25,000,000	16.03%	357,587	16,973	2,708	Note 1
	Yu Hong Investment Corp.	Republic of China	General investing	310,000	310,000	31,000,000	16.40%	392,565	23,263	3,933	Note 1
	Cheng Der Investment Corp.	Republic of China	General investing	14,000	14,000	1,400,000	4.50%	22,907	6,859	309	Note 1
Ambassador Investment Ltd.	Yu Hong Investment Corp.	Republic of China	General investing	150,000	150,000	15,000,000	7.94%	190,059	23,263	1,904	Note 1
	De Hong Investment Corp.	Republic of China	General investing	105,000	105,000	10,500,000	6.73%	150,129	16,973	1,137	Note 1
	Cheng Der Investment Corp.	Republic of China	General investing	6,000	6,000	600,000	1.93%	9,825	6,859	131	Note 1
	Yu Der Investment Corp.	Republic of China	General investing	7,000	7,000	700,000	1.30%	7,330	1,224	16	Note 1
Benz Investment Ltd.	Yu Der Investment Corp.	Republic of China	General investing	73,000	73,000	7,300,000	13.54%	76,342	1,224	166	Note 1
	De Hong Investment Corp.	Republic of China	General investing	135,000	95,000	13,500,000	8.65%	192,959	16,973	1,487	Note 1
	Yu Hong Investment Corp.	Republic of China	General investing	120,000	80,000	12,000,000	6.35%	151,999	23,263	1,282	Note 1

Note 1: Recognized in financial statements audited by the auditors.

Note 2: Recognized in unaudited financial statements.

Note 3: The amount was written-off in the consolidated financial statements

Note 4: On October 29, 2021, the Company elected not to participate in the share capital increase of Qun Xin Properties Co., Ltd, the percentage of ownership is decrease from 25.71% to 12.41% lend to reclassify from investments accounted for using the equity method to FVOCI-non current.

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Attachment 6: Information on major shareholders

Shares Name of Major Shareholder	Number of Shares	Percentage of Ownership
Shihlin Electric& Engineering Corporation	66,918,617	18.23%
HCT Logistics Co., Ltd.	28,157,000	7.67%
De Hong Investment Corp.	25,217,000	6.87%
Xin He Investment Corp.	23,704,000	6.46%
Jine De Sheng Co., Ltd.	20,512,000	5.59%
Yu Hong Investment Corp.	19,684,000	5.36%

(1) The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of

ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration

(including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

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

AI assistant

AMBH — Audit Report / Information 2021

52183_rns_2021-11-10_763a489a-f25a-4524-9d53-82eb4492eceb.pdf

THE AMBASSADOR HOTEL CO., LTD.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT AUDITORS

Representation Letter Translated from Chinese

Independent Auditors’ Report Translated from Chinese

Opinion

Basis for Opinion

Key Audit Matters

Revenue Recognition

Net defined benefit liabilities

Other Matter – Making Reference to the Audits of Component Auditors

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Other

Notice to Readers

ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2021 and 2020

ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) December 31, 2021 and 2020

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. History and organization

2. Date and procedures of authorization of financial statements for issue

3. Newly issued or revised standards and interpretations

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Amendment to IFRS 9 Financial Instruments

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Amendment to IAS 41

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

4. Summary of significant accounting policies

(1) Statement of compliance

Preparation principle of consolidated financial statement

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Financial assets measured at amortized cost

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese

THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Financial asset measured at fair value through other comprehensive income

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Financial asset measured at fair value through profit or loss

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Classification between liabilities or equity

Equity instruments

Financial liabilities

Financial liabilities at fair value through profit or loss

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Financial liabilities at amortized cost

Derecognition of financial liabilities

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(12) Investment property

English Translation of Finacial Statements and Footnotes Originally Issued in Chinese THE AMBASSADOR HOTEL CO., LTD. AND SUBSIDIARIES

AMBH Audit Report / Information 2021