DE LICACY — Annual Report 2021

Nov 11, 2021

Stock Number: 1464

De Licacy Industrial Co., Ltd. and Subsidiaries

Consolidated Financial Statement for the year ended December 31, 2021 and 2020 and independent Auditors’ Report

Address: No. 240 San Sher Li, Shin Shih District, Tainan City

Tel: (06)599-2866

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§CONTENTS§

				Financial Report
		ITEMS	Page	Note No
1.	Cover		1	-
2.	Contents		2	-
3.	Statement of consolidate financial report of		3	-
	related enterprises
4.	Independent Auditors’ report		4～8	-
5.	Consolidated balance sheet		9	-
6.	Consolidated statements of comprehensive		10～11	-
	income
7.	Consolidated statement of changes in equity		12	-
8.	Consolidated statement of cash flows		13～14	-
9.	Notes to the consolidated financial statements
	(1)	Company history	15	1
	(2)	The date and procedures for passing	15	2
		the financial report
	(3)	Application of newly issued and	15～17	3
		revised standards and interpretations
	(4)	Summary explanation of major	17～34	4
		accounting policies
	(5)	Major sources of uncertainty in	34～40	5
		major accounting judgments,
		estimates and assumptions
	(6)	Explanation of important accounting	41～94, 121	6-36
		items
	(7)	Related party transactions	95～103	37
	(8)	Pledged assets	104	38
	(9)	Significant contingent liabilities and	104	39
		unrecognized contractual
		commitments
	(10)	Major disaster losses	-	-
	(11)	Significant post-period events	-	-
	(12)	Other matters	105～106	40-41
	(13)	Matters disclosed in the notes
		1. Information about major	107,110～114,	42
		transactions	118～119
		2. Information about the	107,115	42
		reinvestment business
		3. Mainland investment information	107～108,116～117	42
		4. Major shareholders’ information	108,120	42
	(14)	Segment information	108～109	43

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Statement of Financial Report on Consolidated of Related Enterprises

For the year ended December 31, 2021, pursuant to the “Compilation Standards for the Consolidated Financial Statements of the Affiliated Enterprises and the Relationship Report of the Consolidated Business Report of Affiliated Enterprises”, the Company is that is required to be included in the consolidated financial statements of affiliates, is the same as the company required to be included in the consolidated financial statements under International Financial Reporting Standards 10, and if relevant information that should be disclosed in the consolidated financial report of the affiliated company has been disclosed in the former consolidated financial report of the parent-subsidiary company. Separately prepare the consolidated financial report of the related companies.

We hereby declare all details.

Company Name: De Licacy Industrial Co., Ltd.

Chairman: Yeh, Chia-Ming

Date: 24 March 2022

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Independent Auditors’ Report

Dear the Board of Directors and Shareholders of De Licacy Industrial Co., Ltd.

Opinion

We have audited the accompanying financial statements of De Licacy Industrial Co., Ltd and its subsidiaries (the “De Licacy Group”), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the consolidated statements of comprehensive income, consolidated changes in equity and consolidated cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies. In our opinion, which is based on our and other accountants’ auditing results (please refer other matters section) and accompanying consolidated financial statements present fairly, in all material respects, the financial position of the De Licacy Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (“IFRS”), International Accounting Standards (“IAS”), Interpretations of IFRS (“IFRIC”), and Interpretations of IAS (“SIC”) endorsed by the Financial Supervisory Commission (“FSC”) of Taiwan, the Republic of China (“ROC”).

Basis of 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 ROC. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Corporation in accordance with The Norm of Professional Ethics for Certified Public Accountant of the ROC, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is

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sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The descriptions of the key audit matter of the 2021 consolidated financial statements of the De Licacy Group are as follows:

Authenticity of revenue recognition

The De Licacy Group’s operating income were from the major customers. Due to the significant changes in revenue of some major customers this year, it is considering that the revenue recognition inherently carries a higher risk of fraud and the management may be under pressure to achieve expected financial goals. The authenticity of revenue recognition from some of major customers is listed as a key audit item. Please refer to the Consolidated Financial Report Note 4(17) for the explanation of revenue recognition policy.

The accountants had performed major auditing procedures to the sales revenue from some of the major customers, which are as follows:

1. Understand and test the effectiveness of the design and implementation of the internal sales cycle control system.

2. Select samples from the sales details of some of the above-mentioned major customers, verify their purchase orders, pro forma invoices, export declarations and other relevant documents to confirm whether the control rights of the goods had been truly transferred and the obligations had been performed, and check whether there are significant abnormalities between the sales objects and the payers to confirm the authenticity of the sales revenue.

Other Matters

The consolidated financial statements included in the consolidated financial statements of Deloitte Touche Tohmatsu, Inc. and its investment in ERA NOUVEAU International Co., Ltd. (“ERA NOUVEAU”). Accordingly, our opinion on the consolidated financial statements referred to above, which relates to the amount of the aforementioned investment and its share of other comprehensive income accounted for using equity method, were based on the audited reports of other auditors. The above investments accounted for by the equity method amounted to $9,395,000 and $46,459,000 as of December 31, 2021 and 2020, respectively, both representing less than 1% of the total consolidated assets. The consolidated loss recognized under the equity

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method amounted to $3,572,000 and $50,314,000 for the years ended December 31, 2021 and 2020, respectively, which accounted for (6%) and 22% of the consolidated total profit or loss.

De Licacy Industrial Co., Ltd. has prepared its individual financial statements for the years ended December 31, 2020 and 2019, and we have issued an unqualified audit report, with additional qualifications for reference.

Management’s and Governance’s Responsibility for the Consolidated Financial Statements

Management's responsibility is to prepare consolidated financial statements in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, and Interpretations and Interpretations issued by the Financial Supervisory Commission, and to maintain such internal control relevant to the preparation of consolidated financial statements as 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's responsibility also includes assessing the ability of the Group to continue as a going concern, the disclosure of related matters, and the adoption of the going concern basis of accounting, unless management intends to liquidate the Group or cease operations, or there is no practical alternative to liquidation or discontinuation of operations.

The governance unit (Audit Committee) of the Group has the responsibility for overseeing the financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the ROC 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 financial statements.

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures

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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.

1. 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 Corporation’s internal control.

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

3. 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 Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.

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

5. We have obtained sufficient and appropriate auditing evidence of the financial information of the constituent entities of the Group to express our opinions on the consolidated financial statements. We are responsible for the guidance, supervision and execution of the Group's audits and we are responsible for providing auditing opinions with the Group.

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.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 2021 financial statements and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Deloitte Touche Tohmatsu, Inc. The engagement partners on the audit resulting in this independent auditors’ report are CPA: Chao-Chin Yang CPA: Teng-Wei Wang

Financial Supervisory Commission Financial Supervisory Commission Authorized No. Authorized No. Jin-Kuan-Chen-Sheni-Tzu No. Jin-Kuan-Chen-Sheni-Tzu No. 1100356048 1060023872

Date: 24 March 2022

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De Licacy Industrial Co., Ltd. and Subsidiaries Consolidated Balance Sheets

The Years Ended December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars)

Code 1100 1110 1120 1136 1150 1160 1170 1180 1200 1210 130X 1410 1479 11XX 1517 1535 1550 1600 1755 1760 1805 1821 1840 1920 1975 1990 15XX 1XXX Code 2100 2110 2120 2150 2160 2170 2180 2219 2220 2230 2280 2322 2365 2399 21XX 2541 2580 2570 2630 2645 25XX 2XXX 3100 3110 3200 3310 3320 3350 3300 3400 31XX 36XX 3XXX	Assets Current assets Cash and cash equivalents（Note 4 and 6） Financial assets at fair value through profit and loss-current（Note 4 and 7） Financial assets at fair value through other comprehensive gains and losses-current（Note 4 and 8） Financial assets at amortized cost-current（Note 4, 9 and 38） Notes receivable（Note 4, 10 and 28） Notes receivable-related parties（Note 4, 28 and 37） Net accounts receivable（Note 4, 10 and 28） Accounts receivable-net amount of related parties（Note 4, 28 and 37） Other receivables（Note 10） Other receivables-related parties（Note 37） Inventory（Note 4 and 11） Prepayments（Note 19） Other current assets（Note 20 and 30） Total current assets Non-current assets Financial assets measured at fair value through other comprehensive gains and losses-non-current（Note 4 and 8） Financial assets measured at amortized cost-non-current（Note 4 and 9） Investments using the equity method（Note 4 and 13） Property, plant and equipment（Note 4, 14, 37 and 38） Right-of-use assets（Note 4, 15 and 38） Investment properties（Note 4, 16 and 38） Goodwill（Note 4 and 17） Other intangible assets（Note 4 and 18） Deferred tax assets（Note 4 and 30） Refundable deposits（Note 4） Net confirmed welfare assets-non-current（Note 4 and 26） Other non-current assets（Note 20） Total non-current assets Total assets Liabilities and Equity Current liabilities Short-term loans（Note 21 and 38） Short-term notes payable（Note 21） Financial liabilities measured at fair value through profit and loss-current（Note 4 and 7） Notes payable（Note 22） Notes payable-related parties（Note 37） Accounts payable（Note 22） Accounts payable-related parties（Note 37） Other payables（Note 23） Other payables-related parties（Note 37） Current income tax liabilities（Note 4 and 30） Lease liabilities-current（Note 4 and 15） Long-term loans due within one year（Note 21 and 38） Refund liabilities-current（Note 4 and 25） Other current liabilities（Note 28） Total current liabilities Non-current liabilities Long-term bank loans（Note 21 and 38） Lease liabilities-non-current（Note 4 and 15） Deferred tax liabilities（Note 4 and 30） Long-term deferred income（Note 4 and 24） Deposit received Total non-current liabilities Total liabilities Equity attributed to the owners of the company（Note 27） Stocks Common stocks Capital surplus Retained surplus Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equities Total equity of company owners Non-controlling interests（Note 27） Total equity Total liabilities and equity		December 31,2021	December 31,2021	％ 5 1 - 18 1 - 9 1 - - 22 1 3 61 1 - 4 29 2 - - - 2 - - 1 39 100 31 4 - 1 - 4 1 3 1 - - 1 - 1 47 24 - - 1 - 25 72 20 3 1 2 1 4 3) 24 4 28 100		December 31,2020	December 31,2020
			Amount $ 1,045,569 142,732 109,867 3,419,464 156,292 54,268 1,680,044 117,973 98,578 47,803 4,151,693 190,389 531,231 11,745,903 106,209 - 816,317 5,561,614 352,024 60,820 12,996 13,640 322,206 23,418 2,077 114,685 7,386,006 $ 19,131,909 $ 6,004,949 739,511 120 144,652 63,956 787,521 129,756 585,182 153,238 2,557 8,523 199,251 5,213 136,416 8,960,845 4,651,851 4,624 41,391 72,032 2,243 4,772,141 13,732,986 3,845,657 676,850 121,649 401,956 172,602 696,207 564,277) 4,654,437 744,486 5,398,923 $ 19,131,909				Amount $ 1,223,480 64,704 38,979 2,816,902 79,586 24,845 1,614,862 147,303 116,078 114,870 3,210,797 156,743 561,533 10,170,682 120,056 27,725 793,054 5,922,156 370,567 65,071 12,996 15,423 283,407 17,082 5,476 43,735 7,676,748 $ 17,847,430 $ 6,400,957 709,501 20,927 72,165 32,206 650,938 98,596 498,196 183,505 5,814 27,739 282,952 3,705 121,343 9,108,544 3,181,005 14,435 36,823 49,376 2,464 3,284,103 12,392,647 3,845,657 791,558 283,732 401,956 162,083) 523,605 456,503) 4,704,317 750,466 5,454,783 $ 17,847,430		％
		(		(		( (		( (	7 - - 16 - - 9 1 1 1 18 1 3 57 1 - 5 33 2 - - - 2 - - - 43 100 36 4 - - - 4 - 3 1 - - 2 - 1 51 18 - - - - 18 69 22 4 2 2 1) 3 2) 27 4 31 100

The accompanying notes are an integral part of the individual financial statements.

（ Please refer to the auditors’ report of Deloitte and Touche on March 24, 2022 ）

Chairman: Chia-Min Yeh

Manager: Wei-Li Yeh

Accounting Manager: Yi-Nung Yu

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De Licacy Industrial Co., Ltd. and Subsidiaries

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2021 and 2020

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

Code Operating income（Note 4, 28 and 37） 4100 Net sales revenue 4800 Other operating income 4000 Total operating income Operating costs（Note 11, 26, 29 and 37） 5110 Cost of goods sold 5900 Gross operating income 5910 Unrealized sales benefits（Note 4） 5920 Realized sales benefits（Note 4） 5950 Gross realized operating income Operating expenses（Note 10, 26 and 29） 6100 Marketing expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit loss 6000 Total operating expenses 6500 Net other income and expenses（Note 29 and 37） 6900 Operating income Non-operating income and expenses （Note 4, 7, 29 and 37） 7100 Interest income 7190 Other income 7020 Other benefits and losses 7050 Financial costs 7060 Share of losses of affiliated companies using the equity method 7000 Total non-operating income and expenses 7900 Net profit before tax（net loss） 7950 Income tax benefits（Note 4 and 30） 8200 Net profit（net loss）for the year		2021		％ 98 2 100 85 15 - - 15 5 5 2 - 12 1 4 - 2 2 ) 2 ) - 2) 2 - 2		2020
		Amount $ 10,313,762 161,923 10,475,685 8,871,900 1,603,785 - 26 1,603,811 543,464 485,837 230,732 19,941 1,279,974 47,228 371,065 21,432 173,970 204,258 ) 152,354 ) 15,842) 177,052) 194,013 1,909) 195,922				Amount $ 8,407,460 187,199 8,594,659 7,350,952 1,243,707 26 ) - 1,243,681 471,947 490,694 208,459 60,043 1,231,143 9,383) 3,155 42,886 204,648 281,461 ) 177,717 ) 83,313) 294,957) 291,802 ) 85,169) 206,633)		％
	( ( ( ( (		( ( (		( ( ( ( ( ( ( ( (		( ( ( ( ( ( (	98 2 100 86 14 - - 14 5 6 2 1 14 - - - 2 3 ) 2 ) 1) 4) 4 ) 1) 3)

（ Continued ）

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（ continued from the previous page ）

Code Other comprehensive income 8310 Items not reclassified to profit or loss 8311 Determine the remeasurement of the benefit plan（Note 26） 8316 Unrealized appraisal gains and losses of equity instrument investments measured at fair value through other comprehensive gains and losses（Note 27） 8320 Share of other comprehensive profit and loss of affiliates using the equity method（Note 27） 8349 Income tax related to items not reclassified（Note 30） Items that may be reclassified to profit and loss in the future 8361 Conversion difference in the conversion of financial statements of foreign operating institutions （Note 27） 8370 Share of other comprehensive profit and loss of affiliates using the equity method（Note 27） 8399 Income tax related to items that may be reclassified （Note 27 and 30） 8360 8300 Other comprehensive profit and loss for the year (net after tax) 8500 Total comprehensive profit and loss for the year 8600 The net profit (net loss) is attributed to: 8610 Owner of the company 8620 Non-controlling interests 8700 The total comprehensive profit and loss is attributed to: 8710 Owner of the company 8720 Non-controlling interests Earnings per share (net loss)（Note 31） 9710 Basic 9810 Dilution The accompanying notes are		2021

（ Please refer to the auditors’ report of Deloitte and Touche on March 24, 2022 ）

Chairman: Chia-Min Yeh Manager: Wei-Li Yeh

Accounting Manager: Yi-Nung Yu

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De Licacy Industrial Co., Ltd. and Subsidiaries Consolidated Statements of Changes in Equity

For the Years Ended December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars, Except Dividends per Share)

Code A1 Balance at 1 January 2020 Appropriations of 2019 earnings（Note 27） B1 Legal reserve B3 Special reserve B5 Cash dividends to shareholders - NT$1.05 per share C15 Cash dividends from capital surplus distributed to shareholders - NT$0.45 per share（Note 27） D1 Net income (loss) for the year ended December 31, 2020 D3 Other comprehensive (loss) income after tax for the year ended December 31, 2020 D5 Total comprehensive (loss) income for the year ended December 31, 2020 M3 Subsidiary liquidation and returned shares（Note 27 and 32） M5 Difference between actual acquisition of the subsidiary equity price and book value（Note 12, 27 and 33） M7 Changes equity to the subsidiary ownership（Note 12, 27 and 33） O1 Cash dividends from the subsidiaries（Note 27） Q1 Other comprehensive loss and income at fair value through liquidation（Note 27） T1 Non-controlling interests increase（Note 27） Z1 Balance at 31 December 2020 Distributions and appropriations of 2020 earnings （Note 27） B13 Legal reserve to offset accumulated deficit C7 Changes in equity of investment in affiliates for using equity method C15 Cash dividends from capital surplus to shareholders - NT$0.3 per share（Note 27） D1 Net income for the year ended December 31, 2021 D3 Other comprehensive (loss) income after tax for the year ended December 31, 2021 D5 Total comprehensive (loss) income for the year ended December 31, 2021 O1 Cash dividends from the subsidiaries（Note 27） Q1 Other comprehensive loss and income at fair value through liquidation（Note 27） T1 Non-controlling interests increase（Note 27） Z1 Balance at 31 December 2021										Equity attributetoth	e Company’s owner	e Company’s owner								Grand total $ 5,473,114 - - 403,794) 173,055) 207,286 ) 34,099) 241,385) 32,928 675 23,918 - - 8,084) 4,704,317 - 661 115,369) 182,988 118,160) 64,828 - - - $ 4,654,437		Non-controlling interests $ 795,067 - - - - 653 16,328 16,981 189,185) 22,004) 23,918) 45,663) - 219,188 750,466 - - - 12,934 22,774) 9,840) 9,271) - 13,131 $ 744,486		Totalequity
		Commonstock $ 3,845,657 - - - - - - - - - - - - - 3,845,657 - - - - - - - - - $ 3,845,657		Capitalsurplus $ 942,169 - - - 173,055) - - - 7,459 675 22,394 - - 8,084) 791,558 - 661 115,369) - - - - - - $ 676,850				Retained Earnings		Unappropriated earnings $ 578,530 55,379) 108,914) 403,794) - 207,286 ) 23,332 183,954) - - - - 11,428 - 162,083) 162,083 - - 182,988 10,446) 172,542 - 60 - $ 172,602				Other Equities		Total $ 401,956) - - - - - 57,431) 57,431) 12,788 - 1,524 - 11,428) - 456,503) - - - - 107,714) 107,714) - 60) - $ 564,277)		Treasury stocks $ 12,681) - - - - - - - 12,681 - - - - - - - - - - - - - - - $ -
						Legal reserve $ 228,353 55,379 - - - - - - - - - - - - 283,732 162,083) - - - - - - - - $ 121,649		Special reserve $ 293,042 - 108,914 - - - - - - - - - - - 401,956 - - - - - - - - - $ 401,956			C i f o	onversion difference n the conversion of inancial statements f foreign operating institutions $ 451,447) - - - - - 74,434) 74,434) 12,788 - 422 - - - 512,671) - - - - 59,350) 59,350) - - - $ 572,021)	U l	nrealized gains or osses on financial assets at fair value through other comprehensive income $ 49,491 - - - - - 17,003 17,003 - - 1,102 - 11,428) - 56,168 - - - - 48,364) 48,364) - 60) - $ 7,744
			( ( (		(				( ( ( ( ( ( (		( ( ( ( ( ( (		( ( ( (		( ( ( ( ( ( ( ( (		(		( ( ( ( ( ( ( (		( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( (	$ 6,268,181 - - 403,794) 173,055) 206,633 ) 17,771) 224,404) 156,257) 21,329) - 45,663) - 211,104 5,454,783 - 661 115,369) 195,922 140,934) 54,988 9,271) - 13,131 $ 5,398,923

The accompanying notes are an integral part of the individual financial statements.

（ Please refer to the auditors’ report of Deloitte and Touche on March 24, 2022 ）

Chairman: Chia-Min Yeh

Manager: Wei-Li Yeh

Accounting Manager: Yi-Nung Yu

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De Licacy Industrial Co., Ltd. and Subsidiaries Consolidated Statements of Cash Flows

For the Years Ended December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars)

Code CASH FLOWS FROM OPERATING ACTIVITIES A10000 Income (Loss) before tax A20000 Adjustments for: Revenues/Expenses A20100 Depreciation A20200 Amortization A20300 Expected credit loss A20400 Financial assets and liabilities at fair value through profit or loss A20900 Financial costs A21200 Interest income A21300 Dividend income A22300 Share of loss of associates & joint ventures accounted for using the equity method A22500 Loss (income) from liquidation of property, plant and equipment A23700 Inventory valuation and obsolescence losses A23900 Unrealized sales benefits A24000 Realized sales benefits A24100 Unrealized foreign exchange losses A24500 Benefits from liquidation of subsidiary A29900 Allowance (reversal) for refund liability A29900 Gains from lease amendment Changes in operating assets and liabilities A31130 Notes receivable（include related parties） A31150 Accounts receivable（include related parties） A31180 Other receivables（include related parties） A31200 Inventory A31230 Prepayments A31240 Other current assets A32130 Notes payable A32150 Accounts payable A32160 Accounts payable-related parties A32180 Other payables A32190 Other payables-related parties A32230 Other current liabilities A32240 Net confirmed welfare liability (assets)-non-current A32990 Long-term deferred income A33000 Cash generated from operations A33100 Interest received A33200 Dividends received A33300 Interest paid A33500 Income tax paid AAAA Cash generated from operations (net) CASH FLOWS FROM INVESTING ACTIVITIES B00010 Acquisition of financial assets at fair value through other comprehensive gains and losses-current B00020 Liquidation of financial assets at fair value through other comprehensive gains and losses-current B00100 Acquisition of financial assets at fair value through profit or loss B00200 Liquidation of financial assets at fair value through profit or loss		2021 $ 194,013 647,023 1,827 19,941 15,798 152,354 21,432 ) 2,334 ) 15,842 47,228 ) 33,199 - 26 ) 38,893 - 1,541 224 ) 106,129 ) 55,793 ) 16,208 973,293 ) 33,646 ) 30,781 102,265 136,270 31,473 48,618 8,298 ) 22,248 9,439 ) 15,481 265,933 19,339 2,334 154,074 ) 20,613) 112,919 88,650 ) 14,656 146,867 ) 16,822		2020
	( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 291,802 ) 615,814 2,073 60,043 9,740 177,717 42,886 ) 1,487 ) 83,313 9,383 42,628 26 - 95,539 9,154 ) 1,950 ) 10 ) 14,976 58,893 56,839 ) 42,252 37,655 88,533 1,367 ) 7,761 32,879 ) 122,455 ) 9,697 19,993 ) 27,231 ) 22,829 770,819 40,590 1,487 179,579 ) 30,296) 603,021 83,563 ) 63,635 21,277 ) 24,242

（ Continued ）

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（ continued from the previous page ）

Code B00040 Acquisition of financial assets at amortized cost B00060 Financial assets at amortized cost repayment of principal upon maturity B01800 Investments accounted for using the equity method B02000 Incrase in prepayments for investments B02200 Net cash flows from subsidiary acquisition B02300 Net cash flows (outflows) from subsidiary liquidation B02400 Net returned payments for share from subsidiary liquidation B02700 Acquisition of property, plant and equipment B02800 Proceeds from liquidation of property, plant and equipment B03700 Increase in refundable deposits B03800 Decrease in refundable deposits B04100 Increase in other receivables B04300 Increase in other receivables-related parties B04400 Decrease in other receivables-related parties B04500 Acquisition of intangible assets B05350 Liquidation of right-of-use assets B05500 Proceeds from disposal of real estate investments B06700 Increase in prepayment for equipment B06800 Decrease in long-term receivables B07600 Received dividends from associated companies BBBB Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES C00100 Increase in short-term loans C00200 Decrease in short-term loans C00500 Increase in short-term notes payable C00600 Decrease in short-term notes payable C01600 Loan of long-term debt C01700 Repayment of long-term debt C03000 Increase in deposit received C03100 Decrease in deposit received C03700 Increase in other payables-related parties C03800 Decrease in other payables-related parties C04020 Repayment of the principal portion of lease liabilities C04500 Cash dividends C05400 Cash capital increase of subsidiary C05800 Payment of cash dividends of non-controlling interests C09900 Acquisition of ownership interests in subsidiaries CCCC Net cash generated from financing activities DDDD EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREGIN CURRENCIES EEEE NET DECREASE IN Cash and cash equivalents E00100 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR E00200 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR		2021 $ 10,521,071 ) 9,884,632 88,332 ) - - 74,012 33,492 288,921 ) 112,113 8,219 ) 1,849 40,000 ) - 8,009 99 ) 1,773 7,452 86,410 ) 732 - 1,113,027) 27,655,183 28,039,284 ) 18,280,607 18,250,597 ) 7,226,476 5,834,283 ) 3,828 4,050 ) 184,476 205,544 ) 60,449 ) 115,369 ) 13,131 9,271 ) - 844,854 22,657) 177,911 ) 1,223,480 $ 1,045,569		2020
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 10,682,165 ) 9,900,763 6,375 ) 34,647 ) 1,225 ) 1,801 ) - 438,271 ) 263,177 1,445 ) 2,928 - 8,009 ) - 565 ) - 43,030 12,866 ) 1,355 7,949 985,130) 29,164,154 27,574,750 ) 3,948,627 3,638,916 ) 5,023,231 6,105,032 ) 6,224 8,010 ) 175,660 181,974 ) 47,391 ) 576,849 ) 211,104 45,663 ) 96,279) 254,136 8,106 119,867 ) 1,343,347 $ 1,223,480

The accompanying notes are an integral part of the individual financial statements.

• （ Please refer to the auditors’ report of Deloitte and Touche on March 24, 2022 ）

Chairman: Chia-Min Yeh

Manager: Wei-Li Yeh

Accounting Manager: Yi-Nung Yu

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De Licacy Industrial Co., Ltd. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars, unless stated otherwise)

1. Company history

De Licacy Industrial Co., Ltd. (“the Company”) was incorporated in July 1982 and engaged in manufacturing plaid cloth, blended cloth, jacquard cloth, bubble cloth, telescopic cloth, chemical fiber cloth, polyester cotton cloth, satin and other textile manufacturing dyeing and finishing processing and trading business.

The Company’s stock has been listed and traded on the Taiwan Stock Exchange since January 1997.

The currency used in the consolidated financial statements is New Taiwan Dollars.

1. The date and procedures for passing the financial report

The consolidated financial statements were approved by the Corporation’s board of directors on March 24, 2022.

1. Application of newly issued and revised standards and interpretations

2. (1) Initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of (IFRIC), and Interpretation announcement (SIC), (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

   • The application of amendments to the IFRSs recognized and issued by the FSC did not have a significant impact on the Company and the entities controlled by the Company’s (collectively, “the Group”) accounting policies.

3. (2) The IFRSs endorsed by the FSC for application starting from 2022

New IFRSs “Annual improvement for the 2018-2020 period” Amendment to IFRS 3 “Updating a Reference to the Conceptual Framework” Amendment to IAS 16 “Property, Plant and Equipment – Proceeds before Intended Use” Amendment to IAS 37 “Onerous Contracts – Cost of Fulfilling a Contract”	Effective Date Announced byIASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

Note 1: IFRS 9 Amendments will be applied to the exchange of financial

• 15 -

liabilities or modification of terms that occur during the annual report period after January 1, 2022; IAS 41 amendments “Agriculture” will be applied to fair value measures for the annual report period after January 1, 2022. IFRS 1 amendments “First adoption of IFRSs” will be applied retroactively to the annual report period after January 1, 2022.

Note 2: The Corporation shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2022.

• Note 3: This amendment applies to plant, property and equipment in the location and condition necessary to achieve management's intended operation mode after January 1, 2021.

• Note 4: This amendment will be applied to contracts that have not fulfilled all their obligations as at January 1, 2022.

As of the date the consolidated financial statements were authorized for issue, the Group evaluated that there is no significant impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations and related applicable period.

• (3) New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contract” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Accounting Estimates Definitions” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities Arising from a Single Transaction”

Effective Date Announced by IASB (Note 1)

To be confirmed January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

Note 1: Unless stated otherwise, the above New IFRSs are effective for

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annual reporting periods beginning on or after their respective effective dates.

• Note 2: The Company shall apply these amendments postponed for annual reporting periods beginning on or after January 1, 2023.

• Note 3: This amendment applies to changes in accounting estimates and changes in accounting policies that occur in the beginning annual report period after January 1, 2023.

• Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.Except for the recognition of deferred tax for the temporary differences of lease and decommissioning obligations on January 1, 2022, the amendment applies to all transaction after January 1, 2022.

As of the date the consolidated financial statements were authorized for issue, the Group continues to evaluate the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. Summary explanation of major accounting policies

• (1) Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC. (2) Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis, except for financial instruments that are measured at fair value and net defined benefit assets recognized at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1. Level 1 input is quoted prices (unadjusted) in active markets for identical assets or liabilities.

2. Level 2 inputs are inputs other than quoted prices included within Level - 17 -

1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

1. Level 3 inputs are unobservable inputs for an asset or liability.

2. (3) Classification of current and noncurrent assets and liabilities

   • Current assets include:

3. Assets held primarily for the purpose of trading;

4. Assets expected to be realized within 12 months after the reporting period; and

5. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

   • Current liabilities include:

6. Liabilities held primarily for the purpose of trading;

7. Liabilities due to be settled within 12 months after the reporting period; and

8. Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

9. Assets and liabilities that are not classified as current are classified as

10. non-current assets or non-current liabilities.

11. (4) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries). When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra-company transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When the Group’s changes in the ownership and equity of the subsidiary do not result in the loss of control, it is treated as an equity transaction. The carrying amount of the Group and non-controlling interests has been adjusted to reflect changes in its relative equity in the subsidiary. The difference between the adjustment amount of non-controlling interests and the fair value

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of the consideration paid or received is directly recognized as equity and attributable to the owners of the company.

When the Group loses control of a subsidiary, the gain or loss on disposal is the difference generated from (1) the aggregate of the fair value of the consideration received and the fair value of the remaining investment in the former subsidiary at the date of loss of control, and (2) the aggregate total of the assets and liabilities and noncontrolling interests of the former subsidiary at the carrying amount on the date of loss of control. The Group accounts for all amounts recognized in other comprehensive income or loss related to the subsidiary on the same basis as the Group must follow for the direct disposal of the related assets or liabilities.

The remaining investment in a former subsidiary is recognized as the original investment in related companies based on the fair value on the date of loss of control.

See Note 12, Schedule 6 and Schedule 7 for detailed information on subsidiaries (including percentages of ownership and main businesses).

(5)

Business combinations

The business combinations follow the acquisition laws. The related acquisition-related costs are included as expenses in the period of cost occurrence and labor acquisition.

Goodwill is measured at the fair value of the transfer consideration and the total fair value of the acquirer’s previously held interest in the acquirer at the date of the acquisition, in excess of the net amount of identifiable assets and liabilities acquired at the date of the acquisition.

(6)

Foreign currencies

In preparing the financial statements of each individual entity, transactions in currencies other than the entity’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items measured at fair value that are denominated in

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foreign currencies are retranslated at the rates prevailing at the date when fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gain and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction (i.e., not recalculated).

For the purpose of presenting the consolidated financial statements, the functional currencies of its foreign operations are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the Company and non-controlling interests as appropriate).

If the Group disposes of all the interests of a foreign operation, or disposes of some interest of a subsidiary of a foreign operation but loses control, or disposes of a related company of a foreign operation after the retained interests are financial assets and treated in accordance with the accounting policies of financial instruments, all accumulated foreign exchange differences attributed to the owners of the Company and related to the foreign operations will be re-classified to profit or loss.

(7) Inventories

Inventories consist of raw materials, work in progress (including outsourced) and finished goods, and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

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(8) Investments in associates and joint venture

An associate is an entity over which the Group has significant influence, and which are neither a subsidiary nor an interest in a joint venture. A joint venture is a joint agreement whereby the merging company has joint control over another company and has rights to its net assets.

The Group uses the equity method to account for its investments in associates.

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the Group’s share of the equity of associates.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When the Group subscribes for additional new shares of the associate, at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in the Group’s share of equity of associates. If the Group’s ownership interest is reduced due to the additional subscription of the new shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for by the equity method is insufficient, the shortage is debited to retained earnings.

When the Group transacts with its associates or joint ventures, profits and losses resulting from the transactions with the associate or joint venture are

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recognized in the consolidated financial statements to the extent of interests in the associate that are not related to the Group.

(9) Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation.

Property, plant and equipment in the course of construction are measured at cost. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. If their respective lease terms are shorter than their useful lives, such assets are depreciated over their lease terms. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

(10) Investment properties

Investment properties are properties held to earn rental and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation.

Straight-line basis depreciation of investment real estate.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

(11) Goodwill

Goodwill arising from the acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated

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impairment loss.

To impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as “cash-generating units”) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual year, that unit shall be tested for impairment before the end of the current annual year. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

(12) Intangible assets

1. Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

1. Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

(13) Impairment of property, plant and equipment, right-of-use asset, investment - 23 -

properties and intangible assets (excluding goodwill)

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset, investment properties and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

(14)

Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1. Financial assets

2. 24 -

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

• (1) Measurement categories

Financial assets are classified into the following categories: financial assets at amortized cost and investments in equity instruments at FVTOCI.

• A. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets measured at fair value through profit or loss on a mandatory basis. Financial assets at fair value through profit or loss include investments in equity instruments that are not designated as at fair value through other comprehensive income.

Financial assets at fair value through profit or loss are measured at fair value with dividends and interest recognized in other income and interest income, respectively, and gains or losses arising from remeasurement recognized in other gains and losses. For the determination of fair value, please refer to Note 36.

• B. Financial assets carried at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• 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.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable (net) and other receivables at amortized cost, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

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Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

• a. Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit adjusted effective interest rate to the amortized cost of such financial assets; and

• b. Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

A financial asset is credit impaired when one or more of the following events have occurred: significant financial difficulty of the issuer or the borrower; breach of contract, such as a default: it is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or the disappearance of an active market for that financial asset because of financial difficulties.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

C. Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses - 26 -

arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

(2) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable).

The Group always recognizes lifetime expected credit losses (ECLs) for accounts receivable. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

For internal credit risk management purposes, the Group determines that internal or external information which shows that the debtor is unlikely to pay its creditors would indicate that a financial asset is in default (without taking into account any collateral held by the Group).

• 27 -

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

• (3) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2. Financial liabilities

• (1) Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

• (2) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

3. Derivative instruments

The derivative instruments which are entered into by the Group are exchange rate swap contract to manage the exchange rate risk of the Group.

Derivative instruments are originally recognized at fair value at the time of signing the derivative instruments contract, and are subsequently re-measured at fair value at the balance sheet date. When the fair value of - 28 -

derivative instruments is positive, it is then classified as a financial asset; when the fair value is negative, it is then classified as a financial liability.

(15) Treasury stocks

The subsidiary holds the shares of the parent company on the basis of the book value of the parent company when the subsidiary becomes a subsidiary. (16) Provisions

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

(17) Revenue recognition

The Group allocates the transaction price to each contractual performance obligation after the contractual performance obligation is identified in the customer contract and recognized revenue when each performance obligation is satisfied.

Sales revenue

Sales revenue comes from the sale of long and short fiber fabrics. The Group recognizes revenue and accounts receivable at the time when the customer has the right to set the price and use the products and has the primary responsibility for re-selling the products and bears the risk of obsolescence of the products when the trade terms are fulfilled. Receipts in advance are recognized as contract liabilities when the trade term is fulfilled or the products shipped.

Therefore, no revenue is recognized when the product is in de-materialization process.

(18) Lease

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1. The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

• 29 -

The lease payment of the operating lease is recognized as income on a straight-line basis during the relevant lease period. The original direct costs incurred as a result of the acquisition of a business lease are added to the carrying amount of the underlying asset and are recognized as expenses during the lease period on a straight-line basis.

2.

• The Group as lessee

The Corporation recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any re-measurement of the lease liabilities.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Corporation uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. If the changes in lease term result in changes in future lease payments, The Group re-measures the lease liability and adjusts the right-to-use assets relatively, provided that the book value of the right-to-use assets has been reduced to zero, the remaining measured

• 30 -

amount is recognized in the profit and loss. Lease liabilities are expressed separately in the consolidated balance sheet.

(19) Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

(20)

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

Government grants related to revenue are recognized in other income on a systematic basis over the period in which the related costs intended to be reimbursed are recognized as expenses by the Group. Government grants that are contingent on the acquisition of non-current assets by the Group are recognized as deferred revenue and are transferred to other income on a systematic basis over the life of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

• 31 -

(21) Employee benefits

1. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

1. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit assets are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit assets represent the actual surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

(22) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1. Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Law in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

• 32 -

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

1. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group

• 33 -

expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. If investment properties measured using the fair value model are non-depreciable assets, or are held under a business model whose objective is not to consume substantially all of the economic benefits embodied in the assets over time, the carrying amounts of such assets are presumed to be recovered entirely through sale.

1. Current and deferred taxes

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

5. Major sources of uncertainty in major accounting judgements, estimates and assumptions

In the application of the Group’s accounting policies, management is required to make judgments, estimations, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Group considers the economic implications of the COVID-19 recent situation in domestic when making its critical accounting estimates, including cash flow estimates, growth rate, discount rate and profitability, etc. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

6. Cash and cash equivalents

Cash and cash equivalents
Cash on hand, turnover and petty cash Bank checks and demand deposits Cash equivalents (investments	December 31,2021 $ 1,372 814,263	December 31,2020
		$ 1,403 1,115,912

• 34 -

with an original expiry date of less than 3 months) Time deposit Commercial paper	229,934 - $ 1,045,569	6,165 100,000 $ 1,223,480

The annual interest rate of cash equivalents on December 31, 2021 and 2020 was 0.08% to 3.3% and 0.95% to 3.3%, respectively.

7. Financial Instruments at fair value through profit and loss

Financial assets-current Mandatory measurement at fair value through profit and loss Derivative instruments (not designated as hedge) Conversion rights of private placement convertible bonds of listed companies (Note 9) Structured deposits (1) Non-derivative financial assets Domestic listed (OTC) stocks Fund beneficiary certificates Financial liabilities-current Held for trading Derivative instruments (not designated as hedge) Exchange rate swap contracts (2)	December 31,2021 $ - 130,413 3,405 8,914 $ 142,732 $ 120	December 31,2020
		$ 52,461 - 2,856 9,387 $ 64,704 $ 20,927

• (1) Structure deposits contain an embedded derivative instrument that is not closely associated with host contracts. All of these investments have been classified as mandatorily measured at FVTPL under IFRS 9 since the structured deposits contain host contracts that are assets within the scope of IFRS 9.

• (2) Foreign exchange contracts with no hedging accounting applied at the balance sheet date and which have not yet due are as follows:

• 35 -

December 31, 2021

December 31, 2021
Category Currencies Exchange rate swap contracts NTD to USD Exchange rate swap contracts NTD to CNY December 31, 2020	Expiration Period 2022.02.09～ 2022.03.21 2022.05.24～ 2022.06.09	Contract Amount (In thousands of NTD)
		NTD 442,586／USD 15,900 NTD 109,513／CNY 26,000

Category Exchange rate swap contracts Exchange rate swap contracts	Currencies NTD to USD NTD to CNY	Expiration Period 2021.01.28～ 2021.08.09 2021.02.23	Contract Amount (In thousands of NTD)
			NTD 679,680／USD 23,100 NTD 43,128／CNY 10,000

The purpose of the Group to engage in foreign exchange transactions is mainly to avoid the risk of foreign currency assets and liabilities due to foreign exchange fluctuations.

Financial assets and liabilities at fair value through profit or loss in the years of 2021 and 2020 resulted the evaluation loss of NT$44,383,000 and evaluation benefits of NT$18,301,000, respectively, which were included under other benefits and losses in the consolidated comprehensive income statement.

1. Financial assets - Equity instrument investment at fair value through other comprehensive income

December 31, 2021 December 31, 2020 Current Domestic investment Shares of listed (OTC) companies $ 109,867 $ 38,979 Non-current Domestic investment Private shares of listed companies Chia Her Industrial Co., Ltd., Private common shares $ 106,209 $ 120,056

The Group exercises the conversion right in November 2021 and acquired 3,550,000 shares of Chia Her Industrial Co., Ltd. (“Chia Her”) private placement

• 36 -

common stock at NT$8.45 per share. The fair value per share on the conversion date measured by an independent appraiser was NT$12.74 and the total amount of NT$45,231,000, which was included in financial assets at fair value through other comprehensive income.

In July 2013 and May 2014, the Group subscribed 13,980,000 and 15,873,000 shares (2,266,000 and 2,573,000 shares after the capital reduction) of Chia Her private placement common stock at NT$1.43 and NT$1.26 per share for $19,991,000 and $20,000,000, respectively. Although the 3-year lock-up period has passed, the Company is still unable to complete the public offering because its past profitability does not meet the requirements for listing.

The Group invests in common shares and private placement common stocks of listed companies and common share of unlisted (un-OTC) companies for medium- and long-term strategic purposes. The management of the Group believes that it would be inconsistent with the aforementioned long-term investment plan to include short-term fair value fluctuations of these investments in profit or loss. Thus, they select and designate these investments at fair value through other comprehensive income.

1. Financial assets at amortized cost

Financial assets at amortized cost
Current Domestic investment Financial product (1) Pledged demand deposit Pledged time deposit (1) Non-current Domestic investment Chia Her Industrial Co., Ltd., Private equity convertible corporate bond (2) (1) Financial product interest rate range Time deposit interest rate range	December 31,2021 $ - 303,374 3,116,090 $ 3,419,464 $ - - 0.07%～2.65%	December 31,2020
			$ 13,094 323,470 2,480,338 $ 2,816,902 $ 27,725 3.88% 0.07%～2.2%

The financial products are non principal guaranteed and with floating interest rates.

(2) In October 2018, the Group purchased 300 three-year private placement - 37 -

convertible bonds of Chia Her Industrial Co. at a book value of $100,000 with a coupon rate of 4.5% and an effective interest rate of 14.66%. This investment is not transferable within three years in accordance with the relevant laws and regulations. The Group has exercised the conversion right in November 2021 (please refer to Note 8).

The Group classifies its investment in corporate bonds as investment in liability instruments measured at amortized cost - non-current. Since the economic characteristics and risks of these derivative instruments are not closely related to those of the host contract, the Group recognizes the derivative separately from the corporate bonds.

• (3) For information on pledges of financial assets measured at amortized cost, please refer to Note 38.

• (4) The Group invests only in liability instruments with low credit risk as assessed by the impairment. The Group considers the historical default loss rate and the outlook of the industry in which it operates to measure the expected credit loss over 12 months or the expected credit loss over the life of the investment in liability instruments. As the debtor has low credit risk and sufficient ability to settle the contractual cash flows, no expected credit loss has been recorded against financial assets at amortized cost as of December 31, 2020 and 2019.

• Notes receivable, net accounts receivable, and other accounts receivable

• (1) Notes receivable

Notes receivable of the Group are all business-related.

No overdue notes receivable of the Group on 31 December 2021 and 2020, thus no allowance was made for losses.

• (2) Accounts receivable

• December 31, 2021 December 31, 2020

At amortized cost Total carrying amount Less: Allowance for losses	$ 1,769,323 89,279 $ 1,680,044	$ 1,709,214 94,352 $ 1,614,862

The average credit period of sales of goods of the Group was 30-120 days. No interest for accounts receivable. To mitigate credit risk, the Group’s

• 38 -

management assigns a dedicated team to determine credit limits, approve credit facilities and other monitoring procedures to ensure that appropriate actions are taken to collect overdue accounts receivable. In addition, the Group reviews the recoverable amounts of accounts receivable on an individual case basis at the balance sheet date to ensure that appropriate impairment losses have been recorded for uncollectible accounts receivable. Accordingly, the management of the Company believes that the credit risk of the Group has been significantly reduced.

The Group measures the loss allowance for notes and accounts receivable at an amount equal to lifetime ECLs. The expected credit losses on notes and accounts receivable are estimated by reference to the past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show there are significant differences in the loss patterns of different customer groups, therefore, instead of further differentiating the customer groups, only sets the expected credit loss rate based on the number of days to establish accounts receivable.

If there is any evidence shows that the counter-party is in serious financial difficulty and the Group cannot reasonably expect to recover the amount, for example, if the counter-party is in a liquidation process, the Group will directly write off the related accounts receivable but will continue the recovery activities, and the recovered amount will be recognized in profit or loss.

The Group measured the allowance for losses on accounts receivable as follows:

December 31, 2021

Expected credit loss rate Total carrying amount Allowance for losses (expected credit losses during the continuance period) Amortized cost		Less than 90 days 0% $ 1,575,339 - $ 1,575,339	91-180 days 0%～5% $ 104,197 ( 3,981 ) $ 100,216	181-365 days 0%～100% $ 34,913 ( 31,127 ) $ 3,786	More than 366 days 0%～100% $ 54,874 ( 54,171 ) $ 703	Total
						$ 1,769,323 ( 89,279 ) $ 1,680,044

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December 31, 2020

Expected credit loss rate Total carrying amount Allowance for losses (expected credit losses during the continuance period) Amortized cost		Less than 90 days 0% $ 1,470,655 - $ 1,470,655	91-180 days 0%～5% $ 130,757 ( 1,273 ) $ 129,484	181-365 days 0%～100% $ 47,868 ( 33,993 ) $ 13,875	More than 366 days 0%～100% $ 59,934 ( 59,086 ) $ 848	Total
						$ 1,709,214 ( 94,352 ) $ 1,614,862

Information on the changes in the allowance for losses on accounts receivable is as follows:

receivable is as follows:
Beginning balance Impairment loss for the year Actual write-off for the year Subsidiary liquidation and returned shares Foreign exchange difference Ending balance		2021 $ 94,352 19,941 24,855 ) - 159) $ 89,279		2020
	( (		( (	$ 37,788 60,043 3,605 ) 207 ) 333 $ 94,352

Please see Note 36-5, financial assets transfer information, for the Group’s

transfer of accounts receivable.

(3) Other receivables

Loans to others Proceeds from sale of equipment Proceeds from sale of investment fixed property Proceeds from sale of right-of-use asset Government grants Others	December 31,2021 $ 40,000 665 - 11,426 - 46,487 $ 98,578	December 31,2020	December 31,2020
			$ - 20,554 7,452 13,199 8,817 66,056 $ 116,078

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11. Inventory

Inventory
Finished goods Work-in-progress Raw materials Work-in-progress materials-outsourced Natures of cost of goods sold: Cost of inventory sold Inventory valuation and obsolescence losses Unallocated manufacturing cost (Note) Others	December 31,2021 $ 2,124,448 1,069,607 934,953 22,685 $ 4,151,693 2021 $ 8,813,922 33,199 22,517 2,262 $ 8,871,900	December 31,2020
			$ 1,810,813 807,249 586,119 6,616 $ 3,210,797 2020
			$ 7,254,036 42,628 53,118 1,170 $ 7,350,952

Note: Unallocated manufacturing costs of the year 2020 include expenses related to the shutdown period due to the impact of the COVID-19 outbreak.

12. Subsidiary

Subsidiaries included in Consolidated Financial Statements

The main elements of the consolidated financial statements are as follows:

Name of investment company The Company De Licacy Samoa Company	Name of subsidiary De Licacy (Samoa) Holdings Company (De Licacy Samoa Company) De-Fa International Industrial Co., Ltd. (De Fa Company) Chadtex Industrial Co., Ltd. (Chadtex Company) Lucky Unique Enterprise Co., Ltd. (Lucky Unique Enterprise) British Virgin Islands De Licacy Holdings Limited (De Licacy BVI Holdings) View Best Global Limited (View Best Global Limited) Vantage Gain Holdings Limited (Vantage Gain Limited) Best Alliance International Limited (Best Alliance Limited) Hao Wan Investment Limited (Hao Wan Limited) De Licacy (Anguilla) Holdings Co. Ltd. (De Licacy Anguilla Company) De Hong Holdings Co., Ltd. （De Hong Company）	Business type General investment General import and export trade Manufacture and sale of long fiber garments Manufacture and processing of various fiber textile products General investment General investment General investment General investment General investment General investment General investment	Percentage of shareholding (%) December 31,2021 December 31,2020 100 100 100 100 55.06 55.06 - - 100 100 100 100 73.33 73.33 100 100 - - 100 100 50 50	Note
			December 31,2021 100 100 55.06 - 100 100 73.33 100 - 100 50
				(1) (2) (3) (4) (5) (6) (7) (16) (8)

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（ Continued ）

（ continued from the previous page ）

Name of investment company Hao Wan Limited De Licacy BVI Holdings De Shen (Cayman) Company De Hong Company Best Alliance Limited De Fa Company Lucky Unique Enterprise Bright Wisdom Ltd. Lucky Apex Ventures Limited － － －	Name of subsidiary New Lake Ltd. (New Lake Ltd.) Beauty Plus Ventures Limited (Beauty Plus Limited) Chang Sin Lucky Unique Enterprise Textile Limited (Chang Sin Lucky Unique Enterprise) De Shen (Cayman) Holdings Co., Ltd. (De Shen (Cayman) Company) Vietnam De Licacy Enterprise Liabilities Limited (Vietnam De Licacy Enterprise) De Hong International Co., Ltd. (Vietnam) (De Hong (Vietnam) Company) Hangzhou De Licacy Textile Limited (Hangzhou De Licacy Limited) Eden Road International Limited (Eden Road Limited) Bright Wisdom Ltd. Hong Kong Eden Road International Limited (Hong Kong Eden Road Limited) Nantong De Licacy Textile Technology Limited (Nantong De Licacy Limited) Eden Road Limited Gain Faith Investments Ltd. (Gain Faith Ltd.) E Textile Co., Ltd. (E Textile Company) De Kao Trading Co., Ltd. (De Kao Company) Tung Ming Textile Co., Ltd. (Tung Ming Company) Total Express Ltd. Apex Textile Co., Ltd. (Apex Textile Company) Lucky Apex Ventures Limited Futures Co., Ltd. Apex (Anqing) Textile Co., Ltd. (Apex (Anqing) Company) Thousand Well International Limited (Thousand Well Limited) Fastpower Limited (Fastpower Limited) Thousand Well (Samoa) International Limited (Thousand Well (Samoa) Limited)	Business type General import and export trade General investment Manufacture, dyeing and sales of various high-quality fabrics and textiles General investment Printing, dyeing, finishing, garment manufacturing and trading of various textile and yarn materials Printing and finishing of various types of garments and cloths Production and sales of long and short fiber fabric processing and finishing General import and export trade General investment General import and export trade Production and sales of long and short fiber fabric processing and finishing General import and export trade General investment Manufacture and processing of various fiber textile products General import and export trade Manufacture, processing, and trading of chemical fibers International trade business Manufacture and sale of textile products and dyeing and finishing General investment General import and export trade Manufacture and sale of various high-quality fabrics and textiles International trade business International trade business International trade business	Percentage of shareholding (%) December 31,2021 December 31,2020 100 100 85 85 - - 100 100 100 100 100 100 100 100 - 100 53.22 53.22 100 100 100 - 100 - - - - - - - - - 100 100 100 100 100 100 100 100 100 100 - - - - - -	Note
			December 31,2021 100 85 - 100 100 100 100 - 53.22 100 100 100 - - - - 100 100 100 100 100 - - -
				(9) (8) (7) (10) (11) (6) (6) (10) (3) (3) (3) and (12) (3) and (13) (14) (15)

• 42 -

－ Fastpower (Samoa) Limited International trade business - - (15) (Fastpower (Samoa) Limited)

• (1) The Company increased investments in De Licacy Samoa Company NT$55,645,000 (USD2,000,000) and NT$320,241,000 (USD11,059,000) in 2021 and 2020, respectively.

• (2) In 2020, the Company acquired 4.65% of Chadtex Company from an unrelated party for NT$21,329,000, resulting in an increase in shareholding from 50.41% to 55.06%. The Company increased capital surplus by NT$675,000 for the difference between the actual acquisition price and the carrying amount, see Note 33.

• (3) On January 14, 2020, the Board of Directors approved the purchase of 1.22% of Lucky Unique Enterprise from its subsidiary Tung Ming Company for NT$6,633,000, resulting in an increase in shareholding from 59.7% to 60.92%, and therefore the transfer of shareholding was a reorganization of a jointly controlled entity. Therefore, the transfer of ownership was a reorganization under common control, and the Group reduced the capital surplus by NT$27,000 for the difference between the transaction price and the net equity, see Note 33.

On June 19, 2020, the Board of Directors approved the sale of 35.94% of Lucky Unique Enterprise’s shares (14,293,000 shares to unrelated parties) for NT$195,227,000 (NT$13.7 per share, net of securities transaction tax of NT$587,000), resulting in a reduction of the shareholding to 24.98%. The transaction price was determined with reference to the equity value valuation report of Evermore Consulting Co., Ltd., an independent consultant of the unrelated party, as of March 31, 2020. The evaluation method adopted shareholders’ equity-net value method and price-to-earnings ratio method. The mutual parties for buying and selling completed the equity transfer and the settlement made on July 8, 2020, the Company lost control over Lucky Unique Enterprise and its subsidiaries. The remaining investment was recognized as investment in affiliated companies at fair value on the date of loss of control, see Note 13 and Note 32.

• (4) The Company increased its investment in View Best Global Limited by $15,622,000 (USD540,000) in 2020, mainly for the purpose of lending funds to

• 43 -

ATAGO Vietnam for its operations. The Company decreased the paid-in capital and received the returned payment of shares, amounting to $15,315,000 (US$540,000) in October 2021.

• (5) De Licacy Samoa Company increased its investment in Vantage Gain Limited by USD1,281,000 and USD159,000 in 2021 and 2020, respectively, mainly for indirect investment in Perfect Step Investments Limited (Perfect Step Ltd. holds 20% of the shares).

• (6) De Licacy Samoa Company indirectly invested NT$1,572,000 (USD50,000) in Hong Kong Eden Road Limited through Best Alliance Limited in March 2020, and Hong Kong Eden Road Limited is mainly engaged in general import and export trade. De Licacy Samoa Company increased its investment of NT$138,875,000 (USD5,000,000) in Best Alliance Limited in 2021, mainly for directly investing Nantong De Licacy Limited (100% shareholdings). This investment was approved by Investment Commission, MOEA and registered in August 2021.

• (7) Chang Sin Lucky Unique Enterprise was liquidated on October 31, 2020, and the liquidation amount of NT$77,739,000 was remitted to Hao Wan Limited on November 30, 2020 for the remittance to De Licacy Samoa Company.

• (8) De Licacy Samoa Company increased its investment in De Hong Company (50% shareholdings) by USD300,000 and Beauty Plus Limited (85% shareholdings) by USD179,000 in 2020, mainly for paying employees’ salaries and wages and overseas maintenance fee.

• (9) De Licacy Samoa Company invested an additional NT$174,300,000 (USD6,000,000) in New Lake Company in 2020 to repay the USD loan.

• (10) On January 14, 2021, the Board of Directors approved the acquisition of 100% equity interest in Eden Road Limited by De Fa Company from Best Alliance Limited. As such, the transfer of ownership was a reorganization under common control, and De Fa Company increased an additional invest of NT$104,969,000 (USD3,700,000) in Eden Road Limited in March 2021, mainly for repaying loans to related parties. In June 2021, De Fa Company received the return payment of NT$88,259,000 (USD3,111,000) from the capital reduction of Eden Road Limited.

• (11) On January 14, 2020, the Board of Directors approved the acquisition of 5.22% and 20.23% equity interest in Bright Wisdom Ltd. by Best Alliance Limited

• 44 -

from its subsidiaries Tung Ming Company and Eden Road Limited at US$1.0376 per share, respectively. As such, the transfer of ownership was a reorganization under common control, and the Group increased the Capital surplus by NT$1,177,000 for the difference between the transaction price and the net equity, see Note 33 attached.

Bright Wisdom Ltd. increased its capital by NT$209,403,000 (USD7,100,000) from January to September 2020, and its shareholding decreased from 71.3% to 53.22% because Best Alliance Limited did not recognize the capital increase in proportion to its shareholding. The Company reduced its capital stock by NT$8,084,000 for this unrecognized increase in capital stock, see Note 33.

(12) On March 12, 2020, the Board of Directors approved the sale of 60% of the shares of De Kao Company to the subsidiary, Lucky Unique Enterprise for $12,000,000. As such, the transfer of ownership was a reorganization under common control, and the Group increased the Capital surplus by NT$1,192,000 for the difference between the sale price and the net equity, see Note 33 attached.

(13) On April 20, 2020, the Board of Directors approved the sale of 91.28% of the shares of Tung Ming Company to the subsidiary, Lucky Unique Enterprise for $258,989,000. As such, the transfer of ownership was a reorganization under common control, and the Group increased the Capital surplus by NT$20,052,000 for the difference between the sale price and the net equity, see Note 33 attached.

(14) On September 24, 2020, Bright Wisdom Ltd. acquired 100% of the shares held by Futures Co., Ltd., which is mainly engaged in general import and export trade, from the key management for NT$3,000,000 (USD103,000). The Group recognized goodwill of NT$552,000 for the difference between the consideration transferred and the fair value, which was valued using the discounted cash flow method as of September 30, 2020, based on the valuation report of Eternal Asset Consulting Co. On September 24, 2020, Bright Wisdom Ltd. increased its investment in Futures Co., Ltd. by NT$7,000,000 (US$239,000), which was approved by the Investment Commission, MOEA on September 16, 2020 and approved on October 27, 2020.

(15) Thousand Well Limited and Fastpower Limited are companies to which the - 45 -

Group has no material equity investment, but the Group has control over the financial and operating policies of these companies and therefore the Group has control over them and they are included in the preparation of the consolidated financial statements. The Group has established Thousand Well (Samoa) Limited and Fastpower (Samoa) Limited in October 2020 to transfer the operating activities of the former Thousand Well Limited and Fastpower Limited.

• (16) De Licacy Samoa Company received the returned payment of NT$33,642,000 (USD1,200,000) from the capital reduction of De Licacy Anguilla Company in July 2021.

13. Investments using the equity method

Investments using the equity method
Investment in affiliates Investment in joint ventures	December 31,2021 $ 806,922 9,395 $ 816,317	December 31,2020
			$ 746,595 46,459 $ 793,054

• (1) Investment in affiliates

vestment in affiliates
Significant affiliates Perfect Step Ltd. Sung Yu Company Lucky Unique Enterprise Individually insignificant affiliates Vietnam ATAGO Company	December 31,2021 $ 248,679 385,909 155,127 789,715 17,207 $ 806,922	December 31,2020
			$ 210,718 399,151 111,412 721,281 25,314 $ 746,595

The Group’s shareholdings and voting rights in significant affiliates as of the balance sheet date were as follows:

Companyname Perfect Step Ltd. Sung Yu Company Lucky Unique Enterprise Vietnam ATAGO Company	December 31,2021 20% 38% 24.1% 30%	December 31,2020
		20% 38% 24.98% 30%

The subsidiary, Vantage Gain Holdings Limited, increased its investment

• 46 -

in Perfect Step Ltd. by NT$49,370,000 (US$1,747,000) and NT$6,375,000 (US$217,000) in 2021 and 2020, respectively, and Perfect Step Ltd. is mainly engaged in general investment.

Please refer to Note 12(3) for information on the Company’s investment in the affiliate, Lucky Unique Enterprise Co., Ltd. The Company did not recognize cash capital increase of Lucky Unique Enterprise amounting to NT$38,962,000 in proportion of its shareholding, resulting in the shareholding decreased from 24.98% to 24.1%.

For information on the nature of business, principal place of business and country of incorporation of the above affiliates, please refer to Schedule 6, “Information on Investee Companies, Location...etc.”.

1. Significant affiliates

The following summarized financial information has been prepared on the basis of the financial statements of each affiliate IFRSs and reflects adjustments made under the equity method.

Perfect Step Ltd.

Perfect Step Ltd.
Current assets Non-current assets Current liabilities Equity Controlled equity Equity of the Group Operating income Net loss	December 31,2021 $ 10,210 1,566,631 ( 506,330) 1,070,511 ( 821,832) $ 248,679 2021 $ - ($ 22,660)	December 31,2020
	( (	( (	$ 10,159 1,611,909 649,100) 972,968 762,250) $ 210,718 2020
	(	(	$ - $ 50,482)

Sung Yu Company

Sung Yu Company
Current assets Non-current assets Current liabilities Equity Controlled equity Equity of the Group Operating income Net loss	December 31,2021 $ 73 1,026,839 ( 3,637) 1,023,275 ( 637,366) $ 385,909 2021 $ - ($ 22,804)	December 31,2020
	( (	( (	$ 77 1,054,024 3,703) 1,050,398 651,247) $ 399,151 2020
	(	(	$ - $ 38,283)

• 47 -

Lucky Unique Enterprise

Lucky Unique Enterprise
Current assets Non-current assets Current liabilities Non-current liabilities Equity Controlled equity Equity of the Group Unrealized income(loss) of upstream and downstream transactions Investment carrying amount Operating income Net income	December 31,2021 $ 992,723 1,065,722 ( 1,389,028 ) ( 25,738) 643,679 ( 488,552) 155,127 - $ 155,127 2021 $ 1,109,553 $ 31,512	December 31,2020
	( ( (	( ( ( (	$ 598,775 801,251 924,092 ) 29,780) 446,154 334,684) 111,470 58 ) $ 111,412 2020
			$ 614,595 $ 15,285

1. Summarized information of individually insignificant affiliates

Shares of the Group Total income (loss)		2021 $ 8,107)		2020
	(		(	$ 15,941)

• (2) Investment in joint ventures －

• Significant joint ventures New Premium Enterprise Co., Ltd.

Current assets Non-current assets Current liabilities Equity Controlled equity Equity of the Group Investment carrying amount Operating income Net loss	December 31,2021 $ 18,326 464 - 18,790 ( 9,395) $ 9,395 $ 9,395 2021 $ - ($ 5,143)	December 31,2020	December 31,2020
	(	( (	$ 76,836 19,196 3,114) 92,918 46,459) $ 46,459 $ 46,459 2020
	(	(	$ 42,829 $ 53,282)

• 48 -

As of the balance sheet date, the Group held 50% of the equity and voting rights in the significant joint venture (New Premium Enterprise Co., Ltd.).

Investments accounted for using the equity method and the Group’s share of profit or loss and other comprehensive income or loss are recognized on the basis of the audited financial statements of each of the affiliates and the joint venture for the same period.

14. Property, plant and equipment

Details of the two-period change in property, plant and equipment are set out in Schedule 11.

Among the owned land, part of the Group’s factory land (with a book value of NT$23,507,000) is agricultural land, which is temporarily registered in the name of others, but the agricultural land has been set up as a mortgage to the Group.

The Group did not perform an impairment assessment for 2021 and 2020 as there was no indication of impairment.

Depreciation expense is accrued on a straight-line basis over the following number of years of useful life:

of years of useful life:
Land improvements	3 to 40 years
Buildings
Plant main buildings	20 to 55 years
Mechanical and power	5 to 40 years
equipment
Engineering system	3 to 55 years
Others	2 to 25 years
Machinery equipment	2 to 25 years
Transportation equipment	3 to 15 years
Other equipment	2 to 25 years

For the amount of property, plan and equipment pledged as security for loans by the Group, please refer to Note 38.

15. Lease agreement

(1) Right-of-use assets

Right-of-use assets
Right-of-use asset carrying amount Land Buildings Transportation equipment Other equipment	December 31,2021 $ 317,336 26,286 3,001 5,401 $ 352,024	December 31,2020
			$ 328,818 37,984 3,175 590 $ 370,567

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Additions of right-of-use asset Depreciation expense of right-of-use asset Land Buildings Transportation equipment Other equipment		2021 $ 53,004 $ 8,109 32,674 1,179 4,489 $ 46,451		2020
				$ 27,455 $ 10,287 40,155 1,070 4,124 $ 55,636

Except for the above additions and recognition of depreciation expense, the Group’s right-of-use assets are not subject to significant sublease or impairment in 2021 and 2020.

See Note 38 for the amount of the right-of-use asset that is set as a guarantee for the loan.

• (2) Lease liabilities

Lease liabilities
Lease liabilities carrying amount Current Non-current	December 31,2021 $ 8,523 $ 4,624	December 31,2020
			$ 27,739 $ 14,435

The discount rate range of the lease liabilities is as follows:

Buildings Transportation equipment Other equipment	December 31,2021 4.73% 1.12%～1.41% -	December 31,2020
		1.32%～4.73% 1.41%～1.45% 1.78%

• (3) Important tenant activities and terms

The Group leased certain pieces of land and buildings for factory and office use for a term of 40 to 50 years. At the end of the lease term, the Group has no priority purchasing rights for the leased land and buildings.

As of December 31, 2021, the right-of-use asset lease period was as follows:

Land Buildings Transportation

June 2047 to December 2068 March 2022 to March 2023 April 2024 to June 2024

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equipment

Apex Textile Co., Ltd. and Hangzhou De Licacy Company were authorized by the resolution of the Board of Directors on November 10, 2021 and December 15, 2021, respectively, to sign contracts with the enterprises entrusted by the local government for the acquisition of land use rights, plant and other assets. As of these Consolidated Financial Statements report date to the Board of Directors, it does not meet to any condition of an immediate sale or a highly probable sale.

• (4) Other leasing information

Other leasing information
Short-term leasing expense Total cash used in leasing		2021 $ 1,680 $ 62,129)		2020
	(		(	$ 5,025 $ 52,416)

All commitments under leases commencing after the balance sheet date for the lease period are as follows:

Lease commitment	December 31,2021 $ 610	December 31,2020	December 31,2020
			$ 4,870

16. Investment properties

Changes of land use right and buildings are as follows:

Costs Beginning balance Net foreign exchange difference Ending balance Accumulated depreciation Beginning balance Depreciation Net foreign exchange difference Ending balance Year end, net		2021 $ 149,959 1,099) $ 148,860 $ 84,888 3,240 88) $ 88,040 $ 60,820		2020
	( (			$ 145,772 4,187 $ 149,959 $ 81,056 3,415 417 $ 84,888 $ 65,071

Investment properties are depreciated on a straight-line basis over 20 years of useful life.

The fair value of investment property as of December 31, 2021 and 2020 was NT$252,598,000 and NT$202,384,000, respectively, which was based on the appraisal

• 51 -

report performed by Evermore Valuation Joint Office, an independent non-related party. The valuation was performed using the discounted cash flow analysis method. Of which, the fair value as of December 31, 2020 was based on the valuation performed by Evermore Valuation Joint Office on December 31, 2019. There was no significant change at the fair value as of December 31, 2020 compared to December 31, 2019.

Please refer to Note 38 for the amount of investment property pledged as collateral for loans.

17. Goodwill

The goodwill represents the increase in the indirect ownership of Bright Wisdom Ltd. by the Group in 2011, which was an investment classified as financial assets measured at cost-noncurrent, and changed to the valuation accounted for using equity method at the end of October 2011. The initial carrying value of the equity-method long-term equity investments was the carrying value as of January 1, 2011. The difference between the carrying value and the net equity includes goodwill of NT$12,444,000, which arose from the business combination of Bright Wisdom Ltd., which became a subsidiary of the Group from an affiliate company at the end of 2014.

The Group also acquired Jon Da Company in September 2020 and recognized goodwill totaling NT$552,000 for the difference between the consideration transferred and the fair value, see Note 12(14) attached.

18. Other intangible assets

Other intangible assets
Computer software Emissions right Costs Balance at 1 January 2020 Purchase of the year Net foreign exchange difference Subsidiary liquidation and returned shares Balance at 31 December 2020 Accumulated amortization Balance at 1 January 2020 Amortization Net foreign exchange difference Subsidiary liquidation and returned	December 31,2021 December 31,2020 $ 2,513 $ 3,414 11,127 12,009 $ 13,640 $ 15,423 Computer software Emissions right Total $ 9,349 $ 16,478 $ 25,827 565 - 565 ( 25 ) 258 233 ( 970) - ( 970) $ 8,919 $ 16,736 $ 25,655 $ 4,703 $ 3,830 $ 8,533 1,252 821 2,073 ( 18 ) 76 58 ( 432) - ( 432)			December 31,2020
	( ( ( (	$ 2,513 11,127 $ 13,640 Computer software $ 9,349 565 25 ) 970) $ 8,919 $ 4,703 1,252 18 ) 432)			$		3,414 12,009 15,423 Total
					$
						( (	$ 25,827 565 233 970) $ 25,655 $ 8,533 2,073 58 432)

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shares Balance at 31 December 2020 Net at 31 December 2020 Costs Balance at 1 January 2021 Purchase of the year Disposal Net foreign exchange difference Balance at 31 December 2021 Accumulated amortization Balance at 1 January 2021 Amortization Disposal Net foreign exchange difference Balance at 31 December 2021 Net at 31 December 2021	( ( ( (	$ 5,505 $ 3,414 Computer software $ 8,919 99 2,086 ) 13) $ 6,919 $ 5,505 995 2,086 ) 8) $ 4,406 $ 2,513		$ 4,727 $ 12,009 Emissions right $ 16,736 - - 68) $ 16,668 $ 4,727 832 - 18) $ 5,541 $ 11,127		$ 10,232 $ 15,423 Total
			( (		( ( ( (	$ 25,655 99 2,086 ) 81) $ 23,587 $ 10,232 1,827 2,086 ) 26) $ 9,947 $ 13,640

Except for the additions, disposals and recognition of amortization fee, there were no significant impairments to the Group’s other intangible assets in 2021 and 2020.

Emissions Rights, which were acquired by a subsidiary in China in March 2015 for a fee, are accrued on a straight-line basis over 20 years. Computer software is amortized on a straight-line basis over 1 to 8 years.

19. Prepayments

Prepayments
Current Prepayment for purchases Prepayment for plating fee Prepayment for leasing fee Prepayment for insurance fee Others	December 31,2021 $ 128,041 2,606 2,431 879 56,432 $ 190,389	December 31,2020
			$ 100,052 4,090 2,174 913 49,514 $ 156,743

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20. Other assets

Other assets
Current Input tax Tax overpaid retained for offsetting the future tax payable Refundable tax Others Non-current Prepayment for equipment Long-term receivables	December 31,2021 $ 377,355 84,495 46,161 23,220 $ 531,231 $ 114,685 - $ 114,685	December 31,2020
			$ 383,971 115,350 37,493 24,719 $ 561,533 $ 43,003 732 $ 43,735

21.

Loan

(1) Short-term loans

Short-term loans
Secured loan (Note 38) Bank loan Unsecured loan Bank loan by line of credit	December 31,2021 $ 3,318,332 2,686,617 $ 6,004,949	December 31,2020
			$ 3,849,446 2,551,511 $ 6,400,957

The annual interest rates of bank loans are 0.34% to 6.00% and 0.79% to 6.00% in 2021 and 2020, respectively.

The amount of fully-guaranteed short-term secured loans on December 31,2021 and 2020 is NT$1,908,500,000 and NT$1,393,000,000, respectively. (2) Short-term notes payable

Short-term notes payable
Commercial paper payable Less: Discount on short-term notes and bills payable	December 31,2021 $ 740,000 489 $ 739,511	December 31,2020
			$ 710,000 499 $ 709,501

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Outstanding short-term notes and bills payable are as follows: December 31, 2021

December 31,	2021	2021
Guarantor/Acceptan ce agency	Face amount			Discount amount		Carrying amount	Interest rate range(%)	Name of collateral	Collateral carrying amount
Commercial paper payable Grand Bills Finance Corp. Taiwan Cooperative Bills Finance Corp. China Bills Finance Corp. Mega Bills Finance Co. Ltd. Dah Chung Bills Finance Corp. Da Ching Bills Finance Corp. Taiwan Finance Corp. International Bills Finance Corp. O-Bank		$ 50,000 100,000 50,000 50,000 50,000 80,000 50,000 50,000 260,000 $ 740,000		$ 12 114 4 64 15 6 47 40 187 $ 489		$ 49,988 99,886 49,996 49,936 49,985 79,994 49,953 49,960 259,813 $ 739,511	0.500 0.902 0.400 0.852 0.850 0.952～1.040 1.000 0.650 0.270	None None None None None None None None None	$ - - - - - - - - -

December 31, 2020

December 31,	2020	2020
Guarantor/Acceptan ce agency	Face amount			Discount amount		Carrying amount	Interest rate range(%)	Name of collateral	Collateral carrying amount
Commercial paper payable Grand Bills Finance Corp. Taiwan Cooperative Bills Finance Corp. China Bills Finance Corp. Mega Bills Finance Co. Ltd. Dah Chung Bills Finance Corp. Da Ching Bills Finance Corp. Taiwan Finance Corp. International Bills Finance Corp. O-Bank		$ 50,000 100,000 50,000 50,000 50,000 50,000 50,000 50,000 260,000 $ 710,000		$ 20 133 3 5 41 81 28 5 183 $ 499		$ 49,980 99,867 49,997 49,995 49,959 49,919 49,972 49,995 259,817 $ 709,501	0.500 0.902 0.400 0.852 0.850 1.040 1.140 0.650 0.330	None None None None None None None None None	$ - - - - - - - - -

(3) Long-term bank loans

Long-term bank loans
Secured loan Bank loan 1. Syndicated loans 2. Less: Syndicated loans arrangement fee Unsecured loan Bank loan by line of	December 31,2021 $ 1,051,667 2,698,807 5,225 3,745,249 1,105,853	December 31,2020
			$ 12,000 2,561,628 6,023 2,567,605 896,352

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credit1.

4,851,102 3,463,957 Less: Classified as the part due within one year 199,251 282,952 $ 4,651,851 $ 3,181,005

1. Bank guarantees and credit loans

Secured loan Bank loan Bank loan Unsecured loan Bank loan by line of credit Bank loan by line of credit Bank loan by line of credit Bank loan by line of credit Bank loan by line of credit Bank loan by line of credit Bank loan by line of credit Bank loan by line of credit Bank loan by line of credit Less: Classified as the part due within one year	Expirydate 2023.10.13 2024.08.15 2022.01.19～ 2026.12.08 2022.08.05 2026.05.15～ 2029.07.09 2025.08.21～ 2029.11.12 2025.10.08 2026.02.04 2024.09.30 2024.06.04 2024.09.29	Contents The principal is repaid at a time when it is due. From September 2021, average amortization of principal in 36 installments. Since July 2017, the principal has been amortized on an average half-year basis. This loan is intended to remit the capital required to set up the Vietnam plant in the investment share capital. The first installment was made 9 months after the first utilization of the credit line, and every 3 months thereafter, in a total of 10 equal installments. The Group had completed the repayment in 2021. From April and May 2022, the principal will be repaid in average monthly installments. From September 2021 to September 2024, the principal is repaid in average monthly installments. From November 2021, the principal is repaid in average monthly installments. From March 2022, the principal will be repaid in average monthly installments. From October 2022, the principal will be repaid in average monthly installments. From June 2022, the principal will be repaid in 24 equal monthly installments. The principal is repaid at a time when it is due.	D	ecember 31, 2021 $ 1,041,000 10,667 270,000 - 250,000 288,117 95,833 70,000 10,000 4,000 117,903 2,157,520 199,251 $ 1,958,269	D	ecember 31, 2020
						$ - 12,000 240,000 14,952 250,000 293,400 88,000 - 10,000 - - 908,352 106,952 $ 801,400

The interest rate as of December 31, 2021 and 2020 are 0.21% to 1.55% and 0.21% to 1.79% per annum, respectively.

1. New bank syndications signed on September 30, 2021

2. (1) New bank syndications signed on September 30, 2021

On September 30, 2021, the Company entered into a syndicated credit agreement with a syndicate of banks for a total amount of NT$2,200,000,000, the purpose of which is to repay loans from financial institutions and to replenish medium-term operating turnover.

Terms and conditions

Item A Item B	- 56 Line of credit $ 1,200,000 1,000,000	- Used amount December 31, 2021 $ 1,023,600 998,907	Creditperiod From the date of first use to the date of expiration of 5 years From the date of first	Annual interest rate 1.797% 1.4905%	Credit granting method
					Should not be revolving use Revolving use is

(Commercial paper guarantee)

use to the date of expiration of 5 years $ 2,200,000 $ 2,022,507

allowed

Settlement method

• Item A: The 30-month maturity date from the first drawdown date (October 22, 2021) will be the first installment. Thereafter, the outstanding principal balance of Item A before the date of expiration will be amortized in six months at a rate of six installments. Of these, 8 percent were amortized for the first to fifth installments and 60 percent for the sixth installment. However, if the date of amortization of the balance of principal for any period as set out in the foregoing manner will be later than the final maturity date, the final maturity date shall be the amortization date of the principle for that period.

• Item B: The full payment obligation shall be fulfilled on the maturity date of the commercial promissory note at the face amount as scheduled, and the first installment shall expire 30 months from the date of the first use, and thereafter the amount shall be reduced in six installments at a rate of one every six months. Among them, the first to the fifth phase of the amortization and decrement of 8 percent, the sixth phase of the amortization and decrement of 60 percent.

－ (2) Bank syndication quota USD28,000,000

On September 30, 2021, De Shen (Cayman) Holdings Co., Ltd., a subsidiary of the Company, entered into a syndicated credit facility agreement with a syndicate of banks for a total amount of USD28,000,000 for the repayment of loans from financial institutions, including but not limited to the outstanding balance of the old syndicated loan and the replenishment of medium-term operating revolver.

• 57 -

Terms and conditions

Line of credit USD28,000,000	Used amount December 31,2021 $ 676,300 (USD24,500,000)	Creditperiod From the date of first use to the date of expiration of five years	Annual interest rate 1.04%	Creditgrantingmethod
				The total amount of the credit facility is to be utilized on a recurring basis, with the first installment of 30 months from the date of initial utilization (November 10, 2021) and subsequent installments every six months, with the total amount of the credit facility being reduced in six installments of eight percent (8%) from the first to the fifth installment and sixty percent (60%) from the sixth installment.

Financial ratios

During the term of this contract, the Company’s consolidated financial statements shall maintain the ratios shown below:

• －

• A. Current Ratio (Current Assets/(Current Liabilities Dividends payable)): shall not be less than one hundred percent (100%) (Inclusive).

• － －

• B. Liabilities Ratio: (Total Liabilities Dividends Payable Bank loans secured by full certificates of deposit)/Net of tangibles: in 2021 and before 2022 (inclusive), shall not be higher than two hundred and twenty-five percent (225%) (inclusive); in 2023, shall not be higher than two hundred and ten percent (210%) (inclusive); in 2024, shall not be higher than two hundred percent (200%) (inclusive).

• C. Interest covers multiplier ((Net income before tax＋Finance costs ＋ Depreciation ＋ Amortization)/Amortization)/Finance costs): 4 times (inclusive) above.

• D. Net of Tangibles (Equity(include minor shareholdings) － Intangible Assets＋Dividends payable): not less than NT$4.5 billion (inclusive).

The above financial ratios shall be reviewed every six months from the 2021 consolidated financial statements provided by the borrower. If the borrower fails to meet any one of the above financial ratios in one inspection, but can meet at the next inspection, it will not be regarded as a breach of the contract agreement. However, from the latest interest rate adjustment base

• 58 -

date after the inspection date, the loan interest rate shall be increased by 0.15 percent until the financial ratios meet all financial ratio requirements at the next inspection.

All financial ratios in the Company’s 2021 consolidated financial statements are in compliance with the above loan contract requirements.

1. Original bank syndications signed on February 13, 2019

2. －

3. (1) Bank syndication quota 2,200,000,000

One February 13, 2019, the Company entered into a syndicated credit agreement with a syndicate of banks for a total amount of NT$2,200,000,000, the purpose of which is to repay loans from financial institutions and to replenish medium-term operating turnover.

As the financial ratios in the consolidated financial statements for the second quarter of 2020 and fiscal year of 2020 did not meet the requirements of the loan agreement, the Company applied to the syndicated credit syndicate for a waiver of the financial ratios in the 2020 semi-annual and annual reports and for a new guarantee line of NT$800,000,000 (Item B) for the issuance of commercial paper (the total amount of Item A and Item B to be utilized shall not exceed the total line of NT$2,200,000,000, and the first supplementary contract was signed on November 30, 2020.

Terms and conditions

Item A Item B (Commercial paper guarantee) Less: Classified as the part due within one year		Line of credit $2,200,000 800,000 $3,000,000		Used amount December 31,2021 $1,400,000 799,932 2,199,932 176,000 $2,023,932	Creditperiod From the date of first use to the date of expiration of 5 years From the date of first use to the date of expiration of 5 years	Annual interest rate 1.797% 0.85%	Credit granting method
							Should not be revolving use Revolving use is allowed

Settlement method

Item A: The 30-month maturity date from the first drawdown date

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(February 21, 2019) will be the first installment. Thereafter, the outstanding principal balance of Item A will be amortized in six installments at a rate of six installments. Of these, 8 percent were amortized for the first to fifth installments and 60 percent for the sixth installment. However, if the date of amortization of the balance of principal for any period as set out in the foregoing manner will be later than the final maturity date, the final maturity date shall be the amortization date of the principle for that period.

• Item B: The full payment obligation shall be fulfilled on the maturity date of the commercial promissory note at the face amount as scheduled, and the first installment shall expire 30 months from the date of the first use, and thereafter the amount shall be reduced in six installments at a rate of one every six months. Among them, the first to the fifth phase of the amortization and decrement of 8 percent, the sixth phase of the amortization and decrement of 60 percent.

－ (2) Bank syndication quota USD28,000,000

On February 13, 2019, De Shen (Cayman) Holdings Co., Ltd., a subsidiary of the Company, entered into a syndicated credit facility agreement with a syndicate of banks for a total amount of USD28,000,000 for the repayment of loans from financial institutions, including but not limited to the outstanding balance of the old syndicated loan and the replenishment of medium-term operating revolver.

Terms and conditions

Line of credit USD28,000, 000	Used amount December 31,2020 $ 361,696 (USD12,700, 000)	Creditperiod From the date of first use to the date of expiration of five years	Annual interest rate 1.1%～ 1.11%	Credit granting method
				The total amount of the credit facility is to be utilized on a recurring basis, with the first installment of 30 months from

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the date of initial utilization (February 13, 2019) and subsequent installments every six months, with the total amount of the credit facility being reduced in six installments of eight percent (8%) from the first to the fifth installment and sixty percent (60%) from the sixth installment.

(3) Financial ratios

During the term of this contract, the Company’s consolidated financial statements shall maintain the ratios shown below:

• －

• A. Current Ratio (Current Assets/(Current Liabilities Dividends payable)): shall not be less than one hundred percent (100%) (Inclusive).

• － －

• B. Liabilities Ratio: (Total Liabilities Dividends Payable Bank loans secured by full certificates of deposit)/Net of tangibles: shall not be higher than two hundred percent (200%) (inclusive).

• C. Interest covers multiplier ((Net income before tax＋Finance costs ＋ Depreciation ＋ Amortization)/Amortization)/Finance costs): 6 times (inclusive) above.

• D. Net of Tangibles (Equity(include minor shareholdings) － Intangible Assets＋Dividends payable): not less than NT$4.5 billion (inclusive).

The Company fails to meet the above restrictions of liability ratio for the second quarter of 2021. If the Company can meet at the next inspection on the 2021 consolidated financial statements, it will not be regarded as a breach of the contract agreement. However, from the latest interest rate adjustment base date after the inspection date, the loan interest rate shall be increased by 0.15 percent until the financial ratios meet all financial ratio requirements at the next inspection for 2021 consolidated financial

• 61 -

statements. The Company and its subsidiary, Desheng Cayman Holding Company, signed a syndicated credit agreement with the banks for a total amount of NT$2,200,000,000 and US$28,000,000, respectively. On October 22, 2021 and November 10, 2021, the Company and Desheng Cayman Holding Company made the repayment of NT$2,023,483,000 and US$24,500,000, respectively for the above syndicated credit with the new bank syndications.

The Group’s pledges to secure long-term loans are described in Note 38.

22. Notes payable and accounts payable

• (1) Notes payable

Notes payable
Occurrence due to business Occurrence due to nonbusiness-purchase of property, plant and equipment	December 31,2021 $ 141,397 3,255 $ 144,652	December 31,2020
			$ 70,882 1,283 $ 72,165

• (2) All accounts payable for business.

• (3) The Group has a financial risk management policy to ensure that all payables are repaid within the prearranged credit terms.

23. Other payables

Other payables
Payroll payable, bonus, remuneration for employees and directors Utilities payable Commission payable Equipment payable Leave payable Sludge and sewage treatment payable Business tax payable Others	December 31,2021 $ 182,815 87,835 40,372 70,885 13,856 15,153 17,363 156,903 $ 585,182	December 31,2020
			$ 184,518 68,793 46,690 32,157 8,218 16,946 7,200 133,674 $ 498,196

1. Long-term deferred income

Long-term deferred income
Government grants	December 31,2021 $ 72,032	December 31,2020
			$ 49,376

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This represents government subsidies from environmental improvement projects, energy conservation projects and production line technology renovation, which has been transferred to profit or loss over the useful lives of the related assets of 5 to 15 years. Of which within one year has been transferred to income is NT$409,000, and recorded under current liabilities.

The subsidiary, Apex (Anqing) Textile Co., Ltd., received a land use right grant, which was recorded under deferred revenue and amortized to income over the 50-year life of the land use right.

25. Refund liability

Refund liability
Beginning balance Current year provision (reversal) Subsidiary liquidation and returned shares Net foreign exchange difference Ending balance		2021 $ 3,705 1,541 - 33) $ 5,213		2020
	(		( ( (	$ 6,523 1,950 ) 860 ) 8) $ 3,705

26. Post-employment benefit plan

• (1) Defined contribution plan

The Labor Pension Act, which is a defined post-employment contribution plan administered by the government, is applicable to the Group and its domestic subsidiaries, and contributes 6% of employees’ monthly salaries to the individual accounts of the Labor Insurance Bureau.

The employees of the Group’s subsidiaries in China and Vietnam are members of the post-employment benefit plan operated by the local governments in China and Vietnam. The subsidiaries are required to contribute a certain percentage of payroll costs to the post-employment benefit plan in order to fund the plan. The Group’s obligation to this government-operated post-employment benefit plan is only to contribute a specific amount. (2) Defined benefit plan

The pension plan of the Group and its domestic subsidiaries under the Labor Standards Act in Taiwan is a government-administered defined benefit pension plan. The employees’ pension payments are based on the average salary for the six months prior to the date of approved retirement. The

• 63 -

Company contributes 2% to 4% of the employees’ monthly salaries to the pension fund, which is deposited in the name of the Labor Pension Fund Supervisory Committee in a special account in the Bank of Taiwan. If the balance of the special account is not sufficient to pay the employees who are expected to meet the retirement requirements in the following year before the end of the year, the difference will be withdrawn in one lump sum by the end of March of the following year. The management of the special account is entrusted to the Bureau of Labor Funds, Ministry of Labor, and the Group has no right to influence the investment management strategy.

The amounts of defined benefit plan included in the consolidated balance sheets are shown below:

sheets are shown below:
Defined benefit obligation current value Plan assets at fair value Net defined benefit assets	December 31,2021 $ 194,129 ( 196,206) ($ 2,077)	December 31,2020
	( (	( (	$ 187,855 193,331) $ 5,476)

Net defined benefit liabilities changes:

January 1, 2020 Current service costs Interest expense (income) Recognized in profit or loss Re-measurement Planning assets remuneration (in addition to the amount included in net interest) Actuarial loss (income) Changes in demographic assumptions Changes in financial assumptions Experience adjustment Recognized in other comprehensive income Employer’s contribution Benefit expenditures	Defined benefit obligation current value $ 304,916 2,312 1,841 4,153 - 16 4,271 ( 26,226) ( 21,939) - ( 42,433)	Plan assets at fair value ($ 249,372) - ( 1,659) ( 1,659) ( 7,287 ) - - - ( 7,287) ( 29,725) 42,433	Net defined benefit assets	Net defined benefit assets
		( ( ( ( ( (	( ( ( (	$ 55,544 2,312 182 2,494 7,287 ) 16 4,271 26,226) 29,226) 29,725) -

• 64 -

Disposal of subsidiaries ( December 31, 2020 Current service costs Interest expense (income) Recognized in profit or loss Re-measurement Planning assets remuneration (in addition to the amount included in net interest) Actuarial loss (income) Changes in demographic assumptions Changes in financial assumptions ( Experience adjustment Recognized in other comprehensive income Employer’s contribution Benefit expenditures ( December 31, 2021	56,842) 187,855 ( 1,227 904 ( 2,131 ( - ( 3,514 2,126 ) 13,610 14,998 ( - ( 10,855) $ 194,129 (	52,279 ( 193,331) ( - 983) ( 983) 2,625 ) ( - - ( - 2,625) 10,122) ( 10,855 $ 196,206) (	4,563) 5,476) 1,227 79) 1,148 2,625 ) 3,514 2,126 ) 13,610 12,373 10,122) - $ 2,077)

The amounts recognized in profit or loss for defined benefit plans are summarized by function as follows:

Operating costs Marketing expenses General and administrative expenses Research and development expenses		2021 $ 644 171 144 189 $ 1,148		2020
				$ 1,410 382 320 382 $ 2,494

The Group is exposed to the following risks as a result of the Labor Standards Act pension system:

1. Investment Risk: Bureau of Labor Funds, Ministry of Labor invests its labor pension funds in domestic and foreign equity securities, debt securities and bank deposits through its own use and entrusted operations, but the amount of Plan Assets allocated to the Group is based on the income at an interest rate not lower than the local bank’s two-year time deposit rate.

2. 65 -

3. Interest Risk: The decrease in interest rates on government bonds will increase the current value of the defined benefit obligation, but the return on investment in plan assets will also increase, which will have a partially offsetting effect on the net defined benefit obligation.

4. Payroll Risk: The defined benefit obligation current value is calculated by reference to the future salary of the plan member. Therefore, an increase in plan members’ salaries will increase the defined benefit obligation current value.

The defined benefit obligation current value of the Group was actuarially determined by a qualified actuary with the following significant assumptions as of the measurement date:

of the measurement date:
Discount rate Expected rate of salary increase	December 31,2021 0.5%～0.625% 1.5%～2%	December 31,2020
		0.2%～0.5% 1.5%～2%

The amount by which the defined benefit obligation current value would increase (decrease) if there were reasonably possible changes in significant actuarial assumptions, respectively, with all other assumptions held constant, is as follows:

as follows:
Discount rate Increase 0.1% Decrease 0.1% Expected rate of salary increase Increase 0.1% Decrease 0.1%	December 31,2021 ($ 1,631) $ 1,652 $ 1,602 ($ 1,585)	December 31,2020
	( (	( (	$ 1,693) $ 1,716 $ 1,663 $ 1,644)

The sensitivity analysis above may not reflect actual changes in the current value of the defined benefit obligation because actuarial assumptions may be correlated with each other and changes in only one assumption are unlikely.

unlikely.
Amount expected to be withdrawn within 1 year Average period of	December 31,2021 $ 10,530 3.7～8.7 years	December 31,2020
			$ 9,919 4.3～9.3 years

• 66 -

defined benefit obligation expiration

27. Equity

• (1) Common shares

Common shares
Authorized shares (1000 shares) Authorized capital shares Number of shares issued and fully paid (1000 shares) Issued capital shares	December 31,2021 480,000 $ 4,800,000 384,566 $ 3,845,657	December 31,2020
			480,000 $ 4,800,000 384,566 $ 3,845,657

The issued common shares have a par value of $10 per share and each share is entitled to one vote and the right to receive dividends.

• (2) Capital surplus

Capital surplus
May be used to make up losses, pay cash or capitalize (Note) Stock issuance premium Corporate bond conversion premium Treasury stocks transactions Actual acquired or the difference between the actual acquisition or disposal price of a subsidiary and its carrying value To be used to make up losses only Recognition of changes in equity of investment in affiliates accounted for using equity method	December 31,2021 $ 501,694 32,325 77,146 65,024 661 $ 676,850	December 31,2020
			$ 617,063 32,325 77,146 65,024 - $ 791,558

Note: Such capital surplus may be used to cover losses or, when the Company

has no losses, to distribute cash or to capitalize capital, provided that such capitalization is limited to a certain percentage of the paid-in capital each year.

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(3) Retained earnings and dividends policy

In accordance with the Company’s Articles of Incorporation, if there is any surplus in the annual accounts, the Company shall first pay taxes to cover the deficits of previous years and then set aside 10% as legal reserve, but if the legal reserve has reached the Company’s paid-in capital, it may not be set aside, and the rest shall be set aside or reversed to special reserve in accordance with the law, and the remaining amount shall be added up. The accumulated undistributed earnings of prior years shall be retained by the board of directors at its discretion, depending on the operational needs, to prepare a proposal for the distribution of earnings and submit it to the shareholders' meeting for resolution on the distribution of dividends to shareholders. The Company’s policy on the distribution of employees’ and directors’ remuneration is described in Note 29(8) “Employee Compensation and Directors’ Remuneration”.

Under the objective of maintaining schedule dividends, the Board of directors shall, in principle, distribute not less than 50% of the scheduled earnings, of which the cash portion of dividends and bonuses to shareholders shall not be less than 10% of the shareholders’ distribution, subject to adjustment based on the Company’s performance and capital requirements.

The legal reserve shall be set aside until the remaining balance reaches the Company’s total paid-in capital and may be used to cover losses. If the Company has no deficit, the excess of the legal reserve over 25% of the total paid-in capital may be distributed in cash.

When the Company sets aside the special reserve by using the net amount of prior accumulated other equity deductions, and the unappropriated surplus in the previous period is insufficient to set aside, the current net profit after tax plus the other items other than the net profit after tax shall be included in the current unappropriated surplus for setting aside. Before the amendments of the Articles of Incorporation, the Company sets aside the special reserve from the unappropriated surplus of the previous period in accordance with the law.

The Company resolved to distribute earnings for the year 2019 at the Shareholders’ Meetings held on June 11, 2020, the distribution is as follows:

==> picture [382 x 26] intentionally omitted <==

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Special reserve 108,914 Cash dividends 403,794 Cash dividends per share 1.05 (NT$)

Due to the announcement of “Relevant measures to postpone the shareholders’ meetings of listed companies upon the epidemic” by FSC, the Company cancelled the original Shareholders’ Meeting and rescheduled it on July 28, 2021.

The Company resolved to cover the loss by legal reserve of NT$162,083,000 at the Shareholders’ Meeting on July 28, 2021.

The Company resolved at the regular Shareholders’ Meeting on July 28, 2021 to distribute cash dividends (NT$0.3 per share) at a capital surplus - share issue premium of NT$115,369,000 and on June 11, 2020 to distribute cash dividends (NT$0.45 per share) at a capital surplus - share issue premium of NT$173,055,000.

As of March 24, 2022, the Board of Directors of the Company has not yet proposed the earning distribution for 2021.

• (4) Special reserve

Special reserve
Beginning balance Special reserve Deductions from other equity Ending balance		2021 $ 401,956 - $ 401,956		2020
				$ 293,042 108,914 $ 401,956

Upon the distribution of earnings, a special reserve is provided for the difference between the net decrease in other stockholders’ equity recorded at the end of the reporting period and the special reserve provided for the first time using IFRSs. If the balance of the decrease in other stockholders’ equity subsequently reverses, the earnings may be distributed as part of the reversal. (5) Other equities

1. Conversion difference in the conversion of financial statements of foreign operating institutions

Beginning balance Current year occurred		2021 $ 512,671)		2020
	(		(	$ 451,447)

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Conversion differences of foreign operating institutions ( Related taxes of foreign operating institutions Shares of affiliates and joint ventures adopting the equity method ( Other comprehensive income of the year ( Disposal of subsidiaries Changes equity to the subsidiary ownership Ending balance (	61,977 ) ( 14,447 11,820) 59,350) ( - - $ 572,021) (	119,345 ) 18,096 26,815 74,434) 12,788 422 $ 512,671)

1. Unrealized valuation gains or losses on financial assets measured at fair value through other comprehensive income

- 70 - Beginning balance Current period generated Unrealized gains or losses / Equity instruments ( Shares of affiliates adopting the equity method ( Total other comprehens ive income ( Changes equity to the subsidiary ownership		2021 $ 56,168 46,747 ) 1,617) 48,364) -		2020
			(	$ 49,491 18,335 1,332) 17,003 1,102

Transfer of accumulated gain or loss on disposal of equity instruments to retained earnings Ending balance (6) Non-controlling interests Beginning balance Net income Other comprehensive income of the year Conversion difference in the conversion of financial statements of foreign operating institutions Unrealized gains or losses on financial assets at fair value through other comprehensive income Income taxes related to the translation of financial statements of foreign operating entities Cash dividends allocated Subsidiary liquidation and returned shares Non-controlling interests increase Non-controlling interests decrease Ending balance (7) Treasury stocks Shares of the parent company held by subsidiaries(1000 shares)	(	60) $ 7,744 2021 $ 750,466 12,934 7,337 ) 15,437 ) - 9,271 ) - 13,131 - $ 744,486	(	11,428) $ 56,168 2020
	( ( (		( ( (	$ 795,067 653 4,881 11,238 209 45,663 ) 189,185 ) 219,188 45,922) $ 750,466 2020

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Shares at beginning of the period Increase (Note 1) Decrease (Note 2) ( Shares at end of the period	1,218 25 1,243) -

• Note 1: The Company’s shareholding in Lucky Unique Enterprise increased by 1.22% in 2020, representing a consolidated shareholding of 25,000 shares in the Company.

• Note 2: The Company disposed of Lucky Unique Enterprise’s shares in 2020 and lost control of Lucky Unique Enterprise Company. Therefore, Lucky Unique Enterprise’s shares are no longer treated as treasury stock, and the market price of the Company’s shares and the carrying amount of treasury stock are increased by the capital surplus - treasury stock of NT$7,459,000.

The shares held by subsidiaries are treated as treasury stocks, except that they are not allowed to participate in the Company’s capital increase and have no voting rights, and have the same rights as ordinary shareholders.

28. Revenue

Revenue
Sales revenue		2021 $ 10,475,685		2020
				$ 8,594,659

• (1) Description of customer agreement Revenue from sales of long- and short-staple fibers

The Group recognizes revenue and accounts receivable from the sale of short- and long-haul fabrics when the terms of trade are fulfilled. The average credit period of the Group’s merchandise sales is 30 to 120 days. Most of the contracts are recognized as accounts receivable when the merchandise is transferred and the Group has the unconditional right to receive the consideration. However, for some of these contracts, The Group is obligated to transfer the merchandise to the customer.

(2) Balance of contract

(2) Balance of contract
Notes receivable (include related	December 31, 2021 $ 210,560	December 31, 2020 $ 104,431		January 1, 2020
				$ 177,969

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29.	parties) (Note 10 & 37) Accounts receivable (include related parties) (Note 10 & 37) $ 1,798,017 Contract liabilities (items under other current liabilities included) Sale of goods $ 52,407 (3) Revenue breakdown from customer contracts 2021 Major products Long- and short-staple fibers $ 10,300,893 Others 174,792 $ 10,475,685 Net income (loss) before tax (1) Other income and loss, net 2021 Net income (loss) on disposal of property, plant and equipment $ 47,228 (2) Interest income 2021 Bank deposits $ 18,170 financial assets at amortized cost 3,100 Loan interest received from related parties 162 $ 21,432 (3) Other income 2021 Subsidy income $ 28,991 Rent income 32,489 Claim income 4,790 Sale of cloth samples 6,015 Dividend income 2,334 Fire insurance claims income 10,405 Others 88,946 $ 173,970	parties) (Note 10 & 37) Accounts receivable (include related parties) (Note 10 & 37) $ 1,798,017 Contract liabilities (items under other current liabilities included) Sale of goods $ 52,407 (3) Revenue breakdown from customer contracts 2021 Major products Long- and short-staple fibers $ 10,300,893 Others 174,792 $ 10,475,685 Net income (loss) before tax (1) Other income and loss, net 2021 Net income (loss) on disposal of property, plant and equipment $ 47,228 (2) Interest income 2021 Bank deposits $ 18,170 financial assets at amortized cost 3,100 Loan interest received from related parties 162 $ 21,432 (3) Other income 2021 Subsidy income $ 28,991 Rent income 32,489 Claim income 4,790 Sale of cloth samples 6,015 Dividend income 2,334 Fire insurance claims income 10,405 Others 88,946 $ 173,970	parties) (Note 10 & 37) Accounts receivable (include related parties) (Note 10 & 37) $ 1,798,017 Contract liabilities (items under other current liabilities included) Sale of goods $ 52,407 (3) Revenue breakdown from customer contracts 2021 Major products Long- and short-staple fibers $ 10,300,893 Others 174,792 $ 10,475,685 Net income (loss) before tax (1) Other income and loss, net 2021 Net income (loss) on disposal of property, plant and equipment $ 47,228 (2) Interest income 2021 Bank deposits $ 18,170 financial assets at amortized cost 3,100 Loan interest received from related parties 162 $ 21,432 (3) Other income 2021 Subsidy income $ 28,991 Rent income 32,489 Claim income 4,790 Sale of cloth samples 6,015 Dividend income 2,334 Fire insurance claims income 10,405 Others 88,946 $ 173,970	$ 1,762,165 $ 1,960,681 $ 50,446 $ 86,947 2020 $ 8,137,230 457,429 $ 8,594,659 2020 ($ 9,383) 2020 $ 38,992 3,859 35 $ 42,886 2020 $ 101,472 18,551 15,243 3,499 1,487 - 64,396 $ 204,648	$ 1,762,165 $ 1,960,681 $ 50,446 $ 86,947 2020 $ 8,137,230 457,429 $ 8,594,659 2020 ($ 9,383) 2020 $ 38,992 3,859 35 $ 42,886 2020 $ 101,472 18,551 15,243 3,499 1,487 - 64,396 $ 204,648	$ 1,762,165 $ 1,960,681 $ 50,446 $ 86,947 2020 $ 8,137,230 457,429 $ 8,594,659 2020 ($ 9,383) 2020 $ 38,992 3,859 35 $ 42,886 2020 $ 101,472 18,551 15,243 3,499 1,487 - 64,396 $ 204,648	$ 1,960,681 $ 86,947 2020
			$ 10,300,893 174,792 $ 10,475,685 2021			$ 8,137,230 457,429 $ 8,594,659 2020
			$ 47,228 2021		(	$ 9,383) 2020
			$ 18,170 3,100 162 $ 21,432 2021			$ 38,992 3,859 35 $ 42,886 2020
			$ 28,991 32,489 4,790 6,015 2,334 10,405 88,946 $ 173,970			$ 101,472 18,551 15,243 3,499 1,487 - 64,396 $ 204,648

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(4) Other benefits and losses

(4) Other benefits and losses
Benefits from liquidation of subsidiary Foreign exchange net loss Financial product evaluation net loss at fair value through profit or loss Others (5) Financial costs Total bank loan interest Amortization of handling fees for syndicated loan cases Lease liabilities interest Loan interest paid to related parties Less: Amounts included in the cost of qualified assets (included under property, plant and equipment and prepayments for equipment)		2021 $ - 91,071 ) 44,383 ) 68,804) $ 204,258) 2021 $ 141,666 3,268 369 8,137 1,086 $ 152,354		2020
	( ( ( (		( ( ( (	$ 9,154 219,941 ) 18,301 ) 52,373) $ 281,461) 2020
				$ 167,040 1,562 1,401 9,019 1,305 $ 177,717

Capitalization of interest, the relevant information is as below:

Capitalization of interest amount Capitalization of interest rate	2021 $ 1,086 1.14%～1.82%	2020
		$ 1,305 1.32%～4.58%

(6) Depreciation and amortization

Depreciation and amortization
Property, plant and equipment Investment properties	2021 $ 597,332 3,240	2020
		$ 556,763 3,415

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Right-of-use assets Intangible assets Depreciation expense summary by function Operating costs Operating expenses Amortization fee summary by function Operating costs Operating expenses (7) Employee benefit expense Short-term employee benefits Payroll Labor and health insurance fees Others Retirement benefits Defined contribution plan Defined benefit plan (Note 26) Summary by function Operating costs Operating expenses		46,451 1,827 $ 648,850 $ 594,639 52,384 $ 647,023 $ 285 1,542 $ 1,827 2021 $ 987,806 98,000 31,785 1,117,591 29,692 1,148 30,840 $ 1,148,431 $ 686,232 462,199 $ 1,148,431		55,636 2,073 $ 617,887 $ 557,453 58,361 $ 615,814 $ 177 1,896 $ 2,073 2020
				$ 1,087,967 96,672 38,431 1,223,070 112,336 2,494 114,830 $ 1,337,900 $ 823,155 514,745 $ 1,337,900

(8) Remuneration to employee and directors

In accordance with the Company’s Articles of Incorporation, the Company provides for employee remuneration and director remuneration at a rate of not less than 4% and not more than 3%, respectively, of the pre-tax benefit for the year before the distribution of employee and director remuneration.

The Company does not intend to contribute employees and directors’

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remuneration for the year 2020 as the Company’s net loss before tax. 2021 employees and directors’ remuneration were resolved by the Board of Directors on March 24, 2022, the resolution is as follows:

Estimated ratio

Estimated ratio
Remuneration to employees Remuneration to directors Amount Remuneration to employees Remuneration to directors	2021
	4% 1.5% 2021
	$ 7,061 2,648

If there is any change in the amount after the adoption of the annual consolidated financial statements, the change in accounting estimate will be adjusted and recorded in the following year.

There is no difference between the actual amount of employee compensation and remuneration of directors and supervisors for fiscal years of 2020 and 2019 and the amount recognized in the consolidated financial statements for fiscal 2020 and 2019.

Please refer to the Market Observation Post System of the Taiwan Stock Exchange Corporation for information on the remuneration of employees and directors resolved by the Board of Directors of the Company.

(9) Foreign exchange (loss) income

Total foreign exchange income Total foreign exchange loss Net loss		2021 $ 185,966 277,037) $ 91,071)		2020
	( (		( (	$ 281,234 501,175) $ 219,941)

30. Income tax

• (1) Income tax recognized in profit or loss

Main items of income tax benefit are as below:

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(2)	2021 2020 Current income tax Occurred in current year $ 7,959 $ 2,714 Unallocated surplus plus tax - 57 Prior year adjustments 7,524 2,952 Repatriation of foreign exchange surplus - 15,081 Deferred tax Occurred in current year ( 17,392) ( 105,973) Income tax benefit recognized in profit or loss ($ 1,909) ($ 85,169) A reconciliation of accounting income to income tax benefit is as follows: 2021 2020 Net income (loss) before tax $ 194,013 ($ 291,802) Income tax expense (benefit) calculated at statutory tax rate on net income ( loss) before tax $ 14,337 ( $ 59,767 ) Nondeductible expenses in determining taxable income 21,271 169 Nonaccrual income in determining taxable income ( 1,452 ) ( 24,649 ) Unallocated surplus plus tax - 57 Unrecognized deductible temporary differences ( 43,589 ) ( 19,012 ) Repatriation of foreign exchange surplus - 15,081 Adjustments for prior years 7,524 2,952 ($ 1,909) ($ 85,169) Income tax recognized in other comprehensive income 2021 2020 Deferred tax Current year occurred		2020
		( ( ( ( (	$ 291,802) $ 59,767 ) 169 24,649 ) 57 19,012 ) 15,081 2,952 $ 85,169) 2020

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Conversion of foreign operating institutions $ 14,447 $ 18,305 Re-measurement of defined benefit plan 2,392 ( 5,678 ) $ 16,839 $ 12,627 Current tax assets and liabilities December 31, 2021 December 31, 2020 Tax assets Tax refund receivable (included in other current assets) $ 6,583 $ 4,710 Tax liabilities Income tax payable $ 2,557 $ 5,814

• (3) Current tax assets and liabilities

• (4) Deferred tax assets and liabilities

Changes in deferred tax assets and liabilities as below:

2021

2021
Deferred tax assets Temporary differences Unrealized gross profit of sales Leave payable Allowance for loss of market price decline and obsolete and slow-moving inventories Defined retirement benefit plans Allowance for losses Exchange differences of foreign operating institutions Unrealized foreign exchange losses Others Loss credit D e fe r r e d t a x l i a b i l i t ie s Temporary differences Property, plant and equipment Defined retirement benefit plans		Beginning balance $ 52,100 1,135 22,217 304 9,100 95,338 34,529 6,635 221,358 62,049 $ 283,407 $ 33,919 2,904	Recognized in profit or loss ( $ 1,641 ) 982 1,753 - 372 - 5,641 ( 6,635) 472 23,880 $ 24,352 ( $ 4,689 ) 4,185	Recognized in other comprehensive income $ - - - - - 14,447 - - 14,447 - $ 14,447 $ - ( 2,392 )	Endingbalance
			( ( (	(		$ 50,459 2,117 23,970 304 9,472 109,785 40,170 - 236,277 85,929 $ 322,206 $ 29,230 4,697

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Others 2020 Deferred tax assets Temporary differences Unrealized gross profit of sales Leave payable Allowance for loss of market price decline and obsolete and slow-moving inventories Defined retirement benefit plans Allowance for losses Exchange differences of foreign operating institutions Unrealized foreign exchange losses Others Loss credit D e f e r r e d t a x l i a b i l i t i e s Temporary differences Property, plant and equipment Subsidiary unappropriate d retained earnings Defined retirement benefit plans		Beginning balance $ 54,295 2,700 12,684 8,838 1,885 79,477 10,496 1,549 171,924 3,644 $ 175,568 $ 35,950 17,185 - $ 53,135		- $ 36,823 Recognized in profit or loss $ 2,251 ) 679 ) 10,491 2,545 ) 7,215 383 ) 24,767 5,905 42,520 64,146 $ 106,666 $ 2,031 ) 180 ) 2,904 $ 693		7,464 $ 6,960 Recognized in other comprehensive income $ - - - 5,678 ) - 18,305 - - 12,627 - $ 12,627 $ - - - $ -	(	- $ 2,392) Subsidiary liquidation and returned shares $ 56 886 ) 958 ) 311 ) - 2,061 ) 734 ) 819) 5,713 ) 5,741) $ 11,454) $ - 17,005 ) - $ 17,005)		7,464 $ 41,391 Endingbalance
			( ( ( ( ( (		(		( ( ( ( ( ( ( ( ( ( (			$ 52,100 1,135 22,217 304 9,100 95,338 34,529 6,635 221,358 62,049 $ 283,407 $ 33,919 - 2,904 $ 36,823

(5) Information about unused loss credit

Information about the Group’s loss credit for the year ended December 31,

2021 is as follows:

2021 is as follows:
Balance not yet deducted $ 17,472 673 240,386 171,113 $ 429,644	Final credityear
	2027 2028 2030 2031

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• (6) Aggregate amount of temporary differences related to investments and not recognized as deferred income tax liabilities

As of December 31, 2021 and 2020, taxable temporary differences related to investments in subsidiaries and not recognized as deferred income tax liabilities amounted to $2,261,227,000 and $1,898,201,000, respectively.

• (7) Income tax assessments

The income tax returns of the Company through 2018 and its subsidiaries, De Fa Company and Chadtex Company through 2019, have been assessed by the tax authorities.

31. Earnings per share (net loss)

The net income and weighted average number of common stock outstanding that were used in the computation the net income (net loss) of earnings per share (net loss) were as follows:

were as follows:
Net income (net loss) Net income (net loss) attributable to the Company’s owners Shares Weighted average number of outstanding shares Weighted-average treasury stocks - shares of the parent company held by subsidiaries Weighted average number of shares of common stock for basic earnings per share calculation Effect of dilutive potential common stock: Employee remuneration Weighted-average number of common shares for the purpose of diluted earnings per share		2021 $ 182,988 2021 384,566 - 384,566 450 385,016		2020 $ 207,286) Unit: 1000 shares 2020 384,566 642) 383,924 - 383,924
			(
			(

If the Company has the option to pay employees in stock or cash, the calculation of diluted earnings per share assumes that employee compensation will be paid in stock

• 80 -

and is included in the weighted-average number of common shares outstanding for the purpose of calculating diluted earnings per share when the potential common shares have a dilutive effect. The dilutive effect of these potential common shares will continue to be considered in the calculation of diluted earnings per share prior to the issuance of employee compensation shares in the following year.

The Company’s net loss for 2020 is based on the fact that the effect of the potential dilutive effect of employee compensation on common stock is not included in the calculation of diluted net loss per share.

32. Subsidiary liquidation and returned shares

On June 19, 2020, the Group’s board of directors approved the sale of Lucky Unique Enterprise Co., Ltd. to an un related party and completed the transfer of ownership on July 8, 2020. As a result, the Company lost control over Lucky Unique Enterprise Co., Ltd. and its subsidiaries (Tung Ming Company, De Kao Company, De Sin Company and Jie Sen Company), which are responsible for the manufacture and processing of various fiber textile products and import and export trading of the Group.

(1) Consideration received

Consideration received
Cash and cash equivalents Analysis of assets and liabilities for loss of control Current assets Cash and cash equivalents Financial assets at amortized cost-current Accounts receivable Other receivables Inventory Others Non-current assets Property, plant and equipment Intangible assets	Lucky Unique Enterprise and its subsidiaries
	$ 195,227 Lucky Unique Enterprise and its subsidiaries
	$ 197,028 310,136 139,423 11,788 54,878 87,816 217,702 539

• (2) Analysis of assets and liabilities for loss of control

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Right-of-use assets Deferred tax assets Others Current liabilities Short-term loans and short-term notes and bills payable Accounts payable Other payables Tax liabilities Lease liabilities-current Others Non-current liabilities Defined benefit plan liabilities-non-cur rent Lease liabilities-non-cur rent Others Deferred tax liabilities Net assets disposal (3) Subsidiary disposal income Consideration received Net assets disposal Non-controlling interests Treasury stocks decrease Capital surplus - treasury stocks increase Fair value of residual equity Gain on disposal (4) Net cash outflow of subsidiary disposal Consideration received in cash and cash equivalents Less: Disposal of cash and cash equivalents	44,325 11,454 41,294 ( 472,644 ) ( 60,025 ) ( 49,135 ) ( 2,496 ) ( 12,528 ) ( 4,118 ) ( 4,563 ) ( 32,165 ) ( 719 ) ( 17,005) $ 460,985 Lucky Unique Enterprise and its subsidiaries	44,325 11,454 41,294 ( 472,644 ) ( 60,025 ) ( 49,135 ) ( 2,496 ) ( 12,528 ) ( 4,118 ) ( 4,563 ) ( 32,165 ) ( 719 ) ( 17,005) $ 460,985 Lucky Unique Enterprise and its subsidiaries
	$ 195,227 ( 460,985 ) 189,185 ( 12,681 ) ( 7,459 ) 120,464 $ 23,751 Lucky Unique Enterprise and its subsidiaries
	(	$ 195,227 197,028 $ 1,801)

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33. Equity transaction with non-controlled equity

The share transfer of the Group was carried out successively in 2020. However, the share transfer was an organizational restructuring under the common control of the individual. The transaction did not change the control of the Group over the subsidiaries. Please refer to Notes 12(2), (3), (11), (12) and (13).

January 1 to December 31, 2020

Cash consideration paid The carrying amount of the subsidiary’s net assets should be transferred to noncontrolling interests based on the relative changes in equity Equity transaction differences Equity transaction differences adjustment Capital surplus - difference between actual acquisition price and book value of equity in subsidiaries	Best Alliance Limited	Best Alliance Limited	Tung Ming Company $ - ( 1,150 ) ($ 1,150) $ 1,150	Lucky Unique Enterprise $ - ( 21,244 ) ($ 21,244) $ 21,244	Chadtex Company
	(	$ - 8,084 $ 8,084 $ 8,084)			$ 21,329 ( 22,004 ) ($ 675) $ 675

34. Non-cash transactions

The Group has the following non-cash transaction investment in 2021 and 202:

• (1) Acquisition of property, plant and equipment

Affects cash and non-cash investment Additions of property, plant, and equipment Increase in equipment payable and notes payable Cash paid for		2021 $ 329,261 40,340) $ 288,921		2020
	(		(	$ 438,872 601) $ 438,271

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property, plant and equipment

• (2) Disposal of property, plant and equipment

Affects cash and non-cash investment Disposal proceeds of property, plant and equipment Decrease (increase) in other receivables (including related parties) Cash received for property, plant and equipment (3) Disposal of investment properties Affects cash and non-cash investment Proceeds from disposal of investment properties Decrease in other receivables Cash received from investment properties		2021 $ 92,164 19,949 $ 112,113 2021 $ - 7,452 $ 7,452		2020
				$ 18,330 244,847 $ 263,177 2020
				$ - 43,030 $ 43,030

• (4) Disposal of the full equity cash receipts of Apex (Shanghai) Textile Co., Ltd., De Shen (Samoa) Holdings Co., Ltd. and New Gallant Limited.

Beginning claim for proceeds balance Ending claim for proceeds balance Foreign exchange difference Cash received		2021 $ 102,011 26,730 ) 1,269) $ 74,012		2020
	( (		(	$ 101,599 102,011 ) 412 $ -

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35. Capital risk management

Due to the need to maintain adequate capital to support the upgrading of plant and equipment, the Group will be required to maintain adequate capital. Therefore, the capital management of the Group is to ensure that the necessary financial resources and operating plans are in place to meet the future needs of working capital, capital expenditure, research and development expenses, debt repayment and dividend payment.

36. Financial instruments

• (1) Fair value information - Financial instruments not measured at fair value December 31, 2020

December 31, 2020
Financial assets Financial assets measured at amortized cost-non-current Chia Her Industrial Co., Ltd., private equity convertible corporate bond		Carrying amount $ 27,725				Fairvalue
				Level 1 $ -		Level 2 $ -		Level 3 $ 30,576	Total
									$ 30,576

The above fair value for Level 3 is based on the binomial tree convertible

bond valuation model, and the significant unobservable input value used is the stock price volatility.

• (2) Fair Value Information - Financial instruments measured at fair value on a repetitive basis

• Fair value levels

December 31, 2021

December 31, 2021
financial assets at fair value through profit or loss Structured deposits Domestic listed companies stocks Fund beneficiary certificates Total		Level 1 $ - 3,405 8,914 $ 12,319		Level 2 $ - - - $ -		Level 3 $ 130,413 - - $ 130,413		Total
								$ 130,413 3,405 8,914 $ 142,732

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Financial assets at fair value through other comprehensive gains and losses-current Investments accounted for using equity method －Domestic listed (OTC) companies stocks Financial assets measured at fair value through other comprehensive gains and losses-non-current Investments accounted for using equity method －Domestic listed companies private placement of shares Financial liabilities at fair value through profit or loss Derivative instruments －Exchange rate swap contracts December 31, 2020 financial assets at fair value through profit or loss Domestic listed companies stocks Derivative instruments －Conversion rights of private placement convertible bonds of listed companies Fund beneficiary certificates Total Financial assets at fair value through other comprehensive gains and losses-current		Level 1 $ 109,867 $ - $ - Level 1 $ 2,856 - 9,387 $ 12,243		Level 2 $ - $ 106,209 $ 120 Level 2 $ - - - $ -		Level3 $ - $ - $ - Level 3 $ - 52,461 - $ 52,461		Total
								$ 109,867 $ 106,209 $ 120 Total
								$ 2,856 52,461 9,387 $ 64,704

• 86 -

Investments accounted for using equity method － Domestic listed $ 38,979 $ - $ - $ 38,979 companies stocks Financial assets measured at fair value through other comprehensive gains and losses-non-current Investments accounted for using equity method － Domestic listed $ - $ 120,056 $ - $ 120,056 companies private placement of shares Level 1 Level 2 Level 3 Total Financial liabilities at fair value through profit or loss Derivative instruments $ - $ 20,927 $ - $ 20,927 － Exchange rate swap contracts

There were no transfers between Level 1 and Level 2 fair value measurements in fiscal years of 2021 and 2020.

1. Reconciliation of financial instruments at Level 3 fair value

Financial assets at fair value through profit or loss

Financial assets Beginning balance Purchase Recognized in profit or loss (accounted to other benefits and losses) Transfer to Level 3 Ending balance		2021 $ 52,461 130,413 37,049 ) 15,412) $ 130,413		2020
	( (			$ 43,599 - 8,862 - $ 52,461

1. Level 2 fair value valuation techniques and inputs

Type of financial instruments Derivative instruments-Exchange rate	Valuation techniques and inputs
	The discounted cash flow method: the future cash flows are estimated based

• 87 -

swap contracts on the observable forward exchange rate and the contracted foreign exchange rate at the end of the period and are discounted at a rate that reflects the credit risk of each counter party. Domestic listed companies Evaluated by the B-S option pricing private placement of shares model, based on the underlying price, option performance price, risk-free interest rate, historical volatility of the underlying and the maturity period.

1. Level 3 fair value measurement techniques and inputs

The fair value of the derivatives - conversion rights of private convertible bonds is estimated using a binary tree convertible bond valuation model, and the significant unobservable input is the stock price volatility. When the stock price volatility increases, the fair value of these derivatives will increase.

A structured deposit mandatorily measured at fair value through profit or loss is adopting the net asset value method to evaluate the fair value.

(3) Type of financial instruments

Type of financial instruments
Financial assets At fair value through profit or loss Mandatory measurement through profit or loss at fair value financial assets at amortized cost (Note 1) Financial assets - Equity instrument investment at fair value through other comprehensive income Financial liabilities At fair value through profit or loss-Held for trading At amortized cost (Note 2)	December 31,2021 $ 142,732 6,643,409 216,076 120 13,462,110	December 31,2020
		$ 64,704 6,182,733 159,035 20,927 12,112,485

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• Note 1: Balances include cash and cash equivalents, notes and accounts receivable (including related parties), other receivables (including related parties), financial assets carried at amortized cost (both current and non-current) and refundable deposits, and other financial assets carried at amortized cost.

• Note 2: The balance includes financial liabilities measured at amortized cost such as short-term borrowings, short-term bills payable, notes and accounts payable (including related parties), other payables (including related parties), long-term bank loans (including those due within one year) and guarantee deposits.

• (4) Financial risk management objectives and policies

The Group’s major financial instruments include investments in equity and debt instruments, receivables, payables, lease liabilities and borrowings. The Group’s financial management department provides services to each business unit, coordinates access to domestic and international financial markets, and monitors and manages the financial risks associated with the Group’s operations through internal risk reporting that analyzes risk exposures based on the level and breadth of risk. These risks include market risk (including exchange rate risk, interest rate risk and other price risks), credit risk and liquidity risk.

The Group mitigates the effects of these risks by hedging the risk through derivative financial instruments. The use of derivative financial instruments is governed by the policies adopted by the Group’s board of directors, which are the written principles for exchange rate risk, interest rate risk, use of derivative financial instruments and non-derivative financial instruments, and investment of surplus liquidity. Internal auditors review compliance with the policy and the amount of risk exposure on an ongoing basis. The Group does not trade in financial instruments (including derivative financial instruments) for speculative purposes.

1. Market risk

The main financial risks to which the Group is exposed as a result of its operating activities are foreign currency exchange rate risk (see (1)

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below), interest rate risk (see (2) below), and other price risk (see (3) below).

The Group engages in various derivative financial instruments to manage its exposure to foreign currency exchange rate risk, including exchange rate swap contracts to hedge the exchange rate risk arising from foreign sales of goods.

There is no change in the Group’s exposure to market risk of financial instruments and its management and measurement of such exposure.

• (1) Exchange rate risk

The Group engages in foreign currency-denominated sales and import transactions and foreign currency borrowings, which expose the Group to exchange rate risk. The carrying amounts of the Group’s monetary assets and monetary liabilities denominated in non-functional currencies as of the balance sheet date (including monetary items denominated in non-functional currencies that have been eliminated in the Consolidated Financial Statements) are described in Note 41.

Sensitivity analysis

The Group is primarily affected by fluctuations in the U.S. dollar exchange rate. The following Schedule details the sensitivity analysis of the Group when the functional currency strengthens or weakens by 1% against the U.S. dollar. The sensitivity analysis includes only foreign currency items in circulation. A positive number in the Schedule below represents the amount by which pre-tax income would increase if the functional currency weakened by 1% relative to the U.S. dollar; a negative number in the same amount would affect pre-tax income if the functional currency strengthened by 1% relative to the U.S. dollar.

==> picture [326 x 25] intentionally omitted <==

This was mainly due to the Group’s cash and cash equivalents denominated in U.S. dollars, financial assets measured at amortized

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cost, receivables, other receivables, payables, other payables and borrowings that were outstanding and not cash flow hedged at the balance sheet date.

The decrease in the Group’s sensitivity to foreign exchange rates during the year was mainly due to the decrease in the Group’s net assets denominated in U.S. dollars.

• (2) Interest rate risk

Interest rate risk arises because individuals in the Group borrow funds at both fixed and floating interest rates. The Group manages interest rate risk by maintaining an appropriate mix of fixed and floating interest rates.

The carrying amounts of the Group’s financial assets and financial liabilities exposed to interest rate risk as of the balance sheet date were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31,2021 $ 3,346,024 2,929,496 992,068 8,832,451	December 31,2020
		$ 2,614,228 3,126,480 1,303,180 7,664,914

Sensitivity analysis

If interest rates had increased by 1%, the Group’s income before income taxes would have decreased by $78,404,000 and $63,617,000 for fiscal years of 2021 and 2020, respectively, with all other variables held constant.

The increase in the Group’s sensitivity to interest rates for the year was mainly due to the increase in variable interest rate deposits.

(3) Other price risk

The Group’s equity price risk arising from its investment in

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domestic listed and unlisted securities is insignificant.

2. Credit risk

Credit risk refers to the risk of financial loss resulting from the counter-parties’ default on contractual obligations. As of the balance sheet date, the Group’s maximum exposure to credit risk due to non-performance of counter-parties’ obligations mainly arises from the carrying amount of financial assets recognized in the Group’s balance sheet.

The Group’s counter-parties are all creditworthy organizations and are not expected to have significant credit risk.

3. Liquidity risk

The Group manages and maintains sufficient cash and cash equivalents to support its operations and mitigate the impact of cash flow fluctuations. The Group’s management monitors the use of banking facilities and ensures compliance with the terms of borrowing contracts.

The Group’s working capital and the obtained banking facilities are sufficient to meet future operating requirements, and therefore there is no liquidity risk due to the inability to raise funds to meet contractual obligations.

(1) Liquidity and interest rate risk of non-derivative financial liabilities

The analysis of the remaining contractual maturities of non-derivative financial liabilities is prepared based on the undiscounted cash flows (including principal and estimated interest) of financial liabilities based on the earliest possible date that the Group could be required to repay. Accordingly, the Group’s bank loans that may be required to be repaid immediately are listed in the Schedule below at the earliest possible date, without considering the probability that the bank will immediately enforce the right; the maturity analysis of other non-derivative financial liabilities is prepared based on the contractual repayment dates.

The undiscounted interest amount of interest cash flows paid at floating interest rates is derived from the curve of the yield rate at the balance sheet date.

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December 31, 2021

December 31, 2021
Non-derivative financial liabilities No interest-bearing liabilities Lease liabilities Floating rate instrument Fixed rate instrument		Less than 6 months $ 1,707,727 6,363 5,730,113 911,168 $ 8,355,371	6 months to 1 year $ 158 2,776 544,942 16,598 $ 564,474		1to 9 years
					$ 5,825 4,639 2,628,674 2,144,530 $ 4,783,668

Further information on the maturity analysis of lease liabilities is as follows:

is as follows:
Lease liabilities	Less than 1year $ 9,139		1 to 3years
			$ 4,639

December 31, 2020

December 31, 2020
Non-derivative financial liabilities No interest-bearing liabilities Lease liabilities Floating rate instrument Fixed rate instrument		Less than 6 months $ 1,361,911 16,196 6,308,288 904,889 $ 8,591,284	6 months to 1 year $ - 14,152 258,674 194,140 $ 466,966		1 to9 years
					$ 5,059 15,077 1,218,609 2,091,584 $ 3,330,329

Further information on the maturity analysis of lease liabilities is as follows:

==> picture [326 x 26] intentionally omitted <==

The amount of floating rate instruments for the above non-derivative financial assets and liabilities will vary depending on the difference between the floating rate and the interest rate estimated at the balance sheet date.

(2) Liquidity and interest rate risk of derivative financial liabilities

The liquidity analysis of derivative financial instruments is

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based on total undiscounted cash inflows and outflows for derivative instruments with gross settlement. When the amount payable or receivable is not fixed, the amount disclosed is determined based on the projected interest rate derived from the yield rate curve at the balance sheet date.

December 31, 2021

Total settlement Exchange rate swap contracts Flow-in Flow-out		1 to 3 months $ 440,296 442,586) $ 2,290)		4 to 6 months $ 111,683 109,513) $ 2,170		6 to 12 months $ - - $ -		Total
	( (		(				( (	$ 551,979 552,099) $ 120)

December 31, 2020

Total settlement Exchange rate swap contracts Flow-in Flow-out		1 to 3 months $ 116,872 120,805) $ 3,933)		4 to 6 months $ 582,161 599,156) $ 16,995)		6 to 12 months $ 2,848 2,847) $ 1		Total
	( (		( (		(		( (	$ 701,881 722,808) $ 20,927)

(5) Transfer of financial assets information

Unit: 1 dollar

				Unit: 1 dollar
Trading partners 2020 Mega Bank	Sales amount USD 29,452	Cash received USD 29,452	Limit USD 300,000	Note
				The management fee is 0.75% to 0.8% of the invoice amount + $15

The above credit is recurring.

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37. Related Party Transactions

All transactions, account balances, revenues and expenses between the Company and its subsidiaries (which are related parties of the Company) were eliminated upon consolidation and are therefore not disclosed in this note. In addition to those disclosed in other notes, the transactions between the Group and other related parties were as follows:

• (1) Names of related parties and their relationships

Name of related party Relationship with the Group Perfect Step Ltd. Affiliated company Vietnam ATAGO Company Affiliated company Lucky Unique Enterprise Affiliated company (Note 1) E Textile Company Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) Gain Faith Ltd. Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1)

Tung Ming Company De Kao Company

Full Vision Enterprise Co., Ltd.

Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1)

Name of related party Yeh, Fu-lin Yeh, Chia-ming Yeh, Chia-how Yeh, Wei-li Jei Jom Enterprise Co. Ltd.

Future Tycoon Holdings Co., Ltd.

Future Tycoon Enterprise Co., Ltd.

Fu-hwa Investment Co., Ltd. DNE Energy Inc. Doyo Enterprise Co., Ltd.

Sheng-Bo Technology Corp. Fuson International Co., Ltd. THRIVE POWER LIMITED Futures Co., Ltd.

Relationship with the Group

Key management Key management Key management Key management Subsidiary of joint venture, Era Nouveau International Co., Ltd. The special assistant to the Chairman of the Company is a director of the company (Note 2) The special assistant to the Chairman of the Company is a director of the company (Note 2) The Chairman is the same person The Chairman is the same person The Chairman of the Company is a director of the company The Chairman of the Company is a director of the company The Chairman of the Company is a director of the company The Vice Chairman of the Company is a director of the company The Vice Chairman of the Company is a

• 95 -

director of the company (Note 3) Chuan Yeh Investment Co., The Vice Chairman of the Company is a Ltd. director of the company

Note 1: A subsidiary of the Company until July 8, 2020.

Note 2: The General Manager of the Company is a director of the company until July 26, 2020.

Note 3: A subsidiary of the Company since September 24, 2020.

• (2) Operating income

Operating income
Item Sales of goods sold	Type of relatedparty The special assistant to the Chairman of the Company is a director of the company Affiliated company Subsidiary of affiliated company, Lucky Unique Enterprise Subsidiary of joint venture, Era Nouveau International Co., Ltd.		2021 $ 421,004 592,662 101,056 - $ 1,114,722		2020
					$ 376,206 286,537 17,005 3,921 $ 683,669

The Group’s sales prices to related parties are comparable to those of non-related parties, and the collection terms are one to three months at the end of each month, which are not materially different from those of non-related parties.

• (3) Purchase

Purchase
Type of relatedparty The special assistant to the Chairman of the Company is a director of the company (Note 2) Affiliated company (Note 1) Subsidiary of joint venture, Era Nouveau International Co., Ltd. Subsidiary of affiliated		2021 $ 428,588 162,825 - 15,091		2020
				$ 391,026 93,355 20,035 6,718

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company, Lucky Unique Enterprise (Note 1)

$ 606,504 $ 511,134

The Group has no comparable purchase price for related party products. The payment period of related party is approximately one month at the end of each month, which is not materially different from that of non-related party.

(4) Amounts due from related parties (excluding loans to related parties)

Item Notes receivable-related parties Accounts receivable-related parties	Type of related party / Name Affiliated company (Note 1), Lucky Unique Enterprise Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1), Tung Ming Company Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) Affiliated company (Note 1), Lucky Unique Enterprise The special assistant to the Chairman of the Company is a director of the company (Note 2), Future Tycoon Enterprise Co., Ltd. Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1), De Kao Company Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) Affiliated company	December 31, 2021 $ 36,122 16,176 1,970 $ 54,268 $ 29,794 55,775 21,478 10,499 427 $ 117,973	December 31, 2020	December 31, 2020
				$ 21,488 2,533 824 $ 24,845 $ 86,011 52,354 - 7,923 1,015 $ 147,303

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Item Other receivables-related parties	Type of related party / Name Affiliated company, Perfect Step Ltd. (Note 34) Affiliated company The special assistant to the Chairman of the Company is a director of the company (Note 2), Future Tycoon Holdings Co., Ltd. Key management Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1)	December 31, 2021 $ 26,730 2,115 12,109 6,769 80 $ 47,803	December 31, 2020	December 31, 2020
				$ 102,011 3,836 980 - 34 $ 106,861

No guarantees have been received for related party receivables outstanding. No allowance for losses has been provided for related party receivables in 2021 and 2020.

(5) Amounts payable due to related parties (excluding loans from related parties)

Item Notes payable-related parties Accounts payable-related parties	- 98 - Type of related party / Name Affiliated company (Note 1), Lucky Unique Enterprise Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1), Tung Ming Company The special assistant to the Chairman of the Company is a director of the company (Note 2), Future Tycoon Enterprise Co., Ltd. Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1),	December 31, 2021 $ 24,679 39,277 $ 63,956 $ 72,431 28,142	December 31, 2020	December 31, 2020
				$ 22,197 10,009 $ 32,206 $ 60,961 29,156

Item Other payables-related parties	Tung Ming Company Affiliated company (Note 1), Lucky Unique Enterprise Type of relatedparty Key management Affiliated company (Note 1) Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) The special assistant to the Chairman of the Company is a director of the company (Note 2)	29,183 $ 129,756 December 31, 2021 $ 10 44 41 305 $ 400	8,479 $ 98,596 December 31, 2020	8,479 $ 98,596 December 31, 2020
				$ 3,511 4,547 337 305 $ 8,700

The outstanding balance due to related parties is unsecured and will be settled in cash.

• (6) Acquisition of property, plant and equipment

The Company purchased property, plant and equipment from Lucky Unique Enterprise in 2020 for NT$4,439,000.

• (7) Disposal of property, plant and equipment

		Disposalproceeds	Disposalproceeds	Disposalproceeds	Disposalproceeds		Disposal income(loss)	Disposal income(loss)	Disposal income(loss)
	Type of relatedparty/ Name	2021			2020		2021		2020
	The Chairman of the
	Company is a director of the
	company (Note 2)／Future
	Tycoon Holdings Co., Ltd.	$ 20,035		$	60		$ 14,122	$	3
	Affiliated company (Note 1),
	Lucky Unique Enterprise		-		2,160		-		1,671
		$ 20,035		$	2,220		$ 14,122	$	1,674
(8)	Operating lease - for rent
	Type of relatedparty/ Name	Rent objective					Leasing period
	Affiliated company (Note 1),		Plant			January 2021 to		December
	Lucky Unique Enterprise					2023
	Affiliated company (Note 1),		Office			July 2020 to March			2023
	Lucky Unique Enterprise
	Subsidiary of affiliated		Office			May	2020 to June 2021
	company, Lucky Unique

• 99 -

Enterprise (Note 1)
The Chairman is the same	Office	April 2020 to February 2021
person
The Chairman is the same	Plant roof	October 2017 to October
person	(Note 4)	2037
The Chairman of the	Plant roof	October 2017 to October
Company is a director of	(Note 4)	2037
the company

Note 4: The Company leased the roof of the plant to related party for solar power generation at a rent of 7% of the sales revenue of the solar power system.

The total lease payments to be received in the future are summarized as follows:

follows:
Type of related party / Name Affiliated company (Note 1), Lucky Unique Enterprise Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) The Chairman is the same person		2021 $ 9,859 - - $ 9,859		2020
				$ 10,257 165 52 $ 10,474

Summary of leasing revenue is as below:

Type of related party / Name Affiliated company (Note 1), Lucky Unique Enterprise Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) The Chairman is the same person The Chairman of the Company is a director of the company		2021 $ 7,921 60 136 370 $ 8,487		2020
				$ 2,864 480 404 390 $ 4,138

(9) Loans to related parties

• 100 -

Type of relatedparty Other receivables-related parties Affiliated company Type of relatedparty Interest income Affiliated company	December 31,2021 $ - 2021 $ 162	December 31,2020	December 31,2020
			$ 8,009 2020
			$ 35

The Group provides short-term loans to related parties as non-guaranteed loans with interest rate 2.5% as of December 31, 2020.

• (10) Borrowings from related parties

Type of related party / Name Other payables-related parties Key management Yeh, Fu-lin Others The Vice Chairman of the Company is a director of the company Type of related party / Name Interest expense Key management Yeh, Fu-lin (1) Others (2) The Vice Chairman of the Company is a director of the company (3) Interest rate (1) Interest rate (2) Interest rate (3)	December 31,2021 $ 136,641 2,956 13,241 $ 152,838 2021 $ 6,917 1,115 105 $ 8,137 1.5%～4.5% 4%～4.5% 1.4%～1.55%	December 31,2020	December 31,2020
			$ 141,263 26,189 7,353 $ 174,805 2020
			$ 7,767 1,173 79 $ 9,019 1.5%～4.5% 1.5% 1.4%～2.25%

The Group’s borrowings from related parties bear interest rates comparable to market rates. All loans are unsecured loans.

• (11) Other related party transactions

• Processing Fees

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The Group pays the related party’s entrusted processing fee, which is recorded as operation cost according to its nature, none of similar products processing price can be compared, and the payment terms are monthly for 1 to 3 months.

Type of related party The special assistant to the Chairman of the Company is a director of the company (Note 2), Future Tycoon Enterprise Co., Ltd. Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1), Tung Ming Company Affiliated company (Note 1), Lucky Unique Enterprise		2021 $ 352,401 247,298 107,797 $ 707,496		2020
				$ 236,234 84,195 2,678 $ 323,107

1. Manufacturing and operation expense

The Company’s expenses for purchasing gifts from related parties

and renting sample display rooms are as follows:

Type of related party The Chairman of the Company is a director of the company Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) Affiliated company (Note 1)		2021 $ 261 1,880 924 $ 3,065		2020
				$ 348 1,108 31 $ 1,487

• 102 -

3. Other income

The income from counseling services and commissions were as follows:

follows:
Type of related party The special assistant to the Chairman of the Company is a director of the company (Note 2) Affiliated company (Note 1), Lucky Unique Enterprise Subsidiary of affiliated company, Lucky Unique Enterprise (Note 1) Subsidiary of joint venture, Era Nouveau International Co., Ltd.		2021 $ 4,465 13,282 127 - $ 17,874		2020
				$ 699 2,995 2,348 $ 6,042

(12) Remuneration to key management personnel

The Group’s total remuneration to directors and other key management personnel is as follows:

personnel is as follows:
Short-term employee benefits Retirement benefits		2021 $ 45,830 718 $ 46,548		2020
				$ 49,614 705 $ 50,319

The remuneration of directors and other key management personnel is determined by the Remuneration Committee based on the current year’s operating results and the base of year-end bonuses paid in previous years.

• 103 -

38. Pledged Assets

The following assets of the Group have been provided as collateral for bank loans:

Land Buildings Machinery equipment Right-of-use assets Investment properties Pledged bank deposits (recorded as financial assets at amortized cost-current) (Note)	December 31,2021 $ 266,446 244,531 58,032 256,951 60,820 3,419,464 $ 4,306,244	December 31,2020	December 31,2020
			$ 266,446 275,536 65,816 267,437 65,071 2,803,808 $ 3,744,114

Note: The collaterals as fully guaranteed borrowings as of December 31, 2021 and 2020 were NT$3,294,310,000 and NT$2,687,940,000, respectively.

1. Significant Contingent Liabilities and Unrecognized Contractual Commitments

In addition to those described in other Notes, the Group has the following significant commitments and contingencies on its balance sheet:

• (1) As of December 31, 2021 and 2020, the Group has opened unused letters of credit for raw materials purchases of NT$8,932,000 and NT$120,717,000, respectively.

• (2) The Group’s unrecognized contractual commitments were as follows:

Purchase of property, plant and equipment	December 31,2021 $ 60,510	December 31,2020	December 31,2020
			$ 46,661

• (3) As of December 31, 2021 and 2020, the Group has provided guarantee notes of NT$450,000,000 and NT$348,000,000 for the purchase of raw materials and the provision of guarantees for borrowing lines from financial institutions, respectively.

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40. Other Matters

The Group was affected by the global pandemic of COVID-19, resulting in a significant decrease in operating revenue in 2020. In response to the impact of the epidemic, the Company has applied for salary and working capital subsidies from the government and received NT$92,182,000 in subsidies (see Note 29). With the ease of the epidemic, the Company expects the operation will be gradually returning to normal functions.

41. Information on foreign currency assets and liabilities with significant impacts

The following information is presented in the aggregate in foreign currencies other than the functional currency of each entity of the Group. Assets and liabilities denominated in foreign currencies that have a significant effect are as follows:

Unit: Foreign currency and NT$1,000

December 31, 2021

December 31, 2021
Foreign currencyassets Currency items USD USD USD Non-currency items Associates & joint ventures accounted for using equity method USD HKD Foreign currency liabilities Currency items USD USD USD	Foreign currency $ 240,965 4,090 16,089 9,324 108,737 74,387 9,974 77,364	Foreign exchange rate 27.68 （USD：NTD） 6.3674 （USD：CNY） 22,780 （USD：VND） 27.68 （USD：NTD） 7.7994 （HKD：USD） 27.68 （USD：NTD） 6.3674 （USD：CNY） 22,780 （USD：VND）	Carryingamount
			$ 6,669,918 113,215 445,346 258,074 385,909 2,059,031 276,097 2,141,425

December 31, 2020

• 105 -

Foreign currencyassets Currency items USD USD USD Non-currency items Associates & joint ventures accounted for using equity method USD HKD Foreign currency liabilities Currency items USD USD USD	Foreign currency $ 207,488 3,261 16,067 9,030 108,672 57,932 11,619 57,760	Foreign exchange rate 28.48 （USD：NTD） 6.5249 （USD：CNY） 23,100 （USD：VND） 28.48 （USD：NTD） 7.7539 （HKD：USD） 28.48 （USD：NTD） 6.5249 （USD：CNY） 23,100 （USD：VND）	Carryingamount
			$ 5,909,257 92,863 457,589 257,177 399,151 1,649,875 330,920 1,645,013

The Group is primarily exposed to foreign currency exchange rate risk for the U.S. dollar, CNY and Vietnamese Dong. The following information is presented as a summary of the functional currencies of the individual foreign currency holdings, and the exchange rates disclosed represent the rates at which those functional currencies were translated into the presentation currency. Foreign currency exchange gains and losses (realized and unrealized) with significant effect are as follows:

Functional currency NTD USD CNY VND	2021	Net FX income (loss) ( $ 127,481 ) - 3,214 33,196 ($ 91,071)	2020
	Functional currency to Presentation currency 1 （NTD：NTD） 28.009 （USD：NTD） 4.3417 （CNY：NTD） 0.001221 （VND：NTD）		Functional currency to Presentation currency 1 （NTD：NTD） 29.549 （USD：NTD） 4.2827 （CNY：NTD） 0.001271 （VND：NTD）	Net FX income (loss)
		( (		( ( (	$ 226,572 ) 61 389 ) 6,959 $ 219,941)

• 106 -

42. Matters Disclosed in the Notes

• (1) Information about major transactions:

• Loan of funds to others: see Schedule 1.

• Endorsement and guarantee for others: see Schedule 2.

• Marketable securities held at the end of the period (excluding investments in subsidiaries, affiliates and joint ventures): see Schedule 3.

• Cumulative purchase or sale of market securities amounting to at least NT$300 million or 20% of the paid-in capital: None.

• Acquisition of real estate amounting to at least NT$300 million or 20% of the paid-in capital: None.

• Disposal of real estate amounting to at least NT$300 million or 20% of the paid-in capital: None.

• Purchase from or sale to related parties amounting to at least NT$100 million or 20% of the paid-in capital: see Schedule 4.

• Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: see Schedule 5.

• Derivative transactions: refer to Note 7.

• Others: Business relationships and significant transactions between the parent and subsidiaries and between subsidiaries: see Schedule 9.

• (2) Information about the reinvestment business: see Schedule 6.

• (3) Information of investments in China:

• Name of the investee company in, main business items, paid-in capital, investment method, capital remittance, shareholding, investment gain or loss, closing balance of investment, repatriated investment gain or loss, and investment limit in China: see Schedule 7.

• Significant transactions with the investee company in China, directly or indirectly through a third country, and the prices, terms of payment, and unrealized gains or losses:

  • (1) The balance and percentages of import amounts and related payables at the end of the period: see Schedule 8.

  • (2) Amounts and percentages of sales and related Receivables: see Schedule 8.

  • (3) Amount of property transactions and the amount of resulting gain - 107 -

or loss: None.

• (4) End-of-period balance and purpose of guarantees or collaterals provided: see Schedule 2.

• (5) Maximum balance, ending balance, interest rate range, and total current interest on financial instruments: see Schedule 1.

• (6) Other transactions that have a significant effect on current income or financial position, such as the provision or receipt of labor services: None.

• (4) Information on major shareholders: name, amount and percentage of shares held by shareholders with at least 5% ownership: see Schedule 10.

43. Segment Information

• (1) Segment revenue and operating results

The Group is in the textile industry. The financial information provided to the chief operating decision maker for the purpose of allocating resources and evaluating the performance of the divisions focuses on the Company and its subsidiaries, and is presented below by reportable segment:

2021 Revenue from customers other than the Company and consolidated subsidiaries Revenue from the Company and subsidiaries Total income Segment income (loss) Interest income Other income Other benefits and losses Financial costs Share of losses of affiliated companies and joint ventures recognized under the equity method Net segment income before tax 2020 Revenue from customers other than the Company and consolidated subsidiaries Revenue from the Company and subsidiaries Total income Segment income (loss) Interest income Other income Other benefits and losses Financial costs Share of losses of affiliated companies and joint ventures recognized under the equity method Net segment loss before tax		The Company		Hangzhou De Licacy Group (Note 1)		Vietnam De Licacy Group (Note 2)		Other	Adjustments and eliminations	Adjustments and eliminations	Adjusted amount
	( (	$ 3,561,364 308,248 $ 3,869,612 $ 51,711) $ 2,769,524 236,116 $ 3,005,640 $ 236,705)		$ 2,364,600 70,502 $ 2,435,102 $ 171,055 $ 1,918,680 30,370 $ 1,949,050 $ 108,188		$ 2,446,085 562,398 $ 3,008,483 $ 140,526 $ 2,123,927 436,557 $ 2,560,484 $ 129,261	(	$ 2,103,636 1,980,413 $ 4,084,049 $ 48,950 $ 1,782,528 1,575,693 $ 3,358,221 $ 3,781)	( ( ( (	$ - 2,921,561) $ 2,921,561) $ 62,245 $ - 2,278,736) $ 2,278,736) $ 6,192	$ 10,475,685 - $ 10,475,685 $ 371,065 21,432 173,970 ( 204,258 ) ( 152,354 ) ( 15,842 ) $ 194,013 $ 8,594,659 - $ 8,594,659 $ 3,155 42,886 204,648 ( 281,461 ) ( 177,717 ) ( 83,313 ) ($ 291,802)

Note 1: Hangzhou De Licacy Group includes companies: Best Alliance International Limited, Eden Road International Ltd., Eden Road International Ltd. (H.K.), Hangzhou De Licacy Textile Co., Ltd., De

• 108 -

Fa Company, Hao Wang Company, Chang Xin Lucky Unique Enterprise Company, Thousand Well International Limited, Thousand Well (Samoa) International Limited, Fastpower Limited and Fastpower (Samoa) Limited.

Note 2: Vietnam De Licacy Group includes companies: De Licacy Holdings company, De Shen (Cayman) Holdings Co., Ltd., Vietnam De Licacy Company and New Lake Ltd.

Segment profit or loss represents the profit earned by each segment, excluding non-operating income and expense and income tax expense. This measure is provided to the chief operating decision maker for the purpose of allocating resources to the segments and evaluating their performance.

(2)

The Group’s chief operating decision maker makes decisions based on the operating results of each segment and does not have information on segment assets and liabilities to evaluate the performance of different business activities, therefore, only the operating results of reportable segments are presented. Location information

The Group operates mainly in three regions: Taiwan, China and Vietnam. The information on continuing business unit income from external customers of the Group by operation and non-current assets locations are as below:

below:
Taiwan China Vietnam	Income from external customers 2021 2020 $ 3,757,268 $ 3,114,738 4,266,483 3,355,370 2,451,934 2,124,551 $10,475,685 $ 8,594,659			Non-current assets
		2021 $ 3,757,268 4,266,483 2,451,934 $10,475,685		December 31, 2021 $ 671,655 2,258,612 3,185,512 $ 6,115,779	December 31, 2020
						$ 756,201 2,302,791 3,370,956 $ 6,429,948

Non-current assets exclude classified as financial assets, refundable deposits, investments accounted for using equity method, net defined benefit assets and deferred income tax assets.

(3)

Major customers’ information

The Group has no sales income from major customers which accounts for more than 10% of the net sales income in the consolidated Income Statement.

• 109 -

De Licacy Industrial Co., Ltd. and Subsidiaries Loan of Funds to Others

For the Year Ended December 31, 2021

Schedule 1

(In Thousands of New Taiwan Dollars)

No.	Loan funded by	Loan recipients	Current accounts	Is a related party	Highest balance for the period	Closing balance	Actual expenditures	Interest rate range (%)	Nature of funds lending	Business transactions (Note 3)	Reasons of short-term financing funds	Allowance for bad debts	Collateral	Collateral	Amount limit for individual funds lending (Notes 1 & 6)	Total limit of capital loan (Notes 2 & 6)
													Name	Value
0 1 2 3 4 5 6 7 8 9 10 11	The Company The Company The Company The Company De Licacy Samoa Company De Licacy Samoa Company De Licacy Samoa Company Hong Kong Eden Road Limited Hong Kong Eden Road Limited Hong Kong Eden Road Limited De Shen (Cayman) Company De Shen (Cayman) Company De Hong Company Hangzhou De Licacy Limited Hangzhou De Licacy Limited Hangzhou De Licacy Limited Hangzhou De Licacy Limited Apex Textile Company Lucky Apex Ventures Limited View Best Global Limited Best Alliance Limited Best Alliance Limited Best Alliance Limited New Lake Ltd. Chadtex Company	Best Alliance Limited De Shen (Cayman) Company Total Express Ltd. Vietnam De Licacy Enterprise Vietnam De Licacy Enterprise Apex Textile Company New Lake Ltd. De Fa Company De Fa Company Best Alliance Limited Vietnam De Licacy Enterprise Total Express Ltd. De Hong (Vietnam) Company Apex Textile Company Apex Textile Company Apex Textile Company Apex (Anqing) Company Apex (Anqing) Company Apex (Anqing) Company Vietnam ATAGO Company Hangzhou De Licacy Limited Hong Kong Eden Road Limited New Lake Ltd. Vietnam De Licacy Enterprise CHIA HER INDUSTRIAL CO., LTD. (Note 5)	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Temporary payments Temporary payments Temporary payments Temporary payments Accounts receivable Other receivables Other receivables Temporary payments Temporary payments Other receivables Other receivables Other receivables	Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y	$ 74,191 77,044 128,408 342,420 175,518 77,044 50,130 2,853 19,975 4,179 418,200 125,325 13,982 109,425 153,195 130,320 130,413 (Note 4) 87,540 (Note 4) 121,416 7,990 68,484 68,484 66,840 292,713 40,000	$ - - - 249,120 174,384 - 49,824 - - 4,152 415,200 124,560 6,366 - - 130,320 130,320 86,880 117,778 - - - 66,432 290,640 40,000	$ - - - 160,544 174,384 - - - - 3,654 415,200 124,560 6,366 - - 43,471 (Note 4) 130,413 (Note 4) 61,294 (Note 4) 117,751 - - - 66,432 290,640 40,000	1.8 - 1.8 2.8 2.8 1.8 - - - - 2.5 1.4 2.5 5.1 4.15 4.05 4.25 5.1 1.0 2.5 - - - 2.5 7	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Business transactions Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	$ - - - - - - - 3,886 - - - - - - - - - - - - - - - - -	Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund － Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund Operating revolving fund	$ - - - - - - - - - - - - - - - - - - - - - - - - -	None None None None None None None None None None None None None None None None None None None None None None None None None	$ - - - - - - - - - - - - - - - - - - - - - - - - -	$ 1,396,331 1,396,331 1,396,331 1,396,331 1,148,609 1,148,609 1,148,609 85,886 82,000 82,000 911,721 911,721 23,646 514,150 514,150 514,150 514,150 93,785 128,528 5,304 790,417 790,417 790,417 387,439 110,658	$ 1,861,774 1,861,774 1,861,774 1,861,774 1,531,479 1,531,479 1,531,479 113,220 109,334 109,334 1,215,628 1,215,628 31,528 685,534 685,534 685,534 685,534 125,047 171,371 7,072 1,053,890 1,053,890 1,053,890 387,439 147,544

Note 1: Based on 30% of the net shareholders’ equity of each lending company and the amount of business transactions in the previous year. Note 2: Based on 40% of the net shareholders’ equity of each lending company and the amount of business transactions in the previous year.

Note 3: Based on the amount of business transactions in the previous year.

Note 4: The difference from the announcement is the adjustment of foreign currency exchange gain or loss at the end of the period.

Note 5: CHIA HER INDUSTRIAL CO., LTD. is a significant investor to Chadtex Company.

Note 6: The ceiling on total loans to other is 40% of the Company net worth. Limits on loans granted for a single party:

(1) The total amount to one entity which has business transactions with the Company shall not exceed the total amount of the business transactions.

(2) For short-term financing needs, the amount available for financing of each entity shall not exceed 30% of the Company net worth.

(3) For those foreign subsidiaries in which the Company and their parent companies or the Company, directly or indirectly, owned 100% of their shares, the amount available for short-term financing needs is not limited to 40% of the Company net worth, but shall not exceed the total amount of the Company's net worth.

• 110 -

(In Thousands of New Taiwan Dollars)

De Licacy Industrial Co., Ltd. and Subsidiaries

Endorsement and Guarantee for Others

For the Year Ended December 31, 2021

Schedule 2

No.	Name of guarantor and endorsements	Counterpartyof endorsements/guarantees	Counterpartyof endorsements/guarantees	Limitation on amount of endorsements/guarantees for a specific enterprise (Note 1)	Highest balance for endorsements /guarantees during the period	Balance of endorsements /guarantees as of reporting date	Actual usage amount during the period	Property pledged for endorsements /guarantees	Ratio of accumulated amounts of endorsements/guarant ees to net worth of the latest financial statements (%)	Maximum amount for endorsements /guarantees (Note 2)	Parent company endorsement s/guarantees to third parties on behalf of subsidiary	Subsidiary endorsement s/guarantees to third parties on behalf of the parent company	Endorsement s /guarantees to third parties on behalf of companies in Mainland China
		Company name	Relationship with the Company
0	The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	New Lake Ltd. De Fa Company Chadtex Company Eden Road Limited Vietnam De Licacy Enterprise De Shen (Cayman) Company Apex Textile Company Hangzhou De Licacy Limited Apex (Anqing) Company Total Express Ltd. Hong Kong Eden Road Limited	Subsidiary（Indirect shareholdings 100%） Subsidiary（Direct shareholdings 100%） Subsidiary（Direct shareholdings 55.06%） Subsidiary（Indirect shareholdings 100%） Subsidiary（Indirect shareholdings 100%） Subsidiary（Indirect shareholdings 100%） Subsidiary（Indirect shareholdings 53.22%） Subsidiary（Indirect shareholdings 100%） Subsidiary（Indirect shareholdings 53.22%） Subsidiary（Indirect shareholdings 53.22%） Subsidiary（Indirect shareholdings 100%）	$ 2,327,218 2,327,218 2,327,218 2,327,218 2,327,218 2,327,218 2,327,218 2,327,218 2,327,218 2,327,218 2,327,218	$ 1,012,993 278,470 80,000 456,560 960,922 884,585 207,383 452,060 173,760 27,491 334,200	$ 927,280 185,360 80,000 - 932,280 858,080 184,620 293,320 173,760 - 332,160	$ 501,626 - 40,000 - 432,658 761,200 162,344 48,440 152,040 - 2,768	$ - - - - - - - - - - -	20 4 2 - 20 18 4 6 4 - 5	$ 6,981,655 6,981,655 6,981,655 6,981,655 6,981,655 6,981,655 6,981,655 6,981,655 6,981,655 6,981,655 6,981,655	Y Y Y Y Y Y Y Y Y Y Y	N N N N N N N N N N N	N N N N N N Y Y Y N N

Note 1: Based on 50% of the total equity of the owners of each endorsing company. Note 2: Based on 150% of the total equity of the owners of each endorsing company.

• 111 -

De Licacy Industrial Co., Ltd. and Subsidiaries

Year-end Marketable Securities Breakdown Statement

December 31, 2021

Schedule 3

(In Thousands of New Taiwan Dollars)

Name of holder	Type and name of marketable securities	Relationship with the Company	Account title	December 31,2021	December 31,2021	December 31,2021	December 31,2021	Note
				Unit/Share	Carrying amount	Percentage (%)	Fair value
The Company The Company De Fa Company Chadtex Company Chadtex Company Chadtex Company Chadtex Company Chadtex Company Chadtex Company Chadtex Company Chadtex Company Chadtex Company The Company	Stocks Chia Her Industrial Co., Ltd. NANTEX INDUSTRY CO., LTD. Hua Nan Financial Holdings Co., Ltd. Chia Her Industrial Co., Ltd. TSRC Corporation Far Eastern International Bank CHING FENG HOME FASHIONS CO., LTD. Cheng Loong Corp. CHINA MOTOR CORPORATION NANTEX INDUSTRY CO., LTD. LANNER ELECTRONICS INC. Chia Her Industrial Co., Ltd. Fund beneficiary certificates Hua Nan－Saudi Arabian National Oil Fund	None None None None None None None None None None None None None	Financial assets measured at fair value through other comprehensive gains and losses-non-current Financial assets at fair value through other comprehensive gains and losses-current Financial assets at fair value through profit and loss-current Financial assets measured at fair value through other comprehensive gains and losses-non-current Financial assets at fair value through other comprehensive gains and losses-current Financial assets at fair value through other comprehensive gains and losses-current Financial assets at fair value through other comprehensive gains and losses-current Financial assets at fair value through other comprehensive gains and losses-current Financial assets at fair value through other comprehensive gains and losses-current Financial assets at fair value through other comprehensive gains and losses-current Financial assets at fair value through other comprehensive gains and losses-current Financial assets at fair value through other comprehensive gains and losses-current Financial assets at fair value through profit and loss-current	2,266,091 30,000 160,619 6,123,232 200,000 3,661,116 300,000 300,000 300,000 200,000 100,000 110,000 285,000	$ 28,689 2,556 3,405 77,520 8,080 39,357 5,955 10,590 19,020 17,040 5,570 1,699 8,914	2.019 0.006 0.001 5.46 0.024 0.104 0.177 0.027 0.054 0.041 0.086 0.098 -	$ 28,689 2,556 3,405 77,520 8,080 39,357 5,955 10,590 19,020 17,040 5,570 1,699 8,914

Note 1: The marketable securities mentioned in this Schedule refer to stocks, bonds, beneficiary certificates and marketable securities derived from the above items within the scope of IFRS 9 “Financial Instruments”. Note 2: For information on investments in Subsidiaries, please refer to Schedule 6 and Schedule 7.

• 112 -

De Licacy Industrial Co., Ltd. and Subsidiaries

Purchase from or sale to related parties amounting to at least NT$100 million or 20% of the paid-in capital

For the Year Ended December 31, 2021

Schedule 4

(In Thousands of New Taiwan Dollars)

Buying (selling) company	Trading partners	Relationship		Transactions	Transactions		Circumstances and reasons of transaction conditions are different from general transactions	Circumstances and reasons of transaction conditions are different from general transactions	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Note
			Purchase (Sales)	Amount	Percentage of total purchase (sales) (%)	Credit period	Unit price (Note)	Credit period	Balance	Percentage of total receivables (payables) (%)
The Company The Company The Company Hong Kong Eden Road Limited Hangzhou De Licacy Limited Apex Textile Company New Lake Ltd. New Lake Ltd. Apex Textile Company	New Lake Ltd. New Lake Ltd. Lucky Unique Enterprise Thousand Well (Samoa) Limited Thousand Well (Samoa) Limited Total Express Ltd. Vietnam De Licacy Enterprise Vietnam De Licacy Enterprise Apex (Anqing) Company	Subsidiary Subsidiary Affiliated company Affiliated company Affiliated company Affiliated company Affiliated company Affiliated company Affiliated company	Purchase (Sales) (Sales) Purchase (Sales) (Sales) (Sales) Purchase Purchase	$ 500,344 ( 233,281 ) ( 588,951 ) 504,110 ( 504,110 ) ( 1,320,868 ) ( 1,272,797 ) 1,068,570 560,793	21 6 15 55 24 78 44 37 37	Open account 30-90 days Open account 30-60 days Open account 60 days Open account 90 days Open account 90 days Open account 90 days Open account 90 days Open account 120 days Open account 90 days	Not applicable 〞 〞 〞 〞 〞 〞 〞 〞	General open account 30-90 days General open account 30-60 days General open account 30-60 days No general suppliers available for comparison General open account 30-90 days General open account 30-90 days General open account 30-60 days General open account 30 days General open account 30-90 days	( $ 93,272 ) 19,078 64,279 ( 80,055 ) 80,055 1,234 543,008 ( 320,807 ) ( 226,206 )	21 3 9 78 17 1 63 81 55

Note: The purchase price is not comparable to the general purchase price of similar products; the sales price is comparable to the general customers’.

• 113 -

De Licacy Industrial Co., Ltd. and Subsidiaries

Receivables from Related Parties Amounting to At Least NT$100 Million or 20% of the Paid-in Capital

December 31, 2021

Schedule 5

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate (%)		Overdue	Amounts due from related parties recovered in subsequentperiod	Allowance for bad debts
					Amount	Action taken
The Company Lucky Apex Ventures Limited De Shen (Cayman) Company De Shen (Cayman) Company New Lake Ltd. Vietnam De Licacy Enterprise Hangzhou De Licacy Limited Hangzhou De Licacy Limited De Licacy Samoa Company Apex (Anqing) Company	Vietnam De Licacy Enterprise Apex (Anqing) Company Vietnam De Licacy Enterprise Total Express Ltd. Vietnam De Licacy Enterprise New Lake Ltd. Apex Textile Company Apex (Anqing) Company Vietnam De Licacy Enterprise Apex Textile Company	Subsidiary Subsidiary Subsidiary Affiliated company Affiliated company Affiliated company Affiliated company Affiliated company Affiliated company Affiliated company	$ 162,781 119,239 490,584 125,248 844,441 320,807 191,027 136,246 176,852 226,206	(Note 1) (Note 2) (Note 3) (Note 2) 2.39 (Note 4) 3.52 0.49 (Note 5) 4.07 (Note 6) (Note 2) 4.32	$ - - - - - - - - - -	－ － － － － － － － － －	$ - - - - 122,765 156,935 - 4,741 - 140,561	$ - - - - - - - - - -

Note 1: NT$162,635,000 are receivables from loans and interest on funds, and the rest are receivables from endorsement and guarantee fees, which are not included in the calculation of the turnover rate. Note 2: All of them are receivables arising from capital loans and interest, which are not included in the calculation of the turnover rate. Note 3: NT$417,219,000 are receivables arising from capital loans and interest; the rest of receivables are arising from the sale of property, plant and equipment, which are not included in the calculation of the turnover rate. Note 4: NT$297,841,000 are receivables arising from capital loans and interest, and NT$3,592,000 are receivables arising from the sale of property, plant and equipment, which are not included in the calculation of the turnover rate. Note 5: NT$43,471,000 are receivables arising from capital loans, the rest of receivables are advance payments for the sale of investment properties and plant leasing, which are not included in the calculation of the turnover rate. Note 6: NT$130,413,000 are receivables arising from capital loans and interest, which are not included in the calculation of the turnover rate.

• 114 -

De Licacy Industrial Co., Ltd. and Subsidiaries

Information of the Invested Company, Location ... and Other Related Information

For the Year Ended December 31, 2021

Schedule 6

(In Thousands of New Taiwan Dollars) (Except in USD)

Name of investment company	Investee company name	Location	Major business scope	Original investment	Original investment	Held atperiod-end	Held atperiod-end	Held atperiod-end	Investee income (loss) for the period	Recognized investment income (loss) (Note 1)	Note
				End of the current period	End of the last period	Shares	Percentage (%)	Carrying amount
The Company The Company The Company The Company The Company The Company De Fa Company De Licacy Samoa Company De Licacy Samoa Company De Licacy Samoa Company De Licacy Samoa Company De Licacy Samoa Company De Licacy Samoa Company De Hong Company Best Alliance Limited Best Alliance Limited Best Alliance Limited Bright Wisdom Ltd. Bright Wisdom Ltd. Bright Wisdom Ltd. De Licacy BVI Holdings De Shen (Cayman) Company Vantage Gain Limited De Licacy Anguilla Company View Best Global Limited Beauty Plus Limited	De Licacy Samoa Company Lucky Unique Enterprise De Fa Company Chadtex Company De Licacy BVI Holdings View Best Global Limited Eden Road Limited Best Alliance Limited Vantage Gain Limited De Licacy Anguilla Company De Hong Company New Lake Ltd. Beauty Plus Limited De Hong (Vietnam) Company Eden Road Limited Bright Wisdom Ltd. Hong Kong Eden Road Limited Total Express Ltd. Lucky Apex Ventures Ltd. Futures Co., Ltd. De Shen (Cayman) Company Vietnam De Licacy Enterprise Perfect Step Ltd. New Premium Enterprise Co., Ltd. Vietnam ATAGO Company Sung Yu Company	Samoa Taiwan Taiwan Taiwan British Virgin Islands Samoa British Virgin Islands British Virgin Islands Samoa Anguilla Samoa Anguilla British Virgin Islands Vietnam British Virgin Islands Samoa Hong Kong Seychelles Samoa Taiwan Cayman Islands Vietnam British Virgin Islands Samoa Vietnam British Virgin Islands	General investment Manufacture and processing of various fiber textile products General import and export trade Textile manufacturing, dyeing and finishing, and trading of various textile products General investment General investment General import and export trade General investment General investment General investment General investment General import and export trade General investment Printing and finishing of various types of garments and cloths General import and export trade General investment General import and export trade International trade business General investment General import and export trade General investment Printing, dyeing, finishing, garment manufacturing and trading of various textile and yarn materials General investment General investment Garment manufacturing and trading General investment	$ 1,678,430 141,550 59,878 177,335 USD 108,040,000 USD 1,935,000 16,710 USD 42,900,000 USD 7,782,862 USD 3,805,000 USD 1,800,000 USD 6,100,000 USD 12,098,738 USD 2,500,000 - USD 14,902,500 USD 50,000 USD 1 USD 14,655,000 10,000 USD 108,032,701 USD 114,660,489.5 USD 10,609,097 USD 3,800,000 USD 1,915,070 USD 14,023,848	$ 1,622,785 102,588 59,878 177,335 USD 108,040,000 USD 2,475,000 - USD 37,900,000 USD 6,501,742 USD 5,005,000 USD 1,500,000 USD 6,100,000 USD 11,920,238 USD 2,500,000 1,700 USD 14,902,500 USD 50,000 USD 1 USD 14,655,000 10,000 USD 108,032,701 USD 114,660,489.5 USD 8,862,037 USD 5,000,000 USD 1,915,070 USD 14,023,848	54,604,382 12,533,651 5,500,000 18,931,098 27,010 1,935,000 639,000 42,900,000 7,782,862 3,805,000 1,800,000 6,100,000 12,098,738 - - 14,902,500 50,000 1 14,655,000 1,000,000 108,032,700,860 - 10,609,097 3,800,000 - 38	100 24.1 100 55.06 100 100 100 100 73.33 100 50 100 85 100 - 53.22 100 100 100 100 100 100 20 50 30 38	$ 3,726,360 155,127 24,271 202,176 3,033,551 17,681 12,673 2,669,855 182,333 9,396 39,410 387,440 331,979 61,751 - 496,062 273,336 157,952 428,428 9,439 3,039,071 3,166,435 248,679 9,395 17,207 385,909	$ 299,697 31,512 ( 25,407 ) ( 11,906 ) 66,656 ( 7,735 ) ( 5,487 ) 232,542 ( 4,418 ) ( 2,436 ) ( 4,861 ) 90,580 ( 8,721 ) 1,638 ( 5,320 ) 50,653 255,763 98,161 3,750 ( 1,930 ) 66,689 55,599 ( 22,660 ) ( 5,143 ) ( 25,951 ) ( 22,804 )	$ 301,420 7,712 ( 25,437 ) ( 7,188 ) 69,342 ( 7,735 )	The difference is recognition of realized gains on disposal of investment property and (un)realized gain on disposal of property, plant and equipment The difference is recognition of unrealized sales profit and loss The difference is recognition of effects among inter-group lease gains or losses The difference is recognition of (un)realized sales profit and loss and gain on disposal of property, plant and equipment The difference is recognition of realized gain on disposal of property, plant and equipment

Note 1: Only the amount of profit or loss recognized for each subsidiary directly invested by the Company and each investee company using the equity method shall be shown.

Note 2: Please refer to Schedule 7 (attached) for the information about China investee companies.

• 115 -

(In Thousands of New Taiwan Dollars) (Except in USD)

De Licacy Industrial Co., Ltd. and Subsidiaries Investment Information in Mainland China

For the Year Ended December 31, 2021

Schedule 7

Name of investee	Main business and products	Main business and products	Total amount of paid-in capital (Note 3)	Total amount of paid-in capital (Note 3)	Method of investment (Note 6)	Accumulated outflow of investment from Taiwan as of January 1, 2021 (Note 3)	Accumulated outflow of investment from Taiwan as of January 1, 2021 (Note 3)	Investment flows during the period	Investment flows during the period	Investment Information in Mainland China	Investment Information in Mainland China	Investment Information in Mainland China	Investment Information in Mainland China	Investment Information in Mainland China	Investment Information in Mainland China
								Outflow	Inflow
Hangzhou De Licacy Limited Apex Textile Company Shanghai De Licacy Company Apex (Anqing) Company Nantong De Licacy Limited	Production and sales of long and short fiber fabric processing and finishing Manufacture and sale of textile products and dyeing and finishing General investment Manufacture and sale of various high-quality fabrics and textiles Production and sales of long and short fiber fabric processing and finishing		$ 1,162,560 （USD 42,000,000） 359,840 （USD 13,000,000） 1,529,320 （USD 55,250,000） 287,872 （USD 10,400,000） 138,400 （USD 5,000,000）		3. Best Alliance Limited 3. Bright Wisdom Ltd. 3. Sin Hao Company, Samoa Sin Young International Limited 3. Lucky Apex Ventures Ltd. 3. Best Alliance Limited	$ 1,287,012 (Note 4) （USD 18,289,091 and $ 780,770） 118,440 （USD 3,000,000 and $ 35,400） 56,744 （USD 2,050,000） 287,872 （USD 10,400,000） -		$ - - - - 138,400 （USD 5,000,000）	$ - - - - -	$ 1,287,012 (Note 4) （USD 18,289,091 and $ 780,770） 118,440 （USD 3,000,000 and $ 35,400） 56,744 （USD 2,050,000） 287,872 （USD 10,400,000） 138,400 （USD 5,000,000）	( $ 60,929 ) ( 49,330 ) - 2,249 -	100 53.22 14.67 53.22 100	( $ 60,030 ) (Note 5) ( 26,253 ) - 1,197 -	$ 1,663,048 166,376 38,183 164,535 138,486	$ - - - - -
Company name		Accumulated investment in Mainland China as of December 31, 2021 (Note 3)		Investment amount authorized by the Investment Commission, MOEA (Note 3)			Investment quota in China according to the Investment Commission, MOEA
Hangzhou De Licacy Limited Apex Textile Company Shanghai De Licacy Company Apex (Anqing) Company Nantong De Licacy Limited		$ 1,287,012 （USD 18,289,091及$ 780,770） $ 118,440 （USD 3,000,000 and $ 35,400） $ 56,744 （USD 2,050,000） $ 287,872 （USD 10,400,000） $ 138,400 （USD 5,000,000）		$ 1,287,012 （USD 18,289,091 and $ 780,770） $ 118,440 （USD 3,000,000 and $ 35,400） $ 347,384 （USD 12,550,000） $ 442,880 （USD 16,000,000） $ 415,200 （USD 15,000,000）			(Note 2) (Note 2) (Note 2) (Note 2) (Note 2)

Note 1: Recognized based on the financial statements of the investee company audited by the parent company’s certified public accountants in Taiwan during the same period.

Note 2: In accordance with the newly revised “Regulations Governing the Examination of Investment or Technical Cooperation in Mainland China” dated August 29, 2018, the Company obtained the certificate issued by the Industrial Development Bureau, Ministry of Economic Affairs on March 24, 2021, which conforms to the scope of operation of the Ministry of Manufacturing Operations, so the calculation of investment limit is not required.

Note 3: The related amount was translated at the Foreign Exchange Rate of NT$27.68 per USD at the end of the period.

Note 4: Including the recognition of De Yi Company’s investment of NT$108,480,000 (USD3,919,091) in Hangzhou Deli by way of debt in proportion to its shareholding.

Note 5: The difference is the unrealized gain or loss on disposal of property, plant and equipment and investment of real property.

Note 6: (1) Investment in Mainland China through third-party remittance.

(2) Investment in Mainland China through a third-party company.

(3) Reinvestment in Mainland China through reinvestment in an existing company in a third region.

• 116 -

De Licacy Industrial Co., Ltd. and Subsidiaries

Significant Transactions with China Investees Directly or Indirectly through Third Regions, the Prices, Payment Terms, and Unrealized Gains or Losses For the Year Ended December 31, 2021

Schedule 8

(In Thousands of New Taiwan Dollars)

Company	Trading partners	Relationship with transaction partner	Transaction type	Amount		Balance		Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Unrealized income (loss)
					Price	Payment erm	Comparison with general transactions	Balance	Percentage (%)
De Fa Company Hong Kong Eden Road Limited Hong Kong Eden Road Limited Thousand Well (Samoa) Limited Fastpower (Samoa) Limited Total Express Ltd. New Lake Ltd.	Hangzhou De Licacy Limited Hangzhou De Licacy Limited Hangzhou De Licacy Limited Hangzhou De Licacy Limited Hangzhou De Licacy Limited Apex Textile Company Hangzhou De Licacy Limited	Affiliated company Affiliated company Affiliated company Affiliated company Affiliated company Affiliated company Affiliated company	Sales Sales Purchase Purchase Purchase Purchase Sales	$ 28,696 21,712 39,786 504,110 30,879 1,320,868 15,062	Trade at general price Trade at general price Trade at general price Trade at general price Trade at general price Trade at general price Trade at general price	Open account 120 days Open account 90 days Open account 90 days Open account 90 days Open account 90 days Open account 90 days Open account 75 days	No general customers to compare General customer open account 45-120 days No general customers to compare No general customers to compare No general customers to compare No general customers to compare No general customers to compare	$ 6,581 8,147 ( 14,970 ) ( 80,055 ) ( 6,711 ) ( 1,234 ) 13,032	92 4 15 100 100 100 2	$ - - - - - - -

• 117 -

De Licacy Industrial Co., Ltd. and Subsidiaries

Business Relationships between Parent-Subsidiaries and Subsidiaries and Significant Transactions and Amount

For the Year Ended December 31, 2021

Schedule 9

(In Thousands of New Taiwan Dollars)

No.	Company	Transaction partner	Relationship with transaction partner (Note 1)			Transactions
				Account title	Amount	Trading term	% of total consolidated revenue or total assets (%)
0 1 2 3 4	The Company Hangzhou De Licacy Limited Thousand Well (Samoa) Limited Fastpower (Samoa) Limited Hong Kong Eden Road Limited	Chadtex Company New Lake Ltd. Vietnam De Licacy Enterprise Thousand Well (Samoa) Limited Fastpower (Samoa) Limited De Fa Company Apex Textile Company Hong Kong Eden Road Limited Apex (Anqing) Company New Lake Ltd. Hong Kong Eden Road Limited Hong Kong Eden Road Limited New Lake Ltd.	(1) (1) (1) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3)	Operating income Operating costs (manufacturing expense) Other payables-related parties Accounts receivable-related parties Operating income Operating costs Accounts receivable-related parties Accounts payable-related parties Other receivables-related parties Other receivables-related parties Interest income Operating income Accounts receivable-related parties Advance sales receipts Operating income Accounts receivable Operating costs Accounts payable-related parties Other receivables-related parties Operating income Accounts receivable-related parties Operating costs Accounts payable-related parties Accounts receivable-related parties Other receivables-related parties Operating income Operating costs Accounts payable-related parties Operating income Accounts receivable-related parties Temporary receipts Operating income Accounts receivable-related parties Accounts receivable-related parties Operating income	$ 74,966 24,120 37,775 7,321 233,281 500,344 19,078 93,272 16,500 162,781 6,606 504,110 80,055 51,204 30,879 6,711 28,696 6,581 191,027 39,786 14,970 21,712 8,147 5,833 130,413 27,934 15,062 13,032 504,110 80,055 51,204 30,879 6,711 15,697 41,500	Trade at general price, open account 60 days. Trade at general price, open account 30-60 days. Trade at general price, open account 30-90 days. Trade at general price, open account 90 days. Trade at general price, open account 90 days. Trade at general price, open account 120 days. Trade at general price, open account 90 days. Trade at general price, open account 120 days. Trade at general price, open account 30-90 days. Trade at general price, open account 75 days. Trade at general price, open account 90 days. Trade at general price, open account 90 days. Trade at general price, open account 90 days.	1 - - - 2 5 - - - 1 - 5 - - - - - - 1 - - - - - - - - - 4 - - - - - -

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No.	Company	Transaction partner	Relationship with transaction partner (Note 1)			Transactions
				Account title	Amount	Trading term	% of total consolidated revenue or total assets(%)
5 6 7 8 9 10 11	Lucky Apex Ventures Limited Apex Textile Company De Shen (Cayman) Company Vietnam De Licacy Enterprise De Hong Company New Lake Ltd. Best Alliance Limited	Apex (Anqing) Company Total Express Ltd. Apex (Anqing) Company Vietnam De Licacy Enterprise Total Express Ltd. New Lake Ltd. New Lake Ltd. De Hong (Vietnam) Company De Licacy Samoa Company Hong Kong Eden Road Limited De Hong (Vietnam) Company De Fa Company Apex (Anqing) Company	(3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3)	Other receivables-related parties Operating income Temporary receipts Other payables-related parties Operating income Operating costs Accounts payable-related parties Other receivables-related parties Prepayment for purchases Other receivables-related parties Interest income Other receivables-related parties Other receivables-related parties Operating income Operating costs Purchase of property, plant and equipment Accounts receivable-related parties Accounts payable-related parties Other payables-related parties Interest expenses Operating costs Other payables-related parties Operating income Other receivables-related parties Operating income Operating expenses Other receivables-related parties	$ 119,239 1,320,868 7,795 49,728 58,422 560,793 226,206 61,295 170,367 490,584 7,822 125,248 5,447 1,068,570 1,272,797 10,444 320,807 543,008 301,433 11,553 22,413 176,852 16,803 6,467 6,798 8,763 66,432	Trade at general price, open account 90 days. Trade at general price, open account 90 days. Trade at general price, open account 90 days. Trade at general price, open account 120 days. Trade at general price, open account 90 days. Trade at general price, open account 30 days. Trade at general price, open account 90 days. Trade at general price, open account 90 days.	1 13 - - 1 5 1 - 1 3 - 1 - 10 12 - 2 3 2 - - 1 - - - - -

• Note 1: The three types of transaction partners’ relationship are as follows:

(1) Parent company to subsidiary. (2) Subsidiary to parent company. (3) Subsidiary to subsidiary.

• Note 2: Written off at the time of the preparation of the consolidated financial statements.

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De Licacy Industrial Co., Ltd.

Major Shareholders’ Information

December 31, 2021

Schedule 10

Names of major shareholders	Shares	Shares
	Shareholding (shares)	Shareholding ratio
Fu-Fa International Investment Co. Ltd. Fu-Hwa Investment Co. Ltd. Fuson International Trade Co. Ltd.	31,268,067 30,000,994 30,000,443	8.13% 7.8% 7.8%

• Note 1: The information on major shareholders in this Schedule is based on the last business day of the quarter in which the shareholders held 5% or more of the Company’s total common shares that have been delivered without physical registration. The share capital in the consolidated financial statements may differ from the actual number of shares delivered without physical registration due to differences in the basis of computation.

• Note 2: The above information is revealed by the trustee’s individual subaccount of the trust account opened by the trustee if the shareholder has delivered the shares to the trust. As for the shareholders’ shareholding of more than 10% of insider shares reported under the Securities and Exchange Act, the shareholdings include the shareholdings of the shareholders plus the shares delivered to the trust and the shareholder has the right to decide the use of the trust property, etc. Please refer to the Market Observation Post system for the information on insiders’ shareholding report.

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De Licacy Industrial Co., Ltd. and Subsidiaries

Property, plant and equipment

For the Years Ended December 31, 2021 and 2020

Schedule 11

(In Thousands of New Taiwan Dollars)

Costs Balance at 1 January 2020 Additions Disposal Reclassification Acquired in a business combination Subsidiary liquidation and returned shares Net foreign exchange difference Balance at 31 December 2020 Accumulated depreciation and impairment Balance at 1 January 2020 Depreciation Disposal Acquired in a business combination Subsidiary liquidation and returned shares Net foreign exchange difference Balance at 31 December 2020 Net at 31 December 2020 Costs Balance at 1 January 2021 Additions Disposal Reclassification Net foreign exchange difference Balance at 31 December 2021 Accumulated depreciation and impairment Balance at 1 January 2021 Depreciation Disposal Net foreign exchange difference Balance at 31 December 2021 Net at 31 December 2021		Owned land $ 405,335 4,022 - - - 115,382 ) - $ 293,975 $ - - - - - - $ - $ 293,975 $ 293,975 - - - - $ 293,975 $ - - - - $ - $ 293,975	Land improvements $ 68,419 - - - - ( 1,706 ) ( 2,571) $ 64,142 $ 16,616 5,909 - - ( 1,659 ) ( 447) $ 20,419 $ 43,723 $ 64,142 - - - ( 771) $ 63,371 $ 20,419 5,690 - ( 188) $ 25,921 $ 37,450		Buildings $ 2,238,341 2,795 - 39,454 - 105,307 ) 33,422) $ 2,141,861 $ 910,353 53,179 - - 69,810 ) 2,849 $ 896,571 $ 1,245,290 $ 2,141,861 23,384 441 ) 350,372 13,945) $ 2,501,231 $ 896,571 60,675 441 ) 2,173) $ 954,632 $ 1,546,599		Machinery equipment $ 6,142,772 136,246 50,858 ) 175,774 - 460,696 ) 80,012) $ 5,863,226 $ 2,663,615 361,131 32,476 ) - 429,660 ) 3,734 $ 2,566,344 $ 3,296,882 $ 5,863,226 182,249 206,127 ) 76,892 52,790) $ 5,863,450 $ 2,566,344 391,729 169,591 ) 8,911) $ 2,779,571 $ 3,083,879		Transportation equipment $ 73,222 2,429 9,233 ) 92 - 10,011 ) 826) $ 55,673 $ 40,329 5,566 8,266 ) - 7,617 ) 97) $ 29,915 $ 25,758 $ 55,673 1,356 3,948 ) - 397) $ 52,684 $ 29,915 4,616 3,546 ) 130) $ 30,855 $ 21,829	Other equipment $ 1,743,008 79,674 ( 23,938 ) 33,879 375 ( 206,696 ) 5,478 $ 1,631,780 $ 1,054,118 130,978 ( 15,574 ) 19 ( 171,634 ) 15,327 $ 1,013,234 $ 618,546 $ 1,631,780 34,737 ( 62,456 ) 9,941 ( 6,532) $ 1,607,470 $ 1,013,234 134,622 ( 57,942 ) ( 3,254) $ 1,086,660 $ 520,810		Property in construction $ 293,770 213,706 - 113,432 ) - - 3,938 $ 397,982 $ - - - - - - $ - $ 397,982 $ 397,982 87,535 3,484 ) 422,477 ) 2,484) $ 57,072 $ - - - - $ - $ 57,072		Total
	(		( ( ( ( ( (	( ( ( ( ( ( (		( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( (	( ( ( (		( ( ( ( ( ( ( ( (	$ 10,964,867 438,872 84,029 ) 135,767 375 899,798 ) 107,415) $ 10,448,639 $ 4,685,031 556,763 56,316 ) 19 680,380 ) 21,366 $ 4,526,483 $ 5,922,156 $ 10,448,639 329,261 276,456 ) 14,728 76,919) $ 10,439,253 $ 4,526,483 597,332 231,520 ) 14,656) $ 4,877,639 $ 5,561,614

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