DE LICACY — Annual Report 2021

Nov 11, 2021

Stock Number: 1464

De Licacy Industrial Co., Ltd.

Individual Financial Statement for the year ended December 31, 2021 and 2020 and independent Auditor’s Report

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

Tel: (06)599-2866

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§CONTENTS§

				Financial Repot
		ITEMS	Page	Note No
1.	Cover		1	-
2.	Directory		2	-
3.	Independent Auditor’s report		3～7	-
4.	Individual balance sheet		8	-
5.	Individual statements of comprehensive		9～11	-
	income
6.	Individual statement of changes in equity		12	-
7.	Individual cash flow statement		13～14	-
8.	Notes to	the Individual financial report
	(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	17～31	4
		accounting policies
	(5)	Major sources of uncertainty in	31	5
		major accounting judgments,
		estimates and assumptions
	(6)	Explanation of important accounting	32～77	6-32
		items
	(7)	Related party transactions	77～86	33
	(8)	Pledged assets	86	34
	(9)	Significant contingent liabilities and	86～87	35
		unrecognized contractual
		commitments
	(10)	Major disaster losses	-	-
	(11)	Significant post-period events	-	-
	(12)	Other matters	87～88	36-37
	(13)	Matters disclosed in the notes
		1. Information about major	88, 90～95	38
		transactions
		2. Information about reinvestment	88, 96	38
		business
		3. Mainland investment information	88～89, 97～98	38
		4. Major shareholder information	89, 99	38
	(14)	Departmental information	-	-
9.	The contents of statements of major		101～123
	accounting items

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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. (the “De Licacy Group”), which comprise the individual balance sheets as of December 31, 2021 and 2020, and the individual statements of comprehensive income, individual statements of changes in equity and individual statements of cash flows for the years then ended, and the notes to the individual 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 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 financial performance and its 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 sufficient and appropriate to provide a basis for our opinion.

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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 individual 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 Individual Financial Report Note 4(14) 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 financial statements included in the individual financial statements of Deloitte Touche Tohmatsu, Inc. and its investee company, ERA NOUVEAU International Co., Ltd. (“ERA NOUVEAU”). Accordingly, our opinion on the individual financial statements referred to above, which relates to the amount of the aforementioned investment and its comprehensive income and loss, was 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 individual assets. The individual loss recognized under the equity 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 21% of the

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individual total profit or loss.

Management’s and Governance’s Responsibility for the Individual Financial Statments

Management's responsibility is to prepare individual 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 individual financial statements as is necessary to enable the preparation of individual financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the individual 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.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

2. 5 -

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

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

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

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

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

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

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

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

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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. Individual Balance Sheets

For the Years Ended December 31 of 2021 and 2020

(In Thousands of New Taiwan Dollars)

Code 1100 1110 1121 1136 1150 1160 1170 1180 1200 1210 130X 1410 1470 11XX 1517 1550 1600 1755 1840 1920 1915 1975 15XX 1XXX Code 2100 2110 2120 2150 2160 2170 2180 2200 2220 2230 2280 2313 2322 2365 2399 21XX 2541 2570 2580 2630 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3XXX	Assets Current assets Cash（Note 4 and 6） Financial assets at fair value through profit and loss-current（Note 4 and 7） Financial assets measured at fair value through other comprehensive gains and losses-current（Note 4 and 8） Financial assets at amortized cost-current（Note 4, 9 and 34） Notes receivable（Note 4, 10 and 25） Notes receivable-related parties（Note 4, 25 and 33） Net accounts receivable（Note 4, 10 and 25） Accounts receivable-related parties（Note 4, 25 and 33） Other receivables（Note 4） Other receivables-related parties（Note 4 and 33） Inventory（Note 4 and 11） Prepayments（Note 16） Other current assets（Note 17 and 27） Total current assets Non-current assets Financial assets measured at fair value through other comprehensive gains and losses-non-current（Note 4 and 8） Investments using the equity method（Note 4 and 12） Property, plant and equipment（Note 4, 13, 33 and 34） Right-of-use assets（Note 4 and 14） Deferred income tax assets（Note 4 and 27） Refundable deposits（Note 4） Prepayment for equipment Net confirmed welfare assets（Note 4 and 23） Total non-current assets Total assets Liabilities and Equity Current liabilities Short-term loans（Note 18 and 34） Short-term notes payable（Note 18） Financial liabilities measured at fair value through profit and loss-current（Note 4 and 7） Notes payable（Note 19） Notes payable-related parties（Note 33） Accounts payable（Note 19） Accounts payable-related parties（Note 33） Other payables（Note 20） Other payables-related parties（Note 33） Current tax liabilities（Note 4 and 27） Lease liabilities-current（Note 4 and 14） Deferred income-current（Note 4 and 21） Long-term loans due within one year（Note 18 and 34） Refund liabilities-current（Note 4 and 22） Other current liabilities Total current liabilities Non-current liabilities Long-term bank loans（Note 18 and 34） Deferred tax liabilities（Note 4 and 27） Lease liabilities-non-current（Note 4 and 14） Deferred income-non-current（Note 4 and 21） Deposit received Total non-current liabilities Total liabilities Equity（Note 24） Common stocks Capital reserve Retained surplus Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equities Total equity Total liabilities and equities		December 31,2021	December 31,2021	％ 2 - - 22 1 - 3 1 - 1 11 - - 41 - 51 6 - 2 - - - 59 100 29 5 - 1 - 1 1 1 - - - - 1 - 1 40 27 - - - - 27 67 27 5 1 3 1 5 4) 33 100		December 31,2020	December 31,2020
			Amount $ 218,567 8,914 2,556 3,089,638 92,973 52,974 473,054 88,593 15,473 183,092 1,568,947 37,408 50,566 5,882,755 28,689 7,159,166 830,479 8,453 277,345 10,288 13,660 11,523 8,339,603 $ 14,222,358 $ 4,039,653 709,511 120 137,847 57,287 110,911 144,134 170,752 38,167 2,557 6,892 297 197,001 2,844 60,568 5,678,541 3,845,898 33,927 1,652 6,125 1,778 3,889,380 9,567,921 3,845,657 676,850 121,649 401,956 172,602 696,207 564,277) 4,654,437 $ 14,222,358				Amount $ 341,357 9,387 - 2,689,686 26,432 25,152 347,100 116,894 16,850 556,912 1,371,756 24,549 38,916 5,564,991 56,222 6,847,702 904,882 23,195 247,413 10,488 20,325 14,522 8,124,749 $ 13,689,740 $ 4,611,976 709,501 18,919 61,205 32,206 94,909 83,871 152,393 16,521 2,557 14,035 7,472 273,158 - 51,229 6,129,952 2,805,521 36,823 9,378 1,422 2,327 2,855,471 8,985,423 3,845,657 791,558 283,732 401,956 162,083) 523,605 456,503) 4,704,317 $ 13,689,740		％
		(		(		( (		( (	3 - - 20 - - 3 1 - 4 10 - - 41 - 50 7 - 2 - - - 59 100 34 5 - 1 - 1 1 1 - - - - 2 - - 45 21 - - - - 21 66 28 6 2 3 1) 4 4) 34 100

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.

Individual Statements of Comprehensive Income

For the Years Ended December 31 of 2021 and 2020

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

Code Operating income（Note 4, 25 and 33） 4100 Net sales revenue 4800 Other operating income 4000 Total operating income Operating costs（Note 11, 23, 26 and 33） 5110 Cost of goods sold 5900 Gross operating income 5910 Unrealized subsidiaries and associated companies losses companies losses （Note 4） 5920 Realized subsidiaries and associated companies losses（Note 4） 5950 Gross realized operating income Operating expenses（Note 10, 23, 26 and 33） 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 26 and 33） 6900 Operating income (net loss) Non-operating income and expenses （Note 4, 7, 26 and 33） 7100 Interest income 7010 Other income 7020 Other benefits and losses 7050 Financial costs 7070 Share of losses of affiliated companies using the equity method 7000 Total non-operating income and expense 7900 Net profit before tax（net loss）		2021		％ 99 1 100 90 10 - - 10 5 3 3 1 12 1 1) - 2 3 ) 3 ) 9 5 4		2020
		Amount $ 3,843,741 25,871 3,869,612 3,498,333 371,279 6,364 6,405) 371,238 206,446 118,375 122,937 19,559 467,317 44,368 51,711) 17,872 82,442 123,009 ) 96,903 ) 338,114 218,516 166,805				Amount $ 3,002,049 3,591 3,005,640 2,807,286 198,354 6,405 3,815) 200,944 181,924 99,275 123,078 33,378 437,655 6 236,705) 40,280 121,553 215,109 ) 102,090 ) 93,887 61,479) 298,184 )		％
	( ( ( (		( ( (		( ( ( ( ( (		( ( ( ( (	100 - 100 93 7 - - 7 6 4 4 1 15 - 8) 1 4 7 ) 3 ) 3 2) 10 )

（ Continued ）

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（ continued from the previous page ）

Code 7950 Income tax benefit（Note 4 and 27） 8200 Net profit（net loss）for the year Other comprehensive loss（net） 8310 Items not reclassified to profit or loss: 8311 Determine the remeasurement of the benefit（Note 23） 8316 Unrealized appraisal gains and losses of equity instrument investments measured at fair value through other comprehensive gains and losses（Note 24） 8331 The equity method is used to recognize the re-measurement of defined welfare plans of subsidiaries and affiliated companies 8336 The equity method is used to recognize the unrealized gains and losses of subsidiaries and related companies through other comprehensive gains and losses to measure equity instruments at fair value （Note 24） 8349 Income tax related to items not reclassified（Note 27） 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 24） 8380 Share of other comprehensive profits and losses of subsidiaries and affiliates recognized using the equity method （Note 24） 8399 Income tax related to items that may be reclassified （Note 24 and 27） 8360		2021		％ 1) 5 - 1 ) - - - 1) 2 ) - - 2)		2020
		Amount $ 16,183) 182,988 11,961 ) 27,834 ) 877 ) 20,530 ) 2,392 58,810) 72,233 ) 1,564 ) 14,447 59,350)				Amount $ 90,898) 207,286) 28,389 8,894 621 8,109 5,678) 40,335 88,840 ) 3,362 ) 17,768 74,434)		％
	( ( ( ( ( ( ( ( (		( ( ( ( (		( ( ( ( ( (		( ( ( (	3) 7) 1 - - - - 1 3 ) - 1 2)

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8300 Total net comprehensive profit and loss for the year（after tax） ( 8500 Total comprehensive profit and loss for the year Earnings per share（net loss）（Note 28） 9710 Basic 9810 Dilution	118,160) ( $ 64,828 $ 0.48 $ 0.48	3) ( 2 ( ( (	34,099) ( $ 241,385) ( $ 0.54) $ 0.54)	1) 8)

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.

Individual Statements of Changes in Equity

For the Years Ended December 31 of 2021 and 2020

(In Thousands of New Taiwan Do llars, Except Dividends Per Share)

Code A1 Balance at 1 January 2020 Appropriations of 2019 earnings（Note 24） 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 24） D1 Net income 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 24） M5 Difference between actual acquisition of the subsidiary’s equity price and book value（Note 12） M7 Changes equity to the Subsidiary ownership Q1 Other comprehensive loss and income at fair value through liquidation（Note 24） Z1 Balance at 31 December 2020 Distributions and appropriations of 2020 earnings（Note 24） 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 24） D1 Net profit 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 Q1 Other comprehensive loss and income at fair value through liquidation（Note 24） Z1 Balance at 31 December 2021		Common stock $ 3,845,657 - - - - - - - - - - - 3,845,657 - - - - - - - $ 3,845,657		Capital surplus $ 942,169 - - - 173,055) - - - 7,459 675 14,310 - 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)		Treasurystocks $ 12,681 ) - - - - - - - 12,681 - - - - - - - - - - - $ -		Grand Total
						Legal reserve $ 228,353 55,379 - - - - - - - - - - 283,732 162,083) - - - - - - $ 121,649		Special reserve $ 293,042 - 108,914 - - - - - - - - - 401,956 - - - - - - - $ 401,956			Exchange differences from the financial statements of foreign operatingentities ( $ 451,447 ) - - - - - ( 74,434) ( 74,434) 12,788 - 422 - ( 512,671) - - - - ( 59,350) ( 59,350) - ($ 572,021)	Unrealized gains or losses 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
			( (		(				( ( ( ( ( ( (		( ( ( ( ( ( (	( ( ( (	( ( ( ( ( ( ( ( (		(		( ( ( ( ( ( (	$ 5,473,114 - - 403,794) 173,055) 207,286 ) 34,099) 241,385) 32,928 675 15,834 - 4,704,317 - 661 115,369) 182,988 118,160) 64,828 - $ 4,654,437

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

Chairman: Chia-Min Yeh

（ Please refer to the auditors’ report of Deloitte and Touche on March 24, 2022 ） Manager: Wei-Li Yeh

Accounting Manager: Yi-Nung Yu

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De Licacy Industrial Co., Ltd.

Individual Cash Flows Statement

For the Years Ended December 31 of 2021 and 2020

(In Thousands of New Taiwan Dollars)

Code Cash flow from operating activities A10000 Income (loss) before tax this year Adjustments for: A20010 Income and expense: A20100 Depreciation expenses A20200 Amortization expenses A20300 Expected credit loss A20400 Losses from financial assets and liabilities at fair value through profit or loss A20900 Financial costs A21200 Interest income A22300 Share of profits and losses of subsidiaries and affiliates accounted for using the equity method A22500 Gains on disposal of Property, plant and equipment A23700 Inventory valuation and obsolescence losses A23900 Unrealized subsidiaries and associated companies losses A24000 Realized subsidiaries and associated companies losses A24100 Unrealized foreign exchange losses A24500 Gains from lease amendment A29900 Benefits from liquidation of subsidiary using the equity method A29900 Provision for (reversal) liabilities A30000 Changes in operating assets and liabilities A31130 Notes receivable A31140 Notes receivable-related parties A31150 Accounts receivable A31160 Accounts receivable-related parties A31180 Other receivables A31190 Other receivables-related parties A31200 Inventory A31230 Prepayments A31240 Other current assets A32110 Decrease in financial liabilities held for trading A32130 Notes payable A32140 Notes payable-related parties A32150 Accounts payable A32160 Accounts payable-related parties A32180 Other payables A32190 Other payables-related parties A32210 Deferred income-current and non-current A32230 Other current liabilities A32240 Net defined benefit liabilities-non-current A33000 Cash used in operations A33100 Interest received A33200 Dividends received A33300 Interest paid		2021 $ 166,805 128,415 - 19,559 226 96,903 17,872 ) 338,114 ) 44,368 ) 8,491 6,364 ) 6,405 20,304 84 ) - 2,844 66,541 ) 27,822 ) 145,513 ) 28,301 2,441 7,444 ) 205,682 ) 12,859 ) 11,650 ) 18,919 ) 74,720 25,081 16,002 60,263 15,240 21,646 2,472 ) 9,338 8,962) 211,682) 15,781 11,358 98,265 )		2020
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 298,184 ) 135,352 93 33,378 17,623 102,090 40,280 ) 93,887 ) 6 ) 23,625 6,405 ) 3,815 109,982 10 ) 9,154 ) 2,789 ) 14,771 1,584 ) 178,110 18,668 ) 1,998 ) 2,300 ) 101,064 ) 6,379 14,243 2,462 ) 16,629 ) 6,114 17,345 ) 19,391 ) 45,283 ) 9,492 ) 8,894 14,366 8,366) 26,462) 32,404 39,147 101,686 )

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（ Continued ）

• （ continued from the previous page ）

Code A33500 Income tax paid AAAA Net cash used in operating activities Cash flow from investing activities B00040 Acquisition of amortized cost financial assets B00060 Gains (losses) from sale of amortized cost financial assets B00100 Acquisition for fair value through profit and loss financial assets B00200 Disposal for fair value through profit and loss financial assets B00010 Acquisition for Fair value through other comprehensive income financial assets B00020 Sales for Fair value through other comprehensive income financial assets B01800 Acquisition of investments accounted for using equity method B02300 Net cash generated from disposal of subsidiaries B02400 Returned payments for share from subsidiary reduction of capital B02700 Acquisition of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Refundable deposits increase B03800 Refundable deposits decrease B04300 Other receivables-related parties increase B04400 Other receivables-related parties decrease B05500 Disposal of investing real-estate B07100 Prepayment for equipment increase BBBB Net cash used in investing activities Cash flows from financing C00100 Short-term loans increase C00200 Short-term loans decrease C00500 Short-term notes payable increase C00600 Short-term notes payable decrease C01600 Payments of finance lease liabilities C01700 Repayment of long-term debt C03000 Deposit received increase C03100 Deposit received decrease C04020 Repayment of the principal portion of lease liabilities C04500 Cash dividends CCCC Net cash generated from financing activities EEEE NET INCREASE (DECREASE) IN CASH E00100 CASH AT THE BEGINNING OF THE YEAR E00200 CASH AT THE END OF THE YEAR		2021 $ 870) 283,678) 9,702,766 ) 9,261,244 16,455 ) 16,630 12,037 ) 9,180 94,607 ) - 15,315 35,477 ) 51,006 350 ) 550 161,410 ) 566,293 - 612) 103,496) 20,778,774 21,351,097 ) 18,230,606 18,230,596 ) 3,067,693 2,101,808 ) 3,451 4,000 ) 13,270 ) 115,369) 264,384 122,790 ) 341,357 $ 218,567		2020
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 4,380) 60,977) 10,158,528 ) 9,478,204 20,969 ) 23,942 7,959 ) 11,925 363,825 ) 466,216 - 46,934 ) 9,414 160 ) 2,814 566,293 ) 76,064 146,827 20,325) 969,587) 20,296,772 18,429,901 ) 3,898,627 3,618,916 ) 1,334,900 1,988,000 ) 5,649 7,333 ) 13,614 ) 576,849) 901,335 129,229 ) 470,586 $ 341,357

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.

NOTES TO INDIVIDUAL FINANCIAL STATEMENTS

For the Years Ended December 31 of 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 individual financial statements is New Taiwan Dollars.

2. THE DATE AND PROCEDURES FOR PASSING THE FINANCIAL REPORT

The individual financial statements were approved by the Corporation’s Board of Directors on March 24, 2022.

3. APPLICATION OF NEWLY ISSUED AND REVISED STANDARDS AND INTERPRETATIONS

• (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), which did not have any material impact on the Company’s accounting policies.

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

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

Note 1: IFRS 9 Amendments will be applied to the exchange of financial liabilities or modification of terms that occur during the annual report

• 15 -

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 individual financial statements were authorized for issue, the Company 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

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 annual

• 16 -

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: Except for the recognition of deferred tax for the temporary differences of lease and decommissioning obligations, the amendment applies to all transactions after January 1, 2022.

As of the date the financial statements were authorized for issue, the Company continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the related standards or interpretations. The related impact will be disclosed when the Company completes the evaluation.

1. SUMMARY EXPLANATION OF MAJOR ACCOUNTING POLICIES

2. (1) Statement of compliance

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

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

4. 17 -

In the preparation of individual financial reports, the Company applies the equity method to investment subsidiaries and related enterprises. In order to make the annual profit or loss, other comprehensive profit or loss and equity of the individual financial report the same as the annual profit or loss, other comprehensive profit or loss and equity of the Company attributable to the owners of the Company in the individual financial report of the Company, a number of accounting differences on an individual basis are adjusted for the “Investment using the equity method”, “Profit or loss share of the subsidiaries and related companies using the equity method” and related equity items.

• (3) Classification of current and non-current assets and liabilities

• Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

• 3) Cash 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:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period; and

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

• Assets and liabilities that are not classified as current are classified as

• non-current.

• (4) 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

• 18 -

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).

In the preparation of individual financial reports, the assets and liabilities of foreign operating institutions (including subsidiaries and affiliates in countries in which they operate or in currencies different from the Company) are converted to NTD at the exchange rate of each balance sheet date. Income and expense loss items are converted at the average exchange rate for the period and the resulting conversion difference is recognized as other comprehensive profit or loss.

• (5) Inventories

Inventories consist of raw materials, work in progress 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.

(6) Investment in subsidiaries

The Company uses the equity method to account for its investment in subsidiaries.

A subsidiary is an entity over which the Company has control.

Under the equity method, the original investment is recognized at cost, and the carrying amount of the investment after the acquisition date increases or decreases in accordance with the Company’s share of earnings and other comprehensive income or loss of the subsidiary and profit distribution. In addition, changes in the Company’s other equity interests in subsidiaries are - 19 -

recognized in proportion to the Company’s ownership interest.

Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The difference between the carrying amount of the investment and the fair value of the consideration paid or received is recognized directly in equity.

When the Company’s share of loss in a subsidiary equals or exceeds its interest in the subsidiary (including the carrying amount of the subsidiary under the equity method and other long-term interests that are substantially part of the Company’s net investment in the subsidiary), the loss continues to be recognized in proportion to the Company’s ownership.

When control over a subsidiary is lost, the Company measures its remaining investment in the former subsidiary at fair value at the date of loss of control. The difference between the fair value of the remaining investment and the carrying amount of the investment at the date of loss of control, if any, is recognized in profit or loss for the current period. In addition, all amounts recognized in other comprehensive income or loss related to the subsidiary are accounted for on the same basis as if the Company had disposed of the related assets or liabilities directly.

Unrealized gains or losses on downstream transactions with subsidiaries are eliminated in the individual financial statements. Gains or losses resulting from counter-current and side-stream transactions with subsidiaries are recognized in the individual financial statements only to the extent that they are not related to the Company’s interest in the subsidiary.

(7) Investment in affiliated companies

An affiliate is an enterprise over which the Company has significant influence but which is not a subsidiary or a joint venture.

The Company uses the equity method for its investments in affiliated companies.

Under the equity method, investments in affiliated companies are initially recognized at cost, and the carrying amount of such investments is adjusted for any subsequent increases or decreases in the Company’s share of income or loss of the affiliated companies and other comprehensive income or loss and profit distribution. In addition, changes in equity in affiliated companies are recognized in proportion to the Company’s ownership interest.

• 20 -

Gains or losses resulting from transactions with affiliates are recognized in the financial statements only to the extent that they are not related to the Company’s interest in the affiliates.

(8) 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.

• (9) Intangible assets

• Separately acquired

Individually acquired intangible assets with finite useful lives are initially measured at cost and subsequently measured at cost less accumulated amortization. Intangible assets are amortized on a straight-line basis over their useful lives. The Company reviews the estimated useful lives, residual values and amortization method at least at each year-end and defers the effect of changes in applicable accounting estimates.

1. Derecognition

When an intangible asset is derecognized, the difference between the net disposal price and the carrying amount of the asset is recognized in profit or loss for the year.

• 21 -

• (10) Impairment of property, plant and equipment, right-of-use assets and intangible assets

The Company assesses at each balance sheet date whether there is any indication that property, plant and equipment, right-of-use assets and intangible assets may be impaired. If any indication of impairment exists, the recoverable amount of the asset is estimated. If the recoverable amount of an individual asset cannot be estimated, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Shared assets are allocated to the smallest group of cash-generating units on a reasonably consistent basis.

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 less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, and the impairment loss is recognized in profit or loss.

When the impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised recoverable amount, provided that the increased carrying amount does not exceed the carrying amount (net of amortization or depreciation) that would have been determined had the impairment loss not been recognized in prior years. Reversal of impairment loss is recognized in profit or loss.

(11) Financial instruments

Financial assets and financial liabilities are recognized in the individual balance sheets when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities that are not measured at fair value through profit or loss are measured at fair value plus transaction costs that are directly attributable to the acquisition or issuance of the financial assets or financial liabilities when the financial assets or financial liabilities are recognized initially. Transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

1. Financial assets

2. 22 -

Regular transactions of financial assets are recognized and derecognized using trade date accounting.

• (1) Types of measurement

The types of financial assets held by the Company are financial assets measured at fair value through profit or loss, financial assets measured at amortized cost and investments in equity instruments measured at fair value through other comprehensive income.

• 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 32.

• B. Financial assets carried at amortized cost

• Financial assets are classified as financial assets carried at

• amortized cost if both of the following conditions are met:

• a. they are held within an operating model whose objective is to hold the financial assets to collect the contractual cash flows; and

• b. the contractual terms give rise to cash flows at a specific date, which are solely payments of principal and interest on the principal amount outstanding.

• Financial assets carried at amortized cost (including cash,

• receivables and refundable deposits carried at amortized cost) are measured at amortized cost using the effective interest method to determine the total carrying amount less any impairment loss after initial recognition, with any foreign - 23 -

currency exchange gain or loss recognized in profit or loss.

Interest income is calculated by multiplying the effective interest rate by the total carrying amount of the financial asset, except for the following two cases.

a. For credit-impaired financial assets acquired or created, interest income is computed by multiplying the credit-adjusted effective interest rate by the amortized cost of the financial assets.

• b. For financial assets that are not impaired but subsequently become impaired, interest income is computed by multiplying the effective interest rate by the amortized cost of the financial assets from the next reporting period after the impairment is applied.

Credit-impaired financial assets are those for which the issuer or the debtor has experienced significant financial difficulties, defaulted, it is probable that the debtor will declare bankruptcy or other financial reorganization, or the active market for the financial assets has disappeared due to financial difficulties.

• C. Investments in equity instruments measured at fair value through other comprehensive income or loss

At initial recognition, the Company has an irrevocable option to designate investments in equity instruments that are not held-for-trading and not acquired in a business combination with contingent consideration to be measured at fair value through other comprehensive income.

Investments in equity instruments measured at fair value through other comprehensive income are measured at fair value, with subsequent changes in fair value reported in other comprehensive income and accumulated in other equity. Upon disposal of an investment, the cumulative gain or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

Dividends from investments in equity instruments - 24 -

measured at fair value through other comprehensive income are recognized in profit or loss when the Company's right to receive them is established, unless the dividends represent a partial recovery of the cost of the investment.

(2) Impairment of financial assets

The Company assesses impairment losses on financial assets (including accounts receivable) measured at amortized cost at each balance sheet date based on expected credit losses.

An allowance for impairment is recognized on accounts receivable based on the expected credit loss over the period of the receivable. If there is no significant increase in credit risk, an allowance for loss is recognized on the basis of expected credit losses over 12 months, and if there is a significant increase, an allowance for loss is recognized on the basis of expected credit losses over the remaining period.

Expected credit losses are weighted average credit losses based on the risk of default, 12-month expected credit losses represent expected credit losses arising from possible defaults within 12 months after the reporting date and expected credit losses over the life of the financial instrument represent expected credit losses arising from all possible defaults during the expected life of the financial instrument.

For internal credit risk management purposes, the Company determines that a default on a financial asset has occurred when internal or external information indicates that the debtor is unlikely to settle the obligation, without regard to the collateral held.

An impairment loss on a financial asset is recognized by reducing the carrying amount of the financial asset through an allowance account.

(3) Derecognition of financial assets

Financial assets are derecognized only when the Company's contractual rights to the cash flows from the financial assets have lapsed or when the financial assets

have been transferred and substantially all the risks and rewards of

• 25 -

ownership of the assets have been transferred to other enterprises.

When a financial asset is derecognized in its entirety at amortized cost, the difference between the carrying amount and the consideration received is recognized in profit or loss. When equity instruments measured at fair value through other comprehensive income are derecognized as a whole, the cumulative gain or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

1. Financial liabilities

2. (1) Subsequent measurement

All of the Company's financial liabilities are measured at amortized cost using the effective interest method.

• (2) Derecognition of financial liabilities

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

1. Derivative instruments

Derivatives are exchange rate swaps entered into by the Company to manage the Company's exposure to exchange rate risk.

Derivatives are initially recognized at fair value at the time the derivative contracts are entered into and subsequently remeasured at fair value at the balance sheet date, with gains or losses arising from subsequent measurements recognized directly in profit or loss. When the fair value of a derivative is positive, it is recorded as a financial asset; when the fair value is negative, it is recorded as a financial liability.

• (12) Treasury stocks

The carrying value of the parent company's stock held by a subsidiary is based on the carrying value of the investment in the parent company when the subsidiary becomes a subsidiary.

• (13) Provision for liabilities

The amount recognized as a provision for liabilities is the best estimate of the amount required to settle the obligation at the balance sheet date, taking into account the risks and uncertainties of the obligation. The provision for

• 26 -

liabilities is measured as the discounted value of the estimated cash flows from the settlement of the obligation.

(14) Revenue recognition

After recognizing performance obligations under customer contracts, the Company allocates the transaction price to each performance obligation and recognizes revenue when each performance obligation is satisfied.

Merchandise Sales Revenue

Revenue from merchandise sales is derived from sales of long- and short-staple fibers. The Company recognizes revenue and accounts receivable at the point when the customer has the right to set the price and use of the products and has the primary responsibility to re-sell the products, as well as the risk of obsolescence. Receipts in advance are recognized as contract liabilities when the trade term of merchandise is fulfilled or before the shipment.

Therefore, the Company does not recognize revenue at the time of material removal.

(15)

Leases

The Company assesses whether the contract is a lease at the contract inception date.

1. The Company is the lessor

A lease is classified as a finance lease when the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the asset to the lessee. All other leases are classified as operating leases.

Lease payments under operating leases are recognized as income on a straight-line basis over the term of the relevant lease. The original direct costs incurred in acquiring an operating lease are added to the carrying amount of the underlying asset and recognized as an expense over the lease term on a straight-line basis.

1. The Company is the lessee

Right-of-use assets and lease liabilities are recognized at the lease commencement date for all leases, except for leases of low-value subject assets to which recognition exemptions apply and short-term leases where lease payments are recognized as expenses on a straight-line basis over the lease term.

• 27 -

Right-of-use assets are measured initially at cost (including the original measurement of the lease liability, lease payments made prior to the lease commencement date less lease incentives received, original direct cost and estimated cost of restoration of the subject asset) and subsequently measured at cost less accumulated depreciation, with adjustments for remeasurement of the lease liability. Right-of-use assets are presented separately in the individual balance sheets.

Right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease to the earlier of the end of the useful life or the end of the lease term.

Lease liabilities are measured initially at the present value of the lease payments (which are fixed payments). If the interest rate implied by the lease is readily determinable, the lease payments are discounted using that rate. If the interest rate is not readily determinable, the lessee's incremental borrowing rate is used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, and interest expense is allocated over the lease term. If a change in the lease term results in a change in future lease payments, the Company remeasures the lease liability and adjusts the right-of-use asset accordingly, but if the carrying amount of the right-of-use asset is reduced to zero, the remaining remeasurement amount is recognized in profit or loss. Lease liabilities are presented separately in the individual balance sheets.

(16)

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an eligible asset are included as part of the cost of the asset until substantially all activities necessary to bring the asset to its intended use or sale condition have been completed.

Investment income earned on specific borrowings that are temporarily invested prior to the incurrence of qualifying capital expenditures is deducted from the cost of borrowings eligible for capitalization.

Except as described above, all other borrowing costs are recognized in profit or loss in the year in which they are incurred.

(17) Government grants

• 28 -

Government grants are recognized only when there is reasonable assurance that the Company will comply with the conditions attached to the government grant and that the grant will be received.

Government grants related to revenue are recognized in other income on a systematic basis over the period in which they are intended to compensate the Company for the related costs recognized as expenses. Government grants that are contingent upon the Company's acquisition, construction or other acquisition of non-current assets are recognized as deferred revenue and are transferred to profit or loss on a reasonable and systematic basis over the useful lives of the related assets.

Government grants are recognized in profit or loss in the period in which they become receivable if they are intended to compensate for expenses or losses already incurred or to provide immediate financial support to the Company and have no future related costs.

(18) 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.

• 29 -

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.

(19) Taxation

Income tax expense is the sum of current income tax and deferred income tax.

1. Current tax

Current income (loss) is determined by the regulations of each jurisdiction in which the Company files income tax returns and is used to calculate the amount of tax payable (recoverable).

Income tax on undistributed earnings is recognized in the year when the shareholders' meeting is held.

Adjustments to prior years' income tax payable are included in the current period’s income tax.

1. Deferred tax

Deferred tax is calculated on temporary differences between the carrying amounts of assets and liabilities and the tax bases used to compute taxable income.

Deferred tax liabilities are generally recognized for all taxable temporary differences, while deferred income tax assets are recognized to the extent that it is probable that taxable profit will be available against which the temporary differences and loss carryforwards can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and affiliates, except where the Company can control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognized for deductible temporary differences associated with such investments only to the extent that it is probable that sufficient taxable income will be available to allow the temporary differences to be realized and to the extent that reversal is expected in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable

• 30 -

that sufficient taxable income will be available to allow all or part of the asset to be recovered. Deferred tax assets are reviewed at each balance sheet date and the carrying amount is increased to the extent that it is more likely than not that sufficient tax assets will be available to allow recovery of all or part of the assets.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the liability is settled or the asset is realized, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences of the manner in which the Company expects to recover or settle the carrying amounts of its assets and liabilities at the balance sheet date.

3.

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 JUDGMENTS, ESTIMATES AND ASSUMPTIONS

In the application of the Company’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 Company takes the recent development of the COVID-19 epidemic in Taiwan and the possible impact on the economic environment and relevant government policies and regulations into the consideration of cash flow estimates, growth rate, discount rate, profitability and other relevant significant accounting estimates. The management continuously inspect the estimates and underlying assumptions. If a revision of an accounting estimate affects the current period, it is recognized in the period in which the estimate is revised; if a revision of an accounting estimate affects both the current and future periods, it is recognized in the period in which the estimate is revised and in future periods.

• 31 -

6. Cash

Cash
Cash on hand, turnover Bank checks and demand deposits	December 31,2021 $ 410 218,157 $ 218,567	December 31,2020
			$ 410 340,947 $ 341,357

7.	Financial instruments at fair value through profit and loss December 31,2021 December 31,2020 Financial assets-current Mandatory measurement at fair value through profit or loss Non-derivative financial assets Fund beneficiary certificates $ 8,914 $ 9,387 Financial liabilities-current Held for trading Derivative instruments (not designated as hedges) Exchange rate swap contracts (Note) $ 120 $ 18,919	Financial instruments at fair value through profit and loss December 31,2021 December 31,2020 Financial assets-current Mandatory measurement at fair value through profit or loss Non-derivative financial assets Fund beneficiary certificates $ 8,914 $ 9,387 Financial liabilities-current Held for trading Derivative instruments (not designated as hedges) Exchange rate swap contracts (Note) $ 120 $ 18,919	Financial instruments at fair value through profit and loss December 31,2021 December 31,2020 Financial assets-current Mandatory measurement at fair value through profit or loss Non-derivative financial assets Fund beneficiary certificates $ 8,914 $ 9,387 Financial liabilities-current Held for trading Derivative instruments (not designated as hedges) Exchange rate swap contracts (Note) $ 120 $ 18,919	Financial instruments at fair value through profit and loss December 31,2021 December 31,2020 Financial assets-current Mandatory measurement at fair value through profit or loss Non-derivative financial assets Fund beneficiary certificates $ 8,914 $ 9,387 Financial liabilities-current Held for trading Derivative instruments (not designated as hedges) Exchange rate swap contracts (Note) $ 120 $ 18,919
	Financial assets-current Mandatory measurement at fair value through profit or loss Non-derivative financial assets Fund beneficiary certificates Financial liabilities-current Held for trading Derivative instruments (not designated as hedges) Exchange rate swap contracts (Note)	December 31,2021 $ 8,914 $ 120
				$ 9,387 $ 18,919

Note: Exchange rate swap contracts not subject to hedge accounting and outstanding at the balance sheet date were as follows:

December 31, 2021

Contract Amount Category Currencies Expiration Period (in 1,000 dollars) Foreign 2022.02.09 ～ 2022.03.21 NTD 442,586/USD 15,900 exchange swap NTD to USD contract Foreign 2022.05.24 ～ 2022.06.09 NTD 109,513/CNY 26,000 exchange swap NTD to RMB contract December 31, 2020 Contract Amount Category Currencies Expiration Period (in 1,000 dollars) Foreign 2021.01.28 ～ 2021.06.21 NTD 588,807/USD 20,000 exchange swap NTD to USD contract

The Company engages in exchange rate swaps mainly to hedge the risk of foreign currency assets and liabilities arising from exchange rate fluctuations.

The financial assets and liabilities at fair value through profit or loss incurred valuation losses of $7,212,000 and $23,795,000 for the years ended December 31, 2021 and 2020, respectively, are included in other gains and losses in the

• 32 -

individual statements of income.

8. Financial assets - Equity instrument investment at fair value through other comprehensive profit or loss

Investments in equity instruments -current Domestic investment Domestic listed stocks NANTEX Industry Co., Ltd., common stocks Investments in equity instruments -non-current Domestic investment Private shares of listed companies Chia Her Industry Co., Ltd., private common shares	December 31,2021 $ 2,556 $ 28,689	December 31,2020	December 31,2020
			$ - $ 56,222

In July 2013, the Company subscribed 13,980,000 shares (2,266,000 shares after capital reduction, 2.764% shareholding) of the private placement common stock of Chia Her Industrial Co. at NT$1.43 per share, totaling NT$19,991,000. Although the aforementioned shareholding has passed the three-year lock-up period, the past profit situation of Chia Her Industrial Co. Ltd. However, the Company is still unable to complete the public offering because its past profits do not meet the requirements for listing.

The Company has invested in the private placement of common stock of Chia Her Industrial Co. Ltd. for medium and long-term strategic purposes and expects to make profits from the long-term investment. The Company's management 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, and has therefore elected to designate these investments as measured at fair value through other comprehensive income.

• 33 -

9. Financial assets at amortized cost

Financial assets at amortized cost
Current Domestic investment Pledged demand deposit Pledged time deposit (1)	December 31,2021 $ 297,374 2,792,264 $ 3,089,638	December 31,2020
			$ 302,193 2,387,493 $ 2,689,686

• ～

• (1) As of December 31, 2021 and 2020, time deposit interest rate range is 0.07% 2.65% and 0.07% ～ 0.6%, respectively.

• (2) For information on pledges of financial assets measured at amortized cost. (see Note 34)

• (3) The Company invests only in liability instruments with low credit risk as assessed by the impairment. The Company 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, 2021 and 2020.

• Notes receivable and net accounts receivable

• Notes receivable

Notes receivable of the Company are all business-related.

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

1. Accounts receivable

Accounts receivable
At amortized cost Total book value Less: Allowance for the losses	December 31,2021 $ 521,203 48,149 $ 473,054	December 31,2020
			$ 397,203 50,103 $ 347,100

The average credit period for merchandise sales is 60 days and accounts receivable are non-interest bearing. To mitigate credit risk, the Company's management assigns a dedicated team to determine credit limits, approve credit facilities and other monitoring procedures to ensure that appropriate actions are

• 34 -

taken to collect overdue accounts receivable. In addition, the Company reviews the recoverable amounts of accounts receivable on a case-by-case basis at the balance sheet date to ensure that appropriate impairment losses have been recorded for uncollectible accounts receivable. Accordingly, the Company's management believes that the Company's credit risk has been significantly reduced.

The Company recognizes an allowance for losses on accounts receivable based on expected credit losses over the period of time. The expected credit loss for the duration of the period is calculated, which takes into account the customer's past default history and current financial condition. Since the Company's credit loss history shows that there is no significant difference in loss patterns among different customer groups, it does not further differentiate between customer groups and only uses the number of days that accounts receivable are open to determine the expected credit loss rate.

If there is evidence that the counter-party is in serious financial difficulty and the Company cannot reasonably expect to recover the amount, for example, if the counter-party is in liquidation, the Company directly eliminates the related accounts receivable, but continues to pursue recovery activities, as the amount recovered is recognized in profit or loss.

The Company measured the allowance for losses on accounts receivable based on the provision matrix as follows:

December 31, 2021

December 31, 2021
Less than 90 days Expected credit loss rate 0% Total carrying amount $ 443,912 Allowance for losses (expected credit losses during the continuance period) - Amortized cost $ 443,912 December 31, 2020 Less than 90 days Expected credit loss rate 0%	91-180 days 5% $ 30,676 ( 1,534 ) $ 29,142 91-180 days 5%	181-365 days 100% $ 14,249 ( 14,249 ) $ - 181-365 days 100%	366 days above 100% $ 32,366 ( 32,366 ) $ - 366 days above 100%	Total
				$ 521,203 ( 48,149 ) $ 473,054 Total
Expected credit loss rate

• 35 -

Total carrying amount Allowance for losses (expected credit losses during the continuance period) Amortized cost	$ 322,912 $ 25,461 $ 17,988 $ 30,842 $ 397,203 - ( 1,273 ) ( 17,988 ) ( 30,842 ) ( 50,103 ) $ 322,912 $ 24,188 $ - $ - $ 347,100

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

Beginning balance Impairment loss for the year Actual write-off for the year Ending balance		2021 $ 50,103 19,559 21,513) $ 48,149		2020
	(		(	$ 16,807 33,378 82) $ 50,103

11. Inventory

Inventory
Finished goods Work-in-progress Raw materials	December 31,2021 $ 942,075 342,971 283,901 $ 1,568,947	December 31,2020
			$ 922,188 268,596 180,972 $ 1,371,756

The nature of cost of goods sold is as follows:

Costs of goods sold Inventory valuation and obsolescence losses Unallocated manufacturing costs (Note) Others		2021 $ 3,465,976 8,491 22,495 1,371 $ 3,498,333		2020
			(	$ 2,734,293 23,625 49,874 506) $ 2,807,286

Note: Unallocated manufacturing costs include expenses related to the

shutdown period due to the impact of the COVID-19 epidemic.

12. Investments by using the equity method

Investment in subsidiary Investment in affiliated companies	December 31,2021 $ 7,004,039 155,127 $ 7,159,166	December 31,2020	December 31,2020
			$ 6,736,290 111,412 $ 6,847,702

1. Investment in subsidiary

2. 36 -

Unlisted public and OTC companies De Licacy (Samoa) Holding Company De-Fa International Industrial Co., Ltd. View Best Global Limited Chadex Industrial Co., Ltd. British Virgin Islands De Licacy BVI Holdings Limited De Licacy (Samoa) Holding Company De-Fa International Industrial Co., Ltd. View Best Global Limited Chadex Industrial Co., Ltd. British Virgin Islands De Licacy BVI Holdings Limited	December 31,2021 December 31,2020 $ 3,726,360 $ 3,393,211 24,271 49,709 17,681 41,053 202,176 239,702 3,033,551 3,012,615 $ 7,004,039 $ 6,736,290 Percentage of ownershipand votingrights	December 31,2020
	December 31,2021 100% 100% 100% 55.06% 100%	December 31,2020
		100% 100% 100% 55.06% 100%

• 1) The Company increased its investment in De Licacy (Samoa) Holding Company by $55,645,000 (US$2,000,000) and $320,241,000 (US$11,059,000) in 2021 and 2020, respectively.

• 2) The Company increased its investment in View Best Global Limited (100% owned) by $15,622,000 (US$540,000) in October 2020, mainly for the purpose of lending funds to ATAGO Vietnam (30% owned) 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.

• 3) In 2020, the Company acquired 4.65% of the shares of Chadex Industrial Co., Ltd. from an unrelated party for $21,329,000, resulting in an

• 37 -

increase in shareholding from 50.41% to 55.06%. The Company increased capital surplus by $675,000 for the difference between the actual acquisition price and the carrying value.

4) On January 14, 2020, the Board of Directors approved the purchase of

1.22% of the shares of Lucky Unique Enterprise Co., Ltd. (“Lucky Unique”) from its subsidiary Tung Ming Textile Co., Ltd. (“Tung Ming”) for $6,633,000, which increased its shareholding from 59.7% to 60.92%; on March 12, 2020, the Board of Directors approved the sale of 60% of the shares of De Kao Trading Co., Ltd. (“De Kao”) to Lucky Unique for $12,000,000. On April 20, 2020, the Board of Directors approved the sale of 91.28% of the shares of Tung Ming to the subsidiary, Lucky Unique for $258,989,000; and on June 19, 2020, the Board of Directors approved the sale of 35.94% of the shares of Lucky Unique (total of 14,293,000 shares) to a unrelated party for $195,227,000 ($13.7 per share, and $587,000 of securities transactions tax was deducted), resulting in a reduction of the shareholding to 24.98%. The transaction price was determined with reference to the valuation report of Chang Xin Asset Consulting Co. Ltd., an independent consultant of the unrelated party, on 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 Co., Ltd. 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 29 and Note 32 to the Consolidated Financial Statements for 2021.

5) For the changes in the percentage of ownership and items of stockholders’ equity resulting from various equity transactions, see Notes 12 and 33 to the Company’s 2021 Consolidated Financial Statements. For the details of the Company’s indirectly held investment subsidiaries, see Notes 6 and 7.

The shares of income and other comprehensive income of the subsidiaries using the equity method in 2021 and 2020 are recognized

• 38 -

based on the audited financial statements of each subsidiary for the same periods.

1. Investment in affiliated companies – Significant affiliated companies

December 31, 2021 December 31, 2020

Lucky Unique Enterprise Co., Ltd. $ 155,127 $ 111,412

In 2021, the Company increased cash capital to Lucky Unique for $38,962,000 (not according to shareholding percentage), which decrease its shareholding from 24.98% to 24.1%. As of December 31, 2021, the Company’s percentage of shareholding and voting rights in Lucky Unique is 24.1% and 24.98%, respectively.

For the business nature, principal place of business and country information of the company registration of the above-mentioned related enterprises, please refer to Schedule 6 “Information of the Invested Company, Location ... and Other Related Information”.

1. Property, plant and equipment

The schedule of changes in property, plant and equipment for the years ended December 31, 2021 and 2020 is shown in Schedule 10.

Owned land includes a portion of the Company's plant (with a carrying value of $23,507,000), which is agricultural land and is temporarily registered in the name of others, but the agricultural land has been pledged to the Company.

The Company’ property, plant and equipment were assessed in 2021 and 2020, there is no indication of impairment.

Depreciation expense is provided on a straight-line basis over the following useful lives:

lives:
Land improvements	3 to 40 years
Buildings
Plant main buildings	20 to 55 years
Mechanical and power
equipment	5 to 40 years
Engineering system	3 to 55 years
Others	2 to 25 years
Machinery	2 to 12 years
Transportation equipment	3 to 6 years
Other equipment	2 to 25 years

• 39 -

For the amount of property, plant and equipment pledged as security for loans by the Company, see Note 34.

14. Lease agreement

1. Right-of-use assets

1.	Right-of-use assets
2.	Costs Balance at 1 January 2020 Additions Decrease Balance at 31 December 2020 Accumulated depreciation Balance at 1 January 2020 Depreciation expenses Decrease Balance at 31 December 2020 December 31, 2020 net Costs Balance at 1 January 2021 Additions Decrease Balance at 31 December 2021 Accumulated depreciation Balance at 1 January 2021 Depreciation expenses Decrease Balance at 31 December 2021 December 31, 2021 net Lease liabilities Lease liabilities carrying amount Current Non-current Buildings Transportation equipment	Buildings Transportatio n equipment Total $ 27,902 $ 2,106 $ 30,008 16,662 416 17,078 ( 3,084) ( 2,106) ( 5,190) $ 41,480 $ 416 $ 41,896 $ 7,685 $ 1,656 $ 9,341 12,808 508 13,316 ( 1,850) ( 2,106) ( 3,956) $ 18,643 $ 58 $ 18,701 $ 22,837 $ 358 $ 23,195 $ 41,480 $ 416 $ 41,896 9,281 1,007 10,288 ( 16,661) - ( 16,661) $ 34,100 $ 1,423 $ 35,523 $ 18,643 $ 58 $ 18,701 12,662 335 12,997 ( 4,628) - ( 4,628) $ 26,677 $ 393 $ 27,070 $ 7,423 $ 1,030 $ 8,453 December 31,2021 December 31,2020 $ 6,892 $ 14,035 $ 1,652 $ 9,378 $ 7,508 $ 23,054 1,036 359 $ 8,544 $ 23,413				Total
				$ 14,035 $ 9,378 $ 23,054 359 $ 23,413

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

December 31, 2021 December 31, 2020

• 40 -

Buildings Transportation equipment 3. Other leasing information Short-term leasing expense Total cash used in leasing	December 31,2021 1.53%～1.68% 1.45%～1.48% 2021 $ 1,680 ($ 14,950)	December 31,2020	December 31,2020
		1.53%～1.68% 1.45% 2020
	(	(	$ 1,680 $ 15,294)

The Company has selected to apply the exemption from recognition to leases office premises and plant that qualify as short-term leases and does not recognize the related right-of-use assets and lease liabilities for these leases.

All commitments under leases with lease periods beginning after the balance sheet date are as follows:

	balance sheet date are as follows:
15.	December 31,2021 Lease commitment $ 580 Other intangible assets–December 31, 2020 For computer software licenses, the changes are as	December 31,2020
		$ 490 follows:

Costs Beginning balance Expiry derecognition Ending balance Accumulated amortization Beginning balance Amortization expenses Expiry derecognition Ending balance Ending net		2020
	(	$ 945 945) $ - 2020
	(	$ 852 93 945) $ - $ -

Amortization fee is accrued on a straight-line basis over one year of useful life for the above assets.

16. Prepayments

Prepayments
Prepayment for purchases Prepayment for plating fee Others	December 31,2021 $ 20,580 2,606 14,222 $ 37,408	December 31,2020
			$ 11,419 4,090 9,040 $ 24,549

• 41 -

17. 18.	Other current assets Income tax refund receivable Input tax Overpaid sales tax Others Loan 1. Short-term loans Secured loan (Note 34) Bank loan Unsecured loan Bank loan by line of credit	December 31,2021 $ 45,368 1,037 766 3,395 $ 50,566 December 31,2021 $ 2,061,500 1,978,153 $ 4,039,653	December 31,2020	December 31,2020
			$ 35,966 1,097 - 1,853 $ 38,916 December 31,2020
				$ 2,677,000 1,934,976 $ 4,611,976

The annual interest rates of bank loans ranged from 0.34% to 1.5% and 0.97% to 1.41% on December 31, 2021 and 2020, respectively.

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

Outstanding short-term notes and bills payable are as follows:

December 31, 2021

Guarantor/ Acceptance agency	Face amount	Discount amount	Carrying amount	Interest rate range(%) 0.500 0.902 0.400 0.852	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.	$ 50,000 100,000 50,000 50,000	$ 12 114 4 64	$ 49,988 99,886 49,996 49,936		none none none none	$ - - - -

• 42 -

Dah Chung Bills Finance Corp. Da Ching Bills Finance Corp. Taiwan Finance Corp. International Bills Finance Corp. O-Bank	50,000 50,000 50,000 50,000 260,000 $ 710,000	15 6 47 40 187 $ 489	49,985 0.850 none - 49,994 1.040 none - 49,953 1.000 none - 49,960 0.650 none - 259,813 0.270 none - $ 709,511

December 31, 2020

Guarantor/ Acceptance agency	Face amount	Face amount		Discount amount		Carrying amount	Interest rate range(%) 0.500 0.902 0.400 0.852 0.850 1.040 1.140 0.650 0.330	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		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. & 3. Less: Syndicated loans arrangement fee Unsecured loan Bank loan by line of credit 1. Less: Classified as the part due within one year	December 31,2021 $ 1,051,667 2,022,507 5,225 3,068,949 973,950 4,042,899 197,001 $ 3,845,898	December 31,2020
			$ 12,000 2,199,932 4,653 2,207,279 871,400 3,078,679 273,158 $ 2,805,521

• 1) Bank guarantees and credit loan

Secured loan Bank loan Bank loan Unsecured loan	ExpiryDate	Significant Terms The principal is repaid at a time when it is due. From September 2021, average amortization of principal in 36 installments.	December 31, 2021 $ 1,041,000 10,667	December 31, 2020
	2023.10.13 2024.08.15			$ - 12,000

• 43 -

Bank loan by line of credit 2022.01.19～ 2026.12.08 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. Bank loan by line of credit 2026.05.15～ 2029.07.09 From April and May 2022, the principal will be repaid in average monthly installments, respectively. Bank loan by line of credit 2025.08.21～ 2029.11.12 From September 2021 to May 2024, the principal will be repaid in average monthly installments, respectively. Bank loan by line of credit 2025.10.08 From November 2021, the principal will be repaid in average monthly installments. Bank loan by line of credit 2026.02.04 From March 2021, the principal will be repaid in average monthly installments. Less: Classified as the part due within one year	270,000 250,000 288,117 95,833 70,000 2,025,617 197,001 $ 1,828,616	240,000 250,000 293,400 88,000 -
		883,400 97,158
		$ 786,242

The interest rates on December 31, 2021 and 2020 were 0.21% to 1.55% and 0.21% to 1.5%, respectively.

• 2) New bank syndications signed on September 30, 2021

• －

• (1) Syndicated credit line NT$2,200,000,000

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 (Commercial paper guarantee)		Line of credit $ 1,200,000 1,000,000 $ 2,200,000		Used amount December 31, 2021 $ 1,023,600 998,907 $ 2,022,507	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% 1.4905%	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 (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

• 44 -

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.

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

• 45 -

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 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.

3) Original bank syndications signed on February 13, 2019

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, 2020 $ 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 (February 21, 2019) will be the first installment. Thereafter, the - 46 -

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.

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

• 47 -

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 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 Company’s pledges to secure long-term loans are described in Note 34.

19. Notes payable and Accounts payable

• (1) Notes payable

Notes payable
Notes payable Occurrence due to business Occurrence due to nonbusiness－ purchase of property, plant and equipment	December 31,2021 $ 134,702 3,145 $ 137,847	December 31,2020
			$ 59,983 1,222 $ 61,205

• (2) All accounts payable for business.

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

• 48 -

20. Other accounts payables

20.	Other accounts payables
21.	Payroll payable and bonus Remuneration for employees and directors Utilities payable Commission payable Transportation fee payable Leave payable Equipment payable Others Deferred income Current Noncurrent	December 31,2021 $ 60,587 9,709 17,733 8,413 16,154 7,830 3,970 46,356 $ 170,752 December 31,2021 $ 297 $ 6,125	December 31,2020
			$ 36,379 25,096 13,868 8,662 7,768 3,696 924 56,000 $ 152,393 December 31,2020
				$ 7,472 $ 1,422

This represents government subsidies from environmental improvement projects, energy conservation projects and production line technology renovation, which has been recorded as deferred income and transferred to profit or loss over the useful lives of the related assets of 7 to 14 years.

22. Refund liability

Refund liability
Beginning balance Current year provision (reversal) of refund liability Ending balance		2021 $ - 2,844 $ 2,844		2020
			(	$ 2,789 2,789) $ -

23. 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 Company and its domestic subsidiaries, and contributes 6% of employees' monthly salaries to the individual accounts of the Labor Insurance Bureau.

• (2) Defined benefit plan

The pension plan of the Company 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

• 49 -

salary for the six months prior to the date of approved retirement. The 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 Company has no right to influence the investment management strategy.

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

sheets are shown below:
Defined benefit obligation current value Plan assets at fair value	December 31,2021 $ 181,821 ( 193,344) ($ 11,523)	December 31,2020
	( (	( (	$ 176,026 190,548) $ 14,522)

Net defined benefit assets changes:

January 1, 2020 Current service costs Interest expense (income) Recognized in profit or loss Re-measurement Plan assets remuneration (in addition to the amount included in net interest) Actuarial losses (benefits) Changes in demographic assumptions	Defined benefit obligation current value $ 235,314 2,028 1,765 3,793 - 16	Plan assets at fair value ($ 213,081) - ( 1,642) ( 1,642) ( 7,198 ) -	Net defined benefit assets	Net defined benefit assets
		( ( ( (	(	$ 22,233 2,028 123 2,151 7,198 ) 16

• （ Continued ）

• 50 -

（ continued from the previous page ）

Changes in financial assumptions Experience adjustment Recognized in other comprehensive loss or income Employer’s contribution Benefit expenditures December 31, 2020 Current service costs Interest expense (income) Recognized in profit or loss Re-measurement Plan assets remuneration (in addition to the amount included in net interest) Actuarial losses (benefits) Changes in demographic assumptions Changes in financial assumptions Experience adjustment Recognized in other comprehensive loss or income Employer’s contribution Benefit expenditures December 31, 2021	Defined benefit obligation current value $ 4,051 ( 25,258) ( 21,191) - ( 41,890) 176,026 1,227 880 2,107 - 3,514 ( 1,976 ) 13,005 14,543 - ( 10,855) $ 181,821	Plan assets at fair value $ - - ( 7,198) ( 10,517) 41,890 ( 190,548) - ( 978) ( 978) ( 2,582 ) - - - ( 2,582) ( 10,091) 10,855 ($ 193,344)	Net defined benefit assets	Net defined benefit assets
		( ( ( ( ( ( ( ( (	( ( ( ( ( ( ( ( (	$ 4,051 25,258) 28,389) 10,517) - 14,522) 1,227 98) 1,129 2,582 ) 3,514 1,976 ) 13,005 11,961 10,091) - $ 11,523)

The amounts recognized in profit or loss for defined benefit

plans are summarized by function as follows:

Operation cost Marketing expense Management expense R&D expense		2021 $ 644 152 144 189 $ 1,129		2020
				$ 1,176 319 274 382 $ 2,151

• 51 -

The Company 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 Company is based on the income at an interest rate not lower than the local bank’s two-year time deposit rate.

2. 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.

3. 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 present value of the Company's defined benefit obligation was actuarially determined by a qualified actuary and the significant assumptions at the measurement date were as follows:

Discount rate Expected rate of salary increase	December 31,2021 0.625% 1.5%	December 31,2020
		0.5% 1.5%

The amounts that would increase (decrease) the present value of the defined benefit obligation if there were reasonably possible changes in significant actuarial assumptions, respectively, with all other assumptions held constant, are as follows:

constant, are as follows:
Discount rate Increase 0.1% Decrease 0.1% Expected rate of salary increase Increase 0.1% Decrease 0.1%	December 31,2021 ($ 1,582) $ 1,603 $ 1,563 ($ 1,546)	December 31,2020
	( (	( (	$ 1,637) $ 1,659 $ 1,616 $ 1,598)

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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 defined benefit obligation expiration	December 31,2021 $ 10,500 8.7 years	December 31,2020
			$ 9,888 9.3 years

24. Equity

• (1) Common stocks

Common stocks
Authorized shares (1000 shares) Authorized capital stock Number of shares issued and fully paid (1000 shares) Issued capital stocks	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 May be used to make up losses	December 31,2021 $ 501,694 32,325 77,146 65,024	December 31,2020
		$ 617,063 32,325 77,146 65,024

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Recognition of changes in equity of investment in affiliates accounted for using equity method 661 - $ 676,850 $ 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.

• (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 26-(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

• 54 -

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:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	2019
	$ 55,379 108,914 403,794 1.05

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

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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

Other equities	Other equities
1. Conversion difference in the conversion statements of foreign operating institutions 2021 Beginning balance ($ 512,671) ( Current year occurred Conversion differences of foreign operating institutions ( 72,233 ) ( Related taxes of foreign operating institutions 14,447 Shares of subsidiaries and affiliates adopting the equity method ( 1,564) ( Other comprehensive income of the year ( 59,350) ( Disposal of shares of subsidiaries accounted for using the equity method - Changes equity to the Subsidiary ownership - Ending balance ($ 572,021) (		of financial 2020 $ 451,447) 88,840 ) 17,768 3,362) 74,434) 12,788 422 $ 512,671)
	( ( ( ( (

• 56 -

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

Beginning balance Current year occurred Unrealized gain or loss/equity instruments Shares of subsidiaries and affiliates adopting the equity method Other comprehensive income of the year Changes equity to the Subsidiary ownership Transfer of accumulated gain or loss on disposal of equity instruments to retained earnings Ending balance		2021 $ 56,168 27,834 ) 20,530) 48,364) - 60) $ 7,744		2020
	( ( ( (		(	$ 49,491 8,894 8,109 17,003 1,102 11,428) $ 56,168

• (6) Treasury stocks

Treasury stocks
Shares of parent company held by subsidiaries (1000 shares) Shares in starting period Increase during the period (Note 1) Decrease during the period (Note 2) Shares in ending period		2020
	(	1,218 25 1,243) -

Note 1: The Company’s shareholding in Lucky Unique Enterprise Company increased by 1.22% in 2020, representing an individual shareholding of

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25,000 shares in the Company.

• Note 2: The Company disposed of Lucky Unique Enterprise Company's shares in 2020 and lost control of Lucky Unique Enterprise Company. Therefore, Lucky Unique Enterprise Company'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.

25. Revenue

venue
Sales revenue		2021 $ 3,869,612		2020
				$ 3,005,640

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

The Company 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 Company's merchandise sales is 60 days. Most of the contracts are recognized as accounts receivable when the merchandise is transferred and the Company has the unconditional right to receive the consideration. These account receivables are usually collected in short time and do not have significant financial components. However, for some of these contracts, the Company is obligated to transfer the merchandise to the customer when the consideration was received from those customers before transferring the merchandise, which shall be recognized as contract liabilities.

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(2) Balance of contract

	(2) Balance of contract	(2) Balance of contract	(2) Balance of contract
26.	December 31, 2021 December 31, 2020 Notes receivable (including related party) (Note 10 and 33) $ 145,947 $ 51,584 Accounts receivable (including related party) (Note 10 and 33) $ 561,647 $ 463,994 (3) Revenue breakdown from customer contracts 2021 Major merchandise Long- and short-staple fibers $ 3,867,747 $ Others 1,865 $ 3,869,612 $ Net income (loss) before tax (1) Other income and loss, net 2021 Net income on disposal of property, plant and equipment $ 44,368 $ (2) Interest income 2021 Bank deposits $ 9,497 $ Capital loans and related party interest 8,356 Deposit settlement interest 19 $ 17,872 $ (3) Other income 2021 Government subsidy income $ 13,384 $ Rental income 11,656 Counseling fee income 8,467 Handling fee income 4,656 Income from sale of sample fabric 6,015 Income from sale of waste materials 2,695				January 1, 2020
					$ 64,771 $ 656,814 2020
			$	2,936,390 69,250 3,005,640 2020
			$
			$	6 2020
			$	32,169 8,078 33 40,280 2020
			$
			$	72,982 7,171 5,548 3,505 3,395 2,062

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Claims income 1,939 26 Fire insurance claims income 10,405 - Others 23,225 26,864 $ 82,442 $ 121,553 (4) Other benefits and losses 2021 2020 Net loss on foreign currency exchange ( $ 97,639 ) ( $ 195,764 ) Net loss on valuation of financial instruments at fair value through profit or loss ( 7,212 ) ( 23,795 ) Income (loss) on disposal of subsidiaries - 9,154 Others ( 18,158) ( 4,704) ($ 123,009) ($ 215,109) (5) Financial costs 2021 2020 Interest on bank loans $ 93,126 $ 101,023 Amortization of handling fees on syndicated loans 3,759 1,130 Interest on lease liabilities 230 406 Less: Amounts included in the cost of qualifying assets (included in property, plant and equipment and prepayments for equipment) 212 469 $ 96,903 $ 102,090 Capitalization of interest relevant information as below: 2021 2020 Capitalization of interest amount $ 212 $ 469 Capitalization at interest rate 1.14%～1.82% 1.32%～1.68%		26 - 26,864 $ 121,553 2020
	( ( ( (	$ 195,764 ) 23,795 ) 9,154 4,704) $ 215,109) 2020
		$ 101,023 1,130 406 469 $ 102,090 as below: 2020
	$ 469 1.32%～1.68%

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(6) Depreciation and amortization

Property, plant and equipment Intangible assets Right-of-use assets Depreciation expense summarized by function Operation cost Operation expense Amortization fee summarized by function Operation expense Employee benefit expense Short-term employee benefits Payroll Labor and health insurance fees Remuneration to directors Others Post-employment benefits Defined contribution plan Defined benefit plan （Note 23） Summary by function Operation cost Operation expense		2021 $ 115,418 - 12,997 $ 128,415 $ 103,996 24,419 $ 128,415 $ - 2021 $ 424,112 42,290 6,907 15,372 488,681 13,991 1,129 15,120 $ 503,801 $ 319,321 184,480 $ 503,801		2020
				$ 122,036 93 13,316 $ 135,445 $ 112,717 22,635 $ 135,352 $ 93 2020
				$ 385,527 43,155 4,151 16,245 449,078 15,316 2,151 17,467 $ 466,545 $ 304,365 162,180 $ 466,545

(7) Employee benefit expense

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(8) Remuneration to employees 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’ 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
	Cash
	$ 7,061 2,648

If there is any change in the amount after the adoption of the annual individual 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 employees and directors’ remuneration for fiscal years of 2020 and 2019 and the amount recognized in the individual 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 income (loss)

Total foreign exchange income Total foreign exchange loss		2021 $ 13,592 111,231)		2020
	(		(	$ 62,327 258,091)

• 62 -

( $ 97,639 ) ( $ 195,764 )

Net loss

27. Income tax

• (1) Income tax recognized in profit or loss and expenses and losses Main items of income tax benefit are as follows:

Current year income tax Adjustments to prior years ( Deferred income tax Current year occurred ( ( The reconciliation of benefit is as follows: Net income (loss) before tax Income tax expense (benefit) before income tax (net loss) at statutory tax rate Non-deductible expenses and losses for tax purposes Non-additive income for tax purposes Unrecognized temporary differences ( Adjustments to current income tax expense in prior years ( (		2021 2020 $ 194 ) $ 3,950 15,989) ( 94,848) $ 16,183) ($ 90,898) accounting income to income tax 2021 2020 $ 166,805 ($ 298,184) $ 33,361 ( $ 59,637 ) 5,049 141 - ( 16,402 ) 54,399 ) ( 18,950 ) 194) 3,950 $ 16,183) ($ 90,898)
	( ( (

(2) Income tax recognized in other comprehensive income

Deferred income tax Current year occurred Conversion of	2021 $ 14,447	2020
		$ 17,768

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foreign operating institutions Remeasurement of defined benefit plan 2,392 ( 5,678 ) $ 16,839 $ 12,090

• (3) Current tax assets and liabilities

Income tax refund receivable（included in other current assets） Income tax payable	December 31,2021 $ 5,637 $ 2,557	December 31,2020	December 31,2020
			$ 4,573 $ 2,557

• (4) Deferred tax assets and liabilities

Changes in deferred tax assets and liabilities as below:

2021

2021
Deferred tax assets Temporary differences Unrealized sales gross profit Allowance for decline in value of inventories and obsolescence losses Leave payable Unrealized foreign exchange losses Temporary differences Exchange differences from foreign operations Allowance for doubtful accounts Unallocated fixed manufacturing costs Others Loss credit Deferred tax liabilities Temporary differences Property, plant and equipment Net confirmed welfare assets		Beginning balance $ 30,463 22,108 739 34,173 95,337 8,889 3,140 2,869 197,718 49,695 $ 247,413 $ 33,919 2,904 $ 36,823	Recognized in profit or loss ( $ 1,641 ) 1,698 827 5,062 - 562 ( 1,864 ) ( 617) 4,027 11,458 $ 15,485 ( $ 4,689 ) 4,185 ($ 504)	Recognized in other comprehensi ve income $ - - - - 14,447 - - - 14,447 - $ 14,447 $ - ( 2,392) ($ 2,392)		Ending balance
			( ( ( ( (	( (		$ 28,822 23,806 1,566 39,235 109,784 9,451 1,276 2,252 216,192 61,153 $ 277,345 $ 29,230 4,697 $ 33,927

• 64 -

2020

2020
Deferred tax assets Temporary differences Unrealized sales gross profit Allowance for decline in value of inventories and obsolescence losses Leave payable Net defined benefit liabilities Unrealized foreign exchange losses Exchange differences from foreign operations Allowance for doubtful accounts Unallocated fixed manufacturing costs Others Loss credit Deferred tax liabilities Temporary differences Property, plant and equipment Net confirmed welfare assets		Beginning balance $ 32,625 12,168 1,204 4,446 9,054 77,569 1,885 227 423 139,601 - $ 139,601 $ 35,949 - $ 35,949	Recognized in profit or loss ( $ 2,162 ) 9,940 ( 465 ) 1,232 25,119 - 7,004 2,913 2,446 46,027 49,695 $ 95,722 ( $ 2,030 ) 2,904 $ 874	Recognized in other comprehensi ve income $ - - - ( 5,678 ) - 17,768 - - - 12,090 - $ 12,090 $ - - $ -		Ending balance
			( ( (	(		$ 30,463 22,108 739 - 34,173 95,337 8,889 3,140 2,869 197,718 49,695 $ 247,413 $ 33,919 2,904 $ 36,823

• (5) The amount of deductible temporary differences and unused loss credit for deferred income tax assets were not recognized in the consolidated balance sheet.

sheet.
Loss credit Expire in 2030 Expire in 2031	December 31,2021 $ 218,643 144,000 $ 362,643	December 31,2020
			$ 248,473 - $ 248,473

• (6) Summary of temporary differences associated with investments and not recognized as deferred income tax liabilities amount.

For the years ended December 31, 2021 and 2020, the taxable temporary differences related to investment in subsidiaries not recognized as deferred income tax liabilities amounted to $2,261,227,000 and $1,898,201,000, respectively.

• 65 -

• (7) Income tax assessments

The income tax returns of the Company through 2018 have been assessed by the tax authorities.

28. 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:

Net income (net loss) for the current period

Net income (net loss) Shares Weighted average number of shares outstanding Weighted-average number of shares in treasury stock - Parent company shares held by subsidiaries Weighted-average number of shares of common stock used in the basic earnings per share calculation Effect of dilutive potential common stock: Employees’ remuneration Weighted-average number of shares of common stock used in the calculation of diluted earnings per share		2021 2020 $ 182,988 ($ 207,286) Unit: 1,000 shares 2021 2020 384,566 384,566 - ( 642) 384,566 383,924 450 - 385,016 383,924

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 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.

• 66 -

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.

29. Disposal of investment in the subsidiary – loss of control power

On June 19, 2020, the Company's Board of Directors approved the sale of Lucky Unique Enterprise Co., Ltd. to an unrelated party for $195,227,000 ($13.7 per share, net of securities transaction tax of $587,000), and the closing of the equity transfer was completed on July 8, 2020; therefore, the Company lost control over Lucky Unique Enterprise Co., Ltd. Please refer to Note 32 of the Company's 2021 Consolidated Financial Statements for a description of the disposal of Lucky Unique Enterprise Co., Ltd.

30. Non-cash transactions

The Company has the following non-cash transaction investments in 2021 and 2020:

(1) Acquisition of property, plant and equipment

Investing activities affecting both cash and non-cash items Increase in property, plant and equipment Increase in payables for equipment and notes payable Cash paid for property, plant and equipment		2021 $ 40,446 4,969) $ 35,477		2020
	(		(	$ 47,929 995) $ 46,934

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(2) Disposal of property, plant and equipment

Investing activities affecting both cash and non-cash items Proceeds from disposal of property, plant and equipment Decrease (Increase) in other receivables (including related parties) Cash received from property, plant and equipment		2021 $ 51,076 70) $ 51,006		2020
	(			$ 1,536 7,878 $ 9,414

31. Capital risk management

Due to the need to maintain adequate capital to support the upgrading of plant and equipment, the Company will be required to maintain adequate capital. Therefore, the capital management of the Company 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.

32. Financial instruments

• (1) Fair value information – financial instruments not measured at fair value

The carrying amount of the Company’s financial instruments not measured at fair value are reasonable approximations of their fair value, such as cash, current financial assets at amortized costs, accounts receivable (including related parties), other accounts receivable (including related parties), refundable deposits, short-term loans, short-term notes and bills payable, accounts payable (including related parties), other accounts payable (including related parties) and long-term loans (including maturity date within one year)

• (2) Fair value information - financial instruments measured at fair value on a recurring basis

• 68 -

1. Levels of fair value

December 31, 2021

December 31, 2021
Financial assets at fair value through profit or loss Fund beneficiary certificates Financial assets measured at fair value through other comprehensive gains and losses-current Listed companies stocks Financial assets at fair value through other comprehensive income-non-current Investment in equity instruments －Private placement of stocks in domestic listed companies Financial liabilities at fair value through profit or loss Derivatives - Foreign exchange rate swap contract December 31, 2020 Financial assets at fair value through profit or loss Fund beneficiary certificates Financial assets at fair value through other comprehensive income-non-current Investment in equity instruments		Level 1 $ 8,914 $ 2,556 $ - $ - Level 1 $ 9,387		Level 2 $ - $ - $ 28,689 $ 120 Level 2 $ -		Level3 $ - $ - $ - $ - Level3 $ -		Total
								$ 8,914 $ 2,556 $ 28,689 $ 120 Total
Financial assets at fair value through profit or loss Fund beneficiary certificates Financial assets at fair value through other comprehensive income-non-current Investment in equity instruments
								$ 9,387

• 69 -

－ Private $ - $ 56,222 $ - $ 56,222 placement of stocks in domestic listed companies

Financial liabilities at fair value through profit or loss Derivatives - Foreign $ - $ 18,919 $ - $ 18,919 exchange rate swap contract

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

1. Level 2 fair value valuation techniques and inputs

Type of financial instruments Derivatives - Foreign exchange rate swap contract Domestic listed companies private placement of shares

Valuation techniques and inputs

The discounted cash flow method: The future cash flows are estimated based 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. Evaluated by the B-S option pricing model, based on the underlying price, option performance price, risk-free interest rate, historical volatility of the underlying and the maturity period.

• (3) Type of financial instruments

Financial assets Mandatory measurement at fair value through profit or loss Financial assets at amortized cost (Note 1) Financial assets at fair value through other comprehensive income Financial liabilities Financial liabilities at fair	December 31,2021 $ 8,914 4,224,652 31,245 120	December 31,2020
		$ 9,387 4,130,871 56,222 18,919

• 70 -

value through profit or loss / held for trading At amortized cost (Note 2) 9,452,939 8,843,588

• Note 1: The balance includes cash, 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.

• (3) Financial risk management objectives and policies

The Company's major financial instruments include investments in equity and debt instruments, receivables, payables, lease liabilities and borrowings. The Company'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 Company'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 Company 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 Company'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 Company does not trade in financial instruments (including derivative financial instruments) for speculative purposes.

1. Market risk

2. 71 -

The main financial risks to which The Company is exposed as a result of its operating activities are foreign currency exchange rate risk (see (1) below), interest rate risk (see (2) below), and other price risk (see (3) below).

The Company 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 Company's exposure to market risk of financial instruments and its management and measurement of such exposure.

(1) Exchange rate risk

The Company engages in foreign currency-denominated sales and import transactions and foreign currency borrowings, which expose The Company to exchange rate risk. The carrying amounts of The Company'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 37.

Sensitivity analysis

The Company is primarily affected by fluctuations in the U.S. dollar exchange rate.

The following Schedule details the sensitivity analysis of the Company 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 <==

• 72 -

This was mainly due to the Company's cash denominated in U.S. dollars, financial assets measured at amortized 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 Company’s sensitivity to foreign exchange rates during the year was mainly due to the decrease in the Company’s net assets denominated in U.S. dollars.

(2) Interest rate risk

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

The carrying amounts of the Company'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 $ 3,250,182 2,741,655 109,256 6,058,952	December 31,2020
		$ 3,233,654 2,932,914 224,067 5,490,655

Sensitivity analysis

As 1% increase in interest rates would decrease the Company's income before income taxes by NT$59,497,000 and NT$52,666,000 for 2021 and 2020, respectively, with all other variables held constant.

The Company's sensitivity to interest rates increased during the year mainly due to the increase in variable rate debt instruments.

• 73 -

(3) Other price risk

The Company's equity price risk arising from its investment in domestic listed stocks is not material.

1. Credit risk

Credit risk refers to the risk of financial loss resulting from the default of the counter-parties to the contracts. As of the balance sheet date, the Company's maximum exposure to credit risk, which may result from the counter-parties' default on their obligations and the Company's provision of financial guarantees, is mainly due to:

• (1) The carrying amount of financial assets recognized in the individual balance sheets.

• (2) The maximum amount that the Company may be required to pay as a result of providing financial guarantees, regardless of the likelihood of occurrence.

The Company's counter-parties are all creditworthy organizations and are not expected to have significant credit risk. The Company also evaluates the financial position of its accounts receivable customers on an ongoing basis.

Total accounts receivable with significant concentrations of credit risk are as follows:

SINTEX INTERNATIONAL LTD. SHANTA INDUSTRIES LTD.	December 31,2021 Amount Ratio $ 86,540 17% 81,748 16%	December 31,2020	December 31,2020
	Amount $ 86,540 81,748	Amount $ 141,518 5,205	Ratio
			36% 1%

3. Liquidity risk

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

The Company's working capital and banking facilities obtained are sufficient to meet future operating requirements and therefore there is no

• 74 -

liquidity risk that the Company will not be able to raise funds to meet its 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 the financial liabilities based on the earliest possible date on which the Company could be required to make repayment. Accordingly, the Company's bank loans that are repayable on demand are listed in the table below at the earliest possible date, regardless of 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.

December 31, 2021

Non-derivative financial liabilities Non-interest-bearing liabilities Lease liabilities Floating rate instruments Fixed rate instruments Financial guarantee liabilities		Less than 6 months $ 657,026 4,536 4,165,583 726,598 1,149,652 $ 6,703,395	6 months to 1 year $ 158 2,422 117,951 16,598 273,264 $ 410,393	1 to 9 years
				$ 3,692 1,658 1,943,528 2,089,205 678,160 $ 4,716,243

Further information on the maturity analysis of lease liabilities is as

Lease liabilities	Less than 1year $ 6,958		1 to 3years
			$ 1,658

December 31, 2020

• 75 -

Non-derivative financial liabilities Non-interest-bearing liabilities Lease liabilities Floating rate instruments Fixed rate instruments Financial guarantee liabilities		Less than 6 months $ 440,845 7,145 4,671,722 728,140 1,209,350 $ 7,057,202	6 months to 1 year $ - 7,145 71,777 194,140 - $ 273,062	1 to9 years
				$ 2,587 9,453 843,004 2,091,584 376,648 $ 3,323,276

Further information on the maturity analysis of lease liabilities is as

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

The floating rate instrument amount of the above non-derivative financial assets and liabilities will be different from the interest rate estimated at the balance sheet date due to the floating rate.

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

The liquidity analysis of derivative financial instruments is based on total undiscounted cash inflows and outflows for derivative instruments with gross settlement. When the amounts payable or receivable are not fixed, the disclosed Amounts are determined based on the projected interest rates derived from the yield rate curve at the balance sheet date.

December 31, 2021

Total settlement Exchange rate swap contract Flow-in Flow-out	1 to 3 months $ 440,296 ( 442,586) ($ 2,290)	4 to6months $ 111,683 ( 109,513) ( $ 2,170 (	Total
	( (	(	$ 551,979 552,099) $ 120)

December 31, 2020

• 76 -

1 to 3 months 4 to 6 months Total

Total settlement Exchange rate swap contract Flow-in $ 116,872 $ 453,016 $ 569,888 Flow-out ( 120,805 ) ( 468,002 ) ( 588,807 ) ( $ 3,933 ) ( $ 14,986 ) ( $ 18,919 )

33. RELATED PARTIES’ TRANSACTIONS

Except as disclosed in other notes, the transactions between the Company and its related parties are as follows:

• (1) Names of related parties and their relationships

Name of related party Relationship with the Company BEST ALLIANCE Subsidiary INTERNATIONAL LIMITED DE LICACY (SAMOA) Subsidiary HOLDINGS CO., LTD. View Best Global Limited Subsidiary Total Express Ltd. Subsidiary CHADTEX INDUSTRIAL Subsidiary CO., LTD.

Name of relatedparty Hangzhou De Licacy Company DE-FA INTERNATIONAL INDUSTRIAL CO., LTD. EDEN ROAD INTERNATIONAL LTD. DE SHEN (CAYMAN) HOLDINGS CO., LTD. New Lake Ltd. Vietnam De Licacy Industrial Company Futures Co., Ltd. Bright Wisdom Ltd. De Licacy BVI Holdings Co. De Hong Company De Hong (Vietnam) Company BEAUTY PLUS VENTURES LIMITED Lucky Unique Enterprise Company Tung Ming Textile Co., Ltd.	Relationshipwith the Company
	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Affiliated company (Note 1) Subsidiary of affiliated company Lucky Unique Enterprise (Note 1)

• 77 -

E TEXTILE CO., LTD. Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) De Kao Trading Co., Ltd. Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) Full Vision Enterprise Co., Subsidiary of affiliated company Lucky Ltd. Unique Enterprise (Note 1) Jei Jom Enterprise Co., Ltd. Subsidiary of joint venture Era Nouveau International Co., Ltd. Future Tycoon Holdings The special assistant to the Chairman of the Co., Ltd. Company is a director of the Company (Note 2) Fuson International Co., The Chairman is a director of the company Ltd. De Yang Co., Ltd. The Chairman is a director of the Company Sheng-Bo Technology Corp. The Chairman is a director of the Company DNG Energy Inc. The Chairman is the same person

• 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.

• (2) Operation income

Operation income
Item Sales income	Type/Name of related party Subsidiary Affiliated company (Note 1)／Lucky Unique Enterprise Company Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) Subsidiary of joint venture Era Nouveau International Co., Ltd.		2021 $ 308,626 588,951 101,002 - $ 998,579		2020
					$ 205,487 293,918 30,505 2,454 $ 532,364

The prices of sales to related parties are comparable to those of sales to

non-related parties, and the terms of collection are 60 days after the end of the month, which are not materially different from those of non-related parties.

• (3) Purchase

• 78 -

Type/Name of related party Subsidiary／New Lake Ltd. Subsidiary Affiliated company (Note 1) Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) Subsidiary of joint venture Era Nouveau International Co., Ltd.		2021 $ 500,344 1,948 51,189 15,091 - $ 568,572		2020
				$ 451,073 108,303 138,775 16,431 20,034 $ 734,616

The Company does not have comparable purchase prices for similar products from related parties, and the payment period is approximately one month for related parties and one to three months for non-related parties.

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

parties)
Item Notes receivable-related parties Accounts receivable-related parties	Type/Name of related party Affiliated company (Note 1)／Lucky Unique Enterprise Company Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) Subsidiary Affiliated company (Note 1)／Lucky Unique Enterprise Company Subsidiary／New Lake Ltd. Subsidiary Subsidiary of affiliated company	December 31, 2021 $ 34,485 18,146 343 $ 52,974 $ 29,794 19,078 7,744 31,977	December 31, 2020
				$ 21,394 3,357 401 $ 25,152 $ 85,961 13,947 9,063 7,923

• 79 -

Lucky Unique Enterprise (Note 1) Other receivables-related parties Subsidiary／New Lake Ltd. Subsidiary 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)	$ 88,593 $ 16,500 3,820 1,206 80 942 $ 22,548	$ 116,894 $ 685 9,791 1,568 34 866 $ 12,944

No guarantees have been received for amounts due from related parties in circulation, and no allowance for losses has been provided for amounts due from related parties in 2021 and 2020. (5) Amounts due to related parties (excluding loans from related parties)

parties)
Item Notes payable-related parties Accounts payable-related parties	Type/Name of related party Affiliated company (Note 1)／Lucky Unique Enterprise Company Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) ／Tung Ming Textile Co., Ltd. Subsidiary／New Lake Ltd. Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) ／Tung Ming	December 31, 2021 $ 18,009 39,278 $ 57,287 $ 93,272 28,142	December 31, 2020
				$ 22,197 10,009 $ 32,206 $ 43,685 29,156

• 80 -

Textile Co., Ltd. Affiliated company (Note 1)／Lucky Unique Enterprise Company Subsidiary Other payables-related parties Subsidiary／ CHADTEX INDUSTRIAL CO., LTD. Affiliated company (Note 1) Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) Subsidiary The special assistant to the Chairman of the Company is a director of the Company (Note 2)	21,444 1,276 $ 144,134 $ 37,775 44 28 15 305 $ 38,167	8,134 2,896 $ 83,871 $ 16,098 - 118 - 305 $ 16,521

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 Company in 2020 for NT$4,439,000.

(7) Disposal of property, plant and equipment

Type/Name of related party Subsidiary New Lake Ltd. The special assistant to the Chairman of the Company is a director of the Company (Note 2)		Disposal	proceeds 2020 $ 1,476 60 $ 1,536		Gains on	disposal	disposal
		2021 $ 1,575 - $ 1,575			2021 $ 58 - $ 58		2020
							$ 12 3 $ 15

• (8) Operating lease – for rent

• 81 -

Type/Name of related party Affiliated company (Note 1)／Lucky Unique Enterprise Company Affiliated company (Note 1)／Lucky Unique Enterprise Company Subsidiary／DE-FA INTERNATIONAL INDUSTRIAL CO., LTD. Subsidiary／Futures Co., Ltd. Subsidiary of affiliated company Lucky Unique Enterprise The Chairman is the same person The Chairman is the same person The Chairman is a director of the Company	Rent objective Plant Office Office Office Office Office Plant roof (Note 3) Plant roof (Note 3)	Leasing period
		January 2021 to December 2023 July 2020 to March 2023 April 2019 to March 2022 May 2020 to March 2022 May 2020 to June 2021 April 2020 to February 2021 October 2017 to October 2037 October 2017 to October 2037

Note 3: 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:

summarized as follows:
Type/Name of related party Affiliated company (Note 1)／Lucky Unique Enterprise Company Subsidiary／DE-FA INTERNATIONAL INDUSTRIAL CO., LTD. Subsidiary／Futures Co., Ltd. Subsidiary of affiliated company Lucky	2021 $ 9,859 732 206 -	2020
		$ 10,257 3,661 1,033 165

• 82 -

(9)	Unique Enterprise (Note 1) The Chairman is the same person - $ 10,797 Summary of leasing revenue as below: Type/Name of related party 2021 Subsidiary／DE-FA INTERNATIONAL INDUSTRIAL CO., LTD. $ 2,929 Subsidiary／Futures Co., Ltd. 826 Affiliated company (Note 1)／Lucky Unique Enterprise Company 7,282 Subsidiary of affiliated company Lucky Unique Enterprise Company (Note 1) 60 The Chairman is the same person 133 The Chairman is a director of the Company 368 $ 11,598 Loans to related parties Type/Name of related party December 31,2021 Other receivables-related parties Subsidiary Vietnam De Licacy Industrial Company $ 160,544 Total Express Ltd. - BEST ALLIANCE INTERNATIONAL LIMITED - $ 160,544 Interest income Subsidiary Vietnam De Licacy Industrial Company (1) $ 6,606		52 $ 15,168 2020
		$ 2,929 551 2,429 480 359 366 $ 7,114 December 31,2020
			$ 341,760 128,160 74,048 $ 543,968 $ 6,589

• 83 -

Total Express Ltd. (2) BEST ALLIANCE INTERNATION AL LIMITED (2) Interest rate (1) Interest rate (2)	1,235 515 $ 8,356 2.8% 1.8%	944 545 $ 8,078 2.8% 1.8%

• (10) Endorsement and guarantee for others

For the amount of guarantee provided by the Company for related parties, see Schedule 2.

• (11) Other related party transactions

• Processing fees

The Company pays processing fees to related parties, which are recorded as operating costs depending on the nature of the payment. There is no similar product finishing price for comparisons, and the payment term is open accounts one to three months.

one to three months.
Type of related party Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) Subsidiary Affiliated company (Note 1)		2021 $ 247,298 2,206 107,236 $ 356,740		2020
				$ 200,882 13,050 2,678 $ 216,610

2. Manufacturing and operating expenses

The Company's expenses for purchasing samples from related parties, renting sample display rooms, dyeing and finishing factory lines and plants, paying commissions, and purchasing gifts were as follows:

==> picture [356 x 41] intentionally omitted <==

• 84 -

CHADTEX INDUSTRIAL CO., LTD. Affiliated company (Note 1) Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) The Chairman is a director of the Company	770 1,285 261 $ 191,015	35 1,353 348 $ 91,315

3. Other income

The income from the sale of the Company's managed assets to related parties, income from counseling services and commissions were as follows:

Type/Name of relatedparty Subsidiary Affiliated company (Note 1) Subsidiary of affiliated company Lucky Unique Enterprise (Note 1) 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)		2021 $ 6,749 5,035 127 - 3,823 $ 15,734		2020
				$ 7,100 1,364 - 2,348 699 $ 11,511

(12) Remuneration to key management personnel

2021

2020

• 85 -

Short-term employee benefits Post-employment benefits	$ 16,857 324 $ 17,181	$ 16,483 259 $ 16,742

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.

34. PLEDGED ASSETS

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

collateral for bank loans:
Land Buildings Machinery Pledged bank deposits (recorded as financial assets at amortized cost-current)	December 31,2021 $ 266,446 113,423 14,187 3,089,638 $ 3,483,694	December 31,2020
			$ 266,446 138,997 16,766 2,689,686 $ 3,111,895

35. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACTUAL COMMITMENTS

Except as mentioned in other notes, the Company’s significant commitments and contingencies as of the balance sheet date are as follows:

• (1) As of December 31, 2021 and December 31, 2020, the Company had issued for the purchase of raw material and unused letter of credit balance of NT$8,932,000 and NT$61,717,000, respectively.

• (2) The Company's unrecognized contractual commitments are as follows.

follows.
Purchase of property, plant and equipment	December 31,2021 $ 14,785	December 31,2020
			$ 12,802

• 86 -

• (3) For the years ended December 31, 2021 and 2020, the Company provided NT$412,500,000 and NT$310,500,000, respectively, in guaranteed notes for the purchase of raw materials and to provide guarantees for borrowing lines from financial institutions.

36. OTHER MATTERS

The Company was affected by the global pandemic of COVID-19 and the impact in domestic recently, 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$69,554,000 in subsidies (see Note 26). With the ease of the epidemic, the Company’s operation is gradually returning to normal functions.

37. 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 of the consolidated companies. Assets and liabilities denominated in foreign currencies that have a significant effect are as follows: Unit: Foreign currency and thousands NT$

December 31, 2021

December 31, 2021
Foreign currencyassets Currency USD RMB Foreign currencyliabilities Currency USD	Foreign currency $ 132,208 30,494 3,806	Foreign exchange rate 27.68 （USD：NTD） 4.344 （RMB：NTD） 27.68 （USD：NTD）	Carryingamount
			$ 3,659,515 132,466 105,349

December 31, 2020

December 31, 2020
Foreign currencyassets Currency USD	Foreign currency $ 130,325	Foreign exchange rate 28.48 （USD：NTD）	Carryingamount
			$ 3,711,644

• 87 -

Foreign currencyliabilities
Currency
USD	2,043	28.48	58,187
		（USD：NTD）

Foreign currency exchange gains and losses (realized and unrealized) with significant effect are as follows:

Currency USD	2021	Net foreign exchange loss $ 97,639	2020
	Foreign exchange rate 27.834（USD：NTD）		Foreign exchange rate 29.549（USD：NTD）	Net foreign exchange loss
					$ 195,764

38. MATTERS DISCLOSED IN THE NOTES

• (1) Information on significant transactions

• Loans of funds to others: see Schedule 1.

• Endorsement and guarantee for others: see Schedule 2.

• Year-end Marketable Securities Breakdown Statement: 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.

• (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:

• 88 -

• (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 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 9.

• 89 -

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

For the year end 31 December of 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) HOLDINGS CO., LTD. DE LICACY (SAMOA) HOLDINGS CO., LTD. DE LICACY (SAMOA) HOLDINGS CO., LTD. Hong Kong Eden Road Company Hong Kong Eden Road Company Hong Kong Eden Road Company DE SHEN (CAYMAN) HOLDINGS CO., LTD. DE SHEN (CAYMAN) HOLDINGS CO., LTD. De Hong Company Hangzhou De Licacy Company Hangzhou De Licacy Company Hangzhou De Licacy Company Hangzhou De Licacy Company Apex Textile Co., Ltd. Lucky Apex Ventures Limited View Best Global Limited BEST ALLIANCE INTERNATIONAL LIMITED BEST ALLIANCE INTERNATIONAL LIMITED BEST ALLIANCE INTERNATIONAL LIMITED New Lake Ltd. CHADTEX INDUSTRIAL CO., LTD.	BEST ALLIANCE INTERNATIONAL LIMITED DE SHEN (CAYMAN) HOLDINGS CO., LTD. Total Express Ltd. Vietnam De Licacy Industrial Company Vietnam De Licacy Industrial Company Apex Textile Co., Ltd. New Lake Ltd. DE-FA INTERNATIONAL INDUSTRIAL CO., LTD. DE-FA INTERNATIONAL INDUSTRIAL CO., LTD. BEST ALLIANCE INTERNATIONAL LIMITED Vietnam De Licacy Industrial Company Total Express Ltd. De Hong (Vietnam) Company Apex Textile Co., Ltd. Apex Textile Co., Ltd. Apex Textile Co., Ltd. Apex (Anqing) Textile Co., Ltd. Apex (Anqing) Textile Co., Ltd. Apex (Anqing) Textile Co., Ltd. Vietnam ATAGO Company Hangzhou De Licacy Company Hong Kong Eden Road Company New Lake Ltd. Vietnam De Licacy Industrial Company 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

• 90 -

• Note 1: Based on 30% of the net shareholders’ equity of each l ending 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 y ear.

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

• Note 4: The difference between the announcement, and the announcement is the adjustment of foreign currency exchange gain or loss at t he end of the period.

• Note 5: CHIA HER INDUSTRIAL CO., LTD. is a significant investor t o CHADTEX INDUSTRIAL CO., LTD.

• 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.

• 91 -

(In Thousands of New Taiwan Dollars)

De Licacy Industrial Co., Ltd. and Subsidiaries

Endorsement and guarantee for others

For the year end 31 December of 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 (Amount)	Ratio of accumulated amounts of endorsements/guarantees to net worth of the latest financial statements (%)	Maximum amount for endorsements /guarantees (Note 2)	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of the parent company	Endorsements /guarantees to third parties on behalf of companies in Mainland China
		Name of Company	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 INTERNATIONAL INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. EDEN ROAD INTERNATIONAL LTD. Vietnam De Licacy Industrial Company DE SHEN (CAYMAN) HOLDINGS CO., LTD. Apex Textile Co., Ltd. Hangzhou De Licacy Company Apex (Anqing) Textile Co., Ltd. Total Express Ltd. Hong Kong Eden Road Company	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.

• 92 -

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	Footnote
				Unit/Share	Carrying amount	Percentage (%)	Fair value
The Company The Company DE-FA INTERNATIONAL INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. The Company	Stocks Chia Her Industry Co., Ltd. NANTEX INDUSTRY CO., LTD. Hua Nan Financial Holdings Co., Ltd. Chia Her Industry 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 Industry 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 at fair value through other comprehensive income-non-current Financial assets measured at fair value through other comprehensive gains and losses-current Financial assets at fair value through profit and loss- current Financial assets at fair value through other comprehensive income-non-current Financial assets measured at fair value through other comprehensive gains and losses-current Financial assets measured at fair value through other comprehensive gains and losses-current Financial assets measured at fair value through other comprehensive gains and losses-current Financial assets measured at fair value through other comprehensive gains and losses-current Financial assets measured at fair value through other comprehensive gains and losses-current Financial assets measured at fair value through other comprehensive gains and losses-current Financial assets measured at fair value through other comprehensive gains and losses-current Financial assets measured 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.

• 93 -

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 end 31 December of 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)	Footnote
			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 Company Hangzhou De Licacy Company Apex Textile Co., Ltd. New Lake Ltd. New Lake Ltd. Apex Textile Co., Ltd.	New Lake Ltd. New Lake Ltd. Lucky Unique Enterprise Company Thousand Well (Samoa) International Limited Thousand Well (Samoa) International Limited Total Express Ltd. Vietnam De Licacy Industrial Company Vietnam De Licacy Industrial Company Apex (Anqing) Textile Co., Ltd.	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’.

• 94 -

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) HOLDINGS CO., LTD. DE SHEN (CAYMAN) HOLDINGS CO., LTD. New Lake Ltd. Vietnam De Licacy Industrial Company Hangzhou De Licacy Company Hangzhou De Licacy Company DE LICACY (SAMOA) HOLDINGS CO., LTD. Apex (Anqing) Textile Co., Ltd.	Vietnam De Licacy Industrial Company Apex (Anqing) Textile Co., Ltd. Vietnam De Licacy Industrial Company Total Express Ltd. Vietnam De Licacy Industrial Company New Lake Ltd. Apex Textile Co., Ltd. Apex (Anqing) Textile Co., Ltd. Vietnam De Licacy Industrial Company Apex Textile Co., Ltd.	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 an d 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.

• 95 -

De Licacy Industrial Co., Ltd. and Subsidiaries

Information of the Invested Company, Loca tion ... and Other Related Information

For the year end 31 December of 2021

Schedule 6

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

Investor company name	Investee company name	Location	Major business scope	Original investment	Original investment	Held at period-end	Held at period-end	Held at period-end	Investee income (loss) for the period	Recognized investment income (loss) (Note 1)	Footnote
				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 INTERNATIONAL INDUSTRIAL CO., LTD. DE LICACY (SAMOA) HOLDINGS CO., LTD. DE LICACY (SAMOA) HOLDINGS CO., LTD. DE LICACY (SAMOA) HOLDINGS CO., LTD. DE LICACY (SAMOA) HOLDINGS CO., LTD. DE LICACY (SAMOA) HOLDINGS CO., LTD. DE LICACY (SAMOA) HOLDINGS CO., LTD. De Hong Company BEST ALLIANCE INTERNATIONAL LIMITED BEST ALLIANCE INTERNATIONAL LIMITED BEST ALLIANCE INTERNATIONAL LIMITED Bright Wisdom Ltd. Bright Wisdom Ltd. Bright Wisdom Ltd. De Licacy BVI Holdings Co. DE SHEN (CAYMAN) HOLDINGS CO., LTD. Vantage Gain Holdings Limited De Licacy Anguilla Company View Best Global Limited BEAUTY PLUS VENTURES LIMITED	DE LICACY (SAMOA) HOLDINGS CO., LTD. Lucky Unique Enterprise Company DE-FA INTERNATIONAL INDUSTRIAL CO., LTD. CHADTEX INDUSTRIAL CO., LTD. De Licacy BVI Holdings Co. View Best Global Limited EDEN ROAD INTERNATIONAL LTD. BEST ALLIANCE INTERNATIONAL LIMITED Vantage Gain Holdings Limited De Licacy Anguilla Company De Hong Company New Lake Ltd. BEAUTY PLUS VENTURES LIMITED De Hong (Vietnam) Company EDEN ROAD INTERNATIONAL LTD. Bright Wisdom Ltd. Hong Kong Eden Road Company Total Express Ltd. Lucky Apex Ventures Ltd. Futures Co., Ltd. DE SHEN (CAYMAN) HOLDINGS CO., LTD. Vietnam De Licacy Industrial Company Perfect Step Ltd. New Premium Enterprise Co., Ltd. Vietnam ATAGO Company Plentiful Praise Limited	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 dispossal 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 m ethod shall be shown. Note 2: Please refer to Schedule 7 (attached) for the information about China investee companies.

• 96 -

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

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

For the year end 31 December of 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	Accumulated outflow of investment from Taiwan as of December 31, 2021 (Note 3)	Net income (losses) of the investee	Percentage of ownership the Company (in)direct invested (%)	Net income (losses) in current period (Note 1)	Balance as of December 31, 2021 (Note 1)	Accumulated remittance of earnings in current period
								Outflow	Inflow
Hangzhou De Licacy Company Apex Textile Co., Ltd. Shanghai De Licacy Company Apex (Anqing) Textile Co., Ltd. Nantong De Licacy Company	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 INTERNATIONAL LIMITED 3.Bright Wisdom Ltd. 3.Sin Hao Company, Samoa Sin Young International Limited 3.Lucky Apex Ventures Ltd. 3.BEST ALLIANCE INTERNATIONAL 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	$ - - - - -
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 Company Apex Textile Co., Ltd. Shanghai De Licacy Company Apex (Anqing) Textile Co., Ltd. Nantong De Licacy Company		$ 1,287,012 （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 （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 accounta nts 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 Econ omic 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$27.6 8 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.

• 97 -

De Licacy Industrial Co., Ltd. and Subsidiaries

Significant transactions with China investees directly or indirectly through third regions, the prices, payment terms, and un realized gains or losses For the year end 31 December of 2021

Schedule 8

(In Thousands of New Taiwan Dollars)

Company	Transaction partner	Relationship with transaction partner	Transaction type	Amount		Trade term		Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Unrealized income (loss)
					Price	Payment erm	Comparison with general transactions	Balance	Percentage (%)
DE-FA INTERNATIO NAL INDUSTRIAL CO., LTD. Hong Kong Eden Road Company Hong Kong Eden Road Company Thousand Well (Samoa) International Limited Fastpower (Samoa) Limited Total Express Ltd. New Lake Ltd.	Hangzhou De Licacy Company Hangzhou De Licacy Company Hangzhou De Licacy Company Hangzhou De Licacy Company Hangzhou De Licacy Company Apex Textile Co., Ltd. Hangzhou De Licacy Company	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	$ - - - - - - -

• 98 -

De Licacy Industrial Co., Ltd.

Major Shareholders’ Information December 31, 2021

Schedule 9

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.

• 99 -

De Licacy Industrial Co., Ltd. and Subsidiaries Property, plant and equipment

For the Years Ended December 31 of 2021 and 2020

Schedule 10

(In Thousands of New Taiwan Dollars)

Costs Balance at 1 January 2020 Additions Disposal Reclassification Balance at 31 December 2020 Accumulated depreciation and impairment Balance at 1 January 2020 Depreciation expenses Disposal Balance at 31 December 2020 December 31, 2020 net Costs Balance at 1 January 2021 Additions Disposal Reclassification Balance at 31 December 2021 Accumulated depreciation and impairment Balance at 1 January 2021 Depreciation expenses Disposal Balance at 31 December 2021 December 31, 2021 net		Owned land $ 289,953 4,022 - - $ 293,975 $ - - - $ - $ 293,975 $ 293,975 - - - $ 293,975 $ - - - $ - $ 293,975	Land improvements $ 11,310 - - - $ 11,310 $ 8,825 459 - $ 9,284 $ 2,026 $ 11,310 - - - $ 11,310 $ 9,284 458 - $ 9,742 $ 1,568		Buildings $ 762,613 1,248 - 1,244 $ 765,105 $ 504,166 19,020 - $ 523,186 $ 241,919 $ 765,105 1,992 441 ) 4,003 $ 770,659 $ 523,186 19,004 441) $ 541,749 $ 228,910		Machinery equipment $ 1,345,605 11,795 7,588 ) 74,084 $ 1,423,896 $ 1,077,489 75,896 7,588) $ 1,145,797 $ 278,099 $ 1,423,896 16,289 122,160 ) 8,756 $ 1,326,781 $ 1,145,797 69,173 116,969) $ 1,098,001 $ 228,780		Transportation equipment $ 12,637 490 - - $ 13,127 $ 11,741 544 - $ 12,285 $ 842 $ 13,127 606 868 ) - $ 12,865 $ 12,285 499 868) $ 11,916 $ 949	Other equipment $ 384,133 13,056 ( 2,875 ) 14,922 $ 409,236 $ 298,032 26,117 ( 1,345) $ 322,804 $ 86,432 $ 409,236 6,315 ( 5,226 ) 4,137 $ 414,462 $ 322,804 26,284 ( 3,709) $ 345,379 $ 69,083		Property in construction $ 3,785 17,318 - 19,514) $ 1,589 $ - - - $ - $ 1,589 $ 1,589 15,244 - 9,619) $ 7,214 $ - - - $ - $ 7,214		Total
				( (		( ( ( (		( (		( ( ( (	( (		( ( ( (	$ 2,810,036 47,929 10,463 ) 70,736 $ 2,918,238 $ 1,900,253 122,036 8,933) $ 2,013,356 $ 904,882 $ 2,918,238 40,446 128,695 ) 7,277 $ 2,837,266 $ 2,013,356 115,418 121,987) $ 2,006,787 $ 830,479

• 100 -

§THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS§

ITEM

MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY Statement of Cash Statement of Financial Assets at Fair Value through Profit and Loss-Current Statement of Financial Assets Measured at Fair Value through Other Comprehensive Income-Current Statement of Financial Assets at Amortized Cost-Current Statement of Notes Receivable (including Related Parties) Statement of Accounts Receivable-Net (including Related Parties) Statement of Inventories Statement of Prepayments Statement of Other Current Assets Statement of Changes in Financial Assets at Fair Value through Other Comprehensive Income-Noncurrent Statement of Changes in Investments by the Equity Method Statement of Changes in Property, Plant and Equipment Statement of Changes in Accumulated Depreciation and Impairment of Property, Plant and Equipment

Statement of Changes in Right-of-Use Assets Statement of Changes in Accumulated Depreciation of Right-of-Use Assets Statement of Changes in Intangible Assets Statement of Deferred Income Tax Assets Statement of Short-term Borrowings Statement of Short-term Notes Payable Statement of Financial Liabilities at Fair Value through Profit and Loss-Current

Statement of Notes Payable (including Related Parties) Statement of Accounts Payable (including Related Parties)

Statement of Other Payables Statement of Provision for Liabilities-Current Statement of Other Current Liabilities Statement of Long-term Loans Statement of Lease Liabilities

Statement of Deferred Income Tax Liabilities STATEMENT OF PROFIT AND LOSS ITEMS Statement of Operating Revenues

STATEMENT INDEX

Statement 1 Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Note 16 Note 17 Statement 8

Statement 9 Note 13 Note 13 Note 14 Note 14 Note 15 Note 27 Statement 10 Statement 11 Note 7 Statement 12 Statement 13 Note 20 Note 22 Statement 14 Statement 15 Note 14 Note 27

Statement 16

• 101 -

Statement of Operating Costs Statement of Marketing Expenses Statement of Administrative Expenses Statement of Research and Development Expenses Statement of Other Income and Expense-Net Statement of Finance Costs

Statement of Employees’ Welfare, Depreciation and Amortization Expenses Summarized by Function

Statement 17 Statement 18 Statement 18 Statement 18 Note 26 Note 26 Statement 19

• 102 -

De Licacy Industrial Co., Ltd.

Statement of Cash December 31, 2021

Statement 1

(In Thousands of New Taiwan Dollars)

(Foreign Currency Expressed a Full

Amount)

Item Cash on hand, turnover Bank deposits Checks and demand deposits-NTD Foreign currency demand deposits (Note)		Amount
		$ 410 131,097 87,060 218,157 $ 218,567

Note: USD3,145,205 (based on USD1=NTD27.68) and JPY2,212 (based on JPY1=NTD0.2405).

• 103 -

De Licacy Industrial Co., Ltd.

Statement of Financial Assets at Fair Value through Profit and Loss -Current December 31, 2021

Statement 2 Name of financialproduct Funds Hua Nan－Saudi Arabian National Oil Fund	Shares 285,000		Amount $ 8,914	(In Thousands of New Taiwan Dollars) (The Unit Price is Full Amount of NTD) Fair value Acquisition cost Unitprice Total amount Provision of guarantees orpledges $ 10,000 $ 31.28 $ 8,914 None

• 104 -

De Licacy Industrial Co., Ltd.

Statement of Financial Assets Measured at Fair Value through Other Comprehensive Income-Current December 31, 2021

Statement 3 (In Thousands of New Taiwan Dollars) (The Unit Price is Full Amount of NTD)

Name of financialproduct Domestic listed companies stocks NANTEX INDUSTRY CO., LTD.	Shares 30,000		Amount $ 2,556	Acquisition cost $ 2,619	Fairvalue Unitprice Total amount $ 85.2 $ 2,556	Fairvalue Unitprice Total amount $ 85.2 $ 2,556	Provision of guarantees orpledges
					Unitprice $ 85.2
							None

Note: Basis of fair value – the stock price of a listed company is the closing price at the balance sheet date.

• 105 -

De Licacy Industrial Co., Ltd.

Statement of Financial Assets at Amortized Cost-Current

December 31, 2021

Statement 4

(In Thousands of New Taiwan Dollars) (Foreign Currency Expressed a Full Amount)

Item Taiwan Dollar Demand Deposit Taiwan Cooperative Bank Foreign Currency Demand Deposit (Note 1) O-Bank DBS Bank Limited Taiwan Dollar Time Deposit Mega Bank Taiwan Cooperative Bank Foreign Currency Time Deposit (Note 2) E.Sun Commercial Bank Ltd. O-Bank Foreign Currency Time Deposit (Note 3) O-Bank DBS Bank Limited Taishin Bank First Commercial Bank Hua Nan Commercial Bank Mega Bank Bank Sinopac Co., Ltd. Entie Commercial Bank Ltd. E.Sun Commercial Bank Ltd. King’s Town Bank	Annual interest rate(%) 0.07 0.09 2.65 2.6 0.25～0.37 0.14 0.22 0.22 0.18～0.2 0.18～0.2 0.255～0.285 0.3～0.35 0.26 0.35～0.38	Period 2021.12.28～2022.01.28 2021.10.01～2022.03.01 2021.10.25～2022.01.25 2021.10.28～2022.01.28 2021.07.16～2022.06.09 2021.10.01～2022.01.01 2021.10.22～2022.01.21 2021.11.27～2022.02.27 2021.10.20～2022.02.02 2021.07.11～2022.06.25 2021.11.03～2022.03.08 2021.10.25～2022.03.17 2021.12.28～2022.03.28 2021.10.29～2022.03.23		Amount
				$ 30,028 264,612 2,734 267,346 8,000 13,500 21,500 66,239 66,226 132,465 829,486 83,040 96,880 122,159 296,539 149,472 149,472 531,915 47,167 304,480

• 106 -

The Bank of East 0.13 2021.12.15 ～ 2022.03.15 27,689 Asia Limited 2,638,299 $ 3,089,638

Note 1: USD9,658,445 (calculated based on USD1=NTD27.68). Note 2: CNY30,493,954 (calculated based on CNY1=NTD4.344). Note 3: USD95,314,261 (calculated based on USD1=NTD27.68).

• 107 -

De Licacy Industrial Co., Ltd.

Statement of Notes Receivable (including Related Parties) December 31, 2021

Statement 5

(In Thousands of New Taiwan

Dollars)

Companyname Non-related party JIUH SHUENN MACHINERY CO., LTD. GIANT TEXTILE ENTERPRISE CO., LTD. WEI HSU CO., LTD. SOUREX CO., LTD. LUSHWORLD INDUSTRIAL CO., LTD. Other (Note) Related party Lucky Unique Enterprise Company Tung Ming Textile Co., Ltd. Other (Note)		Amount
		$ 51,975 11,745 4,752 4,736 5,115 14,650 $ 92,973 $ 34,485 16,176 2,313 $ 52,974

Note: The balance of each account included does not exceed 5% of the total amount of each subject.

• 108 -

De Licacy Industrial Co., Ltd.

Statement of Accounts Receivable-Net (including Related Parties) December 31, 2021

Statement 6 (In Thousands of New Taiwan

Dollars)

Companyname Non-related party SINTEX INTERNATIONAL LTD. SHANTA INDUSTRIES LTD. Other (Note 1) Less: Allowance for doubtful accounts Related party Lucky Unique Enterprise Company New Lake Ltd. CHADTEX INDUSTRIAL CO., LTD. De Kao Trading Co., Ltd. Tung Ming Textile Co., Ltd. Other (Note 2)		Amount
		$ 86,540 81,748 352,915 521,203 48,149 $ 473,054 $ 29,794 19,078 7,321 21,478 9,445 1,477 $ 88,593

• Note 1: The balance of each account included does not exceed 5% of the total accounts receivable. Of which, NT$32,366,000 was aged over 12 months and an allowance for loss of NT$32,366,000 was provided.

• Note 2: The balance of each account included does not exceed 5% of the total accounts receivable-related parties.

• 109 -

De Licacy Industrial Co., Ltd.

Statement of Inventories December 31, 2021

Statement 7 (In Thousands of New Taiwan Dollars)

Item Finished goods Work-in-progress Raw materials		Amount	Amount
		Cost $ 942,075 342,971 283,901 $ 1,568,947		Market Price (Note)
				$ 1,094,449 398,444 314,526 $ 1,807,419

Note: Market value is based on net realizable value.

• 110 -

De Licacy Industrial Co., Ltd.

Statement of Changes in Financial Assets at Fair Value through Other Comprehensive Income-Noncurrent

Year 2021

Statement 8

Unit: Share, In Thousands of NTD

Name Chia Her Industry Co., Ltd. private equity	Beginning Shares Amount 2,266,091$ 56,222	Beginning Shares Amount 2,266,091$ 56,222	Increase in the	currentperiod Amount $ -	Decrease in the current period (Note) Shares Amount -$ 27,533	Decrease in the current period (Note) Shares Amount -$ 27,533	Ending Shares Fair value 2,266,091$ 28,689	Ending Shares Fair value 2,266,091$ 28,689	Accumulated loss Not applicable	Provision of guarantees or pledges
	Shares 2,266,091		Shares -		Shares -		Shares 2,266,091
										None

Note: This is the valuation adjustment.

• 111 -

De Lica cy Ind ust ri al C o. , Lt d.

Sta te men t of Cha n ges i n In ve st me nts by t he E qu ity Met ho d Year 2 02 1

								Year 2 02 1
Sta te men t 9 Investments using the equity method De Licacy (Samoa) Holding Company Lucky Unique Enterprise Co., Ltd. De-Fa International Industrial Co., Ltd. Chadex Industrial Co., Ltd. View Best Global Limited De Licacy (BVI) Holdings Co.	Beginningb		alance Amount $ 3,393,211 111,412 49,709 239,702 41,053 3,012,615 $ 6,847,702	Increase(Decrease)in theyear Shares Amount 2,000,000 $ 55,645 2,597,444 38,962 - - - - ( 540,000 ) ( 15,315 ) - - $ 79,292				本年度變動			Actuarial gain or loss of defined benefits $ - ( 465 ) ( 412 ) - - - ($ 877)	E n d i n	g b a	l	a n c e Amount $ 3,726,360 155,127 24,271 202,176 17,681 3,033,551 $ 7,159,166		( In T ho u Market value or net equity $ 3,828,700 155,127 24,258 203,094 17,681 3,039,073 $ 7,267,933	s and s of Ne w T Evaluation basis Equity method 〞 〞 〞 〞 〞	aiw an Dol lar s ) Provision of guarantees or pledges
	Shares 52,604,382 9,936,207 5,500,000 18,931,098 2,475,000 27,010			Shares 2,000,000 2,597,444 - - ( 540,000 ) -	Investment income(loss) $ 301,420 7,712 ( 25,437 ) ( 7,188 ) ( 7,735 ) 69,342 $ 338,114	Unrealized profit and loss $ - 26 - ( 67 ) (Note 4) - - ($ 41)	Cash dividend $ - - - ( 11,358 ) - - ($ 11,358)	Capital surplus ( $ 411 ) (Note 1) 661 (Note 3) 411 (Note 2) - (Note 3) - - $ 661	Conversion difference in the conversion of financial statements of foreign operating institutions ( $ 23,505 ) ( 1,564 ) - - ( 322 ) ( 48,406) ($ 73,797)	Unrealized gain or loss on investments in equity instruments measured at fair value through other comprehensive income $ - ( 1,617 ) - ( 18,913 ) - - ($ 20,530)		Shares 54,604,382 12,533,651 5,500,000 18,931,098 1,935,000 27,010	Shareholding ratio(%) 100 24.10 100 55.06 100 100
																			None 〞 〞 〞 〞 〞

Not e 1: The dec re ase of N T$ 411, 0 00 w as d ue t o th e re organ iz ati on und er c o mmon co ntr ol. Not e 2: The inc re ase of N T$ 1, 23 4 , 000 i n th e c api tal in cre ase of a ff ili ate d co mp ani es and the dec re as e of N T$ 573, 00 0 in the reo rgani za tio n un der co mmo n c ont ro l we re n ot re co gni ze d in pro po rti on t o t he shar eh old in g. Not e 3: The inc re ase of N T$ 411, 0 00 w as d ue t o th e re organ iz ati on und er c o mmon co ntr ol. Not e 4: Of w hi ch, N T$1 43, 000 wa s rea li zed fro m t he d isp os al o f pr ope rt y, pl an t an d eq ui p me nt.

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De Lic ac y Ind ust ria l C o., Lt d. Sta te me nt o f S ho rt -te rm Bo rro w in gs Dece mb er 31, 20 21

Sta te me nt 10

(In Tho us a nds o f Ne w Ta iwa n D o lla rs)

Bank name First Commercial Bank The Shanghai Commercial & Savings Bank JIH SUN INTERNATIONAL BANK Taishin Bank Bank of Taiwan Bank Sinopac Co., Ltd. Land Bank of Taiwan Entie Commercial Bank Ltd. Shin Kong Commercial Bank Co., Ltd. DBS Bank Limited Hua Nan Commercial Bank The Bank of East Asia Limited The Export-Import Bank of the Republic of China Yuanta Commercial Bank Co., Ltd. Taipei Fubon Bank KGI Commercial Bank Co., Ltd. E.Sun Commercial Bank Ltd. Bank of Panshin CHANG HWA BANK Taishin Bank Hua Nan Commercial Bank First Commercial Bank DBS Bank Limited Mega Bank Bank Sinopac Co., Ltd. E.Sun Commercial Bank Ltd. Taiwan Cooperative Bank Entie Commercial Bank Ltd. King’s Town Bank The Bank of East Asia Limited	Nature of borrowing Credit loans 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 Collateralized borrowing 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞		Amount $ 221,153 50,000 50,000 75,000 50,000 80,000 20,000 240,000 80,000 135,000 260,000 150,000 80,000 150,000 97,000 70,000 30,000 50,000 90,000 1,978,153 86,000 265,000 110,000 77,000 215,000 140,000 98,000 300,000 476,000 270,000 24,500 2,061,500 $ 4,039,653	Contractperiod 2021.10.07～2022.03.15 2021.12.20～2022.12.18 2021.11.16～2022.02.16 2021.12.15～2022.01.14 2021.11.17～2022.02.15 2021.12.23～2022.03.22 2021.10.18～2022.01.18 2021.12.27～2022.03.27 2021.12.27～2022.01.27 2021.10.08～2022.01.06 2021.12.15～2022.02.15 2021.12.15～2022.01.14 2021.02.01～2022.02.01 2021.08.30～2022.02.24 2021.12.28～2022.03.28 2021.11.25～2022.02.25 2021.12.17～2022.03.17 2021.11.17～2022.02.15 2021.12.15～2022.03.17 2021.12.15～2022.01.14 2021.12.24～2022.01.24 2021.11.26～2022.11.26 2021.10.08～2022.04.06 2021.07.14～2022.05.20 2021.12.23～2022.03.22 2021.10.06～2022.03.30 2021.12.27～2022.12.27 2021.10.25～2022.03.17 2021.10.29～2022.03.23 2021.12.15～2022.01.14	Interest rate range(%) 1.35～1.40 1.41 1.40 1.3 1.25 1.20 1.20 1.17 1.40 1.35 1.22 1.31 0.84 1.33 1.42 1.50 1.15 1.43 1.4 1.00 1.14 1.05 0.95 1.10～1.20 1.15 0.83 1.4 0.85 0.34～0.36 1.10	Lines of credit $ 270,000 50,000 50,000 75,000 100,000 80,000 50,000 240,000 100,000 150,000 260,000 300,000 80,000 150,000 100,000 100,000 50,000 50,000 140,000 100,000 265,000 200,000 77,000 330,000 200,000 300,000 300,000 600,000 553,600 150,000	Pledge or Guarantee
							The Chairman of the Company is the guarantor. 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 Time deposits 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞

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De Licacy Industrial Co., Ltd.

Statement of Short-term Notes Payable

December 31, 2021

Statement 11

(In Thousands of New Taiwan Dollars)

Guarantee or Acceptance agency 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	Period 2021.12.30～2022.01.17 2021.12.17～2022.02.15 2021.12.10～2022.01.07 2021.12.28～2022.02.24 2021.12.17～2022.01.13 2021.11.02～2022.01.04 2021.11.05～2022.02.18 2021.12.16～2022.02.14 2021.12.14～2022.03.14	Discount rate(annual) (%) 0.500 0.902 0.400 0.852 0.850 1.040 1.000 0.650 0.27			Amount
				IssuingAmount $ 50,000 100,000 50,000 50,000 50,000 50,000 50,000 50,000 260,000 $ 710,000	Unamortized ticket discount ( $ 12 ) ( 114 ) ( 4 ) ( 64 ) ( 15 ) ( 6 ) ( 47 ) ( 40 ) ( 187) ($ 489)	Carryingamount
					( ( ( ( ( ( ( ( ( (		$ 49,988 99,886 49,996 49,936 49,985 49,994 49,953 49,960 259,813 $ 709,511

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De Licacy Industrial Co., Ltd.

Statement of Notes Payable (including Related Parties) December 31, 2021

Statement 12

(In Thousands of New Taiwan

Dollars)

Companyname Non-related party Rui Chong Limited Farsmart Co., Ltd. SUN WAN INTERNATIONAL CO., LTD. TIP TOP ADVANCED MATERIALS CO., LTD. Other (Note) Related party Lucky Unique Enterprise Company Tung Ming Textile Co., Ltd.		Amount
		$ 10,689 8,977 13,413 9,242 95,526 $ 137,847 $ 18,009 39,278 $ 57,287

Note: The balance of each account included does not exceed 5% of the total notes payable.

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De Licacy Industrial Co., Ltd.

Statement of Accounts Payable (including Related Parties) December 31, 2021

Statement 13

(In Thousands of New Taiwan

Dollars)

Companyname Non-related party YI SHIN TEXTILE INDUSTRIAL CO., LTD. ZIG SHENG INDUSTRIAL CO., LTD. Other (Note) Related party New Lake Ltd. Tung Ming Textile Co., Ltd. Lucky Unique Enterprise Company Other (Note)		Amount
		$ 17,151 7,104 86,656 $ 110,911 $ 93,272 28,142 21,444 1,276 $ 144,134

Note: The balance of each account included does not exceed 5% of the total amount of each subject.

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De Licacy Industrial Co., Ltd.

Statement of Other Current Liabilities

December 31, 2021

December 31, 2021	December 31, 2021	December 31, 2021
Statement 14 (In Thousands of New Taiwan Dollars) Item Amount Receipts in suspense $ 54,202 Receipts in lieu 4,640 Other (Note) 1,726 $ 60,568
		$ 54,202 4,640 1,726 $ 60,568

Note: The individual balance included does not exceed 5% of total other current liabilities.

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De Licacy Industrial Co., Ltd.

Statement of Long-term Loans

December 31, 2021

Statement 15

(In Thousands of New Taiwan Dollars)

Bank name The Export-Import Bank of the Republic of China O-Bank The Export-Import Bank of the Republic of China O-Bank Hua Nan Commercial Bank Mega Bank Land Bank of Taiwan O-Bank (Lead bank of syndicated loan) O-Bank (Lead bank of syndicated loan) Less: Syndicated loans arrangement fee	Summary Collateralized borrowing 〞 Credit loans 〞 〞 〞 〞 Syndicated loans Commercial paper guarantee for syndicated loans		Endingbalance $ 10,667 1,041,000 270,000 250,000 288,117 95,833 70,000 1,023,600 998,907 4,048,124 5,225 $ 4,042,899	Expiry amount within 1year $ 4,000 - 60,000 29,167 64,606 25,000 14,228 - - 197,001 - $ 197,001	Amount over than 1 year $ 6,667 1,041,000 210,000 220,833 223,511 70,833 55,772 1,023,600 998,907 3,851,123 5,225 $ 3,845,898	Contractperiod 2020.11.27～2024.08.15 2021.10.28～2023.10.13 2017.01.19～2026.12.08 2019.05.22～2029.07.09 2019.08.20～2029.11.12 2020.10.08～2025.10.08 2021.02.04～2026.02.04 2021.10.22～2026.10.22 2021.12.21～2022.03.21 (Note)	Interest rate(%) 0.63 1.02 1.39～1.50 0.21 0.65～1.3 1.39 1.55 1.797 1.4905	Pledge or Guarantee
								Machinery Time deposits The Chairman of the Company is the guarantor. 〞 〞 〞 〞 〞 〞

Note: The loan contract of commercial paper guarantee for syndicated loans will be renew every 3 months.

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De Licacy Industrial Co., Ltd. Statement of Operating Revenues

Year 2021

	Year 2021	Year 2021	Year 2021
Statement 16 Item Sales income Finished fabric Yarn and processed silk Garments and garment substrates Dyeing auxiliaries, pulp and main materials Processing revenue Less: Sales returns Finished fabric Garments Sales discount Net amount	(In Thousands of New Taiwan Dollars) Quantity Amount 42,236,000 yards $ 3,507,167 2,512,000 kg 349,113 45,000 pieces 1,906 413,000 kg 16,655 3,874,841 25,871 3,900,712 93,000 yards 8,344 1,000 pieces 42 8,386 22,714 $ 3,869,612
			$ 3,507,167 349,113 1,906 16,655 3,874,841 25,871 3,900,712 8,344 42 8,386 22,714 $ 3,869,612

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De Licacy Industrial Co., Ltd.

Statement of Operating Costs

Year 2021

Statement 17 (In Thousands of New Taiwan Dollars)

Item Beginning materials Add: Current year material imports Less: Inventory valuation and obsolescence losses Sale of raw materials Ending raw materials Transfer to research and development expenses Transfer to manufacturing costs Others Direct raw material consumption Direct labor Manufacturing costs Add: Processing costs Less: Transfer to research and development expenses Manufacturing costs Add: Beginning work-in-progress Current year purchases Transfer of finished goods Less: Inventory valuation and obsolescence losses Inventory loss Sale of work-in-progress Ending work-in-progress Transfer to manufacturing costs Others Cost of finished goods Add: Beginning finished goods Current year purchases Less: Ending finished goods Inventory loss Transfer to work-in-progress Transfer to marketing expenses Transfer to research and development expenses Inventory valuation and obsolescence losses Others Cost of production and sales Cost of raw materials and work-in-process sold Unallocated fixed manufacturing costs Revenue from sale of scraps Inventory loss Loss on decline in value of inventories Total operating costs		Amount
	(	$ 180,972 1,759,328 1,198 223,539 283,901 10,525 52,816 109 1,368,212 198,659 807,667 420,488 3,383 2,791,643 268,596 3,506 2,353,939 1,789 1,778 116,532 342,971 1,470 2,123 4,951,021 922,188 571,325 942,075 59 2,353,939 6,792 8,950 5,504 1,311 3,125,904 340,072 22,495 466 ) 1,837 8,491 $ 3,498,333

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De Licacy Industrial Co., Ltd.

Statement of Operation Expense

Year 2021

		Year	2021	2021
Statement 18 Payroll Shipping expenses Research fees Depreciation Export expenses Professional service fees Expected credit loss Other (Note)	Summary Salaries, bonuses overtime fees and directors’ remuneration, etc. Land, sea and air freight expenses, etc. Product development expenses Depreciation of property, plant and equipment and right-of-use assets Inspection and testing fees, etc. Accountant’s auditing fee and stock agency service fee	Marketing expense $ 37,537 84,761 - 15,591 16,339 - - 52,218 $206,446	(In Management expense $ 64,960 261 - 4,638 - 9,482 - 39,034 $118,375		Thousands of New Taiwan Dollars) R&D expense Expected credit impairment loss Total $ 52,859 $ - $155,356 154 - 85,176 30,815 - 30,815 4,190 - 24,419 - - 16,339 150 - 9,632 - 19,559 19,559 34,769 - 126,021 $122,937 $ 19,559 $467,317

Note: The amount of each item does not exceed 5% of the amount of this account.

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De Licacy Industrial Co., Ltd.

Statement of Labor, Depreciation and Amortization by Function

Statement 19

(In Thousands of New Taiwan Dollars)

Employee benefits Payroll Labor and health insurance Pension Remuneration to directors Other Depreciation Amortization			2021		Total $ 424,112 42,290 15,120 6,907 15,372 $ 503,801 $ 128,415 -			2020
	Operation cost $ 275,663 26,885 7,919 - 8,854 $ 319,321 $ 103,996 -		Operation expense $ 148,449 15,405 7,201 6,907 6,518 $ 184,480 $ 24,419 -			Operation cost $ 258,458 27,649 9,052 - 9,206 $ 304,365 $ 112,717 -		Operation expense $ 127,069 15,506 8,415 4,151 7,039 $ 162,180 $ 22,635 93		Total
										$ 385,527 43,155 17,467 4,151 16,245 $ 466,545 $ 135,352 93

• Note: The number of employees for the current year and the previous year were 781 and 829, respectively, of which the number of directors who were not concurrent employees in 2021 and 2020 were 3 and 4, respectively.

• (1) The average employee benefit expense for the year was NT$639,000 (“Total employee benefit expense for the year – Total amount of director’s remuneration” / “Number of employees for the year – Number of directors who are not concurrent employees”). The average employee benefit expense for the previous year was NT$560,000 (“Total employee benefit expense for the previous year – Total amount of director’s remuneration” / “Number of employees for the previous year – Number of directors who are not concurrent employees”).

• (2) The average employee salary expense for the year was NT$545,000 (Total salary expense for the year / “Number of employees for the year – Number of directors who are not concurrent employees”). The average employee salary expense for the previous year was N T$467,000 (Total salary expense for the previous year / “Number of employees for the previous year – Number of directors who are not concurrent employees”).

• (3) Change in average employee salary cost adjustment +17% (“Average employee salary cost for the current year – Average employee salary cost for the previous year” / Average employee salary cost for the previous year).

• (4) The Company’s employee compensation policy is to provide employees with compensation and benefits that are above the industry ave rage. Employee compensation includes monthly salaries (including special allowances, special expenses, production bonuses, etc. for performance and production results), bonuses for the three holidays (Spring Festival, Labor Day and Mid-Autumn Festival), and compensation based on the Company’s annual profitability (year-end bonuses). In accordance with Article 26 of the Company’s Articles of Incorporation, the Company shall set aside no less than 4% of the Company’s annual profit as employee compensation, and the amount and distribution method shall be recommended by the Remuneration Committee to the Board of Directors for approval. Employee compensation will be distributed at the mid -year or at the end of year, and the amount distributed is

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determined according to each employee’s position, contribution and performance.

• (5) The Chairman, Vice Chairman and Managers (including managers who serve as directors) of the Company shall be paid monthly in accordance with the Salary Control Act. In the event of a salary increase or a change in position during their term of office that results in an increase in compensation or the payment of a year-end bonus, the Remuneration Committee shall consider the matter and submit it to the Board of Directors for a resolution. The Board of Directors shall recuse itself from voting on any resolution of compensation for itself and its related parties. In accordance with Article 26 of the Company’s Articles of Incorporation, if the Company makes a profit in a year, the Board of Direc tors shall resolve to set aside not more than 3% of the remuneration of the directors. However, if the Company still has accumulated losses, the amount of compensation shall be reserved in advance and then the remuneration to the directors shall be provided in accordance with the aforementioned percentage.

• (6) The remuneration for independent directors shall be NT$250,000 per year for each director, regardless of profit or loss.

• (7) The Company has established an Audit Committee ; there is no supervisor.

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