EVEREST - Annual Report 2021 | FinancialReports.eu

Stock Code: 1460

Everest Textile Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2021 and 2020 and Independent Auditors' Report

Address: No. 256, Minghe Vil., Shanshang Dist., Tainan City, Taiwan (R.O.C.)

Tel:(06)578-2561

§TABLE OF CONTENTS§

Item I. Cover II. Table of Contents III. Declaration of Consolidated Financial Statements of Affiliates IV. Independent Auditors' Report V. Consolidated Balance Sheets VI. Consolidated Statements of Comprehensive Income VII. Consolidated Statements of Changes in Equity VIII. Consolidated Statements of Cash Flows IX. Notes to Consolidated Financial Statements (I) General Information (II) Date and Procedures for the Approval of Financial Statements (III) Application of New and Amended Standards and Interpretations (IV) Summary of Significant Accounting Policies (V) Critical Accounting Judgments and Key Sources of Estimation Uncertainty (VI) Description of Significant Accounting Items (VII) Related Party Transactions (VIII) Pledged Assets (IX) Significant Contingent Liabilities and Unrecognized Contract Commitments (X) Significant Events after the Period (XI) Others (XII) Supplementary Disclosures 1. Information on Significant Transactions 2. Information on Invested Companies 3. Information on Investments in Mainland China 4. Information on Major Shareholders (XIII) Segment Information	Page 1 2 3 4~8 9 10~11 12 13~14 15 15 15~17 17~25 25 25~54 55~57 58 58 58 58~60 60, 64~68, 71~73 61, 69, 71~73 61-62, 70~73 61, 74 61~63	No. of Notes to the Financial Statements
		- - - - - - - - I II III IV V VI~XXV XXVI XXVII XXVIII XXIX XXX`～`XXXI XXXII XXXIII XXXIII XXXIII XXXIII

Declaration of Consolidated Financial Statements of Affiliates

The companies required to be included in the Company’s consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2021 are the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in IFRS 10 "Consolidated Financial Statements." Relevant information that should be disclosed in the consolidated financial statements of affiliates has been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, no separate set of consolidated financial statements of affiliates would be otherwise prepared.

Hereby certify

Name of the Company: Everest Textile Co., Ltd.

Chairman: Johnny Hih

March 28, 2022

Independent Auditors' Report

The Board of Directors and Shareholders Everest Textile Co., Ltd.

Audit Opinion

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

In our opinion, based on our audits and the reports of the other independent auditors (refer to the Other Matters section of our report), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and its financial performance and its cash flows for the years ended December 31, 2021 and 2020 in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC) and SIC Interpretations (SIC) endorsed and kissed into effect by the Financial Supervisory Commission (FSC) of ROC.

Basis for Opinion

We conducted our audits in accordance with the "Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants" and auditing standards generally accepted in the ROC. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in 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.

Emphasis of Matters

As stated in Note 29 of the consolidated financial statements, a fire accident occurred at the warehouse of Tainan factory of the Company on March 15, 2022. Our opinion was not modified in respect of the matter emphasized.

Key Audit Matters

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

in our audit of the consolidated financial statements of the Group for the year ended December 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The descriptions of the key audit matters of the Group’ financial statements for the year ended December 31, 2021, are as follows:

As stated in Note 4(k) Income Recognition and Note 20 Revenue of the accompanying consolidated financial statements, the Group is mainly engaged in the manufacturing and sales of various textiles such as chemical fibers, cotton and blended fabrics. The sales revenue of filament fabric of the Company has a significant impact on the overall operating income and profit of the Group, and therefore we have identified the authenticity of the sales revenue of filament fabric from specific customers of the Company as a key audit matter.

With respect to the key audit matter mentioned above, we performed the following audit procedures:

I. We reviewed the relevant internal control mechanism and operating procedures of sales transaction cycle and designed the internal control audit procedures accordingly to assess the effectiveness of the internal control operations.
II. We conducted sample checking on the sales revenue of filament fabric from the Company's specific customers and checked the shipping documents, customs documents and payment documents in order to verify the the recognition and payment status of its revenue as well as confirm the authenticity of the sales transactions.

Other Matters

Regarding the subsidiaries included in the Group’s consolidated financial statements, the financial statements of Everest Textile (Thailand) Co., Ltd., Everest USA Holdings, Inc., Everest Development USA, LLC., and Everest Textile USA, LLC for the year ended December 31, 2021 were audited by other auditors. In addition, the financial statements of Everest Textile (Thailand) Co., Ltd., Everest Apparel (Ethiopia) S.C., Everest Apparel (Haiti) S.A., Everest USA Holdings, Inc., Everest Development USA, LLC., and Everest Textile USA, LLC for the year ended December 31, 2020 were also audited by other auditors. As of December 31, 2021 and 2020, the total assets of the above subsidiaries were NT$2,686,915 thousand and NT$4,047,433 thousand, respectively, accounted for 18% and 30% of the consolidated total assets. The net operating revenue was NT$1,240,991 thousand and NT$1,374,211 thousand, respectively, accounted for 12% and 19% of the net consolidated operating revenue for the years ended December 31, 2021

and 2020, respectively.

We have also audited the parent company only financial statements of Everest Textile Co., Ltd. as of and for the years ended December 31, 2021 and 2020, on which we have issued an unqualified opinion with the sections of Emphasis of Matters and Other Matters for the year ended December 31, 2021, and an unqualified opinion with the section of Other Matters for the year ended December 31, 2020.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the FSC of the ROC and for such internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including the Audit Committee, are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the ROC will always detect a material misstatement in the consolidated financial statements when it exists. Misstatements can arise from fraud or error. If it could have been reasonably anticipated that misstated amounts, individually or in aggregate, could have influenced the economic decisions made by the users of the Consolidated Financial Statements, it will be deemed as material.

As part of an audit in accordance with the auditing standards generally accepted in the ROC, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: I. Identify and assess the risks of material misstatement of the consolidated financial statements,

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

II. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
III. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
IV. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
V. Evaluate the overall presentation, structure and content of the consolidated financial statements, including relevant notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
VI. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or businesses within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit.

We 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 provided those charged with governance with a statement that we have complied with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China regarding independence, and to communicate with them all relationships and other matters that may be thought to bear on our independence (including relevant preventive measures).

From the matters communicated with those charged with governance, we determined key audit

matters of the consolidated financial statements of the Group for the year ended December 31, 2021. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communications.

Deloitte & Touche CPA Lou Liao CPA Li-yuan Guo Financial Supervisory Commission Securities and Futures Commission Approval Approval No. No. Jin-guan-zheng-shen-zi No. 0990031652 Tai-cai-zheng-liu-zi No. 0920123784

March 28, 2022

Everest Textile Co., Ltd. and Subsidiaries

Consolidated Balance Sheets

December 31, 2021 and 2020

Unit: NT$ Thousands

Code 1100 1110 1120 1150 1170 1200 1220 130X 1470 11XX 1517 1600 1755 1840 1990 15XX 1XXX Code 2100 2110 2120 2130 2150 2160 2170 2180 2219 2220 2230 2250 2280 2322 2399 21XX 2540 2570 2580 2640 2645 2670 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX 36XX 3XXX	Assets Current Assets Cash (Notes 4 and 6) Financial Assets at Fair Value Through Profit or Loss - Current (Notes 4 and 7) Financial Assets at Fair Value Through Other Comprehensive Income - Current (Notes 4 and 8) Notes Receivable (Notes 4, 9, 20, and 26) Trade Receivables (Notes 4, 9, 20, and 26) Other Receivables (Notes 4 and 26) Current Tax Assets (Notes 4 and 22) Inventories (Notes 4, 5, and 10) Other Current Assets (Note 14) Total Current Assets Non-Current Assets Financial Assets at Fair Value Through Other Comprehensive Income - Non- Current (Notes 4 And 8) Property, Plant and Equipment (Notes 4, 12, And 27) Right-Of-Use Assets (Notes 4 And 13) Deferred Tax Assets (Notes 4 And 22) Other Non-Current Assets (Note 14) Total Non-Current Assets Total Assets Liabilities and Equity Current Liabilities Short-Term Borrowings (Notes 15, 26, And 27) Short-Term Bills Payable (Note 15) Financial Liabilities at Fair Value Through Profit or Loss - Current (Notes 4 and 7) Contract Liabilities - Current (Note 20) Notes Payable (Note 16) Notes Payable to Related Parties (Note 26) Trade Payables (Note 16) Trade Payables to Related Parties (Note 26) Other Payables (Note 17) Other Payables to Related Parties (Note 26) Current Tax Liabilities (Note 22) Refund Liabilities - Current Lease Liabilities - Current (Notes 4, 13, And 26) Long-Term Borrowings Due Within One Year (Notes 15, 26, And 27) Other Current Liabilities (Note 17) Total Current Liabilities Non-Current Liabilities Long-Term Borrowings (Notes 15, 26, And 27) Deferred Tax Liabilities (Notes 4 And 22) Lease Liabilities - Non-Current (Notes 4, 13, And 26) Net Defined Benefit Liabilities - Non-Current (Notes 4 And 18) Guarantee Deposits Other Non-Current Liabilities Total Non-Current Liabilities Total Liabilities Equity Attributable to Owners of The Company (Note 19) Share Capital Ordinary Shares Capital Surplus Retained Earnings (Accumulated Losses) Legal Reserve Special Reserve Undistributed Earnings (Deficits to Be Compensated) Net Retained Earnings (Accumulated Losses) Other Equity Interest Treasury Shares (Note 4) Total Equity Attributable to Owners Of The Parent Non-Controlling Interests Total Equity Total Liabilities And Equity		December 31, 2021	December 31, 2021	% 3 - 1 1 13 - - 39 1 58 - 37 3 1 1 42 100 21 6 - - 1 - 5 - 3 - 1 - 1 6 - 44 5 1 3 - - - 9 53 47 1 1 1 1 3 2) 2) 47 - 47 100		December 31, 2020	December 31, 2020
			Amount $ 481,903 5,062 81,526 62,393 1,902,269 55,914 6,186 5,721,143 134,647 8,451,043 3,448 5,453,756 482,329 136,977 80,199 6,156,709 $ 14,607,752 $ 3,010,987 899,785 22 53,593 81,335 19,337 728,657 53,341 469,482 52,716 67,076 7,154 95,016 830,000 16,406 6,384,907 717,500 170,505 440,174 76,619 720 474 1,405,992 7,790,899 6,946,434 115,943 174,022 83,073 183,359 440,454 353,151) 332,836) 6,816,844 9 6,816,853 $ 14,607,752				Amount $ 748,191 - 80,742 4,026 1,336,873 32,639 11,359 4,656,544 175,618 7,045,992 3,448 5,740,814 544,190 134,627 96,025 6,519,104 $ 13,565,096 $ 2,642,698 1,599,118 - 55,190 598 10,487 569,480 32,983 449,842 51,228 7,929 7,154 85,578 697,500 37,128 6,246,913 2,758,333 169,777 506,670 75,515 721 847 3,511,863 9,758,776 5,098,341 99,644 174,022 83,073 1,151,908) 894,813) 164,025) 332,836) 3,806,311 9 3,806,320 $ 13,565,096		%
		( (		( (		( ( ( (		( ( ( (	6 - 1 - 10 - - 34 1 52 - 42 4 1 1 48 100 20 12 - 1 - - 4 - 3 - - - 1 5 - 46 20 1 4 1 - - 26 72 38 1 1 1 9) 7) 1) 3) 28 - 28 100

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

(Refer to Deloitte & Touche auditors’ report dated March 28, 2022)

Chairman: Johnny Hih

Manager:Ching Lai Yeh Accounting Executive:Mei Hsiu Huang

Everest Textile Co., Ltd., and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

Unit: NT$ Thousands (NT$ for earnings (net loss) per share)

Code 4000 Operating revenue (Notes 4, 20, And 26) 5000 Operating costs (Notes 10, 18, 21, and 26) 5900 Gross profit Operating expenses (Notes 9, 18, 21, And 26) 6100 Selling and marketing expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Gains on reversal of expected credit loss 6000 Total operating expenses 6500 Other comprehensive income and expenses (Notes 12 and 21) 6900 Net operating profits (losses) Non-operating income and expenses (Notes 4, 7, 21, and 26) 7100 Interest income 7010 Other income 7020 Other gains and losses 7510 Interest expenses 7000 Total non-operating income and expenses 7900 Net profit (loss) before income tax 7950 Income tax expense (Notes 4 and 22) 8200 Net profit (loss) for the year		2021		% 100 81 19 9 4 2 - 15 - 4 - 1 1 ) 1) 1) 3 1 2		2020
		Amount $ 10,006,733 8,088,599 1,918,134 858,960 458,177 227,634 3,307) 1,541,464 11,937) 364,733 7,427 87,390 76,406 ) 93,656) 75,245) 289,488 107,617 181,871				Amount $ 7,343,877 6,771,871 572,006 734,956 468,512 221,895 950) 1,424,413 573 851,834) 1,007 121,472 101,484 ) 101,423) 80,428) 932,262 ) 4,727 936,989)		%
	( ( ( ( (		( ( (		( ( ( ( ( ( (		( ( ( ( ( (	100 92 8 10 7 3 - 20 - 12) - 2 2 ) 1) 1) 13 ) - 13)

(Continued)

10 -

(Continued)

Code Other comprehensive income/(loss) 8310 Items that will not be reclassified subsequently to profit or loss: 8311 Re-measurement of defined benefit plans (Note 18) 8316 Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income 8349 Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 22) 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences on translating the financial statements of foreign operations 8300 Other comprehensive income/(loss) for the year, net of income tax 8500 Total comprehensive income/(loss) for the year 8600 Net profit (loss) attributable to: 8610 Owners of the Company 8620 Non-controlling interests 8700 Total comprehensive income/(loss) attributable to: 8710 Owners of the Company 8720 Non-controlling interests Earnings (net loss) per share (Note 23) 9710 Basic 9810 Diluted		2021		% - - - - 2) 2) - 2 - 2 - - -		2020
		Amount $ 1,860 784 371) 2,273 189,910) 187,637) $ 5,766) $ 181,871 - $ 181,871 $ 5,766 ) - $ 5,766) $ 0.39 0.39				Amount $ 392 5,806 ) 79) 5,493) 91,331) 96,824) $ 1,033,813) $ 936,987 ) 2) $ 936,989) $ 1,033,811 ) 2) $ 1,033,813) $ 2.50 ) 2.50 )		%
	( ( ( ( ( (		( (		( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( (	- - - - 1) 1) 14) 13 ) - 13) 14 ) - 14)

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

(Refer to Deloitte & Touche auditors’ report dated March 28, 2022)

Chairman: Johnny Hih Manager:Ching Lai Yeh Accounting Executive:Mei Hsiu Huang

11 -

Unit: NT$ Thousands

Everest Textile Co., Ltd. and Subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

		Equity attributable to o	Equity attributable to o	Equity attributable to o	wners of the Company	wners of the Company							Total Equity
Share capital Ordinary Shares $ 5,098,341 - - - 5,098,341 ( 1,151,907 ) 3,000,000 - - - $ 6,946,434	Capital Surplus $ 99,644 - - - 99,644 - 16,299 - - - $ 115,943	Retained earnings (accumulated losses) Legal Reserve Special Reserve Undistributed Earnings (Deficits to Be Compensated) $ 174,022 $ 83,073 ($ 215,234) - - ( 936,987 ) - - 313 - - ( 936,674) 174,022 83,073 (1,151,908) - - 1,151,907 - - - - - 181,871 - - 1,489 - - 183,360 $ 174,022 $ 83,073 $ 183,359				Other equity		Total $ 66,888) - 97,137) 97,137) 164,025) - - - 189,126) 189,126) $ 353,151)	Treasury Shares ($ 332,836) - - - ( 332,836) - - - - - ($ 332,836)
		Legal Reserve $ 174,022 - - - 174,022 - - - - - $ 174,022	Special Reserve $ 83,073 - - - 83,073 - - - - - $ 83,073		Exchange Differences on Translating the Financial Statements of Foreign Operations ($ 85,186) - ( 91,331) ( 91,331) ( 176,517) - - - ( 189,910) ( 189,910) ($ 366,427)	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income $ 18,298 - ( 5,806) ( 5,806) 12,492 - - - 784 784 $ 13,276
(				( ( ( (	( ( ( ( ( ( (	( (	( ( ( ( ( ( (		( ( (	( ( ( ( (	( (	( ( ( ( (	$ 4,840,133 936,989 ) 96,824) 1,033,813) 3,806,320 - 3,016,299 181,871 187,637) 5,766) $ 6,816,853

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

(Refer to Deloitte & Touche auditors’ report dated March 28, 2022)

Chairman: Johnny Hih

Manager: Ching Lai Yeh

Accounting Executive: Mei Hsiu Huang

12 -

Everest Textile Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2021 and 2020

Code Cash flows from operating activities A10000 Net profit (loss) before income tax for the year Adjustments for: A20100 Depreciation expenses A20300 Gains on reversal of expected credit loss A20900 Interest expenses A21200 Interest income A21300 Dividend income A22300 Compensation cost of employee stock option A22500 Loss (gains) on disposal of property, plant and equipment A23600 Impairment loss of property, plant and equipment A23700 Inventory valuation and obsolescence losses A24100 Net losses (gains) on foreign currency exchange A30000 Net changes in operating assets and liabilities A31130 Notes receivable A31150 Trade receivables A31180 Other receivables A31200 Inventories A31240 Other current assets A31990 Financial assets and liabilities at fair value through profit or loss A32125 Contract liabilities A32130 Notes payable A32140 Notes payable to related parties A32150 Trade payables A32160 Trade payables to related parties A32180 Other payables A32190 Other payables to related parties A32230 Other current liabilities A32240 Net defined benefit liabilities - non- current A32990 Other non-current liabilities A33000 Cash used in operations A33100 Interest received A33300 Interest paid A33500 Income tax paid AAAA Net cash outflows from operating activities		Unit: NT$ Thousands 2021 2020 $ 289,488 ( $ 932,262 ) 750,788 757,444 3,307 ) ( 950 ) 93,656 101,423 7,427 ) ( 1,007 ) 2,427 ) ( 3,917 ) 24,709 - 5,818 ( 573 ) 6,119 - - 517,347 22,086 ) 65,356 58,367 ) 5,304 599,830 ) ( 228,441 ) 24,291 ) 20,827 1,177,840 ) ( 486,766 ) 30,707 ( 136 ) 5,040 ) - 1,597 ) 36,639 80,737 ( 51,475 ) 8,850 3,971 179,055 2,391 20,358 ( 16,057 ) 37,450 39,265 1,488 ( 4,836 ) 21,136 ) 9,226 2,964 15,859 373) ( 1,559) 391,534 ) ( 152,927 ) 7,444 1,007 93,148 ) ( 102,815 ) 45,724) ( 60,079) 522,962) ( 314,814)	Unit: NT$ Thousands 2021 2020 $ 289,488 ( $ 932,262 ) 750,788 757,444 3,307 ) ( 950 ) 93,656 101,423 7,427 ) ( 1,007 ) 2,427 ) ( 3,917 ) 24,709 - 5,818 ( 573 ) 6,119 - - 517,347 22,086 ) 65,356 58,367 ) 5,304 599,830 ) ( 228,441 ) 24,291 ) 20,827 1,177,840 ) ( 486,766 ) 30,707 ( 136 ) 5,040 ) - 1,597 ) 36,639 80,737 ( 51,475 ) 8,850 3,971 179,055 2,391 20,358 ( 16,057 ) 37,450 39,265 1,488 ( 4,836 ) 21,136 ) 9,226 2,964 15,859 373) ( 1,559) 391,534 ) ( 152,927 ) 7,444 1,007 93,148 ) ( 102,815 ) 45,724) ( 60,079) 522,962) ( 314,814)	Unit: NT$ Thousands 2021 2020 $ 289,488 ( $ 932,262 ) 750,788 757,444 3,307 ) ( 950 ) 93,656 101,423 7,427 ) ( 1,007 ) 2,427 ) ( 3,917 ) 24,709 - 5,818 ( 573 ) 6,119 - - 517,347 22,086 ) 65,356 58,367 ) 5,304 599,830 ) ( 228,441 ) 24,291 ) 20,827 1,177,840 ) ( 486,766 ) 30,707 ( 136 ) 5,040 ) - 1,597 ) 36,639 80,737 ( 51,475 ) 8,850 3,971 179,055 2,391 20,358 ( 16,057 ) 37,450 39,265 1,488 ( 4,836 ) 21,136 ) 9,226 2,964 15,859 373) ( 1,559) 391,534 ) ( 152,927 ) 7,444 1,007 93,148 ) ( 102,815 ) 45,724) ( 60,079) 522,962) ( 314,814)
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 932,262 ) 757,444 950 ) 101,423 1,007 ) 3,917 ) - 573 ) - 517,347 65,356 5,304 228,441 ) 20,827 486,766 ) 136 ) - 36,639 51,475 ) 3,971 2,391 16,057 ) 39,265 4,836 ) 9,226 15,859 1,559) 152,927 ) 1,007 102,815 ) 60,079) 314,814)

(Continued)

13 -

(Continued)

Code Cash flows from investing activities B00200 Disposal of financial assets at fair value through other comprehensive income B02700 Acquisition of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Increase in refundable deposits B03800 Decrease in refundable deposits B07600 Dividends received BBBB Net cash outflows from investing activities Cash flows from financing activities C00100 Increase in short-term borrowings C00200 Decrease in short-term borrowings C00500 Increase in short-term notes and bills payable C00600 Decrease in short-term notes and bills payable C01600 Proceeds from long-term borrowings C01700 Repayments of long-term borrowings C03000 Increase in guarantee deposits C03100 Decrease in guarantee deposits C04020 Payments of lease liabilities C04600 Cash capital increase C09900 Share issuance costs paid CCCC Net cash inflows from financing activities DDDD Effects of exchange rate changes on cash EEEE Net increase (decrease) in cash E00100 Cash balance at the beginning of the year E00200 Cash balance at the end of the year		2021 $ - 500,728 ) 3,261 1,806 ) 11,020 2,427 485,826) 9,511,521 9,053,278 ) 10,242,818 10,942,151 ) 1,670,000 3,578,333 ) 4,295 3,808 ) 98,681 ) 3,000,000 8,410) 743,973 1,473) 266,288 ) 748,191 $ 481,903		2020
	( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( (	$ 3,512 299,715 ) 20,840 12,106 ) 1,367 3,917 282,185) 6,927,002 6,922,268 ) 8,490,954 7,691,214 ) 1,070,000 606,667 ) 7,405 9,430 ) 100,829 ) - - 1,164,953 4,908) 563,046 185,145 $ 748,191

The accompanying notes are an integral part of the consolidated financial statements. (Refer to Deloitte & Touche auditors’ report dated March 28, 2022)

Chairman: Johnny Hih Manager:Ching Lai Yeh Accounting Executive:Mei Hsiu Huang

14 -

Everest Textile Co., Ltd. and Subsidiaries

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Unit: NT$ Thousands, unless specified otherwise )

I. General Information

Everest Textile Co., Ltd. (the "Company") was incorporated in February 1988 and commenced business in October 1988. The Company mainly engages in the manufacturing of various textiles such as chemical fibers, cotton, and blended fabrics, and knitting processing, dyeing processing, printing processing, and polyester film businesses, as well as the manufacturing, trading, and import/export trading of the abovementioned products and products related to yarn materials and garments.

The Company's shares have been listed on the Taiwan Stock Exchange (TWSE) since April 1995.

The consolidated financial statements are presented in the Company's functional currency, New Taiwan dollars.

II. Date and Procedures for the Approval of Financial Statements

The financial statements were approved by the board of directors (the “Board”) on March 3, 2022.

III. Application of New and Amended Standards and Interpretations (I) Initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission (the "FSC")

(II)

The application of the amended IFRSs endorsed and issued into effect by the
FSC did not result in significant changes on the accounting policies of the Group.
The IFRSs endorsed by the FSC for application starting from 2022
New/Revised/Amended Standards and
Interpretations
Effective Date
Announced by IASB
Annual Improvements to IFRSs 2018-2020 Cycle
January 1, 2022 (Note 1)
Amendment to IFRS 3 "Reference to the Conceptual
Framework"
January 1, 2022 (Note 2)
Amendments to IAS 16 “Property, Plant and Equipment -
Proceeds before Intended Use"
January 1, 2022 (Note 3)
Amendments to IAS 37 "Onerous Contracts - Cost of
Fulfilling a Contract"
January 1, 2022 (Note 4)

Note 1: The amendments to IFRS 9 apply to the exchanges of financial liabilities or the alterations in its terms that occur during the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 "Agriculture" apply to the fair value measurements during the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 "First-time Adoptions of IFRSs" apply for annual reporting periods beginning on or after January 1, 2022.
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Note 2: The amendments shall apply to the business merger with an acquisition date during the annual reporting periods beginning on or after January 1, 2022.
Note 3: The amendments apply to property, plant and equipment that arrived at the location and achieved the condition required for their operating method expected by the management on or after January 1, 2021.
Note 4: The amendments apply to contracts with outstanding obligations on January 1, 2022.

As of the consolidated financial statements were authorized for issue, the Group continues in evaluating the impact on its financial position and financial performance as a result of the aforementioned standards or interpretations. The related impact will be disclosed when the evaluation has been completed.

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

Effective Date New/Revised/Amended Standards and Interpretations Announced by IASB (Note 1) Amendments to IFRS 10 and IAS 28 "Sale or To be determined Contribution of Assets between an Investor and Its Associate or Joint Venture" IFRS 17 "Insurance Contracts" January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS 17 January 1, 2023 and IFRS 9 - Comparative Information” Amendments to IAS 1 "Classification of Liabilities as January 1, 2023 Current or Non-Current" Amendments to IAS 1 in "Disclosure of Accounting January 1, 2023 (Note 2) Policies" Amendments to IAS 8 - "Definition of Accounting January 1, 2023 (Note 3) Estimates" Amendments to IAS 12 “Deferred Income Tax related to January 1, 2023 (Note 4) Assets and Liabilities Derived from Single Transaction”

Note 1: Unless stated otherwise, the above new/revised/amended IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: Application of the amendments is deferred for the annual reporting period beginning on or after January 1, 2023.
Note 3: The amendments apply to the changes in accounting estimates and changes in accounting policies that occurred during the annual reporting period beginning on or after January 1, 2023.
Note 4: Except for the deferred income tax recognized from temporary difference of lease and exemption obligations on January 1, 2022, the amendment was applied to all transactions after January 1, 2022.

As of the approval date for the publishing of the consolidated financial statements, the Group continuously assesses the impacts of amendments to the abovementioned standards and interpretations on financial position and financial performance and will disclose relevant impacts upon the completion of the assessment in due course.

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IV. Summary of Significant Accounting Policies

(I) Statement of compliance

The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs endorsed and issued into effect by FSC.

(II) Basis of preparation

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

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and the significance of relevant inputs:

Level 1 input: Refer to quoted prices in active markets for identical assets or liabilities on the measurement date (unadjusted).
Level 2 input: Refer to observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly (i.e., prices) or indirectly (i.e., deduced from prices).
Level 3 input: Refer to unobservable inputs for asset or liability.
(III) Standards for the classification of current and non-current assets and liabilities Current assets include:
Assets held primarily for the purpose of trading;
Assets expected to be realized within 12 months after the reporting period; and
Cash (excluding those being restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period).

Current liabilities include:

Liabilities held primarily for the purpose of trading;
Liabilities due to be settled within 12 months after the reporting period; and
Liabilities for which the settlement may not be unconditionally deferred for at least 12 months after the reporting period.

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

(IV) Basis of consolidation

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

See Note 11 and Tables 6 and 7 for details on subsidiaries, shareholding, and scope of business.

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(V) Foreign currencies

In preparing the financial statements of the Company, transactions in currencies other than the Company'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 on 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 foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Exchange differences arising from the retranslation of nonmonetary items are included in profit or loss for the period, except for the changes in the fair value are recognized in other comprehensive income/(loss), in which cases, the exchange differences arising thereof are also recognized in other comprehensive income/(loss).

Non-monetary items measured at historical costs that are denominated in foreign currencies are translated using the exchange rate on the date of the transaction without re-translation.

In preparing the consolidated financial statements, assets and liabilities of overseas operating institutions (including subsidiaries in other countries that have or use currencies that are different from that of the Company) are translated into the New Taiwan dollar at exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. The resulting translation differences are recognized in other comprehensive income/(loss).

(VI) Inventories
Inventories consist of raw materials, supplies, finished goods, and work in progress. Inventory is measured by the lower of cost and net realizable value. When comparing cost and net realizable value, except for similar stock in hand, it is based on individual items. The net realizable value refers to the balance of the estimated selling price in normal circumstances after deducting the estimated cost required till completion and the estimated cost to complete the sale. The weighted-average method is adopted for the calculation of inventory costs.
(VII) Property, plant and equipment Property, plant and equipment are recognized at cost, and are subsequently measured at costs less accumulated depreciation.
Property, plant and equipment under construction are recognized at costs less accumulated impairment losses. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are classified into the appropriate categories of property, plant and equipment and depreciated when they are completed and ready for their intended use.
Property, plant and equipment are recognized using the straight-line method during its useful life. Each significant part is depreciated separately. The Group reviews estimated useful lives, residual values, and depreciation methods at the
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end of each year, 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 net consideration from the disposal and the carrying amount of the asset is recognized in profit or loss.

(VIII) Impairment of property, plant and equipment, and right-of-use assets At the end of each reporting period, the Group determines whether there is any indication that property, plant and equipment, and right-of-use assets have suffered any impairment loss. If any impairment indication exists, the Group estimates the recoverable amount of the asset. When it is impossible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of fair value less selling costs 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 shall be reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit shall be increased to the revised recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss. (IX) Financial instruments Financial assets and financial liabilities are recognized in the consolidated balance sheets when the Group becomes a party to the contractual provisions of the instruments.

Upon initial recognition, apart from financial assets and financial liabilities measured at fair value through profit or loss, financial assets and financial liabilities are measured at fair value, plus transaction costs that are directly attributable to the acquisition or issuance of financial assets or financial liabilities. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately as profit or loss.

Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.
(1) Measurement categories

Financial assets held by the Group are classified into financial assets 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 include financial assets designated at fair value through profit or loss. Financial assets at fair value through profit or loss are measured
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at fair value, and its gain or loss arising from re-measurement are recognized in other gain and loss. Please refer to Note 25 for the methods to determine fair values.

B. Financial assets at amortized cost

When the Group's investments in financial assets fulfill the following conditions at the same time, the investment shall be categorized as financial assets at amortized cost:

a. Held under a certain business model, and the purpose of the model is holding such financial assets to collect the contractual cash flows; and
b. The contractual terms give rise to cash flows on specified dates that are solely used for payments of principal and interest on the principal amount outstanding.

After initial recognition, financial assets at amortized cost (including cash, receivables at amortized cost, other receivables, and refundable deposits (stated as other non-current assets)) are measured at the gross carrying amount determined through the effective interest method less amortized costs of any impairment losses. Any exchange gain or loss of foreign currencies is recognized in profit or loss.

Interest income is calculated by multiplying the effective interest rate by the gross carrying amount of the financial assets. Credit-impaired financial assets are those where the issuer or debtor has experienced major financial difficulties or defaults, and the debtor is likely to claim bankruptcy or other financial restructurings, or disappearance of an active market for the financial asset due to financial difficulties.

C. Investments in equity instruments measured at fair value through other comprehensive income
Upon initial recognition, the Group may make an irrevocable election to designate the investments in equity instruments that are neither held for trading nor contingent consideration recognized a business acquisition 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, and any subsequent changes in the fair value are recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss upon their disposal; instead, they will be directly transferred to retained earnings.

Dividends of investments in equity instruments measured at fair value through other comprehensive income are recognized in profit or loss when the Group's right to receive payment is

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established, unless such dividends clearly represent the recovery of a part of the investment cost.

(2) Impairment of financial assets
At the end of each reporting period, the Group evaluates the impairment loss of financial assets at amortized cost (including trade receivables) based on the expected credit loss.
Loss allowances are recognized against trade receivables based on the lifetime expected credit loss. For other financial instruments, the Group recognizes their loss allowance at an amount equal to 12-month expected credit losses if their credit risk has not increased significantly since initial recognition, or otherwise, their lifetime expected credit losses.

An expected credit loss is a weighted-average credit loss with the risks of default as weights. The 12-month expected credit loss on a financial instrument represents the portion of its lifetime expected credit loss that is expected to result from possible default events within 12 months after the end of the reporting period, whereas the lifetime expected credit loss represents the expected credit loss that will result from all possible default events over the expected life of a financial instrument. For the purpose of internal credit risk management, the Group deems the occurrence of the following conditions as a default on financial assets, without considering the collateral held:

A. There is any internal or external information indicating that it is impossible for the debtor to settle the debt.
B. Where the account ages more than 365 days, unless there is any reasonable and authenticated information indicating that the deferred default basis is more appropriate.
The impairment loss of all financial assets is reduced based on the allowance account.
(3) Derecognition of financial assets
The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when the financial asset is transferred, and nearly all the risks and rewards of ownership of the asset are transferred to other entities.

On derecognition of financial assets at amortized cost in its entirety, the difference between its carrying amount and the consideration received is recognized in profit or loss. On derecognition of equity instruments at fair value through other comprehensive income its entirety, the cumulative gain or loss is directly transferred to retained earnings, instead of reclassifying as profit or loss.

Financial liabilities
(1) Subsequent measurement

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

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(2) Derecognition of financial liabilities

On derecognition of financial liabilities, the differences between its carrying amount and the consideration paid, including any non-cash assets transferred or liabilities assumed, are recognized as profit or loss.

Derivative instruments The derivatives into which the Group entered include forward exchange contract to manage the foreign exchange rate risk of the Group.
- Derivatives are initially recognized at fair value upon entering into a derivative contract, and are subsequently remeasured at fair value at the balance sheet date. Gains or losses arising from the subsequent measurement are recognized directly in profit or loss. However, for derivatives that are designated as effective hedging instruments, the timing of their recognition in profit or loss will depend on the nature of the hedging relationship. When its fair value is positive, the derivative is recognized as a financial asset; when its fair value is negative, the derivative is recognized as a financial liability.
(X) Treasury shares
The Company's shares held by subsidiaries are stated at cost and shown as a deduction in equity attributable to owners of the Company.
(XI) Income recognition
The Group allocates the transaction price to each performance obligation after the customer had identified the performance obligations and recognizes its income upon the fulfillment of each performance obligation.
Sales of goods are generated from the sales of textiles, raw materials for yards, and garments. Upon the fulfillment of trading conditions for textiles, raw materials for yards, and garments, the customer has the right to the pricing and use of the commodities, assumes the primary responsibility of re-sale, and bears the risk of obsolescence; the Group recognizes its income and trade receivables at such time.

For processing subcontract, the control over the ownership of the processing products is not transferred; therefore, the Company does not recognize the income thereof.

(XII) Lease The Group evaluates whether a contract is (or includes) a lease on the contract establishment date.
Except for lease payment of low-value assets lease and short-term leases to which exemption is applicable are recognized as expenses on a straight-line basis over the lease term, other leases are recognized as right-of-use assets and lease liabilities on the lease's starting date.

Right-of-use assets are initially measured at cost, and subsequently measured at cost less accumulated depreciation, and adjusted for any remeasurements of the lease liability. Right-of-use assets are separately presented in the consolidated balance sheets.

Right-of-use assets are depreciated on a straight-line basis over the period from

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the lease commencement date to the end of its useful lives, or to the end of the lease term, whichever is earlier.

Lease liabilities are initially measured at the present value of lease payments. When the interest rate implicit in a lease can be easily determined, lease payments are discounted using the interest rate. If the interest rate cannot be easily determined, lease payments are discounted using the lessee's incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, and interest expenses are amortized over the lease term.

(XIII) Government grants
Government grants are only recognized when they can be reasonably assured that the Group would comply with the conditions imposed for the government grants and that such grants can be received.

Government grants related to revenue are recognized in other income on a systematic basis during the period when the Group recognizes the relevant costs that such grants are intended to compensate as expenses.

If the government grants are used to compensate fees or losses that had occurred, or are given to the Group for the purpose of immediate financial support without related future costs, such grants may be recognized in profit or loss within the collectible period.

(XIV) Borrowing costs

Borrowing costs directly attributable to an acquisition, construction, or production of qualifying assets are added to the cost of such assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their capital expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than those stated above, all other borrowing costs are recognized as profit or loss in the period in which they are incurred.

(XV) Employee benefits
Short-term employee benefits Liabilities recognized in respect of short-term employee benefits are measured at the non-discounted amount of the benefits expected to be paid in exchange for the employees' services.
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 liabilities are recognized as employee benefits expenses upon occurrence. Remeasurement, comprising actuarial gains or losses and the return on plan

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assets (net of interest), is recognized in other comprehensive income/(loss) upon occurrence, and will not be reclassified to profit or loss.

Net defined benefit liabilities represent the appropriation deficit in the defined benefit plans.

(XVI) Income tax

The income tax expense represents the sum of the current income tax and deferred tax.

Current income tax
The Group determines its current income (losses) according to the regulations established by the governing authority of each income tax reporting region and calculates the income tax payable (recoverable) accordingly.

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

Adjustments to the income tax payables in prior years are accounted for as the current income tax.

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

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

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

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liabilities are settled, or the

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assets are realized. Such tax rate is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences arising from the manner in which the Company expects to recover or settle the carrying amount of its assets and liabilities at the end of the reporting period.

  3. Current and deferred income taxes

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

V. Critical Accounting Judgments and Key Sources of Estimation Uncertainty
When adopting the Group's accounting policies, the management is required to make judgments, estimates, and assumptions for relevant information that are not readily apparent from other sources based on historical experiences and other related factors. Actual results may differ from these estimates.

The Group has included the recent developments in our country and possible impact on the economic environment caused by COVID-19 into the considerations for significant accounting estimates, such as cash flow forecast, growth rate, discount rate, profitability, etc. The management will review the estimates and basic assumptions on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

The Group had no critical accounting judgments and key sources of estimation uncertainty for the year ended December 31, 2021.

Key sources of estimation uncertainty of the Group were inventory obsolescence losses for the year ended December 31, 2020, and the details are as follows:

The obsolescence status of inventories is evaluated according to their aging status, and the ratio for providing the impairment amount is estimated based on historical experiences, to serve as the basis for evaluating inventory obsolescence losses. Significant losses may occur when the actual inventory impairment in the future is higher than expected.

VI. Cash

Cash
Cash on hand and working capital Checks and demand deposits in banks	December 31, 2021 $ 5,600 476,303 $ 481,903	December 31, 2020
			$ 4,737 743,454 $ 748,191

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VII. Financial instruments at fair value through profit or loss

December 31, 2021

Financial assets - current Held-for-trading Derivatives (not designated for hedging) － Forward exchange $ 5,062 contracts Financial liabilities - current Held-for-trading Derivatives (not designated for hedging) － Forward exchange $ 22 contracts

The forward exchange contracts not applicable to hedge accounting and have not yet expired on the balance sheet date are as follows:

Contractual amount December 31, 2021 Currency Maturity Date (NT$ in thousands) Purchase of forward 2022.01.11 ～ exchange contracts RMB:USD 2022.06.28 RMB 103,809/USD 16,000

For the year ended December 31, 2021, the purpose of the Group's forward exchange transactions is mainly to avoid the risk of foreign currency assets and liabilities arising from exchange rate fluctuations. However, it does not meet the conditions for effective hedging so hedging accounting is not applicable.

From January 1 to December 31, 2021, the valuation gain on financial assets and liabilities at fair value through profit or loss was NT$5,985 thousand, recorded under other gain and loss in the consolidated statement of comprehensive income.

VIII. Financial Assets at Fair Value through Other Comprehensive Income

Current Domestic investments Shares of listed companies Far Eastern International Bank Co., Ltd. - ordinary shares Non-current Domestic investments Unlisted shares Jin Lead Industrial Co., Ltd. - ordinary shares Dah Chung Bills Finance Corp. - ordinary shares	December 31, 2021 $ 81,526 $ 3,433 15	December 31, 2020	December 31, 2020
			$ 80,742 $ 3,433 15

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3,448

$ 3,448 $

The Group invests in ordinary shares of Far Eastern International Bank Co., Ltd., Jin Lead Industrial Co., Ltd., and Dah Chung Bills Finance Corp. according to its strategic objectives and expects to earn profits from the strategic investments. The management of the Group elected to designate these investments to be measured at fair value through other comprehensive income as they believed that recognizing short-term fluctuations in these investments' fair value in profit or loss would not be consistent with the aforementioned strategic investment plan.

IX.

Notes Receivable and Trade receivables (including those from Related Parties)

Notes receivable Measured at amortized costs Gross carrying amount - occurred due to operations Trade receivables Measured at amortized costs Gross carrying amount Less: Allowance for losses	December 31, 2021 $ 62,393 $ 1,920,575 18,306 $ 1,902,269	December 31, 2020	December 31, 2020
			$ 4,026 $ 1,360,201 23,328 $ 1,336,873

The Group's average credit period for sales of goods is 30 to 180 days. Interest does not accrue for trade receivables. To mitigate credit risks, the management of the Group has assigned a delegated team to be responsible for the determination of credit facilities, loan approval, and other monitoring procedures to ensure that appropriate actions are adopted for the recovery of overdue trade receivables. In addition, the Group reviews the recoverable amount of trade receivables on a case-by-case basis at the end of the reporting period to ensure that adequate allowance for impairment losses are made for the irrecoverable trade receivables. In this regard, the management of the Group believes that the Group's credit risk has been significantly reduced.

The Group recognizes the allowance for losses of trade receivables based on the lifetime expected credit loss. Lifetime expected credit loss is calculated based on a provision matrix, taking into account the customer's past default records and its current financial conditions. As the Group's historical credit loss experience does not show significantly different loss patterns for different customer bases, customer bases are not further distinguished for the provision matrix, and the Group stipulates the rate of expected credit loss merely based on the number of days past due regarding the trade receivables.

The Group writes-off trade receivables when there is evidence indicating that the counterparty is experiencing severe financial difficulty and the Group has no recoverable amount that is reasonably expected, such as liquidation undergoing by the counterparty. However, the Company will continue to engage in enforcement activity to attempt to recover the receivables due.

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As of December 31, 2021 and 2020, according to the analysis based on the number of days past due conducted by the Group, notes receivables are not overdue; therefore, no expected credit loss is provided for note receivables.

The Group's allowances for loss of trade receivables measured based on the provisional matrix are as follows:

December 31, 2021

matrix are as follows: December 31, 2021
Rate of expected credit loss Gross carrying amount Allowance for loss (lifetime expected credit loss) Amortized costs	90 days and below	91-180 days 0.09%`～`22.07% $ 53,364 ( 364 ) $ 53,000	181 days and above 2.48%`～`100% $ 54,568 ( 12,777 ) $ 41,791		Total
	0.02%`～`9.08% $ 1,812,643 ( 5,165 ) $ 1,807,478			(	$ 1,920,575 18,306 ) $ 1,902,269

December 31, 2020

December 31, 2020
Rate of expected credit loss Gross carrying amount Allowance for loss (lifetime expected credit loss) Amortized costs	90 days and below	91-180 days 1.02%`～`14.66% $ 92,497 ( 6,696 ) $ 85,801	181 days and above 3.69%`～`100% $ 34,350 ( 10,119 ) $ 24,231		Total
	0.07%`～`4.94% $ 1,233,354 ( 6,513 ) $ 1,226,841			(	$ 1,360,201 23,328 ) $ 1,336,873

Changes in allowance for loss of trade receivables are as follows:

Opening balance Less: Reversed during the year Less: Write-offs during the year Differences of foreign currency translation Closing balance		2021 $ 23,328 3,307 ) - 1,715) $ 18,306		2020
	( (		( ( (	$ 30,032 950 ) 5,226 ) 528) $ 23,328

X. Inventories

Inventories
Finished goods Work in progress Raw materials Supplies	December 31, 2021 $ 3,472,823 1,796,334 223,591 228,395 $ 5,721,143	December 31, 2020
			$ 3,431,007 933,412 121,651 170,474 $ 4,656,544

The cost of sales related to inventories for the years ended December 31, 2021 and 2020 was NT$8,088,528 thousand and NT$6,260,612 thousand, respectively. The cost of sales, including recovery gain on inventory valuation and obsolescence was NT$199,933 thousand and loss on inventory valuation and obsolescence was NT$517,347 thousand, respectively, for the years ended December 31, 2021 and 2020.

XI.

Subsidiary

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Subsidiaries included in the consolidated financial statements

The subjects for the preparation of the consolidated financial statements are as follows:

Name of the investing company The Company Everest Investment `（`Holding`）` Limited Everest International Develop Investment Co., Ltd. Everest International (HK) Limited Everest USA Holdings, Inc. Everest Apparel (HK) Limited	Name of the subsidiary Everest Investment (Holding) Ltd. Everest International Develop Investment Co., Ltd. Everest Textile (HK) Co., Ltd. Everest Textile (Thailand) Co., Ltd. Everest Textile (Shanghai) Ltd. Everest International (HK) Limited Everest Apparel (HK) Limited Everest USA Holdings, Inc. Everest Development USA, LLC. Everest Textile USA, LLC. Everest Apparel (Ethiopia) S.C. Everest Apparel (Haiti) S.A.	Nature of business Holdings and international trade General investment International trade Original equipment manufacturing, production, and sales of processed silk and woven fabrics Research, development, dyeing, back-end processing and selling of high emulation chemical fibers and high-grade textile cloth Investment and holdings Investment and holdings Investment and holdings Operating asset management Production and dyeing of yarn and woven fabrics Apparel production Apparel production	Shareholdingratio (%)	Shareholdingratio (%)
			December 31, 2021 100 100 99.3 100 100 100 100 100 100 100 100 100	December 31, 2020
				100 100 99.3 100 100 100 100 100 100 100 100 100

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XII. Property, plant and equipment

Costs Balance on January 1, 2020 Additions Disposals Net exchange difference Balance on December 31, 2020 Accumulated depreciation Balance on January 1, 2020 Depreciation expenses Disposals Net exchange difference Balance on December 31, 2020 Net balance on December 31, 2020 Costs Balance on January 1, 2021 Additions Disposals Reclassifications Net exchange difference Balance on December 31, 2021 Accumulated depreciation and impairment Balance on January 1, 2021 Depreciation expenses Impairment loss recognized Disposals Reclassifications Net exchange difference Balance on December 31, 2021 Net balance on December 31, 2021		Land	Buildings	Machinery and equipment	Transportation equipment	Furniture and fixtures	Miscellaneous equipment	Construction in progress and equipment to be tested	Total
		$ 712,639 - - ( 4,681) $ 707,958 $ - - - - $ - $ 707,958 $ 707,958 - - - ( 7,256) $ 700,702 $ - - - - - - $ - $ 700,702	$ 2,118,474 28,726 ( 9,935 ) ( 36,127) $ 2,101,138 $ 1,015,301 80,172 ( 9,935 ) ( 17,970) $ 1,067,568 $ 1,033,570 $ 2,101,138 103,966 ( 14,339 ) - ( 64,873) $ 2,125,892 $ 1,067,568 80,312 - ( 14,339 ) - ( 44,340) $ 1,089,201 $ 1,036,691	$ 5,459,074 321,481 ( 129,675 ) ( 108,990) $ 5,541,890 $ 2,546,714 380,718 ( 110,290 ) ( 38,968) $ 2,778,174 $ 2,763,716 $ 5,541,890 280,065 ( 167,748 ) - ( 177,567) $ 5,476,640 $ 2,778,174 356,602 6,119 ( 158,670 ) - ( 120,715) $ 2,861,510 $ 2,615,130	$ 75,434 9,491 ( 4,257 ) ( 1,945) $ 78,723 $ 35,069 12,058 ( 4,203 ) ( 755) $ 42,169 $ 36,554 $ 78,723 4,763 ( 1,448 ) - ( 2,466) $ 79,572 $ 42,169 11,805 - ( 1,447 ) - ( 1,645) $ 50,882 $ 28,690	$ 404,822 75,592 ( 18,473 ) ( 10,247) $ 451,694 $ 204,658 47,199 ( 17,894 ) ( 6,460) $ 227,503 $ 224,191 $ 451,694 34,727 ( 26,117 ) ( 11,289 ) ( 19,074) $ 429,941 $ 227,503 48,925 - ( 26,117 ) ( 63 ) ( 15,723) $ 234,525 $ 195,416	$ 1,061,330 498,500 ( 20,398 ) ( 67,504) $ 1,471,928 $ 475,375 133,561 ( 20,149 ) ( 25,740) $ 563,047 $ 908,881 $ 1,471,928 100,189 ( 12,012 ) - ( 85,522) $ 1,474,583 $ 563,047 150,789 - ( 12,012 ) - ( 57,824) $ 644,000 $ 830,583	$ 747,869 ( 672,540 ) - ( 9,385) $ 65,944 $ - - - - $ - $ 65,944 $ 65,944 ( 16,061 ) - - ( 3,339) $ 46,544 $ - - - - - - $ - $ 46,544	$ 10,579,642 261,250 ( 182,738 ) ( 238,879) $ 10,419,275 $ 4,277,117 653,708 ( 162,471 ) ( 89,893) $ 4,678,461 $ 5,740,814 $ 10,419,275 507,649 ( 221,664 ) ( 11,289 ) ( 360,097) $ 10,333,874 $ 4,678,461 648,433 6,119 ( 212,585 ) ( 63 ) ( 240,247) $ 4,880,118 $ 5,453,756

Everest Apparel (Haiti) S.A., a subsidiary, has shown signs of impairment in the assessed asset value due to continuous operating losses. For the year ended December 31, 2021, the Group determined the recoverable amount based on the asset valuation report issued by independent experts, and the recoverable amount of some property, plant and equipment is lower than its carrying amounts, so an impairment loss of NT$6,119 thousand is recognized. The valuation method of the asset valuation report issued by independent experts is based on the cost method, which belongs to the level 3 of fair value measurement.

The depreciated expenses are provided for on a straight-line basis over the following estimated useful lives:

estimated useful lives:
Buildings
Main buildings	2-56 years
Engineering systems	5-51 years
Machinery and equipment	2-30 years
Transportation equipment	2-16 years
Furniture and fixtures	2-15 years
Miscellaneous equipment	2-15 years

Please refer to Note 27 for the amount of property, plant and equipment pledged as collateral for borrowings. Part of the Group's land is agricultural land, and the ownership is temporarily registered in the name of others. Furthermore, it has been mortgaged to the Group.

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XIII. Lease Agreements

(I) Right-of-use assets

Right-of-use assets
Carrying amount of right- of-use assets Buildings Transportation equipment Addition of right-of-use assets Depreciation expense of right-of-use assets Buildings Transportation equipment Furniture and fixtures Lease liabilities Carrying amount of lease liabilities Current Non-current	December 31, 2021 $ 480,752 1,577 $ 482,329 2021 $ 52,177 $ 100,696 1,659 - $ 102,355 December 31, 2021 $ 95,016 $ 440,174	December 31, 2020
			$ 541,495 2,695 $ 544,190 2020
		$ 28,471 $ 101,832 1,825 79 $ 103,736 December 31, 2020
			$ 85,578 $ 506,670

(II) Lease liabilities

The discount rate ranges for lease liabilities are as follows:

Buildings Transportation equipment Furniture and fixtures	December 31, 2021 1.02%`～`4.12% 1.06%`～`1.16% -	December 31, 2020
		1.06%`～`4.12% 1.10%`～`3.77% 3.77%

(III) Major lease activities and terms

The Group leases certain transportation equipment and furniture and fixtures for operational use, and the lease period is 1 to 3 years.

The Group also leases certain buildings to use as plants, office, and retail outlets, and the lease period is 1-3 years. At the end of the lease period, the Group has no right of first refusal for the leased building.

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(IV) Other lease information

Other lease information
Short-term lease expenses Total cash outflows on lease		2021 $ 22,469 $ 130,672		2020
				$ 15,266 $ 127,215

The Group elects to apply the recognition exemptions to buildings and transportation equipment that qualify as short-term leases, and the Group does not recognize the related right-of-use assets and lease liabilities.

XIV. Other Assets

Other Assets
Current Prepayments for goods Prepaid expenses Input tax Refundable deposits Others Non-current Prepayments for equipment Refundable deposits	December 31, 2021 $ 63,785 29,502 25,305 391 15,664 $ 134,647 $ 62,625 17,574 $ 80,199	December 31, 2020
			$ 63,639 26,376 43,820 10,655 31,128 $ 175,618 $ 78,867 17,158 $ 96,025

XV. Borrowings

(I) Short-term borrowings

Short-term borrowings
Bank credit borrowings Bank secured borrowings Bank mortgage borrowings	December 31, 2021 $ 525,397 2,336,426 149,164 $ 3,010,987	December 31, 2020
			$ 1,031,336 1,334,915 276,447 $ 2,642,698

The interest rates of short-term borrowings at the end of the reporting period were as follows:

The interest rates of short-term were as follows:	borrowings at the end of	the reporting period
Bank credit borrowings Bank secured borrowings Bank mortgage borrowings	December 31, 2021 0.62%`～`2.00% 1.15%`～`3.02% 2.03%	December 31, 2020
		0.83%`～`1.07% 1.18%`～`2.90% 0.93%`～`2.04%

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(II) Short-term bills payable

December 31, 2021

Promissory institution Commercial paper payable China bills China bills Grand bills Ta Ching bills International bills		Nominal amount $ 200,000 100,000 300,000 200,000 100,000 $ 900,000		Discount amount $ 49 7 36 55 68 $ 215		Carrying amount $ 199,951 99,993 299,964 199,945 99,932 $ 899,785	Interest rate range (%) Name of the collateral 0.45 None 0.40 None 0.40 None 0.50 None 0.51 None

December 31, 2020

December 31, 2020
Promissory institution Nominal amount Commercial paper payable Mega bills $ 300,000 Ta Ching bills 150,000 Ta Ching bills 100,000 Ta Ching bills 200,000 China bills 300,000 Grand bills 300,000 Taiwan Cooperative bills 100,000 International bills 150,000 $ 1,600,000 Long-term borrowings Unsecured borrowings Bank credit borrowings Secured borrowings Bank mortgage borrowings Less: Those mature within one year	Discount amount Carrying amount $ 142 $ 299,858 34 149,966 68 99,932 58 199,942 196 299,804 86 299,914 138 99,862 160 149,840 $ 882 $ 1,599,118 December 31, 2021 $ 1,000,000 547,500 1,547,500 830,000 $ 717,500	Interest rate range (%) Name of the collateral 1.06 None 1.07 None 1.01 None 0.55 None 1.05 None 1.06 None 1.05 None 1.05 None December 31, 2020 $ 2,898,333 557,500 3,455,833 697,500 $ 2,758,333
	$
	$

			$ 2,898,333 557,500 3,455,833 697,500 $ 2,758,333

(III) Long-term borrowings

The abovementioned bank borrowings fall due one after another by September 2024. The interest rate per annum on December 31, 2021 and 2020 is both 0.95%-1.47%.

XVI. Notes Payable and Trade Payables

The Group's notes payable and trade payables occurred due to its operations.

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

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XVII. Other current liabilities

Other current liabilities
Other payables Payable for salaries or bonuses Payable for shipping expenses Payable for utilities Payable for labor and health insurance Payable for purchases of equipment Payable for pension Payable for annual leave Payable for commissions Payable for processing expenses Payable for employees' compensation Others Other liabilities Receipts under custody Guarantee deposits Temporary payment Others	December 31, 2021 $ 190,238 30,916 29,833 20,380 17,376 16,727 16,663 12,615 9,249 3,949 121,536 $ 469,482 $ 9,619 5,867 9 911 $ 16,406	December 31, 2020
			$ 182,515 28,622 28,076 21,977 33,690 16,912 14,945 20,234 9,235 189 93,447 $ 449,842 9,665 5,453 12,399 9,611 $ 37,128

XVIII. Retirement Benefit Plans

(I) Defined contribution plans

The Group adopted a pension plan under the "Labor Pension Act," which is a state-managed defined contribution plan. Under the Labor Pension Act, the Company makes monthly contributions to employees' individual pension accounts at 6% of monthly salaries.

Employees of the Group's subsidiaries in China, Thailand, Hong Kong, the U.S., Ethiopia, and Haiti are the participants of the retirement benefit plans operated by local governments. The subsidiaries shall allocate salary costs at a particular ratio to the retirement benefit plans to provide funds for the plans. The obligation

of the Group regarding the retirement benefit plans operated by such governments is limited to the allocation of a particular amount.

(II) Defined benefit plans

The pension system adopted by the Group in accordance with the "Labor Standards Act" is a defined benefit plan operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries for the six months before retirement. The Company contributes amounts

34 -

equal to 4% of total monthly salaries to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee's name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor, and the Company has no right to affect the investment management policy and strategy.

The amounts included in the consolidated balance sheets in respect of the defined benefit plans are set out as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31, 2021 $ 410,581 ( 333,962) $ 76,619	December 31, 2020	December 31, 2020
	(	(	$ 397,945 322,430) $ 75,515

Movements in net defined benefit liabilities are as follows:

Balance on January 1, 2020 Service cost Current service cost Interest expenses (income) Recognized in profit or loss Remeasurements Return on plan assets (excluding amounts that are included in net interest) Actuarial losses - changes in demographic assumptions Actuarial losses - changes in financial assumptions Actuarial gains - experience adjustments Recognized in other comprehensive income/(loss) Contributions from the employer Benefits paid Balance on December 31, 2020 Service cost Current service cost Interest expenses (income) Recognized in profit or loss	Present value of defined benefit obligation $ 402,576 40,959 3,221 44,180 - 2,351 11,753 ( 3,183) 10,921 - ( 59,732) 397,945 38,480 1,393 39,873		Fair value of plan assets $ 342,528) - 2,920) 2,920) 11,313 ) - - - 11,313) 23,508) 57,839 322,430) - 1,170) 1,170)	Net defined benefit liabilities	Net defined benefit liabilities
		( ( ( ( ( ( ( ( (		( ( ( ( (	$ 60,048 40,959 301 41,260 11,313 ) 2,351 11,753 3,183) 392) 23,508) 1,893) 75,515 38,480 223 38,703

(Continued)

35 -

(Continued)

Remeasurements Return on plan assets (excluding amounts that are included in net interest) Actuarial losses - changes in demographic assumptions Actuarial gains - changes in financial assumptions Actuarial losses - experience adjustments Recognized in other comprehensive income/(loss) Contributions from the employer Benefits paid Balance on December 31, 2021	Present value of defined benefit obligation $ - 12,476 ( 10,152 ) 650 2,974 - ( 30,211) $ 410,581		Fair value of plan assets $ 4,834 ) - - - 4,834) 35,739) 30,211 $ 333,962)	Net defined benefit liabilities	Net defined benefit liabilities
		( ( ( (		( ( ( (	$ 4,834 ) 12,476 10,152 ) 650 1,860) 35,739) - $ 76,619

The amounts recognized in profit or loss in respect of the defined benefit plans by functions are compiled as follows:

Operating costs Selling and marketing expenses General and administrative expenses Research and development expenses		2021 $ 30,566 1,356 4,770 2,011 $ 38,703		2020
				$ 26,505 4,693 5,925 4,137 $ 41,260

The Company is exposed to the following risks due to the defined benefit plans under the "Labor Standards Law":

Investment risk: The labor pension funds are invested in domestic and foreign equity and debt securities, bank deposits, and other targets. The investment is conducted at the discretion of the Bureau of Labor Funds, Ministry of Labor, or through its designated agencies. However, the rate of return on plan assets of the Group shall not be less than the interest rate on a two-year time deposit published by the local banks.
36 -
Interest rate risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, the debt investment returns on the plan assets would also increase accordingly, and both items have the effect of offsetting the effects of net defined benefit liabilities.
Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salaries of plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations for the present value of the Company's defined benefit obligation were carried out by qualified actuaries. The significant assumptions on the date of measurement are as follows:

Discount rate Expected growth rate of salary	December 31, 2021 0.75% 1.00%	December 31, 2020
		0.35% 1.00%

When possible reasonable changes in the significant actuarial assumptions occur, and all other assumptions remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate Increase by 0.25% Decrease by 0.25% Expected growth rate of salary Increase by 0.25% Decrease by 0.25%	December 31, 2021 ($ 6,497) $ 6,679 $ 6,376 ($ 6,232)	December 31, 2020	December 31, 2020
	( (	( (	$ 6,676) $ 6,873 $ 6,538 $ 6,382)

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation, as it is unlikely that changes in any of the assumptions would occur in isolation of one another for the reason that the assumptions may be correlated.

Expected contributions to the plan within one year Average duration of the defined benefit obligation	December 31, 2021 $ 35,739 7 years	December 31, 2020	December 31, 2020
			$ 23,508 7 years

XIX. Equity

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(I) Ordinary shares

Ordinary shares
Number of shares authorized (in thousands) Share capital authorized Number of shares issued and paid-up (in thousands) Share capital issued	December 31, 2021 800,000 $ 8,000,000 694,643 $ 6,946,434	December 31, 2020
			560,000 $ 5,600,000 509,834 $ 5,098,341

Issued ordinary shares with a par value of NT$10 carry the right of one vote per share and a right to dividends.

On May 4, 2021, the general meeting of shareholders of the Company passed the resolution to reduce capital in order to make up for the loss of NT$1,151,907 thousand. The public offering of 115,191 thousand ordinary shares was eliminated, and the paid-in capital after the capital reduction was NT$3,946,434 thousand.

On June 1, 2021, the Board of Directors of the Company resolved to issue 300,000 thousand of new shares through cash capital increase with the face value of each share, NT$10, which was issued at NT$10 per share. The paid-in capital after the capital increase was NT$6,946,434 thousand. Those reserved for employees to subscribe had been recognized as salary expense of NT$24,709 thousand based on the fair value of stock options, and, meanwhile, the issue cost of NT$8,410 thousand has been deducted, recorded as capital surplus - stock issuance premium. The above-mentioned cash capital increase had been approved and declared by the Financial Regulatory Commission with the capital increase base date of September 15, 2021.

(II) Capital surplus

Capital surplus
May be used to offsetting a deficit, distributed as cash dividends, or transferred to share capital Premium on issuance of shares Treasury share transactions (Note)	December31,2021 $ 16,299 99,644 $ 115,943	December31,2020
			$ - 99,644 $ 99,644

Note: Such capital surplus may be used to offset a deficit. In addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital, but only at a certain percentage of the Company's capital surplus and once a year.

(III) Retained earnings and dividend policy

Under the dividend policy as set forth in the Company's Articles of Incorporation

38 -

(the "Articles"), where the Company made profits in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any unappropriated earnings from the previous year shall be used as earnings available for appropriation. Such earnings shall be distributed as shareholders' dividends equally based on the number of all shares, provided that a portion of such earning may be retained in accordance with the business conditions. However, in case of capital increases, the incremental shares shall be appropriated in accordance with the respective resolution made in the shareholders' meetings. For the Company's policies on the distribution of employees' compensation and remuneration of directors, refer to Note 21(8) "Employees' compensation and remuneration of directors and supervisors."

The Company appropriates dividends according to a stable dividend distribution while taking into account the features of economic changes regarding its business, the effects of products or services, in terms of their lifecycle, and taxation on its future cash demands. Except for capital demands such as improving the financial structure and providing for the reinvestment, expansion of production capacity, or other significant capital expenditure, the distribution of dividends shall be no less than 50% of the balances equal to the net profit after income tax for the year less amounts offsetting deficits, legal reserve, and special reserve. The cash dividends shall be no less than10% of the current shareholders' bonuses for the year.

The legal reserve shall be appropriated until its balances reach the total paid-in capital of the Company. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company's total paid-in capital, the excess may be transferred to capital and distributed in cash.

The Company's appropriations of deficit for 2020 and 2019 were approved at the shareholders' meetings on May 4, 2021 and June 15, 2020, respectively.

The Company's resolution on earnings distribution for 2021 approved by the Board of Directors on March 3, 2022 is as follows:

Board of Directors on March 3, 2022 is as follows:
Legal reserve provided Special reserve provided		2021
		$ 18,336 $ 165,023

The appropriation of earnings for 2021 is subject to resolution at the shareholders’ meeting to be held on June 16, 2022.

(IV) Treasury shares

At the end of the reporting period, the Company's shares held by its subsidiary Everest International Develop Investment Co., Ltd. for the purpose of

39 -

investment and wealth management were accounted for as treasury shares. The information related to the Company's shares held by its subsidiaries is disclosed as follows (number of shares in thousands):

Purpose of buy-back For the year ended December 31, 2021 Shares of the Company held by subsidiaries as a deduction to equity For the year ended December 31, 2020 Shares of the Company held by subsidiaries as a deduction to equity	Number of shares at the beginning of the year 26,067 26,067		Increase during the year - -		Decrease during the year 5,889 -	At the end of the year	At the end of the year	At the end of the year	At the end of the year	At the end of the year
						Number of shares 20,178 26,067		Carrying amount $332,836 $332,836	Market price
										$194,310 $256,761

Except for the exclusion from the Company's capital increase and having no voting right, the Company's shares held by subsidiaries are accounted for as treasury shares, and shall be entitled to the same rights as general shareholders.

XX. Revenue

Revenue
Revenue from the sales of goods Service revenue		2021 $ 10,003,250 3,483 $ 10,006,733		2020
				$ 7,343,824 54 $ 7,343,877

40 -

(I) Explanation of the customer contract

Revenue from the sales of goods Textiles, raw materials for yarn, and garments are sold to manufacturers or wholesalers. The goods are sold at an agreed price stated in the contract.
Service revenue Regarding the dyeing and finishing manufacturing process and processing for the Textile Department, the transaction price shall be agreed and determined under the contract with reference to prior contracts with similar conditions.
(II) Contract balance

conditions. Contract balance
Notes receivable Trade receivables Contract liabilities – current Sales of goods	December 31, 2021 $ 62,393 $ 1,902,269 $ 53,593	December 31, 2020 $ 4,026 $ 1,336,873 $ 55,190		January 1, 2020
				$ 9,330 $ 1,129,351 $ 18,551

The changes in contract liabilities are mainly arising from the difference between the time of fulfilling the performance obligation and the time of customer payment.

The amounts of revenue recognized during the year generated from contract liabilities at the beginning of the year and the performance obligations fulfilled in previous periods are set out as follows:

Contract liabilities at the beginning of the year Sales of goods		2021 $ 55,190		2020
				$ 18,551

(III) Disaggregation of revenue from customer contracts

Please refer to Note 32 for the information on disaggregation of revenue.

XXI. Net profit (loss) before income tax

(I) Other operating income and expenses

Impairment loss of property, plant and equipment Gain (loss) on disposals of property, plant and equipment		2021 $ 6,119 ) 5,818) $ 11,937)		2020
	( ( (			$ - 573 $ 573

(II) Interest income

41 -

2021 Bank deposits $ 7,393 Others 34 $ 7,427 (III) Other income 2021 Grants $ 25,637 Dividend income 2,427 Others 59,326 $ 87,390 (IV) Other gains and losses 2021 Gains on foreign currency exchange $ 259,054 Losses on foreign currency exchange ( 342,174 ) Gains on financial assets at fair value through profit or loss 5,985 Others 729 ($ 76,406) (V) Interest expenses 2021 Interests on bank borrowings $ 85,059 Interest on lease liabilities 9,526 Less: Amounts included in the cost of required assets 929 $ 93,656 Information related to interest capitalization is as follows: 2021 Amount of interest capitalization $ 929 Interest rate on interest capitalization 1.02%`～`1.15%		2020
		$ 962 45 $ 1,007 2020
		$ 75,341 3,917 42,214 $ 121,472 2020
	( (	$ 137,684 243,648 ) - 4,480 $ 101,484) 2020
		$ 90,857 11,120 554 $ 101,423 2020
	$ 554 1.08%`～`1.27%

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(VI) Depreciation expenses

Depreciation expenses
An analysis of depreciation by function Operating costs Operating expenses		2021 $ 662,137 88,651 $ 750,788		2020
				$ 668,929 88,515 $ 757,444

(VII) Employee benefits expenses

Employee benefits expenses
Short-term employee benefits Salaries Labor and health insurance Others Retirement benefits Defined contribution plans Defined benefit plans (Note 18) By function Operating costs Operating expenses		2021 $ 1,729,892 156,243 138,751 2,024,886 77,397 38,703 116,100 $ 2,140,986 $ 1,551,736 589,250 $ 2,140,986		2020
				$ 1,634,899 140,583 138,009 1,913,491 51,402 41,260 92,662 $ 2,006,153 $ 1,393,950 612,203 $ 2,006,153

(VIII) Employees' compensation and remuneration of directors and supervisors The Company appropriates employees' compensation and remuneration of directors at the rates of 2% to 3.5% and no higher than 2.5%, respectively, of net profit before income tax, employees' compensation, and remuneration of directors and supervisors for the year according to its Articles. The Company recorded a net loss before income tax in 2020; therefore, no employees' compensation or remuneration of directors is appropriated.

The employees' compensation and remuneration of directors for the year ended December 31, 2021, which were approved by the Board of Directors on March 3, 2022, were as follows:

Estimated ratio

Estimated ratio
Employees' compensation Remuneration of directors	2021
	2.0% -

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Amount

Amount
Employees' compensation Remuneration of directors		2021
		$ 3,760 $ -

If there is a change in the proposed amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimates, which shall be adjusted and accounted for in the following year.

Information on the employees' compensation and remuneration of directors resolved by the Company's Board is available at the "Market Observation Post System" website of the Taiwan Stock Exchange.

XXII. Income tax

(I) Major components of tax expense recognized in profit or loss

Major components of tax expense recognized in profit or loss	oss
2021 2020 Current income tax Incurred during the year $ 107,948 $ 4,341 Adjustments to prior years 2,005 8,358 109,953 12,699 Deferred income tax Incurred during the year ( 2,336) ( 7,972) $ 107,617 $ 4,727 A reconciliation of accounting income and income tax expense was as follows: 2021 2020 Net profit (loss) before income tax $ 289,488 ($ 932,262) Income tax expenses (gains) calculated based on the net profit (loss) before income tax at the statutory rate $ 118,461 ( $ 148,313 ) Non-deductible expenses in determining taxable income 1,564 926 Unrecognized loss carryforwards 8,350 59,789 Tax-exempt income ( 485 ) ( 783 ) Withholding tax incurred for overseas income 2,337 3,779 Unrecognized (recognized) temporary differences ( 24,615 ) 94,364 Grants - ( 13,393 ) Adjustments to current income tax expenses for previous years during the year 2,005 8,358 $ 107,617 $ 4,727		2020
	( ( ( (	$ 932,262) $ 148,313 ) 926 59,789 783 ) 3,779 94,364 13,393 ) 8,358 $ 4,727

A reconciliation of accounting income and income tax expense was as follows:

(II) Income tax recognized in other comprehensive income/(loss)

Deferred income tax Incurred during the year Remeasurement on defined benefit plans		2021 $ 371)		2020
	(		(	$ 79)

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(III) Current tax assets and liabilities

Current tax assets and liabilities
Current tax assets Tax refund receivable Current tax liabilities Income tax payable	December 31,2021 $ 6,186 $ 67,076	December 31,2020
			$ 11,359 $ 7,929

(IV) Deferred tax assets and liabilities

The movements of deferred tax assets and liabilities were as follows:

2021

2021
Deferred tax assets Temporary differences Unrealized exchange losses Allowance for sales discount Unrealized gains Defined benefit retirement plan Payable for annual leave Loss on allowance for doubtful debts Loss on inventory valuation Loss carryforwards Deferred tax liabilities Temporary differences Reserve for land value increment tax Unrealized exchange gains		Opening balance $ 10,295 1,431 7,298 15,103 2,989 994 90,736 128,846 5,781 $ 134,627 $ 169,777 - $ 169,777	Recognized in profit or loss ( $ 10,295 ) - ( 413 ) 592 344 - ( 14,815) ( 24,587 ) 27,651 $ 3,064 $ - 728 $ 728	Recognized in other comprehensi ve income /(loss) $ - - - ( 371 ) - - - ( 371 ) - ($ 371) $ - - $ -	Exchange differences $ - - - - - ( 6 ) ( 175) ( 181 ) ( 162) ($ 343) $ - - $ -		Closing balance
			( ( ( (	( ( (	( ( ( ( (		$ - 1,431 6,885 15,324 3,333 988 75,746 103,707 33,270 $ 136,977 $ 169,777 728 $ 170,505

45 -

2020

2020
Deferred tax assets Temporary differences Unrealized exchange losses Allowance for sales discount Unrealized gains Defined benefit retirement plan Payable for annual leave Loss on allowance for doubtful debts Loss on inventory valuation Loss carryforwards Deferred tax liabilities Temporary differences Reserve for land value increment tax		Opening balance $ 5,187 1,431 6,412 12,009 3,280 2,334 89,769 120,422 6,086 $ 126,508 $ 169,777	Recognized in profit or loss $ 5,108 - 886 3,173 ( 291 ) ( 1,371 ) 467 7,972 - $ 7,972 $ -	Recognized in other comprehensi ve income /(loss) $ - - - ( 79 ) - - - ( 79 ) - ($ 79) $ -	Exchange differences $ - - - - - 31 500 531 ( 305) $ 226 $ -		Closing balance
			( (	( ( (	(		$ 10,295 1,431 7,298 15,103 2,989 994 90,736 128,846 5,781 $ 134,627 $ 169,777

(V) Deductible temporary differences and unused loss carryforwards which no deferred tax assets have been recognized in the consolidated balance sheets

Deductible temporary differences Loss carryforwards Expire in 2029 Expire in 2030 Expire in 2031 Expire in 2032	December 31, 2021 $ 358,745 $ 8,575 219,404 130,488 23,500 $ 381,967	December 31, 2020	December 31, 2020
			$ 481,818 $ 11,910 316,725 - 24,032 $ 352,667

(VI) Relevant information of unused investment tax credit, loss carryforward and taxexempt

As of December 31, 2021, information on loss carryforward is as follows:

Balancenotdeducted yet $ 11,910 304,728 180,084 23,500 $ 520,222	Last year of deduction
	2029 2030 2031 2032

46 -
(VII) The aggregate amount of temporary difference associated with investments for which deferred tax liabilities have not been recognized
As of December 31, 2021 and 2020, taxable temporary differences associated with investments in subsidiaries for which no deferred tax liabilities have been recognized were NT$1,397,173 thousand and NT$1,099,573 thousand, respectively.
(VIII) Income tax assessments The Company and its subsidiary Everest International Develop Investment Co., Ltd.'s income tax returns through 2018 have been assessed by the tax authorities.

XXIII. Earnings (net loss) per share

When calculating the net loss per share, the effect of capital reduction to make up for the loss has been adjusted retrospectively, and the changes in net loss per share for the year ended December 31, 2020 are as follows:

Basic and diluted net loss per share	Before retrospective adjustment ($ 1.94)	After retrospective adjustment	After retrospective adjustment
	(	(	$ 2.50)

The earnings (net loss) per share and the weighted average number of ordinary shares used in the calculation are as follows:

Net profit (loss) for the year

used in the calculation are as follows: Net profit (loss) for the year
Net profit (loss) attributable to owners of the Company Number of shares Basic earnings (net loss) per share Number of issued ordinary shares at the beginning of the year Add: the weighted average number of shares due to capital increase Less: Retrospective adjustment due to capital reduction to make up for the loss The weighted average number of treasury shares regarding the Company's shares held by subsidiaries The weighted average number of ordinary shares used in the calculation of basic earnings (net loss) per share Impacts of potential ordinary shares with dilution effect: Employees' compensation The weighted average number of ordinary shares used in the calculation of diluted earnings (net loss) per share	2021 2020 $ 181,871 ($ 936,987) Unit: thousand shares 2021 2020 394,643 509,834 87,945 - - 115,191 20,178 20,178 462,410 374,465 390 - 462,800 374,465	2020

		509,834 - 115,191 20,178 374,465 - 374,465

47 -

If the Company has the option to issue the employee bonus in stocks or cash when calculating the diluted earnings (net loss) per share, it is assumed that the employee bonus will adopt the method of issuing shares, and the weighted average number of outstanding shares will be included in the calculation of diluted earnings (net loss) per share when the potential ordinary shares are diluted. While calculating diluted earnings (net loss) per share before distributing shares to employees as compensations in the following year, dilutive effects of such potential ordinary shares should still be considered.

XXIV. Capital management

The Company requires sufficient amounts of capital for the expansion and upgrades of its production facilities and equipment. The Company manages its capital in a manner to ensure that it has sufficient and necessary financial resources and operating plan to provide for its working capital, capital expenditures, research and development expenses, debt repayment, and dividend payments required in the future.

XXV. Financial instruments

(I) Fair value information - Fair value of financial instruments not measured at fair value
The carrying amounts of the Company's financial instruments that are not measured at fair value approximate their fair values; these financial instruments include cash, receivables, other receivables, refundable deposits (accounted for as other non-current assets), short-term borrowings, short-term bills payable, payables (including those to related parties), other payables (including those to related parties), long-term borrowings (including those due within one year), and guarantee deposits received.
(II) Fair value information - Fair value of financial instruments measured at fair value on a recurring basis
Fair value hierarchy

December 31, 2021

December 31, 2021
Financial assets at fair value through other comprehensive income Investments in equity instruments - Shares of domestic listed companies - Shares of domestic unlisted companies Financial assets at fair value through profit or loss Derivative instruments – forward exchange contract Financial liabilities at fair value through profit or loss Derivative instruments – forward exchange contract		Level 1 $ 81,526 - $ 81,526 $ - $ -		Level 2 $ - - $ - $ 5,062 $ 22		Level 3 $ - 3,448 $ 3,448 $ - $ -		Total
								$ 81,526 3,448 $ 84,974 $ 5,062 $ 22

48 -

December 31, 2020

December 31, 2020
Financial assets at fair value through other comprehensive income Investments in equity instruments - Shares of domestic listed companies - Shares of domestic unlisted companies		Level 1 $ 80,742 - $ 80,742		Level 2 $ - - $ -		Level 3 $ - 3,448 $ 3,448		Total
								$ 80,742 3,448 $ 84,190

There were no transfers between Level 1 and 2 during the years ended December 31, 2021 and 2020.

Valuation techniques and inputs applied for Level 2 fair value measurement

Category of financial instruments Valuation techniques and inputs Derivative instruments – The fair value of forward exchange forward exchange contracts is measured at the interest rate contract yield curve of the quoted price at the forward exchange rate and derived from the quoted interest rate matching the expiry period of the contract.

Reconciliation of Level 3 fair value measurement of financial instruments

Equity instruments

Financial assets at fair value through other comprehensive income Opening balance Capital reduction Closing balance		2021 $ 3,448 - $ 3,448		2020
			(	$ 6,960 3,512) $ 3,448

Valuation techniques and inputs applied for Level 3 fair value measurement The fair values of investments in domestic unlisted equity were determined based on the net value of comparable companies' shares; the liquidity allowance is taken into consideration to calculate the value of valuation targets.
49 -

(III) Categories of financial instruments

Financial assets Financial assets at amortized cost (Note 1) Financial assets at fair value through profit or loss - designated at fair value through profit or loss Financial assets at fair value through other comprehensive income (current and non-current) Investments in equity instruments Financial liabilities Measure at amortized costs (Note 2) Financial assets at fair value through profit or loss - designated at fair value through profit or loss	December31,2021 $ 2,520,444 5,062 84,974 $ 6,869,727 22	December31,2020
		$ 2,149,542 - 84,190 $ 8,818,441 -

Note 1: The balances include cash, notes and trade receivables, other receivables, refundable deposits (accounted for as other current and non-current assets), and other financial assets at amortized cost.
Note 2: The balances include short-term borrowings, short-term bills payable, notes and trade payable (included those to related parties), other payables (included those to related parties), long-term borrowings (including those due within one year), guarantee deposits received, and other financial liabilities at amortized costs.
(IV) Financial risk management objectives and policies

The Group’s major financial instruments include investments in equity and debt instruments, trade receivables, trade payables, borrowings, and lease liabilities. The Group's Corporate Treasury function provides services to all business departments, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports, which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk, and other price risks), credit risk, and liquidity risk.

Material treasury activities of the Group are reviewed by the Board in accordance with relevant regulations and internal control systems. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Group did not perform any financial instruments (including derivative financial instruments) transaction for speculative purposes.

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1. Market risk

The Group's operating activities exposed itself primarily to the financial risks of changes in foreign currency exchange rates (see (i) below), interest rates (see (ii) below), and other price risks (see (iii) below).

There was no change to the Group's exposure to market risks or the manner in which these risks were managed and measured.

(1) Foreign currency risk

The Group engages in sales and purchases denominated in foreign currencies, which exposed the Group to the risks of changes in foreign currency exchange rates.

The carrying amounts of monetary assets and monetary liabilities （ including monetary items not denominated in the functional currency being written-off in the consolidated financial statements ） not denominated in the functional currency of the Group at the end of the reporting period are set out in Note 30.

Sensitivity analysis

The Group is mainly exposed to the fluctuation of the United States dollar (USD) and Thai Baht (THB). In addition, certain subsidiaries (whose functional currency is not NT$) are affected by the fluctuation in NTD.

The following table details the Group's sensitivity to a 1% increase and decrease in NT$ (the functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding monetary items denominated in foreign currencies, and their translations at the end of the year are adjusted at 1% of changes in the exchange rate. A positive number in the table below indicates an increase (decrease) in net profit (loss) before income tax that would result when the functional currency weakens 1% against the relevant currency. For a 1% strengthening of NTD against the relevant currency, the effect on the net profit (loss) before income tax would be the same amount in negative.

mount in negative.
Profit or loss Profit or loss Profit or loss	USD impact
	2021 2020 $ 9,917 $ 16,479 THB impact	2020
	2021 2020 $ 375 $ 1,076 ETB impact	2020
	2021 $ 1,867	2020
		$ 1,387

51 -

In the management's opinion, the sensitivity analysis was unrepresentative of the inherent foreign exchange risk as the exposure at the end of the reporting period is unable to reflect the exposure during the period. Furthermore, trade receivables and other receivables not denominated in the functional currency would change in accordance with the working capital.

(2) Interest rate risk

The Group was exposed to interest rate risk as it borrows funds at both fixed and floating interest rates concurrently. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings.

The carrying amount of the Group's financial assets and financial liabilities with exposure to interest rates at the end of the reporting period was as follows:

bilities with exposure riod was as follows:	to interest rates at the	end of the reporting
Fair value interest rate risk Financial liabilities With cash flow interest rate risk Financial assets Financial liabilities	December 31, 2021 $ 2,952,579 270,167 3,040,883	December 31, 2020
		$ 3,571,778 226,053 4,718,119

Sensitivity analysis

The sensitivity analysis below was determined based on the Group's exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis assumed that the amount of the liability outstanding at the end of the reporting period was outstanding throughout the reporting period.

If interest rates had been 1% higher and all other variables were held constant, the Group’s net profit (losses) before income tax for the years ended December 31, 2021 and 2020 would have decreased (increased)/inceased (decreased) by NT$27,707 thousand and NT$44,921 thousand, respectively, which primarily relates to the Group's floating rate borrowings.

(3) Other price risks

The Group was exposed to equity price risk due to its investments in shares. The Group manages such exposure by maintaining a portfolio of investments with different risks and through asset allocation. Sensitivity analysis

The sensitivity analysis below was conducted based on the Group’s exposure to equity price risk at the end of the reporting period. If

52 -

equity prices had been 1% higher/lower, other comprehensive income/(loss) before income tax for the years ended December 31, 2021 and 2020 would have increased/decreased by NT$850 thousand and NT$842 thousand, respectively, as a result of the changes in the fair values of financial assets at fair value through other comprehensive income.

Credit risk
Credit risk refers to the risk where the counterparty is having any default on its contractual obligations that results in financial losses to the Group. At the end of the reporting period, the Group's maximum exposure to credit risk due to the failure of counterparties to discharge its obligations is primarily arising from the carrying amount of financial assets recognized in the consolidated balance sheets.

Counterparties for trade receivables involve diverse customers who locate in different geographical regions. Ongoing credit evaluations are performed on the financial conditions of customers with whom the Group has trade receivables.

Liquidity risk

The Group manages and maintains sufficient cash to finance the Group's operations and mitigate the effects of fluctuations in cash flows. In addition, the Group's management monitors the utilization of bank facilities and ensures compliance with the borrowings' contract terms.

The Group's working capital and the bank facilities acquired are sufficient to meet its demand for future operations; therefore, there is no liquidity risk relating to the incapability of raising funds for performing contractual obligations.

(1) Liquidity and interest rate risk table for derivative financial liabilities The analysis of remaining contractual maturity for the Group's nonderivative financial liabilities was drawn up based on the undiscounted cash flows of financial liabilities (including principals and estimated interests) from the earliest date on which the Group can be required to make the repayment. Specifically, the Group's bank borrowings with repayment on demand clause are included in the earliest time band regardless of the probability of the banks choosing to exercise their rights immediately. The analysis of maturity dates for other nonderivative financial liabilities is based on the agreed repayment dates. The amount of undiscounted interests relating to cash flow paid from floating rate payments is extrapolated based on the interest rate yield curve at the end of the reporting period.
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December 31, 2021

Non-derivative financial liabilities Non-interest- bearing liabilities Lease liabilities Floating rate instruments Fixed rate instruments	Payment on demand or less than 1 month $ 781,017 10,845 417,171 1,081,421 $ 2,290,454	1 to 3 months $ 551,330 16,329 643,692 100,155 $ 1,311,506	3	to 12 months $ 78,388 75,806 1,272,083 1,237,296 $ 2,663,573		1-5 years $ 720 296,251 740,249 - $ 1,037,220		5 years and above
								$ - 162,553 - - $ 162,553

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

follows:
Lease liabilities		Less than 1 year $ 102,980		1 to 5 years $ 296,251	5 to 10 years $ 155,245	10 to 15 years
							$ 7,308

December 31, 2020

Non-derivative financial liabilities Non-interest- bearing liabilities Lease liabilities Floating rate instruments Fixed rate instruments	Payment on demand or less than 1 month $ 556,940 9,291 96,128 2,193,200 $ 2,855,559	1 to 3 months $ 510,974 15,143 674,966 650,686 $ 1,851,769	3	to 12 months $ 52,157 71,718 1,197,966 138,755 $ 1,460,596		1-5 years $ 721 300,765 2,850,142 - $ 3,151,628		5 years and above
								$ - 234,083 - - $ 234,083

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

==> picture [325 x 33] intentionally omitted <==

(2) Liquidity and interest rate risk table for derivative financial assets and liabilities
Liquidity analysis for derivative financial instruments, for grosssettled derivatives, is prepared on the basis of gross undiscounted cash inflows and outflows.

December 31, 2021

Total amount of delivery Forward exchange contracts `－`Inflow `－`Outflow		Payment on demand or less than 1 month $ 2,153 - $ 2,153	1to 3months $ 2,049 - $ 2,049		3 to 12 months $ 860 22) $ 838		1to 5 years $ - - $ -		5 years and above
				(					$ - - $ -

54 -

XXVI. Related Party Transactions

Transactions, account balances, income and expenses between the Company and its subsidiaries (who are related parties of the Company) have been eliminated upon consolidation and are not disclosed in this note. In addition to the information disclosed in other notes, transactions between the Group and its related parties are as follows: (I) Names of related parties and relationships with the Company

Names of the related party Relationship with the Group Far Eastern New Century Investors with significant influence over the Corporation (FENC) Company Far Eastern International Bank Other related parties (the Vice-Chairman is a (FEIB) second degree relative of the Chairman of the Company) Far Eastern Fibertech Co., Ltd. Other related parties (the investee of FENC) Everest Textile (Shanghai) Ltd. Other related parties (the investee of FENC) (Everest Shanghai) Far Eastern Apparel (Suzhou) Co., Other related parties (the investee of FENC) Ltd. Far Eastern Investment (Holding) Other related parties (the investee of FENC) Ltd. Oriental Petrochemical (Shanghai) Other related parties (the investee of FENC) Corporation Jin Lead Industrial Co., Ltd. Other related parties (the Company is the corporate director of Jin Lead Industrial Co., Ltd.)

(II) Sales of goods

Sales of goods
Categoryof relatedparty Other related parties Investors with significant influence over the Company		2021 $ 5,483 260 $ 5,743		2020
				$ 2,276 54 $ 2,330

The sales to related parties are made at general transaction prices with collection terms of 1 to 3 months, equivalent to general customers.

(III) Purchases

Purchases
Categoryof relatedparty Investors with significant influence over the Company Other related parties		2021 $ 254,982 433,499 $ 688,481		2020
				$ 173,765 281,348 $ 455,113

The purchase prices were equivalent to those of purchases from general suppliers. Purchases of yarn products from investors with significant influence over the Company require partial payment in advance; the payment terms for remaining purchases range from 1 to 4 months.

(IV) Receivables from related parties

55 -

	December 31,	December 31,	December 31,	December 31,
Line item Categoryof relatedparty		2021		2020
Notes receivable Other related parties	$	-	$	894
Trade receivables Other related parties	$	1,831	$	646
Other receivables Other related parties	$	33	$	22
The outstanding receivables from related parties	are	unsecured.	For	the years
ended December 31, 2021 and 2020, no allowance for losses was provided for
receivables from related parties.

(V) Payables to related parties (excluding loans from related parties)

(V)	Payables to related parties (excluding loans from related parties)	Payables to related parties (excluding loans from related parties)	Payables to related parties (excluding loans from related parties)
(VI)	Lineitem Category of related party December 31, 2021 Notes payable to related parties Investors with significant influence over the Company Far Eastern New Century Corporation (FENC) $ 19,337 Trade payables to related parties Investors with significant influence over the Company $ 1,382 Other related parties 51,959 $ 53,341 Other payables to related parties Investors with significant influence over the Company $ 1 Other related parties Everest Shanghai - Others 52,715 $ 52,716 The outstanding payables to related parties are not guaranteed Lease agreements Line item Category/name of relatedparty December 31, 2021 Lease liabilities Other related parties Far Eastern Investment (Holding) Ltd. $ 105,283 Categoryof relatedparty 2021 Interest expenses Other related parties $ 4,700 $			December 31, 2020
				$ 10,487 $ 5,359 27,624 $ 32,983 $ 13 50,486 729 $ 51,228 December 31, 2020
				$ 130,005 2020 5,599

		$ 4,700	$

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(VII) Borrowings from related parties

Borrowings from related parties
Category/name of related party Other related parties (included in short-term and long-term borrowings) FEIB Interest expenses Category/name of related party Other related parties FEIB	December31,2021 $ 496,146 2021 $ 3,153	December31,2020
			$ 344,391 2020
			$ 2,294

The interest rates of the Group’s borrowings from related parties are similar to the market interest rates for the years ended December 31, 2021 and 2020. In addition, to apply for a credit line, the Group provided land, buildings and machinery equipments as collateral to FEIB for financing. The carrying amounts of the related assets were NT$1,284,240 thousand and NT$429,970 thousand as of December 31, 2021 and 2020, respectively.

(VIII) Other transactions with related parties
Processing expenses

The Group has entrusted other related parties, Jin Lead Industrial Co., Ltd., with processing services. The processing expenses were NT$43,863 thousand and NT$16,094 thousand for the years ended December 31, 2021 and 2020, respectively. These processing expenses are based on general trading prices, and the payment terms range from 1 to 2 months, equivalent to that of processing suppliers.

Energy expenses

Energy expenses
Category/name of relatedparty Other related parties Everest Shanghai Others		2021 $ 244,060 781 $ 244,841		2020
				$ 191,767 1,525 $ 193,292

The provision of electricity and steam for production were assessed based on market price.

(IX) Compensation of key management personnel

Short-term employee benefits Retirement benefits		2021 $ 25,645 2,314 $ 27,959		2020
				$ 27,222 2,188 $ 29,410

The remuneration of directors and other key management personnel was determined by the remuneration committee with regard to the correlation and rationale of general remuneration standards within the industry, individual performance, the Company's performance, and future risk.

57 -

XXVII. Pledged Assets

The following assets were provided as collateral for short-term and long-term bank facilities:

The following assets were provided as facilities:	collateral for short-term	and long-term bank	and long-term bank
Land Buildings Machinery and equipment	December 31, 2021 $ 509,679 269,534 766,124 $ 1,545,337	December 31, 2020
			$ 615,670 315,756 2,125 $ 933,551

XXVIII. Significant Contingent Liabilities and Unrecognized Contract Commitments

In addition to those disclosed in other notes, significant commitments of the Company at the end of the reporting period are as follows:

Significant commitments

(I) The subsidiary in Everest Thailand has applied to the electric power company for the right to use electricity. The guarantees provided by the entrusted bank were NT$6,322 thousand and NT$7,237 thousand (translated into THB7,573 on December 31, 2021 and 2020) as of December 31, 2021 and 2020, respectively.
(II) As of December 31, 2021 and 2020, the Group’s unused letters of credit for purchases of raw materials and machinery and equipment amounted to approximately NT$32,812 thousand and NT$27,734 thousand, respectively.
(III) The contractual commitments that were contracted for but not realized are as follows:

follows:
Acquisition of property, plant and equipment	December 31, 2021 $ 72,005	December 31, 2020
			$ 14,705

XXIX. Significant Events after the Period

On March 15, 2022, a fire broke out in the warehouse of the Group's Tainan factory, causing damage to some buildings and inventories while no impact on the production line. The Group has taken out full insurance, and the application for claims is being processed with the insurance company. The amount of damage and insurance claims cannot be reasonably estimated as of March 28, 2022 (the date of the independent auditors' report).

XXX. Other Matters

Under the effect of COVID-19’s global outbreak, the Group recorded a significant yearon-year decrease in its operating revenue for the year ended December 31, 2020. The Group applied for salary and working capital subsidies from the government and had received grants that amounted to NT$66,965 thousand (Note 21). As of the approval date for the issuance of the consolidated financial statements, the Group continues assessing the economic effects arising from the outbreak on the Group.

XXXI. Significant Assets and Liabilities Denominated in Foreign Currencies

The following information is an aggregation of the foreign currencies other than functional currencies of the Group, and the exchange rates disclosed are the exchange rate

58 -

used in translating such foreign currencies into the functional currency. Significant assets and liabilities denominated in foreign currencies were as follows:

Unit: foreign currencies and NT$ in thousand

December 31, 2021

December 31, 2021
Financial assets Monetary items USD USD USD THB ETB Financial liabilities Monetary items USD USD USD December 31, 2020 Financial assets Monetary items USD USD USD THB ETB Financial liabilities Monetary items USD USD USD	Foreign currencies $ 31,813 24,871 24,730 44,983 335,143 28,643 15,264 1,678 Foreign currencies $ 54,431 17,928 12,702 112,628 192,779 21,902 3,687 1,612	Exchange rate 27.68 (USD:NTD) 33.162 (USD:THB) 6.367 (USD:RMB) 0.8347 (THB:NTD) 49.686 (ETB:USD) 27.68 (USD:NTD) 33.162 (USD:THB) 6.367 (USD:RMB) Exchange rate 28.48 (USD:NTD) 29.803 (USD:THB) 6.5249 (USD:RMB) 0.9556 (THB:NTD) 39.573 (ETB:USD) 28.48 (USD:NTD) 29.803 (USD:THB) 6.5249 (USD:RMB)	Carrying amount
			$ 880,583 688,421 684,523 37,548 186,709 792,849 422,520 46,460 Carrying amount
			$ 1,550,182 510,594 361,760 107,627 138,741 623,759 104,993 45,919

The Group is mainly exposed to the foreign currency risks related to USD. The following information is an aggregation of the functional currencies of the entities holding foreign currencies. The currency rates disclosed were the rates used to translate such functional

59 -

currencies into the presentation currency. The significant realized and unrealized foreign exchange gains or losses are as follows:

Functional currency USD NTD RMB THB HKD	2021		Net exchange (losses) gains $ 67,155 ) 17,645 ) 12,316 ) 13,985 11 $ 83,120)	2020
	Functional currency translated into presentation currency 28.0088 (USD:NTD) 1 (NTD:NTD) 4.3416 (RMB:NTD) 0.8823 (THB:NTD) 3.6033 (HKD:NTD)			Functional currency translated into presentation currency 29.5493 (USD:NTD) 1 (NTD:NTD) 4.2827 (RMB:NTD) 0.9496 (THB:NTD) 3.8094 (HKD:NTD)		Net exchange (losses) gains
		( ( ( (			( ( ( ( (	$ 2,180 ) 78,558 ) 20,558 ) 4,674 ) 6 $ 105,964)

XXXII. Supplementary Disclosures

(I) Information on Significant Transactions:
Loaning to others. (Table 1)
Endorsement and guarantee provided for others. (Table 2)
Securities held at the end of the period (excluding the investments in subsidiaries). (Table 3)
Cumulative purchase or sales of securities of the same company with an amount achieving NT$300,000 thousand or reaching 20% of its paid-in capital and above. (None)
Properties acquired with an amount achieving NT$300,000 thousand or reaching 20% of its paid-in capital and above. (None)
Disposal of properties with an amount achieving NT$300,000 thousand or reaching 20% of its paid-in capital and above. (None)
Purchases and sales with related parties with an amount achieving NT$100,000 thousand or reaching 20% of its paid-in capital and above. (Table 4)
Receivables from related parties achieving NT$100,000 thousand or reaching 20% of its paid-in capital and above. (Table 5)
Engaging in derivatives trading. (Note 7)
Others: Business relationships and status and amount of significant transactions between the parent company and subsidiaries and between the respective subsidiaries. (Table 9)
(II) Information on Invested Companies. (Note 6)
(III) Information on Investments in Mainland China:
Information on invested companies in Mainland China, including the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, shareholding, profit or loss and investment gain or loss recognized for the period, carrying amount of investment at the end of the period, repatriated investment gain or loss, and ceiling of investments in Mainland China. (Table 7)
Significant transactions directly with investee companies in Mainland China or directly or indirectly through a third region, and their prices, payment terms, unrealized profit or loss. (Tables 4, 5, 8, and 9)
- (1) Purchase amount and percentage, and the closing balance and
60 -

percentage of the related payables.

(2) Sales amount and percentage, and the closing balance and percentage of the related receivables.
(3) Property transaction amount and the resulting gain or loss.
(4) Closing balances and purposes of endorsements and guarantees or collateral provided.
(5) The maximum balance, closing balance, interest rate range, and total amount of current interest of financing facilities.
(6) Other transactions having a significant impact on profit or loss or financial position for the period, such as provision or receipt of service.
(IV) Information on major shareholders: Names of shareholders with a shareholding ratio of 5% or more and the amount and proportion of shareholding. (Table 10)

XXXIII. Segment Information

Information reported to the chief operating decision-maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Group's reportable segments were as follows Textile segment - textile production

Investment segment - general investment

(I) Segment revenue and operating results

The analysis of the Group's revenue and operating result of continuing operations by reportable segment is as follows:

2021 Segment revenue - from external customers Segment profits (losses) Interest income Net loss on foreign currency exchange Interest expenses Other non-operating income - net Net profit before income tax 2020 Segment revenue - from external customers Segment losses Interest income Net loss on foreign currency exchange Interest expenses Other non-operating income - net Net loss before income tax	Textile segment $ 10,006,733 $ 365,161 $ 7,343,877 ($ 851,095)		Investment segment $ - $ 428) $ - $ 739)		Total
	(	( (		( ( ( ( ( (	$ 10,006,733 $ 364,733 7,427 83,120 ) 93,656 ) 94,104 $ 289,488 $ 7,343,877 $ 851,834 ) 1,007 105,964 ) 101,423 ) 125,952 $ 932,262)

The revenue of reportable segments set out above were generated from transactions with external customers; there were no intra-segment sales for the years ended December 31, 2021 and 2020.

61 -

Segment profit represented the profit earned by each segment without the allocation of interest revenue, net foreign exchange gains or losses, interest expenses, and income tax expenses. The measured amounts are reported to the chief operating decision-maker for the purpose of resource allocation and assessment of segment performance.

(II) Segment total assets

Segment total assets
Segment assets Textile segment Investment segment Consolidated total assets	December 31, 2021 $ 14,599,815 7,937 $ 14,607,752	December 31, 2020
			$ 13,551,069 14,027 $ 13,565,096

(III) Revenue from major products

The analysis of the Group's revenue from its major products is as follows:

Finished fabric Processed silk Others		2021 $ 8,628,242 782,503 595,988 $ 10,006,733		2020
				$ 6,196,798 374,210 772,869 $ 7,343,877

(IV) Geographical information

The Group principally operates in five geographical areas - Taiwan, China, Thailand, the U.S., and Ethiopia.

The Group's revenue from external customers by location of operations and information about its non-current assets by location of assets are set out as follows:

follows:
Taiwan China Thailand The U.S. Ethiopia Haiti	Revenue from external customers
	2021 $ 5,754,958 2,891,861 1,079,117 161,874 115,958 2,965 $ 10,006,733	2020
		$ 3,987,732 1,981,934 665,111 331,651 377,449 - $ 7,343,877

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Taiwan China Thailand The U.S. Ethiopia Others	Non-current assets	Non-current assets	Non-current assets
	December 31, 2021 $ 3,875,325 446,825 385,028 860,340 250,907 180,285 $ 5,998,710	December 31, 2020
			$ 3,850,780 480,563 446,121 1,103,078 232,340 250,989 $ 6,363,871

Non-current assets exclude financial instruments and deferred tax assets.

(V) Information on major customers

There was no single customer contributing 10% or more to the Group’s revenue for the years ended December 31, 2021 and 2020.

63 -

Unit: NT$ Thousands

Everest Textile Co., Ltd. and Subsidiaries Loaning to Others

For the year ended December 31, 2021

Table 1

Code	Financing company	Borrower	Current account	Whether the borrower is a related party	Maximum balance for the period	Maximum balance for the period		Closing balance	Actual amount utilized	Actual amount utilized	Interest rate range (%)	Nature of financing (Note 3)	Transaction amount	Reason for the short- term financing	Allowance for doubtful debts provided	Collateral	Collateral	Credit limit for the individual borrower	Total credit limit for loans
																Name	Value
1 2 3	Everest International (HK) Limited Hongzhan Textile (Shanghai) Ltd. Everest Textile USA, LLC.	Everest International Develop Investment Co., Ltd. Everest Apparel (Haiti) S.A. Everest Apparel (HK) Limited Everest Apparel (Ethiopia) S.C. Everest International (HK) Limited Everest Apparel (Haiti) S.A. Everest Development USA, LLC.	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes Yes Yes Yes		$ 96,880 276,800 95,219 574,711 $ 1,043,610 $ 359,840 $ 304,480 117,640 $ 422,120		$ 96,880 276,800 95,219 468,129 $ 937,028 $ 359,840 $ 296,176 117,640 $ 413,816		$ 89,960 143,936 95,219 468,129 $ 797,244 $ 359,840 $ 296,176 117,640 $ 413,816	1.24`～`1.61 1.24`～`1.32 1.24`～`1.61 1.24`～`1.61 0.19`～`0.21 1.92`～`2.2 1.92`～`2.2	2. 2. 2. 2. 2. 2. 2.	$ - - - - - - -	Working capital Working capital Working capital Working capital Working capital Working capital Working capital	$ - - - - - - -	None None None None None None None	$ - - - - - - -	$ 1,363,369 (Note 1) 1,363,369 (Note 1) 1,363,369 (Note 1) 1,363,369 (Note 1) 1,363,369 (Note 1) 1,363,369 (Note 1) 1,363,369 (Note 1)	$ 2,726,738 (Note 2) 2,726,738 (Note 2) 2,726,738 (Note 2)

Note 1: Based on 20% of the equity attributable to owners of the Company.

Note 2: Based on 40% of the equity attributable to owners of the Company.

Note 3: Nature of the loan:
(1) Please complete item i. for a borrower having transactions with the Group.
(2) Please complete item ii. for a borrower who has short-term financing requirements.
64 -

Everest Textile Co., Ltd. and Subsidiaries

Endorsement and Guarantee Provided for Others

For the year ended December 31, 2021

Table 2

Unit: NT$ Thousands

Code	Name of the endorsement and guarantee provider	Parties being endorsed and guaranteed	Parties being endorsed and guaranteed	Limit of endorsement and guarantee for a single entity (Note 1)	Maximum balance of endorsement and guarantee for the period	Maximum balance of endorsement and guarantee for the period		Closing balance of endorsement and guarantee	Actual amount utilized	Actual amount utilized	Amount of endorsement and guarantee secured with collateral	Ratio of cumulative endorsement and guarantee to the net value stated in the latest financial statements (%)	Ratio of cumulative endorsement and guarantee to the net value stated in the latest financial statements (%)	Cap of endorsement and guarantee (Note 2)	Cap of endorsement and guarantee (Note 2)	Endorsement and guarantee provided by the parent for subsidiary	Endorsement and guarantee provided by the subsidiary for parent	Endorsement and guarantee provided for entities in Mainland China
		Name of the company	Relationship
0	The Company	Everest Investment (Holding) Ltd. Everest Textile (Thailand) Co., Ltd. Everest Textile USA, LLC. Everest International Develop Investment Co., Ltd. Everest International (HK) Limited	Subsidiary - 100% shareholding `〞` `〞` `〞` `〞`	$ 5,112,633 5,112,633 5,112,633 5,112,633 5,112,633		$ 1,051,840 276,800 2,117,520 667,000 719,680 $ 4,832,840		$ 138,400 276,800 2,117,520 667,000 719,680 $ 3,919,400		$ 19,376 163,312 1,444,662 240,000 470,560 $ 2,337,910	$ - - - - -		2.03 4.06 31.06 9.78 10.56 57.49		$ 10,225,266	Y Y Y Y Y	N N N N N	N N N N N

Note 1: Based on 75% of the equity attributable to owners of the Company.

Note 2: Based on 150% of the equity attributable to owners of the Company.

65 -

Unit: NT$ Thousands

Table 3

Everest Textile Co., Ltd. and Subsidiaries

Details of Securities Held at the End of the Period

December 31, 2021

Company held	Category and name of securities	Relationship with the issuer of securities	Accounting item		End of the period	End of the period	End of the period			Remarks
				Unit/number of shares	Carrying amount		Ratio (%)	Market value/net equity value
The Company Everest International Develop Investment Co., Ltd.	Far Eastern International Bank - shares of a listed company Jin Lead Industrial Co., Ltd. - shares of an unlisted company Dah Chung Bills Finance Corp. - shares of a listed company Everest Textile - shares of a listed company	The Vice-Chairman is a second degree relative of the Chairman of the Company The Company is a corporate director of Jin Lead Industrial Co., Ltd. None Parent company	Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - non-current `〞` Financial assets at fair value through other comprehensive income - non-current	7,583,800 526,800 1,204 20,177,533		$ 81,526 $ 3,433 15 $ 3,448 $ 194,310	- 19 - 2.9		$ 81,526 $ 3,433 15 $ 3,448 $ 194,310

Note 1: The term "securities" used in this Schedule refers to shares, bonds, beneficiary certificates, and securities derived from the aforesaid items. Note 2: Please see Table 6 and Table 7 for information related to investments in subsidiaries.

66 -

Unit: NT$ Thousands

Everest Textile Co., Ltd. and Subsidiaries

Purchases and Sales with Related Parties with an Amount Achieving NT$100,000 Thousand or Reaching 20% of its Paid-in Capital and Above

For the year ended December 31, 2021

Table 4

Purchasing (selling) company	Counterparty	Relationship		Transaction status	Transaction status		Circumstance and reason for transaction conditions differ from general transactions	Circumstance and reason for transaction conditions differ from general transactions	Notes and trade receivables (payables)	Notes and trade receivables (payables)	Remarks
			Purchase (sales) of goods	Amount	Ratio to total purchase (sales) of goods (%)	Credit period	Unit price	Credit period	Balance	Ratio to total receivables (payables) (%)
The Company Everest Textile (Shanghai) Ltd. Everest Textile USA, LLC.	Everest Textile (Thailand) Co., Ltd. Far Eastern New Century Corporation (FENC) Far Eastern Fibertech Co., Ltd. Everest Textile (Shanghai) Ltd. Everest Textile USA, LLC. Everest International (HK) Limited Everest Textile (Thailand) Co., Ltd.	Subsidiary Subsidiary Company evaluates the Company using the equity method Company evaluates the Company using the equity method Subsidiary Subsidiary Subsidiary Fellow subsidiary Fellow subsidiary	Outsourced processing Sales Purchases Purchases Sales Purchases Sales Sales Sales	$ 561,124 ( 297,419 ) 254,982 326,715 ( 348,411 ) 344,475 ( 141,733 ) ( 1,336,841 ) ( 211,705 )	65 ( 5 ) 8 10 ( 5 ) 10 ( 2 ) ( 46 ) ( 31 )	Settle every 1 month Settle every 6 months Settle every 1 to 2 months, except for advance payments made for partial yarn products Settle every 1 month Settle every 6 months Settle every 6 month Settle every 6 months Settle every 2 to 4 months Settle every 6 months	No comparable goods under the same category Equivalent Equivalent Equivalent Equivalent Equivalent Equivalent Equivalent Equivalent	— Equivalent Equivalent Equivalent Equivalent Equivalent Equivalent Equivalent Equivalent	( $ 68,446 ) - ( 20,719 ) ( 33,355 ) 42,377 ( 135,177 ) 31,446 121,028 93,653	( 9 ) - ( 3 ) ( 4 ) 4 ( 18 ) 3 21 39

67 -

Everest Textile Co., Ltd. and Subsidiaries

Receivables from Related Parties Achieving NT$100,000 Thousand or Reaching 20% of Its Paid-in Capital and Above

December 31, 2021

			December 31, 2021
Table 5							Unit: NT$ Thousands
Company with book receivables	Counterparty	Relationship	Balance of receivables from the related party	Turnover rate	Overdue receivables from related parties		Amount recovered from related parties after expiry	Allowance for losses provided
					Amount	Method of disposal
Everest Textile (Shanghai) Ltd. Everest Textile USA, LLC. Everest International (HK) Limited Everest Textile (Thailand) Co., Ltd.	Everest International (HK) Limited Everest International (HK) Limited Everest Apparel (Haiti) S.A. The Company Everest Development USA, LLC. Everest Apparel (Ethiopia) S.C. Everest Apparel (Haiti) S.A. Everest Apparel (Ethiopia) S.C.	Fellow subsidiary Fellow subsidiary Fellow subsidiary Parent company Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary	$ 121,028 360,422 311,899 135,177 119,018 473,625 144,102 187,913	9.05 Note Note 3.6 Note Note Note 0.12	$ - - - - - - - -	`－` `－` `－` `－` `－` `－` `－` `－`	$ 121,028 - - 51,947 - - - -	$ - - - - - - - -

Note: The nature of the financing, not applicable for turnover rate calculation.

68 -

Unit: NT$ Thousands

Everest Textile Co., Ltd. and Subsidiaries

Information on Invested Companies

For the year ended December 31, 2021

Table 6

Name of the investing company	Name oftheinvestee Companies	Location	Principalbusiness activities	Initial investment amount	Initial investment amount	Held at the end ofthe period	Held at the end ofthe period	Held at the end ofthe period	Current (loss) gain of the investee company	Investment (loss) gain recognized for the period	Remarks
				End of the period	End of previous year	Number of shares	Ratio (%)	Carrying amount
The Company Everest Investment (Holding) Ltd. Everest International Develop Investment Co., Ltd. Everest International (HK) Limited Everest USA Holdings, Inc. Everest Apparel (HK) Limited	Everest Investment (Holding) Ltd. Everest International Develop Investment Co., Ltd. Everest Textile (HK) Co., Ltd. Everest Textile (Thailand) Co., Ltd. Everest International (HK) Limited Everest Apparel (HK) Limited Everest USA Holdings, Inc. Everest Development USA, LLC. Everest Textile USA, LLC. Everest Apparel (Ethiopia) S.C. Everest Apparel (Haiti) S.A.	Bermuda Taiwan Hong Kong Thailand Hong Kong Hong Kong The U.S. The U.S. The U.S. Ethiopia Haiti	Holdings and international trade General investment International trade Original equipment manufacturing, production, and sales of processed silk and woven fabrics Investment and holdings Investment and holdings Investment and holdings Operating asset management Production and dyeing of yarn and woven fabrics Apparel production Apparel production	$ 955,893 1,998,400 2,427 701,063 1,260,433 848,467 1,260,433 79,170 1,181,263 557,696 390,960	$ 955,893 1,998,400 2,427 701,063 1,260,433 848,467 1,260,433 79,170 1,181,263 557,696 390,960	1,300 191,400,000 695,000 79,999,993 41,300,000 27,580,000 1,000 2,500,000 38,800,000 542,415 4,000	100 100 99.3 100 100 100 100 100 100 100 100	$ 2,660,535 417,926 `（`Note 1`）` 1,215 1,187,365 951,214 ( 174,014 ) 866,259 53,395 807,309 69,244 ( 146,758 )	$ 331,585 ( 224,829 ) ( 53 ) 140,360 88,144 ( 307,871 ) 29,990 ( 2,778 ) 32,239 ( 110,734 ) ( 195,836 )	$ 331,585 ( 224,829 ) ( 53 )

Note 1: The carrying amount at the end of the period is the balance after deducting the parent company's shares held by the subsidiary that are deemed as treasury shares amounted to NT$332,836.

Note 2: Please refer to Table 7 for information on investments in Mainland China.

69 -

Everest Textile Co., Ltd. and Subsidiaries

Information on Investments in Mainland China For the year ended December 31, 2021

Table 7

Unit: NT$ Thousands, unless specified otherwise

Name of the investee company in Mainland China	Principal business activities	Principal business activities	Paid-in capital (Note 2)	Investment method	Cumulative investment amount remitted from Taiwan at the beginning of the period	Investment amount remitted or recovered for the period	Investment amount remitted or recovered for the period	Cumulative investment amount remitted from Taiwan at the end of the period	Current (loss) gain of the investee company	The Company's direct or indirect investment shareholding (%)	Investment (loss) gain recognized for the period (Notes 3 and 4)	Carrying amount of investments at the end of the period	Investment gains repatriated at the end of the period
						Remitted	Recovered
Everest Textile (Shanghai) Ltd.	Research, development, dyeing, back- end processing and selling of high emulation chemical fibers and high-grade textile cloth		$ 830,400 (USD$30,000 thousand)	The Company's indirect investment via the third party Everest Investment (Holding) Ltd.	$ 980,349 (USD$30,000 thousand)	$ -	$ -	$ 980,349 (USD$30,000 thousand)	$ 182,643	100	$ 185,293	$1,492,906	$ -

Cumulative investment amount remitted from Taiwan to Mainland China at the end of the period (Note2)		Investment amount approved by the Ministry of Economic Affairs Investment Committee (MOEAIC) (Note2)		Investment limits stated by MOEAIC regarding investments in Mainland China (Note 1)
$ 830,400 (USD$30,000 thousand)		$ 830,400 (USD$30,000 thousand)		$ 4,090,106

Note 1: Calculated based on the limits stated in the “Regulations Governing the Examination of Investment or Technical Cooperation in Mainland China” amended by the MOEAIC on August 29, 2009 ($6,816,844×60%=$4,090,106).
Note 2: The amount is translated at a currency rate where USD$1 equals NT$27.68.
Note 3: Investment gains are recognized according to the financial statements audited by an international accounting firm that cooperates with CPA Associations R.O.C. (Taiwan).
Note 4: Investment gains recognized for the period is the net amount after adding the realized gross sales of goods amounted to NT$2,650 thousand arising from the side current transactions.
70 -

Everest Textile Co., Ltd. and Subsidiaries

Significant Transactions with Investee Companies in Mainland China, either Directly or Indirectly through A Third Area, and Their Prices, Payment Terms, and Unrealized Gains or Losses For the year ended December 31, 2021

Table 8

Unit: NT$ Thousands

Purchasing (selling) company	Counterparty	Relationship		Transaction status	Transaction status		Circumstance and reason for transaction amount differ from general transactions	Circumstance and reason for transaction amount differ from general transactions	Notes and trade receivables (payables)	Notes and trade receivables (payables)	Unrealized gains (losses)
			Purchase (sales) of goods	Amount (Note)	Ratio to total purchase (sales) of goods (%)	Credit period
							Unit price	Credit period	Balance	Ratio to total notes and trade receivables (payables) (%)
The Company Everest Textile (Shanghai) Ltd. Everest Textile (Thailand) Co., Ltd.	Everest Textile (Shanghai) Ltd. Everest International (HK) Limited Everest Textile (Shanghai) Ltd.	Subsidiary Fellow subsidiary Fellow subsidiary	Sales Sales Sales	( $ 348,411 ) ( 1,336,841 ) ( 80,445 )	( 5 ) ( 46 ) ( 5 )	Settle every 6 months Settle every 2 to 4 months Settle every 2 to 4 months	Equivalent Equivalent Equivalent	Equivalent Equivalent Equivalent	$ 42,377 121,028 5,836	4 21 1	$ 4,370 ( 1,283 ) -

71 -

Everest Textile Co., Ltd. and Subsidiaries

Business Relationships and Status of Significant Transactions between the Parent Company and Subsidiaries and between the Respective Subsidiaries.

For the year ended December 31, 2021

Table 9

Unit: NT$ Thousands

Code	Name of the transacting party	Counterparty of the transaction	Relationship with the transacting party (Note 1)			Transaction status	Transaction status
				Accounts	Amount (Note 2)	Transaction conditions	Ratio to the consolidated total operating revenue or total assets (%)
0	The Company	Everest Textile (Thailand) Co., Ltd. Everest Textile (Shanghai) Ltd. Everest Textile USA, LLC. Everest International (HK) Limited Everest Apparel (Ethiopia) S.C. Everest Apparel (Haiti) S.A.	1 1 1 1 1 1	Sales of goods Processing expenses Purchase of machine supplies on behalf of others Trade payables to related parties Sales of goods Trade receivables from related parties Sales of goods Purchases Trade receivables from related parties Trade payables to related parties Purchase of machine supplies on behalf of others Purchases Commission expenses Advances Processing expenses Processing expenses Sales of goods Trade receivables from related parties	$ 297,419 561,124 45,270 68,446 348,411 42,377 141,733 344,475 31,446 135,177 19,601 54,475 19,502 52,848 16,457 41,515 50,137 23,455	The transactions are made at general transaction prices; collection terms shall be settled every 6 months. No comparable goods under the same category; payment terms shall be settled every 1 month. The transactions are made at general transaction prices; collection terms shall be settled every 6 months. The transactions are made at general transaction prices; collection terms shall be settled every 6 months. The transactions are made at general transaction prices; collection terms shall be settled every 6 months. The transactions are made at general transaction prices; payment terms shall be settled every 6 months. The transactions are made at general transaction prices; collection terms shall be settled every 6 months. The transactions are made at general transaction prices; payment terms shall be settled every 6 months. No comparable goods under the same category; payment terms shall be settled every 1 month. No comparable goods under the same category; payment terms shall be settled every 1 month. No comparable goods under the same category; payment terms shall be settled every 1 month. The transactions are made at general transaction prices; collection terms shall be settled every 6 months.	3 6 1 - 3 - 1 3 - 1 - 1 - 1 - - 1 -

(Continued)

72 -

(Continued)

Code	Name of the transacting party	Counterparty of the transaction Everest International (HK) Limited Everest International (HK) Limited Everest Textile (Thailand) Co., Ltd. Everest Apparel (HK) Limited Everest Apparel (Haiti) S.A. Everest Apparel (Ethiopia) S.C. Everest Textile (Thailand) Co., Ltd. Everest Apparel (Haiti) S.A. Everest Development USA, LLC. Everest Textile (Shanghai) Ltd. Everest Apparel (Ethiopia) S.C.	Relationship with the transacting party (Note 1)			Transaction status	Transaction status
				Accounts	Amount (Note 2)	Transaction conditions	Ratio to the consolidated total operating revenue or total assets (%)
1 2 3 4 5	Everest International Develop Investment Co., Ltd. Everest Textile (Shanghai) Ltd. Everest International (HK) Limited Everest Textile USA, LLC. Everest Textile (Thailand) Co., Ltd.		3 3 3 3 3 3 3 3 3 3 3	Other payables to related parties Sales of goods Trade receivables from related parties Other receivables from related parties Sales of goods Trade receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Trade receivables from related parties Sales of goods Other receivables from related parties Trade payables to related parties Purchases Other receivables from related parties Sales of goods Sales of goods Purchases Trade receivables from related parties Other receivables from related parties	90,574 1,336,841 121,028 360,422 58,055 31,634 96,515 144,102 473,625 93,653 211,705 $ 311,899 16,608 50,130 119,018 80,445 21,826 40,143 187,913 19,495	The transactions are made at general transaction prices; collection terms shall be settled every 2 to 4 months. The transactions are made at general transaction prices; collection terms shall be settled every 6 months. The transactions are made at general transaction prices; collection terms shall be settled every 6 months. The transactions are made at general transaction prices; payment terms shall be settled every 6 months. The transactions are made at general transaction prices; collection terms shall be settled every 2 to 4 months. The transactions are made at general transaction prices; collection terms shall be settled every 6 months. The transactions are made at general transaction prices; payment terms shall be settled every 6 months.	1 13 1 2 1 - 1 1 3 1 2 2 - 1 1 1 - - 1 -

Note 1: The relationship with a transacting party is divided into three categories set out below:

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

Note 2: Written-off during the preparation of the consolidated financial statements.

73 -

Everest Textile Co., Ltd. Information on Major Shareholders December 31, 2021

Table 10

Name of the major shareholder	Shares	Shares
	Number of shares held (share)	Shareholding (%)
Yuan Ding Investment Corp.	164,613,745	23.69%

74 -

AI assistant

EVEREST — Annual Report 2021

51820_rns_2021-11-15_7d5ab691-a99f-4008-9d20-d1d9289126ff.pdf

Everest Textile Co., Ltd. and Subsidiaries

§TABLE OF CONTENTS§

Declaration of Consolidated Financial Statements of Affiliates

Independent Auditors' Report

Audit Opinion

Basis for Opinion

Emphasis of Matters

Key Audit Matters

Other Matters

and 2020, respectively.

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Everest Textile Co., Ltd. and Subsidiaries

Consolidated Balance Sheets

December 31, 2021 and 2020

Everest Textile Co., Ltd., and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

Everest Textile Co., Ltd. and Subsidiaries

Everest Textile Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

Everest Textile Co., Ltd. and Subsidiaries

Notes to Consolidated Financial Statements

I. General Information

II. Date and Procedures for the Approval of Financial Statements

IV. Summary of Significant Accounting Policies

(2) Derecognition of financial liabilities

VI. Cash

VII. Financial instruments at fair value through profit or loss

VIII. Financial Assets at Fair Value through Other Comprehensive Income

December 31, 2021

December 31, 2020

X. Inventories

XI.

Subsidiaries included in the consolidated financial statements

XII. Property, plant and equipment

XIII. Lease Agreements

(I) Right-of-use assets

(IV) Other lease information

XIV. Other Assets

XV. Borrowings

(II) Short-term bills payable

December 31, 2021

December 31, 2020

(III) Long-term borrowings

XVI. Notes Payable and Trade Payables

XVII. Other current liabilities

XVIII. Retirement Benefit Plans

(I) Defined contribution plans

(II) Defined benefit plans

(Continued)

(II) Capital surplus

(IV) Treasury shares

XX. Revenue

XXI. Net profit (loss) before income tax

(VI) Depreciation expenses

(VII) Employee benefits expenses

Estimated ratio

Amount

XXII. Income tax

(II) Income tax recognized in other comprehensive income/(loss)

(III) Current tax assets and liabilities

(IV) Deferred tax assets and liabilities

2021

XXIII. Earnings (net loss) per share

XXIV. Capital management

XXV. Financial instruments

December 31, 2021

December 31, 2020

1. Market risk

(2) Interest rate risk

Sensitivity analysis

(3) Other price risks

December 31, 2021

December 31, 2020

December 31, 2021

XXVI. Related Party Transactions

EVEREST Annual Report 2021