EVEREST — Annual Report 2021

Nov 15, 2021

Stock Code: 1460

Everest Textile Co., Ltd.

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

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§TABLE OF CONTENTS§

Item I. Cover II. Table of Contents III. Independent Auditors' Report IV. Balance Sheets V. Statements of Comprehensive Income VI. Statements of Changes in Equity VII. Statements of Cash Flows VIII. Notes to 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 IX. Statements of Significant Accounting Items	Page 1 2 3~6 7 8~9 10 11~12 13 13 13~15 15~23 23~24 24~50 50~55 56 56 56 56~57 58, 59~63 58, 64, 66 58, 65~66 58, 67 68~83	No. of Notes to the Financial Statements
		- - - - - - - I II III IV V VI～XXV XXVI XXVII XXVIII XXIX XXX～XXXI XXXII XXXII XXXII XXXII -

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Independent Auditors' Report

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

Audit Opinion

We have audited the balance sheets of Everest Textile Co., Ltd. (the “Company”) as of December 31, 2021 and 2020, the statements of comprehensive income, statements of changes in equity, statements of cash flows for the years then ended, and the notes to 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."

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 Financial Statements section of our report. We are independent of the Company 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. Based on our audit results and the audit reports of other auditors, we believe that sufficient and appropriate audit evidence has been obtained to form a basis for expressing an audit 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.

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Key Audit Matters

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

Sales revenue recognition

The Company 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 has a significant impact on the overall operating income and profit of the Company, and therefore we have identified the authenticity of the sales revenue of filament fabric from specific customers 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

Certain investments in subsidiaries accounted for using the equity method in the financial statements of the Company for the years ended December 31, 2021 and 2020 were audited by other auditors. Therefore, in our opinions expressed for the financial statements, the amount of the above investments accounted for using the equity method and its profit or loss were recognized according to the report from other auditors. As of December 31, 2021 and 2020, the amounts of the above investments accounted for using the equity method were NT$2,053,624 thousand and NT$2,297,180 thousand, respectively, accounted for 18% and 21% of the total assets. Furthermore, for the years ended December 31, 2021 and 2020, the consolidated profit or loss recognized using the equity method was a loss of NT$11,720 and NT$280,979, respectively, accounted for 203% and 27% of the total consolidated profit or loss, respectively.

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

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

In preparing the financial statements, management is responsible for assessing the Company'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 Company or to cease operations, or has no realistic alternative but to do so.

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

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the ROC will always detect a material misstatement in the financial statements when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit 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 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 Company'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 Company's ability to

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

• V. Evaluate the overall presentation, structure and content of the financial statements, including relevant notes, and whether the 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 Company to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for forming the audit opinion for the Company.

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

We also 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 financial statements of the Company 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 No. Approval No. Jin-guan-zheng-shen-zi No. 0990031652 Tai-cai-zheng-liu-zi No. 0920123784

March 28, 2022

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Everest Textile Co., Ltd. Balance Sheets

December 31, 2021 and 2020

Unit: NT$ Thousands

Code 1100 1120 1150 1170 1180 1200 1210 1220 130X 1470 11XX 1517 1550 1600 1755 1840 1990 15XX 1XXX Code 2100 2110 2150 2160 2170 2180 2219 2220 2230 2250 2280 2322 2399 21XX 2540 2570 2580 2640 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX	Assets Current Assets Cash (Notes 4 and 6) Financial Assets at Fair Value Through Other Comprehensive Income - Current (Notes 4 and 7) Notes Receivable (Notes 4, 8, 20, and 26) Trade Receivables (Notes 4, 8, and 20) Trade Receivables from Related Parties (Notes 4, 8, 20, and 26) Other Receivables (Note 4) Other Receivables from Related Parties (Notes 4 and 26) Current Tax Assets (Note 22) Inventories (Notes 4, 5, and 9) Other Current Assets (Note 13) Total Current Assets Non-Current Assets Financial Assets at Fair Value Through Other Comprehensive Income - Non- Current (Notes 4 and 7) Investments Accounted For Using The Equity Method (Notes 4 and 10) Property, Plant and Equipment (Notes 4, 11, 26, 27, and 28) Right-Of-Use Assets (Notes 4 and 12) Deferred Tax Assets (Notes 4 and 22) Other Non-Current Assets (Note 13) Total Non-Current Assets Total Assets Liabilities and Equity Current Liabilities Short-Term Borrowings (Notes 14, 26, and 27) Short-Term Bills Payable (Note 14) Notes Payable (Note 15) Notes Payable to Related Parties (Notes 15 and 26) Trade Payables (Note 15) Trade Payables to Related Parties (Notes 15 and 26) Other Payables (Note 16) Other Payables to Related Parties (Note 26) Current Tax Liabilities (Note 22) Refund Liabilities - Current (Note 17) Lease Liabilities - Current (Notes 4 and 12) Long-Term Borrowings Due Within One Year (Notes 14, 26, and 27) Other Current Liabilities (Notes 16 and 20) Total Current Liabilities Non-Current Liabilities Long-Term Borrowings (Notes 14, 26, and 27) Deferred Tax Liabilities (Notes 4 and 22) Lease Liabilities - Non-Current (Notes 4 and 12) Net Defined Benefit Liabilities - Non-Current (Notes 4 and 18) Guarantee Deposits Total Non-Current Liabilities Total Liabilities Equity (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 Total Liabilities and Equity		December 31, 2021	December 31, 2021	% 2 1 1 8 1 - - - 34 - 47 - 28 23 - 1 1 53 100 6 8 1 - 4 2 3 - - - - 7 - 31 5 2 - 1 - 8 39 62 1 1 1 2 4 3) 3) 61 100		December 31, 2020	December 31, 2020
			Amount $ 233,370 81,526 51,105 829,461 99,109 40,606 21,792 1,868 3,824,625 34,674 5,218,136 3,448 3,079,676 2,547,625 72,101 97,809 108,643 5,909,302 $ 11,127,438 $ 679,407 899,785 79,990 19,337 403,234 260,154 326,092 382 - 7,154 35,464 710,000 7,424 3,428,423 597,500 170,505 36,826 76,619 721 882,171 4,310,594 6,946,434 115,943 174,022 83,073 183,359 440,454 353,151) 332,836) 6,816,844 $ 11,127,438				Amount $ 303,448 80,742 3,213 535,041 460,890 27,245 709,726 1,868 2,795,444 35,635 4,953,252 3,448 3,160,820 2,528,072 60,542 95,116 51,165 5,899,163 $ 10,852,415 $ 1,175,727 1,599,118 598 10,487 299,340 183,082 317,323 29,353 7,929 7,154 28,594 577,500 13,908 4,250,113 2,518,333 169,777 31,645 75,515 721 2,795,991 7,046,104 5,098,341 99,644 174,022 83,073 1,151,908) 894,813) 164,025) 332,836) 3,806,311 $ 10,852,415		%
		( (		( (		( ( ( (		( ( ( (	3 1 - 5 4 - 7 - 26 - 46 - 29 23 1 1 - 54 100 11 15 - - 3 2 3 - - - - 5 - 39 23 2 - 1 - 26 65 47 1 2 1 11) 8) 2) 3) 35 100

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

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

Chairman: Johnny Hih

Manager: Ching Lai Yeh Accounting Executive: Mei Hsiu Huang

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Everest Textile Co., Ltd.

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 9, 18, 21, and 26) 5900 Gross Profit 5910 Unrealized gains from subsidiaries 5920 Realized profit from subsidiary 5950 Realized gross profit Operating expenses (Notes 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 21 and 26) 6900 Net operating profits (losses) Non-operating income and expenses (Notes 4, 21, and 26) 7100 Interest income 7010 Other income 7020 Other gains and losses 7510 Interest expenses		2021		% 100 83 17 - - 17 10 3 3 - 16 - 1 - 1 - 1 )		2020
		Amount $ 6,597,881 5,478,519 1,119,362 4,370 ) 3,803 1,118,795 654,811 219,286 177,423 3,307) 1,048,213 3,405 73,987 3,508 58,580 18,919 ) 41,988 )				Amount $ 5,174,017 5,054,561 119,456 3,803 ) 3,984 119,637 474,594 227,039 178,463 - 880,096 2,747 757,712) 6,153 110,288 74,949 ) 54,328 )		%
	( ( ( (		(		( ( ( (		( ( (	100 98 2 - - 2 9 4 4 - 17 - 15) - 2 1 ) 1 )

(Continued)

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(Continued)

Code 7070 Share of profit or losses from subsidiaries accounted for using equity method 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 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 Earnings (net loss) per share (Note 23) 9710 Basic 9810 Diluted		2021		% 2 2 3 - 3 - - - - 3) 3) -		2020
		Amount $ 106,703 107,884 181,871 - 181,871 1,860 784 371) 2,273 189,910) 187,637) $ 5,766) $ 0.39 0.39				Amount $ 163,606) 176,442) 934,154 ) 2,833 936,987) 392 5,806 ) 79) 5,493) 91,331) 96,824) $ 1,033,811) $ 2.50 ) 2.50 )		%
	( ( ( (		( (		( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( (	3) 3) 18 ) - 18) - - - - 2) 2) 20)

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

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

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Everest Textile Co., Ltd.

Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

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	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)	Unit: NT$ Thousands Treasury Shares Total Equity ($ 332,836) $ 4,840,122 - ( 936,987 ) - ( 96,824) - (1,033,811) ( 332,836) 3,806,311 - - - 3,016,299 - 181,871 - ( 187,637) - ( 5,766) ($ 332,836) $ 6,816,844	Unit: NT$ Thousands Treasury Shares Total Equity ($ 332,836) $ 4,840,122 - ( 936,987 ) - ( 96,824) - (1,033,811) ( 332,836) 3,806,311 - - - 3,016,299 - 181,871 - ( 187,637) - ( 5,766) ($ 332,836) $ 6,816,844
	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
			( ( ( ( ( ( (	( (	( ( ( ( ( ( (		( ( (	$ 4,840,122 ( 936,987 ) ( 96,824) (1,033,811) 3,806,311 - 3,016,299 181,871 ( 187,637) ( 5,766) $ 6,816,844

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

Chairman: Johnny Hih

Manager: Ching Lai Yeh

Accounting Executive: Mei Hsiu Huang

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Everest Textile Co., Ltd.

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

Unit: NT$ Thousands

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 A21900 Compensation Cost of Employee Stock Option A22400 Share Of Profit or Losses from Subsidiaries Accounted for Using Equity Method A22500 Gain On Disposal of Property, Plant and Equipment A23700 Inventory Valuation and Obsolescence Losses A23900 Unrealized Gains from Subsidiaries A24000 Realized Profit from Subsidiary A29900 Gains From the Early Termination of Lease Liabilities A30000 Net Changes in Operating Assets and Liabilities A31130 Notes Receivable A31150 Trade Receivables A31160 Trade Receivables from Related Parties A31180 Other Receivables A31190 Other Receivables from Related Parties A31200 Inventories A31240 Other Current Assets 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 A33000 Cash Used in Operations A33100 Interest Received A33300 Interest Paid A33500 Income Tax Paid AAAA Net Cash Outflows from Operating Activities		2021 $ 181,871 304,121 3,307 ) 41,988 3,508 ) 2,427 ) 24,709 106,703 ) 3,405 ) - 4,370 3,803 ) 5 ) 47,892 ) 291,113 ) 361,781 13,361 ) 158,202 1,029,181 ) 961 562 ) 79,392 8,850 103,894 77,072 30,451 491 ) 5,922 ) 2,964 131,054 ) 3,508 42,839 ) 10,266) 180,651)		2020
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 934,154 ) 307,174 - 54,328 6,153 ) 3,917 ) - 163,606 2,736 ) 471,818 3,803 3,984 ) 29 ) 2,334 125,180 ) 547,281 ) 15,130 310,548 291,208 ) 12,442 ) 914 27,013 ) 3,971 15,997 25,276 21,329 8,054 ) 3,879 15,859 546,185 ) 6,153 54,258 ) 4,400) 598,690)

(Continued)

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(Continued)

Code Cash Flows from Investing Activities B00020 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 B04300 Increase in Other Accounts Receivable from Related Parties B04400 Decrease in Other Receivables from Related Parties B07600 Dividends Received BBBB Net Cash Inflows 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 C04020 Repayment of the Principal Portion of Lease Liabilities C03100 Decrease in Guarantee Deposits C03800 Decrease in Other Payables to Related Parties C05400 Acquisition of Subsidiaries C04600 Cash Capital Increase C09900 Share Issuance Costs Paid CCCC Net Cash Inflows (Outflows) from Financing Activities 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 $ - 362,907 ) 772 249 ) 400 - 529,732 2,427 170,175 5,983,431 6,479,751 ) 10,242,818 10,942,151 ) 1,670,000 3,458,333 ) 38,726 ) - 28,480 ) - 3,000,000 8,410) 59,602) 70,078 ) 303,448 $ 233,370		2020
	( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( (	$ 3,512 108,261 ) 38,133 1,216 ) 1,083 534,604 ) 666,846 3,917 69,410 3,861,012 3,933,033 ) 8,490,954 7,691,214 ) 1,070,000 486,667 ) 38,517 ) 104 ) 23,520 ) 468,000 ) - - 780,911 251,631 51,817 $ 303,448

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

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

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Everest Textile Co., Ltd.

Notes to 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 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")

  • 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 Company.

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

New/Revised/Amended Standards and Interpretations Annual Improvements to IFRSs 2018-2020 Cycle Amendment to IFRS 3 "Reference to the Conceptual Framework" Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use" Amendments to IAS 37 "Onerous Contracts - Cost of Fulfilling a Contract"	Effective Date Announced by IASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) 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

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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.

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

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

New/Revised/Amended Standards andInterpretations Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and Its Associate or Joint Venture" IFRS 17 "Insurance Contracts" Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 - Comparative Information” Amendments to IAS 1 "Classification of Liabilities as Current or Non-Current" Amendments to IAS 1 in "Disclosure of Accounting Policies" Amendments to IAS 8 - "Definition of Accounting Estimates" Amendments to IAS 12 “Deferred Income Tax related to Assets and Liabilities Derived from Single Transaction”

Effective Date Announced by IASB (Note1)

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

• Note 1: Unless stated otherwise, the above new/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.

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

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."

• (II) Basis of preparation

• The 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:

1. Level 1 input: Refer to quoted prices in active markets for identical assets or liabilities on the measurement date (unadjusted).

2. 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).

3. Level 3 input: Refer to unobservable inputs for asset or liability.

The Company has adopted the equity method for investments in subsidiaries when preparing the financial statements. To ensure the consistency between the profit or loss for the year, other comprehensive income/(loss), and equity in the financial statements and the profit or loss for the year, other comprehensive income/(loss), and equity attributable to owners of the Company in the Company's consolidated financial statements, certain accounting processing differences under the individual and consolidated basis were adjusted by "investments accounted for using the equity method," "share of profit or loss from subsidiaries accounted for using the equity method," "shares of other comprehensive income/(loss) from subsidiaries accounted for using the equity method" and other related equity items.

• (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;

• 15 -

• 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) 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 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).

(V)

(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. Investments in subsidiaries

The Company adopts the equity method for the accounting of investments in subsidiaries.

Subsidiaries are entities controlled by the Company.

• 16 -

Under the equity method, the investment is initially recognized at cost. The carrying amount is adjusted after the acquisition date in accordance with the profit or loss, the share of other comprehensive income/(loss), and profit distribution from subsidiaries entitled to the Company. In addition, changes in subsidiaries' other equity entitled to the Company are recognized in proportion to its shareholding percentage.

Upon impairment assessment, the Company gives overall consideration to the cash-generating unit based on the financial statements and compares its recoverable amount with the carrying amount. Subsequently, if the recoverable amount of an asset increases, the reversal of impairment losses shall be recognized as gains, provided that the carrying amount of the asset after the reversal of impairment losses shall not exceed the carrying amount of the asset to be amortized if the impairment loss is not recognized.

The unrealized profit or loss in downstream transactions between the Company and its subsidiary shall be eliminated in the financial statements. The profit or loss arising from the countercurrent and side current transactions between the Company and its subsidiaries shall be recognized in the financial statements only to the extent when they are not related to the Company's equity in the subsidiaries. (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 Company reviews estimated useful lives, residual values, and depreciation methods at the 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 Company 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 Company estimates the recoverable amount of the asset. When it is impossible to estimate the recoverable amount of an individual asset, the Company 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

• 17 -

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 balance sheets when the Company 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.

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

2. (1) Measurement categories

Financial assets held by the Company 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 amortized cost

• When the Company'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

• 18 -

recognized in profit or loss.

Except for the following circumstances, interest income is calculated by multiplying the effective interest rate by the gross carrying amount of the financial assets:

• a. In the case of purchased or originated credit-impaired financial assets, interest income is recognized by applying the credit-adjusted effective interest rate to the amortized cost.

• b. In the case of a financial asset that is not a purchased or originated credit-impaired financial asset but subsequently has become credit-impaired, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset.

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.

• B. Investments in equity instruments measured at fair value through other comprehensive income

• Upon initial recognition, the Company 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 Company's right to receive payment is 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 Company 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 Company recognizes their loss allowance at an amount equal to 12-

• 19 -

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 Company 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 Company 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.

1. Financial liabilities

2. (1) Subsequent measurement

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

3. (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.

• (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

• 20 -

The Company 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 Company 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 Company 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 balance sheets.

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

• 21 -

(XIV) Government grants

Government grants are only recognized when they can be reasonably assured that the Company 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 Company 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 Company for the purpose of immediate financial support without related future costs, such grants may be recognized in profit or loss within the collectible period.

• (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 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.

1. Current income tax

The Company 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.

• 22 -

• 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 Company 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 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.

1. 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.

2. V. Critical Accounting Judgments and Key Sources of Estimation Uncertainty When adopting the Company'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.

3. 23 -

The Company 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 Company 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 Company 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

VI.

VII.

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. Cash

Cash	Cash
December 31, 2021 Cash on hand and working capital $ 2,478 Checks and demand deposits in banks 230,892 $ 233,370 Financial assets at fair value through other comprehensive income December 31, 2021 Current Domestic investments Shares of listed companies Far Eastern International Bank Co., Ltd. - ordinary shares $ 81,526 Non-current Domestic investments Unlisted shares Jin Lead Industrial Co., Ltd. - ordinary shares $ 3,433 Dah Chung Bills Finance Corp. - ordinary shares 15 $ 3,448		December 31, 2020
		$ 2,397 301,051 $ 303,448 December 31, 2020
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
			$ 80,742 $ 3,433 15 $ 3,448

The Company 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 Company 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.

• 24 -

VIII. 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 (including those from related parties) Measured at amortized costs Gross carrying amount Less: Allowance for losses	December 31, 2021 $ 51,105 $ 931,219 2,649 $ 928,570	December 31, 2020	December 31, 2020
			$ 3,213 $ 1,001,887 5,956 $ 995,931

The Company'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 Company 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 Company reviews the recoverable amount of trade receivable 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 Company believes that the Company's credit risk has been significantly reduced.

The Company 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 Company'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 Company stipulates the rate of expected credit loss merely based on the number of days past due regarding the trade receivables.

The Company writes-off trade receivables when there is evidence indicating that the counterparty is experiencing severe financial difficulty and the Company 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. Where recoveries are made, they are recognized in profit or loss.

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

The Company's allowances for loss of trade receivables (including those from related parties) measured based on the provisional matrix are as follows:

• 25 -

December 31, 2021

December 31, 2021
Rate of expected credit loss Gross carrying amount Allowance for loss (lifetime expected credit loss) Amortized costs December 31, 2020 Rate of expected credit loss Gross carrying amount Allowance for loss (lifetime expected credit loss) Amortized costs	90 days and below 0.02%～0.07% $ 873,747 ( 136 ) $ 873,611 90 days and below 0%～1.32% $ 580,191 ( 1,146 ) $ 579,045		91-180 days 0.09% $ 54,791 36 ) $ 54,755 91-180 days 0%～1.34% $ 347,798 522 ) $ 347,276	181-365 days 2.48%～15.97% $ 204 - $ 204 181 - 365 days 0%～22.49% $ 71,421 ( 1,941 ) $ 69,480		366 days and above 0%～100% $ 2,477 2,477 ) $ - 366 days and above 0%～100% $ 2,477 2,347 ) $ 130		Total
		(			(		(	$ 931,219 2,649 ) $ 928,570 Total
	(	(		(	(		(	$ 1,001,887 5,956 ) $ 995,931

Changes in allowance for loss of trade receivables for the year ended December 31, 2021 are as follows:

are as follows:
Opening balance Less: Reversed during the year Closing balance		Amount
	(	$ 5,956 3,307) $ 2,649

The allowance for loss of trade receivables remained unchanged for the year ended December 31, 2020.

IX. Inventories

December 31, 2020. Inventories
Finished goods Work in progress Raw materials Supplies	December 31, 2021 $ 2,243,198 1,337,020 111,626 132,781 $ 3,824,625	December 31, 2020
			$ 1,937,906 686,472 67,867 103,199 $ 2,795,444

The cost of sales related to inventories for the years ended December 31, 2021 and 2020 was NT$5,478,448 thousand and NT$5,054,476 thousand, respectively. The cost of goods sold for the years ended December 31, 2021 and 2020 included the recovery gain on inventory valuation and obsolescence amounted to NT$197,150 thousand and the loss on inventory valuation and obsolescence NT$471,818 thousand, respectively.

X.

Investments Accounted for Using the Equity Method - Investments in Subsidiaries

Everest Investment (Holding) Ltd. Everest International Develop Investment Co., Ltd. Everest Textile (HK) Co., Ltd. Less: the Company's shares held by subsidiaries that are deemed as treasury shares	December 31, 2021 $ 2,660,535 750,762 1,215 3,412,512 332,836 $ 3,079,676	December 31, 2020	December 31, 2020
			$ 2,493,422 998,921 1,313 3,493,656 332,836 $ 3,160,820

• 26 -

The ratios of all ownership and voting rights of the Company in subsidiaries at the end of the reporting period are as follows:

the reporting period are as follows:
Everest Investment (Holding) Ltd. Everest International Develop Investment Co., Ltd. Everest Textile (HK) Co., Ltd.	December 31, 2021 100% 100% 99.3%	December 31, 2020
		100% 100% 99.3%

Please refer to Table 6 and Table 7 for details on investments in subsidiaries indirectly held by the Company.

The shares of gain or loss and other comprehensive income/(loss) from the investment in subsidiaries accounted for using the equity method are recognized according to the audited financial statements from the auditors of each subsidiary during the same period for the years ended December 31, 2021 and 2020, except for Everest Textile (HK) Co., Ltd., which was calculated based on unaudited financial statements.

XI. Property, plant and equipment

Costs Balance on January 1, 2020 Additions Disposals Reclassifications Balance on December 31, 2020 Accumulated depreciation Balance on January 1, 2020 Depreciation expenses Disposals Balance on December 31, 2020 Net balance on December 31, 2020 Costs Balance on January 1, 2021 Additions Disposals Reclassifications Balance on December 31, 2021 Accumulated depreciation Balance on January 1, 2021 Depreciation expenses Disposals Reclassifications Balance on December 31, 2021 Balance on December 31, 2021		Land	Buildings	Machinery and equipment	Transportation equipment	Furniture and fixtures	Miscellaneous equipment		Construction inprogress	Total
		$ 622,008 - - - $ 622,008 $ - - - $ - $ 622,008 Land	$ 1,416,990 4,003 ( 9,935 ) - $ 1,411,058 $ 673,672 45,563 ( 9,935) $ 709,300 $ 701,758 Buildings	$ 1,750,027 50,512 ( 130,224 ) 108 $ 1,670,423 $ 608,221 169,923 ( 104,974) $ 673,170 $ 997,253 Machinery and equipment	$ 24,395 1,273 ( 4,031 ) - $ 21,637 $ 12,756 3,101 ( 4,017) $ 11,840 $ 9,797 Transportation equipment	$ 214,605 36,137 ( 17,232 ) - $ 233,510 $ 76,373 27,137 ( 17,232) $ 86,278 $ 147,232 Furniture and fixtures	$ 68,153 23,581 ( 20,149 ) - $ 71,585 $ 25,577 23,366 ( 20,108) $ 28,835 $ 42,750 Miscellaneous equipment		$ 7,382 - - ( 108) $ 7,274 $ - - - $ - $ 7,274 Construction inprogress	$ 4,103,560 115,506 ( 181,571 ) - $ 4,037,495 $ 1,396,599 269,090 ( 156,266) $ 1,509,423 $ 2,528,072 Total
		$ 622,008 - - - $ 622,008 $ - - - - $ - $ 622,008	$ 1,411,058 14,050 ( 14,339 ) - $ 1,410,769 $ 709,300 44,143 ( 14,339 ) - $ 739,104 $ 671,665	$ 1,670,423 189,130 ( 86,088 ) - $ 1,773,465 $ 673,170 161,642 ( 85,457 ) - $ 749,355 $ 1,024,110	$ 21,637 2,663 ( 1,080 ) - $ 23,220 $ 11,840 3,372 ( 1,080 ) - $ 14,132 $ 9,088	$ 233,510 18,431 ( 24,967 ) ( 11,289) $ 215,685 $ 86,278 25,301 ( 24,967 ) ( 63) $ 86,549 $ 129,136	$ 71,585 59,024 ( 12,012 ) - $ 118,597 $ 28,835 30,439 ( 12,012 ) - $ 47,262 $ 71,335		$ 7,274 13,009 - - $ 20,283 $ - - - - $ - $ 20,283	$ 4,037,495 296,307 ( 138,486 ) ( 11,289) $ 4,184,027 $ 1,509,423 264,897 ( 137,855 ) ( 63) $ 1,636,402 $ 2,547,625

No impairment assessment was performed for the year ended December 31, 2021, therefore there was no indication of impairment.

The Company impairment assessments on property, plant and equipment, and used the value-in-use as the basis for calculating the recoverable amount for the year ended December 31, 2020. The value-in-use calculation is based on the estimated cash flows of the Company's future financial projections and is calculated by the rate of 7.44% on December 31, 2020 to reflect the specific risks of the related cash-generating units. After

• 27 -

the assessment, no impairment loss on property, plant and equipment has been recognized for the year ended December 31, 2020.

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

for the year ended December 31, 2020. The depreciated expenses are provided for on a estimated useful lives:	straight-line basis over the followi
Buildings
Main buildings	5-56 years
Engineering systems	5-51 years
Machinery and equipment	2-30 years
Transportation equipment	3-16 years
Furniture and fixtures	2-15 years
Miscellaneous equipment	2-10 years

Please refer to Note 27 for the amount of property, plant and equipment pledged as collateral for borrowings.

Part of the Company's land is agricultural land, and the ownership is temporarily registered in the name of others. Furthermore, it has been mortgaged to the Company.

XII. Lease Agreements

(I) Right-of-use assets

(I)	Right-of-use assets
(II)	Costs Balance on January 1, 2020 Additions Reductions Balance on December 31, 2020 Accumulated depreciation Balance on January 1, 2020 Depreciation expenses Reductions Balance on December 31, 2020 Net balance on December 31, 2020 Costs Balance on January 1, 2021 Additions Reductions Balance on December 31, 2021 Accumulated depreciation Balance on January 1, 2021 Depreciation expenses Reductions Balance on December 31, 2021 Net balance on December 31, 2021 Lease liabilities		Buildings $ 117,524 16,587 5,454) $ 128,657 $ 34,796 36,452 438) $ 70,810 $ 57,847 $ 128,657 51,637 2,159) $ 178,135 $ 70,810 37,565 764) $ 107,611 $ 70,524	Transportation equipment $ 3,664 1,679 - $ 5,343 $ 1,016 1,632 - $ 2,648 $ 2,695 $ 5,343 541 - $ 5,884 $ 2,648 1,659 - $ 4,307 $ 1,577		Total
		( ( ( (			( ( ( (	$ 121,188 18,266 5,454) $ 134,000 $ 35,812 38,084 438) $ 73,458 $ 60,542 $ 134,000 52,178 2,159) $ 184,019 $ 73,458 39,224 764) $ 111,918 $ 72,101

• 28 -

Carrying amount of lease liabilities Current Non-current	December 31, 2021 $ 35,464 $ 36,826	December 31, 2020	December 31, 2020
			$ 28,594 $ 31,645

The discount rate ranges for lease liabilities are as follows:	The discount rate ranges for lease liabilities are as follows:
	December 31, 2021	December 31, 2020
Buildings	1.02%～1.16%	1.06%～1.16%
Transportation equipment	1.06%～1.16%	1.10%～1.16%

• (III) Major lease activities and terms

The Company leases certain transportation equipment for operational use, and the lease period is 3 years.

The Company also leases certain buildings to use as plants, office, and retail outlets, and the lease period is 2-5 years. At the end of the lease period, the Company has no right of first refusal for the leased building.

(IV) Other lease information

Other lease information
Short-term lease expenses Total cash outflows on lease		2021 $ 7,953 $ 47,415		2020
				$ 6,530 $ 45,802

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

XIII. Other Assets

Other Assets
Current Prepaid expenses Prepayments for goods Temporary payments - import expenses Temporary payments - others Others Non-current Prepayments for equipment Refundable deposits	December 31, 2021 $ 11,551 14,412 6,876 1,563 272 $ 34,674 $ 99,209 9,434 $ 108,643	December 31, 2020
			$ 11,495 11,803 10,532 1,554 251 $ 35,635 $ 41,580 9,585 $ 51,165

XIV. Borrowings

• 29 -

December 31, 2020

(I) Short-term borrowings

December 31, 2021

Secured borrowings (Note
27)
Bank borrowings	$	236,146	$	144,391
Unsecured borrowings
Credit facility borrowings		443,261		1,031,336
	$	679,407	$	1,175,727
Interest rate per annum	0.6204%～1.32638%		0.83%～1.10994%

(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 (Note 27) 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 $ 760,000 547,500 1,307,500 710,000 $ 597,500		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 $ 2,538,333 557,500 3,095,833 577,500 $ 2,518,333
		$
		$
						$ 2,538,333 557,500 3,095,833 577,500 $ 2,518,333

(III) Long-term borrowings

The abovementioned bank borrowings fall due one after another by September

• 30 -

• The interest rate per annum on December 31, 2021 and 2020 is 1.00%1.47% and 0.95%-1.47%, respectively.

XV. Notes Payable (including Those from Related Parties) and Trade Payables (including Those from Related Parties)

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

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

XVI. Other liabilities

XVI.	Other liabilities
XVII.	Current Other payables Payable for salaries or bonuses Payable for utilities Payable for shipping expenses Payable for labor and health insurance Payable for purchases of equipment Payable for annual leave Payable for pension Payable for processing expenses Payable for employees' compensation Others Other current liabilities Receipts under custody Contract liabilities (Note 20) Others Refund liabilities-current Sales return and discounts Opening and closing balances	December 31, 2021 $ 142,231 24,805 22,114 19,868 17,330 16,663 11,200 9,249 3,760 58,872 $ 326,092 $ 6,049 1,366 9 $ 7,424 2021 $ 7,154	December 31, 2020
				$ 139,107 22,862 20,726 21,197 26,935 14,945 10,970 9,235 - 51,346 $ 317,323 $ 5,976 1,928 6,004 $ 13,908 2020
				$ 7,154

XVIII. Retirement Benefit Plans

(I) Defined contribution plans

The Company 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.

(II) Defined benefit plans

The pension system adopted by the Company in accordance with the "Labor Standards Act" is a defined benefit plan operated by the government. Pension

• 31 -

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 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 balance sheets in respect of the defined benefit plans are set out as follows:

are set out as follows:
	December31,2021		December31,2020
Present value of defined
benefit obligation	$	410,581	$	397,945
Fair value of plan assets	(	333,962)	(	322,430)
Net defined benefit
liabilities	$	76,619	$	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 Remeasurements Return on plan assets (excluding amounts that are included in net interest)	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) 4,834 )		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 4,834 )

(Continued)

• 32 -

(Continued)

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) 35,739) 30,211 $ 333,962)		Net defined benefit liabilities
		( ( (		( ( (	$ 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":

1. 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 Company shall not be less than the interest rate on a two-year time deposit published by the local banks.

2. 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.

3. 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.

4. 33 -

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 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 $ 35,739 7 years December 31, 2021 800,000 $ 8,000,000 694,643 $ 6,946,434	December 31, 2020	December 31, 2020
		$ 23,508 7 years December 31, 2020
			560,000 $ 5,600,000 509,834 $ 5,098,341

XIX. Equity

(I) Ordinary shares

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

• 34 -

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 abovementioned 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 (Note) Premium on issuance of shares Treasury share transactions	December 31, 2021 $ 16,299 99,644 $ 115,943	December 31, 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 (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

• 35 -

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 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

• 36 -

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 $ 6,597,834 47 $ 6,597,881		2020
				$ 5,173,963 54 $ 5,174,017

• (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 (accounted for as other current liabilities) Sales of goods	2021 December 31 $ 51,105 $ 928,570 $ 1,366	2020 December 31 $ 3,213 $ 995,931 $ 1,928		2020 January 1
				$ 5,547 $ 678,412 $ 1,014

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 $ 1,928		2020
				$ 1,014

• 37 -

XXI. Net profit (loss) before income tax

(I) Other income

(I) Other income
Gain on disposal of property, plant and equipment (II) Interest income Bank deposits Loans Imputed interest on deposits (III) Other income Grants Service fee on endorsements and guarantees Dividend income Others (IV) Other gains and losses Net foreign currency exchange losses Others Gains or losses on foreign currency exchange include: Total gains on foreign currency exchange Total losses on foreign currency exchange (V) Interest expenses Interests on borrowings Interest on lease liabilities Less: Amounts included in the cost of required assets		2021 $ 3,405 2021 $ 51 3,423 34 $ 3,508 2021 $ 13,489 11,109 2,427 31,555 $ 58,580 2021 $ 18,097 ) 822) $ 18,919) $ 54,685 72,782) $ 18,097) 2021 $ 42,181 736 929 $ 41,988		2020
				$ 2,747 2020
				$ 181 5,927 45 $ 6,153 2020
				$ 75,341 8,548 3,917 22,482 $ 110,288 2020
	( ( ( ( (		( ( ( (	$ 75,838 ) 889 $ 74,949) $ 55,303 131,141) $ 75,838) 2020
				$ 54,127 755 554 $ 54,328

• 38 -

Information related to interest capitalization is as follows:

Amount of interest capitalization Interest rate on interest capitalization (VI) Depreciation expenses An analysis of depreciation by function Operating costs Operating expenses (VII) 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 $ 929 1.02%～1.15% 2021 $ 241,541 62,580 $ 304,121 2021 $ 974,647 102,291 36,718 1,113,656 34,315 38,703 73,018 $ 1,186,674 $ 810,879 375,795 $ 1,186,674		2020
				$ 554 1.08%～1.27% 2020
				$ 244,218 62,956 $ 307,174 2020
				$ 900,605 101,598 36,472 1,038,675 35,283 41,260 76,543 $ 1,115,218 $ 739,980 375,238 $ 1,115,218

(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:

• 39 -

Estimated ratio

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

Current income tax Incurred during the year Adjustments to prior years Deferred income tax Incurred during the year		2021 $ 2,336 - 2,336) $ -		2020
	(		(	$ 3,780 7,929 8,876) $ 2,833

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

Net profit (loss) before income tax Income tax expenses (gains) calculated based on the net profit (loss) before income tax at the statutory rate Unrecognized loss carryforwards Unrecognized (recognized) temporary differences Loss (gain) on investments accounted for using equity method Non-deductible expenses in determining taxable income Grants Tax-exempt income Withholding tax incurred for overseas income Adjustments to current income tax expenses for previous years during the year		2021 $ 181,871 $ 36,374 7,327 24,615 ) 21,340 ) 402 - 485 ) 2,337 - $ -		2020
	( ( (		( ( ( (	$ 934,154) $ 186,831 ) 64,127 94,364 32,721 920 13,393 ) 783 ) 3,779 7,929 $ 2,833

• 40 -

(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)

(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 $ 1,868 $ -	December 31, 2020
			$ 1,868 $ 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 from subsidiaries Defined benefit retirement plan Payable for annual leave 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 58,000 95,116 - $ 95,116 $ 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) $ - - $ -		Closing balance
			( ( ( (	( ( (		$ - 1,431 6,885 15,324 3,333 43,185 70,158 27,651 $ 97,809 $ 169,777 728 $ 170,505

• 41 -

2020

2020
Deferred tax assets Temporary differences Unrealized exchange losses Allowance for sales discount Unrealized gains from subsidiaries Defined benefit retirement plan Payable for annual leave Loss on inventory valuation Deferred tax liabilities Temporary differences Reserve for land value increment tax		Opening balance $ 5,187 1,431 6,412 12,009 3,280 58,000 $ 86,319 $ 169,777	Recognized in profit or loss $ 5,108 - 886 3,173 ( 291 ) - $ 8,876 $ -	Recognized in other comprehensi ve income/ (loss) $ - - - ( 79 ) - - ($ 79) $ -		Closing balance
			(	( (		$ 10,295 1,431 7,298 15,103 2,989 58,000 $ 95,116 $ 169,777

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

Deductible temporary differences Loss carryforwards Expire in 2029 Expire in 2030 Expire in 2031	December 31, 2021 $ 358,745 $ 8,575 219,404 130,488 $ 358,467	December 31, 2020	December 31, 2020
			$ 481,818 $ 11,910 316,725 - $ 328,635

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

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

Balance not deductedyet $ 11,910 304,728 180,084 $ 496,722	Last year of deduction
	118 119 120

• (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.

• 42 -

(VIII) Income tax assessments

The Company'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:

used in the calculation are as follows:
Net profit (loss) for the year 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

• 43 -

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 (including those from related parties), other receivables (including those from related parties), 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		Level 1 $ 81,526 - $ 81,526		Level 2 $ - - $ -		Level 3 $ - 3,448 $ 3,448	Total
							$ 81,526 3,448 $ 84,974

• 44 -

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.

1. Reconciliation of Level 3 fair value measurement of financial instruments

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

1. 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.

(III) Categories of financial instruments

Financial assets Financial assets at amortized cost (Note 1) Financial assets at fair value through other comprehensive income Investments in equity instruments Financial liabilities Measure at amortized costs (Note 2)	December 31, 2021 $ 1,284,877 84,974 3,976,602	December 31, 2020
		$ 2,049,148 84,190 6,711,582

• 45 -

• Note 1: The balances include cash, notes and trade receivable (included those from related parties), other receivables (included those from related parties), refundable deposits (accounted for as other 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 Company's major financial instruments include investments in equity instruments, trade receivables, trade payables, borrowings, and lease liabilities. The Company's treasury management department 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 Company 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 Company 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 Company did not perform any financial instruments (including derivative financial instruments) transaction for speculative purposes.

1. Market risk

2. The Company'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 Company's exposure to market risks or the manner in which these risks were managed and measured.

3. (1) Foreign currency risk

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

   • The carrying amounts of monetary assets and monetary liabilities not denominated in the functional currency of the Company at the end of the reporting period are set out in Note 31. Sensitivity analysis

The Company is mainly exposed to the fluctuation of the United States dollar (USD) and Thai Baht (THB).

The following table details the Company's sensitivity to a 1% increase and decrease in NTD (the functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding

• 46 -

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.

Profit or loss Profit or loss	USD impact	USD impact
	2021 2020 $ 877 $ 9,226 THB impact	2020
	2021 $ 344	2020
		$ 972

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, sales not denominated in the functional currency would change in accordance with the customer's contract and investment positions of assets.

• (2) Interest rate risk

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

The carrying amount of the Company'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 $ 972,075 46,080 1,986,907	December 31, 2020
		$ 1,929,415 36,830 3,941,263

• 47 -

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 Company’s net profit (losses) before income tax for the years ended December 31, 2021 and 2020 would have decreased (increased)/inceased (decreased) by NT$19,408 thousand and NT$39,044 thousand, respectively, which primarily relates to the Company's floating rate borrowings.

• (3) Other price risks

The Company was exposed to equity price risk due to its investments in shares. The Company 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 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.

1. 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 Company. At the end of the reporting period, the Company's maximum exposure to credit risk due to the failure of counterparties to discharge its obligations is primarily arising from:

• (1) Carrying amounts of financial assets recognized in the balance sheets.

• (2) The maximum possible amount payable by the Company for providing financial guarantees regardless of the probability of occurrence.

At the end of 2021 and 2020, the amount of maximum credit exposure assumed by the Company through engaging in endorsement and guarantee not recognized in the statements is NT$2,337,910 and NT$1,694,722, respectively.

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 Company has trade receivable.

• 48 -

3. Liquidity risk

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

Liquidity and interest rate risk table for non-derivative financial liabilities The analysis of remaining contractual maturity for the Company’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 Company can be required to make the repayment. Specifically, the Company'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 non-derivative 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. December 31, 2021

December 31, 2021
Non-derivative financial liabilities Non-interest-bearing liabilities Lease liabilities Floating rate instruments Fixed rate instruments Financial guarantee liabilities	Payment on demand or less than 1 month $ 863,605 5,041 416,948 800,000 2,337,910 $ 4,423,504	1 to 3 months $ 225,584 4,722 153,065 100,000 - $ 483,371	3 to 12 months $ - 26,262 823,947 - - $ 850,209	1-5 years
				$ 720 37,056 612,375 - - $ 650,151

December 31, 2020

December 31, 2020
Non-derivative financial liabilities Non-interest-bearing liabilities Lease liabilities Floating rate instruments Fixed rate instruments Financial guarantee liabilities	Payment on demand or less than 1 month $ 575,175 5,425 96,040 1,280,297 1,694,722 $ 3,651,659	1 to 3 months $ 236,528 5,220 358,436 650,000 - $ 1,250,184	3 to 12 months $ - 20,193 1,004,158 - - $ 1,024,351	1-5 years
				$ 721 31,922 2,597,075 - - $ 2,629,718

• 49 -

The amounts of floating interest rate instruments for both non-derivative financial assets and liabilities above are subject to change due to differences between the floating interest rate and the interest rate estimated at the end of the reporting period.

The amount of financial guarantee contract is the maximum amount that may be payable by the Company in performing the guarantee obligations when the holder of the financial guarantee contract claims for the entire guarantee amount from the guarantor. However, based on the expectations at the end of the reporting period, the Company is in the opinion that it is unlikely to pay for such contractual amounts.

XXVI. Related Party Transactions

Transactions between the Company 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 Company Far Eastern New Century Corporation Investors with significant influence over (FENC) the Company Far Eastern International Bank (FEIB) Other related parties (the vice-chairman is a second degree relative of the chairman of the Company) Far Eastern Fibertech Co., Ltd. Other related parties (the investee of FENC) Jin Lead Industrial Co., Ltd. Other related parties (the Company is the corporate director of Jin Lead Industrial Co., Ltd.) Everest Textile (HK) Co., Ltd. (Everest Subsidiary (with a shareholding of HK) 99.3%) Everest Investment (Holding) Ltd. Subsidiary (with a shareholding of (Everest Bermuda) 100%) Everest International Develop Subsidiary (with a shareholding of Investment Co., Ltd. (Everest 100%) International) Everest International (HK) Limited Subsidiary (with a shareholding of (Everest International HK) 100%) Everest Apparel (HK) Limited (Everest Subsidiary (with a shareholding of Apparel HK) 100%) Everest Textile (Thailand) Co., Ltd. Subsidiary (with a shareholding of (Everest Thailand) 100%) Everest Textile (Shanghai), Ltd. (Everest Subsidiary (with a shareholding of Shanghai) 100%) Everest Textile USA, LLC. (Everest Subsidiary (with a shareholding of USA) 100%) Everest Development USA, LLC. Subsidiary (with a shareholding of (Everest Development USA) 100%) Everest Apparel (Ethiopia) S.C. (Everest Subsidiary (with a shareholding of Ethiopia) 100%) Everest Apparel (Haiti) S.A. (Everest Subsidiary (with a shareholding of Haiti) 100%)

• 50 -

(II) Sales of goods

Sales of goods
Category of related party Subsidiary Other related parties Investors with significant influence over the Company		2021 $ 842,923 5,432 260 $ 848,615		2020
				$ 1,186,285 1,876 54 $ 1,188,215

The sales to related parties are made at general transaction prices with collection terms of 1 to 6 months, equivalent to general customers.

(III) Purchases

Purchases
Category of related party Investors with significant influence over the Company Other related parties Subsidiary Everest Thailand Others		2021 $ 254,982 403,059 - 398,950 $ 1,056,991		2020
				$ 172,181 247,584 259,995 282,995 $ 962,755

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 6 months.

(IV) Receivables from related parties (excluding loans to related parties)

Line item Notes receivable Trade receivables from related parties Other receivables from related parties	Category/name of related party Other related parties Subsidiary Everest Shanghai Everest USA Everest Ethiopia Others Other related parties Subsidiary Everest International HK Everest Haiti Everest Ethiopia Everest USA Others Other related parties	December 31, 2021 $ - $ 42,377 31,446 - 23,455 1,831 $ 99,109 $ 8,887 5,601 4,523 2,050 698 33 $ 21,792	December 31, 2020	December 31, 2020
				$ 894 $ 52,607 73,127 334,003 536 617 $ 460,890 $ 6,815 31,565 93,490 47,400 702 22 $ 179,994

• 51 -

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)

Lineitem Notes payable to related parties Trade payables to related parties Other payables to related parties	Category/name of related party Investors with significant influence over the Company Far Eastern New Century Corporation (FENC) Subsidiary Everest USA Everest Thailand Everest International HK Others Other related parties Investors with significant influence over the Company Investors with significant influence over the Company Subsidiary	December 31, 2021 $ 19,337 $ 135,177 68,446 6,096 3,046 46,007 1,382 $ 260,154 $ 1 381 $ 382	December 31, 2020	December 31, 2020
				$ 10,487 $ 42,274 66,861 42,051 4,436 22,101 5,359 $ 183,082 $ 13 860 $ 873

The outstanding payables to related parties are unsecured and will be settled in cash.

(VI) Disposals of property, plant and equipment

Category/name of related party Subsidiary Everest USA Everest Ethiopia Everest Haiti		Disposal consideration 2021 2020 $ - $ 37,913 - 217 772 - $ 772 $ 38,130	Disposal consideration 2021 2020 $ - $ 37,913 - 217 772 - $ 772 $ 38,130		Disposalgains	Disposalgains	Disposalgains
		2021 $ - - 772 $ 772			2021		2020
					$ - - 141 $ 141		$ 12,771 68 - $ 12,839

• 52 -

(VII) Loans to related parties

Category/name of related

Category/name of related
party Other receivables Subsidiary Everest Haiti Everest Ethiopia Everest Apparel HK	December 31, 2020
		$ 270,234 161,841 97,657 $ 529,732

Category/name of related

Category/name of related
party Interest income Subsidiary Everest USA Everest Apparel HK Everest International		2020
		$ 5,002 884 41 $ 5,927

Due to the operating requirements of subsidiaries, the Company provide loans to its subsidiaries, with interest rate at 0.43% to 1.17% for the year ended December 31, 2020; the interest rates are similar to the market interest rates. Loans to subsidiaries were unsecured loans for the year ended December 31, 2020.

(VIII) Borrowings from related parties

Category/name of related

Category/name of related
party Subsidiary Everest International (included in other payables to related parties) Other related parties - FEIB (included in short-term and long-term borrowings) Category/name of related party Interest expenses Subsidiary Other related parties	December 31, 2021 $ - $ 496,146 2021 $ - 3,153 $ 3,153	December 31, 2020
			$ 28,480 $ 344,391 2020
			$ 290 2,294 $ 2,584

• 53 -

The interest rates of the Company’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 Company 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.

(IX) Endorsement and guarantee

The amount guaranteed by the Company for related parties is as follows: Category/name of related

Category/name of related
party Subsidiary Everest USA Everest Bermuda Everest International HK Everest International Everest Thailand Category/name of related party Service fee on endorsements and guarantees Subsidiary Everest USA Everest International HK Everest Thailand	December 31, 2021 $ 2,117,520 138,400 719,680 667,000 276,800 $ 3,919,400 2021 $ 6,833 2,050 2,226 $ 11,109	December 31, 2020
			$ 1,566,400 1,082,240 655,040 360,000 284,800 $ 3,948,480 2020
			$ 3,918 773 3,857 $ 8,548

(X) Other transactions with related parties

1. Processing expenses

Processing expenses
Category/name of relatedparty Subsidiary Everest Thailand Others Other related parties Jin Lead Industrial Co., Ltd.		2021 $ 561,124 57,972 43,863 $ 662,959		2020
				$ 335,825 68,742 16,094 $ 420,661

• 54 -

The transactions are made at general transaction prices; payment terms and receivables offset mutually or range from 1 to 2 months, similar to those provided to the general processing suppliers.

2. Commission expenses

Commission expenses
Category/name of relatedparty Subsidiary Everest Bermuda Everest International HK		2021 $ - 19,502 $ 19,502		2020
				$ 10,205 3,790 $ 13,995

1. Procurement transaction on behalf of others

The amount of purchasing equipment, supplies, dyeing agents, and advances made by the Company on behalf of related parties is as follows:

Category/name of

Category/name of
relatedparty Subsidiary Everest International HK Everest Thailand Everest USA Everest Ethiopia Everest Haiti Everest Bermuda Others		2021 $ 52,848 45,270 24,692 12,843 9,041 - 1,155 $ 145,849		2020
				$ 9,901 48,871 36,098 58,966 58,376 50,864 470 $ 263,546

(XI) Compensation of key management personnel

Short-term employee benefits Retirement benefits		2021 $ 19,701 2,314 $ 22,015		2020
				$ 21,041 2,188 $ 23,229

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.

• 55 -

XXVII. Pledged Assets

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

Pledged Assets 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 $ 472,450 218,588 764,980 $ 1,456,018	December 31, 2020
			$ 573,052 254,538 - $ 827,590

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) Contracted but outstanding contractual commitments of the Company are as follows:

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

• (II) As of December 31, 2021 and 2020, the Company’s unused letters of credit for purchases of raw materials and machinery and equipment amounted to approximately NT$13,436 thousand and NT$7,798 thousand, respectively.

XXIX. Significant Events after the Period

On March 15, 2022, a fire broke out in the warehouse of the Company's Tainan factory, causing damage to some buildings and inventories while no impact on the production line. The Company 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 Company recorded a significant year-on-year decrease in its operating revenue for the year ended December 31, 2020. The Company 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 financial statements, the Company continues assessing the economic effects arising from the outbreak on the Company.

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 Company, and the exchange rates disclosed are the exchange rate used in translating such foreign currencies into the functional currency. Significant assets and liabilities denominated in foreign currencies were as follows:

• 56 -

Unit: foreign currencies and NT$ in thousand

December 31, 2021

December 31, 2021
Assets denominated in foreign currencies Monetary items USD THB Non-monetary items Subsidiaries accounted for using the equity method USD Liabilities denominated in foreign currencies Monetary items USD THB December 31, 2020 Assets denominated in foreign currencies Monetary items USD THB Non-monetary items Subsidiaries accounted for using the equity method USD Liabilities denominated in foreign currencies Monetary items USD THB	Foreign currencies $ 31,813 44,983 96,275 28,643 3,728 Foreign currencies $ 54,431 112,628 87,683 21,902 8,408	Exchange rate 27.68 0.8347 27.68 27.68 0.8347 Exchange rate 28.43 0.9356 28.48 28.53 0.9756	Carrying amount
			$ 880,583 37,548 2,664,904 792,849 3,112 Carrying amount
			$ 1,547,460 105,375 2,497,225 624,854 8,203

The carrying amount of the above investments accounted for using the equity method in NTD is the amount before deducting unrealized gains.

Significant foreign currency exchange gain or loss (including those realized and unrealized) is as follows:

Currency USD THB Others	2021		Net exchange (losses) gains $ 19,594 ) 1,429 68 $ 18,097)	2020
	Exchange rate 28.0088 (USD:NTD) 0.8823 (THB:NTD)			Exchange rate 29.549 (USD:NTD) 0.9496 (THB:NTD)		Net exchange (losses) gains
		( (			( ( (	$ 80,434 ) 4,634 38) $ 75,838)

• 57 -

XXXII. Supplementary Disclosures

(I) Information on Significant Transactions:

1. Loaning to others. (Table 1)

2. Endorsement and guarantee provided for others. (Table 2)

3. Securities held at the end of the period (excluding the investments in subsidiaries). (Table 3)

4. 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)

5. Properties acquired with an amount achieving NT$300,000 thousand or reaching 20% of its paid-in capital and above. (None)

6. Disposal of properties with an amount achieving NT$300,000 thousand or reaching 20% of its paid-in capital and above. (None)

7. 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)

8. Receivables from related parties achieving NT$100,000 thousand or reaching 20% of its paid-in capital and above. (Table 5)

9. Engaging in derivatives trading. (None)

10. (II) Information on Invested Companies. (Table 6)

11. (III) Information on Investments in Mainland China:

12. 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)

13. 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 and 8)

    • (1) Purchase amount and percentage, and the closing balance and 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.

14. (6) Other transactions having a significant impact on profit or loss or financial position for the period, such as provision or receipt of service.

15. (IV) Information on major shareholders: Names of shareholders with a shareholding ratio of 5% or more and the amount and proportion of shareholding. (Table 9)

16. 58 -

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.

• 59 -

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		Limit of endorsement and guarantee for a single entity (Note 1)	Maximum balance of endorsement and guarantee for the period			Closing balance of endorsement and guarantee	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 (%)		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 Subsidiary - 100% shareholding Subsidiary - 100% shareholding Subsidiary - 100% shareholding 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.

• 60 -

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 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.

• 61 -

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

Unit: NT$ Thousands

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 months 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

• 62 -

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

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	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.

• 63 -

For the year ended December 31, 2021

Unit: NT$ Thousands

Everest Textile Co., Ltd. and Subsidiaries

Information on Invested Companies

Table 6

Name of the investing company	Name of the investee Companies	Location	Principal business 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.

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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 (Note2)	Investmentmethod	Cumulative investment amount remitted from Taiwan at the beginning ofthe 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 and4)	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 (Note 2)		Investment amount approved by the Ministry of Economic Affairs Investment Committee (MOEAIC) (Note 2)		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.

• 65 -

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)
									Balance	Ratio to total notes and trade receivables (payables) (%)
			Purchase (sales) of goods	Amount (Note)	Ratio to total purchase (sales) of goods (%)	Credit period
							Unit price	Credit period
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 ) -

• 66 -

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

Table 9

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

• 67 -

§CONTENT FOR STATEMENTS OF SIGNIFICANT ACCOUNTING ITEMS§

Items Statements of Assets, Liabilities and Equity Items Statement of Cash Statement of Current Financial Assets at Fair Value through Other Comprehensive Income Statement of Notes Receivable Statement of Trade Receivables Statement of Other Receivables Statement of Inventories Statement of Other Current Assets Statement of Changes in Investments Accounted for Using the Equity Method Statement of Changes in Property, Plant and Equipment Statement of Changes in Accumulated Depreciation of Property, Plant, and Equipment Statement of Changes in Right-of-use Assets Statement of Changes in Accumulated Depreciation of Right-of-use Assets Statement of Deferred Tax Assets Statement of Other Non-current Assets Statement of Short-term Borrowings Statement of Short-term Notes Payable Statement of Notes Payable Statement of Trade Payable Statement of Other Payables Statement of Other Current Liabilities Statement of Long-term Borrowings Statement of Lease Liabilities Statement of Deferred Tax Liabilities Statement of Profit or Loss Items Statement of Operating Revenue Statement of Operating Costs Statement of Operating Expenses Statement of Other Operating Income and Expenses Summary Statement of Employee Benefits and Depreciation Expenses Incurred during the Period by Function

No./Index

Statement 1 Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Note 13 Statement 7 Note 11 Note 11 Note 12 Note 12 Note 22 Note 13 Statement 8 Note 14 Statement 9 Statement 10 Note 16 Note 16 Statement 11 Note 12 Note 22 Statement 12 Statement 13 Statement 14 Note 21 Statement 15

• 68 -

Everest Textile Co., Ltd.

Statement of Cash December 31, 2021

Statement 1

Unit: NT$1,000

(NT$ for foreign currency)

Items Petty cash Cash on hand Bank deposits Cheques and demand deposit Foreign currency demand deposits (Note 1)		Amount
		$ 1,325 1,153 192,785 38,107 $ 233,370

Note	1.	USD$1,376,683.12, EUR$0.04, and CAD$0.2.
Note	2.	USD, Euro, and CAD are translated at the currency rate of US$1＝NT$27.68,
		EUR$1＝NT$31.32, and CAD$1＝NT$21.62, respectively.

• 69 -

Everest Textile Co., Ltd.

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

Statement 2 Shares of listed companies Far Eastern International Bank	Number of shares 7,583,800	Valuation amount $ 70,403	Fairvalue $ 11,123	Unit: NT$1,000 Numberofshares Unit price (NT$) Amount $ 10.75 $ 81,526
				Unit price (NT$) $ 10.75

Note: Basis of fair value - Closing price at the end of the reporting period for the shares of the listed company.

• 70 -

Everest Textile Co., Ltd.

Statement of Notes Receivable

December 31, 2021

Statement 3

Unit: NT$1,000

Name ofcustomer Incurred due to operations Great King Garment Co., Ltd. N-Stars Fashion Co., Ltd. Aptex Textiles Co., Ltd. Tonche Prosperous Co., Ltd. Sing Ho Precision Textile Co., Ltd. Chung Kung Enterprise Co., Ltd. Others (Note)	Summary Sales Sales Sales Sales Sales Sales Sales		Amount
			$ 13,332 10,746 3,859 3,429 3,313 2,701 13,725 $ 51,105

Note: The balances of each customer are less than 5% of the balances for the item.

• 71 -

Everest Textile Co., Ltd.

Everest Textile Co., Ltd.
Statement of Trade Receivables December 31, 2021 Statement 4 Name of customer Summary Amount TAN DE COMPANY LIMITED Sales $ 85,887 Others (Note 1) 746,223 832,110 Less: Allowance for losses 2,649 $ 829,461	Unit: NT$1,000 Remarks (Note 2)
		$ - 2,477 $ 2,477

Note 1. The balances of each customer are less than 5% of the balances for the item. Note 2. The account age of each customer is overdue for over a year, and an allowance for losses amounted to NT$2,477 thousand is provided.

• 72 -

Everest Textile Co., Ltd. Statement of Other Receivables December 31, 2021 Statement 5 Items Sales tax refund receivable Others (Note)		Unit: NT$1,000 Amount
		$ 39,985 621 $ 40,606

Note: The balances of each customer are less than 5% of the balances for the item.

• 73 -

Everest Textile Co., Ltd. Statement of Inventories December 31, 2021

Statement 6

Unit: NT$1,000

==> picture [444 x 191] intentionally omitted <==

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

Amount
Items Costs Net realizable value
Finished goods $ 2,243,198 $ 2,575,080
Work in progress 1,337,020 1,743,406
Raw materials 111,626 111,647
Materials 132,781 137,905
$ 3,824,625 $ 4,568,038
----- End of picture text -----

Note: The net realizable value is the estimated selling price of inventories less estimated costs to be invested until the completion and the estimated costs required for the completion of the sale under general circumstances.

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Everest Textile Co., Ltd.

Statement of Changes in Investments Accounted for Using the Equity Method

2021

Statement 7

Unit: NT$1,000

Name Unlisted companies Everest Investment (Holding) Ltd. Everest International Develop Investment Co., Ltd. Everest Textile (HK) Co., Ltd. Less: the Company's shares held by subsidiaries that are deemed as treasury shares	Opening	balance Amount $ 2,493,422 998,921 1,313 3,493,656 332,836 $ 3,160,820	Net increase	Net increase	(decrease) during the year Amount Remarks $ 567 ) Note 2,630 Note - $ 2,063	Investment income or loss $ 331,585 ( 224,829 ) ( 53) $ 106,703		Cumulative translation adjustments $ 163,905 ) 25,960 ) 45) $ 189,910)		Closing balance		Amount $ 2,660,535 750,762 1,215 3,412,512 332,836 $ 3,079,676	Market value/net equity value $ 2,664,904 780,816 1,216 $ 3,446,936	Provision of guarantee or pledge
	Number of shares 1,300 191,400,000 695,000		Number of shares - - -		Amount $ 567 ) 2,630 - $ 2,063				Number of shares 1,300 191,400,000 695,000	Shareholdings (%) 100 100 99.3
				(		( (	( ( ( (							None None None

Note: The change during the year is the unrealized loss and gains on adjusted downstream transactions amounted to NT$567 thousand and NT$2,630 thousand, respectively.

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Everest Textile Co., Ltd.

Statement of Short-term Borrowings

December 31, 2021

Statement 8

Unit: NT$1,000

Credit borrowings The Export-Import Bank of the Republic of China The Shanghai Commercial & Savings Bank The Shanghai Commercial & Savings Bank Mizuho Bank Mizuho Bank The Shanghai Commercial & Savings Bank The Shanghai Commercial & Savings Bank The Shanghai Commercial & Savings Bank The Shanghai Commercial & Savings Bank The Shanghai Commercial & Savings Bank The Shanghai Commercial & Savings Bank The Shanghai Commercial & Savings Bank The Shanghai Commercial & Savings Bank Secured borrowings Mega International Commercial Bank Far Eastern International Bank Far Eastern International Bank Far Eastern International Bank Far Eastern International Bank Far Eastern International Bank Far Eastern International Bank	Borrowingterm Annual interest rate(%) 2021.9 - 2022.9 0.62040 2021.7 - 2022.1 1.22350 2021.10 - 2022.4 1.22350 2021.12 - 2022.1 1.10000 2021.12 - 2022.1 1.10000 2021.10 - 2022.2 1.22350 2021.11 - 2022.3 1.22350 2021.11 - 2022.3 1.22350 2021.11 - 2022.3 1.22350 2021.11 - 2022.3 1.25913 2021.12 - 2022.4 1.28825 2021.12 - 2022.4 1.32550 2021.12 - 2022.4 1.32638 2021.12 - 2022.1 0.90000 2021.8 - 2022.1 0.80340 2021.10 - 2022.2 0.79281 2021.11 - 2022.3 0.85624 2021.10 - 2022.2 0.82452 2021.11 - 2022.5 0.87738 2021.12 - 2022.6 0.99366		Balance Financingline $ 80,000 55,360 Note 1 13,840 Note 1 83,040 Note 2 152,240 Note 2 6,616 Note 1 9,657 Note 1 10,433 Note 1 3,478 Note 1 4,254 Note 1 13,910 Note 1 6,955 Note 1 3,478 Note 1 443,261 40,000 Note 3 63,664 Note 4 50,931 Note 4 49,824 Note 4 17,714 Note 4 7,295 Note 4 6,718 Note 4 236,146 $ 679,407	Pledge or guarantee
				None None None None None None None None None None None None None Yes Yes Yes Yes Yes Yes Yes

Note 1.The amount of NT$224,047 thousand was shared with long-term loans.

Note 2.The amount of NT$553,600 thousand was shared with long-term loans.

Note 3.The amount of NT$297,500 thousand was shared with long-term loans.

Note 4.The amount of NT$614,257 thousand was shared with long-term loans.

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Everest Textile Co., Ltd.

Statement of Notes Payable

December 31, 2021

Statement 9

Unit: NT$1,000

Name ofthe supplier Chung Shing Textile Marketing Co., Ltd. China Man-Made Fiber Corporation Zig Sheng Industrial Co., Ltd. Tainan Spinning Co., Ltd. Gisong Enterprise Corporation Hsin Sin Textile Co., Ltd. Zeustex Co., Ltd. Others (Note)	Summary Purchase of materials Purchase of materials Purchase of materials Purchase of materials Purchase of materials Purchase of materials Purchase of materials		Amount
			$ 29,742 10,270 8,161 8,090 8,054 5,716 4,086 5,871 $ 79,990

Note: The balances of each customer are less than 5% of the balances for the item.

• 77 -

Everest Textile Co., Ltd. Statement of Trade Payable December 31, 2021

Statement 10 Name ofthe supplier Chain Yarn Co., Ltd. Farsmart Co., Ltd. Taiwan Nicca Chemical Co., Ltd. Others (Note)	Summary		Unit: NT$1,000 Amount $ 24,374 21,738 21,200 335,922 $ 403,234

Note: The balances of each customer are less than 5% of the balances for the item.

• 78 -

Everest Textile Co., Ltd.

Statement of Long-term Borrowings

December 31, 2021

Unit: NT$1,000

Statement 11 Credit borrowings The Shanghai Commercial & Savings Bank O-Bank Hua Nan Bank Bangkok Bank Public Company Limited Entie Commercial Bank, Ltd. Secured borrowings Mega Bank Far Eastern International Bank Less: Due within one year	Borrowing term Annual interest rate (%) 2020.4 - 2023.4 1.0500 2021.12 - 2023.4 1.0042 2020.6 - 2023.6 1.0000 2019.6 - 2022.6 1.4700 2021.12 - 2022.1 1.0890 2019.9 - 2024.9 1.0300 2021.12 - 2023.11 1.2106		U Balance Financing line $ 75,000 Note 1 100,000 $ 583,920 225,000 225,000 350,000 350,000 10,000 50,880 760,000 247,500 Note 2 300,000 Note 3 547,500 1,307,500 710,000 $ 597,500	nit: NT$1,000 Pledge or guarantee
				None None None None None Yes Yes

Note 1. The amount of NT$224,047 thousand was shared with short loans. Note 2. The amount of NT$297,500 thousand was shared with short loans. Note 3. The amount of NT$614,257 thousand was shared with short loans.

• 79 -

Everest Textile Co., Ltd.

Statement of Operating Revenue

2021

Statement 12 Items Total sales income Finished fabric Draw textured yarn Others (Note) Less: Sales return Sales discount Net sales of goods	Quantity 53,498 thousand yards 14,802 tonnes		Unit: NT$1,000 Amount $ 4,770,982 1,428,188 520,141 6,719,311 43,279 78,151 $ 6,597,881

Note: The amounts are less than 10% of the balances for the item.

• 80 -

Everest Textile Co., Ltd.

Statement of Operating Costs

2021

Statement 13

Unit: NT$1,000

Items Raw materials at the beginning of the yar Add: Feed for the year Less: Cost of sales for raw materials Loss on inventory valuation Transferred expenses Net inventory loss Raw materials at the end of the year Direct raw material consumption Direct labor Manufacturing expenses Manufacturing costs Add: Work in progress at the beginning of the year Reversal of losses on inventory valuation Less: Work in progress at the end of the year Net inventory loss Transferred expenses Cost of finished goods Add: Finished good at the beginning of the year Outsourced during the year Outsourced processing fee Reversal of losses on inventory valuation Less: Finished good at the end of the year Net inventory loss Transferred expenses Cost of Goods Sold Add: Cost of sales for raw materials Net inventory loss Less: Income from scraps Reversal of losses on inventory valuation Operating costs		Amount
		$ 67,867 1,594,354 103,361 2,106 3,060 183 111,626 1,441,885 466,505 1,878,541 3,786,931 686,472 141,984 1,337,020 13 785 3,277,569 1,937,906 1,706,709 864,432 57,271 2,243,198 1,558 27,764 5,571,367 103,361 1,754 814 197,149 $ 5,478,519

• 81 -

Everest Textile Co., Ltd.

Statement of Operating Expenses

2021

		2021
Statement 14 Items Salaries and bonuses Shipping expenses Travel expenses Depreciation Commission Requisition of finished goods Advertising fee Others	Summary Salaries, bonuses, overtime pay Land, sea, and air transportation expenses for goods Transportation, meals, and miscellaneous expenses for employees on business trips Provisions for Property, plant and equipment, and right-of-use assets Fees paid to domestic and foreign distributors Sample fee Advertising fees for product sales and talents recruitment	Selling and marketing expenses $ 100,859 362,194 14,872 26,742 36,343 9,026 1,362 103,413 $ 654,811	Unit: NT$1,000 General and administrative expenses Research and development expenses Total $ 121,518 $ 88,180 $ 310,557 2,940 381 365,515 4,100 10,302 29,274 23,305 12,533 62,580 - - 36,343 363 11,727 21,116 644 8,737 10,743 63,109 45,563 212,085 $ 215,979 $ 177,423 $1,048,213
					$ 310,557 365,515 29,274 62,580 36,343 21,116 10,743 212,085 $1,048,213

• 82 -

Everest Textile Co., Ltd.

Summary Statement of Employee Benefits and Depreciation Expenses by Function

Statement 15

Unit: NT$1,000

Employee benefits Salaries Labor and health insurance Pension Remuneration of directors Others Depreciation			2021		Total $ 970,817 102,291 73,018 3,830 36,718 $1,186,674 $ 304,121			2020
	Operating costs $ 664,090 72,412 50,616 - 23,761 $ 810,879 $ 241,541		Operating expenses $ 306,727 29,879 22,402 3,830 12,957 $ 375,795 $ 62,580			Operating costs $ 598,692 70,687 46,608 - 23,993 $ 739,980 $ 244,218		Operating expenses $ 298,203 30,911 29,935 3,710 12,479 $ 375,238 $ 62,956		Total
										$ 896,895 101,598 76,543 3,710 36,472 $1,115,218 $ 307,174

Note:

1. The number of employees for the year and the previous year was 1,682 and 1,777, respectively, which included 9 non-employee directors for both years.

2. For companies whose shares have been listed on the Taiwan Stock Exchange or traded on Taipei Exchange, disclose additional information as follows:

3. (1) The average employee benefits expenses for the year is NT$707 thousand ("total employee benefit expenses for the year - total remuneration of directors"/"number of employees for the year - number of non-employee directors"). The average employee benefits expenses for the previous year is NT$629 thousand ("total employee benefit expenses for the previous year - total remuneration of directors"/"number of employees for the previous year - number of non-employee directors").

4. (2) The average employee salary expenses for the year is NT$580 thousand (total employee salary expenses for the year/"number of employees for the year - number of non-employee directors"). The average employee salary expenses for the previous year is NT$507 thousand (total employee salary expenses for the previous year/"number of employees for the previous year - number of non-employee directors").

5. (3) Changes in average employee salary expenses 14% ("average employee salary expenses for the year - average employee salary expenses for the previous year"/average employee salary expenses for the previous year).

6. (4) There is no supervisor for the year and the previous year.

7. (5) The Company’s policies for compensation of managers and employees and the remuneration for directors are as follow:

8. 1) The remuneration of the directors is based on the degree of their participation in and contributions to the business operations. Independent directors are paid the fixed remuneration.

9. 2) The compensation of the managers and employees is based on their academic experience, evaluation of personal performance and consideration of the Company's operating results.

10. 83 -