FEDS — Annual Report 2023

Nov 14, 2023

Far Eastern Department Stores, Ltd.

Financial Statements for the Years Ended December 31, 2023 and 2022 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Far Eastern Department Stores, Ltd.

Opinion

We have audited the accompanying financial statements of Far Eastern Department Stores, Ltd. (the “Company”), which comprise the balance sheets as of December 31, 2023 and 2022, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including material accounting policy information (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. 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 Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 for the year ended December 31, 2023. 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.

• 1 -

The key audit matter identified in the Company’s financial statements for the year ended December 31, 2023 is stated as follows:

Assessment of impairment of property, plant and equipment and right-of-use assets

The department store and hypermarket industries in which the Company is engaged in are highly competitive. Due to the rising threat from external competition, some of our cash-generating units have been in the red in recent years. Management estimates and makes judgments about the expected future economic benefits and recoverable amounts of the assets of the cash-generating units in accordance with IAS 36, “Impairment of Assets,” in order to assess whether they are impaired. The assessment of impairment of the Company’s property, plant and equipment and right-of-use assets is considered to be a key audit matter for the current year because of the high percentage of property, plant and equipment and right-of-use assets in the total assets of the cash-generating units, which is material to the financial statements as a whole. Thus, we considered the evaluation of impairment loss of property, plant and equipment and right-of-use assets as a key audit matter. For the accounting policy related to the impairment loss of the property, plant and equipment and right-of-use assets, refer to Notes 4 (k), 5, 12, and 13 to the accompanying financial statements.

The key audit procedures that we performed in respect of the impairment loss of property, plant and equipment and right-of-use assets are as follows:

1. We obtained an assessment of impairment of assets for each cash-generating unit as assessed by management.

2. We assessed the reasonableness of the assumptions and methods used in the valuation.

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 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, as applicable, matters related to going concern and using the going concern basis of accounting unless 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.

• 2 -

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 Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

2. 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.

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

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

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

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

• 3 -

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Chih-Ming Shao and Kuo-Ning Huang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 1, 2024

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

• 4 -

FAR EASTERN DEPARTMENT STORES, LTD.

BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at amortized cost - current (Notes 8 and 29) Trade receivables (Note 9) Trade receivables from related parties (Notes 9 and 28) Other receivables (Notes 9 and 28) Inventories (Note 10) Prepayments (Note 28) Other current assets (Note 16) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 7, 28 and 29) Financial assets at amortized cost - non-current (Notes 8 and 29) Investments accounted for using the equity method (Notes 11 and 29) Property, plant and equipment (Notes 12, 28, 29 and 30) Right-of-use assets (Notes 13 and 28) Investment properties (Notes 14 and 29) Intangible assets (Notes 15 and 28) Deferred tax assets (Note 23) Net defined benefit assets (Note 19) Other non-current assets (Notes 16 and 28) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 17 and 29) Short-term bills payable (Note 17) Contract liabilities (Note 21) Trade payables Trade payables to related parties (Note 28) Other payables (Notes 18 and 28) Current tax liabilities (Note 23) Lease liabilities (Notes 13 and 28) Advance receipts (Note 28) Current portion of long-term borrowings (Notes 17 and 29) Other current liabilities (Notes 18 and 28) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 17 and 29) Deferred tax liabilities (Note 23) Lease liabilities (Notes 13 and 28) Other non-current liabilities (Notes 11, 18 and 28) Total non-current liabilities Total liabilities EQUITY Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity TOTAL		2023 Amount % $ 2,091,483 3 25,808 - 522,543 1 63,272 - 99,806 - 381,678 - 259,772 - 8,618 - 3,452,980 4 2,804,362 4 - - 25,223,508 31 16,700,292 21 21,802,795 27 9,098,310 11 49,891 - 91,173 - 501,684 1 648,533 1 76,920,548 96 $ 80,373,528 100 $ 6,650,000 8 859,853 1 3,837,202 5 5,999,059 8 70,403 - 1,622,292 2 297,755 - 870,027 1 252,195 - 480,000 1 184,497 - 21,123,283 26 13,700,000 17 2,180,925 3 11,945,716 15 101,118 - 27,927,759 35 49,051,042 61 14,169,406 18 3,343,595 4 3,930,366 5 2,648,051 3 2,086,045 3 8,664,462 11 5,242,133 6 (97,110) - 31,322,486 39 $ 80,373,528 100		2022
				Amount % $ 838,566 1 25,600 - 525,632 1 86,973 - 102,064 - 353,112 1 262,890 - 8,134 - 2,202,971 3 2,793,214 4 200 - 22,573,000 29 17,083,127 22 22,963,693 29 9,018,266 12 60,986 - 87,144 - 283,748 - 562,391 1 75,425,769 97 $ 77,628,740 100 $ 8,500,000 11 599,932 1 4,076,038 5 4,707,626 6 53,419 - 1,703,701 2 180,160 - 950,111 1 265,297 1 950,000 1 166,546 - 22,152,830 28 9,100,000 12 2,155,083 3 12,595,824 16 85,460 - 23,936,367 31 46,089,197 59 14,169,406 18 3,341,024 4 3,729,018 5 2,657,978 3 2,798,561 4 9,185,557 12 4,940,666 7 (97,110) - 31,539,543 41 $ 77,628,740 100

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

• 5 -

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 21 and 28) OPERATING COSTS (Notes 10, 22 and 28) GROSS PROFIT OPERATING EXPENSES (Notes 22 and 28) Selling and marketing expenses General and administrative expenses Expected credit loss Total operating expenses OPERATING PROFIT NON-OPERATING INCOME AND EXPENSES Interest income (Note 22) Other income (Note 22) Other gains and losses (Notes 22 and 28) Finance costs (Notes 22 and 28) Share of profit of subsidiaries and associates accounted for using the equity method Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 23) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 19, 20 and 23) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income		2023 Amount % $ 11,628,628 100 3,579,943 31 8,048,685 69 360,276 3 4,907,252 42 199 - 5,267,727 45 2,780,958 24 406 - 143,541 1 124,260 1 (546,934) (5) 630,225 6 351,498 3 3,132,456 27 380,153 3 2,752,303 24 120,634 1 9,380 -		2022
				Amount % $ 11,287,323 100 3,665,034 32 7,622,289 68 398,555 4 4,794,877 42 - - 5,193,432 46 2,428,857 22 165 - 201,628 2 (181,610) (2) (473,255) (4) 264,276 2 (188,796) (2) 2,240,061 20 309,887 3 1,930,174 17 45,616 - (110,721) (1) (Continued)

• 6 -

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of other comprehensive income (loss) of subsidiaries and associates accounted for using the equity method Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Share of other comprehensive income (loss) of subsidiaries and associates accounted for using the equity method Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE, NT$(Note 24) Basic Diluted		2023 Amount % $ 196,522 1 (24,126) - 302,410 2 834 - 834 - 303,244 2 $ 3,055,547 26 $ 1.95 $ 1.95		2022
				Amount % $ (31,751) - (9,123) - (105,979) (1) (58,077) - (58,077) - (164,056) (1) $ 1,766,118 16 $ 1.37 $ 1.37
		$		$

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

(Concluded)

• 7 -

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2022 Appropriation of 2021 earnings Legal reserve Special reserve Cash dividends Net profit for the year ended December 31, 2022 Other comprehensive income (loss) for the year ended December 31, 2022, net of income tax Total comprehensive income (loss) for the year ended December 31, 2022 Changes in capital surplus from investments in subsidiaries and associates accounted for using the equity method Disposal of investments in equity instruments designated as at fair value through other comprehensive income by associates BALANCE AT DECEMBER 31, 2022 Appropriation of 2022 earnings Legal reserve Special reserve Cash dividends Net profit for the year ended December 31, 2023 Other comprehensive income (loss) for the year ended December 31, 2023, net of income tax Total comprehensive income (loss) for the year ended December 31, 2023 Difference between consideration and carrying amount of subsidiaries acquired Changes in capital surplus from investments in subsidiaries and associates accounted for using the equity method Disposal of investments in equity instruments designated as at fair value through other comprehensive income by associates BALANCE AT DECEMBER 31, 2023	Share Capital Capital Surplus (Note 20) (Note 20) $ 14,169,406 $ 3,340,982 - - - - - - - - - - - - - - - 42 - - 14,169,406 3,341,024 - - - - - - - - - - - - - - - - - 2,571 - - $ 14,169,406 $ 3,343,595		Retained Earnings (Notes 19, 20 and 23) Unappropriated Legal Reserve Special Reserve Earnings $ 3,611,319 $ 2,619,569 $ 2,216,433 117,699 - (117,699) - 38,409 (38,409) - - (1,275,247) 117,699 38,409 (1,431,355) - - 1,930,174 - - 87,848 - - 2,018,022 - - - - - (4,539) 3,729,018 2,657,978 2,798,561 201,348 - (201,348) - (9,927) 9,927 - - (1,558,635) 201,348 (9,927) (1,750,056) - - 2,752,303 - - 75,130 - - 2,827,433 - - (1,815,989) - - 2,478 - - 23,618 $ 3,930,366 $ 2,648,051 $ 2,086,045	Other Equity (Note 20) Unrealized Gain Exchange Differences on (Loss) on Financial Translating the Assets at Fair Financial Value Through Statements of Other Foreign Comprehensive Gain on Property Treasury Shares Operations Income Revaluation (Note 20) $ 65,935 $ 2,944,932 $ 2,177,164 $ (97,110) - - - - - - - - - - - - - - - - - - - - (10,169) (241,735) - - (10,169) (241,735) - - - - - - - 4,539 - - 55,766 2,707,736 2,177,164 (97,110) - - - - - - - - - - - - - - - - - - - - (2,260) 230,374 - - (2,260) 230,374 - - 44,910 54,589 - - (50) (2,478) - - - (23,618) - - $ 98,366 $ 2,966,603 $ 2,177,164 $ (97,110)	Total Equity $ 31,048,630 - - (1,275,247) (1,275,247) 1,930,174 (164,056) 1,766,118 42 - 31,539,543 - - (1,558,635) (1,558,635) 2,752,303 303,244 3,055,547 (1,716,490) 2,521 - $ 31,322,486

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

• 8 -

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss recognized on receivables Amortization of prepayments Finance costs Share of profit of subsidiaries and associates accounted for using the equity method Interest income Dividend income Loss on disposal of property, plant and equipment Loss on disposal of investment properties Profit from lease modification (Gain) loss on changes in fair value of investment properties Concession on lease liabilities Net changes in operating assets and liabilities Trade receivables Trade receivables from related parties Other receivables Inventories Prepayments Other current assets Contract liabilities Notes payable and trade payables Trade payables from related parties Other payables Advance receipts Other current liabilities Net defined benefit assets Cash generated from operations Interest paid Interest received Dividends received Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Acquisition of investments accounted for using the equity method	2023 $ 3,132,456 1,830,345 26,351 199 1,963 546,934 (630,225) (406) (143,541) 38,111 94 (2,277) (77,022) - 2,890 23,701 19,112 (28,566) 3,118 (484) (238,836) 1,291,433 16,984 24,982 73,477 17,951 (97,302) 5,831,442 (530,162) 406 517,800 (264,871) 5,554,615 (1,768) (25,808) 25,800 (4,500,000)	2022 $ 2,240,061 1,907,923 30,298 190,000 525 473,255 (264,276) (165) (201,628) 10,486 538 - 50,970 (54,625) 30,471 5,013 (11,919) 53,481 (26,086) 552 137,178 470,202 2,790 176,744 159,053 6,533 (41,431) 5,345,943 (438,350) 163 689,340 (224,474) 5,372,622 - (25,800) 25,508 (1,800,000) (Continued)

• 9 -

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

Proceeds from disposal of investments accounted for using the equity method Proceeds from capital reduction of investments accounted for using equity method Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Payments for intangible assets Acquisition of right-of-use assets Payments for investment properties Increase in other non-current assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from short-term bills payable Repayments of short-term bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Repayment of the principal portion of lease liabilities (Decrease) increase in other non-current liabilities Dividends paid Net cash generated from (used in) financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS, END OF THE YEAR	2023 $ 17,206 589,717 (653,948) 251 (11,497) (419) (3,116) (9,465) (4,573,047) 39,200,000 (41,050,000) 2,349,114 (2,089,193) 128,680,000 (124,550,000) (704,436) (7,092) (1,557,044) 271,349 1,252,917 838,566 $ 2,091,483	2022 $ - - (502,424) 60 (23,813) (41,681) (2,194) (37,932) (2,408,276) 63,370,000 (59,670,000) 7,546,731 (8,496,314) 111,000,280 (114,900,000) (670,801) 2,040 (1,273,077) (3,091,141) (126,795) 965,361 $ 838,566

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

(Concluded)

• 10 -

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

FAR EASTERN DEPARTMENT STORES, LTD.

1. GENERAL INFORMATION

Far Eastern Department Stores, Ltd. (the “Company” or “FEDS”) was incorporated in the Republic of China (ROC) on August 31, 1967 and operates a nationwide chain of department stores. The Company’s shares have been listed on the Taiwan Stock Exchange since October 11, 1978.

The financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Company’s board of directors on March 1, 2024.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRS Accounting Standards”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The initial application of the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies.

• b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2024

New, Amended and Revised Standards and Interpretations Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants” Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”	Effective Date Announced by IASB (Note1)
	January 1, 2024 (Note 2) January 1, 2024 January 1, 2024 January 1, 2024 (Note 3)

• Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

Note 3: The amendments provide some transition relief regarding disclosure requirements.

As of the date the consolidated financial statements were authorized to issue, the Company has assessed that the application of other standards and interpretations will not have a material impact on the Company’s financial position and financial performance.

• 11 -

• c. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC

Effective Date New, Amended and Revised Standards and Interpretations Announced by IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - January 1, 2023 Comparative Information” Amendments to IAS 21 “Lack of Exchangeability” January 1, 2025 (Note 2)

• Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments, the entity recognizes any effect as an adjustment to the opening balance of retained earnings. When the entity uses a presentation currency other than its functional currency, it shall, at the date of initial application, recognize any effect as an adjustment to the cumulative amount of translation differences in equity.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the “Regulations”).

• b. Basis of preparation

The financial statements have been prepared on the historical cost basis except for financial instruments and investment properties 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 the plan assets.

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

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 inputs are unobservable inputs for the asset or liability.

• 12 -

When preparing the Company’s financial statements, the Company used the equity method to account for its investments in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owner of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatment between the parent company only basis and consolidated basis were made to investments accounted for using the equity method, share of profit or loss of subsidiaries and associates accounted for using the equity method, share of other comprehensive income of subsidiaries and associates accounted for using the equity method and related equity items, as appropriate, in the Company’s financial statements.

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

Current liabilities include:

• Liabilities held primarily for the purpose of trading;

• Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorized for issue; and

• Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Assets and liabilities that are not classified as current are classified as non-current.

• d. Foreign currencies

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

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

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purposes of presenting the Company’s financial statements, the assets and liabilities of the Company’s foreign operations (including the subsidiaries and associates in other countries or subsidiaries which use currencies that are different from the Company) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income.

• 13 -

e. Inventories

Inventories are stated at the lower cost or net realizable value, using the retail method. Inventories are recorded at the weighted-average cost on the balance sheet date. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale.

f. Investments in subsidiaries

The Company uses the equity method of accounting to recognize its investments in subsidiaries. A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and is adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary. In addition, the Company recognizes the changes in the Company’s share of equity of subsidiaries attributable to the Company.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amounts of the Company’s interests and the fair value of the consideration paid or received is recognized directly in equity.

When the Company’s share of losses of a subsidiary equals or exceeds its interest in that subsidiary (which includes any carrying amount of the investment in the subsidiary accounted for using the equity method and long-term interests that, in substance for part of the Company’s net investment in the subsidiary), the proportionate share of losses is recognized.

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

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

When the Company loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Company had directly disposed of the related assets or liabilities.

Profits and losses from downstream transactions with a subsidiary are eliminated in full in the Company’s financial statements. Profits and losses resulting from upstream transactions and transactions between subsidiaries are recognized in the parent company only financial statements only to the extent of interests in the subsidiaries that are not related to the Company.

• 14 -

• g. Investments in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. The Company uses the equity method of accounting to recognize its investments in associates.

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

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

When the Company’s share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date on which its investment in the associate ceases. Any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on the disposal of the associate. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities.

When the Company transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s financial statements only to the extent of interests in the associate that are not related to the Company.

• h. Property, plant and equipment

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

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

• 15 -

The depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognize the asset of property, plant and equipment, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss for the year.

• i. Investment properties

Investment properties are properties held to earn long-term rental profit and/or capital gain (including properties that are qualified as investment properties and under construction). Investment properties also include land in which the intended use has yet to be determined.

Freehold investment properties are measured initially at cost, including transaction costs. All investment properties are subsequently measured using the fair value model. Changes in the fair value of investment properties are included in profit or loss for the period in which they arise.

Investment properties under construction, of which the fair value is not reliably measurable, are measured at cost less accumulated impairment loss until such time as either the fair value becomes reliably measurable or construction is completed (whichever comes earlier).

For a transfer of classification from investment properties to property, plant and equipment, the deemed cost of an item of property for subsequent accounting is its fair value at the commencement at the commencement of owner-occupation.

For a transfer of classification from property, plant and equipment to investment property at the end of owner-occupation, any difference between the fair value of the property at the transfer date and its previous carrying amount is recognized in other comprehensive income.

To derecognize an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss for the year.

• j. Intangible assets

• 1) Intangible assets acquired separately

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

• 2) Derecognition of intangible assets

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

• k. Impairment of property, plant and equipment, right-of-use assets and intangible assets

At the end of each reporting period, the Company reviews for any indications of impairment loss pertaining to the property, plant and equipment, right-of-use assets and intangible assets. If any such indication exists, the recoverable amount of the asset is estimated. When it is not possible 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. Corporate assets are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

• 16 -

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

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount (deducting amortization or depreciation) 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.

l. Financial instruments

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

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

1) Financial assets

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

a) Measurement categories

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

• i. Financial assets at amortized cost

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

• i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost (including cash, cash equivalents, accounts receivable at amortized cost and refundable deposits) are measured at the carrying amount determined by the effective interest method less any impairment loss. Any exchange differences are recognized in profit or loss. Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset.

• 17 -

• ii. Investments in equity instruments at FVTOCI

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

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

• b) Impairment of financial assets and contract assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

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

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

Without taking the collateral held into consideration, pertinent to the objectives of the credit risk management, the Company determines that a default has occurred for a financial asset when internal or external information indicates that the borrower can no longer repay the liability, unless there is reasonable and substantiated information to recognize the default later.

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

• c) 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 it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

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

• 18 -

2) Financial liabilities

• a) Subsequent measurement

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

• b) Derecognition of financial liabilities

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

m. Revenue recognition

The Company identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

Revenue from the sale of goods are recognized as revenue when the goods are shipped or delivered because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently.

When the other party participates in providing goods or services to customers, the Company obtains control of the specified goods or services before they are transferred to the customers and, therefore, is acting as a principal in the transaction. On the contrary, the other party is acting as an agent. As the principal, the total amount of the consideration that is expected to be obtained in exchange for the transfer of goods or services is recognized as income. As an agent, the amount of any fees or commissions that the other party expected to obtain in exchange for the provision of goods or services, recognized as income. The charge or commission of the Company may be the net amount of the consideration. The income retained by the Company in exchange for goods or services is the amount retained after payment to the other party.

The Company offers award credits which can be used for future purchases when the customer shops (customer loyalty program). The award credits provide a material right to the customer. The transaction price allocated to the award credits is recognized as a contract liability when collected and will be recognized as revenue when the award credits are redeemed or have expired.

n. Leases

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

• 1) The Company as lessor

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

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

Variable lease payments that do not depend on an index or a rate are recognized as income in the periods in which they are incurred.

• 19 -

When a lease includes both land and building elements, the Company assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the lessee. The lease payments are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of a contract. If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

• 2) The Company as lessee

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

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

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

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate, less any lease incentives receivable. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

The Company and the lessor conducted rent negotiations directly related to COVID-19 and adjusted the rent due before June 30, 2022, resulting in a decrease in rent. These negotiations did not significantly change other lease terms. The Company chooses to adopt a practical and expedient approach to all rent negotiations that meet the aforementioned conditions. It does not assess whether the negotiation is a lease modification, but recognizes a reduction of lease payment in the profit or loss when the concession event or situation occurs (accounted for as a deduction in variable lease payments) and reduces the lease liability accordingly.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

• 20 -

o. Borrowing costs

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

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

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

p. Retirement benefit costs

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 the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost and net interest on the net defined benefit assets are recognized as employee benefits expenses when the plan amendment or curtailment occurs. Remeasurement, comprising actuarial gains and losses (the effect of the changes to the asset ceiling) and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income (loss) is reflected immediately in retained earnings and will not be reclassified subsequently to profit or loss.

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

q. Taxation

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

1) Current tax

The current payable (recoverable) income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in the country where the Company operates and generates taxable income (loss).

According to the Income Tax Act of the ROC, the recognition of annual undistributed surplus earnings that are taxable, is subject to the resolution passed in the shareholders’ meeting.

Adjustments of prior years’ tax liabilities are added to or deducted from the current period’s income tax expenses.

• 21 -

2) Deferred tax

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

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

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the 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 deductible temporary differences associated with these investments are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to use the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. For investment properties that are measured using the fair value model, the carrying amounts of such assets are presumed to be recovered entirely through their sale.

3) Current and deferred tax for the year

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

When developing material accounting estimates, the Company considers the possible impact of volatility in markets on the cash flow projection, growth rates, discount rates, profitabilities and other relevant material estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

• 22 -

Key Sources of Estimation Uncertainty

Impairment of property, plant and equipment and right-of-use assets

Impairment of property, plant and equipment and right-of-use assets is evaluated based on the recoverable amount of the assets, which is the higher of its fair value less costs of disposal and its value in use. Any changes in the market prices, future cash flows or discount rates will affect the recoverable amount of the assets and may lead to the recognition of additional impairment losses or the reversal of impairment losses.

6. CASH AND CASH EQUIVALENTS

Cash on hand and revolving funds Checking accounts and demand deposits		December 31	December 31
		2023 $ 36,862 2,054,621 $ 2,091,483	2022 $ 41,051 797,515 $ 838,566

The market rate intervals of cash in bank at the end of the reporting period are as follows:

Deposits in bank	December 31
	2023 2022 0.40%-1.45% 0.05%-0.85%

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

Investments in equity instruments at FVTOCI Domestic investments Listed shares and emerging market shares Unlisted shares		December 31	December 31
		2023 $ 2,695,409 108,953 $ 2,804,362	2022 $ 2,686,884 106,330 $ 2,793,214

• a. These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Company’s strategy of holding these investments for long-term purposes.

• b. Refer to Note 29 for information relating to investments in equity instruments at FVTOCI pledged as security.

• c. Yuanshi Digital Technology Co., Ltd. implemented a capital reduction in November 2022 to make up for the losses, resulting in a decrease in the Company ’ s shareholding percentage by 281 thousand shares, proportional to its shareholding percentage. In January 2023, the Company subscribed 177 thousand shares at $10 per share, and the investment amount was $1,768 thousand.

• 23 -

8. FINANCIAL ASSETS AT AMORTIZED COST

Time deposits with original maturities of more than 3 months Money lodged at courts Current Non-current Gross carrying amount Less: Allowance for impairment loss Amortized cost		December	31
		2023 $ 25,808 - $ 25,808 $ 25,808 - $ 25,808 $ 25,808 - $ 25,808	2022 $ 25,600 200 $ 25,800 $ 25,600 200 $ 25,800 $ 25,800 - $ 25,800

• a. The credit risk of financial instruments such as bank deposits is measured and monitored by the accounting department. The counterparties are creditworthy banks and financial institutions with good credit rating.

• b. As of December 31, 2023 and 2022, the interest rates for financial assets at amortized cost were both 0.90% as at the end of the reporting period.

• c. Refer to Note 29 for information relating to financial assets at amortized cost pledged as security.

9. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES (INCLUDING RELATED PARTIES)

• a. Notes receivable

Operating Non-operating Less: Allowance for impairment loss		December	31
		2023 $ - 1,794 (1,794) $ -	2022 $ - 1,794 (1,794) $ -

• 24 -

December 31, 2023

Not Past Due Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days Expected credit loss rate 0.00% 0.00% 0.00% 0.00% 100% Gross carrying amount $ - $ - $ - $ - $ 1,794 Loss allowance (Lifetime ECLs) - - - - (1,794) Amortized cost $ - $ - $ - $ - $ - December 31, 2022	Total $ 1,794 (1,794) $ -

Not Past Due Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days Expected credit loss rate 0.00% 0.00% 0.00% 0.00% 100% Gross carrying amount $ - $ - $ - $ - $ 1,794 Loss allowance (Lifetime ECLs) - - - - (1,794) Amortized cost $ - $ - $ - $ - $ -	Total $ 1,794 (1,794) $ -

b. Trade receivables (including related parties)

At amortized cost Trade receivables Less: Allowance for impairment loss		**December 31 **	**December 31 **
		2023 $ 588,430 (2,615) $ 585,815	2022 $ 615,220 (2,615) $ 612,605

The Company’s trade receivables pertained to revenue on credit cards and gift certificates. The average credit period for revenue from credit cards and gift certificates was 2 to 3 days and 15 days, respectively.

In determining the recoverability of a trade receivable, the Company considered any change in the credit quality of the trade receivable since the date credit was initially granted to the end of the reporting period. Allowances for impairment loss were recognized against trade receivables based on estimated irrecoverable amounts determined with reference to past default experience of the counterparties and an analysis of their current financial position.

The Company measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix approach considering the past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Company’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Company’s different customer base.

• 25 -

The Company writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables (including related parties) based on the Company’s provision matrix.

December 31, 2023

Not Past Due Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days Expected credit loss rate 0.00% 0.00% 0.00% 0.00% 100% Gross carrying amount $ 580,337 $ 5,478 $ - $ - $ 2,615 Loss allowance (Lifetime ECLs) - - - - (2,615) Amortized cost $ 580,337 $ 5,478 $ - $ - $ - December 31, 2022 Not Past Due Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days Expected credit loss rate 0.00% 0.00% 0.00% 0.00% 100% Gross carrying amount $ 610,971 $ 1,634 $ - $ - $ 2,615 Loss allowance (Lifetime ECLs) - - - - (2,615) Amortized cost $ 610,971 $ 1,634 $ - $ - $ -

Total $ 588,430 (2,615) $ 585,815 Total $ 615,220 (2,615) $ 612,605

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Add: Impairment losses recognized Less: Amounts written off Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 2,615 199 (199) $ 2,615	2022 $ 2,678 - (63) $ 2,615

c. Other receivables

At amortized cost Other receivables Less: Allowance for impairment loss		**December 31 **	**December 31 **
		2023 $ 121,133 (21,327) $ 99,806	2022 $ 313,391 (211,327) $ 102,064

• 26 -

The following table details the loss allowance of trade receivables based on the Company’s provision matrix.

December 31, 2023

Not Past Due Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days Expected credit loss rate 0.00% 0.00% 0.00% 0.00% 100% Gross carrying amount $ 99,806 $ - $ - $ - $ 21,327 Loss allowance (Lifetime ECLs) - - - - (21,327) Amortized cost $ 99,806 $ - $ - $ - $ -	Total $ 121,133 (21,327) $ 99,806

December 31, 2022

Not Past Due Less than 30 Days 31 to 60 Days 61 to 90 Days Over 90 Days Expected credit loss rate 0.00% 0.00% 0.00% 0.00% 100% Gross carrying amount $ 102,064 $ - $ - $ - $ 211,327 Loss allowance (Lifetime ECLs) - - - - (211,327) Amortized cost $ 102,064 $ - $ - $ - $ -	Total $ 313,391 (211,327) $ 102,064

The movements of the loss allowance of other receivables were as follows:

Balance at January 1 Add: Impairment losses recognized Less: Actual write-off for the year Balance at December 31	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2023 $ 211,327 - (190,000) $ 21,327	2022 $ 21,327 190,000 - $ 211,327

10. INVENTORIES

Merchandise The cost of goods sold includes: Cost of goods sold			December 31	December 31
		2023 $ 381,678 2023 $ 3,377,016		2022 $ 353,112 2022 $ 3,457,083

• 27 -

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries Investments in associates a. Investments in subsidiaries Bai Yang Investment Co., Ltd. (BYIC) Pacific Liu Tong Investment Co., Ltd. (PLTI) Bai Ding Investment Co., Ltd. (BDIC) FEDS Development Ltd. (FEDS Development) Far Eastern Ai Mai Co., Ltd. (AIMAI) Ya Tung Department Stores, Ltd. (YTDS) Yu Ming Advertising Agency Co., Ltd. (YMAC) Far Eastern CitySuper Co., Ltd. (FECS) Far Eastern Hon Li Do Co., Ltd. (FEHLD) Asians Merchandise Company (AMC) Add: Credit balance on the carrying amounts of investments accounted for using the equity method Less: Ordinary shares held by subsidiary and reclassified from long-term investments to treasury shares of BDIC Less: The differences of accounting treatments from the consolidated financial statements (Note)		December 31	December 31
		2023 2022 $ 23,834,678 $ 20,638,204 1,388,830 1,934,796 $ 25,223,508 $ 22,573,000 December 31
		2023 $ 15,340,382 4,436,702 2,690,274 1,106,787 (22,750) 361,639 118,099 172,159 14,607 4,942 24,222,841 22,750 (97,110) 24,148,481 (313,803) $ 23,834,678	2022 $ 12,213,294 4,189,408 2,427,337 1,285,817 193,362 467,263 117,506 158,022 13,553 4,840 21,070,402 - (97,110) 20,973,292 (335,088) $ 20,638,204

Note: Some of the Company’s leased assets from subsidiaries or investment properties which were leased to subsidiaries were evaluated under fair value method, but these investment properties were recognized as property, plant and equipment in the consolidated financial statements. In order to agree with the amount of net profit for the year, other comprehensive (loss) income and equity attributable to the owner of the Company in the consolidated financial statements, the difference of the accounting treatment between the Company only basis and the consolidated basis was adjusted under the heading of investments accounted for using the equity method, the share of (loss) profit of subsidiaries and associates was accounted for using the equity method, and the share of other comprehensive (loss) income of subsidiaries and associates was accounted for using the equity method and related equity items.

• 28 -

BYIC PLTI BDIC FEDS Development AIMAI YTDS YMAC FECS FEHLD AMC	Proportion of Ownership and Voting Rights
	**December 31 **
	2023 2022 100% 100% 35% 35% 67% 67% 54% 54% 100% 100% 100% 100% 100% 100% 96% 96% 56% 56% 100% 100%

Refer to Note 31 for the details of the subsidiaries indirectly held by the Company.

The Company has 35% equity interest in PLTI. However, the proportion of the combined equity of PLTI held by the Company and its subsidiaries is 78%. The Company thus recognizes this investee as a subsidiary.

BYIC implemented a cash capital increase in December 2023 and November 2022. The Company had subscribed for 450,000 thousand shares and 130,000 thousand shares, respectively, at $10 par value for a total amount of $4,500,000 thousand and $1,300,000 thousand, respectively.

In November 2022, YTDS implemented a capital reduction to offset the deficit, which resulted in a decrease of 40,000 thousand shares in the Company’s equity in YTDS. YTDS issued shares for an increase in cash capital, and the Company acquired 50,000 thousand shares at $10 per share, which totaled $500,000 thousand.

The investments in subsidiaries accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2023 and 2022 were based on the subsidiaries’ financial statements audited for the same years by other auditors.

• b. Investments in associates

Associates that are not individually material		December 31	December 31
		2023 $ 1,388,830	2022 $ 1,934,796

Aggregate information of associates that are not individually material are summarized as follows:

The Company’s share of Net profit (loss) for the year Other comprehensive income Total comprehensive income	For the Year Ended	For the Year Ended	December 31
		2023 $ 45,358 13,231 $ 58,589	2022 $ (124,191) (68,253) $ (192,444)

• 29 -

The combined shareholding of the Company and its sub-subsidiary, BDIC and Pacific Sogo Department Stores Co., Ltd., in Ding Integrated Marketing Service Co., Ltd. and Yuan Hsin Digital Payment Co., Ltd., amounted to 20%. As such, these investments were accounted for using the equity method.

Yuan Hsin Digital Payment Co., Ltd. was dissolved and liquidated on July 12, 2023. On September 25, 2023, $17,206 thousand has been recovered, and the remaining $4,672 thousand has not been recovered and is accounted for in other receivables.

The extraordinary shareholders' meeting of Oriental Securities Corporation passed a resolution on August 16, 2023 to return the capital to shareholders in cash. As of October 18, 2023, the share payment of $589,717 thousand has been collected.

Refer to Note 29 for the information on the carrying amounts of investments in associates accounted for using the equity method that were pledged as security.

12. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2023 Additions Disposals Reclassifications Balance at December 31, 2023 Accumulated depreciation and impairment Balance at January 1, 2023 Disposals Depreciation expense Balance at December 31, 2023 Carrying amount at December 31, 2023 Cost Balance at January 1, 2022 Additions (deductions) Disposals Reclassifications Balance at December 31, 2022 Accumulated depreciation and impairment Balance at January 1, 2022 Disposals Depreciation expense Balance at December 31, 2022 Carrying amount at December 31, 2022	Land $ 8,038,597 - - - $ 8,038,597 $ - - - $ - $ 8,038,597 $ 8,038,597 - - - $ 8,038,597 $ - - - $ - $ 8,038,597	Buildings $ 9,292,891 - (43,002 ) - $ 9,249,889 $ (2,901,254 ) 37,294 (159,775) $ (3,023,735) $ 6,226,154 $ 9,370,709 (77,818 ) - - $ 9,292,891 $ (2,740,379 ) - (160,875) $ (2,901,254) $ 6,391,637	Buildings and Facilities $ 7,274,684 85,486 (185,019 ) 33,770 $ 7,208,921 $ (5,659,631 ) 166,370 (276,053) $ (5,769,314) $ 1,439,607 $ 7,189,737 91,099 (11,086 ) 4,934 $ 7,274,684 $ (5,345,253 ) 10,117 (324,495) $ (5,659,631) $ 1,615,053	Decorative Facilities Plant, Transportation and Miscellaneous Equipment Property under Construction $ 7,053,692 $ 792,712 $ 3,001 253,246 58,052 3,066 (427,629 ) (121,901 ) - 9,840 - - $ 6,889,149 $ 728,863 $ 6,067 $ (6,181,750 ) $ (629,815 ) $ - 414,672 117,509 - (296,951) (51,810) - $ (6,064,029) $ (564,116) $ - $ 825,120 $ 164,747 $ 6,067 $ 6,861,940 $ 776,086 $ - 246,247 36,807 3,001 (57,984 ) (22,447 ) - 3,489 2,266 - $ 7,053,692 $ 792,712 $ 3,001 $ (5,924,097 ) $ (599,670 ) $ - 48,970 21,779 - (306,623) (51,924) - $ (6,181,750) $ (629,815) $ - $ 871,942 $ 162,897 $ 3,001	Total $ 32,455,577 399,850 (777,551 ) 43,610 $ 32,121,486 $ (15,372,450 ) 735,845 (784,589) $ (15,421,194) $ 16,700,292 $ 32,237,069 299,336 (91,517 ) 10,689 $ 32,455,577 $ (14,609,399 ) 80,866 (843,917) $ (15,372,450) $ 17,083,127

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings 55 years Buildings and facilities 8-15 years Decorative facilities 6-10 years Plant, transportation, and miscellaneous equipment 5-8 years

Refer to Note 29 for the information on the carrying amounts of property, plant and equipment that were pledged as security.

• 30 -

13. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Land Buildings Plant, transportation, and miscellaneous equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Plant, transportation, and miscellaneous equipment		December 31	December 31
	2023 2022 $ 7,211,056 $ 7,463,262 14,583,701 15,495,057 8,038 5,374 $ 21,802,795 $ 22,963,693 For the Year Ended December 31
		2023 $ 85,387 $ 282,114 847,781 2,303 $ 1,132,198	2022 $ 308,623 $ 282,165 875,951 1,823 $ 1,159,939

Except for the above-mentioned additions and recognized depreciation expenses, the Company's Taipei branch terminated the lease with its affiliated companies in advance on August 15, 2023, resulting in a decrease of 108,447 thousand in right-of-use assets. The company did not have any major events of subletting and impairment situations in 2023 and 2022.

b. Lease liabilities

Carrying amount Current Non-current Range of discount rates for lease liabilities was as follows:		**December 31 **	**December 31 **
		2023 $ 870,027 $ 11,945,716	2022 $ 950,111 $ 12,595,824

Land Buildings Plant, transportation, and miscellaneous equipment	December 31
	2023 2022 1.71%-1.72% 0.88%-1.72% 0.86%-1.72% 0.86%-1.72% 0.86%-1.71% 0.86%-0.92%

• 31 -

c. Material lease-in activities and terms

The Company operates a retail business of leasing property and equipment for its operating activities with lease term of 3 to 50 years. In addition to fixed payments, some lease contracts also indicate variable lease payments with different conditions. Some stores are leased by acquiring land use rights to build buildings and transfer buildings to lessor unconditionally at the end of the lease term.

In 2022, due to the COVID-19 pandemic that severely affected the global market economy, the Company entered into lease negotiations with some of the lessors. The lessors agreed to reduce the rents from January 1 to December 31, 2022. The Company recognized the aforementioned rent reductions of $54,625 thousand (as a deduction in operating expenses).

d. Other lease information

Expenses relating to short-term leases Expenses relating to low-value asset leases Expenses relating to variable lease payments not included in the measurement of lease liabilities Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 4,963 $ 5,392 $ 448,837 $ (1,372,489)	2022 $ 4,865 $ 4,848 $ 362,366 $ (1,280,841)

The Company has elected to apply the recognition exemption for short-term leases and low-value assets leases and, thus, did not recognize right-of-use assets and lease liabilities for these leases.

14. INVESTMENT PROPERTIES

Balance at January 1, 2023 Additions Disposals Gain (loss) on fair value changes of investment properties Balance at December 31, 2023 Balance at January 1, 2022 Additions Disposals Gain (loss) on fair value changes of investment properties Balance at December 31, 2022	Land Buildings and Facilities Investment Properties under Construction $ 5,725,030 $ 3,278,982 $ 14,254 - 3,116 - - (94) - 221,570 (144,548) - $ 5,946,600 $ 3,137,456 $ 14,254 $ 5,617,784 $ 3,435,542 $ 14,254 - 2,194 - - (538) - 107,246 (158,216) - $ 5,725,030 $ 3,278,982 $ 14,254	Total $ 9,018,266 3,116 (94) 77,022 $ 9,098,310 $ 9,067,580 2,194 (538) (50,970) $ 9,018,266

Some of the Company’s investment properties have been leased out under operating leases with lease term of 2-20 years, and the lease contracts disclose lessee’s buy-back agreement.

Except for minimum lease payments, some of the Company’s lease contracts stipulate that the Company should adjust rentals on the basis of the consumer price index per annum.

• 32 -

The maturity analysis of lease payments receivable under operating leases of investment properties at December 31, 2023 is as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 5 onwards		December 31	December 31
		2023 $ 720,498 656,930 569,702 416,967 391,247 2,858,430 $ 5,613,774	2022 $ 769,017 636,002 586,383 524,331 389,209 3,232,823 $ 6,137,765

The fair values of the investment properties as of December 31, 2023 and 2022 were based on the valuations carried out at those dates, on a recurring basis by independent qualified professional valuers, Hong-Kai Chang, Yi-Chih Chang, Yu-Fen Yeh and Kuang-Ping Tai from Savills Real Estate Appraiser Office, a member of certified ROC real estate appraisers.

Except for undeveloped lands, the fair values of investment properties were measured using the income approach and the significant assumptions used are the increase in the estimated future net cash inflows, or the decrease in discount rates that would result in increases in the fair values.

Expected future cash inflows Expected future cash outflows Expected future cash inflows, net Discount rate		December 31
		2023 2022 $ 22,541,825 $ 22,307,730 3,010,940 2,882,100 $ 19,530,885 $ 19,425,630 4.595% 4.095%-4.595%

The market rentals in the area where the investment properties are located were between $1 thousand and $2 thousand per ping (i.e., per 3.3 square meters). The market rentals for comparable properties were between $1 thousand and $4 thousand per ping (i.e., per 3.3 square meters).

The expected future cash inflows generated by investment properties referred to rental income, interest income on rental deposits and disposal value. The rental income was extrapolated using the existing lease contracts of the Company and comparative market rentals covering 5-10 years, taking into account the annual rental growth rate. The interest income on rental deposits was extrapolated by the one-year average deposit interest rate, and the disposal value was determined by the direct capitalization method under the income approach. The expected future cash outflows on investment properties included expenditures such as property taxes, insurance premiums, management fees, maintenance costs and replacement allowances. These expenditures were extrapolated on the basis of the current level of expenditures, taking into account the future adjustments to the government-announced land value, the tax rate promulgated under the Construction Cost Index and the House Tax Act and construction costs.

The discount rate was determined with reference to the interest rate for two-year time deposits of Chunghwa Post Co., Ltd. plus 0.75% and the risk premium of investment properties of 2.25%.

• 33 -

Part of the land owned by the Company which is located in the east of Taiwan was not developed yet. The fair value of the undeveloped land area was measured by the land development analysis approach. The increase in the estimated total sales price, the increase in the rate of return, or the decrease in the overall capital interest rate would result in increase in the fair value. The significant assumptions used are as follows:

Estimated total sales price Rate of return Overall capital interest rate		**December 31 **	**December 31 **
		2023 $ 2,193,982 17%-20% 3.02%-3.55%	2022 $ 2,076,696 17%-20% 1.50%-3.21%

The total sales price is estimated on the basis of the most effective use of land or property available for sale after development is completed, taking into account the related regulations, optimism of domestic macroeconomic prospects, local land use, and comparable market prices.

Refer to Note 29 for the information on the carrying amounts of investment properties pledged as collateral for borrowings.

15. INTANGIBLE ASSETS

Cost Balance at January 1, 2023 Additions Disposal Reclassifications Balance at December 31, 2023 Accumulated amortization and impairment Balance at January 1, 2023 Disposal Amortization expense Balance at December 31, 2023 Carrying amount at December 31, 2023 Cost Balance at January 1, 2022 Additions Reclassifications Balance at December 31, 2022	Computer Software $ 276,712 11,497 (2,888) 3,759 $ 289,080 $ (215,726) 2,888 (26,351) $ (239,189) $ 49,891 $ 245,088 23,813 7,811 $ 276,712

(Continued)

• 34 -

Accumulated amortization and impairment Balance at January 1, 2022 Amortization expense Balance at December 31, 2022 Carrying amount at December 31, 2022	Computer Software $ (185,428) (30,298) $ (215,726) $ 60,986 (Concluded)

The following intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Computer software

3-5 years

16. OTHER ASSETS

Leases incentives Prepayment for equipment Refundable deposits Others Current Non-current		December 31	December 31
		2023 $ 414,586 128,877 102,254 11,434 $ 657,151 $ 8,618 648,533 $ 657,151	2022 $ 404,485 50,237 102,891 12,912 $ 570,525 $ 8,134 562,391 $ 570,525

17. BORROWINGS

a. Short-term borrowings

Secured loans (Note 29) Credit loans Interest rate intervals are as follows Secured loans Credit loans		**December 31 **	**December 31 **
		2023 $ 4,850,000 1,800,000 $ 6,650,000 1.68%-1.80% 1.68%	2022 $ 4,700,000 3,800,000 $ 8,500,000 1.75%-2.30% 1.45%-1.88%

• 35 -

b. Short-term bills payable

Commercial papers Less: Unamortized discount on bills payable		December 31	December 31
		2023 $ 860,000 (147) $ 859,853	2022 $ 600,000 (68) $ 599,932

Outstanding short-term bills payable are as follows:

December 31, 2023

Promissory Institution Commercial papers Mega Bills Taiwan Finance International Bills Finance December 31, 2022 Promissory Institution Commercial papers International Bills Finance Taiwan Finance	Nominal Amount $ 600,000 200,000 60,000 $ 860,000 Nominal Amount $ 500,000 100,000 $ 600,000	Discount Amount $ 58 59 30 $ 147 Discount Amount $ 56 12 $ 68	Carrying Amount Interest Rate Collateral $ 599,942 1.788% - 199,941 1.788% - 59,970 1.798% - $ 859,853 Carrying Amount Interest Rate Collateral $ 499,944 2.038% - 99,988 2.138% - $ 599,932	Carrying Amount of Collateral $ - - - $ - Carrying Amount of Collateral $ - - $ -

• c. Long-term borrowings

Secured loans (Note 29) Credit loans Less: Listed as part due within 1 year Interest rate intervals are as follows: Secured loans Credit loans		December 31
	2023 2022 $ 10,400,000 $ 5,300,000 3,780,000 4,750,000 14,180,000 10,050,000 (480,000) (950,000) $ 13,700,000 $ 9,100,000 1.653%-1.680% 1.375%-1.410% 1.650%-1.790% 1.770%-2.110%

• 36 -

18. OTHER LIABILITIES

Other payables Payables for salaries and bonuses Payables for remuneration of directors Payables for purchases of equipment Payables for compensation of employees Others Other liabilities Deposits received Investments accounted for using the equity method in credit Others Current Other payables Other liabilities Non-current Other liabilities		December 31	December 31
		2023 $ 351,936 209,386 148,456 107,952 804,562 $ 1,622,292 $ 78,368 22,750 184,497 $ 285,615 $ 1,622,292 $ 184,497 $ 101,118	2022 $ 373,526 175,247 273,210 78,302 803,416 $ 1,703,701 $ 85,460 - 166,546 $ 252,006 $ 1,703,701 $ 166,546 $ 85,460

19. RETIREMENT BENEFIT PLANS

a. Defined contribution plan

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plan

The defined benefit plan adopted by the Company in accordance with the Labor Standards Act is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contribute amounts equal to 2% of total monthly salaries and wages 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 following year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the following year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy.

• 37 -

The amounts included in the balance sheets in respect of the Company’s defined benefit plan are as follows:

Present value of the defined benefit obligation Fair value of the plan assets Net defined benefit assets		December 31	December 31
		2023 $ 530,990 (1,032,674) $ (501,684)	2022 $ 614,928 (898,676) $ (283,748)

Movements in net defined benefit assets are as follows:

Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Balance at January 1, 2023 $ 614,928 $ (898,676) Service cost Current service cost 2,569 - Prior service cost 23,403 - Net interest expense (income) 9,224 (13,520) Recognized in profit or loss 35,196 (13,520) Remeasurement Return on plan assets (excluding amounts included in net interest) - (120,648) Actuarial loss - changes in financial assumptions 11,104 - Actuarial loss - experience adjustments (11,090) - Recognized in other comprehensive income 14 (120,648) Contributions from the employer - (118,974) Benefits paid (119,144) 119,144 Company paid (4) - Balance at December 31, 2023 $ 530,990 $ (1,032,674) Balance at January 1, 2022 $ 662,495 $ (859,196) Service cost Current service cost 3,586 - Net interest expense (income) 3,312 (4,308) Recognized in profit or loss 6,898 (4,308) Remeasurement Return on plan assets (excluding amounts included in net interest) - (34,652) Actuarial loss - changes in financial assumptions (43,204) - Actuarial loss - experience adjustments 32,240 - Recognized in other comprehensive income (10,964) (34,652) Contributions from the employer - (44,021) Benefits paid (43,501) 43,501 Balance at December 31, 2022 $ 614,928 $ (898,676)

Net Defined Benefit Assets $ (283,748) 2,569 23,403 (4,296) 21,676 (120,648) 11,104 (11,090) (120,634) (118,974) - (4) $ (501,684) $ (196,701) 3,586 (996) 2,590 (34,652) (43,204) 32,240 (45,616) (44,021) - $ (283,748)

• 38 -

Through the defined benefit plan under the Labor Standards Act, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated with reference to the future salaries of plan participants. As such, an increase in the salaries of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations are as follows:

Discount rates Expected rates of salary increase	December 31
	2023 2022 1.250% 1.500% 2.250% 2.250%

If possible reasonable change in each of 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(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		**December **	**31 **
		2023 $ (11,104) $ 11,463 $ 11,147 $ (10,854)	2022 $ (13,342) $ 13,786 $ 13,437 $ (13,071)

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

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		**December **	**31 **
		2023 $ 4,574 8.5 years	2022 $ 5,283 8.9 years

• 39 -

20. EQUITY

• a. Share capital

Ordinary shares

Shares authorized (in thousands) Shares authorized Shares issued and fully paid (in thousands) Shares issued		**December 31 **	**December 31 **
		2023 1,750,000 $ 17,500,000 1,416,941 $ 14,169,406	2022 1,750,000 $ 17,500,000 1,416,941 $ 14,169,406

Fully paid ordinary shares, which have a par value of $10, are entitled to one vote and a right to receive dividends per share.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note) Issuance in excess of ordinary shares Treasury share transactions May only be used to offset a deficit Changes in percentage of ownership interest in associates		December 31	December 31
		2023 $ 2,142,074 1,173,346 28,175 $ 3,343,595	2022 $ 2,142,074 1,173,346 25,604 $ 3,341,024

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 or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year).

c. Retained earnings and dividend policy

According to the Articles of Incorporation, where the Company makes profit in a fiscal year, the profit shall be first utilized to make its business income tax payments and offset deficit. From any remaining profit, out of the profit after tax for the current period plus other profit items adjusted to the current year’s undistributed earnings other than profit after tax for the period, 10% will be appropriated as a legal reserve. After appropriating to the special reserve as required by government regulations, the remaining amount, along with any prior years’ undistributed earnings, may be utilized for earnings distribution in the form of dividend based on shareholding percentage. However, the Company may retain a certain portion depending on the operating needs. In case of a capital increase during the year, dividends appropriated to new shareholders are subject to the resolution passed in the shareholders’ meeting. For policies of compensation of employees and remuneration of directors stipulated by the Articles of Incorporation, please see Note 22(i).

• 40 -

The Company’s distribution of dividends would be in consideration of economic conditions, tax obligations, and operating requirements for cash. For an orderly system of dividend distribution, the dividends are distributed in accordance with the Articles of Incorporation. In addition, improvements of the financial structure and support for investment, capacity expansion or other major capital expenditures. The cash dividends to be distributed should not be below 50% than the current year’s post-tax net profit deduction, offsetting losses of previous years, the statutory surplus reserve and the special surplus reserve, except for the improvement of financial structure and the transfer of funds, capacity expansion or other major capital expenditures. The cash dividends to be distributed should not be below 10% of the total cash and share dividends for the current accounting year.

Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriation of earnings for 2022 and 2021, which were approved in the shareholders’ meetings on June 21, 2023 and June 24, 2022, respectively, are as follows:

Appropriate legal reserve (Reverse) appropriate special reserve Cash dividends Cash dividends per share (NT$)	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2022 $ 201,348 $ (9,927) $ 1,558,635 $ 1.10	2021 $ 117,699 $ 38,409 $ 1,275,247 $ 0.90

The appropriation of earnings for 2023 was proposed by the board of directors on March 1, 2024. The appropriations and dividends per share are as follows:

	For the Year	For the Year
		Ended
	December 31,
		2023
Appropriate legal reserve	$	103,754
Appropriate special reserve	$	34,177
Reversals of special reserve from previous years	$	(1,000,564)
Cash dividends	$	2,267,105
Dividends per share (NT$)	$	1.60

The appropriation of earnings of 2023 is subject to the resolution of the shareholders in their meeting to be held on June 18, 2024.

d. Special reserve

Balance at January 1 Appropriations in respect of provision for special reserve Net increases in the fair value of investment properties Reversals of special reserve Reversal of fair value of investment properties Balance at December 31	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2023 $ 2,657,978 - (9,927) $ 2,648,051	2022 $ 2,619,569 38,409 - $ 2,657,978

• 41 -

On the initial application of the fair value model to investment properties and on the initial application of IFRS 16, property leasehold interests which were previously accounted for as operating leases under IAS 17 are recognized as investment properties and measured at fair value, the Company appropriated for a special reserve at the amount that was the same as the net increase arising from fair value measurement and transferred to retained earnings. The additional special reserve should be appropriated for subsequent net increases in fair value. The amount appropriated may be reversed to the extent that the cumulative net increases in fair value decrease or on the disposal of investment properties.

• e. Other equity items

• 1) Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Changes in capital surplus from investments in subsidiaries and associates accounted for using the equity method Exchange difference of associates accounted for using the equity method Acquisition of interests in subsidiaries Balance at December 31 2) Unrealized gain (loss) on financial assets at FVTOCI Balance at January 1 Recognized for the year Unrealized loss (gain) - equity instruments Share from associates accounted for using the equity method Other comprehensive income recognized for the year Reclassification adjustment Changes in capital surplus from investments in subsidiaries and associates accounted for using the equity method Cumulative unrealized (loss) gain of equity instruments transferred to retained earnings due to disposal Acquisition of interests in subsidiaries Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2023 2022 $ 55,766 $ 65,935 (50) - (2,260) (10,169) 44,910 - $ 98,366 $ 55,766 For the Year Ended December 31
		2023 $ 2,707,736 9,380 220,994 230,374 (2,478) (23,618) 54,589 $ 2,966,603	2022 $ 2,944,932 (110,721) (131,014) (241,735) - 4,539 - $ 2,707,736

• 42 -

• f. Treasury shares

The shares that the subsidiaries held were acquired before the Company Act was amended in 2001. The Company’s shares held by its subsidiaries at the end of the reporting period are as follows:

December 31, 2023

Name of Subsidiary Number of Shares Held (In Thousands of Shares) Bai Ding Investment Co., Ltd. 8,207 December 31, 2022 Name of Subsidiary Number of Shares Held (In Thousands of Shares) Bai Ding Investment Co., Ltd. 8,207	Carrying Amount Market Price $ 97,110 $ 203,123 Carrying Amount Market Price $ 97,110 $ 176,433

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as the rights to dividends and to vote. The subsidiaries holding treasury shares, however, retain shareholders’ rights, except the rights to participate in any share issuances for cash and to vote.

21. REVENUE

Sale of goods (Note) Commissions from concessionaires’ sales (Note) Advertisement and promotion fee income Rental income Investment properties (Note 14) Variable lease payments that do not depend on an index or a rate and contingent rentals Other lease payments Other operating leases Variable lease payments that do not depend on an index or a rate and contingent rentals Other lease payments Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 4,171,864 5,259,258 721,947 17,930 263,415 116,805 618,663 458,746 $ 11,628,628	2022 $ 4,249,572 4,872,066 727,956 18,143 259,182 89,458 614,390 456,556 $ 11,287,323

• 43 -

Note: Gross revenue is presented as follows:

Concessionaires’ sales Sale of goods Contract Balances December 31, 2023 Notes receivable (Note 9) $ - Trade receivable (Note 9) $ 585,815 Contract liabilities - current Sale of goods $ 3,788,837 Customer loyalty programs 48,365 $ 3,837,202	For the Year Ended December 31	For the Year Ended December 31
		2023 2022 $ 54,990,230 $ 51,117,041 4,325,299 4,417,677 $ 59,315,529 $ 55,534,718 December 31, 2022 January 1, 2022 $ - $ - $ 612,605 $ 648,089 $ 4,009,799 $ 3,908,338 66,239 30,522 $ 4,076,038 $ 3,938,860

The changes in the balance of contract liabilities primarily result from the timing difference between the Company’s performance and the respective customer’s payment.

Revenue of the reporting period recognized from the beginning contract liabilities which were satisfied in the previous periods is as follows:

From contract liabilities at the start of the years Sale of goods Customer loyalty programs	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 1,629,285 66,239 $ 1,695,524	2022 $ 1,602,716 30,522 $ 1,633,238

22. NET PROFIT FOR THE YEAR

Net profit for the year includes the following items:

• a. Operating costs

Operating costs Cost of sales Rental costs Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 3,377,016 170,945 31,982 $ 3,579,943	2022 $ 3,457,083 176,774 31,177 $ 3,665,034

• 44 -

b. Interest income

Interest income Bank deposits Others c. Other income Dividends income d. Other gains and losses Profit (loss) from the adjustment of fair value of investment property Foreign exchange loss, net Loss on disposal of property, plant and equipment, net Loss on disposal of investment properties, net Expected credit loss Other gains Other losses e. Finance costs Interest on lease liabilities Interest on bank loans Endorsement guarantee fee Total interest expense of financial liabilities not measured at fair value through profit or loss	For the Year Ended	For the Year Ended	December 31
	2023 $ 405 1 $ 406 **For the Year Ended **		2022 $ 165 - $ 165 December 31
	2023 $ 143,541 **For the Year Ended **		2022 $ 201,628 December 31
	2023 $ 77,022 (67) (38,111) (94) - 96,793 (11,283) $ 124,260 For the Year Ended		2022 $ (50,970) (69) (10,486) (538) (190,000) 79,817 (9,364) $ (181,610) December 31
		2023 $ 223,997 304,881 18,056 $ 546,934	2022 $ 234,973 217,519 20,763 $ 473,255

• 45 -

f. Depreciation and amortization

Property, plant and equipment Right-of-use assets Less: Adjustment to receipts in advance and depreciation Intangible assets (including amortization expense) An analysis of deprecation by function Operating costs Operating expenses An analysis of amortization by function Operating expenses g. Operating expenses directly related to investment properties Direct operating expenses from investment properties generating rental income Direct operating expenses from investment properties not generating rental income h. Employee benefits expenses Post-employment benefits Defined contribution plan Defined benefit plan (Note 19) Other employee benefits Total employee benefits expenses An analysis of employee benefits expenses by function Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2023 2022 $ 784,589 $ 843,917 1,132,198 1,159,939 (86,442) (95,933) 1,830,345 1,907,923 26,351 30,298 $ 1,856,696 $ 1,938,221 $ 75,729 $ 81,382 1,754,616 1,826,541 $ 1,830,345 $ 1,907,923 $ 26,351 $ 30,298 For the Year Ended December 31
	2023 $ 85,983 26,515 $ 112,498 For the Year Ended			2022 $ 83,613 26,629 $ 110,242 December 31
		2023 $ 36,145 21,676 57,821 1,283,334 $ 1,341,155 $ 1,341,155	2022 $ 35,428 2,590 38,018 1,253,674 $ 1,291,692 $ 1,291,692

• 46 -

• i. Compensation of employees and remuneration of directors

According to the Company’s Articles, the Company accrues compensation of employees and remuneration of directors at rates of 2% to 3.5% and no more than 2.5%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and the remuneration of directors for the years ended December 31, 2023 and 2022, which were approved by the Company’s board of directors on March 1, 2024 and March 2, 2023, respectively, are as follows:

Accrual rate

Compensation of employees Remuneration of directors Amount Compensation of employees Remuneration of directors	**For the Year Ended December 31 **	**For the Year Ended December 31 **
	2023 2022 3.2% 3.2% 2.4% 2.4% For the Year Ended December 31
	2023 Cash $ 106,185 79,639	2022
		Cash $ 75,934 56,951

If there is a change in the amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the financial statements for the years ended December 31, 2022 and 2021.

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

23. INCOME TAX

a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current income tax In respect of the current year Adjustments for the prior year Deferred income tax In respect of the current year Adjustments for the prior year Income tax expense recognized in profit or loss	**For the Year Ended **	**For the Year Ended **	December 31
		2023 $ 424,486 (42,020) 382,466 (2,888) 575 (2,313) $ 380,153	2022 $ 296,113 7,192 303,305 6,256 326 6,582 $ 309,887

• 47 -

A reconciliation of accounting profit and income tax expenses is as follows:

Profit before income tax from continuing operations Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Permanent differences Unrecognized deductible temporary differences Adjustments for prior years’ income tax Adjustments for prior years’ deferred tax Land value increment tax Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 3,132,456 $ 626,491 141 (266,896) 53,148 (42,020) 575 8,714 $ 380,153	2022 $ 2,240,061 $ 448,012 38,008 (179,593) (7,899) 7,192 326 3,841 $ 309,887

b. Income tax recognized in other comprehensive income

c.	Deferred tax In respect of the current year Remeasurement on defined benefit plans Current tax assets and liabilities Current tax liabilities Income tax payable	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
			2023 $ (24,126) December	2022 $ (9,123) 31
			2023 $ 297,755	2022 $ 180,160

d. Deferred tax assets and liabilities

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

For the year ended December 31, 2023

Deferred tax assets Temporary differences Promotion expense on gift certificates Investments accounted for using the equity method Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 21,920 $ (1,092) $ - 15,649 10,676 - 49,575 (5,555) - $ 87,144 $ 4,029 $ -	Closing Balance $ 20,828 26,325 44,020 $ 91,173 (Continued)

• 48 -

Deferred tax liabilities Temporary differences Depreciation Reserve for land revaluation increment tax Investment properties Investments accounted for using the equity method Differences of pension in determining taxable income Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 1,128,737 $ 12,464 $ - 397,203 8,714 - 277,083 (8,143) - 213,094 (32,892) - 56,750 19,460 24,126 82,216 2,113 - $ 2,155,083 $ 1,716 $ 24,126	Closing Balance $ 1,141,201 405,917 268,940 180,202 100,336 84,329 $ 2,180,925 (Concluded)

For the year ended December 31, 2022

Deferred tax assets Temporary differences Promotion expense on gift certificates Investments accounted for using the equity method Others Deferred tax liabilities Temporary differences Depreciation Reserve for land revaluation increment tax Investment properties Investments accounted for using the equity method Differences of pension in determining taxable income Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 21,812 $ 108 $ - 17,506 (1,857) - 41,178 8,397 - $ 80,496 $ 6,648 $ - $ 1,103,358 $ 25,379 $ - 393,362 3,841 - 290,796 (13,713) - 227,423 (14,329) - 39,340 8,287 9,123 78,451 3,765 - $ 2,132,730 $ 13,230 $ 9,123	Closing Balance $ 21,920 15,649 49,575
		$ 87,144
		$ 1,128,737 397,203 277,083 213,094 56,750 82,216
		$ 2,155,083

• 49 -

• e. Deductible temporary differences for which no deferred tax assets were recognized in the balance sheets

Deductible temporary differences		December 31	December 31
		2023 $ 1,605,259	2022 $ 1,447,129

• f. Income tax assessments

The Company’s income tax returns through 2021 have been assessed by the tax authorities.

24. EARNINGS PER SHARE

Basic earnings per share Diluted earnings per share	Unit: NT$ Per Share For the Year Ended December 31	Unit: NT$ Per Share For the Year Ended December 31	Unit: NT$ Per Share For the Year Ended December 31
		2023 $ 1.95 $ 1.95	2022 $ 1.37 $ 1.37

Earnings and weighted average number of ordinary shares outstanding for the computation of earnings per share are as follows:

Net Profit for the Year

Net profit for the year Effect of potential dilutive ordinary shares: Compensation of employees Earnings used in the computation of diluted earnings per share Shares	For the Year Ended December 31	For the Year Ended December 31
		2023 2022 $ 2,752,303 $ 1,930,174 - - $ 2,752,303 $ 1,930,174 (In Thousand Shares)

Weighted average number of ordinary shares outstanding in computation of basic earnings per share Effect of potential dilutive ordinary shares: Compensation of employees Weighted average number of ordinary shares outstanding in computation of dilutive earnings per share	For the Year Ended	For the Year Ended	December 31
		2023 1,408,734 5,877 1,414,611	2022 1,408,734 4,540 1,413,274

• 50 -

The Company may settle the compensation paid to employees in cash or shares; therefore, the Company assumes that the entire amount of the compensation or bonus will be settled in shares and the resulting potential shares will be included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in their meeting in the following year.

25. CASH FLOW INFORMATION

• a. Non-cash transactions

For the years ended December 31, 2023 and 2022, the Company engaged in the following non-cash investing activities:

For the years ended December 31, 2023 and 2022, the prepayment for equipment reclassified to property, plant and equipment amounted to $43,610 thousand and $10,689 thousand, respectively (please see Note 12).

• b. Changes in liabilities arising from financing activities

For the year ended December 31, 2023

Opening Balance Short-term borrowings $ 8,500,000 Short-term bills payable 599,932 Long-term borrowings (including current portion) 10,050,000 Lease liabilities 13,545,935 Other non-current liabilities 85,460 $ 32,781,327	Cash Flows $ (1,850,000 ) 259,921 4,130,000 (704,436 ) (7,092) $ 1,828,393		Non-cash Changes New Leases Others $ - $ - - - - - 84,968 - - 22,750 $ 84,968 $ 22,750	Others Closing Balance $ - $ 6,650,000 - 859,853 - 14,180,000 (110,724 ) 12,815,743 - 101,118 $ (110,724) $ 34,606,714
			New Leases $ - - - 84,968 - $ 84,968

For the year ended December 31, 2022

Opening Balance Short-term borrowings $ 4,800,000 Short-term bills payable 1,549,515 Long-term borrowings (including current portion) 13,949,720 Lease liabilities 14,090,911 Other non-current liabilities 83,420 $ 34,473,566	Cash Flows $ 3,700,000 (949,583 ) (3,899,720 ) (670,801 ) 2,040 $ (1,818,064)		Non-cash Changes New Leases Others $ - $ - - - - - 180,450 - - - $ 180,450 $ -	Others Closing Balance $ - $ 8,500,000 - 599,932 - 10,050,000 (54,625 ) 13,545,935 - 85,460 $ (54,625) $ 32,781,327
			New Leases $ - - - 180,450 - $ 180,450

26. CAPITAL MANAGEMENT

Under its operating development schemes and related government rules, the Company manages its capital to ensure it can continue to operate as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings offset by cash) and equity of the Company (comprising share capital, capital surplus, retained earnings and other equity). The Company’s capital management concerns its capital expenditures for capital structure and relative risks to ensure the optimal capital structure, and the Company may adjust the amount of dividends paid to shareholders, the number of new shares issued, proceeds from borrowings and repayments of borrowings, in order to balance the overall capital structure.

• 51 -

27. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments not measured at fair value

The financial instruments not measured at fair value are either those with due dates in the near future or those with a future collection value which approximately equals its carrying amount. Thus, the fair value of these financial instruments are estimated at their carrying amounts on the financial reporting date.

• b. Fair value of financial instruments measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2023 Financial assets at FVTOCI Equity investments Domestic listed ordinary shares Domestic unlisted ordinary shares December 31, 2022 Financial assets at FVTOCI Equity investments Domestic listed ordinary shares Domestic unlisted ordinary shares	Level 1 $ 2,695,409 - $ 2,695,409 Level 1 $ 2,686,884 - $ 2,686,884	Level 2 $ - - $ - Level 2 $ - - $ -	Level 3 $ - 108,953 $ 108,953 Level 3 $ - 106,330 $ 106,330	Total $ 2,695,409 108,953 $ 2,804,362 Total $ 2,686,884 106,330 $ 2,793,214

There were no transfers between Level 1 and 2 in both 2023 and 2022.

• 52 -

• 2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2023

		Investment in
		Equity
		Instruments at
	Financial Assets	FVTOCI
Balance at January 1, 2023		$ 106,330
Recognized in other comprehensive income (included in unrealized valuation
gain (loss) on financial assets at FVTOCI)		855
Purchase		1,768
Balance at December 31, 2023		$ 108,953
For the year ended December 31, 2022
		Investment in
		Equity
		Instruments at
	Financial Assets	FVTOCI
Balance at January 1, 2022		$ 103,957
Recognized in other comprehensive income (included in unrealized valuation
gain (loss) on financial assets at FVTOCI)		2,373
Balance at December 31, 2022		$ 106,330

• 3) Valuation techniques and inputs applied for Level 3 fair value measurements

Financial Instruments Domestic unlisted shares

Valuation Techniques and Inputs

a) Asset-based approach. Valuation based on the fair value of an investee, calculated through each investment of the investee using the income approach, market approach or a combination of the two approaches, while also taking the liquidity premium into consideration. b) Transaction method of market approach. The approach is a valuation strategy based on market ratios of companies with similar profitability at the end of the reporting period, while taking the liquidity premium into consideration.

• c. Categories of financial instruments

Financial assets Financial assets at amortized cost (1) Equity instruments at FVTOCI Financial liabilities Measured at amortized cost (2)	**December 31 **
	2023 2022 $ 2,905,166 $ 1,681,926 2,804,362 2,793,214 29,459,975 25,700,138

• 53 -

• 1) The balance amount includes cash and cash equivalents, trade receivable (including related parties), other receivables, refundable deposits, and other financial assets measured at amortized cost.

• 2) The balances included the carrying amount of short-term borrowings, short-term bills payable, notes payable and trade payables (including related parties), other payables, long-term borrowings including the current portion and deposits received, which are measured at amortized cost.

d. Financial risk management objectives and policies

The Company’s main financial instruments include equity instrument investments, accounts receivable, accounts payable, lease liabilities and loans. The purpose of the Company’s financial risk management is to manage market risk (including exchange rate risk, interest rate risk and other price risk), credit risk, liquidity risk, and other financial risks related to operating activities. The Company’s Finance Department strives to analyze and evaluate financial risk factors related to the market, and then propose and implement relevant responsive strategies to reduce the impact of risks related to market changes.

The main financial activities of the Company are governed by the Company’s internal management and approved by the board of directors. The financial schemes, which include fund raising plans should be carried out in compliance with the Company’s policies.

1) Market risk

• a) Interest rate risk

The Company was exposed to interest rate risk because the Company borrowed funds at both fixed and floating interest rates. 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 are as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2023 2022 $ 25,808 $ 25,600 12,815,743 13,545,935 35,314 48,043 21,689,853 19,149,932

Sensitivity analysis

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for financial assets and financial liabilities at the end of the reporting period. For sensitivity analysis purposes, the sensitivity rate was adjusted as a result of the volatile financial market. The measurement of the increase or decrease in the interest rates is based on 100 basis points, which is reported to the senior management denoting the management’s assessment for the reasonableness of the fluctuation of the interest rates.

If interest rates increase/decrease by 100 basis points and all variables remained unchanged, the profit before tax for the years ended December 31, 2023 and 2022 would decrease/increase by $216,544 thousand and $191,019 thousand, respectively.

• 54 -

b) Other price risks

The Company was exposed to equity price risks involving equity investments in listed companies and beneficial certificates. The Company’s investments in listed companies and beneficial certificates should be in compliance with the rules made by the board of directors in order to achieve the goal of risk management and maximize the returns on investments.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period. For sensitivity analysis purposes, the sensitivity rate was adjusted as a result of the volatile financial market.

If equity prices increase/decrease by 5%, the pre-tax other comprehensive income for the years ended December 31, 2023 and 2022 would increase/decrease by $140,218 thousand and $139,661 thousand, respectively.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. At the end of the reporting period, the Company’s credit risk was mainly contributed from trade receivables in operating activities, bank deposits and financial instruments in financial activities.

To maintain the quality of trade receivables, the Company manages credit risk by assessing customers’ credit status in terms of financial status, historical transactions, etc., and obtains an adequate amount of collaterals as guarantees from the customers with high credit risk. In addition, the Company reviews the recoverable amount of each trade debt at the end of the reporting period to ensure that adequate allowances are made for irrecoverable amounts. On the credit risk management of bank deposits and other financial instruments, the Company trades with counterparties which comprise banks with good credit ratings.

3) Liquidity risk

Liquidity risk is a risk in which the Company has difficulty in settling its financial liabilities either by cash or other financial assets. The Company manages its liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance its operations and mitigate the effects of fluctuations in cash flows. Further, the management monitors the use of bank borrowings and ensures compliance with loan covenants, to avoid critical damage and mitigate the reputation risk facing the Company.

To cater to the demand of capital payments for a particular purpose, the Company maintains adequate cash by way of long-term financing/borrowings. For the management of cash shortage, the Company monitors cash management and allocates cash appropriately to maintain financial flexibility and ensure the mitigation of liquidity risk.

• 55 -

• a) Liquidity and interest rate risk tables for non-derivative financial liabilities

The following table details the Company’s remaining contractual maturities for its non-derivative financial liabilities with agreed upon repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The table includes both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed upon repayment dates.

December 31, 2023

	On Demand or
	Not Later than
	1 Year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5+ Years	Total
Non-derivative financial liabilities
Short-term borrowings	$ 6,650,000	$	-	$	-	$	-	$	-	$	-	$ 6,650,000
Short-term bills payable	859,853		-		-		-		-		-	859,853
Trade payables	5,999,059		-		-		-		-		-	5,999,059
Trade payables to related parties	70,403		-		-		-		-		-	70,403
Other payables	1,622,292		-		-		-		-		-	1,622,292
Lease liabilities	870,027		871,281		867,960		864,086		865,083		10,696,280	15,034,717
Long-term borrowings (including
current portion)	480,000		13,700,000		-		-		-		-	14,180,000
Deposits received	-		73,558		2,226		-		2,584		-	78,368

Additional information on the maturity analysis for lease liabilities

Lease liabilities December 31, 2022 Non-derivative financial liabilities Short-term borrowings Short-term bills payable Trade payables Trade payables to related parties Other payables Lease liabilities Long-term borrowings (including current portion) Deposits received	Less than 1 Year $ 870,027 On Demand or Not Later than 1 Year $ 8,500,000 $ 599,932 4,707,626 53,419 1,703,701 950,155 950,000 -	1-5 Years $ 3,468,410 1-2 Years 2-3 - $ - - - - 936,670 9,100,000 69,655	5-10 Years $ 4,247,540 Years 3-4 Ye - $ - - - - 856,984 858 - 15,805	10-15 Years $ 3,034,238 ars 4-5 Years - $ - - - - ,754 859,97 - -	15-20 Years $ 1,969,520 5+ Years - $ - - - - - - - - - 2 11,517,761 - - - -	20+ Years $ 1,444,982
						Total $ 8,500,000 599,932 4,707,626 53,419 1,703,701 15,980,296 10,050,000 85,460

Additional information on the maturity analysis for lease liabilities

Lease liabilities	Less than 1 Year $ 950,155	1-5 Years $ 3,512,380	5-10 Years $ 4,330,021	10-15 Years $ 3,306,928	15-20 Years $ 2,169,013	20+ Years $ 1,711,799

The amounts of variable interest rate instruments for both non-derivative financial liabilities mentioned above are subject to change if the changes in variable interest rates differ from those estimates of interest rates determined at the end of the year.

• 56 -

b) Financing facilities

Unsecured bank overdraft facilities Amount used Amount unused Secured bank overdraft facilities Amount used Amount unused Secured bank loan facilities Amount used Amount unused Unsecured bank loan facilities Amount used Amount unused		December 31	December 31
		2023 $ - 50,000 $ 50,000 $ - 50,000 $ 50,000 $ 15,250,000 2,100,000 $ 17,350,000 $ 6,440,000 10,140,000 $ 16,580,000	2022 $ - 50,000 $ 50,000 $ - - $ - $ 10,000,000 7,100,000 $ 17,100,000 $ 9,150,000 8,200,000 $ 17,350,000

28. TRANSACTIONS WITH RELATED PARTIES

The transactions between the Company and its related parties, other than those disclosed in other notes, are summarized as follows:

• a. The Company’s related parties and their relationships

Related Party Relationship with the Company Far Eastern Ai Mai Co., Ltd. (AIMAI) Subsidiary Ya Tung Department Stores, Ltd. (YTDS) Subsidiary Yu Ming Advertising Agency Co., Ltd. (YMAC) Subsidiary Far Eastern CitySuper Co., Ltd. (FECS) Subsidiary Bai Ding Investment Co., Ltd. (BDIC) Subsidiary Bai Yang Investment Co., Ltd. (BYIC) Subsidiary Far Eastern Hon Li Do Co., Ltd. (FEHLD) Subsidiary Chubei New Century Shopping Mall Co., Ltd. Subsidiary FEDS Asia Pacific Development Co., Ltd. Subsidiary FEDS New Century Development Co., Ltd. Subsidiary Far Eastern Big City Shopping Malls Co., Ltd. Subsidiary Pacific Sogo Department Stores Co., Ltd. (SOGO) Subsidiary Ding Ding Integrated Marketing Service Co., Ltd. Associate (DDIM) Oriental Securities Corporation (OSC) Associate

(Continued)

• 57 -

Relationship with the Company

Related Party

Far Eastern International Leasing Corp. (FEIL) Far Eastern New Century Corporation (FENC)

Far EasTone Telecommunications Co., Ltd.

New Century InfoComm Tech Co., Ltd. Far Eastern General Contractor Inc. (FEGC) Far Eastern Construction Co., Ltd. (FEC) Far Eastern Resources Development Co., Ltd. Fetc International Co., Ltd. Arcoa Communication Co., Ltd. Ding Ding Hotel Co., Ltd.

Far Eastern Electronic Toll Collection Co., Ltd. Far Eastern Apparel Co., Ltd. Yuan Ding Co., Ltd. (YDC) YDT Technology International Co., Ltd. Far Eastern Technical Consultants Co., Ltd. Yuanshi Digital Technology Co., Ltd. Prime EcoPower Co., Ltd. Asia Cement Corporation (ACC) Everest Textile Co., Ltd.

Far Eastern International Bank Ltd. (FEIB) Yuan Bo Asset Management Corporation

Oriental Union Chemical Corporation Yuan Ze University Oriental University of Science and Technology Mr. Xu Yuanzhi Memorial Foundation Far Eastern Memorial Hospital Ya Tung Ready Mixed Concrete Co., Ltd. Fu Ming Transport Corporation Mr. Xu Yuanzhi Memorial Foundation Ding & Ding Management Consultants Co., Ltd.

Associate

Investor with significant influence over the Company (equity method investor of FEDS) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the subsidiary of FENC) Associate of investor with significant influence over the Company (the associate of FENC) Associate of investor with significant influence over the Company (the associate of FENC) Other related party (the chairman of Company, also the vice chairman of FEIB) Other related party (subsidiary of Far Eastern International Leasing Corporation) Other related party (the same chairman) Other related party (the same chairman) Other related party (the same chairman) Other related party (the same chairman)

Other related party (the subsidiary of ACC) Other related party (the subsidiary of ACC) Other related party (related party in substance) Other related party (related party in substance) (Concluded)

• 58 -

Note: Yuan Hsin Digital Payment Co., Ltd. has completed its dissolution and liquidation on July 12, 2023.

• b. Operating revenue

Line Item Related Party Category/Name Sales of goods (Note) Subsidiaries Associates of investor with significant influence over the Company Other related parties Other operating revenue Other related parties Associates of investor with significant influence over the Company Subsidiaries Associates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 43,074 29,036 12,897 $ 85,007 $ 46,303 24,706 21,803 19 $ 92,831	2022 $ 43,738 29,758 983 $ 74,479 $ 44,313 20,542 22,244 204 $ 87,303

Note: Sales to related parties and unrelated parties were made under normal terms.

• c. Purchases

Line Item Related Party Category/Name Operating costs (Note) Associates of investor with significant influence over the Company Subsidiaries	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 9,590 6,306 $ 15,896	2022 $ 10,397 4,234 $ 14,631

Note: Purchases from related parties and unrelated parties were made under normal terms.

• d. Receivables from related parties

Line Item Related Party Category/Name Trade receivable Associates of investor with significant influence over the Company Other related parties Subsidiaries Investor with significant influence over the Company Associates		**December 31 **	**December 31 **
		2023 $ 32,916 26,042 4,048 256 10 $ 63,272	2022 $ 35,164 44,443 2,437 3,416 1,513 $ 86,973

(Continued)

• 59 -

Line Item Related Party Category/Name Other receivables Other related parties Subsidiaries Associates Associates of investor with significant influence over the Company e. Prepayments Related Party Category/Name Associates f. Other non-current assets Line Item Related Party Category/Name Lease incentives Associates of investor with significant influence over the Company Other related parties Refundable deposits Subsidiaries Associates of investor with significant influence over the Company g. Payables to related parties Line Item Related Party Category/Name Trade payable Subsidiaries Associates of investor with significant influence over the Company		**December 31 **	**December 31 **	**December 31 **
		2023 2022 $ 9,005 4,572 8,088 41,114 4,672 - 1,869 1,903 $ 23,634 $ 47,589 (Concluded) **December 31 **
			2023 2022 $ 72 $ - **December 31 **
		2023 2022 $ 5,588 $ 10,719 23 303 $ 5,611 $ 11,022 $ 20,000 $ 20,000 7,740 7,740 $ 27,740 $ 27,740 **December 31 **
		2023 $ 48,097 22,306 $ 70,403		2022 $ 31,115 22,304 $ 53,419 (Continued)

• 60 -

h. i. j.	Line Item Related Party Category/Name Other payables Subsidiaries Associates of investor with significant influence over the Company Associates Investor with significant influence over the Company Other related parties Other current liabilities Line Item Related Party Category/Name Advance receipts Associates of investor with significant influence over the Company Others Subsidiaries Other related parties Other non-current liabilities Line Item Related Party Category/Name Guarantee deposits received Associates of investor with significant influence over the Company Yuan Ding Co., Ltd. Others Other related parties Subsidiaries Lease arrangements - the Company as lessee Related Party Category/Name Acquisition of right-of-use assets Subsidiaries Associates Associates of investor with significant influence over the Company		**December 31 **	**December 31 **	**December 31 **
			2023 2022 $ 115,888 $ 165,158 86,294 92,050 72,139 69,539 47,691 41,054 36,494 33,278 $ 358,506 $ 401,079 (Concluded) December 31
			2023 2022 $ 316 $ 384 $ 15 $ 8 - 200 $ 15 $ 208 **December 31 **
		2023 2022 $ 63,083 $ 61,701 87 87 63,170 61,788 1,023 1,023 881 881 $ 65,074 $ 63,692 For the Year Ended December 31
				2023 $ 29,908 4,144 210 $ 34,262	2022 $ - - 133,364 $ 133,364

• 61 -

Line Item Related Party Category/Name Lease liabilities (Note) Associates of investor with significant influence over the Company Far Eastern Construction Co., Ltd. Others Subsidiaries Associates Other related parties		**December 31 **	**December 31 **
		2023 $ 3,276,868 - 3,276,868 2,648,744 7,422 5,635 $ 5,938,669	2022 $ 3,380,997 171,616 3,552,613 2,810,310 5,492 6,985 $ 6,375,400

Note: The lease payments, payable either monthly or yearly, are made per the agreement between the Company and the related parties.

k.	Related Party Category/Name Interest expense Associates of investor with significant influence over the Company Far Eastern Construction Co., Ltd. Others Subsidiaries Other related parties Associates Acquisition of financial assets Related Party Category/Name Line Item Number of Shares Traded Associates of investor with significant influence over the Company Financial assets at fair value through other comprehensive income - non-current 177	**For the Year Ended **	**December 31 **
		2023 2022 $ 57,590 $ 59,436 762 1,948 58,352 61,384 46,709 49,656 107 131 69 55 $ 105,237 $ 111,226 Underlying Assets Purchase Price Common shares$ 1,768

• 62 -

l. Acquisition of other assets

Related Party Category/Name Line Item Other related parties Intangible assets Associates of investor with significant influence over the Company Intangible assets Subsidiaries Property, plant and equipment		Acquisition Price	Acquisition Price
		2023 $ 6,515 96 - $ 6,611	2022 $ 12,133 - 19,362 $ 31,495

m. Construction projects

The construction projects of the Company were as follows:

Associates of investor with significant influence over the Company Other related parties Other related-party transactions Line Item Related Party Category/Name Operating expenses Subsidiaries Investor with significant influence over the Company Associates of investor with significant influence over the Company Other related parties Associates Other gains and losses - Subsidiaries gains Pacific Sogo Department Stores Co., Ltd. Others Other related parties Far Eastern International Bank Ltd. Associates of investor with significant influence over the Company Associates	**For the Year Ended **	**For the Year Ended **	**For the Year Ended **	**December 31 **
	2023 $ 7,086 84 $ 7,170 For the Year Ended			2022 $ 5,368 - $ 5,368 December 31
		2023 $ 644,751 86,553 85,593 84,523 51,954 $ 953,374 $ 22,739 2,790 25,529 19,803 2,291 - $ 47,623	2022 $ 634,093 94,570 53,488 78,692 50,533 $ 911,376 $ 22,985 9,613 32,598 18,799 18 323 $ 51,738 (Continued)

n. Other related-party transactions

• 63 -

Line Item Related Party Category/Name Other gains and losses - Associates losses Investor with significant influence over the Company Other related parties Finance costs Subsidiaries Loans from related parties Related Party Category/Name Other related parties Far Eastern International Bank Ltd. Finance costs Related Party Category/Name Other related parties Far Eastern International Bank Ltd. Remuneration of key management personnel Short-term employee benefits Post-employment benefits	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2023 2022 $ 6,986 $ 6,991 19 22 - 10 $ 7,005 $ 7,023 $ 15,366 $ 15,702 (Concluded) December 31
	2023 $ 750,000 For the Year Ended			2022 $ 500,000 December 31
	2023 $ 1,870 **For the Year Ended **			2022 $ 2,737 December 31
			2023 $ 98,231 - $ 98,231	2022 $ 74,187 29 $ 74,216

• o. Loans from related parties

• p. Remuneration of key management personnel

The remuneration of directors and other key management personnel was determined by the compensation committee of the Company in accordance with the individual performance and the market trends.

• 64 -

29. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings and administrative proceedings:

Financial assets at amortized cost Financial assets at FVTOCI Investments accounted for using the equity method Property, plant and equipment Investment properties		**December 31 **	**December 31 **
		2023 $ 25,808 1,450,750 801,241 13,098,494 1,274,400 $ 16,650,693	2022 $ 25,800 1,435,000 1,110,279 13,248,254 1,250,158 $ 17,069,491

30. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant unrecognized commitments and contingencies of the Company as of December 31, 2023 and 2022 are as follows:

• a. Significant unrecognized commitments

The amounts of unrecognized commitments are as follows:

Acquisition of property, plant and equipment		**December 31 **	**December 31 **
		2023 $ 184,785	2022 $ 188,412

• b. In April 2023, under a ruling by the MOEA whereby “the terms and conditions of gift certificates for certain goods and for certain services within the retail industry should be documented in a standard contract while others should not”, the Company and SOGO signed an agreement to have mutual performance guarantees on gift certificates bought by customers. The guarantee period was from April 1, 2023 to March 31, 2024. As of December 31, 2023, the Company’s guarantee amount for SOGO was $5,680,307 thousand and that of SOGO for the Company was $3,860,223 thousand.

31. SEPARATELY DISCLOSED ITEMS

• a. Information on significant transactions:

• 1) Financing provided to others: Table 1.

• 2) Endorsements/guarantees provided: Table 2.

• 3) Marketable securities held (excluding investment in subsidiaries, associates and joint ventures): Table 3.

• 4) Cumulative purchase or sale of one security for an amount exceeding NT$300 million or 20% of the paid-in capital: Table 4.

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.

• 65 -

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.

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

• 9) Trading in derivative instruments: None.

• b. Information on investees: Table 6.

• c. Information on investments in mainland China:

• 1) Name of the investees in mainland China, main business and products, paid-in capital, method of investment, information on inflow or outflow of capital, percentage of ownership, investment income or loss, ending balance of investment, repatriation of investment income, and the limit of investment in mainland China: Table 7.

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: None.

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: None.

  • c) The amount of property transactions and the amount of the resultant gains or losses: None.

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: Table 2.

  • e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: Table 1.

  • f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: None.

• d. Information of major shareholders: List all shareholders with ownership of 5% or greater, showing the names and the numbers of shares and percentage of ownership of each shareholder, please see Table 8.

• 66 -

TABLE 1

FAR EASTERN DEPARTMENT STORES, LTD.

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Amounts	Reason for Short-term Financing	Allowance for Impairment Loss	Colla	**teral **	Financing Limit for Each Borrower	Aggregate Financing Limits
													Item	Value
1	Pacific Sogo Department Stores Co., Ltd.	Pacific China Holding Ltd. (B.V.I.)	Other receivables	Y	$ 2,000,000	$ 2,000,000	$ -	-	(Note A)	$ -	Transaction	$ -	-	$ -	$ 5,433,746 (Note B)	$ 5,433,746 (Note B)
2	Chongqing FEDS Co., Ltd.	Chongqing Pacific Consultant and Management Co., Ltd. Dalian Pacific Department Store Co., Ltd. Chengdu Quanxing Mansion Pacific Department Store Co., Ltd. Shanghai Bai Ding Consultant & Management Co., Ltd. Chengdu FEDS Co., Ltd. Chongqing Metropolitan Plaza Pacific Department Store Co., Ltd.	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Y Y Y Y Y Y	736,984 (RMB 170,000 thousand ) 86,704 (RMB 20,000 thousand ) 216,760 (RMB 50,000 thousand ) 43,352 (RMB 10,000 thousand ) 216,760 (RMB 50,000 thousand ) 433,520 (RMB 100,000 thousand )	736,984 (RMB 170,000 thousand ) 86,704 (RMB 20,000 thousand ) 216,760 (RMB 50,000 thousand ) 43,352 (RMB 10,000 thousand ) - 433,520 (RMB 100,000 thousand )	498,548 (RMB 115,000 thousand ) - - - - -	1.504523% (Note D) - 1.504523% (Note E) - - -	(Note A) (Note A) (Note A) (Note A) (Note A) (Note A)	- - - - - -	Transaction Transaction Transaction Transaction Transaction Transaction	- - - - - -	- - - - - -	- - - - - -	12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C)	12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C)
3	Chongqing Metropolitan Plaza Pacific Department Store Co., Ltd.	Chongqing FEDS Co., Ltd. Chengdu FEDS Co., Ltd. Pacific (China) Investment Co., Ltd.	Other receivables Other receivables Other receivables	Y Y Y	303,464 (RMB 70,000 thousand ) 216,760 (RMB 50,000 thousand ) 216,760 (RMB 50,000 thousand )	303,464 (RMB 70,000 thousand ) - 216,760 (RMB 50,000 thousand )	- - -	- - 1% (Note F)	(Note A) (Note A) (Note A)	- - -	Transaction Transaction Transaction	- - -	- - -	- - -	12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C)	12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C)
4	Pacific China Holdings (HK) Co., Ltd.	Pacific China Holding Ltd. (B.V.I.)	Other receivables	Y	307,050 (US$ 10,000 thousand )	307,050 (US$ 10,000 thousand )	-	5.78%-5.85% (Note G)	(Note A)	-	Transaction	-	-	-	12,528,994 (Note C)	12,528,994 (Note C)
5	Pacific (China) Investment Co., Ltd.	Chongqing FEDS Co., Ltd. Dalian Pacific Department Store Co., Ltd. Chengdu FEDS Co., Ltd. Chengdu Quanxing Mansion Pacific Department Store Co., Ltd.	Other receivables Other receivables Other receivables Other receivables	Y Y Y Y	216,760 (RMB 50,000 thousand ) 86,704 (RMB 20,000 thousand ) 216,760 (RMB 50,000 thousand ) 2,168 (RMB 500 thousand )	216,760 (RMB 50,000 thousand ) 86,704 (RMB 20,000 thousand ) 216,760 (RMB 50,000 thousand ) 2,168 (RMB 500 thousand )	- - - -	- 1% (Note H) - -	(Note A) (Note A) (Note A) (Note A)	- - - -	Transaction Transaction Transaction Transaction	- - - -	- - - -	- - - -	12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C)	12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C) 12,528,994 (Note C)
6	Shanghai Pacific Department Store Co., Ltd.(Note I)	Shanghai Xujiahui Centre (Group) Co., Ltd.	Other receivables	Y	199,813 (RMB 46,091 thousand )	199,813 (RMB 46,091 thousand )	199,813 (RMB 46,091 Thousand )	-	(Note A)	-	Transaction	-	-	-	240,997 (Note B)	240,997 (Note B)

Note A: Short-term financing.

Note B: 40% of the financing company’s net assets.

Note C: The amount of the collateral/guarantees is based on 40% of the net value of the ultimate parent company, Far Eastern Department Stores Co., Ltd. per its latest financial statements.

Note D: The interest for the period amounted to RMB1,930 thousand.

Note E: The interest for the period amounted to RMB23 thousand.

Note F: The interest for the period amounted to RMB165 thousand.

Note G: The interest for the period amounted to US$40 thousand.

Note H: The interest for the period amounted to RMB75 thousand.

Note I: Due to the capital reduction of Shanghai Pacific Department Store Co., Ltd. to make up losses, the shares held by the Consolidated Company were all extinguished; therefore, Shanghai Pacific Department Store Co., Ltd. was derecognized at the end of the period.

(Concluded)

• 67 -

TABLE 2

FAR EASTERN DEPARTMENT STORES, LTD.

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement/ Guarantee Given on Behalf of Each Party	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Maximum Endorsement/ Guarantee Amounts Allowable	Endorsement/ Guarantee Provided by Parent Company	Endorsement/ Guarantee Provided by A Subsidiary	Endorsement/ Guarantee Provided to Mainland China
		Name	Nature of Relationship (Note E)
0	Far Eastern Department Stores, Ltd.	Bai Ding Investment Co., Ltd. (Bai Ding) FEDS Development Ltd. Pacific Sogo Department Stores Co., Ltd.	2 2 2	$ 18,793,491 (Note A) 18,793,491 (Note A) 18,793,491 (Note A)	$ 900,000 307,050 (US$ 10,000 thousand) 6,137,841	$ 900,000 307,050 (US$ 10,000 thousand) 5,680,307	$ 550,000 - 5,680,307	$ - - -	3 1 18	$ 31,322,486 (Note B) 31,322,486 (Note B) 31,322,486 (Note B)	Y Y Y	- - -	- - -
1	Pacific Sogo Department Stores Co., Ltd.	Far Eastern Department Stores, Ltd. Pacific China Holding Ltd. (B.V.I.) Chongqing Metropolitan Plaza Pacific Department Store Co., Ltd.	3 2 2	18,793,491 (Note C) 18,793,491 (Note C) 18,793,491 (Note C)	4,056,266 11,826,378 (US$ 356,500 thousand) (RMB 203,000 thousand) 1,654,548 (US$ 20,000 thousand) (RMB 240,000 thousand)	3,860,223 11,639,965 (US$ 356,500 thousand) (RMB 160,000 thousand) 1,654,548 (US$ 20,000 thousand) (RMB 240,000 thousand)	3,860,223 4,192,138 (RMB 967,000 thousand) 637,210 (US$ 10,000 thousand) (RMB 76,158 thousand)	- - -	12 37 5	31,322,486 (Note D) 31,322,486 (Note D) 31,322,486 (Note D)	- - -	Y - -	- - Y
2	Far Eastern Big City Shopping Malls Co., Ltd.	Pacific Sogo Department Stores Co., Ltd.	3	501,270 (Note A)	187,446	187,446	187,446	-	1	835,451 (Note B)	-	-	-

Note A: The amount is 60% of net assets based on the latest financial statements of the endorser/guarantor.

Note B: The amount is 100% of net assets based on the latest financial statements of the endorser/guarantor.

Note C: The amount of the collateral/guarantees is based on 60% of the net value of the ultimate parent company, Far Eastern Department Stores Co., Ltd. per its latest financial statements.

Note D: The amount of the collateral/guarantees is based on 100% of the net value of the ultimate parent company, Far Eastern Department Stores Co., Ltd. per its latest financial statements.

Note E: Relationships between the endorsement/guarantee provider and the guaranteed party:

1. Trading partner.

2. The direct and indirect shareholding of the Company amounts to more than 50%.

3. The companies that directly and indirectly hold more than 50% of the Company’s voting rights.

4. The Company that directly and indirectly holds more than 90% of the voting shares.

5. Guaranteed by the Company according to the construction contract.

6. An investee company. The guarantees were provided based on the Company’s proportionate share in the investee company.

7. Companies in the same industry provide among themselves joint and several securities for as performance guarantees of sales contracts for pre-construction homes pursuant to the Consumer Protection Act.

8. 68 -

TABLE 3

FAR EASTERN DEPARTMENT STORES, LTD.

MARKETABLE SECURITIES HELD DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company	Type and Name of Marketable Securities	Relationship with Issuer of Securities	Financial Statement Account		December 31, 2023	December 31, 2023		Note
				Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
Far Eastern Department Stores, Ltd. Bai Ding Investment Co., Ltd. Bai Yang Investment Co., Ltd. Yu Ming Advertising Agency Co., Ltd.	Shares Asia Cement Corporation Far Eastern New Century Corporation Kaohsiung Rapid Transit Corporation Yuan Ding Leasing Corp. Yuan Ding Co., Ltd. Yuan Shi Digital Technology Co., Ltd. Shares Far Eastern Department Stores, Ltd. Asia Cement Corporation Far Eastern New Century Corporation Chung-Nan Textile Co., Ltd. Ding Ding Management Consultants Co., Ltd. Yue Ding Industry Co., Ltd. Oriental Securities Investment Advisory Co., Ltd. Ding Sheng Investment Co., Ltd. Shares Far Eastern International Bank Ltd. Asia Cement Corporation U-Ming Marine Transport Corporation Oriental Securities Investment Advisory Co., Ltd. Shares Asia Cement Corporation	4 3 - - 4 4 2 7 6 - 8 7 8 - 8 7 8 8 7	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 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 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 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 Financial assets at fair value through other comprehensive income - non-current 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 Financial assets at fair value through other comprehensive income - non-current	50,000 19,964 6,286 7,309 3 208 8,207 14,814 15,812 2,984 647 3,133 1 40,329 75,068 3,849 200 1 1,506	$ 2,072,521 622,888 33,756 72,848 10 2,339 203,123 614,057 493,320 114,000 9,981 50,667 10 351,262 949,611 159,561 10,420 10 62,406	1 - 2 9 - - 1 - - 5 5 2 - 18 2 - - - -	$ 2,072,521 622,888 33,756 72,848 10 2,339 203,123 614,057 493,320 114,000 9,981 50,667 10 351,262 949,611 159,561 10,420 10 62,406	35,000 thousand shares of Asia Cement Corporation pledged for loans and commercial papers issued of the investor company 5,200 thousand shares of Asia Cement Corporation pledged for commercial papers issued of the investor company 15,000 thousand shares of Far Eastern New Century Corporation pledged for loans of the investor company

(Continued)

• 69 -

Holding Company	Type and Name of Marketable Securities	Relationship with Issuer of Securities	Financial Statement Account		December 31, 2023	December 31, 2023		Note
				Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
FEDS Development Ltd. Pacific Sogo Department Stores Co., Ltd. Pacific China Holding Ltd. (B.V.I.)	Shares Kowloon Cement Corp., Ltd. Shares CMC Magnetics Corp. Pacific Construction Co., Ltd. Oriental Union Chemical Corp. Pacific Liu Tong Investment Co., Ltd. Asia Cement Corporation E-Shou Hi-tech Co., Ltd. Tian Yuan Investment Co., Ltd. PURETEK Corp. Pacific 88 Co., Ltd. Yuan Shi Digital Technology Co., Ltd. Shares Overseas Development Corp. Taiwan Ocean Farming Corp.	7 - - 8 1 7 - - - - 4 - -	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current 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 - current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current	46 188 7,931 50 800 20 18,300 98,000 119 16 312 2,250 2,250	$ 18,849 2,159 80,895 1,008 4,019 829 - - - - - - -	- - 2 - - - 15 20 - 1 - 15 15	$ 18,849 2,159 80,895 1,008 4,019 829 - - - - - - -

Note A: 1. Subsidiary of FEDS.

1. Parent company.

2. Investor with significant influence over the Company.

3. Associate of investor with significant influence over the Company. 5. Other related party.

4. Investor with significant influence over FEDS.

5. Associate of investor with significant influence over FEDS.

6. Other related party of FEDS.

(Concluded)

• 70 -

TABLE 4

FAR EASTERN DEPARTMENT STORES, LTD.

CUMULATIVE PURCHASE OR SALE OF ONE SECURITY FOR AN AMOUNT EXCEEDING NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

Selling and Buying Company	Type and Name of Marketable Securities	Financial Statement Account	Transacting Company	Relationship	January 1, 2023	January 1, 2023	Buy	Buy	Sell	Sell	Sell		Adjustments (Note A)	December 31, 2023	December 31, 2023
					Shares (In Thousands)	Amount	Shares (In Thousands)	Amount	Shares (In Thousands)	Selling Price	Booked Cost	Disposal Profit		Shares (In Thousands)	Amount
Far Eastern Department Stores, Ltd. Bai Yang Investment Co., Ltd.	Shares Bai Yang Investment Co., Ltd. Shares Pacific Liu Tong Investment Co., Ltd.	Investments accounted for using the equity method Investments accounted for using the equity method	Note B Note C	Subsidiary Associates of investor with significant influence over the Group	1,204,991 19,800	$ 12,213,294 314,351	450,000 177,594	$ 4,500,000 4,498,463	- -	$ - -	$ - -	$ - -	$ (1,372,912) (1,698,321)	1,654,991 197,394	$ 15,340,382 3,114,493

Note A: The share of comprehensive income recognized using the equity method, and paid cash dividend.

Note B: There was an increase in cash capital.

Note C: There are Yuan Ding Investment Corporation, Ta Chu Chemical Fiber Co., Ltd., Kai Yuang Investment Corp., Din Yuang Investment Co., Ltd., Yuan Tone Investment Co., Ltd. and An Ho Garment Co., Ltd.

• 71 -

TABLE 5

FAR EASTERN DEPARTMENT STORE CO., LTD.

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
Pacific Sogo Department Stores Co., Ltd. Chongqing FEDS Co., Ltd. FEDS Development Ltd.	Sogo Department Store Co., Ltd. Chongqing Pacific Consultant and Management Co., Ltd. Chongqing FEDS Co., Ltd.	Associate Same ultimate parent company Subsidiary	$ 117,810 499,194 (Note A) 303,464 (Note B)	- - -	$ 117,810 - -	Collection expedited - -	$ 21 - -	$ 117,810 - -

Note A: This balance refers to fund lending.

Note B: Mainly cash dividends receivable.

• 72 -

TABLE 6

FAR EASTERN DEPARTMENT STORES, LTD.

NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Net Income (Loss) of the Investee	Share of (Loss) Profit	Note
				December 31, 2023	December 31, 2022	Shares (In Thousands)	Percentage of Ownership (%)	Carrying Amount
Far Eastern Department Stores Co., Ltd. Bai Ding Investment Co., Ltd. FEDS Asia Pacific Development Co., Ltd. FEDS New Century Development Co., Ltd. Bai Yang Investment Co., Ltd. Ya Tung Department Stores, Ltd. Yu Ming Advertising Agency Co., Ltd. Far Eastern Hon Li Do Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Sogo Department Stores Co., Ltd. Pacific China Holdings (HK) Limited Pacific China Holding Ltd. (B.V.I.)	Bai Yang Investment Co., Ltd. Oriental Securities Corporation Pacific Liu Tong Investment Co., Ltd. Bai Ding Investment Co., Ltd. Far Eastern Ai Mai Co., Ltd. FEDS Development Ltd. Yu Ming Advertising Agency Co., Ltd. Ya Tung Department Stores, Ltd. Ding Ding Integrated Marketing Service Co., Ltd. Asians Merchandise Company Far Eastern Hon Li Do Co., Ltd. Far Eastern CitySuper Co., Ltd. Yuan Hsin Digital Payment Co., Ltd. Oriental Securities Corporation Pacific Liu Tong Investment Co., Ltd. Far Eastern International Leasing Corporation Pacific Sogo Department Stores Co., Ltd. Yue Ming Trading Co., Ltd. Far Eastern Hon Li Do Co., Ltd. Far Eastern CitySuper Co., Ltd. Yuan Hsin Digital Payment Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Chubei New Century Shopping Mall Co., Ltd. FEDS Asia Pacific Development Co., Ltd. Far Eastern International Leasing Corporation Bai Ding Investment Co., Ltd. FEDS New Century Development Co., Ltd. Pacific Liu Tong Investment Co., Ltd. FEDS Development Ltd. Pacific China Holdings (HK) Limited Far Eastern Big City Shopping Malls Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Liu Tong Investment Co., Ltd. Pacific Sogo Department Stores Co., Ltd. Pacific Department Store Co., Ltd. Pacific China Holdings (HK) Limited Pacific Department Store Co., Ltd. Lian Ching Investment Co., Ltd. (Note C) Pacific Venture Investment Ltd. Sogo Department Store Co., Ltd. Ding Ding Integrated Marketing Service Co., Ltd. Far Eastern Big City Shopping Malls Co., Ltd. Yuan Hsin Digital Payment Co., Ltd. Pacific China Holding Ltd. (B.V.I.) Bai Fa China Holdings (HK) Limited	Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Island Taiwan Taiwan Taiwan US Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Island Hong Kong Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Hong Kong Taiwan Taiwan Hong Kong Taiwan Taiwan Taiwan Taiwan British Virgin Island Hong Kong	Investment Securities investment Investment Investment Retail Investment Advertising and import agent Department store Marketing Trading Building leasing Retail E-ticket Securities investment Investment Leasing Department store Import and export trading and distribution Building leasing Retail E-ticket Investment Investment Department store Shopping mall Leasing Investment Shopping mall Investment Investment Investment Department store Investment Investment Investment Department store Department store Investment Department store Investment Investment Credit card business Marketing Department store E-ticket Investment Investment	$ 16,222,181 83,986 1,764,210 33,357 1,535,538 125,058 33,000 1,419,292 64,500 5,316 40,278 478,269 - 95,627 658,129 301,125 33,490 21,291 28,672 - - 99,000 99,000 5,300,000 1,522,761 1,555,590 577,457 5,445,272 4,597,463 723,946 4,559,660 200,000 55,000 1,200 8,400 4,469,904 55,735 7,175,973 539,541 270,641 357,050 32,984 64,500 300,000 - 6,662,985 46	$ 11,722,181 143,652 1,764,210 33,357 1,535,538 125,058 33,000 1,419,292 64,500 5,316 40,278 478,269 238,292 163,563 658,129 301,125 33,490 21,291 28,672 - 21,179 99,000 99,000 5,300,000 1,522,761 1,555,590 577,457 5,445,272 99,000 723,946 4,559,660 200,000 55,000 1,200 8,400 4,469,904 62,480 7,175,973 599,000 270,641 357,050 32,984 64,500 300,000 358,292 6,662,985 46	1,654,991 83,008 281,734 131,979 87,744 218 3,500 51,000 3,631 950 1,571 47,827 - 57,460 100,250 22,203 11,254 4,901 1,259 2 - 19,800 19,800 530,000 149,100 132,388 66,021 552,000 197,394 185 68,880 20,000 11,000 200 1,400 650,817 6,165 103,320 54,350 26,764 100,000 7,120 3,631 30,000 - 192,200 2	100 20 35 67 100 54 100 100 10 100 56 96 - 14 13 5 1 15 44 - - 2 2 100 70 30 33 100 25 46 40 40 1 - - 79 3 60 29 50 48 34 10 60 - 100 100	$ 15,340,382 1,367,311 4,436,702 2,593,164 (Note B) (22,750 ) 1,106,787 118,099 361,639 21,519 4,942 14,607 172,159 - 946,547 1,592,409 329,006 184,747 69,534 14,649 1 - 331,739 331,739 5,135,950 1,651,209 1,697,995 1,312,545 5,522,887 3,114,493 942,438 (810,445 ) 377,755 184,017 3,152 21,367 12,269,437 138,647 (1,215,668 ) 1,012,564 - - - 21,519 566,632 - (2,148,628 ) 46	$ 190,566 212,377 1,714,863 333,324 (210,572 ) (281,480 ) 12,359 (105,960 ) 32,719 104 2,687 15,486 (966 ) 212,377 1,714,863 150,882 2,193,039 4,477 2,687 15,486 (966 ) 1,714,863 1,714,863 (32,711 ) 163,838 150,882 333,324 9,130 1,714,863 (281,480 ) (383,299 ) 281,871 1,714,863 1,714,863 1,714,863 2,193,039 140,373 (383,299 ) 140,373 - - - 32,719 281,871 (966 ) (388,884 ) -	$ 190,597 42,111 602,420 222,415 (210,572 ) (164,459 ) 12,359 (105,705 ) 3,336 104 1,609 14,814 (89 )	Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Subsidiary Subsidiary Subsidiary Associate Associate Subsidiary Associate Subsidiary Associate Subsidiary Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Subsidiary Associate Subsidiary Associate Associate Associate Subsidiary Associate Subsidiary Subsidiary

(Continued)

• 73 -

(Concluded)

Note A: The foreign-currency investments were translated at the rate of US$1:NT$30.705 prevailing on December 31, 2023.

Note B: The amount is the investment accounted for using the equity method to $2,690,274 thousand deduct the parent company shares reclassification to treasury shares of $97,110 thousand.

Note C: The amount of Lian Ching Investment Co., Ltd. has been written off to zero, no liabilities were undertaken by the Group and the accounts are not disclosed in the financial statement.

• 74 -

TABLE 7

FAR EASTERN DEPARTMENT STORES, LTD.

INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital (Note A)	Method of Investment (Note G)	Accumulated Outflow of Investment from Taiwan as of January 1, 2023 (Note A)	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2023 (Note A)	Net Income (Loss) of the Investee (Note E)	% Ownership of Direct or Indirect Investment	Share of (Loss) Profit (Note E)	Carrying Amount as of December 31, 2023	Accumulated Repatriation of Investment Income as of December 31, 2023
					Outflow	Inflow
Shanghai Pacific Department Store Co., Ltd.(Note H) Chengdu Quanxing Mansion Pacific Department Store Co., Ltd. Chongqing Metropolitan Plaza Pacific Department Store Co., Ltd. Chongqing Pacific Consultant and Management Co., Ltd. Shanghai Pacific Consultant and Management Co., Ltd. Shanghai Bai Ding Consultant and Management Co., Ltd. Chongqing FEDS Co., Ltd. Chengdu Department Emporium Group Co., Ltd. Dalian Pacific Department Store Co., Ltd. Pacific (China) Investment Co., Ltd. Chengdu FEDS Co., Ltd. Yuan Ding Enterprise (Shanghai) Co., Ltd.	Department store Department store Department store Consulting services Consulting services Consulting services Department store Department store, logistics and storehouse Department store Investment Department store Wholesale of equipment and consulting services	$ 543,479 675,203 1,688,775 2,241,465 10,747 3,071 85,974 975,423 69,363 6,939,330 4,114,470 7,644,800	(2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2)	$ 394,022 (Note B) 675,203 (Note B) 1,688,775 (Note C) 6,141 (Note B) 5,266 (Note B) - - - - - - -	$ - - - - - - - - - - - -	$ - - - - - - - - - - - -	$ 394,022 (Note B) 675,203 (Note B) 1,688,775 (Note C) 6,141 (Note B) 5,266 (Note B) - - - - - - -	$ (28,265) 82,819 (87,809) (10,391) 53 1,044 (231,220) 116,852 (1,149) (34,026) (17,785) (273,631)	56 78 78 78 38 100 100 26 78 78 78 20	$ (18,982) 55,621 (58,972) (6,979) 17 1,044 (231,220) - (771) (22,852) (11,944) (54,726)	$ - 6,505 421,754 734,225 4,365 14,475 384,599 1,059,206 4,885 140,766 3,642 1,282,202	$ - - - - - - - - - - - -

(Continued)

• 75 -

Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2023	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$ - (Note D)	$242,969 (US$7,913 thousand) (Notes A and D)	$ - (Note F)

• Note A: Translated at the rate of US$1:NT$30.705 and RMB1:NT$4.3352 prevailing on December 31, 2023.

• Note B: Amount remitted by the former shareholders.

• Note C: The amount of $92,115 thousand was remitted by the former shareholders plus $1,596,660 thousand from subsidiaries.

• Note D: The payment made by the Company and the investment amount approved by the Investment Commission, except for the payment made by subsidiary’s investment amount approved by the Investment Commission. The financial report was audited by an international accounting firm with a cooperative working relationship.

• Note E: The financial report was audited by an international accounting firm with a cooperative working relationship.

• Note F: There is no upper limit, as stated in the Principles Governing the Review of Investment or Technical Corporation in Mainland China (No. 11020435420), which was issued by the Industrial Development Bureau, Ministry of Economic Affairs, ROC.

• Note G: Three investment types are as follows:

• The Company made the investment directly.

• The Company made the investment through companies registered in a third region. The companies registered in a third region were FEDS Development Ltd. and Pacific China Holding Ltd. (B.V.I.)

• Others.

• Note H: Due to the capital reduction of Shanghai Pacific Department Store Co., Ltd. to make up losses, the shares held by the Consolidated Company were all extinguished; therefore, Shanghai Pacific Department Store Co., Ltd. was derecognized at the end of the period.

(Concluded)

• 76 -

TABLE 8

FAR EASTERN DEPARTMENT STORES, LTD.

INFORMATION ON MAJOR SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2023

Major Shareholder	Shareholding	Shareholding
	Number of Shares Held	Shareholding Percentage
Far Eastern New Century Corporation Yuan Ding Investment Corporation Asia Cement Corporation Yuan Tone Investment Co., Ltd.	241,769,702 139,785,985 80,052,950 79,699,530	17.06 9.86 5.64 5.62

Note: The information on major shareholders in the table above is extracted as of the last business day of the current quarter. The shareholders are holding non-physical common and preferential stocks (including treasury stocks) of 5% or more. The share capital in the consolidated financial statements of the Company and the actual registration of non-physical shares may differ due to a difference in computation basis.

• 77 -

FAR EASTERN DEPARTMENT STORES, LTD.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item Major Accounting Items in Assets, Liabilities and Equity Statement of cash Statement of trade receivables Statement of inventories Statement of changes in financial assets at fair value through other comprehensive income 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 and accumulated impairment of property, plant and equipment Statement of changes in investment properties Statement of changes in right-of-use assets Statement of changes in accumulated depreciation for right-of-use assets Statement of short-term borrowings Statement of short-term bills payable Statement of trade payables Statement of other payables Statement of long-term borrowings Statement of lease liabilities Statement of deferred tax liabilities Major Accounting Items in Profit or Loss Statement of operating revenue Statement of operating cost Statement of operating expenses Statement of other gains and losses Statement of finance costs Statement of labor, depreciation and amortization by function

**Statement Index **

1 2 3 4 5 Note 12 Note 12 Note 14 6 6 7 8 9 Note 18 10 11 Note 23(4) Note 21 12 13 Note 22(4) Note 22(5) 14

• 78 -

STATEMENT 1

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF CASH DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Rate (%) Cash on hand Revolving funds Checking accounts Demand deposits (Note) 0.40-1.45	Amount $ 1,325 35,537 2,019,307 35,314 $ 2,091,483

Note: It includes US$41,615.08, EUR11,129.93, AUD741.96 and HK$57,758.63 that were translated at the exchange rates of US$1=NT$30.705, EUR1=NT$33.98, AUD1=NT$20.98 and HK$1=NT$3.929, respectively.

• 79 -

STATEMENT 2

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF TRADE RECEIVABLES DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Client Name Related parties (Note) Yuan Ding Co., Ltd. Far Eastern International Bank Others (Note) Non-related parties National credit card center of R.O.C. Others (Note) Less: Allowance for impairment loss	Amount $ 30,645 24,781 7,846 63,272 328,043 197,115 525,158 (2,615) 522,543 $ 585,815

Note: The amount of individual client included in others does not exceed 5% of the account balance.

• 80 -

STATEMENT 3

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF INVENTORIES DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Merchandise Cosmetics and boutiques Supermarket and restaurants Men’s fashion Living and lifestyle Others		Amount
		Cost Net Realizable Value $ 351,608 $ 490,153 26,507 40,137 3,202 6,777 317 366 44 45 $ 381,678 $ 537,478

Note: The amount of individual client included in others does not exceed 5% of the account balance.

• 81 -

STATEMENT 4

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investees Shares Asia Cement Corporation Far Eastern New Century Corporation Yuan Ding Leasing Corp. Kaohsiung Rapid Transit Corporation Yuan Shi Digital Technology Co., Ltd. Yuan Ding Co., Ltd.	Balance at January 1, 2023 Shares (In Thousands) Amount 50,000 $ 2,050,021 19,964 636,863 7,309 71,993 6,286 33,756 31 571 3 10 $ 2,793,214	Additions in Investment Shares (In Thousands) Amount - $ - - - - - - - 177 1,768 - - $ 1,768	Decrease in Investment Shares (In Thousands) Amount - $ - - - - - - - - - - - $ -	Unrealized Profit or Loss Amount $ 22,500 (13,975) 855 - - - $ 9,380	Balance at December 31, 2023 Shares (In Thousands) Amount Collateral 50,000 $ 2,072,521 Including 35,000 thousand shares provided as collateral for bank borrowings and issuance 19,964 622,888 Nil 7,309 72,848 Nil 6,286 33,756 Nil 208 2,339 Nil 3 10 Nil $ 2,804,362
	Shares (In Thousands) 50,000 19,964 7,309 6,286 31 3	Shares (In Thousands) - - - - 177 -	Shares (In Thousands) - - - - - -		Shares (In Thousands) 50,000 19,964 7,309 6,286 208 3

• 82 -

STATEMENT 5

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Par Value Investees Per Share Bai Yang Investment Co., Ltd. (BYIC) $ 10 Pacific Liu Tong Investment Co., Ltd. (PLTI) 10 Bai Ding Investment Co., Ltd. (BDIC) 10 Oriental Securities Corporation (OSC) 10 Far Eastern Ai Mai Co., Ltd. (AIMAI) 10 FEDS Development Co., Ltd. (BVI) US$ 10 Far Eastern CitySuper Co., Ltd. (FECS) 10 Yuan Hsin Digital Payment Co., Ltd. (YHDP) 10 Yu Ming Advertising Agency Co., Ltd. (YMAC) 10 Ding Ding Integrated Marketing Service Co., Ltd. (DDIM) 10 Far Eastern Hon Li Do Co., Ltd. (FEHLD) 10 Asians Merchandise Company (AMC) US$ 1 Ya Tung Department Stores, Ltd. (YTDS) 10 Add: Credit balance on the carrying amounts of investments accounted for using the equity method and reclassified to other liabilities Less: Ordinary shares held by subsidiary and reclassified from long-term investments to treasury shares Less: The differences of accounting treatments from the consolidated financial statements (Note E)	Balance at January 1, 2023 Shares (In Thousands) Amount 1,204,991 $ 12,213,294 281,734 4,189,408 119,981 2,427,337 141,980 1,894,683 87,744 193,362 218 1,285,817 47,827 158,022 6,171 21,967 3,500 117,506 3,631 18,146 1,571 13,553 950 4,840 51,000 467,263 23,005,198 - (97,110) 22,908,088 (335,088) $ 22,573,000		Changes in	Investment		Other Amount (Note D) $ (1,811,612 ) (363,368 ) 7,644 3,856 (5,540 ) - (677 ) - (12,450 ) 6 (578 ) - (240) $ (2,182,959)	Balance at December 31, 2023 Shares (In Thousands) (Note A) % Amount 1,654,991 100 $ 15,340,382 281,734 35 4,436,702 131,979 67 2,690,274 83,008 20 1,367,311 87,744 100 (22,750 ) 218 54 1,106,787 47,827 96 172,159 - 0 - 3,500 100 118,099 3,631 10 21,519 1,571 56 14,607 950 100 4,942 51,000 100 361,639 25,611,671 22,750 (97,110) 25,537,311 (313,803) $ 25,223,508	Market Value or Net Assets Value	Market Value or Net Assets Value
		Addition/Decrease in Investment (Notes B and C) Shares (In Thousands) Amount 450,000 $ 4,500,000 - - 11,998 - (58,972 ) (589,717 ) - - - - - - (6,171 ) (21,878 ) - - - - - - - - - - $ 3,888,405	Share of Loss of Subsidiaries and Associates Accounted for Using the Equity Method Amount $ 190,597 602,420 222,415 42,111 (210,572 ) (164,459 ) 14,814 (89 ) 12,359 3,336 1,609 104 (105,705) 608,940 21,285 $ 630,225	Unrealized Gain or Loss on Financial Assets At FVTOCI Amount $ 198,725 1,927 31,225 16,409 - 441 - - 679 - 6 - 75 $ 249,487	Exchange Differences on Translating the Financial Statements of Foreign Operations Amount $ 49,378 6,315 1,653 (31 ) - (15,012 ) - - 5 31 17 (2 ) 246 $ 42,600
							Shares (In Thousands) (Note A) % 1,654,991 100 281,734 35 131,979 67 83,008 20 87,744 100 218 54 47,827 96 - 0 3,500 100 3,631 10 1,571 56 950 100 51,000 100
	Shares (In Thousands) 1,204,991 281,734 119,981 141,980 87,744 218 47,827 6,171 3,500 3,631 1,571 950 51,000	Shares (In Thousands) 450,000 - 11,998 (58,972 ) - - - (6,171 ) - - - - -						Unit Price NT$ 9.29 15.67 20.40 16.47 (0.19) 4,481.34 4.49 - 33.74 5.93 11.63 5.2 7.09	Total Amount $ 15,373,246 4,415,353 2,692,096 1,367,114 (16,830 ) 976,933 214,590 - 118,099 21,519 18,274 4,942 361,639 $ 25,546,975

Note A: Including 48,643 thousand shares of OSC provided as collateral of bank borrowings and bills payables.

Note B: BYIC conducted a cash capital increase in December 2023, and the Company subscribed 450,000 thousand shares at $10 par. OSC conducted a cash capital reduction in August 2023 to refund the share payment. The Company's invested shares decreased by 58,972 thousand shares; the liquidation of YHDP. in July 2023 was completed, and the Company's invested shares decreased by 6,171 thousand shares.

Note C: Includes share dividends.

Note D: The retained earnings was adjusted for an amount of $(1,789,893) thousand in proportion to the shareholding ratio, additional paid-in capital was adjusted for an amount of $2,571 thousand, actuarial loss for an amount of $(21,378) thousand, and cash dividends for an amount of $(374,259) thousand.

Note E: Please see Note 11.

• 83 -

STATEMENT 6

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF RIGHT-OF-USE ASSETS DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Cost Land Buildings Plant, transportation, and miscellaneous equipment Accumulated depreciation Land Buildings Plant, transportation, and miscellaneous equipment	Balance at January 1, 2023 $ 8,449,447 19,691,018 9,120 28,149,585 (986,185 ) (4,195,961 ) (3,746) (5,185,892) $ 22,963,693	Addition in $ 29,909 50,511 4,967 $ 85,387 $ (282,114 ) (847,781 ) (2,303) $ (1,132,198)	Decrease in Reclassification $ (45,555 ) $ - (527,879 ) (5,640 ) - - $ (573,434) $ (5,640) $ 45,554 $ - 419,433 - - - $ 464,987 $ -	Balance at December 31, 2023 Note $ 8,433,801 19,208,010 14,087 27,655,898 (1,222,745 ) (4,624,309 ) (6,049) (5,853,103) $ 21,802,795

• 84 -

STATEMENT 7

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF SHORT-TERM BORROWINGS DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

Type Contract Period Interest Rates (%) Credit loans Bank of Taiwan 2023/10/27-2024/01/25 1.68 Yuanta Bank 2023/10/13-2024/01/11 1.68 Secured loans Far Eastern International Bank 2023/12/07-2024/01/15 1.80 Bank of Taiwan 2023/10/27-2024/02/02 1.68 Taiwan Cooperative Bank 2023/12/07-2024/01/25 1.80 ChinaTrust Commercial Bank 2023/12/07-2024/03/22 1.69	Balance, End of Year Loan Commitments Collateral $ 800,000 $ 800,000 - 1,000,000 1,000,000 - 1,800,000 1,800,000 750,000 800,000 Shares 700,000 700,000 Land and buildings 2,000,000 2,000,000 Land and buildings 1,400,000 3,500,000 Land and buildings 4,850,000 7,000,000 $ 6,650,000 $ 8,800,000

• 85 -

STATEMENT 8

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF SHORT-TERM BILLS PAYABLE DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Promissory Institution Contract Period Interest Rates (%) Mega Bills Finance 2023/12/14-2024/01/03 1.788 International Bills Finance Corporation 2023/12/22-2024/01/11 1.798 Taiwan Finance Corporation 2023/12/14-2024/01/11 1.788	Nominal Amount $ 600,000 60,000 200,000 $ 860,000	Discount Amount $ 58 30 59 $ 147	Carrying Amount Collateral $ 599,942 - 59,970 - 199,941 - $ 859,853

• 86 -

STATEMENT 9

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF TRADE PAYABLES DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Vendor Name Related parties (Note) Unrelated parties Others (Note)	Amount $ 70,403 5,999,059 $ 6,069,462

Note: The amount of individual vendor in others does not exceed 5% of the account balance.

• 87 -

STATEMENT 10

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF LONG-TERM BORROWINGS DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Type and Contract Repayment Interest Rates Creditor Period Terms (%) Secured loans Bank of Taiwan 2025/11/01 A revolving line of credit of loans is allowed 1.68 Hua Nan Commercial Bank 2025/08/25 A revolving line of credit of loans is allowed 1.65 Credit loans Bank of China 2025/07/22 A revolving line of credit of loans is allowed 1.74 Mega Bank 2024/09/25 A revolving line of credit of loans is allowed 1.65 Bank of Taiwan 2025/11/01 A revolving line of credit of loans is allowed 1.68 ChinaTrust Commercial Bank 2024/10/31 A revolving line of credit of loans is allowed 1.79 Mizuho Bank 2025/08/02 A revolving line of credit of loans is allowed 1.68	Current $ - - - - 230,000 - 250,000 - 480,000 $ 480,000	Non-current $ 2,400,000 8,000,000 10,400,000 1,000,000 - 1,000,000 - 1,300,000 3,300,000 $ 13,700,000	Total Collateral $ 2,400,000 Land and buildings 8,000,000 Land and buildings 10,400,000 1,000,000 - 230,000 - 1,000,000 - 250,000 - 1,300,000 - 3,780,000 $ 14,180,000

• 88 -

STATEMENT 11

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF LEASE LIABILITIES DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

				Balance at
				December 31,
Item	Summary	Lease Period	Discount Rates	2023	Note
Land		2003/10/31-2053/10/30	1.71%-1.72%	$ 5,535,718	-
Buildings		2011/12/29-2041/12/31	0.86%-1.72%	7,271,830	-
Miscellaneous equipment		2019/03/01-2028/08/14	0.86%-1.71%	8,195	-
				12,815,743
Transferred into current liabilities
within a year				(870,027)
				$ 11,945,716

• 89 -

STATEMENT 12

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF OPERATING COST FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Cost of goods sold Inventories, beginning of year Add: Purchases Less: Inventories, end of year Less: Transferred to operating expenses Rental cost Others	Amount $ 353,112 3,406,448 (381,678) (866) 3,377,016 170,945 31,982 $ 3,579,943

• 90 -

STATEMENT 13

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Advertising Payroll Depreciation Utilities Cleaning fee Tax Others (Note)	Selling and Marketing Expenses General and Administrative Expenses $ 286,566 $ - - 1,152,698 - 1,754,616 - 306,090 - 297,668 - 290,856 73,710 1,105,324 $ 360,276 $ 4,907,252	Expected Credit Loss $ - - - - - - 199 $ 199	Total $ 286,566 1,152,698 1,754,616 306,090 297,668 290,856 1,179,233 $ 5,267,727

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

• 91 -

STATEMENT 14

FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

Employees’ benefits expenses Salary and bonus Labor and health insurance Pension Director remuneration Others Depreciation Amortization			2023	Total $ 1,072,411 95,311 57,821 80,287 35,325 $ 1,341,155 $ 1,830,345 $ 26,351			2022
		Classified as Cost of Revenue $ - - - - - $ - $ 75,729 $ -	Classified as Operating Expenses $ 1,072,411 95,311 57,821 80,287 35,325 $ 1,341,155 $ 1,754,616 $ 26,351			Classified as Cost of Revenue $ - - - - - $ - $ 81,382 $ -	Classified as Operating Expenses $ 1,070,632 92,719 38,018 57,599 32,724 $ 1,291,692 $ 1,826,541 $ 30,298	Total $ 1,070,632 92,719 38,018 57,599 32,724 $ 1,291,692 $ 1,907,923 $ 30,298

Note A: As of December 31, 2023 and 2022, the Company had 1,282 and 1,367 employees, which both included 5 directors not serving concurrently as employees.

Note B: As of December 31, 2023 and 2022, the Company’s average employees’ benefits expenses were $987 thousand and $906 thousand, respectively.

Note C: As of December 31, 2023 and 2022, the Company’s average employees’ salary and bonus were $840 thousand and $786 thousand, respectively.

Note D: The adjustment of average employees’ salary and bonus was 6.87%.

Note E: The Company has established the remuneration committee in accordance with the laws and regulations. The committee takes into consideration the remuneration offered by the industry counterparts and publicly listed corporations and convenes meetings to evaluate and determine the remuneration of directors and managers.

The distribution of remuneration of directors is as provided by the Articles of Incorporation, Article 27. If the Company is profitable for the year, it shall appropriate not more than 2.5% of its profit as remuneration of directors. The actual appropriation percentage and amount of the remuneration of directors are reported to the shareholders’ meeting by the board of directors after taking into consideration the performance evaluation, operating performance of the Company, future business risks and other relevant factors. Furthermore, the payment is determined by taking into consideration the payments offered by the industry counterparts and publicly listed corporations.

The remuneration to managers consists of four types of payments, namely salary, pension, bonus reward and special allowance, and compensation of employees. The compensation of employees is appropriated as per the Articles of Incorporation. The actual appropriation percentage, amount and disbursement method are subject to the resolution passed by the board of directors, and in turn shall be reported to the shareholders’ meeting. The overall combination of the compensation is determined by taking into consideration the payments offered by the industry counterparts for the corresponding positions. The reasonableness of the correlation between individual performance, operating performance of the Company and future business risks is also taken into consideration, so as to establish a compensation policy that is rewarding and can reasonably reflect performances.

The Company shall review the compensation level of the market on a regular basis, so as to establish a fair, competitive and rewarding compensation benefit that retains employees and attracts outstanding talents to join the big family of Far Eastern Department Store. The compensation system consists of economic factors, namely the fixed salary, variable bonus and employee benefits, as well as non-economic factors, namely the work environment, job rotation, training and education, etc. Via a holistic design of the compensation system, the Company seeks to attract and retain outstanding and critical talents in the entity, boost working morale which form the core competitive advantages of the Company.

• 92 -