FIRST HOTEL - Annual Report 2021 | FinancialReports.eu

FIRST HOTEL COMPANY LTD.

Financial Statements and Independent Auditor's Report 2021 and 2020

Where any discrepancy arises between the English translation and the original Chinese version of this Report the Chinese version shall prevail.

Address: No. 63, Section 2, Nanjing East Road, Taipei City TEL: (02)2541-8234

§Table of Contents§

				Notes to Financial
		Item	Page	Statements
I.	Cover		1	-
II.	Table of Contents		2	-
III.	Independent Auditor's Report		3～6	-
IV.	Balance sheets		7	-
V.	Comprehensive Income statements		8～10	-
VI.	Statements of changes in equity		11	-
VII. Cash		flow statements	12～13	-
VIII. Notes to financial statements.
	(i)	Company history	14	1
	(ii)	Date and procedures for passing the	14	2
		financial report
	(iii)	Newly-released and amended	14～16	3
		standards and interpretations
	(iv)	Summary of significant accounting	16～25	4
		policies
	(v)	Critical accounting judgments and	25	5
		key sources of estimation and
		uncertainty
	(vi)	Statements of main accounting items	25～39	6~16
	(vii)	Related-Party Transactions	44	19
	(viii)	Pledged assets	-	-
	(ix)	Significant contingent liabilities and	44	20
		unrecognized contract commitments
	(x)	Losses due to major disasters	-	-
	(xi)	Significant events after the balance	-	-
		sheet date
	(xii) Others		39～45	17~18
				, 21~22
	(xiii) Additional disclosures
		1. Significant transactions	45～46、48～49	23
		information
		2. Information on investees	45～46、48～49	23
		3. Information on investments in	46	23
		China
		4. Information on major shareholders	46、50	23
	(xiv)	Segment Information	46～47	24
IX.	List of	Major Accounting Items	51～57	-

Independent Auditor's Report

To First Hotel Company Ltd.:

Opinions

We have audited the balance sheets of First Hotel Company Ltd. as of December 31, 2021 and as of December 31, 2020, as well as the comprehensive income statements, the statements of changes in equity and cash flow statements, and notes to the financial statements (including a summary of significant accounting policies) for the years 2021 and 2020, from January 1st to December 31st.

In our opinion, based on our audits and the reports of other independent auditors (please refer to the Other Information), the financial statements referred to above present fairly, in all material respects, the financial position of First Hotel Company Ltd. as of December 31, 2021 and 2020, and its financial performance and cash flows from January 1st to December 31st, 2021 and 2020, in conformity with the requirements of regulations governing the preparation of financial statements by securities issuers and International Financial Reporting Standards, International Accounting Standards, and Interpretations endorsed and issued into effect by the Financial Supervisory Commission.

Basis for Opinions

We conducted our audits in accordance with the “Regulations Governing Auditing” and generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. 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 were of most significance in our audit to First Hotel Company Ltd. of the 2021 financial statements of the current period in our professional judgment. 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. 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.

Key audit matters of the 2021 financial statements of First Hotel Company Ltd. are as follows:

Investments accounted for under the equity method

As of December 31, 2021, the balance of the investment in Today's Hotel Corporation of the USA under the equity method was NT$3,871,871 thousand. As of December 31, 2021, the amount of loss recognized under the equity method in relation to Today's Hotel Corporation USA was NT$128,797 thousand. Since the amounts of the aforementioned items are significant in relation to the overall financial statements, if the investee's financial statements do not properly reflect the results of operations for the year or do not correctly calculate the investment income or loss, the amount in the investment using the equity method and its share of the income or loss will be adjusted for deviations and is therefore considered a key audit matter for the year ended December 31, 2021. Please refer to Notes 4 and 9 for related accounting policies and disclosures.

In order to address the above risks, we understood the planning of the audit teams of these affiliated companies, assessed the professional competence of the audit teams and communicated the materiality of the audit and the risk of a material misstatement by means of audit contact letters. Upon completing the audit, we assessed whether the audit teams had obtained sufficient and appropriate audit evidence and obtained audited financial statements to confirm and verify the accuracy of the amount in profit or loss and related investments recognized under the equity method.

Other Information

Among the affiliated companies accounted for under the equity method in the financial statements of First Hotel Company Ltd., the 2021 and 2020 financial statements of Forward Time Corporation, Today’s V, Inc. and Today’s VI, LLC accounted for under the equity method by F&W Hotel corporation and Today's Hotel Corporation USA have not been audited by us. Therefore, our opinion on the financial statements referred to above is based on the report of the other auditors as to the amounts of the above-mentioned investments accounted for under the equity method and the shares of income or loss of the affiliates accounted for under the equity method. As of December 31, 2021 and 2020, the aforementioned balances audited by other CPAs were NT$1,468,847 thousand and NT$1,471,744 thousand, respectively, representing 14% of the total assets, and the shares of profit or loss of affiliates recognized by the equity method were NT$16,524thousand in loss and NT$76,283 thousand in profit, respectively, for the years 2021 and 2020, representing (18%) and 38% of net profit before tax, respectively.

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 the IFRS, IAS, IFRIC and SIC endorsed and issued into effect by the Financial Supervisory Commission 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 ability of FIRST HOTEL COMPANY LTD 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 FIRST HOTEL COMPANY LTD's financial reporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

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

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

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. Fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not to express an
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opinion on the effectiveness of the internal control of FIRST HOTEL COMPANY LTD.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting. Based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of FIRST HOTEL COMPANY LTD. to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s report. However, future events or conditions may cause FIRST HOTEL COMPANY LTD. to cease to continue as a going concern.
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.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within FIRST HOTEL COMPANY LTD. to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion of FIRST HOTEL COMPANY LTD.

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

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

From the matters communicated with those charged with governance, we determine those of most significance in the audit of FIRST HOTEL COMPANY LTD.’s financial statements for the year ended December 31, 2021 and are the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences

of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Deloitte & Touche
CPA	CPA
Ying-Chou Chen	Wang-Sheng Lin
Financial Supervisory Commission Approval	Financial Supervisory Commission Approval
Jin-Guan-Zheng-Shen-Zi No.	Jin-Guan-Zheng-Shen-Zi No.
1050024633	1060023872

March 28, 2022

FIRST HOTEL COMPANY LTD.

Balance sheets

From January 1 to December 31, 2021 and 2020

Code 1100 1110 1120 1136 1150 1170 1476 1479 11XX 1517 1550 1600 1760 1840 1920 1990 15XX 1XXX Code 2150 2219 2230 2300 21XX 2570 2640 2645 25XX 2XXX 3110 3210 3240 3200 3310 3320 3350 3300 3410 3420 3400 3XXX	Assets Current assets Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Financial assets at fair value through other comprehensive income - current (Notes 4 and 8) Financial assets at amortized cost - current (Notes 4 and 6) Notes receivable (Note 4) Accounts receivable (Note 4) Other financial assets - current (Note 4) Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income - non- current (Notes 4 and 8) Investments accounted for using the equity method (Notes 4 and 9) Property, plant and equipment (Note 4 and 10) Investment property (Notes 4 and 11) Deferred tax assets (Notes 4 and 15) Refundable deposits (Note 20) Other non-current assets Total non-current assets Total assets Liabilities and Shareholders’Equity Current liabilities Notes payable Other payables Current tax liabilities (Note 4) Other current liabilities Total current liabilities Non-current liabilities Deferred tax liabilities (Notes 4 and 15) Net defined benefit liabilities - non-current (Notes 4 and 12) Deposits received (Notes 4 and 11) Total non-current liabilities Total liabilities Equity Capital stock Capital surplus Capital stock premium Gain on disposal of assets Total capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Total retained earnings Other equity interests Exchange differences arising on translation of foreign operations Unrealized valuation gain or loss on financial assets at fair value through other comprehensive income Total other equity Total equity Total liabilities and equity		December 31, 2021	December 31, 2021	% 3 - - 23 - - - - 26 20 41 3 9 1 - - 74 100 1 - - - 1 12 - 1 13 14 48 1 - 1 8 6 16 30 3 ) 10 7 86 100		Unit: Thousand NTD December 31, 2020	Unit: Thousand NTD December 31, 2020	Unit: Thousand NTD December 31, 2020
			Amount $ 312,396 11,239 1,557 2,337,084 114 747 6,798 1,286 2,671,221 2,103,165 4,255,000 374,366 946,853 88,610 2,398 322 7,770,714 $ 10,441,935 $ 81,659 15,289 39,589 8,534 145,071 1,183,166 1,089 126,697 1,310,952 1,456,023 4,999,984 76,008 23 76,031 871,613 592,542 1,722,909 3,187,064 354,443 ) 1,077,276 722,833 8,985,912 $ 10,441,935				Amount $ 267,017 11,220 1,456 2,265,022 114 606 6,671 1,294 2,553,400 2,092,716 4,454,346 375,910 948,509 64,348 2,939 361 7,939,129 $ 10,492,529 $ 64,610 18,382 47,564 8,626 139,182 1,198,571 960 126,757 1,326,288 1,465,470 4,999,984 76,008 23 76,031 855,488 592,542 1,735,476 3,183,506 257,394 ) 1,024,932 767,538 9,027,059 $ 10,492,529		%
		(		(		(		(	2 - - 22 - - - - 24 20 42 4 9 1 - - 76 100 1 - - - 1 12 - 1 13 14 48 1 - 1 8 6 16 30 3 ) 10 7 86 100

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

Chairperson: An-Sheng Ku Managerial officer: Hsiao-Hua Hsu Accounting officer: Hsiu-Mei Lin

FIRST HOTEL COMPANY LTD.

Comprehensive Income statements

From January 1 to December 31, 2021 and 2020

Code Operating revenues (Note 4) 4300 Rental incomes (Note 11) Travel service revenues 4411 Guest room revenues 4412 Food service revenues 4413 Post and telecommunication revenues 4418 Others 4400 Total travel service revenues 4000 Total operating revenues Operating costs (Note 14) 5300 Rental costs Travel service costs 5411 Guest room costs 5412 Food service costs 5413 Post and telecommunication service costs 5400 Total travel service costs 5000 Total operating costs 5900 Gross profit 6000 Operating expenses (Notes 4, 10, 11, 12 and 14) 6900 Operating profit		2021	Total basic % 85 3 12 - - 15 100 7 8 9 - 17 24 76 9 67	Total basic % 85 3 12 - - 15 100 7 8 9 - 17 24 76 9 67	Unit: Thousand NTD earnings per share 2020	Unit: Thousand NTD earnings per share 2020
		Amount $ 214,639 6,693 30,179 - 1,367 38,239 252,878 17,330 20,816 22,374 289 43,479 60,809 192,069 23,900 168,169			Amount $ 209,773 16,529 36,726 4 1,834 55,093 264,866 17,653 25,932 28,358 304 54,594 72,247 192,619 27,245 165,374	%
						79 6 14 - 1 21 100 7 10 10 - 20 27 73 11 62

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(Continued from previous page)

Code Non-operating income and expenses 7060 Share of gain or loss of affiliated enterprise accounted for using the equity method (Notes 4 and 9) 7100 Interest incomes (Note 4) 7130 Dividend incomes (Notes 4 and 8) 7190 Other incomes (Note 4) 7235 Net gain on financial assets at fair value through profit or loss 7510 Interest expenses (Note 11) 7590 Non-operating expenses 7000 Total non-operating income and expenses 7900 Profit before tax 7950 Income tax expenses (Notes 4 and 15) 8200 Net Profit Other comprehensive income (Notes 4, 9, 12, 13 and 15) Items that are not reclassified to profit or loss 8311 Remeasurement of defined benefit plan 8316 Unrealized valuation gain or loss on equity instruments at fair value through other comprehensive income 8320 Share of other comprehensive income of affiliated enterprise accounted for using the equity method 8349 Income taxes related to items that are not reclassified 8310		2021	% ( 52 ) 7 15 1 - - ( 1) (30) 37 ( 6) 31 - 4 21 ( 4) 21		2020
		Amount $ 130,531 ) 17,197 38,903 2,005 19 941 ) 2,177) 75,525) 92,644 14,240) 78,404 154 10,550 52,496 10,702) 52,498			Amount $ 42,214 ) 18,842 58,906 3,494 43 1,255 ) 2,068) 35,748 201,122 40,381) 160,741 505 86,361 ) 7,199 ) 1,681 91,374)	%
	( ( ( ( ( (			( ( ( ( ( ( (		( 16 ) 7 22 2 - - ( 1) 14 76 (16) 60 - ( 32 ) ( 3 ) 1 (34)

(Continued on next page)

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Code Items that will be reclassified under profit or loss 8371 Exchange differences on translation of financial statements of foreign operations of affiliated enterprises recognized under the equity method 8399 Income taxes related to items that may be reclassified to profit or loss 8360 8300 Other comprehensive income for the period (net after-tax) 8500 Total comprehensive income (loss) for the year Earnings per share (Note 16) 9710 Total basic earnings per share		2021	% ( 48 ) 9 (39) (18) 13		2020
		Amount $ 121,311 ) 24,262 97,049) 44,551) $ 33,853 $ 0.16			Amount $ 230,949 ) 46,190 184,759) 276,133) $ 115,392) $ 0.32	%
	( ( (			( ( ( (		( 87 ) 17 (70) (104) (44)

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

Chairperson: An-Sheng Ku Managerial officer: Hsiao-Hua Hsu Accounting officer: Hsiu-Mei Lin

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FIRST HOTEL COMPANY LTD.

Statements of changes in equity

From January 1 to December 31, 2021 and 2020

Unit: Thousand NTD

Retained	earnings (Notes 4 and 13) Special reserve Unappropriated retained earnings $ 592,542 $ 1,852,480 - ( 53,251 ) - ( 224,999 ) - 160,741 - 505 - 161,246 592,542 1,735,476 - ( 16,125 ) - ( 75,000 ) - 78,404 - 154 - 78,558 $ 592,542 $ 1,722,909	earnings (Notes 4 and 13) Special reserve Unappropriated retained earnings $ 592,542 $ 1,852,480 - ( 53,251 ) - ( 224,999 ) - 160,741 - 505 - 161,246 592,542 1,735,476 - ( 16,125 ) - ( 75,000 ) - 78,404 - 154 - 78,558 $ 592,542 $ 1,722,909	Other equity (Notes 4 and 13) Through other comprehensive Foreign operations Profit or loss at fair value Financial statement translation Financial assets measured Exchange difference Unrealized valuation gains and losses ( $ 72,635 ) $ 1,116,811 - - - - - - ( 184,759) ( 91,879) ( 184,759) ( 91,879) ( 257,394 ) 1,024,932 - - - - - - ( 97,049) 52,344 ( 97,049) 52,344 ($ 354,443) $ 1,077,276	Other equity (Notes 4 and 13) Through other comprehensive Foreign operations Profit or loss at fair value Financial statement translation Financial assets measured Exchange difference Unrealized valuation gains and losses ( $ 72,635 ) $ 1,116,811 - - - - - - ( 184,759) ( 91,879) ( 184,759) ( 91,879) ( 257,394 ) 1,024,932 - - - - - - ( 97,049) 52,344 ( 97,049) 52,344 ($ 354,443) $ 1,077,276		Total equity
			Foreign operations Financial statement translation Exchange difference ( $ 72,635 ) - - - ( 184,759) ( 184,759) ( 257,394 ) - - - ( 97,049) ( 97,049) ($ 354,443)
Legal reserve $ 802,237 53,251 - - - - 855,488 16,125 - - - - $ 871,613	Special reserve $ 592,542 - - - - - 592,542 - - - - - $ 592,542
		( ( ( (	( ( ( ( ( ( (	( (	( ( ( ( (	$ 9,367,450 - 224,999 ) 160,741 276,133) 115,392) 9,027,059 - 75,000 ) 78,404 44,551) 33,853 $ 8,985,912

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

(Please refer to the audit report dated March 28, 2022 of Deloitte & Touche).

Chairperson: An-Sheng Ku

Managerial officer: Hsiao-Hua Hsu Accounting officer: Hsiu-Mei Lin

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FIRST HOTEL COMPANY LTD.

Cash flow statements

From January 1 to December 31, 2021 and 2020

Unit: Thousand NTD

Code Cash flow from operating activities A10000 Profit before tax A20010 Income and expenses having no effect on cash flows A20100 Depreciation expense A20200 Amortization expense A20400 Net gain on financial assets and liabilities at fair value through profit or loss A20900 Interest expenses A21200 Interest income A21300 Dividend incomes A22500 Loss of disposal and scrapping of property, plant and equipment A22300 Share of gain or loss of affiliated enterprise accounted for using the equity method A30000 Net changes in assets and liabilities related to operating activities A31130 Notes receivable A31150 Accounts receivable A31240 Other current assets A31250 Other financial assets A32130 Notes payable A32180 Other payables A32230 Other current liabilities A32240 Net defined benefit liabilities A33000 Cash flow from operating activities A33500 Income taxes paid AAAA Net cash generated by operating activities Cash Flow from Investing Activities B00040 Increase in financial assets at amortized cost B02700 Purchase of property, plant and equipment B03700 Increase in refundable deposits B03800 Decrease in refundable deposits B06800 Decrease in other non-current assets		2021 $ 92,644 3,228 39 19 ) 941 17,197 ) 38,903 ) 124 130,531 - 141 ) 8 66 ) 14,915 4,034 ) 92 ) 283 182,261 48,322) 133,939 72,062 ) 152 ) - 541 -		2020
	( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( (	$ 201,122 3,678 39 43 ) 1,255 18,842 ) 58,906 ) - 42,214 387 3,376 72 343 1,648 ) 4,737 ) 1,060 ) 269) 166,981 34,441) 132,540 25,484 ) 537 ) 2,246 ) 2,417 271

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(Continued from previous page)

Code
B07500
Interest received
B07600
Dividend received
BBBB
Net cash inflow (outflow) from
investing activities
Cash Flow from Financing Activities
C03100
Decrease in guarantee deposit
C04500
Cash dividends paid
CCCC
Net cash used in financing activities
EEEE
Increase(decrease) in cash and cash equivalents
for the period
E00100 Beginning of year cash and cash equivalents
E00200 End of year cash and cash equivalents

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

Chairperson: An-Sheng Ku Managerial officer: Hsiao-Hua Hsu Accounting officer: Hsiu-Mei Lin

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FIRST HOTEL COMPANY LTD.

Notes to financial statements.

From January 1 to December 31, 2021 and 2020

(Amounts are in NTD thousands unless otherwise stated)

I. Company history

The Company is mainly engaged in tourist hotels, rental of commercial buildings and related businesses

The shares issued by the Company are listed and traded on the Taiwan Stock Exchange.

II. Date and procedures for passing the financial report These financial statements were approved by the Board of Directors on March 23, 2022.

III. Newly -released and amended standards and interpretations (i) First-time application of International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IASs"), Interpretations ("IFRICs" and "SICs") (hereinafter collectively referred to as the "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission (hereinafter referred to as the "FSC") by the Company.

The adoption of the IFRSs endorsed and issued into effect by the FSC will not significantly change the Consolidated Company's accounting policies. (ii) The effect of the IFRSs endorsed and issued into effect by the FSC for 2022 not applicable to the Company:

Newly released / corrected / amended standards and Effective Date of IASB interpretations publication "IFRSs Annual Improvement for 2018-2020 January 1, 2022 (Note 1) Amendment to IFRS 3 "Reference to the conceptual January 1, 2022 (Note 2). framework.” Amendment to IAS 16 "Property, plant and equipment: January 1, 2022 (Note 3). price before reaching the intended state of use" Amendment to IAS 37 "Onerous Contracts - Cost of January 1, 2022 (Note 4). Performing Contracts.”

Note 1: The amendment to IFRS 9 applies to swaps or changes in the terms of financial liabilities that occur in annual reporting periods beginning after January 1, 2022; the amendment to IAS 41, “Agriculture,” applies to fair value measurements in annual reporting periods beginning after January 1, 2022; and the amendment to IFRS 1, “First-time Adoption of IFRSs,” applies retrospectively to annual reporting periods beginning after January 1, 2022.

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Note 2: This amendment applies to business mergers for which the acquisition date falls within the annual reporting period after January 1, 2022.
Note 3: This amendment applies to plant, property and equipment that begins to operate in the manner such as location and condition expected by management after January 1, 2021.
Note 4: This amendment applies to contracts with unfulfilled obligations as of January 1, 2022.

The Company does not expect the above amendments to have a material impact on the Company. The Company will continue to evaluate the effect of the amendment to other IFRSs on the financial positions and performance of the Company to the date the financial statements are approved and released. They will make appropriate disclosure after the evaluation.

(iii) The IFRSs released by the IASB but not yet endorsed and issued into effect by the FSC and not applicable to the Company

Newly released / corrected / amended standards and Effective Date of IASB interpretations publication (Note 1) Amendment to IFRS 10 and IAS 28, “Sale or Contribution Undecided of Assets between an Investor and its Affiliate or Joint Venture.” FRS 17 “Insurance Contracts” January 1, 2023 Amendment to IFRS 17 January 1, 2023 Amendment to IFRS 17 "Initial Application of IFRS 17 and January 1, 2023 IFRS 9 - Comparative Information” Amendment to IAS 1 “Classification of Liabilities as January 1, 2023 Current or Non-current” Amendment to IAS 1 "Disclosure of Accounting Policies.” January 1, 2023(Note 2). Amendment to IAS 8 "Definition of Accounting January 1, 2023(Note 3) Estimates.” Amendment to IAS 12 "Deferred Income Taxes Related to January 1, 2023(Note 4). Assets and Liabilities Arising from a Single Transaction"

Note 1: Unless otherwise stated, the aforementioned new/amended/revised standards or interpretation are effective for annual reporting periods beginning after the respective dates.
Note 2: This amendment will be applicable for annual reporting periods beginning after January 1, 2023.
Note 3: This amendment applies to changes in accounting estimates and changes in accounting policies that occur in annual reporting periods beginning after January 1, 2023.
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Note 4: The amendment applies to transactions occurring after January 1, 2022, except for the recognition of deferred income taxes on temporary differences between leases and ex-service obligations as of January 1, 2022.

IV. Summary of significant accounting policies (i) Compliance statement

The financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs approved and published by the FSC.

(ii) Basis of preparation

The consolidated financial statements were prepared on the historical cost basis, except for financial instruments measured at fair value and net defined benefit liabilities recognized at the present value of defined benefit obligation less the fair value of plan assets. Historical cost is generally determined by the fair value of the consideration paid to acquire the asset. The evaluation of fair value could be classified into Level 1 to Level 3 by the observable intensity and importance of the related input value:

Level 1 input value: refers to the quotation of the same asset or liability in an active market as of the evaluation (before adjustment).
Level 2 input value: refers to the direct (the price) or indirect (inference of price) observable input value of asset or liability further to the quotation of Level 1.
Level 3 input value: the unobservable input value of asset or liability.
(iii) Standards in differentiating current and non-current assets and liabilities Current assets include:
Assets held mainly for trading purposes:
Assets that are expected to be realized within twelve months from the balance sheet date; and
Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

Current liabilities include:

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Liabilities held mainly for trading purposes:
Liabilities that are to be paid off within twelve months from the balance sheet date; and
Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date.

Those that are not current assets or liabilities above are classified as noncurrent assets or liabilities.

(iv) Foreign currency

Foreign currency monetary items are translated at the closing rate on each balance sheet date. The exchange differences arising from the settlement of monetary items or translating monetary items are recognized in the current profit or loss.

The foreign non-currency items measured at fair value are translated in accordance with the exchange rate on the fair value determination date and the exchange difference is booked as profit or loss in the period. However, for the changes in fair value recognized in other comprehensive income, the exchange difference is recorded in other comprehensive income.

The foreign non-currency items measured at historical cost are translated in accordance with the exchange rate on the transaction date without the need for a translation again.

In preparing the financial statements, the assets and liabilities of the Company's foreign operations are translated into New Taiwan dollars at the exchange rates prevailing on each balance sheet date, and income and expense items are translated at the average exchange rates for the period, with the resulting exchange differences recorded in other comprehensive income.

Upon the disposal of a foreign operation that constitutes a loss of significant influence over the foreign operation, all interests related to the foreign operation that is attributable to the Company's owners are reclassified to profit or loss.

In the case of partial disposal of a foreign operation (i.e., the Company's ownership interest in an affiliate is reduced without a loss of significant influence), the cumulative translation differences recognized in other comprehensive income are reclassified profit or loss in proportion to the disposal.

(v) Investment in affiliates

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

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The Company uses the equity method to account for its investments in affiliates. Under the equity method, investments in affiliated companies are initially recognized at cost, and the carrying amount in the investment after the acquisition date increases or decreases in accordance with the Company's share of profits or losses of the affiliated companies and other comprehensive income and profit distribution. In addition, changes in equity in affiliated companies are recognized on a proportional basis to shareholdings.

If the Company does not subscribe for new shares of a related company in proportion to its shareholding, resulting in a change in the Company's shareholding and a resulting increase or decrease in the net value of the investment, the increase or decrease is adjusted to capital surplus and investments accounted for using the equity method. However, if the Company does not subscribe or acquire according to the shareholding percentage and causes a decrease in the ownership interest of affiliated companies, the previously recognized amount in the affiliated companies will reduce the ratio accordingly based on the comprehensive income and its accounting process is same as the direct disposition of the relevant assets or liabilities for the affiliated companies.

The recognition of further losses ceases when the Company's share of losses in an affiliate equals or exceeds its interest in the affiliate (including the carrying amount in its investment in the affiliate under the equity method and other long-term interests that are in substance a component of the Company's net investment in the affiliate). The Company recognizes additional losses and liabilities only to the extent that legal obligations, constructive obligations or payments on behalf of affiliates have been incurred.

In assessing the impairment, the Company treats the overall carrying amount in the investment as a single asset to compare the recoverable amount with the carrying amount and performs an impairment test. The impairment loss recognized is also part of the carrying amount in the investment. Any reversal of the impairment loss can be recognized within the range of the recoverable amount in the subsequently increased investment.

The Company measures its remaining investment in the former affiliate at fair value at the date of loss of significant influence. The difference between the fair value of the remaining investment and any disposal price and the carrying amount in the investment at the date of loss of significant influence is recognized in profit or loss for the current period. In addition,

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all amounts recognized in other comprehensive income related to the affiliate are accounted for on the same basis as if the affiliate had directly disposed of the related assets or liabilities.

(vi) Property, plant and equipment

Property, plant and equipment are recognized at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment losses.

No depreciation on self-owned land

Property, plant and equipment are depreciated on a straight-line basis over their useful lives, with separate depreciation for each significant component. The Company reviews the estimated useful lives, residual values and depreciation methods at least at the end of each year and defers the effect of changes in applicable accounting estimates.

When property, plant and equipment are derecognized, the difference between the net disposal price and the carrying amount in the assets is recognized in profit or loss.

(vii) Real estate investment

Investment property is held to earn rent or for capital appreciation or both. Investment property also includes land held for future use that has not yet been determined and is therefore considered to be held for capital appreciation.

Investment property is recognized at cost (including transaction cost) and subsequently measured at cost less accumulated depreciation and accumulated impairment losses. The Company accounts for depreciation on a straight-line basis.

When investment property is derecognized, the difference between the net disposal price and the carrying amount in the assets is recognized in profit or loss.

(viii) Impairment of property, plant and equipment and investment property

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

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

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

(ix) Financial instruments

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

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

Financial assets

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

(1) Type of measurement

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

A. Financial assets at fair value through profit and loss

Financial assets at fair value through profit or loss are financial assets that are mandatorily measured at fair value through profit or loss. Financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments investments not designated by the Consolidated Company as being measured at fair value through other

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comprehensive income and investments in debt instruments not qualified for classification as being measured at amortized cost or at fair value through other comprehensive income.

Financial assets at fair value through profit or loss are measured at fair value. Gains or losses arising from remeasurement are recognized in gains and losses. Please refer to Note 18 for the determination of fair value.

B. Financial assets measured at amortized cost

The Company's financial assets, if meeting both of the following conditions, are classified as financial assets at amortized cost:

a. Financial assets held under a particular mode of operation and the purpose of holding is for the collection of contractual cash flows; and
b. The terms of the contracts give rise to cash flows at specified dates that are solely for the payment of principal and interest on the outstanding principal amount.

Financial assets carried at amortized cost (including cash and cash equivalents, time deposits with original maturities of more than three months, notes and accounts receivable, etc.) are measured at amortized cost using the effective interest method to determine the total carrying amount less any impairment loss after initial recognition, with any foreign currency exchange gain or loss recognized in profit or loss.

Interest income is calculated by multiplying the effective interest rate by the total carrying amount in the financial assets.

Cash equivalents include time deposits with a maturity of less than 3 months that are highly liquid, readily convertible into a fixed amount in cash with minimal risk of value changes, and are used to meet short-term cash commitments.

C. Investments in equity instruments at fair value through other comprehensive income

The Company may make an irrevocable choice at the time of initial recognition for designating the investment of equity instruments not available-for-sale and not recognized by the acquirer under corporate merger and acquisition or with

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consideration at fair value through other comprehensive income for measurement.

The investment of equity instruments at fair value through other comprehensive income is measured at fair value. Subsequent changes in fair value will be recognized as other comprehensive income and accumulated into other equity. In the disposition of assets, accumulated gains or loss shall be directly transferred to retained earnings without classification as profit or loss.

The dividend of the investment of equity instruments at fair value through other comprehensive income shall be recognized as income when the Consolidated Company's right in the collection of dividends is ascertained, unless the dividend is obviously representing the recovery of the cost of investment in part.

(2) Impairment of financial assets

The Company at each balance sheet date assesses the impairment loss of financial assets (including accounts receivable) at amortized cost according to the expected credit loss.

An allowance for losses is recognized for accounts receivable and lease payment receivables based on the expected credit loss over the duration.

The carrying amount in all financial assets is reduced through an allowance account.

(3) De-recognition of financial assets

The Company has financial assets derecognized only when the contractual rights from the cash flows of a financial asset become invalid or when the financial assets are transferred. Almost all the risks and rewards of the asset ownership have been transferred to other enterprises.

When a particular entry of financial assets measured at amortized cost is removed, the difference between its book value and consideration shall be recognized as profit or loss. When investments in equity instruments measured at fair value through other comprehensive income are derecognized as a whole, the cumulative gain or loss is transferred directly to retained earnings. It is not reclassified to profit or loss.

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2. Equity instruments

The debt and equity instruments issued by the Company are classified as financial liabilities or equity pursuant to the contractual agreements and the definition of financial liabilities and equity instruments.

Equity instruments issued by the Company are recognized for an amount after deducting the direct issuing cost from the proceeds collected.

The Company’s equity retrieved is debited or credited to the equity.

The Company’s equity purchased, sold, issued, or cancelled is not recognized in the profit or loss.
Financial liabilities
(1) Subsequent measurement

Financial liabilities measured at amortized cost are measured at amortized cost using the effective interest method. Except for the recognition of interest on short-term accounts payable, which is not material.

(2) De-recognition of financial liabilities

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

(x) Revenue recognition

After the Company identifies performance obligations in customer contracts, the transaction price is allocated to each performance obligation and revenue is recognized when each performance obligation is satisfied.

Travel service revenues

Travel service revenue is recognized when the services are actually provided and is measured at the transaction price agreed between the Company and the buyer. Prepayments received before the services are provided are recognized as contract liabilities.

Rental income

Rental income is recognized in accordance with IFRS 16, "Leases,” and is recognized monthly for the realized portion.

(xi) Lease

The Company is the lessor

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The Company assesses whether a contract is (or contains) a lease at the date of contract establishment

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

Under operating leases, rental payments, net of lease incentives, are recognized as income on a straight-line basis over the period of the relevant lease. The original direct cost incurred in acquiring an operating lease is added to the carrying amount in the subject asset and recognized as an expense on a straight-line basis over the lease period.

Rentals under leases that do not depend on changes in indices or rates are recognized as income in the period in which they are incurred. (xii) Government grants

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

Government grants are recognized in profit or loss on a systematic basis over the period in which the related costs for which they are intended to compensate are recognized as expenses by the Company.

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

(xiii) Employee benefits

Short-term employee benefits

Liabilities relating to short-term employee benefits are measured by the non-discounted amount in the expected payment in exchange for employee services.

Post-employment benefits

Under a defined contribution pension plan, the pension amount appropriated during the service years of the employees is recognized as an expense.

The defined benefit cost (including service cost, net interest and remeasurement) of a defined benefit pension plan is actuarially determined using the projected unit credit method. Service cost and net interest on net defined benefit liabilities (assets) are recognized as

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employee benefit expense as incurred. Remeasurements (including actuarial gains and losses and return on plan assets, net of interest) are recognized in other comprehensive income and included in retained earnings as incurred and are not reclassified to profit or loss in subsequent periods.

The net defined benefit liability (asset) represents the deficit (remaining) of the defined benefit pension plan appropriation. The net defined benefit asset may not exceed the present value of refunds of appropriations from the plan or reductions in future appropriations. (xiv) Income tax

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

Income tax in the current period

Surtax on unappropriated earnings calculated in accordance with the Income Tax Act is recognized in the year in which resolutions are made at the shareholder meeting.

The adjustment to prior period income tax payable is booked as current income tax.

Deferred income tax:

Deferred tax is calculated on temporary differences between the carrying amounts of assets and liabilities and the tax bases used to compute taxable income. Deferred tax is generally recognized for all taxable temporary differences. In contrast, deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which income tax credits can be utilized, such as deductions for temporary differences, loss carry forwards and investment tax credits.

Deferred tax liabilities are recognized for taxable temporary differences associated with affiliates except where the Company can control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not be reversed in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and equities are recognized only to the extent that it is probable that sufficient taxable income will be available to realize the benefits of the temporary differences and within the amount of the reversal expected to occur in the foreseeable future.

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The carrying amount in deferred tax assets must be reviewed at each balance sheet date. The carrying amount in those that no longer have any sufficient taxable income to recover all or part of the asset should be adjusted down. Those that are not originally recognized as deferred income tax assets should also be reexamined at each balance sheet date. The book amount in those that are likely to generate taxable income in the future for the recovery of all or part of their assets should be adjusted up.

Deferred income tax assets and liabilities are measured in accordance with the expected liability liquidation or the tax rate in the period when the asset is realized. The tax rate is based on the tax rate and tax laws that are legislated or substantively legislated at the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax consequences of the manner in which an enterprise expects to recover or settle the carrying amount of its assets and liabilities at the balance sheet date.

Current and deferred income tax

Current and deferred income taxes are recognized in the profit or loss, except for the current and deferred income taxes related to the items recognized in other comprehensive income or directly included in the equity are recognized in other comprehensive income or directly included in the equity.

V. Critical accounting judgments and key sources of estimation and uncertainty

When the Company adopts accounting policies, the Company’s management is required to make judgments, estimates and assumptions that are based on historical experience and other factors that are not readily apparent from other sources. Actual results may differ from the estimates.

Management will review the estimates and underlying assumptions on an ongoing basis. If a revision of an estimate affects only the current period, it is recognized in the period in which it is revised. If a revision of an accounting estimate affects both the current and future periods, it is recognized in the period in which it is revised and in the future periods.

The investor's shareholding is less than 50% but is the single largest shareholder, and it is judged that there is no control.

As stated in Note 9, the Company holds 48.21% of Today’s Hotel Corporation USA's voting rights and is the single largest shareholder. The Company has considered the number and distribution of the voting rights of the

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other shareholders, and the shareholdings of the other shareholders are not extremely dispersed. The Company does not have a seat on the board of directors of Today’s Hotel Corporation USA. The Company is unable to direct the relevant activities of Today’s Hotel Corporation USA. Therefore, the Company does not have control over Today’s Hotel Corporation USA and therefore classifies it as an affiliate of the Company.

VI. Cash and cash equivalents

Cash and cash equivalents
Cash on hand and working capital Checking accounts and demand deposits Cash equivalents Time deposits with an original maturity of less than 3 months	December 31, 2021 $ 337 49,944 262,115 $ 312,396	December 31, 2020
			$ 306 17,695 249,016 $ 267,017

As of December 31, 2021 and 2020, bank time deposits with original maturities of more than 3 months amounted to NT2,337,084 thousand and NT$2,265,022 thousand, respectively, which were classified as financial assets at amortized cost - current.

The interest rate ranges of bank time deposits as of the balance sheet date were as follows

were as follows
Cash equivalents Time deposits with an original maturity of less than 3 months Financial assets measured at amortized cost	December 31, 2021 0.37%～0.41% 0.41%～0.82%	December 31, 2020
		0.35%～0.41% 0.41%～0.82%

VII. Financial assets at fair value through profit or loss - current

Financial assets mandatorily measured at fair value through profit or loss Money Market Funds	December 31, 2021 $ 11,239	December 31, 2020	December 31, 2020
			$ 11,220

VIII. Financial assets at fair value through other comprehensive income

Current Domestic investments Listed stocks Chunghwa Telecom Co., Ltd.	December 31, 2021 $ 1,557	December 31, 2020	December 31, 2020
			$ 1,456

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Non-current Domestic investments Listed stocks WanHwa Enterprise Company Ltd. MEGA FINANCIAL HOLDING COMPANY LIMITED Non-listed stocks DAH CHUNG BILLS FINANCE CORP. Kubo Investment Corporation Today's Department Store Company Ltd. Foreign investments Non-listed stocks Forward Time International, Ltd (BVI)	$ 1,095,678 1,771 1,097,449 218,106 207,668 545,952 971,726 33,990 $ 2,103,165	$ 1,113,640 1,485 1,115,125 238,193 209,719 496,699 944,611 32,980 $ 2,092,716

The Company invests in the above non-current equity instruments for longterm strategic purposes and expects to earn profits through long-term investments. The Company's management believes that it would be inconsistent with the aforementioned long-term investment plan to include short-term fair value fluctuations of these investments in profit or loss. Therefore, it has elected to designate these investments at fair value through other comprehensive income.

The Company recognized dividend income of NT$38,903 thousand and NT$58,906 thousand for the years ended December 31, 2021 and 2020, respectively. The amount in related investment still held by the Company then was NT$38,903 thousand and NT$58,906 thousand, respectively.

IX. Investments accounted for under the equity method

Investments accounted for under the	equity method
Investment in affiliates Investment in affiliates Affiliates of materiality Today's Hotel Corporation of USA Affiliates of no materiality F&W hotel Corporation of USA	December 31, 2021 $ 4,255,000 December 31, 2021 $ 3,871,871 383,129 $ 4,255,000	December 31, 2020
		$ 4,454,346 December 31, 2020
			$ 4,114,738 339,608 $ 4,454,346

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(i) Affiliates of materiality

Affiliates of materiality
Company name Today's Hotel Corporation of USA	Percentage of shareholding and voting rights
	December 31, 2021 48.21%	December 31, 2020
		48.21%

For the business nature, principal place of business and country, etc. information of the above affiliated companies, please refer to Schedule 2, "Name and Location of Investees...and Other Related Information.”

Aggregate financial information of affiliates of materiality is as follows. Today 's Hotel Corporation of USA

Current assets Non-current assets Current liabilities Non-current liabilities Equity The Company’s shareholding The Company’s equity interests Operating revenue Net losses for the year Other comprehensive income Total comprehensive Income	December 31, 2021 $ 3,836,418 7,348,740 ( 677,178 ) ( 2,477,434) 8,030,546 48.21% $ 3,871,871 2021 $ 2,453,549 ( $ 267,135 ) ( 236,589) ($ 503,724)	December 31, 2020	December 31, 2020
		$ 3,840,646 7,952,384 ( 507,843 ) ( 2,750,917) 8,534,270 48.21% $ 4,114,738 2020
	( ( (	( (	$ 1,926,647 $ 104,429 ) 55,805 $ 48,624)

(ii) Aggregate information on affiliates of no materiality

The Company’s share Net profits (net losses) for the year Other comprehensive income Total comprehensive Income		2021 $ 1,734 ) 45,254 $ 43,520		2020
	(		( (	$ 8,135 20,697) $ 12,562)

The Company's share of profit or loss and other comprehensive income of affiliated companies recognized under the equity method for the years ended December 31, 2021 and 2020 were based on the audited financial statements of the respective affiliated companies for the same periods.

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X. Property, plant and equipment

Costs Balance as of January 1, 2020 Addition Balance as of January 1, 2020 Accumulated depreciation Balance as of January 1, 2020 Depreciation expense Balance as of January 1, 2020 Net as of December 31, 2020 Costs Balance as of January 1, 2021 Addition Disposal Reclassification Balance as of December 31, 2021 Accumulated depreciation Balance as of January 1, 2021 Depreciation expense Balance as of December 31, 2021 Net as of December 31, 2021		Land		Buildings	Machinery and equipment	Machinery and equipment	Transportation equipment and office equipment	Transportation equipment and office equipment		Operation facilities		Other revenues		Total
		$ 364,131 - $ 364,131 $ - - $ - $ 364,131 $ 364,131 - - - $ 364,131 $ - - $ - $ 364,131		$ 114,949 - $ 114,949 $ 112,040 742 $ 112,782 $ 2,167 $ 114,949 - - 580 $ 115,529 $ 112,782 596 $ 113,378 $ 2,151		$ 28,859 - $ 28,859 $ 27,501 249 $ 27,750 $ 1,109 $ 28,859 - - 400 $ 29,259 $ 27,750 199 $ 27,949 $ 1,310		$ 13,402 - $ 13,402 $ 6,801 708 $ 7,509 $ 5,893 $ 13,402 - - - $ 13,402 $ 7,509 705 $ 8,214 $ 5,188		$ 16,362 29 $ 16,391 $ 15,929 258 $ 16,187 $ 204 $ 16,391 73 - - $ 16,464 $ 16,187 72 $ 16,259 $ 205	( (	$ 1,898 508 $ 2,406 $ - - $ - $ 2,406 $ 2,406 79 124 ) 980) $ 1,381 $ - - $ - $ 1,381	(	$ 539,601 537 $ 540,138 $ 162,271 1,957 $ 164,228 $ 375,910 $ 540,138 152 124 ) - $ 540,166 $ 164,228 1,572 $ 165,800 $ 374,366

The Company depreciates its property, plant and equipment on a straightline basis over the following useful lives:

over the following useful lives:
Building
Main building	29 to 48 years
Auxiliary building	5 to 15 years
Machinery and equipment
Utilities equipment	5 to 15 years
Elevator equipment	5 to 15 years
Air Conditioning Equipment	5 to 8 years
Fire fighting equipment	5 to 8 years
Other machines and equipment	5 to 10 years
Transportation equipment	15 years
Office equipment	5 to 8 years
Operation facilities	5 years

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XI. Real estate investment

Real estate investment
Costs Balance as of January 1, 2020 Change in the year Balance as of January 1, 2020 Accumulated depreciation Balance as of January 1, 2020 Depreciation expense Balance as of January 1, 2020 Net as of December 31, 2020 Costs Balance as of January 1, 2021 Change in the year Balance as of December 31, 2021 Accumulated depreciation Balance as of January 1, 2021 Depreciation expense Balance as of December 31, 2021 Net as of December 31, 2021	Real estate investment
		$ 1,049,872 - $ 1,049,872 $ 99,642 1,721 $ 101,363 $ 948,509 $ 1,049,872 - $ 1,049,872 $ 101,363 1,656 $ 103,019 $ 946,853

The Company depreciates its investment property on a straight-line basis over the following useful lives:

llowing useful lives:
Building
Main building	29 to 51 years
Auxiliary building	5 to 10 years
Machinery and equipment
Utilities equipment	15 years
Elevator equipment	17 years
Air Conditioning Equipment	5 years
Operation facilities	5 to 10 years

The fair values of the Company's investment property were NT$5,189,141 thousand and NT$5,140,701 thousand as of December 31, 2021 and 2020, respectively. The fair values were estimated by the Company's management with reference to market evidence of similar property transaction prices and were Level 3 input values.

All of the Company's investment properties are owned by the Company. Investment property owned by the Company is leased out as operating leases. The leases expired one after another by the end of May 2030. The rental was calculated with reference to the rental of the neighboring shopping mall and adjusted according to the lease agreement. The lessees did not have a preferential right to acquire the property at the end of the lease period.

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As of December 31, 2021 and 2020, the Company had received NT$ 126,697 thousand and NT$126,757 thousand in security deposits (recorded as deposits received) under operating leases. For the years of 2021 and 2020, the rental income was NT$941 thousand and NT$1,255 thousand, respectively, based on the interest rate of bank time deposits during the lease period, and interest expense was debited.

The total future lease payments to be received by the Company for investment property leased under operating leases are as follows:

1st year 2nd year 3rd year 4th year 5th year More than 5 years	December 31, 2021 $ 246,311 232,488 237,429 244,990 244,990 895,847 $ 2,102,055	December 31, 2020	December 31, 2020
			$ 248,556 252,882 236,469 237,429 244,990 1,140,837 $ 2,361,163

Due to the severe impact of the coronavirus epidemic on the market economy in 2021 and 2020, the Company agreed to change the rent for some months of some leases to be calculated based on the turnover and the contracted percentage or charged according to the agreed amount.

XII. Post-employment benefits plan

(i) Defined contribution plan

The pension system of the Company under the “Labor Pension Act” is a government-administered defined contribution pension plan with contributes 6% of employees' monthly salaries contributed to the personal accounts at the Bureau of Labor Insurance. For the years ended December 31, 2021 and 2020, the Company recognized in the comprehensive income statements a total of NT$621 thousand and NT$686 thousand, respectively, in accordance with the percentage of the defined contribution plan.

(ii) Defined benefit plan

The Company has a retirement plan for its regular employees; the Labor Standards Act has been in effect since March 1998. The calculation of seniority of the Company's employees prior to the implementation of the Labor Standards Act was in accordance with the "Regulations for the Implementation of Post-Employment and Retirement" of the "Personnel Management Regulations” of the Company, which came into effect on January 1, 1989. Therefore, if the Company's employees who were employed before the implementation of the Labor Standards Act retire or are laid off, their

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seniority for determining pension or severance will be calculated in two stages as follows: (1) For seniority prior to the implementation of the Labor Standards Act, pension or severance shall be paid in accordance with the provisions of the “Regulations for the Implementation of Post-Employment and Retirement" of the "Personnel Management Regulations” of the Company, which came into effect on January 1, 1989. (ii) The seniority after the implementation of the Labor Standards Act shall be in accordance with the provisions of the Labor Standards Act.

The pension system of the Company under the “Labor Standards Act” is a government-administered defined benefit pension plan. Since August 2003, The Company has been appropriating 2% of employees' monthly salaries to pension funds, which is deposited by the Supervisory Committee of Labor Retirement Reserve in the Committee's name into a special account at the Bank of Taiwan. Before the end of the year, if the balance in the special account is estimated to be insufficient to pay for employees who are expected to meet the retirement requirements in the following year, the difference will be made up in one lump sum by the end of March of the following year. The management of the special account is entrusted to the Bureau of Labor Funds, the Ministry of Labor. The Consolidated Company has no right to influence the investment management strategy.

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The amounts included in the Company’s balance sheets for defined benefit plans are shown below:

benefit plans are shown below:
Present value of defined benefit obligation Fair value of plan assets Appropriations for shortfall (recorded as net defined benefit obligation)	December 31, 2021 $ 17,943 ( 16,854) $ 1,089	December 31, 2020
	(	(	$ 17,434 16,474) $ 960

The changes in the Company's net defined benefit liabilities are as follows:

follows:
January 1, 2020 Service costs Service costs for the period Interest expenses (incomes) Recognized in profit or loss Remeasurement Return on plan assets (Other than amounts included in net interest) Actuarial loss – change in financial assumptions Actuarial gain – adjustment through experience Recognized in other comprehensive income Employer appropriation Benefit Payment December 31, 2020 January 1, 2021 Service costs Service costs for the period Interest expenses (incomes) Recognized in profit or loss Remeasurement Return on plan assets (Other than amounts included in net interest) Actuarial loss – change in financial assumptions Actuarial gain – adjustment through experience Recognized in other comprehensive income Employer appropriation December 31, 2021	Defined benefit Present value of obligations $ 17,539 364 110 474 - 175 ( 143) 32 - ( 611) $ 17,434 $ 17,434 365 65 430 - 156 ( 77) 79 - $ 17,943		Plan assets Fair value $ 15,805) - 100) 100) 537 ) - - 537) 643) 611 $ 16,474) $ 16,474) - 62) 62) 233 ) - - 233) 85) $ 16,854)		Net defined benefit Liabilities
	( ( (	( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( (	$ 1,734 364 10 374 537 ) 175 143) 505) 643) - $ 960 $ 960 365 3 368 232 ) 156 78) 154) 85) $ 1,089

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The Company is exposed to the following risks due to the pension system under the Labor Standards Act:

Investment risk: The Bureau of Labor Funds, Ministry of Labor invests the labor pension fund in domestic and foreign equity securities, debt securities, and bank deposits through its own management or entrusted third parties, but the amount allocated to the Company's plan assets is based on the income at a rate no less than the local bank's 2-year time deposit rate.
Interest rate risk: A decrease in interest rates on government bonds will increase the present value of the defined benefit obligation, but the return on debt investment in plan assets will also increase, which will have a partially offsetting effect on the net defined benefit obligation.
Salary Risk: The present value of the defined benefit obligation is calculated by reference to the plan member's future salary. Therefore, increases in plan member’s salary will result in an increase in the present value of the defined benefit obligation.

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

Discount rate Expected rate of salary increase	December 31, 2021 0.500% 1.500%	December 31, 2020
		0.375% 1.500%

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

is as follows:
Discount rate Increase by 0.25% Decrease by 0.25% Expected rate of salary increase Increase by 0.25% Decrease by 0.25%	December 31, 2021 ($ 183) $ 186 $ 182 ($ 179)	December 31, 2020
	( (	( (	$ 175) $ 179 $ 174 $ 171)

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The sensitivity analysis above may not reflect actual changes in the present value of the defined benefit obligation because the actuarial assumptions may be correlated and changes in only one assumption are not feasible.

feasible.
Amount expected to be appropriated within 1 year Average duration to maturity of the defined benefit obligation	December 31, 2021 $ 88 4.1 years	December 31, 2020
			$ 88 4.0 years

(xiii) Equity

(i) Share capital - common stock

Share capital - common stock
Authorized number of shares (in thousands) Authorized capital stock Number of shares issued and fully paid (in thousands) Capital stock issued	December 31, 2021 600,000 $ 6,000,000 499,998 $ 4,999,984	December 31, 2020
			600,000 $ 6,000,000 499,998 $ 4,999,984

The issued common stock has a face value of NT$10 per share and each share is entitled to one voting right and receiving dividends. (ii) Capital surplus

Capital surplus
Capital stock premium Gain on disposal of assets	December 31, 2021 $ 76,008 23 $ 76,031	December 31, 2020
			$ 76,008 23 $ 76,031

The excess of capital surplus over the par value of stock issued (including the issuance of common stock in excess of par value, conversion premium of corporate bonds, etc.) may be used to make up losses. It may be used to pay cash dividends or capitalize as equity when the Company has no losses, provided that the capitalization is limited to a certain percentage of the paid-in capital each year.

(iii) Retained earnings and dividend policy

In accordance with the provisions of the earnings distribution policy of the Company's Articles of Incorporation, when the Company makes a profit as indicated in the annual final accounting reports, the Company shall pay tax in accordance with the law, make up for accumulated losses and then set aside 10% as legal reserve except when the legal reserve has reached the Company's paid-in capital. In addition, if the Company complies with the regulations of the competent authorities, the remaining balance after setting

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aside or reversing the special reserve in accordance with the law, together with the accumulated unappropriated earnings, shall be retained at the discretion of the Board of Directors for business needs. The Board of Directors shall prepare a proposal for the distribution of earnings and submit it to the shareholders for a resolution to distribute dividends to shareholders.

The Company is a stable and growing company. In order to meet the operational development plan and achieve the goal of the diversified operation, in case shareholder dividend is distributed, the cash dividend portion should be no less than 10% of the shareholder dividend distributed that year.

The earnings distribution should be ratified at the shareholders' meeting to be held in the following year.

The legal reserve should be provided until the balance reaches the Company's total paid-in capital. The legal reserve may be used to make up losses. If the Company has no losses, the excess of legal reserve over 25% of the paid-in capital may be distributed in cash in addition to capitalization as equity.

At the shareholders' annual meetings held on August 27, 2021 and June 15, 2020, the Company resolved the following distribution of earnings for 2020 and 2019, respectively.

Legal reserve cash dividends	Earnings distribution proposal 2020 2019 $ 16,125 $ 53,251 75,000 224,999	Dividends Per	Share (NT$)
	2020 $ 16,125 75,000	2020 $ 0.15	2019
			$ 0.45

The distribution of earnings and dividends per share for 2021 proposed by the Board of Directors on March 23, 2022 are as follows:

Legal reserve cash dividends	Earnings distribution proposal $ 7,856 67,000	Dividends Per Share (NT$)
		$ 0.14

The distribution of earnings for 2021 is a pending resolution at the 2022 Annual Shareholders’ Meeting.

(iv) Special reserve

When IFRS was first adopted, the Company recorded NT$592,542 thousand of unrealized revaluation gain in retained earnings, and a special reserve of the same amount was provided. Subsequent use, disposal or reclassification of the related assets may result in a reversal and distribution of earnings.

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(v) Total other equity
Exchange differences arising on translation of foreign operations

Balance at the beginning of the year Share of exchange differences on translation of financial statements of foreign operations of affiliated enterprises recognized under the equity method Related income tax: Balance at the end of the year	( ( (	2021 $ 257,394 ) 121,311 ) 24,262 $ 354,443)	( ( (	2020
				$ 72,635 ) 230,949 ) 46,190 $ 257,394)

Unrealized valuation gain or loss on financial assets at fair value through other comprehensive income

Balance at the beginning of the year Unrealized valuation gain or loss on financial assets at fair value through other comprehensive income Share of other comprehensive income of affiliated enterprise accounted for using the equity method Related income tax: Balance at the end of the year	(	2021 $ 1,024,932 10,550 52,496 10,702) $ 1,077,276	( (	2020
				$ 1,116,811 86,361 ) 7,199 ) 1,681 $ 1,024,932

XIV. Employee benefits, depreciation and amortization expenses

Employee benefits expense Payroll expenses Labor and health insurance fees Pension costs Directors' remuneration Others Depreciation expense Amortization expense				2021		Total $ 15,876 1,786 989 3,770 856 $ 23,277 $ 3,228 $ 39				2020
		Operating costs $ 5,877 779 - - 289 $ 6,945 $ 2,383 $ -		Operating expenses $ 9,999 1,007 989 3,770 567 $ 16,332 $ 845 $ 39				Operating costs $ 7,169 969 - - 360 $ 8,498 $ 2,819 $ -		Operating expenses $ 8,765 982 1,060 7,104 577 $ 18,488 $ 859 $ 39		Total
												$ 15,934 1,951 1,060 7,104 937 $ 26,986 $ 3,678 $ 39

The Company had 37 and 39 employees at the end of 2021 and 2020, respectively, and no director was also an employee.

The Company contributes a fixed amount in NT$2,000 thousand to employees' remuneration and no more than 3% to directors' remuneration based

39 -

on the profits before tax before employee and director remuneration distributions for the year, respectively. The remuneration of employees was estimated at NT$2,000 thousand for both 2021 and 2020, and the remuneration of directors was estimated at NT$2,680 thousand and NT$6,000 thousand for 2021 and 2020, respectively. The directors' remuneration was estimated at 2.75% and 2.87% of the aforementioned profits before tax, respectively.

On March 23, 2022 and March 24, 2021, respectively, the Board of Directors resolved to pay employee remuneration and director remuneration for 2021 and 2020 as follows:

Amount resolved by the Board of Directors Amount recognized in financial statements	2021 Employee cash remuneration Director remuneration $ 2,000 $ 2,680 $ 2,000 $ 2,680	2021 Employee cash remuneration Director remuneration $ 2,000 $ 2,680 $ 2,000 $ 2,680	2020	2020	2020
	Employee cash remuneration		Employee cash remuneration $ 2,000 $ 2,000	Director remuneration
		$ 2,000 $ 2,000			$ 6,000 $ 6,000

If there is a change in the amount after the annual financial statements are approved and released, the change will be accounted for as a change in the accounting estimate. It will be recorded as an adjustment in the following year. Please refer to the "Market Observation Post System" of the Taiwan Stock Exchange for information on the remuneration of employees and directors and supervisors resolved by the board of directors of the Company. XV. Income tax

(i) Income tax expenses recognized in profit or loss

The major components of income tax expense are as follows.

Income tax in the current period Occurred in the year Surtax on undistributed earnings Prior year adjustment Deferred income tax: Occurred in the year Income tax expenses recognized in profit or loss		2021 $ 37,023 3,506 182 ) 26,107) $ 14,240		2020
	( (		( (	$ 36,206 12,713 95 ) 8,443) $ 40,381

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The reconciliation of accounting income to income tax expenses is as follows:

follows:
Profit before tax Income tax expenses calculated based on profits before tax and statutory tax rate (20%) Non-deductible expenses for tax purposes Tax-exempt incomes Surtax on undistributed earnings Prior year adjustment Income tax expenses recognized in profit or loss		2021 $ 92,644 $ 18,528 169 7,781 ) 3,506 182) $ 14,240		2020
	( (		( ( (	$ 201,122 $ 40,224 29 ) 12,432 ) 12,713 95) $ 40,381

(ii) Income tax expenses (benefits) recognized in other comprehensive income

Deferred income tax: Exchange differences arising on translation of foreign operations Unrealized valuation gain or loss on financial assets at fair value through other comprehensive income	2021 ( $ 24,262 ) 10,702 ($ 13,560)	2020
		( $ 46,190 ) ( 1,681) ($ 47,871)

(iii) Deferred tax assets and liabilities

Changes in deferred tax assets and liabilities are as follows:

2021

2021
D e f e r r e d i n c o m e t a x a s s e t s Temporary difference Exchange differences arising on translation of foreign operations D e f e r r e d t a x l i a b i l i t i e s Temporary difference Financial assets at fair value through other comprehensive income Share of profit or loss recognized using the equity method Reserve for Land Revaluation Increment Tax	Balance at the beginning of the year		Recognized in profit or loss $ - $ - ( 26,107 ) - ($ 26,107)	Recognized in other comprehensive income Comprehensive Income $ 24,262 $ 10,702 - - $ 10,702	Balance at the end of the year
		$ 64,348 $ 19,207 834,579 344,785 $ 1,198,571				$ 88,610 $ 29,909 808,472 344,785 $ 1,183,166

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2020

2020
						Recognized in
							other
						comprehensive
	Balance at the						income
	beginning of the		Recognized in			Comprehensive		Balance at the
		year		profit	or loss		Income	end	of the year
D e f e r r e d i n c o m e t a x a s s e t s
Temporary difference
Exchange differences arising on
translation of foreign
operations	$	18,158		$	-	$	46,190	$	64,348
D e f e r r e d t a x l i a b i l i t i e s
Temporary difference
Financial assets at fair value
through other comprehensive
income	$	20,888		$	-	( $	1,681 )	$	19,207
Share of profit or loss
recognized using the equity
method		843,022	(		8,443 )		-		834,579
Reserve for Land Revaluation
Increment Tax		344,785			-		-		344,785
	$	1,208,695	(	$	8,443)	($	1,681)	$	1,198,571

(iv) The state of income tax assessment

The Company's income tax returns have been assessed by the tax authorities up to 2019.

XVI. Earnings per share

Earnings per share
Total basic earnings per share		Unit: 2021 $ 0.16		NT$ per share 2020
				$ 0.32

The earnings and weighted-average number of common shares used to calculate basic earnings per share are as follows:

Net profits for the period (numerator) Weighted average number of shares of common stock (denominator)		2021 2020 $ 78,404 $ 160,741 Unit: Thousand shares 2021 2020 499,998 499,998		2020

				499,998

XVII. Capital Risk Management

The company's capital management's primary objective is to ensure that the Company can support corporate operations and maximize shareholders' equity by optimizing debt and equity balances while continuing to operate. The Company manages and adjusts its capital structure according to economic

42 -

conditions and may pay dividends or issue new shares to maintain and adjust capital structure.

The Company is not subject to any other external capital requirements.

XVIII. Financial instruments

(i) Fair Value Information - Financial Instruments Not Measured at Fair Value The Company's management believes that the carrying amounts of
financial assets and liabilities that are not measured at fair value approximate their fair values.
(ii) Fair value information - financial instruments measured at fair value on a recurring basis
Fair value hierarchy

Fair value hierarchy
December 31, 2021 Financial assets at fair value through profit and loss Money Market Funds Financial assets at fair value through other comprehensive income or loss - investments in equity instruments Domestic listed stocks Domestic and foreign non-listed stocks December 31, 2020 Financial assets at fair value through profit and loss Money Market Funds Financial assets at fair value through other comprehensive income or loss - investments in equity instruments Domestic listed stocks Domestic and foreign non-listed stocks	Level 1 $ 11,239 $ 1,099,006 - $ 1,099,006 Level 1 $ 11,220 $ 1,116,581 - $ 1,116,581	Level 2 $ - $ - - $ - Level 2 $ - $ - - $ -	Level 3 $ - $ - 1,005,716 $ 1,005,716 Level 3 $ - $ - 977,591 $ 977,591	Total
				$ 11,239 $ 1,099,006 1,005,716 $ 2,104,722 Total
				$ 11,220 $ 1,116,581 977,591 $ 2,094,172

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

Reconciliation of financial instruments measured at fair value in Level

2021

Investments in equity instruments at fair value through other comprehensive income

Financial assets

43 -

Balance at the beginning of the year Recognized in other comprehensive income (unrealized valuation gains or losses on financial assets measured at fair value through other comprehensive income) Balance at the end of the year 2020	$ 977,591 28,125 $ 1,005,716

2020
Financial assets Balance at the beginning of the year Recognized in other comprehensive income (unrealized valuation gains or losses on financial assets measured at fair value through other comprehensive income) Balance at the end of the year	Investments in equity instruments at fair value through other comprehensive income
	(	$ 978,580 989) $ 977,591

Methods, valuation techniques and input values for measuring the fair value of financial instruments
- (1) The fair values of financial instruments with standard terms and conditions and traded in active markets are determined by reference to quoted market prices (including listed stocks and beneficiary certificates of open-end funds, etc.).
- (2) The Company holds financial assets measured at fair value in Level 3, which are non-listed stocks, and the fair value is measured primarily by the income, market and asset methods. The estimates or assumptions used are based on information and estimates of future cash flows with reference to market comparable transactions. The major unobservable input values include the discount for the absence of control at 21.45% and 19.68% as of December 31 2021 and 2020, respectively, and the discount for the risk of lack of marketability at 14.07%~ 23.46% and 16.54% ～ 26.10% as of December 31 2021 and 2020, respectively. The fair value of the investments would decrease by NT$10,027 thousand and NT$9,206 thousand, respectively, if the discount for the absence of control increases by 1%, and by NT$11,920 thousand and NT$11,861 thousand, respectively, if the discount for the risk of lack of marketability increases by 1%.
(iii) Types of financial instrument

December 31, 2021 December 31, 2020

Financial assets

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Financial assets at fair value
through profit and loss
Mandatorily measured at fair
value through profit or
loss	$	11,239	$	11,220
Financial assets at amortized cost
(Note 1)		2,659,537		2,542,369
Financial assets at fair value
through other comprehensive
income
Investments in equity
instruments		2,104,722		2,094,172
Financial liabilities
Financial assets measured at
amortized cost (Note 2)		84,331		66,780

Note 1: The balance includes financial assets measured at amortized cost, such as cash and cash equivalents, investments in debt instruments, notes receivable, accounts receivable, other financial assets - current and refundable deposits.
Note 2: The balance includes financial liabilities measured at amortized cost, such as notes payable and certain other payables.
(iv) Purpose and policy of financial risk management

The Company's financial risk management objective is to manage market risk (including interest rate risk and other price risks), credit risk and liquidity risk associated with operating activities. The Company identifies, measures and manages the aforementioned risks in accordance with the Company's policies and risk appetite.

The Company has established appropriate policies, procedures and internal controls for the aforementioned financial risk management in accordance with relevant regulations. Significant financial activities are subject to review by the Board of Directors in accordance with relevant regulations and internal control systems. During the implementation of the financial risk management activities, the Company did comply with the relevant regulations established for financial risk management.

Market risk

Market risk refers to the potential loss that the Company may suffer from the related transactions due to changes in market interest rates or prices. The Company assesses that the impact of market risk on financial assets and liabilities is limited.

45 -

There have been no changes in the Company's exposure to market risk of financial instruments and how it manages and measures such exposures.

(1) Interest rate risk

Interest rate risk is the risk of fluctuations in the fair value of financial instruments or future cash flows due to market changes. The Company's interest rate risk is mainly related to floating-rate time deposits. The Company assesses that the change in interest rates does not impact the Company's net profits before tax.

(2) Other Price risk

The Company has price risk due to equity securities investments and fund beneficiary certificates. If the equity and fund prices had increased/decreased by 1%, profit or loss would have increased/decreased by NT$112 thousand for both 2021 and 2020 due to the change in fair value of financial assets measured at fair value through profit or loss. Other comprehensive income would have increased/decreased by NT$10,990 thousand and NT$11,166 thousand for 2021 and 2020, respectively, due to the change in fair value of financial assets measured at fair value through other comprehensive income.

2. Credit risk

Credit risk refers to the risk of financial loss resulting from the default of contractual obligations by the counterparties. As of the balance sheet date, the Company's maximum exposure to the credit risk of financial loss due to non-performance by counter-parties is mainly from the carrying amount in financial assets recognized in individual balance sheets.

The business unit manages customer credit risk in accordance with the Company's policies, procedures and controls for customer credit risk. The credit risk of all customers is evaluated by taking into account the customer's financial condition, historical transaction experience and the current economic environment. The Company also uses certain credit enhancement tools (such as advance on sales) at appropriate times to reduce the credit risk of specific customers.

The Company does not have significant credit risk exposure to any single counterparty or to any group of counterparties with similar characteristics.

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3. Liquidity risk

The Company manages and maintains sufficient positions of cash and cash equivalents to support its operations and mitigate the impact of cash flow fluctuations.

Liquidity and Interest Rate Risk Schedule

The below details the analysis of the remaining contractual maturities of the Company's non-derivative financial liabilities with contractual repayment periods, which are based on the earliest possible date on which the Company can be required to make repayment, and is prepared using the undiscounted cash flows of the financial liabilities, which include cash flows of interest and principal. December 31, 2021

December 31, 2021
Non-derivative financial liabilities Notes payable Other payables	Immediate repayment or less than 3 months $ 81,659 2,672	3 to 6 months $ - -	6 months to 1 year $ - -	More than 1 year
				$ - -

December 31, 2020

December 31, 2020
Non-derivative financial liabilities Notes payable Other payables	Immediate repayment or less than 3 months $ 64,610 2,170	3 to 6 months $ - -	6 months to 1 year $ - -	More than 1 year
				$ - -

XIX. Related-Party Transactions

(i) Related parties' names and relationships

Name of the related parties Others	Relationship with the Company
	Chairperson, Directors and Key Management of the Company

(ii) There were no other significant transactions between the Company and its related parties in 2021 and 2020.
(iii) The total remuneration to directors and other key management for 2021 and 2020 were as follows:

2020 were as follows:
Short-term employee benefits Post-employment benefits		2021 $ 7,369 288 $ 7,657		2020
				$ 9,816 232 $ 10,048

XX. Significant contingent liabilities and unrecognized contract commitments
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As of the end of 2021, the bank performance guarantees for the Company's accommodation coupons amounted to NT$1,684 thousand, and the Company had provided NT$1,706 thousand of time deposits as collateral (recorded as refundable deposits). The Company had issued commercial paper and unused credit facilities amounting to NT$400,000 thousand and NT$6,000 thousand, respectively.

XXI. Information on foreign currency assets and liabilities with significant effect The Company’s foreign currency assets and liabilities with significant effect:

December 31, 2021

December 31, 2021
Foreign currency assets Non-monetary items Financial assets at fair value through other comprehensive income USD Investments accounted for under the equity method USD Foreign currency liabilities No December 31, 2020	Foreign currency $ 1,228 153,721 Foreign currency $ 1,158 156,403	Exchange rate 27.68（USD: NTD） 27.68（USD: NTD） Exchange rate 28.480（USD: NTD） 28.480（USD: NTD）	Book value
			$ 33,990 4,255,000 Book value
Foreign currency assets Non-monetary items Financial assets at fair value through other comprehensive income USD Investments accounted for under the equity method USD Foreign currency liabilities No
			$ 32,980 4,454,346

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XXII. Other Information

Due to the impact of the COVID-19 epidemic, the global economy is in severe recession and contraction due to the lock-down management policy. The Company's business has also been affected by the epidemic, with guest room revenues and operating revenues from affiliated companies being more affected by the epidemic control measures. The Company will continue to pay attention to the subsequent development and respond carefully to reduce the possible adverse impact. Please refer to Note 11 for the impact on rental incomes.

XXIII. Additional disclosures

(i) Information on major transactions and (ii) information on investees
Lending funds to others: None.
Provision of endorsements and guarantees to others: None.
Holding marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Schedule 1.
Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company's paid-in capital: None.
Acquisition of real estate exceeding NT$300 million or 20% of paid-in capital or more: None.
Disposal of real estate exceeding NT$300 million or 20% of paid-in capital or more: None.
Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more; None.
Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.
Engagement in derivative transactions: None.
Name and Location of investees...and Other Related Information (excluding Mainland China investees): Schedule 2
(iii) Information on investments in China: None.
(iv) Information on major shareholders: Please refer to Schedule 3 for the names, amounts and percentages of shares held by shareholders with 5% or more of the equity

XXIV. Segment Information

Information provided to the key operating decision maker to allocate resources and evaluate departmental performance, centering on each type of product or services delivered or offered. The reportable segments of the Company are as follows.

49 -

Travel service Segment - Provides tourist hotel service Leasing Segment - Rent out commercial buildings

(i) Segment Revenue and Operating Results The revenues and operating results of the Company's continuing
operations analyzed by reportable segment are as follows.

Travel service segment Leasing segment Total from continuing operations Interest income Interest expenses General income (expense) Net profits before tax (continuing operations)		Segment	re	venues 2020 $ 55,093 209,773 $ 264,866	Depreciation and	Depreciation and	Depreciation and	amortization 2020 $ 1,098 1,721 $ 2,819	Segment profits or losses	Segment profits or losses	Segment profits or losses
		2021 $ 38,239 214,639 $ 252,878				2021 $ 727 1,656 $ 2,383			2021 ( $ 5,240 ) 197,309 192,069 17,197 ( 941 ) ( 115,681) $ 92,644		2020
										$ 499 192,120 192,619 18,842 ( 1,255 ) ( 9,084) $ 201,122

The revenues reported above were generated from transactions with external customers. There were no inter-segment sales in 2021 and 2020.

Segment profits refer to each segment's profits, excluding general income (expense), interest income, interest expense, and income tax expense. This measure is provided to the chief business decision maker to allocate resources to segments and to measure their performance.

(ii) Segment assets

Segment assets
Segment assets Travel service segment Leasing segment Total segment assets Financial assets at fair value through profit and loss Financial assets at fair value through other comprehensive income Investments accounted for under the equity method General assets Total Assets	December 31, 2021 $ 323,733 946,853 1,270,586 11,239 2,104,722 4,255,000 2,800,388 $ 10,441,935	December 31, 2020 $ 323,422 948,509 1,271,931 11,220 2,094,172 4,454,346 2,660,860 $ 10,492,529
			$ 323,422 948,509 1,271,931 11,220 2,094,172 4,454,346 2,660,860 $ 10,492,529

(iii) Geographical information

The Company's operating revenues in 2021 and 2020 were derived from the Company's home country, and therefore the Company does not have geographic information.

50 -

Unit: Thousand NTD

FIRST HOTEL COMPANY LTD.

Marketable securities held at the end of the period.

December 31, 2021

Schedule 1

Companies held	Types and names of marketable securities	Relationship with the securities issuer	Account in the book	The end of theperiod	The end of theperiod	The end of theperiod	The end of theperiod	Remarks
				Thousands of units / Thousands of shares	Book value	Ownership	Fair value
FIRST HOTEL COMPANY LIMITED	Stocks and Funds Taiwan Cooperative Bank Money Market Funds Chunghwa Telecom Co., Ltd. WanHwa Enterprise Company Ltd. MEGA FINANCIAL HOLDING COMPANY LIMITED DAH CHUNG BILLS FINANCE CORP. Kubo Investment Corporation Today's Department Store Company Ltd. Forward Time International, Ltd	- - - - - - - -	Financial assets at fair value through income - 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	1,096 13 89,810 50 32,629 1,906 5,082 654	$ 11,239 1,557 1,095,678 1,771 218,106 207,668 545,952 33,990	- - 19.96% - 7.24% 9.54% 19.80% 5.40%	$ 11,239 1,557 1,095,678 1,771 218,106 207,668 545,952 33,990	Note Note Note Note

Note: Calculated based on the net asset value or closing price of the investee as of December 31, 2021.

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FIRST HOTEL COMPANY LTD.

Name and Location of Investees...and Other Related Information

January 1 to December 31, 2021

Schedule 2

Unit: Thousand NTD ; US$

Name of Investor	Investee	Location	Main business activities	Original investment amount	Original investment amount	Shares held as of the end of period	Shares held as of the end of period	Shares held as of the end of period	Investee company Profits (losses) for the period	Recognized in the period (Gain) loss on investments	Remarks
				Balance at the end of period	The end of the last period	Number of shares (thousand)	Ownership	Book value
FIRST HOTEL COMPANY LTD.	Today’s Hotel Corporation USA F&W Hotel Corporation of USA	U.S.A. U.S.A.	Tourist hotel Mainly engaged in business hotel investment	USD 16,200,000 USD 4,068,750	USD 16,200,000 USD 4,068,750	16,200 3,875	48.21 31.00	$ 3,871,871 383,129	( USD 9,537,479 ) ( USD 199,665 )	( $ 128,797 ) ( 1,734 )	Note Note

Note: Recognized on the basis of the financial statements audited by CPA for the year ended December 31, 2021.

52 -

FIRST HOTEL COMPANY LTD.

Information on major shareholders

December 31, 2021

Schedule 3

Unit: shares

	Unit: shares	Unit: shares
Names of major shareholders	Shares
	Number of Shares Held	Ownership
Kubo Investment Corporation WanHwa Enterprise Company Ltd. Mandarin Investment Corporation Zen Fong Investment Corporation	99,000,503 99,000,503 73,605,668 40,761,943	19.80% 19.80% 14.72% 8.15%

Note 1: The information on major shareholders in this Exhibit is compiled by Taiwan Depository & Clearing Corporation based on the last business day of the quarter in which the shareholders held 5% or more of the Company's common shares and preferred shares whose registration and delivery have been completed in non-physical form (including treasury shares). The number of shares recorded in the Company's financial statements and the actual number of shares registered and delivered in non-physical form may differ depending on the basis of preparation of the calculations.
Note 2: If a shareholder delivers his or her shares to a trust, the above information shall be disclosed by the individual trustor account opened by the trustee As for the declaration of insider’s equity for shareholders with more than 10% shareholding in accordance with the Securities and Exchange Act, the shareholding of the shareholder includes his or her own shares plus the shares that he or she has delivered to a trust and has the right to decide the use of the trust property, etc. Please refer to the Market Observation Post System for information on insider's equity declaration.
53 -

FIRST HOTEL COMPANY LTD.

Schedule of changes in financial assets at fair value through other comprehensive income - non-current

2021

Schedule 1

Unit: Thousand NTD

Name Listed stocks WanHwa Enterprise Company Ltd. MEGA FINANCIAL HOLDING COMPANY LIMITED Non-listed stocks DAH CHUNG BILLS FINANCE CORP. Kubo Investment Corporation Today's Department Store Company Ltd. Forward Time International, Ltd Total	Balance at the beginning of the year Number of shares (thousand) Fair value 89,810 $ 1,113,640 50 1,485 1,115,125 32,629 238,193 1,906 209,719 5,082 496,699 654 32,980 977,591 $ 2,092,716	Balance at the beginning of the year Number of shares (thousand) Fair value 89,810 $ 1,113,640 50 1,485 1,115,125 32,629 238,193 1,906 209,719 5,082 496,699 654 32,980 977,591 $ 2,092,716	Increase in the year Number of shares (thousand) Amount - $ - - 286 286 - - - - - 49,253 - 1,010 50,263 $ 50,549	Increase in the year Number of shares (thousand) Amount - $ - - 286 286 - - - - - 49,253 - 1,010 50,263 $ 50,549	Decrease in the year Number of shares (thousand) Amount - ( $ 17,962 ) - - ( 17,962) - ( 20,087 ) - ( 2,051 ) - - - - ( 22,138) ($ 40,100)	Balance at the end of the year Number of shares (thousand) Fair value 89,810 $ 1,095,678 50 1,771 1,097,449 32,629 218,106 1,906 207,668 5,082 545,952 654 33,990 1,005,716 $ 2,103,165	Balance at the end of the year Number of shares (thousand) Fair value 89,810 $ 1,095,678 50 1,771 1,097,449 32,629 218,106 1,906 207,668 5,082 545,952 654 33,990 1,005,716 $ 2,103,165	Provision of guarantee or Pledge status (Note 2)	Remarks
	Number of shares (thousand) 89,810 50 32,629 1,906 5,082 654		Number of shares (thousand) - - - - - -		Number of shares (thousand) - - - - - -	Number of shares (thousand) 89,810 50 32,629 1,906 5,082 654
									Note 1 Note 1 Note 1 Note 1 Note 1 Note 1

Note 1: The increase and decrease in the current year represent the valuation adjustments resulting from changes in fair value.

Note 2: None was provided as collaterals.

54 -

FIRST HOTEL COMPANY LTD.

Schedule of Changes in Investments Accounted for Under Equity Method

2021

				2021
Schedule 2 Name Today's Hotel Corporation of USA F&W hotel Corporation of USA	Balance at the beginning of the year Number of shares (thousand) Amount 16,200 $ 4,114,738 3,875 339,608 $ 4,454,346	Increase in the year Number of shares (thousand) Amount - $ - - 52,496 $ 52,496	Decrease in the year Number of shares (thousand) Amount - $ 114,070 - 7,241 $ 121,311	Gain or loss on investment ( $ 128,797 ) ( 1,734) ($ 130,531)	Balance at the end of the		year Amount $ 3,871,871 383,129 $ 4,255,000	Market value or net worth (Note 4) Unit Price Total price $ 3,871,871 383,129 $ 4,255,000	Unit: Provision of guarantee or Pledge status (Note 5)	Thousand NTD Remarks
	Number of shares (thousand) 16,200 3,875	Number of shares (thousand) - -	Number of shares (thousand) - -		Number of shares (thousand) 16,200 3,875	Shareholding % 48.21 31.00		Unit Price
										Notes 1 and 2 Notes 1 and 3

Note 1: Recognized on the basis of the financial statements audited by CPA for the year ended December 31, 2021. Note 2: The decrease in the current year was due to the recognition of translation differences on the financial statements of foreign operations.

Note 3: The increase for the year was due to the recognition of unrealized valuation loss on investments in equity instruments measured at fair value through other comprehensive income and the decrease in the current year was recognized as translation difference on the financial statements of foreign operations.

Note 4: The net equity in the investees was calculated based on the financial statements of the investees and the Company's percentage of ownership. Note 5: None was provided as collaterals.

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FIRST HOTEL COMPANY LTD.

Schedule of notes payable

December 31, 2021

Schedule 3

Unit: Thousand NTD

Customer Name Company A Others (Note) Total		Amount
		$ 14,500 67,159 $ 81,659

Note: None of the balance exceeded 5% of the total balance of this item.

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FIRST HOTEL COMPANY LTD.

Schedule of other payables

December 31, 2021

Schedule 4

Unit: Thousand NTD

Item Employee remuneration payables Director remuneration payables Salary Business tax House tax Others (Note) Total		Amount
		$ 4,887 2,935 168 2,435 1,901 2,963 $ 15,289

Note: None of the balance exceeded 5% of the total balance of this item.

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FIRST HOTEL COMPANY LTD.

Schedule of deposits received

December 31, 2021

Schedule 5

Unit: Thousand NTD

Item Company A Others (Note)		Amount
		$ 120,800 5,897 $ 126,697

Note: None of the balance exceeded 5% of the total balance of this item.

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FIRST HOTEL COMPANY LTD.

Schedule of guest room costs and operating expenses 2021

Schedule 6

Unit: Thousand NTD

Item Salary Directors' remuneration Utilities fee Meal coupon fee Tax Depreciation and amortization Service fee Cleaning fee Repair fee Others (Note)	Guest room costs $ 5,877 - 3,923 3,019 3,568 727 - 357 616 2,729 $ 20,816	Operating expenses	Operating expenses
			$ 9,999 3,770 11 - 850 884 1,904 3 1,440 5,039 $ 23,900

Note: None of the balance exceeded 5% of the total balance of this item.

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FIRST HOTEL COMPANY LTD.

Schedule of employee benefits, depreciation and amortization expenses 2021 and 2020

Schedule 7

Unit: Thousand NTD

Employee benefits expense Payroll expenses Labor and health insurance fees Pension costs Directors' remuneration Others Depreciation expense Amortization expense		2021		Total $ 15,876 1,786 989 3,770 856 $ 23,277 $ 3,228 $ 39		2020
	Attributable to operating costs $ 5,877 779 - - 289 $ 6,945 $ 2,383 $ -	Attributable to operating expenses $ 9,999 1,007 989 3,770 567 $ 16,332 $ 845 $ 39			Attributable to operating costs $ 7,169 969 - - 360 $ 8,498 $ 2,819 $ -	Attributable to operating expenses $ 8,765 982 1,060 7,104 577 $ 18,488 $ 859 $ 39		Total
								$ 15,934 1,951 1,060 7,104 937 $ 26,986 $ 3,678 $ 39

As of the end of 2021 and 2020, the average number of employees of the Company were 37 and 42 employees, respectively, which included 5 directors, respectively, who did not hold a concurrent employee position.
The average employee benefit expenses were NT$610 thousand and NT$537thousand for 2021 and 2020, respectively.
The average employee salary expenses were NT$496thousand and NT$431 thousand for 2021 and 2020, respectively. The change in average employee salary expenses was 15% .
The supervisors’ remuneration for both the current year and the previous year was NT$0 thousand.
The Company's remuneration policy is as follows:
(1) The remuneration of the Company's directors is determined in accordance with the Company's Articles of Incorporation, based on their positions and responsibilities, and with reference to the usual industry standards.
(2) The remuneration of the Company's managerial officers is based on the salary scale for employees approved by the Remuneration Committee. It is based on the positions and responsibilities they hold, with reference to the usual industry standards.
(3) The remuneration of the Company's employees is based on the positions and responsibilities they hold and the Company's business performance and personal performance. It is implemented after approval by appropriate authorization.
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FIRST HOTEL — Annual Report 2021

52185_rns_2021-11-15_a07fa50b-042a-4b2a-b861-39023155943f.pdf

FIRST HOTEL COMPANY LTD.

Financial Statements and Independent Auditor's Report 2021 and 2020

Independent Auditor's Report

Opinions

Basis for Opinions

Key Audit Matters

Other Information

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

Auditors' Responsibilities for the Audit of the Financial Statements

FIRST HOTEL COMPANY LTD.

Balance sheets

FIRST HOTEL COMPANY LTD.

Comprehensive Income statements

(Continued from previous page)

(Continued from previous page)

FIRST HOTEL COMPANY LTD.

Statements of changes in equity

FIRST HOTEL COMPANY LTD.

Cash flow statements

FIRST HOTEL COMPANY LTD.

I. Company history

(v) Investment in affiliates

2. Equity instruments

VI. Cash and cash equivalents

VII. Financial assets at fair value through profit or loss - current

X. Property, plant and equipment

XI. Real estate investment

XIV. Employee benefits, depreciation and amortization expenses

(iv) The state of income tax assessment

XVI. Earnings per share

XVII. Capital Risk Management

XVIII. Financial instruments

2. Credit risk

3. Liquidity risk

Liquidity and Interest Rate Risk Schedule

XIX. Related-Party Transactions

December 31, 2021

XXII. Other Information

XXIII. Additional disclosures

XXIV. Segment Information

(iii) Geographical information

FIRST HOTEL COMPANY LTD.

Marketable securities held at the end of the period.

Schedule 1

FIRST HOTEL COMPANY LTD.

FIRST HOTEL COMPANY LTD.

Information on major shareholders

Schedule 3

FIRST HOTEL COMPANY LTD.

2021

Schedule 1

Unit: Thousand NTD

FIRST HOTEL COMPANY LTD.

FIRST HOTEL COMPANY LTD.

Schedule of notes payable

Schedule 3

FIRST HOTEL COMPANY LTD.

Schedule of other payables

Schedule 4

FIRST HOTEL COMPANY LTD.

Schedule of deposits received

FIRST HOTEL COMPANY LTD.

Schedule of guest room costs and operating expenses 2021

Schedule 6

FIRST HOTEL COMPANY LTD.

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FIRST HOTEL Annual Report 2021