LEALEA — Annual Report 2021

Nov 12, 2021

Stock Code 1444

LEALEA ENTERPRISE CORPORATION Limited

Individual Financial Statements for the Years Ended December 31, 2021 and 2020 and Independent Auditors’ Report

ADD: 11F, No. 162, Songjiang Rd., Taipei City 104, Taiwan TEL: 02-2100-2888

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§Table of Contents§

Item Page 1. Cover 1 2. Table of Contents 2 3. Independent Auditors’ report 3～6 4. Balance Sheets 7 5. Statements of Comprehensive Income 8～9 6. Statements of Change In Equity 10 7. Statements of Cash Flows 11～12 8. Notes to Individual Financial Statements (1) General 13 (2) The Authorization of Financial Statements 13 (3) Application of New And Revised International Financial Reporting Standards 13～15 (4) Summary of Significant Accounting Policies 15～31 (5) Critical Accounting Judgments and Key Sources of Estimation and Uncertainty 31 (6) Description for Significant Accounting Items 32～53 (7) Related Parties Transactions 58～64 (8) Pledged Assets 64 (9) Significant Contingent Liabilities and Unrecognized Contract Commitments 64 (10) Significant Loss Due to Disasters - (11) Significant Subsequent Events - (12) Other 54～58、65～66 (13) Notes for Disclosed Matters 1. Related Information on Significant Transaction Matters 66～67 2. Related Information on Reinvestment Businesses 66～67 3. Information on Investment in China 67 4. Information on Major Shareholders 67 (14) Department Information 67 9. The Contents of Statements of Major Accounting Items 76～107

Individual Financial

Statements - - - - - - - 1 2 3 4 5 6～20 23 24 25 - - 21～22, 26～27 28 28 28 28 29 -

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INDEPENDENNT AUDITORS’ REPORT

The Board of Directors and Shareholders LEALEA ENTERPRISE CORPORATION Limited:

Opinion

We have audited the accompanying individual financial statements of LEALEA ENTERPRISE CORPORATION Limited (the “Company”), which comprise the individual balance sheets as of December 31, 2021 and 2020, and the individual statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the individual financial statements, including a summary of significant accounting policies.

Per opinions of our accountants, the individual financial statements mentioned in paragraph one have been prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers in all material aspects, and can be reasonably assessed to present the individual financial conditions of the Company as of December 31, 2021 and 2020, as well as the individual financial performance and individual cash flow from January 1 to December 31, 2021 and 2020.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Individual Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Key audit matters for the Company’s individual financial statements for the year ended December 31, 2021 are stated as follows:

The authenticity of sales revenue of polyester chip product

LEALEA ENTERPRISE CORPORATION Limited is mainly engaged in the manufacturing and sales of polyester fully oriented yarn, draw textured yarn and polyester chip. The sales revenue and gross profit margin of polyester chip increased in 2021 compared to previous years. Since there are inherent significant risks in revenue recognition, and the true occurrence of sales

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income will be relevant to income recognition and the fair expression of financial reports. As a result, the accountant listed the authenticity of customer sales revenue of polyester chip as the key audit items for this year. For accounting policies and relevant disclosure information related to the recognition of sales revenue, please refer to Note 4.

The main auditing procedures adopted by the accountants with regard to the issues described above are to understand the effectiveness of internal controls concerning sales management procedures related to the revealed sales revenue, test the effectiveness of design and execution related to internal control, execute test of details of revenue, take random inspections on customer orders as well as relevant documents and certificates of shipment and payment collection and raise requests for confirmation letters in order to assure the authenticity of sales revenue.

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

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

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Individual Financial Statements

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

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

1. Identified and evaluated the risk of material misstatement due to fraud or error in the Individual Financial Statements; designed and carried out appropriate countermeasures for the evaluated risks; obtained sufficient and appropriate evidence as the basis for the audit opinion. Fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Therefore, the risk of not detecting a material misstatement

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resulting from fraud is higher than for one resulting from error.

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

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

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

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

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

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

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

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In the communications between us and the Company’s governing body, we have determined the key audit items from 2021 individual financial statements of the Company and its subsidiaries. We have clearly indicated such matters in the auditors' report. Unless legal regulations prohibit the public disclosure of specific items, or in extremely rare cases, where we decided not to communicate over specific items in the auditors' report for it could be reasonably anticipated that the negative effects of such disclosure would be greater than the public interest it brings forth.

The engagement partners on the audit resulting in this independent auditors’ report are Chiu, Ming-Yu and Wu, Ke-Chang.

____ ____ Chiu, Ming-Yu Wu, Ke-Chang Deloitte & Touche Deloitte & Touche Taipei, Taiwan Taipei, Taiwan Republic of China Republic of China

Financial-Supervisory-Securities- Financial-Supervisory-SecuritiesVI-0930160267 of the Financial Auditing-1000028068 of the Supervisory Commission Financial Supervisory Commission

March 28, 2022

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LEALEA ENTERPRISE CORPORATION Limited INDIVIDUAL BALANCE SHEETS Years Ended December 31, 2021 and 2020 (In Thousands of New Taiwan Dollars)

Code 1100 1110 1150 1160 1170 1180 1210 1310 1320 1410 1476 1479 11XX 1510 1550 1600 1755 1760 1780 1840 1915 1990 15XX 1XXX Code 2100 2110 2150 2160 2170 2180 2200 2220 2280 2320 2399 21XX 2540 2570 2580 2640 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 3XXX	ASSETS CURRENT ASSETS Cash and cash equivalents (Note 4, 6) Financial assets at fair value through profit or loss－Current (Note 4, 7) Notes receivable, net (Note 4, 8) Notes Receivable from related parties, net (Note 4,8, 23) Accounts receivable, net (Note 4, 8) Accounts Receivable from related parties, net (Note 4,8, 23) Advance loans to related parties (Note 23) Inventories－Textile business (Note 4, 9) Inventories - Construction（Note 4, 9） Prepayments Other financial assets－Current(Note 6) Other current assets (Note 11) Total current assets NONCURRENT ASSETS Financial assets at fair value through profit or loss－Noncurrent (Note 4, 7) Investments accounted for using equity method (Note 4, 10) Property, plant and equipment (Note 4, 11) Right-of-use assets (Note 4, 12) Investment property (Note 4, 13) Other intangible assets Deferred income tax assets (Note 4, 18) Prepayments for business facilities Other noncurrent assets－Others Total noncurrent assets TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term loans (Note 14) Short-term bills payable (Note 14) Notes payable Notes payables to related parties (Note 23) Accounts payable Accounts payables to related parties (Note 23) Other payables Advance loans to related parties (Note 23) Lease liabilities－Current (Note 4, 12) Long-term liabilities－Current portion (Note 14) Other current liabilities (Note 11) Total current liabilities NONCURRENT LIABILITIES Long-term borrowings (Note 14) Deferred income tax liabilities－Noncurrent (Note 4, 18) Lease liabilities－Noncurrent (Note 4, 12) Net defined liabilities－Noncurrent (Note 4, 15) Guarantee deposits Total noncurrent liabilities Total liabilities EQUITY (NOTE 16) Capital stock Capital－Common stock Capital surplus Retained earnings Appropriated as legal capital reserve Appropriated as special capital reserve Unappropriated earning（Loss to be recovered） Total retained earnings Others Treasury stock Total equity TOTAL LIABILITIES AND EQUITY		2021		％ 8 - 1 - 3 1 3 13 5 1 3 - 38 - 32 28 - 1 - 1 - - 62 100 18 7 1 - 3 - 3 2 - 1 2 37 3 1 - 1 - 5 42 51 1 3 - 2 5 1 - 58 100		2020
			Amount $ 1,579,162 71,403 108,857 102,213 618,953 186,936 490,553 2,347,403 896,305 126,709 505,989 - 7,034,483 1,347 6,050,211 5,151,173 539 269,813 2,506 97,181 60,010 3,391 11,636,171 $ 18,670,654 $ 3,450,000 1,260,000 105,457 58,349 552,266 75,264 568,559 346,000 177 175,000 299,877 6,890,949 650,000 96,653 363 273,501 2,357 1,022,874 7,913,823 9,573,029 92,954 530,980 40,464 371,211 942,655 176,663 28,470) 10,756,831 $ 18,670,654				Amount $ 1,124,927 67,305 49,352 12,833 418,133 198,627 583,840 1,514,587 - 82,992 306,802 54,255 4,413,653 1,347 6,102,266 4,933,893 720 - 1,599 133,187 93,489 5,782 11,272,283 $ 15,685,936 $ 1,750,000 770,000 7,796 730 375,669 89,142 391,307 331,000 107 474,667 312,708 4,503,126 520,000 96,653 541 306,039 1,657 924,890 5,428,016 9,573,029 78,422 530,980 40,464 259,472) 311,972 322,967 28,470) 10,257,920 $ 15,685,936		％
		(				( (		(	7 - - - 3 1 4 10 - 1 2 - 28 - 39 31 - - - 1 1 - 72 100 11 5 - - 2 1 3 2 - 3 2 29 3 1 - 2 - 6 35 61 - 4 - 2) 2 2 - 65 100

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

Chairman: KUO, SHAO YI Manager: KUO, SHAO YI Accounting Supervisor: Hsu, Li Hsueh

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LEALEA ENTERPRISE CORPORATION Limited INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME Years Ended December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars, Except Earnings per Share)

Code 4000 OPERATING REVENUE（Note 4, 23） 5000 COST OF REVENUE（Note 9, 23） 5900 GROSS PROFIT 5910 GROSS PROFIT BEFORE UNREALIZED WITH SUBSIDIARIES AND ASSOCIATES 5950 REALIZED GROSS PROFIT OPERATING EXPENSE (Note 23) 6100 Marketing expenses 6200 General and administrative 6300 Research and development 6450 Expected credit loss (gain) on reversal of impairment loss 6000 Total operating expenses 6900 OPERATING INCOME (LOSS) NON-OPERATING INCOME AND EXPENSE (Note 17, 23) 7100 Interest income 7140 Gain recognized in bargain purchase transaction－ subsidiary acquired 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit (loss) of associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses		2021		％ 100 88 12 - 12 8 2 - - 10 2 - - 1 3 - 1 5		2020
								％
							100 96 4 - 4 4 1 1 - 6 ( 2) - - 2 ( 3 ) ( 1 ) ( 2) ( 4)

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Code 7900 INCOME (LOSS) BEFORE INCOME TAX 7950 INCOME TAX( EXPENSE) PROFIT (Note 18) 8200 NET INCOME (LOSS) OTHER COMPREHENSIVE INCOME (LOSS) 8310 Items that will not be reclassified subsequently to profit or loss 8311 Remeasurement of defined benefit obligation 8330 Share of other comprehensive loss of associates and joint ventures accounted for using equity method 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences arising on translation of foreign operations 8300 Other comprehensive loss for the year, net of income tax 8500 TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS (LOSS) PER SHARE (Note 19) FROM CONTINUING OPERATION 9710 Basic earnings per share 9810 Diluted earnings per share		2021

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

Chairman: KUO, SHAO YI Manager: KUO, SHAO YI Accounting Supervisor: Hsu, Li Hsueh

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LEALEA ENTERPRISE CORPORATION Limited INDIVIDUAL STATEMENTS OF CHANGE IN EQUITY Years Ended December 31, 2021 and 2020 (In Thousands of New Taiwan Dollars)

Code A1 BALANCE JANUARY 1, 2020 2019 Appropriation of earnings B1 Legal capital reserve Adjustments to other capital surplus: C7 Adjustments to share of changes in equities of associates Q1 Disposal of investments in equity instruments at fair value through other comprehensive income, accounted for using equity method D1 Net income (loss) in 2020 D3 Other comprehensive income (loss) in 2020, net of income tax D5 Total comprehensive income (loss) in 2020 Z1 BALANCE DECEMBER 31, 2020 Adjustments to other capital surplus: C7 Adjustments to share of changes in equities of associates Q1 Disposal of investments in equity instruments at fair value through other comprehensive income, accounted for using equity method D1 Net income (loss) in 2021 D3 Other comprehensive income (loss) in 2021, net of income tax D5 Total comprehensive income (loss) in 2021 Z1 BALANCE DECEMBER 31, 2021		Capital Stock-Common Stock Shares (In Thousands) Amount 957,303 $ 9,573,029 - - - - - - - - - - - - 957,303 9,573,029 - - - - - - - - - - 957,303 $ 9,573,029	Capital Stock-Common Stock Shares (In Thousands) Amount 957,303 $ 9,573,029 - - - - - - - - - - - - 957,303 9,573,029 - - - - - - - - - - 957,303 $ 9,573,029		Capital Surplus $ 83,024 - 4,602 ) - - - - 78,422 14,532 - - - - $ 92,954			Retained Earnings		Unappropriated Earnings $ 62,527 2,330 ) - 23,992 357,444 ) 13,783 343,661) 259,472 ) - 15,570 648,800 33,687) 615,113 $ 371,211	EquityAdjustments Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Foreign Currency Translation Reserve ( $ 48,179 ) $ 50,030 - - - - - ( 23,992 ) - - ( 67,996) 413,104 ( 67,996) 413,104 ( 116,175 ) 439,142 - - - ( 15,570 ) - - ( 43,343) ( 87,391) ( 43,343) ( 87,391) ($ 159,518) $ 336,181	EquityAdjustments Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Foreign Currency Translation Reserve ( $ 48,179 ) $ 50,030 - - - - - ( 23,992 ) - - ( 67,996) 413,104 ( 67,996) 413,104 ( 116,175 ) 439,142 - - - ( 15,570 ) - - ( 43,343) ( 87,391) ( 43,343) ( 87,391) ($ 159,518) $ 336,181		Treasury Stock $ 28,470 ) - - - - - - 28,470 ) - - - - - $ 28,470)		Total Equity
											Foreign Currency Translation Reserve ( $ 48,179 ) - - - - ( 67,996) ( 67,996) ( 116,175 ) - - - ( 43,343) ( 43,343) ($ 159,518)
		Shares (In Thousands) 957,303 - - - - - - 957,303 - - - - - 957,303				Legal Capital Reserve $ 528,650 2,330 - - - - - 530,980 - - - - - $ 530,980		Special Capital Reserve $ 40,464 - - - - - - 40,464 - - - - - $ 40,464
				(					( ( ( ( (		( ( ( ( ( ( (	( ( ( (	( ( (		( ( (	$ 10,261,075 - 4,602 ) - 357,444 ) 358,891 1,447 10,257,920 14,532 - 648,800 164,421) 484,379 $ 10,756,831

The accompanying notes are an integral part of the individual financial statements. Chairman: KUO, SHAO YI Manager: KUO, SHAO YI Accounting Supervisor: Hsu, Li Hsueh

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LEALEA ENTERPRISE CORPORATION Limited INDIVIDUAL STATEMENTS OF CASH FLOWS Years Ended December 31, 2021 and 2020 (In Thousands of New Taiwan Dollars)

Code CASH FLOWS FROM OPERATING ACTIVITIES A10000 Income (loss) before income tax A20010 Adjustments to reconcile profit (loss) A20100 Depreciation expense A20200 Amortization expense A20300 Expected credit loss (gain) on reversal of impairment loss A20900 Finance costs A21200 Interest income A21300 Dividend income A20400 Loss (gain) on financial assets or liabilities at fair value through profit or loss, net A22300 Share of profits (loss) of subsidiaries, associates and joint ventures accounted for using equity method A22500 Loss (gain) on disposal or retirement of property, plant and equipment A23100 Disposal of loss (gain) on investment A23700 Loss for market price decline and obsolete and slow-moving inventories or gain from price recovery of inventory A23700 Impairment loss on Property, plant and equipment A23900 Unrealized (realized) gain from inter-affiliated accounts A24100 Loss (gain) on foreign exchange A29900 Gain recognized in bargain purchase transaction A30000 CHANGES IN OPERATING ASSETS AND LIABILITIES A31130 Notes receivable A31150 Accounts receivable A31200 Inventories A31230 Prepayments A31240 Other current assets A31250 Other financial assets A31990 Other assets A32130 Notes and bills payable A32150 Accounts payable A32180 Other payables A32230 Other current liabilities A32240 Net defined benefit liability		2021 $ 694,951 551,564 57,802 19,668 34,215 29,248 ) 1,511 ) 4,098 ) 99,173 ) 353,932 ) - 5,813 391 318 33,552 ) 9,594 ) 149,487 ) 187,426 ) 1,734,934 ) 236,662 ) - 216,416 ) 18,099 ) 155,280 162,737 169,206 111,527 63,484)		2020
	( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 409,193 ) 612,378 56,558 180 ) 39,987 42,691 ) 1,547 ) 30,867 ) 165,207 2,051 62 ) 31,586 ) - 119 14,110 - 83,191 162,012 444,018 79,704 ) 461 ) 261,403 ) 63 ) 85 ) 49,372 42,629 ) 82,922 ) 14,193)

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Code A33000 Net cash generated by operating activities A33100 Interest received A33200 Dividend received A33200 Dividends received from associates A33300 Interest paid A33500 Income tax received (paid) AAAA Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES B01800 Acquisition of long-term equity investment using the equity method B01900 Disposal of long-term equity investments using the equity method B02700 Acquisition of property, plant and equipment B02800 Disposal of property, plant and equipment B03700 Increase (decrease) in refundable guarantee deposits B04300 Decrease in advance loans from related parties B04500 Acquisition of Intangible assets B05400 Purchase of investment property BBBB Net cash used in investing activities CASH FLOWS FROM FINANCIING ACTIVITIES C00100 Increase (decrease) in short-term loans C00500 Increase in short-term bills payable C01600 Long-term borrowings C01700 Repayment of long-term borrowings C03100 Increase (decrease) in guarantee deposits received C03700 Increase in advance loans payable to related parties C04020 Repayment of the principal portion of lease liabilities CCCC Net cash used in financing activities DDDD EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS EEEE NET DECREASE (INCREASE) IN CASH AND CASH EQUIVALENTS E00100 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR E00200 CASH AND CASH EQUIVALENTS, END OF YEAR		2021 $ 1,174,144 ) 28,980 1,511 52,223 34,142 ) 9,550 1,116,022) 10,661 ) - 598,771 ) 292,383 193 116,143 3,001 ) 269,964) 473,678) 1,700,000 490,000 1,000,000 1,169,667 ) 927 15,000 106) 2,036,154 7,781 454,235 1,124,927 $ 1,579,162		2020
	( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( (	$ 631,417 43,501 1,547 51,236 40,628 ) 7,465) 679,608 625,090 ) 15,648 395,156 ) 127,795 215 ) 14,109 1,445 ) - 864,354) 170,000 ) 660,000 - 474,667 ) 592 ) 72,000 236) 86,505 9,292) 107,533 ) 1,232,460 $ 1,124,927

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

Chairman: KUO, SHAO YI Manager: KUO, SHAO YI Accounting Supervisor: Hsu, Li Hsueh

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LEALEA ENTERPRISE CORPORATION Limited and Subsidiaries

NOTES TO INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. GENERAL

LEALEA ENTERPRISE CORPORATION Limited (hereinafter referred to as the “Company”), a Republic of China (R.O.C.) corporation, was incorporated in 1979 with an initial capital of NT$16,000 thousand. After several capital increases the total capital was NT$9,573,029 thousand as of December 31, 2021 The Company is mainly engaged in the manufacturing and sales of polyester fully oriented yarn, polyester draw textured yarn, and polyester chip. Its factories are located in Zhongli District, Taoyuan City and Fangyuan Township, Changhua County. In addition, the Company has added a construction department since the second half of 2004, which cooperated with its affiliate Rich Development Company Limited to work together on building and selling residences and other businesses. On August 1990, LEALEA ENTERPRISE shares were officially listed and traded on the Taiwan Stock Exchange (TWSE).

The functional currency of the individual financial report of LEALEA ENTERP is expressed in New Taiwan Dollars.

2. THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying individual financial statements were approved and authorized by the Board of Directors on March 28, 2022.

3. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

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

The initial application of the amendments to the IFRSs endorsed and issued into effect by the FSC did not have a significant effect on accounting policies of the Company.

• b. The IFRSs endorsed by FSC with effective date starting 2022

New, Revised or Amended Standards and Interpretations Annual Improvements to IFRS Standards 2018–2020 Reference to the Conceptual Framework (Amendments to IFRS 3） Property, Plant and Equipment - Proceeds before Intended Use (Amendments to IAS 16) Onerous Contracts–Cost of Fulfilling a Contract (Amendments to IAS 37)	Not Effective Date Issued byIASB January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

e 1: The amendment of IFRS 9 is applicable to the exchange or clause modification

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of financial liabilities in the annual reporting period beginning after January 1, 2022. The amendment of IAS 41 "Agriculture" is applicable to fair value measurement in the annual reporting period beginning after January 1, 2022. The amendment to IFRS 1 "First Adoption of IFRSs" is retrospectively applied to the annual reporting period beginning after January 1, 2022.

Note 2: The amendment is applicable to business combinations with acquisition date in the annual reporting period beginning after January 1, 2022.

Note 3: The amendment is applicable to plants, property, and equipment with necessary locations and conditions that meet the modes of operations expected by the management after January 1, 2021.

Note 4: This amendment is applicable to contracts that have not fulfilled all obligations on January 1, 2022.

As of the date the accompanying Individual financial statements were authorized for issue, the aforementioned standards or interpretations evaluated by the company will not have a material impact on financial position and performance.

c. The IFRSs issued by International Accounting Standards Board (IASB) but not yet endorsed and issued into effect by the FSC.

New, Revised or Amended Standards and Interpretations Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) IFRS 17 Insurance Contracts Amendments to IFRS 17 Initial application of IFRS 17 and IFRS 9 - comparative information (Amendments to IAS 17) Classification of Liabilities as Current or Noncurrent (Amendments to IAS 1) Disclosure of Accounting Policies (Amendments to IAS 1) Definition of Accounting Estimates (Amendments to IAS 8) Deferred income taxes related to assets and liabilities arising from a single transaction (Amendments to IAS 12)

Effective Date Issued byIASB(Note 1)

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

Note 1: Unless otherwise specified, the above-mentioned new/revised/amended standards and interpretations will first apply to annual reporting period beginning after each date.

Note 2: The amendment effective date is deferred and will be applicable to the annual reporting period beginning after January 1, 2023

Note 3: This amendment is applicable to changes of accounting estimates and accounting policies in the annual reporting period beginning on January 1, 2023.

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Note 4: This amendment is applicable to transactions occurring after January 1, 2022, except for the deferred tax recognized by temporary differences in lease and decommissioning obligation on January 1, 2022.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of Compliance

The accompanying Individual financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

b. Basis of Preparation

The accompanying Individual financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values.

Fair value measurements are categorized into a three-level hierarchy, according to the observability and importance of the relevant input values, as follows:

• (1) Level 1 inputs are unadjusted quoted prices in active markets for identical asset or liability that the entity can access at the measurement date

• (2) Level 2 inputs are inputs other than the quoted prices in determined in level 1 that are directly or indirectly observable for that asset or liability.

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

When preparing individual financial reports, the Company adopts the equity method for investment in subsidiaries and affiliated enterprises. In order to make the current profit and loss, other comprehensive profit and loss and equity of this individual financial report consistent with those attributed to the owner of the Company in the consolidated financial statements of the Company, some accounting treatment differences between the individual basis and the consolidated basis are due to adjustment of "investment using the equity method", "share of profit and loss in subsidiaries and affiliated enterprises using the equity method" "Share of other comprehensive profits and losses in subsidiaries and affiliated enterprises using the equity method" and related equity items.

c. Classification of Current and Noncurrent Assets and Liabilities

Current assets are:

• (1) Assets held for trading purposes.

• (2) Assets expected to be realized within 12 months after the balance sheet date.

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• (3) Cash and cash equivalents (but excluding those restricted for exchange or settlement of liabilities more than 12 months after the balance sheet date).

Current liabilities are:

• (1) Obligations incurred for trading purposes

• (2) Obligations expected to be settled within 12 months after the balance sheet date. (It is still a current liability even if an agreement to refinance or to reschedule payments on a long-term basis is completed after the balance sheet date and before the financial report is issued)

• (3) The entity does not have an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Those not belonging to the above-mentioned current assets or current liabilities are classified as noncurrent assets or noncurrent liabilities.

The Company is engaged in the construction projects with business cycle longer than one year. The assets and liabilities related to the construction businesses are classified as a current or noncurrent based on the time frame of normal business cycles.

d. Business Combinations

Business combinations are accounted for using the acquisition method. The acquisition-related costs are considered as expenses in the periods in which the costs are incurred and the services are received.

Goodwill is measured as the excess of the fair value of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the acquisition date fair value of the previously held equity interest in the acquiree, which exceeds the share acquired by the Company in the fair value of the entity’s identifiable net assets and commitments at the acquisition date. If, after reassessment, the net amount of the acquiree’s identifiable assets and liabilities assumed at the acquisition date still exceeds the consideration transferred, the excess of the acquisition date fair value related to the acquiree’s non-controlling interests and previously held equity interests in the acquiree will be accounted as bargain purchase benefit and immediately recognized in profit or loss.

The non-controlling benefits that have the current ownership interest in the acquiree and have the right to share the net assets of the acquiree in proportion at the time of liquidation are measured at fair value. Other non-controlling interests are measured at fair value.

When the consideration transferred by the Company in a business combination includes assets or liabilities arising from the contingent consideration agreement, the contingent consideration is measured at the fair value on the acquisition date and as part of the transfer consideration paid in exchange for the acquiree.If a change in the fair value of contingent consideration is treated as an adjustment during the measurement period, it

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will be accounted as a retrospective adjustment of the acquisition cost and a relative adjustment of goodwill. The measurement period adjustment refers to the adjustment aroused during the "measurement period" (which cannot exceed one year from the acquisition date) due to additional information obtained after the acquisition date that affects the facts or circumstances as they existed at the acquisition date.

If changes in the fair value of contingent consideration are not treated as adjustments during the measurement period, the subsequent treatment will depend on the classification of the contingent consideration. For those classified as equity and listed in the capital reserve, the contingent consideration of the options shall not be remeasured, and its subsequent delivery will be adjusted in the equity and transferred to the capital reserve-the premium of the issuance of ordinary shares. Other contingent consideration is measured at fair value on the subsequent balance sheet date, and changes in fair value are recognized in profit or loss.

e. Foreign Currencies

While preparing financial statements, for those entities trade in currencies other than the functional currency of the entity, foreign currencies are converted into functional currency in accordance with the rates of exchange as on the date of initial transactions

Foreign currency monetary items are converted in accordance with the rates of exchange as on the date of balance sheet. The exchange differences arising from the delivery or the conversion of monetary items are accounted into current profit or loss.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined and the resulting conversion differences are listed in the current profit and loss. However, if the fair value change is recognized in other comprehensive gains and losses, the resulting conversion differences are listed in other comprehensive profit and loss.

Non-monetary items measured at historical cost in a foreign currency are translated in accordance with the rates of exchange as on the date of initial transactions and will not be converted again.

f. Inventories

Inventories refer to raw materials and supplies, finished goods, and work in progress. Inventories are stated at the lower of cost or net realizable value (NVR).

With the exception of inventory of the same category, individual items shall be assessed when comparing the cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventory is calculated using weighted average method.

g. Investments Accounted for Using Equity Method

Investments accounted for using the equity method include investments in subsidiaries and associates.

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(1) Investment in subsidiaries

A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

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

When the company’s share of losses to a subsidiary equals or exceeds its equity in the subsidiary (including the carrying amount of the subsidiary under the equity method and other long-term equity that is essentially part of the company’s net investment in the subsidiary), the Company recognizes losses based on shareholding ratio continually.

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

To assess impairment, the Company must consider the cash-generating unit as a whole in the financial report and compare the recoverable amount with carrying amounts. If the recoverable amount of the asset increases subsequently, the reversal of the impairment loss shall be recognized as an interest, but the carrying amount of the asset after the reversal of the impairment loss shall not exceed the asset that should be deducted if the impairment loss is not recognized. Any reversal of the impairment loss attributable to goodwill shall not be reversed in subsequent periods.

When the Company loses control of a subsidiary, any retained investment of the former subsidiary is measured at the fair value at that date. A gain or loss is recognized in profit or loss and calculated as the difference between (a) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and (b) the previous carrying amount of the investments in such subsidiary. In addition, the Company shall account for all amounts previously recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the subsidiary had directly disposed of the related assets and liabilities.

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

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(2) Investment in associates

An associate is an entity over which the Company has significant influence but is not a subsidiary.

The Company adopts the equity method for investments in associates. Under the equity method, an investment in an associate is initially recognized in the individual statements of financial position at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate as well as the distribution received. The Company also recognizes its share in the changes in the equities of associates.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included in the carrying amount of the investment and cannot be amortized. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, is recognized immediately in profit or loss.

When the Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the net assets of the associate. The Company adopts the equity method to record such a difference as an adjustment to equity and investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to the additional subscription to the shares of associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate shall be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities. If the capital reserve is used for the aforementioned adjustment and the balance of capital reserve derived from investment accounted for using equity method is not sufficient, the difference shall be registered under retained earnings.

When the Company's share of losses in the associate equals or exceeds its investment in the equity of the associate (including the carrying amount of the investment in the associate under the equity method and other long-term interests that, in substance, form part of the Company's net investment in the associate), the Company shall cease the recognition of further losses. The Company shall only recognize additional losses and liabilities within the scope of legal obligations, inferential obligations, or payments made on behalf of associates.

To assess impairment, the Company must consider the overall carrying amount (including goodwill) of the investment as a single asset to compare the recoverable and carrying amounts for the impairment test. The recognized impairment constitutes part of the carrying amount of the investment. Any reversal of the impairment loss has to be considered after subsequent increases in the recoverable amount of investment.

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The Company shall suspend the use of the equity method on the day that its investment is no longer an associate and shall measure its retained equity in the original associate through fair value. The difference between the fair value, the amount gained from the disposal, and the carrying amount of the investment on the day the equity method ceases to apply shall be listed into the profit or loss of the current period. In addition, the basis accounting policies for amounts of the associate shown in other comprehensive profit or loss accounts shall follow the same basis applicable to the Company for direct disposal of related assets or liabilities of associates. For investment in associates that turns them into joint ventures or investment in joint ventures that turns them into associates, the Company shall continue to use the equity method and shall not reassess retained equity.

Profit or loss in upstream and downstream transactions between the Company and the associates or transactions between associates needs to be shown in the Individual financial statements when not affecting the interests of the Company or the associate.

h. Property, Plant and Equipment

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

Property, plant and equipment under construction are recognized at costs less accumulated impairment losses. The cost shall include professional service expenses and the cost of loans eligible for capitalization. Such assets shall be classified into appropriate property, plant and equipment categories upon completion and reaching the expected use status and the depreciation shall begin.

The Company shall adopt the straight-line basis or the units of production method for the depreciation of each property, plant and equipment in its useful life based on the nature of such property. If the lease period is shorter than the service life, depreciation shall be provided during the lease period. The Company shall conduct at least one annual review at the end of each year to assess the estimated useful life, residual value, and depreciation methods. The effects of changes in accounting estimates shall be applied prospectively.

When derecognizing property, plant, and equipment, the difference between the net disposal proceeds and the carrying amount of the asset shall be recognized in loss or profit.

i. Investment property

Investment property is held to earn rent or capital appreciation or both. Investment property also includes the land currently held for undecided future use.

Personally-owned investment property is measured by the original cost (including transaction cost), and the subsequent cost is measured by the amount after deducting accumulated depreciation and accumulated impairment loss. Investment property adopts the straight line basis for depreciation.

When the investment property is excluded, the difference between the net disposal price

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and the book value of the asset is recognized as profit or loss.

j. Intangible Assets

Separately acquired intangible assets with finite useful lives are carried at cost less accumulated amortization and accumulated impairment losses. The amortization of intangible assets within the useful life is in accordance with the straight-line method. The Company shall review the estimated useful life, residual value, and amortization method at least at the end of each year and defer the effect of any changes in applicable accounting estimates. Intangible assets with non-determined useful life are carried at cost less accumulated impairment losses.

When intangible assets are derecognized, the difference between the net disposal price and the asset’s carrying amount is recognized in current profit and loss.

k. Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purpose of impairment testing, goodwill is allocated to each of the Company’s cash-generating units or groups of cash-generating units.

The cash-generating unit of amortized goodwill is tested for impairment annually (and when there is an indication that the cash generating unit may be impaired) by comparing the carrying amount of the unit containing goodwill with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of a cash-generating unit is less than its carrying amount, the difference is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to the other assets of the cash generating unit pro rata based on the carrying amount of each asset in the cash generating unit. Any impairment loss for goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

At the time of disposal of related cash-generating units, the amount of goodwill related the disposition of the operation that is included in the carrying amount of operation will be determined and accounted as disposition of profits and losses.

l. Impairment of Assets related to Property, Plant and Equipment, Right-of-Use Assets, Intangible Assets (except Goodwill) and Contract Costs

On each balance sheet date, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use assets and intangible assets (except goodwill) to determine whether there is an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Shared assets are allocated to the smallest group of cash-generating units in accordance with a reasonable and consistent allocation basis.

For intangible assets that have indefinite useful lives and are not yet available for use, impairment tests are conducted at least annually and when there are indications of impairment.

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

When an impairment loss subsequently reverses, the carrying amount of the asset, cash-generating unit, and contract cost related asset shall be increased to the revised recoverable amount, but the increased carrying amount shall not exceed the carrying amount (minus amortization or depreciation) of the asset, cash generating unit, or contract cost related asset that was not impaired in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

m. Financial Instruments

Financial assets and liabilities shall be recognized in the balance sheet when the Company becomes a party to the contractual provisions of the instruments.

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

• (1) Financial assets

Regular trading of financial assets shall be recognized and derecognized in accordance with transaction date accounting.

(1.1) Measurement types

Financial assets held by the Company are classified into these categories: financial assets at fair value through profit or loss, financial assets measured at amortized cost, investment in debt instruments measured at fair value through other comprehensive gains and losses, and investments in equity instruments measured at fair value through other comprehensive profits and losses.

• (1.1.1) Financial assets at fair value through profit or loss

This category includes financial assets that are mandatorily required to measure at fair value through profit or loss and designed to be measured at fair value through profit or loss.

The financial assets that are mandatorily required to measure at fair value through profit or loss include the equity instrument investment that is not specified to be measured at fair value through other comprehensive profits and losses, and investment in debt instruments that cannot meet the criteria of measuring assets at amortized cost or at fair value through other comprehensive profits and losses.

The designation as at fair value through profit or loss at the time of initial recognition

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is for eliminating or significantly reducing measurement or recognition inconsistencies.

Financial assets at fair value through profit or loss are measured at fair value. The dividends and interest generated are recognized in other income and interest income respectively, and the profit or loss generated by remeasurement is recognized in other benefits and losses. Please refer to Note 22 for the method of determining the fair value.

• (1.1.2) Financial assets measured at amortized cost

The financial assets invested by the Company shall be classified as financial assets measured at amortized cost if both conditions below are met:

• (a) Where the financial asset is held under a certain business model with the purpose of holding financial assets to collect contract cash flow; and

• (b) The cash flow generated on specific dates specified in contractual terms is completely used to pay for the principal and interest for principal in external circulation.

After financial assets measured at amortized cost (including cash and cash equivalents, bills and accounts receivable measured at amortized cost) on initial recognition, they shall be measured through the effective interest rate approach to determine the total carrying amount minus the amortized cost of any impairment loss. All foreign currency exchange gains and losses shall be recognized in profit or loss. Except for the two following conditions, income from interest shall be calculated based on the effective interest rate multiplied by the total carrying amount of financial assets:

• (a) The interest income of a credit-impaired financial asset purchased or provided for the founding is calculated by multiplying the credit-adjusted effective interest rate by the amortized cost of the financial asset.

• (b) Financial assets that are not credit impairment from purchases or at the time of founding but subsequently become credit impairments shall be calculated by multiplying the effective interest rate in the reporting period after the credit impairment by the cost after the amortization of financial assets.

Credit impaired financial assets refer to the issuer or debtor who has experienced major financial difficulties, defaults, the debtor is likely to apply for bankruptcy or other financial reorganization, or the active market for that financial assets disappears due to financial difficulties

Cash equivalents include time deposits with maximum maturity of 3 months from the date of acquisition, which are high liquid, can be converted into a fixed amount of cash at any time and have relatively low risk in price changes. They are used for satisfying short-term cash commitments

• (1.1.3) Investment in debt instruments measured at fair value through other comprehensive profits and losses.

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The debt instruments invested by the Company shall be classified as financial assets measured at fair value through other comprehensive profits and losses if both conditions below are met:

• (a) Where the financial asset is held under a certain business model with the purpose

of collecting contractual cash flow and selling financial assets; and

• (b) The cash flow generated on specific dates specified in contractual terms is completely used to pay for the principal and interest for principal in external circulation.

The investment in debt instruments measured at fair value through other comprehensive profits and losses is measured at fair value. The changes in the carrying amount belong to the interest income calculated by the effective interest method. Foreign currency exchange gains and losses and impairment losses or reversal benefits are recognized in profit and loss. The remaining changes are recognized in other comprehensive profit and loss, and are reclassified as profit and loss at the time of investment disposal.

• (1.1.4) Investments in equity instruments measured at fair value through other comprehensive profits and losses

The Company may make an irrevocable choice on initial recognition and designate the investments in equity instruments that are not held for trading and not recognized by the acquirer of a business combination or having consideration to be measured at fair value through other comprehensive profits and losses.

Investments in equity instruments measured at fair value through other comprehensive profits and losses are subsequently measured at fair value with profits and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity.

Dividends on these investments in equity instruments at fair value through other comprehensive profits and losses are recognized in profit or loss when the rights of the Company to receive the dividends is established, unless the dividends clearly represent the recovery of part of the investment cost.

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(1.2) Impairment of financial Assets and Contract Assets

On each balance sheet date, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable) and for investments in debt instruments that are measured at fair value through other comprehensive profits and losses.

The loss allowance for accounts receivable, lease receivable and contract assets receivable is measured at an amount equal to lifetime expected credit losses. For other financial assets, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss over the expected life of a financial instrument.

Expected credit loss refers to the weighted average credit loss weighted by the risk of default. The 12-month expected credit loss represents the expected credit loss arising from the possible default of the financial instrument within 12 months after the reporting date, and the expected credit loss in the duration represents the expected credit loss caused by all possible default of the financial instrument in the expected duration.

When the Company, for the purpose of internal credit risk management and without considering the collateral held, determines that the debtor is unable to pay off the debt in accordance with internal or external information, it means that financial asset has defaulted.

The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at fair value through other comprehensive profits and losses, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.

• (1.3) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity.

On derecognition of a financial asset as a whole, the difference between the carrying amount of the asset and the sum of the consideration received and any accumulated gains or losses recognized in other comprehensive profits and losses are recognized in profit or loss.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the carrying amount of the asset and the sum of the consideration received and receivable is recognized in profit or loss.

On derecognition of an investment in a debt instrument at fair value through other

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comprehensive profits and losses, the difference between the carrying amount of the asset and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at fair value through other comprehensive profits and losses, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

• (2) Financial liabilities

• (2.1) Subsequent assessment

Except for the following circumstances, all financial liabilities are measured at amortized cost by the effective interest method.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include held for trading and designated as at fair value through profit or loss.

Financial liabilities held for trading are measured at fair value and the interest incurred is recognized in financial costs. Other benefits or losses arising from remeasurement are recognized in other benefits and losses. Please refer to Note 22 for the method of determining the fair value.

• (2.2) Derecognition of financial liabilities

When derecognizing financial liabilities, the difference between its carrying amount and the paid consideration (including any transferred non cash assets or liabilities assumed) shall be recognized in profit or loss.

• (3) Derivative Financial Instruments

The derivative instruments signed by the Company include forward foreign exchange contracts, interest rate swap and cross currency swap, used for interest rate and exchange rate risk management for the Company.

Derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is signed and are subsequently remeasured at fair value on the balance sheet date. The benefits or losses arising from subsequent measurement are taken directly to profit or loss. However, for derivatives designated as effective hedging instruments, the point at which they are recognized in profit or loss will depend on the nature of the hedging relationship. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

If derivative instruments are embedded in the host contract of an asset within the scope of IFRS 9, the overall contract determines the classification of financial assets. The derivative is treated as a stand-alone derivative if it is embedded in the host contract of an asset that is not within the scope of IFRS 9 (such as embedded in a financial liability host contract), meets the definition of a derivative, does not have risks and characteristics closely related to those of host contracts, and the mixed contracts are not measured at fair value through profit or loss.

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n. Provision for liabilities

The amount recognized as a provision for liabilities is the best estimate of the expenditure required to pay off the obligation at the balance sheet date, taking into account the risks and uncertainties of the obligation. Provision for liabilities is measured as the discounted present value of optimal estimated cash flows to pay off obligations.

o. Revenue Recognition

After the Company identifies its performance obligations in contracts with customers, it shall amortize the transaction costs to each obligation in the contract and recognize revenue upon satisfaction of performance obligations.

Commodity sales revenue

Revenue from sale of goods comes from customers who have the right to set prices and use the goods, have the main responsibility for resale, and bear the risk of obsolescence. The Company recognizes revenue and accounts receivable at this point.

While processing of materials supplied by the clients, the control of the ownership of processed products has not been transferred, so revenue is not recognized when receiving materials.

Property sales within the normal business scope are to collect fixed transaction prices in installments and recognize contract liabilities. After considering major financial components, the revenue is recognized when each property is completed and delivered to the buyer.

p. Leases

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

• (1) The Company as lessor

When the lease clause transfers almost all the risks and benefits incidental to ownership of the asset to the lessee, it is classified as a financial lease. All other leases are classified as operating leases.

In accordance with operating lease standards, lease payments after deduction of lease incentives are recognized as income on a straight-line basis over the relevant lease period. The original direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognized as expenses on a straight-line basis during the lease term. Lease negotiation with the lessee is treated as a new lease from the effective date of lease modification.

Variable lease payments in lease agreement, that don't depend on indexes or rates, are recognized as income in the current period.

When the lease includes both land and building elements, the Company assesses whether almost all the risks and benefits incidental to the ownership of each element have been transferred to the lessee in order to assess the classification of each element as a financial lease or an operating lease.

Lease payments are apportioned to land and buildings based on the relative proportion of the

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fair value of the land and building lease rights on the date of contract establishment. If the lease payment can be allocated reliably to these two elements, each element is treated according to the applicable lease classification. If the lease payment cannot be allocated reliably between the two elements, then the entire lease is classified as a finance lease. However, if both of these elements clearly meet the operating lease standards, the entire lease is classified as an operating lease.

(2) The Company as lessee

Except for lease payments for low-value underlying asset leases and short-term leases that are subject to the applicable recognition exemption, the lease payments are recognized as expenses on a straight-line basis during the lease period, and other leases are recognized as the right-of-use asset and lease liability starting from commencement of the lease.

The right-of-use asset is initially measured at cost (including the original measured amount of the lease liability, the lease payment paid before commencement of the lease minus the lease incentives for compensation, the original direct cost and the estimated cost of restoring the underlying asset), and subsequently measured at the amount of cost minus accumulated depreciation and accumulated impairment losses, and adjust the remeasurement amount of the lease liability.

Right-of-use assets are separately expressed on individual balance sheets.

Right-of-use assets are depreciated on a straight-line basis from the commencement of the lease to the expiration of the useful life or the expiration of the lease term, whichever is earlier.

The lease liability is initially measured by the present value of lease payments (including fixed payments). If the implicit interest rate of the lease is easily determinable, the lease payment is discounted using that interest rate. If the interest rate is not easily determinable, the incremental borrowing rate of the lessee should be used.

Subsequently, the lease liability is measured on the amortized cost basis using the effective interest method, and the interest expense is amortized during the lease period. For lease modifications that are not treated as separate leases, the remeasurement of the lease liability due to lease scope reduction is to reduce the right-of-use asset and to recognize the profit and loss of the partial or full termination of the lease. The remeasurement of the lease liability due to other modifications is to adjust the right-of-use asset.

The Company negotiates with the lessor for COVID-19 related rent concessions for the adjustment of the rent due before June 30, 2022, resulting in a decrease in rent, and these negotiations did not significantly change other lease terms. The Company chooses to adopt practical expedients to deal with the rent negotiation that meets the aforementioned conditions without assessing whether the negotiation is a lease modification, but recognizes the reduction in lease payments in the profit and loss when the concession event or situation occurs, and relatively reduces the lease liability.

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q. Borrowing Costs

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

If a specific borrowing is temporarily invested before the occurrence of capital expenditure meeting the requirements, the investment income earned from the temporary investment is deducted from the borrowing cost meeting the capitalization conditions. Except for the above, all other borrowing costs are recognized as profit and loss in the period in which they are incurred.

r. Government Grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with.

Government grants related to income are recognized in the profit and loss on a systematic basis during the period when it is intended to compensate to the expenses accounted by the Company.

If the government grants are used to compensate for the expenses or losses that have occurred, or are for the purpose of providing immediate financial support to the Company and there are no future related costs, they are recognized in the profit and loss during the period when it can be received.

s. Employee benefits

(1) Short-term employee benefits

Related liabilities for short-term employee benefits are measured by the non-discounted amount expected to be paid in exchange for employee services.

• (2) Benefits after retirement

Pension funds that are verified as contribution for retirement plans are recognized as expenses according to the amount of funds contributed to pension in the employee's service period.

The defined cost of benefits under the defined benefit retirement plan (including service cost, net interest, and the remeasurement amount) are calculated based on the projected unit credit method. The service cost (including the service cost of the current period and the net interest of the net defined benefit liabilities or assets) are recognized as employee benefit expenses as they occur. The remeasurement amount (including actuarial gains and losses and the return on plan assets after deducting interest) is recognized in other comprehensive income and presented in retained earnings when it occurs. It shall not be reclassified to profit or loss in subsequent periods.

The net defined benefit liabilities (assets) are the shortfall (surplus) of the defined benefit retirement plan. The net defined benefit assets may not exceed the present value of refund from the plan or reductions in future contributions.

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t. Treasury Shares

The treasury shares are recognized at the purchase cost when the Company reacquired these company stocks. When disposing of treasury shares, the price difference generated by the treasury stock exchange is recognized in shareholders' equity. The company’s subsidiaries hold the company’s stocks, which are treated as treasury shares in accordance with the provisions of the International Financial Reporting Standards (IFRS) Bulletin No. 2 "Share Basic Payment".

The Company acquires company stocks within the scope of the law. Before disposition or cancellation of the treasury shares, the costs of recovery or acquisition are listed as the deduction of the equity of shareholders.

When disposing of treasury shares, if the disposal price is higher than the carrying value, the difference is adjusted to capital reserve-treasury shares. If the disposal price is lower than the carrying value, the difference shall offset the capital reserve generated by the same type of treasury stock exchange. If it is insufficient, the retained earnings shall then be offset.

u. Income Tax

Income tax expense is the aggregate amount current tax and deferred tax.

(1) Current income tax

The undistributed surplus calculated in accordance with the provisions of the Income Tax Law of the Republic of China is subject to additional income tax, and the annual recognition is determined in accordance with the resolution of the shareholders meeting.

Adjustments to income tax payable in previous years are included in current income tax.

(2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the individual financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, net operating loss carry forwards or machinery and equipment purchased, and tax credits for research and development expenses and other expenses recognized when they are utilized.

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

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The carrying amount of deferred tax assets is reviewed on every balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed on every balance sheet date and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted on every balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, on every balance sheet date, to recover or settle the carrying amount of its assets and liabilities.

• (3) Current and deferred tax for the year

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

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

The management shall review the estimates and underlying assumptions on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Critical Accounting Judgments Related to Associates

The Company holds 15.89% of the shares of Li Peng Enterprise Company Limited (hereinafter referred to as "Li Peng Enterprise") and is its single largest shareholder. The assessment of various indicators identifies that the Company does not have the right to lead the relevant activities of Li Peng Enterprise, cannot appoint more than half of the members of its governance unit, and therefore has no control over Li Peng Enterprise. As such, the management of the Company concludes that the Company only has a significant influence on Li Peng Enterprise and therefore listed it as an associate of the Company.

• 31 -

6. CASH AND CASH EQUIVALENTS

Cash on hand and working fund Bank cheques and demand deposits Foreign currency deposits Bank foreign currency time deposits with original maturity within 3 months Short-term bill	December 31,2021 $ 282 71,404 150,444 941,832 415,200 $ 1,579,162	December 31,2020	December 31,2020
			$ 294 66,902 68,619 766,968 222,144 $ 1,124,927

As of 2021 and December 31, 2020, bank time deposits with an original maturity date of more than three months were NT$424,600 thousand and and NT$253,866 respectively, accounted as other current financial assets.

7. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Mandatory to measure at fair value through profit and loss－Current Non-derivative financial assets －Domestic publicly traded stocks Mandatory to measure at fair value through profit and loss－Noncurrent Non-derivative financial assets －Foreign non-publicly traded common stocks －Domestic non-publicly traded common stocks	December 31,2021 $ 71,403 $ 373 974 $ 1,347	December 31,2020	December 31,2020
			$ 67,305 $ 373 974 $ 1,347

The current financial assets and liabilities at fair value through profit and loss in 2021 and 2020 are assessed as NT$4,098 thousand in gains and NT$30,867 thousand in gains.

8. NOTES AND ACCOUNTS RECEIVABLE

Notes receivable At amortized cost Total carrying amount Notes receivable -related parties Less: Loss allowance	December 31,2021 $ 109,957 102,213 ( 1,100) $ 211,070	December 31,2020	December 31,2020
		(	$ 49,850 12,833 498) $ 62,185

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Account receivable At amortized cost Total carrying amount Accounts receivable-related parties Less: Loss allowance (	$ 624,613 186,936 5,660) $ 805,889	$ 422,826 198,627 ( 4,693) $ 616,760

Account Receivable

In principle, the payment term granted by the Company to customers is due 30 days to 180 days from the end of the month, and no interest is accrued on accounts receivable.

Aside from recognizing impairment loss for credit-impaired accounts receivable, the Company recognizes loss allowance based on the expected credit loss ratio of customers by different risk levels with consideration of factors of historical loss ratios and customers’ financial conditions, competitiveness and business outlook.

To lower the credit risk, the management of the Company appoints a dedicated team to handle decisions on credit limits, credit approval, and other monitoring procedures for ensuring that appropriate actions are taken to recover overdue receivables.

In addition, the Company would review the recoverable amount of each receivable on the balance sheet dates to ensure that impairment loss is recognized for unrecoverable receivables. As such, the management of the Company concludes that the credit risk of the Company is significantly reduced.

The Company assesses the allowances for losses for notes and accounts receivable (excluding related parties) on balance sheet date as follows:

December 31, 2021 Within 30 days Expected credit loss rate 0.5%～1% Total carrying amount $ 525,580 Loss allowance (expected credit loss over the period) ( 4,161) Amortized cost $ 521,419 December 31, 2020 Within 30 days Expected credit loss rate 0.5%～1% Total carrying amount $ 377,759 Loss allowance (expected credit loss over the period) ( 2,592) Amortized cost $ 375,167	December 31, 2021 Within 30 days Expected credit loss rate 0.5%～1% Total carrying amount $ 525,580 Loss allowance (expected credit loss over the period) ( 4,161) Amortized cost $ 521,419 December 31, 2020 Within 30 days Expected credit loss rate 0.5%～1% Total carrying amount $ 377,759 Loss allowance (expected credit loss over the period) ( 2,592) Amortized cost $ 375,167	December 31, 2021 Within 30 days Expected credit loss rate 0.5%～1% Total carrying amount $ 525,580 Loss allowance (expected credit loss over the period) ( 4,161) Amortized cost $ 521,419 December 31, 2020 Within 30 days Expected credit loss rate 0.5%～1% Total carrying amount $ 377,759 Loss allowance (expected credit loss over the period) ( 2,592) Amortized cost $ 375,167		31 to 60 days	61 to 90 days	61 to 90 days	91 to 120 days	91 to 120 days	Over 121 days		Total
			(	0.5%～3% $ 115,763 1,681) $ 114,082 31 to 60 days	0.5%～10% $ 61,552 ( 592) $ 60,960 61 to 90 days		0.5%～50% $ 27,008 ( 314) $ 26,694 91 to 120 days		0.5%～100% $ 4,667 ( 12) $ 4,655 Over 121 days	(	$ 734,570 6,760) $ 727,810 Total
Expected credit loss rate Total carrying amount Loss allowance (expected credit loss over the period) Amortized cost
	(	0.5%～1% $ 377,759 2,592) $ 375,167	(	0.5%～3% $ 66,578 1,681) $ 64,897	(	0.5%～10% $ 16,314 592) $ 15,722	(	0.5%～50% $ 11,854 314) $ 11,540	0.5%～100% $ 171 ( 12) $ 159	(	$ 472,676 5,191) $ 467,485

Information regarding changes in the allowance for losses of notes and Accounts receivable

• 33 -

is as follows: ：

follows:：
Balance, beginning of year Add: Provision for the current year Less: overdue receivable Less: Reversal on impairment loss Balance, end of year			2021 $ 5,191 19,668 18,099 ) - $ 6,760		2020
		(			$ 5,371 - - ( 180) $ 5,191

9. INVENTORIES

• (a) The inventory details related to textile business are as follow:

Finished goods Work in process Raw materials Inventory in transit	December 31,2021 $ 1,273,738 27,936 564,701 481,028 $ 2,347,403	December 31,2020	December 31,2020
			$ 788,245 25,697 489,438 211,207 $ 1,514,587

As of 2021 and 2020, the costs of goods sold related to the inventories of textile business were NT$8,189,102 thousand and NT$7,021,196 thousand, respectively.

The costs of goods sold related to textile business in 2021 and 2020 including inventory valuation loss and gains on inventory value recoveries of NT$5,813 thousand in loss and NT$31,586 thousand in gains, respectively.

As of December 31, 2021 and 2020, the allowances for reduction of inventory to market related to textile business were NT$128,085 thousand and NT$122,272 thousand, respectively.

The profit from the increase in the net realizable value of inventories in 2020 was mainly from the disposal of the inventory that was originally listed as a loss for market price decline.

• (b) The inventory details related to construction business are as follow:

Construction land Construction volume Parking spaces for sales	December 31,2021 $ 885,995 10,310 - $ 896,305	December 31,2020	December 31,2020
			$ - - - $ -

	2021
Interest rate％		Amount

• 34 -

Capitalization of interest 1.129419~1.150841 $ 192 (1)

The information regarding capitalization of interest on construction land of the company as of 2021 is as follows

• (3) Parking spaces for sale are mechanical or flat parking spaces jointly held by Rich Development Company Limited, each accounting for one-half of the rights. As of December 31, 2021, the impairment provision has been made and the carrying value is NT$ 0. As of December 31 2021 and 2020, the allowance for reduction of inventory to market for the construction business was NT$15,702 thousand.

10. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investment in Subsidiaries Investment in Associates	December 31,2021 $ 2,000,088 4,050,123 $ 6,050,211	December 31,2020	December 31,2020
			$ 2,074,091 4,028,175 $ 6,102,266

(a) Investment in Subsidiaries

Unlisted or Private Company LIHAO INVESTMENT CO. Ltd. LIZAN INVESTMENT CO. Ltd. LEA JIE ENERGY CO. Ltd. LIBOLON ENTERPRISE CO. Ltd. PT. INDONESIA LIBOLON FIBER SYSTEM	December 31,2021 $ 477,565 266,449 246,679 8,713 1,000,682 $ 2,000,088	December 31,2020	December 31,2020
			$ 475,770 267,327 234,810 10,329 1,085,855 $ 2,074,091

Percentage of Equity and Voting Rights Held

	Percentage of Equityand	VotingRights Held
Subsidiary Name LIHAO INVESTMENT CO. Ltd. LIZAN INVESTMENT CO. Ltd. LEA JIE ENERGY CO. Ltd. LIBOLON ENTERPRISE CO.	December 31,2021 53.38% 53.17% 70.00% 100.00%	December 31,2020
		53.38% 53.17% 70.00% 100.00%

• 35 -

Ltd. PT. INDONESIA LIBOLON FIBER SYSTEM 70.00% 70.00%

(b) Investment in Associates

December 31, 2021 December 31, 2020 Significant associate LI PENG ENTERPRISE CO., LTD. $ 1,610,983 $ 1,608,134 Individually insignificant associates 2,439,140 2,420,041 $ 4,050,123 $ 4,028,175

(1) Significant associates

Percentage of Equity and Voting Rights Held Investee Comp an y Name December 31, 2021 December 31, 2020 LI PENG ENTERPRISE CO., LTD. 15.89% 15.89%

Please refer to "Information on Investees, Locations, etc." in Table 6 for information on the nature of business, its area of operations, and country of company registry of the above associates.

The information of the quoted price in active markets of associates, the level 1 fair value measurement, is as follows:

Investee CompanyName LI PENG ENTERPRISE CO., LTD RICH DEVELOPMENT Co., LTD.	December 31,2021 $ 1,497,145 $ 503,109	December 31,2020	December 31,2020
			$ 1,311,092 $ 544,319

The Company adopts the equity method to measure all the above-mentioned associates.

The following summary financial information is prepared on the basis of each associate's financial statements in accordance with IFRSs, and has reflected the adjustments made when the equity method is adopted.

LI PENG ENTERPRISE CO., LTD.

ENG ENTERPRISE CO., LTD.
Current assets Noncurrent assets Current liabilities Noncurrent liabilities	December 31,2021 $ 7,932,919 10,990,903 ( 6,884,963 ) ( 2,198,772)	December 31,2020
	( (	( (	$ 6,088,742 11,241,168 5,352,555 ) 2,258,701)

• 36 -

Equity Treasury Stock Shareholding ratio of the Company Equity attributable to the Company Unrealized profits and losses of upstream transactions Investment carrying amount Operating revenue Net gain (loss) of this period Other comprehensive income and loss Total comprehensive income and loss	(	9,840,087 330,507 $ 10,170,594 15.89% $ 1,616,573 5,590) $ 1,610,983 2021 $ 12,268,967 $ 284,924 323,123) $ 38,199)	(	9,718,654 432,404 $ 10,151,058 15.89% $ 1,613,008 4,874) $ 1,608,134 2020
	( (		(	$ 10,369,775 $ 429,571 ) 537,701 $ 108,130

(2) Summary information of individually insignificant associates

Share of the Company Continuing operation Net income of this period Other comprehensive income and loss Total comprehensive income and loss		2021 $ 59,858 33,962) $ 25,896		2020
	(			$ 36,813 292,802 $ 329,615

The recognition of share for both the profits and losses of the Company's investments accounted for using the equity method and other comprehensive profits and losses is based on the financial statements of each associate audited by accountants during the same period. Among them, the financial statements of Rich Development Company Limited, Fuli Express Co., Ltd. and PT LONG JOHN INNOVATION MATERIAL are audited by the other accountants, instead of the Company's certified accountant.

11. PROPERTY, PLANT AND EQUIPMENT

Lands owned by the Company Buildings Machinery Equipment Transportation Equipment Other Equipment Leased Assets Equipment awaiting Examination	December 31,2021 $ 1,570,425 903,167 1,532,862 25,237 139,961 838,054 141,467 $ 5,151,173	December 31,2020	December 31,2020
			$ 1,485,305 944,692 1,752,891 14,095 145,379 587,299 4,232 $ 4,933,893

E q u i p m e n t Lands used by M a c h i n e r y Leased Transportation a w a i t i n g t h e C o m p a n y B u i l d i n g s E q u i p m e n t A s s e t s E q u i p m e n t Other Equipment E x a m i n a t i o n T o t a l Cost Balance at January 1, $ 1,542,738 $ 2,404,730 $ 10,083,022 $ 725,868 $ 93,018 $ 1,628,511 $ 85 $ 16,477,972

• 37 -

2020 Additions Disposals Transfers ( Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Disposals Depreciation Transfers Balance at December 31, 2020 Carrying amounts at December 31, 2020 Cost Balance at January 1, 2021 Additions Disposals Transfers Balance at December 31, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Disposals Depreciation Impairment loss Transfers Balance at December 31, 2021 Carrying amounts at December 31, 2021	54,25	- - 4) ( 4 9 - - - ( 9 5 4 6 - 4 4 9 - - - 9- 5	2,505 - 10,213) $ 2,397,022 $ 1,391,741 - 71,759 11,170) $ 1,452,330 $ 944,692 $ 2,397,022 33,597 - 6,700 $ 2,437,319 $ 1,452,330 - 70,129 11,693- $ 1,534,152 $ 903,167	( ( ( ( ( $	276,293 279,866 ) 666) $ 10,078,783 $ 8,119,464 276,755 ) 483,183 - $ 8,325,892 $ 1,752,891 $ 10,078,783 218,161 77,266 ) - ( $ 10,219,678 $ 8,325,892 68,752 ) 428,882 391 403 8,686,816403 $ 1,532,862	- - ( - $ 725,868 $ 132,419 - ( 6,150 - $ 138,569 $ 587,299 $ 725,868 276,019 - ( 31,513) $ 970,374 $ 138,569 - ( 6,180 ( 12,429)- $ 132,320 $ 838,054	1,309 3,908 ) ( - ( $ 90,419 $ 72,772 3,453 ) ( 7,005 - $ 76,324 $ 14,095 $ 90,419 17,081 2,876 ) ( 1,619 $ 106,243 $ 76,324 2,876 ) ( 6,822 736- $ 81,006 $ 25,237	16,984 51,634 ) 291) $ 1,593,570 $ 1,453,802 49,712 ) 44,101 - $ 1,448,191 $ 145,379 $ 1,593,570 33,439 8,237 ) - $ 1,618,772 $ 1,448,191 8,197 ) 39,220 ( 403)- $ 1,478,811 $ 139,961	4,147 - ( - ( $ 4,232 $ - - ( - - ( $ - $ 4,232 $ 4,232 - - ( 137,235 $ 141,467 $ - - ( - - $ -- $ 141,467	301,238 335,408 ) 65,424) $ 16,378,378 $ 11,173,377 329,920 ) 612,198 11,170) $ 11,444,485 $ 4,933,893 $ 16,378,378 640,223 88,379 ) 137,235 $ 17,067,457 $ 11,444,485 79,825 ) 551,233 391 - $ 11,916,284-
	$ 1,488,48
	$ 3,17
	$ 3,17
	$ 1,485,30
	$ 1,488,48 61,92 23,19
	$ 1,573,60
	$ 3,17 $ 3,17
	$ 1,570,42									$ 5,151,173

• (a) The property, plant, and equipment of the Company are depreciated on a straight-line basis based on the following durability years:

Buildings
Office Building and Plant	25～40 years
Warehouse	10～25 years
Hydroelectric Engineering	10～20 years
Maintenance and Repair Engineering	3～10 years
Machinery Equipment
Machinery Engineering	5～15 years
Electrical Engineering	5～9 years
Maintenance and Repair Engineering	2～5 years
Transportation Equipment
Lifts and Elevators	10～15 years
Fork Lift and Pallet Truck	5～6 years
Other Equipment
Power Equipment	9～15 years
Engineering Facilities	5～15 years
Other Facilities	5～10 years
Maintenance and Repair Engineering	2～5 years

• (b) Please refer to Note 12 and 24 for the amount related to property, plant, and equipment that the Company set pledge as loan guarantee.

Land, Buildings, and Machinery Equipment	December 31,2021 $ 2,586,279	December 31,2020	December 31,2020
			$ 2,629,702

• 38 -

• (c) The Company signed a contract with a non-related party on August 2020 in order to sell the lands and buildings in Fangyuan Township, Changhua County. On December 31, 2020, the carrying amount was NT$54,255 thousand classified under other current assets. The total contract amount is NT$ 414,528, and NT$124,358 thousand has been received in advance as of December 31, 2020, which is listed under other current liabilities. The relevant disposal procedures has been completed in October, 2021, and the full amount was also received, resulting in disposal profits of NT$ 360,273 thousand, which is listed under other profits and losses in 2021.

• (d) The Company signed a contract with the related party Rich Development Co., Ltd. on October 2021 in order to acquire the land and buildings. The total contract amount is NT$ 633,910 thousand, which is classified under property, plant and equipment and investment property.

12.LEASE ARRANGEMENTS

• (a) Right-of-use assets

Carrying amounts Lands Depreciation of right-of-use assets Lands	December 31,2021 $ 539 2021 $ 180	December 31,2020	December 31,2020
			$ 720 2020
			$ 180

Except for the recognition of depreciation expense, there were no material subleases or impairments of the company's right-of-use assets in 2021 and 2020.

(b) Lease liabilities

Carrying amounts Current portion Noncurrent portion	December 31,2021 $ 177 $ 363	December 31,2020	December 31,2020
			$ 107 $ 541

Ranges of discount rates for lease liabilities are as follows:

Lands	December 31,2021 1.4749%	December 31,2020
		1.4749%

• 39 -

(c) Other lease information

Expenses related to short-term leases Total cash outflow for leases		2021 $ 9,963 $ 10,076)		2020
	(		(	$ 9,786 $ 10,034)

13. Investment property

Cost Balance at January 1, 2021 Additions Balance at December 31, 2021	Lands $ - 204,728 $ 204,728	Buildings $ - 65,236 $ 65,236	Total
			$ - 269,964 $ 269,964

Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expenses Balance at December 31, 2021 Carrying amounts at December 31, 2021	Lands $ - - $ - $ 204,728	Buildings $ - 151 $ 151 $ 65,085	Total
			$ - 151 $ 151 $ 269,813

• (1) The investment property is depreciated on a straight-line basis based on the following durability years:

Main buildings

35 years

• (2 ) The company entrusts an independent appraisal agency (unrelated party) to evaluate the value of the investment real estate, and the appraisal result shows that the property value of the investment property is NT$316,556 thousand as of December 31, 2021

• (3) All the investment real estate owned by the company is its own equity.

14. BORROWINGS

• (a) Short-term loans

Secured bank loans Bank loans Unsecured bank loans Credit limit loans	December 31,2021 $ 1,890,000 1,560,000 $ 3,450,000	December 31,2020	December 31,2020
			$ 300,000 1,450,000 $ 1,750,000

• 40 -

The interest rates of bank revolving loans were 0.3403%～0.95% and 0.3394%～0.868% as of December 31, 2021 and 2020, respectively.

The interest rates of secured bank loans were 0.81%～0.85% and 0.82% on December 31, 2021 and 2020, respectively.

The short-term loans on December 31, 2021 and 2020 were collateral for property, plant and equipment. Please refer to Notes 11 and 24.

－ Short-term bills payable Commercial paper

December 31, 2021 Guarantee Agency Interest Rate Carrying Amount Unsecured China Bills, Ta Ching Bills, Taiwan Cooperative Financial Holding Co., Ltd., , TAIWAN Finance, International Bills, Grand Bills, MEGA Bills, Checking Deposits of Sung Shan Branch, TAICHUNG COMMERCIAL BANK 0.36%~0.68% $ 1,070,000 Secured Checking Deposits of Shih Lin Branch, The Shanghai Commercial & Savings Bank 0.38% 190,000 $ 1,260,000 December 31, 2020 Guarantee Agency Interest Rate Carrying Amount Unsecured China Bills, Ta Ching Bills, MEGA Bills, TAIWAN Finance, International Bills, Grand Bills 0.36%~0.67% $ 770,000 December 31, December 31, Interest Rate 2021 2020 Long-term bank loans CHANG HWA COMMERCIAL BANK, LTD. The total amount of credit loans 1.40% ～ $ - $ 116,667 dated as August 15, 2017 to 1.70% August 15, 2022 is NT$800 million with interest paid monthly. The repayment of the first installment started on November 15, 2019. After that, every 3 months is one installment, and the principal will be amortized evenly in 12 installments. The loan has been paid off in advanced on September, 2021. CENTRAL BANK OF THE REPUBLIC OF CHINA (TAIWAN) The total amount of credit loans 1.1945% ～ - 260,000 dated as August 15, 2017 to 1.6543% June 14, 2022 is NT$500 million. The loan will be allocated once or in installments

(b) Long-term loans

• 41 -

within two years after the contract, and the interest will be paid monthly. The repayment of the first installment started on December 14, 2019. After that, every 6 months is one installment, with a total of 6 installments. The repayment of the first 5 installments will be repaid NT$80 million per installment. The sixth installment will be repaid NT$100 million. The loan has been paid off in advanced on July, 2021.

THE EXPORT-IMPORT BANK OF THE REPUBLIC OF CHINA The total amount of credit loans dated as September 15, 2017 to September 15, 2022 is NT$600 million. Five years from disbursement date, the interest must be made on the twenty-first day of every 3 months. The repayment of the first installment started on March 15, 2019. After that, every 6 months is one installment, and the principal will be amortized evenly in 8 installments. THE EXPORT-IMPORT BANK OF THE REPUBLIC OF CHINA The total amount of credit loans dated as March 8, 2021 to March 8, 2026 is NT$400 million. Five years from disbursement date, the interest must be made on the twenty-first day of every 3 months. The repayment of the first installment started on September 8, 2022. After that, every 6 months is one installment, and the principal will be amortized evenly in 8 installments. MEGA INTERNATIONAL COMMERCIAL BANK CO. LTD. The total amount of mortgage loans for land, buildings, and machinery equipment dated as September 15, 2017 to September 15, 2022 is NT$700 million, with interest paid per month. The extension period of each loan shall not exceed 180 days. Each loan shall be repaid at the expiration date and may be used in revolving. The loan has been paid off in advanced on March, 2021. KGI COMMERCIAL BANK CO., LTD.	Interest Rate 1.1298%～ 1.369% 1.1293%～ 1.1297% 1.2938%～ 1.492749%	December 31, 2021 $ 125,000 400,000 -	December 31, 2020
			$ 275,000 - 343,000

• 42 -

The total amount of credit loans for 1.1883% ～ 300,000 - dated as September 29, 2021 to 1.19078% April 1, 2023 is NT$300 million, with interest paid per month. The extension period of each loan shall not exceed 4 months. Each loan shall be repaid at the expiration date and may be used in revolving. 825,000 994,667 Less: Portion of current liabilities due within ( 175,000 ) ( 474,667 ) one year $ 650,000 $ 520,000

According to the provisions of the loan contract of Mega International Commercial Bank Co., Ltd., the annual consolidated financial statements audited by an accountant during the period of the loan shall maintain a specific financial ratio. If the agreed financial ratio is not reached, the loan interest rate is calculated based on the agreed interest rate plus an annual interest rate of 0.15%. The description is as follows:

Current ratio, current assets divided by current liabilities, shall not be less than 100%. Debt ratio, total liabilities divided by total equity, shall not be higher than 110%. Interest protection multiple is a ratio calculated by dividing the net profit before tax plus interest expense plus depreciation plus amortization by the interest expense, that shall not less than 5 times.

Formula:

Current ratio= (Current assets) / (Current liabilities) Debt ratio= (Total liabilities) / (Total equity) Interest Protection Multiple = [(Net profit before tax + Interest expense + Depreciation + Amortization) / (Interest expense)]

For collateral for long-term loans, please refer to Notes 11 and 24.

15. RETIREMENT BENEFIT PLANS

(a) Defined contribution plans

The plan under the R.O.C. Labor Pension Act (the “Act”) managed by the government is deemed a defined contribution plan. Pursuant to the Act, LEALEA ENTERPRISE CORPORATION Limited and subsidiaries have made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts.

(b) Defined benefit plans

The Company has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by Bureau of Labor Funds (MOL); as such, the Company does not have any right to intervene in the investments of the Funds.

Amounts recognized in respect of these defined benefit plans, included in the individual balance sheet, were as follows:

December 31, 2021 December 31, 2020 Present value of defined benefit $ 397,568 $ 379,523

• 43 -

obligation Fair Value of Plan Assets ( 124,067 ) ( 73,484 ) Net defined benefit liability $ 273,501 $ 306,039

Movements in the present value of the net defined benefit liabilities or assets were as follows:

Balance as of January 1, 2020 Service cost Current service cost Interest expense (income) Recognized in profit and loss		Present Value of Defined Benefit Obligation $ 442,499 4,766 3,319 8,085	Fair Value of Plan Assets ($ 120,431) - ( 984) ( 984)	Net Defined Benefit Liability (Asset)	Net Defined Benefit Liability (Asset)
			( ( (		$ 322,068 4,766 2,335 7,101

	Present Value of	Present Value of
	Defined Benefit		Fair	Value of	Plan	Net	Defined Benefit
		Obligation		Assets		Liability (Asset)
Remeasurement
Return on plan assets (excluding
amounts included in net interest
expense)	$	-	( $	3,602 )		( $	3,602 )
Actuarial loss (gain) arising from
－Changes in demographic
assumptions		88			-		88
－Changes in financial
assumptions		10,705			-		10,705
－Experience adjustments	(	9,025)			-	(	9,025)
Components of defined benefit
costs recognized in other comprehensive income		1,768	(	3,602)		(	1,834)
Contributions from employer		-	(	21,296 )		(	21,296 )
Benefits paid	(	72,829)		72,829			-
December 31, 2020	$	379,523	($	73,484)		$	306,039
Balance as of January 1, 2021	$	379,523	($	73,484)		$	306,039
Service cost
Current service cost		3,132			-		3,132
Interest expense (income)		1,898	(	470)			1,428
Recognized in profit and loss		5,030	(	470)			4,560
Remeasurement
Return on plan assets (excluding
amounts included in net interest
expense)		-	(	1,508 )		(	1,508 )
Actuarial loss (gain) arising from
－Changes in demographic
assumptions		11,264			-		11,264
－Changes in financial
assumptions	(	5,342 )			-	(	5,342 )
－Experience adjustments		26,533			-		26,533
Components of defined benefit costs recognized in other		32,455	(	1,508)			30,947

• 44 -

comprehensive income Contributions from employer Benefits paid ( December 31, 2021	- ( 68,045 ) ( 68,045 ) 19,440) 19,440 - $ 397,568 ($ 124,067) $ 273,501

The amount of the defined benefit plans was recognized in profit or loss, according to the function categories summarized as follows:

tion categories summarized as follows:
Cost of revenue Marketing expenses General and administrative expenses Research and development expenses		2021 $ 3,813 245 384 118 $ 4,560		2020
				$ 6,076 508 275 242 $ 7,101

Through the defined benefit plans under the R.O.C. Labor Standards Law, the Company is exposed to the following risks:

• (1) Investment risk: The pension funds are invested in domestic or foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of Bureau of Labor Funds (MOL). However, the allocable amount of the plan assets shall be calculated no less than the average interest rate on a two-year time deposit published by the local banks.

• (2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation, but the return on debt investments of plan assets will increase accordingly, and both of them have the partial offset effect on the influence of the net defined benefit liabilities.

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

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions of the actuarial valuation were as follows:

ws:
Discount rate Long-term average salary increase rate	December 31,2021 0.625% 2.25%	December 31,2020
		0.50% 2.25%

If reasonably possible changes occur in major actuarial assumptions while all other assumptions remain unchanged, the present value of defined benefit obligations will increase (decrease) as follows:

rease) as follows:
Discount rate Increase by 0.25% Decrease by 0.25% Expected average salary increase rate Increase by 0.25%	December 31,2021 ($ 10,639) $ 11,051 $ 10,693	December 31,2020
		(	$ 10,705) $ 11,135 $ 10,759

• 45 -

( $ 10,351 ) ( $ 10,401 )

Decrease by 0.25%

As actuarial assumptions may be related to one another, the likelihood of fluctuation in a single assumption is not high. Therefore, the aforementioned sensitivity analysis may not reflect the actual fluctuations of the present value of defined benefit obligations.

Expected appropriation amount within 1 year Average maturity period of defined benefit obligations	December 31,2021 $ 9,120 10.8 years	December 31,2020
		$ 41,120 11.4 years

16. EQUITY

(a) Capital

Common stocks

mon stocks
Authorized shares (in thousands) Authorized capital Number of shares issued and fully paid (in thousand shares) Issued capital	December 31,2021 1,200,000 $ 12,000,000 957,303 $ 9,573,029	December 31,2020
			1,200,000 $ 12,000,000 957,303 $ 9,573,029

• (1) As of December 31, 2021, the paid-in capital of the Company was NT$9,573,029 thousand, divided into 957,302,942 shares, each with a par value of NT$10, all of which were common stocks.

• (2) A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive dividends.

(b) Capital surplus

Treasury share transactions Changes in capital surplus of associates accounted for using equity method Acquisition the equity price and carrying amount of the subsidiaries	December 31,2021 $ 22,889 65,547 4,518 $ 92,954	December 31,2020	December 31,2020
			$ 22,889 51,015 4,518 $ 78,422

The capital surplus generated from the excess of the issuance price over the par value of capital stock (including the stock issued for new capital, treasury stock transactions, and acquisition or disposition from the difference between the equity price and carrying amount of the subsidiaries) may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or stock dividends up to a certain percentage of the Company’s paid-in capital. However, the capital replenishment is restricted to a certain ratio of paid-in capital each year.

The capital surplus from the investments accounted for using equity method may not be used

• 46 -

for other purposes, except for a deficit offset.

• (c) Retained earnings and dividend policy

• (1) According to the regulations on earnings distribution in the Articles of Incorporation of the Company, in the event of surplus earnings after closing of annual accounts, losses incurred in preceding years shall be compensated first. Then, 10% of the remainder surplus shall be set aside as legal capital reserve in accordance with the law. However, in the event that the accumulated legal capital reserve is equivalent to or exceeds the Company’s total paid-in capital, such allocation may be exempted. The remainder may be set aside or reversed as special surplus reserve in accordance with laws and regulations. If there are remaining earnings, the Board of Directors shall draft an earnings distribution proposal regarding the remainder of the earnings as well as accumulated undistributed surplus at the beginning of the year, at which the 0% to 100% distributable surplus may be set aside, for approval at the shareholders' meeting. Among them, the cash dividend shall not be less than 5% of the total dividend. However, if the cash dividend per share does not reach NT$ 0.1, distribution of earnings may be made by way of stock dividend. Due to the volatile industrial environment and the development of diversification, the Board of Directors may have distribution of earnings to be made by way of stock dividend totally after considering the current operating conditions and the capital budget. Please refer to Note 17 (7) Employee remuneration and remuneration for Directors and Supervisors for the distribution policy for remuneration for employees, Directors, and Supervisors in the Articles of Incorporation of the Company.

The Company held a general shareholders' meeting on August 18, 2021 and June 18, 2020 and decided to approve the 2020 case of loss appropriation but not to distribute 2019 appropriation of earnings.

The legal capital reserve is supplemented until the balance equals the Company's total paid-in capital. The legal capital reserve may be used to make up for losses. When the Company has no loss, the portion of the legal capital reserve that exceeds 25% of the total paid-in capital may be appropriated in cash in addition to being transferred to capital stock.

(d) Treasury stocks

The changes in the number of treasury shares of the Company in 2021 and 2020 are illustrated below:

trated below:
				2021
Withdrawal Reason Shares of parent company held by subsidiaries		Number of Shares, Beginningof Year 10,774,028		Increase in Current Period - 2020		Decrease in Current Period -		Number of Shares, End of Year
								10,774,028
Withdrawal Reason Shares of parent company held by subsidiaries		Number of Shares, Beginningof Year 10,774,028		Increase in Current Period -		Decrease in Current Period -		Number of Shares, End of Year
								10,774,028

The purpose of holding the Parent Company’s shares by the subsidiaries is to protect shareholders’ rights and interests. The relevant information is illustrated below:

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Name of Subsidiary December 31, 2021 LIHAO INVESTMENT Company Limited LIZAN INVESTMENT Company Limited	Number of Shares Held 4,672,653 6,101,375	Transfer Amount of TreasuryStock	Transfer Amount of TreasuryStock
			$ 11,842 16,628 $ 28,470

Name of Subsidiary December 31, 2020 LIHAO INVESTMENT Company Limited LIZAN INVESTMENT Company Limited	Number of Shares Held 4,672,653 6,101,375	Transfer Amount of TreasuryStock	Transfer Amount of TreasuryStock
			$ 11,842 16,628 $ 28,470

The Company accounted NT$28,470 thousand in treasury stocks on December 31, 2021 and 2020, that is the amount of parent company shares held by the subsidiaries and transferred as treasury stocks. The transfer amount has been adjusted in accordance with the comprehensive shareholding ratio of the Company in its subsidiaries. The market price of the Company on December 31, 2021 was NT$11.3 per share.

The treasury stocks held by the Company shall not be pledged in accordance with the provisions of the Securities Exchange Law, nor shall it entitled to the rights of dividend distribution and voting.

17. INCOME FROM CONTINUING OPERATIONS

(a) Interest income

Interest on bank deposits Interest on advance loans to related parties Others		2021 $ 22,064 6,870 314 $ 29,248		2020
				$ 27,085 13,329 2,277 $ 42,691

(b) Other income

Rental income Rental income from operating lease Dividend income Others (Please refer to Note 26.)		2021 $ 51,095 1,511 22,755 $ 75,361		2020
				$ 53,042 1,547 70,321 $ 124,910

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(c) Other gains and losses

Gains (losses) on disposal of property, plant and equipment(Please refer to Note 11.) Foreign exchange losses (gains), net Gains (losses) on financial assets and financial liabilities at fair value through profit or loss Gains (losses) on disposal of investments Impairment losses Other losses		2021 $ 353,932 50,911 ) 2021 $ 4,098 - 391 ) 14,291) $ 292,437		2020
	(		( (	$ 2,051 ) 230,010 ) 2020
	( (		( (	$ 30,867 62 - 13,980) $ 215,112)

(d) Finance costs

Interest on bank loans Interest on borrowings from related parties Finance expenses Interests on lease liabilities Others Less: The amount included in the cost of assets according with the requirements		2021 $ 28,190 2,725 1,694 8 2,801 1,203) $ 34,215		2020
	(		(	$ 34,018 1,981 1,320 10 2,795 137) $ 39,987

Capitalization of interest related information is as follows:

Capitalized interest amount Capitalized interest rate reciation and Amortization Property, plant and equipment Right-of-use assets Investment property Amortization expense (Including the amortization for other intangible assets and prepayments) Total	2021 $ 1,203 1.129419%～ 1.280816% 2021 $ 551,233 180 151 57,802 $ 609,366	2020	2020
		$ 137 1.280413%～ 1.472526% 2020
			$ 612,198 180 - 56,558 $ 668,936

(e) Depreciation and Amortization

• 49 -

Depreciation expenses summarized by function Costs of Revenue Operating expenses Non-operating expenses Amortization expenses summarized by the function Costs of Revenue Operating expenses Non-operating expenses		2021 $ 528,559 14,232 8,773 $ 551,564 $ 56,631 1,171 - $ 57,802		2020
				$ 588,935 16,447 6,996 $ 612,378 $ 54,007 2,488 63 $ 56,558

(f) Employee benefits expenses

Salary and Wages Labor and health insurance expenses Pension expenses Defined contribution Plan Defined benefit plan (Note 15) Compensation to directors Other employee benefits Total employee benefit expenses		2021
	Costs of Revenue $ 505,820 54,123 16,060 3,813 19,873 - 43,345 $ 623,161	OperatingExpenses $ 88,405 6,197 2,585 747 3,332 12,674 4,563 $ 115,171		Total
				$ 594,225 60,320 18,645 4,560 23,205 12,674 47,908 $ 738,332

Salary and Wages Labor and health insurance expenses Pension expenses Defined contribution Plan Defined benefit plan (Note 15) Compensation to directors Other employee benefits Total employee benefit expenses		2020
	Costs of Revenue $ 452,828 51,033 15,916 6,077 21,993 - 40,713 $ 566,567	OperatingExpenses $ 73,322 6,305 2,633 1,024 3,657 3,195 4,361 $ 90,840		Total
				$ 526,150 57,338 18,549 7,101 25,650 3,195 45,074 $ 657,407

• 50 -

• (g) Profit sharing bonus to employees and Compensation to directors

According to the Company's Articles of Incorporation, the Company accrued profit sharing bonus to employees and compensation to directors based on net income before income tax of current year and shall appropriates profit sharing bonus to employees and compensation to directors of the Company no less than 2% and no more than 5% of annual profits before tax during the period, respectively.

The Company's profit sharing bonus to employees and compensation to directors for 2021 had been approved by the Board of Directors on March 28, 2022, as illustrated below:

Estimated ratio

Profit sharing bonus to employees Compensation to directors Amount Profit sharing bonus to employees Compensation to directors	2021
	2% 2% 2021
	Cash
	$ 9,072 9,072

As the Company had accumulated losses from 2020, it did not estimate the profit sharing bonus to employees and compensation to directors.

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

The information about the appropriations of the Company’s profit sharing bonus to employees and compensation to directors approved by the Board of Directors is available at the Market Observation Post System website of Taiwan Stock Exchange.

18. INCOME TAX OF CONTINUING OPERATION

(a) Income tax expense (benefits) recognized in profit or loss consisted of the following:

Current income tax Current tax expense recognized in the current year Land value increment tax Income tax adjustments on prior years	2021 $ 1,837 7,000 1,308	2020
		( $ 1,168 ) - ( 4,060 )

• 51 -

Deferred income tax Expense recognized in the current year Income tax expense recognized in profit or loss Deferred income tax		2021 $ 43,305 7,299) $ 46,151		2020
	(		( (	$ 46,521 ) - $ 51,749)

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

Income tax expense (benefits) at the statutory rate for income before tax Tax effect of adjusting items Investment loss (gain) accounted for using equity method Gains on valuation of financial asset Tax-exempt income Land Value Increment Tax Others Adjustments to income tax expense recognized in the prior year Current income tax (benefits) expense		2021 $ 138,990 19,834 ) 820 ) 71,876 ) 7,000 1,318 ) ( 5,991) $ 46,151		2020
	( ( ( (		( ( ( ( (	$ 81,839 ) 33,040 114 ) 309 ) - 1,533 4,060) $ 51,749)

(b) Deferred income tax assets and liabilities

D e fer red i n co me t a x a s s e t s The excess amount of bad debt Allowance for valuation loss of idle assets Allowance for reduction of inventory to market Defined benefit pension plan Unused vacation bonus Unrealized exchange losses Net operating loss carryforwards Others Deferred income tax liabilities Reserve for land revaluation increment tax	December 31,2021 $ 2,890 70 28,760 15,707 3,840 2,670 28,028 15,216 $ 97,181 $ 96,653	December 31,2020	December 31,2020
			$ - 37 27,587 28,401 3,300 9,397 56,974 7,491 $ 133,187 $ 96,653

• 52 -

• (c) Relevant information regarding unused net operating loss carryforwards

As of December 31, 2021, the relevant information about net operating loss carryforwards is as follows:

==> picture [299 x 32] intentionally omitted <==

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

Undeducted
Balance Last Year of Deduction
$ 140,224 2030
----- End of picture text -----

(d) Income tax examination

The tax authorities have examined the profit-seeking enterprise annual income tax returns of the Company through 2019.

19. BASIC AND DILUTED EARNINGS PER SHARE (OPERATING LOSSES)

Earnings per share (EPS) are computed as follows:

Year Ended December 31, 2021 Basic EPS Current profits (losses) attributable to common shareholders Dilutive effect of potential ordinary Share Profit sharing bonus to employees Diluted EPS Current profits (losses) attributable to common shareholders plus dilutive effect of potential ordinary share Year Ended December 31, 2020 Basic EPS Current losses attributable to common shareholders, net		Amounts (Numerator) Before Tax After Tax $ 694,951 $ 648,800 - - $ 694,951 $ 648,800 $ 409,193) ($ 357,444)	Amounts (Numerator) Before Tax After Tax $ 694,951 $ 648,800 - - $ 694,951 $ 648,800 $ 409,193) ($ 357,444)		Number of Shares (Denominator) (In thousands) 951,565 803 952,368 951,565		Earnings Per Shar	(Losses) e(NT$)	(Losses) e(NT$)
		Before Tax $ 694,951 - $ 694,951 $ 409,193)					Before Tax $ 0.73 $ 0.73 $ 0.43)		After Tax
	(		(			(		(	$ 0.68 $ 0.68 $ 0.38)

If the Company may settle the profit sharing bonus to employees by the way of stock or cash, then in order to calculate the diluted earnings per share (EPS), the Company should presume that the profit sharing bonus to employees will be settled in the form of stocks and add the potential ordinary share dilution should be included in the weighted average number used in the calculation of diluted EPS if the shares have a dilutive effect. Before settling the number of share issued for profit sharing bonus to employees in next year, the dilutive effect of potential ordinary share will be continually considered when calculating the diluted EPS.

20. DISPOSAL OF SUBSIDIARIES

On July 2020, the Company signed an agreement to dispose LIBOLON ENERGY Company Limited, which is mainly engaged in the trading business of renewable-energy-based self-usage power generation equipment. The Company completed the disposal on July 1, 2020, and lost control of the subsidiary. For relevant illustration, please refer to Note 21 of 2021 Annual Consolidated Financial Statements.

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21. CAPITAL RISK MANAGEMENT

Under the premise that the companies in the group are ensured to be operated continually, the Company manages its capital through optimizing the balance of the liabilities and equity for maximizing the shareholders' return on equity. The Company's overall strategy has not changed.

The Company does not have to comply with other external capital regulations

22. FINANCIAL INSTRUMENTS

• －

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

The management of the Company believes that the carrying amounts of financial assets and financial liabilities not measured at fair value are close to their fair values or their fair values cannot be measured reliably.

• －

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

December 31, 2021 Financial assets at fair value through profit or loss December 31, 2020 Financial assets at fair value through profit or loss		Level 1 $ 71,403 Level 1 $ 67,305		Level 2 $ - Level 2 $ -		Level 3 $ 1,347 Level 3 $ 1,347		Total
								$ 72,750 Total
								$ 68,652

No transfer has occurred between level 1 and level 2 of the fair value hierarchy in 2021 and 2020.

• (3) The valuation techniques and the inputs used in Level 3 fair value measurement

Unlisted and Non-OTC equity investments have adopted the asset-based valuation approach and to report the overall value of the investment target in accordance with the total value of individual assets and individual liabilities.

• (4) Categories of financial instruments

Financial assets At fair value through profit or loss at fair value through profit or loss, mandatorily measured at fair value Carried at amortized cost	December 31,2021 $ 72,750 3,593,880	December 31,2020
		$ 68,652 2,695,924

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Financial liabilities Carried at amortized cost	December 31,2021 $ 7,050,155	December 31,2020
		$ 4,580,117

• (5) The net profit from the operation of financial derivatives in 2020 is NT$30,092 thousand, which is respectively NT$0 thousand for unsettled losses and NT$30,092 thousand for settled gains, which are accounted for as non-operating income and expenses.

• (6) Financial risk management objectives and policy

The principal financial instruments applied by the Company include equity and liability investments, bank loans, account receivable, account payable, etc. The finance management department of the Company provides services to business units and coordinates operations in the domestic and overseas financial markets by supervising internal risk exposure reports and managing financial risks related to the operations of the Company in accordance with the risk level and breadth analyses. Such risks consist of market risks (includes exchange rate risk, interest rate risk and other price risk), credit risks, and liquidity risks.

The Company applies derivative financial instruments to hedge risks for mitigating risk impacts. The derivative financial instruments applied is regulated by the policies approved by the Board of Directors of the Company, which are written principles for exchange rate risk, interest rate risk, credit risk, the utilization of derivative and non-derivative financial instruments, and the investment of remaining circulating capital. Internal auditors continue to review compliance with policies and the risk exposure limit. The Company did not trade financial instruments (including derivative financial instruments) for speculative purposes.

(6.1) Market risks

The principal financial risks that the Company bears for operating activities are foreign currency fluctuation risk and interest rate fluctuation risk.

The Company engages in various derivative financial instruments to manage foreign currency exchange rate risks, including the utilization of forward exchange contract to hedge currency exchange rate risks associated with exports.

The Company’s exposures to financial instrument market risks and its management and measurement methods have not changed

Sensitivity Analysis

The Company conducts risk measurement for the position of the foreign currency financial assets and liabilities that has significant impacts to the Company after considering the net position of the unexpired cross currency swap contracts foreign exchange swap contracts.

The Company is mainly affected by fluctuations in the exchange rate of the U.S.

• 55 -

dollar and Chinese Yuan.

The sensitivity analysis only included circulating monetary items denominated in foreign currencies and adjusted the translation at the end of year to a 1% change in exchange rate. In the table below, a positive number represented an increase in income before income tax when New Taiwan dollar (functional currency) depreciated by 1%. The impact on income before income tax would be of the same amount in negative when New Taiwan dollar (functional currency) appreciated by 1%.

December 31, 2021

Financial Assets	Foreign Currency	Foreign Currency (In Thousands)	Exchange Rate	Carrying Amount (NT$) (In Thousands)	SensitivityAnalysis	SensitivityAnalysis
					Variation	Profit and Loss Impact
	$ 77,139,701 169,452,247 96,149 6,753,697	$ 77,140 169,452 96 6,754	27.68 4.344 27.68 27.68	$ 2,135,227 736,101 2,661 186,942	1% 1% 1% 1%	$ 21,352 7,361 27 ( 1,869 )
Monetary items US Dollar to New Taiwan Dollar Chinese Yuan to New Taiwan Dollar Non-monetary items Non-derivatives US Dollar to New Taiwan Dollar Financial Liability
Monetary items US Dollar to New Taiwan Dollar

December 31, 2020

Financial Assets	Foreign Currency	Foreign Currency (In Thousands)	Exchange Rate	Carrying Amount (NT$) (In Thousands)	SensitivityAnalysis	SensitivityAnalysis
					Variation	Profit and Loss Impact
	$ 37,769,195 208,216,622 96,149 3,530,063	$ 37,769 208,217 96 3,530	28.48 4.377 28.48 28.48	$ 1,075,667 911,364 2,738 100,536	1% 1% 1% 1%	$ 10,757 9,114 27 ( 1,005 )
Monetary items US Dollar to New Taiwan Dollar Chinese Yuan to New Taiwan Dollar Non-monetary items Non-derivatives US Dollar to New Taiwan Dollar Financial Liability
Monetary items US Dollar to New Taiwan Dollar

(6.2) Credit risks

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Company. The Company always requires the provision of collateral or other guarantee rights from major transaction partners. Accordingly, the management of the Company believes that the credit risk of the Company has been significantly reduced.

(6.3) Liquidity risks

• 56 -

The Company supports its business operations and reduces the impact of cash flow fluctuation through appropriate management and the maintenance of sufficient cash and cash equivalents. The management of the Company has supervised bank financing conditions and ensured compliance with loan contracts.

Financing and loans from banks are regarded as an important source for maintaining liquidity for the Company. As of December 31, 2021 and 2020, the unspent quota of short-term bank financing, including opening quota for letter of credit (L/C) of the Company was NT$2,342,484 thousand and NT$4,644,106 thousand, respectively.

(6.3.1)

The maturity analysis of remaining contracts of non-derivative financial liabilities is based on the earliest possible date on which the Company may be required to make repayments and the undiscounted cash flows of financial liabilities (including principal and estimated future interest). Therefore, the Company may be requested to immediately return bank loans in the earliest period specified in the table below without considering the probability of bank's immediate execution of such rights. Maturity analysis of other non-derivative financial liabilities shall be prepared in accordance with the agreed repayment date. The analysis is as follows:

December 31, 2021

December 31, 2021
Non-derivative financial liabilities Short-term loans Short-term bills payable Notes payable (including related parties) Accounts payable (including related parties) Other payables (including related parties) Advance loans to related parties Long-term loans (including due within one year or one operating cycle) Guarantee deposits Lease liabilities December 31, 2020 Non-derivative financial liabilities Short-term loans Short-term bills payable Notes payable (including related parties) Accounts payable (including related parties) Other payables (including related parties) Advance loans to related parties Long-term loans (including due within one year or one operating cycle) Guarantee deposits Lease liabilities		Within 1year $ 3,450,000 1,260,000 163,806 627,530 377,819 346,000 175,000 2,357 183 $ 6,402,695 Within 1year $ 1,750,000 770,000 8,526 464,811 261,113 331,000 474,667 1,657 115 $ 4,061,889		Within 1 to 2years $ - - - - - - 400,000 - 183 $ 400,183 Within 1 to 2years $ - - - - - - 520,000 - 183 $ 520,183		Within 2 to 5years $ - - - - - - 250,000 - 183 $ 250,183 Within 2 to 5years $ - - - - - - - - 366 $ 366		More Than 5 Years
								$ - - - - - - - - - $ - More Than 5 Years
								$ - - - - - - - - - $ -

(6.3.2) Liquidity of derivative financial liabilities

For liquidity analysis of derivative financial instruments, net settled

• 57 -

derivatives are prepared in accordance with inflows and outflows of net cash of undiscounted contract and gross settled derivatives are prepared in accordance with inflows and outflows of total cash of undiscounted contract.

23.RELATED PARTY TRANSACTIONS

Except for the items disclosed other notes, the following is a summary of transactions between the Company and other related parties:

(a) Name and relationship of related parties

Related PartyName LI HAO Investment Co., Ltd. LI ZAN Investment Co., Ltd. LIBOLON Enterprise Co., Ltd. LEA JIE Energy Co., Ltd. Pt. Indonesia LIBOLON Fiber System VIRTUE ELITE Ltd. LI PENG Enterprise Co., Ltd. LEALEA Technology Co., Ltd. Rich Development Co., Ltd. FU LI Express Co., Ltd. LI MAO Investment Co., Ltd. LI XING Investment Co., Ltd. HONG XING Investment Co., Ltd. LI LING Film Co., Ltd. DONG TING Investment Co., Ltd. LIBOLON (Shanghai) International Trading Co., Ltd LIBOLON International Corp. LIBOLON Energy Co., Ltd. ETON Petrochemical Co., Ltd. APEX FONG YI Technology Co., Ltd. BLOOMING Development Co., Ltd.

Relationshipwith the Company

Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Second-tier Subsidiary Associate Associate Associate Associate Associate Associate Associate Associate Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party

(b) Net revenue

Related PartyCategory/Name Subsidiary Associates Other related parties		2021 $ 146,817 831,642 125,967 $ 1,104,426		2020
				$ 198,757 602,604 188,851 $ 990,212

• 58 -

The Company's sales to associates and other related parties were not significantly different from the general transactions.

(c) Purchases

Related PartyCategory/Name Subsidiary Associates	Related PartyCategory/Name Subsidiary Associates		2021 $ 215	2021 $ 215		2020
						$ -
LI PENG Enterprise Co.,Ltd.			596,602			565,073
Others			7,465 $ 604,282			4,506 $ 569,579

The Company's purchases from associates and other related parties were not significantly different from the general transactions.

• (d) Receivables from related parties (excluding loans to related parties)

Item Accounts receivable Notes receivable	Related Party Category/Name Subsidiary Pt. Indonesia LIBOLON Fiber System Others Associates LI PENG Enterprise Co., Ltd. Others Other related parties Associates LI PENG Enterprise Co., Ltd.	December 31,2021 $ 54,931 1 116,585 2,582 12,837 $ 186,936 $ 102,213	December 31,2020	December 31,2020
				$ 67,827 1 63,483 2,358 64,958 $ 198,627 $ 12,833

No deposit has been collected for the circulating accounts receivables from related parties. Accounts receivables from related parties in 2021 and 2020 do not include bad debt expenses.

(e) Payables to related parties (excluding borrowings from related parties)

Item Accounts payable	Related Party Category/Name Associates LI PENG Enterprise Co., Ltd. Others	December 31,2021 $ 73,410 1,854 $ 75,264	December 31,2020	December 31,2020
				$ 88,388 754 $ 89,142

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Item Notes payable Other accrued expense	Related Party Category/Name Associates LI PENG Enterprise Co., Ltd. Others Subsidiary Associates	December31,2021 $ 57,700 649 $ 58,349 $ 24,652 5,983 $ 30,635	December31,2020	December31,2020
				$ 730 - $ 730 $ 10,304 3,270 $ 13,574

No guarantee is provided for the balance of circulating payables to related parties.

(f) Acquisition of property, construction land, plant and equipment, investment property

Related Party Category/Name Associates Other Equipment Machinery Equipment Rich Development Co., Ltd. Land Buildings Other related parties BLOOMING Development Co., Ltd. Construction land		Proceedsfrom Acquisition	Proceedsfrom Acquisition	Proceedsfrom Acquisition
		2021 $ 93 12,321 475,430 150,933 885,000 $ 1,523,777		2020
				$ 4,555 80 - - - $ 4,635

(g) Acquisition of other assets

RelatedParty Category/Name Associates Computer software		Proceedsfrom Acquisition	Proceedsfrom Acquisition	Proceedsfrom Acquisition
		2021 $ 3,001		2020
				$ 1,443

(h) Disposal of property, plant, and equipment

Item Transportation Equipment Other Equipment Machinery Equipment	Related Party Category/Name Associates Associates Associates		Proceedsfrom Disposal 2021 2020 $ - $ 300 - 2 - 138 $ - $ 440	Proceedsfrom Disposal 2021 2020 $ - $ 300 - 2 - 138 $ - $ 440		Disposal(Loss)Profits	Disposal(Loss)Profits	Disposal(Loss)Profits
			2021 $ - - - $ -			2021 $ - - - $ -		2020
								$ - 2 - $ 2

• 60 -

(i) Advance loans to related parties

December 31, 2021

Subsidiary VIRTUE ELITE Ltd. Pt. Indonesia LIBOLON Fiber System		Maximum Balance $ 144,464 824,663 $ 969,127		Ending Balance $ 6,153 484,400 $ 490,553	Interest Rate Range(%) 1.27907～ 1.42981 1.34155～ 3.1451		Interest Income $ 219 6,651 $ 6,870	Interests of Accounts Receivable Financing at the end of theperiod	Interests of Accounts Receivable Financing at the end of theperiod
									$ 7 560 $ 567

Subsidiary VIRTUE ELITE Ltd. Pt. Indonesia LIBOLON Fiber System				December 31,2020	December 31,2020	December 31,2020
		Maximum Balance $ 89,817 952,383 $1,042,200		Ending Balance $ - 583,840 $ 583,840	Interest Rate Range(%) 1.29004～ 1.66084 1.45296～ 4.0485		Interest Income $ 242 13,087 $ 13,329	Interests of Accounts Receivable Financing at the end of theperiod
									$ - 730 $ 730

The Company provides short-term loans to associates and other related parties. The interest rate range is similar to the market interest rate.

(j) Advance loans payable to related parties

Subsidiaries LI ZAN Investment Co., Ltd. LI HAO Investment Co., Ltd. Associates LI MAO		December 31,2021	December 31,2021	December 31,2021
	Maximum Balance $ 59,000 98,000 93,000	Ending Balance $ 42,000 71,000 90,000	Interest Rate Range(%) 0.76715~0.8137 5 0.76715~0.8137 5 0.80514~0.8622	Interest Income $ 329 551 682	Interests of Accounts Receivable Financing at the end of theperiod
					$ 29 48 63

• 61 -

Investment					8
Co., Ltd.
LI XING
Investment					0.80514~0.8622
Co., Ltd.		93,000		75,000	8		602		52
HONG
XING
Investment					0.80514~0.8622
Co., Ltd.		70,000		68,000	8		561		47
	$	413,000	$	346,000		$	2,725	$	239
					December 31,2020

Investment Co., Ltd. LI XING Investment Co., Ltd. HONG XING Investment Co., Ltd.		93,000 70,000 $ 413,000	93,000 70,000 $ 413,000	8 75,000 0.80514~0.8622 8 68,000 0.80514~0.8622 8 $ 346,000 December 31,2020	8 75,000 0.80514~0.8622 8 68,000 0.80514~0.8622 8 $ 346,000 December 31,2020	8 75,000 0.80514~0.8622 8 68,000 0.80514~0.8622 8 $ 346,000 December 31,2020	602 561 $ 2,725	602 561 $ 2,725	52 47 $ 239
Subsidiaries LI ZAN Investment Co., Ltd. LI HAO Investment Co., Ltd. Associates LI MAO Investment Co., Ltd. LI XING Investment Co., Ltd. HONG XING Investment Co., Ltd.		Maximum Balance $ 42,000 71,000 93,000 75,000 70,000 $ 351,000		Ending Balance $ 42,000 71,000 73,000 75,000 70,000 $ 331,000	Interest Rate Range(%) 0.76715~0.9047 9 0.76715~0.9047 9 0.8204~0.91554 0.8204~0.91554 0.8204~0.91554		Interest Income $ 198 488 543 341 411 $ 1,981	Interests of Accounts Receivable Financing at the end of theperiod
									$ 28 47 60 52 49 $ 236

The interest rate for the Company's borrowings from associates and other related parties is equivalent to the market interest rate. Borrows to associates and other related parties are unsecured borrows.

(k) Others

ers
Rental Income Subsidiaries Associates LI PENG Enterprise Co., Ltd. LI LING Film Co., Ltd. Others Other related parties		2021 $ 3,999 25,358 5,347 5,566 30 $ 40,300		2020
				$ 3,988 28,012 5,337 5,288 13 $ 42,638

The rental income collected by the Company from associates and other related parties is in accordance with local market quotations, and the receivable term is a one-month commercial promissory note.

• 62 -

Rent Expense Associates LI PENG Enterprise Co., Ltd. Rich Development Co., Ltd.		2021 $ 6,936 2,442 $ 9,378		2020
				$ 6,694 2,891 $ 9,585

The Company pays rents to associates in accordance with local market quotations, and the payment term is a one-month commercial promissory note.

ShippingExpense Associates Information Service Fee Associates LEALEA Technology Co., Ltd. Other Income Subsidiary Associates Other related parties Fuel Costs－Coal Subsidiary LEA JIE Energy Co., Ltd. Service Fee－Coal ProcessingFee Subsidiary LEA JIE Energy Co., Ltd. Consumables－Public Fluid Associates LI PENG Enterprise Co., Ltd. ProcessingCosts Associates LI PENG Enterprise Co., Ltd.		2021 $ 18,747 2021 $ 17,739 2021 $ - 3,010 23 $ 3,033 2021 $ 185,092 2021 $ 1,371 2021 $ 7,555 2021 $ 12,337		2020
				$ 18,706 2020
				$ 18,571 2020
				$ 27 2,268 57 $ 2,352 2020
				$ 143,650 2020
				$ 1,371 2020
				$ 4,847 2020
				$ 5,991

(l) Compensation of key management personnel

The compensation to directors and other key management personnel were as follows:

Short-term employee benefits Post-employment benefits		2021 $ 18,973 284 $ 19,257		2020
				$ 18,242 284 $ 18,526

The compensation to directors and other key management personnel were determined by

• 63 -

the Compensation Committee of the Company in accordance with the individual performance and the market trends.

(m)Transactions with other related parties

Related Party Category/Name Associates LEALEA Technology Co., Ltd. Related Party Category/Name Associates LEALEA Technology Co., Ltd. ity transactions Associates	Related Party Category/Name Associates LEALEA Technology Co., Ltd. Related Party Category/Name Associates LEALEA Technology Co., Ltd. ity transactions Associates	Item	Amount of Signed and Unfinished Contracts (Untaxed) Balance of Prepayments for Equipment December 31,2021 December 31,2020 $ 150 $ - Amount of Signed and Unfinished Contracts (Untaxed) Balance of Prepayments for Equipment December 31,2021 December 31,2020 $ 1,028 $ - Object Number of Shares Amount LIBOLON Energy Co., Ltd. 55,000 $ 550	Amount of Signed and Unfinished Contracts (Untaxed)	Balance of Prepayments for Equipment	Balance of Prepayments for Equipment	Balance of Prepayments for Equipment
				December 31,2021	December 31,2020
		Software Item		$ 150 Amount of Signed and Unfinished Contracts (Untaxed)	$ - Balance of Prepayments for Equipment
				December 31,2021	December 31,2020
		Software Transaction Date				$	- Amount
		July 2020					$ 550

• (n) Equity transactions

24. PLEDGED ASSETS

Assets provided by the Company as collaterals to financial institutions were as follows:

Property, plant and equipment (Note 11)	December 31,2021 $ 2,586,279	December 31,2020	December 31,2020
			$ 2,629,702

25. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACTUAL COMMITMENTS

Significant contingent liabilities and unrecognized commitments of the Company as of balance sheet date, excluding those disclosed in other notes, were as follows:

As of December 31, 2021 and December 31, 2020, the Company still has amounts available under issued but unused letters of credit, illustrated as follows:

Unit: Foreign Currencies (In Thousands)

USD EURO Japanese Yen NTD	December 31,2021 $ 480 293 308,390 10,000	December 31,2020
		$ 289 119 712,400 -

• 64 -

26. OTHER MATTERS

Due to the impact of global pandemic of the novel coronavirus pneumonia. In response to the impact of the epidemic, the Company has taken the following actions:

• (a) Operation strategy adjustments

In terms of operating strategy, the Company has minimized the inventory backlog of textile and automotive textiles during the period of the novel coronavirus, and continued to develop such kind of textile products in line with the requirements of electronic brands for carbon reduction, green energy and circular economy for holding the business opportunities of stay-at-home economy.

• (b) Fund-raising strategy

No major fund-raising plans were implemented by the Company for the impact of the novel coronavirus.

• (c) Government relief measures

The Company has applied for relief subsidies from the government, illustrated as follows:

(1) NT$10,508 thousand and NT$54,207 thousand in salary and working capital subsidies were received in year 2021 and 2020 respectively and accounted for as other income.

• (2) According to the "Relief Plan for Industrial Zones during the Epidemic Prevention for Severe Special Infectious Pneumonia Period", it is possible to apply for a 20% reduction in rent and have general public facility maintenance fees to be levied by half. The implementation period of the plan is from January 15, 2020 to June 30, 2021.

The Company has incorporated the economic effects caused by the epidemic into major accounting estimates based on the information available on the balance sheet date and there are no significant effects on the Company.

27. EXCHANGE RATE INFORMATION OF SIGNIFICANT FOREIGN-CURRENCY FINANCIAL ASSETS AND LIABILITIES

The following information was summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:

Foreign	December 31,2021 Foreign Currency Exchange Rate Carrying Amount	December 31,2021 Foreign Currency Exchange Rate Carrying Amount	Unit: Foreign currencies/New Taiwan Dollars In Thousands December 31,2020 Foreign Currency Exchange Rate Carrying Amount	Unit: Foreign currencies/New Taiwan Dollars In Thousands December 31,2020 Foreign Currency Exchange Rate Carrying Amount
	Foreign Currency	Exchange Rate	Foreign Currency	Exchange Rate

• 65 -

Currency
Assets
Monetary
items
USD	$	77,139,701	27.68	$ 2,135,227	$	37,769,195	28.48	$ 1,075,667
			(USD: NTD)				(USD: NTD)
RMB		169,452,247	4.344	736,101		208,216,622	4.377	911,364
			(RMB: NTD)				(RMB: NTD)
Non-
Monetary
items
Financial assets
measured at
fair value
through profit
and loss－
Noncurrent
USD		96,149	27.68	2,661		96,149	28.48	2,738
			(USD: NTD)				(USD: NTD)
Investment using
the equity
method
IDR	515,156,771,868		0.0019399	999,353	542,715,622,180		0.0020191	1,095,797
			(IDR: NTD)				(IDR: NTD)
Foreign
Currency
Liabilities
Monetary
items
USD		6,753,697	27.68	186,942		3,530,063	28.48	100,536
			(USD: NTD)				(USD: NTD)

The unrealized significant foreign currency profits and losses are as follow:

The unrealized significant foreign currency exchange profits and losses in the year 2021 and 2020 are loss of NT$ 13,345 thousand and loss of NT$ 46,897 thousand accordingly. Due to the wide variety of foreign currency transactions, it is not possible to disclose exchange profits and losses based on the significant foreign currency.

28. ADDITIONAL DISCLOSURES

• (a) Following are the additional disclosures required by the Securities and Futures Bureau for the Company:

• (1) Financings provided: See Table 1 attached;

• (2) Endorsement/guarantee provided: None;

• (3) Marketable securities held (excluding investments in subsidiaries and associates and joint venture equity): See Table 2 attached;

• (4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None;

• (5) Acquisition of individual properties at costs of at least NT$300 million or 20% of the paid-in capital: See Table 3 attached;

• (6) Disposal of individual properties at prices of at least NT$300 million or 20% of the paid-in capital: None;

• 66 -

• (7) Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: See Table 4 attached;

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

• (9) Information about the derivative financial instruments transaction: None;

(10) Information of investees over which the Company exercises significant influence: See Table 6 attached;

• (b) Information on investment in mainland China

• (1) The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: None

• (2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: None

  • (2.1) Purchase amount and percentage, and the ending balance and percentage of payables.

  • (2.2) Sales amount and percentage, and the ending balance and percentage of receivables.

  • (2.3) Property transaction amount and the resulting profits or losses

  • (2.4) Ending balance and purposes of endorsement, guarantee or collateral provided

(2.5) The maximum balance, ending balance, interest rate range and total amount of current interest of financing.

• (2.6) Other transactions having a significant impact on profit or loss or financial status of the period, such as providing or receiving services.

• (c) Information of major shareholder

List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: See Table 7 attached.

29. OPERATING SEGMENTS INFORMATION

The Company has disclosed operating segments information in the consolidated financial statements, so the relevant information won't be disclosed in individual financial statements again.

• 67 -

LEALEA ENTERPRISE CORPORATION Limited TABLE 1 FINANCINGS PROVIDED

FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

No. (Note 1)	Financing Company	Counterparty	Financial Statement Account (Note 2)	Related Party	Maximum Balance for the Period (Note 3)	Ending Balance (Note 8)	Amount Actually Drawn	Interest Rate Range (%)	Nature for Financing (Note 4)	Transaction Amounts (Note 5)	Reason for Financing (Note 6)	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company (Notes 7)	Financing Company’s Total Financing Amount Limits (Notes 7)	Note
													Item	Value
0 0	LEALEA Enterprise Co., Ltd. LEALEA Enterprise Co., Ltd	VIRTUE ELITE Ltd. Pt. Indonesia LIBOLON Fiber System	Receivable of advance loans to related parties Receivable of advance loans to related parties	Yes Yes	$ 950,000 900,000	$ 950,000 500,000	$ 6,153 484,400	1.27907%～ 1.42981% 1.34155%～ 3.1451%	2 2	$ - -	Operating capital Operating capital	$ - -	- -	$ - -	$ 1,075,683 1,075,683	$ 4,302,732 4,302,732

Note 1: The description of number column is as follows:

• (1) The issuer is coded "0".

• (2) The investee company is numbered sequentially from Arabic numeral 1 according to the company type.

• Note 2: The accounts receivable from associates, accounts receivable from related parties, shareholder transactions, prepayments, temporary payments, etc. that are classified as nature for financing must be filled in this field. Note 3: “Maximum balance for the period” refers to the highest balance of lending amount to others in the current year.

• Note 4: “Nature for financing” should be listed as (1) companies or firms having business relationship with the Company, or (2) ones requiring short-term financing.

• Note 5: As the nature of financing is companies or firms having business relationship with the Company, the business transaction amount should be filled in. The transaction amount refers to the previous year’s transaction amount between the lending company and the lender.

• Note 6: As the nature of financing is companies or firms requiring short-term financing, the reasons of financing and the usage of funds, such as repayment of loans, purchase of equipment, working capital turnover, etc., should be specified.

• Note 7: The fields should be filled in accordance with the procedures for lending funds to other parties of the Company that specifies the financing limits for each borrowing Company as 10% of the shareholders' equity of LEALEA Enterprise Co., Ltd. and the financing company’s total financing amount limits as 40% of the shareholders' equity of LEALEA Enterprise Co., Ltd.

• Note 8: Should a public company comply with the Article 14-1 of “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” to submit financing reports to the Board of Directors for approval one by one, even though the financing funds have not yet been allocated, the financing amount approved by the Board of Directors should still be included in the balance announcement for exposing risks. When the funds are subsequently repaid, the balance after repayment shall be disclosed to reflect the adjustment of risk. In accordance with the Article 14-2 of the Regulations, a public company may authorize the chairman of the Board of Directors to approve a financing funds in a certain amount and allocated it in installments or revolving within a one-year period, but the financing funds approved by the Board of Directors should still be used as the declared balance. Although the funds will be repaid thereafter, in consideration that the loan may be allocated again, the financing funds approved by the Board of Directors should be used as the announced balance.

• 68 -

LEALEA ENTERPRISE CORPORATION Limited TABLE 2 MARKETABLE SECURITIES HELD

FOR THE YEAR END DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Held Company Name	Marketable Securities Type and Name (Note 1)	Relationship with the Company (Note 2)	Financial Statement Account		December 31,2021	December 31,2021		Note (Note 4)
				Shares	Carrying Value (Note 3)	Percentage of Ownership (%)	Fair Value
LEALEA Enterprise Co., Ltd.	Publicly traded stocks Trade-Van Information Service Corp. China Development Financial Holding Corp. Asia Pacific Telecom Co., Ltd. Information Technology Total Services Co., Ltd. Stocks The Techgains Pan-Pacific Corp. Progate Group Corp. Book4U Co., Ltd.	None 〃 〃 〃 None 〃 〃	Financial assets at fair value through profits and losses－ Current 〃 〃 〃 Financial assets at fair value through profits and losses－ Noncurrent 〃 〃	427,675 1,217,782 3,277,157 33,750 150,000 114,508 6,250	$ 21,854 21,311 26,938 1,300 373 974 -	0.29 0.01 0.08 0.12 0.26 0.34 0.12	$ 21,854 21,311 26,938 1,300 373 974 -

• Note 1: The securities mentioned in this table refer to stocks, bonds, beneficiary certificates, and securities derived from such items, that are within the scope of IFRS 9 "Financial Instruments". Note 2: The securities issuer who is not classified as related party does not need to fill in the column.

• Note 3: If measured by fair value, please fill in the “carrying value” column with the carrying balance that has adjusted the value in accordance with fair value evaluation and deducted allowance losses; if it is not measured by fair value, please fill in the “carrying value” column with the original acquisition cost or the carrying balance of the amortized cost after deducting the accumulated impairment.

• Note 4: If the listed securities are restricted due to the provision of guarantees, pledged loans, or other agreed-upon, the note column should indicate the number of guarantees or pledged shares, the amount of guarantees or pledges, and restrictions on use.

• Note 5: For information about the equity investments in subsidiaries, associates, and joint ventures, please refer to attached "Table 6".

• 69 -

LEALEA ENTERPRISE CORPORATION Limited TABLE 3

THE AMOUNT OF REAL ESTATAE ACQUIRED AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Company Name	Types of Property	Transaction Date	Transaction Amount	Payment Term	Counter- party	Nature of Relationships	The data transferred previously when the counter-partyis a relatedparty	The data transferred previously when the counter-partyis a relatedparty	The data transferred previously when the counter-partyis a relatedparty	The data transferred previously when the counter-partyis a relatedparty	Price Reference	The purpose of acquisition and condition of use	Other
							Owner	The relationship with the issuer	Transfer Date	Amount
LEALEA Enterprise Co., Ltd. LEALEA Enterprise Co., Ltd.	Inventory- Construction land Land and Buildings	Sep.15, 2021 Oct. 27, 2021	$ 885,000 633,910	$ 885,000 633,910	BLOOMING Development Co., Ltd. Rich Development Co., Ltd.	Related Parties Related Parties	Non-related Parties -	Non-related Parties -	110.07.21 -	$ 871,950 -	Market quotations and appraisal information and estimated amount from professional appraisal organizations $ 884,215 Market quotations and appraisal information and estimated amount from professional appraisal organizations 636,296	To invest in the development of residential or commercial buildings for rent or sale To Cooperate with company operation and save lease cost

Note 1: If the acquisition of assets should be appraised in accordance with regulations, the result of appraisal should be indicated in the "price reference" column.

Note 2: The amount of paid-in capital refers to the amount of paid-in capital of the parent company. If the issuer’s stock has no denomination or the denomination per share is not NT$10, the transaction amount of 20% of the paid-in capital shall be calculated based on the 10% of the equity attributable to the owner of the parent company on the balance sheet.

Note 3: The "transaction date" refers to the date when the contract is signed, the payment date, the entrusted transaction date, the transfer date, the resolution date of the Board, or the date when the transaction related parties and transaction amount are fully determined, whichever is the former.

• 70 -

LEALEA ENTERPRISE CORPORATION Limited

TABLE 4

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Company Name	Related Party	Nature of Relationships		Transaction Details	Transaction Details		Abnormal Transaction (Note 1)	Abnormal Transaction (Note 1)	Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable	Note (Note 2)
			Purchase/ Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
LEALEA Enterprise Co., Ltd. 〃 〃	LI PENG Enterprise Co., Ltd. 〃 Pt. Indonesia LIBOLON Fiber System	The investee of the Company accounted for under the equity method 〃 Subsidiary	Sales Purchase Sales	( $ 801,401 ) 596,602 ( 146,806 )	( 9 ) 9 ( 2 )	1 month commercial promissory note 〃 〃	N/A 〃 〃	N/A 〃 〃	Notes and Accounts Receivables $ 218,798 Notes and Accounts Payables ( 131,110 ) Notes and Accounts Receivables 54,931	22 ( 17 ) 5

Note 1: If the related party's trade terms are different from the general trade terms, the differences and reasons of abnormal transaction should be described in the "unit price" and "payment terms" columns. Note 2: If there is unearned receipts, prepayment, the reason, contractual terms, amount, and differences with general transaction should be stated in the note column. Note 3: The amount of paid-in capital refers to the amount of paid-in capital of the parent company. If the issuer’s shares have no denomination or the denomination per share is not NT$10, the transaction amount requirement of 20% of the paid-in capital shall be calculated based on the 10% equity attributable to the owner of the parent company on the balance sheet.

• 71 -

LEALEA ENTERPRISE CORPORATION Limited

TABLE 5

THE RECEIVABLES FROM RELATED PARTIES AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR END DECEMBER 31,2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Company Name	Related Party	Nature of Relationships	Ending balance of receivables from related parties (note 1)	Turnover	Overdue receivables from relatedparties	Overdue receivables from relatedparties	Recovered amount of the receivables from related parties after theperiod	Provision for allowance of bad debt
					Amount	Way of Processing
LEALEA Enterprise Co., Ltd.	LI PENG Enterprise Co., Ltd.	The investee of the Company accounted for under the equity method	Notes and Accounts Receivables $ 218,798	5.43 times	$ -	-	$ 114,539	$ -

Note 1: Please fill in the blank according to account receivables from related parties, receivable notes, other receivables, etc.

Note 2: Paid-in capital refers to the paid-in capital of the parent company. Where the issuer's shares have no par value or the par value per share is not NT $10, the transaction amount of 20% of the paid in capital shall be calculated by 10% of the equity attributable to the owner of the parent company in the balance sheet.

• 72 -

LEALEA ENTERPRISE CORPORATION Limited TABLE 6 NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investor Company	Investee Company (Note 1, 2)	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance a	s of December 31,2021	s of December 31,2021	Net Income (Losses) of the Investee (Note 2-2)	Share of Profits/Losses of Investee (Note 2-3)	Note
				December 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value
LEALEA Enterprise Co., Ltd.	LI HAO Investment Co., Ltd. LI ZAN Investment Co., Ltd. LI XING Investment Co., Ltd. HONG XING Investment Co., Ltd. LI MAO Investment Co., Ltd. LEALEA Technology Co., Ltd. LIBOLON Enterprise Co., Ltd. FU LI Express Co., Ltd. LI PENG Enterprise Co., Ltd. Rich Development Co., Ltd. LEA JIE Energy Co., Ltd. LI LING Film Co., Ltd. PT.INDONESIA LIBOLON FIBER SYSTEM	11F., No. 162, Songjiang Rd., Taipei City 104, Taiwan 〃 〃 〃 〃 〃 6F., No. 162, Songjiang Rd., Taipei City 104, Taiwan No. 122, Zili 2nd Street, Wuqi District, Taichung City, Taiwan (R.O.C.) 6F., No. 162, Songjiang Rd., Taipei City 104, Taiwan 8F., No.99, Jilin Road, Taipei City, Taiwan (R.O.C.) 4F., No. 162, Songjiang Rd., Taipei City 104, Taiwan 11F., No. 162, Songjiang Rd., Taipei City 104, Taiwan Lantai 1 JI. Cideng Barat No. 15, RT.011/RW.001 Kel. Duri Pulo. Kec, Gambir. DKZ Jakarta	Investments of various production businesses, securities investment companies, banks, etc. 〃 〃 〃 〃 Information software and data processing services Sporting and recreation goods wholesaling and retailing business Container trucking carrier Manufacturing of weaving, dyeing and finishing, processing of artificial fiber and woven fabrics Appointment of construction enterprises for commercial building construction, rent and sales of public housing, etc. Coal wholesaling and retailing business Manufacturing of nylon film Manufacturing and sales of weaving, dyeing and finishing, processing of artificial fiber fabrics	$ 416,616 359,877 376,000 364,595 363,629 74,031 50,000 35,000 1,221,597 481,268 210,000 39,580 1,680,880	$ 416,616 359,877 376,000 364,595 363,629 74,031 50,000 35,000 1,221,597 470,606 210,000 39,580 1,680,880	40,356,000 24,460,000 37,600,000 23,304,000 35,244,000 12,685,767 5,000,000 3,500,000 145,353,853 52,958,894 21,000,000 2,100,000 13,370,000	53.38 53.17 47.00 46.98 46.62 29.05 100.00 25.00 15.89 7.12 70.00 3.50 70.00	$ 477,565 266,449 412,266 366,253 481,425 202,678 8,713 47,151 1,610,983 917,070 246,679 12,297 1,000,682	$ 19,719 7,494 ( 433 ) 2,666 561 129,797 ( 1,616 ) 12,418 284,924 306,691 40,659 ( 113,991 ) ( 68,548 )	$ 10,537 4,008 ( 203 ) 1,252 261 37,724 ( 1,616 ) 3,104 45,746 21,709 28,624 ( 3,989 ) ( 47,984 )

Note 1: If a public company has a foreign holding company that uses consolidated statements as the main financial statements in accordance with local laws and regulations, the disclosure of information about the foreign invested company may only disclose the relevant information of the holding company.

Note 2: If it is not in the situation described in Note 1, fill in according to the following regulations:

• (1) For "Investee Company", "Location", "Main Businesses and Products", "Original Investment Amount" and "Balance as of December 31, 2021" columns, the information should be filled out in order in accordance with the investment circumstances of the public company or the investment circumstances of each directly or indirectly controlled investee company. The relationship between each investee company and the public company should also be indicated in the note column, such as subsidiary or second-tier subsidiary.

• (2) The "Net Income (Losses) of the Investee" column should be filled in with the current profit and loss amount of each investee company.

• (3) The "Share of Profits/Losses of Investee" column should only be filled in the amount of profits and losses of the public Company’s direct investment in subsidiaries and the amount of profit and loss of each investee company measured by using the equity method. The rest is not required. When filling in the "current profit and loss of subsidiaries recognized as direct reinvestment " column, we should confirm that the current profit and loss of each subsidiary already includes the investment profit and loss of its investees required to be recognized by laws.

• 73 -

LEALEA ENTERPRISE CORPORATION Limited TABLE 7 INFORMATION ON MAJOR SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2021

Shareholders	Shares	Shares
	Total Shares Owned	Ownership Percentage
DONG TING Investment Co., Ltd. LI PENG Enterprise Co., Ltd. LI MAO Investment Co.,Ltd.	76,336,784 71,743,197 49,122,710	7.97 7.49 5.13

Note 1: This table is based on the information provided by the Taiwan Depository & Clearing Corporation for stockholders holding greater than 5% of the Company’s ordinary and special stocks, including treasury stocks, completed the process of registration and book-entry delivery in dematerialized from on the last business date of current quarter. There may be a discrepancy in the number of shares recorded on the Company’s consolidated financial statements and its dematerialized securities arising from the difference in basis of preparation.

Note 2: As table above, the shareholder who delivers the shares to the trust is disclosed by the individual trustee, who opened the trust account, in accordance with the Securities Exchange Act, the shareholders have to disclose the insider equity more than 10% of the shares, include their own shares and their delivery to the trust and have the right to make decisions on the trust property. Information on insider equity declaration is available on the Market Observation Post System website.

• 74 -

CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY STATEMENT OF CASH AND CASH EQUIVALENTS STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS－ CURRENT STATEMENT OF NOTES RECEIVABLE STATEMENT OF ACCOUNTS RECEIVABLE STATEMENT OF INVENTORIES STATEMENT OF PREPAYMENTS STATEMENT OF OTHER FINANCIAL ASSETS－ CURRENT STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS－NONCURRENT STATEMENT OF CHANGES IN LONG-TERM EQUITY INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT STATEMENT OF CHANGS IN INVESTMENT PROPERTY STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF INVESTMENT PROPERTY STATEMENT OF RIGHT-OF-USE ASSETS STATEMENT OF DEFERRED INCOME TAX ASSETS STATEMENT OF OTHER NONCURRENT ASSETS－OTHER STATEMENT OF SHORT-TERM LOANS STATEMENT OF SHORT-TERM BILLS PAYABLES STATEMENT OF NOTES PAYABLES STATEMENT OF ACCOUNTS PAYABLES STATEMENT OF OTHER PAYABLES STATEMENT OF CURRENT PORTION OF LONG-TERM LOANS PAYABLE STATEMENT OF OTHER CURRENT LIABILITIES STATEMENT OF LONG-TERM LOANS MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS STATEMENT OF NET REVENUE STATEMENT OF COST OF REVENUE STATEMENT OF MARKETING EXPENSES STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES STATEMENT OF OTHER INCOME AND EXPENSES, NET STATEMENT OF LABOR, DEPRECIATION, DEPLETION, AND AMORTIZATION BY FUNCTION

STATEMENT INDEX

1 2 3, 4 5, 6 7 8 9 10 11 Note 11 Note 11 Note 13 Note 13 13 Note 18 13 14 15 16, 17 18, 19 20 21 22 23 24 25 26 27 28 Note 17 29

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 1

STATEMENT OF CASH AND CASH EQUIVALENTS FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item Cash on hand Demand deposits Checking deposits Foreign currency deposits Foreign currency time deposits with original maturity within 3 months Short-term loan notes	Description USD5,074,136；EUR14,178； JPY20,373,040；CNY1,070,015 USD21,000,000；CNY83,000,000 Maturity date: Jan. 4, 2022-Mar. 14,2022 Interest rate: 0.33%~0.38%； USD15,000,000		Amount
			$ 282 2,665 68,739 150,444 941,832 415,200 $ 1,579,162

Note: Exchange rate at the end of December 31, 2021

USD ： NT=1 ： 27.68 EUR ： NT=1 ： 31.32 JPY ： NT=1 ： 0.2405 CNY ： NT=1 ： 4.344

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LEALEA ENTERPRISE CORPORATION Limited

STATEMENT 2

－ STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS CURRENT

FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Name of Financial Products Trade-Van Information Service Corp. China Development Financial Holding Corp. Asia Pacific Telecom Co., Ltd. (Note 1) Information Technology Total Services Co., Ltd. (Note 2)	Description Listed stocks Listed stocks Listed stocks Over-The-Counter (OTC) stocks	Shares 427,675 1,217,782 3,277,157 33,750	Par Value (NT$) 10 10 10 10	Stocks or Bonds Total Value $ 4,277 12,178 32,772 338 $ 49,565	Acquisition Cost $ 33,389 3,395 - - $ 36,784	Cumulative Impairment $ - - - - $ -	Fair	Value Total Amount $ 21,854 21,311 26,938 1,300 $ 71,403	Collateral
							Unit Price (NT$) 51.10 17.50 8.22 38.50
									Nil 〃 〃 〃

Note 1: The original acquisition cost of Asia Pacific Telecom Co., Ltd. is NT$50,000 thousand, which has been listed for impairment losses in 2006. The company conducted a capital reduction on November 8, 2019 for covering accumulated deficits. The stock exchange date is January 17, 2020. The cost after the capital reduction was NT$ 32,772 thousand and the market price was calculated based on the capital reduction ratio. Note 2: Information Technology Total Services Co., Ltd. was acquired after the closure of liquidation of Hua-Li-Yi Ventures invested in previous years.

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 3

STATEMENT OF NOTES RECEIVABLE FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars)

Client Name Daye International Development Co., Ltd. Yea Chun International C0., Ltd. Horng Yah Enterprise C0., Ltd. Pro Data Tone Enterprise C0., Ltd. Zig Sheng Industrial Co., Ltd Others (Note) Less: Allowance for bad debts	Description General Business 〃 〃 〃 〃 〃	Amount	Amount
		(	$ 12,320 7,753 19,506 7,960 12,642 49,776 109,957 1,100) $ 108,857

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

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 4

STATEMENT OF NOTES RECEIVABLES FROM RELATED PARTIES FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars)

Client Name LI PENG Enterprise Co., Ltd.	Description General business		Amount
			$ 102,213

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 5

STATEMENT OF ACCOUNTS RECEIVABLE FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Client Name OPP FILM S.A FILS PROMPTEX YARNS INC. AYM SYNTES LIMITED Others (Note) Less: Allowance for bad debts	Description General business 〃 〃 〃		Amount
		(	$ 185,012 37,930 50,148 351,523 624,613 5,660) $ 618,953

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

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 6

STATEMENT OF ACCOUNTS RECEIVABLES FROM RELATED PARTIES FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Client Name LI PENG Enterprise Co., Ltd. LIBOLON International Corp. LIBOLON (Shanghai) International Trading Co., Ltd. LIBOLON Enterprise Co., Ltd. Pt. Indonesia LIBOLON Fiber System LI LING Film Co., Ltd.	Description General business 〃 〃 〃 〃 〃		Amount
			$ 116,585 4,430 8,407 1 54,931 2,582 $ 186,936

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EALEA ENTERPRISE CORPORATION Limited STATEMENT 7 STATEMENT OF INVENTORIES

FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Item Textile Raw materials Supplies Work in process Finished goods Inventory in transit Less: Allowance for loss due to market price decline Construction Construction land Construction volume Parking spaces for sale Less: Allowance for loss due to market price decline		Cost $ 509,321 116,724 28,128 1,340,287 481,028 128,085) 2,347,403 885,995 10,310 15,702 15,702) 896,305 $ 3,243,708	Market Value	Market Value
	( (			$ 484,841 79,860 27,936 1,273,738 481,028 - 2,347,403 885,995 10,310 - - 896,305 $ 3,243,708

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 8 STATEMENT OF PREPAYMENTS

FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars)

Item Prepaid expenses Prepayments of land volume Prepayments Deferred expenses	Description Insurance fee Others		Amount
			$ 4,001 12,846 77,813 32,049 $ 126,709

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 9

－ STATEMENT OF OTHER FINANCIAL ASSETS CURRENT FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Item Business tax return receivable Profit-seeking enterprise income tax return receivable Other receivables Interest receivable Time deposits with original maturity over three months	Description Rent receivable and payment for leftover tailings		Amount
			$ 51,082 2,908 24,904 2,495 424,600 $ 505,989

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 10

－ STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS NONCURRENT FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars)

CompanyName The Techgains Pan-Pacific Corporation Progate Group Corp. Book4U Co., Ltd.	Balance,January1,2021 Shares Amount 150,000 $ 373 114,508 974 6,250 - $ 1,347	Balance,January1,2021 Shares Amount 150,000 $ 373 114,508 974 6,250 - $ 1,347	Additions in	Investment Amount $ - - - $ -	Decrease in	Investment Amount $ - - - $ -	Balance,December 31,2021 Shares Amount 150,000 $ 373 114,508 974 6,250 - $ 1,347	Balance,December 31,2021 Shares Amount 150,000 $ 373 114,508 974 6,250 - $ 1,347
	Shares 150,000 114,508 6,250		Shares - - -		Shares - - -		Shares 150,000 114,508 6,250		Collateral
									Nil 〃 〃

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 11

STATEMENT OF CHANGES IN LONG-TERM EQUITY INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR 2021

(Unit Price Per Share Is New Taiwan Dollars. The Rest Is Amounts in Thousands of New Taiwan Dollars)

Investees Listed company at stock exchange market LI PENG Enterprise Co., Ltd. Listed company at over-the-counter market Rich Development Co., Ltd. Privately held companies LEA JIE Energy Co., Ltd. LI HAO Investment Co., Ltd. LI ZAN Investment Co., Ltd. LI XING Investment Co., Ltd. HONG XING Investment Co., Ltd. LI MAO Investment Co., Ltd. LIBOLON Enterprise Co., Ltd. LEALEA Technology Co., Ltd. FU LI Express Co., Ltd. Pt. Indonesia LIBOLON Fiber System LI LING Film Co., Ltd.	Balance,January1,2021 Shares Amount 145,353,853 $ 1,608,134 51,839,894 891,582 21,000,000 234,810 40,356,000 475,770 24,460,000 267,327 37,600,000 403,623 23,304,000 379,140 35,244,000 502,464 5,000,000 10,329 11,031,102 181,500 3,500,000 45,446 13,370,000 1,085,855 2,100,000 16,286 $ 6,102,266	Balance,January1,2021 Shares Amount 145,353,853 $ 1,608,134 51,839,894 891,582 21,000,000 234,810 40,356,000 475,770 24,460,000 267,327 37,600,000 403,623 23,304,000 379,140 35,244,000 502,464 5,000,000 10,329 11,031,102 181,500 3,500,000 45,446 13,370,000 1,085,855 2,100,000 16,286 $ 6,102,266	Additions in	Investment Amount $ - 10,662 - - - 8,846 - - - - - - - $ 19,508	Decrease in	Investment Amount $ 42,897 6,883 16,755 8,742 4,886 - 14,139 21,300 - 16,546 1,399 37,189 - $ 170,736	Investment (loss) profit $ 45,746 21,709 28,624 10,537 4,008 ( 203 ) 1,252 261 ( 1,616 ) 37,724 3,104 ( 47,984 ) ( 3,989) $ 99,173	Balance, December 31, 2021 Shares （％） Amount 145,353,853 15.89 $ 1,610,983 52,958,894 7.12 917,070 21,000,000 70.00 246,679 40,356,000 53.38 477,565 24,460,000 53.17 266,449 37,600,000 47.00 412,266 23,304,000 46.98 366,253 35,244,000 46.62 481,425 5,000,000 100.00 8,713 12,685,767 29.05 202,678 3,500,000 25.00 47,151 13,370,000 70.00 1,000,682 2,100,000 3.50 12,297 $ 6,050,211	Market Value or Net Assets Value(Note) Unit Price (NT$) Total Amount 10.3 $ 1,497,145 9.5 503,109 11.75 246,679 12.53 505,741 12.39 303,086 10.96 412,266 15.72 366,253 13.66 481,425 1.74 8,713 15.98 202,678 13.47 47,151 74.85 1,006,321 5.86 12,297 $ 5,592,864	Market Value or Net Assets Value(Note) Unit Price (NT$) Total Amount 10.3 $ 1,497,145 9.5 503,109 11.75 246,679 12.53 505,741 12.39 303,086 10.96 412,266 15.72 366,253 13.66 481,425 1.74 8,713 15.98 202,678 13.47 47,151 74.85 1,006,321 5.86 12,297 $ 5,592,864	Collateral
	Shares 145,353,853 51,839,894 21,000,000 40,356,000 24,460,000 37,600,000 23,304,000 35,244,000 5,000,000 11,031,102 3,500,000 13,370,000 2,100,000		Shares - 1,119,000 - - - - - - - 1,654,665 - - -		Shares - - - - - - - - - - - - -				Unit Price (NT$) 10.3 9.5 11.75 12.53 12.39 10.96 15.72 13.66 1.74 15.98 13.47 74.85 5.86
											Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil

Note 1: The market value refers to the unit price calculated by closing price as of December 31, 2021. The net asset value is calculated mainly based on the financial statements of the investee and the shareholding ratio of the Company.

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 12

STATEMENT OF RIGHT-OF-USE ASSETS FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars)

Item Cost: Land Accumulated depreciation: Land		Balance, January 1, 2021 $ 960 $ 240		Additions $ - $ 180		Deductions $ 1 $ -	Balance, December 31, 2021	Balance, December 31, 2021
								$ 959 $ 420

• 87 -

LEALEA ENTERPRISE CORPORATION Limited STATEMENT 13

－ STATEMENT OF OTHER NONCURRENTASSETS OTHER FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Item Refundable deposits Prepaid income tax Other noncurrent assets－ Other Overdue receivables Less: Allowance for bad debts	Description		Amount
		(	$ 1,217 2,111 63 18,099 18,099) $ 3,391

• 88 -

LEALEA ENTERPRISE CORPORATION Limited STATEMENT 14

STATEMENT OF SHORT-TERM LOANS

FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Bank Name Bank loans The Export-Import Bank of the Republic of China The Export-Import Bank of the Republic of China KGI Securities Investment Trust Co. Ltd. Mega International Commercial Bank Taishin International Bank, Jan Kuo-North-Road Branch Bank of Taiwan, Gong Guan Branch Bank of Taiwan, Gong Guan Branch Bank of Taiwan, Gong Guan Branch Bank of Taiwan, Gong Guan Branch Bank of Taiwan, Gong Guan Branch Cathay United Bank Company Limited, Guang Hua Branch Land Bank of Taiwan, Chang Zhang Branch Yuanta Securities Co., Ltd., Ban Qiao Branch Bangkok Bank Public Company Limited, Taipei Branch Shin Kong Commercial Bank Co., Ltd, Cheng Tai Nan Dong Branch	Amount of Loan $ 100,000 200,000 160,000 400,000 370,000 300,000 200,000 60,000 440,000 490,000 160,000 160,000 150,000 100,000 160,000 $ 3,450,000	Description Credit Loans Credit Loans Credit Loans Secured Loans Credit Loans Secured Loans Secured Loans Secured Loans Secured Loans Credit Loans Credit Loans Credit Loans Credit Loans Credit Loans Credit Loans	Contract Period 2021.06.29~2022.06.29 2021.06.29~2022.06.29 2021.12.30~2022.01.27 2021.12.30~2022.01.20 2021.12.15~2022.01.14 2021.02.23~2022.01.21 2021.12.15~2022.03.15 2021.12.29~2022.03.29 2021.12.16~2022.03.15 2021.12.10~2022.03.10 2021.11.30~2022.02.25 2021.12.29~2022.01.10 2021.11.16~2022.02.14 2021.12.29~2022.01.14 2021.12.24~2021.12.31	Interest Rates(%) 0.8688 0.3403 0.95 0.85 0.83 0.8208 0.81 0.81 0.81 0.82 0.80 0.86 0.81 0.86 0.80	Loan Commitments $ 300,000 300,000 300,000 700,000 420,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 160,000 200,000 150,000 100,000 160,000 $ 10,290,000	Collateral
						Nil Nil Nil The property at No. 16, Gongqu 7th Rd. and No. 38, Gongye Rd., Fangyuan Township, Changhua County 528011, Taiwan. Nil First Plant of Zhong Li and Third Plant of Zhanghua First Plant of Zhong Li and Third Plant of Zhanghua First Plant of Zhong Li and Third Plant of Zhanghua First Plant of Zhong Li and Third Plant of Zhanghua First Plant of Zhong Li and Third Plant of Zhanghua Nil Nil Nil Nil Nil

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 15

STATEMENT OF SHORT-TERM BILLS PAYABLES FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Item Commercial paper payable Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Secured	Guarantee or Acceptance Institutes Ta Ching Bills Finance Corporation China Bills Finance Co., Ltd. Mega Bills Finance Co., Ltd. Checking Deposits of Sung Shan Branch, TAICHUNG COMMERCIAL BANK Grand Finance Corporation Taiwan Cooperative Financial Holding Co., Ltd. International Bills Finance Corporation Grand Bills Finance Corporation Checking Deposits of Shih Lin Branch, The Shanghai Commercial & Savings	Contract Period 2021.12.14~2022.01.03 2021.12.23~2022.01.03 2021.12.27~2022.01.06 2021.12.17~2022.01.14 2021.12.20~2022.01.19 2021.12.14~2022.01.04 2021.10.22~2022.01.20 2021.12.14~2022.01.03 2021.12.23~2022.01.21	Range of Interest Rates(%) 0.58 0.40 0.65 0.36 0.60 0.68 0.55 0.48 0.38		Issuing Amount
					$ 150,000 150,000 170,000 200,000 100,000 100,000 100,000 100,000 190,000 $1,260,000

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 16

STATEMENT OF NOTES PAYABLES

FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars)

Vendor Name China Man-made Fiber Co.,Ltd Hung Chou Fiber Industral Co.,Ltd Chung Shing Textile Marketing Co.,Ltd Others (Note)	Description General Business 〃 〃 〃		Amount
			$ 54,427 39,060 10,000 1,970 $ 105,457

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

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 17

STATEMENT OFNOTES PAYABLES TO RELATED PARTIES FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Name LI PENG Enterprise Co., Ltd. FU LI Express Co., Ltd.	Description General Business General Business		Amount
			$ 57,700 649 $ 58,349

• 92 -

LEALEA ENTERPRISE CORPORATION Limited STATEMENT 18

STATEMENT OF ACCOUNTS PAYABLES FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars)

Vendor Name Oriental Petrochemical (Taiwan) Co. Ltd. Oriental Union Chemical Corporation Nan Ya Plastics Corporation China Man-made Fiber Co.,Ltd Others (Note)	Description General Business 〃 〃 〃 〃		Amount
			$ 288,938 59,577 55,409 45,960 102,382 $ 552,266

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

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 19

STATEMENT OF ACCOUNTS PAYABLES TO RELATED PARTIES FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars)

CompanyName LI PENG Enterprise Co., Ltd. FU LI Express Co., Ltd.	Description General Business 〃		Amount
			$ 73,410 1,854 $ 75,264

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 20

STATEMENT OF OTHER PAYABLES

FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars)

Item Salary and bonus payable Electricity bill payable Other notes payable Other payable (Note)	Description		Amount
			$ 135,097 45,550 44,526 343,386 $ 568,559

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

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 21

STATEMENT OF STATEMENT OF CURRENT PORTION OF LONG-TERM LOANS PAYABLE

FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Item The Export-Import Bank of the Republic of China	Description Current portion of long-term loans payable		Amount
			$ 175,000

• 96 -

LEALEA ENTERPRISE CORPORATION Limited STATEMENT 22

STATEMENT OF OTHER CURRENT LIABILITIES FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Item Advance sales receipt Temporary credits Others	Description		Amount
			$ 294,074 2,159 3,644 $ 299,877

• 97 -

LEALEA ENTERPRISE CORPORATION Limited STATEMENT 23

STATEMENT OF LONG-TERM LOANS

FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts in Thousands of New Taiwan Dollars)

Item The Export-Import Bank of the Republic of China The Export-Import Bank of the Republic of China KGI Bank	Description Unsecured loans with interests paid once every three months Unsecured loans with interests paid once every three months Unsecured loans with interest paid once every month Less: Repayments for current portion of long-term loans		Amount $ 125,000 400,000 300,000 175,000) $ 650,000	Contract Period 111.09.15 115.03.08 112.04.01	Interest Rates(%) 1.1298%~1.3690% 1.1293%～1.1297% 1.1883%～1.19078%	Collateral
		(				－ － －

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 24

STATEMENT OF NET REVENUE FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars)

Item Polyester fully oriented yarn and polyester chip Polyester draw textured yarn Polyester solid state PET chip Processing income Others (including raw material, steam, electricity, etc.)		Amount
		$ 2,099,838 4,964,610 2,094,669 1,314 134,677 $ 9,295,108

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 25

STATEMENT OF COST OF REVENUE FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars)

Item Direct raw material Balance, beginning of year Add: Raw material purchased Inventory in transit, beginning of year Estimated difference Less: Raw material, end of the year Inventory in transit, end of year Purchase allowance Other warehouse-out Requisition by departments Direct labor Manufacturing expenses Manufacturing cost Add: Work in process, beginning of year Less: Work in process, end of year Others Costs of Finished Goods Add: Finished goods, beginning of year Inventory in transit, beginning of year Finished goods purchased Estimated difference Loss from price recovery of inventory Less: Requisition by departments Finished goods, end of year Inventory in transit, end of year Income of leftover tailings sales Other warehouse-out Total

Amount

$ 444,597 5,718,834 6,054 8 ( 509,321 ) ( 5,491 ) ( 1,831 ) ( 37,425 ) ( 4,675) 5,610,750 392,316 2,328,672 8,331,738 25,869 ( 28,128 ) ( 3,409) 8,326,070 854,364 204,242 638,158 49 5,813 ( 5,070 ) ( 1,340,287 ) ( 475,537 ) ( 17,786 ) ( 914) $ 8,189,102

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 26

STATEMENT OF MARKETING EXPENSES FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars)

Item Transportation expense Others (Note)		Amount
		$ 640,686 48,105 $ 688,791

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

• 101 -

LEALEA ENTERPRISE CORPORATION Limited STATEMENT 27 STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars)

Item Salary and Wages Depreciation expense Service fee Others (Note)		Amount
		$ 87,655 11,467 8,482 30,036 $ 137,640

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

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LEALEA ENTERPRISE CORPORATION Limited STATEMENT 28

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES FOR THE YEAR 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item Salary and Wages Raw material Processing expenses Depreciation expense Others (Note)		Amount
		$ 13,423 10,314 2,433 2,766 7,300 $ 36,236

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

• 103 -

LEALEA ENTERPRISE CORPORATION Limited STATEMENT 29

STATEMENT OF LABOR, DEPRECIATION, DEPLETION, AND AMORTIZATION BY FUNCTION FOR THE YEAR 2021 AND 2020

(Amounts in Thousands of New Taiwan Dollars)

Labor cost Salary and bonus Labor and health insurance expenses Pension fund expenses Board compensation Other employee benefits Depreciation expenses Amortization expenses				2021		Total $ 594,225 60,320 23,205 12,674 47,908 $ 738,332 $ 542,791 $ 57,802				2020
	C	lassified as Costs of Revenue $ 505,820 54,123 19,873 - 43,345 $ 623,161 $ 528,559 $ 56,631		Classified as Operating Expenses $ 88,405 6,197 3,332 12,674 4,563 $ 115,171 $ 14,232 $ 1,171			C	lassified as Costs of Revenue $ 452,828 51,033 21,993 - 40,713 $ 566,567 $ 588,935 $ 54,007		Classified as Operating Expenses $ 73,322 6,305 3,657 3,195 4,361 $ 90,840 $ 16,447 $ 2,488		Total
												$ 526,150 57,338 25,650 3,195 45,074 $ 657,407 $ 605,382 $ 56,495

Note 1: As of December 31, 2021 and 2020, the Company had 1,057 and 1,103 employees, respectively. There were 6 non-employee directors in both years.

Note 2:

• (2.1) Average labor cost for the year ended December 31, 2021 was NT$690 thousand.

• “ ”－ “ ”

• 2021 Average Labor Cost = 2021 Employee Benefits Board Compensation －

• “2021 Employee Quantity” “Quantity of Non-Employee Directors” Average labor cost for the year ended December 31, 2020 was NT$596 thousand. 2020 Average Labor Cost = “2020 Employee Benefits”－ “Board Compensation” _ －

• “2020 Employee Quantity” “Quantity of Non-Employee Directors”

• (2.2) Average salary and bonus for the year ended December 31, 2021 was NT$565 thousand. 2021 Average Salary and Bonus = “2021 Salary and Bonus” －

• “2021 Employee Quantity” “Quantity of Non-Employee Directors” Average salary and bonus for the years ended December 31, 2020 was NT$480 thousand. 2020Average Salary and Bonus = “2020 Salary and Bonus” －

• “2020 Employee Quantity” “Quantity of Non-Employee Directors”

• (2.3) The average salary and bonus increased by 18% year over year.

• ”－“

• 2021 Average Salary and Bonus Increase = “2021 Average Salary and Bonus 2020Average Salary and Bonus

• “2020 Average Salary and Bonus”

Note 3: The audit committee has been established by the Company that did not appoint any supervisor; therefore there was no compensation to the supervisor.

Note 4: The Company’s compensation policies are as follows:

• (4.1) Board of Directors:

According to Article 28 of the Company’s Articles of Incorporation, the compensation to directors shall be no more than 5% of profits before tax of the period, which is calculated prior to the deduction of profit sharing bonus to employees and compensation to directors. However, when the Company has accumulated losses, the reserve shall be retained in advance before allocating the compensation to directors in accordance with the aforementioned proportion.

• (4.2) Executive Officers:

The Company offers competitive compensation package to employee, in order to enhance business performance and assure the executive officers to carry the responsibilities for business performance, and ensures that the competitiveness of the compensation package will motivate the employee to continue to perform for the Company.

• (4.3) Employee:

• 104 -

The compensation package offered to employees includes fixed salary and variable bonus, which is for assuring fair pay reflecting internal equity and external competitiveness. According to the Company’s Articles of Incorporation, the total amount of profit sharing bonus to employees shall be no less than 2% of annual profits before tax, which is calculated prior to the deduction of profit sharing bonus to employees and compensation to directors. Employee salary is determined by job responsibilities and professional proficiency. The bonuses and employee remuneration were provided in accordance with each employee's comprehensive performance and contribution.

• 105 -

• 106 -