Les enphants — Annual Report 2021

Nov 12, 2021

Les Enphants Co., Ltd. and Subsidiaries

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

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2021 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard No. 10 “Consolidated Financial Statements.” Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

LES ENPHANTS CO., LTD.

ALEX LIN Chairman March 24, 2022

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Les Enphants Co., Ltd.

Opinion

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

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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 Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the 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 consolidated financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Valuation of Inventories

Inventories are stated at the lower of cost or net realizable value. The net realizable value was based on judgments and accounting estimates made by management; therefore, we identified the valuation of inventories as a key audit matter in our audit for the year ended December 31, 2021.

The main audit procedures that we performed in respect of the valuation of inventories included obtaining the estimated data of inventories stated at the lower of cost or net realizable value by management; sampling recent sales data to evaluate the reasonableness of the net realizable value.

Disposal of Right-of-use Assets (Land Use Rights) and Property, Plant and Equipment

In order to repay bank loans and utilize funds flexibly, the Group disposed of the right-to-use assets (land use rights) and buildings of Suzhou Les Enphants Children Articles Co., Ltd., located in Taicang City, Suzhou to invest in the establishment of Suzhou Les Enphants Logistics Co., Ltd. After selling the entire equity of Suzhou Les Enphants Logistics Co., Ltd. to unrelated parties, the Group immediately leased back the right-of-use assets (land use rights) and buildings on the account of Suzhou Les Enphants Logistics Co., Ltd. and recognized the gain on disposal of $232,602 thousand. Refer to Notes 4 and 16 of the consolidated financial statements. Since the gain on disposal accounted for pre-tax net loss of (100.94)% was significant to the consolidated financial statements, we considered such disposal of right-of-use assets (land use rights) and property, plant and equipment as a key audit matter in 2021.

We performed the main audit procedures as follows:

1. We obtained the board meeting minutes of Company and confirmed the resolution of the disposal. We verified management’s compliance in the acquisition and disposal of assets.

2. We obtained the sales contract, real estate transfer documents and relevant tax documents, checked the property transfer certificate, and confirmed that gains or losses on disposal were properly calculated and expressed.

Other Matter

We have also audited the parent company only financial statements of Les Enphants Co., Ltd. as of and for the years ended December 31, 2021 and 2020 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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Those charged with governance, including the supervisors, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the 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 consolidated 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. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Shu-chuan Yeh and Ya-ling Wong.

Deloitte & Touche Taipei, Taiwan Republic of China

March 24, 2022

Notice to Readers

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

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

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LES ENPHANTS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through other comprehensive income - current (Note 8) Financial assets at amortized cost - current (Notes 9, 10 and 37) Notes receivable (Notes 11 and 25) Trade receivable from unrelated parties, net (Notes 11 and 25) Other receivables, net (Note 11) Inventories (Note 12) Prepayments Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Note 8) Investments accounted for using the equity method (Note 14) Property, plant and equipment (Notes 15 and 37) Right-of-use assets (Notes 16 and 37) Investment properties (Notes 17 and 37) Other intangible assets (Note 18) Deferred tax assets (Note 27) Refundable deposits Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 19 and 37) Financial liabilities at fair value through profit of loss - current (Note 7) Contract liabilities - current (Note 25) Notes payable (Note 21) Trade payables to unrelated parties (Note 21) Trade payables to related parties (Note 36) Other payables (Note 22) Current tax liabilities (Note 27) Lease liabilities - current (Note 16) Advance receipts Current portion of long-term borrowings (Notes 20 and 37) Other current liabilities (Note 22) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 20 and 37) Deferred tax liabilities (Note 27) Lease liabilities - non-current (Note 16) Net defined benefit liability - non-current (Note 23) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Ordinary shares Capital surplus Accumulated deficit Legal reserve Special reserve Accumulated deficit Total retained earnings Other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL		2021 Amount % $ 751,337 14 - - 40,263 1 25,249 - 434,664 8 198,031 4 1,476,179 27 104,526 2 2,681 - 3,032,930 56 54 - 111,285 2 519,130 10 703,672 13 867,828 16 42,862 1 49,219 1 81,312 1 2,375,362 44 $ 5,408,292 100 $ 1,091,033 20 8 - 68,819 1 9,536 - 657,824 12 6,942 - 369,919 7 1,029 - 210,872 4 1,368 - 1,691 - 37,336 1 2,456,377 45 - - - - 871,678 16 96,814 2 46,565 1 1,015,057 19 3,471,434 64 1,846,778 34 905,938 17 197,866 4 109,317 2 (971,244) (18) (664,061) (12) (195,407) (4) 1,893,248 35 43,610 1 1,936,858 36 $ 5,408,292 100		2020
				Amount % $ 283,189 6 289 - 56,298 1 26,181 1 401,086 8 72,664 1 1,390,289 29 79,368 2 1,924 - 2,311,288 48 2,635 - 124,228 3 685,503 14 654,770 13 889,831 18 43,582 1 64,452 1 84,059 2 2,549,060 52 $ 4,860,348 100 $ 831,857 17 37 - 75,471 2 528 - 459,904 9 8,952 - 323,384 7 284 - 184,966 4 549 - 11,074 - 42,863 1 1,939,869 40 1,849 - 9 - 562,324 11 128,157 3 44,081 1 736,420 15 2,676,289 55 1,846,778 38 905,938 19 197,866 4 109,317 2 (738,351) (15) (431,168) (9) (179,830) (4) 2,141,718 44 42,341 1 2,184,059 45 $ 4,860,348 100

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

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LES ENPHANTS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

OPERATING REVENUE (Notes 25 and 36) OPERATING COSTS (Notes 12, 26 and 36) GROSS PROFIT OPERATING EXPENSES (Note 26) Selling and marketing expenses General and administrative expenses Expected credit (gain) loss Total operating expenses LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 26, 30 and 36) Interest income Other income Other gains and losses Finance costs Share of loss or profit of associates Total non-operating income and expenses LOSS BEFORE INCOME TAX INCOME TAX EXPENSE (Note 27) NET LOSS FOR THE YEAR OTHER COMPREHENSIVE LOSS (Notes 23, 24 and 27) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Share of other comprehensive income (loss) of associates accounted for using the equity method Income tax relating to items that will not be reclassified subsequently to profit or loss		2021 Amount % $ 3,711,748 100 2,080,980 56 1,630,768 44 1,620,707 44 533,765 14 (816) - 2,153,656 58 (522,888) (14) 706 - 122,016 3 224,072 6 (49,130) (1) (5,216) - 292,448 8 (230,440) (6) 15,620 1 (246,060) (7) 9,777 - 7,306 - 337 - (1,966) - 15,454 -		2020
				Amount % $ 4,025,561 100 2,247,990 56 1,777,571 44 1,657,533 41 444,113 11 1,697 - 2,103,343 52 (325,772) (8) 1,196 - 99,920 2 (6,606) - (45,714) (1) (3,714) - 45,082 1 (280,690) (7) 36,548 1 (317,238) (8) (7,518) - (1,425) - (449) - 69 - (9,323) -

(Continued)

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LES ENPHANTS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Share of other comprehensive loss of associates accounted for using the equity method Income tax relating to items that may be reclassified subsequently to loss or profit Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE LOSS FOR THE YEAR NET (LOSS) PROFIT ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE (LOSS) PROFIT ATTRIBUTABLE TO: Owners of the Company Non-controlling interests LOSS PER SHARE (NEW TAIWAN DOLLARS; Note 28) Basic		2021 Amount % $ (10,719) - (5,876) - - - (16,595) - (1,141) - $ (247,201) (7) $ (243,083) (7) (2,977) - $ (246,060) (7) $ (248,470) (7) 1,269 - $ (247,201) (7) $ (1.32)		2020
				Amount % $ 18,426 - (3,354) - (8,468) - 6,604 - (2,719) - $ (319,957) (8) $ (319,547) (8) 2,309 - $ (317,238) (8) $ (323,798) (8) 3,841 - $ (319,957) (8) $ (1.72)
		$		$
		$		$
		$		$
		$		$
		$		$

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

(Concluded)

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LES ENPHANTS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2020 Net (loss) profit for the year ended December 31, 2020 Other comprehensive (loss) income for the year ended December 31, 2020, net of income tax Total comprehensive (loss) income for the year ended December 31, 2020 Buy-back of ordinary shares Cancelation of treasury shares Changes due to disposal of subsidiaries Changes in percentage of ownership interests in subsidiaries Disposal of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT DECEMBER 31, 2020 Net loss for the year ended December 31, 2021 Other comprehensive income (loss) for the year ended December 31, 2021, net of income tax Total comprehensive (loss) income for the year ended December 31, 2021 Disposal of investments in equity investments designated as at fair value through other comprehensive income BALANCE AT DECEMBER 31, 2021		Equity Attributable to Owners of	the Company	Non-controlling Interests Total (Notes 24, 31 and 32) $ 2,509,954 $ 67,147 (319,547) 2,309 (4,251) 1,532 (323,798) 3,841 (31,767) - - - - (41,318) (12,671) 12,671 - - 2,141,718 42,341 (243,083) (2,977) (5,387) 4,246 (248,470) 1,269 - - $ 1,893,248 $ 43,610	Total Equity $ 2,577,101 (317,238) (2,719) (319,957) (31,767) - (41,318) - - 2,184,059 (246,060) (1,141) (247,201) - $ 1,936,858
	Ordinary Shares (Note 24) Capital Surplus (Note 24) $ 1,963,248 $ 871,382 - - - - - - - - (116,470) 34,556 - - - - - - 1,846,778 905,938 - - - - - - - - $ 1,846,778 $ 905,938	Accumulated Deficit (Notes 24, 26 and 31) Legal Reserve Special Reserve Accumulated Deficit $ 197,866 $ 109,317 $ (400,426) - - (319,547) - - (7,717) - - (327,264) - - - - - - - - - - - (11,718) - - 1,057 197,866 109,317 (738,351) - - (243,083) - - 9,672 - - (233,411) - - 518 $ 197,866 $ 109,317 $ (971,244)	Other Equity (Notes 24 and 31) Exchange Differences on Translation of the Financial Statements Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Foreign Operations Comprehensive Income Treasury Shares (Note 24) $ (181,044) $ (242) $ (50,147) - - - 6,889 (3,423) - 6,889 (3,423) - - - (31,767) - - 81,914 - - - (953) - - - (1,057) - (175,108) (4,722) - - - - (16,430) 1,371 - (16,430) 1,371 - - (518) - $ (191,538) $ (3,869) $ -

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

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LES ENPHANTS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before income tax Adjustments for: Depreciation expense Amortization expense Expected credit (reversed) loss recognized on trade receivables Net loss (gain) on fair value change of financial assets designated as at fair value through profit or loss Finance costs Interest income Dividend income Share of loss of associates (Gain) loss on disposal of property, plant and equipment Loss on disposal of investment property Loss on disposal of intangible assets Gain on disposal of investments Impairment losses Net gain on lease modification Changes in operating assets and liabilities Notes receivable Trade receivables from unrelated parties Other receivables Inventories Prepayments Other current assets Contract liabilities - current Notes payable Trade payables to unrelated parties Trade payables to related parties Other payables Advance receipts Other current liabilities Net defined benefit liability Cash generated from operating activities Interest received Interest paid Income tax received Income tax paid Net cash generated from operating activities	2021 $ (230,440) 331,434 12,958 (816) (29) 49,130 (706) (1,359) 5,216 (225,813) 4,041 - (569) 52,086 (1,592) 932 (32,896) 5,932 (85,890) (25,158) (757) (6,652) 9,008 197,920 (1,941) 45,675 819 (5,527) (21,566) 73,440 706 (48,980) - (2,097) 23,069	2020 $ (280,690) 330,199 12,299 1,697 1 45,714 (1,196) (28) 3,714 5,487 13,391 10 - 27,332 (337) (4,915) 82,287 12,049 200,379 5,216 1,101 1,136 526 7,288 (5,651) (32,497) 88 15,128 (20,737) 418,991 1,196 (46,802) 725 (2,135) 371,975 (Continued)

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LES ENPHANTS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Disposal of financial assets at fair value through other comprehensive income Return of capital from financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sales of financial assets at amortized cost Disposal of interests in subsidiaries Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Payments for intangible assets Payments for investment properties Proceeds from disposal of investment properties Dividends received Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from guarantee deposits received Refund of guarantee deposits received Proceeds from payables to related parties Repayments of payables to related parties Repayment of lease liabilities Payments for buy back of ordinary shares Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2021 $ (169,994) 181,369 1,034 (5,360) 21,395 - (76,809) 462,967 - 2,747 (12,409) (688) 675 3,575 408,502 267,409 - - (11,127) 2,796 - - - (212,623) - 46,455 (9,878) 468,148 283,189 $ 751,337	2020 $ (29,394) 9,769 - (38,779) 20,741 (17,256) (69,763) 4,493 (12,189) - (27,041) (39) - 625 (158,833) - (76,846) 14,987 (42,345) - (5,578) 9,421 (4,710) (198,574) (31,767) (335,412) (6,656) (128,926) 412,115 $ 283,189

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

(Concluded)

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LES ENPHANTS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Les Enphants Co., Ltd. (the “Company”) was established in 1971. The Company’s shares have been listed on the Taiwan Stock Exchange. The Company mainly manufactures and sells clothes and toys for children and infants.

The consolidated financial statements of the Company and its subsidiaries, collectively referred to as the “Group”, are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on March 24, 2022.

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

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

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies and financial performance.

• b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2022

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”	Effective Date Announced by IASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

• Note 1: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

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• Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

The Group determined that as of the date the financial report was approved and authorized for issue, the above application of other standards and interpretations did not have material impact on the financial position and financial performance of the Group.

• c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction

Effective Date Announced by IASB (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 stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note 4: Except for deferred taxes that will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the financial report was approved and authorized for issue, the Group is continuously assessing the impact of the application of other standards and interpretations on the financial position and financial performance of the Group and will disclose the relevant impact when the assessment is completed.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

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

• b. Basis of preparation

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

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

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

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

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

• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

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

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period; and

• 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

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

• d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

• 14 -

When necessary, adjustments are made to the financial statements of subsidiaries to align their accounting policies with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

See Note 13, Tables 9 and 10 for the detailed information of subsidiaries (including percentages of ownership and main businesses).

e. Foreign currencies

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

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

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

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

For the purpose of presenting consolidated financial statements, the functional currencies of the Company and its foreign operations (including subsidiaries, associates in other countries that use currencies which are different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the Company and non-controlling interests as appropriate).

f. Inventories

Inventories consist of raw materials, supplies, finished goods and work in progress and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

g. Investments in associates

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture.

The Group uses the equity method to account for its investments in associates.

• 15 -

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

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

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

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

h. Property, plant and equipment

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

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

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

• i. Investment properties

Investment properties are properties held to earn rental and/or for capital appreciation. Investment properties include right-of-use assets and properties under construction that meet the definition of investment properties.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss.

Investment properties acquired through leases are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made on or before the commencement date, plus initial direct costs incurred and an estimate of costs needed to restore the underlying assets, less any lease incentives received. These investment properties are subsequently measured at cost less accumulated depreciation and accumulated impairment loss and adjusted for any remeasurement of the lease liabilities.

Depreciation is recognized using the straight-line method.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

• 16 -

• j. Intangible assets

• 1) Intangible assets acquired separately

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

• 2) Derecognition of intangible assets

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

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

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset, investment property and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

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

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

• l. Financial instruments

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

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

1) Financial assets

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

• 17 -

• a) Measurement categories

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

• i. Financial assets at amortized cost

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

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

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

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade receivables and other receivables are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset

• ii. Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

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

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

• b) Impairment of financial assets

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

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

• 18 -

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

For internal credit risk management purposes, the Group determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held by the Group):

• i. Internal or external information show that the debtor is unlikely to pay its creditors.

• ii. When a financial asset is more than 90 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

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

• c) Derecognition of financial assets

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

If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognizes its retained interest in the asset and any associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

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

2) Equity instruments

Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.

• 19 -

3) Financial liabilities

• a) Subsequent measurement

Except the following situations, all financial liabilities are measured at amortized cost using the effective interest method:

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when such financial liabilities are either held for trading or are designated as at FVTPL.

Financial liabilities held for trading are stated at fair value, and any remeasurement gains or losses on such financial liabilities are recognized in other gains or losses and do not incorporate any interest or dividends paid on such financial liability. Fair value is determined in the manner described in Note 36.

• b) Derecognition of financial liabilities

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

• 4) Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks.

Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument; in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets that is within the scope of IFRS 9 (e.g., financial liabilities) are treated as separate derivatives when they meet the definition of a derivative; their risks and characteristics are not closely related to those of the host contracts; and the host contracts are not measured at FVTPL.

m. Provisions

Provisions, including those arising from contractual obligations specified in service concession arrangements to maintain or restore infrastructure before it is handed over to the grantor and levies imposed by governments, are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

• n. Revenue recognition

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

• 20 -

For contracts where the period between the date on which the Group transfers a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, the Group does not adjust the promised amount of consideration for the effects of a significant financing component.

Revenue from the sale of goods comes from sales of production and sales of clothes, department store of children and toys. Revenue is recognized when the customer purchases the goods.

Under Customer Loyalty Program, the Group offers reward points when the customer shops. The reward points provides a material right to the customer. The transaction price allocated to the reward points is recognized as a contract liability when collected and will be recognized as revenue when the reward points is redeemed or has expired.

o. Leases

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

• 1) The Group as lessor

All leases are classified as operating leases.

When the Group subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. However, if the head lease is a short-term lease that the Group, as a lessee, has accounted by applying recognition exemption, the sublease is classified as an operating lease.

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

• 2) The Group as lessee

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

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets, except for those that meet the definition of investment properties. With respect to the recognition and measurement of right-of-use assets that meet the definition of investment properties, refer to Note 4(i) for the accounting policies for investment properties.

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

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

• 21 -

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

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

For sale and leaseback transactions, if the transfer of an asset satisfies the requirements of IFRS 15 to be accounted for as a sale, the Group recognizes only the amount of any gain or loss which relates to the rights transferred to the buyer-lessor.

p. Borrowing costs

All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

• q. Government grants

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

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

• r. Employee benefits

• 1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

• 2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cos and past service cos) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses, and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

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

• 22 -

Shanghai Les Enphants Children Articles Co., Ltd., Beijing Les Enphants Children Articles Co., Ltd., Suzhou Les Enphants Children Articles Co., Ltd., Shanghai L.E. Genius Co., Ltd., and Shanghai Lead Han Trading Co., Ltd. follow their local statute to set defined contribution retirement benefit plans. PT Les Enphants (Indonesia) Co., Ltd. do not have any employee retirement plans because they do not reach the standard for establishment of employees’ retirement plan of their local statutes.

• s. Taxation

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

• 1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

• 2) Deferred tax

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

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

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

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• 23 -

3) Current and deferred taxes

Current and deferred taxes 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 taxes are also recognized in other comprehensive income or directly in equity, respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The Company considers the possible impact of the recent development of the COVID-19 in the world and its economic environment implications when making its critical accounting estimates on cash flow projections, growth rate, discount rate, profitability, etc. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Key Sources of Estimation Uncertainty

Valuation of inventories

The net realizable value of inventory is the estimated selling price in the ordinary course of business less the estimated costs of completion and disposal. The estimation of net realizable value was based on current market conditions and historical experience with product sales of a similar nature. Changes in market conditions may have a material impact on the estimation of the net realizable value.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits		December 31	December 31
		2021 $ 9,958 741,379 $ 751,337	2020 $ 8,674 274,515 $ 283,189

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial liabilities financial liabilities held for trading-current Derivative financial liabilities (not under hedge accounting) Foreign exchange forward contracts (b)		**December **	**31 **
		2021 $ 8	2020 $ 37

• 24 -

• At the end of the reporting period, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

		Notional Amount
	Maturity Date	(In Thousands)
December 31, 2021
Sell NTD/Buy USD	2022.01.03	NTD187/USD7
Sell NTD/Buy USD	2022.01.26	NTD578/USD21
Sell NTD/Buy USD	2022.01.28	NTD258/USD9
Sell NTD/Buy USD	2022.02.16	NTD147/USD5
Sell NTD/Buy USD	2022.02.21	NTD94/USD3
Sell NTD/Buy USD	2022.03.16	NTD165/USD6
December 31, 2020
Sell NTD/Buy USD	2021.01.04	NTD80/USD3
Sell NTD/Buy USD	2021.01.05	NTD312/USD11
Sell NTD/Buy USD	2021.01.12	NTD462/USD16
Sell NTD/Buy USD	2021.01.13	NTD133/USD5
Sell NTD/Buy USD	2021.01.20	NTD364/USD13
Sell NTD/Buy USD	2021.01.25	NTD486/USD17
Sell NTD/Buy USD	2021.01.27	NTD512/USD18
Sell NTD/Buy USD	2021.03.02	NTD139/USD5
Sell NTD/Buy USD	2021.03.15	NTD231/USD8

The Group entered into foreign exchange forward contracts to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities.

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in Equity Instruments at FVTOCI

Current Depositary receipts Adjustments for change in value of investment Non-current Domestic unlisted ordinary shares Foreign unlisted ordinary shares Adjustments for change in value of investment		**December **	**31 **
		2021 $ - - $ - $ 54 3,869 3,923 (3,869) $ 54	2020 $ 2,689 (2,400) $ 289 $ 1,088 3,869 4,957 (2,322) $ 2,635

• 25 -

The Group holds the listed shares, the depositary receipts and the unlisted shares - domestic and foreign for medium to long-term strategic purposes and expects to profit from long-term investment. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Restricted bank deposit		December	31
		2021 $ 40,263	2020 $ 56,298

• a. As of December 31, 2021, and 2020, the range of interest rates for restricted bank deposit was approximately 0.01%-0.02% and 0.01%-0.30% per annum, respectively.

• b. Refer to Note 10 for information relating to their credit risk management and impairment.

• c. Refer to Note 38 for information relating to investments in financial assets at amortized cost pledged as security.

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

Investments in debt instruments are classified as at amortized cost.

At amortized cost Gross carrying amount Less: Allowance for impairment loss Amortized cost		December	31
		2021 $ 40,263 - $ 40,263	2020 $ 56,298 - $ 56,298

The credit risk of financial instruments such as bank deposits is measured and monitored by the finance department. The Group selects the transaction partners and the performing partners which are all banks with good credit.

11. NOTES RECEIVABLE, TRADE RECEIVABLE AND OTHER RECEIVABLES

Notes receivable At amortized cost Gross carrying amount Notes receivable - operating		December 31	December 31
		2021 $ 25,249 $ 25,249	2020 $ 26,181 $ 26,181 (Continued)

• 26 -

Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Real estate receivables Shares receivable (Note) Dividends receivable Others Less: Allowance for impairment loss		**December 31 **	**December 31 **
		2021 $ 470,105 35,441 $ 434,664 $ 132,698 21,016 - 44,707 198,421 390 $ 198,031	2020 $ 437,250 36,164 $ 401,086 $ - 22,680 28 50,739 73,447 783 $ 72,664

(Concluded)

Note: It is the outstanding payment on disposal of financial assets at fair value through other comprehensive income.

a. Notes receivable

As of December 31, 2021 and 2020, the notes receivable did not expire.

b. Trade receivables

The average credit period of sale of goods is 60-90 days. The Group regards the trade receivables which are overdue for certain number of days as default.

Except China, the Group applies the simplified approach for expected credit loss provision prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. Considering the economic situation at the time, the Group collects accounts receivable with similar credit risk characteristics and assesses loss allowance individually.

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

In China, management has assigned business units to determine credit limits, credit approvals and other regulatory procedures to ensure that follow-up measures are taken to recover overdue debts. In addition, according to IFRS 9 under the expected credit loss, the corresponding assessment of the impairment of receivables is performed. The business unit continues to track the recovery of the receivables and evaluates the situation according to the dunning communication status with the receivables. For its recoverability, when there is any forward-looking information that the trade receivables are not recoverable, it will start legal channels, including the legal unit to issue a dunning letter or initiate a lawsuit to list the corresponding bad debt provision. The trade receivables generated by the main business are subject to the individual recognition method for the provision of allowance for losses. That is, the business unit will communicate the trade receivables based on the status of the communication. Once in a lawsuit, 100% of the amount of the receivables will be provided as allowance for losses.

• 27 -

December 31, 2021

Except China, the following table details the loss allowance of trade receivables.

Not Past Due Less than 90 Days 91 to 180 Days Over 181 Days Gross carrying amount $ 236,313 $ 2,543 $ - $ - Loss allowance (lifetime ECL) (491) (2,470) - - Amortized cost $ 235,822 $ 73 $ - $ - The following table details the loss allowance of trade receivables in China. Normal Risk Suspicious Risk Gross carrying amount $ 198,769 $ 32,480 Loss allowance (lifetime ECL) - (32,480) Amortized cost $ 198,769 $ -	$	Total $ 238,856 (2,961) $ 235,895 Total 231,249 (32,480) 198,769
	$

The following table details the age of trade receivables in China.

Gross carrying amount Loss allowance (lifetime ECL) Amortized cost	Not Past Due Less than 90 Days $ 179,799 $ 17,765 - - $ 179,799 $ 17,765	91 to 180 Days $ 608 - $ 608	Over 181 Days $ 33,077 (32,480) $ 597	Total $ 231,249 (32,480) $ 198,769

December 31, 2020

Except China, the following table details the loss allowance of trade receivables.

Not Past Due Less than 90 Days 91 to 180 Days Over 181 Days Gross carrying amount $ 212,630 $ 1,861 $ 1,238 $ 163 Loss allowance (lifetime ECL) (129) (1,431) (1,238) (163) Amortized cost $ 212,501 $ 430 $ - $ - The following table details the loss allowance of trade receivables in China. Normal Risk Suspicious Risk Gross carrying amount $ 188,155 $ 33,203 Loss allowance (lifetime ECL) - (33,203) Amortized cost $ 188,155 $ -	$	Total $ 215,892 (2,961) $ 212,931 Total 221,358 (33,203) 188,155
	$

• 28 -

The following table details the age of trade receivables in China.

Gross carrying amount Loss allowance (lifetime ECL) Amortized cost	Not Past Due Less than 90 Days $ 181,848 $ 5,437 - - $ 181,848 $ 5,437	91 to 180 Days $ 230 - $ 230	Over 181 Days $ 33,843 (33,203) $ 640	Total $ 221,358 (33,203) $ 188,155

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

Balance at January 1 Change due to disposal of subsidiaries Add: Loss allowance Less: Amounts written off Less: Amounts recovered Foreign exchange gains and losses Balance at December 31	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 36,164 - 2,599 40 3,031 (251) $ 35,441	2020 $ 38,443 (1,982) 10,304 2,166 8,977 542 $ 36,164

12. INVENTORIES

Merchandise Finished goods Work in process Raw materials Supplies		**December 31 **	**December 31 **
		2021 $ 1,355,777 91,400 15,168 10,119 3,715 $ 1,476,179	2020 $ 1,272,769 84,228 19,292 10,892 3,108 $ 1,390,289

The nature of the cost of goods sold is as follows:

Cost of inventories sold Loss on (reversed) net realizable value of inventory Inventory write-downs Loss on inventory shrinkage		December 31	December 31
		2021 $ 2,039,496 (17,558) 20,534 467 $ 2,042,939	2020 $ 2,256,113 (63,648) 20,542 677 $ 2,213,684

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13. SUBSIDIARIES

Entities Included in the Consolidated Financial Statements

Investor Investee Nature of Activities Les Enphants Co., Ltd. L.E. Capital Enterprise Co., Ltd. Holding company Mike and Friends Co., Ltd. (Note 3) Distribution of children’s clothes and supplies L.E. Capital Enterprise Co., Ltd. L.E. Cayman Co., Ltd. Holding company L.E. International Co., Ltd. Holding company L.E. Genius Co., Ltd. (Note 4) Holding company L.E. Cayman Co., Ltd. L.E. Venture Co., Ltd. Holding company L.E. Venture Co., Ltd. Shanghai Les Enphants Children Articles Co., Ltd. Leasing, property management and distribution of children’s clothes and supplies Les Enphants Retail Group Co., Limited. Holding company Les Enphants Retail Group Co., Limited. Suzhou Les Enphants Children Articles Co., Ltd. (Note 6) Distribution of children’s clothes and supplies and warehousing transportation and distribution Shanghai Les Enphants Children Articles Co., Ltd. Shanghai Les Han Trading Co., Ltd. (Note 5) Distribution of children’s clothes and supplies Chengdu Lixue Education Technology Co., Ltd (Note 7) Development of educational facilities Suzhou Les Enphants Children Articles Co., Ltd. (Note 6) Distribution of children’s clothes and supplies and warehousing transportation and distribution Suzhou Les Enphants Children Articles Co., Ltd. Beijing Les Enphants Children Articles Co., Ltd. Distribution of children’s clothes and supplies Shanghai Lead Han Trading Co., Ltd (Note 5) Distribution of children’s clothes and supplies L.E. International Co., Ltd. PT Les Enphants (Indonesia) Co., Ltd. Distribution of children’s clothes and supplies Les Enphants (Thailand) Co., Ltd. Manufacture and distribution of children’s clothes and supplies Les Enphants Thailand Marketing Co., Ltd. Distribution of children’s clothes and supplies PT Les Enphants (Indonesia) Co., Ltd. PT Les Enphants Mitraprima Distribution of children’s clothes and supplies Les Enphants (Thailand) Co., Ltd. Les Enphants Thailand Marketing Co., Ltd. Distribution of children’s clothes and supplies Mike and Friends Co., Ltd. L.E. Champions Co., Ltd. (Note 1) Distribution of children’s clothes and supplies L.E. Champions Co., Ltd. L.E. Genius Co., Ltd. (Note 4) Holding company L.E. Genius Co., Ltd. Shanghai L.E. Genius Co., Ltd. (Note 7) Distribution of children’s toy

Percentage of Ownership December 31 2021 2020 Remark 100.00 100.00 The main operational risks are exchange rate risk and tax risk 100.00 100.00 100.00 100.00 The main operational risks are exchange rate risk and tax risk 100.00 100.00 The main operational risks are exchange rate risk and tax risk 51.00 51.00 The main operational risks are exchange rate risk and tax risk 100.00 100.00 The main operational risks are exchange rate risk and tax risk 100.00 100.00 The main operational risks are exchange rate risk and political risk 100.00 100.00 The main operational risks are exchange rate risk and tax risk 50.00 100.00 The main operational risks are exchange rate risk and political risk - 100.00 The main operational risks are exchange rate risk and political risk 100.00 - The main operational risks are exchange rate risk and political risk 50.00 - The main operational risks are exchange rate risk and political risk 100.00 100.00 The main operational risks are exchange rate risk and political risk - - The main operational risks are exchange rate risk and political risk 100.00 100.00 The main operational risks are exchange rate risk Note 2 Note 2 The main operational risks are exchange rate risk and political risk Note 2 Note 2 The main operational risks are exchange rate risk and political risk 98.45 98.45 The main operational risks are exchange rate risk Note 2 Note 2 The main operational risks are exchange rate risk and political risk 34.59 34.59 - - The main operational risks are exchange rate risk and tax risk 100.00 100.00 The main operational risks are exchange rate risk and political risk

• Note 1: Although the holding of Mike and Friends Co., Ltd. in L.E. Champions Co., Ltd. is only 34.59% and the Group does not have a majority of interest in L.E. Champions Co., Ltd., the Company has 50% representation in L.E. Champions Co., Ltd.’s Board. Thus, L.E. Champions Co., Ltd. is one of the consolidated entities.

• Note 2: The directors of Les Enphants (Thailand) Co., Ltd. and Les Enphants Thailand Marketing Co., Ltd. were re-elected in December 2019. Due to the long-term business strategy and direction, the Group did not appoint any director to serve. Therefore, on February 10, 2020 the board of directors passed a resolution to lose control of Les Enphants (Thailand) Co., Ltd. and Les Enphants Thailand Marketing Co., Ltd. and transferred these subsidiaries to ‘‘investments accounted for using the equity method’’ in 2020. Refer to Note 14.

• Note 3: In March 2020, Mike and Friend Co., Ltd. reduced its share capital to compensate loss of $20,000 thousand through share cancellations.

• Note 4: In December 2019, the board of directors of L.E. CHAMPIONS Co., Ltd. passed a resolution to sell the shares of L.E. Genius Co., Ltd. to L.E. Capital Enterprise Co., Ltd., and the share transfer was completed in the second quarter of 2020.

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• Note 5: On May 7, 2020, the board of directors of the Company passed a resolution to sell 100% of the shares of Shanghai Lead Han Trading Co., Ltd., a subsidiary of Suzhou Les Enphants Children Articles Co., Ltd., to Shanghai Les Enphants Children Articles Co., Ltd., and the share transfer was completed in the second quarter of 2020. Shanghai Lead Han Trading Co., Ltd. was dissolved on August 30, 2021.

• Note 6: On May 7, 2020 and in April 2020, the board of directors of the Company and L.E. Capital Enterprise Co., Ltd. passed a resolution of issuing additional shares to increase the capital of Suzhou Les Enphants Children Articles Co., Ltd. by US$3,000 thousand. On February 25, 2021, July 22, 2021 and October 21, 2021, respectively, the board of directors of Shanghai Les Enphants Children Articles Co., Ltd. passed a resolution of issuing additional shares to increase the capital of Suzhou Les Enphants Children Articles Co., Ltd. by US$5,000 thousand, US$3,000 thousand and US$5,000 thousand, respectively.

• Note 7: On February 25, 2021, the board of directors of Shanghai Les Enphants Children Articles Co., Ltd. passed a resolution to invest RMB2,000 thousand in Chengdu Xueyu Education Technology Co., Ltd. According to the laws in China, Chengdu Xueyu Education Technology Co., Ltd. is limited by direct investment of foreign judicial person. Shanghai Les Enphants Children Articles Co. entered into a shareholding entrustment agreement with Mr. Hong-Wei Mu. Under the agreement, Mr. Hong-Wei Mu would serve as the statutory representative and act as a private registered shareholder. Mr. Hong-Wei Mu held 100% shares of Chengdu Xueyu Education Technology Co., and invested RMB1,000 thousand in the third quarter of 2021.

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in Associates

Material associate Genius Toy Taiwan Co., Ltd. Les Enphants (Thailand) Co., Ltd. Les Enphants Thailand Marketing Co., Ltd. Associate Genius Toy Taiwan Co., Ltd. Les Enphants (Thailand) Co., Ltd. Les Enphants Thailand Marketing Co., Ltd.		**December 31 **
	2021 2020 $ 75,154 $ 74,617 21,501 28,217 14,630 21,394 $ 111,285 $ 124,228 Percentage of Ownership and Voting Rights
	**December 31 **
	2021 2020 20.00% 20.00% 49.00% 49.00% 49.00% 49.00%

Refer to Table 9 “Information on Investees” following the Notes to Consolidated Financial Statements for the nature of activities, principal place of business and country of incorporation of the associates.

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2021 and 2020 was based on the associates’ financial statements audited by the auditors for the same years. The Group measured the above associates by using the equity method.

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The directors of Les Enphants (Thailand) Co., Ltd. and Les Enphants Thailand Marketing Co., Ltd. were re-elected in December 2019. Due to the long-term business strategy and direction, the Group did not appoint any director to serve. Therefore, the board of directors on February 10, 2020 passed a resolution to lose control of Les Enphants (Thailand) Co., Ltd. and Les Enphants Thailand Marketing Co., Ltd. and transferred these subsidiaries to “investments accounted for using the equity method” in 2020. Refer to Note 13 “Subsidiaries” for more details.

Summarized financial information in respect of each of the Group’s material associates is set out below:

Genius Toy Taiwan Co., Ltd.

Current assets Non-current assets Current liabilities Non-current liabilities Equity Percentage of the Group’s ownership Equity attributable to the Group Unrealized loss on the investment in associates Goodwill Other adjustments Carrying amount Operating revenue Net profit for the year Other comprehensive gain (loss) Total comprehensive income for the year Dividends received		**December 31 **	**December 31 **
	2021 $ 213,921 49,467 (51,279) (25,550) $ 186,559 20.00% $ 37,312 (7) 26,376 11,473 $ 75,154 **For the Year Ended **		2020 $ 210,052 63,859 (56,981) (27,305) $ 189,625 20.00% $ 37,925 (1,157) 26,376 11,473 $ 74,617 **December 31 **
		2021 $ 283,489 $ 7,652 1,637 $ 9,289 $ 2,188	2020 $ 279,804 $ 21,822 (2,165) $ 19,657 $ 625

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Les Enphants (Thailand) Co., Ltd.

Current assets Non-current assets Current liabilities Non-current liabilities Equity Percentage of the Group’s ownership Equity attributable to the Group Unrealized loss on the investment in associates Carrying amount Operating revenue Total comprehensive loss for the year Les Enphants Thailand Marketing Co., Ltd. Current assets Non-current assets Current liabilities Non-current liabilities Equity Percentage of the Group’s ownership Equity attributable to the Group Carrying amount Operating revenue Total comprehensive loss for the year		December	31
	2021 2020 $ 42,026 $ 48,766 5,107 9,326 (3,105) (281) (146) (219) $ 43,882 $ 57,592 49.00% 49.00% $ 21,501 $ 28,220 - (3) $ 21,501 $ 28,217 For the Year Ended December 31
		2021 $ 6,866 $ (6,790) **December **	2020 $ 13,465 $ (8,711) **31 **
	2021 2020 $ 42,307 $ 57,782 2,365 3,203 (13,568) (16,074) (1,246) (1,248) $ 29,858 $ 43,663 49.00% 49.00% $ 14,630 $ 21,394 $ 14,630 $ 21,394 For the Year Ended December 31
		2021 $ 32,539 $ (8,753)	2020 $ 40,730 $ (9,167)

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15. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2021 Additions Disposals Reclassified Effects of foreign currency exchange differences Balance at December 31, 2021 Accumulated depreciation Balance at January 1, 2021 Depreciation expense Impairment loss Disposals Reclassified Effects of foreign currency exchange differences Balance at December 31, 2021 Carrying amount at December 31, 2021 Cost Balance at January 1, 2020 Change due to disposal of subsidiaries Additions Disposals Reclassified Effects of foreign currency exchange differences Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Change due to disposal of subsidiaries Depreciation expense Impairment loss Disposals Reclassified Effects of foreign currency exchange differences Balance at December 31, 2020 Carrying amount at December 31 2020	Land $ 156,057 - - - - $ 156,057 $ - - - - - - $ - $ 156,057 $ 156,057 - - - - - $ 156,057 $ - - - - - - - $ - $ 156,057	Buildings Leasehold Improvements $ 557,509 $ 442,144 - 16,331 (245,880 ) (31,216 ) 3,187 48,999 (3,087) (1,648) $ 311,729 $ 474,610 $ 193,274 $ 318,374 17,225 49,235 - 9,913 (105,609 ) (25,231 ) 599 782 (961) (1,183) $ 104,528 $ 351,890 $ 207,201 $ 122,720 $ 571,316 $ 438,239 - (5,710 ) - 10,091 - (34,206 ) (20,370 ) 30,569 6,563 3,161 $ 557,509 $ 442,144 $ 177,140 $ 274,192 - (5,684 ) 17,359 54,773 - 21,305 - (25,949 ) (3,369 ) (2,795 ) 2,144 2,532 $ 193,274 $ 318,374 $ 364,235 $ 123,770	Other Equipment Property Under Construction $ 135,135 $ 4,868 9,419 51,810 (15,422 ) - 882 (49,692 ) (639) (31) $ 129,375 $ 6,955 $ 98,562 $ - 14,140 - 5,116 - (14,235 ) - - - (405) - $ 103,178 $ - $ 26,197 $ 6,955 $ 160,016 $ 9,375 (32,490 ) - 14,370 48,089 (9,094 ) (650 ) 981 (51,989 ) 1,352 43 $ 135,135 $ 4,868 $ 122,062 $ - (29,348 ) - 13,027 - - - (8,021 ) - - - 842 - $ 98,562 $ - $ 36,573 $ 4,868	Total $ 1,295,713 77,560 (292,518 ) 3,376 (5,405) $ 1,078,726 $ 610,210 80,600 15,029 (145,075 ) 1,381 (2,549) $ 559,596 $ 519,130 $ 1,335,003 (38,200 ) 72,550 (43,950 ) (40,809 ) 11,119 $ 1,295,713 $ 573,394 (35,032 ) 85,159 21,305 (33,970 ) (6,164 ) 5,518 $ 610,210 $ 685,503

The Group estimates that the decrease in the future cash inflows derived from leasehold improvements leads the recoverable amount to be less than its carrying amount, and the impairment loss of $21,305 thousand is recognized in 2020. The impairment loss has been recognized in other gains and losses of comprehensive income.

The Group estimates that the decrease in the future economic benefits derived from leasehold improvements and other equipment leads the recoverable amount to be less than their carrying amount, and the impairment loss of $15,029 thousand is recognized in 2021. The Group estimates the recoverable amount through fair value less costs of disposal. The impairment loss has been recognized in other gains and losses of comprehensive income.

• 34 -

Depreciation is calculated on a straight-line basis over the estimated useful lives as follows:

Buildings 55-60 years Leasehold improvements 3-5 years Other equipment 3-15 years

Property, plant and equipment pledged as collateral for bank borrowings is set out in Note 38.

16. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amount Land Buildings Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Transportation equipment		**December 31 **	**December 31 **
	2021 $ 81,811 621,240 621 $ 703,672 For the Year Ended		2020 $ 106,959 545,273 2,538 $ 654,770 December 31
		2021 $ 261,128 $ 2,822 194,861 1,683 $ 199,366	2020 $ 140,552 $ 2,832 192,680 2,491 $ 198,003

The Group estimates that the decrease in the future cash inflows derived from the right-of-use assets - buildings leads the recoverable amount to be less than its value in use. The impairment loss of $6,027 thousand was recognized in 2020. The Group estimates the recoverable amount through its value in use, and the discount rate was 8.60%. The impairment loss has been recognized in other gains and losses of the consolidated statements of comprehensive income.

The Group estimates that the decrease in the future economic benefits derived from the right-of-use assets - buildings leads the recoverable amount to be less than their carrying amount, and the impairment loss of $24,966 thousand was recognized in 2021. The Group estimates the recoverable amount based on fair value less costs of disposal. The impairment loss has been recognized in other gains and losses of comprehensive income.

Except for the additions, depreciation charge, and impairment loss of right-of-use assets listed on the table above, there were no material subleases of the Group’s right-of-use assets in 2021 and 2020.

The Group subleased its leasehold Neihu headquarter building to a third party in 2018. Such sublease was classified as operating lease. Those right-of-use assets are listed as investment properties, refer to Note 17. The relevant amount of the right-of-use asset does not include the right-of-use asset that meets the definition of investment properties.

• 35 -

b. Lease liabilities

Carrying amount Current Non-current Range of discount rates for lease liabilities is as follows:		December 31	December 31
		2021 $ 210,872 $ 871,678	2020 $ 184,966 $ 562,324

Land Buildings Transportation equipment	December 31
	2021 2020 - - 1.67%-7.50% 1.67%-7.50% 1.50% 1.50%

c. Material lease-in activities and terms

In response to the Group’s medium- and long-term strategic development plan, the land and buildings of the Neihu headquarter building were sold to non-related parties for $1,296,685 thousand on September 29, 2017, and then they were leased back for use for a period of 20 years (the company may notify the owner of the termination of the lease 12 months in advance after the 6th month of the 15th lease year expires). The lease agreement does not have the terms of the off-take rights, and the annual lease payment is adjusted according to the terms of the lease contract.

In order to repay bank loans and utilize funds flexibly, Suzhou Les Enphants Children Articles Co. disposed of all shares to unrelated parties for $595,055 thousand (RMB136,983 thousand) on December 17, 2021. The Group immediately leased back the right-of-use assets (land use rights) and buildings for a period of ten years. The rights transferred by Suzhou Les Enphants Children Articles to unrelated parties were calculated based on the ratio of the lease liabilities and the acquisition price. The amount of right-of-use asset recognized was $75,099 thousand (RMB17,288 thousand). The amount of lease liability recognized was $276,053 thousand (RMB63,548 thousand). The gain on sale-leaseback (recognized in other profits and losses) recognized was $232,602 thousand (RMB53,582 thousand).

d. Other lease information

Lease arrangements under operating leases for the leasing out of investment properties are set out in Note 17.

Expenses relating to short-term leases/low-value asset leases Total cash outflow for leases	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2021 $ 30,126 $ (257,957)	2020 $ 35,886 $ (249,939)

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17. INVESTMENT PROPERTIES

Cost Balance at January 1, 2021 Additions Disposals Reclassified Effects of foreign currency exchange differences Balance at December 31, 2021 Accumulated depreciation Balance at January 1, 2021 Depreciation expense Impairment losses Disposals Reclassified Effects of foreign currency exchange differences Balance at December 31, 2021 Carrying amount at December 31, 2021 Cost Balance at January 1, 2020 Additions Disposals Reclassified Effects of foreign currency exchange differences Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expense Disposals Reclassified Effects of foreign currency exchange differences Balance at December 31, 2020 Carrying amount at December 31, 2020	Building $ 1,026,894 688 (18,841) (3,376) (7,692) $ 997,673 $ 308,251 31,704 - (14,125) (1,381) (2,293) $ 322,156 $ 675,517 $ 1,003,364 39 (34,089) 40,809 16,771 $ 1,026,894 $ 285,114 32,570 (20,698) 6,164 5,101 $ 308,251 $ 718,643	Right-of-use Assets $ 200,122 - - 52,978 - $ 253,100 $ 28,934 19,764 12,091 - - - $ 60,789 $ 192,311 $ 200,122 - - - - $ 200,122 $ 14,467 14,467 - - - $ 28,934 $ 171,188	Total $ 1,227,016 688 (18,841) 49,602 (7,692) $ 1,250,773 $ 337,185 51,468 12,091 (14,125) (1,381) (2,293) $ 382,945 $ 867,828 $ 1,203,486 39 (34,089) 40,809 16,771 $ 1,227,016 $ 299,581 47,037 (20,698) 6,164 5,101 $ 337,185 $ 889,831

The Group estimates that the decrease in the future economic benefits derived from the investment properties - right-of-use assets leads the recoverable amount to be less than its carrying amount, and the impairment loss of $12,091 thousand is recognized in 2021. The Group estimates the recoverable amount through fair value less costs of disposal. The impairment loss were recognized in other gains and losses of comprehensive income.

• 37 -

The maturity analysis of lease payments receivable under operating leases of investment properties as of December 31, 2021 and 2020 is as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 onwards		December 31	December 31
		2021 $ 167,046 131,245 77,550 63,334 47,520 154,342 $ 641,037	2020 $ 140,571 95,243 67,896 51,972 52,397 237,031 $ 645,110

The above items of investment properties are amortized on a straight-line basis over the useful lives for 10-60 years.

The fair value of the investment property in R.O.C. as of December 31, 2020 was $205,583 thousand. The fair value was not appraised by independent qualified professional valuers. It was determined by the Company’s management by reference to rentals of similar properties in the vicinity.

The determination of fair value in R.O.C. was performed by independent qualified professional valuers, and the fair value was measured by using of Level 3 inputs on December 31, 2021. The investment properties - self-owned investment properties were appraised by comparison method and capitalization method, and the fair value was $18,441 thousand. The investment properties - right-of-use assets were appraised based on market rental price and market interest rates at fair value, and the appraised fair value was $193,869 thousand.

The determination of fair value in China was performed by independent qualified professional valuers, and the fair value was measured by using Level 3 inputs; then a calculation was made to determine the ratio of the assessed amount to the total rental of all the investment properties. On December 31, 2021, the investment properties were appraised by comparison method and capitalization method, and the fair value was $1,219,934 thousand (RMB280,832 thousand). On December 31, 2020, the replacement cost approach used in investment properties was $1,220,973 thousand (RMB278,952 thousand).

Investment properties pledged as collateral for bank borrowings is set out in Note 38.

18. INTANGIBLE ASSETS

Cost Balance at January 1, 2021 Additions Derecognition Effects of foreign currency exchange differences Balance at December 31, 2021	Patent $ 17,479 544 (4,903) - $ 13,120	Computer Software $ 83,010 11,865 (19,909) (347) $ 74,619	Total $ 100,489 12,409 (24,812) (347) $ 87,739 (Continued)

• 38 -

Accumulated amortization Balance at January 1, 2021 Amortization expense Derecognition Effects of foreign currency exchange differences Balance at December 31, 2021 Carrying amount at December 31, 2021 Cost Balance at January 1, 2020 Change due to disposal of subsidiaries Additions Derecognition Effects of foreign currency exchange differences Balance at December 31, 2020 Accumulated amortization Balance at January 1, 2020 Change due to disposal of subsidiaries Amortization expense Derecognition Effects of foreign currency exchange differences Balance at December 31, 2020 Carrying amount at December 31, 2020	Patent $ 11,008 1,388 (4,903) - $ 7,493 $ 5,627 $ 15,705 - 1,774 - - $ 17,479 $ 9,628 - 1,380 - - $ 11,008 $ 6,471	Computer Software $ 45,899 11,570 (19,909) (176) $ 37,384 $ 37,235 $ 59,988 (1,839) 25,267 (1,225) 819 $ 83,010 $ 36,931 (1,137) 10,919 (1,215) 401 $ 45,899 $ 37,111	Total $ 56,907 12,958 (24,812) (176) $ 44,877 $ 42,862 $ 75,693 (1,839) 27,041 (1,225) 819 $ 100,489 $ 46,559 (1,137) 12,299 (1,215) 401 $ 56,907 $ 43,582 (Concluded)

The above items of intangible assets are amortized on a straight-line basis over the estimated useful lives as follows:

Patents 10 years Computer software 3-5 years

19. SHORT-TERM BORROWINGS

Unsecured bank loans Secured bank loans Other secured borrowings		December 31	December 31
		2021 $ 398,248 617,488 75,297 $ 1,091,033	2020 $ 497,451 301,389 33,017 $ 831,857

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At the end of the reporting period, the interest rates on the short-term loans were as follows:

Unsecured bank loans Secured bank loans Other secured borrowings	December 31
	2021 2020 1.30%-5.24% 0.51%-5.44% 1.30%-5.22% 1.34%-5.10% 4.77%-11.00% 4.65%

The secured bank loans of the Company from First Bank are collateralized by land, buildings and investment properties. Refer to Note 38.

The secured loans of Suzhou Les Enphants Children Articles Co., Ltd. from Chang Hwa Bank is collateralized by its buildings and right-of-use assets, and the borrowing period is from July 2020 to September 2021; another secured borrowing from IBT international lease Corp. is collateralized by its leasehold improvements and other equipment, and the borrowing period is from September 2021 to September 2022. Refer to Note 38.

The secured loans of Shanghai Les Enphants Children Articles Co., Ltd. from China Zheshang Bank is collateralized by its buildings and investment properties; another secured borrowing from Navigator Financial Leasing Co., Ltd. is collateralized by its leasehold improvements and investment properties. Refer to Note 38.

20. LONG-TERM BORROWINGS

Unsecured bank loans Less: Current portion		December	31
		2021 $ 1,691 1,691 $ -	2020 $ 12,923 11,074 $ 1,849

At the end of the reporting periods, the interest rates on long-term loans were as follows:

Other unsecured borrowings	December 31
	2021 2020 4.07% 4.07%

The secured borrowing of Suzhou Les Enphants Children Articles Co., Ltd. from SinoPac International Leasing Corp. is collateralized by its leasehold improvements and other equipment, and the borrowing period is from August 2020 to June 2022. Refer to Note 38.

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21. NOTES PAYABLE AND TRADE PAYABLES

Notes payable Operating Trade payables Operating		December 31	December 31
		2021 $ 9,536 $ 657,824	2020 $ 528 $ 459,904

22. OTHER LIABILITIES

Current Other payables Payable for salaries Payable for business tax Payable for purchases of equipment Payable for interest Others Other current liabilities Refund liability Others		December 31	December 31
		2021 $ 135,335 43,493 10,181 1,079 179,831 $ 369,919 $ 35,871 1,465 $ 37,336	2020 $ 126,318 61,300 9,471 929 125,366 $ 323,384 $ 40,819 2,044 $ 42,863

23. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

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

The employees of the Group’s subsidiary in China are members of a state-managed retirement benefit plan operated by the government of China. The subsidiary is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

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b. Defined benefit plans

The defined benefit plan adopted by the Company and Les Champions Co., Ltd. of the Group in accordance with the Labor Standards Act is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company and Les Champions Co., Ltd. contribute amounts equal to 2%, of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy.

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans are as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability		**December 31 **	**December 31 **	**December 31 **
		2021 The Company Les Champions Co., Ltd. $ 269,126 $ 11,208 (176,266) (7,254) $ 92,860 $ 3,954		2020
				The Company Les Champions Co., Ltd. $ 284,417 $ 10,522 (164,184) (2,598) $ 120,233 $ 7,924

Movements in net defined benefit liability are as follows:

Balance at January 1, 2021 Service cost Current service cost Net interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in demographic assumptions Actuarial gain - changes in financial assumptions Actuarial loss - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Balance at December 31, 2021 Balance at January 1, 2020 Service cost Current service cost Past service cost Net interest expense (income) Recognized in profit or loss	P	resent Value of the Defined Benefit Obligation he Company Les Champions Co., Ltd. $ 284,417 $ 10,522 4,343 238 844 37 5,187 275 - - 398 26 (10,748 ) (427 ) 2,631 812 (7,719) 411 - - (12,759) - $ 269,126 $ 11,208 $ 282,059 $ 9,727 4,678 226 (451 ) - 2,088 72 6,315 298		FairValue of the P	lan Assets es Champions Co., Ltd. $ (2,598) - (9) (9) (47 ) - - - (47) (4,600 ) - $ (7,254) $ (358) - - (2) (2)		Net Defined Benefi	t Liability
	T	he Company L $ 284,417 4,343 844 5,187 - 398 (10,748 ) 2,631 (7,719) - (12,759) $ 269,126 $ 282,059 4,678 (451 ) 2,088 6,315	T	he Company L $ (164,184) - (496) (496) (2,422 ) - - - (2,422) (21,602 ) 12,438 $ (176,266) $ (150,052) - - (1,134) (1,134)		T	he Company Les Champions Co., Ltd. $ 120,233 $ 7,924 4,343 238 348 28 4,691 266 (2,422 ) (47 ) 398 26 (10,748 ) (427 ) 2,631 812 (10,141) 364 (21,602 ) (4,600 ) (321) - $ 92,860 $ 3,954 $ 132,007 $ 9,369 4,678 226 (451 ) - 954 70 5,181 296 (Continued)

• 42 -

Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in demographic assumptions Actuarial (gain) loss - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Balance at December 31, 2020	P	resent Value of the Defined Benefit Obligation he Company Les Champions Co., Ltd. $ - $ - 12,868 450 (594) 47 12,274 497 - - (16,231) - $ 284,417 $ 10,522		FairValue of the P	lan Assets es Champions Co., Ltd. $ (151 ) - - (151) (2,087 ) - $ (2,598)		Net Defined Benefi	t Liability
	T	he Company L $ - 12,868 (594) 12,274 - (16,231) $ 284,417	T	he Company L $ (5,102 ) - - (5,102) (23,175 ) 15,279 $ (164,184)		T	he Company L $ (5,102 ) 12,868 (594) 7,172 (23,175 ) (952) $ 120,233	es Champions Co., Ltd. $ (151 ) 450 47 346 (2,087 ) - $ 7,924

(Concluded)

Through the defined benefit plans under the Labor Standards Act, the Group is exposed to the following risks:

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

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

• 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 are carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations are as follows:

Discount rate(s) Expected rate(s) of salary increase Turnover rate	December 31	December 31
	2021 The Company Les Champions Co., Ltd. 0.70% 0.70% 2.00% 3.00% 0.19% 0.22%	2020
		The Company Les Champions Co., Ltd. 0.30% 0.35% 2.00% 3.00% 0.38% 0.29%

• 43 -

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

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease Turnover rate 110% of default turnover rate 90% of default turnover rate		**December 31 **	**December 31 **	**December 31 **
		2021 The Company Les Champions Co., Ltd. $ (6,522) $ (297) $ 6,758 $ 306 $ 6,598 $ 299 $ (6,402) $ (291) $ (5) $ - $ 5 $ -		2020
				The Company Les Champions Co., Ltd. $ (7,286) $ (285) $ 7,562 $ 295 $ 7,365 $ 286 $ (7,135) $ (278) $ (35) $ - $ 35 $ -

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

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December 31	December 31	December 31
		2021 The Company Les Champions Co., Ltd. $ 11,368 $ 101 9 years 10 years		2020
				The Company Les Champions Co., Ltd. $ 11,162 $ 96 10 years 11 years

24. EQUITY

• a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Share issued		December 31	December 31
		2021 300,000 $ 3,000,000 184,678 $ 1,846,778	2020 300,000 $ 3,000,000 184,678 $ 1,846,778

The changes in the Company’s share capital in May 2020 and February 2020 were due to the cancellation of 4,264 thousand treasury shares ($42,640 thousand) and 7,383 thousand treasury shares ($73,830 thousand) respectively.

• 44 -

Ordinary shares issued had a par value of NT$10, and holders have the right to vote and receive dividends.

Of the Company’s authorized shares, 30,000 thousand shares and 5,000 thousand shares were reserved for the issuance of convertible bonds and employee share options, respectively.

• b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital Issuance of ordinary shares Treasury share transactions Others		**December 31 **	**December 31 **
		2021 $ 756,694 120,137 29,107 $ 905,938	2020 $ 756,694 120,137 29,107 $ 905,938

Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be appropriated as cash dividends or transferred to share capital.

On the cancellation of 4,264 thousand treasury shares and 7,383 thousand treasury shares in May 2020 and February 2020, respectively, the Company wrote off a capital surplus of $17,472 thousand and $30,250 thousand from the issuance of ordinary shares and recognized a capital surplus of $32,175 thousand and $50,103 thousand from treasury share transactions, which are the differences between the carrying amount of treasury shares and the sum of par value and capital surplus from the issuance of ordinary shares.

• c. Retained earnings and dividend policy

Under the dividends policy as set forth in the amended Articles, the Company’s Articles of Incorporation, the Company should make appropriations from its profit in the following order:

• 1) Offset of prior years’ deficit against the current year’s net income;

• 2) Legal reserve at 10% of the earnings balance;

• 3) Special reserve based on a directive by the Securities and Futures Bureau;

• 4) From any remaining balance, an appropriation based on a resolution passed at the shareholders’ meeting.

For the policies on distribution of compensation of employees and remuneration of directors and supervisors before and after amendment, refer to employee benefits expense in Note 26g.

The Company prefers to balance the distribution of share dividends and cash dividends, and share dividends are issued only when the Company has no earnings available for distribution. For cash dividends, the Company considers its operating scale and future cash capital requirements; for cash dividends, the amount should be at least 10% of total dividends.

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

• 45 -

The make-up for loss proposals for 2020 and 2019 were approved by the shareholders in the shareholders’ meetings on August 11, 2021 and June 12, 2020, respectively.

The appropriation of earnings for 2021 was proposed by the Company’s board of directors on March 24, 2022.

The appropriation of earnings for 2021 are subject to the resolution by the shareholders in the shareholders’ meeting to be held on June 23, 2022.

Under the Company Act article 211, the amount of the Company's accumulated deficit was $971,244 thousand as of December 31, 2020, and the accumulated deficit constitutes one half of its paid-in capital which is reported to the recent shareholders’ meetings.

• d. Special reserve

Balance at January 1 and December 31	For the Year Ended	For the Year Ended	December 31
		2021 $ 109,317	2020 $ 109,317

The increase in retained earnings that resulted from all IFRSs adjustments was not enough for this appropriation; therefore, the Company appropriated for special reserve an amount of $63,206 thousand, the increase in retained earnings that resulted from all IFRSs adjustments on transitions to IFRSs.

A proportionate share of special reserve relating to exchange differences from the translation of the financial statements of foreign operations (including the subsidiaries of the Company) will be reversed on the Group’s disposal of foreign operations; on the Group’s loss of significant influence, however, the entire special reserve will be reversed. Additional special reserve should be appropriated for the amount equal to the difference between net debit balance reserves and the special reserve appropriated on the first-time adoption of IFRSs. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and thereafter distributed.

e. Other equity items

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

Balance at January 1 Exchange differences on translation of the financial statements of foreign operations Related income tax Share of exchange difference of associates accounted for using equity method Other comprehensive income recognized for the year Change in equity ownership for subsidiaries Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2021 $ (175,108) (10,554) - (5,876) (16,430) - $ (191,538)	2020 $ (181,044) 18,711 (8,468) (3,354) 6,889 (953) $ (175,108)

• 46 -

• 2) Unrealized gain (loss) on financial assets at FVTOCI

Balance at January 1 Recognized for the year Unrealized gain (loss) - equity instruments Other comprehensive income recognized for the year Cumulative unrealized gain of equity investments transferred to retained earnings due to disposal Balance at December 31 Non-controlling interests Balance at January 1 Change due to disposal of subsidiaries Changes in percentage of ownership interest in subsidiaries Share of gain (loss) for the year Share of other comprehensive income for the year: Exchange differences on translation of the financial statements of foreign operations Unrealized gain on financial assets at fair value through other comprehensive income Remeasurement on defined benefit plans Related income tax Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ (4,722) 1,371 1,371 (518) $ (3,869) 2021 $ 42,341 - - (2,977) (165) 5,935 (238) (1,286) $ 43,610	2020 $ (242) (3,423) (3,423) (1,057) $ (4,722) 2020 $ 67,147 (41,318) 12,671 2,309 (285) 1,998 (226) 45 $ 42,341

• f. Non-controlling interests

• g. Treasury shares

	Maintaining the
	Credibility of
	the Company
Purpose of Buyback	(In Thousands)
Number of shares at January 1, 2020	6,883
Increase during the year	4,764
Decrease during the year	(11,647)
Number of shares at December 31, 2020	-

On September 3, 2019, the board of directors of the Company approved to buy back shares from the centralized trading market to protect the Company’s credit and shareholders’ equity. The period of purchase was from September 3 to November 1, 2019, and the Company bought back 3,053 thousand treasury shares in total for $21,889 thousand. On November 7, 2019, the board of directors of the Company approved to buy back shares from the centralized trading market to protect the Company’s credit and shareholders’ equity. The period of purchase was from November 7, 2019 to January 6, 2020, and the Company bought back 4,330 thousand treasury shares in total for $32,088 thousand. On February 10, 2020, the board of directors of the Company approved the cancellation of 7,383 buy-back shares, and the record date used for this reduction was February 12, 2020.

• 47 -

On February 10, 2020, the board of directors of the Company approved to buy back shares from the centralized trading market to protect the Company’s credit and shareholders’ equity. The period of purchase was from February 10 to April 9, 2020, and the Company bought back 4,264 thousand treasury shares in total for $27,937 thousand. Additionally, on May 7, 2020, the board of directors of the Company approved the cancellation of 4,264 buy-back shares, and the record date used for this reduction was May 8, 2020.

Under the Securities and Exchange Act, the Company should neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote.

25. REVENUE

Revenue from contract with customers Revenue from the sale of goods Revenue from process Rental income Revenue from the warehouse storage	2021 $ 3,665,731 867 45,150 $ 3,711,748	2020 $ 3,984,157 734 40,670 $ 4,025,561

a. Contract information

Revenue from sale of goods

The Group sells children’s clothes and supplies to wholesalers and directly to customers through its own retail stores and through internet sales. A volume discount is offered to wholesalers whose purchases exceed a specific threshold. The most likely expected discount amount is based on the wholesaler’s historical purchase records. All other goods are sold at respective fixed amounts as agreed in the contracts.

The Group’s customary business practice allows customers to return children’s clothes and supplies within a certain amount with a full refund. The rate of return is estimated using the most likely amount, taking into account the Group’s accumulated historical experience. The refund liability and the related right to recover products from customers are recorded accordingly.

b. Contract balances

December 31, 2021 December 31, 2020 Account receivables and Note receivables (include related parties) (Note 11) $ 459,913 $ 427,267 Contract liabilities Sale of goods $ 57,850 $ 64,920 Sale of goods (gift certificate) - Cathy Securities Investment Trust 8,859 8,532 Customer loyalty programs 2,110 2,019 $ 68,819 $ 75,471	January 1, 2020 $ 522,272 $ 62,745 8,208 3,382 $ 74,335

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

• 48 -

c. Contract detail

Refer to Table 43 for the details of revenue information.

26. NET LOSS

a. Interest income

Bank deposits Others Other income Rental income Investment properties Direct operating expenses from investment properties Depreciation expense from investment properties Dividends Other gains and losses Gain on sale and leaseback transaction Net foreign exchange gain (loss) Net gain on lease modification Gain on disposal of finance assets Net gain on financial assets designated as at FVTPL Impairment loss on right-of-use assets Impairment losses on property, plant and equipment Impairment loss on investments properties Loss on disposal of property, plant and equipment Loss on disposal of investments properties Loss on disposal of intangible assets Other revenue (Note 30) Other expenses	For the Year Ended	For the Year Ended	December 31
	2021 $ 417 289 $ 706 **For the Year Ended **		2020 $ 1,001 195 $ 1,196 **December 31 **
	2021 $ 212,025 (39,900) (51,468) 120,657 1,359 $ 122,016 For the Year Ended		2020 $ 185,679 (38,750) (47,037) 99,892 28 $ 99,920 December 31
		2021 $ 232,602 4,177 1,592 569 29 (24,966) (15,029) (12,091) (6,789) (4,041) - 50,074 (2,055) $ 224,072	2020 $ - 15,816 337 - 1 (6,027) (21,305) - (5,487) (13,391) (10) 28,707 (5,247) $ (6,606)

• b. Other income

c. Other gains and losses

• 49 -

d. Finance costs

Interest on bank loans Interest on lease liabilities Other interest expense Interest on loans from related parties e. Depreciation and amortization Property, plant and equipment Right-of-use assets Investment properties Intangible assets An analysis of depreciation by function Operating costs Operating expenses Other gains and losses An analysis of amortization by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
	2021 $ 31,511 15,207 2,264 148 $ 49,130 For the Year Ended		2020 $ 29,159 15,479 797 279 $ 45,714 December 31
		2021 $ 199,366 80,600 51,468 12,958 $ 344,392 $ 18,958 261,008 51,468 $ 331,434 $ 928 12,030 $ 12,958	2020 $ 198,003 85,159 47,037 12,299 $ 342,498 $ 16,917 266,245 47,037 $ 330,199 $ 550 11,749 $ 12,299

f. Employee benefits expense

Short-term benefits Post-employment benefits Defined contribution plans Defined benefit plans (Note 23) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2021 $ 763,489 95,070 4,957 100,027 118,374 $ 981,890 $ 57,262 924,628 $ 981,890	2020 $ 773,208 26,498 5,477 31,975 128,975 $ 934,158 $ 56,905 877,253 $ 934,158

• 50 -

• g. Compensation of employees and remuneration of directors

According to the Articles of Incorporation of the Company, the Company accrued compensation of employees and remuneration of directors at the rates of 5%-7% and no higher than 2%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. However, the Company should offset a deficit first when the Company has accumulated a deficit. For the years ended December 31, 2021 and 2020, the accumulated deficit of the Company was $971,244 thousand and $738,351 thousand, respectively. The Company had no earnings available for appropriation, so the compensation of employees and remuneration of directors were not estimated.

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences will be recorded as a change in the accounting estimate in the next fiscal year.

There was no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2020 and 2019.

Information on the compensation of employees and remuneration of directors resolved by the Company’s board of directors in 2021 and 2020 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

27. INCOME TAXES

a. Major components of tax expense recognized in profit or loss

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior periods Deferred tax In respect of the current year Adjustments for prior periods Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 1,717 1,029 96 2,842 12,179 599 12,778 $ 15,620	2020 $ 1,713 284 (124) 1,873 34,922 (247) 34,675 $ 36,548

• 51 -

A reconciliation of accounting loss and income tax expense is as follows:

Loss before tax from continuing operations Income tax benefit calculated at the statutory rate Non-deductible expenses in determining taxable income Tax-exempt income Income tax on unappropriated earnings Deferred tax effect of earnings of subsidiaries Foreign income tax expense Unrecognized deductible temporary differences/loss carryforwards Adjustments for prior years’ current tax Adjustments for prior years’ deferred tax Others Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2021 $ (230,440) $ (53,836) 5,649 (10,864) 1,029 (34,841) 1,717 106,071 96 599 - $ 15,620	2020 $ (280,690) $ (64,043) 4,871 (1,456) 284 (49,508) 1,712 142,248 (124) (247) 2,811 $ 36,548

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year Translation of foreign operations Remeasurement on defined benefit plans Total income tax recognized in other comprehensive income Current tax assets and liabilities Current tax liabilities Income tax payable	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ - (1,966) $ (1,966) December	2020 $ (8,468) 69 $ (8,399) 31
		2021 $ 1,029	2020 $ 284

• c. Current tax assets and liabilities

• 52 -

d. Deferred tax assets and liabilities

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

For the year ended December 31, 2021

Deferred tax assets Temporary differences Allowance for impaired receivables Accrued salaries Defined benefit obligation Loss carryforwards Deferred tax liabilities Temporary differences Unrealized exchange loss For the year ended December 31, 2020	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income Exchange Differences $ 3,635 $ (13 ) $ - $ (27 ) 3,179 1,200 - (23 ) 1,966 - (1,966) - 8,780 1,187 (1,966 ) (50 ) 55,672 (13,974) - (430) $ 64,452 $ (12,787) $ (1,966) $ (480) $ 9 $ (9) $ - $ -	Closing Balance $ 3,595 4,356 - 7,951 41,268
		$ 49,219
		$ -

Deferred tax assets Temporary differences Defined benefit obligation Provision for loss on inventories Exchange differences on translation of the financial statements of foreign operations Allowance for impaired receivables Payable for annual leave Accrued salaries Unrealized gross profit on sales Deferred revenue Unrealized exchange loss Others Loss carryforwards Deferred tax liabilities Temporary differences Share of profit or loss of associates Unrealized exchange loss	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income Exchange Differences $ 31,839 $ (29,942 ) $ 69 $ - 14,585 (14,585 ) - - 8,468 - (8,468 ) - 4,009 (433 ) - 59 3,033 (3,033 ) - - 2,925 201 - 53 1,430 (1,430 ) - - 377 (377 ) - - 190 (190 ) - - 253 (253) - - 67,109 (50,042 ) (8,399 ) 112 77,318 (22,441) - 795 $ 144,427 $ (72,483) $ (8,399) $ 907 $ 37,817 $ (37,817 ) $ - $ - - 9 - - $ 37,817 $ (37,808) $ - $ -	Closing Balance $ 1,966 - - 3,635 - 3,179 - - - -
		8,780 55,672
		$ 64,452
		$ - 9
		$ 9

e. Deductible temporary differences and unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets

Loss carryforwards Loss carryforwards (in thousands of RMB) Deductible temporary differences		December 31	December 31
		2021 $ 619,931 $ 227,650 $ 392,248	2020 $ 553,274 $ 258,483 $ 281,572

• 53 -

• f. Information on unused loss carryforwards

Loss carryforwards of the Company, Mike and Friends Co., Ltd. and Les Champions Co., Ltd. as of December 31, 2021 were comprised of the following:

Loss carryforwards Expiry in 2026 Expiry in 2027 Expiry in 2028 Expiry in 2029 Expiry in 2030 Expiry in 2031		**December 31 **	**December 31 **
		2021 $ 70,599 113,108 86,752 185,153 91,786 72,533 $ 619,931	2020 $ 70,599 113,108 87,904 189,897 91,786 - $ 553,294

Loss carryforwards of Shanghai Les Enphants Children Articles Co., Ltd., Suzhou Les Enphants Children Articles Co., Ltd., Beijing Les Enphants Children Articles Co., Ltd., Shanghai Lead Han Trading Co., Ltd., and Shanghai L.E. Genus Co., Ltd. as of December 31, 2021 were comprised of the following:

Loss carryforwards Expiry in 2021 Expiry in 2022 Expiry in 2023 Expiry in 2024 Expiry in 2025 Expiry in 2026		(In Thousands of RMB) **December 31 **	(In Thousands of RMB) **December 31 **
		2021 $ - 41,836 69,185 37,730 72,611 44,288 $ 265,650	2020 $ 49,935 41,836 79,658 54,046 83,875 - $ 309,350

g. Income tax assessments

The tax returns of the Company, Les Champions Co., Ltd. and Mike and Friends Co., Ltd. through 2019 have been assessed and cleared by the tax authorities.

• 54 -

28. LOSS PER SHARE

Basic loss per share The loss and weighted average number of ordinary shares outstanding in t are as follows: Net Loss for the Years Loss used in the computation of basic and diluted earnings per share Number of ordinary shares outstanding (in thousand shares): Weighted average number of ordinary shares outstanding in computation of basic loss per share	Unit: NT$ Per Share 2021 2020 $ (1.32) $ (1.72) he computation of loss per share 2021 2020 $ (243,083) $ (319,547) 2021 2020 184,678 185,288

29. SHARE-BASED PAYMENT ARRANGEMENTS

Restricted Share Plan for Employees

On March 26, 2015, the board of directors’ meeting approved a restricted share plan for employees with a total amount of $20,000 thousand, consisting of 2,000 shares, whose par value and issue price were $10 and $0, respectively. As of March 24, 2022, the Company has not issued any restricted shares for employees.

30. GOVERNMENT GRANTS

The Company acquired subsidies of COVID-19 from the Ministry of Economic Affairs, R.O.C. on July 23, 2021. The amount was $31,640 thousand, and it was recognized in other gains and losses to the statements of comprehensive income.

• 55 -

31. LOSS OF CONTROL ON SUBSIDIARIES

The directors of Les Enphants (Thailand) Co., Ltd. and Les Enphants Thailand Marketing Co., Ltd. were re-elected in December 2019. Due to the long-term business strategy and direction, the Group did not appoint any director to serve. Therefore, on February 10, 2020 the board of directors passed a resolution to lose control of Les Enphants (Thailand) Co., Ltd. and Les Enphants Thailand Marketing Co., Ltd. and transferred these subsidiaries to ‘‘investments accounted for using the equity method’’ in 2020.

Analysis of assets and liabilities on the date control was lost

	Les	Enphants
	(Thailand) Co.,
	Ltd. and Les
	Enphants
	Thailand
	Marketing Co.,
		Ltd.
Current assets
Cash and cash equivalents	$	17,256
Financial assets at amortized		17,145
Trade receivables		15,772
Other receivables		852
Inventories		50,867
Prepayments		2,119
Other current assets		3,210
Non-current assets
Property, plant and equipment		3,168
Intangible assets		702
Refundable deposits		1,805
Current liabilities
Notes payable		(151)
Trade payables		(665)
Other payables		(6,653)
Other current liabilities		(934)
Non-current liabilities
Other non-current liabilities		(1,463)
Net assets		103,030
Adjustments for non-controlling interests		(41,318)
Adjustments for investments accounted for using equity method	$	61,712

• 56 -

32. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

In April 2020, L.E. Champions Co., Ltd. sold its subsidiary L.E. Genius Co., Ltd. to L.E. Capital Enterprise Co., Ltd. for $29,204 thousand (US$964 thousand) which increased the percentage of its interest from 17.64% to 51.00%. This transaction was accounted for equity transactions, since the Group did not cease to have control over L.E. Genius Co., Ltd.

	L.E. Genus Co.,
	Ltd.
Consideration paid (33.36% of total consideration)	$ (19,102)
The proportionate share of the carrying amount of the net assets of the subsidiary
transferred to (from) non-controlling interests	6,431
Reattribution of other equity to the Company
Exchange differences on translation of the financial statements of foreign operations	953
Differences recognized from equity transactions	$ (11,718)
Line items adjusted for equity transactions
Unappropriated earnings	$ (11,718)

33. CASH FLOWS INFORMATION

• a. Non-cash transaction

For the years ended December 31, 2021 and 2020, the Group entered into the following non-cash investing and financing activities which were not reflected in the consolidated statements of cash flows: As of December 31, 2021 and 2020, the amount of property, plant and equipment acquired by the Group was $10,181 thousand and $9,471 thousand, respectively, which has not been paid, was recognized in other payables - payable for purchase of equipment.

• b. Changes in liabilities from financing activities

For the year ended December 31, 2021

Short-term borrowings Long-term borrowings (included current portion) Guarantee deposits received Trade payables to related parties Lease liabilities	Opening Balance $ 831,857 12,923 44,081 4,815 747,290 $ 1,640,966	Cash Flows $ 267,409 (11,127 ) 2,796 - (212,624) $ 46,454		Non-cashChanges Leases Movement Effects of Foreign Currency $ - $ (8,233 ) - (105 ) - (312 ) - (37 ) 548,264 (380) $ 548,264 $ (9,067)	Closing Balance $ 1,091,033 1,691 46,565 4,778 1,082,550 $ 2,226,617
				Leases Movement $ - - - - 548,264 $ 548,264

• 57 -

For the year ended December 31, 2020

Short-term borrowings Long-term borrowings (included current portion) Guarantee deposits received Trade payables to related parties Lease liabilities Other non-current liabilities	Opening Balance $ 915,188 40,000 49,009 - 814,561 1,463 $ 1,820,221	Cash Flows $ (76,847 ) (27,358 ) (5,578 ) 4,711 (198,573 ) - $ (303,645)	Non-cash Changes	Non-cash Changes	Effects of Foreign Currency $ (6,484 ) 281 650 104 1,340 - $ (4,109)	Closing Balance $ 831,857 12,923 44,081 4,815 747,290 - $ 1,640,966
			Effects of Retrospective Application $ - - - - - (1,463) $ (1,463)	Leases Movement $ - - - - 129,962 - $ 129,962

34. SEASONAL OPERATIONS

The Company mainly manufactures and sells apparel for children. Spring and summer apparel sells from April to August, and fall and winter apparel sells from September to March. Usually, the third quarter is generally a low season.

35. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group’s overall strategy remains unchanged in recent year.

The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Group comprising issued capital, capital surplus, retained earnings, other equity and non-controlling interests.

The Group is not subject to any externally imposed capital requirements.

Key management personnel of the Group review the capital structure on a quarterly basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Group may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and/or the amount of new debt issued or existing debt redeemed.

36. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

Management believes the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values, or their fair values cannot be reliably measured.

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

• 1) Fair value hierarchy

December 31, 2021 Financial assets at FVTOCI Domestic unlisted share Financial assets at FVTPL Derivative financial assets December 31, 2020 Financial assets at FVTOCI Depositary receipts Domestic unlisted share Financial assets at FVTPL Derivative financial assets	Level 1 $ - $ - Level 1 $ 289 - $ 289 $ -	Level 2 $ - $ 8 Level 2 $ - - $ - $ 37	Level 3 $ 54 $ - Level 3 $ - 2,635 $ 2,635 $ -	Total $ 54 $ 8 Total $ 289 2,635 $ 2,924 $ 37

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

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

For the year ended December 31, 2021

Financial Assets Balance at January 1, 2021 Recognized in other comprehensive income (included in unrealized valuation gain on financial assets at FVTOCI) Return of capital from financial assets Balance at December 31, 2021	Financial Assets at FVTOCI
	Equity Instruments $ 2,635 (1,547) (1,034) $ 54

• 59 -

For the year ended December 31, 2020

Financial Assets Balance at January 1, 2020 Recognized in other comprehensive income (included in unrealized valuation gain on financial assets at FVTOCI) Balance at December 31, 2020	Financial Assets at FVTOCI
	Equity Instruments $ 7,225 (4,590) $ 2,635

• 3) Valuation techniques and inputs applied for the purpose of Level 2 fair value measurement

Financial Instruments Derivatives - foreign currency forward contracts	Valuation Techniques and Inputs
	Future cash flows are estimated based on observable forward exchange rates at the end of the reporting period and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

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

	Financial Instruments	Valuation Techniques and Inputs	Valuation Techniques and Inputs
	Unlisted shares - domestic and	The asset method is used for evaluation based on the total value
	foreign	of individual assets and individual liabilities to show the
		overall value of investment target. Significant unobservable
		inputs are discounted by considering market liquidity.
	Categories of financial instruments
			December 31
			2021	2020
	Financial assets at amortized cost
	Cash and cash equivalents	$	751,337 $	283,189
	Financial assets at amortized cost		40,263	56,298
	Notes receivable		25,249	26,181
	Accounts receivable, net		434,664	401,086
	Other receivables, net		198,031	72,664
	Refundable deposits		81,311	84,059
	Financial assets at fair value through	other comprehensive
	income - current		-	289
	Financial assets at fair value through	other comprehensive
	income - non-current		54	2,635
				(Continued)

• c. Categories of financial instruments

• 60 -

Financial liabilities Fair value through profit or loss Held for trading Amortized cost Short-term borrowing Notes payable Accounts payable Trade payables to related parties Other payables Refund liability (presented other liabilities - current) Long-term borrowing (included current portion) Guarantee deposits receivable	**December 31 **
	2021 2020 $ 8 $ 37 1,091,033 831,857 9,536 528 657,824 459,904 6,942 8,952 191,091 135,766 35,871 40,819 1,691 12,923 46,565 44,081

(Concluded)

d. Financial risk management objectives and policies

The Group’s major financial instruments include equity and debt investments, accounts receivable, accounts payable, borrowings and bills payable. The Group’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (primarily to the, interest rate risk), credit risk and liquidity risk.

The Group seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provided written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Group did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Corporate Treasury function reports to the Group’s risk management committee, and the internal auditors also review the implementation of the policies constantly.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Group entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including:

There have been no changes in the Group’s exposure to market risks or the manner in which these risks were measured and managed.

a) Foreign currency risk

The Group holds foreign currency assets and liabilities, which exposes the Group to foreign currency risk.

• 61 -

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) and of the derivatives exposed to foreign currency risk at the end of the reporting period are set out in Note 41.

Sensitivity analysis

The Group is mainly exposed to the U.S. dollar.

The following table details the Group’s sensitivity to a 5% increase and decrease in the New Taiwan dollar (i.e., the functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items and foreign exchange forward contracts designated as cash flow hedges, and adjusts their translation at the end of the reporting period for a 5% change in foreign currency rates. A positive number below indicates a decrease in pre-tax profit and other equity associated with the New Taiwan dollar strengthening 5% against the relevant currency.

Profit or loss	U.S. Dollar Impact	U.S. Dollar Impact	U.S. Dollar Impact
	For the Year Ended December 31
		2021 $ 8,067	2020 $ 9,258

b) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows.

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2021 2020 $ - $ 16,036 1,835,274 1,292,070 587,435 192,996 340,000 300,000

Sensitivity analysis

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. The rate of a 1% increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s per-tax profit for the years ended December 31, 2021 and 2020 would have decreased/increased by $5,874 thousand and $1,930 thousand, respectively, which would have been mainly attributable to the Group’s exposure to interest rates on its variable-rate financial assets.

• 62 -

If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s per-tax profit for the years ended December 31, 2021 and 2020 would have decreased/increased by $3,400 thousand and $3,000 thousand, respectively, which would have been mainly attributable to the Group’s exposure to interest rates on its variable-rate financial liabilities.

The Group’s sensitivity to interest rates increased during the current period mainly due to the increase in variable rate debt instruments.

• c) Other price risk

The Group was exposed to equity price risk through its investments in listed equity securities and beneficiary certificate.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% lower, the fair value of FVTOCI and available for sale financial assets for the years ended December 31, 2021 and 2020 would have decreased by $0 thousand and $146 thousand, respectively.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. At the end of the reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation and financial guarantees provided by the Group could arise from:

• a) The carrying amount of the respective recognized financial assets as stated in the balance sheets; and

• b) The amount of contingent liabilities in relation to financial guarantee issued by the Group.

The Group adopted a policy of dealing only with creditworthy counterparties, which were mostly reputable department stores and shopping malls; the Group’s exposure and the operating performance of its counterparties are continuously monitored. From historical experience, the Group considers that the possibility of facing a credit-related risk is low.

The Group provided endorsements/guarantees only to subsidiaries within the Group to help them get loans from financial institutions. The loans are evaluated on the basis of their actual needs, and this evaluation and all related procedures and processes are in accordance with the policies and regulations of the Group. Further approval of the loans by the Group’s board of directors is also required. Under this approval system, the possibility of default on endorsed/guaranteed loans is rather limited/low.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

• 63 -

Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the Group’s short, medium and long-term funding and liquidity management requirements.

The Group manages liquidity risk by maintaining adequate cash, reserves and using variety of equity and liability instruments, and continuously monitoring forecast and actual cash flows as well as matching the maturity profiles of financial assets and liabilities.

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

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

To the extent that interest flows are floating rate, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

The non-interest-bearing financial liabilities of the Group's current liabilities are due within one year and not required to be paid off. Guarantee deposits received in non-current financial liabilities are mainly deposited by customers as credit guarantees and have no specific maturity date. The maturity analysis of interest-bearing financial liability contracts as shown in the following table is summarized based on the agreed maturity amount.

December 31, 2021

Non-derivative financial liabilities Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities	Less Than 1 Year $ 228,835 340,983 779,208 $ 1,349,026	1-5 Years Over 5 Years $ 528,898 $ 454,959 - - - - $ 528,898 $ 454,959

Additional information on the maturity analysis for lease liabilities:

Lease liabilities	Less Than 1 Year $ 228,835	1-5 Years $ 528,898	5-10 Years 10-15 Years $ 416,294 $ 38,665

• 64 -

December 31, 2020

Non-derivative financial liabilities Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities	Less Than 1 Year $ 202,319 301,082 547,963 $ 1,051,364	1-5 Years Over 5 Years $ 329,845 $ 316,351 - - 1,984 - $ 331,829 $ 316,351

Additional information on the maturity analysis for lease liabilities:

Lease liabilities	Less Than 1 Year $ 202,319	1-5 Years $ 329,845	5-10 Years 10-15 Years $ 221,153 $ 95,198

The amounts included above for variable interest rate instruments under non-derivative financial liabilities are subject to change if changes in variable interest rates differ from the interest rates estimated at the end of the reporting period.

b) Liquidity and interest risk rate tables for derivative financial liabilities

The following table detailed the Group’s liquidity analysis for its derivative financial instruments. The table was based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by the yield curves at the end of the reporting period.

December 31, 2021

On Demand or Less than 1 Month Gross settled Foreign exchange forward contracts Inflows $ 1,017 Outflows (1,023) $ (6)	1 Month to 1 Year $ 404 (406) $ (2)

• 65 -

December 31, 2020

c)	Gross settled Foreign exchange forward contracts Inflows Outflows Financing facilities Unsecured bank loan facilities: Amount used Amount unused Amount used Amount unused (In thousands of USD) Amount used Amount unused (In thousands of RMB) Secured bank loan facilities: Amount used Amount unused Amount used Amount unused (In thousands of USD) Amount used Amount unused (In thousands of RMB)	On Demand or Less than 1 Month 1 $ 2,314 (2,349) $ (35) **December **	On Demand or Less than 1 Month 1 $ 2,314 (2,349) $ (35) **December **	Month to 1 Year $ 368 (370) $ (2) **31 **
			2021 $ 250,000 530,000 $ 780,000 $ 6,000 - $ 6,000 $ 15,000 - $ 15,000 $ 100,000 160,000 $ 260,000 $ - - $ - $ 100,000 45,000 $ 145,000	2020 $ 175,000 630,000 $ 805,000 $ 6,000 - $ 6,000 $ 34,520 3,480 $ 38,000 $ 150,000 110,000 $ 260,000 $ 1,500 1,500 $ 3,000 $ 24,800 200 $ 25,000

• 66 -

37. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, have been eliminated on consolidation and are not disclosed in this note. Besides as disclosed elsewhere in the other notes, details of transactions between the Group and its related parties are disclosed below.

• a. Related party category/name

Related-party Name Related Party Category

Genius Toy Taiwan Co., Ltd. Associate

• b. Sales of goods

Line Item Related-party Type Revenue from sale of goods Associates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ -	2020 $ 30

The Group sold its own products to related parties at 55% of retail price. The collection periods were 60 days.

• c. Purchases of goods

Related-party Type Associates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 2,924	2020 $ 16,121

The Group bought products from L.E. Genius Toy (Taiwan) Co., Ltd. at 35% to 60% of retail price. The payment period was 60 to 90 days.

• d. Other income

Related-party Type Associates	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 161	2020 $ 498

Other income is calculated using the agreed-upon price in accordance with the contractual agreements signed by the Group and Genius Toy Taiwan Co., Ltd.

• e. Payables to related parties (excluding loans from related parties)

Line Item Related-party Type Trade payables to related parties Associates		**December **	**31 **
		2021 $ 2,164	2020 $ 4,137

The outstanding trade payables to related parties were unsecured.

Except for those transactions described above, the related-party transactions were conducted under normal terms.

• 67 -

f. Loans from related parties

Line Item Related-party Type Payables to related parties Associates Interest expense Related-party Type Associates		December	31
	2021 2020 $ 4,778 $ 4,815 For the Year Ended December 31
		2021 $ 148	2020 $ 279

Interest rate of borrowings from related parties to the Group is similar to that of the market. The borrowings from related parties are unsecured or uncollateralized.

• g. Remuneration of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 55,644 2,372 $ 58,016	2020 $ 48,309 1,440 $ 49,749

The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.

38. ASSETS PLEDGED AS COLLATERALS OR FOR SECURITY

The Group’s assets pledged as collateral for electronic gift certificates and long-term liabilities are as follows:

Financial assets at amortized cost - restricted assets Property, plant, and equipment Right-of-use assets Investment properties		December 31	December 31
		2021 $ 40,263 428,336 81,811 674,341 $ 1,224,751	2020 $ 56,298 459,947 22,221 6,030 $ 544,496

• 68 -

39. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group are as follows:

Unrecognized commitments are as follow:

	December 31,	December 31,
		2021
Purchase of property, plant and equipment
The Company	$	4,004
Shanghai Les Enphants Children Articles Co., Ltd. (in thousands of RMB thousand)	$	38
Suzhou Les Enphants Children Articles Co., Ltd. (in thousands of RMB thousand)		3,988
Beijing Les Enphants Children Articles Co., Ltd. (in thousands of RMB thousand)		260
	$	4,286

40. OTHER MATTERS

The impact of the COVID-19 pandemic which has evolved globally and currently in Taiwan resulted in the impairment of the Group’s property, plant and equipment, right-of-use assets and investment properties in 2021 and 2020 (refer to Notes 15, 16 and 17).

Although the domestic epidemic situation has slowed and the government’s policies have been loosened, the Group expects that the operations will gradually return to normal. Based on the assessment, the Group’s overall business and financial position are not affected significantly and materially; therefore, there is no doubt on its financing risk and ability to continue as a going concern.

41. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the entities in the Group and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies are as follows:

(In Thousands)

December 31, 2021
		Foreign		Carrying
	Currency		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	2,506	27.68 (USD:NTD)	$	69,364
USD		715	6.37 (USD:RMB)		19,802
USD		662	13,979.80 (USD:IDR)		18,054
Non-monetary items
Investment accounted for using the
equity method
THB		43,288	0.8347 (THB:NTD)		36,131
					(Continued)

• 69 -

		Foreign		Carrying	Carrying
	Currency		Exchange Rate	Amount
Financial liabilities
Monetary items
USD	$	1,440	27.68 (USD:NTD)	$	39,871
USD		8,257	6.37 (USD:RMB)		228,687
					(Concluded)
December 31, 2020
		Foreign		Carrying
	Currency		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	2,551	28.48 (USD:NTD)	$	72,639
USD		616	6.52 (USD:RMB)		17,535
USD		671	14,245.19 (USD:IDR)		19,415
Non-monetary items
Investment accounted for using the
equity method
THB		51,920	0.9555 (THB:NTD)		49,611
Financial liabilities
Monetary items
USD		1,498	28.48 (USD:NTD)		42,671
USD		8,828	6.52 (USD:RMB)		252,069

For the years ended December 31, 2021 and 2020, realized and unrealized net foreign exchange gains (losses) were $4,177 thousand and $15,816 thousand, respectively. It is impractical to disclose net foreign exchange (losses) gains by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the entities in the Group.

42. SEPARATELY DISCLOSED ITEMS

• a. Information on significant transactions

• 1) Financing provided to others. (Table 1).

• 2) Endorsements/guarantees provided. (Table 2).

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

• 4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital. (Table 4).

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

• 70 -

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (Table 5).

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 6).

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 7).

• 9) Trading in derivative instruments. (Note 7).

• 10) Intercompany relationships and significant intercompany transactions. (Table 8).

• b. Information on investees. (Table 9).

• c. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 10).

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

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

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

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

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

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

  • f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services. (Table 8)

• d. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 11).

• 71 -

43. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Specifically, the Group’s reportable segments were as follows:

• Taiwan area.

• China area.

• Other area.

• a. Segment revenue and results

The analysis of the Group’s revenue and results by reportable segment was as follows:

Taiwan area China area Other area Total for operations Interest income Other income Share of profit or loss of associates accounted for using equity method Financial cost Other gains and losses Loss before tax		Segment Revenue For the Year Ended December 31 2021 2020 $ 2,162,900 $ 2,301,658 1,548,848 1,723,903 - - $ 3,711,748 $ 4,025,561		Segment Loss	Segment Loss
				For the Year Ended December 31
		2021 $ 2,162,900 1,548,848 - $ 3,711,748		2021 $ (80,112) (442,776) - (522,888) 706 122,016 (5,216) (49,130) 224,072 $ (230,440)	2020 $ (49,257) (276,514) (1) (325,772) 1,196 99,920 (3,714) (45,714) (6,606) $ (280,690)

Segment revenue reported above was from external customers. The intersegment sales for the years ended December 31, 2021 and 2020 have been eliminated completely in preparing the consolidated financial statements.

Segment profit represents the profit earned by each segment without the investment income or loss recognized under the equity method, interest income, finance costs, gain or loss on disposal of financial instruments, exchange gain or loss, valuation gain or loss on financial instruments, gain or loss on disposal of properties, other income, other expense and income tax expense. This was the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

• 72 -

b. Segment total assets and liabilities

Taiwan area China area Other area Total consolidated segment assets Taiwan area China area Other area Total consolidated segment liabilities		December 31	December 31
		2021 $ 2,335,583 3,036,469 36,240 $ 5,408,292 $ 1,674,535 1,796,445 454 $ 3,471,434	2020 $ 2,254,532 2,556,093 49,723 $ 4,860,348 $ 1,507,264 1,167,947 1,078 $ 2,676,289

• c. Geographical information

The Group operates in three principal geographical areas - Taiwan, China and other.

The Group’s revenue from external customers by location of operations and information on its non-current assets by location of assets are detailed below.

Taiwan China		Revenue from External Customers For the Year Ended December 31 2021 2020 $ 2,162,900 $ 2,301,658 1,548,848 1,723,903 $ 3,711,748 $ 4,025,561		Non-current Assets	Non-current Assets
				**December 31 **
		2021 $ 2,162,900 1,548,848 $ 3,711,748		2021 $ 1,011,278 1,122,214 $ 2,133,492	2020 $ 993,504 1,280,182 $ 2,273,686

Non-current assets include property, plant and equipment, right-of-use assets, investment properties, intangible assets and other non-current assets.

• d. Information on major customers

No single customer contributed 10% or more to the Group’s revenue for both years ended December 31, 2021 and 2020.

• 73 -

TABLE 1

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period (Note 2)	Ending Balance (Note 2)	Actual Borrowing Amount (Note 2)	Interest Rate (%)	Nature of Financing (Note 1)	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 3)	Aggregate Financing Limits (Note 3)	Note
													Item	Value
1	Shanghai Les Enphants Children Articles Co., Ltd.	Shanghai Lead Han Trading Co., Ltd.	Other receivables from related parties	Yes	$ 65,160 (RMB 15,000 thousand)	$ -	$ -	3.34	b	$ -	Operational needs	$ -	-	$ -	$ 532,922	$ 532,922	Note 4
2	Shanghai Les Enphants Children Articles Co., Ltd.	Suzhou Les Enphants Children Articles Co., Ltd.	Other receivables from related parties	Yes	543,000 (RMB 125,000 thousand)	434,400 (RMB 100,000 thousand)	145,524 (RMB 33,500 thousand)	3.34 (Note 5)	b	-	Operational needs	-	-	-	532,922	532,922
3	Shanghai Les Enphants Children Articles Co., Ltd.	Chengdu Lixue Education Technology Co., Ltd	Other receivables from related parties	Yes	4,344 (RMB 1,000 thousand)	4,344 (RMB 1,000 thousand)	-	-	b	-	Operational needs	-	-	-	532,922	532,922
4	L. E. Capital Enterprise Co., Ltd.	Shanghai Les Enphants Children Articles Co., Ltd.	Other receivables from related parties	Yes	152,240 (US$ 5,500 thousand)	152,240 (US$ 5,500 thousand)	52,592 (US$ 1,900 thousand)	2.39 (Note 6)	b	-	Operational needs	-	-	-	502,006	502,006
5	L.E. Capital Enterprise Co., Ltd.	Suzhou Les Enphants Children Articles Co., Ltd.	Other receivables from related parties	Yes	166,080 (US$ 6,000 thousand)	166,080 (US$ 6,000 thousand)	-	2.39	b	-	Operational needs	-	-	-	502,006	502,006
6	L. E. Capital Enterprise Co., Ltd.	L.E. Genius Co., Ltd.	Other receivables from related parties	Yes	4,778 (RMB 1,100 thousand)	4,778 (RMB 1,100 thousand)	4,778 (RMB 1,100 thousand)	4.78 (Note 7)	b	-	Operational needs	-	-	-	502,006	502,006
7	Suzhou Les Enphants Children Articles Co., Ltd.	Shanghai Lead Han Trading Co., Ltd.	Other receivables from related parties	Yes	33,833 (RMB 7,800 thousand)	-	-	5.44	b		Operational needs	-	-	-	93,578	93,578	Note 4
8	L.E. Champions Co., Ltd.	Komphort Royal of Life Co., Ltd.	Other receivables from related parties	No	10,000	10,000	-	2.85 (Note 8)	a	47	Business dealings	-	-	-	26,819	26,819

• Note 1: Nature of financing is as follows:

• a. Business dealings

• b. Necessity of short-term financing

• Note 2: The amount was calculated by exchange rate US$27.68 and RMB4.344 on December 31, 2021.

• Note 3: Aggregate financing limits should not exceed 50% of Shanghai Les Enphants Children Articles Co., Ltd.’s net worth. The limit of short-term financing for each counterparty should not exceed 50% of Shanghai Les Enphants Children Articles Co., Ltd.’s net worth as shown in the latest audited or reviewed financial statements. Aggregate financing limits should not exceed 40% of L.E. Capital Enterprise Co., Ltd.’s net worth. The limit of short-term financing for each counterparty should not exceed 40% of L.E. Capital Enterprise Co., Ltd.’s net worth as shown in the latest audited or reviewed financial statements. Aggregate financing limits should not exceed 50% of Suzhou Les Enphants Children Articles Co., Ltd.’s net worth. The limit of short-term financing for each counterparty should not exceed 50% of Suzhou Les Enphants Children Articles Co., Ltd.’s net worth as shown in the latest audited or reviewed financial statements. Aggregate financing limits should not exceed 40% of L.E. Champions Co., Ltd.’s net worth. The limit of short-term financing for each counterparty should not exceed 40% of L.E. Champions Co., Ltd.’s net worth as shown in the latest audited or reviewed financial statements.

• Note 4: Shanghai Les Enphants Children Articles Co., Ltd. granted Shanghai Lead Han Trading Co., Ltd. exemption from its obligation to pay RMB15,288 thousand. Shanghai Les Enphants Children Articles Co., Ltd. agreed to debit the amount of RMB7,861 thousand borrowed by Shanghai Lead Han Trading Co., Ltd. from Suzhou Les Enphants Children Articles Co., Ltd.

• Note 5: Total current interest was RMB3,617 thousand.

(Continued)

• 74 -

(Concluded)

Note 6: Total current interest was US$28 thousand.

Note 7: Total current interest was RMB38 thousand.

Note 8: Total current interest was $127 thousand.

Note 9: All intra-group transactions have been eliminated upon consolidation of the financial statements.

• 75 -

TABLE 2

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorsement/ Guarantee Provider	Counterparty	Counterparty	Limit on Each Counter-party’s Endorsement/ Guarantee Amounts (Note 1)	Maximum Balance for the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collaterals	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 2)
		Name	Nature of Relationship
0	Les Enphants Co., Ltd.	Shanghai Les Enphants Children Articles Co., Ltd. Shanghai Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd.	Subsidiary of L.E Venture Co., Ltd. Subsidiary of L.E Venture Co., Ltd. Subsidiary of L.E Venture Co., Ltd. Subsidiary of L.E Venture Co., Ltd.	$ 946,624 946,624 946,624 946,624	RMB 5,000 thousand US$ 9,000 thousand RMB 98,000 thousand US$ 12,000 thousand	$ - US$ 3,000 thousand RMB 21,000 thousand US$ 3,000 thousand	$ - 83,040 (US$ 3,000 thousand) 43,440 (RMB 10,000 thousand) 83,040 (US$ 3,000 thousand)	$ - - - -	- 4.39 4.82 4.39	$ 946,624 946,624 946,624 946,624
1	Shanghai Les Enphants Children Articles Co., Ltd.	Suzhou Les Enphants Children Articles Co., Ltd.	Fellow subsidiary	532,922	RMB 140,000 thousand	RMB 100,000 thousand	-	-	40.76	532,922

Note 1: The endorsement/guarantee amount should not exceed 50% of the Company’s net worth as shown in the latest financial statements; the endorsement/guarantee amount of the Company and the same parent company should not exceed 50% of the subsidiary’s net worth as shown in the latest financial statements.

Note 2: The maximum endorsement/guarantee amount should not exceed 50% of the Company’s net worth as shown in the latest financial statements; the maximum endorsement/guarantee amount of the Company and the same parent company should not exceed 50% of the subsidiary’s net worth as shown in the latest financial statements.

• 76 -

TABLE 3

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2021

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

Holding Company	Type and Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		December 31, 2021	December 31, 2021		Note
				Shares/Units	Carrying Amount	Percentage of Ownership	Fair Value
Les Enphants Co., Ltd. L.E. Capital Enterprise Co., Ltd. Shanghai Les Enphants Children Articles Co., Ltd.	Shares WK Technology Fund Komphort Royal of Life Co., Ltd. Shares DEF Group Limited (HK) Share warrants Shanghai Holyca E-Business Co., Ltd.	- The company serves as its corporate supervisor The company serves as its corporate supervisor -	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial instruments at fair value through profit or loss - non-current	8,438 864,000 9,768 -	$ 54 - (Note 1) - - (Note 1)	0.85 14.90 9.67 13.92	$ 54 - - -

Note 1: The carrying amount shown above is net of impairment loss.

Note 2: Refer to Tables 9 and 10 for information relating to investments in subsidiaries and associate.

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TABLE 4

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

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

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Others	Ending	Balance
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal		Number of Shares	Amount
Shanghai Les Enphants Children Articles Co., Ltd.	Suzhou Les Enphants Logistics Co., Ltd.	Investments accounted for using equity method	Note 1	Subsidiary	-	$ -	-	$ 366,681	-	$ -	$ -	$ -	$ (273,103) (Note 2)	-	$ 93,578

• Note 1: The board of directors of Shanghai Les Enphants Children Articles Co., Ltd. resolved to increase capital in Suzhou Les Enphants Children Articles Co., Ltd., and the transaction amounts were $5,000 thousand, $3,000 thousand, and $5,000 thousand on February 25, 2021, July 22, 2021, and October 21, 2021, respectively.

Note 2: Investment loss accounted for using the equity method was $(17,019) thousand, exchange differences on translation of foreign financial statements was $(1,028) thousand and capital surplus adjustment was $(255,056) thousand.

• 78 -

TABLE 5

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

DISPOSAL OF INDIVIDUAL REAL ESTATE AT PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

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

Seller	Property	Event Date	Original Acquisition Date	Carrying Amount	Transaction Amount	Collection	Gain (Loss) on Disposal	Counterparty	Relationship	Purpose of Disposal	Price Reference	Other Terms
Suzhou Les Enphants Children Articles Co., Ltd.	The land use right and buildings in Taicang, Suzhou	2021/12/17	2001/3/31	$ 161,885 (RMB 37,266 thousand)	$ 595,055 (RMB 136,983 thousand)	85% received	232,602 (RMB 53,582 thousand)	NE HK S4 Limited	Unrelated parties	Repayment of bank borrowings and fund application	Market conditions	Note 2

Note 1: Resolution date of the board of directors’ meeting.

• Note 2: In order to repay bank loans and utilize funds flexibly, Suzhou Les Enphants Children Articles Co. disposed of all shares held to unrelated parties for $595,055 thousand (RMB136,983 thousand) on December 17, 2021. The Group immediately leased back the right-of-use assets (land use rights) and buildings for a period of ten years. The rights transferred by Suzhou Les Enphants Children Articles unrelated parties were calculated based on the ratio of the lease liabilities and the acquisition price. The amount of right-of-use assets recognized was $75,099 thousand (RMB17,288 thousand). The amount of lease liability recognized was $276,053 thousand (RMB63,548 thousand). The amount of sale-leaseback (recognized in other profits and losses) recognized was $232,602 thousand (RMB53,582 thousand).

• 79 -

TABLE 6

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship		Transaction	Transaction		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% to Total	Payment Term	Unit Price	Payment Term	Ending Balance	% to Total
The Company Les Champions Co., Ltd. Shanghai Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd. Shanghai Les Enphants Children Articles Co., Ltd.	Les Champions Co., Ltd. The Company Suzhou Les Enphants Children Articles Co., Ltd. Shanghai Les Enphants Children Articles Co., Ltd. Shanghai Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd.	Subsidiary Ultimate parent company Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary	Sale Purchase Sale Purchase Sale Purchase	$ (159,099) 159,099 (343,429) 343,429 (131,390) 131,390	8.00 67.18 99.93 37.54 8.53 22.95	90 days 90 days Note 1 Note 1 Note 1 Note 1	At 40%-45% of retail prices At 40%-45% of retail prices Based on the price agreement Based on the price agreement Based on the price agreement Based on the price agreement	90 days 90 days Note 1 Note 1 Note 1 Note 1	Accounts receivable $ 60,100 Accounts payable (60,100) Accounts receivable 387,315 Accounts payable (387,315) Accounts receivable 163 Accounts payable (163)	29.44 89.16 100.00 67.25 0.07 0.09

Note 1: Payments are received and made irregularly.

Note 2: Related transactions have been eliminated during the preparation of the consolidated financial statements.

• 80 -

TABLE 7

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2021

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

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate		Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
Shanghai Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd.	Suzhou Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd. Beijing Les Enphants Children Articles Co., Ltd.	Fellow subsidiary Fellow subsidiary Fellow subsidiary	$ 146,457 387,315 113,703	Note 1 1.77 0.95	$ - - -	- - -	$ 146,457 39,423 4,344	$ - - -

Note 1: It is loan or non-distribution, so it is not applicable to the calculation of the turnover rate.

Note 2: Related transactions have been eliminated during the preparation of the consolidated financial statements.

• 81 -

TABLE 8

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

No.	Name	Counterparty	Transaction Flow (Note 1)	Eliminated Accounts	Eliminated Accounts
				Accounts	Amount	Note	% to Consolidated Total Assets or Total Revenue
0	Les Enphants Co., Ltd.	Shanghai Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd. Les Champions Co., Ltd. Les Champions Co., Ltd. Les Champions Co., Ltd. Les Champions Co., Ltd. L.E. Capital Enterprise Co., Ltd.	a a a a a a a a	Other receivables Other receivables Non-operating income Accounts receivable Operating revenue Operating revenue - warehouse revenue Non-operating income Other receivables	$ 5,174 15,983 17,175 60,100 159,099 22,853 2,418 1,820	Note 2 Note 2 Note 6 Note 3 Note 5 Note 4 Note 6 Note 2	- - - 1 4 1 - -
1	Les Champions Co., Ltd.	Les Enphants Co., Ltd. Les Enphants Co., Ltd.	a a	Accounts receivable Operating revenue	3,811 7,653	Note 3 Note 7	- -
2	Suzhou Les Enphants Children Articles Co., Ltd.	Shanghai Les Enphants Children Articles Co., Ltd. Shanghai Les Enphants Children Articles Co., Ltd. Shanghai Les Enphants Children Articles Co., Ltd. Beijing Les Enphants Children Articles Co., Ltd. Beijing Les Enphants Children Articles Co., Ltd. Shanghai L.E. Genius Co., Ltd. Shanghai L.E. Genius Co., Ltd.	b b b b b b b	Other receivables Operating revenue Non-operating income Accounts receivable Operating revenue Accounts receivable Operating revenue	1,994 131,390 5,209 113,703 96,726 1,013 1,422	Note 2 Note 6 Note 6 Note 2 Note 6 Note 2 Note 6	- 4 - 2 3 - -
3	Shanghai Les Enphants Children Articles Co., Ltd.	Suzhou Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd.	b b b b	Accounts receivable Other receivables Operating revenue Non-operating income	387,315 146,457 343,429 31,005	Note 2 Note 2 Note 6 Note 6	7 3 9 1
4	L.E. Capital Enterprise Co., Ltd.	Shanghai Les Enphants Children Articles Co., Ltd. Shanghai L.E. Genius Co., Ltd.	b b	Other receivables Other receivables	59,467 4,778	Note 2 Note 2	2 -
5	Shanghai Lead Han Trading Co., Ltd.	Shanghai Les Enphants Children Articles Co., Ltd.	b	Non-operating income	100,488	Note 9	3
							(Continued)

• 82 -

Note 1: The following are the two types of transaction flows:

• a. From the Company to the direct subsidiary.

• b. Between subsidiaries.

• Note 2: The settlement of accounts is based on irregular agreements.

• Note 3: The collection period and payment period are 90 days each.

• Note 4: It is equal to unrelated parties.

• Note 5: The amount is at 40% to 45% of the unit price for sales.

• Note 6: The amount is based on intercompany transaction price negotiations.

• Note 7: The amount is at 45% to 60% of the unit price for sales.

• Note 8: Only an intercompany transaction amounting to more than $1,000 thousand is shown in this table.

• Note 9: Shanghai Lead Han Trading Co., Ltd. was exempted from the obligation to pay RMB15,288 thousand by Shanghai Les Enphants Children Articles Co., Ltd.. Shanghai Les Enphants Children Articles Co., Ltd. agreed to afford the debit RMB7,861 thousand borrowed by Shanghai Lead Han Trading Co., Ltd. from Suzhou Les Enphants Children Articles Co., Ltd.

• Note 10: All intra-group transactions have been already eliminated upon consolidation of the financial statements.

(Concluded)

• 83 -

TABLE 9

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Business and Product	Original Investment Amount	Original Investment Amount	As of	December 31, 2021	December 31, 2021	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value
Les Enphants Co., Ltd. L.E. Capital Enterprise Co., Ltd. Mike and Friends Co., Ltd. L.E. Cayman Co., Ltd. L.E. Venture Co., Ltd. L.E. International Co., Ltd. PT Les Enphants (Indonesia) Co., Ltd.	L.E. Capital Enterprise Co., Ltd. Mike and Friends Co., Ltd. Genius Toy Taiwan Co., Ltd. L.E. Cayman Co., Ltd. L.E. International Co., Ltd. L.E. Genius Co., Ltd. Les Champions Co., Ltd. L.E. Venture Co., Ltd. Les Enphants Retail Group Co., Limited PT Les Enphants (Indonesia) Co., Ltd. Les Enphants (Thailand) Co., Ltd. Les Enphants Marketing (Thailand) Co., Ltd. PT Les Enphants Mitraprima	British Virgin Islands Taipei, Taiwan Taichung, Taiwan Cayman Islands British Virgin Islands British Virgin Islands Taipei, Taiwan British Virgin Islands Hong Kong Bandung, Indonesia Bangkok, Thailand Bangkok, Thailand Jakarta, Indonesia	Holding company Distribution of children’s clothes and supplies Distribution of children’s toys Holding company Holding company Holding company Distribution of children’s clothes and supplies Holding company Holding company Distribution of children’s clothes and supplies Manufacture and distribution of children’s clothes and supplies Distribution of children’s clothes and supplies Distribution of children’s clothes and supplies	$ 1,587,608 70,000 50,000 1,192,614 180,323 29,204 32,657 1,192,614 455,867 153,131 19,085 7,436 41,805	$ 1,587,608 70,000 50,000 1,192,614 180,323 29,204 32,657 1,192,614 455,867 153,131 19,085 7,436 41,805	47,562,373 2,500,000 625,000 413,024,450 5,555,700 25,500 3,592,248 41,302,445 13,001,282 3,250 166,600 98,000 -	100.00 100.00 20.00 100.00 100.00 51.00 34.59 100.00 100.00 100.00 49.00 49.00 98.45	$ 1,255,016 18,654 75,154 1,176,622 53,195 (2,852 ) 22,350 RMB 270,862 thousand RMB 21,455 thousand 13,623 21,501 14,630 IDR (691,571 ) thousand	$ (165,718 ) 3,682 6,234 RMB (33,533 ) thousand (7,713 ) (20,392 ) 8,956 RMB (33,533 ) thousand RMB (42,066 ) thousand - THB (7,695 ) thousand THB (9,921 ) thousand -	$ (165,718 ) 3,682 2,397	Subsidiary Subsidiary Equity-method investee (Note 1) Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Equity-method investee Equity-method investee Subsidiary

Note 1: The difference between an investee’s net income and the Company’s net income from investment was a deferred unrealized gain (loss) from upstream and downstream transactions of the investee.

Note 2: Information of investments in mainland China in Table 10.

Note 3: All intra-group transactions have been already eliminated upon consolidation of the financial statements

Note 4: As shown in Table 9, the highest shareholding of the Company’s investment is equal to the shareholding held on December 31, 2021 and the share has uncollateralized bank borrowings.

• 84 -

TABLE 10

LES ENPHANTS CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital (Note 6)	Total Amount of Paid-in Capital (Note 6)	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2021	Investment Flows	Investment Flows	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2021	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2021	Accumulated Repatriation of Investment Income as of December 31, 2021
							Outflow	Inflow
Shanghai Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd. Shanghai Lead Han Trading Co., Ltd. (Note 3) Beijing Les Enphants Children Articles Co., Ltd. Shanghai L.E. Genius Co., Ltd. Chengdu Lixue Education Technology Co., Ltd Suzhou Les Enphants Logistics Co., Ltd. (Note 4)	Leasing, property management and ma Manufacture and distribution of children’s clothes, toys and supplies Distribution of children’s clothing and supplies and warehousing and general shipping and freight forwarding Distribution of children’s clothes and supplies Distribution of children’s clothes, and supplies Distribution of children’s toys and supplies Educational equipment development Warehousing, general freight and freight forwarding		$ 1,223,456 (US$ 44,200 thousand) 719,680 (US$ 26,000 thousand) 139,008 (RMB 32,000 thousand) 43,440 (RMB 10,000 thousand) 27,680 (US$ 1,000 thousand) 4,344 (RMB 1,000 thousand) 210,250 (RMB 48,400 thousand)		Indirect Note 2 Indirect Indirect Indirect Indirect Indirect	$ 975,828 216,786 - - 15,101 - -	$ - - - - - - -	$ - - - - - - -	$ 975,828 216,786 - - 15,101 - -	$ 37,464 (RMB 8,630 thousand) (199,518) (RMB (45,961) thousand) 100,485 (RMB 23,148 thousand) (34,690) (RMB (7,991) thousand) (20,392) (RMB (4,697) thousand) (5,365) (RMB (1,236) thousand) -	100% indirect investment 100% indirect investment - 100% indirect investment 60.80% indirect investment 100% indirect investment -	$ 37,464 (RMB 8,630 thousand) (199,518) (RMB (45,961) thousand) 100,485 (RMB 23,148 thousand) (34,690) (RMB (7,991) thousand) (12,398) (RMB (2,856) thousand) (5,365) (RMB (1,236) thousand) -	$ 1,065,845 (RMB 245,360 thousand) 187,156 (RMB 43,084 thousand) - (72,141) (RMB (16,607) thousand) (3,400) (RMB (783) thousand) (1,025) (RMB (236) thousand) -	$ - - - - - - -
Accumulated Investment in	Mainland	Investment Amount Approved by the		Mi Allbl Itt
China as of December 31, 2021		Investment Commission, MOEA		axmum owae nvesmen
$1,192,614		$1,564,672		(Note 5)

(Continued)

• 85 -

Note 1: The investment gain (loss) is recognized based on the audited financial statements.

• Note 2: The Company invested $131,256 thousand in Suzhou Les Enphants Children Articles Co., Ltd. through a company located in a third area, and the other investments of the Company in Suzhou Les Enphants Children Articles Co., Ltd. were through the Company’s investees based in mainland China. The board of directors of Shanghai Les Enphants Children Articles Co., Ltd. resolved to increase capital in Suzhou Les Enphants Children Articles Co., Ltd., and the transaction amounts were $5,000 thousand, $3,000 thousand, and $5,000 thousand on February 25, 2021, July 22, 2021, and October 21, 2021, respectively.

• Note 3: Shanghai Lead Han Trading Co., Ltd. was dissolved on August 30, 2021

• Note 4: Suzhou Les Enphants Logistics Co., Ltd. was incorporated by Suzhou Les Enphants Children Articles Co., Ltd. Suzhou Les Enphants Children Articles Co., Ltd. invested in Suzhou Les Enphants Logistics Co., Ltd. the amount of RMB48,400 thousand by right-of-use land and buildings, and the shareholding ratio was 100%. On December 29, 2021, Suzhou Les Enphants Children Articles Co. sold all the shares of Suzhou Les Enphants Logistics Co., Ltd. to unrelated parties.

• Note 5: There was no limit on the amounts of the Company’s investments in China, and these investments have been approved by the Investment Commission (as shown in approval reference No. 10920419480) under the Taiwan’s Ministry of Economic Affairs.

Note 6: The exchange rates for US$1 and RMB1 are NT$27.68 and NT$4.344, respectively

• Note 7: Income and loss from investments, long-term equity investments of investors, and net equity of investees have been eliminated upon consolidation.

• Note 8: As shown in Table 10, investments in mainland China are equal to the shareholdings held on December 31, 2021, and the shares are uncollateralized for bank borrowings.

(Concluded)

• 86 -

TABLE 11

LES ENPHANTS CO., LTD.

INFORMATION ON MAJOR SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2021

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Standard Chartered Bank Department of Business securities account on behalf of Alex Lin Christi Lan Lin Eric Lin	24,837,933 11,771,671 11,553,828	13.44 6.37 6.25

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preference shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual truster who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, refer to Market Observation Post System.

• 87 -