MERCURIES — Annual Report 2021

Nov 15, 2021

MERCURIES & ASSOCIATES HOLDING, LTD.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 TOGETHER WITH INDEPENDENT AUDITORS’ REPORT

1

INDEX TO FINANCIAL STATEMENTS

	Page
Representation Letter	3
Independent Auditors’ Report	4-10
Consolidated Balance Sheets as of December 31, 2021 and 2020	11
Consolidated Statements of Comprehensive Income for the years ended December 31, 2021 and	12
2020
Consolidated Statements of Change in Stockholders’ Equity for the years ended December 31,	13
2021 and 2020
Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020	14
Notes to Financial Statements	15-203

2

REPRESENTATION LETTER

The entities that are 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 those included in the consolidated financial statements of Mercuries & Associates Holding, LTD. and its subsidiaries prepared in conformity with the International Financial Reporting Standard 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates is included in the consolidated financial statements of Mercuries & Associates Holding, LTD. and its subsidiaries. Hence, we did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

Mercuries & Associates Holding, LTD.

Chen, Shiang-Li

Chairman

March 31, 2022

3

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders Mercuries & Associates Holding, Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Mercuries & Associates Holding, Ltd. and its subsidiaries as of December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors as described in the Other Matter section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Mercuries & Associates Holding, Ltd. and its subsidiaries 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 the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed 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 generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the section of Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements of our report. We are independent of Mercuries & Associates Holding, Ltd. and its subsidiaries in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with the Norm. 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 financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

4

The completeness and accuracy of recording insurance reserves

Description:

Please refer to Note 4.27 for the related accounting policy of the completeness and accuracy of recording insurance reserves, Note 5 about accounting judgments, key sources of estimates and uncertainty for insurance reserves, Note 6.22 and Note 12.7 for insurance reserves details, change and adjustment, and risk management and disclosure of insurance contract.

Various insurance reserves of Mercuries Life Insurance are provided by actuary in accordance with the “Guidelines for Insurance Enterprises Handling All Statutory Reserves” based on their professional judgment and experience. The insurance reserves are estimated for different types of insurance, and thus, the provision process of these reserves has a high degree of complexity. Liability reserves involve significant judgment from management due to uncertainty of estimation. In addition, to ensure the adequacy of the insurance liabilities recognition, significant judgment to the final total settlement value of each insurance claims is required. The Company should assess its adequacy of liabilities through estimated future cash flow for insurance contracts based on current information. If there is any shortfall in the current carrying amount of the insurance liability, the shortfall should be recognized as liability adequacy reserve. Therefore, this matter needs significant attention in our audit.

We performed the following audit procedures on the above key audit matter:

1. Testing the effectiveness of the design and implementation of internal controls within the financial reporting process that are related to insurance reserves, which include testing the controls responsible for ascertaining the completeness and accuracy of the policy information.

2. Performing the analysis on movements and recognition of insurance reserves and checking whether the related information and carrying amount of the worksheet are accurate.

3. Testing samples on unearned premium reserves, liability reserves, claim reserves, premium deficiency reserves, special reserves and liabilities adequacy reserve to assess the accuracy of the premium and claim information, as well as inspecting the provision methodology, and examining whether the provision and hypothesis are in accordance with the “Guidelines for Insurance Enterprises Handling All Statutory Reserves”.

4. Assess the appropriateness of the disclosure that are related to insurance reserves.

Valuation of investment assets

Description:

Please refer to Note 4.11 for the related accounting policy of valuation of investment, Note 5 about accounting judgments, key sources of estimates and uncertainty for investment assets valuation, Note 12.2 to 12.4 for valuation details and risk management of financial assets.

5

The subsidiary Mercuries Life Insurance’s fair value measurement of financial assets at fair value through profit or loss and fair value through other comprehensive income for debt instrument without an active market is determined by observable input parameters obtained either directly or indirectly in inactive markets. The fair value is estimated on the basis of the results of various valuation techniques, which is based on professional judgment by the Company’s management. In addition, debt instruments that measured at amortized cost and fair value through other comprehensive income has excepted credit loss, recognition and estimation of such loss require significant judgment by the Company’s management. Therefore, this matter needs significant attention in our audit. We performed the following audit procedures on the above key audit matter:

1. Performing an assessment over the investment cycle of its initial recognition, subsequent measurements and their disclosures on financial statements.

2. Inspecting the accounting policies related to fair value measurements and disclosures of financial instruments of the Company.

3. Obtaining statements for financial assets and understanding the acquisition methods used for fair value of each category, as well as evaluating whether the fair value hierarchy is appropriate.

4. Assessing the reasonableness of significant assumptions, fair value and the valuation sources according to the relevant information obtained from external sources.

5. Executing impairment test, which included evaluating whether the design of the process for providing expected credit losses are appropriate and the significant hypothesis and factors of the estimations are reasonable, selecting the result to check the reasonableness of the credit risk has increased significantly since the original recognition of financial assets and test the accuracy of the calculation.

The completeness and accuracy of retail sales revenue

Description:

Please refer to Note 4.32 for the related accounting policy of retail sales revenue, Note 5 about accounting judgments, key sources of estimates and uncertainty for revenue recognition.

Retail sales revenue of Mercuries & Associates Ltd. and Simple Mart Retail Co., Ltd are recorded by point-of-sale (POS) terminals, which collect the merchandise information of item names, quantity, sales price and total sales amount of each transaction using pre-established merchandise master file data (which contains information such as item name, cost of purchase, retail price, combination sales promotions, etc.). After the daily closing process, each store manager uploads their sales information to the Enterprise Resource Planning (“ERP”) system, which summarizes all sales and automatically generates sales revenue journal entries. Each store manager also prepares a daily cash report, which summarizes amounts of sales, types of collections and cash deposited to the bank.

6

As retail sales revenue comprises numerous small amount transactions and highly relies on the POS and ERP systems, the process of summarizing and recording sales revenue by these systems is important with regard to the completeness and accuracy of the retail sales revenue. Therefore, this matter needs significant attention in our audit.

We performed the following audit procedures on the above key audit matter:

1. Inspecting and checking whether additions and changes to the merchandise master file data had been properly approved and supported by the relevant documents.

2. Inspecting and checking whether approved additions and changes to the merchandise master file data had been correctly entered in the merchandise master file.

3. Inspecting and checking whether merchandise master file data had been periodically transferred to POS terminal in stores.

4. Inspecting and checking whether sales information in POS terminals had been periodically and completely transferred to the ERP system and verify the daily cash reports and accounting information in stores.

5. Inspecting daily cash reports and relevant documents.

6. Inspecting cash deposit amounts recorded in daily cash reports and agreed them to bank remittance amounts.

Other matter

As described in Note 4.4, we did not audit the financial statements of certain consolidated subsidiaries which were audited by other auditors. Thus, the amounts and information of the subsidiaries shown within are in accordance with the audit reports assured by other auditors whose reports thereon have been furnished to us. Total assets of these subsidiaries were $13,668,201 thousand and $13,173,861 thousand, constituting 0.96% and 0.96% of the total consolidated assets as of December 31, 2021 and 2020 respectively, and total comprehensive income were $554,180 thousand and $949,138 thousand, constituting 200.84% and 220.37% of total consolidated comprehensive income for the years ended December 31, 2021 and 2020, respectively. As described in Note 6.10, the financial statements of certain investee companies under equity method were audited by other auditors. Thus, the amounts and information of those investee companies shown within are in accordance with the audit reports assured by other auditors whose reports thereon have been furnished to us. The investments in the aforementioned investee companies were amounted to $3,805,152 thousand and $3,796,755 thousand, constituted 0.27% and 0.28% of the total consolidated asset as of December 31, 2021 and 2020, respectively, and the recognized shares of profit of associates and joint ventures accounted for under equity method of these investee companies were $641,519 thousand and $307,523 thousand, constituted 99.27% and 9.69% of the consolidated profit before income tax for the years ended December 31, 2021 and 2020, respectively.

7

We have audited the parent company only financial statements of Mercuries & Associates Holding, Ltd. and expressed an unqualified opinion with other matter paragraph as of and for the year ended December 31, 2021, and expressed an unqualified opinion with other matter paragraph and emphasis of matter paragraph as of and for the year ended December 31, 2020.

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 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 ability of Mercuries & Associates Holding, Ltd. and its subsidiaries 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 Mercuries & Associates Holding, Ltd. and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of Mercuries & Associates Holding, Ltd. and its subsidiaries.

Auditor’s 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 auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS 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.

8

As part of an audit in accordance with ROC GAAS, 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 Mercuries & Associates Holding, Ltd. and its subsidiaries 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 Mercuries & Associates Holding, Ltd. and its subsidiaries’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the 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 auditor’s report. However, future events or conditions may cause Mercuries & Associates Holding, Ltd. and its subsidiaries 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 appropriate audit evidence regarding the financial information of the entities or business activities within Mercuries & Associates Holding, Ltd. and its subsidiaries 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.

9

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Ke-Yi Liu and Shu-Chen Chang.

BDO TAIWAN

March 31, 2022

Notice to Readers

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

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

10

MERCURIES & ASSOCIATES HOLDING, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2021 and 2020

								UNIT：NTD(In Thousands)	UNIT：NTD(In Thousands)
Assets Notes	December 31,2021	％	December 31,2020	％	Liabilities & Stockholders' Equity Notes	December 31,2021	％	December 31,2020	％
Current assets Cash and cash equivalents 6.1 Financial assets at fair value through profit 6.2 or loss - current Financial assets at fair value through other comprehensive income - current Financial assets at amortized cost - current Contract assets - current Accounts receivable, net 6.3 Current income tax assets Inventories 6.4 Prepayments Reinsurance contract assets, net 6.5 Other current assets Bills discounted and loans, net 6.6 Sub-total Non-current assets Financial assets at fair value through profit 6.7 or loss - non-current Financial assets at fair value through other 6.8 comprehensive income - non-current Financial assets at amortized cost - non-current 6.9 Investments accounted for under equity method 6.10 Property, plant and equipment 6.11 Right-of-use assets 6.12 Investment property, net 6.13 Intangible assets Deferred tax assets 6.34 Other non-current assets 6.14 Sub-total Total assets	$100,356,813) 360,401) 127) 39,334) 509,754) 14,112,961) 463,268) 4,539,620) 471,280) 1,629,869) 168,771) 70,474,553)	7.03) 0.03) -0 -0 0.04) 0.99) 0.03) 0.32) 0.03) 0.11) 0.01) 4.94)	$148,214,785) 30,312) 110) 45,472) 409,242) 10,876,348) 1,516,216) 4,429,808) 545,226) 861,360) 219,151) 70,275,910)	Current liabilities 10.85) Short-term borrowings 6.15 -0 Short-term notes and bills payable 6.16 Contract liabilities - current -0 Accounts payable 6.17 Commissions payable -0 Claims and benefits payable 0.03) Due to reinsurers and ceding companies 0.80) Current income tax liabilities 0.11) Advanced receipts 0.32) Lease liabilities - current 6.12 0.04) Other current liabilities 0.06) Sub-total 0.02)Non-current liabilities 5.16) Financial liabilities at fair value through 6.18 17.39) profit or loss- non-current Contract liabilities - non-current Bonds payable 6.19 Long-term borrowings 6.20 Provisions - non-current 6.21 Separate account liabilities for unit-linked 6.14 products Guarantee deposits received Lease liabilities - non-current 6.12 Deferred tax liabilities 6.34 Other non-current liabilities 6.36) Sub-total Total Liabilities 3.35)Equity attributable to owners of the parent Share Capital 6.27 59.84) Common stock 0.28) Capital collected in advance 1.12) Capital surplus 6.28 0.29) Retained earnings 6.29 2.00) Legal reserve 0.02) Special reserve 0.39) Unappropriated earnings (Accumulated deficit) 8.96) Other equity 6.31 82.61) Treasury stock 6.30 Total equity attributable to owners of the parent Non-controlling interests 6.32 Total Equity 100.00)Total Liabilities and Equity		$590,000) 949,985) 780,485) 8,254,651) 873,230) 699,858) 1,315,863) 141,307) 123,413) 1,314,353) 481,095)	0.04) 0.07) 0.05) 0.58) 0.06) 0.05) 0.09) 0.01) 0.01) 0.09) 0.04)	$665,000) 1,249,824) 905,484) 8,095,703) 1,063,740) 750,325) 683,968) 384,091) 184,495) 1,319,334) 636,788)	0.05) 0.09) 0.07) 0.59) 0.08) 0.05) 0.05) 0.03) 0.01) 0.10) 0.05)
						15,524,240)	1.09)	15,938,752)	1.17)
						127,201) 10,644) 10,341,380) 6,030,000) 1,203,579,402) 136,143,090) 1,814,258) 2,749,701) 1,627,100) 1,873,695)	0.01) -0 0.72) 0.42) 84.34) 9.54) 0.13) 0.19) 0.11) 0.14)	1,979,315) 15,782) 7,500,000) 8,506,500) 1,159,532,867) 115,616,466) 2,666,246) 2,863,486) 1,651,801) 2,327,263)	0.14) -0 0.55) 0.62) 84.92) 8.47) 0.20) 0.21) 0.12) 0.17)
	193,126,751)	13.53)	237,423,940)
	63,596,148) 46,041,385) 919,991,107) 3,902,840) 19,391,729) 3,937,272) 26,130,520) 204,797) 7,886,160) 142,837,794)	4.46) 3.23) 64.47) 0.27) 1.36) 0.28) 1.83) 0.01) 0.55) 10.01)	86,871,455) 45,729,877) 817,023,310) 3,800,369) 15,276,996) 3,981,644) 27,250,368) 210,814) 5,381,989) 122,462,097)
						1,364,296,471)	95.60)	1,302,659,726)	95.40)
						1,379,820,711)	96.69)	1,318,598,478)	96.57)
						9,131,067) 2,553) 2,455,481) 2,575,337) 5,566,015) 4,854,079) (4,375,416) (488,279)	0.64) -0 0.17) 0.18) 0.39) 0.34) (0.31) (0.03)	9,093,510) -0 2,032,125) 2,464,186) 4,068,090) 5,590,916) (3,087,013) (532,672)	0.67) -0 0.15) 0.18) 0.30) 0.41) (0.23) (0.04)
	1,233,919,752)	86.47)	1,127,988,919)
	$1,427,046,503)	100.00)	$1,365,412,859)			19,720,837)	1.38)	19,629,142)	1.44)
						27,504,955)	1.93)	27,185,239)	1.99)
						47,225,792)	3.31)	46,814,381)	3.43)
						$1,427,046,503)	100.00)	$1,365,412,859)	100.00)

The accompanying notes are an integral part of financial statements

11

MERCURIES & ASSOCIATES HOLDING, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2021 and 2020

				UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)
Item	Notes	2021	％	2020	％
Operating revenue Interest income Premiums income Commission on reinsurance ceded Fee income Share of profit of associates and joint ventures accounted for under equity method Separate account revenue for unit-linked products Gain on financial assets (liabilities) measured at fair value through profit or loss Realized gains on financial assets measured at fair value through other comprehensive income Gain arising from derecognition of financial assets measured at amortized cost Net sales revenue Sales revenue Sales returns Sales discounts and allowances Rental income Service revenue Construction revenue Gain on disposal of investments Gain on disposal of property, plant and equipment Gain on investment property Reserve for fluctuation of foreign exchange movement Profit reclassified by applying overlay approach Gain on reversal of expected credit impairment loss Other income Total operating revenue Operating cost Interest expenses Underwriting expenses Commission expenses Insurance claims and benefits Other insurance liabilities movement Separate account expenses for unit-linked products Cost of goods sold Service cost Construction cost Operating expenses Selling expense General and administrative expenses Research and development expenses Loss on disposal of property, plant and equipment Loss on impairment losses Loss on foreign exchange Other expense Total operating cost Profit (loss) before income tax from continuing operations Income tax (expenses) benefits Net profit (loss) from continuing operations Net profit (loss) Other comprehensive income (loss) Components of other comprehensive income that will not be reclassified to profit or loss Gain (loss) on remeasurements 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 and joint ventures accounted for under equity method Income tax relating to components Components of other comprehensive income that will be reclassified to profit or loss Financial statements translation differences of foreign operations Unrealized gain (loss) on investments in debt instruments at fair value through other comprehensive income Other comprehensive income (loss) on reclassification under the overlay approach Income tax relating to components Other comprehensive income (loss) Total comprehensive income (loss) Profit (loss) attributable to: Shareholders of the parent Non-controlling interests Total Comprehensive income (loss) attributable to: Shareholders of the parent Non-controlling interests Total Earnings per share Income (loss) from continuing operations, net of income tax Basic earnings (loss) per share (in dollars) Diluted earnings per share (in dollars) The pro forma net income and earning per share if accounting for treasury stock had not been adopted are as follows: Pro forma after income tax Earnings per share	6.25 6.10 6.14 6.22 6.7 6.26 6.14 6.34 6.34 6.7 6.34 6.35 6.35	$31,410,434) 94,097,770) 41,304) 2,380,291) 655,579) 9,503,814) 9,420,132) 121,295) 8,063,423) 27,765,649) (20,935) (2,310) 412,054) 556,178) -0 644,471) 108,055) 793,476) (161,061) 2,053,002) 72,924) 457,657)	16.67) 49.95) 0.02) 1.26) 0.35) 5.05) 5.00) 0.06) 4.28) 14.74) (0.01) -0 0.22) 0.30) -0 0.34) 0.06) 0.42) (0.09) 1.09) 0.04) 0.25)	$32,902,572) 107,018,303) 18,286) 1,714,474) 307,050) 10,141,355) 11,599,778) 3,389,361) 9,053,523) 28,039,273) (43,508) (2,240) 417,960) 486,241) 24,302) 2,830) -0 746,505) 1,002,577) 3,048,482) 443,331) 348,855)	15.62) 50.80) 0.01) 0.81) 0.15) 4.81) 5.51) 1.61) 4.30) 13.31) (0.02) -0 0.20) 0.23) 0.01) -0 -0 0.35) 0.48) 1.45) 0.21) 0.16)
		188,373,202)	100.00)	210,659,310)	100.00)
		(110,320) (32,127) (6,031,793) (73,537,826) (50,112,107) (9,503,814) (19,885,264) (12,865) -0 (5,586,651) (6,970,000) (225,503) -0 (2,038) (15,137,458) (579,221)	(0.06) (0.02) (3.20) (39.04) (26.60) (5.05) (10.56) (0.01) -0 (2.97) (3.70) (0.12) -0 -0 (8.04) (0.29)	(113,775) (37,068) (7,254,559) (62,911,262) (70,158,681) (10,141,355) (19,257,556) (12,966) (8,083) (5,347,027) (6,765,995) (211,718) (10,798) (8,571) (24,083,067) (1,164,843)	(0.05) (0.02) (3.44) (29.86) (33.31) (4.81) (9.14) (0.01) -0 (2.54) (3.21) (0.10) (0.01) -0 (11.43) (0.56)
		(187,726,987)	(99.66)	(207,487,324)	(98.49)
		646,215) 1,965,773)	0.34) 1.05)	3,171,986) (649,507)	1.51) (0.31)
		2,611,988)	1.39)	2,522,479)	1.20)
		2,611,988)	1.39)	2,522,479)	1.20)
		(40,931) 254,537) 104,451) (12,879) (4,626) (1,326,754) (2,053,002) 191,285)	(0.02) 0.14) 0.06) (0.01) -0 (0.70) (1.09) 0.09)	58,569) (120,048) (45,924) (2,511) (13,470) 280,424) (3,048,482) (61,730)	0.03) (0.06) (0.02) -0 (0.01) 0.13) (1.45) (0.02)
		(2,887,919)	(1.53)	(2,953,172)	(1.40)
		(275,931)	(0.14)	(430,693)	(0.20)
		1,890,261) 721,727)	1.00) 0.39)	1,397,680) 1,124,799)	0.66) 0.54)
		2,611,988)	1.39)	2,522,479)	1.20)
		692,062) (967,993)	0.37) (0.51)	72,754) (503,447)	0.03) (0.23)
		$(275,931)	(0.14)	$(430,693)	(0.20)
		$2.19)		$1.63)
		$2.19)		$1.63)
		$1.96)		$1.63)
		$1,938,231)		$1,445,087)
		$2.13)		$1.59)

The accompanying notes are an integral part of financial statements

12

MERCURIES & ASSOCIATES HOLDING, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2021 and 2020

UNIT ： NTD (In Thousands)

		For the Years Ended December 31,	2021 and 2020 UNIT：NTD(In Thousands)
Summary		EquityAttributable to Sh	areholders of the Parent Non-Controlling Interest Total Other EquityInterests Treasury Stock SubTotal Exchange Differences Arising on Translation of Foreign Operations Unrealized Gain (Loss) on Financial Assets at Fair Value through Other Comprehensive Income Reclassification to Other Comprehensive Income Due to The Overlay Approach Others
	Share Capital Common Stock Share capital collected in advance Capital Surplus	Retained Earnings
		Legal Reserve Special Reserve Unappropriated Earnings
Balance on January 1, 2020 Special reserve Appropriation earnings 2019 Legal reserve Special reserve Cash dividends Stock dividends Effects of changes in ownership interest from investee Changes in capital surplus of investees Net profit (loss) Other comprehensive income (loss) Dividends from the Company received by subsidiaries Changes in non-controlling interest Disposal of investments in equity instruments at fair value through other comprehensive income Disposal of investments in equity instruments at fair value through other comprehensive income from investees	$8,266,827) $-) $1,913,534) -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 826,683) -0 -0 -0 -0 (13,240) -0 -0 84,424) -0 -0 -0 -0 -0 -0 -0 -0 47,407) -0 -0 -0 -0 -0 -0 -0 -0 -0	$2,111,950) $4,487,427) $6,065,675) -0 2,543,314) (2,543,314) - 352,236) -0 (352,236) -0 (2,962,651) 2,962,651) -0 -0 (826,683) -0 -0 (826,683) -0 -0 (308,220) -0 -0 -0 -0 -0 1,397,680) -0 -0 (45,923) -0 -0 -0 -0 -0 -0 -0 -0 62,625) -0 -0 5,344)	$(16,180) $79,948) $(1,810,452) $6,643) $(532,672) $20,572,700) $27,138,468) $47,711,168) -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 (826,683) -0 (826,683) -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 (321,460) -0 (321,460) -0 -0 -0 -0 -0 84,424) -0 84,424) -0 -0 -0 -0 -0 1,397,680) 1,124,799) 2,522,479) (79) 87,731) (1,366,655) -0 -0 (1,324,926) (1,628,246) (2,953,172) -0 -0 -0 -0 -0 47,407) -0 47,407) -0 -0 -0 -0 -0 -0 550,218) 550,218) -0 (62,625) -0 -0 -0 -0 -0 -0 -0 (5,344) -0 -0 -0 -0 -0 -0
Balance on January 1, 2021 Appropriation earnings 2020 Legal reserve Special reserve Cash dividends Stock options from issuing convertible bonds Effects of changes in ownership interest from investee Changes in unappropriated retained earnings of investees Changes in capital surplus of investees Net profit (loss) Other comprehensive income (loss) Conversion of convertible bonds Disposal of common stock of the Company held by subsidiaries Dividends from the Company received by subsidiaries Differences of acquisition or disposal price and book value of subsidiaries Changes in non-controlling interest Disposal of investments in equity instruments at fair value through other comprehensive income Disposal of investments in equity instruments at fair value through other comprehensive income from investees Changes in special reserve of investees	$9,093,510) $-) $2,032,125) -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 77,332) -0 -0 228,275) -0 -0 -0 -0 -0 (38,369) -0 -0 -0 -0 -0 -0 37,557) 2,553) 46,684) -0 -0 55,826) -0 -0 47,970) -0 -0 5,638) -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0	$2,464,186) $4,068,090) $5,590,916) 111,151) -0 (111,151) -0 1,500,716) (1,500,716) -0 -0 (909,351) -0 -0 -0 -0 -0 (165,423) -0 -0 (30,661) -0 -0 -0 -0 -0 1,890,261) -0 -0 104,452) -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 (330) -0 -0 (13,918) -0 (2,791) -0	$(16,259) $99,710) $(3,177,107) $6,643) $(532,672) $19,629,142) $27,185,239) $46,814,381) -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 (909,351) -0 (909,351) -0 -0 -0 -0 -0 77,332) -0 77,332) -0 -0 -0 -0 -0 62,852) -0 62,852) -0 -0 -0 -0 -0 (30,661) -0 (30,661) -0 -0 -0 -0 -0 (38,369) -0 (38,369) -0 -0 -0 -0 -0 1,890,261) 721,727) 2,611,988) (4,340) (456,151) (842,160) -0 -0 (1,198,199) (1,689,720) (2,887,919) -0 -0 -0 -0 -0 86,794) -0 86,794) -0 -0 -0 -0 44,393) 100,219) -0 100,219) -0 -0 -0 -0 -0 47,970) -0 47,970) -0 -0 -0 -0 -0 5,638) -0 5,638) -0 -0 -0 -0 -0 -0 1,287,709) 1,287,709) -0 330) -0 -0 -0 -0 -0 -0 -0 13,918) -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 (2,791) -0 (2,791)
Balance on December 31, 2021	$9,131,067) $2,553) $2,455,481)	$2,575,337) $5,566,015) $4,854,079)	$(20,599) $(342,193) $(4,019,267) $6,643) $(488,279) $19,720,837) $27,504,955) $47,225,792)

The accompanying notes are an integral part of financial statements

13

MERCURIES & ASSOCIATES HOLDING, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2021 and 2020

MERCURIES & ASSOCIATES HOLDING, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2021 and 2020
Items Cash flows from operating activities Profit (loss) before income tax from continuing operations Adjustments for Income and expenses having no effect on cash flows Depreciation Amortization Net change in insurance liabilities Net gain (loss) on financial assets or liabilities at fair value through profit or loss Net gain on financial assets or liabilities at fair value through other comprehensive income Interest expense Net gain arising from derecognition of financial assets measured at amortized cost Interest income Net change in reserve for fluctuation of foreign exchange movement Reversal of expected credit impairment losses on investments Expected credit impairment losses (gains) on non-investments Share of profit of associates and joint ventures accounted for under equity method (Profit) loss reclassified by applying overlay approach Gain on disposal of investment property Gain on fair value adjustment of investment property Loss on disposal of property, plant and equipment Loss on disposal of intangible assets Loss on unrealized foreign exchange Net cash generated from Income and expenses having no effect on cash flows Changes in assets and liabilities related to operating activities Changes in assets related to operating activities: (Increase) decrease in financial assets at fair value through profit or loss (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in prepayments (Increase) decrease in contract assets (Increase) decrease in other current assets (Increase) decrease in reinsurance contract assets (Increase) decrease in other assets Net cash generated from changes in assets related to operating activities Changes in liabilities related to operating activities: Increase (decrease) in accounts payable Increase (decrease) in provisions Increase (decrease) in contract liabilities Increase (decrease) in other liabilities Others Net cash generated from changes in liabilities related to operating activities Net cash generated from changes in assets and liabilities related to operating activities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows generated from (used in) operating activities Cash flows from (used in) investing activities Decrease in loans Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost Proceeds from disposal of financial assets at amortized cost Proceeds from repayments of financial assets at amortized cost Remittance of cash due to capital reduction of financial assets at fair value through other comprehensive income Acquisition of investment accounted for under equity method Disposal of investments accounted under the equity method Acquisition of subsidiary Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Proceeds from disposal of intangible assets Decrease (increase) in guarantee deposits Acquisition of investment property Proceeds from disposal of investment property Net cash flows generated from (used in) investing activities Cash flows from (used in) financing activities Increase (decrease) in short-term borrowings Increase (decrease) in short-term notes and bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Increase (decrease) in guarantee deposits received Repayment of the principle portion of lease liabilities Cash dividends Cash increase Issuance of bonds payable Increase(decrease) in non-controlling interest Net cash generated from (used in) financing activities Effect of exchange in exchanges rate on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	UNIT：NTD(In Thousands)
	2021	2020
	$646,215 2,327,466 145,306 50,332,304 (9,420,132) (121,295) 524,050 (8,063,423) (31,410,434) 161,061 (70,451) (439) (655,579) (2,053,002)	$3,171,986 2,252,919 188,448 70,426,488 (11,599,778) (3,389,361) 519,435 (9,053,523) (32,902,437) (1,002,577) (456,632) 21,872 (307,050) (3,048,482)
	(216,296)	-
	(37,210) (88,214)	(250,675) 413,365
	7	-
	7,116,373 8,470,092 28,369,283 (3,250,552) (109,812) 98,619 (100,513) 50,381 (442,713) (154,445) 24,460,248 531,701 (205,808) (130,138) (196,933) (7,498,124) (7,499,302) 16,960,946 25,431,038 38,197,404 2,257,783 (491,768) 438,346 66,479,018 (189,638) (25,660,480) 23,509,874 (245,276,160) 56,254,415 81,244,104 116,013 (373,500) 1,120,689 - (5,024,758) 159,881 (72,256) - 243,838	23,378,132
		35,190,144
		22,292,375 (92,043) 168,116 136,768 5,247 (24,378) 209,498 (100,279)
		22,595,304
		93,171 (277,479) 7,097 (285,965) (12,186,144)
		(12,649,320)
		9,945,984
		45,136,128
		34,374,757 1,932,260 (479,169) (781,178)
		83,354,784
		999,075 (53,351,342) 65,790,829 (250,893,466) 68,291,635 140,261,071 22,127 - - (1,562) (1,113,366) 1,557 (102,855) 2,328 427,316
	(19,245)	-
	1,392,600	-
	(112,574,623)	(29,666,653)
	(75,000) (299,839) 65,756,500 (68,233,000) (851,988) (1,559,523)	(622,000) 335,038 82,767,500 (82,491,000) (24,718) (1,442,247)
	(1,025,406) 1,295,886 2,996,500	(1,186,988) 723,302 -
	238,757	59,452
	(1,757,113)	(1,881,661)
	(5,254) (47,857,972) 148,214,785	(442) 51,806,028 96,408,757
	$100,356,813	$148,214,785

The accompanying notes are an integral part of financial statements

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MERCURIES & ASSOCIATES HOLDING, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

1. GENERAL

Mercuries & Associates Holding, Ltd.(the Company) was founded in February 1965, formerly known as Mercuries & Associates, Co., Ltd. and reorganized its structure in 2015. The Company and its affiliates belong to a comprehensive service industry, providing a group of services including insurance, food & beverage, pharmaceutical and IT integration. The Company is mainly engaged in finance and investment.

2. THE AUTHORIZATION OF THE FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issuance by the Board of Directors on March 31, 2022.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

3.1 Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRSs”) as endorsed by the Financial Supervisory Commission (“FSC”) ：

New standards, interpretations and amendments as endorsed by FSC effective from 2021 are as follows:

New, Revised or Amended Standards and Interpretations Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest rate benchmark reform - phase 2’ Amendment to IFRS 16, ‘Covid-19-related rent concessions beyond June 30, 2021’	Effective Date Issued by IASB
	January 1, 2021 January 1, 2021 April 1, 2021 (Note)

Note ： Earlier application from January 1, 2021 is allowed by FSC.

Except for the following, the above standards and interpretations have no significant impact to the Company’s financial position and operating results.

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• 3.1.1 Amendments to IFRS 4 “Extension of the temporary exemption from applying IFRS 9”

On the issue of IFRS 17 (Revised) Insurance Contracts in June 2020, the end date for applying the two options under the IFRS 4 amendments was extended to January 1, 2023, aligned with the effective date of IFRS 17. In accordance with the “Regulations Governing the Preparation of Financial Reports by Enterprises Engaging in Insurance”, the subsidiary MLI adopts the “overlay approach” rather than temporary exemption. Therefore, the subsidiary MLI assesses that the adoption of the abovementioned amendments would not have any material impact on its financial statements.

• 3.1.2. Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest rate benchmark reform － phase 2” (the Phase 2 amendments)

The subsidiary MLI applied the Phase 2 amendments retrospectively. In accordance with the exceptions permitted in the Phase 2 amendments, the subsidiary MLI has elected not to restate the prior period to reflect the application of these amendments, including not providing additional disclosures for 2020.

The Phase 2 amendments provide practical relief from certain requirements in the standards. These reliefs relate to modifications of financial instruments when a benchmark interest rate in a contract is replaced with a new alternative benchmark rate.

• 3.1.3. Amendments to IFRS 16“Covid-19-related rent concessions beyond June 30, 2021”

  • A one-year extension to the practical expedient is available to lessees when accounting for COVID-19-related rent concessions reduce the lease payments originally due on or before June 30, 2022.

• 3.2 Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company ：

New standards, interpretations and amendments as endorsed by the FSC effective from 2022 are as follows:

as follows:
New, Revised or Amended Standards and Interpretations	Effective Date Issued by IASB
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’ Annual improvements to IFRS standards 2018-2020	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

Based on the Company’s assessment, the above standards and interpretations have no significant impact to the Company’s financial position and operating results.

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3.3 Effect of IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

New, Revised or Amended Standards and Interpretations

Effective Date Issued by IASB

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, ‘Insurance contracts’ Amendments to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9— comparative Information’ Amendments to IAS 1 ‘Classification of liabilities as current or non- current’ Amendments to IAS 1 ‘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’

To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

Except for the following, the Company is evaluating the impact of its initial adoption of the abovementioned standards and interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation ：

3.3.1. IFRS 17 ‘Insurance contracts’

The new standard of accounting for insurance contracts contain recognition, measurement, presentation and disclosure of insurance contracts issued, and the main amendments are as follows:

• (1) Recognition: the beginning of the coverage period of the group of contracts, the date when the first payment from a policyholder in the group becomes due and when the group becomes onerous shall recognize a group of insurance contracts it issues from the earliest.

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• (2) Measurement: on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. For subsequent measurement, the entity shall estimate the cash flows, discount rates and the adjustment for non-financial risk.

• (3) Presentation and disclosure: the presentation of insurance revenue is based on the provision of service pattern and investment components excluded from insurance revenue.

3.3.2. Amendments to IFRS 17, ‘Insurance contracts’

The fundamental principles introduced when the International Accounting Standards Board first issued IFRS I7 in May 2017 remain unaffected. The amendments are designed to:

• (1) reduce costs by simplifying some requirements in the Standard ;

• (2) make financial performance easier to explain; and

• (3) Ease transition by deferring the effective date of the Standard to 2023 and by providing additional relief to reduce the effort required when applying IFRS 17 for the first time.

• 3.3.3. Amendments to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 — comparative Information’

The amendment adds a new transition option to IFRS 17 (classification overlay approach) to alleviate accounting mismatches in comparative information between insurance contract liabilities and related financial assets on the initial application of IFRS 17. It allows presentation of comparative information about financial assets to be presented in a manner that is more consistent with IFRS 9 Financial Instruments.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

4.1. Statement of Compliance

The consolidated financial statements have been prepared in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, the IFRSs, IASs, IFRIC Interpretations, and SIC Interpretations endorsed by the FSC(the ‘IFRSs’).

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4.2. Basis of Preparation

• 4.2.1. The consolidated financial statements have been prepared on the historical cost basis except for the followings:

• (1) Financial instruments at fair value through profit or loss are measured at fair value (including derivative instruments).

• (2) Financial instruments at fair value through other comprehensive income are measured at fair value.

• (3) Liabilities on cash-settled share-based payment arrangements are measured at fair value.

• (4) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

• (5) Reinsurance contract assets, insurance liabilities and provisions for insurance contracts with the feature of financial instruments are measured in compliance with the ‘Regulations Governing Various Reserves by Insurance Enterprises’.

• (6) Investment properties are measured at fair value.

• 4.2.2. The preparation of financial statements in compliance with the IFRSs as endorsed by the FSC requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the accounting policies. Areas involve higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, please refer to Note 5 for more information.

4.3. Basis of Consolidation

All subsidiaries are included in the consolidated financial statements. Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Company obtains control of the subsidiaries and ceases when the Company loses control of the subsidiaries.

Inter-company transactions, balances and unrealized gains or losses are eliminated. Accounting policies of its subsidiaries have been adjusted to align with those used by the Company.

Changes in ownership of a subsidiary that do not result in loss of control are accounted for as equity transactions. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changed in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

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4.4. Subsidiaries of the Company (MAH) included in the consolidated financial statements:

NO	Investor	Investee	Main Business and Products	Percentage of Ownership	Percentage of Ownership	Percentage of Ownership
				2021.12.31	2020.12.31	Note
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15	MAH, MDS, MFB, MF, MA and MF&B MAH MAH MAH and MFB MAH MAH MAH MAH MAH, MA, MFB, MF&B and MH MAH, MDS and MFB MAH MAH MAH MAH MAH	Mercuries Life Insurance Co., Ltd. (“MLI”) Mercuries & Associates, Ltd. (“MA”) Mercuries Data Systems Ltd. (“MDS”) SCI Pharmtech Inc. (“SCI”) Mercury Fu Bao Co., Ltd. (“MFB”) Mercuries General Media, Inc. (“MGM”) Mercuries Harvest Co., Ltd. (“MH”) Mercuries F&B Co., Ltd. (“MF&B”) Mercuries Leisure Co., Ltd. (“MI”) Hipact Tech. Inc. (“HT”) Mercuries Furniture Co., Ltd. (“MF”) M.T.I. Cigars Co., Ltd. (“M.T.I.”) Mercuries Insurance Agency Co. Ltd. (“MIA”) Mercuries Liquor & Food Co., Ltd. (“MLF”) Tastynoodle Co., Ltd (“Tastynoodle”)	Life insurance Retail of footwear Sales of Computer equipment Manufacture and sales of Active Pharmaceutical Ingredients(“API”) and API Intermediates Sales and agency of liquor, cigar and cigarette Agency for import production of video tapes, etc. Lease and sales of machinery equipment Beef noodles, other kinds of rice, noodles, pizza and fried chicken restaurant chain stores Leisure and entertainment Computer equipment installation and data processing Furniture retail and decoration Sales and agency of liquor, cigar and cigarette Agency of insurance Wholesale of tobacco and liquor, beverage and food Investment	43.80% 100.00% 53.44% 34.18% 100.00% 86.96% 100.00% 93.63% 81.64% 86.58% 100.00% 100.00% 100.00% 100.00% 100.00%	44.57% 100.00% 53.44% 34.18% 100.00% 86.96% 100.00% 93.63% 81.64% 86.58% 100.00% 100.00% 100.00% 100.00% 100.00%	(1),(2) - - (1) - - - - - - - - - - -

20

NO	Investor	Investee	Main Business and Products	Percentage of Ownership	Percentage of Ownership	Percentage of Ownership
				2021.12.31	2020.12.31	Note
16 17 18 19 20 21 22 23 24 25 26 27	MAH and MA MAH and MA MAH and SMR MF&B MAH, MFB, M.T.I. and MF&B MAH and MFB MDS MDS MDSI CIT HK SCI SMR	Family Shoemart Co., Ltd (“Family Shoemart”) Simple Mart Retail Co., Ltd. (“SMR”) Sanyou Drugstores, Ltd.(“SD”) Mercuries Food Service Japan Ltd. (“MFS Japan”) Mercuries Foodservice Co., Ltd. (“Foodservice”) Asiandawn Ventures Inc. (“Asiandawn”) Mercuries Data Systems International Ltd. (“MDSI”) Mercuries Information Systems International Co., Ltd. (“MISI”) Core Info Tech Limited (Hong Kong) (“CIT HK”) Mercuries Soft (Nanjing) Ltd. (“MS Nanjing”) Yushan Pharmaceuticals, Inc. (“YP”) Simple Mart Plus Co., Ltd. (“SMP”)	Investment Retail Retail of cosmeceutical Catering Investment Investment Investment Software and data processing services Investment Computer software, development, production and sales of information software, self-produced product management and related technical consulting services Research and development, manufacture and sales of Active Pharmaceutical Ingredients(“API”) Retail	100.00% 60.86% 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	100.00% 68.88% 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	- (3) (4) - - (5) - - - - - -

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NO	Investor	Investee	Main Business and Products	Percentage of Ownership	Percentage of Ownership	Percentage of Ownership
				2021.12.31	2020.12.31	Note
28 29 30 31	Foodservice and Family Shoemart MLF SR MF&B	Mercuries Rich Ltd. (“MR”) Shang Rih Ltd. (“SR”) Mercuries Liquor & Food Japan Co., Ltd. (“MLF Japan”) Mercuries F&B Consulting Co., Ltd. (“MF&BC”)	Retail and import and export supporting services Sales of tobacco and liquor, beverage and food Sales of tobacco and liquor, beverage and food Catering	- 100.00% 100.00% 97.00%	- 100.00% 100.00% 97.00%	(6) - - -

• Note 1 ： The Company has control over the subsidiary’s finance, operations, and employment decisions. Therefore, it has control over the subsidiary.

• Note 2 ： MLI has resloved by the board of directors to increase capital by cash 130,000 thousand shares in May, 2021. The Company’s shareholding down to 43.80%.

• Note 3 ： SMR increase capital by cash for initial public offering in November, 2021. The Company further provided 100 thousand shares for underwriter over-allotment. The Company’s shareholding down to 60.86%.

• Note 4 ： MAH and SMR signed a Share Purchase Agreement with Sumitomo Corporation on October 16, 2020 to purchase shares of Sanyou Drugstores, Ltd. (SD) and obtained 5,000 thousand and 45,000 thousand shares, respectively. The transaction were completed on December 22, 2020 and the shareholding increased to 100%.

• Note 5 ： Asiandawn has resolved by the board of directors to dissolve on December 31, 2019. The liquidation procedures has been completed on May 26, 2020.

• Note 6 ： The liquidation procedures of MR has been completed on July 27, 2020.

• 4.5. The financial statements of SMR, SCI, YP, MF&B, MF&BC, SMP, MH, MI, MFS Japan and SD on December 31, 2021 and 2020 were audited by other auditors. Total assets of the aforementioned subsidiaries were $13,668,201 thousand and $13,173,861 thousand, constituting 0.96% and 0.96% of the total consolidated assets as of December 31, 2021 and 2020 respectively. Total comprehensive income were $554,180 thousand and $949,138 thousand, constituting 200.84% and 220.37% of total consolidated comprehensive income for the years ended December 31, 2021 and 2020 respectively.

22

4.6. Subsidiaries not included in the consolidated financial statements: None

• 4.7. Subsidiaries with non-controlling interests that are material to the Company:

As of December 31, 2021 and 2020, non-controlling interest amounted to $27,504,955 thousand, and $27,185,239 thousand, respectively. The information of material non-controlling interest and respective subsidiaries are as follows:

	Non-controlling interest	Non-controlling interest	Non-controlling interest	Non-controlling interest
	December 31, 2021		December 31, 2020
Name of subsidiary Principal place of business	Amount Ownership (%)		Amount Ownership (%)
MLI Taiwan	$23,362,532	56.20%	$23,408,893	55.43%

Summarized financial information of the subsidiaries (Not adjust according to the equity ratio) ：

Balance sheets

Assets Liabilities Total net assets	MLI December 31, 2021 December 31, 2020 $1,400,567,397 $1,338,837,240 1,359,129,007 1,296,725,451 $41,438,390 $42,111,789	MLI December 31, 2021 December 31, 2020 $1,400,567,397 $1,338,837,240 1,359,129,007 1,296,725,451 $41,438,390 $42,111,789
		December 31, 2020
		$1,338,837,240 1,296,725,451
		$42,111,789

Statements of comprehensive income

Revenue Profit (loss) before income tax from continuing operations Income tax (expense) benefit Net profit Other comprehensive income Total comprehensive income (loss)	MLI	MLI
	2021 $143,138,547 (1,045,837) 2,136,635 1,090,798 (2,764,825) $(1,674,027)	2020
		$157,231,964
		1,740,311 (295,773)
		1,444,538
		(2,967,401)
		$(1,522,863)

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Statements of cash flows

Statements of cash flows
Net cash flows generated from (used in) operating activities Net cash flows generated from (used in) investing activities Net cash flows generated from (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	MLI
	2021 $63,038,917 (113,098,426) 1,061,882 (48,997,627) 146,181,928 $97,184,301	2020
		$79,853,993 (28,915,467) 762,816
		51,701,342 94,480,586
		$146,181,928

4.8. Foreign currency transaction

The financial statements of each individual consolidated entity were expressed in the currency which reflected its primary economic environment (functional currency). The functional currency of the Company and presentation currency of the consolidated financial statements are both New Taiwan Dollars (NT$). In preparing the consolidated financial statement, the operating results and financial positions of each consolidated entity are translated into NT$.

In preparing the financial statements of each individual consolidated entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded 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. Such exchange differences are recognized in profit or loss in the year 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 the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income in which case, the exchange differences are also recognized directly in other comprehensive income. Nonmonetary items measured in terms of historical cost in foreign currencies are not retranslated.

For the purposes of presenting consolidated financial statements, the assets and liabilities of the Company’s foreign operations are translated into NT$ using exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period. Exchange differences are recognized in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate).

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4.9. Classification of current and non–current items

Current assets are assets held for trading purposes and assets expected to be converted to cash, sold or consumed within one year from the end of the reporting period. Current liabilities are obligations incurred for trading purposes and obligations expected to be settled within one year from the end of the reporting period. Assets and liabilities that are not classified as current are non-current assets and liabilities, respectively.

The subsidiary MLI primarily engages in life insurance business. In the insurance industries, there is no clear standard distinction for the length of operating cycle depending on the nature of the insurance contracts and the different durations of the insurance claim processing. Therefore, MLI does not present the classification of current or non-current assets, and current or non-current liabilities.

4.10. Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits can be classified as cash equivalents if they meet the criteria mentioned above and are held for short-term cash commitments in operational purpose.

4.11. Financial assets

Financial assets and financial liabilities are initially recognized when the Company and its subsidiaries become a party to the contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus transaction costs that are directly attributable to its acquisition or issue.

4.11.1. Financial assets

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

On initial recognition, a financial asset is classified as measured at amortized cost; fair value through other comprehensive income (FVOCI)–debt investment ; FVOCI-equity investment ; fair value through profit or loss (FVTPL). The Company and its subsidiaries shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

(1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• A. It is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• B. Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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These assets are subsequently measured at amortized cost which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, and impairment loss are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• (2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• A. It is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

• B. Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company and its subsidiaries may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company and its subsidiaries’ right to receive payment is established.

• (3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets and accounts receivable. On initial recognition, the Company and its subsidiaries may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

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(4) Loans

Loans are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans are measured at amortized cost using the effective interest method less any impairment losses. Transaction accounting is used when buying or selling financial assets in accordance with trading practices.

Loans consist of policy loans, auto premium loans, and mortgage loans. Policy loans are loans guaranteed by the policy. Auto premium loans are premiums paid by the Company according to the policy. Mortgage loans include loans and overdue loans that have been secured by real estate, chattel and securities, loans and overdue loans approved by the competent authority. Loans are stated at the outstanding principal without unearned revenue. The amortized cost and interest income are measured using the effective interest method.

(5) Overdue loans

When the principal or interest of a loan is overdue by more than three months, or payment has been requested by the Company, or when the collateral has been disposed of, it is recorded as a delinquent loan.

A delinquent loan is transferred to an overdue loans account within six months after its due date, or when there is a direct evidence to reveal that the financial capability of the accommodator is insufficient to pay off. For delinquent loans transferred to overdue loans, the accrued interest is not accrued internally but externally, and it continues to be included in the request for payment. Unpaid interest for a delinquent loan accrued before it is transferred to the overdue loans account is transferred to overdue loans together with the principal.

Accrued premium receivables, interest receivables and other receivables are classified as delinquent receivables when they are more than three months overdue. Claims recoverable from reinsurers and due from other insurers previously were classified as delinquent receivables when they were more than nine months overdue.

(6) Business model assessment

The Company and its subsidiaries make an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

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• A. The stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets.

• B. How the performance of the portfolio is evaluated and reported to the Company and its subsidiaries’ management.

• C. The risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Company and its subsidiaries’ continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

• (7)Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, principal is defined as the fair value of the financial assets on initial recognition. Interest is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company and its subsidiaries consider the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company and its subsidiaries consider:

• A. Contingent events that would change the amount or timing of cash flows;

• B. Terms that may adjust the contractual coupon rate, including variable rate features;

• C. Prepayment and extension features; and

• D. Terms that limit the Company and its subsidiaries’ claim to cash flows from specified assets (e.g. non- recourse features).

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• (8) Impairment of financial assets

The Company and its subsidiaries recognize loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, accounts receivable, amortized costs, loans, refundable deposits and other financial assets), debt investments measured at FVOCI.

The Company and its subsidiaries measure loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

• A. Debt securities that are determined to have low credit risk at the reporting date; and

• B. Other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company and its subsidiaries are exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company and its subsidiaries consider reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company and its subsidiaries’ historical experience and informed credit assessment as well as forward-looking information.

The Company and its subsidiaries consider a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of “investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s”.

The Company and its subsidiaries assume that the credit risk on a financial asset has increased significantly if it is more than 30 days past due or the credit rating of financial instrument has been defined as lower than the investment grade and equal or lower than the initial purchase rating by 2 notches.

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The Company and its subsidiaries consider a financial asset to be in default when the financial asset is more than 90 days past due or the borrower is unlikely to pay its credit obligations to the Company and its subsidiaries in full.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company and its subsidiaries in accordance with the contract and the cash flows that the Company and its subsidiaries expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company and its subsidiaries assess whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

• A. Significant financial difficulty of the borrower or issuer;

• B. A breach of contract such as a default or being more than 90 days past due;

• C. The lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• D. It is probable that the borrower will enter bankruptcy or other financial reorganization.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charge to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

Other than the assessment described above, in accordance with the “Guidelines for Handling Assessment of Assets, Loans Overdue, Receivable on Demand, and Bad Debts by Insurance Enterprises,” the subsidiary MLI classifies the loan assets into Class 1 “normal”, Class 2 “under notice”, Class 3 “possible to be recovered”, Class 4 “difficult to be recovered”, and Class 5 “with no chance of recovery”, and sets aside an allowance for doubtful accounts. The above mentioned regulation is the minimum requirement of allowance for doubtful accounts, and the sum of the allowance for doubtful accounts must not be less than the following standards:

• A. The total balance of 0.5% of claim balance of Class1 loan assets after deducting life insurance loans, automatic premium loans and government debt, 2% of claim balance of Class 2 loan assets, 10% of Class 3, 50% of Class 4, and the entire claim balance of Class 5 loan assets.

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The sum of loans overdue and receivables on demand which are valuated as no collaterals.

1.5% of the total balance of the policy-related loan, which are started from January 1, 2011, being deducted from the sum of housing purchase, renovating loans, and the building loans, the remaining sum has to be recognized annually before the end of 2016 in order to strengthen the ability of the insurance companies to undertake the loss of specific loans, according to FSC Insurance Bureau (FSCIB) No. 10402506096.

• B. 1% of the total balance of Class 1 to 5 loan assets deducting life insurance loans, automatic premium loans, and government debt.

The amount of doubtful account is estimated as the higher of the results of the two methods used above.

The subsidiary MLI shall provide the related allowance for doubtful accounts according to the above-mentioned guidelines if the assessed amount of impairment loss in accordance with the third amendment of the IFRS 9 Financial Instruments.

(9) Derecognition of financial assets

The Company and its subsidiaries derecognize a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company and its subsidiaries neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company and its subsidiaries enter into transactions whereby it transfers assets recognized in its statement of balance sheet but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(10) Overlay approach

The subsidiary MLI has designated financial assets to adopt the “overlay approach” in accordance with IFRS 4 “Insurance Contracts”, to reduce the financial impact and differences as a result of the different implementation dates between IFRS 9 and IFRS 17, whereby IFRS 17 is expected to be effective at a later date.

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4.11.2. Derivative financial instruments and hedge accounting

The Company and its subsidiaries hold derivative financial instruments to hedge the risk of fluctuation of price, foreign currency and interest rate exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.

4.11.3. Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company and its subsidiaries currently have a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

4.11.4. Structured entity

A structured entity has been specially designed so that voting right or other similar rights do not dominate the entity. That is, the voting right can only affect the administrative tasks, all the key operating decisions are negotiated and determined on the contract basis. The Company consolidates the structured entities into its financial statement when the following criteria are made:

• (1) Having the rights over the structured entity’s activity, such as, but not limit to, voting right;

• (2) Having the rights to obtain the structured entity’s reward by involving in such structure entity;

• (3) Having the capability to exercise its rights over the structured entity to have influences over the entity’s reward.

4.12. Accounts receivable and Notes receivable

Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services and are initially measured at fair value. Subsequent to initial recognition, accounts and notes receivable are measured at amortized cost using the effective interest method and recognized loss allowances in profit or loss.

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4.13. Inventories

Inventories are recorded at cost when purchased and follow the perpetual inventory system. The weighted-average cost method is adopted in determining costs of inventories.

Inventory write-downs are made on an item-by-item basis, except where it may be appropriate to group similar or related items.

Any defective, damaged, or obsolete inventories are stated at net realizable value if the values of such inventories are reduced significantly.

4.14. Investments accounted for under equity method -associates

Investments accounted for under equity method are investments in associates. An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of an entity, but is not control or joint control over those policies.

Except classified as assets held for sale, the operating results and assets and liabilities of associates are incorporated in these consolidated financial statements under equity method of accounting. Under equity method, an investment in an associate is initially recognized in the consolidated statements of financial position at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate as well as the distribution received. When the loss in the affiliated enterprise recognized proportionally by the consolidated company equals or exceeds its interest in the affiliated enterprise, stop recognizing loss; also, only recognizes additional loss and related liability upon the occurrence of a legal obligation, constructive obligations, or prepayment made on behalf of the invested company.

Any excess of the cost of acquisition over the Company and its subsidiaries’ share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

Balances and transactions generated by transactions between companies as well as any unrealized income and expenses have been wrote off during the preparation of consolidated financial statements. When there is any transaction between a consolidated entity and an affiliate, the unrealized profits and losses shall be wrote off according based on the respective proportion at the time of the consolidated.

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4.15. Joint operation and investment accounted for under equity method- joint ventures

Investment of joint arrangements are classified as joint operations or joint ventures based on its contractual rights and obligations.

• 4.15.1. For the interest in a joint operation, the Company and its subsidiaries recognize direct interest in (and other shares of) the joint operation’s assets, liabilities, revenue and expense which are included in the financial statements.

4.15.2. Investment accounted for under equity method - joint ventures

The Company and its subsidiaries accounts for its interest in a joint venture under equity method. Unrealized profits and losses arising from the transactions between the Company and its subsidiaries and its joint venture are eliminated to the extent of the Company and its subsidiaries' interest in the joint venture. However, when the transaction provides evidence of a reduction in the net realizable value of current assets or an impairment loss, all such losses shall be recognized immediately. When the Company and its subsidiaries' share of losses in a joint venture equals or exceeds its interest in the joint venture together with any other unsecured receivables, the Company and its subsidiaries do not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture.

4.16. Reinsurance contract assets

The subsidiary MLI arranges the reinsurance business based on the business need and the related insurance laws to limit the losses caused by certain events. For reinsurance ceded business, the subsidiary MLI cannot refuse to fulfill their obligations to insured even if the reinsurer refuses to fulfill its obligation.

Reimbursement expenses and income arising from the reinsurance business, and the amount of income payable or reimbursement from the relevant insurance contract shall be recognized in the same period. The net entitlement of the reinsurance contract, including the reinsurance reserve asset, claims and payment recoverable from reinsurers, and intercompany reinsurance receivables shall be recognized in accordance with the reinsurance contract and the relevant insurance contract liabilities. The assets or liabilities and the incomes or expenses of the reinsurance contract shall not be offset against the loss or benefit of the relevant insurance liabilities and related insurance contracts.

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Reinsurance contract assets, claims and payment recoverable from reinsurers, and intercompany reinsurance receivables held by ceding companies are periodically assessed for impairment. If the reinsurance asset is impaired, its carrying amount is reduced accordingly, and impairment loss thereon is recognized in profit or loss. A reinsurance asset is impaired if, and only if, there is objective evidence that the subsidiary MLI may not receive all amounts due them under the terms of the contract as a result of an event that occurred after initial recognition of the reinsurance asset; and the impact of that event to the amounts that the subsidiary MLI will receive from the reinsurer can be measured reliably.

In determining the classification of a reinsurance contract, the subsidiaries MLI considers whether a significant insurance risk should be transferred to the reinsurer. If there is no significant insurance risk that are being transferred, the contract shall be recognized and measured in accordance with deposit accounting.

If the subsidiary MLI can measure the constituent elements of its savings separately, the insurance component of the reinsurance contract and the elements of the savings shall be recognized separately. That is, the subsidiary MLI will deduct the insurance component from the reinsurance contract after receive (or pay) the consideration of the contract, and is recognized as financial liabilities (or assets), not income (or expense). The financial liabilities (or assets) are recognized and measured at fair value and are based on discounted future cash flows as a basis for fair value measurement.

4.17. Insurance contracts

The subsidiary MLI classifies a contract as an insurance contract when the subsidiary MLI accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. The definition of an insurance risk is that, a risk, other than financial risk, is being transferred from the holder of a contract to the issuer. The definition of a financial risk is that, a risk came from a possible future change in one or more of the variables (including specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating and credit index or other variable). If one of the above variables is a nonfinancial variable, it must not be specific to a party to the contract. Insurance contracts may also transfer some of financial risks.

The subsidiary MLI deems a risk to be significant if, and only if, an insured event could cause the subsidiary MLI to pay significant additional benefits in any scenario except a scenario that lacks commercial substance. At inception, a contract that qualifies as an insurance contract shall still be considered an insurance contract until all rights and obligations are extinguished or expire. Contracts that do not transfer a significant insurance risk are classified as financial instruments, and if a significant insurance risk is subsequently transferred, the subsidiary MLI shall reclassify the contracts as insurance contracts.

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Sub-classification of insurance contracts and financial instruments will depend on whether they contain discretionary participation features or not. Discretionary participation feature is a contractual right to receive additional benefits as a supplement to guaranteed benefits:

• 4.17.1. That are likely to be a significant portion of the total contractual benefits;

• 4.17.2. Whose amount or timing is contractually at the discretion of the issuer; and

• 4.17.3. That are contractually based on:

• (1)The performance of a specified pool of contracts or a specified type of contract;

• (2)The realized and/or unrealized investment returns on a specified pool of assets held by the issuer; or

• (3)The profit or loss of the subsidiary MLI, fund or other entity that issues the contract.

When the economic characteristic and risk of embedded derivatives do not closely relate to that of their host contract, the subsidiary MLI shall separate the embedded derivatives from the host contract, and measure them at fair value and record the changes in fair value in profit or loss. However, the subsidiary MLI need not separate an embedded derivative from the host contract if it meets the definition of an insurance contract, or when the entire insurance contract are measured at fair value and the changes in fair value are recognized as profit or loss.

4.18. Investment property

Properties held by the Company and its subsidiaries to earn rentals revenue and/or for capital appreciation are classified as investment properties. Investment properties, including office buildings and lands held under operating leases, are measured initially at their costs. Cost of a purchased investment property comprises its purchase price and any directly attributable expenditure. Cost of a self-constructed investment property comprises expenditure of raw materials, direct labor, and any expenditure directly attributable to bringing the property to the condition necessary for it to be capable of operating.

The investment property is measured by fair value model from January 1, 2020 and the change of fair value is recognized as profit & loss in the current period in accordance with IAS 40 “Investment property”. However, those categorized held for sale and discontinued operations according to IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” which met the criteria of non-current asset held for sale (including disposal group held for sale), and those met the criteria of the 53rd paragraph of IAS 40 “Investment property” were excluded.

When the use of a property changes, investment property is reclassified as property, plant and equipment (PPE) and its carrying amount at the date of reclassification becomes the cost for subsequent PPE.

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The subsidiary MLI in order to maintain the soundness and stability of its financial structure in insurance industry, the Company needs to set aside a special reserve equal to the net amount of the adjustments on investment properties and the accumulated excess net amount after tax of the adjustment from subsequent measurement based on the fair value in according with FSCIB No.10904917647 issued on May 11, 2020. The special reserve will then be subsequently set aside only for valid contract based on IFRS 17 "Insurance Contracts", the policy of the fair value evaluation of valid insurance contract in the insurance industry, and the other regulations designated by the authority.

4.19. Property, plant and equipment (PPE)

Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset only when it is probable that future economic benefits associated with the item will flow to the Company and its subsidiaries and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are expensed to profit or loss during the financial period in which they are incurred.

PPE apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Land is not depreciated.Each part of an item of PPE that is significant in relation to the total cost of the item must be depreciated separately.

Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at the end of each reporting period. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, it is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives for buildings are 2 to 60 years, useful lives for other PPE are 2 to 15 years.

4.20. Leasing

4.20.1. As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease constitutes the major part of the economic life of the asset.

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If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

4.20.2. As a lease

Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company and its subsidiaries. For short-term leases or leases of low-value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (1) Fixed payments, less any lease incentives receivable;

• (2) Variable lease payments that depend on an index or a rate;

• (3) Amounts expected to be payable by the lessee under residual value guarantees;

• (4) The exercise price of a purchase option, if the lessee is reasonably certain to exercise that option; and

• (5) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The Company subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

At the commencement date, the right-of-use asset is stated at cost comprising the following:

• (1) The amount of the initial measurement of lease liability;

• (2) Any lease payments made at or before the commencement date; and

• (3) Any initial direct costs incurred.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

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When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

As a practical expedient, the Company elects not to assess all rent concessions that meets all the conditions as follows are lease modifications or not:

• (1) The rent concessions occurring as a direct con sequence of the covid-19 pandemic;

• (2) The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

• (3) Any reduction in lease payments affects only payments originally due on or before 30 June 2021; and

• (4) There is no substantive change to other terms and conditions of the lease.

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

4.21. Intangible asset

Intangible assets individually acquired are measured by cost less accumulated amortization and impairment losses. Amount of amortization is calculated on a straight-line basis over their estimated useful lives. Estimated useful life and amortization method of intangible assets should be reviewed at each financial year-end. Any changes in accounting estimates can be applied prospectively.

4.22. Impairment of non-financial asset

For non-financial assets other than deferred tax assets and employee benefits, the Company and its subsidiaries assess whether the impairment has occurred at the end of each reporting period, and estimate its recoverable value. If the recoverable value cannot be estimated individually, the Company and its subsidiaries estimate the recoverable amount of the cash generating unit of the asset to assess the impairment.

The recoverable amount is the higher of the fair value less cost of sale for individual asset or cash generating units and the value of their use. If the recoverable value of an individual asset or cash generating unit is less than the carrying amount, it shall be write down to the recoverable amount and the impairment loss shall be recognized.

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The Company and its subsidiaries reassess the impairment loss of non-financial assets other than goodwill at the end of each reporting period. If the recoverable value has increased, the impairment loss is written off in accordance with the changed of recoverable value. However, the amount added back cannot exceed the individual asset or cash generate unit's carrying amount less any depreciation expense from last year.

4.23. Employee benefits

4.23.1. Pension

(1) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expense when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

(2) Defined benefit plans

A defined benefit plan is a post-employment benefit other than a defined contribution plan. The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company and its subsidiaries, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company and its subsidiaries determine the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

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When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company and its subsidiaries recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

4.23.2. Bonuses to Employees and Remuneration to Directors

Employee bonuses and directors remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts by board of directors and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee’s compensation is distributed by shares, number of shares distributed was calculated based on the closing price at the previous trading day of the board meeting.

4.23.3. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short-term cash bonuses or profit-sharing plans if the Company has a present legal or constructive obligation to pay as a result of past service provided by the employee, and the obligation can be estimated reliably.

4.24. Separate account assets and liabilities

The subsidiary MLI sells investment-linked products. The insurer's costs and expenses shall be deducted (according to the agreed method) from the premiums paid by insurance applicants, and such residual premiums shall be recorded in a separate account according to the arrangements for investment allocation agreed or designated by the insurance applicants. The value of assets under separate accounts shall be calculated according to the fair value on the valuation date, and the net values of such assets shall be calculated in accordance with applicable laws and regulations and IAS.

In accordance with the "Regulations Governing the Preparation of Financial Reports by Enterprises Engaging in Insurance”, the assets and liabilities under separate accounts (whether they are resulted from insurance contracts or insurance contracts with financial instruments features) are recorded as Separate account assets for unit-linked products" and " Separate account liabilities for unit-linked broducts"; the revenues and the expenses under separate accounts which are the sum of revenues and expenses of separate account that fulfill the definition provided by IFRS 4 (including investment-inked products with discretionary participating features) are respectively recorded as " Separate account revenue for unit-linked products" and "'Separate account expense for unit-linked products.

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4.25. Financial liabilities and equity instruments

4.25.1. Classification of debt or equity

Debt or equity instruments issued by the Company and its subsidiaries are classified as financial liabilities or equity in accordance with the substance of the contractual agreement.

4.25.2. Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

4.25.3. Other financial liabilities

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

4.25.4. Derecognition of financial assets and liabilities

The Company and its subsidiaries derecognize a financial liability when its contractual obligations are discharged, cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

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

4.26. Bonds Payable - Convertible Bonds

The convertible bonds that the Company issued are embedded with a put option and a call option in addition to the option to convert the bonds to common stocks. At issuance, the issue price is split between financial assets and financial liabilities based on the issue term and the related accounting treatments are as follows:

The option to convert the bonds to common stocks, put option and call option are measured at net fair value at initial recognition and are recognized as financial assets or financial liabilities at fair value through profit or loss. The difference between the carrying amount and the fair value at each reporting date is recognized as gains or losses on financial assets (liabilities) at fair value through profit or loss.

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The bonds payable at initial recognition is measured at issue price less the amounts recognized as financial assets or financial liabilities at fair value through profit or loss. The difference between the fair value at initial recognition and the redemption value is recognized as premiums or discounts, an addition to or reduction from bonds payable, and is amortized using the effective interest rate. The amortization is recognized as an adjustment to financial cost in profit or loss during the outstanding period of the bonds.

Transaction costs that directly attribute to the issue of convertible bonds are allocated to each liability component of the bonds in proportion to the initial carrying amounts.

When the bonds are converted to common stocks by bondholders, the liability components, including bonds payable and financial liabilities at fair value through profit or loss, shall be re-measured according to their respective subsequent treatment aforementioned. The issue cost of the common stocks then equals to the total of the carrying amounts of the liability components.

4.27. Insurance reserves

The reserve for both the insurance contracts and the investment contracts with or without discretionary participation feature of the subsidiary MLI determines reserves for insurance contracts in accordance with the Regulations Governing the Provision of Various Reserve, Regulation of Reserves for Operating Investment in Life Insurance, Regulation of Various Reserves for Operating Investment in Life Insurance and Directions for Interest-Sensitive Annuity Insurance Policy Premium Rates. The methodologies used to determine the reserve are certified by the appointed actuary who is authorized by the FSC. Except for the reserve for short-term group insurance which shall be calculated on the actual premiums or the premiums conforming to the rule prescribed in FSCIB No.11004925801 whichever is higher, the bases for determining other reserves or provision for liabilities are as follows:

In addition, some of the subsidiary MLI’s insurance contracts contain discretionary participation features and guarantee factors, but the Company did not separately identify them, so the overall contract is classified as liabilities.

4.27.1. Unearned premium reserve

Unearned premium reserves for effective insurance contracts with a term less than 1 year and accident insurance for effective insurance contracts with a term more than 1 year, universal variable life insurance and universal life insurance with a term over 1 year are calculated based on the gross premiums of the insurance contracts which have not matured yet on the balance sheet date.

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4.27.2. Claim reserve

Claim reserve is provided based on the incurred but not reported claims and reported but unpaid claims. For reported but unpaid cases, the claim reserves are provided based on the actual claim case by case. For incurred but not reported cases, the reserve is provided based on historical claim experiences and expenses along with the insurance types, including accident insurance, health insurance and life insurance with a term less than 1 year via the method conforming to actuarial principles (ex: Loss Development Triangle Method).

4.27.3. Policy reserve

The provision for future policy benefits is calculated in accordance with both the modified method of article 12 of the Enforcement Rules of Insurance Law and the calculation prescribed by the competent authority.

Starting from 2003, for effective insurance contracts which adopt the dividend calculation formula prescribed under MOF No. 11004931041, the policy reserve is provided based on the currently reduced amount of dividend caused by the offset between interest margin and mortality margin for long term effective insurance contracts.

Starting from 2012, in accordance with FSCIB No. 10102500530 issued on January 19, 2012, a liability reserve based on 3% of sales is provided for purposes of writing off allowance for bad debts and calculated based on the terms of the "Regulations Governing the Provision of Various Reserve", the recovery of the special catastrophe reserve. In accordance with the FSCIB 10202124790 issued on November 21, 2013, additional liability reserve is not provided, since 2013.

When an insurer chooses to measure its investment property at fair value, the value of its insurance liabilities must also comply with the condition of measurement designated by the authority every year. If the results of the measurements indicate that the fair value of the insurance liabilities exceeds the book value, the difference should be reserved for insurance liabilities and the retained earnings must be reduced. The subsidiary MLI has changed its accounting policy for subsequent measurement of investment property from cost model to fair value model starting 2020. The results of the measurements indicated that the fair value of the insurance liabilities did not exceed its book value, therefore, there was no need to increase the reserves for insurance liabilities.

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4.27.4. Special reserve

The special reserve provided for retention business with a term within 1 year is divided into 3 categories, which are special catastrophe reserve, special contingency risk reserve and other special needs reserve. The methods for providing these reserves are as follows:

(1) Special catastrophe reserve

A special catastrophe reserve covering all types of insurance is provided at a rate prescribed by the competent authority. For the actual catastrophe claim exceeding $30,000 thousand, the excess amount is offset against special catastrophe reserve. For special catastrophe reserve that remains outstanding for over 15 years, it is written off based on the evaluation of an actuary and after being reported to the competent authority for inspection.

The above-mentioned new provision of special catastrophe reserve, net of income tax pursuant to IAS 12, is accounted for under special reserve of stockholders’ equity.

• (2) Special contingency risk reserve

If the net amount of actual claim minus the related special catastrophe reserve is lower than the amount of expected claim, a special contingency risk reserve is provided at a rate of 15% of the difference between the net amount of actual claim and the amount of expected claim.

If the net amount of actual claim minus the related special catastrophe reserve is higher than the expected claim amount, the difference is debited to special contingency risk reserve. However, the amount and type of insurance are reported to the competent authority for inspection. If the total accumulated amount of the special contingency risk reserve is over 30% of premium earned of the year, the excess is treated under reclaim rule.

The above-mentioned balance for write down or reclaim, net of income tax, is offset against the special reserve for contingency risk of equity in accordance with IAS 12. The new provision of special reserve for contingency risk, net of income tax pursuant to IAS 12, is accounted for under special reserve of stockholders’ equity rule.

In addition, the special contingency risk reserve after tax, which returned to the Company, should be recognized as special reserve with the shareholders’ approval in the next annual meeting. The reserve cannot be used for other purpose without the authorization from the competent authorities.

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• (3) Any increase or write down in other special reserve arise from other needs required the approval from the authority.

In accordance with the provision of article 32 of “ Regulations Governing the Provision of Various Reserve” , except the excess amount of fixed assets measured at fair value is offset against the adverse impacts of other reserves caused by first adoption of TIFRSs, the difference generated from the revaluation surplus of fixed assets is accounted for under special reserve of liability.

Additionally, commencing from January 1, 2013, the excess amount of the enhancement of liability reserve, calculated in accordance with FSC No. 10102515285 issued on November 27, 2012, could transfer to “liability reserve-Insurance contract liability measured at fair value” in accordance with FSC No. 10102515281 issued on November 30, 2012. For remaining outstanding reserve, it is accounted for under special reserve of stockholders’ equity, either recognized by 80% of which at first year or recovered by 5 years with the restriction up to $10 billion dollars each year.

4.27.5. Premium deficiency reserve

For life insurance, health insurance, or annuities with an insurance term over one year, and polices issued after January I, 2001, a deficiency reserve is provided when the actual premium written is less than the premium on the policy reserve prescribed by the competent authority.

In addition, the Company shall evaluate expected future claims and expenses for in-force contracts with contract term less than one year and for accident insurance contracts with terms over one year, and if the amount exceeds unearned premium reserve and expected future premium income, a premium deficiency reserve should be provided for the difference.

4.27.6. Unqualified reinsurance reserve

If a reinsurance contract on the ceded date or balance sheet date is deemed unqualified ceded reinsurance under the “ Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms” , the subsidiary MLI utilizes “ The Provision of Unqualified Reinsurance Reserve” to evaluate the effect of unqualified reinsurance in supervision reports, and the results are disclosed in its financial statements.

4.27.7. Liability adequacy reserve

Liability adequacy reserve is a reserve that is provided depending on the results of the liability adequacy test prescribed under IFRS 4 endorsed by the FSC.

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4.28. Reserve for insurance contracts with financial instrument features

Reserves for the financial instruments that are not separate account and insurance products without discretionary participation features under general account are provided in accordance with the “ Regulations Governing Insurance Enterprises for Setting Aside Various Reserves” and related regulations to set aside reserves.

4.29. Reserve for fluctuation of foreign exchange

Since March 1, 2012, the subsidiary MLI has provided a reserve for fluctuation of foreign exchange under liabilities for foreign investment assets (excluding non-unit-linked life insurance products denominated in foreign currencies) in accordance to the Regulations Governing Insurance Enterprises for Setting Aside Various Reserves. Based on the regulations, the subsidiary MLI may reclassify a portion of special reserves to the reserve for fluctuation of foreign exchange as its beginning balance; however, the reclassified amount should not exceed 50% of the special catastrophe reserve and the special risk volatility reserves under liabilities based on the former ROC generally accepted accounting principles as of December 31, 2011.

In accordance with the Directions Concerning Provision of Life Insurance Reserve for Fluctuation of Foreign Exchange and other associated regulations, the cap on accumulated balance, the provision and reversal mechanism, and other compliance regulations of the reserve for fluctuation of foreign exchange are as follows:

• 4.29.1. The initial amount of reserves for fluctuation of foreign exchange shall be repaid to the special earnings reserves in 3 years since the start date. The provided amount in the first year shall not be less than one third of the initial amount after tax. The accumulated amount provided in the first two years shall not be less than two third of the initial amount after tax. Because the special catastrophe reserve recorded under liability reserves should be provided as the initial amount of reserves for fluctuation of foreign exchange, the abovementioned provision of the special earning reserve should be taken account for the reduced recovery amount of the special catastrophe reserve while calculating based on the "Regulations Governing Insurance Enterprises for Setting Aside Various Reserves”.

• 4.29.2. Limit of provision: the total amount of its foreign investment assets in the current month times the exposure ratio times fixed reserve ratio equals the provision. If any, the foreign exchange gain from the non-hedged foreign currency assets times extra reserve ratio equals the additional provision.

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• 4.29.3. Limit of withdraw: If any, the foreign exchange loss from the non-hedged foreign currency assets times extra offset rate equals the reverse amount of this reserve. The balance of this reserve at the end of each month shall not be less than the "offering lower limit" (calculated as the average of the reserve balance in the prior years since 2012 plus an additional 20%).

• 4.29.4. Should the amount of this reserve decrease to the "offering lower limit" continuously for 3 months, this reserve shall be increased by 75%, and to be at least 3 times the "offsetting lower limit".

The monthly fixed reserve ratio, extra reserve ratio and extra offset ratio mentioned as above are as follows:

• A. The fixed reserve ratio is 0.05%. The ratio will be 0.06% when comply with the following condition.

• B. The extra reserve ratio and extra offset ratio are 50%. It will be 60% when comply with the following condition.

The condition mentioned above is only applicable when the average hedge cost is greater than or equal to 2%. The average hedge cost is calculated annually using the 1- year NTD/USD swap rate whose period begins in December of the previous year until November of the current year.

• 4.29.5. The upper limit of this reserve is considered as 9.5% of the total amount of its foreign investment assets at the end of each year.

• 4.29.6. The savings in costs from hedging due to this rule shall be provided as special earnings reserves each year. If the retained earnings are insufficient in the current year, the Company shall make up the insufficiency in the following year while it becomes sufficient.

• 4.29.7. If there are earnings after tax in the current year, 10% of the earnings amount should be provided as special earnings reserves. However, the Company may not provide such reserves if the regulatory authority approves. Besides, in accordance with Shou-Hui-Gui No. 1090201026, the calculation basis on set aside reserve should be based on the “amount of net profit after tax, plus, items other than net profit after tax for the current period included in the unappropriated earning for the year.”

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4.30. Provision

A provision is recognized if, as a result of a past event, the Company and its subsidiaries have a present legal or constructive obligation that can be estimated reliably, and is probable that an outflow of economic benefits will be required to settle the obligation.

The amount recognized as a provision is the best estimate 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. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

4.31. Treasury stock

The Company and its subsidiaries adopt cost method to repurchase outstanding shares as treasury shares. The cost of repurchasing treasury shares is specified in the financial statement as a deduction of shareholders’ equity, and the price difference of treasury share transactions is listed under the section of shareholders’ equity. When retiring treasury shares, it shall be credited as - “treasury share”, and debited as “share capital” and “capital reserve stock premium” in proportion to the share percentage of retirement.

The Company's shares held by its subsidiary are recorded as treasury shares. The profits generated from the subsidiaries’ disposal of the Company’s shares and the revenue received from the Company’s cash dividends are recorded in the “capital reserve - treasury stock transaction”.

4.32. Revenue

Revenue is measured by fair value of the consideration received or receivable deducting the estimated customer returns, discounts, and other related sales allowance.

4.32.1. Sales of goods

The Company and its subsidiaries recognize accounts receivable when the control to the goods or services is transferred and it is entitled to unconditionally claim the consideration. Such accounts receivable usually have a short period and have no major financial components. If the control to goods or services have been transferred to the customer but it is not yet entitled to unconditionally claim of consideration, the contract assets and revenue shall be recognized. If part of the consideration has been collected from the customer and the obligation to continue to provide the goods or services is still effective, the contract liabilities shall be recognized and transferred to revenue when the performance of obligations is completed.

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4.32.2. System integration and maintenance revenue

The subsidiary MDS provides services related to the installation of specific software and modules. The service revenue is recognized when services are provided to customers. The revenue from fixed-price contracts shall be recognized based on the percentage of services actually provided to the total services to be provided as of the date of financial statement, and the completion percentage of services shall be determined based on the actual costs incurred to the estimated total costs. The customer shall pay the contract price according to the mutually-agreed payment schedule. When the value of service provided exceeds the customer’s payable, it shall be recognized as the contract asset, and if the customer pays more than the value of service provided, it shall be recognized as the contract liability.

4.32.3. Premium income and acquisition costs

First-year and renewal premiums of insurance contract and financial instruments with discretionary participation features are respectively recognized as income when premiums are received and the policies are approved or due. Acquisition costs, including commissions and other costs related to acquiring new business, are recognized as expenses as incurred.

Premiums collected from the financial instruments without discretionary participation features under general account shall be recognized on the balance sheet as "reserve for insurance contract with financial feature". Acquisition costs related to acquiring new business are charged to "reserve for insurance contract with financial feature" as the insurance contracts become effective. Premiums collected from the financial instruments without discretionary participation features under separate account for unit-linked products shall be recognized as premium income to the extent of insurance component. The remaining, after being subtracted by other revenues, including up-front fee or investment management service fee income, shall be fully recognized as "separate account liabilities" on the balance sheet.

• 4.32.4. Accounting for service charge on investment-linked insurance contracts classified as financial products without discretionary participation features.

The service charges normally collected from the policyholder of insurance contracts, which do not belong to investment-linked insurance and which are classified as financial products non-discretionary participation features, include contract administrative charge, investment administrative charge, rescinding charge and others. These charges are recognized as revenue upon collection. When the subsidiary MLI receives certain service charge which makes them obligated to provide future service (ex: front-end load), this service charge is initially treated as a deferred revenue and is recognized as revenue based on the proportion of the period of service provision, amortized by the straight line method. Besides, the amount of amortization is recognized under fee income.

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In addition, the costs incurred by the policies of investment management services, including commission fees and incremental fees directly related to the issuance of the new contract, are subject to deferred approval and are provided under "deferred acquisition costs". And amortized by the proportion of the service rendered on the straight-line basis, with expense classified under "other operating costs".

4.32.5. Loyalty programmer

The customer loyalty program aims to provide customers with bonus points and grant them the right to purchase goods at discounted prices. The fair value of the consideration received or receivable for the original sale is jointly allocated to the bonus points and other components of such sale. The amount allocated to the bonus points shall be estimated based on the fair value of the right to purchase goods at discounted prices. The fair value shall be estimated based on the discounted amount and adjusted according to the proportion that is not expected to be redeemed. Such amounts shall be deferred first, and subsequently recognized as the revenue after the bonus points are actually redeemed and the discounted goods have been provided to fulfill the obligations. In this case, the amount of revenue recognized shall be calculated based on the proportion of actually redeemed quantity to the total expected redeemed quantity. In addition, when it is no longer expected that the bonus points are likely to be redeemed, the deferred revenue shall be transferred to revenue.

4.32.6. Dividend income and interest income

The dividend income is generated by investment and recognized when the shareholders’ right to receive payment is established, provided that the economic profits related to the transaction have the potential to be acquired by the Company and its subsidiaries, and the amount of income could be reliably measured.

The interest income is recognized on an accrual basis based on the duration of time for the applicable effective interest rate for the outstanding principal.

4.32.7. Profit or loss from investment property

The rental income arising from the investment property is recognized as a part of the total leasing income during the lease period, and the incentive for the lease is recognized as a decrease in the rental income by the straight-line method during the lease term.

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4.33. Income tax

• 4.33.1. The tax expense for the period comprises both current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity.

• 4.33.2. Deferred income tax is recognized, using the balance sheet method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

• 4.33.3. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At the end of each reporting period, unrecognized and recognized deferred income tax assets are reassessed.

4.33.4. Linked-tax system

The Company and its more than 90% owned subsidiaries adopt the linked-tax system for tax filings in accordance with MOF No.10500580850. Differences between current and deferred income tax expenses on consolidated entity basis and those on nonconsolidated entity basis are adjusted in the Company’s income tax expenses. Related reimbursement and appropriation are recognized as receivables or payables.

4.34. Operating segments

Operating segments are reported in a manner consistent with the internal managements reports provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

4.35. Earnings per share

Basic earnings per share are computed by dividing profit or loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the current reporting period. Diluted earnings per share are computed after adjustments (regarding all impact caused by potential diluted ordinary shares) made on profit or loss attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding. Potential diluted ordinary shares include convertible bonds and bonus paid to employee. However, the adverse dilutive share is not computed.

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

The preparation of consolidated financial statements requires management to make critical judgments in applying the accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. The above information is addressed below:

5.1 Revenue recognition

Sales revenues are recognized when the goods have transferred to customers and the performance obligation has been satisfied. Service revenues are recognized based on the degree of completion of services at the end of reporting period. The Company estimates discounts and returns based on historical experience and other known factors. Provisions for such liabilities are recorded as a deduction item to sales revenues when the sales are recognized. The Company reassesses the reasonableness of estimates of discounts and returns periodically.

5.2 Financial instrument

5.2.1 Fair value

The Company and its subsidiaries held certain financial instruments without active markets, including financial instruments lacking of active market quotes and financial instruments that turned out to be inactive due to market conditions (ex: low market liquidity). When a market is inactive, it is usually only a few or no observable market data available to measure the fair value of financial instruments. Determination of the existence of an active market for a financial instrument requires management’s judgments.

If the market of an investment held by the Company and its subsidiaries is not active, the fair value of the instrument is determined with valuation techniques. When the fair value may be publicly obtained from independent sources, it shall be adopted. Overall, the Company and its subsidiaries would decide a source and/or a valuation technique as a fair value determination method that can reflect the price achieved between market participants through regular trading as of the balance sheet date. Valuation techniques include adoption of recent arm's length transactions, reference to other instruments with substantially identical basis, application of discounted cash flow analysis, etc., which may also include a number of assumptions related to each variable (such as credit risk and interest rate). Adoption of different valuation techniques or assumptions may lead to significant discrepancies in fair value determination results.

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5.2.2 Impairment

Financial assets measured at amortized cost and financial assets measured at FVOCI-debt investment are estimated for loss allowance at an amount equal to the 12-month expected credit losses since initial recognition, despite the existence of evidence of objective impairment. Should credit risk on a financial instrument increase significantly, or there exists evidence of objective impairment, recognized the expected credit losses of the duration then the loss allowance might be increased, and effected profit or loss.

5.3 Valuation of inventory

Inventories are stated at the lower of cost and net realizable value, and the Company determines the net realizable value of inventories using judgments and estimates at the end of each reporting period. The Company estimates the net realizable value of inventory for obsolescence and unmarketable items at the end of each reporting period, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is mainly determined based on assumptions of future demand within a specific time horizon. Therefore, there might be material changes to the evaluation.

5.4 Insurance liabilities

The subsidiary MLI measures insurance liabilities based on the Regulations Governing Insurance Enterprises for Setting Aside Various Reserves.

A policy reserve for life insurance is provided using the lock-in interest ratios assumptions at issue instead of the current market rate.

Unearned premium reserve should be provided based on the unexpired risk. The methods adopted to provide the reserve shall be determined by the actuary in accordance with the characteristics of the types of insurance.

A claim reserve is estimated based on the loss development triangle method. The major assumptions are loss development factors and expected claim rates; this results in an estimate of ultimate claim costs. The loss development factors and expected loss ratios are based on the subsidiary MLI’s historical claim experience.

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For life insurance, health insurance, or annuities with an insurance term over one year, a deficiency reserve is provided when the actual premium written is less than the premium on the policy reserve prescribed by the competent authority. In addition, the subsidiary MLI shall evaluate expected future claims and expenses for in-force contracts with contract term less than one year and for accident insurance contracts with terms over one year, and if the amount exceeds unearned premium reserve and expected future premium income, a premium deficiency reserve should be provided for the difference.

A liability adequacy test is performed based on the Life-Insurance Sector Actuarial Practice Guidance of IFRS 4 Contracts Classification and Liability Adequacy Test issued by the Actuarial Institute of the Republic of China. The subsidiary MLI performs the liability adequacy test using estimates of future insurance benefits, premiums, and related fees, and other reasonable current estimates of future cash flows under its insurance contracts.

The professional judgment applied to the above mentioned liability evaluation process will affect the movement in the insurance reserve.

6 DETAILS OF SIGNIFICANT ACCOUNTS

6.1 Cash and cash equivalents

Cash and cash equivalents
Cash and deposits in bank Repurchase agreement Total	December 31,2021 $67,049,220 33,307,593 $100,356,813	December 31,2020
		$90,973,147 57,241,638
		$148,214,785

The Company and its subsidiaries associate with a number of financial institutions of high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

6.2 Financial assets at fair value through profit or loss-current

Common stocks Beneficiary certificates Preferred stocks Total	December 31,2021 $4,180 105,289 250,932 $360,401	December 31,2020
		$- 30,312 -
		$30,312

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6.3 Accounts receivable, net

Accounts receivable, net
Notes receivable Accounts receivable Installment accounts receivable Lease payment receivable within 1 year Interest receivable Other receivables－delinquent receivables Other receivables－securities and redeeming investment-linked insurance Other Subtotal Less: Allowance－notes receivable Less: Allowance－accounts receivable Less: Allowance－interest receivable Less: Allowance－delinquent receivables Total	December 31,2021 $114,503 741,989 1,245 30,902 8,315,102 8,001 4,572,374 342,165 $14,126,281 (63) (5,742) (232) (7,283) $14,112,961	December 31,2020
		$152,590 1,088,322 2,461 28,061 8,035,876 15,837 940,225 634,908
		$10,898,280 (63) (5,737) (573) (15,559)
		$10,876,348

Lease payment receivables are as follows:

The subsidiary MDS leases ATMs, passbook entry machines and related equipments under financial leases. According to the terms of the lease contract, the ownership of the assets shall be transferred to lessee after the expiry of the lease period. It is expected that all lease payments would be collected according to lease terms. In addition, SMR subleases office building and retail store with a sublease period covering the remaining period of the lease.

Current 1 year Non-current 1~5 years Total		December 31,2021
	Total lease payment receivable	Unearned finance income	Net lease payment receivable
	$33,413 57,461	$(2,511) (4,228)	$30,902 53,233
	$90,874	$(6,739)	$84,135

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December 31,2020 Total lease payment receivable Unearned finance income Current 1 year $30,421 $(2,360) Non-current 1~5 years 66,371 (3,954) Total $96,792 $(6,314) Inventories December 31,2021 Raw materials $279,004 Work in process 42,401 Finished goods 312,103 Inventory in transit 28,384 Merchandise inventories 4,311,779 Subtotal $4,973,671 Allowance for inventory valuation losses (434,051) Total $4,539,620		December 31,2020	December 31,2020
	Total lease payment receivable	Unearned finance income		Net lease payment receivable
	$30,421 66,371	$(2,360) (3,954)		$28,061 62,417
	$96,792	$(6,314)		$90,478
				December 31,2020
				$250,008 37,299 414,405 43,580 4,107,746
				$4,853,038 (423,230)
				$4,429,808

6.4 Inventories

The gain on reversal of decline in market value is due to the sales and scraps of obsolete inventory in 2020.

6.5 Reinsurance contract assets

Reinsurance contract assets
Claims and payment recoverable from reinsurers Intercompany reinsurance receivables Reinsurance reserve asset: Ceded unearned premium reserve Ceded claims reserve Subtotal Total	December 31,2021 $954,684 25,547 $980,231 $365,791 283,847 $649,638 $1,629,869	December 31,2020
		$523,061 14,458
		$537,519
		$300,992 22,849
		$323,841
		$861,360

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6.6 Bills discounted and loans

Policy loans Automatic premium loans Secured loans Less: Loss allowance Total Policy loans Automatic premium loans Secured loans Less: Loss allowance Total		December 31,2021
	Normal loan $29,799,546 11,907,781 29,205,262 $70,912,589 (438,036) $70,474,553	Delinquent loan $- - - $- - $- December 31,2020	Total
			$29,799,546 11,907,781 29,205,262
			$70,912,589 (438,036)
			$70,474,553
	Normal loan $28,793,717 12,123,498 29,801,586 $70,718,801 (444,973) $70,273,828	Delinquent loan $- - 4,149 $4,149 (2,067) $2,082	Total
			$28,793,717 12,123,498 29,805,735
			$70,722,950 (447,040)
			$70,275,910

As of December 31, 2021 and 2020, all receivables past due more than 6 months were transferred to overdue receivables.

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The loss allowance recognized and eliminated for the years ended December 31, 2021 and 2020 are as follows:

Opening balance －Derecognition of financial assets in the period Loss allowance on net measurement Addition of new financial assets Loss allowance based on "Guidelines for Handling Assessment of Assets, Loans overdue, Receivable on Demand and Bad Debts by Insurance Enterprises:"- movement in the current period Closing balance				2021
	12-month expected credit loss	Lifetime expected credit loss – non- credit loss	Lifetime expected credit loss- credit loss	Loss allowance recognized on implementation of IFRS 9	Loss allowance based on “Guidelines for Handling Assessment of Assets, Loans overdue, Receivable on Demand and Bad Debts by Insurance Enterprises”	Total
	$150 (11) (134) 1 -	$1 - 3 - -	$2,388 (278) (1,424) - -	$2,539 (289) (1,555) 1 -	$444,501 - - - (7,161)	$447,040 (289) (1,555) 1 (7,161)
	$6)	$4	$686	$696	$437,340	$438,036

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2020

				2020
Opening balance －Reclassification to 12- month expected credit loss －Derecognition of financial assets in the period Loss allowance on net measurement Addition of new financial assets Loss allowance based on "Guidelines for Handling Assessment of Assets, Loans overdue, Receivable on Demand and Bad Debts by Insurance Enterprises:"- movement in the current period Foreign exchange and other differences Closing balance	12-month expected credit loss	Lifetime expected credit loss – non- credit loss	Lifetime expected credit loss- credit loss	Loss allowance recognized on implementation of IFRS 9	Loss allowance based on “Guidelines for Handling Assessment of Assets, Loans overdue, Receivable on Demand and Bad Debts by Insurance Enterprises”	Total
	$134 113) (14) 4 25 - (112)	$114 (113) - - - - -	$3,373 - (513) (783) - - 311	$3,621 - (527) (779) 25 - 199	$452,392 - - - - (7,891) -	$456,013 - (527) (779) 25 (7,891) 199
	$150)	$1	$2,388	$2,539	$444,501	$447,040

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6.7 Financial assets at fair value through profit or loss – non-current

Item 1. Common stocks 2. Preferred stocks 3. Forward foreign exchange contracts, non- deliverable forward and foreign exchange swaps 4. Financial bonds 5. Beneficiary certificates and others 6. Cross currency swaps contracts 7. Foreign stocks 8. Foreign depository receipts 9. Foreign bonds 10. Foreign beneficiary securities Total	December 31,2021 $10,084,306 124,018 2,386,299 4,541,774 16,970,790 980,647 8,149,718 312,730 2,015,076 18,030,790 $63,596,148	December 31,2020
		$21,884,420 3,026,809 4,686,573 7,584,256 25,987,470 566,673 8,842,580 252,303 2,905,382 11,134,989
		$86,871,455

Gain or loss on valuation of financial assets recognized in the account of gain or loss on financial assets (liabilities) measured at FVTPL (included current and non-current) were losses amounted to $2,081,826 thousand and losses amounted to $6,176,058 thousand for the years ended December 31, 2021 and 2020, respectively.

The subsidiary MLI has applied IFRS 9 together with IFRS 4 “Insurance Contracts” in 2018 using the “overlay approach” to recognize the gains and losses. The financial assets eligible for the overlay approach in connection with the insurance contracts issued by the subsidiary MLI are as follows:

Item	December 31,2021	December 31,2020
1. Common stocks 2. Preferred stocks 3. Beneficiary certificates and others 4. Financial bonds 5. Foreign beneficiary securities 6. Foreign stocks 7. Foreign depository receipts 8. Foreign bonds Total	$10,054,994 17,818 16,970,790 4,541,774 17,981,724 8,149,718 312,730 2,015,076	$21,853,974 2,671,915 25,570,405 7,584,256 11,114,422 8,842,580 252,303 2,905,382
	$60,044,624	$80,795,237

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For the years ended December 31, 2021 and 2020, the reclassification of profit or loss and other comprehensive income as a result of designating financial assets with the overlay method are as follows:

comprehensive income as a result of designating follows:	financial assets with the	overlay method are as
Item	2021	2020
Gains (losses) on adopting IFRS 9 Less: Gains if IAS 39 were adopted Gains (losses) adjustment on adopting the overlay approach	$2,591,094 4,644,096	$(532,293) 2,516,189
	$(2,053,002)	$(3,048,482)

Due to the adjustment on the overlay approach, the profit from $9,414,086 thousand to $11,467,088 thousand, and from $11,650,529 thousand to $14,699,011 thousand, resulted in profit in financial assets measured at FVTPL for the years ended December 31, 2021 and 2020, respectively.

In relation to financial assets which did not fulfil the conditions to adopt the overlay approach in the past, the subsidiary MLI has not designated these financial assets to adopt the overlay approach in the current year, although they fulfil the conditions for the years ended December 31, 2021 and 2020. Hence, there was no change in designation in the current year.

6.8 Financial assets at fair value through other comprehensive income- non-current

Item Debt instruments 1.Government bonds 2.Corporate bonds 3.Financial bonds 4.Foreign bonds Subtotal Equity instruments 1.Unquoted stocks 2.Preferred stocks Subtotal Total	December 31,2021 $8,843,839 20,127,512 5,392,092 10,304,221 $44,667,664 $1,315,225 58,496 $1,373,721 $46,041,385	December 31,2020
		$6,535,505 14,525,285 12,260,139 11,204,571
		$44,525,500
		$1,167,703 36,674
		$1,204,377
		$45,729,877

1. Debt instruments measured at FVOCI

A.The Company and its subsidiaries identify that debt instruments are held within a business model whose main objective is achieved both by collecting contractual cash flows and by selling securities, and recognized these instruments as financial assets measured at FVOCI.

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B.The accumulated loss allowance for the year ended December 31, 2021 and 2020 derived from financial assets measured at FVOCI are as follows:

Item	12-month expected credit loss	Lifetime expected credit loss – non-credit loss	Lifetime expected credit loss - credit loss	Total
Balance as of January 1, 2021 Loss allowance on net measurement Additions in the current period Disposals in the current period Foreign exchange and other differences Balance as of December 31, 2021 Item	$7,053 (3,554) 636 (2,107) (17)	$- - - - -	$- - - - -	$7,053 (3,554) 636 (2,107) (17)
	$2,011	$-	$-	$2,011
	12-month expected credit loss	Lifetime expected credit loss – non-credit loss	Lifetime expected credit loss - credit loss	Total
Balance as of January 1, 2020 Loss allowance on net measurement Additions in the current period Disposals in the current period Foreign exchange and other differences Balance as of December 31, 2020	$10,501 (2,040) 3,163 (4,490) (81)	$- - - - -	$- - - - -	$10,501 (2,040) 3,163 (4,490) (81)
	$7,053	$-	$-	$7,053

The accumulated impairment loss on interest receivable from financial assets measured at FVOCI on December 31, 2021 and 2020 were $9 thousand and $38 thousand, respectively.

As the carry amount of the financial assets measured at FVOCI is presented at fair value, the loss allowance described above has not been presented in the balance sheet.

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2. Equity instruments measured at FVOCI

The Company and its subsidiaries identify that equity instruments are held within a business model whose main objective is to hold the securities for the long term, and recognized these instruments as financial assets held for sale and financial assets measured at FVOCI.

6.9 Financial assets at amortized cost- non-current

Item 1.Government bonds 2.Corporate bonds 3.Financial bonds 4.Beneficiary certificates 5.Foreign bonds Less: Guarantee deposits paid Total	December 31,2021 $92,298,935 62,252,579 31,301,674 999,979 737,916,183 (4,778,243) $919,991,107	December 31,2020
		$84,249,438 52,848,891 28,024,024 999,800 655,675,637 (4,774,480)
		$817,023,310

The accumulated loss allowance for the years ended December 31, 2021 and 2020, derived from financial assets measured at amortized costs (including statutory refundable deposits) are as follows:

Item	12-month expected credit loss	Lifetime expected credit loss – non-credit loss	Lifetime expected credit loss - credit loss	Total
Balance as of January 1, 2021 Loss allowance on net measurement Additions in the current period Disposals in the current period Foreign exchange and other differences Balance as of December 31, 2021	$82,820 (48,013) 5,505 (12,324) (1,573)	$- - - - -	$- - - - -	$82,820 (48,013) 5,505 (12,324) (1,573)
	$26,415	$-	$-	$26,415

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Item	12-month expected credit loss	Lifetime expected credit loss– non-credit loss	Lifetime expected credit loss- credit loss	Total
Balance as of January 1, 2020 Loss allowance on net measurement Additions in the current period Disposals in the current period Foreign exchange and other differences Balance as of December 31, 2020	$244,092 (117,777) 24,965 (56,986) (11,474)	$282,942 15,018 - (282,942) (15,018)	$- - - - -	$527,034 (102,759) 24,965 (339,928) (26,492)
	$82,820	$-	$-	$82,820

The accumulated impairment losses on interest receivable from financial assets measured at amortized cost on December 31, 2021 and 2020 were $224 thousand and $535 thousand, respectively, and the accumulated impairment losses on guarantee deposits paid were $70 thousand and $988 thousand, respectively.

The current gains (losses) of financial assets measured at amortized costs and the derecognized carrying amount for the year ended December 31, 2021 and 2020 are as follows:

Derecognized carrying amount Recognized current gain	2021 $52,602,629 $8,063,423	2020
		$59,238,112
		$9,053,523

6.10 Investments accounted for under equity method

The financial statements of certain investee companies under investments accounted for under equity method in the consolidated financial statements were audited by other auditors whose reports thereon have been furnished to us. The amount of investments in the investee companies were $3,805,152 thousand and $3,796,755 thousand as of December 31, 2021 and 2020 and the recognized shares of profit of associates and join ventures accounted for under equity method of these investee companies were $641,520 thousand and $307,523 thousand for the years ended December 31, 2021 and 2020 respectively.

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1. The investments accounts for under equity method on December 31, 2021 and 2020 are as follows:

follows:
Associates Joint ventures Total	December 31,2021 $3,807,293 95,547 $3,902,840	December 31,2020
		$3,800,369 -
		$3,800,369

1. The shares of profit of associates and join ventures accounted for under equity method for the year ended December 31, 2021 and 2020 are as follows:

Share of profit of associates and joint ventures accounted for under equity method	2021	2020
	$655,579	$307,050

1. Associates

2. (1) Basic information of the associates that are material to the Company and its subsidiaries are as follows:

are as follows:	are as follows:
Main		Percentage of ownership Nature of Methods of December December
Company business
	place		31,2021	31,2020	relationship	measurement
Horizon Securities	TW		8.26%	16.93%	Significant	Equity
Co., Ltd. (“HS”)		influence method
Fuh Hwa Securities Investment Trust Co., Ltd. (“FHSIT”) TW		34.53% 39.99% Significant influence Equity method

• (2) The summarized financial information of the associates that are material to the Company are as follow:

are as follow:
Balance sheets	HS
	December 31,2021	December 31,2020
Current Assets	$14,839,426)	$15,647,677)
Non-current Assets	1,627,283)	1,211,158)
Current Liabilities	10,311,685)	12,617,814)
Non-current Liabilities	826,386)	81,655)
Total net assets	$5,328,638)	$4,159,366)
Share in associate’s net assets	$440,144)	$703,901)
Carrying amount of the associate	$440,144)	$703,901)

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Statements of comprehensive income	HS	HS
	2021	2020
Revenue	$2,608,900)	$1,329,949)
Profit from continuing operations	1,239,274)	414,718)
Other comprehensive income (loss)	42,797)	(6,526)
Total comprehensive income	$1,282,071)	$408,192)
Share of profit (loss) of the associate	$142,070)	$69,971)
Balance sheets	FHSIT
	December 31,2021	December 31,2020
Current Assets	$4,122,510)	$3,030,827)
Non-current Assets	922,930)	998,912)
Current Liabilities	2,125,023)	1,642,373)
Non-current Liabilities	141,629)	176,616)
Total net assets	$2,778,788)	$2,210,750)
Share in associate’s net assets	$959,411)	$884,143)
Carrying amount of the associate	$1,598,826)	$1,573,899)
Statements of comprehensive income	FHSIT
	2021	2020
Revenue	$4,133,077)	$3,264,703)
Profit from continuing operations	1,297,013)	899,981)
Other comprehensive income (loss)	(8,975)	(13,577)
Total comprehensive income	$1,288,038)	$886,404)
Share of profit (loss) of the associate	$518,744)	$359,960)

(3) HS has quoted market prices. Fair value of HS based on December 31, 2021 and 2020 are as follows ：

as follows：
	December 31,2021	December 31,2020
HS marketprice	$507,732)	$643,828)

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• (4) The Carrying amount of the Company’s individually immaterial associates amounted to $1,768,322 thousand and $1,522,568 thousand on December 31, 2021 and 2020 respectively.

The Company’s share of operating results of those immaterial associates are as follows:

	2021	2020
Profit (loss) from continuing operations	$(26,775)	$19,713)
Other comprehensive income (loss)	-	(2,306)
Total comprehensive income	$(26,775)	$17,407)
Share of profit (loss) of the associate	$(20,784)	$4,375)

• (5) The Company and its subsidiaries hold 34.53% of outstanding shares of FHSIT. The remaining shares are held by group of shareholder who are related parties and each hold more than 5% of shares. Base on previous experience, the Company still cannot obtain more than half of the total number of the directors. Therefore, it is determined that the Company only has significant influence of FHSIT.

4. Joint venture

The carrying amount of the Company’s joint venture amounted to $95,547 thousand and $0 thousand on December 31, 2021 and 2020 respectively.

The Company’s share of operating results of those joint ventures ars as follows:

	2021	2020
Profit (loss) from continuing operations	$31,094	$(255,610)
Other comprehensive income (loss)	-	-
Total comprehensive income	$31,094	$(255,610)
Share of profit (loss) of the joint venture	$15,547	$(127,256)

1. The Company held 50% of shares of Sanyou Drugstores Ltd. in 2020 and acquired additional 50% shares in cash of $62,200 thousand on December 22, 2020. Therefore, the Company obtained control over the subsidiary in 2020.

2. The investee HS has resolved by the board of directors to repurchase and cancel its own shares amounted to $122,350 thousand in 2020. In addition, the subsidiaries MLI and MF&B sold the HS shares and recognized gain on disposal of investment amounted to $267,198 thousand in 2021. The Company’s shareholding changed to 8.26%.

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1. The subsidiary MFB sold the FHSIT shares and recognized gain on disposal of investment amounted to $367,834 thousand in 2021. The Company’s shareholding changed to 34.53%.

2. The subsidiary MLI invested in NFC II Renewable Power Co., Ltd. amounted to $157,500 thousand and the shareholding is 21% in November 2021.

3. The subsidiary MA signed a Joint Venture Agreement with BOT NOR Co., Ltd. to set up Sanor Co., Ltd. amounted to $80,000 thousand and the shareholding is 50% in January 2021.

4. The subsidiary MA invested in TriHealth Enterprise Co., Ltd. amounted to $70,000 thousand and the shareholding is 21.21% in July 2021.

5. The subsidiary SCI invested in Formosa Co., Ltd. amounted to $66,000 thousand and the shareholding is 40% in April 2021.

6.11 Property, plant and equipment

2021.1.1 Cost Accumulated depreciation and impairment Total Additions Disposals & Scraps Depreciation Impairment Reclassification Net exchange differences 2021.12.31 Cost Accumulated Depreciation and impairment Total			2021
	Land	Buildings	Others	Prepayment and construction inprogress	Total
	$8,728,255 -	$5,883,874 (1,615,426)	$5,620,858 (3,751,050)	$410,485 -	$20,643,472 (5,366,476)
	$8,728,255	$4,268,448	1,869,808	$410,485	$15,276,996
	2,407,730 (13,007) - - - - $11,122,978 -	1,070,830 (17,913) (152,411) - 128,915 892 $7,031,749 (1,732,988)	720,571 (38,374) (744,077) (2,034) 181,237 20 $6,005,105 (4,017,954)	825,627 (2,373) - - (250,900) - $982,839 -	5,024,758 (71,667) (896,488) (2,034) 59,252 912 $25,142,671 (5,750,942)
	$11,122,978	$5,298,761	1,987,151	$982,839	$19,391,729

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2020.1.1 Cost Accumulated depreciation and impairment Total Additions Disposals & Scraps Depreciation Impairment Reclassification Acquired in a combination Net exchange differences 2020.12.31 Cost Accumulated Depreciation and impairment Total			2020
	Land	Buildings	Others	Prepayment and construction inprogress	Total
	$8,131,581 -	$6,088,803 (1,668,993)	$6,184,272 (4,052,801)	$190,936 -	$20,595,592 (5,721,794)
	$8,131,581	$4,419,810	$2,131,471	$190,936	$14,873,798
	37,558 - - - 559,116 - - $8,728,255 -	28,738 (76,044) (153,261) - 48,847 - 358 $5,883,874 (1,615,426)	758,440 (291,669) (771,315) (6,754) 35,195 14,435 5 $5,620,858 (3,751,050)	288,630 (47,209) - - (21,872) - - $410,485 -	1,113,366 (414,922) (924,576) (6,754) 621,286 14,435 363 $20,643,472 (5,366,476)
	$8,728,255	$4,268,448	1,869,808	$410,485	$15,276,996

• (1) The subsidiary SCI has purchased land for the construction of its factory in Taoyuan Luzhu that was auctioned by the court. The title deed of certain portion of the land, measuring 2,259 square meters, was given to Mr. Wong Weichyun due to certain legal requirements. However, both parties agreed that the subsidiary SCI is the actual owner of the land.

• (2) There is no item of property, plant and equipment impaired for the years 2021 and 2020.

• (3) As of December 31, 2021, the property, plant and equipment pledged as collateral, please refer to Note 8 pledged assets.

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6.12 LEASE ARRANGEMENTS

The Company and its subsidiaries lease various assets including building and transportation equipment. Rental contracts are typically made from 1 to 15 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes. The carrying amount of right-of-use assets and the depreciation charge are as follow:

1. Right-of-use assets

ight-of-use assets
Carrying amount Buildings Transportation equipment Other equipment Total Right-of-use assets additions Depreciation charge Buildings Transportation equipment Other equipment Total	December 31,2021 $3,867,958 42,185 27,129 $3,937,272 2021 $1,401,175 2021 $1,394,229 22,774 13,975 $1,430,978	December 31,2020
		$3,897,992 43,873 39,779
		$3,981,644
		2020
		$1,953,433
		2020
		$1,288,299 24,305 15,739
		$1,328,343

2. Lease liabilities

The Company and its subsidiaries lease liabilities on December 31, 2021 and 2020 are as follows:

Lease liabilities - current Lease liabilities - non-current	December 31,2021 $1,314,353 $2,749,701	December 31,2020
		$1,319,334
		$2,863,486

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The information on profit and loss accounts relating to lease contracts are as follows:

Items affecting profit or loss Interest expense on lease liabilities Variable lease payments not included in the measurement of lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	2021 $43,784 $27,333 $134,941 $13,546	2020
		$41,378
		$5,049
		$73,331
		$18,361

6.13 Investment property

Balance on January 1, 2021 Disposals Follow-up cost Gain on fair value adjustment Balance on December 31, 2021		2021
	Land	Buildings	Total
	$22,401,952 (975,844) - 11,467	$4,848,416 (200,460) 19,245 25,744	$27,250,368 (1,176,304) 19,245 37,211
	$21,437,575	$4,692,945	$26,130,520

Balance on January 1, 2020 Reclassification Follow-up cost Gain (loss) on fair value adjustment Balance on December 31, 2020		2020
	Land	Buildings	Total
	$22,466,811 (559,117) - 494,258	$5,128,851 (46,717) 9,865 (243,583)	$27,595,662 (605,834) 9,865 250,675
	$22,401,952	$4,848,416	$27,250,368

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1. As of December 31, 2021 and 2020, fair value information are as follow:

Source of FV External appraisal	December 31,2021 $26,130,520	December 31,2020
		$27,250,368

1. The main contents of investment property for each companies are as follow:

(1)The Company

Fair value is based on valuation performed by qualified independent appraisers who performed the appraisal based on “Regulations on Real Estate Appraisal” with the valuation dates on December 31, 2021 and 2020.

Name of appraisers firm Panasia Real Estate Appraisers Joint Firm	December 31,2021	December 31,2020
	Yang, Min-An	Yang, Min-An

Fair value of investment property is based on valuation by a professional evaluation agency and supported by market evidence. Appraising methods include the comparison approach, direct capitalization method of the income approach and discount cash flow method of the income approach. Commercial office buildings are appraised mainly using the comparison approach and income approach because of market liquidity and easy access to comparable sales and rental information in the neighboring areas. Marketplace depending on their characteristics, terms of rental contracts and reference of similar cases are generally appraised using the comparison approach, direct capitalization method and discount cash flow method of the income approach. Undeveloped lands are appraised mainly using the comparison approach, land development analysis approach and discount cash flow method of the income approach.

The estimation process of the valuation method involves differentiating between rented and not yet rented. The former is calculated by contract rent and the latter is calculated by market price. It also considers comparative rent information of similar properties to determine annual growth range of rent; includes idle loss, decoration offset loss, and the closing balance of disposal value of that property to calculate future cash inflow, then discounted by an appropriated discount rate accumulated until the valuation date. The income analysis covers a 10-year period, the interest income on rental deposits was extrapolated using the average deposit interest rate of the top five banks announced by the Central Bank of the Republic of China. Future cash out flow which consists of expenses directly related to operations, i.e. land tax, house tax, insurance fee, management fee, maintenance fee, replacement allocation, amortization of agent fee, etc., is estimated based on the actual expenses incurred in the current year, considering the Company’s current operation and possible changes in the future.

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Investment properties measured using fair value model are categorized into Level 3 and related expected future cash inflows are as follow:

Expected future cash inflows Expected future cash outflows Net cash inflows	December 31,2021	December 31,2020
	$2,511,308 (83,197)	$4,160,955 (154,908)
	$2,428,111	$4,006,047

Rent information in the neighboring areas are as follows:

Contract rent (square meter/month/dollar) Market rent (square meter/month/dollar) Main parameters	December 31,2021	December 31,2020
	$223~$1,408 $319~$1,650 December 31,2021	$259~$1,680 $300~$1,640 December 31,2020
Income capitalization rate Discount rate	2.09%~3.79% 2.15%~3.45%	2.09%~4.24% 2.15%~3.70%

Fair value of undeveloped lands are measured by land development analysis. Increase in estimated total sale price, increase in rate of return, or decrease in overall capital interest rate would result in increase in the fair value. Significant assumptions used are as follows:

Estimated total sale price Rate of return Overall capital interest rate	December 31,2021 $23,691 15% 1.02%	December 31,2020
		$23,403
		15% 0.99%

The rate of returns are determined by reference to the annual profit rate and construction period of the similar product. Overall capitalization rate referred to interest rate of bank loan, demand deposit and 1 year time deposit and also considered the proportion of equity funds and borrowed funds.

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(2)The subsidiary MLI

The fair value of investment property was based on valuation by a qualified independent appraiser who performed the appraisal based on “Regulations on Real Estate Appraisal” with the valuation dates on December 31, 2021 and 2020.

Name of appraisers firm	December 31,2021	December 31,2020
Jin Han Real Estate Appraisers Joint Firm Affluence Real Estate Appraisers Joint Firm REPro International Appraisals	Wu, Yu-Chun, Chen, Yi-Chun Wu, Hong-Hsu, Tsai, Yu-Hsiang, Hsu, Hsiang-Yi	Chen, Pi-Yuan, Qiu, Yi-Zhong Wu, Hong-Hsu, Tsai, Yu-Hsiang, Hsu, Hsiang-Yi

The fair value of investment property is based on a valuation by a professional evaluation agency and supported by market evidence. Appraising methods include the comparison approach, direct capitalization method of the income approach and discount cash flow method of the income approach. Commercial office buildings are appraised mainly using the comparison approach and income approach because of the market liquidity and easier access to comparable sales and rental cases in the neighboring areas. Marketplace depending on their characteristics, terms of rental contracts and reference of similar cases are generally appraised using the comparison approach as a primary method as well as cost approach, direct capitalization method and discount cash flow method of the income approach. Factories are appraised by comparison approach, capitalization method of the income approach, and cost approach.

The inputs applied are as follows:

Income capitalization rate Discount rate	December 31,2021	December 31,2020
	about 1.75%~3.23% -	about 1.27%~4.45% -

Professional valuation agencies use the market extraction method, search several comparable properties similar to the subject property, and consider the liquidity risk and future disposal risk premium to decide on the income capitalization discount rate.

The investment properties held by the subsidiary MLI are subsequently measured using fair value model, and categorized into Level 3. When the mail inputs, discount rate and income capitalization rate, has increased, the fair value decrease, and vice versa.

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(3)The subsidiary MFB

Fair value is based on valuation performed by qualified independent appraisers who performed the appraisal based on “Regulations on Real Estate Appraisal” with the valuation dates on December 31, 2021 and 2020.

Name of appraisers firm Panasia Real Estate Appraisers Joint Firm	December 31,2021 Yang, Min-An	December 31,2020
		Yang, Min-An

Fair value of investment property is based on valuation by a professional evaluation agency and supported by market evidence. Appraising methods include the comparison approach, direct capitalization method of the income approach and discount cash flow method of the income approach. Commercial office buildings are appraised mainly using the comparison approach and income approach because of market liquidity and easy access to comparable sales and rental information in the neighboring areas. Marketplace depending on their characteristics, terms of rental contracts and reference of similar cases are generally appraised using the comparison approach, direct capitalization method and discount cash flow method of the income approach. Undeveloped lands are appraised mainly using the comparison approach, land development analysis approach and discount cash flow method of the income approach.

The estimation process of the valuation method involves differentiating between rented and not yet rented. The former is calculated by contract rent and the latter is calculated by market price. It also considers comparative rent information of similar properties to determine annual growth range of rent; includes idle loss, decoration offset loss, and the closing balance of disposal value of that property to calculate future cash inflow, then discounted by an appropriated discount rate accumulated until the valuation date. The income analysis covers a 10-year period, the interest income on rental deposits was extrapolated using the average deposit interest rate of the top five banks announced by the Central Bank of the Republic of China. Future cash out flow which consists of expenses directly related to operations, i.e. land tax, house tax, insurance fee, management fee, maintenance fee, replacement allocation, amortization of agent fee, etc., is estimated based on the actual expenses incurred in the current year, considering the Company’s current operation and possible changes in the future.

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Investment properties measured using fair value model are categorized into Level 3 and related expected future cash inflows are as follow:

Expected future cash inflows Expected future cash outflows Net cash inflows Mainparameters	December 31,2021	December 31,2020
	$21,052 (401)	$20,712 (249)
	$20,651	$20,463
	December 31,2021	December 31,2020
Income capitalization rate Discount Rate	2.25% 2.15%	2.25% 2.15%

Fair value of undeveloped lands are measured by land development analysis. Increase in estimated total sale price, increase in rate of return, or decrease in overall capital interest rate would result in increase in the fair value. Significant assumptions used are as follows:

Estimated total sale price Rate of return Overall capital interest rate	December 31,2021	December 31,2020
	$102,654	$99,014
	13% 1.16%	14% 1.21%

The rate of returns are determined by reference to the annual profit rate and construction period of the similar product. Overall capitalization rate referred to interest rate of bank loan, demand deposit and 1 year time deposit and also considered the proportion of equity funds and borrowed funds.

(4)The subsidiary ML

Fair value is based on valuation performed by qualified independent appraisers who performed the appraisal based on “Regulations on Real Estate Appraisal” with the valuation dates on December 31, 2021 and 2020.

Name of appraisers firm	December 31,2021	December 31,2020
Panasia Real Estate Appraisers Joint Firm	Yang, Min-An	Yang, Min-An

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The fair value of investment property is based on a valuation by a professional evaluation agency and supported by market evidence. Undeveloped lands are appraised mainly using the comparison approach and discount cash flow method of the income approach.

The estimation process of the valuation method involves differentiating between rented and not yet rented. The former is calculated by contract rent and the latter is calculated by market price. It also considers comparative rent information of similar properties to determine annual growth range of rent; includes idle loss, decoration offset loss, and the closing balance of disposal value of that property to calculate future cash inflow, then discounted by an appropriated discount rate accumulated until the valuation date. The income analysis covers a 10-year period, the interest income on rental deposits was extrapolated using the average deposit interest rate of the top five banks announced by the Central Bank of the Republic of China. Future cash out flow which consists of expenses directly related to operations, i.e. land tax, management fee, and amortization of agent fee, etc., is estimated based on the actual expenses incurred in the current year, considering the Company’s current operation and possible changes in the future.

Investment properties measured using fair value model are categorized into Level 3 and related expected future cash inflows are as follow:

Expected future cash inflows Expected future cash outflows Net cash inflows Mainparameters	December 31,2021 $1,270,405 (26,869) $1,243,536 December 31,2021 2.95% 2.80%	December 31,2020
		$1,270,405 (26,869)
		$1,243,536
		December 31,2020
Income capitalization rate Discount Rate		2.95% 2.85%

1. Investment property is a commercial real estate leased to others, for more information please refer Note 6.23.

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1. In order to activated the assets, the Company has resolved by the board of directors to sell the land and buildings in Luzhu District, Taoyuan City on September 17, 2021 and signed a supplementary contract with a revised price of 1,553,000 thousand on October 25, 2021. This transaction has been completed in November 2021, and recognized $216,296 thousand of gain on disposal of investment property and $124,944 thousand of gain on disposal of PPE.

2. The land in Yangmei can not be registered under the Company’s name for limited usage in agricultural and forestry only. Therefore it is registered under Mr. Wang Zhihua and a trust contract had been signed for protection.

3. The land held by the subsidiary ML includes agricultural land, in which a trust contract had been signed and other relevant rights having the Company as the creditor had been established for the assurance purpose.

4. Lands appraisal according legal present value had been performed on December 31, 1987. Total land value increased $17,407 thousand and after net of land value increment tax of $8,153 thousand net value increment of $8,796 thousand was transferred to retained surplus on January 1, 2012 as IFRS adoption.

5. Land (lot number 210-212, located at Subsection 1 of Linyi Section in Taipei City) amounted to $133,123 thousand was partially expropriated by Bureau of Taipei MRT in September 2002. Remaining land of $17,005 thousand had been transferred to investment property.

6.14 Other non-current assets

Refundable deposits Long-term receivable Separate account assets for unit-linked products Prepayments for investments Others Total	December 31,2021 $6,222,964 53,233 136,143,090 13,745 404,762 $142,837,794	December 31,2020
		$6,463,039 62,417 115,616,466 - 320,175
		$122,462,097

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The subsidiary MLI’s separate account for unit-linked products are as follows:

Separate account assets for unit- linked products: Financial assets at FVTPL Bank deposits Other receivables Separate account liabilities for unit- linked products: Separate account value reserve Other payables Separate account assets for unit- linked products: Financial assets at FVTPL Bank deposits Other receivables Separate account liabilities for unit- linked products: Separate account value reserve Other payables	December 31,2021	December 31,2021
	Separate accounts－ insurance contracts and financial instruments with discretionary participation features	Separate accounts －financial instruments without discretionary participation features	Total
	$65,341,929 3,152,836 893,563	$64,482,007 2,272,755 -	$129,823,936 5,425,591 893,563
	$69,388,328	$66,754,762	$136,143,090
	$65,668,627 3,719,701	$66,754,762 -	$132,423,389 3,719,701
	$69,388,328	$66,754,762	$136,143,090
	December 31,2020
	Separate accounts－ insurance contracts and financial instruments with discretionary participation features	Separate accounts －financial instruments without discretionary participation features	Total
	$64,389,261 2,993,631 956,731	$45,969,284 1,307,559 -	$110,358,545 4,301,190 956,731
	$68,339,623	$47,276,843	$115,616,466
	$64,676,637 3,662,986	$47,276,843 -	$111,953,480 3,662,986
	$68,339,623	$47,276,843	$115,616,466

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The related revenues and expenses of separate accounts—insurance contracts and financial instruments with discretionary participation features are as follows:

Separate account for unit-linked products revenues: Premium income Gain (Loss) on valuation of financial liability at FVTPL Gain on disposal of financial liability at FVTPL Gain (loss) on exchange Interest revenue Total Separate account for unit-linked products expenses: Insurance benefits Early termination charge Separate account value reserve net change Management fee Total	2021 $8,772,679 (525,614) 887,030 (190,627) 560,346 $9,503,814 $78,003 6,701,499 1,131,915 1,592,397 $9,503,814	2020
		$8,867,422 744,991 (306,843) 327,387 508,398
		$10,141,355
		$79,823 5,412,716 3,159,630 1,489,186
		$10,141,355

As a result of selling investment-linked products, the subsidiary MLI received sales rebates from counterparties amounting to $1,079,344 thousand and $788,224 thousand for the years ended December 31, 2021 and 2020, respectively, which are recorded under fee income.

6.15 Short-term borrowings

Short-term borrowings
Unsecured loans Interest rate	December 31,2021 $590,000 0.91%~1.25%	December 31,2020
		$665,000
		0.95%~1.24%

The details of assets pledged as collateral, please refer to Note 8 pledged assets.

6.16 Short-term notes and bills payable

Short-term notes and bills payable
Commercial paper payable Interest rate	December 31,2021 949,985 0.86%~0.97%	December 31,2020
		1,249,824
		0.92%~1.10%

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6.17 Accounts payable

Notes payable Accounts payable Other payable Payable on machinery and equipment Accrued Expenses Other payable-others Total	December 31,2021 $27,507 2,867,002 3,214,199 152,308 1,786,764 206,871 $8,254,651	December 31,2020
		$15,218 2,272,015 3,702,782 114,375 1,795,763 195,550
		$8,095,703

6.18 Financial liabilities at fair value through profit or loss – non-current

6.19	Item	December 31,2021	December 31,2020
	1. Forward foreign exchange contracts, non-deliverable forward and foreign exchange swaps 2. Index futures 3. Redemption options and put options of convertible bonds Total Bonds payable Perpetual cumulative subordinated corporate bond Unsecured convertible bonds Less: discount on bonds payable Less: accumulated converted amount Total	$124,987 - 2,214	$1,979,207 108 -
		$127,201	$1,979,315
		December 31,2021	December 31,2020
		$8,190,000 2,300,000 (62,220) (86,400)	$7,500,000 - - -
		$10,341,380	$7,500,000

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1. With the aim of future operational requirement and repay bank loans, the first issuance of convertible bonds in 2020 was approved by FSCIB No.1090377875 on January 25, 2020. The term sheet for the bond is set as follows:

Issue Amount	NT$2,300,000 thousand
Issue date	January 25, 2021
Coupon Rate	0%
Issue period	January 25, 2021 ~ January 25, 2026
Repayment	Except for early call and cancellation by the Company or early put and conversion by bondholders in accordance with the terms and conditions set by the Company, the bondholders will receive in cash at maturity of the convertible bonds.
Redemption at the option of the Company	1. At any time starting three months from the issue date until the 40th day prior to the maturity date, when the closing price of its common shares on the Taiwan Stock Exchange is over 30% of the conversation price for 30 consecutive trading days, the Company could redeem the outstanding bonds based on par value in cash. 2. At any time starting three months from the issue date until the 40th day prior to the maturity date, when the balance of outstanding bonds is lower than NT$230,000 thousand of the total issuance, the Company may repurchase the outstanding bonds at par in cash.
Redemption at the option of the bondholders	Within the 40 days prior to 3 years after the issue day, the bondholders shall have the right to require the Company to redeem the bonds at redemption price of par value plus interest compensation in cash.
Conversion period	Bondholders may convert bonds into the Company’s common shares at any time starting three months from the issue date to the maturity date.
Conversion price	The conversion price was $22.5 per share at issuing. The conversion price was adjusted to $21.54 since July 29, 2021.

The Company’s convertible bonds have been converted into common stocks of 4,011 thousand shares and $46,684 thousand of capital surplus are recognized.

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1. The subsidiary MLI issued the first perpetual cumulative subordinated corporate bond in accordance with FSCIB No.10302131650 and FSC No.1030048645 on December 29, 2014. The term sheet for the bond is set as follows:

Issue Amount	NT$5,000,000 thousand
Issue date	December 29, 2014
Principal Amount and Issue Price	The issued bond sells at the par value of 1,000 thousand.
Coupon rate	Fixed rate of 3.9% from the date of issuance to December 29, 2024, plus 1% if the subsidiary MLI does not redeem the bond in 10 years from the date of issuance.
Maturity date	No maturitydate.
Payment of interest	Interest is payable annually upon coupon rate, beginning on the issue date.
Redemption	The corporate bond has no maturity date. After ten years of issuance, if the subsidiary MLI's risk based capital ratio after redemption, upon calculation, is more than twice the required minimum risk based capital ratio at the time of calculation, with the consent of the competent authority, the bond may be redeemed earlier at face value plus accrued interest. The bond can be redeemed oncequarterly.
Form of bond	No physical certificate issued.

1. The subsidiary MLI issued the first perpetual cumulative subordinated corporate bond in accordance with FSCIB No. 10502121190 and OTC No. 10500315231 on November 24, 2016. The term sheet for the bond was set as follows:

Issue Amount	NT$2,500,000 thousand
Issue date	November 24, 2016
Principal Amount and Issue Price	The issued bond sells at the par value of 1,000 thousand.
Coupon rate	Fixed rate of 3.7% from the date of issuance to November 24, 2026, plus 1% if the subsidiary MLI does not redeem the bond in 10 years from the date of issuance.
Maturity date	No maturitydate.
Payment of interest	Interest is payable annually upon coupon rate, beginning on the issue date.
Redemption	The corporate bonds has no maturity date. After ten years of issuance, if the subsidiary MLI's risk based capital ratio after redemption, upon calculation, is more than twice the required minimum risk based capital ratio at the time of calculation, with the consent of the competent authority, the bond may be redeemed earlier at face value plus accrued interest. The bond can be redeemed oncequarterly.
Form of bond	No physical certificate issued.

84

1. The subsidiary MLI issued the first perpetual cumulative subordinated corporate bond in accordance with FSCIB No. 1100424942 and OTC No. 11000097201 on September 10, 2021. The term sheet for the bond was set as follows:

Issue Amount	NT$1,000,000 thousand
Issue date	September 10, 2021
Principal Amount and Issue Price	The issued bond sells at the par value of 1,000 thousand.
Coupon rate	Fixed rate of 3.3%
Maturity date	No maturity date.
Payment of interest	Interest is payable annually upon coupon rate, beginning on the issue date.
Redemption	The corporate bonds has no maturity date. After ten years of issuance, if the subsidiary MLI's risk based capital ratio after redemption, upon calculation, is more than twice the required minimum risk based capital ratio at the time of calculation, with the consent of the competent authority, the bond may be redeemed earlier at face value plus accrued interest. The bond can be redeemed oncequarterly.
Form of bond	No physical certificate issued.

The Company and the subsidiary MA hold the first perpetual cumulative subordinated corporate bond of the subsidiary MLI amounted to $310,000 thousands, which have been eliminate upon consolidation.

6.20 Long-term borrowings

1. The details are as follows:

Bank	Borrowing period and term	December 31,2021	December 31,2020
O-Bank and 13 banks guarantee syndicated loan O-Bank and 13 banks guarantee syndicated loan	2021/12/01-2026/12/01 issuing commercial paper 2021/12/01-2026/12/01 applying credit loan	$1,600,000) -	$1,440,000) 600,000)

85

Bank	Borrowing period and term	December 31,2021	December 31,2020
Hua Nan Bank Yuanta Bank Bank SinoPac E.SUN Bank Shin Kong Bank First Bank JihSun Bank East Asia Bank Taipei Fubon Bank Taiwan Business Bank Taishin International Bank and 11 banks guarantee syndicated loan Land Bank Entie Bank O-Bank Cathay United Bank Taichung Bank Bank SinoPac	2020/11/13-2023/11/13 issuing commercial paper 2020/12/11-2022/12/11 applying credit loan 2020/08/31-2022/08/31 applying credit loan 2020/06/22-2022/06/22 applying credit loan 2020/11/04-2022/11/04 applying credit loan 2021/02/05-2023/02/05 applying mortgage loan 2021/07/08-2023/06/29 applying credit loan 2021/06/24-2023/06/24 applying credit loan 2020/01/12-2022/01/12 applying credit loan 2020/09/28-2022/09/28 applying credit loan 2019/09/28-2024-12-29 issuing commercial paper 2021/04/07-2023/04/07 applying credit loan 2021/03/04-2023/03/04 applying credit loan 2021/07/28-2023/07/28 applying credit loan 2020/12/22-2023/02/28 applying credit loan 2020/12/16-2023/12/16 applying credit loan 2021/05/26-2023/05/31 applying credit loan	- - - - - 680,000) 450,000) 150,000) - - 1,920,000) 200,000) 200,000) 400,000) -) -) 100,000)	300,000) 400,000) 200,000) 300,000) 300,000) 911,500) 450,000) 200,000) 500,000) 250,000) 1,920,000) 200,000) -) -) 100,000) 200,000) 100,000)

86

Bank	Borrowing period and term	December 31,2021	December 31,2020
JihSun Bank E.Sun Bank First Bank Less: Current portion of Long-term borrowing Total Interest rate range	2022/07/08-2023/06/29 applying credit loan 2021/10/05-2023/10/05 applying credit loan 2021/09/06-2023/09/06 applying credit loan	150,000) 40,000) 140,000) -	35,000) 100,000) - -
		$6,030,000	$8,506,500
		0.73%~1.79%	0.92%~1.79%

1. Guarantee syndicated bank loans were obtained to fulfill the Company’s mid-term working capital and to improve the financial structure. According to loan agreements, the Company shall maintain its current ratio, tangible net worth and interest coverage ratio during the loan periods.

2. Certain long-term borrowings were to satisfy the demands of the Company’s mid-term working capital and to improve the financial structure. According to loan agreements, the Company shall maintain its debt ratio, net asset and interest coverage ratio during the loan periods.

3. Assets pledged as collateral please refer to Note 8 for details.

6.21 Provision – non-current

Insurance liabilities (Note 6.22) Provision for decommissioning, restoration and rehabilitation costs Provision for long-term liabilities of legal procedures Other provisions Total	December 31,2021 $1,203,539,413 13,947 21,960 4,082 $1,203,579,402	December 31,2020
		$1,159,482,645 14,260 35,262 700
		$1,159,532,867

Provision for long-term liabilities of legal procedures please refer to Note 9 significant contingent liabilities and unrecognized contact commitments.

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6.22 Insurance liabilities

Unearned premium reserve Claims reserve Policy reserve Special reserve Premium deficiency reserve Reserves for fluctuation of foreign exchange Subtotal Less:Ceded unearned premium reserve Ceded claims reserve Subtotal Net	December 31,2021 $4,532,742 1,868,509 1,194,703,070 818,586 1,204,801 411,705 $1,203,539,413 $365,791 283,847 $649,638 $1,202,889,775	December 31,2020
		$4,247,678 1,704,749 1,150,842,673 820,017 1,616,884 250,644
		$1,159,482,645
		$300,992 22,849
		$323,841
		$1,159,158,804

1. The reserves of the subsidiary MLI's insurance contracts and financial instruments containing discretionary participation features and the reconciliation schedules are as follows:

2. (1) Unearned premium reserve

The details of the subsidiary MLI's unearned premium reserve are as follows:

Personal life insurance Personal accident insurance Personal health insurance Group insurance Investment-linked insurance Total		December 31,2021
	Insurance Contract $2,785 1,831,321 2,457,897 187,875 52,864 $4,532,742	Financial instruments containing discretionary participation features $- - - - - $-	Total
			$2,785 1,831,321 2,457,897 187,875 52,864
			$4,532,742

88

Less: Ceded unearned premium reserve Personal life insurance Personal accident insurance Personal health insurance Group insurance Total Net		December 31,2021
	Insurance Contract $75,694 16,581 266,805 6,711 $365,791 $4,166,951	Financial instruments containing discretionary participation features $- - - - $- $-	Total
			$75,694 16,581 266,805 6,711
			$365,791
			$4,166,951

Personal life insurance Personal accident insurance Personal health insurance Group insurance Investment-linked insurance Total Less: Ceded unearned premium reserve Personal life insurance Personal accident insurance Personal health insurance Group insurance Total Net		December31,2020
	Insurance Contract $2,627 1,709,237 2,291,968 193,541 50,305 $4,247,678 $75,708 19,391 199,421 6,472 $300,992 $3,946,686	Financial instruments containing discretionary participation features $- - - - - $- $- - - - $- $-	Total
			$2,627 1,709,237 2,291,968 193,541 50,305
			$4,247,678
			$75,708 19,391 199,421 6,472
			$300,992
			$3,946,686

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• (2) The reconciliations of changes in unearned premium reserve previously described are as follows:

follows:
Balance as of January 1 , 2021 Provision Reversal of provision Gain or loss on exchange Balance as of December 31, 2021 Less: Ceded unearned premium reserve: Net balance as of January 1, 2021 Increase Decrease Gain or loss on exchange Net balance as of December 31, 2021 Balance as of December 31, 2021 Balance as of January 1 , 2020 Provision Reversal of provision Gain or loss on exchange Balance as of December 31, 2020 Less: Ceded unearned premium reserve: Net balance as of January 1, 2020 Increase Decrease Gain or loss on exchange Net balance as of December 31, 2020 Balance as of December 31, 2020		2021
	Insurance Contract $4,247,678 5,135,863 (4,850,779) (20) $4,532,742 $300,992 365,822 (300,935) (88) $365,791 $4,166,951	Financial instruments containing discretionary participation features $- - - - $- $- - - - $- $- 2020	Total
			$4,247,678 5,135,863 (4,850,779) (20)
			$4,532,742
			$300,992 365,822 (300,935) (88)
			$365,791
			$4,166,951
	Insurance Contract $3,906,386 4,809,211 (4,467,903) (16) $4,247,678 $227,667 301,108 (227,607) (176) $300,992 $3,946,686	Financial instruments containing discretionary participation features $- - - - $- $- - - - $- $-	Total
			$3,906,386 4,809,211 (4,467,903) (16)
			$4,247,678
			$227,667 301,108 (227,607) (176)
			$300,992
			$3,946,686

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2. Claims reserve

(1) The details of the subsidiary MLI’s claims reserve and ceded claims reserve are as follows:

Personal life insurance -reported and unpaid Personal accident insurance -reported and unpaid -unreported and unpaid Personal health insurance -reported and unpaid -unreported and unpaid Group insurance -reported and unpaid -unreported and unpaid Investment-linked insurance -reported and unpaid Total Less: Ceded claims reserve Personal life insurance Personal accident insurance Personal health insurance Group insurance Total Net	December 31,2021	December 31,2021
	Insurance Contract $84,545 56,429 367,797 280,989 803,402 39,452 223,699 12,196 $1,868,509 $106,137 2,175 173,714 1,821 $283,847 $1,584,662	Financial instruments containing discretionary participation features $- - - - - - - - $- $- - $- $-	Total
			$84,545 56,429 367,797 280,989 803,402 39,452 223,699 12,196
			$1,868,509
			$106,137 2,175 173,714 1,821
			$283,847
			$1,584,662

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December 31,2020

Personal life insurance -reported and unpaid Personal accident insurance -reported and unpaid -unreported and unpaid Personal health insurance -reported and unpaid -unreported and unpaid Group insurance -reported and unpaid -unreported and unpaid Investment-linked insurance -reported and unpaid Total Less: Ceded claims reserve Personal life insurance Personal health insurance Total Net	Insurance Contract $62,312 48,255 369,344 252,420 698,610 38,565 220,217 15,026 $1,704,749 $3,642 19,207 $22,849 $1,681,900	Financial instruments containing discretionary participation features $- - - - - - - - $- $- - $- $-	Total
			$62,312 48,255 369,344 252,420 698,610 38,565 220,217 15,026
			$1,704,749
			$3,642 19,207
			$22,849
			$1,681,900

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• (2) The reconciliations of changes in claims reserve and ceded claims reserve previously described are as follows:

Balance as of January 1, 2021 Provision Reversal of provision Gain or loss on exchange Balance as of December 31, 2021 Less: Ceded claims reserve: Net balance as of January 1, 2021 Increase Decrease Gain or loss on exchange Net balance as of December 31, 2021 Balance as of December 31, 2021 Balance as of January 1, 2020 Provision Reversal of provision Gain or loss on exchange Balance as of December 31, 2020 Less: Ceded claims reserve: Net balance as of January 1, 2019 Increase Decrease Gain or loss on exchange Net balance as of December 31, 2020 Balance as of December 31, 2020		2021
	Insurance Contract $1,704,749 1,865,076 (1,700,949) (367) $1,868,509 $22,849 287,872 (26,867) (7) $283,847 $1,584,662	Financial instruments containing discretionary participation features $- - - - $- $- - - - $- 2020	Total
			$1,704,749 1,865,076 (1,700,949) (367)
			$1,868,509
			$22,849 287,872 (26,867) (7)
			$283,847
			$1,584,662
	Insurance Contract $1,605,545 1,703,639 (1,603,984) (451) $1,704,749 $11,547 22,878 (11,547) (29) $22,849 $1,681,900	Financial instruments containing discretionary participation features $- - - - $- $- - - - $-	Total
			$1,605,545 1,703,639 (1,603,984) (451)
			$1,704,749
			$11,547 22,878 (11,547) (29)
			$22,849
			$1,681,900

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3. Policy reserve

• (1) The details of the subsidiary MLI's policy reserve are as follows:

Personal life insurance Personal health insurance Annuities insurance Investment-linked insurance Reversal of accident Reserve for operating loss Amount payable to insurance holders Total Personal life insurance Personal health insurance Annuities insurance Investment-linked insurance Reversal of accident Reserve for operating loss Amount payable to insurance holders Total		December 31,2021	December 31,2021	Total $877,331,088 296,629,237 18,686,194 1,139,261 10,008 677,110 230,172 $1,194,703,070
	Insurance Contract	Financial instruments containing discretionary participation features	Others
	$877,331,088 296,629,237 214,621 1,139,261 10,008 - -	$- - 18,471,573 - - - -	$- - - - - 677,110 230,172
	$1,175,324,215	$18,471,573	$907,282
		December 31,2020
	Insurance Contract	Financial instruments containing discretionary participation features	Others	Total $859,370,211 267,362,391 22,281,139 902,860 10,008 677,110 238,954 $1,150,842,673
	$859,370,211 267,362,391 187,029 902,860 10,008 - -	$- - 22,094,110 - - - -	$- - - - - 677,110 238,954
	$1,127,832,499	$22,094,110	$916,064

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Reserve for operating loss are the subsidiary MLI in accordance with MOF No.0920750506 to decrease business tax by 3% and not reverse the allowance of receivables.

Amount payable to insurance holders are recognized in reserves in accordance with FSCIB No. 10704548180.

(2) The reconciliations of changes in policy reserve previously described are as follows:

Balance as of January 1, 2021 Provision Reversal of provision Gain or loss on exchange Balance as of December 31, 2021		2021	2021
	Insurance Contract	Financial instruments containing discretionary participation features	Others $916,065 (8,783) - - $907,282	Total
	$1,127,832,498 112,610,758 (58,491,433) (6,627,608)	$22,094,110 (1,777,048) (1,728,985) (116,504)		$1,150,842,673 110,824,927 (60,220,418) (6,744,112)
	$1,175,324,215	$18,471,573		$1,194,703,070

Balance as of January 1, 2020 Provision Reversal of provision Gain or loss on exchange Balance as of December 31, 2020		2020	2020
	Insurance Contract	Financial instruments containing discretionary participation features	Others	Total
	$1,067,249,396 122,024,736 (48,879,710) (12,561,924)	$25,153,348 (421,635) (2,344,774) (292,829)	$885,977 30,088 - -	$1,093,288,721 121,633,189 (51,224,484) (12,854,753)
	$1,127,832,498	$22,094,110	$916,065	$1,150,842,673

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1. Special reserve

2. (1) The details of the subsidiary MLI's special reserve are as follows:

Personal accident insurance Personal health insurance Gain on appreciation of real estate Total Personal accident insurance Personal health insurance Gain on appreciation of real estate Total		December 31,2021	December 31,2021
	Insurance Contract	Financial instruments containing discretionary participation features	Others $- - 148,173 $148,173	Total
	$81,723 588,690 -	$- - -		$81,723 588,690 148,173
	$670,413	$-		$818,586
		December 31,2020
	Insurance Contract	Financial instruments containing discretionary participation features	Others	Total
	$80,410 591,434 -	$- - -	$- - 148,173	$80,410 591,434 148,173
	$671,844	$-	$148,173	$820,017

The subsidiary MLI shall approve the special reserve for short-term products with low-dollar claims in according with MOF No. 831496851.

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In addition, according to Article 32 of “Regulations Governing Preparation of Financial and Operational Reports by Enterprises Engaging in Insurance of the Person”, the fair value of the real estate has increased, the increase will be used to offset the adverse impact due to the initial application of IFRS, the remaining amount will be added to special debt provision. Based on FSCIB No. 10102515281 issued on November 30, 2012 and approved by the competent authority in 2013, the recovery of gain on appreciation of real estate special reserve does not include the surplus per share.

(2) The reconciliations of changes in special reserve previously described are as follows:

Balance as of January 1, 2021 Provision Balance as of December 31, 2021 Balance as of January 1, 2020 Provision Balance as of December 31, 2020		2021	2021
	Insurance Contract	Financial instruments containing discretionary participation features	Others	Total
	$671,844 (1,431)	$- -	$148,173 -	$820,017 (1,431)
	$670,413	$-	$148,173	$818,586
		2020
	Insurance Contract	Financial instruments containing discretionary participation features	Others	Total
	$647,353 24,491	$- -	$148,173 -	$795,526 24,491
	$671,844	$-	$148,173	$820,017

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1. Premium deficiency reserve

2. (1)The details of the subsidiary MLI’s premium deficiency reserve are as follows:

Personal life insurance Personal health insurance Group insurance Total	December 31,2021	December 31,2021
	Insurance Contract $1,140,015 46,923 17,863 $1,204,801	Financial instruments containing discretionary participation features $- - - $-	Total
			$1,140,015 46,923 17,863
			$1,204,801

Personal life insurance Personal health insurance Group insurance Total	December 31,2020	December 31,2020
	Insurance Contract $1,470,070 57,185 89,629	Financial instruments containing discretionary participation features $- - -	Total
			$1,470,070 57,185 89,629
	$1,616,884	$-	$1,616,884

• (2)The reconciliations of changes in premium deficiency reserve previously described are as follows:

follows:
Balance as of January 1, 2021 Provision Reversal of provision Gain or loss on exchange Balance as of December 31, 2021		2021
	Insurance Contract $1,616,884 (380,585) (22,291) (9,207) $1,204,801	Financial instruments containing discretionary participation features $- - - - $-	Total
			$1,616,884 (380,585) (22,291) (9,207)
			$1,204,801

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Balance as of January 1, 2020 Provision Reversal of provision Gain or loss on exchange Balance as of December 31, 2020		2020
	Insurance Contract $1,974,611 (303,133) (29,619) (24,975) $1,616,884	Financial instruments containing discretionary participation features $- - - - $-	Total
			$1,974,611 (303,133) (29,619) (24,975)
			$1,616,884

1. Liability adequacy reserve

The subsidiary MLI tested the following liability adequacy in accordance with the IFRS 4 on December 31, 2021 and 2020 are as follows:

• (1)The type of products using total premium evaluation method, the details of the liability adequacy reserve are as follows:

Insurance contracts and financial instruments containingdiscretionary participation features Policy reserve Unearned premium reserve Premium deficiency reserve Other provisions of the law or voluntary increase for the strengthening of financial reserves Carrying amount of insurance liability Estimated future cash flows amount Balance of liability adequacy reserve	December 31,2021 $1,193,785,780 4,333,411 1,186,938 1,357,531 $1,200,663,660 $964,510,632 $-	December 31,2020
		$1,149,916,601 4,042,069 1,527,255 1,358,962
		$1,156,844,887
		$950,876,896
		$-

The carrying amount of insurance liabilities is adequate compared with the amount using current estimates of future cash flows under insurance contracts on December 31, 2021 and 2020. As a result, the subsidiary MLI does not have to set aside the liability adequacy reserve.

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• (2)The type of products using expected cost method, the details of the liability adequacy reserve are as follows:

Insurance contracts and financial instruments containingdiscretionary participation features Unearned premium reserve Premium deficiency reserve Carrying amount of insurance liability Expected premium income in the future Expected claims and expenses in the future Balance of liability adequacy reserve	December 31,2021 $199,331 17,863 $217,194 $364,463 $465,716 $-	December 31,2020
		$205,609 89,629
		$295,238
		$340,760
		$535,324
		$-

The carrying amount of insurance liabilities and expected premium income in the future is adequate compared with the expected claims and expenses of future under insurance contracts on December 31, 2021 and 2020. As a result, the subsidiary MLI does not have to set aside the liability adequacy reserve.

The subsidiary MLI does the following liability adequacy tests:

Method

The following two types of products are the test bases:

• (1)For Long Term Life Insurance, Universal Life Insurance, Investment Insurance (General account with value-added benefits), Long Term Health Insurance, Long Term Accident Insurance, Immediate Annuity Insurance and Interest-Sensitive Annuity Insurance / Variable Annuity Insurance Annuitization Policy, Interest-Sensitive Insurance, and One-Year Accident Insurance and Health Insurance attached to the long-term insurance, use the “total premium evaluation method”.

• (2)For Personal Life Insurance less than one year, Personal Accident Insurance, Travel Accident Insurance and Group Insurance (excluding Group Interest-Sensitive Annuity Insurance), use the “expected cost method”.

Population

All valid contracts as a whole

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Description of Important Assumptions

The subsidiary MLI adopts the assumption basis from the Appointed Actuary report to establish the actuarial assumptions for this test. Discount rate:

Referring to the subsidiary MLI overall portfolio investment yields rate under the best estimate scenario (adopt the unbiased hypothesis in 30 year later) stated in the Actuarial Standard of Practice in the Life Insurance Industry. Starting from 2012, the date of filing for financial report has been advanced to the end of March, the deadline for annual Appointed Actuary report is also adjusted accordingly. The application in practice is as follows: The discount rate of the liability adequacy test of the first quarter should be the same as that of the Appointed Actuary report in March. As for the related assumptions of the discount rate from the second to fourth quarter in the same year, they will be based according to the calculation used on the discount rate in the first quarter. When considering current information, the principle of consistency should be applied to the reevaluation of discount rate assumptions.

Other key actuary assumptions:

Other key actuary assumptions are set by the principle of actuarial assumption of reserve adequacy stated in the Actuarial Standard of Practice in the Life Insurance Industry.

1. Reserves for fluctuation of foreign exchange

2. (1)According to the "Regulations Governing Insurance Enterprises for Setting Aside Various Reserves," the subsidiary MLI has provided a reserve for fluctuation of foreign exchange under liabilities for foreign investment assets (excluding non-investment-linked life insurance products denominated in foreign currencies). The accumulated balance on December 31, 2021 and 2020 were $411,705 thousand and $250,644 thousand, respectively. The details of the reserve for fluctuation of foreign exchange of the Company are as follows:

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Beginning balance Addition: General provision Additional provision Subtotal Recovery Total	2021 $250,644 $663,381 744,949 $1,408,330 (1,247,269) $411,705	2020
		$1,253,221
		$732,050 874,250
		$1,606,300
		(2,608,877)
		$250,644

The above-mentioned beginning balance, in accordance with the Regulations Governing Insurance Enterprises for Setting Aside Various Reserves, was reclassified from special catastrophe reserve of liabilities under the former ROC generally accepted accounting principles as of December 31, 2011, within the maximum limitation. For the special catastrophe reserve reclassified to reserve for fluctuation of foreign exchange as its beginning balance, the subsidiary MLI should provide the same amount as special earnings reserve within three years after the Regulations Governing Insurance Enterprises for Setting Aside Various Reserves are implemented. In addition, the subsidiary MLI should provide both the decrease in hedge cost due to the adoption of the reserve for fluctuation of the foreign exchange mechanism, and 10% of current-year net income as special earnings reserve every year.

• (2)The effect on income, liabilities, and equity under the circumstance of not providing a reserve for fluctuation of foreign exchange are as follows:

Item December 31,2021 Reserve for fluctuation of foreign exchange Equity December 31,2020 Reserve for fluctuation of foreign exchange Equity	Amount without the adoption of reserve for fluctuation of foreign exchange $- $41,767,754 $- $42,312,304	Amount with the adoption of reserve for fluctuation of foreign exchange $411,705 $41,438,390 $250,644 $42,111,789	Effect
			$411,705 $(329,364) $250,644 $(200,515)

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Item 2021 Net income Earnings per share (after tax) 2020 Net income Earnings per share (after tax)	Amount without the adoption of reserve for fluctuation of foreign exchange $1,219,647 $0.47 $642,477 $0.27	Amount with the adoption of reserve for fluctuation of foreign exchange $1,090,798 $0.42 $1,444,538 $0.60	Effect
			$(128,849) $(0.05) $802,061 $0.33

• (3) Hedge policy and risk exposure under reserve for fluctuation of foreign exchange mechanism

According to "Risk Management Best-Practice Principles for Insurance Enterprises (FSC Enterprise Risk Management Framework)" the subsidiary MLI set up a system of managing and hedging foreign exchange risk, including the control system of the foreign exchange exposure ratio, the calculation basis of the foreign exchange exposure ratio, the scope of the foreign exchange exposure and its relevant hedging instruments and strategies. The hedging strategy of the subsidiary MLI mainly relied on USD hedge supplemented by AUD and EUR hedge, and the hedging instruments include foreign exchange forwards, foreign exchange swaps and cross currency swaps.

6.23 Operating lease

1. Lessor

The Company and its subsidiaries acts as a lessor to rent investment properties under operating lease. For related information, please refers to note 6.13 for more details.

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Maturity analysis of lease payments for undiscounted lease payments to be received after the reporting date are as follows:

Under 1 year 1~ 2 years 2~3 years 3~4 years 4~5 years Over 5 years Total	December 31,2021 $605,155 513,059 224,096 141,103 116,784 367,585 $1,967,782	December 31,2020
		$612,098 482,262 417,517 152,977 88,784 314,048
		$2,067,686

6.24 Pensions

1. Since July 1, 2005, the Company and its subsidiaries have defined contribution pension plans set up according to the ROC Labor Pension Act. 6% of employees’ monthly salaries are contributed to each individual account governed by Bureau of Labor Insurance. Pension cost of $392,505 thousand and $416,609 thousand are recognized for the years ended December 31, 2021 and 2020, respectively.

2. The Company and its subsidiaries have defined benefit pension plans in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. For employees who are applicable to mandatory retirement, an additional 20% of increment amount shall be added based on the aforesaid rules if the mental insanity or physical disability is caused by the performance of duties. The Company and its subsidiaries contribute an amount equal to 2% of salaries paid each month to their respective pension fund deposited with Bank of Taiwan. Pension cost of $39,933 thousand and $44,914 thousand are recognized for the years ended December 31, 2021 and 2020, respectively.

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1. The pension information of the Company and its subsidiaries are as follows:

2. (1)The amounts recognized in the balance sheet are as follows:

	December 31,2021	December 31,2020
Present value of defined benefit obligations	$2,187,576	$2,452,743
Fair value of plan assets	(1,519,169)	(1,383,678)
Recognized liabilities for defined benefit obligations	$668,407	$1,069,065

(2)Movements in present value of the defined benefit are as follows:

	2021	2020
Defined benefit obligation on January 1	$2,452,743	$2,459,782
Current service costs	43,178	50,679
Interest cost	1,123	2,733
Actuarial gains and losses arising from	(67,000)	109,229
financial assumption adjustment
Actuarial gains and losses arising from	(53,203)	51,421
experience assumption adjustment
Actuarial gains and losses arising from	7,356	6,765
demographic assumption adjustment
Benefits paid by the plan	(195,077)	(229,878)
Remeasurements of defined benefit liability	(1,544)	2,012
(asset)
Defined benefit obligation on December 31	$2,187,576	$2,452,743

(3)Movements in defined benefit plan assets are as follows:

	2021	2020
Fair value of plan assets on January 1	$1,383,678	$1,205,894
Interest income on plan assets	4,663	8,498
The return on plan assets	71,966	51,170
Contributions made	252,975	340,292
Benefits paid by the plan	(195,077)	(224,318)
Remeasurements of defined benefit liability (asset)	964	2,142
Fair value of plan assets on December 31	$1,519,169	$1,383,678

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• (4)The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. The composition of fair value of plan assets as of December 31, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

The expected return of the overall plan assets is estimated based on the historical trends, the forecast of the overall period return of the obligations, and the usage of the Labor Pension Fund by the LPF Supervisory Committee under the assumption that the minimum return shall not be less than the income by local banks’ two-year time deposit.

• (5)The principal actuarial assumptions used are as follows:

)The principal actuarial assumptions used are as	follows:
	December 31,2021	December 31,2020
Discount rate	0.55%~0.75%	0.20%~0.70%
Future salary increases rate	0.60%~2.00%	0.60%~2.00%

Assumptions regarding future mortality are based on actuarial advice of the Life Insurance Institutions within territory.

• (6)Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis is as follows:

obligation is affected. The analysis	is as follows:	is as follows:
	Discount rate		Future salaryincreases
	Increase	Decrease	Increase	Decrease
	0.25%~0.5%	0.25%~0.5%	0.25%~0.5%	0.25%~0.5%
December 31,2021
Effect on present value of defined	$(114,008)	$127,408	$128,710	$(113,880)
benefit obligation
December 31,2020
Effect on present value of defined
benefit obligation	$(142,411)	$153,060	$154,037	$(141,833)

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The sensitivity analysis above is based on the analysis for single assumption change effects while other assumptions remain constant. In practice, many changes in assumptions are related. Sensitivity analysis method is in accordance with the method for calculating net defined benefit liability on balance sheet.

• (7)Expected contributions to the defined benefit pension plan of the Company and its subsidiaries for the year ending December 31, 2021 amounted to $169,423 thousand.

6.25 Premiums income

Premium written Less: Reinsurance expense Net change in unearned premium reserves Subtotal Retained premium Premium written Less: Reinsurance expense Net change in unearned premium reserves Subtotal Retained premium		2021
	Insurance Contract $96,917,132 $2,604,704 220,197 $2,824,901 $94,092,231	Financial instruments containing discretionary participation features $5,539 $- - $- $5,539 2020	Total
			$96,922,671
			$2,604,704 220,197
			$2,824,901
			$94,097,770
	Insurance Contract $109,617,529 $2,337,240 267,807 $2,605,047 $107,012,482	Financial instruments containing discretionary participation features $5,821 $- - $- $5,821	Total
			$109,623,350
			$2,337,240 267,807
			$2,605,047
			$107,018,303

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6.26 Insurance claims and benefits

Insurance claims Less: Claims recoverable from reinsurers Insurance claims and benefits Insurance claims Less: Claims recoverable from reinsurers Insurance claims and benefits		2021
	Insurance Contract $73,861,782 2,038,669 $71,823,113	Financial instruments containing discretionary participation features $1,714,713 - $1,714,713 2020	Total
			$75,576,495 2,038,669
			$73,537,826
	Insurance Contract $62,577,834 1,993,973 $60,583,861	Financial instruments containing discretionary participation features $2,327,401 - $2,327,401	Total
			$64,905,235 1,993,973
			$62,911,262

6.27 Share Capital

Share Capital
Authorized share capital Capital stock issued	December 31,2021 $12,000,000 $9,131,067	December 31,2020
		$12,000,000
		$9,093,510

• 1.As of December 31, 2021, the Company’s common stock was 9,131,067 thousand and outstanding common shares was 913,107 thousand shares with par value of $10 (in dollars) per share.

• 2.As of December 31, 2021, the Company’s convertible bonds of $86,400 thousand have been converted into common stocks, among which 3,756 thousand shares have completed the registration proceedure and remaining 255 thousand shares are waiting for registration approval.

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6.28 Capital surplus

• 1.Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations should only be used to offset accumulated deficit, to issue new stocks or to pay out as cash dividend to shareholders, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus used to issue new stocks should not exceed 10% of the paid-in capital each year.

• 2.Capital surplus on December 31, 2021 and 2020 are as follows:

Treasury stock transactions Changes in shareholding - subsidiaries and associates accounted for under equity method Difference between the proceeds and carrying amount for the acquisition or disposal of subsidiaries Stock options of convertible bonds Convertible bonds premium Restricted stock Merger premium Total	December 31,2021 $392,378 1,333,630 550,965 77,332 46,684 1,368 53,124 $2,455,481	December 31,2020
		$288,582 1,143,724 545,327 - - 1,368 53,124
		$2,032,125

6.29 Retained earnings

1. Legal reserve

The legal reserve is for making good the deficit (or loss) of the Company. However, when the Company incurs no loss, it may, pursuant to a resolution of shareholders' meeting, distribute 25% of the amount that legal reserve exceeds the total capital by issuing new shares or paid out cash as dividends.

2. Special reserve

• (1)In accordance with the regulations, the Company shall set aside special reserve equal to the net debit balance of other equity items at the end of the reporting period before distributing earnings. When the net debit balance of other equity items is reversed subsequently, the reversed amount should be included in the distributable earnings.

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• (2)The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with FSC NO. 1010012865 regulations on April 6, 2012 shall be reversed proportionately when the relevant assets are used, disposed or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

• (3)On the initial application of fair value model to investment properties, the Company appropriated for a special reserve on initial application of IFRSs in accordance with FSC No. 1030006415 issued on March 18, 2014 at the amount that were the same as the net increase arising from fair value measurement and transferred to retained earnings. Additional special reserve should be appropriated for subsequent net increase in fair value. The amount appropriated may be reversed to the extent that the cumulative net increases in fair value decrease or on the disposal of investment property.

• (4) The special reserves on December 31, 2021 and 2020 are as follows:

Securities Exchange Act requirement IFRSs first adoption Changes in share interests of investee Fair value adjustment of investment property Total	December 31,2021	December 31,2020
	$2,507,949 61,004 250,198 2,746,864	$1,210,783 61,004 252,989 2,543,314
	$5,566,015	$4,068,090

1. Distribution of retained earnings

2. (1) According to the Company’s articles of incorporation, annual earnings after income tax shall be first used to offset previous deficit, set aside 10% of the remaining amount as legal reserve and set aside or reverse a special reserve according to relevant regulations. Any remaining balance shall be allocated according to the resolution of shareholders’ meeting.

3. (2) The Company’s dividend policy considers the development plan, investment environment, working capital needs, competition and shareholder’s interest. Cash dividends shall be at least 10% of the total distribution.

4. (3) Information about the earning appropriations proposed by the Board of Directors for the year 2021, please refer to the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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• (4) Information about the earning appropriations proposed by the Board of Directors and resolved by the stockholders for the year 2020, please refer to the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

• (5) Information relate to employee’s bonuses and director’s remuneration, please refer to Note 6.33.

6.30 Treasury stocks

Subsidiary name MFB MGM MH Total		December	31,2021
	Shares (Thousand shares) 39,630 2,914 5,629 48,173	Market price (dollars) $22.65 22.65 22.65	Total Market price	Treasury shares amount
			$897,618 65,994 127,493	$403,974 26,264 58,041
			$1,091,105	$488,279

Subsidiary name MFB MGM MH Total	December	December	31,2020	31,2020
	Shares (Thousand shares) Market price (dollars)		Total Market price Treasury shares amount
	43,985 $20.70		$910,489	$448,367
	2,914 20.70		60,312	26,264
	5,629 20.70		116,517	58,041
	52,528		$1,087,318	$532,672

MFB sold of 4,355 thousand shares of the Company in 2021.

6.31 Other equity

January 1,2021 The Company Subsidiaries and Associates December 31,2021	Exchange differences arising on translation of foreign operations	Unrealized gain (loss) on financial assets at FVOCI	Other comprehensive income (loss) on reclassification under the overlay approach	Unearned employee benefit	Total $(3,087,013) (27,727) (1,260,676) $(4,375,416)
	$(16,259) (477) (3,863)	$99,710 (27,250) (414,653)	$(3,177,107) - (842,160)	$6,643 - -
	$(20,599)	$(342,193)	$(4,019,267)	$6,643

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Other

			Other
January 1,2020 The Company Subsidiaries and Associates December 31,2020	Exchange differences arising on translation of foreign operations	Unrealized gain (loss) on financial assets at FVOCI	comprehensive income (loss) on reclassification under the overlay approach $(1,810,452) - (1,366,655) $(3,177,107)	Unearned employee benefit $6,643 - - $6,643	Total
	$(16,180) 2,422 (2,501)	$79,948 (64,049) 83,811			$(1,740,041) (61,627) (1,285,345)
	$(16,259)	$99,710			$(3,087,013)

6.32 Non-controlling interests

Balance on January 1 Non-controlling interests: Net profit Unrealized gain (loss) on financial assets at FVOCI Other comprehensive income (loss) on reclassification under the overlay approach Exchange differences arising on translation of foreign operations Defined benefit plan Non-controlling interests (decrease) increase Balance on December 31	2021	2020
	$27,185,239 721,727 (548,780) (1,086,844) (286) (53,810) 1,287,709	$27,138,468 1,124,799 38,537 (1,708,999) (13,391) 55,607 550,218
	$27,504,955	$27,185,239

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6.33 Employee benefit

Employee benefit
Item Employee benefit Wages and salaries Labor and health insurance Pension Director's remuneration Other employee benefit Depreciation and amortization	2021 $9,840,036 908,783 432,438 62,344 339,707 2,472,772	2020
		$10,670,942 912,150 461,523 67,005 340,731 2,441,367

1. According to Company’s Articles of Incorporation, it shall allocate no less than 1% of annual profit as bonuses to employees, and no more than 1% of annual profit as remuneration to directors, respectively, pursuant to the resolution of the boards of directors. However, the accumulated deficits should be covered first.

2. For the year ended December 31, 2021 and 2020, the employee bonus and directors remuneration were accrued at $31,100 thousands and $23,900 thousands. These amounts were recognized as salary expenses. Employees’ bonuses and director’s remuneration for 2020 had been approved by the shareholders meeting with no difference to the accrued amount in the financial statements ended December 31, 2020.

3. The information about employee’s bonuses and director’s remuneration of the Company will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

6.34 Income tax expenses (benefits)

1. Income tax expense

Current income tax expense Additional tax on unappropriated earnings Basic tax Income tax adjustment on prior years Total current income tax expense Deferred income tax Origination and reversal of temporary differences Income tax expenseds (benefits)	2021 $282,516 - 19,145 (14,174) $287,487 (2,253,260) $(1,965,773)	2020
		$1,003,697 78,731 - (118,958)
		$963,470 (313,963)
		$649,507

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2.The Company’s income tax expenses (benefits) recognized in other comprehensive profit and loss are as follows:

loss are as follows:	loss are as follows:
Items that will not be reclassified to profit: Unrealized gain (loss) from equity instruments measured at FVOCI Actuarial gain (loss) on defined benefit obligations Subtotal Items that will be reclassified to profit: Unrealized gain (loss) from debt instruments measured at FVOCI Other comprehensive income on reclassification under the overlayapproach Subtotal Total 3. The amount of income tax recognized in equity. Current tax benefits Derecognition of equity instruments measured at FVOCI Deferred tax expenses Derecognition of equity instruments measured at FVOCI Income tax on disposal of equity instruments		2021	2020
	Items that will not be reclassified to profit:
	Unrealized gain (loss) from equity instruments measured at FVOCI	$-	$(451)
	Actuarial gain (loss) on defined benefit obligations	12,879	2,962
	Subtotal	$12,879	$2,511
	Items that will be reclassified to profit:
	Unrealized gain (loss) from debt instruments measured at FVOCI	$(67,286)	$34,558
	Other comprehensive income on reclassification under the overlayapproach	(123,999)	27,172
	Subtotal	$(191,285)	$61,730
	Total	$(178,406)	$64,241
		2021	2020
	Current tax benefits
	Derecognition of equity instruments measured at FVOCI	$-	$(3,517)
	Deferred tax expenses
	Derecognition of equity instruments measured at FVOCI	-	3,517
	Income tax on disposal of equity instruments	$-	$-

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1. Reconciliation between income tax expenses (benefits) and accounting profit

Tax calculated based on profit before tax at statutory tax rate Effects from items disallowed by tax regulations Origination and reversal of deferred tax assets Income tax adjustments on prior years Additional tax on unappropriated earnings Basic tax Others Income tax expenses (benefits)	2021 $470,364 (193,918) (2,251,884) (6,750) - 19,145 (2,730) $(1,965,773)	2020
		$946,592 (549,336) 211,721 (43,185) 78,731 - 4,984
		$649,507

1. Deferred tax assets or liabilities as a result of temporary difference are as follows:

	2021	2021	2021	2021
Recognized in profit or Recognized in other comprehensive Income tax					December
January1		loss income		paid	31
Temporary differences:
Inventory valuation	$74,236	$5,454	$-	$-	$79,690
losses
Loss carryforwards	-	381,136	-	-	381,136
Financial assets (liabilities) at fair value through profit or loss (654,808) 6,416 - -					(648,392)
Investment property	(761,182)	(26,076)	-	97,206	(690,052)
Unrealized exchange losses 4,695,854 1,948,667 - -					6,644,521
Others	50,045	(62,337)	(12,879)	-	(25,171)
Financial assets (liabilities) at fair value through other comprehensive income 326,043 - 191,285 -					517,328
Total	$3,730,188	$2,253,260	$178,406	$97,206	$6,259,060
Presented on balance sheet
Deferred tax assets	$5,381,989				$7,886,160
Deferred tax liabilities	(1,651,801)				(1,627,100)
	$3,730,188				$6,259,060

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		2020	2020	2020
		Recognized in profit or Recognized in other comprehensive			Recognized	December
January1		loss income			in equity	31
Temporary differences:
Inventory valuation losses $81,965		$(7,729) $-			$-	$74,236
Loss carryforwards	1,704,498	(1,704,498)		-	-	-
Financial assets (liabilities) at fair value through profit or loss (1,270,151)		615,343 -			-	(654,808)
Investment property	(744,161)	(17,021)		-	-	(761,182)
Unrealized exchange losses 3,223,574		1,472,280 -			-	4,695,854
Others	97,419	(44,412)		(2,962)	-	50,045
Financial assets (liabilities) at fair value through other comprehensive income 390,839		-	(61,279)		(3,517)	326,043
Total	$3,483,983	$313,963		$(64,241)	$(3,517)	$3,730,188
Presented on balance sheet
Deferred tax assets	$5,573,047					$5,381,989
Deferred tax liabilities	(2,089,064)					(1,651,801)
	$3,483,983					$3,730,188

1. Income tax returns of the Company and its subsidiaries have been assess and approved by the Tax Authority are as follows:

(1) 2019 ： the Company and other subsidiaries

• (2) 2020 ： MGM, MH, MI, M.T.I., SMP, MF&BC

• (3) Income tax returns of the subsidiary SD through 2019 has been assessed and approved by the Tax Authority except 2018.

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6.35	Earnings per share 2021	Amount after tax $1,890,261 $1,890,261 14,118 $1,904,379 Amount after tax $1,397,680 $1,397,680 $1,397,680	Weighted average number of ordinary shares outstanding (in thousands)	Earnings per share (in dollar)
	Net profit Basic earnings per share Profit attributable to common shareholders of the parent company Assumed conversion of all dilutive potential common shares Employee bonuses Convertible corporate bonds Diluted earnings per share Current profit attributable to common shareholders plus assumed conversion of all dilutive potential common shares 2020		862,551 1,070 105,786	$2.19
				$1.96
			969,407
			Weighted average number of ordinary shares outstanding (in thousands)	Earnings per share (in dollar)
	Net profit Basic earnings per share Profit attributable to common shareholders of the parent company Assumed conversion of all dilutive potential common shares Employee bonuses Diluted earnings per share Current profit attributable to common shareholders plus assumed conversion of all dilutive potential common shares		857,203 1,238	$1.63
				$1.63
			858,441

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After the retrosprctive adjustmebt, the weighted average number of ordinary shares outstanding is calculated as follows:

outstanding is calculated as follows:
At January 1 Increase: Retained earning converted into common stock, 2020 Increase: Conversion of convertible bonds Decrease: Shares held by the subsidiaries Total	2021 909,351 - 992 (47,792) 862,551	2020
		826,683 82,668 - (52,148)
		857,203

The pro forma net income and earnings per share if accounting for treasure stock had not been adopted are as follows:

Profit attributable to common shareholders of the parent company Weighted average shares outstanding in basic earning per share Basic earnings per share (in dollars): Net profit from continuing operations	2021 $1,938,231 910,343 $2.13	2020
		$1,445,087 909,351 $1.59

The information of treasury stocks hold by subsidiaries, please refer to note 6.30.

7 RELATED-PARTY TRANSACTIONS

Intercompany balances and transactions betwee the Company and its subsidiaries have been eliminated upon consolidation, therefore those items are not disclosed in this note. The following is a summary of significant transactions between the Company and other related parties:

7.1 Names and relationship with related parties

Names of relatedparties Sanyou Drugstores, Ltd.(Note) Sanor Co., Ltd. Horizon Securities Co., Ltd. Fuh Hwa Securities Investment Trust Co., Ltd. CMG Internationl Two Co., Ltd Digicentre Company Limited. Horizon SICE Co., Ltd.	Relationshipwith the Company Joint venture Joint venture Associate Associate Associate Associate Other related party

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Names of relatedparties Inshokutenhanjoukai Co., Ltd. Mercuries & Associates, Ltd. Employee welfare committee Mercuries F&B Co., Ltd. Employee welfare committee Mercuries Life Insurance Employee welfare committee Simple Mart Retail Co., Ltd. Employee welfare committee Foundation of Chinese Dietary Culture Taiwan Slow Pitch Softball Association Criminal Investigation and Prevention Association, R.O.C. Police Academics Foundation The Third Special Police Corps, National Police Agency, Ministry of the Interior Taiwan Tee Ball Association Taiwan Master Golf Foundation Taoyuan County Private Mercuries Social Welfare Charity Foudation The Life Insurance Association of Republic of China Pharmacyplus co., Ltd. Shengbaocun Construction Engineering Co., Ltd. Key management personnel Other related person

Relationshipwith the Company

Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party The Company’s chairman, directors (including independent directors), general manager, deputy general manager and department head of the Company. The spouses, the second immediate family of the chairman and general manager of the subsidiaries. The spouses of the directors (including independent directors) and the managerial officer of the subsidiaries.

Note : SD has been restructured from a joint venture to a subsidiary on December 22, 2021.

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7.2 Significant transaction with related party

7.2.1 Sales

Associate Joint Venture Other related parties Total	2021 $1,986 - 7,412 $9,398	2020
		$- 6,595 1,547
		$8,142

The above sales terms are decided on market condition and collection period are 2-3 months.

7.2.2 Purchase

Joint Venture	2021 $51,290	2020
		$-

The above purchase terms are decided on market condition and payment period are 3 months.

7.2.3 Premiums income

Associate Joint Venture Key management personnel of the Company and other related person Total	2021 $1,338 - 19,361 $20,699	2020
		$1,077 468 19,309
		$20,854

The above premium rates are measured in accordance with the relevant provisions of the insurance law, and there is no difference with the general terms of the transaction.

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7.2.4 Other income

7.2.5 7.2.6 7.2.7	2021 2020 Associate $28,017 $20,874 Joint Venture - 10,263 Other related parties 1,324 1,755 Total $29,341 $32,892 Service revenue 2021 2020 Joint Venture $- $3,189 Other expense 2021 2020 Associate $27,162 $56,152 Joint Venture 3,998 178 Other related parties 48,603 35,236 Total $79,763 $91,566 Outsourcing of investment management service The subsidiary MLI appoints its associates as its fund manager of its investment portfolios. The management expenses charged by associates during each period are as follows:	2020
		$20,874 10,263 1,755
		$32,892
		2020
		$3,189
		2020
		$56,152 178 35,236
		$91,566

7.2.8	2021 Associate $13,119 Property transactions (1) The subsidiary MLI held funds issued by associates are as follows: December 31, 2021 Funds $124,650	2020 $7,880
		December 31, 2020
		$133,350

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• (2) The subsidiary MLI purchased IT equipments, business platform and software from the associate are as follow:

Associate	2021 $1,155	2020
		$-

• (3) The subsidiary MF&B signed a contract with Shengbaocun Construction Engineering Co., Ltd. to construct the central kitchen in Dayuan with contract price $535,000 thousand in October 2020. As of December 31, 2021 and 2020, accumulated amoumt paid were $85,060 thousand and $8,853 thousand, respectively. Fairness opinion of the aforementioned contract price had been issued by the Panasia Real Estate Appraisers Joint Firm.

7.2.9 Accounts receivable- related parties

Associate Other related parties Total	December 31, 2021 $16 16 $32	December 31, 2020
		$- 10
		$10

7.2.10 Accounts payable- related parties

Associate Joint Venture Other related parties Total Guarantee deposits received Other related parties	December 31, 2021 $1,866 33,406 79 $35,351 December 31, 2021 $139	December 31, 2020
		$2,025 - -
		$2,025
		December 31, 2020
		$139

7.2.11 Guarantee deposits received

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7.2.12 Bonds Payable

The amounts of MLI’s first perpetual cumulative subordinated corporate bonds held by the associate are as follows:

associate are as follows:
Associate	December 31, 2021 $200,000	December 31, 2020
		$-

The interest expenses and accrued interest expenses payable are as follows:

Interest expenses Associate Accrued interest expenses payable Associate	2021 $2,043 December 31, 2021 $2,043	2020
		$-
		December 31, 2020
		$-

7.2.13 Secured loan

The details of real estate mortgage and movable property mortgage for key management personnel and other related person on December 31, 2021 and 2020 are as follows:

Real estate mortgage and movable property mortgage Interest receivable Interest revenue Interest rate range	December 31, 2021 $118,892 $43 2020 $1,602 1.00%~1.53%	December 31, 2020
		$104,933
		$36
		2019
		$1,581
		1.00%~1.78%

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7.2.14 Key management compensation

Key management compensation
Salaries and other short-term employee benefit	2021 $424,864	2020
		$440,728

8 PLEDGED ASSETS

Assets provided by the Company and its subsidiaries for business purposes are as follows:

Book Value

Assets	December 31, 2021 $165,995 2,966,899 46,259 4,778,243 $7,957,396	December 31, 2020	Purpose of pledge
Reserved deposits and time deposits MLI common stock Land and buildings Government bonds Total		$169,850 3,220,710 46,906 4,774,480	As a guarantee for bid bonds, performance bonds, sales performance and loans limit As a guarantee for credit line As a guarantee for credit line As a guarantee for security of business and futures margin
		$8,211,946

In accordance with the insurance law and related regulations, the subsidiary MLI paid the deposit of operating bonds and index futures transactions with government bonds, then deposit them in the central bank and the Taiwan Futures Exchange, respectively. As of December 31, 2021 and 2020, the par value of the deposits were $4,800,000 thousand .

9 SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

Promissory notes for borrowing from financial institutions. Unused letters of credit for purchase goods. Performance bonds issued by the financial institutions. Endorsements/guarantees to subsidiary	December 31,2021	December 31,2020
	$18,191,116 265,924 563,658 200,000	$15,546,116 177,362 579,715 -

• 9.1 MLI has 14 significant lawsuits related to the insurance business. The total amount of claim is $34,692 thousand. The subsidiary MLI has assessed the appropriate amount of the compensation reserve, and these lawsuits are currently in court.

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• 9.2 Investment contracts signed by the subsidiary MLI, with the amounts not yet invested in the Commitment of US$521 thousand and NT$893,260 thousand for the year ended December 31, 2021; as well as US$521 thousand and NT$521,809 thousand for the year ended December 31, 2020.

• 9.3 Significant outstanding purchase commitments for property, plant and equipment on December 31, 2021 and 2020 were $1,342,030 thousand and $49,382 thousand, respectively.

• 9.4 As of December 31, 2021, subsidiary MF&B provided warranty notes amounted to $53,500 thousand to Shangbaocun Construction Engineering Co., Ltd. for construction of the central kitchen in Dayuan.

• 9.5 MDS had been in dispute with Acion Technologies Inc. (“Acion”) due to the procurement contract for the surveillance systems leasing case with Civil Affairs Bureau of Kaohsiung. Acion sued MDS and claimed that MDS should pay the contract project bill and additional work bill, $39,823 thousand in total. MDS counterclaimed that the unpaid projects are under dispute and requested penalty of damages in the form of unfulfilling debt to offset the unpaid bills. On October 28, 2009, MDS was defeated in the first instance and has to pay Acion $2,230 thousand; MDS appealed to Taiwan High Court and on July 20, 2010, the court ruled to dismiss the appeal and MDS has to pay Acion additional $6,043 thousand (including the warranty deposit, which should be paid back by MDS when the warranty period expired). On December 24 2020, Taiwan Supreme Court reversed the case to Taiwan High Court (first retrial), and on July 4, 2012, the court judged that MDS shall pay extra $17,100 thousand to Acion except the original amount $2,230 thousand. The case was re-appealed to Taiwan Supreme Court and the court considered the judgement is obviously ambiguous that the delay of the completion is not attributable to Acion. Thus, on June 6, 2013, the Taiwan Supreme Court reversed the case to Taiwan High Court for second retrial. On June 18, 2019, in the second retrial, Taiwan High Court ruled that MDS shall pay Acion $8,362 thousand in addition to the payable $2,230 thousand ruled in the first instance. Both parties have appealed during the period allowing to take an appeal.

10 SIGNIFICANT DISASTER LOSS

SCI had a fire accident occurred on December 20, 2020, and caused damage to some buildings, equipment, construction in progress, and inventories, and spreading to several nearby factories, of which property was impaired and business operation was interrupted. SCI derecognized damaged buildings, equipment and construction in progress at $401,187 thousand and the inventories at $175,565 thousand and accrued for the damaged loss for nearby damaged companies for $509,076 thousand. The total disaster loss is $1,085,828 thousand.

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In 2021, SCI derecognized PPE amounted to $19,545 thousand. In addition, the damaged loss for nearby damaged companies was still under negotiation. SCI resversed the damaged loss of $25,000 thousand according to the compensation claimed by the nearby damaged companies.

Although, the damaged loss is based on the best estimate from the available evidence as of the reporting date, actual loss of the damage is still subject to future negotiation and there are contingent liabilities that cannot be estimated or recorded. As of December 31, 2021, the damaged loss amounted to $109,182 thousand had been paid to the nearby damaged companies and the fire disaster indemnity estimated to be paid is $374,894 thousand, which was recorded under other current liabilities.

SCI has already entered into related property insurance contracts and it currently in the process of negotiation with the insurance company to handle claims. SCI has confirmed with the insurance company and its notary to recognize the virtually certain amount of compensation that can be received from the insurance company as claim receivables, but shall not exceed the disaster loss of each asset. SCI has received the compensation amounted to $253,518 thousand from the insurance company in 2021. As of December 31,2021, SCI recognizes the claim receivable for $265,539 thousand, which is recorded under account receivable-other. However, the insurance claims involve disaster identification, SCI has not been able to confirm the total amount of insurance claims, and will recognize it when the company can almost be certain that it can receive the subsequent increase in insurance claims income.

11 SIGNIFICANT SUBSEQUENT EVENTS

The subsidiary MLI has resolved by the board of directors to engage in an IT contract with EIS Pacific PTY Ltd. Taiwan Branch (Australia) to establish a new life insurance core system amounted to $1,515,000 thousand in January 20, 2022.

12 Other

12.1 Capital management

The objectives of capital management is to maintain capital structure, reduce capital cost and continue to operate at the maximum interests of shareholders.

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12.2 Financial instruments

• I. Fair value of financial instruments

The Company and its subsidiaries do not disclose the fair value for short-term financial instruments, such as cash and cash equivalents, accounts receivable/payable, loans, intercompany reinsurance receivables, claims and payments recoverable from reinsurers, refundable deposits, short-term debts, bank borrowings and guarantee deposits received. Since these financial instruments have relatively shorter maturity date, their carrying amount can be fairly presented as the fair values, the Company does not disclose the fair value. Furthermore, the fair values information of financial assets and financial liabilities are as follows:

are as follows:
Financial assets: Financial assets measured at FVTPL Financial assets measured at FVOCI Financial assets measured at amortized cost Financial liabilities: Financial liabilities measured at FVTPL Bonds payable	December 31,2021 Carrying amount Fair value $63,956,549 $63,956,549 46,041,512 46,041,512 920,030,441 943,342,035 127,201 127,201 10,341,380 11,040,297	December 31,2020
	Carrying amount	Carrying amount	Fair value
	$63,956,549 46,041,512 920,030,441 127,201 10,341,380	$86,901,767 45,729,987 817,068,782 1,979,315 7,500,000	$86,901,767 45,729,987 887,289,138 1,979,315 8,098,075

The Company and its subsidiaries valuation techniques and assumptions used in fair value determination are as follow:

• (1) The fair value of short-term financial products are estimated based on its carrying amount on the balance sheet. Since the maturity date of the products is short, carrying amount should be a reasonable basis for estimating its fair value. This method applies to cash and cash equivalent, notes receivable and notes payable, accounts receivable and accounts payable, and other financial assets.

• (2) Since the loans of all the financial assets are interest-bearing, therefore, the carrying amount after deducting the allowance for bad debt is close to the current fair value.

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• (3) If the equity investments and debt securities are an active market, then the fair value of the asset is the market price. If no market price is available for reference, the method of estimation is the same as those used by the market participants in the pricing of financial products. The discount rate used by the Company is equal to that of the financial products with the same terms and characteristics.

• (4) Refundable deposits and guarantee deposits received are estimated based on its carrying amount.

• (5) Bank borrowings are estimated based on its carrying amount.

• (6) The fair value of the forward foreign exchange contract, if available, is based on the market price. If the market price is unavailable, the fair value is the difference between the forward price of the contract and the current forward price. The remaining period of the contract is discounted.

• (7) The fair value of the interest rate exchange is based on the quotation of the broker, which is derived from estimated future cash flows based on the terms and maturities of each contract, using the present value of the market interest rate of similar instruments to test its reasonableness.

• (8) The fair value of non-derivative financial liabilities is calculated by the cash flow of principal and interest in the future discounted to the fair value used the market interest rate as of the reported date.

II. Financial risk management policies

• (1) The Company and its subsidiaries activities expose it to a variety of financial risks including market risk (foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial position and financial performance. The Company uses derivative financial instruments to hedge certain risk exposures.

• (2) Risk management is carried out by the Company and its subsidiaries risk management department under policies approved by the Board of Directors. The general

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administration division identifies, evaluates and hedges financial risks to cooperation with the business operating units.

III. Significant financial risks and degrees of financial risks

(1) Market risk

• A. Exchange rate risks

• a.The operation of the Company and its subsidiaries are affected by the exchange rate risks arising from various currencies, but the main risk is from the currency USD. The related exchange rate risk comes from recognized assets and liabilities denominated in foreign currencies, mainly accounts receivables/payables, advance receipts, and financial products, etc.

• b.The Company and its subsidiaries pay attention to change in exchange rates and hedged foreign exchange rate by using forward exchange contracts and foreign currency loan, etc.

• c.The Company and its subsidiaries businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations are as follows:

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Financial Assets Monetary items USD AUD CNY NZD HKD EUR JPY GBP KRW SGD Non-monetary items USD EUR HKD AUD CNY JPY SGD KRW GBP Derivative USD AUD Financial Liabilities Monetary items USD CNY EUR GBP JPY Derivative USD AUD NZD CNY	December31,2021	December31,2021	December31,2021	December31,2020	December31,2020	December31,2020
	Local Currency	Exchange rate	NTD	Local Currency	Exchange rate	NTD
	$27,333,789 259,629 4,078,625 134,628 111 2,552 888,408 58 15,428 6 $795,610 45,260 463,140 10,199 274,847 3,761,443 - 4,229,648 - $- - $106,894 - 261 - 606,389 $- - - -	27.69 20.11 4.34 18.92 3.55 31.34 0.24 37.29 0.02 20.47 27.69 31.34 3.55 20.11 4.34 0.24 - 0.02 - 27.69 20.11 27.69 - 31.34 - 0.24 27.69 20.11 18.92 -	$756,873,059 5,221,461 17,719,199 2,547,609 395 79,794 213,548 2,163 359 125	$24,093,892 206,072 4,405,867 165,464 172,476 27,309 2,549,413 20 - 58,466 $509,459 30,354 352,244 46,691 395,948 4,174,302 6,892 - 466 $- - $81,121 9,530 149 98 824,666 $- - - -	28.51 22.05 4.38 20.64 3.68 35.01 0.28 38.98 - 21.57 28.51 35.01 3.68 22.05 4.38 0.28 21.57 - 38.98 28.51 - 28.51 4.38 35.01 38.98 0.28 28.51 22.05 20.64 4.38	$686,865,839 4,544,079 19,281,301 3,414,660 634,280 955,429 704,400 778 - 1,261,229
			$782,657,712			$717,661,995
			22,030,432 1,418,302 1,644,333 205,114 1,194,091 904,627 - 98,509 -			14,523,643 1,062,613 1,295,376 1,029,572 1,734,348 1,155,029 148,684 - 18,182
			$27,495,408			$20,967,447
			$3,328,626 38,320			$5,832,414 -
			$3,366,946			$5,832,414
			$2,959,833 - 8,155 - 145,758			$2,312,285 41,759 4,980 3,812 227,914
			$3,113,746			$2,590,750
			$88,931 22,216 13,840 -			$1,699,941 159,606 71,753 47,907
			$124,987			$1,979,207

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B.Foreign exchange sensitivity analysis

The following table shows the impact of 1% fall in the exchange rates of the foreign currencies to New Taiwan Dollar.

Unit: Thousand dollar

				Unit: Thousand dollar	Unit: Thousand dollar
Currency	Exchange rate change	Effects on profit before tax		Effects on equities
		December 31, 2021	December 31, 2020	December 31, 2021	December 31, 2020
USD	-1%	$(74,899)	$(288,119)	$(230,580)	$(341,640)
CNY	-1%	(175,893)	(190,797)	(147,887)	(163,220)
EUR	-1%	(849)	(9,600)	(10,728)	(14,847)
HKD	-1%	(4)	(6,343)	(10,034)	(13,672)
NZD	-1%	(9,975)	(7,620)	(7,980)	(6,096)

C.The measurements of market risk

The subsidiary MLI uses “ Value at Risk” to measure the market risk of various financial instruments, and sets the "market risk limit" to monitor the value changed in relevant financial instruments, and regularly evaluates the rationality of the risk limits.

The subsidiary MLI uses the historical simulation method, selecting 750 days of historical data, 99% of the trust interval and 10 days holding period, to calculate and monitor the daily risk portfolio. The risks of our financial instruments on December 31, 2021 and 2020 are as follows:

Currency risk Interest rate risk The risk of share price Risk diversification Total at risk	December 31, 2021	December 31, 2020
	$1,046,223 607,750 1,689,532 (1,706,463)	$1,398,401 745,330 2,141,716 (1,878,365)
	$1,637,042	$2,407,082

The risk valuation model has its limitation and MLI regularly tests the market risk to ensure the rationality of the risk valuation model.

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D.Interest rate sensitivity analysis

A change of 100 basis points (“BPS”) in interest rates at the end of the reporting period would have increased/(decreased) equity and pre-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

remain constant.
The changes of rates	Effects on profits before tax		Effects on other comprehensive income
	December 31, 2021	December 31, 2020	December 31, 2021	December 31, 2020
Major yield curve- up 100BPS	$(70,088)	$(116,345)	$(3,396,919)	$(3,674,221)
Major yield curve- down 100BPS	70,369)	116,849)	4,093,447)	4,538,692)

E.Taiwan Stock Exchange Capitalization Weighted Stock Index sensitivity analysis

The table below shows the effects on profits before tax and equities if the subsidiary MLI assumes the other variables remain constant, Weighted Price Index of the Taiwan Stock Exchange increase or decrease by 10%.

Exchange increase or	decrease by 10%.	decrease by 10%.
Changes in the Weighted Stock Index of the Taiwan Stock Exchange	Effects on profits before tax		Effects on other comprehensive income
	December 31, 2021	December 31, 2020	December 31, 2021	December 31, 2020
Increase 10%	$-	$(294)	$164,290	$569,736
Decrease 10%	-	294	(164,290)	(569,736)

(2) Liquidity risk

• A.The liquidity risk of financial instruments is divided into capital liquidity risk and market liquidity risk. Capital liquidity risk refers to the risk that the Company and its subsidiaries do not possess sufficient cash and is not able to raise funds in time and finally failed to fulfill the obligation (debt repayment); Market liquidity risk refers to the risk that the Company and its subsidiaries are not able to settle or offset current position with reasonable market price due to the shallow market depth or market disorder or the oversized possession of the investment position and finally the Company and its subsidiaries may suffer from losses.

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In terms of capital liquidity risk, the Company and its subsidiaries manage it in two aspects, short term and mid to long term. Except for the capital liquidity ratio set up for the index of measurement and control of short term liquidity, relevant departments have established prompt capital report mechanism and apply proper currency market instruments or foreign exchange derivative instruments for daily capital movement; mid to long term capital liquidity management is reviewed by the Assets and Liabilities Management Committee. The Company and its subsidiaries apply cash flow analysis model to monitor the coordination of assets and liabilities in order to lower related risks.

Regarding the market liquidity risk, the risk management department of the Company and its subsidiaries established monitoring mechanism in terms of daily transaction concentration, investment position limit and current assets deployment in order to avoid market liquidity risk.

In addition, the Company and its subsidiaries established complete crisis management and responding mechanism to cope with significant capital demand of unusual or emergent situations.

The Company and its subsidiaries possess sufficient operating funds, including cash and cash equivalents and securities with excellent liquidity such as government bond, to cover the investments and debt repayments. Therefore, the liquidity risk of the Company and its subsidiaries are extremely low. In addition, the derivative financial instruments the Company and its subsidiaries engage in, such as forward exchange contracts and swaps foreign exchange, are all of highly liquid currencies. The possibility that they are not able to be sold at reasonable prices in the market is minimum, and therefore the market liquidity risk is low. Furthermore, forward exchange contracts and foreign exchange swaps which matured are mostly rolled forward and the capital to pay for the settlements is sufficient. Thus, the capital liquidity risk is insignificant.

The following table is an analysis of the cash flows of the Company’s non-derivative financial liabilities based on the remaining periods between the reporting date and the repayment date based on the undiscounted cash flows of the financial liabilities, including interest. Therefore, some accounts illustrated below may not match the corresponding accounts on the balance sheet. The expected cash flow of these financial instruments may significantly differ from the analysis in the following table.

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December 31, 2021	< 1 year	1~5 years	> 5 years	Total
Estimated cash outflow from financial liabilities Short-term borrowings Short-term notes and bills payable Accounts payable Commissions payable Lease liabilities Guarantee deposits received Bonds payable Long-term borrowings	$590,000 949,985 8,254,651 873,230 1,358,182 1,379,613 310,270 6,030,000	$- - - - 2,443,460 412,115 10,564,680 -	$- - - - 387,490 22,530 803,850 -	$590,000 949,985 8,254,651 873,230 4,189,132 1,814,258 11,678,800 6,030,000
Total	$19,745,931	$13,420,255	$1,213,870	$34,380,056
December 31,2020	< 1 year	1~5 years	> 5 years	Total
Estimated cash outflow from financial liabilities Short-term borrowings Short-term notes and bills payable Accounts payable Commissions payable Lease liabilities Guarantee deposits received Bonds payable Long-term borrowings	$665,000 1,249,863 8,095,703 1,063,740 1,364,308 2,211,964 287,500 8,506,500	$- - - - 2,774,653 438,302 955,000 -	$- - - - 209,200 15,980 7,592,500 -	$665,000 1,249,863 8,095,703 1,063,740 4,348,161 2,666,246 8,835,000 8,506,500
Total	$23,444,578	$4,167,955	$7,817,680	$35,430,213

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• B. Maturity analysis for derivative financial liabilities

• a. Net settlement of derivative instruments

The subsidiary MLI’s net settled derivative instruments included foreign derivative instruments.

instruments.
December 31, 2021	0~30 days	31~90 days	91~180 days	181 days ~1year	More than 1year	Total
Derivative liabilities at fair value: －Foreign exchange derivatives	$100,309	$10,755	$13,923	$-	$-	$124,987
Total	$100,309	$10,755	$13,923	$-	$-	$124,987

December 31, 2020	0~30 days	31~90 days	91~180 days	181 days ~1year	More than 1year	Total
Derivative liabilities at fair value: －Foreign exchange derivatives －Other	$398,897 108	$994,677 -	$585,633 -	$- -	$- -	$1,979,207 108
Total	$399,005	$994,677	$585,633	$-	$-	$1,979,315

b.Total settlement of derivative instruments

The subsidiary MLI's total settled derivative instruments included the contracts of cross- currency swap.

cross- currency swap.
December 31, 2021	0~30 days	31~90 days	91~180 days	181 days ~1year	More than 1year	Total
Derivative liabilities at fair value: －Cross-currency swap Cash outflow Cash inflow	$- -	$- -	$- -	$19,021,250 20,001,897	$- -	$19,021,250 20,001,897
Net	$-	$-	$-	$(980,647)	$-	$(980,647)

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December 31, 2020	0~30 days	31~90 days	91~180 days	181 days ~1year	More than 1year	Total
Derivative liabilities at fair value: －Cross-currency swap Cash outflow Cash inflow	$- -	$- -	$- -	$2,172,730 2,319,845	$19,021,250 19,440,808	$21,193,980 21,760,653
Net	$-	$-	$-	$(147,115)	$(419,558)	$(566,673)

(3) Credit risk

• A. Credit risk management

• a. Credit risk is the risk of financial loss to the Company and its subsidiaries if a debtor or counterparty to a financial instrument fails to meet its contractual obligations. When all counterparties are concentrated in a single industry or region, the Company and its subsidiaries may face greater risk. Due to counterparties who are in the same industry or region are subject to the same economic environment and their ability to repay their loans will be affected.

• b. Credit risk is managed through the following mechanisms:

• l Limit Control: Limits were set to monitor on sector, same related entity and country exposure risks in order to avoid concentration risk.

• l The subsidiary MLI’s prudent credit evaluations were performed when conduct the loan business and collateral are requested in order to reduce our credit risk exposure.

• B. Expected credit loss

• a. Significant increase in credit risk

In assessing whether the credit risk on a financial asset has increased significantly since initial recognition, the Company and its subsidiaries consider the reasonable and supportable information (past, present, and future) that is available without undue cost or effort.

The objective of the assessment is to determine whether credit risk has significantly increased by comparing:

• l The default rate of the financial instrument on reporting date; and

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• l The default rate of the financial instrument since initial recognition.

Except for the following which loss allowance are measured at an amount equal to the 12-month credit losses, the Company and its subsidiaries calculate the loss allowance based on the assets lifetime expected credit losses:

• l Investments in debt securities that are determined to have a low credit risk at reporting date, and;

• l Other financial instruments which credit risk have not significantly increased since initial recognition.

When debt securities credit risk are globally reported on an external rating as “investment grade”, these are determined to be a low credit risk investment by the Company and its subsidiaries 12-month expected credit loss refer to the losses that will result if a default occurs in the 12 months after the reporting date.

In assessing whether the credit risk on a financial asset has increased significantly, the Company and its subsidiaries consider that different investment portfolios have different credit risks, including changes in default rates and credit qualities. Based on the Company and its subsidiaries’ assessment policy, in the event that an investment is no longer “investment grade”, and that a decline occurred between its credit rating and its investment grade, this results in a significant increase in credit risk. In the event that the Company and its subsidiaries’ assessment policy do not detect an increase in credit risk in time, the Company and its subsidiaries employ professional judgment and prior experience to determine whether a significant increase in credit risk occurred on a financial asset.

The Company and its subsidiaries assume that the credit risk of a financial asset has increased significantly when contractual payments are overdue after 30 days, or when objective evidence of impairment exists. The past-due days are calculated based on the first day the counterparties exceed its contractual credit term.

b.Credit risk rating

The Company and its subsidiaries have a credit risk rating policy in place for different types of financial instruments. The credit risk rating will correspondingly increase to reflect the escalating risk of default of each financial instrument.

The credit risk rating is initially determined based on the borrower’s credit information. This credit risk rating is monitored on an ongoing basis, and will alter based on changes in the instrument’s risk grade. Credit risk monitoring is based on the aging days and objective evidence of impairment.

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c.Default rate structure

Credit rating is a key component in assessing the exposure loss. The Company and its subsidiaries collect data of customers, such as geographical area, product, borrower, credit rating etc., to assess the exposure loss.

The Company and its subsidiaries utilize statistical analysis of the data collected to assess the exposure loss, and the analysis will be updated based on latest available data.

These assessments include identifying and updating the default rates based on economic indexes and other relevant statistics. For most assessments, the main indexes are the Gross Domestic Product Growth Rates and Unemployment Rates.

d.Definition of default

The Company and its subsidiaries determined that the following as a “default” of financial asset:

• l The borrower is unable to repay the debts in full, unless the Company and its subsidiaries exercise its recourse rights, such as disposing its collateral on auction.

• l The borrower has significant debts past due for more than 90 days.

In assessing whether a borrower has defaulted, the Company and its subsidiaries consider the following:

• l Qualitative indicators – breach of contract

• l Quantitative indicators – the same borrower has other unpaid debts within the Company and its subsidiaries.

• l Based on internal and external data that take into account default input and other main inputs over time, which indicate changes in circumstances.

e.Definition of credit loss on financial assets

At each reporting date, the Company and its subsidiaries assess whether there is a credit loss on debt instruments measured at amortized cost and FVOCI. In the event where one or more circumstances which cause an expected cash shortfall from financial assets occur, then a credit loss has occurred.

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The following observable inputs are examples of circumstances that cause a credit loss:

• l The issuer or borrower faces adverse financial difficulties;

• l A breach of contract, including omission and delay of repayment;

• l The borrower’s creditor has filed for a winding up of the borrower;

• l It is probable that the borrower will declare bankruptcy or other financial restructuring;

• l A buy-in at a large discount of the financial asset.

In the case where a borrower has declared for a rationalization plan, this will normally be viewed as a credit loss, unless there is evidence that the irrecoverable risk has reduced, and there are no other indicators of credit loss.

f.Measurement of expected credit loss

The main factors in calculating expected credit loss are:

• l Default rate

• l Default loss rate

l Default exposure

Default rate is estimated based on statistical data and exposure type of the counterparty, on a particular point in time. These statistical data are calculated based on internal information, which are qualitative and quantitative in nature. Where available, market data are obtained to estimate the default rates of corporate counterparties. In the event of a change in credit rating, it will correspondingly affect the default rate of the asset. The default rate also takes into account the exposure of the contract up to its maturity date and the estimated early repayment ratios.

Default loss rate is the maximum loss rate in the event of a breach of contract occurred. The Company and its subsidiaries use the historic recovery rate of previous defaulting counterparties as a basis of calculating default loss rate. The default loss rate model also considers the financial assets overall structure, guarantee, priority to claims, industry of counterparties, and cost to recover guarantees.

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Default exposure is the claim amount in the event of a breach. The Company and its subsidiaries’ upfront claim amount (including amortization), plus interest, is calculated as the default exposure amount.

g.Data used in forecasting

The default rate for measuring the debt instruments is according to the information announced by Moody’ s, international credit rating agency, including the state of macroeconomic forecasting and the prediction of implicit market data. For the loans to other parties, the Company and its subsidiaries, according to internal historical experience and actual external information and forecasts, set a benchmark for pertinent economic variables and representative intervals of predictable scenarios. The sources of external information include government authorities, the International Monetary Fund (IMF), elected private segments, and economic forecast studies.

C. Analysis of credit risk quality

The subsidiary MLI’s information regarding the credit risk quality of debt instruments measured at FVOCI, financial assets measured at amortized cost and loans and receivables was presented in the tables below. All financial asset balances disclosed below were presented at net, unless specifically stated otherwise.

a. Debt instruments measured at FVOCI (Exclude statutory refundable deposits)

Low credit risk Significant increase in credit risk Carrying amount		2021	2021
	12-month expected credit loss	Lifetime expected credit loss – non-credit loss	Lifetime expected credit loss -credit loss $- - $-	Total
	$44,667,664 -	$- -		$44,667,664 -
	$44,667,664	$-		$44,667,664

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Low credit risk Significant increase in credit risk Carrying amount		2020	2020
	12-month expected credit loss	Lifetime expected credit loss – non-credit loss	Lifetime expected credit loss -credit loss $- - $-	Total
	$44,525,500 -	$- -		$44,525,500 -
	$44,525,500	$-		$44,525,500

b. Financial assets measured at amortized cost (Exclude statutory refundable deposits)

Low credit risk Significant increase in credit risk Loss allowance Carrying amount Low credit risk Significant increase in credit risk Loss allowance Carrying amount		2021	2021
	12-month expected credit loss	Lifetime expected credit loss – non- credit loss	Lifetime expected credit loss -credit loss	Total
	$920,017,228 - (26,121)	$- - -	$- - -	$920,017,228 - (26,121)
	$919,991,107	$-	$-	$919,991,107
		2020
	12-month expected credit loss	Lifetime expected credit loss – non- credit loss	Lifetime expected credit loss -credit loss	Total
	$817,104,607 - (81,297)	$- - -	$- - -	$817,104,607 - (81,297)
	$817,023,310	$-	$-	$817,023,310

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c. Loans (Exclude policy loans and automatic premium loans)

Overdue 0~8 days Overdue 9~30 days Overdue 31~60 days Overdue 61~90 days Overdue more than 91 days or breach of contract Significant increase in credit risk Loss allowance Carrying amount Overdue 0~8 days Overdue 9~30 days Overdue 31~60 days Overdue 61~90 days Overdue more than 91 days or breach of contract Significant increase in credit risk Loss allowance Carrying amount		2021	2021
	12-month expected credit loss	Lifetime expected credit loss – non- credit loss	Lifetime expected credit loss -credit loss	Total
	$29,100,793 50,314 - - - - (437,221)	$- - 628 - - - (9)	$- - - - 53,527 - (806)	$29,100,793 50,314 628 - 53,527 - (438,036)
	$28,713,886	$619	$52,721	$28,767,226
		2020
	12-month expected credit loss	Lifetime expected credit loss – non- credit loss	Lifetime expected credit loss -credit loss	Total
	$29,613,462 122,603 - - - - (445,982)	$- - 737 - - - (11)	$- - - - 68,933 - (1,047)	$29,613,462 122,603 737 - 68,933 - (447,040)
	$29,290,083	$726	$67,886	$29,358,695

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d. Receivables (Interest receivable)

Low credit risk Significant increase in credit risk Loss allowance Carrying amount Low credit risk Significant increase in credit risk Loss allowance Carrying amount		2021	2021
	12-month expected credit loss	Lifetime expected credit loss – non- credit loss	Lifetime expected credit loss -credit loss	Total
	$5,845,341 - (233)	$- - -	$- - -	$5,845,341 - (233)
	$5,845,108	$-	$-	$5,845,108
		2020
	12-month expected credit loss	Lifetime expected credit loss – non- credit loss	Lifetime expected credit loss -credit loss	Total
	$5,545,257 - (573)	$- - -	$- - -	$5,545,257 - (573)
	$5,544,684	$-	$-	$5,544,684

D. Maximum credit risk exposure of financial assets

Carrying amount best represents the subsidiary MLI's maximum exposure to credit risk for its financial instruments on the balance sheet before taking into account any collateral held or other credit risk mitigation. The maximum credit risk exposure amounted to $1,216,558,823 thousand and $1,180,592,562 thousand on December 31, 2021 and 2020, respectively. In addition, the subsidiary MLI has no exposure to credit risk for off-balance-sheet financial instruments.

The maximum exposure to credit risk for loans and receivables except policy loans and automatic premium loans by geographic region:

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Taipei area Zhongli area Taichung area Tainan area Kaohsiung area Total	December 31,2021	December 31,2021	December 31,2020	December 31,2020
	Amount	%	Amount	%
	$15,021,085 - 7,937,021 3,242,893 2,566,227	52 - 28 11 9	$10,228,388 5,843,585 7,391,761 3,134,673 2,760,288	35 20 25 11 9
	$28,767,226	100	$29,358,695	100

The maximum exposure to credit risk for bond investments by geographic region of bond issuers:

bond issuers:	bond issuers:
Region		December 31, 2021		December 31, 2020
		Amount	%	Amount	%
Taiwan		$243,343,923	24.36	$235,658,514	26.34
Developed countries	Asia	33,408,107	3.34	25,346,492	2.83
	North America	303,888,164	30.42	246,044,064	27.50
	Europe	153,036,867	15.32	176,815,033	19.76
	Oceania	19,106,432	1.91	26,202,552	2.93
Multi-countryinvestment		8,377,143	0.84	3,952,824	0.44
Emerging countries (except Taiwan)		237,908,844	23.81	180,828,443	20.20
Total		$999,069,480	100.00	$894,847,922	100.00

• E ： As of December 31, 2021 and 2020, the Company and its subsidiaries had no overdue financial assets that’s was not impaired.

F ： Analysis of financial assets that are individually determined to be impaired.

a. Non-derivative financial asset

Non-derivative financial asset
Accounts receivables Accounts receivables	December 31, 2021
	Impaired Amount Accumulated Impairment Net $14,038 $13,320 $718 December 31, 2020		Net
			$718
	Impaired Amount $22,210	Accumulated Impairment $21,932	Net
			$278

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b. Impaired loans (Exclude policy loans and automatic premium loans)

December 31, 2021 Impaired amount Less: Impairment reserves Net December 31,2020 Impaired amount Less: Impairment reserves Net	Loans (Exclude policy loans and automaticpremium loans)	Loans (Exclude policy loans and automaticpremium loans)	Loans (Exclude policy loans and automaticpremium loans)
	Real estate mortgage Other secured loan Total $53,593 $- $53,593 (687) - (687) $52,906 $- $52,906 Loans (Exclude policy loans and automaticpremium loans)		Total
			$53,593 (687)
			$52,906
	Real estate mortgage $69,005 (2,389) $66,616	Other secured loan $- - $-	Total
			$69,005 (2,389)
			$66,616

(4) Operational risk

Operational risk is the potential for loss of the Company and its subsidiaries’ financial instruments arising from the failure of people, process, technology or the impact of external events. The goal of the Company and its subsidiaries’ operational risk management are to set up and implement sufficient risk management mechanisms; therefore, the Company and its subsidiaries' operation and management goals will be achieved by lowering the operational risk.

The Company and its subsidiaries set up business regulations and internal control systems for each of its products and operating activities and the operating units are responsible to comply with them. Based on the laws and regulations, the nature of business and the operating processes, each of the Company and its subsidiaries’ departments shall execute the procedures of internal control, self-audit and compliance with laws and regulations. Each department shall comply with the laws and regulations, internal chapters and hierarchical authorization to execute operational risk management. The Department of Legal & Compliance shall review all the external contracts or exchanged legal documents, and advice or a legal opinion from external lawyers may be required depending on the situation. Upon material damages or unusual conditions incurred in the internal operations, they shall be reported as the standard procedures and emergency meetings shall also be held to develop risk response strategies.

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In addition, the subsidiary MLI’s every department implemented self-evaluation operation (RCSA) to effectively identify, assess, monitor and control the potential operational risks. The risk management department regularly prepares self-assess operational risk management reports to monitor the subsidiary MLI’s operational risk, provides advises on operational risk management.

(5) The amendments to interest rate benchmark reform-phase 2

A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates. The subsidiary MLI has exposures to IBORs on its financial instruments that will be reformed as part of these market-wide initiatives. The subsidiary MLI main IBOR exposure at the reporting date is sterling LIBOR which is planned to be discontinued by the end of June 2023 and the alternative interest rate benchmark such as SOFT will been used. LIBOR will continue to be published beyond the end of 2021, but the subsidiary MLI plans to finish the process of amending contractual terms or implementing appropriate fallback provisions in response to IBOR reform by the end of 2021.

The main risks to which the subsidiary MLI is exposed as a result of IBOR reform are operational. For example, the renegotiation of borrowing contracts through bilateral negotiation with counterparties, updating of contractual terms, and revision of operational controls related to the reform. Financial risk is predominantly limited to interest rate risk. However, the scope of risk has been determined after checking which also has been adjusted or expected to be adjusted, and there is no risk of economic substance in the financial assets.

The product development department, investment linked product department, and investment department of the subsidiary MLI have assessed the range of the influence, and have reported it to the Board of Directors periodically until the progress of the adjustment is completed.

The subsidiary MLI monitors the progress of transition from IBORs to new benchmark rates by reviewing the total amounts of contracts that have yet to transition to an alternative benchmark rate and the amounts of such contracts that include an appropriate fallback clause. The subsidiary MLI considers that a contract is not yet transitioned to an alternative benchmark rate when interest under the contract is

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indexed to a benchmark rate that is still subject to IBOR reform, even if it includes a fallback clause that deals with the cessation of the existing IBOR (referred to as an ‘unreformed contract’).

The following tables show the total amounts of unreformed contracts and those with appropriate fallback language on December 31, and January 1, 2021. The amounts of financial assets are shown at their carrying amounts.

December 31,2021 Financial assets Financial bonds January 1,2021 Financial assets Financial bonds	USD LIBOR	USD LIBOR
	Total amount of unreformed contracts $- $-	Amount with appropriate fallback clause
		$14,943,109 $16,525,191

12.3 Fair value hierarchy

• 1.The following valuation methods are for analyzing the financial instrument measured at fair value. Each level of fair valued hierarchy is defined as follows:

• Level 1 ： Fair value of financial instruments classified in level 1 is based on the quoted price for an identical financial instrument in an active market. The definition of active market includes all of the following conditions: (1) the products traded in the market are homogeneous, (2) willing parties are available anytime in the market, and (3) price information is available for the public.

• Level 2 ： Fair value of financial instruments classified in level 2 is based on inputs other than quoted prices in active markets including observable input parameters obtained either directly (i.e., as prices) or indirectly (i.e., derived from prices) in active markets. Examples of observable inputs are as follows:

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• (1) The quoted price for a similar financial instrument in an active market means the market transaction price for a similar financial instrument based on its characteristics and terms of transaction. The fair value of a financial instrument has to be adjusted according to the observable market price of the identical financial instrument. The reasons for adjustments include time lag of the market transaction prices for an identical financial instrument, wherein the quoted price does not represent the fair value at the measurement date. The reasons also include the difference in transaction terms for financial instruments, transaction prices involving related parties, and the relationship between the observable transaction prices of identical financial instruments and the market prices of held financial instruments.

• (2) The quoted market price of an identical or similar financial instrument in an inactive market.

• (3) The fair value is estimated on the basis of the results of a valuation technique, and the market inputs (i.e., interest rate, yield curve, and volatility rate) used are based on data obtainable from the market. An observable input can be derived from market data and reflects the expectation of market participants when it is used in evaluating the prices of financial instruments.

• (4) A majority of the inputs are derived from observable market data, or the input correlation can be tested based on observable market data.

• Level 3 ： Input for a fair value measurement for a financial instrument in Level 3 is not based on data obtainable from the market. An unobservable input, such as volatility for a share option derived from the share’s historical price, does not generally represent current market expectations about future volatility.

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Financial assets measured at FVTPL Common stocks Preferred stocks Forward foreign exchange contracts, non- deliverable forward and foreign exchange swaps Cross currency swaps contracts Financial bonds Beneficiary certificates and others Foreign stocks Foreign depository receipts Foreign bonds Foreign beneficiary certificates Total Financial assets measured at FVOCI Government bonds Corporate bonds Financial bonds Foreign bonds Unquoted stocks Common stocks Preferred stocks Total Investment Property Financial liabilities measured at FVTPL Forward foreign exchange contracts, non- deliverable forward and foreign exchange swaps Redemption options and put options of convertible bonds Total		December 31, 2021	December 31, 2021
	Total	Level 1	Level 2 $556,421 - 2,386,299 980,647 4,541,774 - - - 2,015,076 - $10,480,217 $8,843,839 20,127,512 5,392,092 2,670,415 - - - $37,033,858 $- $124,987 2,214 $127,201	Level 3
	$10,088,486 374,950 2,386,299 980,647 4,541,774 17,076,079 8,149,718 312,730 2,015,076 18,030,790	$9,502,753 374,950 - - - 16,263,549 8,149,718 312,730 - 17,474,466		$29,312 - - - - 812,530 - - - 556,324
	$63,956,549	$52,078,166		$1,398,166
	$8,843,839 20,127,512 5,392,092 10,304,221 1,315,225 127 58,496	$- - - 7,633,806 - 127 -		$- - - - 1,315,225 - 58,496
	$46,041,512	7,633,933		$1,373,721
	$26,130,520	$-		$26,130,520
	$124,987 2,214	$- -		$- -
	$127,201	$-		$-

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Financial assets measured at FVTPL Common stocks Preferred stocks Forward foreign exchange contracts, non- deliverable forward and foreign exchange swaps Cross currency swaps contracts Financial bonds Beneficiary certificates and others Foreign stocks Foreign depository receipts Foreign bonds Foreign beneficiary certificates Total Financial assets measured at FVOCI Government bonds Corporate bonds Financial bonds Foreign bonds Unquoted stocks Common stocks Preferred stocks Total Investment Property Financial liabilities measured at FVTPL Futures Forward foreign exchange contracts, non- deliverable forward and foreign exchange swaps Total		December 31, 2020	December 31, 2020
	Total	Level 1	Level 2	Level 3
	$21,884,420 3,026,809 4,686,573 566,673 7,584,256 25,987,470 8,842,580 252,303 2,905,382 11,134,989	$21,745,937 3,026,809 - - - 25,290,935 8,842,580 252,303 - 10,782,862	$109,233 - 4,686,573 566,673 7,584,256 - - - 2,905,382 -	$29,250 - - - - 696,535 - - - 352,127
	$86,871,455	$69,941,426	$15,852,117	$1,077,912
	$6,535,505 14,525,285 12,260,139 11,204,571 1,167,703 110 36,674	$- - - 7,794,815 - 110 -	$6,535,505 14,525,285 12,260,139 3,409,756 - - -	$- - - - 1,167,703 - 36,674
	$45,729,987	S7,794,925	$36,730,685	$1,204,377
	$27,250,368	$-	$-	$27,250,368
	$108 1,979,207	$108 -	$- 1,979,207	$- -
	$1,979,315	$108	$1,979,207	$-

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• 2.There was no significant transfer between the first and second levels for the years ended December 31, 2021 and 2020.

• 3.The below table shows a reconciliation of Level 3 fair values:

January 1, 2021 Gains and losses Recognized in profit or loss Recognized in OCI Purchased Disposals Reclassification December 31, 2021	FVTPL	FVOCI	Investment property	Total
	$1,077,912 179,668 - 154,331 - (13,745)	$1,204,377 - 243,658 50,629 (124,943) -	$27,250,368 37,211 - 19,245 (1,176,304) -	$29,532,657 216,879 243,658 244,205 (1,301,247) (13,745)
	$1,398,166	$1,373,721	$26,130,520	$28,902,407

January 1, 2020 Gains and losses Recognized in profit or loss Recognized in OCI Purchased Disposals Transfer into (out) Level 3 Reclassification December 31, 2020	FVTPL	FVOCI	Investment property	Total
	$682,180 9,983 - 356,499 - 29,250 -	$1,262,974 - (40,671) - (33,545) 15,619 -	$27,595,662 250,675 - 9,865 - - (605,834)	$29,540,816 260,658 (40,671) 366,364 (33,545) 44,869 (605,834)
	$1,077,912	$1,204,377	$27,250,368	$29,532,657

The gains and losses above are recognized based on “Financial assets and liabilities measured at FVTPL”, “Unrealized gains and losses measured at FVOCI” and “Gains and losses on investment property”. The related assets held by the Company and its subsidiaries on December 31, 2021 and 2020 are as follows:

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Gains and losses Recognized in profit or loss (“Financial assets and liabilities measured at FVTPL”) Recognized in OCI (“Unrealized gains and losses measured at FVOCI”) Recognized in profit or loss (“Gains and losses on investment property”)	2021	2020
	$179,668 243,658 37,211	$9,983 (40,671) 250,675

1. Fair value information of significant unobservable inputs (Level 3)

The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the significant unobservable inputs used in the valuation models.

Item	Valuation technique	Significant unobservable inputs	Inter-relationship Between significant Unobservable inputs and fair value measurement
The Company Financial assets measured at FVOCI The subsidiary MLI Financial assets measured at FVTPL – Beneficiary certificates and others Financial assets measured at FVTPL – Private fund	Market comparison method Asset adjustment method Asset adjustment method	Liquidity discount rate 2020 and 2021: 20%~35% Liquidity discount rate 2020 and 2021: 0% to 25% Liquidity discount rate 2020: 0% to 50% 2021: 0% to 60% Discount rate 2020: 0% to 50% 2021: 0% to 20%	Inverse relationship Inverse relationship Inverse relationship

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Item	Valuation technique	Significant unobservable inputs	Inter-relationship Between significant Unobservable inputs and fair value measurement
Financial assets measured at FVOCI–Venture capital The subsidiary MA Financial assets measured at FVTPL Financial assets measured at FVOCI –Unquoted stocks The subsidiary MFB Financial assets measured at FVOCI The subsidiary MDS Financial assets measured at FVOCI –Unquoted stocks The subsidiary SCI Financial assets measured at FVOCI –Unquoted stocks The subsidiary MF Financial assets measured at FVTPL – Private fund	Asset adjustment method Option pricing model Market comparison method Market comparison method Market comparison method Comparable listed company method Option pricing model	Liquidity discount rate 2020 and 2021: 0% to 30% Liquidity discount rate 2021: 20% Liquidity discount rate 2020：25.35% 2021：13.73% Liquidity discount rate 2020 and 2021:20% Liquidity discount rate 2020 and 2021: 20%~50% Liquidity discount rate 2020 and 2021： 23%~50% Liquidity discount Rate 2020 and 2021: 20%	Inverse relationship Inverse relationship Inverse relationship Inverse relationship Inverse relationship Inverse relationship Inverse relationship

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1. Classification process of Level 3 fair value

The Company and its subsidiaries’ Risk Management Department is responsible to verify the fair values of the assets based on independent sources that reflect the nearest market conditions. The Company and its subsidiaries ensure that the information used are independent, reliable, and coherent with other resources and represent exercisable prices. Also, the Company and its subsidiaries policy require that these fair values are analyzed for remeasurement and reassessment on each reporting date to ensure that the fair values are reasonable.

6. Sensitivity analysis of Level 3 fair value

While the Company and its subsidiaries’ measurement of fair value on financial assets are reasonable, these fair values might differ, should a different valuation model be used as its measurement method. The following table describes the impact to the profit or loss and other comprehensive income should change in the inputs be used on Level 3 financial assets.

December 31, 2021

			December 31,2021	December 31,2021
The Company Financial assets measured at FVOCI Unquoted shares Venture capital The subsidiary MLI Financial assets measured at FVTPL Beneficiary certificates and others Private fund	Input	Increase or decrease in input	Impact of changes in fair value on profit loss		Impact of changes in fair value on other comprehensive income
			Positive impact	Negative impact	Positive impact	Negative impact
	Variable discount Variable discount Variable discount Variable discount Discount rate	1% 1% 10% 10% 1%	$- - - - -	$- - (4,817) (81,824) (18,228)	$87 29 - - -	$(87) (30) - - -

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Financial assets measured at FVOCI Venture capital The subsidiary MA Financial assets measured at FVTPL Private fund Financial assets measured at FVOCI Unquoted shares The subsidiary MFB Financial assets measured at FVOCI Unquoted shares The subsidiary MDS Financial assets measured at FVOCI Unquoted shares The subsidiary SCI Financial assets measured at FVOCI Unquoted shares The subsidiary MF Financial assets measured at FVTPL Private fund			December 31,2021	December 31,2021
	Input	Increase or decrease in input	Impact of changes in fair value on profit loss		Impact of changes in fair value on other comprehensive income
			Positive impact	Negative impact	Positive impact	Negative impact
	Variable discount Variable discount Variable discount Variable discount Variable discount Variable discount Variable discount	10% 1% 1% 1% 1% 5% 1%	- 74 - - - - 49	- (74) - - - - (49)	- - 20 43 301 2,345 -	(87,326) - (20) (44) (301) (2,247) -

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December 31, 2020

			December 31,2020	December 31,2020
The Company Financial assets measured at FVOCI Unquoted shares Venture capital The subsidiary MLI Financial assets measured at FVTPL Beneficiary certificates and others Private fund Financial assets measured at FVOCI Venture capital The subsidiary MA Financial assets measured at FVOCI Unquoted shares The subsidiary MFB Financial assets measured at FVOCI Unquoted shares	Input	Increase or decrease in input	Impact of changes in fair value on profit loss		Impact of changes in fair value on other comprehensive income
			Positive impact	Negative impact	Positive impact	Negative impact
	Variable discount Variable discount Variable discount Variable discount Discount rate Variable discount Variable discount Variable discount	1% 1% 10% 10% 1% 10% 1% 1%	$- - - - - - - -	$- - (2,853) (60,933) (9,588) - - -	$164 29 - - - - 39 43	$(165) (29) - - - (69,901) (39) (44)

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The subsidiary MDS Financial assets measured at FVOCI Unquoted shares The subsidiary SCI Financial assets measured at FVOCI Unquoted shares The subsidiary MF Financial assets measured at FVTPL Private fund			December 31,2020	December 31,2020
	Input	Increase or decrease in input	Impact of changes in fair value on profit loss		Impact of changes in fair value on other comprehensive income
			Positive impact	Negative impact	Positive impact	Negative impact
	Variable discount Variable discount Variable discount	1% 5% 1%	- - 206	- - (206)	380 2,895 -	(380) (2,895) -

The positive and negative impacts are results from changes in fair values, which calculations are affected by changes in the unobservable inputs. Should the fair value of a financial asset be affected by more than one input, the fair values are not presented in the table above. The table above presents the impact of changes in one input only, and does not consider the relationship between other inputs in the valuation of fair values above.

12.4 Financial instruments not measured at fair value

The Company and its subsidiaries' financial instruments not measured at fair value are listed in the table below. Other than cash and cash equivalent, receivables / payables, loans, intercompany reinsurance receivables, claims and payments recoverable from reinsurers, shortterm borrowings, refundable deposit and guarantee deposits received, whose values are reasonably closed to their fair value, as well as lease liabilities, disclosure of fair value is not required. The fair value of financial instruments and non-financial assets not measured at fair value are as follows:

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Assets and liabilities		December 31, 2021	December 31, 2021
	Total	Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Financial Assets: Financial assets measured at amortized costs Financial liabilities: Bonds payable Assets and liabilities	$943,342,035 11,040,297			$- -
	Total	Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Financial Assets: Financial assets measured at amortized costs Financial liabilities: Bonds payable	$887,289,138 8,098,075	$319,160,797 -	$568,128,341 8,098,075	$- -

12.5 Offsetting financial assets and financial liabilities

The subsidiary MLI is offsetting its financial instruments according to the conditions set forth in paragraph 42 of IAS 32 endorsed by the FSC, in which its financial assets and liabilities are presented as net amounts in the statement of financial position.

The subsidiary MLI also performs transactions not applicable to the International Financial Reporting Standards Sections 42 NO. 32, but the subsidiary MLI has an exercisable master netting arrangement or similar agreement in place with its counterparties, and both parties reach a consensus regarding net settlement. The aforesaid exercisable master netting arrangement or similar agreement can be net settled after offsetting the financial assets and financial liabilities. Otherwise, the transaction can be settled at the total amount. In the event of default involving one of the parties, the other party can have the transaction net settled.

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The following tables present the aforesaid offsetting financial assets and financial liabilities.

Financial assets (liabilities) subject to offsetting, enforceable master netting arrangement or similar arrangement

	Total gross amounts of recognized financial assets (liabilities) (a)	Total amounts of recognized financial assets (liabilities) offset in the statement of financial position (b) Net amounts of recognized financial assets (liabilities) in the statement of financial position (c)=(a)-(b)	Related amount not offset in the statement of financialposition(d) Financial instrument Cash Collateral received Net amount (e)=(c)-(d) $124,077 $- $3,242,869 (124,077) - (910) $1,556,079 $- $4,276,335 (1,556,079) - (423,236)	Related amount not offset in the statement of financialposition(d) Financial instrument Cash Collateral received Net amount (e)=(c)-(d) $124,077 $- $3,242,869 (124,077) - (910) $1,556,079 $- $4,276,335 (1,556,079) - (423,236)
			Financial instrument $124,077 (124,077) $1,556,079 (1,556,079)
December 31, 2021 Derivative instruments assets Derivative instruments liabilities December 31, 2020 Derivative instruments assets Derivative instruments liabilities	$3,366,946 (124,987) $5,832,414 (1,979,315)	$- $3,366,946 - (124,987) $- $5,832,414 - (1,979,315)		$- $3,242,869 - (910) $- $4,276,335 - (423,236)

12.6 Information of derivatives instruments

1. The subsidiary MLI

The subsidiary MLI’s derivative instruments includes forward foreign exchange contracts, foreign exchange swaps contracts, and cross currency swaps contracts. Relevant information is as follows:

• (1) Type, purpose, contract (principal) value and carry amount

The subsidiary MLI’s forward foreign exchange contracts, foreign exchange swaps contracts, and cross currency swaps contracts are mainly used to avoid the risk arise from changing in interest rate.

The subsidiary MLI’s hedging strategy is aimed to avoid most of the market price risk. The subsidiary MLI uses derivatives (which fair values are inversely proportional to the assets being hedged) as hedging instruments and assesses it regularly. However, the derivatives do not meet the conditions of hedge accounting, thus, they are classified as financial assets held for trading. The details of the derivative instruments held by the subsidiary MLI which does not meet the conditions of hedge accounting are as follows:

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Financial assets measured at FVTPL: Forward foreign exchange contracts, non-deliverable forward and foreign exchange swaps Forward foreign exchange contracts Cross currency swaps contracts Financial liabilities measured at FVTPL: Forward foreign exchange contracts, non-deliverable forward and foreign exchange swaps Forward foreign exchange contracts Forward foreign exchange contracts Financial assets measured at FVTPL: Forward foreign exchange contracts, non-deliverable forward and foreign exchange swaps Cross currency swaps contracts Structured bonds Financial liabilities measured at FVTPL: Forward foreign exchange contracts, non-deliverable forward and foreign exchange swaps Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Futures	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021
	Carrying amount			Amount
	$2,347,979 38,320 980,647
	$3,366,946
	$88,931 13,840 22,216
	$124,987
	Carrying amount	Currencies	Amount
	$4,686,573 566,673 579,168	USD USD USD USD NZD AUD CNH -	$8,328,000 720,000 20,000 $6,234,000 127,800 168,700 1,950,000 -
	$5,832,414
	$1,699,941 71,753 159,606 47,907 108
	$1,979,315

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(2)Fair Value

The fair value of the derivative is the amount that the subsidiary MLI may claim or have to pay if the contract is terminated on the reporting date. It generally includes unrealized gains and losses from outstanding contracts for the current period. The fair value of the subsidiary MLI’s derivatives is calculated from the quotation of financial institutions.

The subsidiary MLI’s futures for hedging purpose on December 31, 2020 is as follows:

December 31, 2020

		December 31, 2020	December 31, 2020
		Open Interest
Item	Type	Buyer/Seller Seller	Open position 1	Amount $2,828	Fair Value
Futures contract	Taiwan Stock Price Index Future				$(108)

The futures of the subsidiary MLI held on December 31, 2021 was closed.

On December 31, 2021 and 2020, the margin paid for futures exchange were $952,290 thousand and $1,133,469 thousand, respectively. The margins were classified under guarantee deposits.

• (3)Presentation of derivatives on financial statement

Derivatives of the subsidiary MLI (including forward foreign exchange, cross currency swaps, structured deposit) presented under balance sheet are as follows:

Financial assets at FVPTL Financial liabilities at FVPTL	December 31, 2021 $3,366,946 $124,987	December 31, 2020
		$5,832,414
		$1,979,315

• 12.7 Nature and extent of risks from insurance contracts of the subsidiary MLI

• Objectives, policies, processes and methods for managing risks arising from insurance contracts.

  • (1) Risk management's structure, organization and the authority scope

    • A. Board of directors

      • a. In order to integrate the planning, implementation, supervision and coordination of the risk management, the “Risk Management Committee” is set up under the Board of directors and the Risk Management Department is set up to execute risk management matters.

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• b. The board of directors is the highest decision-making unit in establishing an effective risk management system for the subsidiary MLI, and assumes the ultimate responsibility for overall risk management.

• c. The board of directors should approve the risk management policies and major decisions in accordance with the overall business environment and strategy, and ensure the effective operation of the risk management mechanism.

• B. Risk Management Committee

• a. The Committee is responsible to conduct risk management policies and procedures, implement risk management decisions of the Board of Directors, and regularly submit risk assessment reports to the Board.

• b. Monitoring all kinds of risks and establishing their management indicators, and coordinating risk management functions with interaction and communication between each departments.

• C. Risk Management department

• a. The department is responsible for aggregating, measuring and monitoring the subsidiary MLI's overall risk information, and regularly submitting risk assessment reports.

• b. Implementing the risk management decisions, coordinating and communicating to various departments’ risk management mechanism. When necessary, giving recommendations of risk management for each departments' decision-making.

• D. Relevant departments of the subsidiary MLI

• a. Risk management operations should be carried out in accordance with risk management procedures, manage their daily risks, take the necessary response measures, and submit relevant reports in a timely manner.

• b. Should provide timely, reliable risk information, and feasible, effective control measures based on the needs of risk management.

E. Audit unit

• a. Examine the relevant departments’ risk management implementation according to the relevant laws and regulations.

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• (2) The scope and nature of the risk reporting and measurement system

• A.Method used: Effective duration or effective convexity analysis, cash flow management, deterministic scenario testing and stress testing.

• B.Relevant assumptions and parameters: Setting the system based on the needs of various measurement methods, the data gathered from domestic or foreign research, and practical experience.

• C. Advantages and limitations of various measurement methods:

  • a. Effective duration or effective convexity analysis

    • － Advantages: It is easy to calculate, and able to measure fixed-income assets with options.

    • － Limitations: If the yield curve is moving in parallel, then it is unable to measure non-parallel movement.

  • b. Cash flow management

    • － Advantages: Enhance the effectiveness of decision-making, strengthen financial control, and reflect the ability to continue to operate.

    • － Limitations: The estimate of the cash flow may be subjective, and the estimated future cash flow may not reflect the actual situation.

  • c. Deterministic Scenario Testing

    • － Advantages: It is able to consider multiple variables change at the same time, and able to analyze and calculate the possibilities for a particular situation.

    • － Limitations: Only some specific situations can be tested, the scenario of the change is subjective and it is not able to consider the situations of nonlinear relationship or extreme risk.

  • d. Stress test

    • － Advantages: It is able to measure the losses that may occur in a particular extreme situation.

    • － Limitations: It is unable to measure the possibility of a particular extreme situation.

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• (3) The procedures for ensuring, monitoring, supervising and controlling insurance risks, and policies to ensure appropriate risk classification and premium level.

A. Insurance risk management procedures.

• a. The relevant departments shall identify the risks that may arise from its business.

• b. The relevant departments shall analyze the possibility of the risk and the impact on the subsidiary MLI as the basis for the management and monitoring of the subsequent risks.

• c. The relevant departments should measure and summarize the risks, and take appropriate response.

• B. Underwriting policy

The objectives of the subsidiary MLI is not only in promoting business development, but also in risk control planning. The underwriting principles are as follows:

• a. Design the proper investments base on the clients’ incentives, demand, financial status, and payment capacity.

• b. If necessary, request the policyholder to provide relevant documents, medical reports, and reasonably adjust the investment contract.

• c. Insurance with significant amount must be provided with financial notice and medical report, and carry out the necessary credit investigation by the subsidiary MLI.

• d. The underwriters should evaluate the policyholders, give the policyholders "annotation", "fee limit" or "decline" based on the health status.

• e. Stipulate rules for uninsurable object.

• (4) Assessing and managing the insurance risks on the corporate base.

The principal risks of the subsidiary MLI's issuance of insurance contracts are as follows:

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• A. Capital allocation risk: Risks arose from asset allocation that is not appropriate for characteristics of commodities.

• B. Reinsurance risk: Risks arose from improper reinsurance planning.

• C. Underwriting risk: Risks arose from improper underwriting control.

• D. Commodity structure risk: Risks arose from improper product design and pricing.

• (5) Limit or transfer risk exposure and avoid inappropriate risk concentration.

For the risks above, the subsidiary MLI’s methods are as follows:

• A. Capital allocation planning: Reduce the risk of capital allocation through investment risk control and interest rate risk control, and effectively manage the risk of interest rate fluctuations in the portfolio.

• B. Reinsurance planning: Through reinsurance, transfer all or part of the risk to the third party.

• C. Underwriting control: Conduct insured limit, insured age limit, underwriting policies, risk control measures and necessary sales descriptions to reduce the risk of underwriting.

• D. Commodity structure design: Conduct profit analysis, sensitivity test, check the ratio of the annual termination fee and the premiums paid for each policy, compared with similar products in the industry to ensure the design, pricing, and the rationality of the structure.

(6) Assets and liabilities management

A. Risk identification include at least three of the following factors.

• a. Market risk: Mainly due to changes in interest rates, causing the difference between the change of price in assets and liabilities.

• b. Liquidity risk: Mainly refers to the absence of sufficient cash or liquidity assets to meet cash expenditures.

• c.Insurance risk: Mainly refers to the behavior of the guarantor causing cash flow of liabilities and assets cannot corporate to each other.

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  - B. Risk measurement methods are as follows:

  - a. Effective duration or effective convexity analysis.

  - b. Cash flow management

  - c. Deterministic scenario analysis

  - d. Stress test

  - C. Risk response `：` Measure and summarize the risks and submit them regularly to the Risk Management Committee for review and discussion in order to conduct appropriate and feasible response.

  - a. Risk avoidance: Not to engage in or carry out the business activities or trade its assets and commodities.

  - b. Risk transfer: Transfer all or part of the asset or liability risk to the third party through reinsurance or hedging.

  - c. Risk control: Take appropriate control measures to reduce the possibilities of risk and the negative impacts.

1. Insurance contracts' credit risk, liquidity risk and market risk.

2. (1) Credit risk

To the subsidiary MLI, the credit risk includes the risk that the reinsurer will fail to meet the obligations of the reinsurance contract, causing loss to the insurer. Financial guarantee contract means that the guarantor must make up for the loss of the contract holder when the debtor cannot pay the debt. The subsidiary MLI does not hold a financial guarantee contract. To avoid the above risks, the subsidiary MLI follow the “Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms” to arrange reinsurance. Also, these reinsurance companies have certain credit rating which meet the requirements of reinsurer, and the credit ratings are periodically evaluated.

According to “The Provision of Unqualified Reinsurance Reserve” fifth point, the subsidiary MLI disclosed the ceding of the unqualified reinsurance in its financial statements and the substance including the summary of unqualified reinsurance contracts and related sort, unqualified reinsurance expense, the amount of the unqualified reinsurance reserve, and the principled summary of the composition.

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(2) Liquidity risk

The subsidiary MLI uses cash flow maturity analysis to assess liquidity risk. The liquidity risk of the subsidiary MLI's insurance contract (net cash outflow (Inflow)) on December 31, 2021 and 2020 are as follows:

	Unit: Milliondollar	Unit: Milliondollar	Unit: Milliondollar	Unit: Milliondollar	Unit: Milliondollar
	December 31, 2021
	Less than 1year	1~3 years	3~5 years	5~15 years	Above 15years
Insurance liabilities with discretion to participate in the characteristic investment contract	$(4,935)	$(8,010)	$8,289	$271,749	$3,163,910

Unit: Million dollar

	Unit: Million dollar	Unit: Million dollar	Unit: Million dollar	Unit: Million dollar	Unit: Million dollar
	December 31, 2020
	Less than 1year	1~3 years	3~5 years	5~15 years	Above 15years
Insurance liabilities with discretion to participate in the characteristic investment contract	$(10,380)	$(8,682)	$1,101	$242,222	$3,141,145

Note: The form above is not able to do reference with the subsidiary MLI’s balance sheet, due to the contract is not discounted cash flow analysis of the maturity date, including the future renewal of premium income cash inflows.

(3) Market risk

• A. When the subsidiary MLI assesses the properness of the insurance liabilities, the subsidiary MLI’s overall return on investment (ROI) is the basis for discounting, so the market risk is reflected in the discount rate. Market risk includes at least the following four risk factors.

• a. Interest rate risk: Refers to the impairment of assets due to the changes of interest rate.

• b. Exchange rate risk: Refers to the impairment of assets due to the changes of exchange rates.

• c. Equity securities risk: Refers to the impairment of market value due to the fluctuation of equity asset price.

• d. Commodity risk: Refers to the impairment of market price due to the fluctuation of commodity price.

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  - B. Market risk measurement: The subsidiary MLI performs discount rate sensitivity analysis to measure the impact of market risk.

  - C. Measurements to reduce the impact causing by changes in market.

     - a. Assets: Regularly calculate market risk, and conduct periodic risk reports to understand the market risk of the assets.

     - b. Liabilities: Issuance of separate account contracts and floating rate contracts to reduce the market risk.

     - c. Assets and liabilities: Reduce the duration differences between assets and liabilities to reduce the impact of market risk.

1. When derivative embedded commodity is not measured at fair value, the market risk of the derivative embedded commodity is as follows:

2. (1) The subsidiary MLI issues three types of derivative embedded commodity that are not valued at market price.

   • A. First type: The contract holder has the option to terminate the contract on agreed value.

   • B. Second type: Derivative embedded commodity with guaranteed minimum interest rate: the interest rate is used to determine the termination value or the maturity value, and the contract is issued at the money or out of the money, and without the leverage effect.

   • C. Third type: The death benefit is the greater of the following.

     • a.The unit value of investment fund (equivalent to the compensation for termination or maturity value).

     • b.Guaranteed minimum payment.

3. (2) Market risk exposure information.

   • A. First type: The subsidiary MLI’s overall return on investment is lower than the average estimated interest rate.

   • B. Second type: The subsidiary MLI's overall return on investment or segmental return on assets is lower than the estimated interest rate.

   • C. Third type: Value of the separate account declined rapidly, resulted in value lower than guaranteed minimum amount of the death benefits, thus the cost of life insurance is insufficient.

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1. Insurance risk information.

2. (1)Sensitivity of insurance riskInsurance contract and financial products with discretionary participation.

Information on the impact of net income before tax and equity.

	Unit: Thousand dollar	Unit: Thousand dollar	Unit: Thousand dollar
Actuarial assumptions	December 31, 2021
	Change assumption	Effect on profits before tax	Effect on equity
Life table / morbidity	+10%	$(1,502,093)	$(1,201,674)
	-10%	1,502,093	1,201,674
Return on investment / discount rate	+0.25%	3,044,132	2,435,306
	-0.25%	(3,044,132)	(2,435,306)
Fee	+10%	(423,030)	(338,424)
	-10%	423,030	338,424
Retreat rate and termination rate	+10%	150,486	120,389
	-10%	(150,486)	(120,389)

	Unit: Thousand dollar	Unit: Thousand dollar	Unit: Thousand dollar
Actuarial assumptions	December 31, 2020
	Change assumption	Effect on profits before tax	Effect on equity
Life table / morbidity	+10%	$(1,406,918)	$(1,125,534)
	-10%	1,406,918	1,125,534
Return on investment / discount rate	+0.25%	2,907,073	2,325,658
	-0.25%	(2,907,073)	(2,325,658)
Fee	+10%	(416,029)	(332,823)
	-10%	416,029	332,823
Retreat rate and termination rate	+10%	162,805	130,244
	-10%	(162,805)	(130,244)

The table illustrates the impact of changing in net income before tax refers of the subsidiary MLI for the years ended December 31, 2021 and 2020. Impact of equity is based on 20% tax rate.

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• (2) Description of Insurance risk concentration

• A. When identifying insurance risk concentration, excludes the factor of reinsurance, the following situations may cause insurance risk concentration.

  • a. Currently, the subsidiary MLI does not cover contracts with risk that the occurrence is low but the impact is significant.

  • b. Risk exposure of multiple contracts causing by one single situation such as significant terrorist attack.

  • c. Risk exposure caused by unexpected changes, such as mortality rate, morbidity, or changing behavior of the insured.

  • d. Significant changes of financial market conditions, causing the policyholders' option becomes in the money.

  • e. Significant lawsuit or legal risk, resulting in a significant loss in a single or multiple contracts, such as large sum of indemnity and reputation loss after losing the lawsuit.

  • f. The interrelationships and interactions between risks, such as the underwriting policy may be for clients that have specific behavior.

  • g. A key variable is close to a significant factor to influence the future cash flow in nonlinear relationship.

  • h. Regional and industrial risks, the subsidiary MLI's business in the north, middle and south three areas, marketing objects are not targeted for specific groups. This items should be insurance risk diversification.

• B. In accordance with "Regulations Governing Insurance Enterprises for Setting Aside Various Reserves," the subsidiary MLI set aside special catastrophe reserve to cover significant claims resulting from major accidents that will incur in the future, and special risk volatility to cover change in loss rate by each type of insurance and abnormal claims. On January 1, 2011, the annual increase in deposits should be in accordance with the IAS 12 after deducting the income tax under other comprehensive income of shareholder's equity.

(3) Claims development trend

The accumulated claims amount of the subsidiary MLI on December 31, 2021 and 2020 are as follows:

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A. Claims development trend of direct business.

December 31, 2021

Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021	Years of development	Years of development	Years of development	Years of development	Years of development	Years of development	Years of development	Years of development	Years of development	Years of development	Claims Reserve
	0	1	2	3	4	5	6	7	8	9
	2,961,202	3,637,724	3,705,026	3,728,376	3,740,360	3,744,586	3,757,409	3,757,409	3,757,409	3,757,409	3,492
	3,073,539	3,830,498	3,913,358	3,924,586	3,930,775	3,941,696	3,941,696	3,941,696	3,941,696	3,941,696	1,862
	3,338,136	4,124,064	4,213,515	4,229,425	4,241,090	4,256,184	4,256,184	4,256,184	4,256,184	4,256,184	5,915
	3,676,775	4,542,442	4,632,340	4,667,449	4,689,284	4,705,705	4,705,705	4,705,705	4,705,705	4,705,705	4,965
	4,125,335	5,152,190	5,301,784	5,376,913	5,445,705	5,474,022	5,474,022	5,474,022	5,474,022	5,474,022	7,615
	3,321,722	4,084,430	4,165,036	4,179,806	4,186,415	4,190,235	4,190,235	4,190,235	4,190,235	4,190,235	3,819
	4,105,120	4,994,680	5,079,467	5,091,286	5,102,377	5,107,114	5,107,114	5,107,114	5,107,114	5,107,114	15,829
	4,835,230	5,816,526	5,912,188	5,929,678	5,941,309	5,946,835	5,946,835	5,946,835	5,946,835	5,946,835	34,647
	5,257,314	6,403,176	6,507,890	6,526,606	6,539,480	6,545,551	6,545,551	6,545,551	6,545,551	6,545,551	142,375
	5,814,213	7,037,980	7,151,363	7,171,434	7,185,330	7,191,893	7,191,893	7,191,893	7,191,893	7,191,893	1,377,679
	Total Reported unpaid claims- long- term insurance Unreported unpaid claims reserve Add: Reported but not approved claims (exclude contracts with financial product nature) Balance of claims reserve										1,598,198 270,311
											$1,868,509
											$1,394,898 473,611
											$1,868,509

December 31, 2020

Accident Year				Years of development	Years of development	Years of development				Claims Reserve
	0	1	2	3	4	5	6	7	8
2012	2,961,202	3,637,724	3,705,026	3,728,376	3,740,360	3,744,586	3,757,409	3,757,409	3,757,409	7,376
2013	3,073,539	3,830,498	3,913,358	3,924,586	3,930,775	3,941,696	3,941,696	3,941,696	3,941,696	2,100
2014	3,338,136	4,124,064	4,213,515	4,229,425	4,241,090	4,256,184	4,256,184	4,256,184	4,256,184	4,069
2015	3,676,775	4,542,442	4,632,340	4,667,449	4,689,284	4,705,705	4,705,705	4,705,705	4,705,705	4,085
2016	4,125,335	5,152,190	5,301,784	5,376,913	5,414,709	5,431,651	5,431,651	5,431,651	5,431,651	17,884
2017	3,321,722	4,084,430	4,165,036	4,179,806	4,188,489	4,191,302	4,191,302	4,191,302	4,191,302	11,496
2018	4,105,120	4,994,680	5,079,467	5,099,538	5,110,190	5,113,553	5,113,553	5,113,553	5,113,553	34,087
2019	4,835,230	5,816,526	5,914,211	5,936,344	5,947,629	5,951,124	5,951,124	5,951,124	5,951,124	134,598
2020	5,257,314	6,362,132	6,466,603	6,489,983	6,501,935	6,505,544	6,505,544	6,505,544	6,505,544	1,248,230
				Total Reported unpaid claims- long- term insurance Unreported unpaid claims reserve Add: Reported but not approved claims (exclude contracts with financial product nature) Balance of claims reserve						1,463,925 240,824
										$1,704,749
										$1,288,170 416,579
										$1,704,749

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B. Claims development trend of retention business

December 31, 2021

Accident Year				Years of development	Years of development	Years of development	Years of development				Claims Reserve
	0	1	2	3	4	5	6	7	8	9
2012	2,955,809	3,626,644	3,693,946	3,717,296	3,729,063	3,733,289	3,746,112	3,746,112	3,746,112	3,746,112	3,492
2013	3,069,522	3,823,459	3,906,315	3,917,543	3,923,732	3,934,731	3,934,731	3,934,731	3,934,731	3,934,731	1,862
2014	3,329,954	4,115,758	4,204,403	4,220,261	4,231,926	4,247,020	4,247,020	4,247,020	4,247,020	4,247,020	5,915
2015	3,666,549	4,525,082	4,614,119	4,649,228	4,671,063	4,687,484	4,687,484	4,687,484	4,687,484	4,687,484	4,966
2016	4,110,406	5,127,656	5,276,209	5,350,309	5,416,238	5,444,556	5,444,556	5,444,556	5,444,556	5,444,556	7,615
2017	3,312,168	4,072,218	4,151,157	4,165,926	4,172,536	4,176,341	4,176,341	4,176,341	4,176,341	4,176,341	3,805
2018	4,079,265	4,962,152	5,042,634	5,054,453	5,063,873	5,068,583	5,068,583	5,068,583	5,068,583	5,068,583	14,130
2019	4,823,566	5,800,141	5,895,697	5,913,132	5,923,318	5,928,825	5,928,825	5,928,825	5,928,825	5,928,825	33,128
2020	5,242,219	6,369,896	6,472,567	6,491,149	6,502,252	6,508,277	6,508,277	6,508,277	6,508,277	6,508,277	138,381
2021	5,766,701	6,968,574	7,079,194	7,099,041	7,111,029	7,117,518	7,117,518	7,117,518	7,117,518	7,117,518	1,350,818

December 31, 2020

Accident Year				Years	of development	of development				Claims Reserve
	0	1	2	3	4	5	6	7	8
2012	2,955,809	3,626,644	3,693,946	3,717,296	3,729,063	3,733,289	3,746,112	3,746,112	3,746,112	7,376
2013	3,069,522	3,823,459	3,906,315	3,917,543	3,923,732	3,934,731	3,934,731	3,934,731	3,934,731	2,100
2014	3,329,954	4,115,758	4,204,403	4,220,261	4,231,926	4,247,020	4,247,020	4,247,020	4,247,020	4,069
2015	3,666,549	4,525,082	4,614,119	4,649,228	4,671,063	4,687,484	4,687,484	4,687,484	4,687,484	4,085
2016	4,110,406	5,127,656	5,276,209	5,350,309	5,385,242	5,402,163	5,402,163	5,402,163	5,402,163	17,863
2017	3,312,168	4,072,218	4,151,157	4,165,926	4,173,107	4,175,905	4,175,905	4,175,905	4,175,905	9,979
2018	4,079,265	4,962,152	5,042,634	5,061,576	5,070,262	5,073,559	5,073,559	5,073,559	5,073,559	30,925
2019	4,823,566	5,800,141	5,896,015	5,917,157	5,926,590	5,930,076	5,930,076	5,930,076	5,930,076	129,935
2020	5,242,219	6,335,439	6,437,634	6,459,872	6,469,961	6,473,520	6,473,520	6,473,520	6,473,520	1,231,301

The subsidiary MLI recognizes the claims reserve based on expected future payments and handling charges of both reported and unreported claims. Provision for claims reserves contains highly complexity because it involves many uncertainties, estimations, and judgments. Any changes in estimation and judgment are regarded as changes in accounting estimates; the effect from the changes will book in the net income of current period. Some claims might be delayed reporting to the subsidiary MLI. When estimating the expected possible claims of unreported claims, the subsidiary MLI may get involved in previous claim experiences and subjective judgments. Therefore, the claims reserve recognized at balance sheet date cannot be confined as the same as the final claims payments. Claims reserve recognized is estimated based on the current available information. However, the final result may be departed from the initial estimation subject to the subsequent claims development.

172

The tables above present the development trend of claim. Each accident year means claim year, the horizontal represents the development years of the claim, and each bold line represents the accumulated incurred claims amount of each accident year on December 31. The claims amount contains the approved and nonapproved claims that express the way the subsidiary MLI estimates claims amount of each accident year through time passing. Situations and trends that affecting amount of setting aside for reserves may differ in the future. Therefore, expected future claims payments will not be decided by the table above.

12.8 Involvement with unconsolidated structured entities

The subsidiary MLI holds the following structured entities. The assessment shows that the subsidiary MLI has no control over its entities and is not exposed to their variable returns. Therefore, they are not consolidated into the subsidiary MLI’s financial report.

Type	Nature and purpose	Interest of the Company
Securitization vehicles Private equity fund REIT securities	The subsidiary MLI purchases securitization vehicles to gain profits, interests and other incomes to improve its investment income, including fixed-income securities, financial asset securitization beneficial securities, asset-backed commercial paper conduit, collateralized loan obligations, and mortgage- backed securitizations. The vehicles were financed by issuing various level (tranche) bonds to investors. The subsidiary MLI invests in the private equity fund and manages the trust assets by the third party, and then distributes the fund proceeds to the consolidated company to increase the investment income. The vehicles are financed by issuing the funds (unit) to the investors. The subsidiary MLI invests in titles or issues certificates on REIT funds delivered by the trustee, evidencing the beneficiary interests in the trust property in terms of the principal and profits, interest, and other proceeds accrued. The vehicles were financed by issuing the document of the titles or the certificate on REIT funds delivered by the trustee.	Securitization vehicles Unit of the private equity funds Unit of REIT securities

173

Type	Nature and purpose	Interest of the Company
Transfer of REIT	The subsidiary MLI invests in the transfer of REIT in order to benefit from the proceeds of the development or sale of the property. The vehicles are financed by issuing the transfer of trusts to the investors.	Unit of REIT securities

The subsidiary MLI considers the natures of various structured entities, and disclosure its scale of net assets, total assets or total outstanding principal. Those scales on December 31, 2021 and 2020 are as follows.

Securitization vehicles Private equity fund REIT beneficiary securities Total	Scale Total balances Total outstanding principal Total outstanding principal	December 31, 2021	December 31, 2020
		$20,297,112 10,616,180 329,763,153	$24,612,730 10,082,831 325,214,031
		$360,676,445	$359,909,592

The following table summarizes the carrying amount of the subsidiary MLI's maximum exposure to loss from its involvement with its unconsolidated structured entities on December 31, 2021 and 2020.

December 31, 2021	Financial assets measured at FVTPL	Financial assets measured at FVOCI	Financial assets measured at amortized cost	Total
Securitization vehicles Private equity fund REIT beneficiary securities Total	$- 1,242,793 147,605	$- - -	$10,799,975 - -	$10,799,975 1,242,793 147,605
	$1,390,398	$-	$10,799,975	$12,190,373

174

December 31, 2020	Financial assets measured at FVTPL	Financial assets measured at FVOCI	Financial assets measured at amortized cost	Total
Securitization vehicles Private equity fund REIT beneficiary securities Total	$579,169 981,834 304,719	$- - -	$13,294,000 - -	$13,873,169 981,834 304,719
	$1,865,722	$-	$13,294,000	$15,159,722

For the years ended December 31, 2021 and 2020, the subsidiary MLI did not provide unconsolidated structured entities financial or other support, and had no intention to provide structured entities financial or other support, either. For the years ended December 31, 2021 and 2020, loss related to interest of unconsolidated structured entities did not occur.

12.9 Transfer of financial assets

There was no transfer of financial assets on December 31, 2021 and 2020.

• 12.10 The assets and liabilities of the subsidiary MLI are expected to be recovered or paid within twelve months after the end of the reporting period, and the amount recovered or paid in more than twelve months:

ore than twelve months:
Assets Cash and cash equivalents Accounts receivables Current income tax assets Investments Reinsurance contract assets Property and equipment Right-of-use assets Intangible assets Other assets		December 31, 2021
	Less than twelve month $97,184,301 13,006,272 459,469 58,297,190 1,629,869 - - - 158,449	More than twelve month $- - - 1,068,199,839 - 11,785,486 238,459 103,889 5,815,822	Total
			$97,184,301 13,006,272 459,469 1,126,497,029 1,629,869 11,785,486 238,459 103,889 5,974,271

175

Liabilities Accounts payables Current income tax liabilities Financial liabilities at fair value through profit or less Bonds payable Lease liabilities Insurance liabilities Reserve for fluctuation of foreign exchange Provisions Other liabilities Assets Cash and cash equivalents Accounts receivables Current income tax assets Investments Reinsurance contract assets Property and equipment Right-of-use assets Intangible assets Other assets		December 31, 2021
	Less than twelve month 6,681,926 2,730 124,987 - 146,047 29,432,113 - 14,083 269,828	More than twelve month - - - 8,500,000 95,550 1,173,695,595 411,705 864,901 1,652,490 December 31, 2020	Total
			6,681,926 2,730 124,987 8,500,000 241,597 1,203,127,708 411,705 878,984 1,922,318
	Less than twelve month $146,181,928 9,142,186 1,511,633 80,076,964 861,360 - - - 82,203	More than twelve month $- - - 965,485,377 - 8,418,496 258,515 116,219 6,056,519	Total
			$146,181,928 9,142,186 1,511,633 1,045,562,341 861,360 8,418,496 258,515 116,219 6,138,722

176

December 31, 2020

		December 31, 2020
Liabilities Accounts payables Current income tax liabilities Financial liabilities at fair value through profit or less Bonds payable Lease liabilities Insurance liabilities Reserve for fluctuation of foreign exchange Provisions Other liabilities	Less than twelve month 6,724,569 59,547 1,979,315 - 151,267 28,482,414 - 25,155 390,470	More than twelve month - - - 7,500,000 108,839 1,130,749,587 250,644 1,182,618 2,476,763	Total
			6,724,569 59,547 1,979,315 7,500,000 260,106 1,159,232,001 250,644 1,207,773 2,867,233

• 12.11 The subsidiary MLI’s information of outsourcing of investment management service

Outsourcing Company	Outsourcing Investment Items Domestic stocks Foreign bonds and equities investment	December 31, 2021 Outsourcing Amount NTD 3,500,000 USD -	December 31, 2020
			Outsourcing Amount
A D			NTD 5,000,000 USD 25,000

• 12.12 Share-based payment

• The information of the subsidiary SMR transferred treasury stock to employees in 2021 is as follows:

Grant date July 7, 2021 Quantity Grant 300 Beneficiaries Qualified employee Vesting Conditions Immediately vested

177

• (1) The fair value of stock options granted on grant date is measured using the BlackScholes option-pricing method. Relevant information is as follows:

Fair value of SMR on grant date Exercise price Expected price volatility Options vesting period Risk-free interest rate	Treasury stock transferred to employee in 2021
	77.28 70.40 15.00 0.04 0.0973

• (2) The compensation cost resulting from the transfer of treasury stock to employees amounted to $2,062 thousand for the year ended December 31, 2021.

• The information of the subsidiary SMR increased capital by shares reserved for employees subscription in 2021 is as follows:

Grant date	November 4, 2021
Quantity Grant	357
Beneficiaries	Qualified employee
Vesting Conditions	Immediately vested

• (1) SMR estimates the fair value of stock options using the Black-Scholes option-pricing model. The details are as follows:

Fair value of SMR on grant date Exercise price Expected price volatility Options vesting period Risk-free interest rate	Capital increase by shares reserved for employees subscription
	77.06 69.00 28.69 0.06 0.222

178

• (2)The compensation cost resulting from capital increase by shares reserved for employees subscription amounted to $2,456 thousand for the year ended December 31, 2021.

• 12.13 Seasonality of operations

The operations of the Company and its subsidiaries are not affected by seasonality or periodicity.

13 SUPPLEMENTARY DISCLOSURES

• 13.1 Significant transactions and information on investees ：

• Loans to others ： Appendix 1.

• Provision of endorsements and guarantees to others: ： Appendix 2.

• Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Appendix 3.

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

• Acquisition of individual real estate properties at costs of at least $$300 million or 20% of the paid-in capital ： Appendix 4.

• 6.Disposal of individual real estate properties at prices of at least $300 million or 20% of the paid-in capital ： Appendix 5.

• 7.Purchases or sales of goods from or to related parties reaching $100 million or 20% of paidin capital or more ： None

• Receivables from related partied reaching $100 million or 20% of paid-in capital or more ： None

• Derivative financial instruments undertaken during the year ended December 31, 2021 ： Please refer to Notes 12.6.

• 10.Significant inter-company transactions during the reporting periods ： Appendix 6.

• 11.Information on investees ： Appendix 7.

• 13.2 Information on investment in mainland China:

• The Company has resolved by the board of directors to invest USD 5,000 thousand in Foodservice, and further invested in Mercuries Bakery (shanghai) Ltd. (MB Shanghai) through Foodservice. The investment was approved by the Investment Commission MOEA No. 10100187460 on May 14, 2012 and No. 10000491270 on November 18, 2011.

179

MB Shanghai seased its operation and liquidated on December 18, 2019. The remaining assets of USD 174 thousand has been repatriated to Foodservice. This liquidation had been approved and verified by the Investment Commission MOEA No. 10900238140 on August 25, 2020.

1. The Company has resolved by the board of directors to invest USD 5,000 thousand in Tastynoodle, and further invested in Mercuries Foodservice (Shanghai) Ltd. (MF Shanghai) through Tastynoodle. The investment was approved by the Investment Commission MOEA No. 1010018747 on May 14, 2012 and No. 10000491290 on November 18, 2011.

2. MF Shanghai seased its operation and liquidated on October 30, 2019. The remaining assets of USD 27 thousand has been repatriated to Tastynoodle. This liquidation had been approved and verified by the Investment Commission MOEA No. 10900258870 on October 12, 2020.

3. The Company has resolved by the board of directors to invest USD 5,000 thousand in Family Shoemart, and further invested in Mercuries Rich Ltd. (MR) through Family Shoemart. The investment was approved by the Investment Commission MOEA No. 10100184740 on May 14, 2012 and No. 10000491290 on November 18, 2011.

MR seased its operation and liquidated on July 27, 2020. The remaining assets of USD 390 thousand has been repatriated to Family Shoemart. This liquiation had been approved and verified by the Investment Commission MOEA No. 10900320080 on November 10, 2020.

1. The subsidiary MFB has resolved by the board of directors to invest USD 1,000 thousand in Foodservice and further invested in MF Shanghai through Foodservice. The investment was approved by the Investment Commission MOEA No. 09600208890 on June 22, 2007.

2. MF Shanghai seased its operation and liquidated on October 30, 2019. The remaining assets of USD 2 thousand has been repatriated to Foodservice. This liquiation had been approved and verified by the Investment Commission MOEA No. 10900259000 on October 12, 2020.

3. The subsidiary MA has resolved by the board of directors to invest USD 4,000 thousand in Family shoemart and further invested in MR through Family Shoemart. The investment was approved by the Investment Commission MOEA No. 10600074280 on May 16, 2017. As December 31, 2017, USD 1,000 thousand has been remitted and verified by the Investment Commission MOEA No. 100700030140 on February 27, 2018.

MR seased its operation and liquidated on July 27, 2020. The remaining assets of USD 54 thousand has been repatriated to Family Shoemart. This liquiation had been approved and verified by the Investment Commission MOEA No. 10900320070 on November 10, 2020.

180

1. The subsidiary M.T.I. has resolved by the board of directors to invest USD 4,197 thousand in Foodservice and further invested in MB Shanghai. The investment was approval by the Investment Commission MOEA No. 09700098260 on April 8, 2008.

2. MB Shanghai seased its operation and liquidated on December 18, 2019. The remaining assets of USD 174 thousand has been repatriated to Foodservice. This liquiation had been approved and verified by the Investment Commission MOEA No. 10900238120 on August 25, 2020.

3. The subsidiary MF&B has resolved by the board of directors to invest USD 9,000 thousand in Foodservice and further invested in MF Shanghai, MB Shanghai and MR through Foodservice. The investment was approved by the Investment Commission MOEA No. 09900252760 on July 2, 2010, No. 09900391710 on October 4, 2010, and No. 09900555440 on January 3, 2011.

MB Shanghai and MF Shanghai seased its operation and liquidated on December 18, 2019, and October 30, 2019, respectively. The remaining assets of USD 315 thousand and USD 11 thousand have been repatriated to Foodservice. This liquiation had been approved and verified by the Investment Commission MOEA No. 10900249360 on October 12, 2020. In addition, MR seased its operation and liquidated on July 27, 2020. The remaining assets of USD 74 thousand has been repatriated to Foodservice. This liquiation had been approved and verified by the Investment Commission MOEA No. 10900333970 on December 14, 2020.

1. The Company’s investment type, amount and shareholding in Mainland China, please refer to appendix 8.

2. 13.3 Information on major shareholders ：

Unit: share

		Unit: share
Shareholding Shareholder's Name	Shares	Percentage
Shang Lin Investment Co., Ltd.	187,146,480	20.48%
Shu Ren Investment Co., Ltd.	129,054,542	14,12%
Shang Hung Investment Co., Ltd.	60,101,185	6.58%
Shu Feng Investment Co., Ltd.	51,282,811	5.61%

181

• Note 1: The major shareholders information was from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialized form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation. The share capital which was recorded in the financial statements may differ from the actual number of shares issued in dematerialized form because of a different calculation basis.

• Note 2: If the aforementioned data contains shares which were kept in trust by the shareholders, the data disclosed was the settlor’s separate account for the fund set by the trustee. As for the shareholder who reports share equity as an insider whose shareholding ratio is greater than 10% in accordance with Securities and Exchange Act, the shareholding ratio includes the self-owned shares and trusted shares, at the same time, persons who have power to decide how to allocate the trust assets. For the information of reported share equity of insider, please refer to Market Observation Post System.

182

14 Segment information

14.1 General information

The Company and its subsidiaries belong to a comprehensive service industry, providing a group of service including insurance, food & beverage, pharmaceutical and IT integration. The board of directors and the management committee lead business strategies, evaluate business performance and allocate resources based on the status of service divisions.

14.2 Measurement of segment information

The accounting policies of the operating segments are the same as the Company’s accounting policies stated in Note 4 of this consolidated financial statement.

14.3 Information about segment profit or loss, assets and liabilities

The information on the segment departments of the company and its subsidiaries are as follows:

Revenue from external customers Inter- segment revenue Total segment revenue Inter- segment profit (loss) Segment assets					2021
	Life insurance	Retail	Food and beverage	Food	IT service	Pharmaceutical	Others	Adjustments $15,123,852 Note (314,302) $14,809,550 $- $-	Total
	$143,109,155 29,392	S18,758,777 83,999	$4,837,547 -	$1,281,112 145,546	$3,527,279 20,958	$907,441 -	$828,039 34,407		$188,373,202 -
	$143,138,547	S18,842,776	$4,837,547	$1,426,658	$3,548,237	$907,441	$862,446		$188,373,202
	$(1,045,837)	S380,420	$278,290	$574,813	$180,020	$65,506	$213,003		$646,215
	$-	$-	$-	$-	$-	$-	$-		$-

Note: It’s adjusted the losses on foreign exchange of MLI.

183

2020

Revenue from external customers Inter-segment revenue Total segment revenue Inter-segment profit (loss) Segment assets	Life insurance	Retail	Food and beverage	Food	IT service	Pharmaceutical	Others	Adjustments $24,057,222 Note (261,612) $23,795,610 $- $-	Total
	$157,203,104 28,860	S17,559,525 45,009	$4,746,461 135	$839,081 133,134	$3,058,534 21,419	$2,741,637 -	$453,746 33,055		$210,659,310 -
	$157,231,964	S17,604,534	$4,746,596	$972,215	$3,079,953	$2,741,637	$486,801		$210,659,310
	$1,740,311	S425,173	$401,862	$81,260	$135,232	$455,215	$(67,067)		$3,171,986
	$-	$-	$-	$-	$-	$-	$-		$-

Note: It’s adjusted the losses on foreign exchange of MLI.

14.4 Reconciliation for segment profit (loss), assets and liabilities

The net profits or losses reported to the chief operating decision-makers are measured in a consistent manner with the income and expenses specified in the financial statement. The Company and its subsidiaries do not provide division information on the amounts of total assets and total liabilities to the operating decision-makers for relevant decision-making. Because there would be no difference between the statements provided to the operating decision-makers and the divisional financial statement.

14.5 Geographical information

The Company and its subsidiaries has no foreign operating segment.

14.6 Information of export sales: none

184

Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)	Appendix 1 Loans to others UNIT：NTD(In Thousands)
Number (Note 1)	Creditor	Borrower	Financial statement account (Note 2)	Related party	Maximum outstanding balance during the year ended December 31, 2021 (Note 3)	Balance at December 31, 2021 (Note 8)	Actual amount drawn down	Interest rate	Nature of loan (Note 4)	Amount of transaction s with the borrower (Note 5)	Reason or short-term financing (Note 6)	Allowance for doubtful accounts	Collateral		Limit on loans granted to a single party (Note 7)	Ceiling on total loans granted (Note 7)
													Item	Value
1	MERCURIES DATA SYSTEMS LTD.	Mercuries Information Systems International	Other receivables	Yes	$20,000	-	-	1.75%	2	-	Working capital	-	-	-	$228,288	$913,152

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

• (1)The parent company is ‘0’.

(2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Fill in the name of account in which the loans are recognized, such as receivables–related parties, current account with shareholders, prepayments, temporary payments, etc.

Note 3: Fill in the maximum outstanding balance of loans to others for the year ended December 31, 2021.

Note 4: The column of ‘Nature of loan’ shall fill in “1” for ‘Business transaction’ or “2” for ‘Short-term financing’.

Note 5: Fill in the amount of business transactions when nature of the loan is related to business transactions, which is the amount of business transactions occurred between the creditor and borrower in the current year.

Note 6: Fill in the purpose when nature of loan is for short-term financing, for example, repayment of loan, acquisition of equipment, working capital, etc.

• Note 7: Fill in limit on loans granted to a single party and ceiling on total loans granted as prescribed in the creditor company’s “Procedures for Provision of Loans”, and state each individual party to which the loans have been provided and the calculation for ceiling on total loans granted in the footnote.

(1)The nature of the loan is related to business transaction of MDS. Amount of the loan cannot exceed the amount of business transactions.

• (2)Nature of the loan is related to financing necessity, total amount of loan cannot exceed 10% of net asset of MDS and the aggregate amount cannot exceed 40% of net asset of MDS.

• Note 8: The amounts of funds to be loaned to others which have been approved by the Board of Directors of a public company in accordance with Article 14, Item 1 of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they have not yet been appropriated. However, this balance should exclude the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the board of directors of a public company has authorized the chairman to loan funds in instalments or in revolving within certain lines and within one year in accordance with Article 14, Item 2 of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies”, the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the Board of Directors, and these lines of loaning should not be excluded from this balance even though the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.

185

Appendix 2 Provision of endorsements and guarantees to others:

		UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)	UNIT：NTD (In Thousands)
Number (Note 1)	Endorser/ guarantor	Party being endorsed/guaranteed		Limit on endorsement/ guarantees provided for a single party (Note 2,4)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2021	Outstanding endorsement/ guarantee amount at December 31,2021	Actual Amount Drawn down	Amount of endorsement/ guarantees secured with collateral	Ratio of accumulate endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3,4)	Provision of endorsement/ guarantees by parent company to subsidiary	Provision of endorsement/ guarantees by subsidiary to parent company	Provision of endorsement / guarantees to the party in Mainland China
		Company name	Relationship with the endorser/ guarantor (Note 1)
0	MERCURIES & ASSOCIATES HOLDING, LTD.	SANYOU DRUGSTORES, LTD.	2	$2,958,126	$200,000	$200,000	$-	-	1.01%	$5,916,252	Y	N	N
1	MERCURIES DATA SYSTEMS LTD.	MERCURIES DATA SYSTEMS LTD. (Note 5)	1	456,576	8,000	8,000	8,000	-	0.35%	1,141,440	N	N	N

Note 1: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories:

(1)Business transaction.

(2)The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(3)The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.

(4)The endorsed/guaranteed parent company directly or indirectly owns more than 50% voting shares of the endorser/guarantor subsidiary.

(5)Mutual guarantee as required by the construction contract.

(6)Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

Note 2: Limit on provision of endorsements and guarantees to others granted to a single party cannot exceed 15% of the total net profit of the most recent financial statement.

Note 3: Total amount of provision of endorsements and guarantees to others cannot exceed 30% of total net profit of the most recent financial statement.

Note 4: 1.The total amount of accumulated external endorsements by the subsidiary MDS shall not exceed 50% of the net value of the latest financial statements of its verified by accountants.

2.The amount of the endorsement guarantee of the subsidiary MDS to a single enterprise shall not exceed 20% of the net value of the latest financial statements of the subsidiary its verified by an accountant.

Note 5: The MDS needs to procedure for handling endorsement/guarantee because of Import and export goods. It is endorsed by the MDS and guaranteed by the bank to issue a letter of guarantee to the customs.

186

Appendix 3 Holding of marketable securities at the end of the period

Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period
					UNIT：NTD (In Thousands)/Thousand Shares
Securities held by	Marketable securities		Relationship with the securities issuer	Financial statement account	As of December 31, 2021				Footnote
					Number of shares	Book value	Ownership (%)	Fair value
Mercuries & Associates Holding, Ltd.	Common Stock	FIRST FINANCIAL HOLDING.	－	Financial assets at fair value through other comprehensive income-current	5	$127	－	$127	NA
Mercuries & Associates Holding, Ltd.	Common Stock	CHIAO-FU REAL ESTATE MANAGEMENT CORP.	－	Financial assets at fair value through other comprehensive income-non-current	100	14,943	2.00%	14,943	NA
Mercuries & Associates Holding, Ltd.	Common Stock	CONCORD VENTURE CAPITAL CO., LTD.	－	Financial assets at fair value through other comprehensive income-non-current	3,124	11,640	3.12%	11,640	NA
Mercuries & Associates Holding, Ltd.	Common Stock	UNION OPTRONICS CORP.	－	Financial assets at fair value through other comprehensive income-non-current	366	6,005	0.69%	6,005	NA
Mercuries & Associates Holding, Ltd.	Common Stock	ADVANCE MATERIALS CORPORATION	－	Financial assets at fair value through other comprehensive income-non-current	2,093	19,135	1.78%	19,135	NA
Mercuries & Associates Holding, Ltd.	Common Stock	SEMICONDUCTOR CO., LTD	－	Financial assets at fair value through other comprehensive income-non-current	300	3,989	1.88%	3,989	NA
Mercuries & Associates Holding, Ltd.	Preferred Stock	MAGICAP VENTURE CAPITAL CO., LTD. PREFERRED SHARES A	－	Financial assets at fair value through other comprehensive income-non-current	317	30,650	1.45%	30,650	NA
Mercuries & Associates Holding, Ltd.	Common Stock	POWTEC ELECTROCHEMICAL CORPORATION	－	Financial assets at fair value through other comprehensive income-non-current	13,630	－	0.96%	－	NA
Mercuries & Associates Holding, Ltd.	Common Stock	VEEGO CORPORATION	－	Financial assets at fair value through other comprehensive income-non-current	400	－	2.22%	－	NA
Mercuries & Associates Holding, Ltd.	Corporate bonds	MERCURIES LIFE INSURANCE CO., LTD.	Investment accounted under the equity method	Financial assets measured at amortized cost-non-current	250	250,000	－	250,000	NA
Mercuries & Associates, Ltd.	Beneficiary certificates	PHI FUND, L.P. FUND	－	Financial assets at fair value through profit or loss-non- current	－	29,440	－	29,440	NA
Mercuries & Associates, Ltd.	Common Stock	ENERGENESIS BIOMEDICAL CO., LTD	－	Financial assets at fair value through other comprehensive income-non-current	354	14,006	0.53%	14,006	NA
Mercuries & Associates, Ltd.	Preferred Stock	ACEPODIA INC.	－	Financial assets at fair value through other comprehensive income-non-current	403	27,846	0.83%	27,846	NA

187

Appendix 3 Holding of marketable securities at the end of the period

Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period
					UNIT：NTD (In Thousands)/Thousand Shares
Securities held by	Marketable securities		Relationship with the securities issuer	Financial statement account	As of December 31, 2021				Footnote
					Number of shares	Book value	Ownership (%)	Fair value
Mercuries & Associates, Ltd.	Corporate bonds	MERCURIES LIFE INSURANCE CO., LTD.	Investment accounted under the equity method	Financial assets measured at amortized cost-non-current	60	60,000	－	60,000	NA
Mercuries Data Systems Ltd.	Common Stock	SHINEWAVE CO. LTD.	－	Financial assets at fair value through other comprehensive income-non-current	1,072	12,826	10.00%	12,826	NA
Mercuries Data Systems Ltd.	Common Stock	EASYCARD INVESTMENT HOLDING CO., LTD.	－	Financial assets at fair value through other comprehensive income-non-current	2,299	69,016	2.21%	69,016	NA
Mercuries Data Systems Ltd.	Common Stock	VEEGO CORPORATION	－	Financial assets at fair value through other comprehensive income-non-current	600	－	3.33%	－	NA
Mercuries Data Systems Ltd.	Common Stock	SHUN TAK HOLDINGS LIMITED	－	Financial assets at fair value through other comprehensive income-non-current	490	4,900	19.69%	4,900	NA
Mercuries Data Systems Ltd.	Common Stock	Piao Shi Jinghua	－	Financial assets at fair value through other comprehensive income-non-current	－	13,893	4.90%	13,893	NA
Mercuries Data Systems Ltd.	Preferred Stock	TAISHIN FINANCIAL HOLDING CO., LTD.	－	Financial assets at fair value through profit or loss-non- current	2,000	106,200	0.40%	106,200	NA
Mercury Fu Bao Co., Ltd.	Common Stock	ENERGENESIS BIOMEDICAL CO., LTD	－	Financial assets at fair value through profit or loss-non- current	654	29,312	0.99%	29,312	NA
Mercury Fu Bao Co., Ltd.	Common Stock	CONCORD VENTURE CAPITAL CO., LTD.	－	Financial assets at fair value through other comprehensive income-non-current	4,686	17,482	4.69%	17,482	NA
Mercury Fu Bao Co., Ltd.	Common Stock	SYSJUST CO., LTD	－	Financial assets at fair value through other comprehensive income-non-current	114	8,067	0.43%	8,067	NA
Mercury Fu Bao Co., Ltd.	Common Stock	MERCURIES & ASSOCIATES HOLDING, LTD.	Investment accounted under the equity method to the holding company	Financial assets at fair value through other comprehensive income-non-current	39,630	897,618	4.34%	897,618	NA
Mercury Fu Bao Co., Ltd.	Common Stock	POWTEC ELECTROCHEMICAL CORPORATION	－	Financial assets at fair value through other comprehensive income-non-current	4,697	－	0.33%	－	NA

188

Appendix 3 Holding of marketable securities at the end of the period

Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period
					UNIT：NTD (In Thousands)/Thousand Shares
Securities held by	Marketable securities		Relationship with the securities issuer	Financial statement account	As of December 31, 2021				Footnote
					Number of shares	Book value	Ownership (%)	Fair value
Mercuries General Media, Inc.	Common Stock	MERCURIES & ASSOCIATES HOLDING, LTD.	Investment accounted under the equity method to the holding company	Financial assets at fair value through other comprehensive income-non-current	2,914	65,994	0.32%	65,994	NA
Mercuries Harvest Co., Ltd.	Common Stock	MERCURIES & ASSOCIATES HOLDING, LTD.	Investment accounted under the equity method to the holding company	Financial assets at fair value through other comprehensive income-non-current	5,629	127,493	0.62%	127,493	NA
SCI Pharmtech Inc.	Beneficiary certificates	UPAMC JAMES BOND MONEY MARKET FUND	－	Financial assets at fair value through profit or loss-current	2,760	46,564	－	46,564	NA
SCI Pharmtech Inc.	Beneficiary certificates	NOMURA TAIWAN MONEY MARKET FUND	－	Financial assets at fair value through profit or loss-current	1,273	20,980	－	20,980	NA
SCI Pharmtech Inc.	Beneficiary certificates	YUANTA USD MONEY MARKET Fund USD	－	Financial assets at fair value through profit or loss-current	99	29,358	－	29,358	NA
SCI Pharmtech Inc.	Beneficiary certificates	FUBON CHINA POLICY BANK BOND ETF	－	Financial assets at fair value through profit or loss-current	420	8,387	－	8,387	NA
SCI Pharmtech Inc.	Common Stock	FUBON FINANCIAL HOLDINGS	－	Financial assets at fair value through profit or loss-current	32	2,411	－	2,411	NA
SCI Pharmtech Inc.	Preferred Stock	FUBON S&P PREFERRED STOCK	－	Financial assets at fair value through profit or loss-current	793	50,118	－	50,118	NA
SCI Pharmtech Inc.	Preferred Stock	FUBON S&P PREFERRED STOCK B	－	Financial assets at fair value through profit or loss-current	36	2,272	－	2,272	NA
SCI Pharmtech Inc.	Preferred Stock	TAISHIN FINANCIAL HOLDING CO., LTD. PREFERRED STOCK E	－	Financial assets at fair value through profit or loss-current	400	21,040	－	21,040	NA
SCI Pharmtech Inc.	Preferred Stock	CATHAY FINANCIAL HOLDING CO., LTD. PREFERRED STOCK A	－	Financial assets at fair value through profit or loss-current	790	49,691	－	49,691	NA
SCI Pharmtech Inc.	Preferred Stock	CATHAY FINANCIAL HOLDING CO., LTD. PREFERRED STOCK B	－	Financial assets at fair value through profit or loss-current	33	2,097	－	2,097	NA

189

Appendix 3 Holding of marketable securities at the end of the period

Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period	Appendix 3 Holding of marketable securities at the end of the period
					UNIT：NTD (In Thousands)/Thousand Shares
Securities held by	Marketable securities		Relationship with the securities issuer	Financial statement account	As of December 31, 2021				Footnote
					Number of shares	Book value	Ownership (%)	Fair value
SCI Pharmtech Inc.	Preferred Stock	FUBON S&P US PREFERRED STOCK	－	Financial assets at fair value through profit or loss-current	2,350	38,963	－	38,963	NA
SCI Pharmtech Inc.	Preferred Stock	CTBC FINANCIAL HOLDING CO., LTD. PREFERRED STOCK B	－	Financial assets at fair value through profit or loss-current	685	43,977	－	43,977	NA
SCI Pharmtech Inc.	Preferred Stock	SHIN KONG FINANCIAL HOLDINGS PREFERRED STOCK A	－	Financial assets at fair value through profit or loss-current	642	27,349	－	27,349	NA
SCI Pharmtech Inc.	Preferred Stock	CHAILEASE PREFERRED STOCK A	－	Financial assets at fair value through profit or loss-current	150	15,225	－	15,225	NA
SCI Pharmtech Inc.	Common Stock	CATHAY FINANCIAL HOLDINGS	－	Financial assets at fair value through profit or loss-current	28	1,769	－	1,769	NA
SCI Pharmtech Inc.	Common Stock	SUNNY PHARMTECH INC.	－	Financial assets at fair value through other comprehensive income-non-current	4,497	31,032	3.25%	31,032	NA
SCI Pharmtech Inc.	Common Stock	ENERGENESIS BIOMEDICAL CO., LTD	－	Financial assets at fair value through other comprehensive income-non-current	1,603	41,489	2.42%	41,489	NA
Mercuries Furniture Co., Ltd.	Beneficiary certificates	PHI FUND, L.P. FUND	－	Financial assets at fair value through profit or loss -non- current	－	19,627	－	19,627	NA

190

Appendix 4 Acquisition of indivdual real estate properties at costs of at least $300 million or 20% of the paid-in capital.

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counterparty	Relationship with the Company	If the counterparty is a related party, disclose the previous transfer information	If the counterparty is a related party, disclose the previous transfer information	If the counterparty is a related party, disclose the previous transfer information	If the counterparty is a related party, disclose the previous transfer information	References for determining price	Purpose of acquisition and current condition	Other agreed matters
							Owner	Relationship with the Company	Date of transfer	Amount
Mercuries Life Insurance Co., Ltd.	Neihu Huaku Finance and IT Center	August 18, 2021	3,400,000	Paid in full	Huaku Development Co., Ltd.	None	-	-	-	-	Evaluated by appraisal report	Self-use	-
SCI Pharmtech Inc.	Guany in factory	October 19, 2021	630,000	63,000	ECO Technical Services Co., Ltd.	None	-	-	-	-	Negotiation	Factory expansion	-

191

Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.

Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.	Appendix 5 Disposal of individual real estate properties at price of at least $300 million or 20% of the paid-in capital.
UNIT：NTD(In Thousands)/Thousand Shares
Name of Company	Name of property	Transaction date	Original date of acquisition	Book value	Transaction amount	Status of receivement	Gain or loss on disposal (Note)	Counterparty	Relationship with the Company	Purpose of disposal	Reference for the determining price	Other
MERCURIES & ASSOCIATES HOLDING, LTD.	No. 323, No. 323-1, No. 323-4, and No. 323-5, Section 2, Nankan Road, Luzhu Township, Taoyuan City and 48 parking spaces	September 17, 2021	74.1 96.1~96.5	1,332,167	1,553,000	Received in full	341,240	DIGIT MOBILE INC.	-	Activated assets	Evaluation according to appraisal report	None

Note ： The company sells the land and buildings in Luzhu District, Taoyuan City and recognized 216,296 thousand of gain on disposal of investment property and 124,944 thousand of gain on disposal of property, plant and equipment respectively.

192

Appendix 6 The important transaction between parent company and subsidiaries.

Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.
				Unit：Thousand
NO. (Note1)	Company name	Counterparty	Relationship with the counterparty （Note 2）	The situation of transaction
				Financial Statement item	Amount (Note 4)	Trading terms	Percentage of consolidated total operating revenue or total assets (Note 3)
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries & Associates, Ltd.	1	Rental Income	$1,525	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries & Associates, Ltd.	1	Other Income	2,048	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries & Associates, Ltd.	1	Other Receivable	26	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries & Associates, Ltd.	1	Guarantee deposits received	90	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Liquor & Food Co., Ltd.	1	Rental Income	3,724	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Liquor & Food Co., Ltd.	1	Other Income	354	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Liquor & Food Co., Ltd.	1	Accounts Receivable	206	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Liquor & Food Co., Ltd.	1	Other Receivable	13	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercury Fu Bao Co., Ltd.	1	Rental Income	3,501	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercury Fu Bao Co., Ltd.	1	Other Income	1,989	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Life Insurance Co., Ltd.	1	Rental Income	21,602	According to general conditions	0.01%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Life Insurance Co., Ltd.	1	Other Income	8,561	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Life Insurance Co., Ltd.	1	Interest Income	2,554	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Life Insurance Co., Ltd.	1	Other Receivable	2,554	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Life Insurance Co., Ltd.	1	Financial assets measured at amortized cost-non- current	250,000	According to general conditions	0.02%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries General Media, Inc.	1	Other Income	572	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Insurance Agency Co. Ltd.	1	Other Income	159	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Simple Mart Retail Co., Ltd.	1	Other Income	1,700	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries Data Systems Ltd.	1	Other Income	1,830	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	Mercuries F&B Co., Ltd.	1	Other Income	1,600	According to general conditions	0.00%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	MERCURIES FOODSERVICE CO., LTD	1	Temporary Receipts	6,483	According to general conditions	0.00%

193

Appendix 6 The important transaction between parent company and subsidiaries.

Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.
					Unit：Thousand
NO. (Note1)	Company name	Counterparty	Relationship with the counterparty （Note 2）		The situation of transaction
				Financial Statement item	Amount (Note 4)	Trading terms	Percentage of consolidated total operating revenue or total assets (Note 3)
0	MERCURIES & ASSOCIATES HOLDING, LTD.	FAMILY SHOEMART CO., LTD	1	Temporary Receipts	10,081	According to general conditions	0.01%
0	MERCURIES & ASSOCIATES HOLDING, LTD.	TASTYNOODLE CO., LTD	1	Temporary Receipts	789	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries General Media, Inc.	3	Rental Income	2,025	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries General Media, Inc.	3	Service Revenue	1,200	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries General Media, Inc.	3	Account Receivable	105	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries General Media, Inc.	3	Other Receivable	15	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries General Media, Inc.	3	Guarantee deposits received	518	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Life Insurance Co., Ltd.	3	Refundable deposits	390	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Life Insurance Co., Ltd.	3	Other Receivable	613	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Life Insurance Co., Ltd.	3	Accrued expenses payable	16	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Life Insurance Co., Ltd.	3	Financial assets measured at amortized cost-non- current	600,000	According to general conditions	0.04%
1	Mercuries & Associates, Ltd.	Mercuries Life Insurance Co., Ltd.	3	Other Expense	191	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Life Insurance Co., Ltd.	3	Interest Income	613	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Furniture Co., Ltd.	3	Rental Income	3,898	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Furniture Co., Ltd.	3	Service Revenue	3,600	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Furniture Co., Ltd.	3	Account Receivable	315	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Furniture Co., Ltd.	3	Other Receivable	31	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Furniture Co., Ltd.	3	Guarantee deposits received	1,010	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Furniture Co., Ltd.	3	Other Expense	100	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercury Fu Bao Co., Ltd.	3	Rental Income	8,138	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercury Fu Bao Co., Ltd.	3	Service Revenue	2,400	According to general conditions	0.00%

194

Appendix 6 The important transaction between parent company and subsidiaries.

Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.
					Unit：Thousand
NO. (Note1)	Company name	Counterparty	Relationship with the counterparty （Note 2）		The situation of transaction
				Financial Statement item	Amount (Note 4)	Trading terms	Percentage of consolidated total operating revenue or total assets (Note 3)
1	Mercuries & Associates, Ltd.	Mercury Fu Bao Co., Ltd.	3	Other Receivable	38	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercury Fu Bao Co., Ltd.	3	Account Receivable	210	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercury Fu Bao Co., Ltd.	3	Guarantee deposits received	1,865	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Simple Mart Retail Co., Ltd.	3	Sales revenue	138	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Simple Mart Retail Co., Ltd.	3	Accrued expenses payable	224	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Simple Mart Retail Co., Ltd.	3	Other Income	203	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries F&B Co., Ltd.	3	Rental Income	23,035	According to general conditions	0.01%
1	Mercuries & Associates, Ltd.	Mercuries F&B Co., Ltd.	3	Other Expense	46	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries F&B Co., Ltd.	3	Other Receivable	489	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries F&B Co., Ltd.	3	Guarantee deposits received	5,844	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Data Systems Ltd.	3	Payable on equipment	4,158	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Mercuries Liquor & Food Co., Ltd.	3	Other Expense	593	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Sanyou Drugstores, Ltd.	3	Service Revenue	1,760	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Sanyou Drugstores, Ltd.	3	Account Receivable	154	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	Sanyou Drugstores, Ltd.	3	Other Receivable	15	According to general conditions	0.00%
1	Mercuries & Associates, Ltd.	FAMILY SHOEMART CO., LTD	3	Temporary Receipts	1,550	According to general conditions	0.00%
2	Mercuries Life Insurance Co., Ltd.	Mercuries & Associates, Ltd.	3	Rental Income	1,543	According to general conditions	0.00%
2	Mercuries Life Insurance Co., Ltd.	Mercuries Data Systems Ltd.	3	Premium Income	3,217	According to general conditions	0.00%
2	Mercuries Life Insurance Co., Ltd.	Simple Mart Retail Co., Ltd.	3	Rental Income	1,126	According to general conditions	0.00%
2	Mercuries Life Insurance Co., Ltd.	Simple Mart Retail Co., Ltd.	3	Premium Income	4,315	According to general conditions	0.00%
2	Mercuries Life Insurance Co., Ltd.	Mercuries F&B Co., Ltd.	3	Rental Income	12,187	According to general conditions	0.01%

195

Appendix 6 The important transaction between parent company and subsidiaries.

Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.
					Unit：Thousand
NO. (Note1)	Company name	Counterparty	Relationship with the counterparty （Note 2）		The situation of transaction
				Financial Statement item	Amount (Note 4)	Trading terms	Percentage of consolidated total operating revenue or total assets (Note 3)
2	Mercuries Life Insurance Co., Ltd.	Mercuries F&B Co., Ltd.	3	Premium Income	2,301	According to general conditions	0.00%
2	Mercuries Life Insurance Co., Ltd.	Mercuries F&B Co., Ltd.	3	Guarantee deposits received	2,130	According to general conditions	0.00%
2	Mercuries Life Insurance Co., Ltd.	SCI Pharmtech Inc.	3	Premium Income	4,703	According to general conditions	0.00%
3	Mercuries Data Systems Ltd.	Simple Mart Retail Co., Ltd.	3	Sales revenue	1,305	According to general conditions	0.00%
3	Mercuries Data Systems Ltd.	Mercuries Life Insurance Co., Ltd.	3	Sales revenue	17,546	According to general conditions	0.01%
3	Mercuries Data Systems Ltd.	Mercuries F&B Co., Ltd.	3	Sales revenue	2,107	According to general conditions	0.00%
3	Mercuries Data Systems Ltd.	Mercuries Liquor & Food Co., Ltd.	3	Accounts Receivable	6,611	According to general conditions	0.00%
4	Simple Mart Retail Co., Ltd.	Mercury Fu Bao Co., Ltd.	3	Purchases	7,417	According to general conditions	0.00%
4	Simple Mart Retail Co., Ltd.	Mercury Fu Bao Co., Ltd.	3	Other Income	2,413	According to general conditions	0.00%
4	Simple Mart Retail Co., Ltd.	Mercury Fu Bao Co., Ltd.	3	Accounts Payble	2,557	According to general conditions	0.00%
4	Simple Mart Retail Co., Ltd.	Sanyou Drugstores, Ltd.	3	Sales revenue	14,027	According to general conditions	0.01%
4	Simple Mart Retail Co., Ltd.	Sanyou Drugstores, Ltd.	3	Purchases	18,603	According to general conditions	0.01%
4	Simple Mart Retail Co., Ltd.	Sanyou Drugstores, Ltd.	3	Rental Income	2,286	According to general conditions	0.00%
4	Simple Mart Retail Co., Ltd.	Sanyou Drugstores, Ltd.	3	Accounts Receivable	3,263	According to general conditions	0.00%
4	Simple Mart Retail Co., Ltd.	Sanyou Drugstores, Ltd.	3	Accounts Payable	3,922	According to general conditions	0.00%
4	Simple Mart Retail Co., Ltd.	Mercuries Liquor & Food Co., Ltd.	3	Purchases	3,776	According to general conditions	0.00%
4	Simple Mart Retail Co., Ltd.	Mercuries Liquor & Food Co., Ltd.	3	Accounts Payable	1,939	According to general conditions	0.00%
5	Mercuries F&B Co., Ltd.	MERCURIES FOODSERVICE CO., LTD	3	Temporary Receipts	11,716	According to general conditions	0.01%
5	Mercuries F&B Co., Ltd.	Mercuries Liquor & Food Co., Ltd.	3	Purchases	5,356	According to general conditions	0.00%
5	Mercuries F&B Co., Ltd.	Mercuries Liquor & Food Co., Ltd.	3	Accounts Payable	1,039	According to general conditions	0.00%
5	Mercuries F&B Co., Ltd.	Simple Mart Retail Co., Ltd.	3	Accrued expenses payable	1,000	According to general conditions	0.00%

196

Appendix 6 The important transaction between parent company and subsidiaries.

Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.	Appendix 6 The important transaction between parent company and subsidiaries.
					Unit：Thousand
NO. (Note1)	Company name	Counterparty	Relationship with the counterparty （Note 2）		The situation of transaction
				Financial Statement item	Amount (Note 4)	Trading terms	Percentage of consolidated total operating revenue or total assets (Note 3)
5	Mercuries F&B Co., Ltd.	Mercuries F&B Consulting Co., Ltd.	3	Sales revenue	763	According to general conditions	0.00%
6	Mercury Fu Bao Co., Ltd.	Mercuries Furniture Co., Ltd.	3	Rental Income	1,829	According to general conditions	0.00%
6	Mercury Fu Bao Co., Ltd.	Mercuries Life Insurance Co., Ltd.	3	Rental Income	13,109	According to general conditions	0.01%
6	Mercury Fu Bao Co., Ltd.	M. T. I. Cigars Co., Ltd.	3	Purchases	18,402	According to general conditions	0.01%
6	Mercury Fu Bao Co., Ltd.	M. T. I. Cigars Co., Ltd.	3	Accounts Payable	9,109	According to general conditions	0.00%
6	Mercury Fu Bao Co., Ltd.	MERCURIES FOODSERVICE CO., LTD	3	Temporary Receipts	1,952	According to general conditions	0.00%
7	M. T. I. Cigars Co., Ltd.	MERCURIES FOODSERVICE CO., LTD	3	Temporary Receipts	5,463	According to general conditions	0.00%
8	Mercuries Liquor & Food Co., Ltd.	Mercuries Liquor & Food Japan Co., Ltd.	3	Purchases	95,087	According to general conditions	0.05%
8	Mercuries Liquor & Food Co., Ltd.	Mercuries Liquor & Food Japan Co., Ltd.	3	Accounts Payable	37,417	According to general conditions	0.02%

Note 1 ： The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• 1.Parent company is ‘0’.

• 2.The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between the Company and counterparty is classified into the following three categories:

• 1.Parent company to subsidiary

• 2.Subsidiary to parent company

• 3.Subsidiary to subsidiary

Note 3 ： Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4 ： It has been eliminated upon preparing the consolidated financial statements.

197

Appendix 7 Information on investees

UNIT ： NTD (In Thousands)/Foreign Currency(In Thousands)/Thousand Shares

Appendix 7 Information	on investees					UNIT：NTD (In Thou	UNIT：NTD (In Thou	UNIT：NTD (In Thou	sands)/Foreign Curr	ency(In Thousands)/	Thousand Shares
Investor	Investees	Location	Main business activities	Initial investment amount		Shares held as at December 31, 2021			Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by parent company for the year ended December 31, 2021(Notes 1)	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value (Note2)
Mercuries & Associates Holding, Ltd.	Mercuries Life Insurance Co., Ltd	Taipei	Life insurance	$5,584,639	$5,312,150	1,056,917	39.59%	$15,678,826	$1,090,798	$445,189	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries & Associates, Ltd.	Taipei	Domestic and international well- known brands of footwear, apparel and related accessories.	250,000	250,000	40,000	100.00%	723,837	103,588	101,280	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries Data Systems Ltd.	Taipei	Purchasing, sale, processing, and installation of computer equipment	612,844	612,844	98,505	53.44%	1,200,773	149,232	79,755	Subsidiary
Mercuries & Associates Holding, Ltd.	SCI Pharmtech Inc.	Taoyuan	Processing, Manufacture, and sale of active pharmaceutical ingredients (APIs) and API intermediates	614,293	614,293	30,283	31.75%	1,054,281	55,696	17,683	Subsidiary
Mercuries & Associates Holding, Ltd.	Simple Mart Retail Co., Ltd.	Taipei	Retail	367,393	368,289	41,019	60.77%	1,158,061	194,503	132,401	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercury Fu Bao Co., Ltd.	Taipei	Liquor, cigar, and cigarette trading and agency.	14,164	14,164	236,260	100.00%	3,207,423	545,137	567,207	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries General Media, Inc.	Taipei	Agency for import production of video tapes, etc.	30,237	30,237	4,200	86.96%	75,185	11,916	7,829	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries Harvest Co., Ltd.	Taipei	Lease and sales of machinery equipment	90,478	90,478	9,000	100.00%	101,915	5,612	(17)	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries F&B Co., Ltd.	Taipei	Beef noodles and pizza restaurant chain stores	514,500	514,500	56,569	93.63%	1,052,806	231,773	216,991	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries Leisure Co., Ltd	Taipei	Leisure and entertainment	485,203	485,203	44,895	63.14%	449,071	8,677	5,479	Subsidiary
Mercuries & Associates Holding, Ltd.	Hipact Tech Inc.	Taipei	Operation Management Consultant and computer equipment installation	19,734	19,734	17	8.61%	534	107	9	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries Furniture Co., Ltd.	Taipei	Furniture retail and decoration	626,210	626,210	13,000	100.00%	29,486	19,002	16,292	Subsidiary

198

Appendix 7 Information on investees

UNIT ： NTD (In Thousands)/Foreign Currency(In Thousands)/Thousand Shares

Appendix 7 Information	on investees					UNIT：NTD (In Thou	UNIT：NTD (In Thou	UNIT：NTD (In Thou	sands)/Foreign Curr	ency(In Thousands)/	Thousand Shares
Investor	Investees	Location	Main business activities	Initial investment amount		Shares held as at December 31, 2021			Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by parent company for the year ended December 31, 2021(Notes 1)	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value (Note2)
Mercuries & Associates Holding, Ltd.	M. T. I. Cigars Co., Ltd.	Taipei	Liquor, cigar, and cigarette trading and agency.	750,000	750,000	3,209	100.00%	27,095	(144)	(144)	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries Liquor & Food Co., Ltd.	Taipei	Sales of tobacco and liquor, beverage and food	180,300	180,300	10,500	100.00%	74,466	(34,404)	14,757	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries Insurance Agency Co., Ltd.	Taipei	Insurance agency	3,000	3,000	500	100.00%	35,679	20,377	20,377	Subsidiary
Mercuries & Associates Holding, Ltd.	Mercuries Foodservice Co., Ltd.	Samoa	Investment	148,380	148,380	－	25.31%	6,124	－	－	Subsidiary
Mercuries & Associates Holding, Ltd.	Tastynoodle Co., Ltd.	Samoa	Investment	147,913	147,913	－	100.00%	741	－	－	Subsidiary
Mercuries & Associates Holding, Ltd.	Family Shoemart Co., Ltd.	Samoa	Investment	192,057	192,057	－	86.67%	9,656	－	－	Subsidiary
Mercuries & Associates Holding, Ltd.	Sanyou Drugstores, Ltd.	Taipei	Cosmeceutical	506,220	506,220	55,000	55.00%	84,609	10,241	5,633	Subsidiary
Mercuries & Associates Holding, Ltd.	Fuh Hwa Securities Investment Trust Co.,Ltd.	Taipei	Securities Investment Trust	86,800	86,800	1,971	3.28%	121,419	1,297,013	42,573	Associate
Mercuries Data Systems Ltd.	Mercuries Data Systems International Ltd.	British Virgin Islands	Investment	738,652	738,652	－	100.00%	213,026	(20,931)	(20,931)	Subsidiary
Mercuries Data Systems Ltd.	Hipact Tech Inc.	Taipei	Operation Management Consultant and computer equipment installation	114,435	114,435	146	72.80%	7,259	107	78	Subsidiary
Mercuries Data Systems Ltd.	Mercuries Information Systems International Co., Ltd	Taipei	Software and data processing services	3,000	3,000	300	100.00%	1,290	(135)	(135)	Subsidiary
Mercuries Data Systems Ltd.	Mercuries Life Insurance Co., Ltd	Taipei	Life insurance	59,737	59,737	6,277	0.24%	97,434	1,090,798	2,901	Subsidiary

199

Appendix 7 Information on investees

UNIT ： NTD (In Thousands)/Foreign Currency(In Thousands)/Thousand Shares

Appendix 7 Information	on investees					UNIT：NTD (In Thou	UNIT：NTD (In Thou	UNIT：NTD (In Thou	sands)/Foreign Curr	ency(In Thousands)/	Thousand Shares
Investor	Investees	Location	Main business activities	Initial investment amount		Shares held as at December 31, 2021			Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by parent company for the year ended December 31, 2021(Notes 1)	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value (Note2)
Mercuries Data Systems Ltd.	Digicentre Company Limited.	Taipei	Software services	150,000	150,000	6,864	28.92%	169,920	19,165	5,543	Associate
Mercuries Data Systems International Ltd.	Core Info Tech Limited(Hong Kong)	Hong Kong	Investment	715,423	715,423	－	100.00%	213,835	(20,931)	(20,931)	Subsidiary
Mercuries & Associates, Ltd.	Mercuries Leisure Co., Ltd	Taipei	Leisure and entertainment	20,000	20,000	2,000	2.81%	20,005	8,677	244	Subsidiary
Mercuries & Associates, Ltd.	Family Shoemart Co., Ltd.	Samoa	Investment	29,995	29,995	－	13.33%	1,486	－	－	Subsidiary
Mercuries & Associates, Ltd.	Mercuries Life Insurance Co., Ltd	Taipei	Life insurance	115,952	80,408	14,571	0.55%	226,183	1,090,798	5,108	Subsidiary
Mercuries & Associates, Ltd.	Sanor Co., Ltd.	Taipei	Agency for shoes	80,000	－	8,000	50.00%	95,547	31,094	15,547	Joint Venture
Mercuries & Associates, Ltd.	TriHealth Enterprise Co., Ltd.	Taipei	Medicine circulation	70,000	－	2,800	21.21%	52,782	22,054	1,949	Associate
Mercuries & Associates, Ltd.	Simple Mart Retail Co., Ltd.	Taipei	Retail	4,347	－	63	0.09%	1,779	194,503	15	Subsidiary
Mercury Fu Bao Co., Ltd.	Mercuries Life Insurance Co., Ltd	Taipei	Life insurance	356,117	356,117	64,792	2.43%	1,076,507	1,090,798	(28,476)	Subsidiary
Mercury Fu Bao Co., Ltd.	SCI Pharmtech Inc.	Taoyuan	Processing, Manufacture, and sale of active pharmaceutical ingredients (APIs) and API intermediates	118,791	118,791	2,317	2.43%	144,807	55,696	1,353	Subsidiary
Mercury Fu Bao Co., Ltd.	Mercuries Leisure Co., Ltd	Taipei	Leisure and entertainment	75,262	75,262	3,718	5.23%	37,189	8,677	454	Subsidiary
Mercury Fu Bao Co., Ltd.	Hipact Tech Inc.	Taipei	Operation Management Consultant and computer equipment installation	8,840	8,840	10	5.17%	515	107	6	Subsidiary

200

Appendix 7 Information on investees

UNIT ： NTD (In Thousands)/Foreign Currency(In Thousands)/Thousand Shares

Appendix 7 Information	on investees					UNIT：NTD (In Thou	UNIT：NTD (In Thou	UNIT：NTD (In Thou	sands)/Foreign Curr	ency(In Thousands)/	Thousand Shares
Investor	Investees	Location	Main business activities	Initial investment amount		Shares held as at December 31, 2021			Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by parent company for the year ended December 31, 2021(Notes 1)	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value (Note2)
Mercury Fu Bao Co., Ltd.	Mercuries Foodservice Co., Ltd.	Samoa	Investment	49,303	49,303	－	7.62%	1,844	－	－	Subsidiary
Mercury Fu Bao Co., Ltd.	Fuh Hwa Securities Investment Trust Co.,Ltd.	Taipei	Securities Investment Trust	14,429	133,200	322	0.54%	19,862	1,297,013	77,866	Associate
Mercury Fu Bao Co., Ltd.	Horizon Securities Co., Ltd	Taipei	Integrated Securities Houses	135,631	135,631	20,286	6.12%	326,212	1,239,274	75,956	Associate
Mercuries Harvest Co., Ltd.	Mercuries Leisure Co., Ltd	Taipei	Leisure and entertainment	7,000	7,000	687	0.97%	7,093	8,677	84	Subsidiary
Mercuries F&B Co., Ltd.	Mercuries Life Insurance Co., Ltd	Taipei	Life insurance	144,691	144,691	14,571	0.55%	226,183	1,090,798	6,129	Subsidiary
Mercuries F&B Co., Ltd.	Horizon Securities Co., Ltd	Taipei	Integrated Securities Houses	－	49,903	－	－	－	－	－	Associate
Mercuries F&B Co., Ltd.	Mercuries Leisure Co., Ltd	Taipei	Leisure and entertainment	70,000	70,000	6,749	9.49%	67,504	8,677	824	Subsidiary
Mercuries F&B Co., Ltd.	Mercuries Foodservice Co., Ltd.	Samoa	Investment	275,896	275,896	－	45.74%	11,064	－	－	Subsidiary
Mercuries F&B Co., Ltd.	Mercuries F&B Consulting Co., Ltd	Taipei	Catering retail and management	29,100	19,400	2,910	97.00%	12,928	(8,394)	(8,142)	Subsidiary
Mercuries F&B Co., Ltd.	Mercuries Food Service Japan Ltd	Japan	Catering retail	27,013	27,013	10	100.00%	15,544	(8,443)	(8,443)	Subsidiary
SCI Pharmtech Inc.	Yushan Pharmaceuticals, Inc.	Taoyuan City Luzhu Dist	The research and development , manufacture and sale of API	351,761	351,761	35,190	100.00%	348,599	(587)	(587)	Subsidiary
SCI Pharmtech Inc.	Framosa Co., Ltd.	Taipei	Circular economy by purifying and utilizing used solvents	66,000	－	6,600	40.00%	52,447	(33,883)	(13,553)	Associate

201

Appendix 7 Information on investees

UNIT ： NTD (In Thousands)/Foreign Currency(In Thousands)/Thousand Shares

Appendix 7 Information	on investees					UNIT：NTD (In Thou	UNIT：NTD (In Thou	UNIT：NTD (In Thou	sands)/Foreign Curr	ency(In Thousands)/	Thousand Shares
Investor	Investees	Location	Main business activities	Initial investment amount		Shares held as at December 31, 2021			Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by parent company for the year ended December 31, 2021(Notes 1)	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value (Note2)
M. T. I. CIGARS CO., LTD.	Mercuries Foodservice Co., Ltd.	Samoa	Investment	134,428	134,428	-	21.33%	5,159	－	－	Subsidiary
Mercuries Furniture Co., Ltd.	Mecuries Life Insurance Co., Ltd	Taipei	Life insurance	143,635	143,635	11,795	0.44%	183,091	1,090,798	4,955	Subsidiary
Mercuries Liquor & Food Co., Ltd.	Shang Rih Ltd.	Taipei	Retail	6,000	6,000	600	100.00%	6,871	1,571	1,571	Subsidiary
Simple Mart Retail Co., Ltd.	Simple Mart Plus Co., Ltd.	Taipei	Catering retail	60,000	60,000	6,000	100.00%	41,191	(3,317)	(3,317)	Subsidiary
Simple Mart Retail Co., Ltd.	Sanyou Drugstores, Ltd.	Taipei	Cosmeceutical	55,980	55,980	45,000	45.00%	59,806	10,241	4,375	Subsidiary
Shang Rih Ltd.	Mercuries Liquor & Food Japan Co., Ltd.	Japan	Sales of liquor, beverage and food	4,116	4,116	-	100.00%	6,339	1,686	1,686	Subsidiary
Mercuries Life Insurance Co., Ltd	Fuh Hwa Securities Investment Trust Co.,Ltd.	Taipei	Investment consulting and asset management	825,352	825,352	18,426	30.71%	1,457,545	1,297,013	398,305	Associate
Mercuries Life Insurance Co., Ltd	Horizon Securities Co., Ltd.	Taipei	Integrated Securities Houses	65,139	263,113	7,085	2.14%	113,932	1,239,274	66,114	Associate
Mercuries Life Insurance Co., Ltd	CMG International One Co., Ltd	Taipei	Residence and Buildings Lease Construction and Development	675,000	675,000	67,500	45.00%	669,617	(11,527)	(5,187)	Associate
Mercuries Life Insurance Co., Ltd	CMG International Two Co., Ltd	Taipei	Residence and Buildings Lease Construction and Development	675,000	675,000	67,500	45.00%	664,371	(16,869)	(7,592)	Associate
Mercuries Life Insurance Co., Ltd	NFC II Renewable Power Co., Ltd.	Taipei	Investment, operation and management of solar power plants	157,500	－	15,750	21.00%	157,044	(2,173)	(456)	Associate

Note 1:Including the current amortization of unrealized gains and losses and the difference between the investment cost and the equity net value the current amortization. Note 2:Including rent for related-party of the fair value adjustment of investment property.

202

Appendix 8 Information on investments in Mainland China:

Aendix 8 Information on investments in Mainland China:	Aendix 8 Information on investments in Mainland China:	Aendix 8 Information on investments in Mainland China:	Aendix 8 Information on investments in Mainland China:	Aendix 8 Information on investments in Mainland China:
pp					UNIT：NTD (In Thousands)/Foreign Currency(In Thousands)
Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the period ended December 31, 2021		Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2021	Net income of investee as of December 31, 2021	Ownership held by the company (direct or indirect)	Investment income (loss) recognized by the parent company for the year ended December 31, 2021(Note 2)	Book value of investment in Mainland China as of December 31, 2021	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2021
					Remitted to Mainland China	Remitted back to Taiwan
Nanjing Sanshang Computer Software Development Co., Ltd.	Computer software, information software development, production, sales, self-produced product management and related technical consulting services	US21 million	(2)	668,244	-	-	668,244	(20,933)	100.00%	(20,933) (2)B	210,257	-
Nanjing Dingshang Digital Technology Co., Ltd.	Engineering design and construction of software development, electronic technology research and development, technology transfer service, communication, network, electromechanical, transportation,etc.	RMB4 million	(3)	-	-	-	-	(3,542)	42.00%	(1,488) (2)B	2,141	-

Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2021	Investment amount approved by the Investment Commission of the Ministryof Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA(Note 3)
$701,719 (Note4)	(1)Beijing Mercury Computer Information System Equipment Co., Ltd. invested USD$1,000,000. (2)Nanjing Dingshang Digital Technology Co., Ltd. invested USD$19,818,822.	$1,369,727
$4,624 (Note5)	Freetech Intelligent Systems Co., Ltd invested USD$159,988.	$528,903

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

• (1)Directly invest in a company in Mainland China.

• (2)Through investing in an existing company in the third area, which then invested in the investee in Mainland China. (3)Others.

Note 2: In the ‘Investment income (loss) recognized by the parent company for the year ended December 31, 2020’ column:

• (1)It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.

• (2)Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:

• A. The financial statements that are audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.

• B. The financial statements that are audited and attested by R.O.C. parent company’s auditors.

• C. Others.

Note 3: The numbers in this table are expressed in New Taiwan Dollars. Note 4: Including Beijing Sanshang Computer Information System Equipment Co., Ltd., which has been liquidated and deregistered, but has not yet applied to the Investment Review Committee of the Ministry of Economic Affairs to cancel the investment quota, the investment of USD 1,000,000 has been approved by the Investment Review Committee of the Ministry of Economic Affairs. The liquidation was completed on February 5, 2001.

Note 5: Subsidiaries MA and MF reinvested in Freetech Intelligent Technology Co., Ltd. through PHI FUND, L.P. Shareholding ratio is 0.0372%.

203