Stock Code: 1451

NIEN HSING TEXTILE CO., LTD.

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

Independent Auditors’ Report

The Board of Directors and the Shareholders

Nien Hsing Textile Co., Ltd.

Opinion

We have audited the Individual Balance Sheets of Nien Hsing Textile Co., Ltd. as of December 31, 2021 and 2020, and the Individual Statements of Comprehensive Income, Individual Statements of Changes in Equity, Individual Statements of Cash Flows and the notes to the Individual Financial Statements (including the Summary of Significant Accounting Policies) from January 1 to December 31, 2021 and 2020.

In our opinion, the Individual Financial Statements referred to above present fairly, in all material respects, the individual financial position of Nien Hsing Textile Co., Ltd. as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years ended December 31, 2021 and 2020 in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Individual Financial Statements section of our report. We have stayed independent from Nien Hsing Textile Co., Ltd. as required by The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled other responsibilities as stipulated by 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 refer to the matters that, in our professional judgment, were of most significance in our audit of the 2021 Individual Financial Statements of Nien Hsing Textile Co., Ltd.. These matters were addressed in the context of our audit of the Individual Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Individual Financial Statements of Nien Hsing Textile Co., Ltd. for the year ended December 31, 2021 are stated as follows:

Operating revenue from major clients

Please refer to Note 4 for the accounting policies and critical accounting estimates used for revenue recognition.

Description of Matter

Nien Hsing Textile Co., Ltd. is principally engaged in the manufacturing and sales of denim fabric and apparels. Based on the consideration of the whole financial statements, we have identified the authenticity of the sales revenue from specific customers whose sales growth percentages were higher than the Company’s overall average as a key audit matter.

Audit Procedures

The main audit procedures of the aforementioned key audit matter are as follows:

We studied the internal control mechanism related to sales transactions, and assessed the effectiveness of its design and implementation.
We tested the sales transactions with the above-mentioned customers for the year to validate the authenticity of the sales.

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

The responsibilities of management are to prepare a set of fairly presented Individual Financial Statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and maintain necessary internal controls associated with the preparation in order to ensure the financial statements are free from material misstatements, whether due to fraud or error.

In preparing the Individual Financial Statements, management is responsible for assessing the ability of Nien Hsing Textile Co., Ltd. to continue as a going concern, disclosing associated matters and adopting the going concern basis of accounting unless the management intends to liquidate Nien Hsing Textile Co., Ltd. or cease its operations, or has no realistic alternative but to do so.

Those charged with governance, including the Audit Committee, are responsible for overseeing the financial reporting process.

Auditors' Responsibilities for the Audit of the Individual Financial Statements

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

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

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Identify and assess the risks of material misstatement of the Individual 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.
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 Nien Hsing Textile Co., Ltd.'s internal control.
Assess the appropriateness of the accounting policies adopted by the management level, as well as the reasonableness of their accounting estimates and relevant disclosures.
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 Nien Hsing Textile Co., Ltd.’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the Individual Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause Nien Hsing Textile Co., Ltd. to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the Individual Financial Statements, including the disclosures, and whether the Individual Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities of Nien Hsing Textile Co., Ltd. to express an opinion on the Individual Financial Statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Shu-Juan Ye and Chih-Ming, Shao.

Deloitte & Touche

Taipei, Taiwan Republic of China

March 10, 2022

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying individual 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 individual financial statements shall prevail.

NIEN HSING TEXTILE CO., LTD.

BALANCE SHEETS DECEMBER 31, 2021 AND 2020 Unit: In Thousands of New Taiwan Dollars

	ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Notes receivable (Note 8) Trade receivables, net (Notes 4 and 8) Amounts due from affiliate enterprises (Note 26) Other receivables (Note 8) Current tax assets (Notes 4 and 21) Inventories(Notes 4 and 9) Prepayments Other financial assets-current (Note 27) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4, 7 and 25) Investments accounted for using the equity method (Notes 4 and 10) Property, plant and equipment (Notes 4, 11 and 27) Investment property, net (Notes 4 and 12) Deferred tax assets (Notes 4 and 21) Prepayments for equipment Refundable deposits Total non-current assets Total assets LIABILITIESAND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 13) Notes payable (Note 14) Trade payables (Note 14) Amounts due from affiliate enterprises (Note 26) Other payables (Note 15) Current tax liabilities (Notes 4 and 21) Short-term provisions for onerous contract (Notes 4 and 16) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 21) Long-term borrowings (Note 13) Net defined benefits liabilities (Notes 4 and 17) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY Capital stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other Equity Total equity Total liabilities and equity		December 31,2021 Amount `％` $ 555,708 6 1,556 - 1,590,889 18 277,634 3 14,685 - - - 2,086,078 24 46,416 1 50 - 24,313 - 4,597,329 52 359,059 4 2,507,295 28 836,441 10 114,544 1 368,359 4 56,761 1 11,629 - 4,254,088 48 $ 8,851,417 100 $ 33,783 - 63,818 1 210,653 2 221,812 3 219,680 3 6,206 - 19,359 - 28,723 - 804,034 9 302,690 4 210,000 2 107,691 1 1,409 - 621,790 7 1,425,824 16 1,980,000 22 419,716 5 2,282,156 26 - - 2,901,523 33 5,183,679 59 157,802 ) ( 2 ) 7,425,593 84 $ 8,851,417 100	December 31,2021 Amount `％` $ 555,708 6 1,556 - 1,590,889 18 277,634 3 14,685 - - - 2,086,078 24 46,416 1 50 - 24,313 - 4,597,329 52 359,059 4 2,507,295 28 836,441 10 114,544 1 368,359 4 56,761 1 11,629 - 4,254,088 48 $ 8,851,417 100 $ 33,783 - 63,818 1 210,653 2 221,812 3 219,680 3 6,206 - 19,359 - 28,723 - 804,034 9 302,690 4 210,000 2 107,691 1 1,409 - 621,790 7 1,425,824 16 1,980,000 22 419,716 5 2,282,156 26 - - 2,901,523 33 5,183,679 59 157,802 ) ( 2 ) 7,425,593 84 $ 8,851,417 100		December 31,2020	December 31,2020	December 31,2020
			Amount $ 555,708 1,556 1,590,889 277,634 14,685 - 2,086,078 46,416 50 24,313 4,597,329 359,059 2,507,295 836,441 114,544 368,359 56,761 11,629 4,254,088 $ 8,851,417 $ 33,783 63,818 210,653 221,812 219,680 6,206 19,359 28,723 804,034 302,690 210,000 107,691 1,409 621,790 1,425,824 1,980,000 419,716 2,282,156 - 2,901,523 5,183,679 157,802 ) 7,425,593 $ 8,851,417			Amount $ 424,703 2,328 1,726,465 225,212 16,552 374 1,979,112 38,663 1,990 10,651 4,426,050 277,983 2,654,977 887,317 115,454 396,914 21,950 11,534 4,366,129 $ 8,792,179 $ 151,190 66,429 277,485 255,318 194,934 - 2,734 33,391 981,481 309,295 100,000 130,388 1,506 541,189 1,522,670 1,980,000 419,715 2,282,156 274,992 2,280,629 4,837,777 32,017 7,269,509 $ 8,792,179		`％`
		(		(				5 - 20 3 - - 22 - - - 50 3 30 10 2 5 - - 50 100 2 1 3 3 2 - - - 11 4 1 1 - 6 17 23 5 26 3 26 55 - 83 100

The accompanying notes are an integral part of the Individual Financial Statements.

NIEN HSING TEXTILE CO., LTD.

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

OPERATING REVENUE (Notes 19 and 26) Sales Less: Sales returns and allowances Net sales Revenue from processing Total operating revenue OPERATING COSTS (Notes 9, 17, 20 and 26) Cost of goods sold Processing costs Total operating costs GROSS PROFIT OPERATING EXPENSES (Notes 8, 17 and 20) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss (gain) Total operating expenses OPERATING PROFIT (LOSS) NON-OPERATING INCOME AND EXPENSES (Notes 10, 20, 23, and 26) Interest income Other income Other gains and losses Finance costs Share of profits (losses) of associates accounted for using the equity method Total non-operating income and expenses		2021	`％` 100 - 100 - 100 93 - 93 7 3 2 - ( 1 ) 4 3 - 1 - - - 1		2020
						`％`
						101 1 100 - 100 98 - 98 2 3 2 1 - 6 ( 4 ) - 1 ( 2 ) - ( 3 ) ( 4 )

(Continued)

PROFIT (LOSS) BEFORE INCOME TAX INCOME TAX (EXPENSE) BENEFITS (Notes 4 and 21) NET PROFIT (LOSS) FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 18 and 21) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income Income tax relating to items that will not be reclassified subsequently to profit or loss Share of other comprehensive income of subsidiaries and associates accounted for using the equity method Items that may be reclassified subsequently to profit or loss Share of other comprehensive income of subsidiaries and associates accounted for using the equity method Income tax relating to items that may be reclassified subsequently to profit or loss Other comprehensive income/(loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR EARNINGS (LOSS) PER SHARE (Note 22) From continuing operations Basic Diluted			2021		2020	2020
		Amount $ 286,724 44,033 ) 242,691 1,579 47,934 316 ) 44,353 76,698 ) 15,340 32,192 $ 274,883 $ 1.23 $ 1.22	`％` 4 ( 1 ) 3 - 1 - - ( 1 ) - - 3		Amount $ 549,185 ) 126,119 423,066 ) 11,567 121,313 2,314 ) 457,248 119,657 ) 23,931 492,088 $ 69,022 $ 2.14 ) $ 2.14 )	`％`
	( ( (			( ( ( ( ( (		( 8 ) 2 ( 6 ) - 2 - 6 ( 2 ) 1 7 1

The accompanying notes are an integral part of the Individual Financial Statements.

(Concluded)

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 Unit: In Thousands of New Taiwan Dollars, Except Dividends Per Share

NIEN HSING TEXTILE CO., LTD.

Share capital (Note 18) Number of Shares Amount 198,000 $ 1,980,000 - - - - - - - - - - 198,000 1,980,000 - - - - - - - - - - - - - - 198,000 $ 1,980,000	Retained earnings(Notes 7 and 18) Legal Reserve Special Reserve Unappropriated Earnings $ 2,282,156 $ 321,638 $ 2,471,970 - ( 46,646 ) 46,646 - - ( 423,066 ) - - 9,253 - - ( 413,813 ) - - 175,826 2,282,156 274,992 2,280,629 - - ( 118,800 ) - ( 274,992 ) 274,992 - - 242,691 - - 1,263 - - 243,954 - - - - - 220,748 $ 2,282,156 $ - $ 2,901,523	Retained earnings(Notes 7 and 18) Legal Reserve Special Reserve Unappropriated Earnings $ 2,282,156 $ 321,638 $ 2,471,970 - ( 46,646 ) 46,646 - - ( 423,066 ) - - 9,253 - - ( 413,813 ) - - 175,826 2,282,156 274,992 2,280,629 - - ( 118,800 ) - ( 274,992 ) 274,992 - - 242,691 - - 1,263 - - 243,954 - - - - - 220,748 $ 2,282,156 $ - $ 2,901,523	Retained earnings(Notes 7 and 18) Legal Reserve Special Reserve Unappropriated Earnings $ 2,282,156 $ 321,638 $ 2,471,970 - ( 46,646 ) 46,646 - - ( 423,066 ) - - 9,253 - - ( 413,813 ) - - 175,826 2,282,156 274,992 2,280,629 - - ( 118,800 ) - ( 274,992 ) 274,992 - - 242,691 - - 1,263 - - 243,954 - - - - - 220,748 $ 2,282,156 $ - $ 2,901,523	Other Equity Exchange differences on translating the financial statements of foreign operations (Note 18) Unrealized gain/(loss) on financial assets at FVTOCI (Note 18) ( $ 496,347 ) $ 221,355 - - - - ( 95,726 ) 578,561 ( 95,726 ) 578,561 - ( 175,826 ) ( 592,073 ) 624,090 - - - - - - ( 61,358 ) 92,287 ( 61,358 ) 92,287 - - - ( 220,748 ) ($ 653,431 ) $ 495,629	Other Equity Exchange differences on translating the financial statements of foreign operations (Note 18) Unrealized gain/(loss) on financial assets at FVTOCI (Note 18) ( $ 496,347 ) $ 221,355 - - - - ( 95,726 ) 578,561 ( 95,726 ) 578,561 - ( 175,826 ) ( 592,073 ) 624,090 - - - - - - ( 61,358 ) 92,287 ( 61,358 ) 92,287 - - - ( 220,748 ) ($ 653,431 ) $ 495,629		Total Equity
				Exchange differences on translating the financial statements of foreign operations (Note 18) ( $ 496,347 ) - - ( 95,726 ) ( 95,726 ) - ( 592,073 ) - - - ( 61,358 ) ( 61,358 ) - - ($ 653,431 )
Number of Shares 198,000 - - - - - 198,000 - - - - - - - 198,000	Legal Reserve $ 2,282,156 - - - - - 2,282,156 - - - - - - - $ 2,282,156	Special Reserve $ 321,638 ( 46,646 ) - - - - 274,992 - ( 274,992 ) - - - - - $ -
		( (	( ( (	( ( ( ( ( ( (	( (	( (	$ 7,200,487 - 423,066 ) 492,088 69,022 - 7,269,509 118,800 ) - 242,691 32,192 274,883 1 - $ 7,425,593

The accompanying notes are an integral part of the Individual Financial Statements.

NIEN HSING TEXTILE CO., LTD. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 Unit: In Thousands of New Taiwan Dollars

CASH FLOWS FROM OPERATING ACTIVITIES Profit (loss) before income tax for the year Adjustments for Depreciation expenses Expected credit loss recognized/(reversed) on trade receivables Net (gain) loss on fair value change of financial assets designated as at fair value through profit or loss Finance costs Interest income Share of profits (losses) of associates and subsidiaries accounted for using the equity method Proceeds from disposal of property, plant and equipment Gain on disposal of investments accounted for the using equity method Write-down (reversal of write-down) of inventories Changes in operating assets and liabilities Notes receivable Trade receivables Receivable from associates Other receivables Inventories Prepayments Other current assets Other financial assets Notes payable Trade payables Payables to associates Other payables Provision for onerous contracts Other current liabilities Net defined benefit liabilities Cash generated from/(used in) operations Income tax paid Net cash inflow from operating activities	2021 $ 286,724 90,447 ( 46,222 ) - 1,740 ( 3,081 ) ( 13,035 ) ( 217 ) - ( 61,193 ) 772 181,798 ( 52,422 ) 1,881 ( 45,773 ) ( 7,753 ) ( 13,662 ) 1,940 ( 2,611 ) ( 66,832 ) ( 33,506 ) 24,853 16,625 ( 4,668 ) ( 21,118 ) 234,687 ( 479 ) 234,208	2020
		( $ 549,185 ) 96,494 16,993 ( 1,797 ) 3,930 ( 2,249 ) 243,974 ( 357 ) ( 2 ) 52,784 ( 540 ) ( 293,557 ) 352,139 ( 9,285 ) 322,874 32,736 9,466 ( 1,940 ) ( 2,868 ) 42,512 ( 61,239 ) ( 17,417 ) 2,354 15,988 ( 15,862 ) 235,946 ( 18,897 ) 217,049

(Continued)

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CASH FLOWS FROM INVESTING ACTIVITY Purchase of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Distribution of residual property at fair value through other comprehensive income Return of capital on financial assets at fair value through other comprehensive income Disposal of financial assets at fair value through profit or loss Disposal of long-term equity investments accounted for using the equity method Return of capital on investments accounted for using the equity method Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (Increase) in refundable deposits Increase in prepayments for equipment Interest received Dividends received from subsidiaries and associates Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Increase (decrease) in guarantee deposits received Cash dividends Exercise the right of profit disgorgement Interest paid Net cash used in financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2021 ( $ 33,142 ) - - - - - 128,372 ( 19,266 ) 237 ( 95 ) ( 54,226 ) 3,067 - 24,947 ( 117,407 ) 420,000 ( 310,000 ) ( 97 ) ( 118,800 ) 1 ( 1,847 ) ( 128,150 ) 131,005 424,703 $ 555,708	2020
		( $ 7,452 ) 84,417 217 303 183,049 20 737 ( 235,308 ) 2,181 70 ( 16,353 ) 2,289 150,632 164,802 ( 384,989 ) 150,000 ( 50,000 ) 80 - - ( 3,912 ) ( 288,821 ) 93,030 331,673 $ 424,703

The accompanying notes are an integral part of the Individual Financial Statements. (Concluded)

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

NIEN HSING TEXTILE CO., LTD.

1. GENERAL INFORMATION

Nien Hsing Textile Co., Ltd. (the Company) was established in 1986. It is listed on the Taiwan Stock Exchange and is principally engaged in the manufacture and distribution of denim fabric and apparels. The Company acquired Chih Hsing Textile Co., Ltd. on the merger date of July 1, 2000, with the Company as the surviving entity.

The Individual Financial Statements of the Company are presented in the Company's functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The Individual Financial Statements were approved by the Company's Board of Directors on March 10, 2022.

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

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

The initial application of the IFRSs endorsed and issued into effect by the FSC would not have any material impact on the Company's accounting policies, financial position and financial performance.

b. FSC-endorsed IFRSs applicable starting from 2022

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

Note 1. The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” are applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 2. The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2022.
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Note 3. The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 4. The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the Financial Statements were authorized for issue, the Company found that the adoption of aforementioned standards and amendments has no significant impacts on the Company's financial position and financial performance.

c. IFRSs that have been issued by IASB but not yet endorsed and issued into effect by the FSC

FSC
New,Revised or Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 "Initial Application of IFRS 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" Amendment to IAS 8 "Definition of Accounting Estimates" Amendments to IAS 12 "Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction"	Effective Date Announced byIASB(Note 1)
	To be determined January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

FSC

New,Revised or Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or
Contribution of Assets between an Investor and Its
Associate or Joint Venture”
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17
Amendments to IFRS 17 "Initial Application of IFRS 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"
Amendment to IAS 8 "Definition of Accounting
Estimates"
Amendments to IAS 12 "Deferred Tax Related to Assets
and Liabilities Arising from a Single Transaction"

Effective Date Announced
byIASB(Note 1)

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

Note 1. Unless otherwise specified, the aforementioned New/Amended/Revised Standards and Interpretations shall be effective for the annual reporting periods after the specified dates.
Note 2. The amendments shall be applied prospectively for the annual reporting periods beginning on or after January 1, 2023.
Note 3. The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur during the annual reporting period beginning on January 1, 2023.
Note 4. Except for deferred taxes that will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of Compliance
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The Individual Financial Statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs approved and promulgated by the FSC.

b. Basis of Preparation

The Individual Financial Statements have been prepared on the historical cost basis except for financial instruments that are measured at fair value and net defined benefit liabilities which is arrived at by taking the present value of defined benefit obligation minus the fair value of planned assets.

The fair value measurement is classified into 3 levels based on the observability and importance of related inputs:

1) Level 1 inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities available at the measurement date.
2) Level 2 inputs: Inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
3) Level 3 inputs: Unobservable inputs for an asset or liability.

The Company accounts for subsidiaries and associates by using the equity method in the preparation of the Individual Financial Statements. In order to align the amounts of profit or loss, other comprehensive income, and equity stated on the Individual Financial Statements for the current year with the amounts attributable to Owners of the Company as stated on the Consolidated Financial Statements for the current year, the Company accounted for the accounting differences between the consolidated basis and the individual basis by adjusting “Investment accounted for using the equity method”, “Share of profit or loss in subsidiaries and associates accounted for using the equity method”, “Share of other comprehensive income in subsidiaries and associates accounted for using the equity method”, and related equity items.

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

Current assets include:

1) Assets held primarily for trading purposes;
2) Assets to be realized within 12 months after the balance sheet date; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the Individual Financial Statements are authorized for issue; and
3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

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

d. Foreign Currency
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When preparing the Individual Financial Statements, transactions in currencies other than the Company's functional currency (i.e. foreign currencies) are converted into the functional currency at the rates of exchange prevailing at the dates of the transactions.

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

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined, with exchange differences arising therefrom recognized in profit or loss, except when fair value changes are recognized in other comprehensive income, in which case the exchange differences are recognized in other comprehensive income.

Non-monetary items that are measured in terms of historical costs in a foreign currency are translated using the exchange rate at the date of the transaction and are not retranslated.

For the purpose of presenting the Individual Financial Statements, the functional currencies of the Company's entities (including subsidiaries and associates in other countries that use currencies different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

On the disposal of a foreign operation (i.e. a disposal of the Company's entire interest in a foreign operation or a disposal involving the loss of control over a subsidiary that includes a foreign operation), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences is reclassified to equity transaction in that foreign operation but is not recognized in profit or loss. For all other situations of partial disposal of a foreign operation, the proportionate share of the accumulated exchange difference recognized in other comprehensive income is reclassified to profit or loss.

e. Inventory

Inventories consist of raw materials, finished goods and work-in-progress. Inventories are measured at the lower of costs and net realizable value. When comparing costs and net realizable values, they are based on individual items except for the same type of inventory. The net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost of inventory is calculated using the weighted-average method.

f. Investment in Subsidiaries

The Company adopted the equity method for accounting treatment of investment in subsidiaries and associates.

Subsidiaries refer to individuals (including structural individuals) that the Company has control over.

Under the equity method, the investment is initially treated at cost and adjusted thereafter for the post-acquisition changes in the Company's share of profit or loss, share of other

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comprehensive income in subsidiaries, and changes in earnings distribution from subsidiaries. In addition, changes in the Company's share of subsidiaries’ other equity are recognized in proportion to its shareholding ratio.

When changes in the ownership interest of the Company in subsidiaries do not cause the Company to lose control, they are recognized as equity transactions. The difference between the carrying amounts of the investment and the fair value of the consideration paid or received is recognized directly in equity.

When the Company's share of losses of a subsidiary equals or exceeds its interest in that subsidiary (including any carrying amount of the investment accounted for by the equity method and long-term interests that, in substance, form part of the Company's net investment in the subsidiary), the Company shall continue to recognize losses based on the shareholding percentage.

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

When the Company assesses impairment, the test shall be performed on the basis of cash generating unit within the financial statements. The recoverable amount and the carrying amount of cash generating unit shall be compared. If the recoverable amount of the asset later increases, the reversal of the impairment loss shall be recognized as profits, but the carrying amount of the asset after reversal of impairment loss shall not exceed the carrying amount of the asset before recognizing the impairment loss, net of amortization. Impairment losses attributable to goodwill shall not be reversed in subsequent periods.

When the Company loses control on a subsidiary, the Company measures its retaining interest at fair value of the former subsidiary at the date when control was lost; any difference between the retaining interest, any proceeds from disposal, and the book value on the date when control was lost is recognized in profit or loss. The Company Accounted for all amounts recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the Company had directly disposed of the related assets and liabilities.

The unrealized profit or loss from downstream transactions between the Company and the subsidiary is eliminated in the Individual Financial Statements. Profit or loss generated from upstream transactions between the Company and subsidiaries and lateral transactions between subsidiaries shall only be recognized in the Individual Financial Statements when it is not related to the Company's interest in the subsidiaries.

g. Investment in Associates

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

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

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate. In addition, equity changes in associates are recognized based on shareholding ratio.

Any excess of the cost of acquisition over the Company's share of the net fair value of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as

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

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

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

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

The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained interest is measured at fair value at that date. The difference between the fair value, proceeds from disposal, and the book value of the investment on the date when the equity method ceases to apply is recognized in profit or loss. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required had that associate directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Company continues to apply the equity method and does not remeasure the retained interest.

Any gain or loss from transactions, either downstream, upstream, or lateral, between the Company and associates are recognized in the Individual Financial Statements only to the extent that such recognition does not affect the Company’s interest in the associate.

h. Property, Plant and Equipment

Property, plant and equipment are stated at costs less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are carried at costs, less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible

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for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Except for self-owned land, which is not depreciated, depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. If the lease term of the item of property, plant and equipment is shorter than its useful life, the asset is depreciated over the lease term. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in estimates accounted for on a prospective basis.

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

i. Investment property

Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

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

j. Impairment of property, plant and equipment

At the end of each reporting period, the Company reviews the carrying amounts of its Property, plant and equipment to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

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

k. Financial Instruments

Financial assets and financial liabilities shall be recognized in the Individual Financial Statements when the Company becomes a party of the financial instrument contract.

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

18 -

attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

1) Financial assets

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

a) Measurement category

Financial assets held by the Company include financial assets at amortized cost and investments in equity instruments at FVTOCI.

i. Financial assets at amortized costs

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

i) Held under a business model whose purpose of holding such financial assets is to collect the contractual cash flows; and
ii) The contractual terms give rise to cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding.

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

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

i) In the case of purchased or originated credit-impaired financial assets, interest revenue is recognized by applying the credit-adjusted effective interest rate to the amortized costs.
ii) Financial assets that are not credit-impaired on purchase or origination but have subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized costs of such financial assets in subsequent reporting periods.

Credit-impaired financial assets are those where the issuer or debtor has experienced major financial difficulties or defaults, the debtor is likely to claim bankruptcy or other financial restructuring, or disappearance of an active market for the financial asset due to financial difficulties.

Cash equivalents include time deposits with original maturities within three months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value and short-term transactions instruments.

ii. Investments in equity instruments at FVTOCI

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

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The investments in equity instruments measured at fair value through other comprehensive income and losses are measured at fair value. Subsequent changes in fair value are presented in other comprehensive income or loss and accumulated in other equity. At the time of investment disposal, the accumulated gains and losses will not be reclassified as profit or loss but transferred directly to retained earnings.

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

b) Impairment of financial assets

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

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

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

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

i. Internal or external information show that the debtor is unlikely to pay its creditors.
ii. When the underlying debt is overdue.

The impairment loss of the above financial assets is reduced by the allowance account to reduce the book amount.

c) Derecognition of financial assets

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

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

2) Equity instruments
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Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

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

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

3) Financial liabilities
a) Subsequent measurement

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

b) Derecognition of financial liabilities

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

l. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. 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 (where the effect of the time value of money is material).

Onerous contract

Where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract, the present obligations arising under onerous contracts are recognized and measured as provisions.

m. Revenue Recognition

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

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

Sale of goods

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

The Company does not recognize revenue on materials processing because this processing does not involve a transfer of control.

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n. Leasing

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

1) The Company as lessor

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

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

2) The Company as lessee

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

o. Borrowing Costs

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

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

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

p. Government Grants

Government grants are only recognized when they can be reasonably assured that the combined Company shall comply with the conditions imposed by government grants and that such grants can be received.

Government grants are recognized in other income on a systematic basis over the periods in which the Company recognizes expenses for the related costs for which the grants are intended to compensate.

If the government subsidy is used to compensate fees or losses that had occurred, or is given to the Company for the purpose of immediate financial support without related future costs, it can be recognized as income within the collectible period.

q. Employee Benefits
a. Short-term employee benefits

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

b. Retirement benefits

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

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

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

r.

Income Tax

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

1) Current tax

According to the Income Tax Act of the Republic of China (ROC), an additional tax at 10% of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain earnings.

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

2) Deferred tax

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

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

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

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based

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

3) Current and deferred tax

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

Where current tax or deferred tax arises from the initial accounting for an investment in a subsidiary, the tax effect is included in the accounting for the subsidiary.

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

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

The Company takes into account the economic impact of the COVID-19 outbreak in its critical accounting judgments and the management will constantly review the estimations and underlying assumptions. If an amendment of estimates only affects the current period, it shall be recognized in the period of amendment; if an amendment of accounting estimates affects the current year and future periods, it shall be recognized in the period of amendment and future periods.

6. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash on hand Checking accounts and demand deposits Cash equivalents (Investments with original maturities within three months) Short-term bills	December 31,2021 $ 2,758 113,190 439,760 $ 555,708	December 31,2020
			$ 2,487 372,289 49,927 $ 424,703

The market interest rate intervals of cash in bank and short-term bills at the end of the reporting period are as follows:

reporting period are as follows:
Bank deposits Short-term bills	December 31,2021 0.001%`～`0.1% 0.21%	December 31,2020
		0.005%`～`0.43% 0.24%

7.

FINANCIAL ASSETS AT FVTOCI - NON-CURRENT December 31,2021 Domestic investment Listed shares and emerging market shares $ 343,664 Unlisted shares 15,395 $ 359,059	December 31,2020	December 31,2020
		$ 262,486 15,497 $ 277,983

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

Youfu Investment Co., Ltd. was liquidated in March 2019, and the Company received a residual property distribution of $217 thousand in 2020. In 2020, the Company transferred related other equity - unrealized gain or loss on financial assets measured at fair value through other comprehensive income of $217 thousand to retained earnings.

The Company participated in Gongwin BioPharm Holdings, Co., Ltd.'s issuance of ordinary shares in 2020 and invested $7,452 thousand.

To diversify risks, the Company adjusted its investment position in 2020. The Company disposed of some shares of Gongwin BioPharm Holdings, Co., Ltd. and Mycenax Biotech Inc. for $84,417 thousand, and transferred other equity - unrealized gain or loss of financial assets at fair value through other comprehensive income of $57,240 thousand to retained earnings.

Der Yang Biotechnology Venture Capital Co., Ltd. implemented a capital reduction in 2020 and returned shares of $303 thousand.

The Company participated in Mycenax Biotech Inc.'s issuance of ordinary shares in 2021 and invested $33,142 thousand.

8.	NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES December 31,2021 December 31,2020 Notes receivable - operating $ 1,556 $ 2,328 Trade receivables Trade receivables $ 1,641,421 $ 1,824,342 Less: Allowance for impairment loss ( 50,532 ) ( 97,877 ) $ 1,590,889 $ 1,726,465 Other receivables Payment on behalf of others $ 719 $ 3,282 Interest 23 9 Others 13,943 13,261 $ 14,685 $ 16,552	NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES December 31,2021 December 31,2020 Notes receivable - operating $ 1,556 $ 2,328 Trade receivables Trade receivables $ 1,641,421 $ 1,824,342 Less: Allowance for impairment loss ( 50,532 ) ( 97,877 ) $ 1,590,889 $ 1,726,465 Other receivables Payment on behalf of others $ 719 $ 3,282 Interest 23 9 Others 13,943 13,261 $ 14,685 $ 16,552	NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES December 31,2021 December 31,2020 Notes receivable - operating $ 1,556 $ 2,328 Trade receivables Trade receivables $ 1,641,421 $ 1,824,342 Less: Allowance for impairment loss ( 50,532 ) ( 97,877 ) $ 1,590,889 $ 1,726,465 Other receivables Payment on behalf of others $ 719 $ 3,282 Interest 23 9 Others 13,943 13,261 $ 14,685 $ 16,552
		(	$ 2,328 $ 1,824,342 97,877 ) $ 1,726,465 $ 3,282 9 13,261 $ 16,552

a. Trade receivables

The average credit period of sales of goods was 30 days to 90 days. No interest was charged on the trade receivables. In determining the recoverability of a trade receivable, the Company considered any change in the credit quality of the trade receivable since the date credit was initially granted to the end of the reporting period. The Company will first review the credit rating of their new customers and, if necessary, obtain sufficient guarantees to mitigate the risk of financial losses due to default. The Company will use other publicly available financial information and historical transaction records to rate its major customers. The Company continuously monitors the credit risk and the credit rating of the debtor, and manages the credit risk insurance by reviewing and approving the debtor’s credit limit. In addition, the Company will review the recoverable amount of the receivables one by one on the balance sheet date to ensure that adequate allowance is

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made for possible irrecoverable amounts. Accordingly, the management of the Company believes that the credit risk of the Company has been significantly reduced.

The Company applies the simplified approach when providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated with reference to past default experiences of the debtor and an analysis of the debtor’s current financial position. The Company considers the aging of accounts receivable, customer ratings and the mechanism for the retention of accounts receivable, etc. comprehensively when determining the Company’s expected credit loss rate.

The expected credit loss rates for the years ended December 31, 2021 and 2020 ranged from 0.5% ~ 50% and 0.5% ~ 15%, respectively. The Company recognizes 100% allowance for doubtful accounts when there is information indicating that a debtor is experiencing severe financial difficulty and there is no realistic prospect of recovery of the receivable. Furthermore, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The Company’s allowance for trade receivables are as follows:

December 31, 2021

December 31, 2021
Gross carrying amount Loss allowance (Lifetime ECL) Amortized costs		Trade receivables without overdue $ 1,424,216 36,647 ) $ 1,387,569		1 to 45days $ 206,802 9,020 ) $ 197,782	Over 46days $ 10,403 ( 4,865 ) $ 5,538		Total
	(		(		(	(	$ 1,641,421 50,532 ) $ 1,590,889

December 31, 2020

December 31, 2020
Gross carrying amount Loss allowance (Lifetime ECL) Amortized costs		Trade receivables without overdue $ 1,626,922 84,685 ) $ 1,542,237		1 to 45days $ 186,710 10,912 ) $ 175,798	Over 46days $ 10,710 ( 2,280 ) $ 8,430		Total
	(		(		(	(	$ 1,824,342 97,877 ) $ 1,726,465

The above aging analysis was based on the overdue days.

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

Balance at January 1 Add: Impairment loss provided (reversed) / Bad debt expenses Less: Actual write-off Balance at December 31	2021 $ 97,877 ( 46,222 ) ( 1,123 ) $ 50,532		2020
			$ 80,884 16,993 - $ 97,877

b. Notes receivable and other receivables

As the Company estimated notes receivable and other receivables’ recoverable amounts and carrying amounts to be equal, the Company did not recognize an allowance for impairment losses.

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9. INVENTORY

INVENTORY
Finished goods Work in process Raw materials Inventory in transit	December 31,2021 $ 265,097 675,027 1,037,490 108,464 $ 2,086,078	December 31,2020
			$ 281,123 545,116 1,141,385 11,488 $ 1,979,112

The costs of inventories recognized as costs of goods sold for the years ended December 31, 2021 and 2020 were $7,385,393 thousand and $6,876,027 thousand, respectively. The costs of goods sold included inventory valuation loss and obsolete loss (recovered gains) of ($61,193) thousand and $52,784 thousand, respectively.

10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

estment in Subsidiaries Investment in Subsidiaries Nien Hsing International (B.V.I.) Co., Ltd. Nien Hsing Garment (Ninh Binh) Co., Ltd. Nien Hsing International Investment Co., Ltd. Chih Hsing Garment (Cambodia) Co., Ltd. Name of Subsidiary Nien Hsing International (B.V.I.) Co., Ltd. Nien Hsing Garment (Ninh Binh) Co., Ltd. Nien Hsing International Investment Co., Ltd. Chih Hsing Garment (Cambodia) Co., Ltd.	December 31,2021 December 31,2020 $ 2,507,295 $ 2,654,977 December 31,2021 December 31,2020 $ 1,671,281 $ 1,897,744 185,391 184,588 579,782 500,665 70,841 71,980 $ 2,507,295 $ 2,654,977 Proportion of Ownership	December 31,2020
		$ 2,654,977 December 31,2020

	December 31,2021 100.00% 100.00% 100.00% 100.00%	December 31,2020
		100.00% 100.00% 100.00% 100.00%

Investment in Subsidiaries

a. Investment in Subsidiaries

The share of profits and loss and share of other comprehensive income in subsidiaries recognized using the equity method in 2021 and 2020 is based on subsidiaries’ financial statements for the same periods that have been audited by an independent auditor.

Nien Hsing International (B.V.I.) Co., Ltd. distributed cash dividends of $148,000 thousand (USD5,000 thousand) for 2020.

China International Investment Co., Ltd. distributed cash dividends of $2,632 thousand for 2020.

27 -

China International Investment Co., Ltd. implemented a capital reduction in 2020 and returned shares of $737 thousand.

Nien Hsing International (B.V.I) Co., Ltd. implemented a capital reduction in 2021 and returned shares of $128,372 thousand.

b. Investment in Associates

Aggregate information of associates that are not individually material

The Company’s share of: Net loss Other comprehensive income Total comprehensive income for the year	2020
	( $ 4,012 ) - ($ 4,012 )

Please refer to Table 5 “Information on Investees” for the nature of activities, principal place of business and country of incorporation of the associates.

All the aforementioned associates are accounted for using the equity method.

The Company disposed of all the shares of China International Investment Co., Ltd. in November 2020 for $20 thousand and recognized a gain on disposal of $2 thousand under other gains and losses. Please refer to Note 20 (c) for other gains and losses.

11. PROPERTY, PLANT AND EQUIPMENT

Carrying amount Land and land improvements Buildings Machinery and equipment Transportation equipment Office equipment Miscellaneous equipment Construction in progress	December 31,2021 $ 234,607 341,821 181,509 5,406 8,026 64,400 672 $ 836,441	December 31,2020	December 31,2020
			$ 230,001 351,234 219,757 213 5,311 80,801 - $ 887,317

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

Land improvements 3 to 4 years Buildings Plants and main buildings 25 to 60 years Construction for drain water 3 to20 years Machinery and equipment 3 to 11 years Transportation equipment 2 to 10 years Office equipment 2 to 10 years Miscellaneous equipment 3 to20 years

For changes of property, plant and equipment for the years ended December 31, 2021 and 2020, please refer to Table 7.

Please refer to Note 27 for the carrying amounts of property, plant and equipment pledged by the Company to secure borrowings.

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The Company signed trust deeds with related parties for agricultural lots the Company bought under their names, under which both parties agreed to follow the Company’s written instructions on the use of these assets and attribute any profits generated from these assets to the Company.

12. INVESTMENT PROPERTY

INVESTMENT PROPERTY
Cost Balance at January 1, 2020 Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expenses Balance at December 31, 2020 Carrying amounts at December 31, 2020 Cost Balance at January 1, 2021 Balance at December 31, 2021 Accumulated depreciation Balance at January 1, 2021 Depreciation expenses Balance at December 31, 2021 Carrying amounts at December 31, 2021		Land $ 80,284 $ 80,284 $ - - $ - $ 80,284 $ 80,284 $ 80,284 $ - - $ - $ 80,284

The above items of investment properties were depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings Main Buildings 50 to 55 years Construction Improvements 5 years

As of December 31, 2021 and 2020, the fair values of the investment properties of the Company were $289,671 thousand and $291,055 thousand, respectively. The management of the Company conducted the evaluation with reference to the market prices of similar real estate transactions in the neighborhood to derive the fair values, which were not provided by independent appraisers.

The investment properties were leased out for 1 to 5 years. The lessees do not have bargain purchase options to acquire the investment properties at the end of the lease terms

The maturity analysis of lease payments receivable under operating leases of investment properties was as follows:

properties was as follows:
Year 1 Year 2 Year 3	December 31,2021 $ 6,235 1,622 422	December 31,2020
		$ 8,203 6,908 308

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Year 4 Year 5	403 93 $ 8,775	231 66 $ 15,716

13. BORROWINGS

a. Short-term borrowings

December 31, 2021 December 31, 2020 Unsecured borrowings - Line of credit borrowings $ 33,783 $ 151,190 Interest rate ranges Unsecured borrowings Line of credit borrowings 1.08% ～ 1.27% 0.81% ～ 1.48%

b. Long-term borrowings

Long-term borrowings
Secured borrowings Guaranteed loans (1) Pledged loans (2) Subtotal Interest rate ranges Secured borrowings Guaranteed loans Pledged loans	December 31,2021 $ - 210,000 $ 210,000 - 0.77%	December 31,2020
			$ 100,000 - $ 100,000 0.99% -

1) Refers to the three-year credit line agreement amounting to $500,000 thousand signed by the Company with Hua Nan Bank in 2020. The borrowings are a revolving line of credit, with the duration from June 19, 2020 to June 19, 2023. The Company’s chairman, Chao-Kuo Chen, acts as a joint guarantor for such borrowings. The borrowings were fully repaid in 2021.
2) The Company signed the three-year credit line agreement amounting to $700,000 thousand with Cathay United Bank in 2021. The borrowings are a revolving line of credit, with the duration from February 2, 2021 to February 2, 2024. The line of credit is secured by the land and buildings owned by the Company (please refer to Note 27).

14. NOTES PAYABLE AND TRADE PAYABLES

Notes payable Trade payables	December 31,2021 $ 63,818 $ 210,653	December 31,2020	December 31,2020
			$ 66,429 $ 277,485

Both notes payable and trade payables were generated from operating activities.

The average credit period on trade payables was 30 days to 120 days in principle. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

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15. OTHER PAYABLES

OTHER PAYABLES
Payables for salaries or bonuses Payables for annual leave Payables for remuneration of directors and supervisors Others	December 31,2021 $ 134,498 14,363 9,000 61,819 $ 219,680	December 31,2020
			$ 107,235 14,559 8,500 64,640 $ 194,934

16. PROVISION FOR ONEROUS CONTRACTS

Onerous contract	December 31,2021 $ 19,359	December 31,2020	December 31,2020
			$ 2,734

The provision for onerous contracts is recognized when the Company assesses that the costs of fulfilling the contract obligations exceed the economic benefits expected to be obtained from the contract.

17. RETIREMENT BENEFIT PLANS

a. Defined contribution plan

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

b. Defined benefit plan

The defined benefit plan adopted by the Company in accordance with the Labor Standards Act is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company contribute amounts equal to 3% (6% from September 2015) of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who would become eligible for retirement in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Company has no right to influence the investment policy and strategy.

The amounts included in the Individual Balance Sheet in respect of the Company’s defined benefit plans are as follows:

defined benefit plans are as follows:
Present value of the defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31,2021 $ 266,340 (158,649 ) $ 107,691	December 31,2020
	(	(	$ 296,323 165,935 ) $ 130,388

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Movements in net defined benefit liabilities are as follows: Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets January 1, 2020 $ 333,746 ($ 175,929 ) Service costs Current service costs 2,966 - Past service costs (gain) ( 1,808 ) - Net interest expense (income) 2,473 ( 1,360 ) Recognized in profit or loss 3,631 ( 1,360 ) Remeasurements Return on plan assets (excluding amounts included in net interest) - ( 5,683 ) Actuarial (gain) loss - changes in demographic assumptions 11 - Actuarial (gain) loss - experience adjustments ( 19,730 ) - Actuarial (gains) losses – changes in financial assumptions 13,835 - Recognized in other comprehensive income ( 5,884 ) ( 5,683 ) Contributions from the employer - ( 18,133 ) Benefits paid ( 35,170 ) 35,170 December 31, 2020 $ 296,323 ($ 165,935 ) January 1, 2021 $ 296,323 ($ 165,935 ) Service costs Current service costs 2,183 - Past service costs (gain) ( 4,900 ) - Net interest expense (income) 871 ( 506 ) Recognized in profit or loss ( 1,846 ) ( 506 ) Remeasurements Return on plan assets (excluding amounts included in net interest) - ( 2,520 ) Actuarial (gain) loss - changes in demographic assumptions 1,041 - Actuarial (gain) loss - experience adjustments 11,506 - Actuarial (gains) losses – changes in financial assumptions ( 11,606 ) - Recognized in other comprehensive income 941 ( 2,520 ) Contributions from the employer - ( 17,985 ) Benefits paid ( 29,078 ) 28,297 December 31, 2021 $ 266,340 ($ 158,649 )		Net Defined Benefit Liabilities
	$ 157,817 2,966 ( 1,808 ) 1,113 2,271 ( 5,683 ) 11 ( 19,730 ) 13,835 ( 11,567 ) ( 18,133 ) - $ 130,388 $ 130,388 2,183 ( 4,900 ) 365 ( 2,352 ) ( 2,520 ) 1,041 11,506 ( 11,606 ) ( 1,579 ) ( 17,985 ) ( 781 ) $ 107,691

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An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

defined benefit plans is as follows:
Operating costs Operating expenses		2021 $ 1,731 4,083 ) $ 2,352 )		2020
	( (		(	$ 2,939 668 ) $ 2,271

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

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investments are conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by the plan assets should not be below the interest rate for a 2-year time deposit with local banks.
2) Interest rate risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

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

the actuarial valuations are as follows:
Discount rate Expected rate of salary increase Turnover rate	December 31,2021 0.70% 2.00% 0.26%	December 31,2020
		0.30% 2.00% 0.47%

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

Discount rate Increase by 0.25% Decrease by 0.25% Expected rate of salary increase Increase by 0.25% Decrease by 0.25% Turnover rate 10% increase 10% decrease	December 31,2021 ($ 6,680 ) $ 6,930 $ 6,823 ($ 6,612 ) ($ 22 ) $ 22	December 31,2020	December 31,2020
	( ( (	( ( (	$ 7,747 ) $ 8,049 $ 7,892 $ 7,639 ) $ 109 ) $ 109

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

correlated.
The expected contributions to the plan for the next year The average duration of the defined benefit obligation	December 31,2021 $ 17,760 10 years	December 31,2020
			$ 17,400 10 years

18. EQUITY

a. Share capital

Ordinary shares

UITY Share capital Ordinary shares
Number of shares authorized (in thousands) Authorized capital Number of shares issued and fully paid (in thousands) Shares issued	December 31,2021 600,000 $ 6,000,000 198,000 $ 1,980,000	December 31,2020
			600,000 $ 6,000,000 198,000 $ 1,980,000

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

b. Capital surplus

Share premiums Treasury share transactions Gain on disposal of property, plant and equipment Consolidation excess The difference between consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition Changes in percentage of ownership interest in subsidiaries Others	December 31,2021 $ 89 5,952 255 380,471 26,599 1,194 5,156 $ 419,716	December 31,2020	December 31,2020
			$ 89 5,952 255 380,471 26,599 1,194 5,155 $ 419,715

The capital surplus arising from shares issued in excess of par (including share premiums from the issuance of ordinary shares, consolidation excess, the difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition and treasury share transactions) and donations may be used to offset a deficit; in addition, when the Company has no deficit, the capital surplus may be distributed as cash dividends, or may be transferred to share capital within a certain percentage of the Company’s capital surplus once a year The capital surplus from the share of changes in equities of subsidiaries may be used to offset a deficit.

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c. Retained earnings and dividend policy

Under the dividend policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonuses to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors before and after the amendment, please refer to employee benefits expense in Note 20(g).

By considering the financial/business/operating factors, e.g. the Company shall distribute no less than 50% of the distributable income arrived at by taking the net income after tax less deficit make-up, legal reserves and special reserves, unless saving for the purposes of improving the financial structure, reinvestments, production expansion or other capital expenditures in which capital is required. Appropriations may be in the form of cash dividends or stock dividends, with cash dividends currently preferred because the Company’s business is mature. In addition, any stock dividends distributed should not exceed 50% of the total dividends distributed. If the Company has no unappropriated earnings, if earnings appropriable are much less than the prior year’s, or if certain financial, business and operating factors need to be considered, the legal reserve may be distributed in accordance with relevant laws or regulations or as requested by the authorities in charge.

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

The Company managed appropriation or reversal of special reserve in accordance with relevant ordinances issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”. If other stockholders' equity deductions are reversed afterward, the reversal may be applicable for the appropriation of earnings.

The appropriations of earnings for 2020 approved in the shareholders’ meeting on August 11, 2021 are as follows:

11, 2021 are as follows:
Cash dividends	Appropriation of Earnings $ 118,800	Dividends per Share(NT$)
		$ 0.6

As per relevant ordinances issued by the FSC, the Company’s shareholders’ meetings held on August 11, 2021 and June 16, 2020 resolved to reverse the special reserve of $274,992 thousand and $46,646 thousand, respectively.

d. Special Reserve

Special Reserve
Balance at January 1 Special reserve reversed Decrease in deduction to other equity Balance at December 31		2021 $ 274,992 274,992 ) $ -		2020
	(		(	$ 321,638 46,646 ) $ 274,992

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e. Other equity items
1) Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Share of exchange difference of investees accounted for using the equity method Income tax related to gains arising on translation of the net assets of foreign operations Balance at December 31	2021 ( $ 592,073 ) ( 76,698 ) 15,340 ($ 653,431 )	2020
		( $ 496,347 ) ( 119,657 ) 23,931 ($ 592,073 )

Exchange differences relating to the translation of the results and net assets of the Company’s foreign operations from their functional currencies to the Company’s presentation currency (New Taiwan dollars) were recognized directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation reserve were reclassified to profit or loss on the disposal of the foreign operation.

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

Balance at January 1 Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income Share of other comprehensive income of subsidiaries and associates accounted for using the equity method Accumulated losses (gains) on disposal of equity instruments by subsidiaries accounted for using the equity method, transferred to retained earnings Accumulated gains and losses on disposal of equity instruments, transferred to retained earnings Balance at December 31	2021 $ 624,090 47,933 44,354 ( 220,748 ) - $ 495,629	2020
		$ 221,315 121,313 457,248 ( 118,369 ) ( 57,457 ) $ 624,090

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19. REVENUE

REVENUE
Revenue from contracts with customers Revenue from sale of goods Revenue from processing		2021 $ 7,990,936 6,888 $ 7,997,824		2020
				$ 7,007,059 - $ 7,007,059

a. Description of customer contracts

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

Sale of goods

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

The Company does not recognize revenue on materials processing because this processing does not involve a transfer of control.

b. Contract balances

b.	Contract balances
c.	Notes receivable and Trade receivables (Note 8) Disaggregation of revenue 2021 Revenue from sale of goods Revenue from processing 2020 Revenue from sale of goods	December 31, 2021 $ 1,592,445 Textile Department $ 4,148,952 468 $ 4,149,420 Textile Department $ 2,913,144	December 31, 2020 $ 1,728,793 Garment Department $ 3,841,984 6,420 $ 3,848,404 Garment Department $ 4,093,915	January1,2020
					$ 1,451,689 Total
					$ 7,990,936 6,888 $ 7,997,824 Total
					$ 7,007,059

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20. NET PROFIT (LOSS) FOR THE YEAR

Net profit (loss) for the current year comprises the following items:

a.	Interest income
			2021			2020
	Bank deposits	$	3,081		$	2,249
b.	Other income
			2021			2020
	Rental income (Note 26)	$	8,580		$	8,565
	Compensation revenue		10,367			20,105
	Government grants (Note 23)		-			34,968
	Others		19,383			26,023
		$	38,330		$	89,661
c.	Other gains and losses
			2021			2020
	Proceeds from disposal of property,
	plant and equipment	$	217		$	357
	Foreign exchange loss - net	(	27,381	)	(	123,474	)
	Net gain on financial instrument at
	fair value through profit or loss		-			1,797
	Compensation loss	(	1,100	)	(	1,360	)
	Gain on disposal of equity
	investment		-			2
	Others	(	942	)	(	1,321	)
		($	29,206	)	($	123,999	)
d.	Finance costs
			2021			2020
	Interest on bank loans	$	1,740		$	3,930
e.	Depreciation expenses
			2021			2020
	Property, plant and equipment	$	89,537		$	95,584
	Investment property		910			910
		$	90,447		$	96,494
	An analysis of depreciation by
	function
	Operating costs	$	78,296		$	83,939
	Operating expenses		11,241			11,645
	Non-operating expenses		910			910
		$	90,447		$	96,494

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f. Employee benefits expense

Employee benefits expense
Retirement benefits (Note 17) Defined contribution plan Defined benefit plan Short-term employee benefits By function Operating costs Operating expenses		2021 $ 17,742 2,352 ) 15,390 603,254 $ 618,644 $ 417,563 201,081 $ 618,644		2020
	(			$ 17,467 2,271 19,738 538,935 $ 558,673 $ 369,181 189,492 $ 558,673

g. Employees’ Compensation

According to the Articles of Incorporation of the Company, the Company accrued employees’ compensation at rates higher than 1% of net profit before income tax. The distribution of earnings is based on past experience and current operating circumstances. The employees’ compensation for 2021 resolved by the Board of Directors amounted to $2,897 thousand on March 10, 2022. Due to loss before income tax, it is not required to appropriate employees’ compensation in 2020.

If there is a change in the amounts after the annual Individual Financial Statements are authorized for issue, the differences should be recorded as a change in the accounting estimate in the following year.

Due to loss before income tax in 2020 and 2019, the Company did not appropriate employees’ compensation. There was no difference between the actual amounts of employees’ compensation paid and the amounts recognized in the Consolidated Financial Statements for the years ended December 31, 2020 and 2019.

Information about employee compensation approved by the Board of Directors for 2022 and 2021 is available at the Taiwan Stock Exchange Market Observation Post System website.

21. INCOME TAX

a. Major components of tax benefits (expenses) recognized in profit or loss

Current tax In respect of the current year Deferred tax In respect of the current year Adjustments for previous years Income tax benefit (expense) recognized in profit or loss	2021 ( $ 11,171 ) ( 36,974 ) 4,112 ($ 44,033 )		2020
			$ - 115,010 11,109 $ 126,119

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

	2021		2020
Profit (loss) before income tax	$ 286,724		($ 549,185	)
Income tax benefits (expenses)
calculated at the statutory rate	( $ 57,345	)	$ 109,837
Nondeductible expenses in
determining taxable income	9,200		5,173
Adjustments for income tax
(expense) benefits of prior
periods	4,112		11,109
Income tax benefit (expense)
recognized in profit or loss	($ 44,033	)	$ 126,119

The applicable tax rate for the Company is 20%.

b. Income tax recognized in other comprehensive income

			2021				2020
	Deferred tax
	Income tax expenses recognized in
	the period
	`－`Translation of foreign
	operations	$	15,340			$	23,931
	`－`Remeasurement of defined
	benefit plans	(	316		)	(	2,314		)
		$	15,024			$	21,617
c.	Current tax assets and liabilities
		December 31,		2021		December 31,		2020
	Current tax assets
	Tax refund receivable	$		-		$	374
	Current tax liabilities
	Income tax payable	$	6,206			$		-

d. Deferred tax assets and liabilities

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

2021

2021
Deferred Tax Assets Temporary difference Exchange differences on translation of foreign operations Allowance for loss of write-down of inventories Allowance for doubtful accounts Defined benefits retirement plans Provisions for warranty Loss carryforwards Others		Balance at January1 $ 273,220 36,675 16,138 25,438 5,837 17,769 21,837 $ 396,914	Recognized in profit or loss $ - ( 12,239 ) ( 9,170 ) ( 5,169 ) ( 709 ) ( 17,769 ) 1,477 ($ 43,579 )	Recognized in other comprehensive income $ 15,340 - - ( 316 ) - - - $ 15,024	Balance at December 31
				(		$ 288,560 24,436 6,968 19,953 5,128 - 23,314 $ 368,359

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Deferred Tax Liabilities Temporary difference Share of profits and losses of subsidiaries accounted for using the equity method 2020 Deferred Tax Assets Temporary difference Exchange differences on translation of foreign operations Allowance for loss of write-down of inventories Allowance for doubtful accounts Defined benefits retirement plans Provisions for warranty Loss carryforwards Others Deferred Tax Liabilities Temporary difference Share of profits and losses of subsidiaries accounted for using the equity method		Balance at January1 $ 309,295 ) Balance at January1	Recognized in profit or loss $ 6,605 Recognized in profit or loss	Recognized in profit or loss $ 6,605 Recognized in profit or loss	Recognized in other comprehensive income $ - Recognized in other comprehensive income $ 23,931 - - ( 2,314 ) - - - $ 21,617 $ -	Balance at December 31	Balance at December 31
	(					($ 302,690 ) Balance at December 31

	(	$ 249,289 26,118 13,247 31,135 2,809 - 15,062 $ 337,660 $ 386,668 )	(	$ - 10,557 2,891 3,383 ) 3,028 17,769 6,775 $ 37,637 $ 77,373	(	(	$ 273,220 36,675 16,138 25,438 5,837 17,769 21,837 $ 396,914 $ 309,295 )
Temporary difference Exchange differences on translation of foreign operations Allowance for loss of write-down of inventories Allowance for doubtful accounts Defined benefits retirement plans Provisions for warranty Loss carryforwards Others Deferred Tax Liabilities
Temporary difference Share of profits and losses of subsidiaries accounted for using the equity method

e. Income Tax Approval Status

Income tax returns of the Company had been examined by the tax authorities through 2019.

22. EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share Diluted earnings (loss) per share		2021 $ 1.23 $ 1.22	Unit: NT$ Per Share 2020 ($ 2.14 ) ($ 2.14 )
			( (

The net profit (loss) and the number of weighted average shares used for calculation of EPS are stated as follows:

Net profit (loss) attributable to owners of the Company

Net profit (loss) used in the computation of basic and diluted earnings (loss) per share		2021 242,691		2020
			(	423,066 )

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Number of Shares

Weighted average number of ordinary shares used in the computation of basic earnings (loss) per share The impact of potential shares of common stock with dilutive effect: Employees’ Bonuses or Compensation Weighted average number of ordinary shares used in the computation of diluted earnings (loss) per share		Unit: Number of shares (in thousand) 2021 2020 198,000 198,000 138 - 198,138 198,000

If the Company offered to settle the compensation paid to employees in cash or shares, the Company assumed the entire amount of the compensation will be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Whereas anti-dilution effect has occurred due to the net loss in 2020, divided loss per share was not included in the calculation as a result.

23. GOVERNMENT GRANTS

In 2020, the Company applied for salary subsidies and working capital subsidies of $34,968 thousand, presented under other income, in accordance with the revised provisions of the Ministry of Economic Affairs on the rescue and revitalization of industries with operating difficulties affected by severe and infectious pneumonia.

24. CAPITAL RISK MANAGEMENT

The Company manages its capital risks to ensure that entities in the Company will be able to continue operating with necessary financial resources and business plans and to respond to the needs for operating fund, capital expenditures, loan repayment, and dividends in the following 12 months.

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

25. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments measured at fair value on a recurring basis
1) Fair value hierarchy
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December 31, 2021

December 31, 2021
Financial assets at FVTOCI Investments in equity instruments `－`Domestic listed shares `－`Domestic and foreign unlisted securities Total December 31, 2020 Financial assets at FVTOCI Investments in equity instruments `－`Domestic listed shares `－`Domestic emerging shares `－`Domestic and foreign unlisted securities Total	Level 1 $ 328,290 - $ 328,290 Level 1 $ 239,343 - - $ 239,343	Level 2 $ 15,374 - $ 15,374 Level 2 $ - 23,143 - $ 23,143	Level 3 $ - 15,395 $ 15,395 Level 3 $ - - 15,497 $ 15,497	Total
				$ 343,664 15,395 $ 359,059 Total
				$ 239,343 23,143 15,497 $ 277,983

There were transfers between Level 1 and Level 2 fair value measurements in 2021. As some of the stocks trading on the Emerging Stock Board became listed, the related amounts were transferred from Level 2 to Level 1.

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

2021

2021
Financial assets Balance at January 1 Recognized in other comprehensive income (included in unrealized gain/(loss) on financial assets at FVTOCI) Balance at December 31	Financial assets classified as at FVTOCI
	Investments in equityinstruments
	(	$ 15,497 102 ) $ 15,395

2020

2020
Financial assets Balance at January 1 Acquisition of residual allocation of financial assets at FVTOCI Return of share due to capital reduction Recognized in other comprehensive income (included in unrealized gain/(loss) on financial assets at FVTOCI) Balance at December 31	Financial assets classified as at FVTOCI
	Investments in equityinstruments
	$ 14,890 ( 217 ) ( 303 ) 1,127 $ 15,497

43 -

3) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instruments Valuation Technique and Inputs Emerging stocks in non-active Observe the market quotation at the end of the markets period and consider the liquidity risk discount. Restricted shares in active Observe the market quotation at the end of the markets period and consider the liquidity risk discount.

b. Categories of financial instruments

The Company’s financial assets and financial liabilities and their fair values as of December 31, 2021 and 2020 are as follows:

Financial assets Financial assets at amortized costs Cash and cash equivalents Notes receivable and trade receivables (including related parties) Other receivables Refundable deposits Other financial assets—current Financial assets at FVTOCI - non-current Financial liabilities Financial liabilities at amortized costs Short-term borrowings Notes payable and trade payables (including related parties) Other payables Provision for onerous contracts Long-term borrowings Guarantee deposits received	December 31,2021 Book Value Fair Value $ 555,708 $ 555,708 1,870,079 1,870,079 14,685 14,685 11,629 11,629 50 50 359,059 359,059 33,783 33,783 496,283 496,283 219,680 219,680 19,359 19,359 210,000 210,000 1,409 1,409	December 31,2020
	Book Value $ 555,708 1,870,079 14,685 11,629 50 359,059 33,783 496,283 219,680 19,359 210,000 1,409	Book Value Fair Value
		$ 424,703 $ 424,703 1,954,005 1,954,005 16,552 16,552 11,534 11,534 1,990 1,990 277,983 277,983 151,190 151,190 599,232 599,232 194,934 194,934 2,734 2,734 100,000 100,000 1,506 1,506

c. Financial risk management objectives and policies

The Company's financial risk management objective is to manage exchange rate risk, interest rate risk, credit risk and liquidity risk related to operating activities. To reduce related financial risks, the Company is committed to identifying, assessing and avoiding market uncertainties, so as to reduce potentially unfavorable effects of market changes on its financial performance.

The important financial activities of the Company are reviewed by the board of directors in accordance with relevant regulations and internal control systems. While the financial plan is underway, the Company shall comply with relevant financial operation procedures on the overall financial risk management and segregation of duties at all times.

1) Market risks
44 -

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

a) Foreign currency risk

The Company had foreign currency sales and purchases, which exposed the Company to foreign currency risk. Exchange rate exposures were managed by adjusting the net position between foreign assets and foreign liabilities and within approved policy parameters utilizing forward foreign exchange contracts.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities exposed to foreign currency risk at the end of the reporting period are set out in Note 30.

Sensitivity Analysis

The Company was mainly exposed to the U.S. dollars.

The following table details the Company’s sensitivity to a 5% increase and decrease in the New Taiwan dollar (the functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 5% change in foreign currency rates. A positive number below indicates an increase in pre-tax profit and other equity associated with the New Taiwan dollar strengthening 5% against the relevant currency. For a 5% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on pre-tax profit and other equity and the balances below would be negative.

Profit or loss	USD 2021 2020 $ 77,276 $ 89,269	PESO 2021 2020 ( $ 2,550 ) ( $ 6,264 )	ZAR	ZAR
	2021 $ 77,276	2021 ( $ 2,550 )	2021 $ 5,911	2020
				$ 5,829

b) Interest rate risk

Interest rate risk refers to the risk arising from changes in market interest rates.

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

Fair value interest rate risk - Financial assets - Financial liabilities Cash flow interest rate risk - Financial assets	December 31,2021 $ 439,810 336,473 113,190	December 31,2020
		$ 49,977 251,190 374,228

Sensitivity Analysis

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liabilities outstanding at the end of the reporting period was outstanding for the whole year.

45 -

If interest rate increases/decreases by 25 basis points, held other variables constant, the Company’s income before tax will increase/decrease by $283 thousand and $936 thousand, respectively for 2021 and 2020.

c) Other price risk

The Company was exposed to equity price risk through its investments in listed equity securities. Equity investments are held for strategic rather than trading purposes.

Sensitivity Analysis

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

If equity prices had been 1% higher/lower, pre-tax other comprehensive income for the years ended December 31, 2021 and 2020 would increase/decrease by $3,591 thousand and $2,780 thousand due to increase/decrease in the fair value of financial assets at FVTOCI.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in a financial loss to the Company. The Company is exposed to credit risk from operating activities, primarily on trade receivables, and from financing activities, primarily on deposits, fixed-income investments and other financial instruments with banks. Credit risk is managed separately for business- and financial-related exposures.

Business-related credit risk

To maintain the quality of its accounts receivable, the Company has established management procedures on dealing with credit risks.

Individual customers are assessed for their payment capability, including financial status, aging analysis, historical transactions, etc. In special cases involving individual customers, the Company may enhance its protection against credit risk by requiring advance payment or using credit insurance.

In addition, the Company will review the recoverable amount of the receivables one by one on the balance sheet date to ensure that adequate allowance is made for possible irrecoverable amounts. Accordingly, the management of the Company believes that the credit risk of the Company has been significantly reduced. Additionally, the counterparties of liquid funds are all creditworthy financial institutions and corporations, with no significant credit risk expected.

Financial credit risk

The credit risk from bank deposits, fixed income investments and other financial instruments is measured and supervised by the financial department of the Company. The counterparties of the Company are banks with good credit ratings, investment-grade financial institutions, corporations and the government, which have no contract performance risk. Thus, the credit risk is insignificant.

3) Liquidity risk

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

46 -

The Company’s current financial liabilities mature within a year and immediate settlements are not required. The Company’s guarantee deposits do not have a specific maturity.

The table below details the contractual repayment schedule of the Company’s non-current bank borrowings other than current liabilities which will mature in less than a year.

than a year.
December 31,2021 Long-term bank borrowings December 31,2020 Long-term bank borrowings	1 to 2years $ - 1 to 2years $ -	2 to 3years $ 210,000 2 to 3years $ 100,000	Over 3years $ - Over 3years $ -	Total
				$ 210,000 Total
				$ 100,000

26. TRANSACTIONS WITH RELATED PARTIES

Except for those mentioned in Notes 11, 13 and 28, the transactions between the Company and other related parties are as follows.

a. The names and relationships of related parties are as follows:

Name of relatedparty	Relationshipwith the Company
Formosa Textile Co., Ltd.	Subsidiary
Nien Hsing International (B.V.I.) Co., Ltd.	Subsidiary
Nien Hsing International (Lesotho) Co., Ltd.	Subsidiary
Phoenix Development and Marketing Co., Ltd.	Subsidiary
Nien Hsing International Investment Co., Ltd.	Subsidiary
Nien Hsing Garment (Ninh Binh) Co., Ltd.	Subsidiary
Chih Hsing Garment (Cambodia) Co., Ltd.	Subsidiary
C & Y Garments Company (Proprietary) Limited	Subsidiary
Global Garment Co., Ltd.	Subsidiary
Nien Hsing International (Victoria) Co., Ltd.	Subsidiary
Nien Hsing International (Samoa) Co., Ltd.	Subsidiary
Glory International Co., Ltd.	Subsidiary
Hung Yuan Investment Co., Ltd	Substantive related party
Guozhong Investment Co., Ltd.	Substantive related party
Li Feng Investment Co., Ltd.	Substantive related party
Nuevo Investment Development Co., Ltd.	Substantive related party
Ying Jeh Co. Ltd.	Substantive related party
Yien Yuan Co. Ltd.	Substantive related party
Fu Yuan Investment Co., Ltd.	Substantive related party

b. Operating revenue

Operating revenue
Related PartyCategory Subsidiary Formosa Textile Co., Ltd. Phoenix Development and Marketing Co., Ltd. Nien Hsing International (Lesotho) Co., Ltd.		2021 $ 577,468 39,710 34,622 $ 651,800		2020
				$ 458,187 23,212 23,721 $ 505,120

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c.	Service Revenue Related PartyCategory Substantive related party		2021 $ 296		2020
					$ 513

d. Rental income

Rental income
Related PartyCategory Subsidiary Substantive related party		2021 $ 25 128 $ 153		2020
				$ 25 128 $ 153

The Company leased operating properties to related parties. The lease prices were determined with reference to the local lease standards and the payments were received monthly.

e. Processing expenses (manufacturing expenses)

	Related PartyCategory	2021	2020
	Subsidiary
	Nien Hsing Garment (Ninh Binh)
	Co., Ltd.	$ 846,902	$ 742,759
	Nien Hsing International
	(Victoria) Co., Ltd.	589,804	436,216
	Formosa Textile Co., Ltd.	388,884	341,277
	Nien Hsing International
	(Lesotho) Co., Ltd.	894,142	682,916
	Global Garment Co., Ltd.	-	143,916
	C & Y Garments Company
	(Proprietary) Limited	-	133,084
	Glory International Co., Ltd.	5,465	65,473
		$ 2,725,197	$ 2,545,641
f.	Receivables from Related Parties
	Related PartyCategory	December 31,2021	December 31,2020
	Subsidiary
	Formosa Textile Co., Ltd.	$ 243,390	$ 180,676
	Nien Hsing International
	(Lesotho) Co., Ltd.	-	31,013
	Phoenix Development and
	Marketing Co., Ltd.	9,321	7,320
	Nien Hsing International
	Investment Co., Ltd.	26	53
	Glory International Co., Ltd.	24,897	6,150
		$ 277,634	$ 225,212

48 -
g. Payable to related parties

Payable to related parties
Related PartyCategory Subsidiary Nien Hsing International (Victoria) Co., Ltd. Nien Hsing International (Lesotho) Co., Ltd. Chih Hsing Garment (Cambodia) Co., Ltd. Nien Hsing Garment (Ninh Binh) Co., Ltd.	December 31,2021 $ 51,006 8,759 69,594 92,453 $ 221,812	December 31,2020
			$ 125,281 - 70,713 59,324 $ 255,318

h. Remuneration to key management

Remuneration to key management	Remuneration to key management	Remuneration to key management
Remuneration to directors and key management in 2021 and 2020 were as follows: 2021 2020 Short-term employee benefits $ 30,680 $ 20,359 Retirement benefits 314 448 $ 30,994 $ 20,807
		$ 20,359 448 $ 20,807

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

27. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as long term loan issuance facilities and customs guarantees

guarantees
Property, plant and equipment Other financial assets—current Total	December 31,2021 $ 525,391 50 $ 525,441	December 31,2020
			$ 537,176 50 $ 537,226

As of December 31, 2021 and December 31, 2020, the remaining pledged amount for property, plant and equipment was $197,548 thousand and $206,094 thousand respectively, which represented the collateral for a revolving line of credit due in March 2014. The Company has not retired the liens.

28. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

a. As of December 31, 2021 and 2020, unused letters of credit for purchases of raw materials and machinery and equipment amounted to $449,004 thousand and $217,041 thousand, respectively.
b. As of December 31, 2021 and 2020, the non-cancellable cotton purchase contracts for which the Company has entered into but where the goods have not yet been received are in the amounts of 16,648 thousand pounds and 12,011 thousand pounds, respectively.
49 -

c. Below are the contingent liability incurred by subsidiaries to the Company	c. Below are the contingent liability incurred by subsidiaries to the Company	c. Below are the contingent liability incurred by subsidiaries to the Company	c. Below are the contingent liability incurred by subsidiaries to the Company
		December 31,2021	December 31,2020
Provide endorsement guarantee for
the loan of Phoenix	Development
and Marketing Co.,	Ltd.
- Guarantee amount		$ 55,310	$		140,500
`－`Actual Amount Borrowed		-				-
Provide endorsement guarantee for
the loan of Nien Hsing
International Investment Co. Ltd.
- Guarantee amount		500,000			500,000
`－`Actual Amount Borrowed		33,500			75,000
OTHER MATTER
Due to the COVID-19 pandemic, management of the Company has been observing						the impact
of COVID-19 on operations, timely adjusted the business policy, and applied to the
government for salary subsidy and working capital subsidy, etc.. In 2020, the					Company has
been awarded $34,968 thousand of government grants; please refer to			Note 23		for	details. In
addition, the Company hasn’t found any		event or circumstances that	would	cast		significant
doubt on its ability to continue operations,		its asset impairment and financing risk assessment.
SIGNIFICANT ASSETS	AND LIABILITIES DENOMINATED IN FOREIGN
CURRENCIES
The following information was summarized by foreign currencies			of the	Company. The
exchange rates were ones used to translate the foreign currencies into the functional currency.
The significant financial	assets and liabilities denominated in foreign currencies are as
follows:
December 31, 2021
ForeignCurrency		Exchange rate		BookValue
Foreign Currency
Asset
Monetary items
USD $	73,078	27.655 (USD: NTD)	$		2,020,965
ZAR	68,102	1.736 (ZAR: NTD)				118,224
			$		2,139,189
Non-monetary items
Subsidiaries
accounted for using
the equity method
USD	2,562	27.655 (USD: NTD)	$			70,841
VND	155,157,696	0.001195 (VND NTD)				185,391
			$			256,232
Foreign currency
liabilities
Monetary items
USD	17,192	27.655 (USD: NTD)	$			475,444
PESO	37,839	1.348 (PESO: NTD)				51,006
			$			526,450

29. OTHER MATTER

Due to the COVID-19 pandemic, management of the Company has been observing the impact of COVID-19 on operations, timely adjusted the business policy, and applied to the government for salary subsidy and working capital subsidy, etc.. In 2020, the Company has been awarded $34,968 thousand of government grants; please refer to Note 23 for details. In addition, the Company hasn’t found any event or circumstances that would cast significant doubt on its ability to continue operations, its asset impairment and financing risk assessment.

30. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

50 -

December 31, 2020

December 31, 2020
Foreign Currency Asset Monetary items USD ZAR Non-monetary items Subsidiaries accounted for using the equity method USD VND Foreign currency liabilities Monetary items USD PESO	Foreign Currency $ 77,777 60,692 2,562 151,946,756 14,241 88,879	Exchange rate 28.10 (USD: NTD) 1.921 (ZAR: NTD) 28.10 (USD: NTD) 0.001215 (VND: NTD) 28.10 (USD: NTD) 1.410 (PESO: NTD)		Book Value
				$ 2,185,544 116,589 $ 2,302,133 $ 71,980 184,588 $ 256,568 $ 400,167 125,281 $ 525,448

The company's foreign currency exchange losses (including realized and unrealized) in 2021 and 2020 were $27,381 thousand and $123,474 thousand, respectively.

31. ADDITIONAL DISCLOSURES

a. Information on significant transactions, and b. information on investees:
1) Financing provided to others: None.
2) Endorsements/guarantees provided: Table 1.
3) Marketable securities held at the end of the period (excluding investments in subsidiaries, associates and jointly-controlled entities): Table 2.
4) Marketable securities acquired or disposed of at costs or prices at least NT$300 million or 20% of the paid-in capital: None.
5) Acquisition of individual real estate at costs of at least NT $300 million or 20% of the paid-in capital: None.
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 3.
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 4.
9) Trading in derivative instruments: None.
10) Information on investees: Table 5
51 -
c. Information on Investments in Mainland China ：
1) Information on any investee company in Mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the Mainland China area: None.
2) Any of the following significant transactions with investee companies in Mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: None.
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
- c) The amount of property transactions and the amount of the resultant gains or losses.
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
- f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receipt of services.
d. Information on Major Shareholders ： Names of shareholders with a holding ratio of 5% or more and the amount and proportion of shares held (Table 6).
52 -

TABLE 1

NIEN HSING TEXTILE CO., LTD.

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2021 Unit: In Thousands of New Taiwan Dollars

No.	Endorsement/ Guarantee Provider	Counterparty	Counterparty	Limits on Guarantee for a Single Entity (Note B)	Maximum Balance for the Period	Ending Balance	Actual Amount Borrowed	Endorsements/ guarantees Secured with Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements(%)	Aggregate Endorsement/ Guarantee Limit (Note B)	Endorsements/ guarantees Provided by Parent for Subsidiary	Endorsements/ guarantees Provided by Subsidiary for Parent	Endorsements/ guarantees for Entities in China	Note
		Name	Nature of Relationship (Note A)
0 0	Nien Hsing Textile Co., Ltd. (the “Company”) Nien Hsing Textile Co., Ltd. (the “Company”)	Phoenix Development & Marketing Co., Ltd. Nien Hsing International Investment Co., Ltd.	2 2	$ 2,227,677 2,227,677	$ 140,500 500,000	$ 55,310 500,000	$ - 33,500	$ - -	0.74 6.73	$ 3,712,796 3,712,796	Y Y	N N	N N

Note A. The relationship between Nien Hsing Textile Co., Ltd. and the endorsed/guaranteed entities can be classified into the following seven categories.

a. A company with a business relationship.
b. A subsidiary in which over 50% of the ordinary shares are directly or indirectly held by the parent company.
c. An investee company in which over 50% of the ordinary shares are directly or indirectly held by the Company.
d. Companies in which the Company directly and indirectly holds more than 90 percent of the voting shares.
e. Companies with the same industry or mutual project undertakers that have mutual guarantee based on contract agreements due to contractual project needs.
f. A company endorsed due to a co-investment agreement. The endorsement percentage of each investor is based on its investment percentage.
g. Companies in the same industry engaged in the provision of joint performance guarantee of sales contracts for the sale of pre-construction homes, pursuant to the Consumer Protection Act.
Note B. The maximum total guarantee that the Company may provide is 50% of the carrying value of its net assets, and the maximum guarantee for each party is 30% of the carrying value of the Company’s net assets.
53 -

TABLE 2

NIEN HSING TEXTILE CO., LTD.

MARKETABLE SECURITIES HELD December 31, 2021 Unit: In Thousands of New Taiwan Dollars

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		EndingBalance	EndingBalance	EndingBalance	Note
				Number of Shares/Units	Book Value	Percentage of Ownership(%)	Fair Value
Nien Hsing Textile Co., Ltd. (the “Company”)	Share Mycenax Biotech Inc. BioGend Therapeutics Co., Ltd. Leadray Energy Co., Ltd. Der Yang Biotechnology Venture Capital Co., Ltd. Wu Hsing International Co., Ltd.	`－` `－` `－` `－` `－`	Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current	8,519,665 806,662 2,532,619 70,798 450,000	$ 322,895 20,769 14,535 860 -	5.56 0.78 6.34 2.22 30.00	$ 322,895 20,769 14,535 860 -	Note B

Note A. For information about investment in subsidiaries and associates, please refer to Table 5.

Note B. The Company’s shareholding proportion is 30 percent, which was assessed by the management as having no material or significant influence.

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TABLE 3

NIEN HSING TEXTILE CO., LTD.

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021 Unit: In Thousands of New Taiwan Dollars

Buyer	Counterparty	Nature of Relationship	Transaction Details	Transaction Details	Transaction Details		Unusual Transaction Terms and Reasons	Unusual Transaction Terms and Reasons	Notes and Trades Receivable (Payable)	Notes and Trades Receivable (Payable)	Note
			Purchase/Sale	Amount	% to Total (Note C)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Nien Hsing Textile Co., Ltd. (the “Company”)	Formosa Textile Co., Ltd. Nien Hsing International (Victoria) Co., Ltd. Nien Hsing Garment (Ninh Binh) Co., Ltd. Nien Hsing International (Lesotho) Co., Ltd. Formosa Textile Co., Ltd.	Sub-subsidiary Sub-subsidiary Subsidiary Sub-subsidiary Sub-subsidiary	Sale Processing expense Processing expense Processing expense Processing expense	( $ 577,468 ) 589,804 846,902 894,142 388,884	( 7.23% ) 15.98% 22.94% 24.22% 10.53%	(Note B) (Note A) (Note A) (Note A) (Note A)	`－` (Note A) (Note A) (Note A) (Note A)	(Note B) (Note A) (Note A) (Note A) (Note A)	$ 243,390 ( 51,006 ) ( 92,453 ) ( 8,759 ) -	13.01% ( 10.28% ) ( 18.63% ) ( 0.10% ) -

Note A. Processing fees charged by subsidiaries were based on operating costs; subsidiaries' payment requests were based on their financial condition.

Note B. Payments were made based on operational cash requirements.

Note C. Processing expense was calculated as a percentage to the sum of manufacturing expenses and direct labor.

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TABLE 4

NIEN HSING TEXTILE CO., LTD.

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL December 31, 2021 Unit: In Thousands of New Taiwan Dollars

Company Name	Counterparty	Nature of Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Action Taken
Nien Hsing Textile Co., Ltd. (the “Company”)	Formosa Textile Co., Ltd.	Sub-subsidiary	$ 243,390	(Note A)	$ -	`－`	$ 28,082	$ -

Note A. Collection of receivables is based on the related parties’ cash requirements.

56 -

TABLE 5

NIEN HSING TEXTILE CO., LTD.

NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE FOR THE YEAR ENDED DECEMBER 31, 2021 Unit: In Thousands of New Taiwan Dollars

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance	as of December31,2021	as of December31,2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2021	December 31, 2020	Number of Shares	Percentage of Ownership (%)	Book Value
Nien Hsing Textile Co., Ltd. (the “Company”)	Nien Hsing International (B.V.I.) Co., Ltd. Nien Hsing Garment (Ninh Binh) Co., Ltd. Chih Hsing Garment (Cambodia) Co., Ltd. Nien Hsing International Investment Co., Ltd.	Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands Plot C4, Khanh Phu Industrial zone, Khanh Phu Commune, Yen Khanh district, Ninh Binh province, Vietnam ROAD 6 ,PHUM KHTOR,SANGKAT PREK LEAP,CHROY CHANGVAR DISTRICT,PHNOM PENH,KINGDOM OF CAMBODIA 12F-2, No. 308, Neihu Rd., Sec. 1, Neihu Dist., Taipei City, Taiwan 114, R.O.C.	Investment holding company Manufacturing of jeans Manufacturing of jeans Investment business	$ 458,543 714,092 133,641 20,000	$ 586,915 714,092 133,641 20,000	19,185 - 4,500 9,722,833	100.00 100.00 100.00 100.00	$ 1,671,281 185,391 70,841 579,782	( $ 36,903 ) 3,876 1 46,061	( $ 36,903 ) 3,876 1 46,061	Subsidiary Subsidiary Subsidiary Subsidiary

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TABLE 6

NIEN HSING TEXTILE CO., LTD.

INFORMATION ON MAJOR SHAREHOLDERS December 31, 2021

Name Ron Yuan Investment Co., Ltd. Panda Investment Co., Ltd. Taiwan Life Insurance Co., Ltd.	Shares	Shares
	Number of Shares Held 47,524,506 24,493,129 11,644,311	Shareholding Percentage
		24.00% 12.37% 5.88%

Note: The information on major shareholders listed in this table is based on the information on shareholders holding more than 5% of the ordinary and preference shares that have completed non-physical registration and delivery (including treasury shares) on the last business day of the current quarter as calculated by the Taiwan Depository & Clearing Corporation. Share capital indicated in the Individual Financial Statements may differ from the actual number of shares that have been issued and delivered without physical registration as a result of different basis of preparation.
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TABLE 7

NIEN HSING TEXTILE CO., LTD.

STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT For the Years Ended December 31, 2021 and 2020 Unit: In Thousands of New Taiwan Dollars

Cost Balance at January 1, 2020 Addition Disposal Reclassifications Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Disposal Depreciation expenses Balance at December 31, 2020 Carrying amounts at December 31, 2020 Cost Balance at January 1, 2021 Addition Disposal Reclassifications Balance at December 31, 2021 Accumulated depreciation Balance at January 1, 2021 Disposal Depreciation expenses Balance at December 31, 2021 Carrying amounts at December 31, 2021		Land $ 230,001 - - - $ 230,001 $ - - - $ - $ 230,001 $ 230,001 4,606 - - $ 234,607 $ - - - $ - $ 234,607	Land improvements $ 1,516 - - - $ 1,516 $ 1,516 - - $ 1,516 $ - $ 1,516 - - - $ 1,516 $ 1,516 - - $ 1,516 $ -		Buildings $ 704,601 288 - - $ 704,889 $ 336,200 - 17,455 $ 353,655 $ 351,234 $ 704,889 8,347 - - $ 713,236 $ 353,655 - 17,760 $ 371,415 $ 341,821	Machinery and equipment $ 1,378,309 - ( 49,886 ) 4,186 $ 1,332,609 $ 1,121,247 ( 49,886 ) 41,491 $ 1,112,852 $ 219,757 $ 1,332,609 928 ( 4,495 ) 1,750 $ 1,330,792 $ 1,112,852 ( 4,475 ) 40,906 $ 1,149,283 $ 181,509	Transportation equipment $ 8,626 - ( 4,277 ) - $ 4,349 $ 5,781 ( 2,474 ) 829 $ 4,136 $ 213 $ 4,349 700 ( 700 ) 4,880 $ 9,229 $ 4,136 ( 700 ) 387 $ 3,823 $ 5,406	Office equipment $ 24,958 2,854 ( 574 ) 651 $ 27,889 $ 21,262 ( 553 ) 1,869 $ 22,578 $ 5,311 $ 27,889 1,337 ( 1,331 ) 4,203 $ 32,098 $ 22,578 ( 1,331 ) 2,825 $ 24,072 $ 8,026	Miscellaneous equipment $ 655,009 2,789 ( 10,524 ) 6,874 $ 654,148 $ 549,931 ( 10,524 ) 33,940 $ 573,347 $ 80,801 $ 654,148 2,676 ( 17,034 ) 8,582 $ 648,372 $ 573,347 ( 17,034 ) 27,659 $ 583,972 $ 64,400	Construction in progress $ - - - - $ - $ - - - $ - $ - $ - 672 - - $ 672 $ - - - $ - $ 672	Total
											$ 3,003,020 5,931 ( 65,261 ) 11,711 $ 2,955,401 $ 2,035,937 ( 63,437 ) 95,584 $ 2,068,084 $ 887,317 $ 2,955,401 19,266 ( 23,560 ) 19,415 $ 2,970,522 $ 2,068,084 ( 23,540 ) 89,537 $ 2,134,081 $ 836,441

59 -

SCHEDULES OF IMPORTANT ACCOUNTS

ITEM
Schedules of Assets, Liabilities and Equity Items
Schedules of Cash and Cash Equivalents
Schedule of Trade Receivables
Statement of Inventories
Statement of Changes in Financial Assets at Fair Value
through Other Comprehensive Income
Statement of Changes in Investments Accounted for Using the
Equity Method
Schedule of Changes in Property, Plant and Equipment
Schedule of Changes in Accumulated Depreciation of
Property, Plant and Equipment
Schedule of Changes in Investment Properties
Schedule of Changes in Accumulated Depreciation of
Investment Properties
Schedule of Deferred Tax Assets
Schedule of Short-term Borrowings and Long-term
Borrowings
Schedule of Trade payables
Schedule of Other Payables
Schedule of Deferred Tax Liabilities
Schedule of Profit or Loss Items
Schedule of Operating Revenue
Schedule of Operating Costs
Schedule of Operating Expenses
Schedule of Other Income
Schedule of Other Gains and Losses
Summary Table of Employee Benefit, Depreciation,
Depletion and Amortization Expenses for the Period

NO./INDEX

Table 1
Table 2
Table 3
Table 4
Table 5
Note 11 and Table 7
Note 11 and Table 7
Note 12
Note 12
Note 21
Table 6
Table 7
Note 15
Note 21
Table 8
Table 9
Table 10
Note 20
Note 20
Table 11

60 -

TABLE 1

NIEN HSING TEXTILE CO., LTD.

Schedules of Cash and Cash Equivalents December 31, 2021 Unit: In Thousands of New Taiwan Dollars, Unless Specified Otherwise

Item Cash on hand Bank deposits Checking account and demand deposit Foreign currency demand deposits (Note A) Cash equivalents Short-term bills - annual interest rate of 0.21%, expiry dates range from January 6, 2022 to January 13, 2022		Amount
		$ 2,758 13,549 99,641 439,760 $ 555,708

Note A. Including USD 3,603 thousand, converted at the exchange rate US$1=NT$27.655.

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TABLE 2

NIEN HSING TEXTILE CO., LTD.

Schedule of Trade Receivables December 31, 2021 Unit: In Thousands of New Taiwan Dollars

Name M001 company S094 company S140 company S106 company Others (Note) Less: Allowance for impairment loss Total		Amount
		$ 484,802 426,590 226,555 112,034 391,440 1,641,421 50,532 $ 1,590,889

Note: The balance for each client did not exceed 5% of the balance of this account.

62 -

TABLE 3

NIEN HSING TEXTILE CO., LTD.

Statement of Inventories December 31, 2021 Unit: In Thousands of New Taiwan Dollars

Item Raw materials Work in process Finished goods Raw materials in transit Supplies		Amount	Amount	Amount
		Cost $ 1,026,327 675,027 265,097 108,464 11,163 $ 2,086,078	Net realizable value (Note)
				$ 1,260,337 741,432 344,730 108,464 11,163 $ 2,466,126

Note: The net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

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TABLE 4

NIEN HSING TEXTILE CO., LTD.

Statement of Changes in Financial Assets at Fair Value through Other Comprehensive Income For the Year Ended December 31, 2021 Unit: In Thousands of New Taiwan Dollars, Unless Specified Otherwise

Name Mycenax Biotech Inc. BioGend Therapeutics Co., Ltd. Leadray Energy Co., Ltd. Der Yang Biotechnology Venture Capital Co., Ltd. Wu Hsing International Industrial Co., Ltd (Note 1)	Balance at	January1 Fair Value $ 239,343 23,143 14,747 750 - $ 277,983	Addition Number of Shares Amount 1,086,665 $ 33,142 - - - - - - - - $ 33,142	Addition Number of Shares Amount 1,086,665 $ 33,142 - - - - - - - - $ 33,142	Reduction Number of Shares Amount - $ - - - - - - - - - $ -	Reduction Number of Shares Amount - $ - - - - - - - - - $ -	Unrealized gain/(loss) on financial assets at FVTOCI $ 50,410 ( 2,374 ) ( 212 ) 110 - $ 47,934	Balance at December 31 Number of Shares/Units Fair Value 8,519,665 $ 322,895 806,662 20,769 2,532,619 14,535 70,798 860 450,000 - $ 359,059	Balance at December 31 Number of Shares/Units Fair Value 8,519,665 $ 322,895 806,662 20,769 2,532,619 14,535 70,798 860 450,000 - $ 359,059	Guarantee or Pledge
	Number of Shares/Units 7,433,000 806,662 2,532,619 70,798 450,000		Number of Shares 1,086,665 - - - -		Number of Shares - - - - -			Number of Shares/Units 8,519,665 806,662 2,532,619 70,798 450,000
										None None None None None None

Note A. The Company’s shareholding proportion is 30 percent, which was assessed by the management as having no material or significant influence.

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Table 5

NIEN HSING TEXTILE CO., LTD.

Statement of Changes in Investments Accounted for Using the Equity Method For the Year Ended December 31, 2021 Unit: In Thousands of New Taiwan Dollars, Unless Specified Otherwise

Investee Accounted for using the equity method Nien Hsing International (B.V.I.) Co., Ltd. Nien Hsing Garment (Ninh Binh) Co., Ltd. Chih Hsing Garment (Cambodia) Co., Ltd. Nien Hsing International Investment Co., Ltd.	Par value per share(NT$) US$ 500 - US$ 1,000 NT$ 10	Balance at	January1 Amount $ 1,897,744 184,588 71,980 500,665 $ 2,654,977	Addition Number of Shares Amount - $ - - - - - - - $ -	Addition Number of Shares Amount - $ - - - - - - - $ -	Reduction Number of Shares Amount 9,224 $ 128,372 - - - - - - $ 128,372	Reduction Number of Shares Amount 9,224 $ 128,372 - - - - - - $ 128,372	Cash dividends $ - - - - $ -	Gain (Loss) on investment accounted for using the equity method ( $ 36,903 ) 3,876 1 46,061 $ 13,035	Adjustment of foreign currency translation ( $ 72,485 ) ( 3,073 ) ( 1,140 ) - ($ 76,698 )	Unrealized gain/(loss) on financial assets at FVTOCI $ 11,297 - - 33,056 $ 44,353	Balance at December 31 Number of Shares Shareholding % Amount 19,185 100 $ 1,671,281 - 100 185,391 4,500 100 70,841 9,722,833 100 579,782 $ 2,507,295	Balance at December 31 Number of Shares Shareholding % Amount 19,185 100 $ 1,671,281 - 100 185,391 4,500 100 70,841 9,722,833 100 579,782 $ 2,507,295	Balance at December 31 Number of Shares Shareholding % Amount 19,185 100 $ 1,671,281 - 100 185,391 4,500 100 70,841 9,722,833 100 579,782 $ 2,507,295	Note
		Number of Shares 28,409 - 4,500 9,722,833		Number of Shares - - - -		Number of Shares 9,224 - - -						Number of Shares 19,185 - 4,500 9,722,833	Shareholding % 100 100 100 100
									(	( ( ( (					(Note A and D) (Note A and B) (Note A) (Note A)

Note A. Calculated based on the financial statements audited by an independent auditor during the same period.

Note B. There is no data on par value and number of shares because it is not a company limited by shares.

Note C. Investments accounted for using the equity method is neither pledged nor collateralized.

Note D. Nien Hsing International (B.V.I) Co., Ltd. implemented a capital reduction and returned shares of $128,372 thousand.

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TABLE 6

NIEN HSING TEXTILE CO., LTD.

Schedule of Short-term Borrowings and Long-term Borrowings December 31, 2021 Unit: In Thousands of New Taiwan Dollars, Unless Specified Otherwise

Types of Borrowings and Creditors	Borrowingsperiod	Annual Interest Rate (%)	Balance at December 31	Balance at December 31		Financing Line	Pledged or Secured	Note
Short-term borrowings Line of credit borrowings Hua Nan Bank Long-term borrowings Secured borrowings Cathay United Bank	2021.12.21-2022.1.6 2021.2.2-2024.2.2	1.08%-1.27% 0.77%		$ 33,783 $ 210,000		$ 33,783 $ 700,000	N/A Note B	Note A `－`

Note A. It is the LC advance on behalf of the Company. The balance at the end of the year is USD 1,222 thousand, which is converted at the exchange rate of US$1: NT$27.655.

Note B. The pledged amount of Property, plant and equipment was $327,843 thousand.

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TABLE 7

NIEN HSING TEXTILE CO., LTD.

Schedule of Trade payables December 31, 2021 Unit: In Thousands of New Taiwan Dollars

Supplier M001 company IMW017 company PD052 company Others (Note) Total		Amount
		$ 61,273 23,228 19,686 106,466 $ 210,653

Note: The balance of each vendor does not exceed 5% of the balance of this account.

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TABLE 8

NIEN HSING TEXTILE CO., LTD.

Schedule of Operating Revenue For the Year Ended December 31, 2021 Unit: In Thousands of New Taiwan Dollars

Item Sales Denim garment (dozens) Denim (yard) Ring spinning yarn (kg) Others Subtotal Less: return of sales Sales allowance Subtotal Revenue from processing Net Operating Revenue	Numbers 1,358 thousand dozens 42,935 thousand yards 5,640 thousand kgs		Amount
			$ 3,820,547 3,570,383 574,395 33,994 7,999,319 83 8,300 8,383 6,888 $ 7,997,824

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TABLE 9

NIEN HSING TEXTILE CO., LTD.

Schedule of Operating Costs For the Year Ended December 31, 2021 Unit: In Thousands of New Taiwan Dollars

Item
Raw materials - beginning (including raw materials
in transit)
Raw materials purchased
Raw materials - ending (including raw materials in
transit)
Plus (minus): Inventory profit
Transferred from self-made finished products
(Note)
Sale
Own use and others
Annual raw material consumption
Direct labor
Manufacturing overheads
Manufacturing costs
Plus (minus): Work in progress at the beginning of
the year
Work in progress at the end of the year
Others
Cost of finished goods
Plus (minus): finished products at the beginning of
the year
Finished products at the end of the year
Transferred back to raw materials (Note)
return of sales
Inventory profit
Own use and others
Cost to sale of finished goods
Cost to sale of raw materials and work in progress
Cost to sale transferred from unamortized fixed
manufacturing overheads
Inventory devaluation loss (reversal of inventory
write-down)
Provision for onerous contracts
Gain on physical inventory
Revenue from sale of scraps
Cost of Goods Sold
Processing costs
Total operating costs

Amount

$ 1,179,342
3,939,330
(
1,152,412 )
3,292
207,652
(
33,513 )
(
98,268
)
4,045,423
176,243

3,484,204
7,705,870
599,776
(
691,261 )

3,547
7,617,932
373,809
(
352,854 )
(
207,652 )
826
16
(
19,377
)
7,412,700
33,513
34,469
(
61,193 )
16,625
(
3,308 )
(
47,413
)
7,385,393

6,182
$ 7,391,575

Note: Conversion of some finished products of the ring spinning mills to the raw materials for the textile mills.

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TABLE 10

NIEN HSING TEXTILE CO., LTD.

Schedule of Operating Expenses For the Year Ended December 31, 2021 Unit: In Thousands of New Taiwan Dollars, Unless Specified Otherwise

Salaries Expected credit loss (reversal of expected credit loss) Freight Taxation Sample fee Insurance expense Commission expense Commodity development fee Depreciation Others (Note) Total		Selling and marketing expenses $ 66,072 - 41,977 22,540 23,260 21,082 13,779 - 2,379 28,694 $ 219,783	General and administrative expenses $ 94,129 - 180 2,777 - 9,036 - - 8,829 35,644 $ 150,595	Research and development expenses $ 2,622 - - - - 191 - 15,663 33 360 $ 18,869	Expected credit loss recognized (reversed) $ - ( 46,222 ) - - - - - - - - ($ 46,222 )		Total
					( (	(	$ 162,823 46,222 ) 42,157 25,317 23,260 30,309 13,779 15,663 11,241 64,698 $ 343,025

Note: Each amount does not exceed 5% of the account total.

70 -

TABLE 11

NIEN HSING TEXTILE CO., LTD.

Summary Table of Employee Benefits, Depreciation and Amortization Expenses for the Period For the Years Ended December 31, 2021 and 2020 Unit: In Thousands of New Taiwan Dollars, Unless Specified Otherwise

Employee benefits expense Salary and Wages Labor and health insurance Pension Directors’ remuneration Other employee benefit expenses Depreciation expenses		2021	2021		Total $ 519,259 47,633 15,390 9,470 26,892 $ 618,644 $ 90,447		2020	2020
	Classified as OperatingCosts $ 356,436 31,820 12,596 - 16,711 $ 417,563 $ 78,296	Classified as OperatingExpenses $ 162,823 15,813 2,794 9,470 10,181 $ 201,081 $ 11,241	Classified as Non-operating Expenses $ - - - - - $ - $ 910			Classified as OperatingCosts $ 315,279 30,693 13,495 - 9,714 $ 369,181 $ 83,939	Classified as OperatingExpenses $ 149,589 15,588 6,243 7,921 10,151 $ 189,492 $ 11,645	Classified as Non-operating Expenses $ - - - - - $ - $ 910		Total
										$ 464,868 46,281 19,738 7,921 19,865 $ 558,673 $ 96,494

Note:

The average number of employees for this year and the previous year were 823 and 834 respectively, of which the average number of directors who do not concurrently serve as an employee were 4 and 3 respectively. 2. For companies whose shares have been listed on the stock exchange or traded on an OTC market, the following additional information should be disclosed:
－
(1) The average employee benefit expense for the year was $744 thousand ((Total employee benefit expense for the year Total remuneration for Directors) / (Number of employees for the year − Number of Directors who do not serve concurrently as an employee))
- －
- The average employee benefit expense for the previous year was $663 thousand ((Total employee benefit expense for the previous year Total remuneration for Directors) / (Number of employees for the previous year − Number of Directors who do not serve concurrently as an employee))
－
(2) The average employee salary expense for the year was $634 thousand (Total salary expense for the year / (Number of employees for the year Number of Directors who do not serve concurrently as an employee.)) －
The average employee salary expense for the previous year was $559 thousand (Total salary expense for the year / (Number of employees for the previous year Number of Directors who do not serve concurrently as an employee.))
(3) The average adjustment of employee salary and wages increased by 13.42%.
(4) The remuneration to the Company’s supervisors for 2020 was $2,000 thousand.
(5) The Company has established an audit committee, and the remuneration of independent directors has been disclosed along with remuneration of the directors. (6) Salary and remuneration policy
- A. Directors' remuneration:
  - a. Commuting fee: $3~5 thousand per meeting.
  - b. Remuneration: Each director of the Company receives a fixed remuneration of $1,000 thousand per year.
  - c. Directors' remuneration: Compensations are not available for directors.
  - d. Other rewards: The chairman of the Company is issued a company car.
- B. Supervisor's remuneration:
  - a. Commuting fee: $3~5 thousand per meeting.
  - b. Remuneration: Each supervisor of the Company receives a fixed remuneration of $1,000 thousand per year.
  - c. Supervisor's remuneration: Compensations are not available for supervisors.
- C. Manager's remuneration:
  - a. Salaries and Bonuses ： Salaries are given in accordance with the Company's salary approval regulations; bonuses are given with reference to the operating performance and future risks of each business unit; a performance bonus is given if the annual operating profit and production targets are met.
  - b. Employees’ Compensation: Employee compensations are not available for managers.
  - c. Other rewards: The Company’s manager equals to or above the vice president level is issued a company car.
    - The remuneration committee of the Company also regularly evaluates and reviews the policies, systems, standards and structures of remuneration awarded to directors, supervisors and managers, and proposes to the board of directors for consideration.
- D. Employee remuneration:

The Company's remuneration policy positively relates to individual ability, contribution to the Company, individual performance and operating performance. Remuneration is comprised of three parts: basic salary, bonus and employee compensation and benefits. Criteria for remuneration payments can be broken down to (a) basic salary, given based on the Company’s salary approval regulations, as well as the market competition of the employee’s job; (b) bonus and employee remuneration, given when department targets are met, or company operating performance are satisfied; and (c) benefits, devised to care for employees needs in accordance with laws and regulations.

71 -

AI assistant

NIEN HSING — Audit Report / Information 2021

51812_rns_2021-11-08_541b65ef-8302-44df-bf0a-0c50e0f6c482.pdf

NIEN HSING TEXTILE CO., LTD.

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Operating revenue from major clients

Description of Matter

Audit Procedures

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

Auditors' Responsibilities for the Audit of the Individual Financial Statements

Notice to Readers

NIEN HSING TEXTILE CO., LTD.

BALANCE SHEETS DECEMBER 31, 2021 AND 2020 Unit: In Thousands of New Taiwan Dollars

NIEN HSING TEXTILE CO., LTD.

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

NIEN HSING TEXTILE CO., LTD.

NIEN HSING TEXTILE CO., LTD.

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

g. Investment in Associates

k. Financial Instruments

ii. Investments in equity instruments at FVTOCI

l. Provisions

Onerous contract

Sale of goods

n. Leasing

r.

Income Tax

1) Current tax

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

6. CASH AND CASH EQUIVALENTS

7.

a. Trade receivables

December 31, 2021

December 31, 2020

b. Notes receivable and other receivables

9. INVENTORY

10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Aggregate information of associates that are not individually material

11. PROPERTY, PLANT AND EQUIPMENT

12. INVESTMENT PROPERTY

13. BORROWINGS

14. NOTES PAYABLE AND TRADE PAYABLES

15. OTHER PAYABLES

16. PROVISION FOR ONEROUS CONTRACTS

17. RETIREMENT BENEFIT PLANS

a. Defined contribution plan

b. Defined benefit plan

18. EQUITY

Ordinary shares

c. Retained earnings and dividend policy

19. REVENUE

Sale of goods

20. NET PROFIT (LOSS) FOR THE YEAR

f. Employee benefits expense

g. Employees’ Compensation

21. INCOME TAX

e. Income Tax Approval Status

22. EARNINGS (LOSS) PER SHARE

Net profit (loss) attributable to owners of the Company

Number of Shares

23. GOVERNMENT GRANTS

24. CAPITAL RISK MANAGEMENT

25. FINANCIAL INSTRUMENTS

December 31, 2021

2021

2020

3) Valuation techniques and inputs applied for Level 2 fair value measurement

c. Financial risk management objectives and policies

a) Foreign currency risk

Sensitivity Analysis

b) Interest rate risk

Sensitivity Analysis

c) Other price risk

Sensitivity Analysis

NIEN HSING Audit Report / Information 2021