TAINAN — Audit Report / Information 2021

Nov 10, 2021

TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2021 AND 2020

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2021, pursuant to Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises, the companies that are required to be included in the consolidated financial statements of affiliates, are the same as the company required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standard 10. Additionally, if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

Tainan Enterprises Co., Ltd. March 22, 2022

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Tainan Enterprises Co., Ltd.

Opinion

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

In our opinion, based on our audits and reports of other auditors (refer to Other matter section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (R.O.C GAAS). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Group’s 2021 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

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Key audit matters for the Group’s 2021 consolidated financial statements are stated as follows:

Cut-off of operating revenue from export sales

Description

Refer to Note 4(30) for accounting policies on operating revenue and Notes 6(22) and 14(6) for details of revenue. Exports sales comprise a significant portion of the Group’s revenues, which are recognized base on the terms and the conditions of the transaction agreed with the customer. As the revenue recognition process involves manual process and judgements, there exists a risk of material misstatement that may arise from improper timing in revenue recognition for transactions that occur near the balance sheet date. Thus, we consider the cut-off of operating revenue from export sales a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

1. Obtained an understanding and assessed the accounting policies on revenue recognition.

2. Confirmed the completeness of the sales revenue transaction details of the export sales for a certain period before or after the balance sheet date and performed cut-off tests on a sampling basis to inspect the supporting documents (including confirming transaction conditions, checking orders, shipping documents, export declarations and bills of lading, etc.) to ascertain whether sales revenue was recognized in the proper period.

Other matter – Reports of other auditors

We did not audit the financial statements of certain investments accounted for under equity method that are included in the consolidated financial statements. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the consolidated financial statements and the information disclosed relative to these investments, is based solely on the audit reports of other auditors. The balance of these investments accounted for under equity method amounted to $61,840 thousands and $48,832 thousands, both representing 1% of the related totals as of December 31, 2021 and 2020, and share of profit or loss amounted to $13,811 thousands and $5,812 thousands, constituting (7%) and (1%) of the comprehensive income for the years then ended, respectively.

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Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion with an Other matter section on the parent company only financial statements of Tainan Enterprises Co., Ltd. as at and for the years ended December 31, 2021 and 2020.

Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

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

Auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free of 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 generally accepted auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

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

6.

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period 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.

Tien, Chung-Yu

Independent Accountants

Lin, Tzu-Shu

PricewaterhouseCoopers, Taiwan Republic of China March 22, 2022

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(3) and 11 6(4) 6(4) 6(29) 6(5) 5(2) and 6(2) 6(6) 6(3) 6(7)(13) 6(8), 7 and 8 6(9) 6(11) 6(12)(13) 6(29) 6(8)(12) 6(8)	December 31, 2021 AMOUNT % $ 681,095 13 39,730 1 380 - 1,145,171 22 71,751 1 215 - 1,216,865 23 127,627 3 3,282,834 63 86,954 2 639 - 352,363 7 71,235 1 1,040,175 20 118,021 2 134,633 3 15,893 - 76,626 2 1,528 - 12,777 - 19,566 - 1,930,410 37 $ 5,213,244 100	December 31, 2020	December 31, 2020
		AMOUNT $ 681,095 39,730 380 1,145,171 71,751 215 1,216,865 127,627 3,282,834 86,954 639 352,363 71,235 1,040,175 118,021 134,633 15,893 76,626 1,528 12,777 19,566 1,930,410 $ 5,213,244	AMOUNT $ 868,736 38,026 687 1,028,273 91,195 457 779,516 119,867 2,926,757 87,084 476 405,136 95,291 1,098,836 150,408 136,549 20,364 74,146 1,994 16,269 25,564 2,112,117 $ 5,038,874	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets at amortized cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories 1410 Prepayments 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non- current 1535 Financial assets at amortised cost - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1915 Prepayments for equipment 1920 Guarantee deposits paid 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets				17 1 - 20 2 - 16 2
				58
				2 - 8 2 22 3 3 - 1 - - 1
				42
				100

(Continued)

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TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2021 December 31, 2020 Notes AMOUNT % AMOUNT % 6(14) and 8 $ 975,185 19 $ 594,894 12 6(15) 149,972 3 174,938 3 6(2) - - 218 - 6(21) 8,776 - 8,035 - 13,154 - 8,038 - 347,395 7 326,624 7 6(16) 427,017 8 380,388 8 6(29) 1,816 - 982 - 23,874 - 22,966 - 581 - 384 - 1,947,770 37 1,517,467 30 6(29) 39,742 1 40,030 1 61,124 1 85,782 2 6(17) 103,151 2 107,487 2 7,703 - 8,109 - 211,720 4 241,408 5 2,159,490 41 1,758,875 35 6(18) 1,471,535 28 1,471,535 29 6(19)(31) 845,412 16 874,643 17 6(20) 766,835 15 766,835 15 162,805 3 63,280 1 41,921 1 289,174 6 6(6)(7)(21) ( 212,091) ( 4) ( 162,805) ( 3 ) 6(18) ( 22,663) - ( 22,663) - 3,053,754 59 3,279,999 65 9 11 $ 5,213,244 100 $ 5,038,874 100

Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2120 Financial liabilities at fair value through profit or loss - current 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Lease liabilities - current 2310 Advance receipts 21XX Total current liabilities Non-current liabilities 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2640 Net defined benefit liabilities - non- current 2645 Guarantee deposits received 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity Contingent liabilities and commitments Significant events after the balance sheet date 3X2X Total liabilities and equity

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

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TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for loss per share data)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(22) and 7 $ 5,761,476 100 $ 5,970,540 100 6(5)(8)(9)(12)(16 )(27)(28), 7 and 12 ( 4,985,268) ( 87) ( 5,299,588) ( 89) 776,208 13 670,952 11 6(9)(11)(12)(17)( 27)(28), 7 and 12 ( 319,250) ( 6) ( 269,739) ( 4) ( 533,293) ( 9) ( 527,781) ( 9) ( 73,251) ( 1) ( 77,373) ( 1) ( 7,044) - ( 124,052) ( 2) ( 932,838) ( 16) ( 998,945) ( 16) ( 156,630) ( 3) ( 327,993) ( 5) 6(3)(23) and 7 23,611 1 37,828 1 6(10)(11)(24) and 7 14,772 - 28,480 - 6(2)(3)(7)(9)(13) (25)(27) and 12( 7,423) - ( 77,658) ( 1) 6(9)(26) ( 12,439) - ( 24,182) ( 1) 6(7) 11,451 - ( 17,220) - 29,972 1 ( 52,752) ( 1) ( 126,658) ( 2) ( 380,745) ( 6) 6(29) ( 8,446) - 25,547 - ($ 135,104)( 2) ($ 355,198)( 6)

4000 Operating revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit losses 6000 Total operating expenses 6900 Operating loss Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit/(loss) of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Loss before income tax 7950 Income tax (expense) benefit 8200 Loss for the year

(Continued)

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TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for loss per share data)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(17) ($ 16,778) - ($ 3,343) - 6(6)(21) 163 - ( 94) - 6(7)(21) ( 227) - ( 3,477) - 6(29) 3,770 - 659 - 6(21) ( 47,973) ( 1) ( 92,881) ( 2) 6(7)(21) ( 865) - ( 2,995) - ($ 61,910) ( 1) ($ 102,131) ( 2) ($ 197,014) ( 3) ($ 457,329) ( 8) ($ 135,104) ( 2) ($ 358,606) ( 6) - - 3,408 - ($ 135,104) ( 2) ($ 355,198) ( 6) ($ 197,014) ( 3) ($ 460,690) ( 8) - - 3,361 - ($ 197,014) ( 3) ($ 457,329) ( 8) 6(30) ($ 0.92) ($ 2.45) ($ 0.92) ($ 2.45)

Other comprehensive loss Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Actuarial loss on defined benefit plans 8316 Unrealized gains (loss) on valuation of investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive loss of associates and joint ventures accounted for under equity method - will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive loss that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8370 Share of other comprehensive loss of associates and joint ventures accounted for under equity method - will be reclassified to profit or loss 8300 Total other comprehensive loss for the year 8500 Total comprehensive loss for the year Loss attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive loss attributable to: 8710 Owners of the parent 8720 Non-controlling interest Loss per share (in dollars) 9750 Basic 9850 Diluted

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

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TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

For the year ended December 31, 2020 Balance at January 1, 2020 Loss for the year ended December 31, 2020 Other comprehensive loss for the year ended December 31, 2020 Total comprehensive loss for the year ended December 31, 2020 Compensation cost of employee stock options Distribution of 2019 net income: Legal reserve Special reserve Cash dividends Adjustment for change in capital surplus of investee companies Difference between the acquisition price and carrying amounts of subsidiaries Non-controlling interest Balance at December 31, 2020 For the year ended December 31, 2021 Balance at January 1, 2021 Loss for the year ended December 31, 2021 Other comprehensive loss for the year ended December 31, 2021 Total comprehensive loss for the year ended December 31, 2021 Distribution of 2020 net income: Special reserve Cash distribution from capital surplus Balance at December 31, 2021	Notes								Equity attribu	Equity attribu	table to owners of	the parent	the parent	the parent				Non-controlling interest		Total equity
			Common stock		Capital surplus				Retained Earnings			Other EquityInterest			Treasury stocks		Total
							Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
	6(21) 6(20) 6(21) 6(19)		$ 1,471,535 - - - - - - - - - - $ 1,471,535 $ 1,471,535 - - - - - $ 1,471,535	$ 880,971 - - - 5 - - - ( 1,609 ) ( 4,724 ) - $ 874,643 $ 874,643 - - - - ( 29,231 ) $ 845,412			$ 758,787 - - - - 8,048 - - - - - $ 766,835 $ 766,835 - - - - - $ 766,835		$ 3,979 - - - - - 59,301 - - - - $ 63,280 $ 63,280 - - - 99,525 - $ 162,805	$ 790,765 ( 358,606 ) ( 2,559 ) ( 361,165 ) - ( 8,048 ) ( 59,301 ) ( 73,077 ) - - - $ 289,174 $ 289,174 ( 135,104 ) ( 12,624 ) ( 147,728 ) ( 99,525 ) - $ 41,921		($ 63,372 ) - ( 95,829 ) ( 95,829 ) - - - - - - - ($ 159,201 ) ($ 159,201 ) - ( 48,838 ) ( 48,838 ) - - ($ 208,039 )	$ 92 - ( 3,696 ) ( 3,696 ) - - - - - - - ($ 3,604 ) ($ 3,604 ) - ( 448 ) ( 448 ) - - ($ 4,052 )		( $ 22,663 ) - - - - - - - - - - ( $ 22,663 ) ( $ 22,663 ) - - - - - ( $ 22,663 )	$ 3,820,094 ( 358,606 ) ( 102,084 ) ( 460,690 ) 5 - - ( 73,077 ) ( 1,609 ) ( 4,724 ) - $ 3,279,999 $ 3,279,999 ( 135,104 ) ( 61,910 ) ( 197,014 ) - ( 29,231 ) $ 3,053,754		($ 3,701 ) 3,408 ( 47 ) 3,361 - - - - - - 340 $ - $ - - - - - - $ -	$ 3,816,393 ( 355,198 ) ( 102,131 ) ( 457,329 ) 5 - - ( 73,077 ) ( 1,609 ) ( 4,724 ) 340 $ 3,279,999 $ 3,279,999 ( 135,104 ) ( 61,910 ) ( 197,014 ) - ( 29,231 ) $ 3,053,754

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

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TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments Adjustments to reconcile profit (loss) Gain on financial assets and liabilities at fair value through profit or loss Loss on disposal of investments Expected credit losses (including listed as “Other income”) Gain on disposal of non-current assets held for sale Share of (profit) loss of associates and joint ventures accounted for under equity method Impairment loss on investments accounted for under equity method Depreciation (Gain) loss on disposal of property, plant and equipment Income from reversion of land entrusted to others’ name Property, plant and equipment transferred to expense Loss from lease modification Loss on disposal of investment property Amortisation Prepayment for equipment transferred to expense Compensation cost of employee stock options Dividend income Interest income Interest expense Changes in operating assets and liabilities Changes in operating assets Notes receivable Accounts receivable Other receivables Inventories Prepayments Changes in operating liabilities Contract liabilities - current Notes payable Accounts payable Other payables Advance receipts Net defined benefit liabilities - non-current Cash (outflow) inflow generated from operations Dividends received Interest received Interest paid Income tax received Income tax paid Net cash flows (used in) from operating activities

Year ended December 31, Notes 2021 2020 ( $ 126,658 ) ( $ 380,745 ) 6(25) ( 218 ) ( 9,805 ) 6(3) - 3,500 12 6,055 124,052 6(25) - ( 34,076 ) 6(7) ( 11,451 ) 17,220 6(7)(13)(25) - 49,970 6(8)(9)(11)(27) 129,993 136,543 6(25) ( 1,106 ) 538 6(8)(32) - ( 11,053 ) 6(8)(32) 64 - 6(9)(25) - 14 6(25) 3 3 6(12)(27) 7,657 8,245 6(32) - 40 6(19) - 5 6(24) - ( 8 ) 6(23) ( 23,611 ) ( 37,828 ) 6(26) 12,439 24,182 307 2,188 ( 122,953 ) 4,534 4,794 ( 11,036 ) ( 437,349 ) 259,073 ( 7,760 ) 70,915 741 6,867 5,116 ( 2,780 ) 20,771 35,679 41,404 ( 87,802 ) 197 157 ( 17,349 ) 3,384 ( 518,914 ) 171,976 803 8 24,598 45,762 ( 12,237 ) ( 25,309 ) 30 - ( 6,948 ) ( 23,478 ) ( 512,668 ) 168,959

(Continued)

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TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Decrease in financial assets at amortised cost Decrease in other reveivables Decrease in other receivables - related parties Proceeds from capital reduction of financial assets at fair value through profit of loss Proceeds from disposal of non-current assets held for sale Return of capital in advance from investments accounted for under equity method Cash paid for acquisition of property plant and equipment Proceeds from disposal of property, plant and equipment Cash paid for acquisition of investment property Acquisition of intangible assets Increase in prepayments for equipment Decrease (increase) in guarantee deposits paid Decrease in other non-current assets Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Repayments of short-term borrowings Increase in short-term notes and bills payable Decrease in short-term notes and bills payable Payments of lease liabilities Decrease in guarantee deposit received Cash distribution from capital surplus Payment of cash dividends Transactions with non-controlling interest Net cash flows from (used in) financing activities Effect of foreign exchange rate changes on cash Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31, Notes 2021 2020 $ 42,364 $ 504,675 13,549 11,279 - 17,221 12 130 153 - 35,205 6(7) 33,612 - 6(32) ( 56,187 ) ( 57,569 ) 2,227 1,288 6(11) - ( 1,540 ) 6(12) ( 3,189 ) ( 4,686 ) ( 1,528 ) ( 1,994 ) 3,492 ( 2,045 ) 6,395 2,844 40,865 504,831 6(33) 885,185 497,394 6(33) ( 504,246 ) ( 771,596 ) 6(33) - 175,000 6(33) ( 25,000 ) ( 100,000 ) 6(33) ( 23,201 ) ( 24,900 ) 6(33) ( 406 ) ( 532 ) 6(19) ( 29,231 ) - 6(20) - ( 73,077 ) 6(31) - ( 6,000 ) 303,101 ( 303,711 ) ( 18,939 ) ( 26,128 ) ( 187,641 ) 343,951 6(1) 868,736 524,785 6(1) $ 681,095 $ 868,736

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

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TAINAN ENTERPRISES CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

• (1) Tainan Enterprises Co., Ltd. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) and other relevant laws and regulations in August 1961. The Company and its subsidiaries (the “Group”) are primarily engaged in manufacturing, retail and export various of apparels (including woven and knitted garments).

• (2) As of December 31, 2021, the Group has 13,151 employees.

• (3) The common shares of the Company had been listed on the Taipei Exchange since April 1999, and has been transferred to be listed on the Taiwan Stock Exchange since September 2000.

• THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on March 22, 2022.

1. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board (“IASB”) Amendments to IFRS 4, ‘Extension of the temporary exemption January 1, 2021 from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, January 1, 2021 － ‘Interest Rate Benchmark Reform Phase 2’ Amendment to IFRS 16, ‘Covid-19-related rent concessions April 1, 2021 (Note) beyond 30 June 2021’

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

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

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

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Effective date by
New Standards, Interpretations and Amendments IASB
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New Standards,Interpretations and Amendments	Effective date by IASB
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IAS 16, ‘Property, plant and equipment:	January 1, 2022
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts -	January 1, 2022
cost of fulfilling a contract’
Annual improvements to IFRS Standards 2018－2020	January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

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

endorsed by the FSC are as follows:
New Standards,Interpretations and Amendments	Effective date by IASB
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – comparative information’ Amendments to IAS 1, ‘Classification of liabilities as current or non- current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

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(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

  • (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

  • (b) Financial assets at fair value through other comprehensive income.

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

• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5, ‘CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY’.

• (3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

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

  • (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

  • (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

  • (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e., transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

  • (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial

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recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. Subsidiaries included in the consolidated financial statements:

Name of Name of Main business investor subsidiaries activities Tainan Enterprises Co., Ltd. Tainan Enterprise (BVI) Co., Limited Professional investments Tainan Enterprises Co., Ltd. P.T.Tainan Enterprises Indonesia Garment processing, production and selling Tainan Enterprises Co., Ltd. PT. ANDALAN MANDIRI BUSANA Garment processing, production and selling Tainan Enterprises Co., Ltd. TAI NAN ENTERPRISES (CAMBODIA) CO., LTD Garment processing, production and selling Tainan Enterprises Co., Ltd. Tainan Enterprises (Vietnam) Co., Ltd. Garment processing, production and selling Tainan Enterprises Co., Ltd. Beyoung Fashion Co., Ltd. Garment processing, production and selling	December31,2021 December31,2020 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Ownership (%)	Note
	100.00 100.00 100.00 100.00 100.00 100.00	－ － － － － －

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Name of Name of Main business investor subsidiary activities Tainan Enterprises Co., Ltd. Fortune International Co., Ltd. Garment and cloth selling and trading service Tainan Enterprise (BVI) Co., Limited Yixing Gaoqing Garments Co., Ltd. Garment processing, production and selling Tainan Enterprise (BVI) Co., Limited Zhoukou Tainan Garment Co., Ltd. Garment processing, production and selling Tainan Enterprise (BVI) Co., Limited T&G FASHION CO., LTD. Professional investments T&G FASHION CO., LTD. Gin-Sovann Fashion (Cambodia) Limited. Garment processing, production and selling T&G FASHION CO., LTD. CAMITEX (CAMBODIA) MFG CO LTD. Garment processing, production and selling T&G FASHION CO., LTD. Golden Harbor Garment (Cambodia) Limited. Garment processing, production and selling	December31,2021 December31,2020 － 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Ownership (%)	Note
	－ 100.00 100.00 100.00 100.00 100.00 100.00	(Note 1) － (Note 2) － － (Note 2) (Note 2)

(Note 1) The liquidation had been completed in the second quarter of 2021.

(Note 2) The subsidiary has been ceased business and was pending for liquidation process.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries with non-controlling interests that are material to the Group: None.

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

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• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within “Other gains and losses”.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

  • iii. All resulting exchange differences are recognized in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

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  - (b) Assets held mainly for trading purposes;

  - (c) Assets that are expected to be realized within twelve months from the balance sheet date;

  - (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than 12 months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

  • (a) Liabilities that are expected to be settled within the normal operating cycle;

  • (b) Liabilities arising mainly from trading activities;

  • (c) Liabilities that are to be settled within twelve months from the balance sheet date;

  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than 12 months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

• (6) Cash equivalents

• A. Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

• B. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

• D. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (8) Financial assets at amortized cost

• A. Financial assets at amortized cost are those that meet all of the following criteria:

  • (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortized cost are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss when the asset is derecognized or

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impaired.

(9) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (10) Inventories

• Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses. If the cost exceeds net realizable value, valuation loss is accrued and recognized in operating costs. If the net realizable value reserves, valuation is eliminated within credit balance and is recognized as deduction of operating costs.

(11) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(12) Impairment of financial assets

For financial assets at amortized cost, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration

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all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

(13) Derecognition of financial assets

• The Group derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

－ (14) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term.

- (15) Investments accounted for under equity method associates and joint ventures

• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes all change in ‘capital surplus’ in proportion to its ownership.

• D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then “Capital surplus” and “Investments accounted for under the equity method” shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

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• F. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

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

• (16) Property, plant and equipment

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

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

• C. Except for land, other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

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Assets Useful lives
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Assets	Useful lives
Buildings ( including accessory equipment )	5 ~ 55 years
Machinery equipment	3 ~ 10 years
Utilities equipment	2 ~ 15 years
Transportation equipment	3 ~ 10 years
Office equipment	2 ~ 5 years
Leasehold assets	5 ~ 9 years
Other equipment	5 years

(17) Leasing arrangements (lessee) － right-of-use assets / lease liabilities

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

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate or the interest rate of government bonds of the country to which each subsidiary belongs. Lease payments are fixed payments, less any lease incentives receivable. The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

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

• (c) Any initial direct costs incurred by the lessee; and

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

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset and remeasure the lease liability to reflect the partial or full termination of the lease, and recognize the difference in profit or loss.

(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 18 ~ 55 years.

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(19) Intangible assets

• A. Computer software

• Computer software is stated at cost and amortized on a straight-line basis over its estimated useful life of 2 ~ 5 years.

• B. Goodwill

Goodwill arises in a business combination accounted for by applying the acquisition method.

• (20) Impairment of non-financial assets

• A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

• B. The recoverable amounts of goodwill are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination.

(21) Borrowings

• Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

(22) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purposed of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.

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(23) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(24) Derecognition of financial liabilities

A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires.

(25) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(26) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plans

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

• (b) Defined benefit plans

  • i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The Group uses interest rates of government bonds (at the balance sheet date) instead.

  • ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

• C. Employees’ compensation and directors’ and supervisors’ remuneration

• Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in

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estimates. If employee compensation is paid by shares, the Group calculates the number of shares based on the closing market price at the previous day of the board meeting resolution.

• (27) Income tax

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

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings of the Company and its domestic subsidiaries and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

• D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

• (28) Share capital

• A. Ordinary shares are classified as equity.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the

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consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(29) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(30) Revenue recognition

• A. Sale of goods

• (a) Sales are recognized when control of the products has transferred, being when the products are delivered to the client, the client has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the client’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the client, and either the client has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• (b) A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

B. Service revenue

• The Group provides processing and business consulting services. Revenue from delivering services is recognized under the percentage-of-completion method when the outcome of services provided can be estimated reliably. If the outcome of a service contract cannot be estimated reliably, contract revenue should be recognized only to the extent that contract costs incurred are likely to be recoverable.

(31) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes expenses for the related costs for which the grants are intended to compensate.

(32) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Group’s chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments.

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5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

• (1) Critical judgements in applying the Group’s accounting policies None.

(2) Critical accounting estimates and assumptions

• －

• A. Financial assets fair value measurement of unlisted stocks without active market

• The fair value of unlisted stocks held by the Group that are not traded in an active market is determined considering those companies’ financial information, operational planning or prediction of future application. Any changes in these judgements and estimates will impact the fair value measurement of these unlisted stocks. Please refer to Note 12(3) for the financial instruments fair value information.

• B. As of December 31, 2021, the carrying amount of unlisted stocks without active market was $86,954.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

$86,954. TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash: Cash on hand Checking accounts and demand deposits Cash equivalents: Time deposits	December31,2021 2,913 $ 300,494 303,407 377,688 681,095 $	December31,2020
		2,289 $ 412,600 414,889 453,847 868,736 $

• A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The Group has no cash and cash equivalents pledged to others as of December 31, 2021 and 2020.

~30~

(2) Financial assets and liabilities at fair value through profit or loss

December 31, 2021 December 31, 2020 Asset Non-current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks $ 86,954 $ 87,084 Liabilities Current items: Financial assets mandatorily measured at fair value through profit or loss － - Derivative forward foreign exchange contracts $ $ 218

• A. Amounts recognized in profit or loss in relation to financial assets and liabilities at fair value through profit or loss are listed below:

through profit or loss are listed below:
		Forthe years ended		December31,
		2021		2020
Financial assets and liabilities mandatorily
measured at fair value through profit or loss	($	896)	($	13,620)

• B. The Group entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting. The information is listed below:

December 31, 2020 Contract amount (notional principal Derivative instruments in thousands) Contract period Forward foreign exchange selling contracts USD 2,000 Dec., 2020 ~ March, 2021

There was no such situation in 2021.

The Group entered into forward foreign exchange contracts to hedge exchange rate risk from operating activities proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• C. The Group has no financial assets at fair value through profit or loss pledged to others as of December 31, 2021 and 2020.

• D. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2), ‘Financial instruments’.

~31~

(3) Financial assets at amortized cost

Financial assets at amortized cost
	December	31,2021		December	31,2020
Current items:
Bonds	$	46,717		$	45,215
Less: Accumulated impairment	(	6,987)	(		7,189)
	$	39,730		$	38,026
Non-current items:
Bonds	$	352,363		$	405,136

• A. Amounts recognized in profit or loss in relation to financial assets at amortized cost are listed below:

Interest income Losses on disposal of investment	2021 2020 17,778 $ 25,728 $ - 3,500) ( 17,778 $ 22,228 $ For theyears ended December31,

• B. As at December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortized cost held by the Group was approximately equal to its carrying amounts.

• C. The Group has no financial assets at amortized cost pledged to others as of December 31, 2021 and 2020.

• D. Information relating to credit risk of financial assets at amortized cost is provided in Note 12(2),

• ‘Financial instruments’.

(4) Notes and accounts receivable

‘Financial instruments’. Notes and accounts receivable
Notes receivable Accounts receivable Less: Allowance for uncollectible accounts (Note)		December31,2021		December31,2020
	380 $ 1,149,481 $ 4,310) ( 1,145,171 $		687 $ 1,152,325 $ 124,052) ( 1,028,273 $

• (Note) The uncollectible accounts have been written-off for the three months ended March 31, 2021.

• A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

~32~

Not past due Up to 30 days 31 to 90 days Over 91 days	Notes receivable Accounts receivable Notes receivable Accounts receivable 380 $ 1,118,719 $ 687 $ 966,401 $ - 9,953 - 21,628 - 3,192 - 10,465 - 17,617 - 153,831 380 $ 1,149,481 $ 687 $ 1,152,325 $ December31,2021 December31,2020

The above aging analysis was based on past due date.

• B. As of December 31, 2021 and 2020, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2020, the balance of receivables from contracts with customers amounted to $1,159,734.

• C. The Group does not hold any collateral pledged for notes and accounts receivable as of December 31, 2021 and 2020.

• D. The Group has no notes and accounts receivable pledged to others as of December 31, 2021 and 2020.

• E. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2), ‘Financial instruments’.

(5) Inventories

nventories
Raw materials Work in progress Raw materials Work in progress	Cost 485,683 $ 731,182 1,216,865 $		Allowance for valuation loss - $ - - $ December31,2021 December31,2020	Bookvalue
				485,683 $ 731,182 1,216,865 $
	Cost 222,757 $ 556,759 779,516 $		Allowance for valuation loss - $ - - $	Bookvalue
				222,757 $ 556,759 779,516 $

The cost of inventories recognized as expense:

		For theyears ended	For theyears ended	December31,
		2021		2020
Cost of goods sold	$	5,010,086	$	5,319,449
Income from sale of scraps	(	24,818)	(	19,861)
	$	4,985,268	$	5,299,588

~33~

(6) Financial assets at fair value through other comprehensive income - non-current

Items	December	31,2021	December	31,2020
Equity instruments
Listed stocks	$	1,452	$	1,452
Valuation adjustment	(	813)	(	976)
	$	639	$	476

• A. The Group has elected to classify investments that are considered to be strategic investments or steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $639 and $476 as of December 31, 2021 and 2020, respectively.

• B. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Fair value changes	2021 2020 163 $ 94) ($ For theyears ended December31,

• C. As of December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was equal to its book value.

• D. The Group has no financial assets at fair value through other comprehensive income pledged to others as of December 31, 2021 and 2020.

• E. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2), ‘Financial instruments’.

~34~

(7) Investments accounted for using equity method

A. Movements of investments accounted for under equity method:

		For theyears ended	For theyears ended	December31,
		2021		2020
At January 1	$	95,291	$	168,953
Share of profit or loss of associates and joint
ventures accounted for under equity method		11,451	(	17,220)
Impairment loss		-	(	49,970)
Return capital in advance from liquidation of
investments accounted for under the equity
method	(	33,612)		-
Earnings distribution of investments accounted
for under equity method	(	803)		-
Changes in other equity items - unrealized gains
and losses on financial assets at fair value
through other comprehensive income	(	611)	(	3,602)
Changes in other equity items - changes in
actuarial benefits of defined benefit plans		384		125
Changes in other equity items - exchange
differences on translation of foreign financial
statements	(	865)	(	2,995)
At December 31	$	71,235	$	95,291

B. Details of investments accounted for under equity method are as follows:

Joint ventures Associates		December31,2021 9,395 $ 61,840 71,235 $	December 31, 2020
			46,459 $ 48,832 95,291 $

C. Joint venture

(a) The basic information of the joint ventures that are material to the Group is as follows:

Shareholding ratio

Companyname	Principal place ofbusiness	December 31,2021	December 31,2020	Nature of relationship	Method of measurement
New Premium Enterprise Co.,Ltd. and subsidiary	Cambodia (Note)	50%	50%	Joint venture	Equity method

(Note) The country of registration is Samoa.

~35~

• (b) The summarised financial information of the joint ventures that are material to the Group is as follows:

Balance sheet

follows: Balance sheet
Cash and cash equivalents Other current assets Current assets Non-current assets Total assets Current financial liabilities Other current liabilities Current liabilities Non-current financial liabilities Other non-current liabilities Non-current liabilities Total liabilities Total net assets Share in joint venture's net assets Carrying amount of the joint venture	December31,2021 December31,2020 18,790 $ 76,473 $ - 363 18,790 76,836 - 19,196 18,790 96,032 - - - 3,114) ( - 3,114) ( - - - - - - - 3,114) ( 18,790 $ 92,918 $ 9,395 $ 46,459 $ 9,395 $ 46,459 $ NewPremium EnterpriseCo.,Ltd. and subsidiary
		76,473 $ 363 76,836 19,196 96,032 - 3,114) ( 3,114) ( - - - 3,114) ( 92,918 $ 46,459 $ 46,459 $

Statement of comprehensive income

Statement of comprehensive income
Revenue Depreciation and amortization Interest income Interest expense Loss before income tax Income tax expense Loss after income tax Other comprehensive loss, net of tax Total comprehensive loss		NewPremium Enterprise Co.,Ltd. and subsidiary
		Forthe years endedDecember31,
		2021		2020
	- $ 1,833 $ 50 $ - $ 5,147) ($ - 5,147) ($ 1,757) ( 6,904) ($		42,830 $ 11,966 $ 669 $ - $ 53,338) ($ - 53,338) ($ 5,670) ( 59,008) ($

In the fourth quarter of 2020, the Board of Directors resolved to shut down JEI JOM Enterprise Co., Ltd., a subsidiary of the Group’s joint venture, New Premium Enterprise Co., Ltd. The Group recognized an impairment loss of $49,970 for the year ended December 31, 2020. Please refer to Note 6(13) for details of accumulated impairment loss.

~36~

• (c) The Group’s joint venture, New Premium Enterprise Co., Ltd., returned capital from liquidation amounting to $33,612 in advance in the second quarter of 2021 due to the liquidation and dissolution of its subsidiary. The amount will be settled after the subsidiary is liquidated and dissolved. However, the liquidation and dissolution process has not been completed as of December 31, 2021.

• D. Associates

• (a) The basic information of the associate that is material to the Group is as follows:

Companyname Principal place of business December 31, 2021 December 31,2020 Tainan Enterprise (Cayman) Co., Limited. China (Note) 13.39% 13.39% Shareholdingratio	Companyname Principal place of business December 31, 2021 December 31,2020 Tainan Enterprise (Cayman) Co., Limited. China (Note) 13.39% 13.39% Shareholdingratio	Nature of relationship Method of measurement Strategic investment Equity method
	13.39%

• (Note) The country of registration is Cayman Islands.

• (b) The summarised financial information of the associates that are material to the Group is as follows:

Balance sheet

follows: Balance sheet
Current assets Non-current assets Current liabilities Non-current liabilities Non-controlling interest Total net assets Share in associate's net assets Carrying amount of the associate	Tainan Enterprise (Cayman) Co.,Limited and subsidiaries
	December31,2021 December31,2020 726,256 $ 824,927 $ 433,521 365,464 511,156) ( 662,989) ( 128,156) ( 112,969) ( 58,634) ( 49,752) ( 461,831 $ 364,681 $ 61,840 $ 48,832 $ 61,840 $ 48,832 $

Statement of comprehensive income

Tainan Enterprise (Cayman) Co., Limited and subsidiaries

Revenue Profit after income tax Other comprehensive loss, net of tax Total comprehensive income Dividends received from associate		Forthe years endedDecember31,	Forthe years endedDecember31,	Forthe years endedDecember31,
		2021		2020
	1,524,895 $ 118,213 $ 1,585) ( 116,628 $ 4,015 $		1,783,704 $ 81,142 $ 27,165) ( 53,977 $ - $

~37~

• (c) The Group’s material associate, Tainan Enterprise (Cayman) Co., Limited, has quoted market price was $168,040 ($38.75 (in dollars) per share) and $205,181 ($51.10 (in dollars) per share) as of December 31, 2021 and 2020, respectively.

• E. The Group has no investments accounted for under equity method pledged to others as of December 31, 2021 and 2020.

~38~

(8) Property, plant and equipment

January 1, 2021 Cost Accumulated depreciation For the year ended December 31, 2021 At January 1 Additions Transferred from prepayment for equipment Reclassifications (Note) Depreciation Disposals - cost - accumulated depreciation Net currency exchange differences ( At December 31 December 31, 2021 Cost Accumulated depreciation	Buildings and Utilities Transportation and Leasehold Land structures Machinery equipment office equipment assets Others 308,775 $ 1,006,890 $ 615,867 $ 146,564 $ 160,779 $ 18,209 $ 18,332 $ - 497,664) ( 456,326) ( 101,183) ( 126,030) ( 7,245) ( 16,022) ( 308,775 $ 509,226 $ 159,541 $ 45,381 $ 34,749 $ 10,964 $ 2,310 $ 308,775 $ 509,226 $ 159,541 $ 45,381 $ 34,749 $ 10,964 $ 2,310 $ - 8,198 26,919 5,868 7,214 7,843 37 - 1,994 - - - - - - - 1,083 20,898 - 5,521 - - 28,868) ( 42,918) ( 10,131) ( 12,108) ( 2,953) ( 244) ( - 27,933) ( 30,319) ( 8,800) ( 7,769) ( 115) ( 237) ( - 27,927 29,571 8,800 7,449 91 214 1,399) 10,598) ( 3,759) ( 1,535) ( 493) ( 461) ( 10) ( 307,376 $ 479,946 $ 140,118 $ 60,481 $ 29,042 $ 20,890 $ 2,070 $ 307,376 $ 972,326 $ 608,983 $ 160,175 $ 157,395 $ 30,760 $ 18,054 $ - 492,380) ( 468,865) ( 99,694) ( 128,353) ( 9,870) ( 15,984) ( 307,376 $ 479,946 $ 140,118 $ 60,481 $ 29,042 $ 20,890 $ 2,070 $

(Note) Transferred to “Other non-current assets – other” $397 and transferred to “Operating costs” $64.

~39~

January 1, 2020 Cost Accumulated depreciation For the year ended December 31, 2020 At January 1 Additions Transferred from prepayment for equipment Transferred from prepayment Reclassifications - cost (Note 1)(Note 2) -accumulated depreciation (Note 2) Depreciation Disposals - cost - accumulated depreciation Net currency exchange differences ( At December 31 December 31, 2020 Cost Accumulated depreciation	Buildings and Utilities Transportation and Leasehold Land structures Machinery equipment office equipment assets Others 300,184 $ 1,046,746 $ 655,296 $ 146,748 $ 154,364 $ 31,940 $ 18,160 $ - 484,440) ( 450,678) ( 96,117) ( 120,675) ( 16,055) ( 15,690) ( 300,184 $ 562,306 $ 204,618 $ 50,631 $ 33,689 $ 15,885 $ 2,470 $ 300,184 $ 562,306 $ 204,618 $ 50,631 $ 33,689 $ 15,885 $ 2,470 $ - - 9,568 5,114 14,177 - 95 - - 470 2,439 - - - - - - - - - - 11,053 8,044) ( - - - - - - 7,240 - - - - - - 31,696) ( 46,293) ( 10,330) ( 11,928) ( 4,073) ( 268) ( - 1,857) ( 22,990) ( 161) ( 1,662) ( 12,590) ( 160) ( - 1,854 21,627 161 1,425 12,381 143 2,462) 20,577) ( 7,459) ( 2,473) ( 952) ( 639) ( 30 308,775 $ 509,226 $ 159,541 $ 45,381 $ 34,749 $ 10,964 $ 2,310 $ 308,775 $ 1,006,890 $ 615,867 $ 146,564 $ 160,779 $ 18,209 $ 18,332 $ - 497,664) ( 456,326) ( 101,183) ( 126,030) ( 7,245) ( 16,022) ( 308,775 $ 509,226 $ 159,541 $ 45,381 $ 34,749 $ 10,964 $ 2,310 $		Construction in progress Total 6,504 $ 2,359,942 $ - 1,183,655) ( 6,504 $ 1,176,287 $ 6,504 $ 1,176,287 $ 17,149 46,103 5,259 8,168 218 218 - 3,009 - 7,240 - 104,588) ( - 39,420) ( - 37,591 1,240) 35,772) ( 27,890 $ 1,098,836 $ 27,890 $ 2,303,306 $ - 1,204,470) ( 27,890 $ 1,098,836 $	Total
		(

~40~

• (Note 1) As restricted by the local regulations of Cambodia, the ownership of the Group’s land located in Cambodia had been registered under the name of Kao-Chhin Co., Ltd. In addition, the Group entered into a contract of borrowing other’s name for real estate registration with Kao-Chhin Co., Ltd. which clearly defined the rights and obligations of both parties and reverted the value of the land at the original holding cost amounting to $11,053 for the year ended December 31, 2020.

(Note 2) Transferred to “Other non-current assets”.

• A. As restricted by the local regulations of Cambodia, the ownership of the Group’s land located in Cambodia had been registered under the name of Kao-Chhin Co., Ltd. In addition, the Group entered into a contract of borrowing other’s name for real estate registration with Kao-Chhin Co., Ltd. which clearly defined the rights and obligations of both parties for the year ended December 31, 2020. The Group is the actual owner of the land.

• B. The Group’s property, plant and equipment are all occupied by the owner for operating purpose as of December 31, 2021 and 2020.

• C. The Group has not capitalized any interest for the years ended December 31, 2021 and 2020.

• D. Please refer to Note 8, ‘Pledged assets’ for information on the Group’s property, plant and equipment that were pledged as collateral as at December 31, 2021 and 2020.

• －

• (9) Leasing arrangements lessee

• A. The Group’s leases various assets including land and buildings. Rental contracts are typically made for periods of 1 to 50 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise partial factories and office. Low-value assets comprise multi-function printer.

• C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Land Buildings	December31,2021 December31,2020 Carryingamount Carryingamount $ 66,685 $ 83,083 51,336 67,325 118,021 $ 150,408 $ For theyear ended Decenver31,	December31,2020
		Carryingamount
		$ 83,083 67,325
		150,408 $
	2021 Depreciationcharge $ 14,294 16,564 30,858 $	2020
		Depreciationcharge
		19,403 $ 10,657
		30,060 $

• D. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $2,169 and $47,909, respectively.

~41~

E. The information on profit and loss accounts relating to lease contracts is as follows:

==> picture [453 x 129] intentionally omitted <==

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

For the year ended December 31,
2021 2020
Items affecting profit or loss
Interest expense on lease liabilities $ 4,526 $ 4,814
Expense on short-term lease contracts 3,930 3,107
-
Loss on lease modification 14
Other gains ( 26) ( 22)
$ 8,430 $ 7,913
----- End of picture text -----

• F. For the years ended December 31, 2021 and 2020, the Group’s total cash outflow for leases were $31,709 and $33,142, respectively.

• (10) Leasing arrangements – lessor

• A. The Group leases various assets including investment property. Rental contracts are typically made for periods of 1 and 10 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. To protect the lessor’s ownership rights on the leased assets, leased assets may not be used as security for borrowing purposes, or a residual value guarantee was required.

• B. For the years ended December 31, 2021 and 2020, the Group recognized rent income in the amounts of $2,650 and $2,788, respectively, based on the operating lease agreement, which does not include variable lease payments.

• C. The maturity analysis of the lease payments under the operating leases is as follows:

Under 1 year 1 ~ 5 years Over 5 years	December31,2021 $ 2,280 1,724 481 4,485 $	December31,2020
		$ 2,261 2,684 601
		5,546 $

~42~

(11) Investment property-net

January 1, 2021 Cost Accumulated depreciation For the year ended December 31, 2021 At January 1 Depreciation Disposals - cost - accumulated depreciation At December 31 December 31, 2021 Cost Accumulated depreciation January 1, 2020 Cost Accumulated depreciation For the year ended December 31, 2020 At January 1 Additions Depreciation Disposals - cost - accumulated depreciation At December 31 December 31, 2020 Cost Accumulated depreciation

Land Buildings Total 95,130 $ 70,162 $ 165,292 $ - 28,743) ( 28,743) ( 95,130 $ 41,419 $ 136,549 $ 95,130 $ 41,419 $ 136,549 $ - 1,913) ( 1,913) ( - 534) ( 534) ( - 531 531 95,130 $ 39,503 $ 134,633 $ 95,130 $ 69,628 $ 164,758 $ - 30,125) ( 30,125) ( 95,130 $ 39,503 $ 134,633 $ Land Buildings Total 95,130 $ 69,058 $ 164,188 $ - 27,281) ( 27,281) ( 95,130 $ 41,777 $ 136,907 $ 95,130 $ 41,777 $ 136,907 $ - 1,540 1,540 - 1,895) ( 1,895) ( - 436) ( 436) ( - 433 433 95,130 $ 41,419 $ 136,549 $ 95,130 $ 70,162 $ 165,292 $ - 28,743) ( 28,743) ( 95,130 $ 41,419 $ 136,549 $

~43~

• A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
	For theyear ended December31,
	2021	2020
Rental income from investment property
(listed as “Other income”)	2,546 $	2,551 $
Direct operating expenses arising from the
investment property that generated rental
income during the year	1,913 $	1,895 $

• B. The fair value of the investment property held by the Group as of December 31, 2021 and 2020 was $412,147 and $355,967, respectively. Valuations were made based on most recent transaction prices of similar and comparable properties and official price, which is categorised within Level 2 in the fair value hierarchy.

• C. The Group has not capitalized any interest as part of investment property for the years ended December 31, 2021, and 2020.

• D. The Group has no investment property pledged to others as of December 31, 2021 and 2020.

• (12) Intangible assets

Intangible assets
		Software		Goodwill		Total
January 1, 2021
Cost	$	32,390	$	82,151	$	114,541
Accumulated amortisation	(	12,026)		-	(	12,026)
Accumulated impairment		-	(	78,081)	(	78,081)
Net currency exchange differences		-	(	4,070)	(	4,070)
	$	20,364	$	-	$	20,364
For the year ended December 31, 2021
At January 1	$	20,364	$	-	$	20,364
Additions－acquired separately		3,189		-		3,189
Amortisation	(	7,657)		-	(	7,657)
Disposals - cost	(	3,369)		-	(	3,369)
- accumulated amortisation		3,369		-		3,369
Net currency exchange differences	(	3)		-	(	3)
At December 31	$	15,893	$	-	$	15,893
December 31, 2021
Cost	$	32,204	$	82,151	$	114,355
Accumulated amortisation	(	16,311)		-	(	16,311)
Accumulated impairment		-	(	78,081)	(	78,081)
Net currency exchange differences		-	(	4,070)	(	4,070)
	$	15,893	$	-	$	15,893

~44~

==> picture [468 x 349] intentionally omitted <==

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

Software Goodwill Total
January 1, 2020
Cost $ 27,435 $ 82,151 $ 109,586
-
Accumulated amortisation ( 6,467) ( 6,467)
-
Accumulated impairment ( 78,081) ( 78,081)
-
Net currency exchange differences ( 4,070) ( 4,070)
-
$ 20,968 $ $ 20,968
For the year ended December 31, 2020
-
At January 1 $ 20,968 $ $ 20,968
－ -
Additions acquired separately 4,686 4,686
-
Reclassifications (Note) 2,952 2,952
-
Amortisation ( 8,245) ( 8,245)
-
Disposals - cost ( 2,698) ( 2,698)
-
- accumulated amortisation 2,698 2,698
-
Net currency exchange differences 3 3
-
At December 31 $ 20,364 $ $ 20,364
December 31, 2020
Cost $ 32,390 $ 82,151 $ 114,541
-
Accumulated amortisation ( 12,026) ( 12,026)
-
Accumulated impairment ( 78,081) ( 78,081)
-
Net currency exchange differences ( 4,070) ( 4,070)
-
$ 20,364 $ $ 20,364
----- End of picture text -----

(Note) Transferred from “Prepayments for equipment”.

• A. The Group has not capitalized any borrowing costs as part of intangible assets for the years ended December 31, 2021 and 2020.

• B. Details of amortization on intangible assets are as follows:

Operating costs Gerneral and administrative expenses	For the year ended December 31,	For the year ended December 31,
	2021 92 $ 7,565 7,657 $	2020
		64 $ 8,181
		8,245 $

• C. The Group's goodwill is assessed for impairment based on the value-in-use recoverable amount that is lower than the carrying amount. There is no impairment loss for the years ended December 31, 2021 and 2020. Impairment loss information about the intangible assets is provided in Note 6(13), ‘Impairment of non-financial assets’.

(13) Impairment of non-financial assets

• A. The Group recognized impairment loss for the years ended December 31, 2021 and 2020 －

• amounting to $ and $49,970 (listed as “Other gains and losses”), respectively. Details of such loss are as follows:

~45~

For the year ended December 31,

Impairment loss －investments accounted for under equity method	Recognized in profit or loss Recognized in other comprehensive income - $ - $ 2021	Recognized in profit or loss Recognized in other comprehensive income 49,970 $ - $ 2020

B. The impairment loss reported by operating segments is as follows:

For the year ended December 31, 2021 2020 Recognised in other Recognised in other Recognised in comprehensive Recognised in comprehensive profit or loss income profit or loss income New Premium Enterprise Co., Ltd. and - - - subsidiary $ $ $ 49,970 $

• C. The accumulated impairment which the Group recognized on investments accounted for under equity method as of December 31, 2021 and 2020 was both $49,970. The accumulated impairment which the Group recognized on goodwill (listed as “Intangible assets”) as of December 31, 2021 and 2020 was both $78,081.

(14) Short-term borrowings

Type of borrowings December 31, 2021 Interest rate range Collateral Bank borrowings Unsecured bank borrowings $ 975,185 0.43%～2.05% None Type of borrowings December 31, 2020 Interest rate range Collateral Bank borrowings Unsecured bank borrowings $ 594,894 0.81%～2.80% None

Please refer to Note 6(26), ‘Finance costs’ for more information about interest expense recognized by the Group for the years ended December 31, 2021 and 2020.

(15) Short-term notes and bills payable

Type of borrowings December 31, 2021 Interest rate range Collateral Commercial papers payable $ 150,000 0.91%～0.92% None Less: Unamortized discount ( 28) $ 149,972

~46~

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

Type of borrowings December 31, 2020 Interest rate range Collateral
----- End of picture text -----

Type ofborrowings	Decem	ber31,2020	Interestraterange	Collateral
Commercial papers payable	$	175,000	0.92%～0.97%	None
Less: Unamortized discount	(	62)
	$	174,938

• A. The above commercial papers were issued and secured by China Bills Finance Co., Ltd., etc. for short-term financing.

• B. Please refer to Note 6(26), ‘Finance costs’ for more information about interest expense recognized by the Group for the years ended December 31, 2021 and 2020.

(16) Other payables

Other payables
Accrued salaries and bonuses Accrued processing fee Accrued pension expense Tax payables Accrued labor insurance and health insurance fee Accrued freight Payables for equipment Others		December31,2021 231,194 $ 74,293 24,938 11,753 8,828 9,569 2,536 63,906 427,017 $	December 31, 2020
			222,245 $ 56,442 19,738 9,479 8,757 5,618 1,972 56,137 380,388 $

(17) Pensions

A. The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contribute monthly an amount equal to 7.5% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March.

－ The information on the Company and its subsidiaries PT. Tainan Enterprise Indonesia and PT. ANDALAN MANDIRI BUSANA’s defined benefit pension plan is as follows:

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(a) The amounts recognized in the balance sheet are as follows:

(a) The amounts recognized in the balance sheet are as follows:	(a) The amounts recognized in the balance sheet are as follows:	(a) The amounts recognized in the balance sheet are as follows:
(b) Movements in present value of defined benefit obligations are as follows: December31,2021 December31,2020 Present value of defined benefit obligations 175,099) ($ 189,047) ($ Fair value of plan assets 71,948 81,560 Net defined benefit liabilities 103,151) ($ 107,487) ($ Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability At January 1, 2021 189,047) ($ 81,560 $ 107,487) ($ Current service cost 15,937) ( - 15,937) ( Interest (expense) income 6,363) ( 245 6,118) ( Past service cost 23,003 - 23,003 188,344) ( 81,805 106,539) ( Remeasurements: Return on plan assets - 1,233 1,233 Change in demographic assumptions 58) ( - 58) ( Change in financial assumptions 2,569 - 2,569 Experience adjustments 20,522) ( - 20,522) ( 18,011) ( 1,233 16,778) ( Pension fund contribution - 16,401 16,401 Paid pension 27,491 27,491) ( - Exchange difference 3,765 - 3,765 At December 31, 2021 175,099) ($ 71,948 $ 103,151) ($
	81,560 $ - 245 - 81,805 1,233 - - - 1,233 16,401 27,491) ( - 71,948 $	107,487) ($ 15,937) ( 6,118) ( 23,003 106,539) ( 1,233 58) ( 2,569 20,522) ( 16,778) ( 16,401 - 3,765 103,151) ($

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At January 1, 2020 Current service cost Interest (expense) income Past service cost Remeasurements: Return on plan assets Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Exchange difference At December 31, 2020	Present value of defined benefit obligations Fair value of plan assets Net defined benefitliability 171,443) ($ 76,154 $ 95,289) ($ 16,712) ( - 16,712) ( 6,221) ( 533 5,688) ( 743) ( - 743) ( 195,119) ( 76,687 118,432) ( - 2,521 2,521 532) ( - 532) ( 5,332) ( - 5,332) ( 5,864) ( 2,521 3,343) ( - 8,817 8,817 6,465 6,465) ( - 5,471 - 5,471 189,047) ($ 81,560 $ 107,487) ($

(c) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company have no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

• (d) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Forthe years endedDecember31,	Forthe years endedDecember31,
	2021 0.70%～7.58% 3.00%～7.00%	2020
		0.30%～7.00%
		3.00%～8.00%

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Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience according to Taiwan Life Insurance Industry 6[th] and 5[th] Mortality Table for the years ended December 31, 2021 and 2020, respectively.

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

==> picture [462 x 143] intentionally omitted <==

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

Discount rate Future salary increases
Increase Decrease Increase Decrease
0.25%～1.00% 0.25%～1.00% 0.25%～1.00% 0.25%～1.00%
December 31, 2021
Effect on present value of
($ 13,132) $ 9,737 $ 8,911 ($ 12,793)
defined benefit obligation
December 31, 2020
Effect on present value of
($ 11,165) $ 12,657 $ 11,708 ($ 10,533)
defined benefit obligation
----- End of picture text -----

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (e) Expected contributions to the defined benefit pension plans of the Group for the next year amount to $10,727.

• (f) As of December 31, 2021, the weighted average duration of the retirement plan is 8 years.

• B. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• The subsidiaries in Vietnam, Cambodia, and mainland China set aside pension reserves based on the regulations of the local governments sponsored defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the local governments are based on 0% (Note) ~ 16% of employees’ monthly salaries and wages. The pension of each employee is managed and arranged by the government; other than the monthly contributions, the Group has no further obligations. The pension costs under the defined contribution pension plans of the Group for the years ended

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December 31, 2021 and 2020 were $48,052 and $37,113, respectively.

(Note) Due to the COVID-19, certain overseas subsidiaries were granted by their respective government a waiver for the contributions to the defined benefit pension plans from February to December in 2020.

• (18) Share capital

• A. Movements in the number of the Company’s ordinary shares outstanding are as follows: (Unit: in thousand shares):

Unit: in thousand shares):
	For theyears ended December31,
	2021 2020
Beginning and ending balance	146,154 146,154

• B. As of December 31, 2021, the Company’s authorized capital was $2,000,000 (including $100,000 thousand shares reserved for employee stock options) and the paid-in capital was $1,471,535, consisting of 147,154 thousand shares of ordinary stock with a par value of NT$10 (in dollars) per share. All proceeds from shares issued have been collected.

• C. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

shares are as follows:
Reason for reacquisition		For the year ended December 31,					2021
		Beginning balance Additions Decrease 1,000 - - Beginning balance Additions Decrease 1,000 - - Forthe yearendedDecember31,		Additions		Decrease		Ending balance
To be reissued to employees Reason for reacquisition							1,000 Ending balance 2020
To be reissued to employees		1,000		-		-		1,000

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus. The balance of the treasury shares after reacquisition and reissue to employees of the Company for the years ended December 31, 2021 and 2020 was both $22,663.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

• (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired.

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(19) Capital surplus

• A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

• B. Movements of the Company’s capital surplus for the years ended December 31, 2021 and 2020 are as follows:

For the year ended December 31,2021		Share premium		Difference between the acquisition or disposal price and carrying amount of subsidiaries		Changes in ownership interests in subsidiaries	Share of change in net equity of associates and joint ventures accounted for under the equitymethod	Share of change in net equity of associates and joint ventures accounted for under the equitymethod		Expired employee stock options		Others		Total
At January 1 Cash distribution from capital surplus At December 31		785,295 $ 29,231) ( 756,064 $		20,166 $ - 20,166 $		46,042 $ - 46,042 $		12,809 $ - 12,809 $		1,257 $ - 1,257 $		9,074 $ - 9,074 $	(	874,643 $ 29,231) 845,412 $

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For the year ended December 31,2020		Share premium Difference between the acquisition or disposal price and carrying amount of subsidiaries 785,295 $ 26,499 $ - 6,333) ( - - 785,295 $ 20,166 $		Changes in ownership interests in subsidiaries	Share of change in net equity of associates and joint ventures accounted for under the equitymethod	Share of change in net equity of associates and joint ventures accounted for under the equitymethod		Expired employee stock options 1,252 $ - 5 1,257 $	Others 9,074 $ - - 9,074 $	Total
At January 1 Transactions with non- controlling interest of subsidiaries (Note 1) Adjustment for change in capital surplus of investee companies (Note 2) At December 31				46,042 $ - - 46,042 $		12,809 $ - - 12,809 $				880,971 $ 6,333) ( 5 874,643 $

• (Note 1) Part of it refers to the difference between consideration and carrying amount arising from equity transactions between the subsidiary, Tainan Enterprise (BVI) Co., Limited, and the non-controlling interest shareholders of the second-tier subsidiary.

• (Note 2) The expired portion of cash capital increase reserved for employee preemption of the subsidiary, Beyoung Fashion Co., Ltd., which the Group recognized in proportion to its ownership.

• C. The Company recognized the cash disbursement from capital surplus of $29,231 ($0.2 (in dollars) per share) in 2021. On March 22, 2022, the Board of Directors proposed for the distribution of dividends from the capital surplus in the amount of $14,615 ($0.1 (in dollars) per share).

(20) Retained earnings

• A. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• B. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. After that, special reserve shall be set aside or reversed in accordance with the related laws or the regulations. The remainder, if any, shall be the current distributable earnings. The current

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distributable earnings along with the unappropriated earnings in the prior year shall be the accumulated distributable earnings which shall be proposed by the Board of Directors and resolved by the shareholders as dividends to shareholders. The Company’s dividend policy shall take into account current and future development plan, investment environment, capital needs, domestic and foreign competition, and capital budget, etc. along with shareholders’ interests. Each year, at least 30% of the current distributable earnings shall be appropriated as dividends. The dividends can be distributed in the form of cash or shares and cash dividends shall account for at least 10% of the total dividends distributed.

• C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• D. For the years ended December 31, 2021 and 2020, the Company recognized cash dividends －

• distributed to owners amounting to $ and $73,077 ($0.5 (in dollars) per share), respectively. On March 22, 2022, the Board of Directors proposed no distribution from 2021 earnings except setting aside special surplus reserve in the amount of $41,919.

(21) Other equity items

For the year ended December 31, 2021 Currency translation difference At January 1 159,201) ($ Currency translation differences: –The Company 47,973) ( –Associates and joint ventures 865) ( Unrealized valuation gains and losses on financial assets at fair value through other comprehensive income –The Company - –Associates and joint ventures - At December 31 208,039) ($	Financial assets at fair value through other comprehensive income 3,604) ($ - - 163 611) ( 4,052) ($	Total 162,805) ($ 47,973) ( 865) ( 163 611) ( 212,091) ($

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				Financial
			assets at fair
			value through
	Currency			other
	translation		comprehensive
For the year ended December 31, 2020	difference			income		Total
At January 1	($	63,372)		92 $	($	63,280)
Currency translation differences:
–The Company	(	92,834)		-	(	92,834)
–Associates and joint ventures	(	2,995)		-	(	2,995)
Unrealized valuation gains and losses on financial
assets at fair value through other comprehensive
income
–The Company		-	(	94)	(	94)
–Associates and joint ventures		-	(	3,602)	(	3,602)
At December 31	($	159,201)	3,604) ($		($	162,805)

(22) Operating revenue

A. The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines and geographical regions. Revenue is mainly from various garment products and related business consulting. Please refer to Note 14, ‘SEGMENT INFORMATION’.

erating revenue The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines and geographical regions. Revenue is mainly from various garment products and related business consulting. Please refer to Note 14, ‘SEGMENT INFORMATION’.	erating revenue The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines and geographical regions. Revenue is mainly from various garment products and related business consulting. Please refer to Note 14, ‘SEGMENT INFORMATION’.	erating revenue The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines and geographical regions. Revenue is mainly from various garment products and related business consulting. Please refer to Note 14, ‘SEGMENT INFORMATION’.
The Group has recognized the following revenue-related contract liabilities: 2021 2020 Timing of revenue recognition At a point in time Sales revenue 5,715,698 $ 5,937,857 $ Over time Service revenue 45,778 32,683 5,761,476 $ 5,970,540 $ Forthe years endedDecember31, December31,2021 December31,2020 January1,2020 Contract liabilities - current 8,776 $ 8,035 $ 1,168 $ 2021 2020 Revenue recognized that was included in the contract liability balance at the beginning of the year - receipts in advance 8,035 $ 1,168 $ Forthe years endedDecember31,
	2021 8,035 $	2020
		1,168 $

B. The Group has recognized the following revenue-related contract liabilities:

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(23) Interest income

Interest income
		Forthe years ended		December31,
		2021		2020
Interest income from bank deposits	$	4,006	$	5,588
Interest income from financial assets
measured at amortised cost		17,778		25,728
Others		1,827		6,512
	$	23,611	$	37,828

(24)	Other income 2021 2020 Rental income 2,650 $ 2,788 $ Government grants income 2,298 2,665 Dividend income - 8 Others 9,824 23,019 14,772 $ 28,480 $ For the years ended December 31,

(25) Other gains and losses

		For theyears ended December31,	For theyears ended December31,	For theyears ended December31,
		2021		2020
Net gain on financial assets and	$	218		$	10,086
liabilities at fair value through
profit or loss
Net currency exchange gain (loss)		2,181	(		37,446)
Net gain on disposal of non-current		-			34,076
assets held for sale
Net gain (loss) on disposals of		1,106	(		538)
property, plant and equipment
Net loss on disposal of investment	(	3)	(		3)
property
Loss on disposal of investment	(	1,114)	(		27,177)
Impairment loss		-	(		49,970)
Loss from lease modifications		-	(		14)
Other losses	(	9,811)	(		6,672)
	($	7,423)	($		77,658)

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(26)	Finance costs 2021 2020 Interest expense Bank borrowings 7,913 $ 19,368 $ Lease liabilities 4,526 4,814 12,439 $ 24,182 $ For theyears ended December31,

(27) Expenses by nature

Employee benefit expenses Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property (Note) Amortization charges on intangible assets	For the year ended December 31, 2021	For the year ended December 31, 2021
	Operating cost 1,300,977 $ 76,483 27,844 - 92 1,405,396 $	Operating expense Total 517,432 $ 1,818,409 $ 20,739 97,222 3,014 30,858 1,913 1,913 7,565 7,657 550,663 $ 1,956,059 $

Employee benefit expenses Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property (Note) Amortization charges on intangible assets		For theyear ended December	For theyear ended December	For theyear ended December	31,2020	31,2020
		Operating cost 1,404,178 $ 83,312 27,687 - 64 1,515,241 $		Operating expense		Total
				515,703 $ 21,276 2,373 1,895 8,181 549,428 $		1,919,881 $ 104,588 30,060 1,895 8,245 2,064,669 $

(Note) Listed as “Other gains and losses”.

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(28) Employee benefit expense

Wages and salaries Labor and health insurance expenses Pension costs Other personnel expenses Wages and salaries Labor and health insurance expenses Pension costs Other personnel expenses

Operating cost Operating expense Total 1,174,706 $ 455,977 $ 1,630,683 $ 67,374 31,684 99,058 32,517 14,587 47,104 26,380 15,184 41,564 1,300,977 $ 517,432 $ 1,818,409 $ Operating cost Operating expense Total 1,260,589 $ 451,131 $ 1,711,720 $ 77,164 32,712 109,876 42,963 17,293 60,256 23,462 14,567 38,029 1,404,178 $ 515,703 $ 1,919,881 $ For theyear ended December 31,2021 Forthe yearendedDecember31,2020

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 5% for directors’ and supervisors’ remuneration.

• B. The Company did not accrue employees’ compensation and directors’ remuneration due to the loss incurred for the year ended December 31, 2021. According to the resolution of the Board of Directors on March 23, 2021, the Company did not accrue employees’ compensation and directors’ remuneration due to the loss incurred for the year ended December 31, 2020. The resolution was in agreement with those amounts recognized in the 2020 financial statements. Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as proposed by the Board of Directors and resolved by the stockholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(29) Income tax

A. Income tax expense (benefit)

(a) Components of income tax expense (benefit):

		Forthe yearendedDecember31,	Forthe yearendedDecember31,	Forthe yearendedDecember31,
		2021		2020
Current income tax:
Income tax incurred in current year	$	4,802	$	10,071
Under provision of prior year income tax
payable		3,227		7,934
		8,029		18,005
Deferred income tax:
Origination and reversal of
temporary differences		971	(	45,422)
Impact of change in tax rate		-		2,950
Net currency exchange difference	(	554)	(	1,080)
		417	(	43,552)
Income tax expense (benefit)	$	8,446	($	25,547)

(b) The income tax relating to components of other comprehensive income is as follows:

		For the year ended December 31,	For the year ended December 31,	For the year ended December 31,
		2021		2020
Remeasurement of defined benefit obligations	($	3,739)	($	653)
Impact of change in tax rate		-	(	42)
Net currency exchange difference	(	31)		36
	($	3,770)	($	659)

B. Reconciliation between income tax expense (benefit) and accounting loss:

			For the	year ended December31,	year ended December31,	year ended December31,
			2021			2020
Tax calculated based on loss before	($		29,793)		($	75,872)
tax and statutory tax rate
Effect from items disallowed by tax
regulation			28,206			48,565
Effect from tax exempt income by tax
regulation	(			190)	(	2)
Temporary differences not recognised
as deferred tax assets				6,996		-
Change in assessment of realisation of
deferred tax assets				-	(	9,122)
Under provision of prior years income
tax payable				3,227		7,934
Effect from changes in the tax rate				-		2,950
Income tax expense (benefit)		$		8,446	($	25,547)

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C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

are as follows:
			For theyear ended				December 31,2021
								Recognized
								in other
				Recognized in			comprehensive
			Jaunary1	profit or loss				income		December31
Deferred tax assets
Temporary differences:
Unrealised loss on currency
exchange		$	3,134		$	1,515	$	-		$	4,649
Unused compensated
absences			1,891			63		-			1,954
Pensions			25,145	(		4,304)		3,739			24,580
Unrealised loss on
investment			14,774			-		-			14,774
Tax losses			29,202			1,467		-			30,669
		$	74,146	($		1,259)	$	3,739		$	76,626
Deferred tax liabilities
Temporary differences:
Unrealised gain on currency
exchange	($		288)		$	288	$	-		$	-
Incremental tax on land
revaluation	(		33,178)			-		-	(		33,178)
Unrealised gain on
investment	(		6,564)			-		-	(		6,564)
	($		40,030)	$		288	$	-	($		39,742)
		$	34,116	($		971)	$	3,739		$	36,884

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For the year ended December 31, 2020

								Recognized	Recognized
									in other
				Recognized in				comprehensive
			Jaunary1		profit or loss				income		December31
Deferred tax assets
Temporary differences:
Unrealised loss on currency
exchange		$	3,629	($			495)	$	-		$	3,134
Unused compensated
absences			1,703				188		-			1,891
Pensions			24,908	(			297)		534			25,145
Unrealised loss on
investment			4,780			9,994			-			14,774
Tax losses			4,633			24,569			-			29,202
	$		39,653	$		33,959		$	534	$		74,146
Deferred tax liabilities
Temporary differences:
Unrealised gain on currency
exchange		$	-	($			288)	$	-	($		288)
Incremental tax on land
revaluation	(		33,178)				-		-	(		33,178)
Unrealised gain on
investment	(		15,365)			8,801			-	(		6,564)
Pensions	(		161)				-		161			-
	($		48,704)	$		8,513		$	161	($		40,030)
	($		9,051)	$		42,472		$	695	$		34,116

D. Expiration dates of unused tax losses and amounts of unrecognized deferred tax assets are as follows:

December 31, 2021

Year incurred 2015 2017 2018 2019 2020 2021	Amount filed/ assessed 10,513 $ 32,998 901 8,690 98,249 11,584 162,935 $	Unrecognized Unused amount deferred taxassets 924 $ - $ 32,998 - 901 - 8,690 - 98,249 - 11,584 - 153,346 $ - $	Expiry year
			2025 2027 2028 2029 2030 2031

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December 31, 2020

	December31,2020
Amount filed/ Year incurred assessed 2015 58,331 $ 2017 32,998 2018 901 2019 8,690 2020 96,754 197,674 $	Unrecognized Unused amount deferred tax assets 54,075 $ 47,818 $ 32,998 - 901 - 8,690 - 96,754 - 193,418 $ 47,818 $	Expiry year
		2025 2027 2028 2029 2030

• E. The amounts of deductible temporary differences that were not recognized as deferred tax assets are as follows:

are as follows:
Deductible temporary differences Unrealized loss on investment Allowance for doubtful accounts that exceeded the allowable tax limit	December 31, 2021 1,150,385 $ 55,670 1,206,055 $	December 31, 2020
		972,332 $ 116,250 1,088,582 $

• F. Under Act 8 which was promulgated by the Indonesia government in 2020, the income tax rate was reduced from 25% to 22% effective from the year ended December 31, 2020. The Group has assessed the impact of the change in income tax rate.

• G. The Group’s income tax returns through 2019~2020 have been assessed and approved by the Tax Authority and there were no disputes existing between the Group and the Authority as of March 22, 2022.

(30) Loss per share

22, 2022. Loss per share
Basic and diluted loss per share Loss attributable to ordinary shareholders of the parent	YearendedDecember31,2021
	Amount aftertax 135,104) ($	Weighted average number of ordinary shares outstanding Loss per share (sharesinthousands) (indollars) 146,154 0.92) ($

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==> picture [471 x 124] intentionally omitted <==

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

Year ended December 31, 2020
Weighted average
number of ordinary
shares outstanding Loss per share
Amount after tax (shares in thousands) (in dollars)
Basic and diluted loss per share
Loss attributable to ordinary
shareholders of the parent ($ 358,606) 146,154 ($ 2.45)
----- End of picture text -----

(31) Transactions with non-controlling interest

A. Acquisition of additional equity interest in a subsidiary

In the fourth quarter of 2020, the Group acquired an additional 30% of shares each of its － subsidiaries Beyoung Fashion Co., Ltd. and T&G FASHION CO., LTD. for a total cash consideration of $6,000. The carrying amount of non-controlling interest in Beyoung Fashion Co., Ltd. and T&G FASHION CO., LTD. was ($340) in total at the acquisition date. This transaction resulted in a decrease in the non-controlling interest by ($340) and a decrease in the equity attributable to owners of the parent by $6,333. The effect of the above changes is shown below:

Beyoung Fashion Co., Ltd. T&G FASHION CO.,LTD. Total Carrying amount of non-controlling interest acquired 2,224) ($ 1,884 $ 340) ($ Differences in net exchange - 7 7 Consideration paid to non-controlling interest 2,500) ( 3,500) ( 6,000) ( Capital surplus - difference between proceeds on actual acquisition of or disposal of equity interest in a subsidiary and its carrying amount 4,724) ($ 1,609) ($ 6,333) ($ Year ended December 31, 2020	Beyoung Fashion Co., Ltd. T&G FASHION CO.,LTD. Total Carrying amount of non-controlling interest acquired 2,224) ($ 1,884 $ 340) ($ Differences in net exchange - 7 7 Consideration paid to non-controlling interest 2,500) ( 3,500) ( 6,000) ( Capital surplus - difference between proceeds on actual acquisition of or disposal of equity interest in a subsidiary and its carrying amount 4,724) ($ 1,609) ($ 6,333) ($ Year ended December 31, 2020	Beyoung Fashion Co., Ltd. T&G FASHION CO.,LTD. Total Carrying amount of non-controlling interest acquired 2,224) ($ 1,884 $ 340) ($ Differences in net exchange - 7 7 Consideration paid to non-controlling interest 2,500) ( 3,500) ( 6,000) ( Capital surplus - difference between proceeds on actual acquisition of or disposal of equity interest in a subsidiary and its carrying amount 4,724) ($ 1,609) ($ 6,333) ($ Year ended December 31, 2020
	T&G FASHION CO.,LTD.	Total
	1,884 $ 7 3,500) ( 1,609) ($	340) ($ 7 6,000) ( 6,333) ($

B. There is no transaction between the Group and non-controlling interest in 2021.

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(32) Supplemental cash flow information

A. Investing activities with partial cash payments:

		Forthe years endedDecember31,	Forthe years endedDecember31,	Forthe years endedDecember31,
		2021		2020
Acquisition of property, plant and
equipment	$	56,751	$	46,103
Add: Beginning balance of payables for
equipment (listed as “Other
payables”)		1,972		13,438
Less: Ending balance of payables for
equipment (listed as “Other
payables”)	(	2,536)	(	1,972)
Cash paid for the acquisition of property,
plant and equipment	$	56,187	$	57,569
Operating and investing activities with no	cash flow effects:
		Forthe years endedDecember31,
		2021		2020
(1) Write-off of allowance for doubtful
accounts	$	125,797	$	-
(2) Prepayment reclassified to property,
plant and equipment	$	-	$	218
(3) Income from reversion of land
entrusted to others’ name	$	-	$	11,053
(4) Property, plant and equipment
reclassified to other current
assets	$	-	$	804
(5) Property, plant and equipment
reclassified to other non-current
assets	$	397	$	-
(6) Prepayment for equipment
reclassified to property, plant
and equipment	$	1,994	$	8,168
(7) Prepayment for equipment
reclassified to intangible assets	$	-	$	2,952
(8) Prepayment for equipment
reclassified to other non-current
assets	$	-	$	1,536

• B. Operating and investing activities with no cash flow effects:

• (7) Prepayment for equipment reclassified to intangible assets

• (8) Prepayment for equipment reclassified to other non-current assets

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(33) Changes in liabilities from financing activities

						Short-term						Guarantee	Total liabilities	Total liabilities	Total liabilities
			Short-term		notes and bills							deposits	from financing
		borrowings				payable	Leaseliabilities					received			activities
At January 1, 2021		$	594,894		$	174,938		$	108,748		$	8,109		$	886,689
Changes in cash flow
from financing activities			380,939	(		25,000)	(		23,201)	(		406)			332,332
Changes in other non-cash
items	(		648)			34	(		549)			-	(		1,163)
At December 31, 2021		$	975,185		$	149,972		$	84,998		$	7,703		$	1,217,858
					Short-term							Guarantee	Total liabilities
			Short-term	notes and bills								deposits	from financing
		borrowings				payable	Leaseliabilities					received			activities
At January 1, 2020	$		874,307	$		99,945	$		92,005	$		8,641	$		1,074,898
Changes in cash flow
from financing activities	(		274,202)			75,000	(		24,900)	(		532)	(		224,634)
Changes in other non-cash
items	(		5,211)	(		7)			41,643			-			36,425
At December 31, 2020	$		594,894	$		174,938	$		108,748	$		8,109	$		886,689

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Tainan Enterprise (Cayman) Co., Limited TONY WEAR (Shanghai) Fashion Co., Ltd. New Premium Enterprise Co., Ltd. JEI JOM Enterprise Co., Ltd. Nelson Sport Co., Ltd.

Relationship with the Group Associate Associate Joint venture Joint venture Other related party

(2) Significant related party transactions

A. Operating revenue

gnificant related party transactions Operating revenue
Sales of goods: Others related parties Sales of services: Joint ventures	Forthe years endedDecember31,
	2021 - $ - - $	2020
		2,206 $ 1,622
		3,828 $

The sales terms to related parties were the same for third parties, and the collection period for related parties was closed their accounts 4 months after the end of each month.

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B. Operating cost

Operating cost
	Forthe years endedDecember31,
	2021	2020
Purchases of services:
Joint vantures	- $	9,662 $

The purchase terms from related parties were the same for third parties, and the payment term for related parties was closed their accounts 4 months after the end of each month.

C. Other income

Other income
TONY WEAR (Shanghai) Fashion Co., Limited Associates	2021 2020 2,187 $ 2,267 $ 228 228 2,415 $ 2,495 $ For theyears ended December31,
		2,267 $ 228
		2,495 $

D. Property transactions

• (a) Acquisition of property, plant and equipment:

Joint ventures	2021 2020 10,124 $ - $ For theyears ended December31,	2021 2020 10,124 $ - $ For theyears ended December31,
		- $

• (b) Acquisition of other assets (listed as “Operating costs” and “General and administrative expenses”):

expenses”):
Key management compensation Joint ventures Salaries and other short-term employee benefits Post-employment benefits	2021 2020 483 $ - $ For theyears ended December31, Forthe years endedDecember31,
	2021 22,883 $ 643 23,526 $	2020
		22,630 $ 663
		23,293 $

(3) Key management compensation

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8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

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

Book value
Pledged asset December 31, 2021 December 31, 2020 Purpose
Land (Note) $ 92,549 $ 92,549 Guarantee for
short-term borrowings
Buildings and
structures, net (Note) 36,962 36,566 ″
$ 129,511 $ 129,115
----- End of picture text -----

Note: listed as “Property, plant and equipment”.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

• A. As of December 31, 2021 and 2020, the remaining balance due for construction in progress was $2,272 and $9,006, respectively.

• B. As of December 31, 2021 and 2020, the unused letters of credit amounted to $166,469 and $170,109, respectively.

• －

• C. Please refer to Note 6(10) ‘Leasing agreements lessor’ for more information regarding operating lease agreements.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

The Group invested $39,730 (US$1,435 thousands, listed as “Financial assets at amortized costcurrent”) in bonds issued by Russia as of December 31, 2021. Due to the escalation of the UkraineRussia military conflict on February 24, 2022, various countries imposed economic sanctions against Russia. Based on the Group’s assessment, restrictions of the economic sanctions to Russia’s foreign exchange variation and financial controls would significantly increase credit risk on the Group’s investment in bonds and might adversely affect the possibility of recovering the bonds.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

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(2) Financial instruments

A. Financial instruments by category

December 31, 2021 December 31, 2020

Financial assets

Financial assets
Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instruments Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liabilities (including current portion) Guarantee deposits received	86,954 $ 639 $ 681,095 $ 392,093 380 1,145,171 71,751 12,777 2,303,267 $ - $ 975,185 $ 149,972 13,154 347,395 427,017 84,998 7,703 2,005,424 $	87,084 $
		476 $
		868,736 $ 443,162 687 1,028,273 91,195 16,269
		2,448,322 $
		218 $
		594,894 $ 174,938 8,038 326,624 380,388 108,748 8,109
		1,601,739 $

B. Financial risk management policies

(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimize any adverse effects on the financial performance of the Group, derivative financial instruments, such as foreign exchange forward contracts and foreign currency option contracts are used to hedge certain exchange rate risk, and interest rate swaps are used to fix variable future cash flows. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

• (b) Risk management is carried out by a central treasury department (Group treasury) under

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policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• (c) Information about derivative financial instruments that are used to hedge certain exchange rate risk are provided in Note 6(2), ‘Financial assets and liabilities at fair value through profit or loss’.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities.

• ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. Exchange rate risk is measured through a forecast of highly probable USD and RMB expenditures. Forward foreign exchange contracts are adopted to minimize the volatility of the exchange rate affecting cost of forecast inventory purchases.

• iii.The Group hedges foreign exchange rate by using forward exchange contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Note 6(2) , ‘Financial assets and liabilities at fair value through profit or loss’.

• iv. The Group's risk management policy is to take appropriate hedging against the expected future cash flow risk of major currencies (mainly the purchase of inventories denominated in USD), so as to reduce the risk exposure of major currencies.

• v. The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group’s foreign operations is managed primarily through borrowings denominated in the relevant foreign currencies.

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• vi. The Group’s businesses involve some non-functional currency operations (the Group’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

fluctuations is as follows:
Foreign currency amount (inthousands) Exchangerate (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 49,530 $ 27.68 RMB:NTD 19,719 4.344 IDR:USD 18,748,232 0.000070 VND:USD 9,311,065 0.000044 Investment accounted for under equity method USD:NTD 339 27.68 Financial liabilities Monetary items USD:NTD 44,980 27.68 RMB:NTD 20,429 4.344 IDR:USD 46,177,878 0.000070 VND:USD 21,280,404 0.000044 December31,2021	Book value (NTD)
	1,370,990 $ 85,660 36,369 11,255 9,395 1,245,040 88,745 89,579 25,722

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Foreign currency amount (inthousands) Exchangerate (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 53,994 $ 28.48 RMB:NTD 35,118 4.36 IDR:USD 7,543,387 0.000071 KHR:USD 558,751 0.000245 Investment accounted for under equity method USD:NTD 1,631 28.48 Financial liabilities Monetary items USD:NTD 30,664 28.48 RMB:NTD 39,995 4.36 IDR:USD 39,609,675 0.000071 VND:USD 17,063,400 0.000043 December31,2020	Book value (NTD)
	1,537,736 $ 153,712 15,231 3,899 46,459 873,321 175,051 79,978 20,723

Sensitivity analysis of foreign exchange risk mainly focuses on the foreign currency monetary items at the end of the financial reporting period. If the exchange rate of NTD to all foreign currencies had appreciated/depreciated by 1% with all other variables held constant, post-tax profit would have increased/decreased by $552 and $5,615 for the years ended December 31, 2021 and 2020, respectively.

vii.The total exchange gain (loss), including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group amounted to $2,181 and ($37,446) for the years ended December 31, 2021 and 2020, respectively.

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit would have increased/decreased by $870 and $871 for the years ended December 31, 2021 and

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2020, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have decreased/increased by $6 and $5, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value Interest rate risk

• i. The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk, partial interest rate risk is offset by cash and cash equivalents held at variable rates. The Group's borrowings issued at floating rates were mainly denominated in New Taiwan Dollars and US Dollars in 2021 and 2020.

• ii. If the borrowing interest rate had increased/decreased by 1% with all other variables held constant, net of tax profit for the years ended December 31, 2021 and 2020 would have decreased/increased by $63 and $155, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortized cost.

• ii. The Group manages its credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilization of credit limits is regularly monitored.

• iii. The Group adopts management of credit risk, if the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. The Group adopts the assumptions under IFRS 9, that is, the default occurs when the contract payments are past due over 90 days.

• v. The Group classifies customer’s accounts receivable in accordance with credit rating of customer, collaterals, credit risk on trade, etc. The Group applies the simplified approach using the provision matrix, loss rate methodology to estimate expected credit loss. The Group uses the forecastability of conditions to adjust historical and timely information to assess the default possibility of accounts receivable. Movements in relation to the Group applying the simplified approach to provide loss allowance for notes receivable, accounts

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receivable and other receivables are as follows:

==> picture [432 x 209] intentionally omitted <==

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

Expected loss rate Book value Allowance
At December 31, 2021
-
Individual D 0.00% $ 56,640 $
Group A 0.24% 1,092,841 4,310
Total $ 1,149,481 $ 4,310
At December 31, 2020
Individual A 39.15% $ 95,693 $ 37,459
Individual B 14.55% 183,274 26,672
Individual C 67.97% 13,980 9,503
Individual D 74.35% 67,813 50,418
-
Group A 0.07% 792,252
Total $ 1,153,012 $ 124,052
----- End of picture text -----

• ix. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable are as follows:

allowance for accounts receivable are	as follows:	as follows:
At January 1 Expected credit losses Transferred to income (listed as “Other income”) Write-offs At December 31	For theyears ended December 31,
	2021 124,052 $ 7,044 989) ( 125,797) ( 4,310 $	2020
		- $ 124,052 - - 124,052 $

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by the Group Finance Department. Group’s Finance Department monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any if its borrowing facilities.

• ii. Surplus cash held by the operating entities over and above the balance required for working capital management are transferred to the Group’s Finance Department. Group’s Finance Department invests surplus cash in interest bearing current accounts and time deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts.

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iii. The Group has the following undrawn borrowing facilities:

December 31, 2021 December 31, 2020 Floating rate: Expiring within one year $ 3,304,520 $ 3,608,673

iv. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows:

December31,2021	Less than 1 year	Between 1 and 3 years	Between 3 and 5 years	Over 5 years
		- $ - - - 1,290 51,284 7,703 Between 1 and3 years	- $ - - - - 13,038 - Between 3 and5 years	- $ - - - - - - Over 5 years
		$ - - - - 1,327 55,120 8,109 -	$ - - - - - 35,209 - -	$ - - - - - 3,498 - -

v. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

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(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is included in Level 1

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in forward exchange contract is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market and investment property is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(11), ‘Investment property-net’.

• C. The carrying amounts of the Group’s financial instruments not measured at fair value including cash and cash equivalents, financial assets at amortized cost, notes receivable, accounts receivable, other receivables, guarantee deposits paid, short term borrowings, short -term notes and bills payable, notes payable, accounts payable, other payables, and guarantee deposits received are approximate to their fair values.

• D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

• (a) The related information on the nature of the assets and liabilities is as follows:

December31,2021 Financial assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Financial assets at fair value through other comprehensive income Equity securities	Level 1 - $ 639 639 $	Level 2 - $ - - $	Level3 86,954 $ - 86,954 $	Total
				86,954 $ 639
				87,593 $

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December31,2020 Financial assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Financial assets at fair value through other comprehensive income Equity securities Financial liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward foreign exchange contract	Level 1 Level 2 - $ - $ 476 - 476 $ - $ - $ 218 $	Level3 87,084 $ - 87,084 $ - $	Total 87,084 $ 476
			87,560 $
			218 $

• (b) The methods and assumptions the Group used to measure fair value are as follows:

• i. The instruments the Group used market quoted prices as their fair values (that is, Level 1).

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• iii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market

• iv. For high-complexity financial instruments, the fair value is measured by using selfdeveloped valuation model based on the valuation method and technique widely used within the same industry. The valuation model is normally applied to derivative financial instruments, debt instruments with embedded derivatives or securitized instruments. Certain inputs used in the valuation model are not observable at market, and the Group must make reasonable estimates based on its assumptions

• v. The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing

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models. Forward exchange contracts are usually valued based on the current forward exchange rate.

• vi. The market approach (Price-to-Book Ratio, P/B ratio) and asset approach (net book value adjustment) are used by the Group to measure its certain equity investment without active market, which is calculating the ratio of recent identical or similar transaction price to book as an observable input to project the fair value of the disposal group.

• (c) For the years ended December 31, 2021 and 2020, there was no transfer between Level 1 and Level 2, and there was no transfer into or out from Level 3.

• (d) The following chart is the movement of Level 3 for the years ended December 31, 2021 and 2020:

==> picture [465 x 221] intentionally omitted <==

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

Derivative
Equity securities financial
For the year ende December 31,2021 (Note) instruments Total
-
At January 1 $ 87,084 $ $ 87,084
-
Proceeds from capital reduction ( 130) ( 130)
-
At December 31 $ 86,954 $ $ 86,954
Derivative
Equity securities financial
For the year ende December 31,2020 (Note) instruments Total
At January 1 $ 87,237 ($ 10,023) $ 77,214
-
Gain on recognized in profit or loss 10,023 10,023
-
Proceeds from capital reduction ( 153) ( 153)
-
At December 31 $ 87,084 $ $ 87,084
----- End of picture text -----

• (Note) There is no adjustment of equity securities in Level 3 for the years ended December

  • 31, 2021 and 2020 because the fair value change was insignificant.

• (e) The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

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Non-derivative equity instrument: Unlisted shares Non-derivative equity instrument: Unlisted shares	Fair value at December 31, 2021	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
	92,894 $ Fair value at December 31, 2020	The market approach (Price-to- Book Ratio)/Asset method (net book value adjustment ) Valuation technique	Discount for lack of marketability / Discount for lack of control Significant unobservable input	30% Range (weighted average)	The higher the discount for lack of marketability, the lower the fair value; the higher the discount for lack of control, the lower the fair value. Relationship of inputs to fairvalue
	89,089 $	The market approach (Price-to- Book Ratio)/Asset method (net book value adjustment )	Discount for lack of marketability / Discount for lack of control	30%	The higher the discount for lack of marketability, the lower the fair value; the higher the discount for lack of control, the lower the fair value.

• (f) The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect on profit or loss or on other comprehensive income from financial assets categorized within Level 3 if the inputs used to valuation models have changed:

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December 31, 2021

Recognized in Recognized in other profit or loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity Discount for lack instrument of marketability for lack of control and - - discount ±10% $ 8,428 ($ 8,428) $ $ December 31, 2020 Recognized in Recognized in other profit or loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity Discount for lack instrument of marketability for lack of control and - - discount ±10% $ 8,526 ($ 8,526) $ $

(4) Other information

Due to the impact of the Covid-19 pandemic and the government’s multiple pandemic prevention measures, the Group has implemented measures related to work place sanitation management, continued to manage related matters and implemented a staggered work schedule to operate all its plants in compliance with the “Guidelines for Enterprise Planning of Business Continuity in Response to the Coronavirus Disease 2019 (COVID-19)” of the Republic of China (R.O.C.). There were no significant adverse effects on various operations. However, the Group is a multinational corporation and some overseas subsidiaries were impacted by the Covid-19. There were losses on work stoppages amounting to $13,167 (listed as ‘Operating costs’ and ‘General and administrative expenses’) arising from the multiple pandemic prevention measures taken by local governments such as Cambodia and Vietnam. Currently, each overseas subsidiary has gradually resumed to work and the Group has also reduced the cancellation of orders by coordinating with its customers to defer the delivery. In addition, being impacted by the Covid-19 pandemic, certain accounts receivable amounting to $125,383 were provisioned for impairment for the year ended December 31, 2020. In the first quarter of 2021, the amount was fully written-off as it was unlikely to be recovered based on the assessment.

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13. SUPPLEMENTARY DISCLOSURES

According to the current regulatory requirements, the Group is only required to disclose the information for the year ended December 31, 2021.

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (excluding subsidiaries, associates and joint ventures): Please refer to table 2.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital or more: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• I. Trading in derivative instruments undertaken during the reporting periods: All transactions had been cleared.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 5.

• (2) Information on investees

Names, locations and other information of investee companies (excluding investees in Mainland China) ： Please refer to table 6.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 8.

(4) Major shareholders information

Major shareholders information: Please refer to table 9.

14. SEGMENT INFORMATION

(1) General information

The management of the Group has identified the reportable operating segments based on information provided to the Group’s chief operating decision-maker in order to make strategic decisions. The Group’s chief operating decision-maker manages the business from an entity’s perspective.

(2) Measurement of segment information

• The chief operating decision-maker, evaluates the performance of the operating segments based on a measure of income before tax; this measure excludes the impact of non-recurring receipts and payments in operating segments. The accounting policies of the operating segment are the same as the summary of the significant accounting policies described in Note 4, ‘SUMMARY OF

~80~

SIGNIFICANT ACCOUNTING POLICIES’.

(3) Information about segment profit or loss, assets and liabilities

The segment information provided to the Chief operating decision-maker for the reportable segments is as follows:

egments is as follows:
Segment revenue Inter-segment revenue Revenue from external customers Interest income Depreciation and amortisation Financial costs Segment income (loss) before tax Segment assets Segment liabilities Segment revenue Inter-segment revenue Revenue from external customers Interest income Depreciation and amortisation Financial costs Segment income (loss) before tax Segment assets Segment liabilities	Garment production Investment Total 9,045,283 $ - $ 9,045,283 $ 3,283,807) ( - 3,283,807) ( 5,761,476 - 5,761,476 - 23,611 23,611 137,650 - 137,650 8,498 3,941 12,439 166,347) ( 39,689 126,658) ( 4,270,610 942,634 5,213,244 1,270,318 889,172 2,159,490 Year ended December 31,2021 Year ended December 31, 2020
	Garment production Investment Total 9,628,890 $ - $ 9,628,890 $ 3,658,350) ( - 3,658,350) ( 5,970,540 - 5,970,540 - 37,828 37,828 144,788 - 144,788 14,553 9,629 24,182 349,345) ( 31,400) ( 380,745) ( 3,897,970 1,140,904 5,038,874 1,095,152 663,723 1,758,875

(4) Reconciliation for segment income (loss), assets and liabilities

Sales between segments are carried out at arm’s length. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income, and the divisional income amounts provided to the chief operating decision maker are measured in accordance with the Group's consolidated financial statements and therefore do not require reconciliation.

(5) Information on products and services

Revenue from external customers is mainly from the production and sales of garment, the design, development, production, and sales of self-owned brands, and the provision of processing and business consulting services, as well as the agency of other internationally well-known brands. Details of revenue are as follows:

~81~

		For theyears ended	For theyears ended	December31,
		2021		2020
Garment foundry and sales revenue	$	5,715,698	$	5,937,857
Service revenue		45,778		32,683
	$	5,761,476	$	5,970,540

(6) Geographical information

Geographical information for the years ended December 31, 2021 and 2020 is as follows: For the years ended December 31,

United States Canada Japan China Taiwan Cambodia Vietnam Indonesia Others	Non-current Revenue assets 3,878,344 $ - $ 569,439 - 749,132 - 71,541 41,371 105,129 549,405 45,775 185,923 602 300,032 22 252,449 341,492 636 5,761,476 $ 1,329,816 $ 2021	Non-current Revenue assets 4,186,732 $ - $ 540,459 - 752,567 - 81,802 38,485 140,168 560,734 32,365 190,323 - 324,677 465 318,461 235,982 1,035 5,970,540 $ 1,433,715 $ 2020	Non-current Revenue assets 4,186,732 $ - $ 540,459 - 752,567 - 81,802 38,485 140,168 560,734 32,365 190,323 - 324,677 465 318,461 235,982 1,035 5,970,540 $ 1,433,715 $ 2020
	Revenue 3,878,344 $ 569,439 749,132 71,541 105,129 45,775 602 22 341,492 5,761,476 $
			- $ - - 38,485 560,734 190,323 324,677 318,461 1,035 1,433,715 $

(7) Major customer information

The details of the Group's major customers whose revenue from a single customer in 2021 and 2020 has reached more than 10% of the revenue on the consolidated comprehensive income statement are as follows:

as follows:
Customer name Customer B Customer D Customer G Customer E Customer F Customer A	Forthe years endedDecember31,
	2021	% 17 16 13 12 10 5	2020
	Net Operating Revenue 991,317 $ 948,723 755,090 701,468 584,715 314,063		Net OperatingRevenue 736,355 $ 606,731 733,193 1,141,800 428,759 1,267,995	%
				12 10 12 19 7 21

~82~

Table 1

Expressed in thousands of NTD

Tainan Enterprises Co., Ltd. and Subsidiaries

Loans to others

For the year ended December 31, 2021

Number	Name	Name of counterparty	Account	Related parties	Maximum balance	Ending balance	Actual amount drawndown	Interest rate	Nature of financial activity	Total transaction amount	Reason for financing	Allowance for doubtful accounts	Assets pledged	Assets pledged	Loan limit per entity (Note2)	Maximum amount available for loan (Note2)	Footnote
													Item	Value
0 1	Tainan Enterprises Co., Ltd. Tainan Enterprise (BVI) Co., Limited	Tainan Enterprises (Vietnam) Co., Ltd. TAI NAN ENTERPRISES (CAMBODIA) CO., LTD. PT. ANDALAN MANDIRI BUSANA Tainan Enterprises (Vietnam) Co., Ltd. YONG JENG INTERNATIONAL CO., LTD.	Other receivables Other receivables Other receivables Other receivables Other receivables	Y Y Y Y Y	249,120 $ 41,520 179,920 110,720 83,040	193,760 $ 41,520 152,240 110,720 69,200	116,256 $ 41,520 119,024 110,720 56,663	0～2.5% － － － 4%	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1)	- $ - - - -	Financing use Financing use Financing use Financing use Financing use	- $ - - - -	－ － － － －	- $ - - - -	916,126 $ 972,736 972,736 972,736 364,776	916,126 $ 972,736 972,736 972,736 364,776	－ － － － －

Note 1: Nature of loans to others is filled for short-term financing.

Note 2: In accordance with the provisions of the operating procedures for loaning to others, the calculation of the capital loan limit of individual objects and the total limit of capital loan is as follows: 1. Loan total limit: 40% of the net worth in the most recent financial report, but only if financing is necessary, 30% of the net worth in the most recent financial report.

1. Limit for a single company

2. (1) Trading partner: each company does not exceed the amount of business transactions.

3. (2) Short-term financing: each company does not exceed 30% net worth of its most recent financial report.

4. (3) Capital loans to foreign companies of the Republic of China that directly or indirectly hold 100% of the voting shares by the same parent company shall not exceed 80% of the net worth of the company's most recent financial report. (4) In the case of (1) and (2) above, the limit shall be calculated in combination, but shall not exceed the total limit of loans.

Note 3: The numbers in the table that involves foreign currencies are expressed in New Taiwan dollars according to the exchange rate posted on the date of the consolidated financial statements (USD:NTD 1:27.68; CNY:USD 1:0.1569).

Table 1, Page 1

Tainan Enterprises Co., Ltd. and Subsidiaries

Table 2

Expressed in thousands of NTD

Holding of marketable securities at the end of the period (excluding subsidiaries, associates and joint ventures)

December 31, 2021

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account (Note 1)		Endingbalance	Endingbalance		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Tainan Enterprises Co., Ltd. Tainan Enterprise (BVI) Co., Limited	Bonds: DEUTSCHE BANK AG 3.6615% DUE 10 APR 2025, etc. Stocks: EUROC VENTURE CAPITAL CORP. SPLENDOR ACTIVEWEAR CO., LTD. KOCHE DEVELOPMENT CO., LTD. KOCHE GLOBAL CO., LTD. DELTAMAC (TAIWAN) CO., LTD. Bonds: SBERBANK 5.125% DUE 29 OCT 2022 BANCO DO BRASIL SA 4.625% DUE 15 JAN 2025, etc. Stocks: NETSOL TECH-NOLOGIES INC.	－ － － Substantive related parties Substantive related parties － － － －	2 3 3 3 3 4 1 2 3	- 2 10 4,888 4,270 40 - - 44	30,230 $ 129 - 60,939 25,886 639 39,730 322,133 -	- 0.25% 17.86% 13.58% 10.42% 0.11% - - 0.27%	30,230 $ 129 - 61,293 31,472 639 39,730 322,133 -	─ ─ ─ ─ ─ ─ ─ ─ ─

Note 1: There are four types of account items as follows:

1. Financial assets at amortized cost - current

2. Financial assets at amortized cost - non-current

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

4. Financial assets at fair value through comprehensive income - non-current

5. Note 2: The numbers in the table that involves foreign currencies are expressed in New Taiwan dollars according to the exchange rate posted on the date of the consolidated financial statements (USD:NTD 1:27.68; CNY:USD 1:0.1569).

Table 2, Page 1

Tainan Enterprises Co., Ltd. and Subsidiaries

• Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid in capital or more For the year ended December 31, 2021

Table 3

Expressed in thousands of NTD

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases(sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Tainan Enterprises Co., Ltd. P.T.Tainan Enterprises Indonesia	P.T.Tainan Enterprises Indonesia Tainan Enterprises Co., Ltd.	Subsidary The Company	Purchases (Sales)	1,249,510 $ 1,249,510) (	36% (100%)	(Note 1) (Note 1)	$ - -	－ －	118,159) ($ 118,159	(32%) 99%	－ －

Note 1: Receipt and payment terms for purchases and sales to related parties is closes its accounts in 4 months.

Note 2: The numbers in the table that involves foreign currencies are expressed in New Taiwan dollars according to the exchange rate posted on the date of the consolidated financial statements (USD:NTD 1:27.68).

Table 3, Page 1

Tainan Enterprises Co., Ltd. and Subsidiaries

Table 4

Expressed in thousands of NTD

- Receivables from related parties reaching $100 million or 20% of paid in capital or more

December 31, 2021

CompanyName	Counterparty	Relationship with the counterparty	Receivable from relatalparty	Receivable from relatalparty	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
			Items	Amount		Amount	Action taken
Tainan Enterprises Co., Ltd. P.T.Tainan Enterprises Indonesia Tainan Enterprise (BVI) Co., Limited Tainan Enterprise (BVI) Co., Limited	Tainan Enterprises (Vietnam) Co., Ltd. Tainan Enterprises Co., Ltd. PT. ANDALAN MANDIRI BUSANA Tainan Enterprises (Vietnam) Co., Ltd.	Subsidary The Company Subsidary Subsidary	Other receivables Accounts receivable Other receivables Other receivables	116,256 $ 118,159 119,024 110,720	－ 8.01 － －	- $ - - -	－ － － －	41,520 $ 118,159 - -	- $ - - -

Note : The numbers in the table that involves foreign currencies are expressed in New Taiwan dollars according to the exchange rate posted on the date of the consolidated financial statements (USD:NTD 1:27.68; CNY:USD 1:0.1569).

Table 4, Page 1

Tainan Enterprises Co., Ltd. and Subsidiaries

• Significant inter company transactions during the reporting periods For the year ended December 31, 2021

Table 5

Expressed in thousands of NTD

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)		Transactions	Transactions
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0 1 2	Tainan Enterprises Co., Ltd. Tainan Enterprise (BVI) Co., Limited Beyoung Fashion Co., Ltd.	P.T.Tainan Enterprises Indonesia PT. ANDALAN MANDIRI BUSANA TAI NAN ENTERPRISES (CAMBODIA) CO., LTD. Tainan Enterprises (Vietnam) Co., Ltd. Yixing Gaoqing Garments Co., Ltd. Gin-Sovann Fashion (Cambodia) Limited. TAI NAN ENTERPRISES (CAMBODIA) CO., LTD. PT. ANDALAN MANDIRI BUSANA Tainan Enterprises (Vietnam) Co., Ltd. Gin-Sovann Fashion (Cambodia) Limited.	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3	Purchases Accounts payable Services revenue External processing cost Services revenue Other payables External processing cost Services revenue Prepayments External processing cost Services revenue Other receivables Other payables External processing cost Services revenue Other payables External processing cost Services revenue Prepayments Other receivables Other receivables Other receivables External processing cost Prepayments	1,249,510 $ 118,159 60,367 381,858 41,518 89,142 736,978 65,880 48,458 260,937 25,118 116,256 48,349 307,779 25,609 88,743 201,367 18,783 44,056 41,520 119,024 110,720 137,430 22,767	Closes its accounts 4 months after the end of each transaction － － － － － － － － － － － － － － － － － － － － － － －	22% 2% 1% 7% 1% 2% 13% 1% 1% 5% － 2% 1% 5% － 2% 3% － 1% 1% 2% 2% 2% －

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) The company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

(1) The company to subsidiary.

(2) Subsidiary to the company.

(3) Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4: Significant inter-company transactions during the reporting periods are not disclosed since these were corresponding transactions. Note 5: The disclosure standard for important transactions is more than NT$10 million.

Note 6: The numbers in the table that involves foreign currencies are expressed in New Taiwan dollars according to the exchange rate posted on the date of the consolidated financial statements (USD:NTD 1:27.68; CNY:USD 1:0.1569).

Table 5, Page 1

Tainan Enterprises Co., Ltd. and Subsidiaries

For the year ended December 31, 2021

Table 6

Expressed in thousands of NTD

Names, locations and other information of investee companies (excluding investees in Mainland China)

Investor	Investee	Location	Main business	Original investment amount	Original investment amount	Shares held	as at December 31,2021	as at December 31,2021	Net income (loss) of the investee	Investment income (loss) recogniszed by the Company	Note
				Balance as at December 31,2021	Balance as at December 31,2020	Number of shares	Ownership (%)	Book value
Tainan Enterprises Co., Ltd. Tainan Enterprise (BVI) Co., Limited T&G FASHION CO., LTD	Tainan Enterprise (BVI) Co., Limited P.T.Tainan Enterprises Indonesia PT. ANDALAN MANDIRI BUSANA TAI NAN ENTERPRISES (CAMBODIA) CO., LTD Tainan Enterprises (Vietnam) Co., Ltd. Fortune International Co., Ltd. Beyoung Fashion Co., Ltd. New Premium Enterprise Co., Ltd. T&G FASHION CO., LTD Tainan Enterprise (Cayman) Co., Limited Gin-Sovann Fashion (Cambodia) Limited. CAMITEX (CAMBODIA) MFG CO LTD. Golden Harbor Garment (Cambodia) Limited.	British Virgin Islands Indonesia Indonesia Cambodia Vietnam Taiwan Taiwan Samoa Seychelles Cayman Islands Cambodia Cambodia Cambodia	Professional investments Garment processing, production and selling Garment processing, production and selling Garment processing, production and selling Garment processing, production and selling Garment and cloth selling and trading service Garment processing, production and selling Professional investments Professional investments Professional investments Garment processing, production and selling Garment processing, production and selling Garment processing, production and selling	517,058 $ 64,446 182,024 29,585 319,090 - 141,742 123,525 108,500 194,623 27,680 16,971 -	517,058 $ 64,446 182,024 29,585 319,090 3,000 141,742 157,137 108,500 194,623 27,680 16,971 -	170,000 $ 2,400,000 6,000 1,000 - - 5,050,000 5,000,000 3,300,000 4,336,515 - 100 -	100.00 100.00 100.00 100.00 100.00 - 100.00 50.00 100.00 13.39 100.00 100.00 100.00	1,218,510 $ 288,219 116,140 24,210 117,360 - 20,330 9,395 9,997 61,840 20,602) ( 738) ( 118) (	42,633) ($ 20,777) ( 1,105 96,906) ( 15,442) ( 2) ( 850 5,147) ( 18,798) ( 104,735 18,362) ( - -	44,322) ($ 20,777) ( 1,105 96,944) ( 15,442) ( 2) ( 850 2,573) ( - - - - -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary (Note 1) Subsidiary Joint venture (Note 2) Subsidiary (Note 3) (Note 3) Subsidiary (Note 3) Subsidiary (Note 3) (Note 4) Subsidiary (Note 3) (Note 4)

Note 1: The liquidation had been completed in the second quarter of 2021.

Note 2: The investee returned proceeds from shares in advance as the Board of Directors resolved to shut down its subsidiary in the second quarter of 2021. The amount will be settled after the subsidiary is liquidated and dissolved.

Note 3: According to regulations, the amount of investment (loss) recognized in the current period may be exempted from disclosure.

Note 4: The subsidiary has ceased business and was pending for liquidation process.

Note 5: The numbers in the table that involves foreign currencies are expressed in New Taiwan dollars according to the exchange rate posted on the date of the consolidated financial statements (USD:NTD 1:27.68; CNY:USD 1:0.1569).

Table 6, Page 1

For the year ended December 31, 2021

Table 7

Expressed in thousands of NTD

Tainan Enterprises Co., Ltd. and Subsidiaries

Information on investments in Mainland China － Basic information

Investee in MainlandChina	Main business	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the the year ended December31,2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the the year ended December31,2021	Accumulated amount of remittance from Taiwan to Mainland China as of December31,2021	Net income of investee	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company （Note 2）	Book value of investments in Mainland China as of December 31, 2021	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2021	Note
					Remitted to MainlandChina	Remitted back to Taiwan
Yixing Gaoqing Garments Co., Ltd. Zhoukou Tainan Garment Co., Ltd.	Garment processing, production and selling Garment processing, production and selling	124,560 $ 138,400	（Note 1） （Note 1）	83,040 $ -	- $ -	- $ -	83,040 $ -	51,047) ($ -	100% 100%	51,047) ($ -	156,159 $ 3,840	- $ -	(Note 3) (Note 4) (Note 5)

Accumulated amount of Investment amount approved Ceiling on investments in remittance from Taiwan by the Investment Commission Mainland China imposed by the to Mainland China of the Ministry of Economic Investment Commission of Company name as of December 31, 2021 Affairs (MOEA) MOEA Tainan Enterprises $ 267,142 $ 1,076,715 (Note 6) Co., Ltd.

Note 1: Indirect investment in Mainland China through a company set up in a third region, Tainan Enterprises (BVI) Co., Limited.

Note 2: Investment gains or losses were recognized based on audited financial statements.

Note 3: Among them, $41,520 (USD1,500 thousand dollars) was indirect investment in Mainland China through a company set up in a third region, Tainan Enterprises (BVI) Co., Limited.

Note 4: Indirect investment in Mainland China through a company set up in a third region, Tainan Enterprises (BVI) Co., Limited. Note 5: The subsidiary has ceased business and was pending for liquidation process. Note 6: Enterprises that have been approved by the Ministry of Economic Affairs to operate their headquarters are not subject to monetary or proportional limits. Note 7: The numbers in the table that involves foreign currencies are expressed in New Taiwan dollars according to the exchange rate posted on the date of the consolidated financial statements (USD:NTD 1:27.68; CNY:USD 1:0.1569).

Table 7, Page 1

Table 8

Expressed in thousands of NTD

Tainan Enterprises Co., Ltd. and Subsidiaries Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas For the year ended December 31, 2021

Investee in MainlandChina	Sale(purchase)	Sale(purchase)	Propertytransaction	Propertytransaction	Accounts receivable (payable)	Accounts receivable (payable)	Provision of endorsements/guarantees or collaterals	Provision of endorsements/guarantees or collaterals		Financing			Others(Note)
	Amount	%	Amount	%	Balance at December 31, 2021	%	Balance at December 31, 2021	Purpose	Maximum balance during the year ended December 31,2021	Balance at December31,2021	Interest rate	Interest during the year ended December 31,2021
Yixing Gaoqing Garments Co., Ltd.	- $	-	- $	-	- $	-	- $		- $	- $	-	- $	External process cost $ 307,779 Service revenue $ 25,609 Other payables $ 88,743

Note: The numbers in the table that involves foreign currencies are expressed in New Taiwan dollars according to the exchange rate posted on the date of the consolidated financial statements (USD:NTD 1:27.68; CNY:USD 1:0.1569).

Table 8, Page 1

Tainan Enterprises Co., Ltd. and Subsidiaries

Major shareholders information

December 31, 2021

Table 9

Expressed in shares

Name of the keyshareholder	Number of	shares	Ownership (%)	Note
	Common stock	Preferred stock
KOCHE GLOBAL CO., LTD. CMC Magnetics Co., Ltd. CHC International Investment Corporation	12,660,000 12,261,000 9,521,000	－ － －	8.60% 8.33% 6.47%	－ － －

Note: The major shareholders information was derived from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation.

The share capital which was recorded in the financial statements is different from the actual number of shares issued in dematerialised form because of the difference in the calculation basis.

Table 9 Page 1