TONLIN — Annual Report 2021

Nov 10, 2021

Stock No.: 2910

Tonlin Department Store Co., Ltd. and Subsidiaries

Consolidated Financial Statements and Auditor's Report 2021 and 2020

Address: 10F-6, No. 197, Zhongxiao E. Rd. Sec. 4, Taipei City TEL: (02)2752-2222

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Table of Contents

Item I. Cover II. Table of Contents III. Declaration Concerning Consolidated Financial Statements of Affiliated Enterprises IV. Independent Auditor's Report V. Consolidated Balance Sheet VI. Consolidated Statements of Comprehensive Income VII. Consolidated Statements of Changes Equity VIII. Consolidated Statements of Cash Flows IX. Notes to consolidated financial statements (I) Organization and operations (II) The Authorization of Financial Statements (III) Application of New and Revised International Financial Reporting Standards (IV) Summary of Significant Accounting Policies (V) Sources of uncertainty to significant accounting judgments, estimates, and assumptions (VI) Summary of Significant Accounting Items (VII) Related party transaction (VIII) Pledged Assets (IX) Significant Contingent Liabilities and Unrecognized Commitments (X) Major Disaster Losses (XI) Significant commitments (XII) Significant Subsequent Events (XIII) Others (XIV) Additional Disclosures 1. Information about significant transactions 2. Information about investees 3. Information on investments in mainland China 4. Information on main investors (XV) Segments Information	Page 1 2 3 4～8 9 10～11 12 13～14 15 15 15～17 17～29 29～30 31～65 65~66 66 - - - - 66～67 67～68、70～74 68、75 - 68、76 68～69	Note No. of Financial Statements
		- - - - - - - - I II III IV V VI~XXVI XXVII XXVIII - - - - XXIX XXX - - - XXXI

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Declaration Concerning Consolidated Financial Statements of Affiliated Enterprises

Affiliated enterprises subject to the preparation of consolidated financial statements of affiliated enterprises under "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" were identical to the affiliated companies subject to the preparation of consolidated financial statements under International Financial Reporting Standards No. 10 (IFRS 10) for financial year 2021 (from January 1 to December 31, 2021). All mandatory disclosures of the consolidated financial statements of affiliated enterprises have been disclosed in the consolidated financial statements, therefore no separate consolidated financial statement of affiliated enterprises was prepared. This declaration is solemnly made by

Company name: Tonlin Department Store Co., Ltd.

Chairman: Su Chien-I

March 14, 2022

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Independent Auditor's Report

To stakeholders of Tonlin Department Store Co., Ltd.

Audit opinions

We have audited the accompanying consolidated balance sheet of Tonlin Department Store Co., Ltd. and subsidiaries (collectively referred to as Tonlin Group) as at December 31, 2021 and 2020, and the consolidated statement of comprehensive income, consolidated statement of changes in shareholders' equity, consolidated cash flow statement, and notes to consolidated financial statements (including summary of significant accounting policies) for the periods from January 1 to December 31, 2021 and 2020.

In our opinion, all material disclosures of the consolidated financial statements mentioned above were prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and the version of International Financial Reporting Standards, International Accounting Standards and interpretations thereof approved by the Financial Supervisory Commission, and presented a fair view of the consolidated financial position of Tonlin Group as at December 31, 2021 and 2020, and consolidated business performance and cash flow for the periods of January 1 to December 31, 2021 and 2020. Basis of audit opinion

We conducted our audits in accordance with Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the generally accepted auditing principles. Our responsibilities as an auditor for the consolidated financial statements under the abovementioned standards are explained in the Responsibilities paragraph. All relevant personnel of the accounting firm have followed CPA code of ethics and maintained independence from Tonlin Group when performing their duties. We believe that the evidence obtained provide an adequate and appropriate basis for our opinion.

Key audit issues

Key audit issues are matters that we considered to be the most important, based on professional judgment, when auditing the 2021 consolidated financial statements of Tonlin Group. These issues have already been addressed when we audited and formed our opinions on the consolidated financial statements. Therefore we do not provide opinions separately for individual issues.

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Key audit issues concerning the 2021 consolidated financial statements of Tonlin Group are as follows:

Impairment assessment of investment properties

As at December 31, 2021, Tonlin Group had investment properties located at Xinzhuang District that were valued at NT$1,059,951 thousand, representing 18% of total consolidated assets and constituted a significant part of consolidated financial statements. The management follows IAS 36 - “Impairment of Assets” and assesses investment properties for signs of impairment at the end of each reporting period. Assets that exhibit any sign of impairment will have recoverable amount estimated in order to determine the amount of impairment. However, considering that real estate prices are affected by several factors including government policy, economic cycle, and market supply/demand, and that impairment assessment requires subjective judgments, major estimates, and assumptions from the management, we have identified impairment assessment of investment properties as a key audit issue. Accounting policy on impairment assessment of investment properties, uncertainties associated with accounting estimates and assumptions, and related disclosures can be found in Notes 4, 5, and 15 of consolidated financial statements.

The following audit procedures were taken in relation to the key audit issues identified above:

1. Understanding and testing the design of key internal control system that is relevant to impairment assessment of investment properties.

2. Obtaining the independent valuation report used by the management, and evaluating the professional capacity, competence, and objectivity of independent valuers.

3. Determining the rationality of the valuation method, parameters, and assumptions used in the valuation of investment property and comparing transaction prices of properties in the vicinity.

4. Consulting our own experts about the independent valuer's choice of valuation method as well as inputs and historical market data used in the calculation, and making appropriate comparisons to determine the rationality of the assessed price.

5. Taking count and verifying records of investment properties, and checking title deeds for the lands owned.

Correctness of retail commission income

Tonlin Group reported retail commission income of NT$99,951 thousand in 2021,

representing 19% of operating revenues and was considered significant to the presentation of consolidated financial statements. The department store operates by having merchants set up individual retail departments, and Tonlin Group earns a certain percentage or amount from each transaction made by merchants. Under this arrangement, the Company first collects payment from customers then deducts merchant's share of the proceeds and recognizes the remainder as sales revenue. Due to the vast number of merchants and the different commission rates involved, calculation of retail commission income depends heavily on the use of computer system, which we consider to be a key audit issue. Disclosures relating to retail commission income and accounting policy can be found in Notes 4 and 21 of consolidated financial statements.

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The following audit procedures were taken in relation to the key audit issues identified above:

1. Understanding and randomly testing the effectiveness of internal control design and execution for retail commission income.

2. Making sample checks on current year's Merchant Settlement Master Report to determine whether the commission rates configured on the computer system are consistent with contract terms; and making separate calculations using the commission rate to verify the correctness of retail commission income.

Other Matters

Tonlin Department Store Co., Ltd. has prepared standalone financial statements for 2021 and 2020, which we have audited and issued independent auditor's reports with unqualified opinions.

Responsibilities of the management and governing body to the consolidated financial statements

Responsibilities of the management were to prepare and ensure fair presentation of consolidated financial statements in accordance with "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the version of International Financial Reporting Standards, International Accounting Standards and interpretations thereof approved and published by the Financial Supervisory Commission, and to exercise proper internal control practices that are relevant to the preparation of consolidated financial statements so that the consolidated financial statements are free of material misstatements, whether caused by fraud or error.

The management's responsibilities when preparing consolidated financial statements also involved: assessing the ability of Tonlin Group to operate, disclose information, and account for transactions as a going concern unless the management intends to liquidate Tonlin Group or cease business operations, or is compelled to do so with no alternative solution.

The governing body of Tonlin Group (including the Audit Committee) is responsible for supervising the financial reporting process.

Responsibilities of the auditor when auditing consolidated financial statements

The purposes of our audit were to obtain reasonable assurance of whether the consolidated financial statements were prone to material misstatements, whether due to fraud or error, and to issue a report of our audit opinions. We considered assurance to be reasonable only if it is highly credible. However, audit tasks conducted in accordance with generally accepted auditing principles do not necessarily guarantee detection of all material misstatements within the consolidated financial statements. Misstatements can arise from fraud or error. Misstatements are considered material if the individual amount or aggregate total is reasonably expected to affect economic decisions of the consolidated financial statement user.

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When conducting audits in accordance with generally accepted auditing principles, we exercised judgments and raised doubts as deemed professionally appropriate. We also performed the following tasks as an auditor:

1. Identifying and assessing risks of material misstatement within the consolidated financial statements, whether due to fraud or error; designing and executing appropriate response measures for the identified risks; and obtaining adequate and appropriate audit evidence to support audit opinions. Fraud may involve conspiracy, forgery, intentional omission, untruthful declaration, or breach of internal control, and our audit did not find any material misstatement where the risk of fraud is greater than the risk of error.

2. Developing the required level of understanding on relevant internal controls and designing audit procedures that are appropriate under the prevailing circumstances, but without providing opinion on the effectiveness of internal control system of Tonlin Group.

3. Assessing the appropriateness of accounting policies adopted by the management, and the rationality of accounting estimates and related disclosures made.

4. Forming conclusions regarding the appropriateness of management's decision to account for the business as a going concern, and whether there are doubts or uncertainties about the ability of Tonlin Group to operate as a going concern, based on the audit evidence obtained. We are bound to remind users of consolidated financial statements and make related disclosures if uncertainties exist in regards to the abovemenetioned events or circumstances, and amend audit opinions when the disclosures are no longer appropriate. Our conclusions are based on the audit evidence obtained up to the date of audit report. However, future events or change of circumstances may still render Tonlin Group no longer capable of operating as a going concern.

5. Assessing the overall presentation, structure, and contents of the consolidated financial statements (including related footnotes), and whether certain transactions and events are presented appropriately in the consolidated financial statements.

6. Obtaining sufficient and appropriate audit evidence on financial information of equityaccounted investments held by the group, and expressing opinions on consolidated financial statements. Our responsibilities as auditor are to instruct, supervise, and execute audits and form audit opinions on the group.

7. We have communicated with the governing body about the scope, timing, and significant

8. findings (including significant defects identified in the internal control) of our audit.

We have also provided the governing body with a declaration of independence stating that all relevant personnel of the accounting firm have complied with auditors' professional ethics, and communicated with the governing body on all matters that may affect the auditor's independence (including protection measures).

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We have identified the key audit issues after communicating with the governing body regarding the 2021 consolidated financial statements of Tonlin Group. These issues have been addressed in our audit report except for: 1. Certain topics that are prohibited by law from disclosing to the public; or 2. Under extreme circumstances, topics that we decided not to communicate in the audit report because of higher negative impacts they may cause than the benefits they bring to public interest.

Deloitte & Touche CPA Huang Hsiu-Chun

CPA Jeff Chen

Approval reference of the Securities and Approval reference of the Financial Futures Bureau Supervisory Commission Tai-Tsai-Cheng-(VI)-0920123784 Jin-Guan-Zhgeng-Shen-0990031652

March 14, 2022

Notice to Readers

For the convenience of readers and for information purposes 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 and the Chinese version or any differences in interpretation between the two versions, the original Chinese version shall prevail. The auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version, and the English version is not audited by certified public accountant.

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Tonlin Department Store Co., Ltd. and Subsidiaries

Consolidated Balance Sheet

As at December 31, 2021 and 2020

Unit: NTD thousand

Code 1100 1110 1136 1150 1172 1175 1200 130X 1470 11XX 1517 1550 1600 1760 1780 1840 1935 1920 15XX 1XXX Code 2100 2110 2150 2170 2209 2213 2219 2230 2320 2399 21XX 2540 2572 2645 2640 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 3XXX	Asset CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at FVTPL (Notes 4 and 7) Financial assets carried at cost after amortization - current (Notes 4 and 9) Notes receivable (Notes 4 and 10) Accounts receivable (Notes 4 and 10) Lease receivable (Notes 4 and 10) Other receivables (Notes 4, 10 and 23) Inventory (Notes 4, 5, 11 and 28) Prepayments and other current assets Total current assets NON-CURRENT ASSETS Financial assets at FVTOCI - non-current (Notes 4 and 8) Equity-accounted investments (Notes 4 and 13) Property, plant, and equipment (Notes 4, 5, 14 and 28) Investment property, net (Notes 4, 5, 15 and 28) Intangible assets (Notes 4 and 5) Deferred income tax assets (Notes 4, 5 and 23) Long-term lease receivable (Notes 4 and 10) Refundable deposits Total non-current assets Total assets LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 4, 11, 14, 15, 16 and 28) Short-term bills payable (Notes 4, 11, 14, 15, 16 and 28) Note payable Accounts payable (Note 17) Accrued expenses (Note 18) Equipment purchase payable (Note 14) Other payables Current income tax liabilities (Notes 4, 5 and 23) Long-term borrowings expiring within a year (Notes 4, 14, 15, 16 and 28) Other current liabilities (Note 21) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 4, 14, 15, 16 and 28) Deferred income tax liabilities (Notes 4, 5 and 23) Guarantee deposits received (Note 21) Net defined benefit liabilities - non-current (Notes 4 and 19) Total non-current liabilities Total liabilities EQUITY (Notes 4, 8, 19 and 20) Common share capital Additional paid-in capital Retained earnings Statutory reserves Special reserves Unappropriated earnings Total retained earnings Other equities Treasury stock Total equity Total liabilities and equity		December 31, 2021 Amount % $ 104,422 2 448,112 8 22,604 - - - 6,604 - 7,135 - 5,714 - 746,728 12 51,477 1 1,392,796 23 22,201 - 146,467 3 2,249,481 37 2,158,918 36 8,673 - 22,218 1 17,586 - 2,956 - 4,628,500 77 $ 6,021,296 100 $ 762,450 13 142,487 2 31,729 1 79,671 1 35,961 1 6,700 - 2,235 - 1,189 - 150,000 2 8,411 - 1,220,833 20 2,120,000 35 216,801 4 51,759 1 14,930 - 2,403,490 40 3,624,323 60 2,087,250 35 523,625 9 474,382 8 456,282 7 228,904 4 1,159,568 19 89,929) ( 2) 1,283,541) ( 21) 2,396,973 40 $ 6,021,296 100	December 31, 2021 Amount % $ 104,422 2 448,112 8 22,604 - - - 6,604 - 7,135 - 5,714 - 746,728 12 51,477 1 1,392,796 23 22,201 - 146,467 3 2,249,481 37 2,158,918 36 8,673 - 22,218 1 17,586 - 2,956 - 4,628,500 77 $ 6,021,296 100 $ 762,450 13 142,487 2 31,729 1 79,671 1 35,961 1 6,700 - 2,235 - 1,189 - 150,000 2 8,411 - 1,220,833 20 2,120,000 35 216,801 4 51,759 1 14,930 - 2,403,490 40 3,624,323 60 2,087,250 35 523,625 9 474,382 8 456,282 7 228,904 4 1,159,568 19 89,929) ( 2) 1,283,541) ( 21) 2,396,973 40 $ 6,021,296 100		December 31, 2020	December 31, 2020	December 31, 2020
			Amount $ 104,422 448,112 22,604 - 6,604 7,135 5,714 746,728 51,477 1,392,796 22,201 146,467 2,249,481 2,158,918 8,673 22,218 17,586 2,956 4,628,500 $ 6,021,296 $ 762,450 142,487 31,729 79,671 35,961 6,700 2,235 1,189 150,000 8,411 1,220,833 2,120,000 216,801 51,759 14,930 2,403,490 3,624,323 2,087,250 523,625 474,382 456,282 228,904 1,159,568 89,929) 1,283,541) 2,396,973 $ 6,021,296			Amount $ 98,787 417,247 20,731 385 2,639 3,430 10,001 881,153 68,174 1,502,547 66,457 162,327 2,309,908 2,165,053 9,015 24,774 18,406 1,188 4,757,128 $ 6,259,675 $ 1,022,423 165,736 17,261 96,659 37,683 77,226 3,618 21,646 - 49,928 1,492,180 2,116,000 217,878 51,115 19,469 2,404,462 3,896,642 2,087,250 506,964 470,347 495,507 170,602 1,136,456 84,096) 1,283,541) 2,363,033 $ 6,259,675		%
		( (		( (	( (		( (	2 7 - - - - - 14 1 24 1 3 37 35 - - - - 76 100 16 3 - 2 1 1 - - - 1 24 34 3 1 - 38 62 33 8 7 8 3 18 1) 20) 38 100

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

Chairman: Su Chien-I

President: Weng Hua-Li

Vice President: Chen Wen-Lung Head of Accounting: Huang Shu-Tzu

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Tonlin Department Store Co., Ltd. and Subsidiaries

Consolidated Statements of Comprehensive Income For periods from January 1 to December 31, 2021 and 2020

Unit: NTD thousands, except EPS which is in dollars

Code 4000 Operating revenues (Notes 4 and 21) 5000 Operating costs (Notes 4, 11 and 22) 5900 Gross profit 6000 Operating expenses (Notes 4, 19, 22 and 27) 6900 Operating profit Non-operating income and expense 7100 Interest income (Notes 4 and 22) 7010 Other income (Notes 4 and 22) 7020 Other gains and losses (Notes 4, 7, 14, 15 and 22) 7050 Financial costs (Note 22) 7060 Share of gain/loss from associated companies accounted using the equity method (Notes 4 and 13) 7000 Total non-operating income and expenses 7900 Profit before tax 7950 Income tax expenses (Notes 4, 5 and 23) 8200 Current net income		2021

(To be Continued)

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(Continued)

Code Other comprehensive income 8310 Items that will not be reclassified subsequently to profit or loss 8311 Remeasurement of defined benefit plan (Notes 4 and 19) 8316 Unrealized profit and loss on valuation of equity instruments at FVTOCI (Notes 4, 8, 13 and 20) 8349 Income tax on items not reclassified into profit and loss (Notes 4 and 23) 8300 Other comprehensive income - current 8500 Total comprehensive income - current Earnings per share (Note 24) 9710 Basic 9810 Diluted	2021	% - ( 3 ) ( 1) ( 4) 23		2020
	Amount $ 1,290 ( 17,645 ) ( 2,698) ( 19,053) $ 121,642 $ 0.80 $ 0.80			Amount $ 38 7,996 10,374) 2,340) $ 111,819 $ 0.65 $ 0.65		%
			( (		( (	- 1 2) 1) 20

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

Chairman: President: Vice President: Head of Accounting: Su Chien-I Weng Hua-Li Chen Wen-Lung Huang Shu-Tzu

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Tonlin Department Store Co., Ltd. and Subsidiaries

Consolidated Statements of Changes Equity

For periods from January 1 to December 31, 2021 and 2020

Unit: NTD thousand

Code A1 Balance as at January 1, 2020 Appropriation and distribution of 2019 earnings B1 Provision for statutory reserves B3 Reversal of special reserves B5 Cash dividends on common shares Total appropriation and distribution of 2019 earnings M1 Adjustment to additional paid-in capital for dividends paid to subsidiaries D1 2020 net income D3 2020 other comprehensive income - after tax D5 2020 total comprehensive income Q1 Disposal of equity instruments at FVTOCI Z1 Balance as at December 31, 2020 Appropriation and distribution of 2020 earnings B1 Provision for statutory reserves B3 Reversal of special reserves B5 Cash dividends on common shares Total appropriation and distribution of 2020 earnings M1 Adjustment to additional paid-in capital for dividends paid to subsidiaries D1 2021 net income D3 2021 other comprehensive income - after tax D5 2021 total comprehensive income Q1 Disposal of equity instruments at FVTOCI Z1 Balance as at December 31, 2021	Common share capital (Notes 4 and 20) $ 2,087,250 - - - - - - - - - 2,087,250 - - - - - - - - - $ 2,087,250	Additional paid-in capital (Note 20) $ 483,638 - - - - 23,326 - - - - 506,964 - - - - 16,661 - - - - $ 523,625		Retained earnings (Notes 4, 19 and 20)	Retained earnings (Notes 4, 19 and 20)		Total $ 1,242,216 - - 146,108) 146,108) - 114,159 30 114,189 73,841) 1,136,456 - - 104,363) 104,363) - 140,695 1,032 141,727 14,252) $ 1,159,568	Other equity item (Notes 4, 8, 13 and 20) Unrealized gains/losses on financial assets at FVTOCI ( $ 156,000 ) - - - - - - ( 2,370) ( 2,370) 74,274 ( 84,096 ) - - - - - - ( 20,085) ( 20,085) 14,252 ($ 89,929)	Treasury stock (Note 20) ( $ 1,283,541 ) - - - - - - - - - ( 1,283,541 ) - - - - - - - - - ($ 1,283,541)		Total equity
			Statutory reserves $ 459,275 11,072 - - 11,072 - - - - - 470,347 4,035 - - 4,035 - - - - - $ 474,382	Special reserves $ 672,223 - ( 176,716 ) - ( 176,716) - - - - - 495,507 - ( 39,225 ) - ( 39,225) - - - - - $ 456,282	Unappropriated earnings $ 110,718 ( 11,072 ) 176,716 ( 146,108) 19,536 - 114,159 30 114,189 ( 73,841) 170,602 ( 4,035 ) 39,225 ( 104,363) ( 69,173) - 140,695 1,032 141,727 ( 14,252) $ 228,904
				( ( ( (	( ( ( ( ( ( (	( ( ( ( ( (		( ( ( ( ( ( (	( ( (	( ( ( ( ( (	$ 2,373,563 - - 146,108) 146,108) 23,326 114,159 2,340) 111,819 433 2,363,033 - - 104,363) 104,363) 16,661 140,695 19,053) 121,642 - $ 2,396,973

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

Chairman: Su Chien-I

President: Weng Hua-Li

Vice President: Chen Wen-Lung

Head of Accounting: Huang Shu-Tzu

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Tonlin Department Store Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

For periods from January 1 to December 31, 2021 and 2020

Unit: NTD thousand

Code Cash flows from operating activities A00010 Pre-tax profit for the current period A20010 Adjustments for: A20100 Depreciation expense A20200 Amortization A20400 Net loss (gain) on financial assets and liabilities at FVTPL A20900 Financial costs A21200 Interest income A21300 Dividend income A22300 Share of gain from associated companies accounted using the equity method A22500 Loss (gain) on disposal and disposition of property, plant and equipment A22600 Expenses reclassified from property, plant, and equipment A22700 Loss on disposal of investment properties A23700 Reversal of impairment on non- financial assets A30000 Changes in operating assets and liabilities A31115 Financial assets mandatory to be carried at FVTPL A31130 Note receivable A31150 Trade receivable A31240 Lease receivable A31180 Other receivables A31200 Inventories A31230 Prepayments and other current assets A32130 Note payable A32150 Accounts payable A32220 Accrued expenses A32180 Other payables A32230 Other current liabilities A32240 Net defined benefit liabilities A33000 Cash inflow from operating activities A33100 Interest received	2021 $ 141,842 73,233 602 ( 9,489 ) 29,685 ( 212 ) ( 6,940 ) ( 3,508 ) 68 269 318 - ( 21,376 ) 385 ( 3,965 ) ( 2,885 ) 4,311 134,425 15,245 14,468 ( 16,988 ) ( 1,907 ) ( 1,383 ) ( 34,851 ) ( 3,249 ) 308,098 316	2020
		$ 156,243 81,590 595 10,551 35,110 ( 580 ) ( 3,902 ) ( 4,176 ) 3,948 - 372 ( 15,000 ) ( 117,413 ) ( 385 ) 112 ( 2,355 ) ( 1,487 ) 57,142 2,405 ( 4,222 ) 29,247 ( 2,513 ) ( 6,476 ) 36,977 ( 5,347 ) 250,436 600

(To be Continued)

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(Continued)

Code A33300 Interest paid A33200 Dividends received A33500 Income tax paid AAAA Net cash inflow from operating activities Cash flows from investing activities B00010 Proceeds from liquidation or capital reduction of financial assets at FVTOCI B00020 Sales of Financial assets at FVTOCI B00040 Disposal (acquisition) of financial assets carried at cost after amortization B02700 Acquisition of property, plant, and equipment B03700 Increase (decrease) in refundable deposits B04500 Acquisition and purchase of intangible assets B05500 Proceeds from disposal of investment property B07100 Increase (decrease) in equipment purchase payable B07600 Dividends received from associated companies BBBB Net cash inflow (outflow) from investing activities Cash flows from financing activities C00100 Decrease in short-term borrowings C00600 Short-term bills payable decreased C01600 Proceeds from long-term borrowings C01700 Repayments of long-term borrowings C03000 Increase (decrease) in deposits received C04500 Payment of cash dividends CCCC Net cash outflow from financing activities EEEE Net increase (decrease) in cash and cash equivalents E00100 Opening balance of cash and cash equivalents E00200 Closing balance of cash and cash equivalents	2021 ( 29,549 ) 6,940 ( 22,951) 262,854 41,882 321 ( 1,873 ) ( 8,973 ) ( 1,768 ) ( 260 ) - ( 74,093 ) 3,776 ( 40,988) ( 259,973 ) ( 23,200 ) 3,886,000 ( 3,732,000 ) 644 ( 87,702) ( 216,231) 5,635 98,787 $ 104,422	2020
		( 35,579 ) 3,902 ( 49,974) 169,385 3,273 - 24,972 ( 29,139 ) 17 - 38 17,537 3,115 19,813 ( 180,500 ) ( 1,200 ) 2,804,000 ( 2,694,000 ) ( 2,106 ) ( 122,782) ( 196,588) ( 7,390 ) 106,177 $ 98,787

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

Chairman: President: Vice President: Head of Accounting: Su Chien-I Weng Hua-Li Chen Wen-Lung Huang Shu-Tzu

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Tonlin Department Store Co., Ltd. and Subsidiaries

Notes to consolidated financial statements

For periods from January 1 to December 31, 2021 and 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

I. Organization and operations

Tonlin Department Store Co., Ltd. (the "Company") was founded in August 1982 and commenced business operations in November 1984. Taoyuan Branch was later established in September 1995 and commenced operation in November 1995. The Company primarily operates as a retail departmental store. The Company's shares have been listed for trading on Taiwan Stock Exchange Corporation since December 1996. The Company closed down its Taipei Branch on September 20, 1999 out of concern for profit yield, and leased out buildings previously occupied by Taipei Branch for income on October 1. The Company currently has lease contracts established with multiple counterparties including World Fitness Asia Limited (H.K.) Taiwan Branch. Please refer to Note 21 for details. Furthermore, to facilitate the Company's transformation into an integrated entertainment complex, the board of directors passed a resolution to remodel Taoyuan Branch on October 24, 2016, and officially opened for business on October 3, 2018. In addition to retaining top revenue-generating merchants, Taoyuan Branch also brought in restaurant (beverages), sports, leisure, entertainment, and cinema brands to support its new transformation.

The consolidated financial statements are presented using the Company's functional currency (NTD).

II. The Date and Procedures to Approve Financial Statements

This consolidated financial statements were was passed during the board of directors meeting dated March 14, 2022.

III. Application of New and Revised International Financial Reporting Standards

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

Adopting the amended version of FSC-approved IFRSs will not result in any material change to the consolidated entity's accounting policies.

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

• Note 1: The IFRS 9 amendment will apply to exchange or modification of financial liability that occur in financial years starting on and after January 1, 2022. Amendments to IAS 41 - "Agriculture" will apply to fair value assessments for financial years starting on and after January 1, 2022. Amendments to IFRS 1 - "First-time Adoption of IFRSs" will apply retrospectively in financial years starting on and after January 1, 2022.

• Note 2: The amendment applies to the merges whose acquisition dates after the annual reported periods since January 1, 2022.

• Note 3: The amendment applies to the property, plant and equipment achieving the expected operations by the management after January 1, 2021.

• Note 4: The amendment applies to the contracts yet performing all obligations as of January 1, 2022.

The consolidated entity continues to evaluate that the amendments to the above standards and interpretations do not materially affect its consolidated financial position and business performance as of the publication date of this financial report. (III) The IFRSs issued by the International Accounting Standards Board (IASB) but not yet endorsed and issued into effect by the FSC

yet endorsed and issued into effect by the FSC
New, Revised or Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments of IFRS 17 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 regarding "Disclosure of Accounting Policies" Amendments to IAS 8 regarding "Definition of Accounting Estimates" Amendment to IAS 12 “deferred tax related to assets and liabilities arising from a single transaction”	Effective Date Issued by IASB (Note 1)
	Undetermined January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

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Note 1: Unless stated otherwise, the above New IFRSs are effective for annual

periods beginning on or after their respective effective dates.

• Note 2: These amendments will be applied prospectively in reporting periods starting from January 1, 2023.

• Note 3: These amendments will be applied to changes in accounting estimates and accounting policies that take place in reporting periods after January 1, 2023.

Note 4: Other than being applicable to the deferred tax for all temporary differences related to leases and decommissioning obligations on January 1, 2022, the amendment is applicable to the transactions occurring after January 1, 2022 The consolidated entity continues to evaluate how revisions of the above standards and interpretations affect its consolidated financial position and business performance as of the publication date of this financial report. Outcomes of these assessments will be disclosed upon completion.

IV. Summary of Significant Accounting Policies

• (I) Statement of compliance

This consolidated financial report has been prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and FSC-approved IFRSs.

• (II) Basis of preparation

This consolidated financial statement has been prepared based on historical cost, except for financial instruments carried at fair value and net defined benefit liabilities calculated by deducting fair value of plan assets from present value of defined benefit obligation.

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

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

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

3. Level 3 inputs are unobservable inputs for the asset or liability.

4. 17 -

(III) Classification of current and non-current assets and liabilities

Current assets include:

1. Assets that are held mainly for the purpose of trading;

2. Assets that are expected to be realized within 12 months after the balance sheet date; and

3. Cash and cash equivalents (except for those that are intended to be swapped or settled against debt more than 12 months after the balance sheet date, and those with restricted uses).

Current liabilities include:

1. Liabilities that are held mainly for the purpose of trading;

2. Liabilities that are expected to be settled within 12 months after the balance sheet date; and

3. Liabilities where the repayment terms can not be extended unconditionally beyond 12 months after the balance sheet date.

Assets and liabilities that do not satisfy the above criteria are classified into noncurrent assets or non-current liabilities.

The consolidated entity's construction activities operate at business cycles that are longer than one year. For this reason, assets and liabilities that arise in relation to construction activities are distinguished between current and non-current portions based on normal business cycle.

• (IV) Basis of consolidation

This consolidated financial statement includes the Company and entities that the Company has control over (i.e. subsidiaries). Subsidiaries have had financial statements adjusted to ensure alignment of accounting policies with those of the consolidated entity. All transactions, account balances, income, expenses, and losses between entities of the consolidated financial statement have been eliminated during consolidation.

Refer to Note 12 and Appendix 2 for details, shareholding percentages, and business activities of subsidiaries.

• (V) Foreign currency

During preparation of financial statement, transactions denominated in currencies other than the functional currency (i.e. foreign currency transactions) are converted and recorded in the functional currency using exchange rate as at the transaction date.

• 18 -

Monetary foreign currency accounts are converted using closing exchange rates as at every balance sheet date. Exchange differences arising from settlement or translation of monetary accounts are recognized in profit and loss in the year occurred.

Foreign currency-denominated non-monetary items carried at fair value are converted using exchange rates as at the date of fair value assessment, with exchange differences recognized in current profit and loss. However, items that have fair value changes recognized in other comprehensive income shall also have exchange differences recognized in other comprehensive income.

Foreign currency-denominated non-monetary items carried at historical cost are converted using exchange rate as at the date of initial transaction. No further recalculation shall be made.

(VI) Inventories

Proprietary inventory is valued at the lower of cost or net realizable value; the lower of cost or net realizable value is compared by retail departments, except for groups of items within the same category. Net realizable value refers to the balance of estimated selling price less any costs required to sell inventory under normal circumstances; cost is calculated using the retail inventory method.

Construction-in-progress is stated at the lower of cost or net realizable value. Down payments are paid for the purchase of construction land or properties pending sale, and borrowing interests accrued during the construction period are capitalized and recognized as cost of inventory.

Construction land is reclassified into construction-in-progress when construction activities begin. Upon completion, the amount of construction-inprogress is reclassified into operating cost and properties pending sale based on percentages of sold and unsold areas.

In joint construction arrangements where the Company contributes land in exchange for units of properties pending sale, no gain/loss is recognized at the time of exchange, and income is recognized only when properties are sold to buyers.

(VII) Investments in Associates

An associated company is an organization in which the consolidated entity has significant influence, but does not meet the criteria of a subsidiary.

The consolidated entity accounts for associated companies using the equity method.

• 19 -

Under the equity method, associated companies are recognized at cost at initiation; after the acquisition date, book value may be increased or decreased by the consolidated entity's share of profits/losses and other comprehensive income in associated companies. Furthermore, changes in the equity of associated companies are recognized based on the consolidated entity's shareholding percentage.

When assessing impairments, the consolidated entity treats the entire account as a single asset and tests for impairment by comparing book value with recoverable amount. Any impairment losses recognized are presented as part of the book value of the investment without amortization. Reversal of impairment loss can be recognized up to the sum of subsequent increases in the recoverable amount of the investment. (VIII) Property, Plant and Equipment

Property, plant, and equipment are initially recognized at cost, and subsequently presented at cost after accumulated depreciation and impairment.

Property, plant, and equipment in progress are carried at cost less cumulative impairments. Cost includes services expenses and borrowing costs that satisfy the capitalization criteria. These assets are classified into appropriate categories of property, plant, and equipment upon completion and reaching the expected usable state, at which time depreciation will also begin.

No depreciation is provided on land, whereas property, plant, and equipment are depreciated using the straight-line method over their useful lives. Depreciation is provided separately for each major component. The consolidated entity reviews estimated useful life, residual value, and depreciation method at least once at the end of each year. Impacts of changes in accounting estimates are applied prospectively.

Gains or losses arising from decommissioned property, plant, and equipment are calculated as the difference between disposal proceeds and the asset's book value, and are recognized through profit and loss in the year occurred.

(IX) Investment Property

Investment properties are real estate properties held for rental income or capital gain, or both. Investment properties include land held on hand that the Company has yet to determine their future uses.

Investment properties are initially recognized at cost (including transaction cost) and subsequently presented at cost after accumulated depreciation and impairment. Investment properties are depreciated on a straight-line basis.

• 20 -

Difference between the disposal proceed and book value of decommissioned investment property is recognized in profit and loss.

• (X) Intangible asset

• Acquisition by separate purchase

Intangible assets that are acquired through separate purchase with limited useful life are recognized at cost at initiation, and subsequently presented at cost less accumulated amortization and impairment. Intangible assets are amortized on a straight-line basis over their useful lives. The estimated useful life, residual value, and amortization method are reviewed at least once at the end of each year. Impacts of changes in accounting estimates are applied prospectively.

1. Decommissioning

Difference between the net disposal proceed and book value of intangible assets removed is recognized in current profit and loss.

• (XI) Impairment of property, plant, equipment, investment properties, and intangible assets

The consolidated entity evaluates all property, plant, equipment, investment properties, and intangible assets for signs of impairment every balance sheet date. Assets that exhibit any sign of impairment will have recoverable amount estimated. If the recoverable amount can not be estimated on an individual basis, the consolidated entity will instead estimate recoverable amount for the entire cashgenerating unit.

Recoverable amount is the higher between "fair value less selling costs" and the "utilization value." If recoverable amount of an asset or cash-generating unit falls below its book value, the book value of that particular asset/cash-generating unit shall be reduced to the recoverable amount with impairment losses recognized through profit and loss.

When impairment losses are reversed on a later date, the book value of corresponding assets/cash-generating units shall be adjusted upwards to the recoverable amount. However, the increased book value shall not exceed the book value (less amortization or depreciation) of the asset/cash-generating unit before impairment losses were recognized in the first place. Reversal of impairment loss is recognized through profit and loss.

• 21 -

(XII) Financial instruments

Financial assets and financial liabilities are recognized on consolidated balance sheet when the consolidated entity becomes a party of the contract.

When recognizing financial assets and liabilities at initiation, those that are not designated to be carried at fair value through profit and loss are measured at fair value plus transaction costs that are directly attributable to the acquisition or issuance of financial assets/liabilities. Transaction costs that are directly attributable to the acquisition or issuance of financial assets/liabilities carried at fair value through profit and loss are recognized immediately through profit and loss.

1. Financial asset

Routine transactions of financial asset are recognized on or removed from balance sheet based on principles of trade date accounting.

• (1) Measurement category

Financial assets held by the consolidated entity are distinguished into the following categories: financial assets at FVTPL, financial assets carried at cost after amortization, and equity instruments at FVTOCI. A. Financial assets at FVTPL

Financial assets at FVTPL mainly comprise financial assets that are mandatory to be measured at fair value with fair value changes recognized through profit and loss. Financial assets that are mandatory to be measured at fair value with fair value changes recognized through profit and loss include: equity instruments that are not specified to be carried at FVTOCI, and debt instruments that do not satisfy the criteria to be carried at cost after amortization or at FVTOCI.

Financial assets at FVTPL are measured at fair value, with dividends and interests recognized as other income. Gains and losses from remeasurement are recognized as other gains and losses. See Note 26 for details regarding the fair value method.

• B. Financial assets carried at cost after amortization

Financial asset investments that satisfy both the following conditions are carried at cost after amortization:

• 22 -

• a. The financial asset is held for a specific business model, and the purpose of which is to hold the financial asset and collect contractual cash flow; and

• b. The contractual terms give rise to cash flows on specific dates, and the cash flows are intended solely to pay principals and interests accruing on outstanding principals.

For financial assets carried at cost after amortization (including cash and cash equivalents, accounts receivable and other receivables carried at cost after amortization etc), the effective interest method is used to determine the book value at initiation. They are subsequently presented net of impairments and amortization. Any gain/loss from currency exchange incurred on these financial assets is recognized through profit and loss.

Except for the two circumstances explained below, interest income is calculated by multiplying the book value of financial asset with effective interest rate:

• a. Acquisition or creation of credit-impaired financial assets; in which case interest income is calculated by multiplying the cost of financial assets after amortization with credit-adjusted effective interest rate.

• b. Financial assets that were not credit-impaired at the time of acquisition or origination, but become credit-impaired on a later date; in which case interest income is calculated by multiplying the cost of financial assets after amortization with the effective interest rate starting from the reporting period after credit impairment. Financial assets are considered credit-impaired if the issuer or

• debtor exhibits major financial distress, default, likely bankruptcy, financial restructuring, or any financial difficulty that may render the financial asset no longer available on the active market.

Cash equivalents include time deposits with less than 3 months until maturity that are highly liquid, readily convertible into defined amounts of cash, and less prone to the risk of fair value changes. Cash equivalents are held for the purpose of meeting short-term cash commitments.

• 23 -

C. Equity instruments at FVTOCI

For equity instruments that are neither held for trading nor recognized/received as a consideration for business acquisition, the consolidated entity is entitled to an irrevocable option to account them at FVTOCI at initial recognition.

Equity instruments at FVTOCI are measured at fair value; subsequent fair value changes are recognized through other comprehensive income and accumulated under other equity. At the time of disposal, cumulative gains/losses are transferred directly into retained earnings and not reclassified into profit and loss.

Dividends from equity instruments at FVTOCI are recognized in profit and loss when the entitlement to receive is confirmed, unless the dividends clearly represent a partial recovery of the investment cost.

(2) Impairment of financial assets

On each balance sheet date, the consolidated entity assesses impairment losses on financial assets carried at cost after amortization (including accounts receivable) and operating lease receivable based on expected credit losses.

Accounts receivable and operating lease receivable have loss provisions recognized based on expected credit losses over their duration. For other financial assets, the Company first evaluates whether there is significant increase in credit risk since initial recognition. If there is no significant increase in credit risk, loss provisions are recognized based on 12-month expected credit loss; if there is significant increase in credit risk, loss provisions are recognized based on expected credit loss over the remaining duration.

Expected credit losses are determined as average credit loss weighed against the risk of default. 12-month expected credit losses represent the amount of credit losses that the financial instrument is likely to incur due to default event in the next 12 months, whereas expected credit losses for the remaining duration represent the amount of credit losses that the financial instrument is likely to incur due to all possible default events for the remaining duration.

• 24 -

All impairment losses on financial assets are recognized using allowance accounts, which reduce book value of the corresponding financial asset.

• (3) Removal of financial assets

Financial assets can be removed from balance sheet only if all contractual cash flow entitlements have ended, or if the asset has been transferred with virtually all risks and returns assumed by another party.

Difference between the book value of financial asset carried at cost after amortization and the amount of consideration received for the asset's removal is recognized through profit and loss. When an equity instruments at FVTOCI is removed from balance sheet, the amount of cumulative gain/loss is transferred directly into retained earnings and is not reclassified to profit and loss.

1. Equity instrument

Equity instruments issued by the consolidated entity are classified into equity depending on the terms of the underlying contract and the definitions of equity used.

Equity instruments issued by the consolidated entity are recognized at the amount of proceeds received net of direct issuing costs.

Buyback of the Company's own equity instruments is recognized and deducted under equity. Acquisition, sale, issuance, or retirement of the Company's own equity instruments is not recognized through profit and loss. 3. Financial liability

• (1) Subsequent measurement

All financial liabilities are carried at cost after amortization using the effective interest method.

• (2) Removal of financial liabilities

When a financial liability is removed, the difference between book value and the consideration paid (including any non-cash assets transferred or any additional liabilities borne) is recognized through profit and loss.

• 25 -

(XIII) Revenue recognition

The consolidated entity first identifies performance obligations in a contract it signs with customer, then divides and allocates the transaction sum to various obligations, and recognizes revenue when each obligation is fulfilled.

Revenue from sale of merchandise

Revenue from sale of merchandise is generated from retail sale of goods in the departmental store, and is recognized as income at the time of customer's purchase. Proceeds collected in advance from the issuance of departmental store vouchers are recognized as contractual liabilities until the vouchers are redeemed by customers.

Customer loyalty program represents reward points granted to customers for merchandises sold that customers can spend to purchase merchandise in the future, and are a form of customers' entitlement. At the time of transaction, a percentage of the sales proceeds received or receivable is treated as reward point and recognized as contractual liability; this liability is reclassified into income when reward points are redeemed or voided on a later date.

Sales proceeds of real estate properties sold under normal terms of business are collected in instalments. Contractual liabilities are recognized at the time the proceeds are collected, which are later recognized as income upon completion and delivery of each property to the respective buyer.

(XIV) Leases

The consolidated entity evaluates whether a contract meets the criteria of (or includes arrangements characterized as) lease on the day of contract establishment. Where the consolidated entity is the lessor

The consolidated entity does not have any lease arrangement that involves a transfer of virtually all risks and returns associated with ownership of the underlying asset to the lessee. All leases are classified as operating lease.

In an operating lease arrangement, the amount of proceeds received net of incentives are recognized as income on a straight-line basis over the lease tenor. Lease negotiation with a lessee is accounted as a new lease from the effective date of lease amendment.

When a lease includes both land and building elements, the consolidated company assesses the classification of each element as the finance or operation lease based on whether substantially all of the risks and rewards incidental to ownership of each element have been transferred to the lessee. The leasing payment is shared

• 26 -

between the land and building, based on the relative proportions between the fair values of the land and building’s leasing rights on the date the contract executed. If the leasing payment may be reliably shared between the two elements, each element is treated with the applicable lease classification. If both elements are obviously qualified for the operation lease criteria, the overall lease is classified as an operation lease.

(XV) Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction, or production of qualified assets are treated as part of an asset's cost until virtually all activities needed to bring the asset to its designated usable or salable state have been completed.

For specific-purpose loans undertaken for qualified capital spending, any investment income earned on short-term investment of the proceeds before incurring the capital spending is deducted from capitalized borrowing costs.

Except for the above, all other borrowing costs are recognized through profit and loss in the year occurred.

(XVI) Governmental subsidies

Governmental subsidies are only recognized when it is reasonably assured that the consolidated company will comply with the conditions attached to the governmental subsidies and receive such subsidies.

The governmental subsidies related to incomes are recognized under other incomes on the systematic basis during the period when the related costs to which the subsidies intend to compensate are recognized as expenses.

If the governmental subsidies are used to compensate the incurred expenses or losses, or the purpose is providing an immediate financial support to the consolidated company without future related cost, such subsidies are recognized under profit/loss during the period to receive such.

(XVII) Employee benefits

1. Short-term employee benefits

Liabilities associated with short-term employee benefits are measured at non-discounted amount of cash that the Company expects to pay in exchange for employees' service.

1. Post-employment benefits

2. 27 -

For defined contribution plans, the amount of contributions that has to be made to pension funds over the duration of employees' service is recognized as expense.

For defined benefit plans, the cost of benefit (including service cost, net interest, and effect of remeasurement) is estimated using the Projected Unit Credit Method. Service costs (including current and previous service costs) and net interests on net defined benefit liabilities (assets) are recognized as employee welfare expense at the time incurred or whenever the plan is amended or curtailed. Effects of remeasurement (including actuarial gains/losses, change in plan asset limits, and return on plan assets net of interest) are recognized under other comprehensive income and added to retained earnings at the time of occurrence. This amount is not reclassified into profit and loss in subsequent periods.

Net defined benefit liabilities (plan assets) represent the shortfall (surplus) of contributions made to the defined benefit plan. Net defined benefit plan assets may not exceed the amount of contributions refundable or the present value of reducible contributions in the future.

(XVIII) Income tax

The income tax expense represents the sum of the tax currently payable and deferred tax.

1. Tax currently payable

The consolidated entity reports current period income (loss) and calculates income tax payable (refundable) according to tax laws stipulated by the local tax jurisdiction.

Pursuant to the Income Tax Act of the Republic of China, undistributed earnings are subject to additional income tax, which is recognized in the year shareholders resolve to retain the earning.

Adjustments to income taxes reported in previous years are recognized as income tax expenses in the period the adjustment is made.

1. Deferred tax

Deferred income taxes are tax effects of temporary differences, given rise by the different book value of assets and liabilities presented in the financial statement and those reported for tax filing.

• 28 -

Tax impacts arising from taxable temporary differences are recognized as deferred income tax liabilities; deferred income tax assets are recognized under the condition that the Company is very likely to generate taxable income in the future to offset deductible temporary differences or losses carried forward.

Temporary differences that were not initially recognized as deferred income tax assets are also subject to re-assessment on every balance sheet date. These differences may be recognized to increase the book value of deferred income tax asset if the Company considers it highly likely to generate taxable income for full or partial recovery of such asset in the future. Temporary differences that were not initially recognized as deferred income tax assets are also subject to re-assessment on every balance sheet date. These differences may be recognized to increase the book value of deferred income tax asset if the Company considers it highly likely to generate taxable income for full or partial recovery of such asset in the future.

Deferred income tax assets and liabilities are estimated using expected tax rate applicable at the time the liability/asset is expected to be settled/realized. This expected tax rate is determined based on the tax rate and tax laws prevailing as at the balance sheet date. Deferred income tax liabilities and assets represent tax impacts of the method by which the consolidated entity expects to recover/settle the book value of its assets and liabilities as at the balance sheet date.

1. Current and deferred income tax

Current and deferred income taxes are recognized through profit and loss, except for source accounts that are recognized under other comprehensive income or directly as other equity item, where current and deferred income taxes are also recognized under other comprehensive income or directly as equity.

• V. Sources of uncertainty to significant accounting judgments, estimates, and assumptions

When applying accounting policies, the management is required to make judgments, estimates, and assumptions based on historical experience or other relevant factors in situations where information cannot be easily obtained from available sources. The actual outcome may differ from initial estimates.

The consolidated company incorporates the development of COVID-19 pandemic in Taiwan, and its potential impact on the economic environment, as the considerations

• 29 -

for the related material accounting estimates, including estimation of cash flow, growth rate, discount rate, and profitability. The management will continue to review the estimates and basic assumptions. If a revision of accounting estimate affects only the current period, the effect shall be recognized only for the current period. If a revision of accounting estimate affects current and future periods, the effect shall also be recognized for current and future periods.

Sources of uncertainty to estimates and assumptions

(I) Income tax

As at December 31, 2021 and 2020 the Company had deferred income tax assets with book value of NT$22,218 thousand and NT$24,774 thousand, respectively. Due to unpredictability of future profitability, the consolidated entity had NT$193,778 thousand and NT$152,561 thousand of tax losses as at December 31, 2021 and 2020, respectively, that were not recognized as deferred income tax asset. Realization of deferred income tax asset depends largely on whether the Company is able to generate sufficient profits or taxable temporary differences in the future. If actual profits are more than previously expected, there may be significant deferred income tax assets recognized additionally during the period of occurrence. (II) Impairment of inventory

Net realizable value of inventory is the estimated selling price less all estimated costs needed to completion and sale under normal circumstances. These estimates are made based on current market condition and previous experiences selling goods of similar nature. A change of market condition may significantly affect the outcome of such estimate.

• (III) Impairment of property, plant, equipment, investment properties, and intangible assets

When assessing asset impairment, the consolidated entity relies on the use of subjective judgment and determines the level of independent cash flow, useful life, and future income/expenses/losses for specific asset groups after taking into consideration the method in which assets are used and industry characteristics. Any change of economic circumstances and any change in estimate caused by the Company's strategies may result in significant impairment in the future.

• 30 -

VI. Cash and cash equivalents

Cash and cash equivalents
Petty cash and cash on hand Check and demand (current) deposit Cash equivalents Time deposits with an original tenor of 3 months or less.	December 31, 2021 $ 294 95,824 8,304 $ 104,422	December 31, 2020
			$ 294 98,493 - $ 98,787

Range of market interest rates applicable to bank deposits as at the balance sheet date is shown below:

date is shown below:
Demand deposits Financial assets at FVTPL-Current Financial assets designated as at FVTPL Non-derivative financial assets - TWSE, TPEX, and Emerging Stock Market shares - Fund beneficiary certificates - Foreign shares - Corporate bonds - Bonds	December 31, 2021 0.01%~0.80% December 31, 2021 $ 129,384 275,834 6,942 30,819 5,133 $ 448,112	December 31, 2020
		0.01%~0.05% December 31, 2020
			$ 120,667 251,446 6,688 23,697 14,749 $ 417,247

VII. Financial assets at FVTPL - Current

Please refer to Note 22 for gains/losses on financial assets at FVTPL.

VIII. Financial assets at FVTOCI

Financial assets at FVTOCI
Non-current Domestic investments Emerging Stock Market shares Unlisted shares Foreign investments Unlisted shares Total	December 31, 2021 $ 4,563 5,008 12,630 $ 22,201	December 31, 2020
			$ 4,563 46,890 15,004 $ 66,457

• 31 -

The consolidated entity invests in the above instruments by adopting a medium-long term strategy, and expects to profit over the long term. Management of the consolidated entity is of the opinion that recognizing short-term fair value changes through profit and loss on such investments does not conform with the long-term investment plans described above, and therefore has chosen to account such investments at FVTOCI.

In June 2021, the consolidated company adjusted the investment positions to diversify risks. Thus, the all the common shares of Fortune Technology Fund II Ltd. were sold as the fair value for NT$321 thousand. The related other equity - unrealized valuation loss of the financial assets at fair value through other comprehensive income, NT$14,252 thousand, was transferred to the retained earnings.

The investees, WK 7 Innovation Co., Ltd., WK 8 Innovation Co., Ltd., WK Innovation Co., Ltd., and WK 5 Innovation Co., Ltd, all conducted capital decreases in cash in March 2021, and refund the share payments. The consolidated company recovered total NT$41,882 thousand per shareholdings. These companies were resolved for liquidation by their board of directors in April 2021. The liquidation has not yet been completed as of the date of the consolidated report.

Investee - Fortune Technology Fund II Ltd. made a cash refund of share capital in November 2020, and the consolidated entity recovered NT$2,840 thousand of investment at the prevailing shareholding percentage.

Investee - Yo Fu Investment Co., Ltd. completed the liquidation procedure in January 2020 and refunded NT$433 thousand of capital.

The consolidated entity recognized NT$2,000 thousand and NT$8,200 thousand of unrealized loss on valuation of equity instruments at FVTOCI in 2021 and 2020, respectively.

IX. Financial assets carried at cost after amortization - current

December 31, 2021 December 31, 2020 Domestic investments Time deposit with initial maturity of more than 3 months $ 22,604 $ 20,731

As at December 31, 2021 and 2020, time deposits with initial tenors of 3 months or ～ longer accrued interests ranges are all 0.815% 3.200% per annum.

• 32 -

X. Notes receivable, accounts receivable, and other receivables

Arising from business activities Note receivable Trade receivable Operating lease receivable - Current - Non-current Subtotal Other receivables Amount receivable from sale of securities Utility and management fees receivable Rent receivable Tax refund receivable (Note 23) Others Subtotal Total	December 31, 2021 $ - 6,604 7,135 17,586 24,721 - 1,168 126 170 4,250 5,714 $ 37,039	December 31, 2020	December 31, 2020
			$ 385 2,639 3,430 18,406 21,836 5,405 1,174 126 42 3,254 10,001 $ 34,861

(I) Notes and accounts receivable

Notes receivable primarily represent rent that the consolidated entity collects for the leasing of investment properties. Accounts are generally recovered within 30 days.

Accounts receivable primarily represent retail sales collectible from consumers on transactions paid with credit cards and third-party payment tools. The majority of accounts receivable are credit card balances to be collected from financial institutions. Credit term on sale of merchandise is generally 30 days, and most proceeds are collected within this duration.

The consolidated entity recognizes loss provisions on accounts receivable based on expected credit losses over the duration of the receivable account. Expected credit loss over the remaining duration takes into account customers' past payment records. Since previous credit loss records showed no significant difference in loss pattern across customer groups, the consolidated entity simply set the expected credit loss rate based on number of days overdue.

If there is evidence to suggest that the counterparty is undergoing severe financial crisis and the recoverable amount can not be reasonably estimated, the consolidated entity will directly offset loss provisions against accounts receivable. In

• 33 -

which case, the consolidated entity will continue collection efforts on the receivables, and any amounts recovered will be recognized through profit and loss. Note and account receivables, and age are analyzed as below:

Not overdue	December 31, 2021 $ 1,364	December 31, 2020	December 31, 2020
			$ 3,024

The consolidated entity found no sign of impairment in accounts and notes receivable as at December 31, 2021 and 2020.

(II) Operating lease receivable

Operating lease receivable represents lease incentives granted on operating leases. The total cost of incentives is amortized on a straight-line basis and allocated over the remaining lease tenor as deductions to rental income. Lease negotiations had taken place with some lessees in the current year due to COVID-19. The negotiations were accounted as new leases from the effective date of lease amendment.

For concentration of credit risks in lease receivables, please refer to Note 26.

XI. Inventories

Inventories
Proprietary inventory Cosmetics and women's undergarments Properties pending sale Huagang Section, Shilin District, Taipei City Jiaoxi Gongyuan Section, Yilan	December 31, 2021 $ 3,169 603,278 140,281 $ 746,728	December 31, 2020
			$ 6,349 673,457 201,347 $ 881,153

Amount of cost of goods sold recognized from inventory totaled NT$152,913 thousand in 2021 and NT$134,258 thousand in 2020.

The consolidated entity's property pending sale at Jiaoxi Gongyuan Section, Yilan County, forms part of the joint construction agreement entered into by subsidiary - De Hong Development and a non-related party in January 2014. Under this agreement, the landlord contributed land located in Jiaoxi while De Hong Development contributed capital and technology to complete and share units of the construction project. A construction service contract was later signed with related and non-related parties in March 2015. This contract involved a joint development and joint construction of project in Jiaoxi, for which a 5% construction management fee was charged on the

• 34 -

construction cost. The joint construction project was completed in October 2017 and all ownership transfer has been completed to date.

The consolidated entity's property pending sale at Huagang Section, Shilin District, Taipei City, had net realizable value determined by an independent valuer using the comparative method and income method (direct capitalization method) as at the balance sheet date. Average income capitalization rate was one of the significant unobservable inputs used during valuation, and the rate was determined at 1.11% for 2021 and 1.15% for 2020.

The consolidated entity's property pending sale at Jiaoxi Gongyuan Section, Yilan County, did not have net realizable value determined by an independent valuer; instead, valuation was performed by the management using valuation model that was commonly accepted among market participants. This valuation had proceeded using market evidence similar to real estate transaction prices.

For disclosure on the amount of inventory pledged as loan collaterals, please refer to Note 28.

XII. Subsidiaries

Subsidiaries included in the consolidated financial statements

This consolidated financial statement encompasses the following:

Investor The Company The Company The Company The Company The Company	Investee GUAN CHAN INVESTME NT CO., LTD. JIA FONG INVESTME NT CO., LTD. SONG YUAN INVESTME NT CO., LTD. SHUN TAI INVESTME NT CO., LTD. De Hong Development Co., Ltd.	Main Business Investment Investment Investment Investment Housing and Building Development and Rental	%of Ownership December 31,2021 December 31,2020 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%	Explanation
			December 31,2021 100.0% 100.0% 100.0% 100.0% 100.0%
				As at December 31, 2021, the entity held 8,750,000 shares of the Company, representing 4.19% of outstanding common shares. As at December 31, 2021, the entity held 8,767,000 shares of the Company, representing 4.20% of outstanding common shares. As at December 31, 2021, the entity held 7,366,000 shares of the Company, representing 3.53% of outstanding common shares. As at December 31, 2021, the entity held 8,439,000 shares of the Company, representing 4.04% of outstanding common shares. -

The Company’s subsidiary, De Hong Development Co., Ltd., resolved by its board of directors on August 25, 2021, conducted a capital decrease to offset the deficit, with 15,000 thousand issued shares cancelled. After the capital decrease, the paid-in capital is NT$450,000 thousand, divided into 45,000 thousand shares.

• 35 -

XIII. Equity-accounted investments Investments in Associates

December 31, 2021 December 31, 2020 Associated companies with significant influence Chung Hsiao Enterprise Co., Ltd. $ 146,467 $ 162,327 Percentage of share ownership/voting rights December 31, 2021 December 31, 2020 Chung Hsiao Enterprise Co., Ltd. 20% 20%

Nature of business activities, main places of business, and countries of registration for the above associated companies are disclosed in Appendix 2 - "Information of Investees."

Summary financial information of associated companies under the consolidated entity is presented below:

presented below:
Current asset Non-current assets Current liabilities Non-current liabilities Equity Shareholding percentage of the consolidated entity Consolidated entity's share of equity Adjustment to fair value of non- current assets due to acquisition of shares Book value of investment Current operating revenues Current net income Other comprehensive income - current Share of current net income Share of other comprehensive income - current Dividends received from Chung Hsiao Enterprise Co., Ltd.	December 31, 2021 $ 262,235 222,414 ( 26,622 ) ( 60,234) $ 397,793 20% $ 79,558 66,909 $ 146,467 2021 $ 21,737 $ 17,542 ($ 77,961) $ 3,508 ($ 15,592) $ 3,776	December 31, 2020
		$ 349,312 222,820 ( 37,117 ) ( 57,923) $ 477,092 20% $ 95,418 66,909 $ 162,327 2020
	( (		$ 24,650 $ 20,878 $ 80,982 $ 4,176 $ 16,196 $ 3,115

• 36 -

Share of profit/loss and other comprehensive income from equity-accounted associated companies in 2021 and 2020 were recognized based on audited financial statements of the respective associated companies for the corresponding periods.

XIV. Property, Plant and Equipment

Property, Plant and Equipment
Book value for each category Land Buildings, net Computer and communication equipment, net Transport equipment, net Other equipment, net Construction in progress	December 31, 2021 $ 858,029 1,373,230 10,734 955 5,213 1,320 $ 2,249,481	December 31, 2020
			$ 853,457 1,433,238 11,723 1,369 6,885 3,236 $ 2,309,908

Cost Land Buildings Computer and communication equipment Transport equipment Other equipment Construction in progress Accumulated depreciation Buildings Computer and communication equipment Transport equipment Other equipment Total					2021
		Opening balance $ 853,457 1,911,058 17,715 4,906 11,242 3,236 2,801,614 477,820 5,992 3,537 4,357 491,706 $ 2,309,908		Increase in current year $ - - 378 - 140 8,455 $ 8,973 $ 61,043 1,325 414 1,786 $ 64,568	Disposal in current year $ - ( 7,894 ) ( 249 ) - ( 159 ) - ($ 8,302) ( $ 7,894 ) ( 207 ) - ( 133) ($ 8,234)				Closing balance
									$ 858,029 1,904,695 17,844 4,906 11,223 1,320 2,798,017 531,465 7,110 3,951 6,010 548,536 $ 2,249,481

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Cost Land Buildings Computer and communication equipment Transport equipment Other equipment Construction in progress Accumulated depreciation Buildings Computer and communication equipment Transport equipment Other equipment Total					2020
		Opening balance $ 853,457 1,896,990 20,571 4,906 11,149 1,736 2,788,809 415,433 6,975 3,124 2,709 428,241 $2,360,568		Increase in current year $ - 27,249 178 - 212 1,500 $ 29,139 $ 68,828 1,423 413 1,747 $ 72,411	Disposal in current year $ - ( 10,000 ) ( 464 ) - ( 119 ) - ($ 10,583) ( $ 6,150 ) ( 386 ) - ( 99) ($ 6,635)	Other adjustments $ - ( 3,181 ) ( 2,570 ) - - - ($ 5,751) ( $ 291 ) ( 2,020 ) - - ($ 2,311)		Closing balance
								$ 853,457 1,911,058 17,715 4,906 11,242 3,236 2,801,614 477,820 5,992 3,537 4,357 491,706 $2,309,908

Remodeling of Taoyuan Branch began in February 2017 and ended in September 2018. The project incurred a sum of approximately NT$1,112,410 thousand. As at December 31, 2021 and 2020, the project still had unpaid billings of NT$3,133 thousand and NT$77,226 thousand, respectively, that were presented as equipment purchase payable. Taoyuan Store was officially opened on October 3, 2018.

There was a delay in renovation works that caused Taoyuan Branch to postpone its official opening, and the Company has since been negotiating with the contractor according to the terms of the renovation contract to agree on the amount of losses, compensation, and construction billings payable. However, the two parties were unable to reach an agreement and sought resolution through arbitration in 2020. According to the ruling made by Chinese Arbitration Association, Taipei in January 2021, the Company was required to pay the contractor the contracted sum of construction billing plus an additional billing of NT$139,071 thousand for contract modification. A portion of the modification billing had already been accounted for; the unaccounted balance of NT$27,395 thousand will be adjusted prospectively into buildings - NT$27,249 thousand and repair expenses - NT$146 thousand in 2020.

As per assessment, the consolidated entity's property, plant, and equipment showed no sign of impairment as at December 31, 2021 and 2020.

• 38 -

Property, plant, and equipment of the consolidated entity were depreciated on a straight-line basis over the number of useful years shown below:

Buildings
Buildings	42 to 55 years
Building
improvements	3-10 years
Water treatment
system	55 years
Others	2 to 15 years
Computer and
communication
equipment	5 years
Transport equipment	5 years
Other equipment	5 to 8 years

For disclosure on the amount of property, plant and equipment pledged as

collaterals, please refer to Note 28.

XV. Investment Property

Investment Property
Investment Property Xinzhuang District, New Taipei City Da'an District, Taipei City	December 31, 2021 $ 1,059,951 1,098,967 $ 2,158,918	December 31, 2020
			$ 1,059,951 1,105,102 $ 2,165,053

Cost Land Buildings Accumulated depreciation Buildings Total Cost Land Buildings Accumulated depreciation Buildings Cumulative impairment Land Total						2021
		Opening balance $ 2,016,189 325,275 2,341,464 176,411 $ 2,165,053		Increase in current year $ - - $ - $ 8,665		Decrease in current year $ - 2,945) $ 2,945) $ 2,627) 2020	Other adjustments ( $ 4,572 ) 6,924 $ 2,352 ($ 496)			Closing balance
					( ( (					$ 2,011,617 329,254 2,340,871 181,953 $ 2,158,918
		Opening balance $ 2,016,189 325,810 2,341,999 167,357 15,000 $ 2,159,642		Increase in current year $ - - $ - $ 9,179 $ -		Decrease in current year $ - 535) $ 535) $ 125) $ 15,000)		Other adjustments $ - - $ - $ - $ -		Closing balance
					( ( ( (					$ 2,016,189 325,275 2,341,464 176,411 - $ 2,165,053

• 39 -

Investment properties - buildings are depreciated on a straight-line basis over the number of useful years shown below:

seful years shown below:
Buildings
Buildings	42 to 55 years
Accessory
equipment of
buildings	10 to 15 years
Building
improvements	3 years

The consolidated entity owned several investment properties located at Qiongtai Section, Fuying Section, and Jianguo Section, Xinzhuang District, New Taipei City. Reversal of impairment losses on investment properties totaling NT$15 million were recognized based on fair values as at December 31, 2020. These reversals represented differences between the book value and the amount of cash flow recoverable on real estate property, after taking into consideration changes in property price, government policies, and market supply/demand. The fair values were determined by independent valuers using the comparative approach and the land development analysis approach as at the respective balance sheet dates. Discount rate was one of the significant unobservable inputs used during valuation, and the rate was determined both at 1.17% as at December 31, 2021 and 2020

The consolidated entity also owned several investment properties located at Renai Section, Da'an District, Taipei City, with fair values determined at NT$6,982,916 thousand and NT$6,942,566 thousand as at December 31, 2021 and 2020, respectively. These fair values were not established by an independent valuer; instead, valuation was performed by the management using valuation model that was commonly accepted among market participants. This valuation had proceeded using market evidence similar to real estate transaction prices.

All of the consolidated entity's investment properties are proprietary owned. For disclosure on the amount of investment property pledged as collaterals, please refer to Note 28.

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XVI. Borrowings

• (I) Short-term borrowings

Short-term borrowings
Secured borrowings Bank borrowings	December 31, 2021 $ 762,450	December 31, 2020
			$ 1,022,423

Working capital bank borrowings bore interest rates of 0.88% ～ 2.55% and 0.88% ～ 1.85% as at December 31, 2021 and 2020, respectively.

• (II) Short-term bills payable

Short-term bills payable
Commercial paper Less: Unamortized discounts on bills payable	December 31, 2021 $ 142,600 113 $ 142,487	December 31, 2020
			$ 165,800 64 $ 165,736

Commercial papers bore interest rates of 0.31% ～ 0.80% and 0.25% ～ 0.65% as at December 31, 2021 and 2020, respectively.

For disclosure on the amount of inventory, property, plant, equipment, and

investment property pledged as collaterals for short-term borrowings and short-term bills payable, please refer to Note 28.

• (III) Long-term borrowings

December 31, 2021 December 31, 2020

Secured borrowings Bank SinoPac Credit line: NT$1,400,000,000. Contract tenor: October 8, 2020 to October 31, 2022. A new contract starting November 24, 2021 and ending November 30, 2023 was signed on November 24, 2021. $ 1,050,000 $ 1,100,000

(To be Continued)

• 41 -

(Continued)

Bank of Taiwan Credit line: NT$600,000,000. Contract tenor: June 24, 2020 to June 24, 2023. Hua Nan Bank Credit line: NT$293,000,000. The contract periods are January 11, 2019 to January 11, 2020; and December 31, 2019 to December 31, 2020. Within the borrowing limit, term of each drawdown is three years. The borrowings have been due since January 2022 to May 2023, successively. Taishin Bank Credit line: NT$278,000,000. Contract tenor: September 30, 2021 to September 30, 2024. First Commercial Bank Credit line: NT$350,000,000. Contract tenor: August 28, 2020 to August 28, 2022. A new contract starting October 5, 2021 and ending October 5, 2023 was signed on October 5, 2021. Less: parts that listed as due within in a year Long-term borrowings	December 31, 2021 $ 600,000 290,000 50,000 280,000 2,270,000 150,000 $ 2,120,000	December 31, 2020	December 31, 2020
			$ 446,000 290,000 - 280,000 2,116,000 - $ 2,116,000

• 42 -

Effective interest rate range for long-term borrowings:

Effective interest rate: Floating interest rate borrowing Fixed interest rate borrowing	December 31, 2021 0.800%~1.050% 0.875%~0.890%	December 31, 2020
		0.800%~1.050% 0.875%~0.910%

For disclosure on the amount of property, plant, equipment, and investment property placed as collateral for long-term borrowings, please refer to Note 28.

XVII. Accounts payable

Accounts payable
Accounts payable Arising from business activities	December 31, 2021 $ 79,671	December 31, 2020
			$ 96,659

The average credit term for trade purchases is 30 days.

XVIII. Accrued expenses

Accrued expenses
Salary and bonus payable Tax payable Utility expenses payable Others	December 31, 2021 $ 15,099 8,962 4,668 7,232 $ 35,961	December 31, 2020
			$ 16,348 8,987 4,914 7,434 $ 37,683

XIX. Post-employment benefit plans

• (I) Defined contribution plans

The pension scheme introduced under the "Labor Pension Act" that the Company and certain subsidiaries of the consolidated entity are subjected to is a government-managed defined contribution plan, for which each participating entity is required to contribute an amount equal to 6% of employees' monthly salary into their individual pension accounts held with the Bureau of Labor Insurance.

(II) Defined benefit plan

The Company is also subject to the pension scheme introduced under the "Labor Standards Act," which is a government-managed defined benefit plan. Under this plan, employees' pension benefits are calculated based on their years of service and gross salary for the month of retirement (excluding allowances and festive bonuses). The Company makes monthly pension contributions equivalent to 2% of employees' monthly salaries into an account held under Bank of Taiwan in the Labor Pension Supervisory Committee's name. In the event that the account is estimated to be short of balance to pay workers who are expected to meet their retirement criteria in the following year, the Company will reimburse the shortfall in one contribution by no later than the end of March next year. The account is managed by Bureau of Labor

• 43 -

Funds, Ministry of Labor. The Company has no influence whatsoever over the investment strategy.

The following amounts relating to the defined benefit plan have been recognized on the consolidated balance sheet:

the consolidated balance sheet:
Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2021 $ 40,883 ( 25,953) $ 14,930	December 31, 2020
	(	(	$ 43,545 24,076) $ 19,469

Changes in net defined benefit liability:

January 1, 2021 Servicing costs Service costs for the current period Interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts already included in net interest) Actuarial loss - change in demographic assumption Actuarial profit - change in financial assumption Actuarial gain - adjustment based on past experience Recognized in other comprehensive income Employer's contribution Plan asset payments December 31, 2021 January 1, 2020 Servicing costs Service costs for the current period Interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts already included in net interest) Actuarial loss - change in demographic assumption Actuarial loss - change in financial assumption Actuarial gain - adjustment based on past experience Recognized in other comprehensive income Employer's contribution December 31, 2020	Present value of defined benefit obligations $ 43,545 393 163 556 - 654 ( 747 ) ( 869) ( 962) - ( 2,256) $ 40,883 $ 42,274 417 318 735 - 2 1,322 ( 788) 536 - $ 43,545	Fair value of plan assets ($ 24,076) - ( 91) ( 91) ( 328 ) - - - ( 328) ( 3,714) 2,256 ($ 25,953) ($ 17,420) - ( 133) ( 133) ( 574 ) - - - ( 574) ( 5,949) ($ 24,076)	Net defined benefit liabilities	Net defined benefit liabilities
	( ( ( ( (	( ( ( ( ( ( ( ( ( ( ( ( ( (	( ( ( ( ( ( ( ( (	$ 19,469 393 72 465 328 ) 654 747 ) 869) 1,290) 3,714) - $ 14,930 $ 24,854 417 185 602 574 ) 2 1,322 788) 38) 5,949) $ 19,469

• 44 -

Amounts of defined benefit plan recognized through profit and loss, by function:

function:
Administrative expenses		2021 $ 465		2020
				$ 602

The consolidated entity is exposed to the following risks due to adoption of pension scheme introduced under the "Labor Standards Act":

1. Investment risks: The Bureau of Labor Funds, Ministry of Labor, manages the labor pension fund either on its own or through mandate. The labor pension fund is being allocated into equity securities, debt securities, and bank deposits local and abroad; however, the consolidated entity estimates return on plan assets at a rate no less than the 2-year time deposit rate offered by local banks.

2. Interest rate risk: A decrease in government bond yield would increase the present value of defined benefit obligations while at the same time increase return of plan assets invested in debt instruments. The overall effect on net defined benefit obligation is partially offset.

3. Salary risk: The present value of defined benefit obligations is calculated by taking into consideration the participants' future salary levels. An increase in salary level would raise the present value of defined benefit obligations.

The present value of defined benefit obligations is determined based on

actuarial estimates made by certified actuaries. Below are the main assumptions used on the date of measurement:

on the date of measurement:
Discount rate Expected salary increase	December31,2021 0.625% 2.000%	December31,2020
		0.375% 2.000%

A reasonable change in the main actuarial assumption would increase (decrease) the present value of defined benefit obligations by the following amounts, provided that all other assumptions remain unchanged:

Discount rate 0.25% increase 0.25% decrease Expected salary increase 0.25% increase 0.25% decrease	December31,2021 ($ 733) $ 755 $ 732 ($ 714)	December31,2020	December31,2020
	( (	( (	$ 889) $ 918 $ 886 $ 863)

• 45 -

Actuarial assumptions tend to be intercorrelated. It is unlikely to see only one assumption changing at one time, therefore the above sensitivity analysis may not truly reflect changes in the present value of defined benefit obligation.

Expected contributions in the next year Average maturity of defined benefit obligations	December31,2021 $ 360 7.2 years	December31,2020	December31,2020
			$ 389 8.1 years

XX. Equity (I) Common share capital

Common share capital
Authorized and issued shares (thousand shares) Authorized and paid-in capital	December 31, 2021 208,725 $ 2,087,250	December 31, 2020
			208,725 $ 2,087,250

All issued common shares have a face value of NT$10 per share. Each share is entitled to one voting right and the right to receive dividends.

(II) Additional paid-in capital

Additional paid-in capital
Shares premium from issuance Treasury stock transaction	December 31, 2021 $ 71,028 452,597 $ 523,625	December 31, 2020
			$ 71,028 435,936 $ 506,964

This additional paid-in capital can be offset against losses, or distributed in cash or capitalized into share capital when the Company has no cumulative losses outstanding. However, capitalization of this additional paid-in capital is capped at a certain percentage of the Company's paid-in share capital each year.

(III) Retained earnings and dividends policy

According to the earnings appropriation policy stipulated in the Articles of Incorporation, annual surpluses concluded by the Company are first subject to taxation and reimbursement of previous losses, followed by a 10% provision for statutory reserves and provision or reversal of special reserves as the laws may require. Any surpluses remaining will be added to unappropriated earnings accumulated from previous years, for which the board of directors will propose an earnings appropriation plan and seek resolution in a shareholder meeting before distribution. Refer to Note 22-(8) - Employee and director remuneration for the

• 46 -

Company's employee and director remuneration policy outlined in the Articles of Incorporation.

The Company passed a resolution during the shareholder meeting dated June 28, 2019 to amend its Articles of Incorporation. In addition to the terms described in the preceding paragraph, any cash distribution of dividend, profit, statutory reserve, or additional paid-in capital, whether in whole or in part, must be resolved in a board meeting with more than two-thirds of the board present, voted in favor by more than half of attending directors, and reported in the upcoming shareholder meeting.

The Company’s shareholders’ meeting resolved to amend the Articles of Incorporation on August 31, 2021. As a conventional department store, the Company experiences no major change in sales volume but foresees moderate growth. After taken into consideration its long-term development plans and goals of maximizing shareholders' interest, the Company has adopted a dividend policy that makes consistent payouts primarily in cash. The shareholders’ dividends are not lower than 10% of the distributable earnings of the year; of which, cash dividends shall not account for less than 50% of the sum of cash dividends plus stock dividends. However, the Company may forgo dividend payment if distributable earnings amount to NT$0.2 or less in a given year.

Other than aforesaid, the shareholders’ meeting also specified that as required by laws, the Company shall make provision for special earnings reserve from unappropriated earnings carried from previous years for any net contra-equity balances accumulated under other contra-equity items in previous years before distributing earnings. If the Company is unable to make adequate provision from unappropriated earnings carried from previous years, the Company shall treat current net income and non-net income items as unappropriated earnings and make provisions accordingly.

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

• 47 -

The distribution of earnings for 2020 and 2019 are described as following:

Statutory reserves Reversal of special reserves Cash dividends Cash dividends per share (NT$)		2020 $ 4,035 $ 39,225) $ 104,363 $ 0.5		2019
	(		(	$ 11,072 $ 176,716) $ 146,108 $ 0.7

The aforesaid cash dividend distributions were resolved by the board of directors on March 22, 2021 and March 23, 2020; and the earning distribution item for 2019 were resolved by the AGM on June 22, 2020. To respond to the “Measures Related to Postponing Shareholders’ Meeting of Public Companies to Cope with the Pandemic,” announced by FSC, the Company cancelled the originally scheduled shareholders’ meeting, and convened the meeting on August 31, 2021.

Details of the 2021 earnings appropriation plan proposed by the board of directors in meeting dated March 14, 2022 are as follows:

meeting dated March 14, 2022 are as follows:
Provision for statutory reserves Provision for special reserves Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings
		$ 12,747 $ 5,832 $ 104,363 $ 0.5

For the above cash dividend, the board of directors has resolved to set April 20, 2022 as the baseline date, and May 9, 2022 as the expected cash dividend payment date. Appropriation of 2021 earnings is still pending for shareholders' resolution in the annual general meeting scheduled on June 14, 2022.

(IV) Special reserves

The Company reclassified NT$372,185 thousand of unrealized gain on revaluation into retained earnings when adopting IFRSs for the first time, and made provisions for special reserves of the same amount in accordance with the authority's instruction No. Jin-Guan-Zheng-Fa-1010012865 in 2013. This special reserve may be reversed when the underlying property is disposed or reclassified on a later date.

When appropriating 2020 and 2019 earnings, the Company made reversal and provision for special reserves totaling NT$39,225 thousand and NT$176,716 thousand, respectively, for differences in the market price and book value of parent

• 48 -

company shares held by subsidiaries, after taking into consideration the prevailing shareholding percentage.

• (V) Other items of equity

Unrealized gain/(loss) on financial assets at FVTOCI

Opening balance Incurred in the current year Unrealized loss - equity instrument (Note 8) Share of equity-accounted associated companies Adjustment to previous years Unrealized gain/(loss) - Equity instruments Transfer of cumulative gains/losses to retained earnings following disposal of equity instrument Closing balance	2021 ( $ 84,096 ) ( 4,493 ) ( 15,592 ) - 14,252 ($ 89,929)	2020
		( $ 156,000 ) ( 7,960 ) 16,196 ( 10,606 ) 74,274 ($ 84,096)

(VI) Treasury stock

Treasury stock
Reason for buyback 2021 Subsidiaries' holding of the Company's shares reclassified from investment into treasury stock 2020 Subsidiaries' holding of the Company's shares reclassified from investment into treasury stock	Shareholding at the beginning of year 33,322 33,322	Increase in current year - -	Unit: Thousand Shares Decrease in current year Shareholding at the end of year - 33,322 - 33,322
					33,322 33,322

• 49 -

Information relating to subsidiaries' holding of the Company's shares as at balance sheet date:

balance sheet date:
Investee December 31, 2021 GUAN CHAN INVESTMENT CO., LTD. JIA FONG INVESTMENT CO., LTD. SONG YUAN INVESTMENT CO., LTD. SHUN TAI INVESTMENT CO., LTD. December 31, 2020 GUAN CHAN INVESTMENT CO., LTD. JIA FONG INVESTMENT CO., LTD. SONG YUAN INVESTMENT CO., LTD. SHUN TAI INVESTMENT CO., LTD.	No. of shares held (thousand shares) 8,750 8,767 7,366 8,439 8,750 8,767 7,366 8,439		Acquisition cost $ 337,066 337,787 283,545 325,143 $ 1,283,541 $ 337,066 337,787 283,545 325,143 $ 1,283,541	Market price and bookvalue
					$ 350,000 350,680 294,640 337,560 $ 1,332,880 $ 462,875 463,775 389,662 446,423 $ 1,762,735

Subsidiaries' holding of the Company's shares are treated as treasury stocks; subsidiaries are not entitled to participate in cash issue or vote, but are otherwise entitled to the same rights as ordinary shareholders.

XXI. Revenues

(I) Breakdown of operating revenues

Breakdown of operating revenues
Net sales revenues Lease incomes Construction incomes Other operating revenues		2021 $ 115,954 242,743 133,329 36,569 $ 528,595		2020
				$ 201,207 247,744 59,669 45,820 $ 554,440

• 50 -

(II) Explanation and breakdown of income from customers' contracts

Net sales revenues Revenues from sale of merchandise Retail commission income Construction incomes Income from sale of property Other operating revenues Incomes from merchants' subsidy for department renovation Management fee income Others		2021 $ 16,003 99,951 $ 115,954 $ 133,329 $ 1,326 28,590 6,653 $ 36,569		2020
				$ 91,736 109,471 $ 201,207 $ 59,669 $ 5,359 30,073 10,388 $ 45,820

Analysis of retail commission income:

		2021		2020
Total department sales	$	829,926	$	975,696
Retail commission income	$	99,951	$	109,471
Contract balance
	December 31, 2021		December 31, 2020
Contract liability	$	6,391	$	46,996

(III) Contract balance

The change in contractual liabilities was mainly attributed to the discrepancy between the time obligation was fulfilled and the the time payment was made to customers.

• (IV) Lease incomes

Lease incomes
Lease incomes Investment Property Share of mall rental income		2021 $ 204,280 38,463 $ 242,743		2020
				$ 212,408 35,336 $ 247,744

Operating lease arrangements involve leasing of investment properties and retail malls (presented as property, plant, and equipment) owned by the consolidated entity, for tenors of 1-7 years and 1-13 years, respectively. The lessees are not entitled to any privileges to purchase the leased properties at the end of the lease tenor.

As at December 31, 2021 and 2020, the consolidated entity had collected deposits totaling NT$51,609 thousand and NT$50,965 thousand, respectively, in relation to the operating lease agreements.

• 51 -

Some of the consolidated entity's real estate leasing agreements contain contingent rent clauses that require the lessee to pay contingent rent at a certain percentage of monthly sales revenues.

XXII. Profit before tax

Pre-tax profit includes the following items:

(I) Breakdown of operating costs

Breakdown of operating costs
Cost of sales Cost of leasing Construction cost Other operating costs		2021 $ 13,406 37,717 139,507 15,276 $ 205,906		2020
				$ 79,125 39,224 55,133 16,529 $ 190,011

(II) Interest income

Cost of leasing Construction cost Other operating costs (II) Interest income		37,717 139,507 15,276 $ 205,906		39,224 55,133 16,529 $ 190,011
Cash in banks (III) Other income Carpark income Dividend income Incomes from governmental subsidies Others		2021 $ 212 2021 $ 7,630 6,940 9,813 4,436 $ 28,819		2020
				$ 580 2020
				$ 9,244 3,902 - 4,307 $ 17,453

The governmental subsidies are the subsidies to the business having difficulties due to impacts of COVID-19 in service sectors, provided by MOEA, and the compensation of the re-zoning urban land announced by New Taipei City Government. In 2021, the total amount received was NT$9,813 thousand.

(IV) Other gains or losses

Other gains or losses
Loss from disposal of property, plant and equipment Loss on disposal of investment properties Net gain (loss) on currency exchange Gain (loss) on financial assets mandatory to be carried at FVTPL Sundry expenses Reversal of impairment loss on investment property (Note 15)		2021 $ 68 ) 318 ) 119 ) 10,444 2,338 ) - $ 7,601		2020
	( ( ( (		( ( ( (	$ 3,948 ) 372 ) 956 1,563 ) 2,747 ) 15,000 $ 7,326

• 52 -

Net gain/loss on financial assets mandatory to be carried at FVTPL includes:

(A) Gain/loss on fair value changes totaling -NT$9,489 thousand of gain in 2021 and NT$10,551 thousand of loss in 2020; and (B) Gain on disposal totaling NT$955 thousand in 2021 and NT$8,988 thousand in 2020.

(V) Financial costs

Financial costs
Interest on bank loans		2021 $ 29,685		2020
				$ 35,110

There was no capitalization of interest in 2021 and 2020.

• (VI) Depreciation and amortization

Depreciation and amortization
Property, Plant and Equipment Investment Property Intangible asset Total An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating costs Operating expenses Employee benefits expense Retirement benefits (Note 19) Defined contribution plans Defined benefit plan Subtotal Other employee benefits Total An analysis by function Operating expenses		2021 $ 64,568 8,665 602 $ 73,835 $ 17,500 55,733 $ 73,233 $ 148 454 $ 602 2021 $ 2,059 465 2,524 69,192 $ 71,716 $ 71,716		2020
				$ 72,411 9,179 595 $ 82,185 $ 19,870 61,720 $ 81,590 $ 149 446 $ 595 2020
				$ 2,133 602 2,735 70,173 $ 72,908 $ 72,908

(VII) Employee benefits expense

(VIII) Employee and director remuneration

The Company provides for employee remuneration at 0.1%-4%, and director remuneration at no more than 4%, of current year's pre-tax profit (before employee and director remuneration). 2021 and 2020 employee/director remuneration were resolved in board of directors meetings dated March 14, 2022 and March 22, 2021, respectively. Details are as follows:

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Ratio

Ratio
Remuneration to employees Remuneration to directors	2021 0.10% -	2020
		0.63% 0.63%

Amount

Amount
Remuneration to employees Remuneration to directors	2021 Cash Stocks $ 150 $ - - -	2020
	Cash	Cash $ 1,000 1,000	Stocks
	$ 150 -		$ - -

The amount actually paid of the employee’ and directors’ remunerations resolved by the board of directors on March 14, 2022 are different form the

recognized amount in the annual consolidated financial statements. The difference is adjusted as the profit/loss in 2022.

adjusted as the profit/loss in 2022.
The distribution amount resolved by the board of directors The amount recognized in the annual consolidated financia statements	2021
	Remuneration to employees	Remuneration to directors
	$ 150 1,000	$ - 1,000

The actual amounts of 2020 and 2019 employee remuneration and director remuneration paid were indifferent from the amounts recognized in the 2020 and 2019 financial statements.

Please visit "Market Observation Post System" for more information regarding employee/director remuneration resolved during the Company's board of director meetings.

• (IX) Gains (losses) on foreign currency exchange

Foreign exchange gains Total loss on currency exchange Net (loss) profit		2021 $ 13,913 14,032) $ 119)		2020
	( (		(	$ 14,340 13,384) $ 956

• 54 -

XXIII. Income tax

(I) Income tax recognized in profit or loss

Major components of tax expense were as follows:

Major components of tax expense were as follows:
2021 2020 Tax currently payable Incurred in the current year $ 1,399 $ 33,730 Levied on unappropriated earnings - 5,131 Prior years adjustment 967 ( 387) 2,366 38,474 Deferred tax Incurred in the current year ( 1,219) 3,610 Income tax expense recognized in profit or loss $ 1,147 $ 42,084 Reconciliation of accounting income and income tax expense: 2021 2020 Profit before tax $ 141,842 $ 156,243 Income tax derived by applying the statutory tax rate to pre- tax net profit $ 26,756 $ 31,447 Loss (gain) on valuation of financial assets ( 1,900 ) 2,109 Levied on unappropriated earnings - 5,131 Tax-exempt income ( 4,161 ) ( 1,250 ) Unrecognized losses carried forward 8,244 3,820 Unrecognized temporary difference 243 1,214 Difference to paid for the basic tax amount 998 - Recognized deficit offset with the capital decrease of the subsidiary ( 30,000 ) - Previous income taxes adjusted in the current year 967 ( 387) Income tax expense recognized in profit or loss $ 1,147 $ 42,084		2020
		$ 33,730 5,131 387) 38,474 3,610 $ 42,084 2020
	$ 156,243 $ 31,447 2,109 5,131 ( 1,250 ) 3,820 1,214 - - ( 387) $ 42,084

• 55 -

(II) Income tax recognized in other comprehensive income

Income tax recognized in other comprehensive income
2021 Deferred tax Incurred in the current year - Remeasurement of defined benefit plan ( $ 258 ) - Equity instruments at FVTOCI ( 2,440 ) Prior years adjustment - Equity instruments at FVTOCI - ($ 2,698) Current income tax assets and liabilities December31,2021 Current income tax asset Tax refunds receivable (presented as other receivables) $ 170 Current tax liabilities Income tax payable $ 1,189	2020
	( $ 8 ) 240 ( 10,606) ($ 10,374) December31,2020
		$ 42 $ 21,646

(III) Current income tax assets and liabilities

• (IV) Deferred income tax assets and liabilities

Below are changes in deferred income tax assets and liabilities:

2021

2021
Deferred taxassets Temporary difference Impairment loss of financial assets at FVTOCI Defined benefit plan Others		Opening balance $ 15,474 9,261 39 $ 24,774	Recognized in profit or loss $ - - 142 ($ 142)	Recognized in other comprehensive income ( $ 2,440 ) ( 258 ) - ($ 2,698)		Closing balance
						$ 13,034 9,003 181
						$ 22,218

(To be Continued)

• 56 -

(Continued)

							Recognized in	Recognized in	Recognized in
				Recognized				other
	Opening			in	profit or		comprehensive				Closing
		balance			loss			income			balance
Deferred tax liabilities
Temporary difference
Provision for land
increment value tax	$	213,961		$		-	$		-		$ 213,961
Adjustment for rent-
free period		3,917	(		1,077)				-		2,840
	$	217,878	(	$	1,077)		$		-		$ 216,801
2020
							Recognized in
								other
	Opening		Recognized in				comprehensiv				Closing
		balance	profit or			loss	e	income			balance
Deferred tax assets
Temporary difference
Impairment loss of
financial assets at
FVTOCI	$	25,840		$		-	( $	10,366 )		$	15,474
Impairment loss on
investment properties		3,000	(		3,000 )				-		-
Defined benefit plan		9,269				-	(		8 )		9,261
Others		628	(		589)				-		39
	$	38,737	($		3,589)		($	10,374)		$	24,774
Deferred tax liabilities
Temporary difference
Provision for land
increment value tax	$	213,961		$		-	$		-	$	213,961
Adjustment for rent-free
period		3,896				21			-		3,917
	$	217,857		$		21	$		-	$	217,878

(V) Unused losses carried forward not recognized as deferred income tax asset in the

consolidated balance sheet

consolidated balance sheet
Loss carried forward Expiring 2022 Expiring 2023 Expiring 2024 Expiring 2025 Expiring 2026 Expiring 2027 Expiring 2029 Expiring 2030 Expiring in 2031	December 31, 2021 $ 8,338 13,979 11,678 16,425 13,382 11,965 57,509 19,285 41,217 $ 193,778	December 31, 2020
			$ 8,338 13,979 11,678 16,425 13,382 11,965 57,509 19,285 - $ 152,561

• 57 -

(VI) Income tax assessments

The Company and subsidiaries De Hong Development as of 2019 and GUAN CHAN INVESTMENT, JIA FONG INVESTMENT, SHUN TAI INVESTMENT, and SONG YUAN INVESTMENT as of 2020, the income tax filings have been certified by the tax authority.

XXIV. EPS

EPS
Basic earnings per share Diluted earnings per share		2021 $ 0.80 $ 0.80	Unit: share/NT$ 2020 $ 0.65 $ 0.65

The net income and weighted average number of ordinary shares outstanding in calculating earnings per share were as follows: Current net income

Current net income
Current net income Number of shares Weighted average number of ordinary shares in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Remuneration to employees Weighted average number of ordinary shares used in the computation of diluted earnings per share		2021 2020 $ 140,695 $ 114,159 Unit: Thousand Shares 2021 2020 175,403 175,403 32 26 175,435 175,429

If the consolidated entity has the option to distribute employee remuneration either in cash or in shares, then the calculation of diluted earnings per share shall be made by assuming full share-based payment. In which case, the number of potential common shares is added to the calculation of weighted-average outstanding shares as soon as they become dilutive, and this is the basis used for calculating diluted earnings per share. Such a dilutive effect of the potential shares is included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

• 58 -

XXV. Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. The consolidated entity has maintained its overall strategies unchanged in past years.

The consolidated entity's capital structure comprises net debt (i.e. borrowings less cash and cash equivalents) and equity (i.e. sum of share capital, additional paid-in capital, retained earnings, and other equity items).

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

The management reviews the consolidated entity's capital structure on a regular basis to address the costs and risks associated with various types of capital. Depending on the recommendations of its management, the consolidated entity may balance its capital structure by paying dividends, raising new debts, or by repaying existing debts. XXVI. Financial instruments

(I) Fair value information - financial instruments that are not measured at fair value In the management's opinion, all financial assets and liabilities that are not measured at fair value have been presented on the consolidated balance sheet at book values that resemble their fair values.

• (II) Fair value information - financial instruments with fair value measured on a recurring basis

• Degree of fair value measurements

December 31, 2021

December 31, 2021
Financial assets at FVTPL Domestic listed shares - Equity investments Foreign public-listed (OTC-traded) securities - Equity investments - Bond investments Fund beneficiary certificates Total		Level 1 $ 129,384 6,942 35,952 275,834 $ 448,112		Level 2 $ - - - - $ -		Level 3 $ - - - - $ -	Total
							$ 129,384 $ 6,942 35,952 275,834 $ 448,112

(To be Continued)

• 59 -

(Continued)

Financial assets at

Financial assets at
FVTOCI Investment in equity instruments - Emerging stock market shares - Domestic unlisted shares - Foreign unlisted shares Total December 31, 2020 Financial assets at FVTPL Domestic listed shares - Equity investments Foreign public-listed (OTC-traded) securities - Equity investments - Bond investments Fund beneficiary certificates Total Financial assets at FVTOCI Investment in equity instruments - Emerging stock market shares - Domestic unlisted shares - Foreign unlisted shares Total		$ - - - $ - Level 1 $ 120,667 6,688 38,446 251,446 $ 417,247 $ - - - $ -		$ - - - $ - Level 2 $ - - - - $ - $ - - - $ -		$ 4,563 5,008 12,630 $ 22,201 Level 3 $ - - - - $ - $ 4,563 46,890 15,004 $ 66,457	$ 4,563 5,008 12,630 $ 22,201 Total
							$ 120,667 6,688 38,446 251,446 $ 417,247 $ 4,563 46,890 15,004 $ 66,457

There was no change of fair value input between level 1 and level 2 in 2021 and 2020.

• 60 -

• Reconciliation of Level 3 fair value measurements of financial instruments

Financial assets that involve the use of level 3 fair value inputs were equity instruments at FVTOCI. Reconciliation of 2021 and 2020 balances is explained below:

explained below:
Opening balance Recognized as other comprehensive income (unrealized loss on valuation of financial assets at FVTOCI) Refund from capital reduction Disposal Closing balance	2021 $ 66,457 ( 2,000 ) ( 41,882 ) ( 374) $ 22,201	2020
		$ 77,497 ( 8,200 ) ( 2,840 ) - $ 66,457

1. Level 3 fair value measurement technique and assumption

Fair value of domestic and foreign unlisted shares is determined based on

investees' latest net worth after taking liquidity into consideration. Liquidity discount

is used as a significant unobservable input; a lower liquidity discount would increase fair value of such investment.

• (III) Categories of financial instruments

Categories of financial instruments
Financial asset At FVTPL Financial assets designated as at FVTPL Financial assets at amortized cost (Note 1) Financial assets at FVTOCI - Investment in equity instruments Financial liability Financial liabilities carried at amortized cost (Note 2)	December31,2021 $ 448,112 142,130 22,201 3,358,931	December31,2020
		$ 417,247 133,689 66,457 3,526,386

Note 1: The balance includes cash, cash equivalents, notes receivable, accounts receivable, other receivables (excluding tax refunds receivable), time deposits with initial maturity of more than 3 months, and refundable

deposits, and other financial assets carried at cost after amortization.

Note 2: The balance includes short-term borrowing, short-term bills payable, notes payable, accounts payable, accrued expenses (excluding tax payable and

• 61 -

salary & bonus payable), equipment purchase payable, other payables, longterm liabilities due within one year, refundable deposits, long-term

borrowings, and other financial liabilities carried at cost after amortization.

• (IV) Financial risk management objective and policies

Main financial instruments used by the consolidated entity include equity and debt instrument investmets, fund beneficiary certificates, accounts receivable, accounts payable, and loans. The consolidated entity's Financial Management Department is responsible for supporting business units, making coordinated use of capital, and performing treasury transactions in local and international financial markets. It monitors and manages financial risks within the consolidated entity by preparing internal reports, which analyze the scope and severity of risk exposures. These risks include market risk (including currency risk, interest rate risk, and other price risks), credit risk, and liquidity risk.

1. Market risk

2. (1) Exchange rate risk

See Note 29 for information on financial assets denominated in nonfunctional currencies as at the balance sheet date. No sensitivity analysis was provided as the effect of exchange rate variation was insignificant.

• (2) Interest rate risk

The consolidated entity is exposed to interest rate risks due to capital borrowed at both fixed and floating rates by various entities within the group.

The book value of financial assets and financial liabilities susceptible to interest rate risks as at the balance sheet date is presented below:

below:
Fair value interest rate risk -Financial assets -Financial liabilities Cash flow interest rate risk -Financial assets -Financial liabilities	December 31, 2021 $ 8,608 1,654,487 117,882 1,520,450	December 31, 2020
		$ 331 1,737,236 118,781 1,566,923

Bank deposits and loans that the consolidated entity has

placed/borrowed at fixed rate are susceptible to interest rate risk in the

• 62 -

form of fair value change. However, the management considers the impact of interest rate variation to be insignificant given the short borrowing tenor and low borrowing rate.

Time deposits, demand deposits, and loans that the consolidated entity has placed/borrowed at floating rate are susceptible to interest rate risk in the form of cash flow changes.

Sensitivity analysis

The following sensitivity analysis has been prepared to explain interest rate risk exposure of floating-rate financial assets and bank loans as at the balance sheet date. Calculations were made on financial assets and liabilities that were susceptible to interest rate risk in the form of cash flow changes as at the balance sheet date. Interest rate sensitivity analyses are reported to the management by applying a variance of 0.25% above and below. This variance conforms with the management's expectation about the possible and reasonable range of interest rate variation.

A 0.25% increase/decrease in interest rate would have reduced/increased the consolidated entity's 2021 and 2020 pre-tax profit by NT$3,506 thousand and NT$3,620 thousand, respectively, if all other variables remained unchanged. This variation is largely attributed to exposure of bank loans undertaken at floating rate.

There was no significant change in the consolidated entity's interest rate sensitivity from the previous year.

(3) Other price risk

The consolidated company is exposed to the risk of equity price variation due to investment in domestic and foreign listed equity securities. The consolidated entity does not engage in active trading of such investment. Equity price risk of the consolidated entity is mainly concentrated in equity instruments issued within the Greater China Region.

Sensitivity analysis

The following sensitivity analysis was conducted based on equity price risks as at the balance sheet date.

• 63 -

If equity prices increased/decreased by 10%, pre-tax profit for 2021 and 2020 would have increased/decreased by NT$13,633 thousand and NT$12,736 thousand, respectively, due to a rise/fall in the fair value of financial assets at FVTPL. Meanwhile, pre-tax other comprehensive income for 2021 and 2020 would have increased/decreased by NT$2,220 thousand and NT$6,646 thousand, respectively, due to a rise/fall in the fair value of financial assets at FVTOCI.

There was no significant change in the consolidated entity's equity price sensitivity from the previous year.

1. Credit risk

Credit risk refers to the risk of financial loss due to counterparties’ failure in fulfilling contractual obligations. As at the balance sheet date, the consolidated entity's maximum exposure to the risk of loss due to counterparties' default on contractual obligations is represented by the book value of financial assets shown on the consolidated balance sheet.

Lease proceeds receivable by the consolidated entity were concentrated in three main customers, which accounted for 95% and 94% of the balance as at December 31, 2021 and 2020, respectively. However, the consolidated entity expects no significant credit risk as it has collected appropriate amounts of deposit.

3.

Furthermore, due to the fact that the consolidated entity places liquid capital with banks of high credit rating issued by reputable international rating agencies, there should be limited level of credit risk exposure. Liquidity risk

The consolidated entity maintains adequate position of cash and cash equivalents as well as bank credit lines to support corporate operations and to mitigate effects of cash flow variation. The management constantly monitors use of bank limits and makes sure that borrowing terms are duly complied.

Maturity analysis for contracted non-derivative financial liabilities was prepared based on the earliest possible repayment dates, using undiscounted cash flows (including principal and estimated interest). Cash flows include interest and principal payments.

• 64 -

The following table shows the earliest times that the consolidated entity may be demanded to make immediate repayment of bank loans, without considering the likelihood of such demands. Maturity analysis of other nonderivative financial liabilities is prepared based on the agreed repayment date.

Undiscounted amounts of floating interest cash flow are estimated using yield curve as at the balance sheet date.

December 31, 2021

December 31, 2021
Non-derivative financial liabilities Non-interest bearing liabilities Floating rate instruments Fixed rate instruments		Repayable upon demand or within 1 month $ 156,296 159,100 136,000 $ 451,396		1 to 3 months $ - - 588,487 $ 588,487		3 months to 1 year $ - 171,350 - $ 171,350		1 to 5 years
								$ - 1,190,000 930,000 $ 2,120,000

December 31, 2020

December 31, 2020
Non-derivative financial liabilities Non-interest bearing liabilities Floating rate instruments Fixed rate instruments		Repayable upon demand or within 1 month $ 232,447 10,500 382,798 $ 625,745		1 to 3 months $ - - 628,438 $ 628,438		3 months to 1 year $ - 166,423 - $ 166,423		1 to 5 years
								$ - 1,390,000 726,000 $ 2,116,000

Bank borrowing constitutes a main source of liquidity for the consolidated entity. As at December 31, 2021 and 2020, the consolidated entity had undrawn bank limits of NT$1,529,900 thousand and NT$1,533,201 thousand, respectively.

XXVII. Related party transaction

All income, expenses, and losses of the Company and subsidiaries (being the Company's related parties) have been eliminated during consolidation, and therefore were not disclosed in the footnote.

• 65 -

The consolidated entity had paid the following compensations to its directors and the executive management:

Short-term employee benefits Post-employment benefits		2021 $ 16,261 164 $ 16,425		2020
				$ 15,649 180 $ 15,829

Compensation to directors and members of the executive management is

determined by the Remuneration Committee based on individual performance and market trends.

XXVIII. Pledged Assets

The consolidated entity has placed part of its inventory, property, plant, equipment, and investment property as collaterals to secure bank borrowings. Below is a summary of assets pledged as collaterals:

of assets pledged as collaterals:
Inventories - Properties pending sale Property, Plant and Equipment - Land - Buildings Investment Property	December 31, 2021 $ 705,672 840,092 768,365 1,029,946 $ 3,344,075	December 31, 2020
			$ 802,423 835,520 768,610 1,041,651 $ 3,448,204

XXIX. Foreign currency-denominated financial assets of material impact

The following information was aggregated by the foreign currencies other than functional currencies of the Group and the exchange rates between foreign currencies and respective functional currencies were disclosed. Foreign currency assets of material effect:

December 31, 2021

December 31, 2021
Financial asset Monetary items USD RMB ZAR	Foreign currency $ 830 488 1,076	Exchange rate 27.680 4.344 1.733	Carrying amount
				$ 22,988 2,121 1,865 $ 26,974

(To be Continued)

• 66 -

(Continued)

Non-monetary items USD RMB ZAR December 31, 2020 Financial asset Monetary items USD HKD Non-monetary items USD HKD AUD ZAR RMB	Foreign currency $ 3,028 616 544 Foreign currency $ 647 161 2,738 1,012 106 2,391 1,029	Exchange rate 27.680 4.344 1.733 Exchange rate 28.480 3.673 28.480 3.673 21.950 1.949 4.377	Carrying amount	Carrying amount
			$ 83,811 2,674 942 $ 87,427 Carrying amount
				$ 18,443 590 $ 19,033 $ 77,996 3,716 2,319 4,661 4,505 $ 93,197

The consolidated entity reported net gain/loss (realized and unrealized) on exchange totaling net loss of NT$119 thousand in 2021 and net gain of NT$956 thousand in 2020. Due to the broad diversity of foreign currencies used for transactions, the consolidated entity was unable to disclose exchange gains/losses separately for each significant foreign currency.

XXX. Additional Disclosures

• (I) Information related to significant transactions:

• Loans to external parties. (None)

• Endorsements/guarantees to external parties. (None)

• Marketable securities held at year-end. (Appendix 1)

• Cumulative purchase or sale of a single security totaling more than NT$ 300 million or 20% of paid-in capital. (None)

• Acquisition of real estate properties amounting to more than NT$ 300 million or 20% of paid-in capital. (None)

• 67 -

• Disposal of real estate properties amounting to more than NT$ 300 million or 20% of paid-in capital. (None)

• Sales and purchases to/from related parties amounting to more than NT$ 100 million or 20% of paid-in capital. (None)

• Related party receivables amounting to more than NT$ 100 million or 20% of paid-in capital. (None)

• Trading of derivatives. (None)

• Others: Major business dealings between the parent company and subsidiaries, and transactions between subsidiaries. (None)

• (II) Information on business investments. (Appendix 2)

• (III) Information relating to investments in the Mainland. (None)

• (IV) Major shareholders: Names of shareholders with more than 5% ownership interest, and the number and percentage of shares held. (Appendix 3)

XXXI. Segments Information

Information provided to the decision maker for resource allocation and performance evaluation; provide explanation by the types of product or service delivered. Reporting segments for the consolidated entity are as follows:

Department store segment - Taoyuan Branch

• Taipei Branch

Investment Segment

Construction Segment

Income and business performance of the Company and subsidiaries, reported by segments, are as follows:

Segment revenues and results

The following was an analysis of the Group’s revenue and results by the reporting department.

department.
Department store segment - Taoyuan Branch - Taipei Branch Investment Segment Construction Segment Total from continuing operations		Segment	Revenue 2020 $ 282,363 206,639 5,769 59,669 $ 554,440		segment profit or loss
		2021 $ 190,986 198,849 5,431 133,329 $ 528,595			2021 $ 19,845 133,232 2,844 24,534) 131,387		2020
				(		(	$ 34,142 140,753 3,156 16,233) 161,818

(To be Continued)

• 68 -

(Continued)

Other income and interest income Other gains and losses Financial costs Share of profit/loss from equity-accounted associated companies Profit before tax	Segment	Revenue 2020	segment profit or loss	segment profit or loss
	2021		2021 $ 29,031 7,601 ( 29,685 ) 3,508 $ 141,842	2020
				$ 18,033 7,326 ( 35,110 ) 4,176 $ 156,243

The investment, construction, and food & beverage segments each paid the department store segment a rent of NT$600 thousand in 2021 and 2020; these amounts have been eliminated upon consolidation. All income of the above reporting segments were generated from transactions with external customers.

Segment gain refers to profits made by each segment. It excludes other income and interest income, other gains and losses, financial cost, share of profit/loss from equityaccounted associated companies, and income tax expense. These amounts are reported to the decision maker for allocating segment resources and evaluating segment performance.

• 69 -

Unit: NTD thousand

Tonlin Department Store Co., Ltd. and Subsidiaries

Marketable securities held December 31, 2021

Table 1

Holding Company Name	Name and type of marketable security	Relationship with the Holding Company	Financial Statement Account		December 31,	2021		Remarks
				Shares / units	Carrying amount	Shareholding percentage	Fair value
Tonlin Department Store Co., Ltd.	Common share WK Technology Fund VII WK Technology Fund VIII WK Technology Fund WK Technology Fund V Wholesome Biopharm Pty Ltd. Harbinger Venture Capital Corp. Budworth Investment Limited KDH Design CO., Ltd. Julien's International Entertainment Group Co., Ltd. Preferred share Phyto Ceutica Inc. Beneficiary certificate Jih Sun Money Market Fund Franklin Templeton Sinoam Money Market FSITC Taiwan Money Market Prudential Financial Money Market Fund CTBC Asia Pacific Real Income Fund	- - - - - - - - - - - - - - -	Equity instrument at FVTOCI - Non-current Equity instrument at FVTOCI - Non-current Equity instrument at FVTOCI - Non-current Equity instrument at FVTOCI - Non-current Equity instrument at FVTOCI - Non-current Equity instrument at FVTOCI - Non-current Equity instrument at FVTOCI - Non-current Equity instrument at FVTOCI - Non-current Equity instrument at FVTOCI - Non-current Equity instrument at FVTOCI - Non-current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current	896,000 1,589,500 29,914 1,192,125 10,000,000 3,367 15,186 40,000 373,501 20,000 3,090,491.02 4,307,371.38 2,609,036.20 938,878.70 200,000.00	$ 660 295 3,632 421 12,630 - - - 4,563 - 46,318 45,028 40,365 15,014 2,104	5.32 6.67 3.00 4.17 12.16 1.70 1.67 2.03 1.30 - - - - - -	$ 660 295 3,632 421 12,630 - - - 4,563 - 46,318 45,028 40,365 15,014 2,104

(To be Continued)

• 70 -

(Continued)

Holding Company Name	Name and type of marketable security	Relationship with the Holding Company	Financial Statement Account		December 31,	2021		Remarks
				Shares / units	Carrying amount	Shareholding percentage	Fair value
	Taishin 1699 Money Market Taishin Ta Chong Money Market Fund Eastspring Investments Well Pool Money Market Fund Fuh Hwa South Africa Short-Term Income ZAR Fund B Nomura Four Years Ladder Maturity Emerging Market Bond Fund CNY Acc Franklin Utilities Fund A Pictet-Russian Equities R BlackRock Global Funds - World Technology Fund A2 LionGlobal Vietnam Fund Allianz Global Investors Fund - Allianz Oriental Income A JPMorgan Funds - China Fund JPMorgan Asia Growth Templeton Asian Growth Fund A USD BlackRock World Mining Fund BNP Paribas Funds Energy Transition JPMorgan Funds - Emerging Markets Equity BNP Paribas Funds Emerging Bond Opportunities Classic MD Distribution JPMorgan Pacific Technology Fund (sub-fund) Franklin Income Fund	- - - - - - - - - - - - - - - - - - -	Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current	2,926,522.40 1,045,388.40 727,839.10 60,260.90 57,600.00 2,145.00 120.87 258.06 15,162.59 122.39 1,042.41 4,726.35 570.99 1,049.10 979.24 515.11 603.40 462.93 8,947.37	$ 40,030 15,002 10,001 942 2,674 1,307 308 601 367 783 2,795 2,933 680 1,825 4,333 708 255 1,480 2,868	- - - - - - - - - - - - - - - - - - -	$ 40,030 15,002 10,001 942 2,674 1,307 308 601 367 783 2,795 2,933 680 1,825 4,333 708 255 1,480 2,868

(To be Continued)

• 71 -

(continued)

Holding Company Name	Name and type of marketable security	Relationship with the Holding Company	Financial Statement Account		December 31,	2021		Remarks
				Shares / units	Carrying amount	Shareholding percentage	Fair value
	JPMorgan Funds - Greater China Fund A (dist) - USD AB - American Income Portfolio AT Inc Franklin Mutual European Fund A(acc)USD Franklin Technology Fund - Bonds Brazilian Government Bonds (VII) - Corporate bonds AT&T Corporate Bonds (VI) Petroleos Mexicanos corporate bonds (VII) Apple Inc. Corporate Bonds (VII) Altria USD bonds Pertamina corporate bonds (III) Verizon Communications corporate bonds Common shares of domestic companies Hon Hai Precision Industry Co., Ltd. Asia Optical Co. Inc. Zhen Ding Technology Holding Limited Crystalvue Medical Corporation FuSheng Precision Co., Ltd. Yageo Corporation	- - - - - - - - - - - - - - - - -	Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current	582.51 1,771.84 1,945.54 1,373.76 2,000 2,000 2,000 1,700 200 2,000 62 26,000 78,000 15,400 78,000 166,000 2,000	$ 1,131 1,590 1,663 1,813 5,133 6,181 4,770 5,179 6,438 6,141 2,110 2,704 7,324 1,548 3,740 32,204 959	- - - - - - - - - - - - - - - - -	$ 1,131 1,590 1,663 1,813 5,133 6,181 4,770 5,179 6,438 6,141 2,110 2,704 7,324 1,548 3,740 32,204 959

(To be Continued)

• 72 -

(Continued)

Holding Company Name	Name and type of marketable security	Relationship with the Holding Company	Financial Statement Account		December 31,	2021		Remarks
				Shares / units	Carrying amount	Shareholding percentage	Fair value
GUAN CHAN INVESTMENT CO., LTD.	Taiwan Semiconductor Manufacturing Co., Ltd. Yeong Guan Energy Technology Group Company Limited Delta Electronics, Inc. Aces Electronics Co., Ltd. YFY Inc. Winbond Electronics Corp. Inventec Corporation TungThih Electronic Co., Ltd. Ardentec Technology Inc. Evergreen Marine Corporation Fubon Financial Holding Co., Ltd. ShunSin Technology Holdings Limited Taiwan High Speed Rail Corporation Raydium Semiconductor Corporation Common share Tonlin Department Store Co., Ltd. Beneficiary certificate Jih Sun Money Market Fund FSITC Taiwan Money Market Taishin 1699 Money Market	- - - - - - - - - - - - - - Parent company - - -	Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Equity instrument at FVTOCI - Non-current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current	8,000 84,962 11,000 44,235 139,000 236,000 60,000 8,000 50,000 135,000 60,000 25,000 445,000 13,000 8,750,000 103,455.50 188,048.70 228,508.64	$ 4,920 5,353 3,025 2,300 4,941 8,024 1,497 1,400 2,775 19,238 4,578 2,325 13,172 7,357 350,000 1,550 2,910 3,126	- - - - - - - - - - - - - - 4.19 - - -	$ 4,920 5,353 3,025 2,300 4,941 8,024 1,497 1,400 2,775 19,238 4,578 2,325 13,172 7,357 350,000 1,550 2,910 3,126	(Note 1 and 2)

(To be Continued)

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(Continued)

Holding Company Name	Name and type of marketable security	Relationship with the Holding Company	Financial Statement Account		December 31,	2021		Remarks
				Shares / units	Carrying amount	Shareholding percentage	Fair value
JIA FONG INVESTMENT CO., LTD. SONG YUAN INVESTMENT CO., LTD. SHUN TAI INVESTMENT CO., LTD.	Common share Tonlin Department Store Co., Ltd. Beneficiary certificate FSITC Taiwan Money Market Mega Diamond Money Market Common share Tonlin Department Store Co., Ltd. Beneficiary certificate Jih Sun Money Market Fund FSITC Taiwan Money Market PIMCO GIS INCOME ASIAN TIGER BOND A2 USD GLOBAL REAL ASSET SECURITIES INVESCO US SENIOR LOAN FUND - Foreign shares U.S. shares BANK OF AMERICA CORP MASTERCARD INCORPORATED Common share Tonlin Department Store Co., Ltd.	Parent company - - Parent company - - - - - - - - Parent company	Equity instrument at FVTOCI - Non-current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Equity instrument at FVTOCI - Non-current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Equity instrument at FVTOCI - Non-current	8,767,000 327,162.10 182,511.63 7,366,000 111,385.73 52,299.90 17,186.02 2,308.94 696.28 523.64 3,200 300 8,439,000	$ 350,680 5,061 2,314 294,640 1,669 809 5,181 2,760 2,757 2,779 3,944 2,998 337,560	4.20 - - 3.53 - - - - - - - - 4.04	$ 350,680 5,061 2,314 294,640 1,669 809 5,181 2,760 2,757 2,779 3,944 2,998 337,560	(Note 1 and 2) (Note 1 and 2) (Note 1 and 2)

Note 1: Subsidiaries' holding of the Company's shares were reclassified as treasury stock, and accounted using the book value at which the Company was recognized as investment by the subsidiary in the beginning of

Note 2: Fully eliminated when preparing consolidated financial statements.

Note 3: See Appendix 2 for information relating to investments in subsidiaries and associated companies.

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Unit: NTD thousand

Tonlin Department Store Co., Ltd. and Subsidiaries

Information of Investees

2021

Table 2

Investor	Investor Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	Current period profit (loss) of the investee (Note 2)	Investment gains (losses) recognized in the current period (Note 2)	Remarks
				December 31, 2021	December 31, 2020	Shares	Percentage (%)	Carrying amount
Tonlin Department Store Co., Ltd.	De Hong Development Co., Ltd. Chung Hsiao Enterprise Co., Ltd. SONG YUAN INVESTMENT CO., LTD. SHUN TAI INVESTMENT CO., LTD. GUAN CHAN INVESTMENT CO., LTD. JIA FONG INVESTMENT CO., LTD.	Taipei City Taipei City Taipei City Taipei City Taipei City Taipei City	General construction General leasing Investment Investment Investment Investment	$ 600,000 101,952 350,000 350,000 350,000 350,000	$ 600,000 101,952 350,000 350,000 350,000 350,000	45,000,000 3,776,000 35,000,000 35,000,000 35,000,000 35,000,000	100.00 20.00 100.00 100.00 100.00 100.00	$ 419,245 146,467 82,066 41,917 28,951 28,418	( $ 27,254 ) 17,542 5,174 5,048 4,427 4,537	( $ 27,254 ) 3,508 1,491 829 52 153	Subsidiary (Notes 2 and 4) Equity- accounted investee Subsidiary (Notes 1, 2, and 3) Subsidiary (Notes 1, 2, and 3) Subsidiary (Notes 1, 2, and 3) Subsidiary (Notes 1, 2, and 3)

• Note 1: Subsidiaries' holding of the Company's shares were reclassified as treasury stock, and accounted using the book value at which the Company was recognized as investment by the subsidiary in the beginning of 2002.

• Note 2: Calculated based on the entity's audited financial statements as at December 31, 2021.

• Note 3: Differences between investment gains/losses the Company had recognized on SONG YUAN INVESTMENT CO., LTD., SHUN TAI INVESTMENT CO., LTD., GUAN CHAN INVESTMENT CO., LTD., and JIA FONG INVESTMENT CO., LTD. and the amount of profit/loss reported by the respective investees were due to distribution of dividends.

• Note 4: De Hong Development Co., Ltd., resolved by its board of directors on August 25, 2021, conducted a capital decrease to offset the deficit, with 15,000 thousand issued shares cancelled. After the capital decrease, the paid-in capital is NT$450,000 thousand, divided into 45,000 thousand shares.

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Tonlin Department Store Co., Ltd. and Subsidiaries

Information on main investors

December 31, 2021

Table 3

Name of major shareholder	Shares	Shares
	No. of shares held	Shareholding percentage (%)
SHUEN SHYANG CO., LTD. JIN DUO LIH ENTERPRISES PTY. LTD. Weng Chun-Chih FlySun Development Co., Ltd.	35,913,664 22,936,442 22,229,920 12,579,333	17.20 10.98 10.65 6.02

• Note 1: Information on major shareholders, as presented in this chart, was taken from records of Taiwan Depository & Clearing Corporation as at the final business day of the reported quarter, and included parties holding book-entry common and preferred shares (including treasury stock) for an aggregate ownership of 5% and above. Share capital reported in the Company's consolidated financial statements may differ from the number of shares delivered via book entry due to different basis of preparation/calculation.

• Note 2: The aforementioned information will be disclosed by the trustors’ personal accounts settled by the trustees If the shareholders put the shares into a trust. As for the insider declaration of the ownership percentage over 10%, including the shares on hand and those being put in the trust and may be able to decide the usage of the trust assets, please refer to the declaration information on Market Observation Post System (MOPS).

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