ADVANCETEK — Annual Report 2021

Nov 11, 2021

Company Code: 1442

Advancetek Enterprise Co., Ltd.

Financial Statement for the

Years Ended December 31, 2021 and 2020 and Independent Auditor’s Report

Advancetek Enterprise Co., Ltd.

5F., No. 16, Ln. 189, Sec. 1, Chengtai Rd., TEL:(02)82922288 FAX:(02) 82925253 Wugu Dist., New Taipei City

Advancetek Enterprise Co., Ltd.

Table of Contents

Section One. Cover Page Two. Content Three. Independent Auditor’S Report Four. Balance Sheet Five. Statements of Comprehensive Income Six. Statements of Changes in Equity Seven. Statements of Cash Flows Eight. Notes to Financial Statements I. General Information II. Approval of Financial Statements III. Application of New, Amended And Revised Standards And Interpretations IV. Summary of Significant Accounting Policies V. Critical Accounting Judgements and Key Sources Of Estimation Uncertainty VI. Note to Significant Accounting Items VII. Related Party Transaction VIII. Pledged Asset IX. Significant Contingent Liabilities and Unrecognized Contractual Commitment X. Significant Disaster Losses XI. Significant Events After Reporting Period XII. Others XIII. Supplementary Disclosures (i) Information About Significant Transactions (ii) Information About Investees (iii) Information on Investments in Mainland China (iv) Information of Major Shareholders XIV. Segment Information Nine. Details of Significant Accounting Items

Page

I ~ III 1~2 3 4 5~6 7 7 7~8 9~21 22 23~54 55~61 61 61~62 62 62 62~68 69, 70~73 69 69 69, 74 69 75~97

Earnest & Co.,CPAs. 4F., No.501, Sec.2,Tiding Blvd., Taipei,Taiwan(R.O.C)

惠眾聯合會計師事務所 台北市內湖區堤頂大道二段501 號4 樓 TEL:(02)87519698 FAX:(02)87515658

INDEPENDENT AUDITOR’S REPORT

To Advancetek Enterprise Co., Ltd.

Opinion

We have audited the accompanying parent company only financial statement of Advancetek Enterprise Co., Ltd. (“the Company”), which comprise the parent company only balance sheets as of December 31, 2021 and 2020, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of Advancetek Enterprise Co., Ltd. as of December 31, 2021 and 2020, and its parent company only financial performance and its cash flows for the years then ended in accordance with the Regulation Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the parent company only financial statements of Advancetek Enterprise, Co., Ltd. for the year ended December 31, 2021. These matters were addressed in the context of our audit of the financial statements as a whole, and by forming of our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company’s parent company only financial statements for the year ended December 31, 2021 are stated as follows:

I

1. Revenue Recognition (timing of recognition and classification of revenue)

Please refer to Note IV(Xvii) of the Notes for Individual financial statements for the accounting policies of the construction industry on operating revenue, the Company recognized the timing of real estate sales revenue in accordance to IFRS 15, of which the criteria that have been satisfied by the Company for recognition of revenue are with influence on net operating revenue and operating cost in financial statements, as recognition of sales revenue and its attribution are listed as one of the key audit matters.

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

• (1) Understood and tested the design and operating effectiveness of the Company’s internal control of sales and collection cycle.

• (2) Understood and assessed reasonableness of method used by the management to recognize real estate sales revenue.

• (3) Performed substantive test of revenue, randomly audited reasonableness of reregistration certificate of transfer of property ownership right and the date on handover document, verified transferring of legal ownership of property and control right to the buyer.

• (4) Performed revenue cut-off test for sales and sales returns, sample audited ownership right transferring of property and its handover after the balance sheet date, and audited reasonableness of the timing of revenue recognition.

• Inventory Valuation

As the inventory of the Company is measured at a lower cost and net realizable value, thus it is necessary to use judgements and estimates to determine the net realizable value of inventory at the end of the reporting period.

The Company evaluates inventory falling price loss or its gain from price recovery arise from public announced current value, economic environment and changes in the price of real estate transaction at the end of the reporting period. In contrast, estimates of the above are based on publicly announced current value, the most current market price of sales of the same construction project, assessment of land development benefits, and comparable information of the market, as these involve considerable uncertainty, inventory evaluation is listed as one of the key audit matters.

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

• (1) Understood and assessed the reasonableness of assumption and method used by the management to estimate inventory evaluation.

• (2) Examined reasonableness of calculation for net realizable value and information for related evaluation.

Responsibilities of Management and those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulation Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

II

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

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

Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

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

III

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

• We communicate with those charged with governance regarding, among other matters,

• the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

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

Earnest & Company CPAs. CPA: Hsiang Wen-Ting CPA: Lu Lien-Sheng

Document approved by the Competent Authority of securities: Jin-Guan-Zheng-Liu-Zi No. 0950106502 Tai-Cai-Zheng-Liu-Zi No. 0910156783

March 22, 2022

Notes to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial

performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China. The independent auditors’ audit report and the accompanying parent company only financial statements are the English

translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and parent company only financial statements, the Chinese version shall prevail

IV

(English Translation of Parent Company Only Balance Sheets Originally Issued in Chinese) Advancetek Enterprise Co., Ltd. Parent Company Only Balance Sheets December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

	Assets		December 31,2021	December 31,2021	December 31,2020	December 31,2020
Code	Items	Note	Amount	％	Amount	％
1100 1120 1150 1170 1200 1220 130x 1410 1476 1479 1480 11xx 1517 1600 1760 1780 1920 1930 1980 15xx 1xxx	Current assets Cash and cash equivalents Current financial assets at fair value through other comprehensive income Notes receivable, net Accounts receivable, net Other receivables Current tax assets Inventories Prepayments Other current financial assets Other current assets, others Current assets recognised as incremental costs to obtain contract with customers Total current assets Non-current assets Non-current financial assets at fair value through other comprehensive income Property, plant and equipment Investment property, net Intangible assets Guarantee deposits paid Long-term notes and accounts receivable Other non-current financial assets Total non-current assets Total assets	IV、VI IV、VI、XII IV、VI IV、VI IV、VI IV、VI、VIII VII VI、VIII IV IV、VI、XII IV、VI、VIII IV、VI、VIII IV、VI IV、VI VI、VIII	212,130 $ 525 3,551 18,195 - 21 12,874,659 182,810 50,332 1,291 35,894	1.51 - 0.03 0.13 - - 91.36 1.30 0.36 0.01 0.25	108,526 $ 518 1,211 37,875 486 1,318 11,954,036 111,097 7,784 1,513 107,363	0.84 - 0.01 0.30 - 0.01 92.52 0.86 0.06 0.01 0.83
			13,379,408	94.95	12,331,727	95.44
			27,223 24,352 623,141 806 7,945 8,408 19,691	0.19 0.17 4.42 0.01 0.06 0.06 0.14	24,529 24,669 505,640 451 8,536 25,708	0.19 0.19 3.91 - 0.07 0.20 -
					-
			711,566	5.05	589,533	4.56
			14,090,974	100.00	12,921,260	100.00

(Continued on the next page)

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(English Translation of Parent Company Only Balance Sheets Originally Issued in Chinese) Advancetek Enterprise Co., Ltd. Parent Company Only Balance Sheets December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

(Continued from previous page) Liabilities andEquity	(Continued from previous page) Liabilities andEquity		December 31,2021	December 31,2021	December 31,2020	December 31,2020
Code	Items	Note	Amount	％	Amount	％
2100 2110 2130 2150 2170 2180 2200 2220 2230 2250 2280 2310 2320 2399 21xx 2540 2552 2570 2580 2645 25xx 2xxx 3110 3100 3200 3310 3320 3350 3300 3400 3xxx 3x2x	Current liabilities Short-term loans Short-term notes and bills payable Current contract liabilities Notes payable Accounts payable Accounts payable to related parties Other payables Other payables to related parties Current tax liabilities Current provisions Current lease liabilities Advance receipts Long-term liabilities, current portion Other current liabilities, others Total current liabilities Non-current liabilities Long-term loans Non-current warranty provision Deferred tax liabilities Non-current lease liabilities Guarantee deposits received Total non-current liabilities Total liabilities Share capital Ordinary share Total share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Total retained earnings Other equity interest Total equity Total liabilities and equity	VI VI IV、VI、VII VII VI VII IV、VI VI IV、VI IV VI VI IV、VI IV、VI IV、VI VI VI VI VI VI	455,980 $ 39,963 73,995 16,164 15,599 241,420 87,538 30,953 - 1,065 2,320 75 81,172 1,985	3.24 0.28 0.53 0.11 0.11 1.71 0.62 0.22 - 0.01 0.02 - 0.58 0.01	200,000 $ 69,933 427,126 16,254 23,322 192,596 37,760 18,657 754 1,033 2,248 37 1,957,799 44,884	1.55 0.54 3.30 0.13 0.18 1.49 0.29 0.14 0.01 0.01 0.02 - 15.15 0.35
			1,048,229	7.44	2,992,403	23.16
			6,813,011 23,061 30,582 327,819 1,775	48.35 0.16 0.22 2.33 0.01	4,029,937 22,682 34,096 326,151 1,795	31.19 0.18 0.26 2.52 0.01
			7,196,248	51.07	4,414,661	34.16
			8,244,477	58.51	7,407,064	57.32
			3,662,113	25.99	3,662,113	28.34
			3,662,113	25.99	3,662,113	28.34
			991,852	7.04	991,852	7.68
			590,827 170 593,914	4.19 - 4.22	583,146 170 269,549	4.51 - 2.09
			1,184,911	8.41	852,865	6.60
			7,621	0.05	7,366	0.06
			5,846,497	41.49	5,514,196	42.68
			14,090,974	100.00	12,921,260	100.00

(The Notes for Parent Company Only Financial Statements are part of the Parent Company Only Financial Statements and should be read together.)

Chairman：Hung-Ying Wu General Manager：Sheng-Li Wu Accountant Officer：Hui-Chin Huang

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(English Translation of Parent Company Only Statements of Comprehensive Income Originally Issued in Chinese) Advancetek Enterprise Co., Ltd.

Parent Company Only Comprehensive Income Statement December 31,2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for earnings per share)

Code	Items	Note	2021	2021	2020	2020
			Amount	％	Amount	％
4000 5000 5900 6000 6100 6200 6000 6900 7000 7010 7020 7050 7070 7000 7900 7950 8200 8300 # # # 8316 8349 8310 8300 8500 9750	Operating revenue Operating costs Gross profit from operations Operating expenses Selling expenses Administrative expenses Total operating expenses Net operating income Non-operating income and expenses Other income Other gains and losses Finance costs Share of profit of subsidiaries,associates and joint ventures accounted for using equity method Total non-operating income and expenses Net profit before tax Tax expense Profit Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will not be reclassified to profit or loss Total other comprehensive income Total comprehensive income Earnings Per Share Total basic earnings per share	IV、VI、VII IV、VI IV VII VI VI VI IV、VI IV、VI IV、VI IV、VI	3,450,135 $ 2,633,984	100.00 76.34	2,226,645 $ 1,896,544	100.00 85.17
			816,151	23.66	330,101	14.83
			185,579 120,027	5.38 3.48	114,876 109,047	5.16 4.90
			305,606	8.86	223,923	10.06
			510,545	14.80	106,178	4.77
			8,953 13,100 13,261) ( -	0.26 0.38 0.39) ( -	6,840 1,800 27,119) ( 2,842	0.31 0.08 1.22) ( 0.13
			8,792	0.25	15,637) (	0.70) (
			519,337 4,185) (	15.05 0.12) (	90,541 13,733) (	4.07 0.62) (
			515,152	14.93	76,808	3.45
			255 -	0.01 -	3,383 -	0.15 -
			255	0.01	3,383	0.15
			255	0.01	3,383	0.15
			515,407 $	14.94	80,191 $	3.60
			1.41 $		0.25 $

(The Notes for Parent Company Only Financial Statements are part of the Parent Company Only Financial Statements and should be read together.)

Chairman：Hung-Ying Wu General Manager：Sheng-Li Wu Accountant Officer：Hui-Chin Huang

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(English Translation of Parent Company Only Statements of Changes in Equity Originally Issued in Chinese) Advancetek Enterprise Co., Ltd. Parent Company Only Statement of Changes in Equity December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

Summary		Share capital			Capital	surplus			Retai	ned earnings		Total other equity interest	Total equity
	Ordinary share	Certificates of entitlement to new shares from convertible bonds	Total share capital	Capital arising from ordinary share	Treasury stock transaction	Share options	Total capital surplus	Legal reserve	Special reserve	Unappropriated retained earnings	Total retained earnings	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income
Balance on January 1, 2021 Appropriation and distribution of retained earnings 2020： Legal reserve appropriated Cash dividends of ordinary share Net profit in 2021 Other comprehensive income in 2021 Total comprehensive income Balance as of December 31, 2021 Balance on January 1, 2020 Appropriation and distribution of retained earnings 2019： Legal reserve appropriated Cash dividends of ordinary share Net profit in 2020 Other comprehensive income in 2020 Total comprehensive income Conversion of convertible bonds Conversion of certificates of bonds-to-share Balance as of December 31, 2020	3,662,113 $ - -	- $ - -	3,662,113 $ - -	964,821 $ - -	27,031 $ - -	- $ - -	991,852 $ - -	583,146 $ 7,681 -	170 $ - -	269,549 $ 7,681) ( 183,106) (	852,865 $ - 183,106) (	7,366 $ - -	5,514,196 $ - 183,106) (
	-	-	-	-	-	-	-	7,681	-	190,787) (	183,106) (	-	183,106) (
	- -	- -	- -	- -	- -	- -	- -	- -	- -	515,152 -	515,152 -	- 255	515,152 255
	-	-	-	-	-	-	-	-	-	515,152	515,152	255	515,407
	3,662,113	-	3,662,113	964,821	27,031	-	991,852	590,827	170	593,914	1,184,911	7,621	5,846,497
	3,031,262 - -	24,521 - -	3,055,783 - -	878,267 - -	27,031 - -	30,576 - -	935,874 - -	573,102 10,044 -	170 - -	510,607 10,044) ( 307,822) (	1,083,879 - 307,822) (	3,983 - -	5,079,519 - 307,822) (
	-	-	-	-	-	-	-	10,044	-	317,866) (	307,822) (	-	307,822) (
	- -	- -	- -	- -	- -	- -	- -	- -	- -	76,808 -	76,808 -	- 3,383	76,808 3,383
	-	-	-	-	-	-	-	-	-	76,808	76,808	3,383	80,191
	606,330		606,330	86,554	-	30,576) (	55,978	-	-	-	-	-	662,308
	24,521	24,521) (	-	-	-	-	-	-	-	-	-	-	-
	3,662,113 $	- $	3,662,113 $	964,821 $	27,031 $	- $	991,852 $	583,146 $	170 $	269,549 $	852,865 $	7,366 $	5,514,196 $

(The Notes for Parent Company Only Financial Statements are part of the Parent Company Only Financial Statements and should be read together.)

Chairman：Hung-Ying Wu General Manager：Sheng-Li Wu Accountant Officer：Hui-Chin Huang

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(English Translation of Parent Company Only Statements of Cash Flows Originally Issued in Chinese)

Advancetek Enterprise Co., Ltd. Parent Company Only Statements of Cash Flows For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities： Profit before tax Adjustments： Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit losses Interest expense Interest income Dividend income Share of profit of subsidiaries,associates and joint ventures accounted for using equity method Gain on disposal of property(Construction land) Gain on disposal of investment properties Other adjustments -Inventory valuation losses Changes in operating assets and liabilities increase in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in other receivables Increase in inventories Increase in prepayments Decrease (increase) in other current assets, others (Increase) decrease in other current financial assets Decrease in assets recognised as incremental costs to obtain contract with customers (Decrease) increase in current contract liabilities (Decrease) increase in notes payable (Decrease) increase in accounts payable Increase in accounts payable to related parties Increase in other payables Increase in other payables to related parties Increase in provisions Increase (decrease) in advance receipts (Decrease) increase in other current liabilities Cash outflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows used in operating activities (Continued on the next page)	2021	2020
	519,337 $ 6,910 296 104 13,261 1,103) ( 1,558) ( - 11,823) ( 1,277) ( 3,924 5,561) ( 41,130 486 927,321) ( 71,713) ( 222 62,239) ( 71,469 357,113) ( 2,290) ( 7,723) ( 48,824 50,732 12,296 411 38 42,899) ( 723,180) ( 70 1,558 144,779) ( 7,156) ( 873,487) (	90,541 $ 5,234 286 73 27,119 659) ( 1,558) ( 2,842) ( - 6,911) ( - 374) ( 30,176) ( 492) ( 599,000) ( 29,478) ( 725) ( 158,286 20,935 63,543 8,645 16,956 49,432 3,365 16,155 1,197 5) ( 39,961 170,492) ( 137 1,558 122,438) ( 16,134) ( 307,369) (

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(English Translation of Parent Company Only Statements of Cash Flows Originally Issued in Chinese)

Advancetek Enterprise Co., Ltd.

Parent Company Only Statements of Cash Flows For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

(Continued from previous page)

(Continued from previous page)
Cash flows from (used in) investing activities： Acquisition of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property(Construction land) Increase in guarantee deposits paid Decrease in guarantee deposits paid Acquisition of intangible assets Proceeds from disposal of investment property Net cash flow from acquisition of subsidiaries Net cash flows from investing activities Cash flows from (used in) financing activities： Increase in short-term loans Decrease in short-term loans Increase in short-term notes and bills payable Decrease in short-term notes and bills payable Payments for issuance costs of bonds Proceeds from long-term loans Repayments of long-term loans Increase in guarantee deposits received Decrease in guarantee deposits received Payments of lease liabilities Cash dividends paid Net cash flows from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2021	2020
	2,446) ( 388) ( 29,452 118,019) ( 118,610 651) ( 6,220 - 32,778 1,234,500 978,520) ( 133,000 163,000) ( - 2,362,396 1,458,689) ( 431 451) ( 2,248) ( 183,106) ( 944,313 103,604 108,526 212,130 $	2,319) ( 326) ( - 45,810) ( 38,543 293) ( 12,542 9,513 11,850 290,000 390,000) ( 195,000 250,000) ( 5,216) ( 1,825,538 1,032,206) ( 280 146) ( 387) ( 307,822) ( 325,041 29,522 79,004 108,526 $

(The Notes for Parent Company Only Financial Statements are part of the Parent Company Only Financial Statements and should be read together.)

Chairman：Hung-Ying Wu General Manager：Sheng-Li Wu Accountant Officer：Hui-Chin Huang

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Advancetek Enterprise Co., Ltd.

Notes To Financial StatementsFor the Year 2020-2021

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

I. GENERAL INFORMATION

Advancetek Co., Ltd (the “Company”) was incorporated in July 1974 to engage primarily in commissioning builders to construct public housings and commercial buildings for lease and sell. The address of its registered office and the principal place of business is 5F., No.16, Ln. 189, Sec. 1, Chengtai Rd., Wugu Dist., New Taipei City. In November 1989, the Company’s shares were listed on the Taiwan Stock Exchange (TWSE).

II. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were authorized for issue by the Company’s board of directors on March 22, 2022.

• III. Application of New, Amended And Revised Standards And Interpretations

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

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Company’s accounting policies.

• 2.The IFRSs endorsed by the FSC with an effective date starting 2022.

The IFRSs endorsed by the FSC with an effective date starting 2022.
New, Revised, Amended Standards and Interpretation Annual Improvements to IFRS Standards 2018-2020 Cycle Amendments to IFRS 3 “Reference to Conceptual Framework” Amendments to IAS 16 “Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”	Effective in the year after following dates as issued by the IASB
	January 1,2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

• Note1: The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022.

• Note2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of

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operating in the manner intended by management on or after January 1, 2021.

Note4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of the above standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

• 3.The IFRSs issued by IASB but not yet endorsed and issued into effect by the FSC

Effective in the year after New, Revised, Amended Standards and Interpretation following dates as issued by the IASB Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” Amendments to IAS 1 “Classification of Liabilities as Current or NonJanuary 1,2023 current” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1,2023 (Note 1) Amendments to IAS 8 “Definition of Accounting Estimates” January 1,2023 (Note 2) Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction” January 1,2023 (Note 3)

Note1: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

Note2: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note3: Except for deferred taxes that will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of the above standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

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IV. Summary of Significant Accounting Policies

The significant accounting policies presented in the financial statements are summarized below. The following accounting policies were applied consistently throughout the period presented in the financial statements unless stated otherwise.

• (i) Statement of Compliance

The financial statements have been prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers.

• (ii) Basis of Preparation

• The accompanying financial statements have been prepared on a historical cost basis, except for important matters explained below.

  • (1) Financial assets and liabilities at fair value through profit or loss (including derivatives).

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

• Historical cost is generally based on the fair value of the consideration given in exchange for the assets.

• (iii) Transactions in foreign currencies

Transactions in foreign currencies are translated into the Company’s functional currency at the rate of exchange prevailing at the date of transaction. Foreign currency monetary assets and liabilities are translated into functional currency at the rate of exchange prevailing at the financial reporting date. The profit or loss of monetary items that are denominated in foreign currency refers to the difference between the amount after the payment of that arising from adjustment of current effective interest rate by the functional currency initially denominated at amortized cost, and the amount of amortized cost denominated in foreign currency at closing rate of exchange. Non-monetary assets and liabilities measured at fair value that are denominated in foreign currencies are retranslated into the functional currency at the rate prevailing the date when the fair value was measured. Exchange differences arising from retranslation of non-monetary items are included in profit or loss for the year. Non-monetary items that are measured in terms of historical cost in foreign currencies are translated at the exchange rate prevailing the date of transaction.

• (iv) Classification of Current and Non-current Assets and Liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current assets:

1. It is expected to be realized, or intended to be sold or consumed, in the normal operating

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cycle;

1. It is held primarily for the purpose of trading;

2. It is expected to be realized within 12 months after the reporting period; or

3. The asset is cash or cash equivalent, unless the asset is restricted from being exchanged or used for settle a liability at least 12 months after the reporting period.

A liability is classified as current under the following criteria, and all other liabilities are classified as non-current liabilities:

1. It is expected to be settled in a normal operating cycle;

2. It is expected to be held for the purpose of trading;

3. It is expected to be settled within 12 months after the reporting period; or

4. The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Terms of a liability that could, at the counterparty's option, result in its settlement by issuing equity instruments do not affect its classification.

The Company engages mainly in the building of real estate, which accounted for a year-long operating cycle. Thus assets and liabilities regarding building business are classified as current or non-current based on a normal operating cycle.

• (v) Cash and Cash Equivalent

Cash and cash equivalent comprises cash, cash on hand, demand deposits, and shortterm, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits that meet the above definition and are held for the operational purpose of meeting short-term cash commitments should be recognized as a cash equivalent.

• (vi) Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments. The scope of IFRS 9 defined “Financial instrument” is applicable to financial assets and financial liabilities of which transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added or deducted from the fair value of the financial assets and financial liabilities, as appropriate, on initial recognition.

*Recognition and measurement of financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.The Company categories financial assets into financial assets at amortized cost, financial assets at FVTOCI, and financial assets at FVTPL on the following basis:

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• A.The business model for managing financial assets.

• B.Contractual cash flow characteristics of financial assets.

1. Financial assets measured at amortized cost

Financial assets meet the following two criteria, are measured at amortized cost, and shall listed in the balance sheet as items of bill receivable, accounts receivable, financial assets measured at amortized cost, and other receivables:

• A. The business model for managing financial assets: financial assets are held for the collection of contractual cash flow.

• B. Contractual cash flow characteristics of financial assets: the contractual cash flow is solely for the payments of principal and interest on the principal amount outstanding. This type of financial assets (not including those involve hedging relationship) are

• measured at amortized cost, which is the amount measured at initial recognition, deduct principal paid, plus or minus the accumulated amortization (determined by effective interest method) arising from the difference between the initial amount and the amount due, and with adjustment of the loss allowance. The gain or loss arising from derecognition, through amortization procedure or recognition of impairment gain or loss, are recognized as profit or loss.

For interest that is determined by effective interest method (multiplying effective interest rate with the total carrying amount of financial assets) or following calculations, is recognized in profit or loss:

  - A. For purchased or originated credit-impaired financial assets, calculated by multiplying   the credit-adjusted effective interest rate and the cost of amortized financial assets.

  - B.For non-purchased but originated credit-impaired financial assets, it is calculated by multiplying effective interest rate and cost of amortized financial assets.

1. Financial assets at fair value through other comprehensive income (FVTOCI)

2. Financial assets that meet the following two criteria are measured at FVTOCI, and shall

3. be listed as assets at FVTOCI on the balance sheet:

4. A. The business model for managing financial assets: collecting contractual cash flows and selling financial assets.

5. B.Contractual cash flow characteristics of financial assets: cash flows are solely payments of principal and interest on the principal amount outstanding.

Recognition of related profit or loss of this type of financial assets are as follows:

• A. Before derecognition or reclassification, except impairment gain or loss and foreign currency exchange profit or loss is recognized in profit or loss, the gains or losses of an asset are recognized in other comprehensive income.

• B. Derecognition of assets is achieved by adjustment for reclassification of the

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accumulated income or loss that were previously recognized in other comprehensive income and reclassified from equity to income.

• C. Interest calculated by using of effective (multiplying effective interest rate with the total carrying amount of financial assets) interest method or following calculations, are recognized as income:

• (a) For purchased or originated credit-impairment financial assets, calculated by multiplying the credit-adjusted effective interest rate and the cost of amortized financial assets.

• (b) For non-purchased but originated credit-impaired financial assets, it is calculated by multiplying effective interest rate and cost of amortized financial assets.

In addition, for equity instrument applicable at IFRS 9, and that equity instrument is not specifically for the transaction, nor it is applicable at IFRS 3 of recognized contingent consideration by the acquirer in a business combination, the equity instrument, at initial recognition, elect (irrevocable) to include the changes at fair value through other comprehensive income. The amount presented in other comprehensive income may not transfer to profit or loss (upon disposal of the equity instrument, it will be included in the cumulative amount of other equity instrument item and directly turned into retained earnings), and the financial assets measured at fair value through other comprehensive income is presented on the balance sheet. Invest in dividend is included in profit or loss unless the dividend shows the obvious partial recovery of investment cost.

3. Financial Assets at fair value through profit or loss (FVTPL)

Except for the abovementioned meet the criteria of measured at amortized cost or at fair value through other comprehensive income, financial assets are measured at fair value through profit or loss and presented on the balance sheet as financial assets at FVTPL.

The gains or losses arising from remeasuring the financial assets measured at fair value are recognized as profit or loss. The recognized profit or loss from the gains and losses includes any dividend or interest collected by the financial assets.

(vii) Impairment of Financial Assets

The Company recognizes and measures loss allowances for expected credit loss (ECL) on debt investments measured at FVTOCI and financial assets measured at amortized cost. The loss allowance for the debt instrument investment measured at FVTOCI is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The Company measures expected credit losses (ECL) in accordance with those listed below:

• A. Through evaluation of the range of possible outcomes for determining an unbiased and probability-weighted amount.

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• B. Time value of money.

• C. Reasonable and supportable information (which involved no undue cost or effort if obtained) about past events, current conditions and reasonable and supportable forecasts of future economic conditions.

Methods for measuring loss allowance are as follows:

• A.Measured at an amount equal to 12-month ECLs: Including financial assets that show no significant increase in credit risk since initial recognition or that is determined as low credit risk at the balance sheet date. The financial assets, which have loss allowance measured at lifetime expected credit losses in the prior reporting period but no longer show a significant increase in credit risk since initial recognition at the current balance sheet date, is also included.

• B.Measured at an amount of lifetime expected credit losses: Including financial assets that have shown a significant increase in credit risk since initial recognition or that of purchased or originated credit-impaired financial assets.

• C.For account receivable and contract assets arising from the transaction within the scope of IFRS 15, the Company measured loss allowance at lifetime expected credit losses. The Company compared the financial instrument at balance sheet date with changes in

• breach of contract risk at initial recognition for evaluating whether financial instruments have shown a significant increase in credit risk since initial recognition.

(viii) Using the Equity Method for Investment in Associates

1. Associates are those entities in which the Company has significant influence but no control over them; the Company normally holds, directly or indirectly, more than 20% of voting shares. The Company uses the equity method to account for its investments in associates, which are recognized at cost when acquired.

2. The Company recognizes the share of profit or loss accounted after acquiring an associate under current profit or loss and recognizes the share of other comprehensive income under other comprehensive income. When the Company’s share of losses exceeds its interests in an associate's, the recognition of further losses is discontinued except to the extent the Company has legal or constructive obligation or has made payments on behalf of the associate.

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

4. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also

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eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

1. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate is reclassified to profit or loss.

(ix) Property, Plant, and Equipment

Property, plant and equipment that is held for producing a commodity or for management, use acquisition cost as basis for an account entry and presented in the balance sheet with the amount that has deducted accumulated depreciation and accumulated impairment.

Aside from land, depreciation of all the property, plant and equipment is computed using the straight-line method and is recognized so as to write off the cost of the assets less their residual values over their useful lives. If each property, plant, and equipment consist of a significant part, it shall be depreciated separately.

The estimated useful lives of property, plant and equipment are as follows:

1. Buildings: 50 years.

2. Computers and communication facilities: 3-5 years.

3. Delivery equipment: 5 years.

4. Office equipment: 3-5 years.

5. Machinery and equipment: 5 years.

The estimated useful lives, residual values and depreciation method are reviewed at the

end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.

An item of property, plant and equipment should be removed from the statement of financial position on disposal or when no future economic benefits are expected from the continued use of the assets. Any gain or loss arising from the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

(x) Investment Property

Either to earn rent income or have assets increase in value or both are purposes to hold this property, including those under construction for the same purposes. Investment property also comprised property that is held but not yet determines its use. Thus it is considered held for the acquisition of capital appreciation.

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Investment property is originally measured at cost (including transaction cost) and subsequently measured at cost less accumulated depreciation and accumulated impairment.

Investment property under construction is recognized at the cost less accumulated impairment loss. Cost comprised of the professional service fee, and the amount of IAS 23 “Borrowing Costs” that are directly attributable to the qualifying asset form part of the cost of that asset should be capitalized. Recognition of depreciation is commenced when this asset is built and achieved its expected usage.

Recognition of depreciation of the building and affiliated facilities use a straight-line method as the basis. The cost of the asset is spread out equally over the expected life of the investment property.

An investment property should be removed from the statement of financial position on disposal on disposal or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. The amount of gain or loss on disposal is the difference between the net disposal proceeds and the carrying amount of the asset and should be recognized in profit and loss.

The estimated use life of each item of investment property is as follows:

House and building (comprised renovation): 3~50 years.

(xi) Leases

For a contract that contains a lease component and non-lease component, the Company may elect to account for the lease and non-lease components as a single lease component.

If the contractual terms have the right to direct the use of the asset and obtain substantially all of the economic benefits through the period of use, then the contract is, or contains, a lease. The Company recognizes right-of use assets and lease liabilities for all leases, except for short-term leases and low-value leases.

As the lessee, the Company recognizes right-of use assets and lease liabilities for all leases at the commencement date of the lease, except for low-value asset leases and shortterm leases which are recognized as expenses on a straight-line basis. The depreciation expense of right-of-use asset and the interest incurred from lease liability measured at the effective interest method shall present separately on the comprehensive income statement. Whereas in statements of cash flows, the principal amount of payment for lease liability and part of paid interest are presented separately as financing activities and operating activities.

Right-of-use assets are measured at cost (including the cost of right of use assets comprises the initial measurement of lease liabilities adjusted for lease payment, lease payment and initial direct costs made at or before the commencement date, and an estimate

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of costs needed to restore the underlying assets). Subsequent measurement is calculated as cost less accumulated depreciation and accumulated impairment loss and adjusted for changes in lease liabilities resulting from lease term modifications or other related factors.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier end of the useful lives of the right-of-use assets or the end of the lease terms. If the lease transfers ownership of the underlying assets to the Company by the end of the lease terms or if the cost of right-of-use assets reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

Lease liabilities are measured at the present value of lease payments. Lease payments comprise fixed payments, variable lease payments which depend on an index or rate and the exercise price of a purchase option if the Company is reasonably certain to exercise that option. The lease payments are discounted using the lessee’s increment borrowing rates.

The carrying amount of lease liabilities are either added or deducted due to the interests and lease payments of subsequent lease liabilities. The interests of lease liabilities during each lease term, of which the amount can turn each term's interest calculated at the remaining balance of lease liability a fixed interest.

The right-of-use assets and lease liabilities are presented in the Company’s balance sheet. In contrast, depreciation expense and interest related to leases are presented separately on the comprehensive income statement. For short-term leases or low-value asset leases, the lease payment of related leases is recognized as an expense during the leasing term on the basis of the straight-line method. Impairment of right-of-use assets recognized are evaluated at balance sheet date, and incurred impairment losses are treated as well.

The right-to-use asset is recognized in inventory if it complies with the definition of inventory, whereas the measurement of it afterward will be treated according to IAS 2.

(xii) Intangible Assets

Other intangible assets with finite useful lives that the Company acquired are measured at cost less accumulated amortization and accumulated impairment loss.

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred, where amortization is calculated on the basis of the cost of the asset or amount of other alternative costs, less its residual value.

The useful life of each item of externally generated intangible asset is as follows:

1. Trademark rights: 12 years.

2. Computer software: 2-5 years.

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(xiii) Impairment - Non financial Assets

The Company recognized impairment loss when there is an indication that the recoverable amount of an asset is less than its carrying amount. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. When the impairment no longer exists, the impairment loss recognized in prior years shall be recovered.

(xiv) Provision

In accordance with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets,” the Company has complied with “Instructions should be / should not be Described in a Standard Contract of the Sale and Purchase of Presale House” announced by the Ministry of Interior and provide 15 years of partial warranty on building structure, and 1 year of partial warranty for fixed building material and facilities, the Company has based on past experience to recognize the best estimates of warranty that are probably most requested as the provisions of the warranty.

(xv) Treasury Shares

Treasury shares shall be accounted for using the cost method and presented as a deduction from equity. The number of shares shall be noted.

(xvi) Accounting practice of revenue, cost and expense

The accounting treatments of revenue, cost, and expense related to investment in building houses for sale are as follows:

1. Operating revenue

The Company commissioned builders to construct pre-sale real estate or for existing home sales, which complies with IFRS 15 regulation on goods sales to recognize revenue. Sell goods is recognized revenue through following procedure:

(a) Identify the contract with custome

• (b) Identify the performance obligations in the contract;

(c) Determine transaction price;

• (d) Allocate the transaction price to each performance obligation; and

(e) Recognize revenue when a performance obligation is satisfied.

The Company runs the business in land development and selling real estate. Related revenue is recognized when transferring the control of real estate to the customer. Based on terms and conditions of a signed residential sale contract, the real estate no longer provides usage to the Company other than that stated in the contract, but the Company will have the enforceable right not until the legal ownership right or use rights of the real estate is transferring to the customer. Thus, revenue is recognized when legal ownership right or use right is transferred to the customer and the real estate has been handover. But if only one of the above-mentioned procedures is done before the end of the reporting period, revenue could also be recognized after reporting period if another is done within 20 days before delivering

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to the board of directors for approval.

Revenue is measured at a price agreed in the contract. The payment of contract price is made by the customer when transferring legal ownership of the real estate. In a few cases, the Company and customer may come to an agreement to defer the time for payment, the time span between transferring of real estate ownership right to customer and the payment made by customer may extent to a year long. Therefore, it is necessary to adjust the consideration promised in the contract to reflect the impact on the time value of money if the contract includes a significant financing arrangement.

2. Operating Cost

The cost arising from the investment of the Company in constructing houses is included in construction in progress. When the house is recognized as revenue, the cost shall be included in the operating cost of the year, whereas established houses but not yet sold are presented as property ready for sale. The operating cost is allocated using the income approach, floor space approach, or method of current assed land value, but if the method used by a construction site has been chosen, then the change cannot be made.

The land purchased for building houses to sale is included in the Land held for construction site, whereas the land with on going construction is included in land under construction. When the house and the land are recognized revenue, the land will turn to the operating cost of the year.

Since the superficies of leased land acquired by the Company is held for the construction project development, the royalties for superficies right is recognized as the cost of inventories.

The Company uses cost as the basis of accounting for land held for a construction site, land with ongoing construction, and real estate property ready for sale, which is evaluated at cost and net realized value at the end of the financial period.

1. Cost of contract with customer - incremental cost of obtaining a contract and operating expense

If the Company expected the recoverable incremental cost of obtaining a contract, the cost is recognized as assets. The incremental cost of obtaining a contract is incurred when obtaining a contract from the customer, whilst the cost will not be incurred if failed to obtain the contract. Whether the contract is obtained or not, the cost is incurred and recognized when obtaining a contract, unless the cost can certainly be collected from the customer no matter the contract is successfully obtained.

4. Capitalization of interest cost

Interest expenses arising from the advance payment before the transfer of legal ownership of the Company’s purchased land are capitalized and included in land cost. Loan interests arising from the cost of land and house construction incurred during the time of establishing houses are capitalized and included in the house under construction to reflect the cost for building a house.

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(xvii) Employee Benefits

1. Retirement benefit plans

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

2. Employee’s compensation and directors’ / supervisors’ remuneration

Employee’s compensation and directors’ (supervisors’) remuneration of the Company are recognized as expense, and included in appropriate accounting item under operating cost or operating expense according to the attribution, whilst the actual amount distributed is the basis on the resolution of the shareholder’s meeting in the next year. Any difference between the resolved amount by the shareholders’ meeting and that presented on financial statements is considered changes in estimates and recognized as profit or loss of the period resolved by the shareholders’ meeting.

(xviii) Taxation

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

1. Income tax

Current tax liabilities are the basis of the tax of the year. As there are income and expense in other periods that are items of either taxable or deductible, or that of non taxable or non deductible, which resulted in taxable income is different from the net income reported in the statements of comprehensive income. The current income tax and related liabilities of the Company are calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date.

According to the Income Tax Act, an additional tax of unappropriated retained earnings is provided for as profit-seeking enterprise income tax. It is recorded as an expense in the year resolved by the shareholders.

2. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognized when it is probable that taxable profit will be available against which those deductible temporary differences can be utilized. If the temporary differences incurred from the initial recognition of other assets and liabilities, which has no effects on taxable income and accounting profit, it’s not recognized as deferred tax assets and liabilities.

The carrying amount of deferred tax assets is reviewed at the end of each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the assets to be recovered.

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

3. Current and deferred tax

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

(xix) Bonds Payable

Convertible bonds payable issued by the Company contain conversion options (that is, the bondholders have the right to convert the bonds into the Company’s common shares by exchanging a fixed amount of cash for a fixed number of common shares), call options and put options. The Company classifies the bonds payable and derivative features embedded in convertible corporate bonds on initial recognition as a financial liability or an equity instrument (“capital surplus - share options”). Convertible corporate bonds are accounted as follows:

1. Call options and put options embedded in convertible bonds payable issued by the Company are recognized initially at net fair value as “financial assets or financial liabilities at fair value through profit or loss.” They are subsequently remeasured and stated at fair value on each balance sheet date; the gain or loss is recognized as “gain or loss on valuation of financial assets or financial liabilities at fair value through profit or loss.”

2. Bonds payable of convertible corporate bonds are initially recognized at fair value and subsequently stated at amortized cost. Any difference between the proceeds and the redemption value is accounted for as the premium or discount on bonds payable/ preference share liabilities and presented as an addition to or deduction from bonds payable, which is amortized in profit or loss as an adjustment to the “finance costs” over the period of bond circulation using the effective interest method.

3. Conversion options embedded in convertible bonds payable issued by the Company, which meet the definition of an equity instrument, are initially recognized in “capital surplus – stock options” at the residual amount of total issue price less amounts of “financial assets or financial liabilities at fair value through profit or loss” and “bonds

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payable - net” as stated above. Conversion options are not subsequently remeasured.

1. Any transaction costs directly attributable to the issuance of convertible corporate bonds payable are allocated to the liability and equity components in proportion to the allocation of proceeds.

2. When bondholders exercise conversion options, the liability component of the bonds (including “bonds payable” and “financial assets or financial liabilities at fair value through profit or loss”) shall be remeasured on the conversion date. The book value of common shares issued due to the conversion shall be based on the adjusted book value of the abovementioned liability component plus the book value of capital surplus - stock options.

(xx) Earnings per Share

Calculation of earnings per share is treated according to IAS 33 “Earnings per Share.” Earning per share is calculated as the net income after tax divided by the weighted average number of outstanding shares during the period. If there is an increase in number of shares due to a capital increase out of earnings or capital reserve, then the calculation of retrospective adjustment shall be used. When calculating diluted earnings per share, shall be taken into account the effect of dilutive potential ordinary shares convert into ordinary share. In contrast, potential ordinary shares with the anti-dilution effect are not included in the calculation.

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V. Critical Accounting Judgements and Key Sources of Estimation Uncertainty

In the application of the Company’s accounting policies as described in Note 4, the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Information about future assumptions and other key sources of estimation uncertainties at the end of the financial reporting period that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities in the coming year is as follows:

1.Valuation of Inventory

Inventories are stated at the lower of cost or net realizable value. The Company uses judgement and estimates to determine the realizable value of inventory at the end of each balance sheet date. Due to the rapid industrial transformation, the Company estimates the net realizable value of inventory for fluctuating market and unmarketable items at the end of the balance sheet date and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is determined mainly based on assumptions about future demand within a specific time horizon. Thus there may be significant changes in the net realizable of inventories.

2. Lessees’ Incremental Borrowing Rates

In determining a lessee’s incremental borrowing rate used in discounting lease payments, the Company mainly takes into account the risk-free market rates, the estimated lessee’s credit spreads and secured status in a similar economic environment.

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VI. Note To Significant Accounting Items

• (i)Cash and cash equivalents

Cash and cash equivalents
Item	2021.12.31		2020.12.31
Petty cash	$	80	$		85
Checking accounts		1			23
Demand deposit		212,049		108,418
Total	$	212,130	$	108,526
Financial assets at fair value through	other	comprehensive income
Item		2021.12.31			2020.12.31
Current item:
Listed company’s stocks
En Tie Commercial Bank Co., Ltd.		$	548	$	548
Less: Valuation Adjustment			( 23	)	(	30 )
Net amount		$	525	$	518
Item		2021.12.31			2020.12.31
Noncurrent item:
Listed company’s stocks
Asia Pacific Telecom Co., Ltd.		$	8,271	$	8,271
Unlisted company’s stocks
Taiwan Biotech Co., Ltd.			11,308		8,862
Tah Chung Steel Corporation			－			－
Subtotal			19,579		17,133
Add: Valuation Adjustment			7,644		7,396
Net amount		$	27,223	$	24,529

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

• For December 31, 2021 and 2020, the Company's financial assets measured at fair value through other comprehensive income was not pledged.

• Taiwan Biotech Co., Ltd. required a capital injection in February 2020. The Company then subscribed 115,964 shares and increased the stock held from 651,488 shares to 767,452 shares.

• 3.The board of directors of Taiwan Biotch Co., Ltd. has resolved on April 28, 2021 to require a capital injection at NT$15 per share, the capital increase base date was July 1,2021. The Company then subscribed 163,083 shares and increased the stock held from 767,452 shares to 930,535 shares.

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(iii) Net notes receivable and long-term notes receivable

Item Notes receivable Less: Loss allowance Subtotal Less: Long-term installment Net notes receivable	2021.12.31 $ 7,532 － 7,532 (3,981 ) $ 3,551	2020.12.31 $ 1,971 － 1,971 (760 ) $ 1,211

No notes receivable was pledged to others.

• (iv) Net accounts receivable and long-term installment accounts receivable

Item Accounts receivable Less: Loss allowance Subtotal Installment account receivable Less: Unrealized interest income Less: Net long-term installment accounts receivable Subtotal Net accounts receivable	2021.12.31 $ 1,176 (114 ) 1,062 21,892 (332 ) (4,427 ) 17,133 $ 18,195	2020.12.31 $ 10,854 (68 ) 10,786 53,346 (1,309 ) (24,948 ) 27,089 $ 37,875

The Company's primary business is to commission builders to construct public housing for sale or lease. Thus, receivables are primarily incurred from the selling of the Company's buildings and land, of which payments were collected according to terms and conditions stated in the sale contract as agreed upon by both sides. Transfer of house will be made only when full payment is collected or that the bank has approved a loan. If a customer has insufficient funds and needs to apply for an installment plan, the Company will valuate credit and repayment capacity of the person, and implement installment payments in accordance with Terms and Conditions agreement.

1. No accounts receivable was pledged to others.

2. Provision matrix approach is used to measure loss allowance of receivables, related information as follows:

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(1) As of December 31, 2021

Days past due

		Days past due	Days past due	Days past due	Days past due	Days past due	Days past due
		Within a month	1-3 months		7-12 months	above 12 months	Forward-looking information on an individual basis	Total
	Not past			4-6
	due (Note)			months
Total book value		$ 164	$ 9		$ -	$ -	$ 114	$ 30,600
	$ 30,313			$ -
Loss rate		-%	1%		30%	100%	100%
	-%			3%
Lifetime expected credit loss		-	-		-	-	(114)	(114)
	-			-
Total		$ 164	$ 9		$ -	$ -	$ -	$ 30,486
	$ 30,313			$ -

(2) As of December 31, 2020

					Days past due
	Not past due	Within	1-3	4-6	7-12		Forward-looking information on an
						above 12
	(Note)	a month	months	months	months	months	individual basis	Total
	$ 65,604	$ 287	$175	$ 40	$ -		$ 65	$ 66,171
						$ -
Total book value
	-%	-%	1%	3%	30%		100%
						100%
Loss rate
	-	-	(2)	(1)	-		(65)	(68)
						-
Lifetime expected
credit loss
	$ 65,604	$ 287	$173	$ 39	$ -		$ -	$ 66,103
						$ -
Total

Note: All notes receivable of the Company were not past due.

1. As of December 31, 2021, and 2020, information on changes in loss allowance of the Company's receivables are as follows:

Item Opening balance Increase in current Decrease in current Balance at December	2021.12.31 $ 68 104 (58) $ 114	2020.12.31 $－ 68 － $ 68

(v) Inventories

Item Buildings and land held for sale Land held for construction site Construction in progress Prepayment for land purchases Royalties for superficies right Right-of-use assets Cost Less: Allowance for inventory valuation losses Total	2021.12.31 $ 1,232,800 2,632,696 8,120,867 － 715,881 182,509 12,884,753 (10,094) $ 12,874,659	2020.12.31 $ 2,077,187 2,325,544 6,234,758 390,293 603,638 328,786 11,960,206 (6,170) $ 11,954,036

~25~

1. Buildings and land held for sale

uildings and land held for sale
Construction Projects	2021.12.31 $ 13,742 87,419 7,433 － 325,718 613,619 80,472 104,397 1,232,800 (3,924) $ 1,228,876	2020.12.31
Xinzhuang Hefeng Jiaoxi Park Linkou A7 Taichung 19 Luodong Gongzheng Xinzhuang Fuduxin Taoyuan Kuaiji Taichung 8 Cost Less: Allowance for inventory valuation losses Total		$ 13,742 153,643 45,359 5,722 496,972 1,206,264 155,485 －
		2,077,187 －
		$ 2,077,187

• (1) As for December 31, 2021 and 2020 the Company's buildings and land held for sale were insured for the amounts of NT$ 311,986 thousand and NT$ 501,480 thousand, respectively.

• (2) The total interest capitalized incurred in converting construction in progress to buildings and land held for sale was found to be NT$ 6,823 thousand and NT$ 15,749 thousand for the end of December 31, 2021 and 2020, as described in Note VI(xxv).

• (3) A total cost incurred in renting the Company's buildings and land held for sale was found to be NT$ 129,592 thousand and NT$ 16,130 thousand for the end of December 31, 2021 and 2020, which was accounted as an item under investment property. Please refer to Note VI(ix) for more details.

• (4) The Company in 2021 exchanged the praking space of investment property to buildings and land held for sale at the price of NT$943 thoudand, as described in Note VI(ix).

• (5) As for December 31, 2021and 2020, the above mentioned buildings and land held for sale were pledged. Please refer to Note VIII for more details.

• (6) As for December 31, 2021 and 2020, the changes in allowance for inventory valuation losses of buildings and land held for sale is as follows:

Item Opening balance Recognized in Balance at December	2021 $－ 3,924 $ 3,924	2020
		$－ －
		$－

In 2021, the Company recognized the amount of NT$3,924 thousand which was the loss of inventory price falling at Luodong Gongzheng project , accounted as cost of goods sold.

~26~

2. Land held for construction site

and held for construction site
Land Name Land held for development Land for capacity transfer Taoyuan Sanmin section Hsinchu Zhongxing section Weizhen Section of Houlong Town, Miaoli Long Chair Section of Houlong Town, Miaoli Subtotal Less:Allowance for inventory valuation losses Total	2021.12.31 $ 127,144 23,884 － 1,727,360 599,398 154,910 2,632,696 ( 6,170) $ 2,626,526	2020.12.31
		$ 127,144 52,034 419,006 1,727,360 － －
		2,325,544 ( 6,170)
		$ 2,319,374

• (1) As for December 31, 2021 and 2020, the above mentioned land held for the construction site was pledged. Please refer to Note VIII for more details.

• (2) The cost for land for capacity transfer as approved by the Kaosiung City Government in June 2021 was NT$ 10,521 thousand, and recognized as construction in progress of the Kaosiung FuCheng project.

• (3) The cost for land for capacity transfer as approved by the Taoyuan City Government in May 2020 was NT$ 87,438 thousand, and recognized as construction in progress of the Taoyuan Sanmin Section A project.

• (4) In May 2021, the Company sold the land for capacity for NT$29,557 thousand, deducting the amount of NT$17,629 thousand which was the book value and NT$105 thousand which was other transaction cost, the gain on disposal was NT$11,823 thousand, and recorded as gain on disposal property (land held for construction site), please refer to Note VI(xxiv).

• (5) The board of directors had resolved on September 3, 2020, to sell the Company's land on Zhongxing Section in Hsinchu through public tendering, but the resolution was later withdrawn by the board on November 6, and the resolution was made to either contact specific person or establishing plant and office. Thus the land on Zhongxing Section in Hsinchu amounted NT$ 1,727,360 thousand was transferred to the land held for construction. The amounts that have been inputted in the construction in progress were listed as prepayments of NT$ 1,386 thousand and miscellaneous disbursements of NT$ 5,085 thousand.

~27~

1. Construction in progress

Construction in progress
Construction Projects Danhai Lot 8, Taichung Zhenxing section Taichung Lianwu section Case A of Taoyuan Sanmin section Case B of Taoyuan Sanmin section Kaosiung FuCheng project Total	2021.12.31 $ 5,297,374 － 947,544 584,027 455,819 836,103 $ 8,120,867	2020.12.31
		$ 3,381,213 1,573,714 781,166 498,665 － －
		$ 6,234,758

• (1) As of December 31, 2021 and 2020, interest capitalized is recognized as construction in progress, amounted NT$ 127,442 thousand and NT$ 115,759 thousand, respectively. Please refer to Note VI(xxv). Capitalization rates range from 2.04%~2.40% and 2.16%~2.64%, respectively.

• (2) Kaosiung FuCheng project is constructed buildings at Kaosiung Fengshan section superficies right. The duration of the superficies was 70 years, staring from August 21, 2020 to August 20, 2090. In line with IFRS 16 requirements, the rent for the land attached with superficies was recognized as right-of-use assets and lease liabilities. Please refer to Note VI(v)5 and VI (v)6. The details are as follows:

are as follows:
Item Royalties for superficies right Right-of-use assets Construction in progress Total	2021.12.31 $ 603,638 150,265 82,200 $ 836,103	2020.12.31
		$－ － －
		$－

As of December 31, 2021, the right-of-use assets in Kaosiung FuCheng project was remeasured lease liabilities and increased the amount of NT$2,028 thousand in the right-of-use assets, because of land value adjustment and increasing land lease monthly.

• (3) As of December 31, 2021and 2020, the above mentioned constructions in progress were pledged. Please refer to Note VIII for more details.

• Prepayment for land purchases

epayment for land purchases
Item	2021.12.31	2020.12.31
Land in Miaoli Houlong Township	$－	$ 175,709
Royalties for superficies right in Taipei Zhongzheng District	－	214,584
Total	$－	$ 390,293

~28~

• (1) Capitalized interest expenses were recognized as prepayment for land purchases, which amounted NT$ 4,397 thousand and NT$ 897 thousand, as of December 31, 2021 and 2020. Please refer to Note VI(xxv). The capitalization rate ranges from 2.04%~2.40% and 2.16%~2.64%.

• (2) The Company has signed up a Contract of Establishment of Superficies for National Non-public Use Land for land in Zhongzheng District, Taipei, with the Northern Region Branch, National Property Administration, MOF. The total contract price of the royalty for superficies right was NT$ 713,880 thousand. In December 31, 2020, registration was not completed, and paid royalties NT$ 214,164 thousand, other necessary costs amounted NT$ 222 thousand, and capitalized interest of NT$ 198 thousand, were accounted as inventoryprepayments for land purchases. In January 25, 2021, registration was recorded as inventory- royalties for superficies right. Please refer to Note VI(v)5 for more details.

• Royalties for superficies right

Royalties for superficies right
Item	2021.12.31	2020.12.31
Kaosiung Fengshan District	$－	$ 603,638
Taipei Zhongzheng District	715,881	－
Total	$ 715,881	$ 603,638

• (1)The Company has signed up a Contract of Establishment of Superficies for National Non-public Use Land for the land in Fengshan District, Kaohsiung, with the Southern Region Branch, National Property Administration, MOF. The duration of the superficies was 70 years, starting from August 21, 2020 to August 20, 2090. The Company may build houses on the subject of the superficies right within this period, according to the objective and usage as agreed upon in the contract. The above mentioned superficies right will be sold for constructing buildings, whereas paid royalties NT$ 602,890 thousand, other necessary costs amounted NT$ 748 thousand, were accounted as inventoryroyalties for superficies right(Kaosiung FuCheng). Please refer to Note VI(v)3.

• (2) The Company has signed up a Contract of Establishment of Superficies for National Non-public Use Land for land in Zhongzheng District, Taipei, with the Northern Region Branch, National Property Administration, MOF. The duration of the superficies was 70 years, starting from December 23, 2020 to December 22, 2090.

The Company may build houses on the subject of the superficies right within this period, according to the objective and usage as agreed upon in the contract. The above mentioned superficies right will be sold for constructing buildings, whereas paid royalties NT$ 713,880 thousand, other necessary costs amounted NT$ 2,001 thousand, were accounted as inventory- royalties for superficies right.

~29~

• (3) In line with IFRS 16 requirements, the rent for the land attached with superficies right was recognized as right-of-use assets and lease liabilities, please refer to Note VI(v)6 and VI(xvi) .

• (4) In 2021, interest capitalized is recognized as prepayment for land purchases to inventory- royalties for superficies right, amounted NT$ 854 thousand. Please refer to Note VI(xxv).

• (5) As of December 31, 2021 and 2020, the above Royalties for superficies right were pledged. Please refer to Note VIII for more details.

• Right-of-use assets

Item Right-of-use assets - land in Kaohsiung Fengshan District Right-of-use assets - land in Taipei Zhongzheng District Total	2021.12.31 $－ 182,509 $ 182,509	2020.12.31
		$ 148,237 180,549
		$ 328,786

• (1) The Company has signed up a Contract of Establishment of Superficies for National Non-public Use Land for land in Fengshan District, Kaohsiung, with the Southern Region Branch, National Property Administration, MOF, and acquired the superficies right. The duration of the superficies was 70 years, starting from August 21, 2020 to August 20, 2090.

• (2) The Company has signed up a Contract of Establishment of Superficies for National Non-public Use Land for land in Zhongzheng District, Taipei, with the Northern Region Branch, National Property Administration, MOF. The duration of the superficies was 70 years, starting from December 23, 2020 to December 22, 2090.

As of December 31,2021, the right-of-use assets in Zhongzheng District, Taipei project was remeasured lease liabilities and increased the amount of NT$1,960 thousand in the right-of-use assets, because of land value adjustment and increasing land lease monthly.

• (3) In line with IFRS 16 requirements, the rent for the land attached with superficies was recognized as right-of-use assets and lease liabilities. The paid royalties were accounted as inventory- royalties for superficies right. Right-of-use assets - land in Kaohsiung Fengshan District was constructed in June 2021 and recorded as Construction in progress- Kaosiung Fucheng project. Please refer to Note VI(V)3 for more details.

• (4) As of December 31, 2021and 2020, the above mentioned right-of-use assets were pledged. Please refer to Note VIII for more details.

~30~

7. Relevant expenses of inventories recognized as sales cost:

Item	2021	2020
Cost of sales	$ 2,623,855	$ 1,891,926
Loss from price decline of inventory	3,924	－
Total	$ 2,627,779	$ 1,891,926

(vi) Other financial assets

Item Other current financial assets: Pre-sale construction trust Trust account of performance guarantee Total Item Other non- current financial assets: Special bank account	2021.12.31 $ 50,332 － $ 50,332 2021.12.31 $ 19,691	2020.12.31 $－ 7,784 $ 7,784 2020.12.31 $－

• (vii) Investment accounted for under equity method

As of December 31, 2021: None.

As of December 31, 2020:

As of December 31, 2020:
Investee Hsinbo Construction Co., Ltd. Love All Corporation Total	2020.12.31
	Number of shares held Shares% Amount － －$－ － － － $－	Amount
	－ －
		$－

1. The summarized financial information of the subsidiary and associate that is material to the Company is as follows:

Net Income Ownership held As of October 31, 2020 Assets Liabilities Revenue for the year by the Company Hsinbo Construction $ 150,576 $ 1,371 $ 4,697 $ 2,842 (Remark 3) Co., Ltd.

1. As of December 31, 2020, the Company was based on investees’ CPA audited financial statements, and recognized share of the profit or loss of subsidiaries, associates, and joint ventures accounted for using the equity method, details as follows:

~31~

Investee Hsinbo Construction Co., Ltd.	2020 $ 2,842

1. The Board of Directors of the Company September 24, 2020 resolved to process a simple merger with its subsidiary, the Hsinbo Construction Co., Ltd., the reference date of the merger was on October 31, 2020, the Company was the surviving company in the merger, and Hsinbo Construction Co., Ltd. was the dissolved company. Information on acquired assets and assumed liabilities from the merger with Hsinbo Construction Co., Ltd. are as follows:

	Main business activities Reference date
Hsinbo Construction Co., Ltd.	Leasing industry, real estate business As of October 31, 2020
	Amount
Assets
Cash and cash equivalents	$ 9,513
Other receivables	1
Investment property, land	113,371
Investment property, buildings	48,399
Accumulated depreciation, investment property, buildings	(20,708)
Liabilities
Other payables	(113)
Current tax liabilities	(258)
Guarantee deposits received	(1,000)
	$ 149,205

1. The Love All Corporation was dissolved and approved by the competent authority on September 30, 2020, Love All Corporation has completed the closure liquidation during the fourth season, 2020 and awaits approval from the court.

(viii) Property, Plant, and Equipment

1. Details of net property, plant, and equipment are as follows:

Item Land Buildings and structures, net Computer and telecommunication equipment, net Transportation equipment, net Office equipment, net Property, plant and equipment, net	2021.12.31 $ 17,371 5,486 470 1,025 － $ 24,352	2020.12.31 $ 17,371 5,646 354 1,298 － $ 24,669

1. Details of changes in property, plant, and equipment are as follows:

~32~

		Buildings and	Computer and telecommunica	Transportation	Office
Cost	Land	structures	tion equipment	equipment	equipment	Total
Balance at January 1, 2021	$ 17,371	$ 8,169	$ 1,815	$ 1,674	$ 1,809	$ 30,838
Addition from purchase	-	-	388	-	-	388
Disposal and disposition	-	-	(632 )	-	-	(632
Balance at December 31, 2021	17,371	8,169	1,571	1,674	1,809	30,594
Accumulated depreciation and impairment
Balance at January 1, 2021	-	2,523	1,461	376	1,809	6,169
Depreciation expense	-	160	272	273	-	705
Disposal and disposition	-	-	(632 )	-	-	(632
Balance at December 31, 2021	-	2,683	1,101	649	1,809	6,242
Property, plant and equipment, net	$ 17,371	$ 5,486	$ 470	$ 1,025	$ -	$ 24,352

		Buildings and	Computer and telecommunica	Transportation	Office
Cost	Land	structures	tion equipment	equipment	equipment	Total
Balance at January 1, 2020	$ 17,371	$ 8,169	$ 1,489	$ 1,674	$ 1,809	$ 30,512
Addition from purchase	-	-	326	-	-	326
Balance at December 31, 2020	17,371	8,169	1,815	1,674	1,809	30,838
Accumulated depreciation and impairment
Balance at January 1, 2020	-	2,363	1,279	102	1,809	5,553
Depreciation expense	-	160	182	274	-	616
Balance at December 31, 2020	-	2,523	1,461	376	1,809	6,169
Property, plant and equipment, net	$ 17,371	$ 5,646	$ 354	$ 1,298	$ -	$ 24,669

1. As for December 31, 2021 and 2020, property, plant, and equipment were pledged. Please refer to Note VIII for more details.

2. As for December 31, 2021 and 2020, property, plant, and equipment were insured for the amounts of NT$ 10,800 thousand and NT$ 11,015 thousand, respectively.

3. As for the end of years 2021 and 2020, the above assets had no interest capitalized.

4. As for December 31, 2021, and 2020, the land on Bafenliao Subsection of Ruifang Town listed as property- land was accounted NT$ 7,481 thousand, while the land could not be transferred as it was attributed as agricultural land. On account of assets preservation, the right to mortgage has been attributed to the Company.

(ix) Investment property

1. Details of net investment property are as follows:

Item Land Buildings and structures, net Investment property, net	2021.12.31 $ 349,435 273,706 $ 623,141	2020.12.31 $ 273,451 232,189 $ 505,640

~33~

2. Details of changes in investment property are as follows:

		Buildings and	Buildings and
Cost	Land	structures		Total
Balance at January 1, 2021	$ 273,451	$ 282,218		$ 555,669
Deduction-disposal	(1,293)	(3,998)		(5,291)
Deduction-asset exchange	(249)	(769)		(1,018)
Transfer pricing	77,526	52,066		129,592
Balance at December 31, 2021	349,435	329,517		678,952
Accumulated depreciation and impairment
Balance at January 1, 2021	-	50,029		50,029
Deduction-disposal	-	(348)		(348)
Deduction-asset exchange	-	(75)		(75)
Depreciation expense	-	6,205		6,205
Balance at December 31, 2021	-	55,811		55,811
Investment property, net
	$ 349,435	$ 273,706		$ 623,141
				Total $ 383,451 161,770 (5,682) 16,130 555,669 24,754 20,708 (51) 4,618 50,029 $ 505,640
		Buildings
		and
Cost	Land	structures		Total
Balance at January 1, 2020	$ 154,596	$ 228,855		$ 383,451
addition-acquired from consolidation	113,371	48,399
Deduction-disposal	(1,468)	(4,214)		(5,682)
Transfer pricing	6,952	9,178		16,130
Balance at December 31, 2020	273,451	282,218		555,669
Accumulated depreciation and impairment
Balance at January 1, 2020	-	24,754		24,754
addition-acquired from consolidation	-	20,708		20,708
Deduction-disposal	-	(51)		(51)
Depreciation expense	-	4,618		4,618
Balance at December 31, 2020	-	50,029		50,029
Investment property, net
	$ 273,451	$ 232,189		$ 505,640

1. As for December 31, 2021and 2020, investment properties were insured for the amounts of NT$ 247,844 thousand and NT$ 13,260 thousand, respectively.

2. The Company and its subsidiary Hsinbo Construction Co., Ltd. were combined in a short-form merger of December 31, 2020. For details of assets acquired from the merge, please refer to Note VI(vii).

3. The cost arising from lease out the buildings and land held for the sale of the Company was a total NT$ 129,592 thousand and NT$ 16,130 thousand, as for December 31, 2021and 2020. It was recorded under investment property from

~34~

buildings and land held for sale. Pleased refer to Note VI(v) for more details.

1. The Company in 2021 exchanged the praking space of investment property to buildings and land held for sale at the price of NT$943 thoudand, as described in Note VI(v)1.

2. Rental income and direct operating expenses of investment property:

Rental income of investment property Direct operating expenses arising from investment property that generated rental income	2021 2020 $10,565 $5,409 $ 9,373 $ 5,948

1. The fair value of investment property held by the Company was NT$ 969,130 thousand and NT$ 590,997 thousand, as of December 31, 2021 and 2020, respectively. The assessment of fair value was based on evaluations by independent external auditors, the economic environment, and changes in transaction prices in the market. The evaluation was performed through the sales comparison approach and income approach, and values generated by the two methods were averaged as a result. Significant unobservable inputs are individual factor and income capitalization rate, which is level 3 fair value. Please refer to Note XII(ii) for more details.

2. As for December 31, 2021 and 2020, the above investment properties were pledged. Please refer to Note VIII for more details.

3. (x) Intangible Assets

4. Details of net intangible assets are as follows:

Item	2021.12.31 2020.12.31
Computer software, net	$ 806 $ 451

1. Details of changes in intangible assets are as follows:

Cost	Computer software	Cost	Computer software
Balance at January 1, 2021	$ 3,266	Balance as of January 1, 2020	$ 2,973
Addition from purchase	651	Addition from purchase	293
Balance at December 31, 2021	3,917	Balance as of December 31, 2020	3,266
Accumulated amortization and iit		Accumulated amortization and iit
mparmen		mparmen
Balance at January 1, 2021	2,815	Balance as of January 1, 2020	2,529
Amortization	296	Amortization	286
Balance at December 31, 2021	3,111	Balance as of December 31, 2020	2,815
Net amount as of December 31, 2021	$ 806	Net amount as of December 31, 2020	$ 451

~35~

(xi) Short-term loans

ort-term loans
Type ofborrowings	2021.12.31	2020.12.31 $－ 200,000 $ 200,000	Collateral
Bank borrowings Secured borrowings Credit borrowings Total	$ 235,980 220,000		Investment property、 Buildings and land held for sale None
	$ 455,980

1. The interest rate collars of Short-term loans by the Company are 1.74%~2.49% and

2. 1.74%~2.26% as of December 31, 2021 and 2020, respectively.

3. The amount in short-term loans granted by the bank that have not yet been used are NT$ 50,000 thousand, as of December 31, 2021 and 2020, respectively.

4. The Company's assets were pledged to the above borrowings as collateral. Please refer to Note VIII for more details.

(xii) Short-term notes and bills payable

refer to Note VIII for more details. Short-term notes and bills payable
Item	2021.12.31 $ 40,000 (37) $ 39,963	2020.12.31 Collateral $ 70,000Buildings and land held for sale (67) $ 69,933	Collateral
Short-term notes and bills payable Less: Discount Short-term notes and bills payable, net

1. As of December 31, 2021 and 2020, the interest rate collars of short-term notes and bills payable are 1.85% and 1.85%~2.038%, respectively.

2. As for December 31, 2021 and 2020, the amounts of short-term notes and bills payable that have not yet been used are NT$ 7,420 thousand and NT$ 18,040 thousand, respectively.

3. The Company's assets were pledged to the above borrowings as collateral. Please refer to Note VIII for more details.

(xiii) Current contract liabilities

Item Advance land receipts Taichung 8 Taoyuan Kuaiji Subtotal Advance building receipts Jiaoxi Park Linkou A7 Taichung 8 Taoyuan Kuaiji Luodong Gongzheng Xinzhuang Fuduxin Danhai Subtotal Other contract liabilities Taichung 8 Taoyuan Kuaiji Danhai Subtotal Total	~36~ 2021.12.31 $－ － － 4,267 95 5,666 － 3,905 10,467 49,454 73,854 － － 141 141 $ 73,995	2020.12.31 $ 2,040 2,280 4,320 6,752 2,314 388,789 8,067 95 5,010 － 411,027 11,694 85 － 11,779 $ 427,126

Item Contract liabilities-building and land sales	2021.12.31 $ 73,995	2020.12.31
		$ 427,126

The opening balance of contract liabilities is NT$ 427,126 thousand and NT$ 354,929 thousand, as of January 1, 2021 and 2020, respectively. As of December 31, 2021 and 2020, all contract obligations were satisfied and recognized as revenue that amounted to NT$ 426,514 thousand and NT$ 110,304 thousand, respectively.

(xiv) Other payables

ther payables
Item Construction retainage received Payable promotional expenses Others Total	2021.12.31 $ 1,284 49,482 36,772 $ 87,538	2020.12.31
		$ 1,761 22,165 13,834
		$ 37,760

(xv) Long-term liabilities, current portion

L	Item Long-term loans, current portion ease liabilities	Item Long-term loans, current portion ease liabilities	2021.12.31 $ 81,172 Discount	2021.12.31 $ 81,172 Discount	2020.12.31 $ 1,957,799	2020.12.31 $ 1,957,799
					$
			Discount
	Item Summary Lease term		Rate	2021.12.31		2020.12.31
Land for superficies Kaohsiung Fucheng 2020.08.21				$ 148,912		$ 147,880
ih P 20900820
rgt roject ~..
Land for superficies right Taipei Zhongzheng District 2020.12.23 ~2090.12.22			1.89%	181,227		180,519
Total				$ 330,139		$ 328,399

(xvi) Lease liabilities

1.Details of the Company's lease liabilities are as follows:

As of December 31, 2021:

As of December 31, 2021:
Item Within 1 year 1 to 3 years 3 years or more Total Current Non-current Total	Future minimum lease payments $ 8,673 17,346 570,875 $ 596,894 $ 8,673 588,221 $ 596,894	Interest $ 6,353 12,570 247,832 $ 266,755 $ 6,353 260,402 $ 266,755	Present value of minimum lease payments
			$ 2,320 4,776 323,043
			$ 330,139
			$ 2,320 327,819
			$ 330,139

~37~

As of December 31, 2020:

As of December 31, 2020:
	Future			Present value of
minimum lease				minimum lease
Item payments			Interest	payments
Within 1 year $	8,568		$ 6,320	$ 2,248
1 to 3 years	17,136		12,507	4,629
3 years or more	572,537		251,015	321,522
Total $	598,241		$ 269,842	$ 328,399
Current $	8,568		$ 6,320	$ 2,248
Non-current	589,673		263,522	326,151
Total $	598,241		$ 269,842	$ 328,399
As of December 31, 2021, the right-of-use assets in Kaohsiung FuCheng project an
Taipei Zhongzheng District project	was remeasured lease liabilities and increased th
amount of NT$2,028 thousand and NT$1,960 thousand, respectively, in the right-o
use assets, because of land value adjustment and increasing land lease monthly.
The amount of lease liabilities recognized in profit or loss and cash flows statements
is as follows:
Item	Year ended December 31, 2021 Year ended December 31, 2020
Interest expense on lease liabilities	$		6,320 $	1,147
Expense on short-term lease contracts $			671 $	1,818
Total cash outflow for leases	$		6,855 $	1,227

As of December 31, 2021, the right-of-use assets in Kaohsiung FuCheng project and Taipei Zhongzheng District project was remeasured lease liabilities and increased the amount of NT$2,028 thousand and NT$1,960 thousand, respectively, in the right-ofuse assets, because of land value adjustment and increasing land lease monthly.

2.The amount of lease liabilities recognized in profit or loss and cash flows statements is as follows:

Note：Total cash outflow for leases during 2021 and 2020 was deducted the amount of NT$1,713 thousand and NT$307 thousand, respectively, which was recorded as rent revenue, because of the rent concession of COVID-19.

(xvii) Long-term loans

Bank Name	Type of borrowings	2021.12.31	Contract period	Collateral
		$ 2,901 56,770 23,590 3,521,000 281,000 290,000 929,000 478,000 45,000	2005.06.27~2025.06.27 2010.11.22~2022.11.22 2016.01.26~2022.11.22 2019.05.15~2024.05.15 2019.09.05~2024.09.05 2019.11.08~2024.11.08 2012.09.25~2025.09.25 2019.01.31~2024.01.31 2021.10.22~2024.10.22	Property, plant and equipment Buildings and land held for sale、Investment property Buildings and land held for sale Land used in construction Land used in construction Land used in construction (Note 5) Land held for construction site Land used in construction Investment property

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(Continued from previous Page) Fengshan Branch, Bank of Taiwan Secured borrowings Mega International Commercial Bank Secured borrowings Chengdong Branch, Land Bank of Taiwan Secured borrowings Chengdong Branch, Land Bank of Taiwan Secured borrowings Total Less: Long-term loans, current portion Unamortized syndicated loan arrangement fee Payable after one year or one operating cycle	361,700 2020.08.17~2025.08.17 Land used in construction 499,716 2021.02.01~2026.02.01 Inventory - superficies land Inventory - right-of-use assets 327,500 2021.05.25~2026.05.25 Land held for construction site 84,400 2021.08.06~2026.08.06 Land held for construction site 6,900,577 (81,172) (6,394) $ 6,813,011

Bank Name	Type of borrowings	2020.12.31	Contract period	Collateral
		$ 3,700 327,550 136,920 2,277,000 281,000 290,000 218,900 929,000 362,000 45,000 764,100 361,700	2005.06.27~2025.06.27 2010.11.22~2022.11.22 2016.01.26~2022.11.22 2019.05.15~2024.05.15 2019.09.05~2024.09.05 2019.11.08~2024.11.08 2014.06.27~2021.08.27 2012.09.25~2021.09.25 2019.01.31~2024.01.31 2018.10.23~2021.10.23 2012.01.19~2021.07.19 2020.08.17~2025.08.17	Property, plant and equipment Buildings and land held for sale Buildings and land held for sale Land used in construction Land used in construction Land held for construction site (Note 6) Buildings and land held for sale (Note 5) Land held for construction site Land used in construction Investment property Land used in construction Inventory - superficies land Inventory - right-of-use assets
		5,996,870 (1,957,799) (9,134)
		$ 4,029,937

• 1.The interest rates of long-term loans by the Company range from 1.59% ~ 2.18% and 1.59% ~ 2.45% as of December 31, 2021 and 2020, respectively.

• The amount in long-term loans granted by the bank that have not yet been used are NT$ 4,076,913 thousand and NT$ 5,213,900 thousand, as of December 31, 2021 and 2020, respectively.

• The Company's assets were pledged to the above borrowings as collateral, please refer to Note VIII.

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1. Repayment terms for bank secured borrowings:

2. (1) Taishan Branch, Land Bank of Taiwan (contract period: from June 27, 2005 to June 27, 2025): The interest is based on the annuity method, payable monthly, starting from the funding date.

For banks other than the above: Interest is payable monthly, and the remaining principal will be paid off when it is due.

1. The due date for the borrowing of land financing ( Mega Holdings) in Hsinchu Zhongxing section for the Company’s construction in progress has been approved to extend the borrowing 3 years and 4 years, respectively, in August 2019 and September 2021, due to the construction was not able to be completed before the due date.

2. As the construction on the Company's land in Gongzheng Section in Luodong is completed, the Yilan Branch of Mega International Commercial Bank has modified the credit terms and conditions by approval to extend the borrowing to 6 months and 12 months, respectively, in February and July 2020.

3. The Bank of Taiwan Syndicated Loan

4. (1) Syndicated loan amount NT$ 6,850,000 thousand

On April 26, 2019, the Company has entered a syndicated credit agreement with a Group of lenders that amounted to NT$ 6,850,000 thousand. The two financial institutes that provided funds were the Bank of Taiwan (as the lead lender and performed administrative tasks) and the Land Bank of Taiwan; the purpose of this facility was to make payment for borrowings from other financial institutes and to support expenditures for the construction of the Danhai project.

• (2) Terms and conditions

ender and performed administrative tasks) and the Land Bank of Taiwan; the urpose of this facility was to make payment for borrowings from other inancial institutes and to support expenditures for the construction of the Danhai project. Terms and conditions	ender and performed administrative tasks) and the Land Bank of Taiwan; the urpose of this facility was to make payment for borrowings from other inancial institutes and to support expenditures for the construction of the Danhai project. Terms and conditions	ender and performed administrative tasks) and the Land Bank of Taiwan; the urpose of this facility was to make payment for borrowings from other inancial institutes and to support expenditures for the construction of the Danhai project. Terms and conditions	ender and performed administrative tasks) and the Land Bank of Taiwan; the urpose of this facility was to make payment for borrowings from other inancial institutes and to support expenditures for the construction of the Danhai project. Terms and conditions	ender and performed administrative tasks) and the Land Bank of Taiwan; the urpose of this facility was to make payment for borrowings from other inancial institutes and to support expenditures for the construction of the Danhai project. Terms and conditions
As of December 31, 2021, the drawn Annual
Line of credit	loan facilities	Payment Terms	percentage rate	Credit method
$ 6,850,000	$ 3,521,000	5 years from the date	Floating interest	Drawdown loan on a
of initially drawn loan facilities rate plus 1.004% points ~1.08% revolving basis is not permitted

According to the terms of the syndicated loan agreement, the Company shall not dispose of any material assets and rights, buy back shares or, and reduce capital or, allocate or distribute dividends when there is a violation, or an expected violation of the agreement, in the duration of the loan, unless as permitted by most of the lenders in a written document.

(3) Arrangement fee for syndicated loans

The arrangement fee for syndicated loans applied by the Company amounts

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NT$ 13,700 thousand, which is to be deducted from the initial measurement of related financial liabilities, which is evenly amortized during the life of the loan.

(4) Repayment term

Interest is payable monthly, and the principal will be paid off when it is mature; however, if the construction of the building is completed for sales, at least 70% of the sales price shall be used to repay for the principal of each A, B, C loans according to the proportion of credit remainder. In any case, the Company shall repay in full the principal and interest of the loan not yet settled before the maturity date of the credit period is reached.

(xviii) Bonds payable

As of December 31, 2021 and 2020: None.

1. The Company issued on December 1, 2015, the third domestic secured convertible corporate bonds with a coupon rate of 0%. The terms and conditions of issuance are as follows:

2. (1) Total issue amount: NT$ 800,000 thousand with a par value of NT$ 100 thousand per share, bonds are issued at par.

3. (2) Issuance period: From December 1, 2015 to December 1, 2020.

4. (3) Availability of collateral: Entrust the Bank of Taiwan as the guarantee bank. Other accessory charges, such as the principal balance after the conversion of the corporate bonds issued and interest premium payable, are included within the scope of the guarantee.

5. (4) Conversion method:

   • (a) Conversion subject: The Company’s common shares, of which the conversion shall be performed by issuing new stocks.

   • (b) Conversion period: Unless (i) the period for suspension of transfer registration of common stock required by laws, (ii) 15 business days prior to the date for the suspension of transfer registration of allocated dividends requested by the Company, the date for the suspension of transfer registration of cash dividends or the date for the suspension of transfer registration of cash capital increase until the record date for allocation of rights, and (iii) from the date of capital decrease until the day prior to the trading of stock swapped upon capital decrease, the bond holders may request the Company to convert the Bond into the Company’s common shares pursuant to the Regulations at any

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time one month after the issuance and throughout the duration of the bond.

• (c) Conversion price and adjustment: The conversion price of the bonds was determined in accordance with the terms and regulation of issuance as NT$ 17.90 per share. If shares of the Company’s common stocks are in accordance with the terms and regulations of issuance, the conversion price will be adjusted as stipulated in terms and regulations of issuance. The conversion price has been adjusted in accordance with the above-mentioned regulations, as NT$ 15.5, NT$ 13.5, NT$ 12.3, NT$ 11.5, and NT$ 10.9, dates of each conversion are as follows: September 10, 2016; September 12, 2017; August 20, 2018; August 17, 2019; and August 9, 2020.

(5) Material terms of redemption:

• (a) From the day following the 1st month of issuance of the convertible bonds until 40 days prior to the expiration of the duration, if the closing price of the Company's common shares at Taipei Exchange exceeds the current conversion price by more than 30% for 30 consecutive business days, the Company may call the bonds outstanding at face value in cash.

• (b) From the day following the 1st month of issuance of the bonds until 40 days prior to the expiration of the duration, if the outstanding amount of bonds is less than 10% of the aggregate nominal amount of the issued bonds, the Company may call the bonds outstanding at face value in cash.

• (6) Put option of bondholders:

At the issuance of the converted corporate bonds to the dates of expiry two years after (December 1, 2017) and three years after (December 1, 2018) respectively, the bondholders may notify the Company’s stock agent in written form to request the Company within 40 days to buy back by cash the converted corporate bonds at face value, plus the redemption premium.

• (7) Date and term of loan repayment:

Except for convertible bonds that were converted into common stock or were exercised the put option, by the holder in accordance with the regulation of issuance, or that were redeemed prior to maturity date by the Company and that were bought back from the Taiwan Stock Exchange or the Taipei Exchange for cancellation, bonds that have reached maturity date shall be settled in cash with

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the par value in bullet repayment.

1. The Company separate the right of conversion of the third domestic secured convertible corporate bonds, embedded derivatives and bond value, and accounted for the "capital surplus-share options", “financial liabilities at FVTPL- noncurrent” and “bonds payable”.

2. The corporate bond discount recognized as “finance costs” in the fiscal year 2020, was NT$ 23,446 thousand. In 2020, the value is NT$0 thousand of embedded derivative financial products which measured at fair value through profit and loss.

3. As of December 1, 2020 (End of the conversion period), the par value of the third domestic secured convertible corporate bonds issued by the Company was NT$ 800,000 thousand that has all been converted to the Company’s common stock totaling 70,937 thousand shares, accounted for share capital of NT$ 709,365 thousand, please refer to Note VI (xxi) for details.

(xix) Retirement benefit plans

The Company's employee retirement measures established in accordance with the Labor Pension Act is of the defined contribution pension plan. The regulations stipulate that the Company is responsible for funding labor retirement benefits with a rate no less than 6% of the employee’s monthly salary. The Company has established the employee retirement measures as stipulated in the regulation and transfers each month, 6% of employees' salary as funding of retirement benefits into individual retirement accounts managed by the Bureau of Labor Insurance.

The Company recognized the expenses in total on defined contribution pension plan are NT$ 1,433 thousand and NT$ 1,482 thousand, respectively, in the fiscal years 2021 and 2020.

(xx) Provisions

Analysis of total provisions is shown below:

Item Current Non-current	2021.12.31 $ 1,065 $ 23,061	2020.12.31 $ 1,033 $ 22,682

	Current provisions
	Provisions for	Non-current
	employee benefits	warranty provision
Balance as of January 1, 2021	$ 1,033	$ 22,682
Recognized as the provision in the current period	1,265	2,706
Provisions incurred in the current period and written off	(1,233)	(2,327)
Balance as of December 31, 2021	$ 1,065	$ 23,061

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	Current provisions
	Provisions for	Non-current
	employee benefits	warranty provision
Balance as of January 1, 2020	$ 967	$ 21,551
Recognized as the provision in the current period	1,446	1,658
Provisions incurred in the current period and written off	(1,380)	(527)
Balance as of December 31, 2020	$ 1,033	$ 22,682

1. Provision of liabilities estimates the possible costs in the future on basis of past experiences, the judgment of management, and other known reasons.

(xxi) Equity

1. Ordinary share

Ordinary share
Authorized shares (shares in thousands) Authorized share capital Number of share capital (shares in thousands) Number of ordinary shares Number of share capital issued Ordinary share	2021.12.31	2020.12.31
	500,000	500,000
	$ 5,000,000	$ 5,000,000
	2021.12.31	2020.12.31
	366,212	366,212
	$ 3,662,113	$ 3,662,113

• (1) The ordinary shares issued has a par value of NT$ 10 per share, each share entitled to one vote and the right to collect dividends.

• (2) The regulation amended as resolved by the shareholders in the meeting on June 16, 2020, stipulated the authorized capital of the Company as NT$ 5,000,000 thousand, divided into 500,000 thousand shares; the amendment registration was completed in July 2020.

• (3) Adjustments of the number of the Company’s outstanding ordinary share are as follows:

as follows:
			Share capital
	Number of shares (shares in		Certificates of entitlement to new shares from
	thousands)	Ordinary share	convertible bond	Total
Balance as of January 1, 2021	366,212	$ 3,662,113	$ -	$ 3,662,113
Increase (decrease) in the current period	-	-	-	-
Balance as of December 31, 2021	366,212	$ 3,662,113	$ -	$ 3,662,113
Balance as of January 1, 2020	305,579	$ 3,031,262	$ 24,521	$ 3,055,783
Conversion of certificates of bonds-to-share	-	24,521	(24,521)	-
Conversion of convertible bonds	60,633	606,330	-	606,330
Balance as of December 31, 2020	366,212	$ 3,662,113	$ -	$ 3,662,113

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(4) Details of the request on converting into ordinary shares according to conversion price by holders of the third domestic secured convertible corporate bonds issued by the Company are as follows.

bonds issued by the Company are	as follows.
Conversion period	Number of converted shares (shares in thousands)	Conversion amount The amendment registration date as approved by the competent authority
From January 2, 2016 to Septemper 30, 2016	453	$ 4,532 As of Octoberl 19, 2016
From October 1, 2016 to December 7, 2016	7	65 As of December 23, 2016
From December 8, 2016 to December 31, 2016	39	387 As of April 18, 2017
Subtotal	499	4,984
From January 1, 2017 to March 28, 2017	45	451 As of April 18, 2017
From March 29, 2017 to June 22, 2017	19	194 As of July 20, 2017
From June 23, 2017 to June 30, 2017	265	2,645 As of Septemper 30, 2017
From July 1, 2017 to Septemper 12, 2017	1,413	14,129 As of Septemper 30, 2017
From Septemper 13, 2017 to Septemper 30, 2017	1,281	12,815 As of January 4, 2018
From October 1, 2017 to December 15, 2017	1,333	13,333 As of January 4, 2018
From December 16, 2017 to December 31, 2017	141	1,407 As of April 10, 2018
Subtotal	4,497	44,974
From January 1, 2018 to March 23, 2018	118	1,185 As of April 10, 2018
From March 24, 2018 to May 7, 2018	15	148 As of May 29, 2018
From May 8, 2018 to Septemper 26, 2018	567	5,672 As of November 20, 2018
From Septemper 27, 2018 to December 24, 2018	838	8,374 As of January 22, 2019
From December 25, 2018 to December 31, 2018	24	244 As of April 10, 2019
Subtotal	1,562	15,623
From January 1, 2019 to March 19, 2019	244	2,439	As of April 10, 2019
From March 20, 2019 to June 30, 2019	41	407	As of August 1, 2019
From July 1, 2019 to September 30, 2019	1,009	10,087	As of December 2, 2019
From October 1, 2019 to December 31, 2019	2,452	24,521	As of April 9, 2020
Subtotal	3,746	37,454
From January 1, 2020 to March 31, 2020	2,147	21,478	As of May 13, 2020
From April 1, 2020 to June 30, 2020	1,392	13,913	As of August 20, 2020
From July 1, 2020 to September 30, 2020	13,910	139,105	As of December 9, 2020
From October 1, 2020 to December 1, 2020 (End of the conversion period)	43,184	431,834 As of January 4, 2021
Subtotal	60,633	606,330
Total	70,937	$ 709,365

2. Capital surplus

Item Capital arising from ordinary share Treasury stock transation Total	2021.12.31 $ 964,821 27,031 $ 991,852	2020.12.31 $ 964,821 27,031 $ 991,852

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	Capital arising from ordinary	Treasury stock	Share options	Total
	share	transation
Balance as of January 1, 2021	$ 964,821	$ 27,031	$ -	$ 991,852
Increase (decrease) in the current period	-	-	-	-
Balance as of December 31, 2021	$ 964,821	$ 27,031	$ -	$ 991,852
Balance as of January 1, 2020	$ 878,267	$ 27,031	$ 30,576	$ 935,874
Conversion of convertible bonds	86,554	-	(30,576)	55,978
Balance as of December 31, 2020	$ 964,821	$ 27,031	$ -	$ 991,852

• (1) Pursuant to the Company Act, capital surplus arising from paid-in capital in excess of par value on the issuance of ordinary shares and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the company has no accumulated deficit. Further, the Regulations Governing the Offering and Issuance of Securities by Securities Issuers requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paidin capital each year, as the investments by the equity method, employ share options. Capital surplus arising from share options, may not be used for any purpose.

• (2) Please refer to Note VI (xviii) for details of “Capital surplus, share options”.

• Retained earnings

• (1) Legal reserve

Pursuant to the Company Act, the Company shall raise 10% of its earnings after tax as the legal reserve until the cumulative amount of capital surplus is equal to the total capital. The legal reserve may be used to cover the deficit, for a company that has no accumulated deficit may use 25% of the part exceeds by the legal reserve over the paid-in capital to issue new stocks or cash to shareholders in proportion to their share ownership.

(2) Special reserve

Pursuant to Rule No. 1010012865, issued by the FSC on April 6, 2012, the Company is required to set aside the same amount of special capital reserve from current profit or loss and unappropriated earnings of the previous year, equivalent to the current net debit balance of the other components of equity accounted for the current year, such as the accumulated balance of foreign currency translation reserve, unrealized loss on available-for-sale financial assets, gain or loss from changes in fair value of hedging instruments in cash flow hedges, etc.; for

~46~

cumulative deduction amount to stockholders’ equity of previous year, the same amount of special capital reserve set aside from the unappropriated earnings of the previous year, shall not be appropriated. When the debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

(3) Retained earnings and dividend policy

In consideration of the capital needs and long-term financial planning for future development, the current dividend policy adopts a residual dividend policy. The current year's earnings after year-end accounting, if any, shall first be used to offset prior years' operating losses, and then 10% of the remaining amount shall be set aside as a legal reserve. This does not apply if the legal reserve has reached the Company's paid-in capital. Special reserve is then allocated or reversed in accordance with the law or regulations of the authority. If there is a balance, the board will take into account the Company's financial situation and propose a surplus distribution proposal of the balance and the accumulated undistributed surplus from the beginning of the same period to the shareholders meeting for a resolution. Dividends for shareholders may be distributed in cash or stocks, and the cash dividend shall not be less than 10% of the total shareholders' dividends.

Because of COVID-19, the appropriations of retained earnings in the fiscal year 2020 , as resolved in the shareholders' meetings on August 26,2021, which was based on June 17, 2021 of electronic voting , and the appropriations of retained earnings in the fiscal year 2019 , as resolved in the shareholders' meetings on June 16, 2020 are presented as follows:

Item Legal reserve Cash dividend Total	Year ended December 31, 2020	Year ended December 31, 2020	Year ended December 31, 2019	Year ended December 31, 2019
	Appropriation of retained earnings $ 7,681 183,106 $ 190,787	Dividend per share (NT$)	Appropriation of retained earnings $ 10,044 307,822 $ 317,866	Dividend per share (NT$)
		0.5		0.9869

The above mentioned proposal of dividends distribution of years 2020and 2019, were resolved in shareholders’ meeting to authorize Chairman to resolve the dividend record date; the ex-rights and dividend dates are set on September 15, 2021 and August 9, 2020, respectively.

The Board of Directors has resolved and approved the 2021 proposal of appropriation of retained earnings on March 22, 2022, which proposed to

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allocate cash dividend of shareholders, but will be effective upon approval of shareholders’ meeting on June 15, 2022, and resolution for a dividend record date, details are as follows:

Item Legal reserve Cash dividend Total	Year ended December 31, 2021 Appropriation of retained earnings Dividend per share (NT$) $ 51,515 439,454 1.2 (Note) $ 490,969
	Appropriation of retained earnings $ 51,515 439,454 $ 490,969

Note: The dividend per share is calculated based on the number of shares outstanding at the time of resolution of the Company’s board of directors.

• (4) Employee’s compensation and directors’ remuneration

Distributions of employee’s compensation and that of directors’ remuneration are as follows:

In accordance with the regulations in the articles of incorporation of the Company. If the Company is profitable in the fiscal year (refers to pre-tax profit before subtracting bonuses and remunerations allocated to employees, supervisors, and directors), no less than 1% of the profit shall be offered as bonuses for employees, and no more than 2% of the profit shall be allocated as remuneration for directors and supervisors. However, if the Company still has accumulated losses, an amount shall be reserved in advance to make up for the losses. Employee compensation is mainly in the form of stocks or cash, and the recipients shall include the employees of subsidiaries who meet certain criteria. The remunerations for directors are to be paid in cash onl. The above allocation shall be determined by the board and reported to the shareholder meetings.

As resolved by the Board of Directors on March 23, 2021, and reported in the shareholders’ meeting on August 26, 2021, the employees’ compensation and Directors’ remuneration that would be paid in cash were both amounted to NT$ 924 thousand, which has no difference from the amount accounted for expense as stated in the 2020 financial statements.

For the year ended December 31, 2021, employees’ compensation and directors’ remuneration were both accrued at NT$ 5,299 thousand.

The employees’ compensation and directors’ remuneration were accrued on the basis of the amount of current net profit before tax before the deduction of employees’ compensation and directors’ remuneration, and taking into account the distribution ratio of previous years, in accordance with articles of incorporation of the Company. If differences incurred between the actual

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distributed amount as determined by the shareholders and that was accrued, such difference would be recorded as profit or loss of the next fiscal year.

The proposal of distributing the Company’s employees’ compensation and directors’ remuneration has been approved by the Board of Directors on March 22, 2022.

For information of resolution to be approved by the Board of Directors, plus appropriation of earnings and remunerations of employees and directors resolved by shareholders’ meeting, please refer to the Market Observation Post System website of TWSE.

(xxii) Operating revenue

perating revenue
Revenue from contracts with customers: Revenue of buildings and land sales Other - rental revenue Total Revenue recognition point: At a point in time Over time Total	Year ended December 31, 2021 $ 3,439,500 10,635 $ 3,450,135 $ 3,439,500 10,635 $ 3,450,135	Year ended December 31, 2020
		$ 2,221,158 5,487
		$ 2,226,645
		$ 2,221,158 5,487
		$2,226,645

1. The sales area of the Company’s construction projects in 2021 and 2020 is all in Taiwan.

2. The aggregated amount of transaction price allocated to unsatisfied performance obligation from the Company's signed contracts, as of December 31, 2021 and 2020, and its expected fiscal year of revenue recognition are as follows:

	Contracted amount Expected year of revenue recognition
As of December 31,2021	$ 973,957 2022~2023
As of December 31,2020	$,2,562,395 2021

(xxiii) Other income

Interest income Dividends income Other income, others Total	Year ended December 31,2021 $ 1,103 1,558 6,292 $ 8,953	Year ended December 31,2020 $ 659 1,558 4,623 $ , 6,840

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(xxiv) Other gains and losses

Other gains and losses
Gain on disposal of property(land held for construction site) Gain on disposal of investment property Miscellaneous disbursements Total	Year ended December 31,2021 $ 11,823 1,277 － $13,100	Year ended December 31,2020
		$,－ 6,911 (5,111) $1,800

(xxv) Finance costs

(xxv) Finance costs	(xxv) Finance costs
Year ended December 31, 2021 Interest expense Interest on bank borrowings $ 139,720 Amortization of arrangement fee for a syndicated loan 2,740 Amortization of corporate bond discount － The imputed interest on deposit 15 Imputed interest on contract liabilities 3,982 Interest on the lease liability 6,320 Subtotal 152,777 Less: amount of the capitalized assets that meet the requirements (139,516) Total $ 13,261 Details of amount of the capitalized assets that meet the requirements Year ended December 31,2021 Buildings held for sale $ 6,823 Buildings under construction 127,442 Prepayment for land purchases 4,397 Inventory - Royalties for superficies right 854 Total $139,516 (xxvi) Expenses by nature Year ended December 31,2021 Depreciation and amortization charges Depreciation of property, plant and equipment $, 705 Depreciation of investment property 6,205 Amortization of intangible assets 296 Total $ 7,206		Year ended December 31, 2021 $ 139,720 2,740 － 15 3,982 6,320 152,777 (139,516)	Year ended December 31, 2020 $ 123,528 2,740 23,446 9 8,654 1,147 159,524 (132,405) $ 27,119 are as follows: Year ended December 31,2020 $ 15,749 115,759 897 － $132,405 Year ended December 31,2020 $ 616 4,618 286 $ 5,520
		$, 705 6,205 296
		$ 7,206

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(xxvii) Employee benefit expense

ployee benefit expense
Wages and salaries Labor and health insurance fees Pension costs Remuneration of Directors Other employee benefit expense Total	Year ended December 31, 2021 $ 36,776 2,814 1,433 7,519 3,497 $ 52,039	Year ended December 31, 2020 $ 32,776 2,645 1,482 2,934 3,304
		$43,141

1. Numbers of employees were both 42 for the years ended 2021 and 2020, numbers of directors who have not served as employees were both 6.

2. Please refer to Note VI(xxi) for information on the remuneration of employees and directors.

(xxviii) Taxation

1. Income tax expense

2. (1) Components of income tax expense:

(1) Components of income tax expense:
Item	Year ended December 31, 2021 $, － 7,699 (3,514) － $4,185	Year ended December 31, 2020
Current income tax expense Land value increment tax Decrease in deferred tax expense Supplementary payment as approved in respect of the prior year Income tax expense included in profit or loss		$－ 14,829 (1,592) 496
		$ ,13,733

• (2) The Company's income tax expenses recognized as other comprehensive income as of December 31, 2021 and 2020, were both NT$ 0 thousand.

• Analysis of items of the Company's deferred income tax liabilities are as follows:

• (1) Deferred income tax liabilities

~51~ 2021.1.1 Temporary differences Buildings and land held for sale and construction in progress Capitalized interest $ (34,096) 2020.1.1 Temporary differences Buildings and land held for sale and construction in progress Capitalized interest $ (35,688)	Included in profit or loss $ 3,514 Included in profit or loss $1,592	2021.12.31 $ (30,582) 2020.12.31 $ (34,096)

3. Unrecognized deferred tax assets:

As of December 31, 2021 and 2020, the amounts of deferred income tax assets not recognized by the Company due to there was not probable to have taxable profits were NT$ 13,544 thousand and NT$ 24,182 thousand, respectively.

1. A reconciliation between profit before tax and income tax expense presented in statements of comprehensive income is as follows:

statements of comprehensive income is as follows:
	Year ended December 31, 2021	Year ended December 31, 2020
Item
Net profit before tax	$ 519,337	$ 90,541
Tax computed at applicable tax rate (20%)	103,867	18,108
Reasons for differences:
Exempt income of land transaction	(94,818)	(12,135)
Share of profit or loss of associates and joint ventures	-	(568)
accounted for using equity
Unrealized loss due to decline in inventories	785	-
Dividends not included in taxable income	(312)	(312)
Capitalized interest on buildings under construction and	(26,853)	(26,301)
buildings held for sale
Other adjustments in accordance with the tax act	28,940	20,861
Deduction for the current year of the approved losses in the	(11,609)	-
previous ten years
Current deduction of losses	-	347
Current tax expense	-	-
Land value increment tax	7,699	14,829
Decrease in deferred tax expense	(3,514)	(1,592)
Supplementary payment as approved in respect of the prior year	-	496
Income tax expense included in profit or loss	$ 4,185	$ 13,733

1. The composition of the Company's income tax expense and current income tax (assets) liabilities is described as follows:

		2021.12.31	2021.12.31	2021.12.31
Item	income tax	(assets)		income	tax liabilities
Current tax expense	$	－		$		－
Less: withholding tax		－				－
Current refundable income tax		－				－
Add: Income tax refund of the		(21)				－
previous year
Current tax (assets) liabilities	$	(21)		$		－
				2020.12.31
Item		Income tax (assets)			Income tax liabilities
Current tax expense		$		－	$	－
Less: withholding tax				(8)		－
Current refundable income tax				(8)		－
Add: Supplementary payment as	approved in			－		496
f h i Income tax liabilities assumed by a				－		258
b i bi i Income tax refund of the prior year				(13)		－
Prepayment for land value increment tax			(1,297)			－
Current tax (assets) liabilities		$	(1,318)		$	754

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1. As of December 31, 2021, the final deadline of tax credit for the unused deduction of losses and the balance is as follows:

Year of event 2019 2020	Final year for using credit 2029 2030 Total	Amount
		$ 26,507 177
		$ 26,684

1. The tax authorities have examined the income tax returns of the Company through 2019. The payment of tax was made.

(xxix) Earnings per share

gs per share
	Year ended December 31, 2021
		Weighted average number of shares	Earnings per share
	Profit after tax	(shares in thousands)	(NT$)
Basic earnings per share	$ 515,152	366,212	$ 1.41
	Year ended December 31, 2020
		Weighted average number of shares	Earnings per share
	Profit after tax	(shares in thousands)	(NT$)
Basic earnings per share	$ 76,808	311,673	$ 0.25

(xxx) Operating lease arrangements

1. The Company has leased out assets in the form of operating leases to lessees for uses as offices, residences, shops, and parking lots. Rental incomes recognized in the fiscal year 2021and 2020 are NT$ 10,635 thousand and NT$ 5,487 thousand. Total amount of future minimum lease payments of non-cancellable lease agreement is as follows:

Item Within 1 year 1 to 5 years Over 5 years Total	2021.12.31 $ 10,100 13,627 3,382 $ 27,109	2020.12.31 $ 10,897 13,946 23 $ 24,866

1. The Company leases xerox machine, warehouse and advertisements in the form of operating leases and pays a fixed rent in accordance with the agreement. Rental expenditures recognized in the fiscal year 2021 and 2020 are NT$ 671 thousand and NT$ 1,818 thousand, respectively. Total amount of future minimum lease payments of non-cancellable lease agreement is as follows:

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Item Within 1 year 1 to 5 years Over 5 years Total	2021.12.31 $ 72 80 － $ 152	2020.12.31 $ 488 121 － $ 609

(xxxi) Changes in liabilities from financing activities

	Short-term loans	Short-term notes and bills payable	Long-term loans (including current portion)	Lease liabilities	Others	Liabilities from financing activities-gross
As of January 1, 2021	$ 200,000	$ 69,933	$ 5,987,736	$ 328,399	$ 1,795	$ 6,587,863
Changes in cash flows from financing activities	255,980	( 30,000	) 903,707	( 2,248	) ( 20	) 1,127,419
Changes in non-cash:
Amortized syndicated loan arrangement fee	-	-	2,740	-	-	2,740
Lease liabilities remeasurements	-	-	-	3,988	-	3,988
Discount on short-term notes and bills payable	-	30	-	-	-	30
As of December 31, 2021	$ 455,980	$ 39,963	$ 6,894,183	$ 330,139	$ 1,775	$ 7,722,040

	Short-term loans	Short-term notes and bills payable	Long-term loans (including current portion)	Lease liabilities	Others	Liabilities from financing activities-gross
As of January 1, 2020	$ 300,000	$ 124,707	$ 5,191,664	$ -	$ 661	$ 5,617,032
Changes in cash flows from financing activities	( 100,000)	( 55,000 )	793,332	( 387)	134	638,079
Changes in non-cash:
Amortized syndicated loan arrangement fee	-	-	2,740	-	-	2,740
Liabilities increased through a merger	-	-	-	-	1,000	1,000
New lease	-			328,786	-	328,786
Discount on short-term notes and bills payable	-	226	-	-	-	226
As of December 31, 2020	$ 200,000	$ 69,933	$ 5,987,736	$ 328,399	$ 1,795	$ 6,587,863

(xxxii) Financing activities of non-cash transactions

The non-cash transaction financing activities of the Company during the fiscal year 2021 and 2020 are as follows:

Please refer to Note VI (xxi) for converting convertible corporate bonds to ordinary shares.

~54~

VII. Related Party Transaction

(i) Names of related parties and relationship with the Company

Name of related parties Relationship with the Company

Name of relatedparties	Relationshipwith the Company
Lih Pao Construction Co., Ltd.	The Chairperson of that company is the relative of the Company’s
	Chairperson, within the 2 degrees of kinship under the civil code.
Pao Juan Development	Parties with substantial relation to the Company
Enterprise Co., Ltd.
Sheng Jun Enterprise Co., Ltd	The Chairperson of that company and the Company’s Chairperson,
	are relatives within the 2 degree of kinship under the civil code.
Xin Shengdi Enterprise Co., Ltd	The Chairperson of that company and the Company’s Chairperson,
	are relatives within the 2 degree of kinship under the civil code.
Fullon Hotels & Resorts	The legal representative director of that company is the relative of
	the 2 degrees of kinship under the civil code.
Fullon Hotel Fulong	The Chairperson of that company is the relative of the Company’s
	Chairperson, within the 2 degree of kinship under the civil code.
Spring Color International Co.,	The Chairman of that company is the Chairman of the Company as
Ltd.	well.
Ansheng Construction Co., Ltd	More than half of directors of that company are relatives of the
	Company’s chairperson, within the 2 degrees of kinship under the
	civil code.
Hsinbo Construction Co., Ltd.	The subsidiary of the Company (had entered into a short-form
	merger with the Company, the reference date for any transaction
	was October 31, 2020)
Zhongfu Construction Co., Ltd	Parties with substantial relation to the Company
Harvest Construction Co., Ltd.	Parties with substantial relation to the Company
Li Xin Emporium Co., Ltd.	The Chairperson of that company is the relative of the Company’s
	Chairperson, within the 2 degree of kinship under the civil code.
Yamay International Development	The Chairperson of that company is the relative of the Company’s
Corp.	Chairperson, within the 2 degree of kinship under the civil code.
	Since Aug 5,2021, parties with substantial relation to the Company
Baoshi Construction Co., Ltd.	Parties with substantial relation to the Company
Lih Feng Assets Management Co.,	Parties with substantial relation to the Company
Chung O Lin	The Company’s deputy manager of the construction and planning
	division
Chen O Yu	Spouse of the Company’s deputy manager of construction and
	planning division

• (ii) Significant transactions between the Company and related parties are disclosed as follows:

• Sales

Name of related parties Chung O Lin (Note 1, 2)	Year ended December 31, 2021 $－	Year ended December 31, 2020
		$ 11,732

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Note 1: Designate to transfer to the spouse named Chen O Yu.

Note 2: The sales price for goods sold to the above related parties was determined through an agreement based on the market rates. The payment terms were no different with non-related parties.

2. Purchase

• (1) Details are as follows:

Details are as follows:
Name of related parties Ansheng Construction Co., Ltd Zhongfu Construction Co., Ltd Baoshi Construction Co., Ltd. Total	Year ended December 31, 2020 $ 432,045 1,791,752 72,422 $ 2,296,219	Year ended December 31, 2019
		$ 666,662 746,794 －
		$ 1,413,456

• (2) Information on construction contracts that the Company has signed with the following related parties but not yet settled or current settled as of December 31, 2021and 2020 are as below:

① Ansheng Construction Co., Ltd

As of December 31, 2021:

Construction projects Case of Xinzhuang Fuduxin Luodong Gongzheng Section Taoyuan Kuaiji section Lot 8, Taichung Zhenxing section Taichung Lianwu section Kaosiung Fucheng section Total	Contracting Contract for labor and materials Contract for labor and materials Contract for labor and materials Contract for labor and materials Contract for labor and materials Contract for labor and materials	(tax excluded) Total contractprice $ 466,624 313,689 870,286 1,173,987 674,575 856,638 $ 4,355,799	Paid amount $ 459,731 313,689 851,693 1,127,027 238,612 － $ 2,990,752	Unpaid amount
				$ 6,893 － 18,593 46,960 435,963 856,638
				$ 1,365,047

As of December 31, 2020:

Construction projects Case of Xinzhuang Fuduxin Luodong Gongzheng Section Taoyuan Kuaiji section Lot 8, Taichung Zhenxing section Taichung Lianwu section Total	Contracting Contract for labor and materials Contract for labor and materials Contract for labor and materials Contract for labor and materials Contract for labor and materials	(tax excluded) Total contractprice $ 466,624 313,689 870,286 1,173,987 384,857 $ 3,209,443	Paid amount $ 447,132 312,780 843,802 851,140 100,063 $ 2,554,917	Unpaid amount
				$ 19,492 909 26,484 322,847 284,794
				$ 654,526

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② Zhongfu Construction Co., Ltd

As of December 31, 2021:

(tax excluded) Construction Unpaid Contracting Total contract Paid amount projects amount price Contract for labor Case of Danhai and materials $ 6,542,509 $ 2,945,034 $ 3,597,475 As of December 31, 2020: (tax excluded) Construction Unpaid Contracting Total contract Paid amount projects amount price Contract for labor Case of Danhai and materials $ 6,519,200 $ 1,211,387 $ 5,307,813 ③ Baoshi Construction Co., Ltd. As of December 31, 2021

Case of Danhai Contract for labor and materials ③Baoshi Construction Co., Ltd. As of December 31, 2021	$ 6,519,200	$1,211,387	$ 5,307,81
Construction projects Contracting Case A of Taoyuan Sanmin section Contract for labor and materials As of December 31, 2020: Construction projects Contracting Case A of Taoyuan Sanmin section Contract for labor and materials	(tax excluded) Total contract price $ 564,715 (tax excluded) Total contract price $193,125	Paid amount $ 68,560 Paid amount $－	Unpaid amount
			$496,155
			Unpaid amount
			$193,125

The payment due under the above construction agreements was paid according to

the progress of the construction. The transaction terms and conditions made no significant difference with those for non-related parties.

3. Prepayments

Name of related parties LihPao Construction Co., Ltd Fullon Hotels & Resorts Lih Feng Assets Management Co., Baoshi Construction Co., Ltd. (Note1、2) Total	2021.12.31 $ 6 369 3,333 3,744 $ 7,452	2020.12.31
		$ 5 － － 1,087
		$ 1,092

Note: 1.The company recognised the amount paid to the unfinished fences constructions as prepayemnts, until the company gets the building permit, prepayments will be transferred to the item of inventoryconstruction in progress.

• 2.The company signed the contract of fences constructions with Baoshi

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Construction Co., Ltd, the details of unpaid amount are as follows:

As of December 31, 2021:

mber 31, 2021:
Contracting		(tax excluded) Total contractprice Paid amount $ 1,087 $,978 1,753 929 5,452 － 1,728 1,667 $ 10,020 $ 3,574 (tax excluded) Total contractprice Paid amount $ 1,087 $,978 2021.12.31 2020.12.31 $ 61,298 $ 77,604 175,889 114,878 4,233 114 $241,420 $192,596 2021.12.31 2020.12.31 $ 30,933 $ 18,607 － 50 20 － $30,953 $18,657	Unpaid amount
			$ 109 824 5,452 61
			$ 6,446
			Unpaid amount
			$ 109
		2021.12.31 $ 61,298 175,889 4,233 $241,420 2021.12.31 $ 30,933 － 20 $30,953

1. Accounts payable to related parties

2. Other payables to related parties

Note: Other payables to the related party, Ansheng Construction Co., Ltd, are construction retainage received recorded under purchase transaction.

1. Rental revenue

Note: Other payables to the related party, Ansheng Construction Co., Ltd, are construction retainage received recorded under purchase transaction. . Rental revenue	Note: Other payables to the related party, Ansheng Construction Co., Ltd, are construction retainage received recorded under purchase transaction. . Rental revenue	Note: Other payables to the related party, Ansheng Construction Co., Ltd, are construction retainage received recorded under purchase transaction. . Rental revenue	Note: Other payables to the related party, Ansheng Construction Co., Ltd, are construction retainage received recorded under purchase transaction. . Rental revenue
Year ended December 31, 2021
Lessee	Location Lease term	Monthlyrent	Rental revenue
Sheng Jun Enterprise Co., Ltd Section 1, Chengtai Road, Wugu District 2021.01.01 ~2021.12.31 $ 3			$ 34
Xin Shengdi Enterprise Co., Ltd Section 1, Chengtai Road, Wugu District 2021.01.01 ~2021.12.31 $ 3			$ 34

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Year ended December 31, 2020	Year ended December 31, 2020	Year ended December 31, 2020	Year ended December 31, 2020	Year ended December 31, 2020
Lessee Location Lease term Monthlyrent				Rental revenue
Hsinbo Construction C Ld N 1 Section 1, Chengtai Rd W Dii 2019.07.01~2020.06.30 2020070120201231 $ 1				$ 10
o., t. (ote ) oa, ugu strct ..~..
Sheng Jun Enterprise C Ld Section 1, Chengtai RdDii 2020.01.01~2020.12.31 $ 3				$ 34
o., t oa, Wugu strct
Xin Shengdi Section 1, Chengtai				$ 34
Ei C Ld
nterprse o., t oa, ugu strct

Note 1: Hsinbo Construction Co., Ltd., had entered into a short-form merger with the Company on October 31, 2020, the lease contract was therefore ceased. 7. Rent expense

Note 1: Hsinbo Construction Co., Ltd., had entered into a short-form merger with the Company on October 31, 2020, the lease contract was therefore ceased. 7. Rent expense	Note 1: Hsinbo Construction Co., Ltd., had entered into a short-form merger with the Company on October 31, 2020, the lease contract was therefore ceased. 7. Rent expense	Note 1: Hsinbo Construction Co., Ltd., had entered into a short-form merger with the Company on October 31, 2020, the lease contract was therefore ceased. 7. Rent expense	Note 1: Hsinbo Construction Co., Ltd., had entered into a short-form merger with the Company on October 31, 2020, the lease contract was therefore ceased. 7. Rent expense
Year ended December 31, 2021
Lessor	Location Lease term	Monthly rent	Rent expense
Archive Room and
Pao Juan Development Enterprise Co., Ltd. warehouse on Section 1, Chengtai Road, Wugu District 2021.01.01 ~2021.12.31 $ 5			$ 62
Pao Juan Development Enterprise Co., Ltd. Conference room 2021.08.01 ~2022.07.31 $ 2			$ 8
Pao Juan Development Enterprise Co., Ltd. Conference room Preliminary tenancy			$ 23
Fullon Hotels & Resorts Signing event venue Preliminary			$ 66
tenancy
Year ended December 31, 2020
Lessor	Location Lease term	Monthly rent	Rent expense
Archive Room and
Pao Juan Development Enterprise Co., Ltd. warehouse on Section 1, Chengtai Road, Wugu District 2020.01.01 ~2020.12.31 $ 5			$ 62
Pao Juan Development Enterprise Co., Ltd. Conference room Preliminary tenancy			$ 23

8. Operating expenses (not including rent expense )

Name of related parties	Year ended December 31, 2021	Year ended December 31, 2020
Fullon Hotels & Resorts Fullon Hotel Fulong Pao Juan Development Enterprise Co., Ltd. Lih Pao Construction Co., Ltd. Spring Color International Co., Ltd. Li Xin Emporium Co., Ltd. Yamay International Development Corp. Zhongfu Construction Co., Ltd Lih Feng Assets Management Co., Ltd Total	$ 2,033 8 657 98 489 4 315 － 286	$ 2,147 29 527 551 562 6 13 23 －
	$ 3,890	$ 3,858

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Details of operating expenses on transactions with above mentioned related parties are as follows:

are as follows:
Item Entertainment expense Traveling expense Employee benefits Advertisement expense Utilities expense Repairs and maintenance expense Other expenses Insurance expense Total	Year ended December 31, 2021 $ 2,579 13 188 57 84 8 961 － $ 3,890	Year ended December 31, 2020
		$ 2,562 9 472 171 70 9 560 5
		$ 3,858

1. Overhead used in construction

9. Overhead used in construction
Item Fullon Hotels & Resorts Ansheng Construction Co., Ltd Total 10. Key management compensation Item Short-term employee benefits Post-employment compensation Total	Year ended December 31, 2021 $ 7 1,905 $ 1,912 Year ended December 31, 2021 $ 13,381 83 $ 13,464	Year ended December 31, 2020
		$ 13 －
		$ 13
		Year ended December 31, 2020
		$ 10,550 161
		$ 10,711

1. Other transactions

2. (1) Lih Pao Construction Co., Ltd. has provided the Company a joint guarantee for the construction project on Lot 8, Taichung Zhenxing section. In March 2018, the guarantee period ends on the construction's completion date (that is the date obtaining the occupation permit). The project was completed in March 2021 and has obtained the permit.

3. (2) Harvest Construction Co., Ltd. has provided the Company a joint guarantee for the construction project on the land in Taoyuan Kuaiji section in January 2018. The guarantee period ends on the construction's completion date (that is the date obtaining the occupation permit). The project was completed in May 2020 and has obtained the permit.

4. (3) The Company has involved in a joint guarantee of performance guarantee for presold home sales contract in September 2018 as required under the Consumer Protection Act, as of December 31, 2021 and 2020, and provided Pao Juan

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Development Enterprise Co., Ltd. a joint guarantee for the construction project in Jiang Cui District in New Taipei City, amounted to NT$ 516,939 thousand, and NT$ 765,439 thousand, respectively. Please refer to Table 1.

VIII. Pledged Asset

The Company provided the assets below as collateral or subject to the limit, details are as follows:

Name of Assets	2021.12.31 Type of pledge $,9,890 Long-term loans guarantee 5,486 Long-term loans guarantee 346,110 Long、Short-term loans guarantee 3,663,023 Long-term loans guarantee 933,474 Short-term notes and bills payable Long、Short-term loans guarantee 2,481,668 Long-term loans guarantee 715,881 Long-term loans guarantee 182,509 Long-term loans guarantee 50,332 Pre-sale construction trust 19,691 Reimbursement bank account $ 8,408,064 2020.12.31 Type of pledge $,9,890 Long-term loans guarantee 5,646 Long-term loans guarantee 224,059 Long-term loans guarantee 2,954,350 Long-term loans guarantee 1,832,534 Short-term notes and bills payable Long-term loans guarantee 2,146,366 Long-term loans guarantee 603,638 Long-term loans guarantee 148,237 Long-term loans guarantee 7,784 Trust account of performance guarantee $ 7,932,504
Land Buildings and structures Investment property Inventories - land used in construction Inventories - buildings and land held for sale Inventories - land held for construction site Inventories - royalties for superficies right Inventories - right-of-use assets Other current financial assets Other non-current financial assets Total Name of Assets
Land Buildings and structures Investment property Inventories - land used in construction Inventories - buildings and land held for sale Inventories - land held for construction site Inventories - royalties for superficies right Inventories - right-of-use assets Other current financial assets Total

IX.Significant Contingent Liabilities and Unrecognized Contractual Commitment

• (i) The Company has entered a significant construction contract, as of December 31, 2021 and 2020, the total contract price amounted to NT$ 11,126,025 thousand and NT$ 9,921,768 thousand, respectively, amounts paid were NT$ 5,667,347 thousand and NT$ 3,766,304 thousand, respectively. In contrast, the payments not yet been made were NT$ 5,458,678 thousand and NT$ 6,155,464 thousand which will be paid along with the progress of the construction project.

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• (ii) As of December 31, 2021 and 2020, the Company has entered a significant construction contract of land purchase and superficies amounted to NT$ 0 thousand and NT$ 1,463,080 thousand, respectively, amounts paid were NT$ 0 thousand and NT$ -

• 389,174 thousand, which were accounted for inventory prepayment for land purchase.

• (iii) The Company has involved in a joint guarantee of performance guarantee for pre-sold home sales contract in September 2018 as required under the Consumer Protection Act, as of December 31, 2021 and 2020, and provided Pao Juan Development Enterprise Co., Ltd. a joint guarantee for the construction project in Jiang Cui Section in New Taipei City, amounted to NT$ 516,939 thousand, and NT$ 765,439 thousand, respectively. Please refer to Table 1.

• (iv) The Company invested the land development project of Mass Rapid Transit System Orange Line 04 Station of Kaohsiung Government MRT Engineering Bureas, the guarantee bank details are as follows:

guarantee bank details are	as follows:
Guarantee Bank	Guaranteed Guarantee period $ 98,444 2021.11.08~2026.03.31
Land Bank

• X. Significant Disaster Losses: None.

• XI. Significant Events After Reporting Period: None.

XII. Others

(i) Capital risk management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company adjusts the amount of the borrowings on the basis of the progress of construction, and the funds required for operating.

(ii) Financial instruments

1. Financial instruments by category

nancial instruments by category
Financial assets Measured at amortized cost Cash and cash equivalents Notes and accounts receivable Other receivables Other current financial assets Guarantee deposits paid Long-term notes and accounts receivable Other non-current financial assets Total	2021.12.31	2020.12.31
	$ 212,130 21,746 － 50,332 7,945 8,408 19,691	$ 108,526 39,086 486 7,784 8,536 25,708 －
	$ 320,252	$ 190,126

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Financial liabilities Measured at amortized cost Short-term loans Short-term notes and bills payable Notes and accounts payable (including related parties) Other payables (including related parties) Other current liabilities, others Long-term loans (including long-term loans, current portion) Guarantee deposits received Lease liabilities Total	2021.12.31	2020.12.31
	$ 455,980 39,963 273,183 118,491 1,985 6,894,183 1,775 330,139	$ 200,000 69,933 232,172 56,417 44,884 5,987,736 1,795 328,399
	$ 8,115,699	$ 6,921,336

2. Fair value information

• (1) The financial assets not at fair value and the book value of financial liabilities were considered by the Company’s management as close to their fair value or has no reliable, fair value measurement.

• (2) Valuation techniques and assumptions used in fair value measurements

The fair value of the Company’s financial assets and financial liabilities were determined by using the following techniques and assumptions:

• A. The fair value of financial assets subject to standard terms and conditions and were transacting in active markets was determined after reference of the quoted market price (including stocks of exchange-listed and oct-listed companies and bond funds-quasi money market).

• B. The fair value of other financial assets and financial liabilities was determined by using the generally recognized valuation model based on discounted cash Flow analysis.

• (3) Fair value measurement recognized in the balance sheet

Below are an analysis of valuation techniques used by financial instruments at fair value. Each level is defined as follows:

• A. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• B. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

• C. Level 3: Inputs are not based on observable market data.

Basic categorization of the Company’s financial assets and liabilities at fair value, by their nature and fair value level is presented as follows:

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Recurring non-derivative assets Current financial assets at fair value through other comprehensive income Shares of listed companies Non-current financial assets at fair value through other comprehensive income Shares of listed companies Shares of unlisted companies Total Recurring fair value measurement disclosures Investment property Recurring non-derivative assets Current financial assets at fair value through other comprehensive income Shares of listed companies Non-current financial assets at fair value through other comprehensive income Shares of listed companies Shares of unlisted companies Total Recurring fair value measurement disclosures Investment property		2021.12.31	2021.12.31
	Level 1	Level 2		Total
	$ 525 2,425 -	$ - - -		$ 525 2,425 24,798
	$ 2,950	$ -		$ 27,748
	$ -	$ -		$969,130
	Level 1	Level 2	Level 3 $ - - 21,550 $ 21,550 $590,997	Total
	$ 518 2,979 -	$ - - -		$ 518 2,979 21,550
	$ 3,497	$ -		$ 25,047
	$ -	$ -		$590,997

No transferring between Level 1 and Level 2 for the years ended 2021 and 2020.

• (4) Valuation techniques for measuring fair value

• A. The fair value of financial assets subject to standard terms and conditions and were transacting in active markets was determined after reference of the quoted market price (including stocks and funds of exchange-listed and octlisted companies).

• B. The equity instruments not traded in active market (including not exchangelisted and oct-listed companies) that use market approach or asset-based approach for valuation of fair value estimates the fair value by using the same or comparable price derived from equity instruments traded in an active market, and other relevant information.

• C. Please refer to Note VI(ix) for details of information on the fair value of the Company’s investment property measured at cost.

• (5) Significant unobservable inputs of level 3 within the fair value hierarchy

• The Company’s assets measured at recurring fair value of level 3 within the fair

• value hierarchy, used for significant unobservable inputs measured at fair value are

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as follows:

As of December 31, 2021

As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021
Valuation technique Significant unobservable inputs Quantitative information Relationship between inputs and fair value Sensitivity of the input to fair value
Financial assets:
Financial Assets at Fair Value through Other Market approach Price-book ratio Value multiples (1.54-1.88) Higher the price-book ratio, the higher the fair value estimates. If the price-book ratio has risen (dropped) 10%, the Company’s equity will increase NT$ 2,466 thousand/decrease NT$ 2,466 thousand.
Comprehensive Income - stock Market approach Liquidity discount rate Liquidity discount rate (10.90%- 22.52%) Higher the liquidity discount rate, the lower the fair value estimates. If the liquidity discount rate has risen (dropped) 5%, the Company’s equity will decrease NT$ 1,721 thousand/increase NT$ 1,740 thousand.
	As of December 31, 2020
	Valuation technique Significant unobservable inputs Quantitative information Relationship between inputs and fair value Sensitivity of the input to fair value
Financial assets:
Financial Assets at Fair Value through Other Market approach Price-book ratio Value multiples (1.81-2.21) Higher the price-book ratio, the higher the fair value estimates. If the price-book ratio has risen (dropped) 10%, the Company’s equity will increase NT$ 2,149 thousand/decrease NT$ 2,141 thousand.
Comprehensive Income - stock Market approach Liquidity discount rate Liquidity discount rate (25%-35%) Higher the liquidity discount rate, the lower the fair value estimates. If the liquidity discount rate has risen (dropped) 5%, the Company’s equity will decrease NT$ 1,535 thousand/increase NT$ 1,543 thousand.

3. Financial risk management policy

The Company’s financial risk management's objective is to manage market risk, credit risk, and liquidity risk regarding operating activities. To reduce relevant financial risks, the Company is devoted to identifying, evaluating and circumventing market uncertainties for mitigating the potential negative impacts on the Company’s financial performance due to market movements.

The Company’s significant financial activities are reviewed by the Board of Directors in accordance with relevant regulations and the internal control system. The internal auditors have assisted the Company’s Board by taking the supervisory role, continually engaged in reviewing policy compliance and different risk exposure amounts.

4. Nature and extend of significant financial risks

(1) Market risk

The Company’s market risks refer to the exposure of financial instruments to risks regarding fair value and fluctuation in cash flows incurred from market price changes. Market risks include primarily foreign currency exchange rate

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risk, interest risk, and price risk.

• a. Foreign currency exchange rate risk

The Company focused primarily on domestic sales. Thus, there has no significant risk of changes in the foreign currency exchange rate for the Company.

b. Interest rate risk

The Company’s interest risks arise from short-term loans, long-term loans, short-term notes and bills payable, and bonds payable. Borrowings issued at variable rates expose the Company to cash flow interest rate risk, which is partially offset by cash held at variable rates. Whereas the borrowings issued at fixed rates expose the Company to the risk of fair value interest rate. The Company’s short-term and long-term loans, and shortterm notes and bills payable were debt with floating interest rate. Thus, any changes in the market interest rate would lead to changes in these financial facilities' effective interest rate and caused fluctuation in future cash flows. Whereas the increase of 1% in market interest rate, has increased the Company’s cash outflows to NT$ 73,901 thousand and NT$ 62,577 thousand, respectively, as of December 31, 2021 and 2020.

c. Price risk

The Company holds listed and non-listed equity securities and other investments. The fair value is exposed to risks due to the uncertainty in future value of portfolios and the price fluctuation arising from market price fluctuation.

As of December 31, 2021, and 2020, for listed company stocks of investments by equity instrument measured at fair value through other comprehensive income, its 1% increase / decrease in the price of equity securities affected the Company’s equity amounted to NT$ 30 thousand and NT$ 35 thousand, respectively.

• (2) Credit risk

Credit risk refers to a breach of contractual obligations by the counterparty, which leads the Company to a financial loss risk. The Company’s credit risks are primarily from receivables and other receivables incurred in business activities. Business related credit risk and financial credit risk are managed separately.

a. Business related credit risk

~66~

The Company is primarily engaged in contractor appointment and management to build public housing and commercial buildings for leasing and selling. Thus, the Company’s accounts receivable in the book are basically incurred on purchases of the Company’s products by customers. Most of the Company’s customers obtained loans from banks, although accounts receivable usually incurred due to time differences between the transfer date of funds and the time on approval of its appropriation, the lending bank would write-off soon after funds are allocated; however, if the customer has insufficient funds and needs to apply for installment payment, the Company will determine whether to collect payments in installment under the Agreement, after assessing the customer’s credit quality and ability to repay. Thus the Company is not exposed to significant risk.

b. Financial credit risk

Since the counterparties to the forgoing financial instruments are reputable banks and financial institutions with a stable rating, management believes its exposure to default by counter-party is low.

(3) Liquidity risk

The Company maintains sufficient funding to support operating requirements and ensures compliance to terms and conditions in loan contracts, through the management and monitors its liquidity requirements and use of bank facilities, as operating funds are deemed sufficient to meet the cash flow demand; therefore, liquidity risk is not considered to be significant.

The Company’s investments of stocks of listed companies and funds, recognized as financial assets at FVTOCI and financial assets at FVTPL respectively, have an active market, thus are expected to be sold quickly with the price close to fair value in the market. The Company’s investments of unlisted companies’ stocks, recognized as financial assets at FVTOCI - noncurrent, have no active market and thus are expected to have material liquidity risk.

The table below analyses the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The contractual cash flow amount disclosed in the following table is the undiscounted amount (principal and interest are included).

~67~

As of December 31, 2021: Non-derivative financial liabilities Short-term loans Short-term notes and bills payable Notes payable (including related parties) Accounts payable (including related parties) Other payables (including related parties) lease liabilities Long-termloans(including current portion) Total As of December 31, 2020: Non-derivative financial liabilities Short-term loans Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other payables (including related parties) lease liabilities Long-termloans(including current portion) Total	Within 1 year $ 460,430 40,000 16,164 257,019 115,925 8,673 218,454 $ 1,116,665 Within 1 year $ 202,018 70,000 16,254 215,918 27,725 8,568 2,019,823 $ 2,560,306	1 to 3 years $ － － － － 2,566 17,346 4,827,232 $ 4,847,144 1 to 3 years $ － － － － 28,692 17,136 660,345 $ 706,173	3 years or more $ － － － － － 570,875 2,303,879 $ 2,874,754 3 years or more $ － － － － － 572,537 3,601,440 $ 4,173,977	Total
				$ 460,430 40,000 16,164 257,019 118,491 596,894 7,349,565
				$ 8,838,563
				Total
				$ 202,018 70,000 16,254 215,918 56,417 598,241 6,281,608
				$ 7,440,456

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

(iii) Although the COVID-19 pandemic has a great impact on the global supply chain and

consumer demands, the impact is not as significant on the business operation of the Company, as of the end of the reporting date, since the Company focuses its business on development and construction of the estate, and sales of buildings and land within the domestic market.

(iv) Pending litigation

The Company has been prosecuted by purchaser A of the Company’s Linkou A7 Project in March 2020 and was requested to fix leaks in the purchased house and make further renovation, plus a compensation amounted to NT$ 170 thousand; however, the inspector sent by the Company did not find any leaking from the ceiling of the house, and the warranty of the house was over. The case was already turned downed by the Taiwan Taoyuan District Court Summary Division (Case No. 109 Tao Jian Zi No. 739).

~68~

XIII. Supplementary Disclosures

• (i) Information About Significant Transactions

• Financing provided to others: None.

• Provision of endorsements and guarantees to others: Please refer to Table 1.

• Holding of marketable securities at the end of the period: Please refer to Table 2.

• Aggregate purchases or sales of the same securities reaching NT$300 million or 20% of paid-in capital or more: None.

• Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to Table 3.

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

• Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid in capital or more: Please refer to Table 4.

• Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.

• Derivatives transactions: None.

• (ii) Information on Investees

• Information on significant transactions with the investee that the Company directly or indirectly exercises control over: Please refer to the above mentioned table.

• Information on investee that the Company directly or indirectly exercises significant influence or control over: None.

(iii) Information on Investments in Mainland China

1. The name of the investee in mainland China, the main businesses, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, the amount received as dividends from the investee, and the limitation on investee: None.

2. Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: None.

3. (iv) Information of major shareholders: Please refer to Table 5.

XIV. Segment Information

Please refer to the Consolidated Financial Statements for 2021.

~69~

Advancetek Enterprise Co., Ltd. And Subsidiaries

Provision of endorsements and guarantees to others

December 31, 2021

Table 1

Unit: thousands of NTD

		Party being endorsed	Party being endorsed	Limit on	Maximum	Outstanding	Amount	Amount of	Ratio of	Ceiling on the	Provision of	Provision of	Provision of
		/guaranteed		endorsements/	outstanding	endorsement	actually	endorsements	accumulated	total amount of	endorsements	endorsements	endorsements
		Name of	Relationship	guarantees	endorsement	/guarantee	drawn	/guarantees	endorsement	endorsements	/guarantees by	/guarantees by	/guarantees to the
	Ed	Company	(Note 2)	provided for a	/guarantee amount	amount at	(Note 6)	secured with	/guarantee	/guarantees	the parent	the subsidiary to	party in
	norser /guarantor			single party	as of December 31,	December 31,		collateral	amount to the	provided	company to the	the parent	Mainland China
				(Note 3)	2021	2021			net asset value	(Note 3)	subsidiary	company	(Note 7)
					(Note 4)	(Note 5)			of the endorser		(Note 7)	(Note 7)
Number									/guarantor
(Note 1)									company
		Pao Juan
	Advancetek
		Development
0	Enterprise		7	$ 1,169,299	$ 857,439	$ 516,939	$ 516,939	$ -	8.84%	$ 2,923,249	N	N	N
		Enterprise
	Co., Ltd.
		Co.,Ltd.

Note 1: The Company and its investees are coded as follows:

1. The Company is ‘0’.

2. The investees are numbered in order starting from ‘1’.

3. Note 2: Nature of relation between the endorser /guarantor and the party being endorsed /guaranteed is classified into the following seven categories:

4. Having a business relationship.

5. The endorser /guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed /guaranteed subsidiary.

6. The endorsed /guaranteed company owns directly and indirectly more than 50% voting shares of the endorser /guarantor parent company.

7. The endorser /guarantor parent company owns directly and indirectly more than 90% of voting shares of the endorsed /guaranteed company.

8. Mutual guarantee of the trade made by the endorsed /guaranteed company or joint contractor as required under the construction contract.

9. Due to joint venture, all shareholders provide endorsements /guarantees to the endorsed /guaranteed company in proportion to its ownership.

10. Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

11. Note 3: 1. According to the Company’s procedures for the Management of Endorsements and Guarantees, the amount of endorsements /guarantees provided by the Company for any single entity shall not exceed 20% of the Company’s net worth. The net worth is based on the Company’s latest parent-company-only financial statements.

    1. According to the Company’s procedures for the Management of Endorsements and Guarantees, the aggregate amount of endorsements /guarantees provided by the Company shall not exceed 50% of its net worth. The net worth is based on the Company’s latest parent-company-only financial statements

Note 4: Maximum outstanding endorsement /guarantee amount for the current period.

• Note 5: Shall fill in the amount as approved by the Board of Directors. The Chairman who has been empowered by the Board of Directors for approval under Article 12, paragraph 8 of Regulations Governing Loaning of Funds and Making of Endorsements /guarantees by Public Companies, refers to grant endorsements /guarantees within a specific limit by the Chairman.

• Note 6: The actual amount drawn from the balance of endorsement /guarantee used by the endorser /guarantor shall be filled in.

• Note 7: Column Y shall be filled in if any of the following criteria were met: Provision of endorsements /guarantees by a listed parent company to subsidiary, provision of endorsements /guarantees by subsidiary to listed parent company, and provision of endorsements /guarantees to the party in Mainland China.

~70~

Advancetek Enterprise Co., Ltd. And Subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2021

Table 2

Unit: share/thousands of NTD

Holding Company Name	Type and Name of Marketable Securities	Type and Name of Marketable Securities	Relationship with the Issuer of Marketable Securities	Account item	At end ofperiod	At end ofperiod	At end ofperiod	At end ofperiod	Remark
					Shares/Units	Book value	Ownership held by the Company	Market Price
Advancetek Enterprise Co., Ltd.	Stock Stock Stock Stock	En Tie Commercial Bank Co., Ltd. Taiwan Biotech Co., Ltd. Tah Chung Steel Corporation Asia Pacific Telecom Co., Ltd.	None None None None	Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Total	32,126 930,535 22 294,944	525	－ 0.44 － 0.01	525	Note 2 Note 1 Note 2
						24,798 － 2,425		24,798 － 2,425
						27,223		27,223

Note 1: The stock value is calculated based on the market approach. Please refer to Note XII(ii) for details.

Note 2: Calculated on the basis of the closing price at the end of December 2021.

~71~

Advancetek Enterprise Co., Ltd. And Subsidiaries

Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more

Year ended December 31, 2021

Table 3

Unit: thousands of NTD

Company Name	Types of Property	Transaction Date	Transaction Amount	Payment Term	Counter-parties	Relationship	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Price Reference	Purpose of Acquisition	Other Terms
							Owner	Relationship	Transfer Date	Amount
		Winning bid date December 14, 2020	$,713,880	Fully paid up	Northern Region Branch, National Property Administration, MOF	None	-	-	-	-	Purchase by way of public tender	Buildings for sale
	Royalties for superficies right in
Advancetek
	Taipei Zhongzheng District	Date of contract December 23, 2020
Enterprise													N
	(Inventory - royalties for
Co., Ltd.
	superficies right)	Approved day January 25, 2021
		Winning bid date August 13, 2020	$,595,600	Fully paid up	Miaoli County Government	None	-	-	-	-	Purchase by way of public tender	Buildings for sale
	Lot 2, Weizhen Section,
Advancetek		Date of contract September 18, 2020
	Houlong Town, Miaoli County
Enterprise													N
	(Inventory - Land held for
Co., Ltd.		Date of transfer registration June 21, 2021
	construction site)
		Winning bid date August 13, 2020	$ 153,600	Fully paid up		None	-	-	-	-	Purchase by way of public tender	Buildings for sale
	No. 413, Long Yi Section,
Advancetek		Date of contract September 18, 2020
	Houlong Town, Miaoli County
Enterprise													N
	(Inventory - Land held for
Co., Ltd.		Date of transfer registration August 26,2021
	construction site)

~72~

Advancetek Enterprise Co., Ltd. And Subsidiaries

The amount of purchase and sales with related parties has reached NT$ 100 million or 20% or above the paid-in capital. Year ended December 31, 2021

Table 4

Unit: thousands of NTD

Company Name	Related Party	Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable
			Purchases/Sales	Amount	Percentage of total purchases (sales)	Credit period	Unit Price	Credit period	Ending Balance	Percentage of total Notes/Accounts Payable or Receivable	Remark
The Company	Ansheng Construction Co.,Ltd	Other related parties	Purchase	$ 432,045	11.34%	50% - within 60 days 50%-cash	Denominated according to the contract	Within 30 days or 60 days for common suppliers	$ (61,298)	(22.44%)	Note 1, 2
The Company	Zhongfu Construction Co., Ltd	Other related parties	Purchase	$ 1,791,752	47.02%	50% - within 60 days 50% - cash	Denominated according to the contract	Within 30 days or within 60 days for common suppliers	$(175,889)	(64.39%)	Note 1

Note 1: Please refer to Note VII for status on construction contracts signed by the Company with related parties.

Note 2: The unpaid construction retainage amounted to NT$ 30,933 thousand included in Company’s purchases from related parties, is accounted in other payables - related parties, please refer to Note VII for details.

~73~

Advancetek Enterprise Co., Ltd. And Subsidiaries

Information of major shareholders

December 31, 2021

Table 5

December 31, 2021 able 5
Name of major shareholders	Number of shares held (shares)	Ownership held by the Company
Ming Sheng Investment Co., Ltd. Bai Xiang Investment Co., Ltd Wu, Pao-Tien	33,428,881 32,911,609 21,153,888	9.12% 8.98% 5.77%

• Note 1: The information on major shareholders in this table is based on data of above 5% in total of common stock and preferred stock, that the companies held by shareholders have completed dematerialized registration and delivery (including treasury shares), and is calculated each quarter on the final business day, by the Taiwan Depository & Clearing Corporation. The capital stock reported in the Company’s financial statements and the number of shares that the Company has completed dematerialized registration and delivery, may show discrepancies due to different basis in calculation.

• Note 2: If any of the above mentioned entities has transferred control of shareholdings to a trustee, then disclosure of information regarding the entity will be in the form of the Settlor’s account of trust opened by the trustee. According to the Securities and Exchange Act, the insiders or shareholders, held greater than 10% of shares shall file if any changes in stocks held, which include shareholdings that have been transferred to trustee and trust assets that the shareholder may determine the usage of shares; for filed information of insiders’ shares, please refer to the Market Observation Post System website.

~74~

Advancetek Enterprise Co., Ltd.

The Contents of Statements of Major Accounting Items in the Fiscal Year 2021

Number	Index Note 6(1) Note 6(6) Note 6(8) Note 6(9) Note 6(10) Note 6(13) Note 6(20) Note 6(16) Note 6(15), (17) Note 6(23)~(25)	Item
Statement 1 Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Statement 8 Statement 9 Statement 10 Statement 11 Statement 12 Statement 13 Statement 14 Statement 15 Statement 16 Statement 17 Statement 18 Statement 19 Statement 20 Statement 21		Statement of Cash and Cash Equivalents Current Financial Assets at Fair Value through Other Comprehensive Income Statement of Net Notes Receivable and Account Receivable Statement of Long-term Notes and Accounts Receivable Statement of Inventory Statement of Prepayments Statement of Other Current Financial Assets Statement of Other Current Assets, Others Statement of Current Assets Recognised as Incremental Costs to Obtain Contract with Customers Statement of Non-Current Financial Assets at Fair Value through Other Comprehensive Income Statement of Changes in Property, Plant, and Equipment Statement of Changes in Investment Property Statement of Changes in Intangible Assets Statement of Guarantee Deposits Paid Statement of Short-term Loans Statement of Short-term Notes and Bills Payable Statement of Current Contract Liabilities Statement of Notes Payable Statement of Accounts Payable Statement of Other Payables Statement of Changes in Provision Statement of Lease Liabilities Statement of Advance Receipts Statement of Other Current Liabilities, others Statement of Long-term Loans and Long-term Liabilities Current portion Statement of Guarantee Deposits Received Statement of Operating Revenue Statement of Operating Costs Statement of Selling and Administrative Expenses Non-Operating Income and Expenses Summary Statement of Current Period Employee Benefits, Depreciation, Depletion and Amortization Expenses by Function

~75~

Advancetek Enterprise Co., Ltd.

Current Financial Assets at Fair Value through Other Comprehensive Income

December 31, 2021

Statement 1 Financial instruments Summary Shares/Units Par value Total amount Interest rate En Tie Commercial Bank Stock 32,126 NT$ 17.05 $ 548 -	Acquisition cost	Valuation Adjustment	Expressed in thousands Fair value	Expressed in thousands Fair value	of NTD Remark
			Unit Price	Total amount
	$ 548	( $ 23 )	NT$ 16.35	$ 525

~76~

Advancetek Enterprise Co., Ltd. Statement of Net Notes Receivable and Account Receivable

December 31, 2021

Statement 2		Expressed	in thousands of NTD
Item	Summary		Amount Remark
Notes Receivable, Net
Taichung Zhenxīng 8	Notes of Sales	$	234
Case of Xinzhuang Fuduxin	Notes of Sales		2,969
Taoyuan Kuaiji	Notes of Sales		348
Total amount			3,551
Less: Loss allowance			-
Total		$	3,551
Accounts Receivable, Net
Case of Xinzhuang Fuduxin	Accrued rent receivable	$	107
Xinzhuang Hefeng	Accrued rent receivable		24
Linkou A7	Accrued rent receivable		20
Case of Danhai	Account sales		1,025
Total amount			1,176
Less: Loss allowance		(	114 )
Subtotal			1,062
Add: Current portion of installment account receivable			17,133
Total		$	18,195

~77~

Advancetek Enterprise Co., Ltd.

Statement of Long-term Notes and Accounts Receivable December 31, 2021

Statement 3			Expressed in thousands of NTD	Expressed in thousands of NTD
Item	Summary			Amount Remark
Long-term installment notes receivable
TaichungZhenxing8	Notes of Sales		$	156
Case of Xinzhuang Fuduxin	Notes of Sales			3,622
Taoyuan Kuaiji	Notes of Sales			203
Total			$	3,981
Long-term installment accounts receivable
Jiaoxi Park	Account sales			510
Taoyuan Kuaiji	Account sales			21,382
Total amount				21,892
Less: Unrealized interest income		(		332 )
Current portion of net installment accounts receivable		(		17,133 )
Long-term installment accounts receivable				4,427
Long-term notes and accounts receivable			$	8,408

~78~

Advancetek Enterprise Co., Ltd.

Statement of Inventory December 31, 2021

Statement 4

Expressed in thousands of NTD

				Amount
Item	Summary			Cost	Net	realizable value	Remark
Buildings and land held for sale
Xinzhuang Hefeng			$	13,742	$	17,037
Jiaoxi Park				87,419		123,127
Linkou A7				7,433		8,460
Luodong Gongzheng				325,718		321,794
Taichung 8				104,397		134,143
Taoyuan Kuaiji				80,472		102,856
Case of Xinzhuang Fuduxin				613,619		631,052
Subtotal				1,232,800		1,338,469
Land held for construction site
Land held for development				127,144		165,750
Land for capacity transfer				23,884		24,618
Hsinchu Zhongxing section				1,727,360		1,959,745
Weizhen Section of
Houlong Town, Miaoli				599,398		599,398
Long Chair Section of
Houlong Town, Miaoli				154,910		154,910
Subtotal				2,632,696		2,904,421
Construction in progress
Case of Danhai				5,297,374		5,297,374	Note
Taichung Lianwu section				947,544		947,544	〞
Case A of Taoyuan Sanmin							〞
section				584,027		584,027
Case B of Taoyuan Sanmin							〞
section				455,819		455,819
Kaohsiung fucheng project				836,103		836,103	〞
Subtotal				8,120,867		8,120,867
Royalties for superficies right –
Taipei Zhongzheng District				715,881		718,253
Right-of-use assets- Taipei
Zhongzheng Districtland				182,509		223,199
Subtotal				182,509		223,199
Total inventories				12,884,753	$	13,305,209
Less: Allowance for inventory
valuation losses		(		10,094 )
Net amount of inventories			$	12,874,659

Note: Due to the nature of the construction industry, the market price of construction in progress is specified according to the lesser amount between cost and net realizable value.

~79~

Advancetek Enterprise Co., Ltd.

Statement of Prepayments

December 31, 2021

Statement 5 Item	Expressed in thousands of NTD Summary Amount Remark Prepaid construction permit application fee, architectural design fee, insurance premium, software maintenance fee, etc. $ 26,603 Advertising budget 18,298 133,363 Advance payment for fence construction 4,546 $ 182,810	Expressed in thousands of NTD Summary Amount Remark Prepaid construction permit application fee, architectural design fee, insurance premium, software maintenance fee, etc. $ 26,603 Advertising budget 18,298 133,363 Advance payment for fence construction 4,546 $ 182,810	Expressed in thousands of NTD Summary Amount Remark Prepaid construction permit application fee, architectural design fee, insurance premium, software maintenance fee, etc. $ 26,603 Advertising budget 18,298 133,363 Advance payment for fence construction 4,546 $ 182,810
Prepaid expenses Excess business tax paid Other prepayments Total	Prepaid construction permit application fee, architectural design fee, insurance premium, software maintenance fee, etc. Advertising budget Advance payment for fence construction	$ 26,603 18,298 133,363 4,546
		$ 182,810

~80~

Advancetek Enterprise Co., Ltd.

Statement of Other Current Assets, others

December 31, 2021

Statement 6 Item	Summary	Expressed in thousands of NTD Amount Remark $ 104 1,187 $ 1,291
Temporary debits Payment on behalf of others Total	Building registration fee etc.	$ 104 1,187
		$ 1,291

~81~

Advancetek Enterprise Co., Ltd.

Statement of Current Assets Recognised as Incremental Costs to Obtain Contract with Customers December 31, 2021

Statement 7 Item	Expressed in thousands of NTD Summary Amount Remark Sale service charge $ 35,894
Case of Danhai

~82~

Advancetek Enterprise Co., Ltd.

Statement of Non-Current Financial Assets at Fair Value through Other Comprehensive Income December 31, 2021

Statement 8

Expressed in thousands of NTD

	Opening	balance	balance	Increase in current period	Increase in current period	Increase in current period	Decrease in	current period			Balance at end of period	Balance at end of period
Name	Number of shares		Amount	Number of shares		Amount	Number of shares	Amount		Number shares	of	Ownership held by the Company	Amount		Pledge or collateral	Remark
Asia Pacific Telecom Co., Ltd.	294,944	$	8,271	-	$	-	-	$	-	294,944		0.01%	$	8,271	None
Taiwan Biotech Co., Ltd.	767,452		8,862	163,083		2,446	-		-	930,535		0.44%		11,308	〞	Note 1
Tah Chung Steel Corporation	22		-	-		-	-		-		22	-		-	〞
Total			17,133			2,446			-					19,579
Add: Valuation Adjustment			7,396			248			-					7,644
Net amount		$ 24,529			$	2,694		$	-				$	27,223

Note 1: Taiwan Biotech Co., Ltd. required a capital injection in July 2021. The Company then subscribed 163,083 shares and increased the stock held from 767,452 shares to 930,535 shares.

~83~

Advancetek Enterprise Co., Ltd.

Statement of Guarantee Deposits Paid December 31, 2021

Statement 9 Item	Expressed in thousands of NTD Summary Amount Remark Environment maintenance of construction project and sidewalk maintenance deposit $ 7,920 Deposits for the internet rentals and the water cooler 25 $ 7,945	Expressed in thousands of NTD Summary Amount Remark Environment maintenance of construction project and sidewalk maintenance deposit $ 7,920 Deposits for the internet rentals and the water cooler 25 $ 7,945
Guarantee deposits paid Total	Environment maintenance of construction project and sidewalk maintenance deposit Deposits for the internet rentals and the water cooler	$ 7,920 25
		$ 7,945

~84~

Advancetek Enterprise Co., Ltd. Statement of Short-term Loans

December 31, 2021

Statement 10 Bank	Type	Loan Commitments	Contract period	Expressed in thousands Interest rate Amount Pledge or Collateral Note $ 120,000 Investment Property “ 115,980 Buildings and land held for sale “ 100,000 None “ 120,000 None $ 455,980	Expressed in thousands Interest rate Amount Pledge or Collateral Note $ 120,000 Investment Property “ 115,980 Buildings and land held for sale “ 100,000 None “ 120,000 None $ 455,980	Expressed in thousands Interest rate Amount Pledge or Collateral Note $ 120,000 Investment Property “ 115,980 Buildings and land held for sale “ 100,000 None “ 120,000 None $ 455,980	of NTD Remark
Shanghai Songjiang Mega International Commercial Bank Yilan Shanghai Songjiang Mega International Commercial Bank Total	Secured borrowings Secured borrowings Credit borrowings Credit borrowings	$ 120,000 148,500 100,000 120,000	2021.07.22-2022.05.06 2021.08.30-2022.08.30 2021.05.06-2022.05.06 2021.10.06-2022.10.06	Note “ “ “	$ 120,000 115,980 100,000 120,000	Investment Property Buildings and land held for sale None None
		$ 488,500			$ 455,980

Note: The interest on loans provided by the above mentioned banks ranges from 1.74%~2.49%.

~85~

Advancetek Enterprise Co., Ltd.

Statement of Short-term Notes and Bills Payable

December 31, 2021

Statement 11 Bank	Type	Amount	Contract Period	Expressed in thousands of NTD Interest rate Loan Commitments Pledge or Collateral Remark Note $ 56,900 Buildings and land held for sale	Expressed in thousands of NTD Interest rate Loan Commitments Pledge or Collateral Remark Note $ 56,900 Buildings and land held for sale	Expressed in thousands of NTD Interest rate Loan Commitments Pledge or Collateral Remark Note $ 56,900 Buildings and land held for sale	Expressed in thousands of NTD Interest rate Loan Commitments Pledge or Collateral Remark Note $ 56,900 Buildings and land held for sale
Dah Chung bills Less: Discount Net amount	Secured borrowings	$ 40,000 ( 37 ) $ 39,963	2021.12.22-2022.01.19	Note	$ 56,900	Buildings and land held for sale

Note: The interest rate of the above-mentioned short-term bills issued by the Company is 1.85%.

~86~

Advancetek Enterprise Co., Ltd. Statement of Notes Payable

December 31, 2021

Statement 12 Vendor Name	Expressed in thousands of NTD Summary Amount Remark Sale service charge $ 2,044 Sale service charge 2,909 Sale service charge 6,649 Sale service charge 1,220 Interest on bank borrowings 2,200 (individual amount not reaching 5%) 1,142 $ 16,164	Expressed in thousands of NTD Summary Amount Remark Sale service charge $ 2,044 Sale service charge 2,909 Sale service charge 6,649 Sale service charge 1,220 Interest on bank borrowings 2,200 (individual amount not reaching 5%) 1,142 $ 16,164	Expressed in thousands of NTD Summary Amount Remark Sale service charge $ 2,044 Sale service charge 2,909 Sale service charge 6,649 Sale service charge 1,220 Interest on bank borrowings 2,200 (individual amount not reaching 5%) 1,142 $ 16,164
Tan Mei Advertising and Marketing Hsin Li Tien Advertising and Marketing Bao Ying Advertising and Marketing Jia Gui Lin Advertising and Marketing Mega International Commercial Bank Others Total	Sale service charge Sale service charge Sale service charge Sale service charge Interest on bank borrowings (individual amount not reaching 5%)	$ 2,044 2,909 6,649 1,220 2,200 1,142
		$ 16,164

~87~

Advancetek Enterprise Co., Ltd. Statement of Accounts Payable

December 31, 2021

Statement 13 Customer Name	Expressed in thousands of NTD Summary Amount Remark Decoration payment $ 1,381 (individual amount not reaching 5%) 14,218 $ 15,599 Construction work payment $ 61,298 Construction work payment 175,889 Construction and Fence work payment 4,233 $ 241,420	Expressed in thousands of NTD Summary Amount Remark Decoration payment $ 1,381 (individual amount not reaching 5%) 14,218 $ 15,599 Construction work payment $ 61,298 Construction work payment 175,889 Construction and Fence work payment 4,233 $ 241,420
Not a related party Mingcheng Design Others Total Related parties Ansheng Construction Co., Ltd Zhongfu Construction Co., Ltd Baoshi Construction Co., Ltd. Total	Decoration payment (individual amount not reaching 5%) Construction work payment Construction work payment Construction and Fence work payment	$ 1,381 14,218
		$ 15,599
		$ 61,298 175,889 4,233
		$ 241,420

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Advancetek Enterprise Co., Ltd. Statement of Other Payables

December 31, 2021

Statement 14 Item	Expressed in thousands of NTD Summary Amount Remark $ 2,167 Interest on bank borrowings 4,964 Accrued employee compensation of the year 2021 5,299 Accrued directors’ remunerations of the year 2021 5,299 Sale service charge 49,482 Construction Retainage 1,284 (individual amount not reaching 5%) 19,043 $ 87,538 Construction Retainage $ 30,933 20 $ 30,953	Expressed in thousands of NTD Summary Amount Remark $ 2,167 Interest on bank borrowings 4,964 Accrued employee compensation of the year 2021 5,299 Accrued directors’ remunerations of the year 2021 5,299 Sale service charge 49,482 Construction Retainage 1,284 (individual amount not reaching 5%) 19,043 $ 87,538 Construction Retainage $ 30,933 20 $ 30,953	Expressed in thousands of NTD Summary Amount Remark $ 2,167 Interest on bank borrowings 4,964 Accrued employee compensation of the year 2021 5,299 Accrued directors’ remunerations of the year 2021 5,299 Sale service charge 49,482 Construction Retainage 1,284 (individual amount not reaching 5%) 19,043 $ 87,538 Construction Retainage $ 30,933 20 $ 30,953
Not a related party Salary and wages payable Interest payable Employees’ payroll and bonus payable Directors’ remuneration payable Selling expenses payable Construction retainage payable Others Total Related parties Ansheng Construction Co., Ltd Pao Juan Development Enterprise Co., Ltd. Total	Interest on bank borrowings Accrued employee compensation of the year 2021 Accrued directors’ remunerations of the year 2021 Sale service charge Construction Retainage (individual amount not reaching 5%) Construction Retainage	$ 2,167 4,964 5,299 5,299 49,482 1,284 19,043
		$ 87,538
		$ 30,933 20
		$ 30,953

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Advancetek Enterprise Co., Ltd. Statement of Advance Receipts December 31, 2021

Statement 15 Item	Summary	Expressed in thousands of NTD Amount Remark $ 75
Advance receipts	Rent is collected in advance	$ 75

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Advancetek Enterprise Co., Ltd.

Statement of Other Current Liabilities, others

December 31, 2021

Statement 16 Item	Expressed in thousands of NTD Summary Amount Remark Temporary receipts of a related tax of transfer $ 1,120 Scrivener fee, and processing fee and the withholding income tax etc. 865 $ 1,985	Expressed in thousands of NTD Summary Amount Remark Temporary receipts of a related tax of transfer $ 1,120 Scrivener fee, and processing fee and the withholding income tax etc. 865 $ 1,985	Expressed in thousands of NTD Summary Amount Remark Temporary receipts of a related tax of transfer $ 1,120 Scrivener fee, and processing fee and the withholding income tax etc. 865 $ 1,985
Temporary credits Receipts under custody Total	Temporary receipts of a related tax of transfer Scrivener fee, and processing fee and the withholding income tax etc.	$ 1,120 865
		$ 1,985

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Advancetek Enterprise Co., Ltd.

Statement of Guarantee Deposits Received

December 31, 2021

Statement 17 Item	Expressed in thousands of NTD Summary Amount Remark Lease deposit of lease out assets $ 1,775	Expressed in thousands of NTD Summary Amount Remark Lease deposit of lease out assets $ 1,775
Guarantee deposits received	Lease deposit of lease out assets	$ 1,775

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Advancetek Enterprise Co., Ltd. Statement of Operating Revenue Year ended December 31, 2021

Statement 18 Item	Summary	Expressed in thousands of NTD Amount Remark $ 1,522,278 1,920,496 ( 3,274 ) $ 3,439,500 10,730 ( 95 ) 10.635 $ 3,450,135	Expressed in thousands of NTD Amount Remark $ 1,522,278 1,920,496 ( 3,274 ) $ 3,439,500 10,730 ( 95 ) 10.635 $ 3,450,135	Expressed in thousands of NTD Amount Remark $ 1,522,278 1,920,496 ( 3,274 ) $ 3,439,500 10,730 ( 95 ) 10.635 $ 3,450,135
Buildings for sale Land revenue Buildings revenue Less: sales returns and discount Rental revenue Less: sales returns and discount Total		$ 1,522,278 1,920,496 ( 3,274 ) 10,730 ( 95 )	$ 3,439,500 10.635 $ 3,450,135

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Advancetek Enterprise Co., Ltd. Statement of Operating Costs Year ended December 31, 2021

Statement 19 Item	Summary		Expressed Amount	in thousands of NTD Remark Total $ 6,205 2,623,855 2,630,060 3,924 $ 2,633,984	in thousands of NTD Remark Total $ 6,205 2,623,855 2,630,060 3,924 $ 2,633,984
		Land	Buildings	Total
Cost of rental sales - depreciation Cost of construction sales Subtotal Other operating cost Total	Buildings and land sales Inventory valuation losses	$ 813,583	$ 1,810,272	$ 6,205 2,623,855
				2,630,060 3,924
				$ 2,633,984

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Advancetek Enterprise Co., Ltd. Statement of Selling and Administrative Expenses

December 31, 2021

Statement 20 Item	Selling expense	Selling expense	Selling expense
	$ - 353 - - - 7 - 295 16 - - - - - - - - - 184,655 - 253	$ 45,728 318 138 1,122 22 279 431 105 1,475 3,316 5,697 1,280 35,158 104 705 296 1,026 1,947 - 79 20,801	$ 45,728 671 138 1,122 22 286 431 400 1,491 3,316 5,697 1,280 35,158 104 705 296 1,026 1,947 184,655 79 21,054

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Advancetek Enterprise Co., Ltd.

Summary Statement of Current Period Employee Benefits, Depreciation, Depletion and Amortization Expenses by Function

Year ended December 31, 2021

Statement 21

Expressed in thousands of NTD

Function Nature	Function Nature		2021			2020
		Classified as operatingcost	Classified as operatingexpenses	Total	Classified as operatingcost	Classified as operatingexpenses	Total
Employee benefit expense		-	52,039	52,039	-	43,141	43,141
	Wages and salaries	-	36,776	36,776	-	32,776	32,776
	Labor and health insurance fees	-	2,814	2,814	-	2,645	2,645
	Pension costs	-	1,433	1,433	-	1,482	1,482
	Remuneration of Directors	-	7,519	7,519	-	2,934	2,934
	Other employee benefit expense	-	3,497	3,497	-	3,304	3,304
Depreciation expense		6,205	705	6,910	4,618	616	5,234
Amortization Expenses		-	296	296	-	286	286
Number of employees		-	42	42	-	42	42

Note:

1. The employees of the Company were both 42 for the years ended 2021 and 2020, both number of directors who have not served as employees were 6.

2. The company has disclosed the following information according to the above table:

3. (1) The average employee benefits expense of current period is NT$ 1,237 thousand (which is calculated as (total amount of current employee benefits expense - total amount of directors’ remuneration) / (number of employee or current period - number of directors who have not serve as an employee)).

4. The average employee benefits expense of the previous year was NT$ 1,117 thousand (which was calculated as (total employee benefits expense of the previous year - total directors’ remuneration) / (number of employees of the previous year - number of directors who have not served as employees)).

5. (2) The average employee’s wages and salaries of the current period is NT$ 1,022 thousand (which is calculated as the total amount of current employee’s wages and salaries / (number of employees of current period - number of directors who have not serve as employees)).

The average employee’s wages and salaries of the previous year was NT$ 910 thousand (which was calculated as the total amount of employee’s wages and salaries of the previous year / (number of employees of the previous year - number of directors who have not served as employees)).

• (3) The range of adjustment in average employees’ wages and salaries is 12.31% (which is calculated as (current average employees’ wages and salaries - average employees’ wages and salaries of the previous year) / average employees’ wages and salaries of the previous year).

• (4) The supervisors’ remuneration of current period is NT$ 0 thousand, whereas the remuneration of the previous year was NT$ 0 thousand.( Notes 3)

• (5) The Company's policy of salary and wages, and remuneration (including directors, managers, and employees).

• A. Policy of directors’ salary and wages, and remuneration:

Compensation to directors is calculated based on their respective involvement in the Company’s operations, their contribution to the Company and industry practice in the R.O.C.. If the Company has profits, shall set aside no more than 2% as compensation to directors, but if the Company still has losses, an amount shall be reserved to make up for the losses. The remunerations for directors are to be paid in cash only.

• B. Policy of managers’ salary and wages:

The total compensation paid to managers includes salary, bonus, and employee’s compensation, which is calculated based on industry practice in the R.O.C., their respective involvement in the Company’s operations, job responsibility, achievement to objectives, performances in other posts, and compensation to the equivalent ranks within the Company in recent years.

• C. Policy of employees’ salary and remuneration:

• (1) Employees’ compensation of remuneration package includes primarily basic salary, meal allowance, Extraneous Duties Allowance (EDA), and bonus, etc..

• (2) Salaries are paid in line with the standard set in accordance with the Company’s operating performance and organization, with regard to staff’s education and experience, knowledge and expertise, and length of service in the Company; necessary

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adjustment would also be carried out in line with wage system in the current market, changes in industry prospect and economy as a whole, and government regulation as stipulated.

• (3) Bonus is paid on the basis of the Company’s operating performance and individual staff’s performance.

• (4) The initial emolument of the employee without previous experience is in compliance with regulation as stipulated by the government.

• (5) If the Company has profits in the year, shall set aside no less than 1% as compensation to employees; employee compensation is mainly in the form of stocks or cash. The recipients shall include the employees of subsidiaries who meet certain criteria.

• The Company has established the Audit Committee; therefore, there is no remuneration for supervisors.

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