APEX — Annual Report 2021

Nov 12, 2021

APEX SCIENCE & ENGINEERING CORP. and subsidiaries

Consolidated Financial Report and Independent Auditors' Report

For the Years Ended December 31, 2021 and 2020

(Stock Code: 3052)

Company address: F4, No.112, Xinmin St., Zhonghe Dist., New Taipei City Tel: (02) 2223-4099

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APEX SCIENCE & ENGINEERING CORP. and subsidiaries

Consolidated Financial Report and Independent Auditors' Report For the Years Ended December 31, 2021 and 2020

Table of Contents

Item

Page

I. Cover II. Contents III. Statements IV. Independent Auditors' Report V. Consolidated balance sheets VI. Consolidated statements of comprehensive income VII. Consolidated statements of changes in equity VIII. Consolidated statements of cash flows IX. Notes to Consolidated Financial Report 1. Company development and business scope 2. Approval date and procedure of financial statements 3. Application of newly promulgated and revised criteria and interpretation 4. Summary description of crucial accounting policy 5. Main source of major accounting judgment, estimate and assumption uncertainty 6. Description of important accounting items 7. Transactions of interested parties 8. Assets in pledge 9. Key contingent liabilities and unrecognized contract promises 10. Major disaster loss 11. Major subsequent events 12. Others 13. Disclosure of notes 14. Department information

1 2 3 4 10 12 13 14 16 16 16-17 18-29 29 30-56 56 57 57-58 58 58 58 67 67-69

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APEX SCIENCE & ENGINEERING CORP.

Declaration of associated enterprises on consolidated financial statement

For the year 2021 (from January 1, 2021, to December 31, 2021), the Company should be included in the companies that should prepare associated enterprises’ consolidated financial statements in accordance with Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises. The Company is the same to the companies preparing parent-subsidiary companies’ consolidated financial statements according to International Financial Reporting Standard 10. However, the information that should be disclosed in associated enterprises’ consolidated financial statements has been disclosed in parent-subsidiary companies’ consolidated financial statements. So, there is no needed to prepare associated enterprises’ consolidated financial statements separately.

It is hereby to declare

Company name: APEX SCIENCE & ENGINEERING CORP.

Principal: KUO,KUO-HUA

March 24, 2022

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Independent Auditors’ Report

To the Board of Directors and Shareholders of Apex Science & Engineering Corp.:

Audit opinions

The Consolidated Balance Sheet of Apex Science & Engineering Corp. and its subsidiares (hereinafter referred to as “Apex Group”) as of December 31, 2021 and 2020, the Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, Consolidated Statements of Cash Flow, as well as the Notes to the Consolidated Financial Statements of Apex Group for the financial year ended December 31, 2021 and 2020.

In our opinion, the aforementioned Consolidated Financial Statements present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2021 and December 31, 2020, and their consolidated financial performance and cash flows for the years ended December 31, 2021 and December 31, 2020, in conformity with the requirements of the Regulations governing the preparation of financial reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee, or the former Standing Interpretations Committee as endorsed and became effective by Financial Supervisory Commission of the Republic of China.

Basis for audit opinions

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Auditing Standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of Apex Group in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of the rest of our auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2021 Consolidated Financial Statements. These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters of 2021 Consolidated Financial Statements of Apex Group are as follows:

Recognition of Construction Revenue

Explanatory notes for the matter

The accounting policies, accounting estimates and relevant subjects related to recognition of construction revenue are detailed on Notes 4(z), 5(b) and 6(u) to the Consolidated Financial Statements.

The principal business of Apex Group consists of construction and engineering related works and services, revenue is recorded in accordance with the percentage of completion per contractual terms during the period of engineering contract. Percentage of completion for each project is determined by

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calculating a ratio of the costs incurred for the contract to-date until the end of the reporting period as a proportion of the total estimated cost of the contract; the estimated total cost is based on the plan of project owner, taking into account additional work or reduced work owing to a change in the project scope, with consideration to the fluctuation in market environment, and forecasted costs regarding labour, materials and various construction costs. Because the estimate of total cost will affect the percentage of completion and recognition of construction revenue, while the items in the estimated total cost are complex, frequently involving subjective judgment and with high uncertainties, as independent auditors we regard recognition of construction revenue as a key audit matter.

Corresponding audit procedures

As independent auditors we have conducted the audit procedures with regard to specific aspects of the key audit matters as described above, as follows:

1. The policies and procedures employed to recognize construction revenue were examined and appraised as to their reasonableness.

2. We collected newly added construction contracts, confirmed the total price used to calculate the construction revenue is in line with the agreement in the contract, selected on sample basis preliminary project budgets which were approved by the Project Management Department, verified whether the estimated total cost is consistent with the basis used to calculate the percentage of completion.

3. We validated significant addition or reduction to construction during the period against corresponding supporting documents, and ensured the changes in total estimated cost is appropriately recognized.

4. With details of construction cost incurred, we vouched sampled cost items recorded in the accounts against related supporting documents, to ensure cost incurred to date used to calculated the percentage of completion is appropriate.

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Other Matters – Parent Company Only Reports

The Parent Company Only Financial Statements of Apex Science & Engineering Corp. for Year 2021 and Year 2020 have been prepared, duly audited by the CPAs with a clean Audit Report with unqualified opinion issued for reference.

Responsibility of the Management and the Governing body for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the Regulations governing the preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China, and for such Internal Controls as Management determines are necessary to enable the preparation of Consolidated Financial Statements that are free from material misstatement, whether due to fraud or error.

In preparing the Consolidated Financial Statements, Management is responsible for assessing the ability to continue as a going concern of Apex Group, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company and its Subsidiaries or to cease operations, or has no realistic alternative but to do so.

The Governing Bodies of Apex Group (including the Audit Committee) have the responsibility to oversee the financial reporting process.

Responsibilities of the CPAs in Auditing the Consolidated Financial Statements

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

As part of an audit in accordance with Auditing Standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also conduct the following work:

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

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

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

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and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of Apex Group. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor’s Report to the related disclosures in the Consolidated Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditor’s Report. However, future events or conditions may cause Apex Group to cease to continue as a going concern.

1. Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the accompanying Notes, and whether the Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

2. Obtain sufficient appropriate audit evidence regarding the financial information of individual entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We as independent auditors are responsible for the guidance, supervision, and implementation of the Group’s audit and responsible for forming audit opinions on the Group.

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

We also provide those entrusted with governance duties 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.

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From the matters communicated with those entrusted with governance duties, we determine those matters that were of most significance in the audit of 2021 Consolidated Financial Statements of Apex Group and are therefore the key audit matters. We describe these matters in our Auditor’s Report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

PricewaterhouseCoopers Taiwan Liao Fu-Ming CPA Chen Ching-Chang Finance Supervisory Commission Approval document No.: Jin Guang Zheng Shen No. 1090350620 Jin Guang Zheng Shen No. 1060025060 March 24, 2022

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Apex Science & Engineering Corp. and its subsidiaries Consolidated Balance Sheets

December 31, 2020 and 2021

Unit: NT$1,000

Assets	Notes 6(a) 6(u) 6(b) 7 6(b) 6(c) and 8 6(d) and 8 6(e) 6(f) and 8 6(g) 6(h) 6(i) and 8 6(j) and 8 6(bb) 8	December 31, 2021 Amount % $ 297,603 4 336,046 4 3,508 - 23,982 - 243,616 3 3,383,436 41 583,350 7 700,945 9 1,922,657 24 7,495,143 92 7,328 - 189,301 2 115,495 2 11,380 - 65,259 1 113,400 1 168,352 2 670,515 8 $ 8,165,658 100	December 31, 2020	December 31, 2020
		Amount $ 297,603 336,046 3,508 23,982 243,616 3,383,436 583,350 700,945 1,922,657 7,495,143 7,328 189,301 115,495 11,380 65,259 113,400 168,352 670,515 $ 8,165,658	Amount $ 209,217 421,497 1,578 - 517,658 3,042,963 879,570 108,012 1,858,425 7,038,920 6,684 180,021 117,701 6,224 65,670 125,121 15,941 517,362 $ 7,556,282	%
Current assets 1100 Cash and cash equivalents 1140 Contract Assets - current 1150 Notes receivable, net 1160 Notes receivable – related parties, net 1170 Accounts receivable, net 1200 Other receivables 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income – non-current 1550 Investments accounted for using the equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment properties, net 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				3 5 - - 7 40 12 1 25
				93
				- 2 2 - 1 2 -
				7
				100

(To be continued on the next page)

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Apex Science & Engineering Corp. and its subsidiaries Consolidated Balance Sheets

December 31, 2020 and 2021

Unit: NT$1,000

. Liabilities and equity

December 31, 2021 December 31, 2020 Notes Amount % Amount % 6(k) $ 363,026 4 $ 1,041,271 14 6(l) 140,000 2 105,000 1 6(u) 141,821 2 175,562 2 16,402 - 3,179 - 6(m) 384,633 5 496,067 7 69,654 1 83,874 1 1,840 - 2,255 - 5,935 - 1,578 - 6(o)(p) 1,772,306 22 1,332,504 18 6(n) 1,648,617 20 1,127,501 15 4,544,234 56 4,368,791 58 6(o) 497,081 6 - - 6(p) 7,569 - 26,111 - 6(bb) 25,353 - 14,916 - 5,165 - 4,477 - 1,926 - 895 - 537,094 6 46,399 - 5,081,328 62 4,415,190 58 6(r) 2,287,135 28 2,287,135 30 6(s) 269,332 3 249,009 3 6(t) 279,960 4 248,440 4 22,686 - 25,337 1 441,778 5 548,857 7 ( 23,118 ) - ( 22,686 ) - 6(r) and 8 ( 281,967 )( 3)( 281,967) ( 4) 2,995,806 37 3,054,125 41 4(c) and 6(dd) 88,524 1 86,967 1 3,084,330 38 3,141,092 42 9 11 $ 8,165,658 100 $ 7,556,282 100

Current liabilities 2100 Short-term loans 2110 Short-term bills payable 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current tax liabilities 2280 Lease liabilities - current 2320 Long-term liabilities due within one year or one business cycle 2399 Other current liabilities - other 21XX Total current liabilities Non-current liabilities 2530 Bonds payable 2540 Long-term loans 2570 Deferred tax liabilities 2580 Lease liabilities - non-current 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to shareholders of parent company Share capital 3110 Ordinary share capital Capital surplus 3200 Capital surplus Retained earnings 3310 Legal capital reserve 3320 Special reserve 3350 Unappropriated earnings Other equity 3400 Other equity 3500 Treasury stock 31XX Total equity attributable to shareholders of parent company 36XXNon-controlling interests 3XXX Total equity Significant contingent liabilities and outstanding contractual commitments Significant subsequent events 3X2X Total liabilities and equity

The accompanying notes form an integral part of these consolidated financial statements, please refer to it together.

President: KUO,KUO-HUA

Manager: KUO,KUO-HUA

Accounting Manager: WU,HSIULIN

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Apex Science & Engineering Corp. and its subsidiaries Consolidated statements of comprehensive income For the Years Ended December 31, 2021 and 2020

Unit: NT$1,000 (Except earnings per share: NT$)

Item

2021 2020 Notes Amount % Amount % 6(u) and 7 $ 3,614,744 100 $ 5,217,591 100 6(d)(z)(aa) ( 3,409,834) ( 94) ( 4,732,188) ( 90) 204,910 6 485,403 10 6(z)(aa) ( 36,980 ) ( 1 ) ( 76,032 ) ( 2) ( 98,042 ) ( 3 ) ( 118,324 ) ( 2) ( 1,831 ) - ( 2,622 ) - 12(b) ( 97) - ( 2,099) - ( 136,950) ( 4) ( 199,077) ( 4) 67,960 2 286,326 6 6(v) 61,330 2 11,841 - 6(w) 8,125 - 8,532 - 6(x) ( 7,484 ) - 3,146 - 6(y) ( 21,661 ) ( 1 ) ( 25,733 ) - 6(h) 30,878 1 24,216 - 71,188 2 22,002 - 139,148 4 308,328 6 6(bb) ( 33,141) ( 1) 14,127 - $ 106,007 3 $ 322,455 6

4000 Operating income 5000 Operating costs 5900 Gross Profit Operating expenses 6100 Selling and marketing expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment losses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit or loss of associates & joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900Net profit before tax 7950 Income tax (expenses) gains 8200Current net profit

(To be continued on the next page)

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Apex Science & Engineering Corp. and its subsidiaries Consolidated statements of comprehensive income For the Years Ended December 31, 2021 and 2020

Unit: NT$1,000 (Except earnings per share: NT$)

Item	Notes 6(g) 6(cc) 6(cc)	2021	% - - - 3 3 - 3 3 - 3 0.52 0.51	2020
		Amount $ 644 ( 1,076) ($ 432) $ 105,575 $ 102,741 3,266 $ 106,007 $ 102,309 3,266 $ 105,575 $		Amount $ 1,581 2,931 $ 4,512 $ 326,967 $ 315,653 6,802 $ 322,455 $ 320,165 6,802 $ 326,967 $	%
Other comprehensive income Items that will not be reclassified subsequently to profit or loss 8316 Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translating the financial statements of foreign operations 8300Other comprehensive income (net) 8500Total comprehensive income Net profit attributable to: 8610 Shareholders of parent company 8620 Non-controlling interests Total comprehensive income attributable to: 8710 Shareholders of parent company 8720 Non-controlling interests Basic earnings per share 9750 Basic earnings per share Diluted earnings per share 9850 Diluted earnings per share					- -
					-
					6
					6 -
					6
					6 -
					6
					1.59
		$		$	1.57

The accompanying notes form an integral part of these consolidated financial statements, please refer to it together.

President: KUO,KUO-HUA Manager: KUO,KUO-HUA

Accounting Manager: WU,HSIULIN

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Apex Science & Engineering Corp. and Its subsidiaries Consolidated statements of changes in equity

For the Years Ended December 31, 2021 and 2020

Unit: NT$1,000

2020 Balance as of January 1, 2020 Consolidated net profit for the period Other comprehensive income for the period Total comprehensive income for the period Allocation and distribution of earnings in 2019: Provision for legal reserve Provision of special reserve Cash dividends Number of cash dividends on the Company’s shares held by its subsidiary as treasury stocks Difference between the actual price and carrying amount of acquisition of subsidiary's equity Changes in percentage of ownership interests in subsidiaries Purchased treasury stock Disposal of equity instruments at fair value through other comprehensive income Decrease in non-controlling interests Balance as of December 31, 2020 2021 Balance as of January 1, 2021 Consolidated net profit for the period Other comprehensive income for the period Total comprehensive income for the period Allocation and distribution of surplus in 2020: Provision for legal reserve Reversal of special reserve Cash dividends Number of cash dividends on the Company’s shares held by its subsidiary as treasury stocks Changes in percentage of ownership interests in subsidiaries Decrease in non-controlling interests Balance as of December 31, 2021	Notes 6(t) 6(dd) 6(r) 6(g) 6(t)						Equity attributable to shareholders of	Equity attributable to shareholders of	parent company
			Ordinary share capital	Capital surplus			Retained earnings		Other	equity	Treasury stock		Total
					Legal capital reserve		Special reserve	Unappropriated earnings	Exchange differences on translating the financial statements of foreign operations	Unrealized gains/losses on financial assets at fair value through comprehensive income
			$ 2,287,135 - - - - - - - - - - - - $ 2,287,135 $ 2,287,135 - - - - - - - - - $ 2,287,135			$ 230,896 - - - 17,544 - - - - - - - - $ 248,440 $ 248,440 - - - 31,520 - - - - - $ 279,960

The accompanying notes form an integral part of these consolidated financial statements, please refer to it together.

President: KUO,KUO-HUA

Manager: KUO,KUO-HUA

Accounting Manager: WU,HSIU-LIN

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Unit: NT$1,000

Apex Science & Engineering Corp. and Its subsidiaries Consolidated statements of cash flows For the Years Ended December 31, 2021 and 2020

Cash flows from operating activities Net income before tax for the period Adjustments for Losses of income and expenses Depreciation expense (including investment properties) Depreciation expenses of right-of- use assets Amortization expenses Amortization expenses of right-of- use assetes Interest income Conversion of deferred sales expense into commission fee Expected credit impairment losses Loss on disposal of property, plant and equipment Interest expenses Share of profits of affiliates and joint ventures recognized by using the equity method Gains on disposal of investments Changes in assets/liabilities relating to operating activities Net changes in assets relating to operating activities Contract assets Notes receivable Notes receivable – related parties, net Accounts receivable Other receivables Inventories Prepayments Other current assets Net changes in liabilities relating to operating activities Contract liabilities Notes payable Accounts payable Other payables Other current liabilities Other non-current liabilities Cash generated from operations Cash collected from interest income Cash paid for interest expenses Income tax paid for the period Net cash generated from operating activities	Notes 6(z) 6(z) 6(z) 6(z) 6(v) ( 12(b) 6(y) 6(h) ( 6(x) ( ( ( ( ( ( ( ( (	January 1 to December 31, 2021 $ 139,148 3,660 4,850 1,393 139 61,330 ) ( 10 97 173 21,661 30,878 ) ( - ( 85,451 1,930 ) 23,982 ) 273,945 ( 795,068 ) ( 296,220 592,933 ) 346,779 ( 33,741 ) ( 13,223 ( 111,434 ) 14,930 ) 1,014,913 1,031 536,467 40,774 20,951 ) ( 11,398 ) ( 544,892	January 1 to December 31, 2020 $ 308,328 4,170 950 1,713 70 11,841 ) 28,016 2,099 - 25,733 24,216 ) 5,477 ) 88,358 2,884 - 112,077 ) 1,137,188 ) 1,630,900 361,436 54,556 ) 407,083 ) 18,696 ) 50,629 6,516 71,461 263 812,392 1,125 23,774 ) 5,170 ) 784,573

(To be continued on the next page)

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Cash flows from investing activities Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in restricted assets Increase in other non-current assets Proceeds from disposal of financial assets at fair value through other comprehensive income Net cash used in investing activities Cash flows from financing activities Proceeds from short-term loans Repayment of short-term loans Increase (decrease) in short-term notes payable Proceeds from long-term loans Repayment of long-term loans Issuance of corporate bonds Repayment of corporate bonds Repayment of the principal portion of lease liabilities Distribution of cash dividends Capital reserve transferred from overdue dividends Treasury stock repurchase Changes in non-controlling interests Net cash generated from (used in) financing activities Impact of exchange rate Increase in cash and cash equivalents for the period Balance of cash and cash equivalents at beginning of the period Balance of cash and cash equivalents at end of the period	Notes 6(i) ( ( ( ( ( 6(ee) ( 6(o) 6(o) ( ( ( ( 6(r) (	January 1 to December 31, 2021 $ 1,683 ) ( 467 562,747 ) ( 2,078 ) ( - 566,041 ) ( 5,489,191 6,167,436 ) ( 35,000 ( 1,765,880 845,663 ) ( 500,000 500,000 ) 5,100 ) ( 160,581 ) ( 47 ) - ( 1,709 ) ( 109,535 ( - ( 88,386 209,217 $ 297,603	January 1 to December 31, 2020 $ 1,626 ) - 26,378 ) 5,999 ) 5,264 28,739 ) 4,472,743 4,510,433 ) 1,281,400 ) 823,180 45,522 ) - - 1,189 ) 102,165 ) 47 26,130 ) 35,063 ) 705,932 ) 14 ) 49,888 159,329 $ 209,217

The accompanying notes form an integral part of these consolidated financial statements, please refer to it together.

President: KUO,KUO-HUA

Manager: KUO,KUO-HUA

Accounting Manager: WU,HSIULIN

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APEX SCIENCE & ENGINEERING CORP. and subsidiaries

Notes to Consolidated Financial Report

For the Years ended December 31, 2021 and 2020

Unit: NT$1,000

(Unless otherwise noted)

1. Company development and business scope

APEX SCIENCE & ENGINEERING CORP. (hereinafter referred to as the "Company") was founded on August 9, 1976. Its original name was "APEX ENGINEERING CORP.", which changed to APEX SCIENCE & ENGINEERING CORP. in Year 2001. The Company and subsidiaries (generally called the "Group") work for projects in mechanical engineering, instrument engineering, environment engineering, related electrical products manufacturing and sales, entrusted construction of factories, residential and commercial building, etc. The Company's shares started for sale on Taiwan Stock Exchange Corporation from November. 1995.

2. Approval date and procedure of financial statements

The consolidated financial report was approved by the Board of Directors on March 24, 2022.

3. Application of newly promulgated and revised criteria and interpretation

a. Already adopted newly promulgated and revised International Financial Reporting Standards recognized by Financial Supervisory Commission (FSC)

The following table collects standards and interpretations that have been promulgated newly, amended and revised in International Financial Reporting Standards effective in year 2021 recognized by FSC:

Newly promulgated/amended/revised standards and Effective date of issuance interpretations IASB Amendment to IFRS 4, “Extension of the Temporary Exemption January 1, 2021 From Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 January 1, 2021 “Interest Rate Benchmark Reform – Phase 2”

“Amendment to IFRS 16 COVID-19-Related Rent

Concessions beyond 30 June 2021” Note: the FSC allows it to April 1, 2021 (note) apply in advance on January 1, 2021

Upon appraisal by the Group, the standards and interpretations do not have significant impacts on the Group's financial situation or financial performance.

• b. Have not adopted the impacts of newly promulgated International Financial Reporting Standards (and amendments) recognized by FSC

The following table collects standards and interpretations that have been promulgated newly, amended and revised in International Financial Reporting Standards effective in year 2022

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recognized by FSC:

Newly promulgated/amended/revised standards and interpretations	Effective date of issuanceby IASB
Amendment to IFRS 3 “Reference to the Conceptual Framework” Amendment to IAS 16 “Property, Plant and Equipment: Proceeds before Intended Use” Amendment to IFRS 37 “Onerous Contracts — Cost of Fulfilling a Contract” Annual Improvements to IFRS Standards 2018-2020	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

Upon appraisal by the Group, the standards and interpretations do not have significant impacts on the Group's financial situation or financial performance.

c. International Accounting Standards Board has promulgated the impacts of International Financial Reporting Standards, which hasn't been recognized by FSC

The following table collects standards and interpretations that have been promulgated newly, amended and revised in International Financial Reporting Standards recognized by FSC:

Newly promulgated/amended/revised standards and	Effective date of
interpretations	issuance by IASB
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of	To be determined by
Assets between an Investor and its Associate or Joint Venture”	IASB
IFRS 17 “Insurance Contracts”	January 1, 2023
Amendment toIFRS 17 “Insurance Contracts”	January 1, 2023
Amendment to IFRS 17, “Initial Application of IFRS 17 and IFRS 9―Comparative Information”	January 1, 2023
Amendment to IAS 1, “Classification of Liabilities as Current or Non-current”	January 1, 2023
Amendment to IAS 1, “Disclosure of Accounting Policies”	January 1, 2023
Amendment to IAS 8, “Definition of Accounting Estimates”	January 1, 2023
Amendment to IAS 12, “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	January 1, 2023

Upon appraisal by the Group, the standards and interpretations do not have significant impacts on the Group's financial situation or financial performance.

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4. Summary description of crucial accounting policy

Major accounting policies of preparing this consolidated financial report are as follows. Unless otherwise noted, such policies will apply during reporting period.

a. Declaration of conformity

The consolidated financial report is prepared based on financial report preparation standard for securities issuers and those International Financial Reporting Standards, International Accounting Standards, interpretations and bulletin ("IFRSs") recognized by FRS.

b. Basis of preparation

• 1) Except the important items below, the consolidated financial report is prepared based on historical cost

Financial assets at fair value through other comprehensive income

• 2) In preparing financial reports conforming to IFRSs, some important accounting estimates need to be used; in applying the Group's accounting policies, the management also needs to make judgments; for items related to high judgment or complexity, or items related to major assumptions and estimates in consolidated financial report, please refer to Note 5.

c. Consolidation basis

• 1) Principle of preparing consolidated financial report

• a) The Group takes all subsidiaries as individuals of preparing consolidated financial report. Subsidiary refers to individual controlled by the Group (including structural bodies). When the Group is involved in individual's remuneration change or enjoys the rights of changing remuneration, or is capable to influence such remuneration, the Group controls the individual. After taking control of subsidiary, the subsidiary is taken into consolidated financial report, but stops consolidation from the date of losing the control.

• b) In the Group, companies' transactions, balances and unrealized gain or loss have been eliminated. Subsidiary's accounting policy has been adjusted as necessary and is consistent with the policy adopted by the Group.

• c) All the components of profit or loss, and other comprehensive income belong to parent company's owners and non-controlling interests; consolidated losses and profits also belong to parent company's owners and non-controlling interests, even if this may cause non-controlling interests to suffer loss balance.

• d) If changes of the Company's shares do not result in the loss of control (transaction with non-controlling interests), these would be taken as equity transaction, i.e., transaction with owners. The difference between non-controlling interests' adjusted amount or paid or collected consideration is directly recognized as interests.

• e) When losing the control of subsidiary, the Group shall measure the remaining investment at fair value as originally listed financial assets' fair value or originally listed invested associated enterprise or joint venture's cost. The difference between fair value and book value is directly recognized as current profit and loss. For all the amounts related to the subsidiary recognized as other comprehensive income, if its accounting treatment has the same basis as that of the Group in directly disposing of associated assets or liabilities, which is like that such amounts previously recognized as other consolidated losses or profits would be reclassified as losses and profits in disposing of related assets or liabilities, then after losing the control of subsidiary, the profits or losses are reclassified into profits and losses from interests.

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2) Subsidiary listed into consolidated financial report:

Name of investment company Name of subsidiary Nature of business

Percent of shares held Descriptio n December 31, 2021 December 31, 2020

APEX SCIENCE & ENGINEERING CORP. Chang Ji Construction Co., Ltd. (Chang Ji Company) Construction of civil and structural works and water conservancy projects, etc. 90.53% 90.53% (Note 1) APEX SCIENCE & ENGINEERING CORP. REINFORCE ENERGY CO. LTD.(REINFORC E) General investment 100.00% 100.00% APEX SCIENCE & ENGINEERING CORP. Hsin Ting Engineering Consulting Co., Ltd. (Hsin Ting Company) Engineering consultant 100.00% 100.00% APEX SCIENCE & ENGINEERING CORP. APEX LIFE INC.(APEX LIFE) Purchase and sell engineering equipment and hi- tech electronic products - - (Note 2)

• Note 1. The Company bought 660,000 shares of Chang Ji in the first season in 2020, and purchased 2,300,000 shares in the fourth season. Please refer to Note 6 (dd) for relevant transactions.

• Note 2. APEX LIFE got approval and registration from local competent authorities on December. 30, 2011 for dissolution. By December 31, 2021, the liquidation procedure had not been completed.

• 3) Subsidiary not listed in consolidated financial report: No such circumstance.

• 4) Subsidiaries' different adjustment and disposal methods in accounting period: No such circumstance.

• 5) Major restriction: No such circumstance.

• 6) Subsidiaries with significant non-controlling interests to the Group:

The Group's non-controlling interests are respectively $88,524 and $86,967 on December 31, 2022 and 2021. The following are about subsidiaries with significant noncontrolling interests to the Group.

Name of subsidiary	Main place of business	Non-controlling interests	Non-controlling interests	Non-controlling interests	Non-controlling interests	Descri ption
		December 31, 2021		December 31, 2020
		Amount	Percent of shares held	Amount	Percent of shares held
Chang Ji Construction Co., Ltd.	Taiwan	$ 88,524	9.47%	$ 86,967	9.47%

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Balance Sheets

Chang Ji Construction Co., Ltd.

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets	December 31, 2021	December 31, 2020
	$ 1,221,408 329,059 ( 719,388) ( 11,878)	$ 1,700,337 390,926 ( 1,178,046) ( 42,957)
	$ 819,201	$ 870,260

Statements of Comprehensive Income

Revenue Pre-tax net (loss) income Income tax Net (loss) income for the period Other comprehensive income (net after tax) Total comprehensive income for the period Comprehensive income attributable to non-controlling interests Payment for dividends of non-controlling interests	Chang Ji Construction Co., Ltd.	Chang Ji Construction Co., Ltd.
	2021	2020
	$ 2,300,394	$ 2,051,761
	31,881 ( 2,724)	54,252 ( 1,839)
	$ 29,157	$ 52,413
	( 67,500)	-
	($ 38,343)	$ 52,413
	$ 3,266	$ 6,802
	$ 1,704	$ 798

Cash Flow Statement

Chang Ji Construction Co., Ltd.

Operating activities - net cash inflows (outflows) Investment activities - net cash inflows (outflows) Financing activities - net cash inflows (outflows) Decrease of cash and cash equivalents for the period Balance of cash and cash equivalents at the beginning of the period Balance of cash and cash equivalents at the ending of the period	2021	2020
	$ 617,788 ( 2,521) ( 575,618)	($ 210,615) ( 30,569) 227,898
	39,649	( 13,286)
	22,283	35,569
	$ 61,932	$ 22,283

• 7) Securities of subsidiaries held by parent company: Please refer to Note 6 (r)

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d. Foreign currency conversion

The items in the financial report of each individual of the Group are measured with the currency (functional currency) used in the main economic environment where the individual operates. The consolidated financial report is made with the Company's functional currency NTD as representative currency.

• 1) Foreign currency transaction and balance

• a) For foreign currency transaction, currency is converted into functional currency at spot exchange rate on trading day or measurement day. The difference occurred due to such transaction is recognized into current profits and losses.

• b) Monetary assets and debt balance at foreign currency are adjusted at spot exchange rate on Balance Sheets day. The conversion difference due to the adjustment is recognized into current profits and losses.

• c) Non-monetary assets and debt balance at foreign currency, which have been measured through profits and losses at fair value, are evaluated and adjusted at spot exchange rate on Balance Sheets day. The conversion difference due to the adjustment is recognized into current profits and losses. Non-monetary assets and debt balance at foreign currency, which have been measured through other comprehensive income at fair value, are evaluated and adjusted at spot exchange rate on Balance Sheets day. The conversion difference due to the adjustment is recognized into other comprehensive income. The conversion difference due to the adjustment is recognized into current profits and losses. Non-monetary assets and debt balance at foreign currency, which haven't been measured at fair value, are measured at historical rate on initial trading day.

• d) All the other conversion profit and loss are recorded in “other gains and losses" in profit and loss statement.

• 2) Overseas operating agency

For all the Group's individuals whose functional currency differs from expressive currency, their operating results and financial conditions are converted into expressive currency in the following methods;

• a) Assets and liabilities listed in balance sheets are converted at closing rate on balance sheets statement day;

• b) Profits and losses recorded in Statements of Comprehensive Income are converted at average exchange rate for the period; and

• c) Conversion differences occurred are recorded into other comprehensive income.

e. Standards of classifying current and non-current assets and liabilities

• 1) The business terms of the Group’s engineering projects and commissioned land development business are usually longer than one year; equivalent assets and liabilities of construction contracts and commissioned land development business are classified for current and non-current ones based on business terms, while other assets and liabilities are classified based on one year.

• 2) Assets that meet one of the following conditions are classified as current assets:

• a) Expected to be realized in normal business term or intended to be sold or consumed.

• b) Held for the main purpose of transaction.

• c) Expected to be realized within 12 months after balance sheets statement day.

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• d) Cash or cash equivalents, unless exchanged or used to pay off debts under limitations at over 12 months after balance sheets statement day.

The Group classifies the assets not conforming to aforesaid conditions into non-current assets.

• 3) Liabilities meeting one of the following conditions are classified into current liabilities:

• a) Expected to be paid off in normal business term.

• b) Held for the main purpose of transaction.

• c) Expected to be paid off within 12 months after balance sheets statement day.

• d) Unable to defer the payoff term to at least 12 months after balance sheets statement day unconditionally. Liabilities clauses may depend on the counterparty's choice; payoff occurred due to the issuance of equity instrument does not affect the classification.

The Group classifies the liabilities not conforming to aforesaid conditions into noncurrent liabilities.

• f. Financial assets at fair value through other comprehensive income

• 1) Refer to one irrevocable choice at original recognition; this records fair value change invested with equity instrument not held for transaction into other comprehensive income; or meet the following conditions in debt instrument investment at the same time:

  • a) The financial assets are held under the operating model for the purpose of collecting and selling contractual cash flows.

  • b) Cash flows generated by the financial assets’ contract terms on specified date, are solely used for payments of principal and outstanding principal interest.

• 2) For financial assets at fair value through other comprehensive income that conforms to trading practices, the Group implements accounting on trading day.

• 3) At original recognition, the Group makes measurement at fair value plus transaction cost, but later at fair value. Changes to fair value of equity instrument are recognized as other comprehensive income; when delisted, cumulative interests or losses that are previously recognized as other comprehensive income shall not be reclassified to profits and losses, but transferred to retained earnings. When the rights to receive dividends are established, it is probable that the economic benefits associated with dividends will flow in and the amount of dividends can be measured reliably, the Group recognizes dividend income as profits or losses.

• g. Accounts and notes receivable

• 1) Refers to accounts and notes that have the right to unconditionally receive the consideration amount in exchange for the transfer of goods or services according to the contract.

• 2) For short-term accounts and notes receivable with unpaid interest, since discount doesn’t have significant influence, the Group measures them by original invoice amount.

• h. Agency land development business

• 1) Agency land development business means development service as entrusted by government unit, but some development projects are for external sale.

• 2) During the agency period, the Company will pay for, on behalf of client, land

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expropriation compensation fee, construction cost, construction supervision and inspection and various development costs. And client will calculate the interests according to the costs already paid on its behalf, and pay to the Company on a periodby-period basis. The accounting treatment of the case costs of various agency land development business (industrial zone development, urban land rezoning and section expropriation) shall be handled in accordance with the entrusted development agreement and the contract with contractor; according to the actual construction progress and completion acceptance, corresponding costs and expenses are recognized. When entrusted for the business of developing an industrial zone, if the following conditions are met, the labour income of the agency shall be recognized on a period-byperiod basis according to the proportion of the input cost:

• a) Costs attributable to contracts are reasonably identifiable.

• b) Except for the confirmed disbursement that is recoverable, the remaining contract costs can be reasonably estimated.

• c) The collectable agency fees (service revenue) can be reasonably determined.

• 3) The development cost is debited to "the land development funds receivable from the agent", while the land purchaser pays for land price, which is credited to "other current liabilities - advance payment for the sale of industrial zone"; when money allocated by owner offsets agency land development amount receivable mutually.

i. Financial assets impairment

On each balance sheet day, by liabilities instrument investment at fair value through other comprehensive income and financial assets at amortized cost, the Group measures the allowance for losses with 12-month expected credit loss amount for these items whose credit risks haven’t risen apparently after originally recognized after considering all reasonable and verifiable information (including forward-looking information); for these items whose credit risks have risen apparently after originally recognized, the Group makes allowance for losses with expected credit loss amount during the period of existence; for accounts receivable or contract assets that do not contain significant financial components, allowance for losses is measured with expected credit loss amount during the period of existence.

j. Financial assets are delisted

Financial assets are delisted when the Group's contractual rights to receive cash flows from the financial assets lose efficacy.

k. Lease payment receivables/lease (tenant)

After deduction of tenant's incentives, operating rental income is amortized with straight line method over the lease term and recognized as profits or losses for the period.

l. Inventories

Inventories are measured by costs and net realizable value (see whichever is lower) and determined by weighted cost average method. The costs of finished goods and work-inprogress goods include raw materials, direct labour costs, other direct costs and manufacturerelated expenses, but exclude borrowing costs. While comparing the lower of the cost and the net realizable value, the item-by-item comparison method is adopted, and the net realizable value refers to the balance after subtracting the estimated cost to be invested in completion and related variable selling expenses from the estimated selling price in normal business.

• m. Investment with the equity method - associated enterprise

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• 1) Associated companies refer to all individuals, on which the Group has significant influence without control, directly or indirectly holding more than 20% of their voting shares on general. The Group's investments in associated enterprise are treated with the equity method and are recognized at cost when acquired.

• 2) The Group recognizes the share of profit or loss obtained by the associated enterprise as the current profit and loss and recognizes the share of other comprehensive income after it has obtained as other comprehensive income. If the Group's loss share in any associated enterprise equals or exceeds its interest in that associated enterprise (including any other unsecured accounts receivable), the Group does not recognize further losses unless the Group has statutory business or constructive obligation with that associated enterprise or paid amounts on its behalf.

• n. Property, plant and equipment

• 1) Acquisition costs are accounting basis for property, plant and equipment, with relevant interest capitalized during the period of construction.

• 2) Subsequent costs are included in the asset's book value or recognized as a separate asset only when the future economic benefits associated with these items will possibly flow to the Group and the costs can be measured reliably. Book value of replaced part is excluded. When incurred, all other maintenance costs are recognized as profit or loss for the period.

• 3) The subsequent measurement of property, plant and equipment is based on the cost model. Except land, they are depreciated with straight-line method according to durable period. If each of property, plant and equipment is great, they should be separately depreciated.

• 4) The Group reviews the residual value, useful life and depreciation method of each asset on the closing day of each fiscal year. If the expected residual value and useful life are different from the previous estimate, or the future economic benefits contained in the assets have significant changes in the expected consumption pattern, then from the date of the change, they should be processed according to accounting estimate change rules in International Financial Reporting Standard 8, “Accounting Policies, Changes in Accounting Estimates and Errors”.

Assets' durable periods:

Accounting Estimates and Errors”. Assets' durable periods:
House and building	50-55 years
Building improvement	3-10 years
Machinery equipment	3-8 years
Transportation equipment	3-5 years
Office equipment	3-5 years

o. Tenant's lease transaction - Right-of-use asset/lease liability

• 1) Lease assets are recognized as right-of-use assets and lease liabilities on the day of becoming available for use by the Group. When the lease contract is for a short-term lease or a lease of a low-value asset, lease payments are recognized as an expense based on straight line method over the lease term.

• 2) As for the lease liability, the lease payment should be recorded by current value discounted according to the Group’s incremental borrowing rate from the lease start day. The lease payment consists of fixed payments by subtraction of collectable lease incentives.

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• 3) The right-of-use asset is recognized into cost from the lease start day; the cost includes the original measurement amount of the lease liability.

Cost model measurement is adopted subsequently; right-of-use assets' durable period expires, or lease term expires (see whichever is earlier) is recorded as depreciation costs. When lease liability is reassessed, the right-of-use assets will be adjusted for remeasurement.

p. Investment property

Investment property is recognized into costs, and subsequently measured with the cost model. Except land, to be depreciated with straight-line method; durable period is 55 years.

q. Impairment of non-financial assets

• 1) On balance sheets statement day, the Group estimates the recoverable amount of assets that present signs of impairment and recognizes impairment losses when the recoverable amount is lower than its book value. The recoverable amount refers to the subtraction of an asset's disposal cost or use value (see whichever is higher) from its fair value. When the recognized asset impairment in previous years does not exist or decreases, the impairment loss shall be reversed, but reversed impairment loss leads to increase of book value of the asset without exceeding the asset value; if no impairment loss has been recorded, deduct the depreciated or amortized book value.

• 2) The recoverable amounts of Goodwill, intangible assets with non-determined service life and intangible assets not yet available for use are estimated on a regular basis. The recoverable amount, if lower than its book value, is recorded as loss reduction losses. Losses in goodwill loss reduction will not be reversed in subsequent years.

• 3) For loss reduction, goodwill is amortized to cash-generating units. This amortization is recognized by operation department. Goodwill is amortized to cash generating unit or cash generating unit group due to benefit from amalgamation of enterprises generating goodwill.

r. Borrowing

Borrowings are measured at the amount after the deduction of transaction costs from fair value at originally recognized column; the difference between amount after the deduction of transaction cost, and redemption value should be first cost-amortized with the effective interest method and measured during borrowing period.

s. Accounts and notes payable

Accounts and notes payable are obligations payable for obtaining goods or services from suppliers in the normal course of business. It is measured at fair value at the time of original recognition, and subsequently at amortized cost with the effective interest method. Due to insignificant subsequent impacts of discounting, short-term accounts payable with unpaid interest, are measured at original invoice subsequently.

t. Ordinary bonds payable

Ordinary bonds payable issued by the Group are measured at the amount after the deduction of transaction costs from fair value at originally recognized column; and the difference from redemption value is recorded in discount on debt equity, and recorded into bonds payable’s addition or deduction items; effective interest method is later amortized and recorded as current profits and losses in bonds circulation period as adjustment item of “finance cost”

u. Delisting of financial liabilities

Performance, cancellation or expiry of liabilities in the Group's contract are delisted from

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financial liabilities.

• v. Employee benefit

• 1) Short-term employee benefit

Short-term employee benefit is measured at expected paid non-discounting amount, and recorded as fees in providing related service.

• 2) Pension

Defined benefit plan

• a) The net obligation under a defined benefit plan is calculated by discounting the amount of future benefits earned by the employee from current or past service and subtracting the fair value of the planned assets from the present value of the defined benefit obligation on the balance sheet day. The defined net benefit obligation is calculated annually by actuary using the projected unit benefit method, and the discount rate is determined with reference to the market yield of high-quality company bonds on the balance sheet day consistent with the currency and period of the defined benefit plan; countries without market depth use the market yield on government bonds (on the balance sheet day).

• b) Actuarial profits and losses arising from defined benefit plans are recognized as other comprehensive income in the period in which they occur

• c) If the early-stage service cost is immediately obtainable, the related expenses will be recognized as profit or loss immediately; if not immediately obtainable, it will be recognized as profit or loss on a straight-line basis over the average obtainable period.

• 3) Dismiss welfare

Dismiss welfare is benefits provided to employee whose employment is terminated before the normal retirement day or when the employee decides to accept the Company's offer of benefits in exchange for termination of employment. The Group recognizes the expenses when the offer of termination benefits can no longer be withdrawn or when the associated restructuring costs are recognized, see whichever is earlier. Benefits that are not expected to be fully settled 12 months after the balance sheet day should be discounted.

• 4) Remuneration of employees and remuneration of directors and supervisors

Employee remuneration and remuneration of directors and supervisors are recognized as expenses and liabilities when such remunerations are legal or constructive obligations and the amounts can be reasonably estimated. If there is a discrepancy between actual distribution amount and the estimated amount in subsequent resolutions, it shall be treated as a change in accounting estimate. Besides, if employees are paid in shares, the basis for calculating the number of shares is the closing price on the day before the board resolution.

w. Income tax

• 1) Income tax includes current and deferred income tax. Income tax is recognized in profit or loss, except income tax relating to items included in other comprehensive income or directly included in equity.

• 2) Based on the tax rates enacted or substantively enacted on the balance sheet day in the countries where the Group operates and generates taxable income, the current income tax is calculated. Management regularly assesses the status of income tax declaration as

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per the regulations related to applicable income tax and, where applicable, assesses income tax liabilities based on expected tax payments to tax authorities. Income tax on undistributed surplus is levied according to income tax law, and undistributed income tax expense will be recognized after the profit distribution proposal is passed at the shareholders' meeting in the following year.

• 3) Deferred income tax is recognized with the balance sheet method. This is based on temporary differences between the tax bases of assets and liabilities and their book values in consolidated balance sheet. Deferred income tax liabilities from originally recognized goodwill will not be recognized; if deferred income tax originates from the original recognition of asset or liability in a transaction (excluding a business amalgamation), which, at the time of the transaction, does not affect accounting profit or taxable income (taxable loss), such deferred income tax liabilities will not be recognized either. If the temporary differences occur in investing in subsidiaries and associated companies, the Group can control the reversion timing of such differences, and the differences are not likely to be reversed in the foreseeable future, they will not be recognized. Based on tax rates (and tax laws) enacted or substantively enacted on the balance sheet day and expected to apply when the related deferred income tax assets are realized or the deferred income tax liabilities are settled, deferred income tax is determined.

• 4) When temporary differences will be possibly used to offset future taxable income, and both unrecognized and recognized deferred income tax assets are reassessed on each balance sheet day.

• 5) When statutory enforcement right is available to allow recognized current income tax assets and liabilities to offset each other, and it is intended to pay off liabilities, on net basis, or at the same time, realize assets and pay off liabilities, current income tax assets and current income tax liabilities shall be offset; When statutory enforcement right is available to allow current income tax assets and current income tax liabilities to offset each other, and the deferred income tax assets and liabilities are generated by the same taxpayer subject to taxation by the same tax authority, or by different taxpayers but each subject intends to pay off liabilities, on net basis, or at the same time, realize assets and pay off liabilities, current income tax assets and current income tax liabilities shall be offset.

x. Share capital

• 1) Ordinary shares classified into rights and interests. Incremental costs directly attributable to the issued new shares or stock options, after deduction of income tax, are shown as a deduction in equity.

• 2) When the Company repurchases issued shares, the consideration paid (including any incremental costs that are directly attributable, is recognized) as a net tax deduction in shareholders' equity. On subsequent reissues of the repurchased shares, the difference between the consideration received (after deduction of any directly attributable incremental costs and the effect of income taxes) and the book value is recognized as an adjustment to shareholders' equity.

y. Dividend distribution

When the Company's shareholders' meeting resolves the distribution of dividends, dividends distributed to shareholders of the Company are recognized in the financial report, cash dividends are recognized as liabilities, and share dividends are recognized as undistributed share dividends, and are transferred to ordinary shares on the base day of issuance of new shares.

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• z. Revenue recognition

• 1) Commodity sale

  • a) The Company's sales revenue is recognized when the control of the product is transferred to customer, that is, when the product is delivered to customer, customer has the discretion to sell the product and decide the price, and the Company has no outstanding performance obligations that may affect customer to accept the product. Delivery of goods occurs when the product has been shipped to the designated location, the risk of obsolescence and loss has passed to customer, and customer has accepted the product in accordance with sales contract, or there is objective evidence that all acceptance criteria have been met.

  • b) Accounts receivable are recognized when the goods are delivered to customer, as the Group has an unconditional right to the contract price from that point on, and it only takes time to collect the consideration from customer.

• 2) Land development and resale

  • a) The Company engages in land development and sales of residential properties, and revenue will be recognized when control of property is transferred to customer. For the signed residential sales contract, due to the restrictions of the contract terms, the property has no other use for the Company, but until the legal ownership of the property is transferred to customer, the Company has an enforceable right to the contract money, so after the legal ownership transfer to customer, revenue is recognized.

  • b) Revenue is measured as agreed contract price, which has been paid by customer when legal title to the property is transferred. On rare occasions, the Company and customer agree on deferred payment period, but deferred repayment period does not exceed 12 months, and it is judged that the contract does not have a significant financial component, so the consideration will not be adjusted.

• 3) Cost of obtaining client contract

For the incremental costs (primarily sales commissions) incurred by the Company in getting customer contracts, the expected collectable parts are recognized as assets (listed as other non-current assets listed in the sheet) at the time of occurrence, and amortized according to the consistency of commodities or labour services related to the assets. In subsequent periods, if the amount that the expected consideration deducts costs not yet recognized as expenses is lower than book value recognized in the asset, an impairment loss is recognized for the excess of the asset's book value.

• 4) Project revenue

• a) The Group offers services about engineering construction. Income from labour services is recognized as income during the financial reporting period of providing the services to customers. Revenue from fixed-price contracts is recognized based on the ratio of services actually provided to all to-be-provided services by the balance sheet day, and the completion ratio of services is determined based on the ratio of incurred costs to estimated total transaction costs. The considerations of some contracts may change due to the transfer price or similar items. Only when the future uncertainty is eliminated, it is highly probable that there will not be a significant reversal of the recognized cumulative revenue amount included in the transaction price. The customer pays the contract price in accordance with the agreed payment schedule. When the service provided by the Company exceeds customer's payment, it is recognized as a contract asset, and if customer's payment

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exceeds the service provided by the group, it is recognized as a contract liability.

• b) The Group's estimates of revenue, costs and degree of completion are revised as circumstances change. Any increase or decrease in estimated revenue or costs due to change of estimate is reflected in profit or loss for the period in which the circumstances leading to the revision are known to management.

• 5) Service revenue

• a) The Group offers services about agency land development. Income from labour services is recognized as income during the financial reporting period of providing the services to customers. The income from fixed price contracts is recognized as the ratio of the services actually provided to the total services to be provided by the balance sheet day. Since the Company engage in the development, planning and management of industrial zones on behalf of government entities, the services are subject to supervision. The completion rate of the service is determined on the basis of the actual labour hours accounted for the estimated total labour hours.

• b) The Company provides agency land development services. It is mainly entrusted by government units to develop on their behalf. Some development projects are also responsible for external sales. It is identified as a performance obligation that is gradually fulfilled over time. The Company recognizes revenue as the proportion of input costs to the estimated total costs.

• c) The Company's estimates of revenue, costs and degree of completion are revised as circumstances change. Any increase or decrease in estimated revenue or costs due to change of estimate is reflected in profit or loss for the period in which the circumstances leading to the revision are known to management.

• d) Please refer to Note 4 (h) for the recognition of relevant revenue.

aa. Operation department

Information from the Group's operation department is reported in consistency with the internal management reports provided to the chief operating decision maker. The chief operating decision maker is responsible for allocating resources to operation departments and evaluating their performance. The Board of Directors works as the chief operating decision maker of the Group is.

5. Main source of major accounting judgment, estimate and assumption uncertainty

In preparing the consolidated financial statements of the Group, management has used their judgment to determine the accounting policies to be adopted, and has made accounting estimates and assumptions based on reasonable expectations of future events based on the conditions prevailing on the balance sheet day. Significant accounting estimates and assumptions made may differ from actual results and will be continuously evaluated and adjusted by taking into account historical experience and other factors. These estimates and assumptions carry risks that will result in material adjustment of the book values of assets and liabilities in the next financial year. Please refer to the following descriptions on the uncertainty of significant accounting judgments, estimates and assumptions:

a. Important judgment for adopting accounting policy

• No such circumstance.

b. Major accounting estimates and assumptions

• Revenue recognition

The Group must judge the amount of the estimated total cost of completion based on the

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characteristics of the project and objective factors. The revenue recognition is estimated based on the percentage of the input cost. The Group regularly reviews the reasonableness of the estimates and is subject to changes in the industrial environment and the impact of the construction status may lead to changes in the estimated total cost of completion, which will affect the amount recognized in the Group's revenue.

6. Description of important accounting items

a. Cash and cash equivalents

Cash in hand and working capital Check deposit Current deposit	December 31, 2021	December 31, 2020
	$ 2,617 28,281 266,705	$ 3,115 42,970 163,132
	$ 297,603	$ 209,217

• 1) The Group's cooperating financial institutions have benign credit quality and the transactions of the Group with multiple financial institutions disperse credit risks with quite low predicted contract breach.

• 2) The Group's cash with limited use and cash equivalents have been classified into other liquid assets. For pledge and guarantee, please refer to Notes 8.

b. Accounts receivable and notes receivable

Accounts receivable Notes receivable Minus: Allowance for bad debts	December 31, 2021	December 31, 2020
	$ 3,508 246,679 ( 3,063)	$ 1,578 524,675 ( 7,017)
	$ 247,124	$ 519,236

• 1) The Group does not have any collateral

• 2) For credit risk information about accounts receivable and notes receivable, please refer to Note 12 (b).

• 3) Analysis of account receivable age of accounts receivable and notes receivable

No overdue Overdue for 1 to 120 days Overdue for 121 days and above	December 31, 2021	December 31, 2021	December 31, 2020	December 31, 2020
	Notes receivable	Accounts receivable	Notes receivable	Accounts receivable
	$ 239,172 3,766 3,741	$ 3,508 - -	$ 517,243 1,779 5,653	$ 1,578 - -
	$ 246,679	$ 3,508	$ 524,675	$ 1,578

The information above represents that account age is analyzed based on days overdue.

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• 4) The balances of accounts receivable and notes receivable on December 31, 2021 and 2020 were all caused by customer contracts, and the balance of accounts receivables on January 1, 2020 for contracts with customers was $412,142.

• 5) Under the condition of not taking into account collateral or other credit enhancements, the insured amounts that best represent the maximum credit risk of the Group's notes receivable on December 31, 2021 and 2020 were $3,508 and $1,578, respectively; The insured amounts that best represent the credit risk of the Group's accounts receivable on December 31, 2021 and 2020 were $243,616 and $517,658, respectively.

c. Other accounts receivable

Receivable agency land development fund Interest receivable Other accounts receivable - Other	December 31, 2021	December 31, 2020
	$ 3,362,821 57 20,558	$ 3,041,185 31 1,747
	$ 3,383,436	$ 3,042,963

• 1) Agency land development amount receivable involves the contract “Chiayi County Machouhou Industry Park Development Project Phase I ” signed by the Group and Chiayi County Government in May, 2013, as the Company was entrusted to develop the industrial park with the period of four years from the date of contract signing; in October 2018, the Group signed a contract with the Chiayi County Government for “Chiayi County Machouhou Industry Park Development Project”, as the Company was entrusted to develop the industrial park with the period of six years from the date of contract signing; the Group signed a contract for "development, rental, sale and management of the Cigu Science and Technology Industrial Park" with Tainan City Government in January 2021, as the Company was entrusted to develop the industrial park with the period of six years from the date of contract signing.

• a) The Group's receivable agency land development fund is detailed as follows:

Machohou Industry Park Development Project - Phase I Machohou Industry Park Development Project - Later Phase I Cigu Tech Industry Park Development Project	December 31, 2021	December 31, 2020	December 31, 2021, cumulative recognized service revenue	Client
	$ 696,253 2,653,121 13,447 -	$ 970,697 2,070,488 - -	$ 406,335 224,144 - -	Chiayi County Government " Tainan Municipal Government
	$ 3,362,821	$ 3,041,185	$ 630,479

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• b) The Group's receivable agency land development funds in 2021 and 2020 are changed as follows:

2021	Opening balance	Increase for the period	Collected amount for the period	balance
Machohou Industry Park Development Project - Phase I Machohou Industry Park Development Project - Later Phase I Cigu Tech Industry Park Development Project 2020	$ 970,697 2,070,488 - -	$ 427,425 2,893,657 13,447 -	($ 701,869) ( 2,311,024) - -	$ 696,253 2,653,121 13,447 -
	$ 3,041,185	$3,334,529	($ 3,012,893)	$ 3,362,821
	Opening balance	Increase for the period	Collected amount for the period	balance
Machohou Industry Park Development Project - Phase I Machouhou Industrial Park Later Phase	$ 952,801 916,683	$ 31,152 1,153,805	($ 13,256) -	$ 970,697 2,070,488
	$ 1,869,484	$1,184,957	($ 13,256)	$ 3,041,185

• 2) In 2021 and 2020, the Group recognized the capitalized interest in advance of agency land development amount as offsetting interest expenses $46,622 and $6,275 respectively. Please refer to Note 6 (o) for details.

• d. Inventories

Inventory of commodity Finished product Semi-finished product work-in-progress product Raw material Property for sale To-be-constructed land Property under construction Advance land payment Subtotal Minus: Allowance for price drop loss Total	December 31, 2021	December 31, 2020
	$ 14,309 9,199 10,774 3,981 10,434 74,841 1,338 386 466,732	$ 10,546 10,455 11,732 2,426 9,480 381,306 1,338 1,200 459,731
	591,994 ( 8,644)	888,214 ( 8,644)
	$ 583,350	$ 879,570

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• 1) Inventory costs recognized as loss by the Group:

Costs of inventories sold Inventory losses Building costs Subtotal Plus: Construction costs Other operating costs Total	2021	2020 $ 114,698 - 2,274,927 2,389,625 2,333,737 8,826 $ 4,732,188
	$ 162,571 1,422 316,369
	480,362 2,913,054 16,418
	$ 3,409,834

• 2) Some inventories have been provided as collateral for bank loans, please refer to Note VIII for details.

• 3) The capitalized amounts of interest on inventories of the Company in 2021 and 2020 are $0 and $4,953 respectively. Please refer to Note 6 (y) for details.

• 4) CHANG JI CONSTRUCTION CO., LTD., a subsidiary of the Group, has jointly developed land in Fanlu Township, Chiayi County with the landlord, and has purchased land (land No. 193-181 and 193-103) in the base of Fanlu Township, Chiayi County. Because the land is used for farming and animal husbandry, according to the regulations on agricultural development, private legal persons are not allowed to take over the land for farming and animal husbandry, so the land is registered in the name of employee; however, in order to protect the rights and interests of the Company, the registrant has been requested to issue a promise to transfer the land after the change of land title. It was registered in CHANG JI CONSTRUCTION CO., LTD., a subsidiary of the Group for the purpose of preservation.

• e. Prepayment

Advance payment of engineering amount Tax retained Others	December 31, 2021	December 31, 2020
	$ 633,019 12,541 55,385	$ 72,648 7,797 27,567
	$ 700,945	$ 108,012

• f. Other current assets

Deposit for joint construction Project deposit and bid bond Restricted assets Land project amount inputted Others	December 31, 2021	December 31, 2020
	$ - 36,522 1,796,809 69,852 19,474	$ 400,000 38,042 1,385,807 17,196 17,380
	$ 1,922,657	$ 1,858,425

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1) Deposit for joint construction

The Group signed a joint construction contract with the owner of the land in the Xinxing section of Banqiao District, New Taipei City in April 2015. As of December 31, 2020, the Group has paid the landlord a security deposit of $400,000 for the performance of the contract. As the above land integration could not be completed as scheduled, the joint construction contract was terminated after negotiation by both parties, and the joint construction deposit of $400,000 was recovered in 2021.

• 2) Restricted Assets The amount of $1,257,958 and $769,531 on December 31, 2021 and December 31, 2020 respectively are for the agency land development business, to collect the land auction deposit and land price transferred from the buyer to the special trust account, and the rest are guaranteed by the bank And the pledged time deposit and special account for loan amount guarantee.

• 3) CHANG JI CONSTRUCTION CO., LTD., a subsidiary of the Group, and the landlord jointly developed the land in Fanlu Township, Chiayi County. The landowner has transferred the land No. 193-197 in the base of Fanlu Township, Chiayi County to CHANG JI CONSTRUCTION CO., LTD. as a consideration for the joint development. However, according to the land cooperative development contract, CHANG JI CONSTRUCTION CO., LTD. has not obtained control of the land, so it has not been recorded as of December 31, 2021.

• 4) CHANG JI CONSTRUCTION CO., LTD., a subsidiary of the Group, and the landlord jointly developed the land in Fanlu Township, Chiayi County. The landowner has already transferred the lands No. 193-192, No. 193-209, No. 193-182, No. 193-183, No. 193-206, in Fanlu Township, Chiayi County. The land with the land title is the consideration for the joint development, but CHANG JI CONSTRUCTION CO., LTD. has not obtained control of the land according to the contract for the joint development of the land. Because the land is used for farming and animal husbandry, according to the regulations on agricultural development, private legal persons are not allowed to take over the land for farming and animal husbandry, so the land is registered in the name of the employee; however, in order to protect the rights and interests of the Company, the registrant has been requested to issue a promise to transfer the land after the change of land title. Registered in CHANG JI CONSTRUCTION CO., LTD. for preservation.

g. Financial assets at fair value through other comprehensive income

Item Non-current items: Equity instrument Non listed, OTCBB listed, and emerging stock Appraisal adjustment Total	December 31, 2021	December 31, 2020
	$ 22,755 ( 15,427) $ 7,328	$ 22,755 ( 16,071) $ 6,684

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• 1) The Group chose to classify the securities investments which are strategic investments as financial assets at fair value through other comprehensive profit and loss. The fair values of these investments as at December 31, 2021 and 2020 were $7,328 and $6,684 respectively.

• 2) In 2020, due to strategic investment adjustment, the Group sold securities investments with a fair value of $5,264, and the accumulated disposal benefits were transferred to retained earnings of $1,861.

• 3) Financial assets at fair value through other comprehensive income are recognized as profit or loss, and comprehensive income:

. Financial instruments at fair value through other comprehensive income Changes of fair value recognized in other comprehensive income Due to delisting, cumulative profit or loss is f d d l	2021	2020
	$ 644	$ 1,581
	$-	$1,861

• 4) For Information of credit risk about financial instruments at fair value through other comprehensive income, please refer to Note 12 (b).

• h. Equity method is adopted for investment

Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd.	December 31, 2021	December 31, 2020
	$189,301	$180,021

• 1) Associated enterprise

• a) Basic information about the Group's major associated enterprise:

Company name	Main place of business	%	%	Nature of relation	Measurement method
		December 31, 2021	December 31, 2020
Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd.	Chinese Mainland	46%	46%	Associated enterprise	Equity method

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• b) Financial information summary of the Group's key associated enterprise: Balance Sheets

Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd.

	Development Co., Ltd.
Current assets Non-current assets Current liabilities Total net assets Share in associated enterprise's net assets Book value in associated enterprise	December31,2021	December31,2020
	$ 374,378 108,250 ( 71,105)	$ 361,112 100,053 ( 69,816)
	$411,523	$ 391,349
	$ 189,301	$ 180,021
	$ 189,301	$ 180,021

Statements of Comprehensive Income

Revenue Total comprehensive income for the period Share of recognized comprehensive income	Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd.	Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd.
	2021	2020
	$ 274,999	$ 245,679
	$ 67,126	$ 52,643
	$ 30,878	$24,216

• 2) The Group's investment interests recognized under the equity method in 2021 and 2020 were $30,878 and $24,216 respectively.

• 3) The Group received dividends from related companies in 2021 and 2020 of $20,564 and $0 respectively.

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i. Property, plant and equipment

January 1, 2021 Cost Accumulated depreciation and impairment 2021 January 1 Add Punishment Depreciation expense December 31 December 31, 2021 Cost Accumulated depreciation and impairment January 1, 2020 Cost Accumulated depreciation and impairment 2020 January 1 Add Reclassification Depreciation expense December 31 December 31, 2020 Cost Accumulated depreciation and impairment	Land	Houses and buildings	Machinery equipment	Others	Total
	$ 71,394 -	$ 67,286 ( 25,577)	$ 435 ( 396)	$ 24,486 ( 19,927)	$163,601 ( 45,900)
	$ 71,394	$ 41,709	$ 39	$ 4,559	$117,701
	$ 71,394 - - -	$ 41,709 - - ( 1,457)	$ 39 - - ( 39)	$ 4,559 1,683 ( 640) ( 1,753)	$117,701 1,683 ( 640) ( 3,249)
	$ 71,394	$ 40,252	$-	$ 3,849	$115,495
	$ 71,394 -	$ 67,286 ( 27,034)	$ 435 ( 435)	$ 23,802 ( 19,953)	$162,917 ( 47,422)
	$ 71,394	$ 40,252	$-	$ 3,849	$115,495
	Land	Houses and buildings	Machinery equipment	Others	Total
	$122,920 -	$ 80,478 ( 34,929)	$ 618 ( 514)	$ 24,586 ( 19,362)	$228,602 ( 54,805)
	$122,920	$45,549	$104	$ 5,224	$173,797
	$122,920 - ( 51,526) -	$ 45,549 112 ( 2,508) ( 1,444)	$ 104 - - ( 65)	$ 5,224 1,514 - ( 2,179)	$173,797 1,626 ( 54,034) ( 3,688)
	$ 71,394	$ 41,709	$ 39	$ 4,559	$117,701
	$ 71,394 -	$ 67,286 ( 25,577)	$ 435 ( 396)	$ 24,486 ( 19,927)	$163,601 ( 45,900)
	$ 71,394	$ 41,709	$ 39	$ 4,559	$117,701

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• 1) Property, plant and equipment do not have the capitalization of interest in 2021 and 2020.

• 2) In 2020, the Group turns some property, plant and equipment ($65,877) depending on nature to investment property in accounts.

• 3) For transfer to property, plant and equipment in 2020, please refer to Note 6 (j) 4.

• 4) For information about guarantee with property, plant and equipment, please refer to Note 8.

j. Investment property

January 1 Land Houses and buildings Cumulative depreciation January 1 Reclassification Depreciation expense December 31 December 31 Land Houses and buildings Cumulative depreciation	December31,2021	December31,2020
	$ 55,380 24,584 (14,294)	$ 3,855 15,426 ( 7,163)
	$ 65,670	$ 12,118
	$ 65,670 - ( 411)	$ 12,118 54,034 ( 482)
	$ 65,259	$ 65,670
	$ 55,380 24,584 ( 14,705)	$ 55,380 24,584 ( 14,294)
	$ 65,259	$ 65,670

• 1) Rental income and direct operation cost of investment properties

Rental income of investment properties Direct operating expenses incurred by investment properties that generate rental income in the current period	2021	2020
	$1,831	$1,231
	$411	$482

The rental income recognized by the Group based on operating lease contracts are all fixed lease payments.

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  - 1) The fair values of the investment properties held by the Group on December 31, 2021 and 2020 were $102,327 and $99,520, which were based on the evaluation results of independent appraisal experts, which adopted the income method. It is estimated based on the difference of its reconstruction cost, nature of use, current state of use, use efficiency, maintenance, depreciation and other factors.

• 2) For transfer to investment property in 2020, please refer to Note 6 (i) 2.

• 3) In 2020, the Group turns some investment properties ($11,843) depending on nature to property, plant and equipment in accounts.

• 4) For information about guarantee with property, plant and equipment, please refer to Note 8.

• k. Short-term loan

Nature of loan	December31,2021	Interestraterange	Collateral
Bank loan Guaranteed loan Credit loan Nature of loan	$ 125,000 238,026	1.41%-1.95% " Interest rate range	Pledged time deposits, special accounts for repayment, inventories, land, buildings and buildings (listed property, plant and equipment and investment property) and treasury shares None Collateral
	$ 363,026
	December 31, 2020
Bank loan Guaranteed loan Credit loan	$ 445,917 595,354	1%-2.45% "	Pledged time deposits, special accounts for repayment, inventories, land, buildings and buildings (listed property, plant and equipment and investment property) and treasury shares None
	$1,041,271

For guarantee on short-term loan, please refer to Note 8.

• l. Short-term notes and bills payable

Commercial promissory notes payable Interest rate range	December 31, 2021	December 31, 2020
	$ 140,000	$ 105,000
	0.44%-0.55%	0.42%-0.8%

• 1) Short-term notes and bills payable do not involve guarantee in 2021

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• 2) Short-term notes and bills payable are issued by financial instruments under guarantee in 2020; for guarantee, please refer to Note 8.

• m. Accounts payable

Engineering fund Others	December31,2021	December31,2020
	$ 366,104 18,529	$ 466,362 29,705
	$ 384,633	$ 496,067

n. Other current liabilities

Advance collection of down payment for industry zone sold Others	December 31, 2021	December 31, 2020
	$ 1,470,905 177,712	$ 1,046,789 80,712
	$ 1,648,617	$ 1,127,501

The deposit received in advance for the sale of the industrial zone and the deposit for the sale of the land are entrusted by the Chiayi County Government to the Company for the "entrusted development, sale and management case of Chiayi County Machouhou industrial Park Phase I" and "entrusted development, sale, and management case of a later stage of Chiayi County Machouhou industrial Park Phase I." When the land is sold by auction, the land deposit that the external company has won the bid will be charged accordingly for the land development fee. Please refer to Note 6 (c) for details.

o. Payable company bonds

Payable company bonds Minus: Discount price of payable company bonds Minus: Due within one year or one operating cycle, or exercise of company bonds' redemption right	December 31, 2021	December 31, 2020
	$ 500,000 ( 2,919)	$ 500,000 ( 1,043)
	497,081 -	498,957 ( 498,957)
	$497,081	$-

• 1) The Company has been approved by the competent authority to raise and issue the first domestic secured ordinary corporate bonds in 2016. The total amount issued is $500,000, the coupon rate is 1.15%, and the issuance period is 5 years. The listing and trading period of the securities OTC trading center is from November 11, 2016 to November 11, 2021. The Company's bonds were paid off by one-off principal repayment and have been paid off in 2021 when due.

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• 2) The Company has been approved by the competent authority to raise and issue the first domestic secured ordinary corporate bonds in 2021. The total amount issued is $500,000, the coupon rate is 0.56%, and the issuance period is 5 years. The listing and trading period of the securities OTC trading center is from November 9, 2021 to November 9, 2026. The Company's bonds were paid of one-off principal repayment when due.

• 3) Aforesaid company bonds payable are issued by financial instruments under guarantee; for guarantee, please refer to Note 8.

• p. Long-term loan

for guarantee, p. Long-term loan	please refer to Note 8.
Nature of loan	Borrowing period and repayment method	Interest rate range	Collateral	December 31, 2021
Bank credit loan The Shanghai Commercial & Savings Bank, Ltd. Monthly payment of interests from October 20, 2021 to July 20, 2023 Taiwan middle and small- sized enterprise banks Monthly payment of interests from May 15, 2020 to May 15, 2023, and monthly payment of principal from May 13, 2021 Taiwan middle and small- sized enterprise banks Monthly payment of interests from May 15, 2020 to May 15, 2023, and monthly payment of principal from May 13, 2021 Hua Nan Commercial Bank, Ltd. Monthly payment of interests and principal August 20, 2020 to August 20, 2023 Taichung Commercial Bank Monthly payment of interests from September 14, 2021 to March 22, 2024 Taiwan Cooperative Bank Monthly payment of interests from April 13, 2020 to February 12, 2026 Taiwan middle and small- sized enterprise banks Monthly payment of interests from April 13, 2020 to February 12, 2026 Chang Hwa Bank Monthly payment of interests from April 13, 2020 to February 12, 2026 Agricultural Bank of Taiwan Monthly payment of interests from April 13, 2020 to February 12, 2026 Hua Nan Commercial Bank, Ltd. Monthly payment of interests from April 13, 2020 to February 12, 2026 Land Bank of Taiwan Monthly payment of interests from April 13, 2020 to February 12, 2026 Minus: Long-term loan due within one year or one operating cycle		1.75% 1.85% 1.85% 1.95% 1.85% 3.17% 3.17% 3.17% 3.17% 3.17% 3.17%	None " " " " " " " " " "	$ 69,909 3,542 7,083 11,111 54,000 472,410 349,520 349,520 231,400 115,690 115,690
				1,779,875 ( 1,772,306)
				$ 7,569

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Nature of loan	Borrowing period and repayment method	Interest rate range	Collatera l	December 31, 2020 $ 38,700 5,000 10,000 17,778 227,830 168,580 168,580 111,610 55,790 55,790 859,658 ( 833,547) $26,111
Bank credit loan The Shanghai Commercial & Savings Bank, Ltd. Monthly payment of interests from June 12, 2019 to March 1, 2021 Taiwan middle and small- sized enterprise banks Monthly payment of interests from May 14, 2020 to May 14, 2023 Taiwan middle and small- sized enterprise banks Monthly payment of interests from May 14, 2020 to May 14, 2023 Hua Nan Commercial Bank, Ltd. Monthly payment of interests from August 20, 2020 to August 20, 2023 Taiwan Cooperative Bank Monthly payment of interests from April 13, 2020 to February 12, 2026 Taiwan middle and small- sized enterprise banks Monthly payment of interests from April 13, 2020 to February 12, 2026 Chang Hwa Bank Monthly payment of interests from April 13, 2020 to February 12, 2026 Agricultural Bank of Taiwan Monthly payment of interests from April 13, 2020 to February 12, 2026 Hua Nan Commercial Bank, Ltd. Monthly payment of interests from April 13, 2020 to February 12, 2026 Land Bank of Taiwan Monthly payment of interests from April 13, 2020 to February 12, 2026 Minus: Long-term loan mature within one year or one business cycle		1.75% 1.11%- 1.85% 1.95% 1.95% 3.17% 3.17% 3.17% 3.17% 3.17% 3.17%	None " " " " " " " " "

In October 2019, the Company signed a joint credit agreement with the Cooperative Bank Commercial Bank Co., Ltd., Chang Hwa Commercial Bank Co., Ltd., Taiwan Small and Medium Enterprise Bank Co., Ltd. for the purpose of execution funds for the "late stage entrusted development, sale and management of Ma Chohou Industrial Park in Chiayi County" signed in October 2018. The total credit limit is $6,780,000 (including the guaranteed limit of $780,000 and the loan limit of $6,000,000). The main credit period is 6

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years from the date of first use. As of December 31, 2021, the Company has used the performance guarantee amount of $775,800 and the loan amount of $1,634,230. President of the Company agrees, on personal behalf, to be joint guarantor of this credit line case. When this credit line case exists, the Company mainly undertakes to promise as follows:

• 1) Financial ratios in annual consolidated financial statement should be maintained as follows:

Tangible equity: After deduction of intangible assets, stockholders' equity shall not be lower than NT$2.5 billion.

• 2) Within 2 years from the first use day of this development project, it should complete the first notice for sale or registration.

• 3) Within 2 years from the first notice for sale or registration, sales rate shall reach 25% (inclusive).

• 4) Within 3 years from the first notice for sale or registration, sales rate shall reach 35% (inclusive).

• 5) During the existence of this credit case, if there is an advance from a shareholder, the Company shall obtain a consent letter signed by the shareholder, agreeing that the shareholder shall not be repaid until the credit case is fully paid, and the interest rate shall not be higher than this credit extension. The loan interest rate at the time of the case or later, unless the advance is converted into a capital company.

The Group didn't break aforesaid promises in 2021 and 2020.

q. Pension

Confirmation of allocation plan

• 1) Since July 1, 2005, the Company and its domestic subsidiaries have formulated a retirement method with certain contributions in accordance with the "Labor Pension Regulations", which are applicable to employees of their own nationalities. For employees who choose to apply the labour pension system stipulated in the "Labor Pension Regulations", the Company and its domestic subsidiaries pay the labour pension at 6% of the salary to the employee's personal account of the Bureau of Labor Insurance. The payment of the employee pension is based on the employee. The individual pension account and the amount of accumulated income are collected in the form of monthly pension or lump sum pension.

• 2) In 2021 and 2020, the pension costs recognized by the Group in accordance with the above-mentioned pension plan were $8,024 and $8,664, respectively.

r. Share capital

• 1) By December 31, 2021, the Company's nominal capital was $3,500,000, the paid-in capital was $2,287,135, and the par value per share was 10 NTD, totaling 228,714,000 shares. The adjustment of the Company's ordinary outstanding shares at the beginning and end of the period is as follows (unit: thousand shares):

January 1 Redemption of treasury stock December 31	2021 (Note)	2020 (Note)
	226,189 -	228,714 ( 2,525)
	226,189	226,189

Note: Not deducting the shares of subsidiaries held by parent company.

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• 2) Treasury stock

• a) Cause and quantity of withdrawing share

Name of companies holding share	Withdrawalcause	December31,2021	December31,2021
		Numberofshares	Bookvalue
APEX Science & Engineering Corp. Subsidiary - Chang Ji Total Name of companies holding share	Transfer of shares to employees Safeguard stockholders' equity Withdrawalcause	2,525,000 shares $ 26,130 28,125,000 shares 255,837 $ 281,967 December31,2020	$ 26,130 255,837
			$ 281,967
		Numberofshares	Bookvalue
APEX Science & Engineering Corp. Subsidiary - Chang Ji Total	Transfer of shares to employees Safeguard stockholders' equity	2,525,000 shares 28,125,000 shares	$ 26,130 255,837
			$281,967

• b) On March 27, 2020, the Company approved the repurchase of 6,000,000 treasury shares through board resolution. By May 29, 2020 (the expiry of the execution period), a total of 2,525,000 treasury shares were repurchased, in total $26,130.

• c) The Securities Exchange Act stipulates that the Company's repurchase of outstanding shares shall not exceed 10% of the Company's total issued shares, and the total repurchase amount of shares shall not exceed the retained earnings plus the premium of the issued shares and the realized capital reserve amount.

• d) The treasury stocks held by the Company shall not be pledged in accordance with the Securities Exchange Act, or enjoy the rights of shareholders before they are transferred.

• e) According to the Securities Exchange Act, the shares transferable to employees bought back shall be transferred within five years from the date of the buyback. If not, the Company shall be deemed as not having issued shares, and shall make registration change and cancellation of shares. To maintain the Company's credit and shareholders' equity, the repurchased shares shall be subject to change registration and cancellation of the shares within six months from the date of repurchase.

• f) For pledge and guarantee information, please refer to Note 8 (b).

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s. Capital surplus

In accordance with the Company Law, the overage from the issuance of shares in excess of the par value and the receipt of the capital reserve as gifts, can be used to make up for losses, but when the Company has no accumulated losses, can be distributed in the form of new shares or cashes on the basis of former shareholding ratio. In addition, in accordance with the Securities Exchange Act, when the above-mentioned capital reserve is allocated to capital, the total annual amount of such allocation shall not exceed 10% of the paid-in capital. The Company shall not use the capital reserve to supplement the surplus even if it is still insufficient to make up for the capital loss.

t. Retained earnings

• 1) According to these articles of association, if there is a surplus in the annual final accounts, besides paying all taxes and levies according to law, the losses of previous years should be made up for first, and later 10% should be set aside as the statutory surplus reserve. If any surplus occurs afterwards, keep it or distribute it according to resolution of shareholders’ meeting.

• 2) The Company's policy on dividends: The Company is in the growing stage of the product life cycle. In order to coordinate the Company's long-term capital plans for sustainable management, the dividend policy adopts the residual dividend policy. According to the Company's budget plan, cash dividend shall first be reserved. If there is a remaining balance, a cash dividend shall be distributed. If the cash dividend can be distributed in the year, it shall not be lower than 5% of the total dividend amount.

• 3) Except for making up for the Company's losses and distributing new shares or cashes in the shareholders' existing shares proportion, the statutory surplus reserve shall not be used. However, if new shares or cashes are issued, such reserve shall not exceed 25% over the paid-in capital.

• 4) Special surplus reserve

• a) When the Company distributes surplus, the debit balance of other equity items on the balance sheet day of the year must be set aside as a special surplus reserve before distribution. When the debit balance of other equity items is reversed, the reversal amount may be included in the surplus available for distribution.

• b) As stipulated in JGZFZ No. 1010047490 order, the accounting treatment of the public offering company's reinvestment subsidiary holding the parent company's stock shall be handled in accordance with the provisions of Paragraph 1, Article 41 of the Securities Exchange Act. Therefore, for listed, OTCBB listed and emerging companies, because their subsidiaries do not hold parent company’s shares, their market values are lower than book values; same amounts as the differences shall be provided as per shareholding ratios, but shall not be distributed. If the market price rebounds subsequently, the listed, OTCBB listed and emerging companies may transfer the amount to the special surplus reserve in accordance with the shareholding ratio.

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5) Surplus distribution

On July 20, 2021 and June 19, 2020, the Company passed the resolutions of surplus distribution plans for the year 2020 and the year 2019 at the shareholders' meeting as follows:

2020 Amount Dividend per share (NTD) Statutory surplus reserve $ 31,520 Special surplus reserve - Rotary special surplus reserve ( 2,651) Cash dividends 180,951 $ 0.80 Total $ 209,820	2020	2020	2019	2019
	Amount	Dividend per share (NTD)	Amount	Dividend per share (NTD)
		$ 0.80	$ 17,544 9,222 - 114,357	$ 0.50
	$ 209,820		$ 141,123

• 6) On March 24, 2022, the Company’s board of directors passed the resolution on annual profit distribution plan for the year 2021. Only annual profit distribution plan for the year 2021 awaits for shareholders’ meeting to make resolution in 2022.

Statutory surplus reserve Special surplus reserve Cash dividends Total	2021	2021
	Amount	Dividend per share (NTD)
	$ 10,274 432 56,547	$ 0.25
	$ 67,253

By March 24, 2022, the above-mentioned for surplus distribution proposal for the year 2021 has not been resolved by the shareholders' meeting.

• u. Operating revenue

• 1) Subdivision of customer contract revenue

The Group's revenue is derived from the provision of goods and services that are gradually recognized over time and recognized at certain time points. Revenue can be broken down into the following major product lines:

2021	Sales revenue	Construction revenue	Project revenue	Service revenue	Total $ 561,068 3,053,676 $3,614,744
Revenue recognition time point Revenue recognized at certain time point Revenue recognized step by step over time	$216,503 -	$ 344,565 -	$ - 2,850,431	$ - 203,245
	$216,503	$ 344,565	$2,850,431	$ 203,245

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2020	Sales revenue	Construction revenue	Project revenue	Service revenue	Total
Revenue recognition time point Revenue recognized at certain time point Revenue recognized step by step over time	$131,713 -	$2,755,094 -	$ - 2,245,136	$ - 85,648	$2,886,807 2,330,784
	$131,713	$2,755,094	$2,245,136	$ 85,648	$5,217,591

• 2) Contractual assets and contractual liabilities

• a) The Group recognizes contractual assets and contractual liabilities related to customer contractual revenue:

Contractual assets: Contractual assets - Construction contract clauses Contractual liabilities: Contractual liabilities - Construction contract clauses Contractual liabilities - Sales contract clauses Total	December 31, 2021	December 31, 2020	January 1, 2020
	$ 336,046	$ 421,497	$ 509,855
	December 31, 2021	December 31, 2020	January 1, 2020
	$ 141,821 -	$ 174,032 1,530	$ 263,719 318,926
	$141,821	$175,562	$ 582,645

• b) Opening contractual liabilities are recognized as revenue of the period

Opening contractual liabilities balance is recognized as revenue of the period Presale contract for construction project	2021	2020
	$ 1,530	$ 302,756

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• c) The Company undertook Taiwan CPC Corporation’s "partial replacement project of the second overseas oil unloading buoy submarine pipeline of Taoyuan refinery". The project was delayed due to irresponsible climate factors, which caused disputes between the two parties over the project payment. The disputes have been mediated by Procurement Appeal Review Committee of the Public Works Committee of the Executive Yuan, with relevant project losses recognized in 2021.

• v. Interest income

Interest income
Bank deposit interest Other interest income	2021	2020
	$ 741 60,589	$ 953 10,888
	$61,330	$11,841

• w. Other income

Other income
Rental income Other revenue - other	2021	2020
	$ 2,101 6,024	$ 1,501 7,031
	$ 8,125	$ 8,532

• x. Other interest and loss

Other interest and loss
Investment disposal interest Conversion loss of net foreign currency Losses in disposing of property, plant and equipment Others	2021	2020
	- ( 527) ( 173) (6,784)	5,477 ( 357) - (1,974)
	($7,484)	$3,146

• y. Finance costs

Finance costs
Interest expense: Bank loan Payment of interests for company bonds Discounted amortization of company bonds Others Minus: Capitalized amount of assets meeting requirements Industry park interest repayment Finance costs	2021	2020 $ 29,901 5,766 1,250 44 ( 4,953) ( 6,275)
	$ 61,641 5,330 1,125 187 - ( 46,622)
	$ 21,661	$ 25,733

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z. Additional information about expense nature

Employee benefit expenses Depreciation expense (inclusive of investment property) Depreciation expense of right-of-use assets Amortization cost Amortization cost of right-of-use assets Employee benefit expenses Depreciation expense (inclusive of investment property) Depreciation expense of right-of-use assets Amortization cost Amortization cost of right-of-use assets		2021
	Belong to operating costs	Belong to operating expenses	Total
	$ 125,881 203 - 3 -	$ 75,724 3,457 4,850 1,390 139 2020	$ 201,605 3,660 4,850 1,393 139
	Belong to operating costs	Belong to operating expenses	Total
	$ 137,207 383 - 9 -	$ 93,426 3,787 950 1,704 70	$ 230,633 4,170 950 1,713 70

aa. Employee benefit expenses

Employee benefit expenses
Salary Labour expense Pension Other labour expense		2021
	Belong to operating costs	Belong to operating expenses	Total
	$ 105,973 10,201 5,531 4,176	$ 65,400 5,676 2,493 2,155	$ 171,373 15,877 8,024 6,331
	$125,881	$ 75,724	$201,605

• 1) According to these articles of association, the Company deducts accumulative losses based on the profits of the current year. If there is also balance afterwards, the Company shall allocate employee remuneration 8%, but director remuneration not greater than 2%.

• 2) In 2021 and 2020, the estimated amounts of employee remuneration of the Company were $11,693 and $26,707 respectively; the estimated amounts of director remuneration

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were $2,923 and $6,677 respectively; aforesaid amounts were recorded as salary expenses.

In 2021, depending on the year's profits, 8% and 2% are estimated and recorded respectively. The resolution of the Board of Directors decided that the actual allotment amounts were $11,693 and $2,923, of which employee remuneration was paid in cash.

The employee remuneration $26,707 and the director remuneration $6,677 approved by the Board of Directors for the year 2020 are consistent with the amounts recognized in the annual report for the year 2020.

Information on employee remuneration and director remuneration approved by the Company's Board of Directors can be viewed on Market Observation Post System.

• 3) By December 31, 2021 and 2020, the Company’s number of employees were 204 and 224 respectively, of which the number of directors who were not concurrently employees was 5.

bb. Income tax

• 1) Income tax expense (interest) Components of income tax expense (interest)

Income tax for the period: Income tax from gains of current period Undistributed surplus tax Underestimate (overestimate) number of income of previous years Total income tax for the period Deferred income tax: Original generation and return of temporary difference Income tax expense (interest)	2021	2020
	$ 5,281 5,502 200	$ 1,765 2,701 1,942
	10,983	6,408
	22,158	( 20,535)
	$ 33,141	($14,127)

• 2) Relationship of income tax expense (interest) with accounting profit

Calculation of income tax of pre-tax net profit at statutory tax rate (Note) To-be-eliminated expenses and tax-exempted income as per tax law Land VAT Temporary difference not recognized as deferred income tax assets Tax loss not recognized as deferred income tax assets Deferred income tax assets' realizable evaluation changes Undistributed surplus tax Underestimate number of income of previous years Income tax expense (interest)	2021	2020
	$ 34,296 ( 17,879) 4,874 3 3,978 2,167 5,502 200	$ 63,964 ( 118,904) 1,766 ( 1,254) ( 34,895) 72,032 2,701 463
	$ 33,141	($ 14,127)

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Note: The basis of the applicable tax rate is the tax rate applicable to the income of the relevant country.

• 3) The amounts of each deferred income tax asset or liability arising from temporary differences and tax losses are as follows:

Temporary difference: - Deferred income tax assets: Unrealized bad debt loss $ Loss on price drop and dull of unrealized inventories Capitalization of deferred interest Unrealized foreign investment loss Unrealized impairment loss Deferred recognition expense Loss offset Subtotal - Deferred income tax liabilities: Conversion difference of foreign operating agency ( Unrealized foreign investment profit ( Subtotal ( Total $				2021
		January 1	Recognized as profit or loss		Recognized as other comprehensive net income		December 31
	$	677 1,729 317 317 84 49 121,948	$ - - ( 317) - - (11,404)		$ - - - - - - -		$ 677 1,729 - 317 84 49 110,544
		125,121	(11,721)		-		113,400
		3,136) 11,780)	- (10,437)		- -	( (	3,136) 22,217)
	(	14,916)	( 10,437)		-	(	25,353)
	$	110,205	($22,158)		$-		$88,047

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January 1 Temporary difference: - Deferred income tax assets: Unrealized bad debt loss $ 677 Loss on price drop and dull of unrealized inventories 2,004 Capitalization of deferred interest 476 Unrealized foreign investment loss 4,205 Unrealized impairment loss 84 Deferred recognition expense 7,401 Loss offset 92,496 Subtotal 107,343 - Deferred income tax liabilities: Unrealized conversion profit ( 151) Conversion difference of foreign operating agency ( 3,136) Unrealized foreign investment profit ( 11,229) Subtotal ( 14,516) Total $ 92,827		2020
	January 1	Recognized as profit or loss	Recognized as other comprehensive net income	December 31
	$ 677 2,004 476 4,205 84 7,401 92,496	$ - ( 275) ( 159) ( 3,888) - ( 7,352) 29,452	$ - - - - - - -	$ 677 1,729 317 317 84 49 121,948
	107,343	17,778	-	125,121
		151 - ( 551)	- - -	- ( 3,136) ( 11,780)
	( 14,516)	( 400)	-	( 14,916)
	$ 92,827	$ 17,378	$-	$ 110,205

• 4) The effective period of the Group's unused tax losses and the relevant amounts of unrecognized deferred income tax assets are as follows:

		December 31,2021
Occurrence year	Declared/Authori zed number	Amount without deduction	Unrecognized deferred income tax assets	Last deduction year
2012 2013 2014 2015 2016 2018 2020 2021	$ 47,167 131,026 47,655 37,887 10,737 165,745 193,493 19,892	$ - 115,268 47,655 37,887 10,737 172,219 187,454 19,892	$ - - - - - - 12,105 19,892	2022 2023 2024 2025 2026 2028 2030 2031
	$ 653,602	$ 591,112	$ 31,997

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December 31, 2020

		December 31, 2020
Occurrence year	Declared/Authori zed number	Amount without deduction	Unrecognized deferred income tax assets	Last deduction year
2012 2013 2014 2015 2016 2018 2020	$ 47,167 131,026 47,655 37,887 10,737 179,615 337,524	$ 47,167 131,026 47,655 37,887 10,737 172,219 337,524	$ - - - - - - 174,476	2022 2023 2024 2025 2026 2028 2030
	$ 791,611	$ 784,215	$ 174,476

• 5) Deductible temporary differences not recognized as deferred income tax assets:

Deductible temporary differences	December 31, 2021	December 31, 2020
	$ 6,311	$ 6,311

• 6) The income tax settlement and declaration of the profit of the Company and its subsidiary - CHANG JI Company, have been approved by the tax collection authority until the year 2019. The income tax settlement and declaration of the profit of the Company's subsidiary - Hsin Ting Company have been approved by the tax collection authority to the year 2020.

• cc. Earnings per share

Basic earnings per share Net profit of current period belong to parent company Dilution of earnings per share Influence of potential ordinary shares with dilution effect Employee dividends Net profit of current period belong to parent company's ordinary share holders, plus potential ordinary shares		2021
	After-tax amount	Weighted average number of outstanding shares (thousand shares)	Earnings per share (NTD)
	$ 102,741 -	198,064 1,528	$ 0.52 $ 0.51
	$ 102,741	199,592

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Basic earnings per share Net profit of current period belong to parent company Dilution of earnings per share Influence of potential ordinary shares with dilution effect Employee dividends Net profit of current period belong to parent company's ordinary share holders, plus potential ordinary shares		2020	Earnings per share (NTD) $ 1.59 $ 1.57
	After-tax amount	Weighted average number of outstanding shares (thousand shares)
	$ 315,653 -	198,925 2,468
	$ 315,653	201,393

• dd. Transaction with non-controlling interests

Additional interests of acquiring subsidiaries

The Company purchased 2,960,000 shares held by employees of CHANG JI CONSTRUCTION CO., LTD. in cash at $34,260 in 2020. The book value of non-controlling interests of CHANG JI CONSTRUCTION CO., LTD. on the acquisition date was $36,121. The transaction reduced non-controlling interests by $36,121 and the equity attributable to owners of the parent company went up by $1,861. The impact of changes in the equity of CHANG JI CONSTRUCTION CO., LTD. in 2020 on the owners' equity belonging to parent company is as follows:

2021 Book value of purchasing non- controlling interests $ - Consideration of paying for non- controlling interests - Capital surplus - difference between price of obtaining subsidiary's shares actually and book value $-	2021	2020
	$ - -	$ 36,121 ( 34,260)
		$ 1,861

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ee. Changes of liabilities from financing activities

January 1, 2021 Changes of financing cash flow Other non-cash changes December 31, 2021	Short-term loan	Short-term notes and bills payable	Long-term loan (inclusive of long- term loan due within one year or one business cycle)	Payable company bonds (inclusive of company bonds mature within one year or one business cycle)	Total liabilities from financing activities 2,504,886 276,972 ( 1,876) $ 2,779,982
	$ 1,041,271 ( 678,245) -	$ 105,000 35,000 -	$ 859,658 920,217 -	$ 498,957 - ( 1,876)
	$ 363,026	$ 140,000	$ 1,779,875	$ 497,081

Short-term loan January 1, 2020 $1,078,961 Changes of financing cash flow ( 37,690) Other non-cash changes - December 31, 2020 $1,041,271	Short-term loan	Short-term notes and bills payable	Long-term loan (inclusive of long- term loan due within one year or one business cycle)	Payable company bonds (inclusive of company bonds mature within one year or one business cycle)	Total liabilities from financing activities $3,045,068 ( 541,432) 1,250 $2,504,886
		1,386,400 (1,281,400) -	$ 82,000 777,658 -	$497,707 - 1,250
	$1,041,271	$ 105,000	$ 859,658	$498,957

7. Transactions of interested parties

a. Major transactions with interested parties

Company name Leishi International Development Co., Ltd.	Relationship with the Company
	President is the Company's president

b. Transaction with interested parties

1) Operating revenue

Project revenue Associated enterprise	2021	2020
	$ 121,626	$ 35,552

There is no material difference between the transaction price and payment terms of construction income, and those who are not interested parties.

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2) Receivable amount of interested parties

Accounts receivable Associated enterprise	December31,2021	December31,2020
	$23,982	$-

c. Remuneration of key managements

Salary and other short-term employee benefit Benefit after retirement Total	2021	2020
	$ 25,383 477	$ 39,149 584
	$ 25,860	$ 39,733

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8. Assets in pledge

• a. The details of the guarantee provided for the assets of the Group are as follows:

Asset item		Book value	Guarantee purpose
	December 31, 2021	December 31, 2020
Inventories - Property for sale Other current assets - Pledged deposit - Allowance for special account - Special account for trust - Joint construction deposit, project deposit and bid bond Property, plant and equipment Investment property Other non-current liabilities -Refundable deposits - Allowance for special account	$ - 192,728 244,290 1,359,799 36,522 96,913 65,259 14,959 151,736	$ 286,575 24,305 519,591 841,911 438,042 111,253 65,670 14,056 -	Guarantee for bank financing limit and guarantee for short-term notes payable Project bond, performance bond and bank financing limit guarantee Performance bond, bank financing limit guarantee and payable company bonds Performance bond Joint construction performance bond, project deposit and bid bond Guarantee for bank financing limit Guarantee for bank financing limit General deposit and golf pass Payable company bonds
	$ 2,162,206	$ 2,301,403

• b. As of December 31, 2021 and December 31, 2020, Chang Ji pledged 28,125,000 shares of the Company (“treasury stock” column) against a loan.

• Key contingent liabilities and unrecognized contract promises

Commitments

Except Note 6 (f), the Group also has major commitments and contingencies. Specific abstracts are as follows:

• a. Warranty

• 1) For bid deposit, performance bond, advance payment guarantee and other construction guarantees required by the Group, the Group entrusted bank as joint and several guarantor. The Group signed entrusted warranty contracts or offered fixed deposit receipts for pledge and guarantee. By December 31, 2021, the guarantee was $1,681,852.

• 2) By December 31, 2021, the performance bond notes issued by the Group for the sale of land at the request of buyer and project owner was $3,031,159.

• b. By December 31, 2021, the Group has issued an unused letter of credit for the purchase of materials and equipment, with an amount of $37,426.

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• c. By December 31, 2021, the Group has signed contract project contract, and the amount to be paid for the project in future years is $7,946,621.

• d. By December 31, 2021, the Group has signed the land purchase contract with a price of $493,426 and without transfer and paid $450,020 in accordance with the contract.

10. Major disaster loss

No such circumstance.

11. Major subsequent events

On March 24, 2022, the Board of Directors of the Company passed the resolution on the profit distribution plan and the payment of remuneration of employees, directors and supervisors for the year 2021. Please refer to Note 6 (t) 6. and Note 6 (bb) for details.

12. Others

a. Capital management

The Group's capital management objectives are to ensure the continued operation, and maintain optimal capital structure to lower capital costs, and provide remuneration to shareholders. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Based on the debt-to-capital ratio, the Group monitors its capital. The ratio is calculated by dividing total capital by net debt. Net debt is calculated as deduction of cash and cash equivalents from total borrowings (including "current and noncurrent borrowings" reported in consolidated balance sheets). Gross capital is calculated as “equity” reported in consolidated balance sheets plus net debt.

By December 31, 2021 and 2020, the Group's debt-to-capital ratio was as follows:

Total borrowing Minus: Cash and cash equivalents Net liabilities Total equity Total capital Debt-to-capital ratio	December31,2021	December31,2020 $ 2,504,886 (209,217) 2,295,669 3,141,092 $ 5,436,761 42.22%
	$ 2,779,982 (297,603)
	2,482,379 3,084,330
	$ 5,566,709
	44.59%

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b. Financial instrument

1) Financial instrument type

December 31, 2021 Financial assests Investment of equity instrument specified for financial assets at fair value through other comprehensive income $ 7,328 Financial assets measured after amortized cost Cash and cash equivalents 297,603 Notes receivable (including interested parties) 27,490 Notes receivable 243,616 Other accounts receivable 3,383,436 Refundable deposits 14,959 Other financial assets 1,985,075 $ 5,959,507 December 31, 2021 Financial liabilities Financial liabilities measured after amortized cost Short-term loan $ 363,026 Short-term notes and bills payable 140,000 Notes payable 16,402 Accounts payable 384,633 Other accounts payable 69,654 Payable company bonds (inclusive of company bonds mature within one year or one business cycle) 497,081 Long-term loan (inclusive of long-term loan due within one year or one business cycle) 1,779,875 Deposits received 159,766 $ 3,410,437	December 31, 2021	December 31, 2020
		$ 6,684 209,217 1,578 517,658 3,042,963 14,056 60,912
	$ 5,959,507	$ 3,853,068
	December 31, 2021	December 31, 2020
	$ 363,026 140,000 16,402 384,633 69,654 497,081 1,779,875 159,766	$ 1,041,271 105,000 3,179 496,067 83,874 498,957 859,658 60,912
	$ 3,410,437	$ 3,148,918

2) Risk management policy

The Group’s financial risks are mainly the risks associated with investing in financial instruments and the exchange rate risks of foreign currency transactions. For the financial risks of investing various financial instruments, the Group has always adopted the strictest control standards. All financial investments and operations have undergone a comprehensive assessment of their possible market

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risks, credit risks, liquidity risks and cash flow risks. The one with the least risk is the one to rely on. For exchange rate risk of foreign currency transactions, also based on policy risk management objectives, the Group aims to figure out optimized risk points and maintain appropriate liquidity points to achieve the best hedging strategy.

• 3) Significant financial risk - Nature and degree

• a) Market risk

Exchange rate risk

• i. The Group involves certain non-functional currencies in business. Therefore, it is affected by important exchange rate fluctuations. The information of foreign currency assets and liabilities with significant exchange rate fluctuations is as follows:

(Foreign currency: Functional currency) Financial assests Monetary item USD: New Taiwan Dollars Non-monetary items USD: New Taiwan Dollars Financial liabilities Monetary item USD: New Taiwan Dollars			December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021
	Foreign currency (thousand NTD)	Exchang e rate	Book value (New Taiwan Dollars)	Sensitivity analysis
				Change range	Influence of profit and loss	Influence of rights and interests
	2,969 6,839 234	27.68 27.68 27.68	$ 82,321 $189,301 $ 10,451	1% 1% 1%	$ 823 $ - ($ 105)	$ - $1,893 $ -

(Foreign currency: Functional currency) Financial assets Monetary item USD: New Taiwan Dollars Non-monetary items USD: New Taiwan Dollars Financial liabilities Monetary item USD: New Taiwan Dollars			December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020
	Foreign currency (thousand NTD)	Exchang e rate	Book value (New Taiwan Dollars)	Sensitivity analysis
				Change range	Influence of profit and loss	Influence of rights and interests
	2,177 6,330 268	28.48 28.48 28.48	-60- $ 62,523 $180,265 $ 7,615	1% 1% 1%	$ 625 $ - ($ 76)	$ - $1,803 $ -

• ii. Due to significant influence of exchange rate fluctuation, the Group recognizes aggregate amounts of all the exchange losses (including realized and unrealized) of monetary items as $527 and $357 respectively in 2021 and 2020.

Price risk

The Group's equity instruments exposed to price risk are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income/(loss) in held column. To manage the price risk of investment in equity instruments, the Group diversifies its investment portfolio on the basis of limits set by the Group.

Interest rate risk of cash flow and fair value

The Group's interest rate risk comes from bank loan. Borrowings issued at floating interest rate expose the Group to take cash flow interest rate risk, which is partially offset by cash and cash equivalents held at floating interest rate. Borrowings issued at fixed interest rate expose the Group to fair value interest rate risk. In 2021 and 2020, the Group's borrowings at floating interest rate were priced in New Taiwan Dollars, and every time when the market interest rate goes up by 1%, the increased cash outflows were $22,829 and $20,059 respectively.

• b) Credit risk

• 1) Credit risk refers to the risk of financial loss to the Group due to the failure of a customer or financial instrument counterparty to meet its contractual obligations. According to the Group's internal credit policy, each operating entity within the Group must conduct management and credit risk analysis for each new customer before setting the terms and conditions for payment and delivery. Internal risk control is to assess the credit quality of customers by taking into account their financial status, past experience and other factors. Individual risk limits are set by the Board of Directors based on internal or external ratings, and used to regularly monitor credit line. The main credit risk comes from deposits made with banks and financial institutions, as well as credit risk from wholesale and retail customers, and includes uncollected accounts receivable.

• 2) In 2021 and 2020, there was no items exceeding the credit limit, and the management did not expect any significant losses due to the counterparty's nonperformance of contracts.

• 3) The Group uses IFRS 9 to provide the following assumptions as a basis for judging whether there is significant increase in the credit risk of financial instrument after original recognition:

When the contract payment is overdue for more than 30 days according to the agreed payment terms, it is deemed that the credit risk of the financial asset has increased significantly after the original recognition.

• 4) The Group uses IFRS 9 to provide the following assumptions. When the contract payment is overdue for more than 90 days according to the agreed payment terms, it is deemed as contract breach.

• 5) The Group groups accounts receivable and contract assets of customers according to the characteristics of customer type, and estimates the expected credit losses based on matrix and loss ratio method with simplification method.

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• 6) Taiwan Institute of Economic Research's Prospect Observation Report introduced by the Group considers the forward-looking adjustment based on specific period history and current information to obtain loss ratio and estimate the allowance for loss of accounts receivable. In December 31, 2020 and 2021, matrix and loss ratio method with is as follows:

December 31, 2021 Expected loss ratio Total book value Allowance for loss December 31, 2020 Expected loss ratio Total book value Allowance for loss	No overdue	Overdue for 1 to 120 days	Overdue for 121 days and above	Total
	0%~4.26% $ 263,154 113 No overdue	4.26%~74.08% $ 3,766 179 Overdue for 1 to 120 days	74.08%~100% $ 3,741 2,771 Overdue for 121 days and above	$ 270,661 3,063 Total
	0%-2.44% $ 517,243 37	2.44%-80.45% $ 1,779 1,327	80.45%-100% $ 5,653 5,653	$ 524,675 7,017

• 7) The Group's simplified bills receivables and changes in allowances for accounts receivables are as follows:

January 1 Impairment loss record Amounts written off due to failure to get back December 31	2021	2021
	Accounts receivable	Notes receivable
	$ 7,017 97 ( 4,051)	$ - - -
	$ 3,063	$-

January 1 Impairment loss record December 31		2020	2020
	Accounts receivable		Notes receivable
	$ 4,918 2,099		$ - -
	$ 7,017		$-

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• c) Liquidity risk

• i. Cash flow projection is executed by operating individuals in the Group, and summarized by the Group's financial department. The Group’s Finance Department monitors the Group's current funds demand forecast to ensure that the Group has sufficient funds to meet its operational needs, and maintains sufficient but unpaid borrowing commitment limit at all times, so that the Group does not violate the relevant borrowing limits or terms. Such forecast takes into account the Group's debt financing plan, compliance with debt terms, compliance with financial ratio targets on the internal statements of balance sheets, and the requirements of external regulatory laws and regulations.

• ii. Details of borrowing limit not used by the Group:

Mature within a year Mature for over a year	December31,2021	December31,2020
	$ 1,439,171 4,365,770	$ 1,680,296 5,211,820
	$ 5,804,941	$ 6,892,116

By the end of December 31, 2021 and 2020, in the Group's unutilized borrowing limit mature for more than one year, $4,365,770 and $5,211,820 are loan limits in execution of “Chiayi County Machouhou Industry Park Development Project” respectively as described in Note 6 (p).

• iii. The following table shows the Group's non-derivative financial liabilities, which are grouped by relevant due dates, and analyzed based on the remaining period from the balance sheets statement day to the contractual maturity date. Contract cash flow presented in the following table is non-discounted amount.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2021 Within 1 year Short-term loan $ 366,911 Short-term notes and bills payable 140,000 Notes payable 13,021 Accounts payable 241,093 Other accounts payable 69,654 Rental liabilities 9,106 Payable company bonds (inclusive of company bonds mature within one year or one business cycle) 3,985 Long-term loan (inclusive of long- term loan due within one year or one business cycle) 16,809 Deposits received 155,703	Within 1 year	1 to 5 years
		$ - - 3,381 143,540 - 4,050 515,470 1,900,795 4,063

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Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2020 Within 1year Short-term loan $ 1,047,294 Short-term notes and bills payable 105,000 Notes payable 3,179 Accounts payable 281,346 Other accounts payable 83,613 Rental liabilities 1,578 Payable company bonds (inclusive of company bonds mature within one year or one business cycle) 506,004 Long-term loan (inclusive of long- term loan due within one year or one business cycle) 45,478 Deposits received -	Within 1year	1to 5 years
		$ - - - 214,713 - 4,477 - 938,257 60,912

c. Fair value information

• 1) The levels of evaluation techniques used to measure the fair value of financial and nonfinancial instruments are defined as follows:

• Level 1: Market prices (unadjusted) that enterprises could obtain identical assets or liabilities over active markets on the measurement date. Active market is where transactions of assets or liabilities occur with sufficient frequency and volume,which provide pricing information on an ongoing basis. Fair value of shares and beneficiary certificates of listed/OTCBB listed invested by the Group falls into the scope.

• Level 2: Assets or liabilities' directly or indirectly observable input values, but excluding prices of level 1.

• Level 3: Assets or liabilities' unobservable input values. Equity instruments invested by the Group over inactive market fall into this range.

• 2) For fair values of investment property measured with costs, please refer to Note 6 (j).

• 3) Financial instruments measured at fair value

The Group's book values of cash and cash equivalents, notes receivable, accounts receivable, other receivables, short-term loans, notes payable, accounts payable and other accounts payable are reasonable approximations of fair values.

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• 4) Financial and non-financial instruments measured at fair value; the Group makes classification depending on the nature, characteristics and risks of assets and liabilities and the basis of fair value level. The relevant information is as follows:

• a) The Group is classified by nature of assets and liabilities. Relevant information is:

December 31, 2021 Assets Repeatable fair value Equity securities of financial assets at fair value through other comprehensive income December 31, 2020 Assets Repeatable fair value Equity securities of financial assets at fair value through other comprehensive income		Level 1		Level 2		Level 3		Total
	$	-	$	-	$ 7,328		$	7,328
		Level 1		Level 2		Level 3		Total
	$	-	$	-	$ 6,684		$	6,684

• b) Methods and assumptions that the Group use to measure fair value are described as follows:

• i. The Group adopts the market prices as the input values of fair values (i.e. level 1), which are sorted depending on the characteristics of the instruments as follows:

Shares of listed (OTCBB listed) companies Open-end fund Market prices Closing price Net worth

• ii. Except financial instruments of aforesaid active markets, other financial instruments’ fair values have been obtained with evaluation technique or by referring to counterparties’ quotations. The fair values obtained through evaluation techniques may refer to current fair values of other financial instruments with substantially similar conditions and characteristics, discounted cash flow method or other evaluation techniques, including the use of models for calculation based on market information available on the consolidated balance sheet day (for example, OTCBB center referred to yield curve, and Reuters average quotation for commercial promissory note rate).

• iii. When evaluating non-standardized and less complex financial instruments, such as debt instruments in inactive market, interest rate swap contracts,

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foreign exchange contracts and options, the Group employed evaluation techniques that are widely used by market participants. Parameters used for such financial instrument's evaluation model are generally observable information over the market.

• 5) No transfer between level 1 and level 2 in 2021 and 2020.

• 6) The following are third-grade changes in 2021 and 2020:

January 1 Profit or loss recognized in other comprehensive income Unrealized profit accounted for through other comprehensive income December 31	2021	2020
	$ 6,684 644	$ 8,441 (1,757)
	$ 7,328	$ 6,684

• 7) No level 3 shift-in and shift-out in 2021 and 2020.

• 8) For the evaluation process that the fair value is classified as level 3, the Group's financial department is responsible for the independent fair value verification of financial instruments. Adopting the data from independent source, this makes the evaluation result close to the market status, and confirms that the data source is independent, reliable, consistent with other resources and represents executive prices. Besides, regularly calibrate the evaluation model, perform retrospective test, update the input values and information required for the evaluation model, and any other necessary fair value adjustments to ensure that the evaluation results are reasonable. External appraiser is entrusted to appraise the price of Investment property

• 9) The quantitative information about the significant unobservable input value and the sensitivity analysis of the change of the significant unobservable input value of the evaluation model used in level 3 fair value measurement items are explained as follows:

Non-derivative equity instrument: Venture capital company shares' private equity fund investment Non-derivative equity instrument: Venture capital company shares' private equity fund investment	Fair value on December 31, 2021	Evaluation technique	Significant unobservable input value	Range (weighted average)	Relation between input value and fair value N/A Relation between input value and fair value N/A
	$ 7,328 Fair value on December 31, 2020	Net asset value method Evaluation technique	N/A Significant unobservable input value	- Range (weighted average)
	$ 6,684	Net asset value method	N/A	-

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d. Other matters

During the prevalence of COVID-19 and the government's implementation of various antiepidemic measures, the Group was working normally. The assessment results show that the Group’s ability to continue operating, asset impairment or financing risk was not significantly affected.

13. Disclosure of notes

a. Relevant information of major transactions

• 1) Loan to others: No such circumstance.

• 2) Endorse for others: No such circumstance.

• 3) Situation of holding marketable securities at the end of the period (excluding investment subsidiary, associated enterprise and joint venture control): Please refer to Attached table I

• 4) Cumulative amount of buying or selling the same marketable securities reaches 0.3 billion New Taiwan dollars or over 20% of paid-in capital: No such circumstance.

• 5) The amount of property obtained reaches 0.3 billion New Taiwan dollars or over 20% of paid-in capital: No such circumstance.

• 6) The amount of property disposed of reaches 0.3 billion New Taiwan dollars or over 20% of paid-in capital: No such circumstance.

• 7) The amount of interested parties purchasing and selling goods reaches 0.1 billion New Taiwan dollars or over 20% of paid-in capital: No such circumstance.

• 8) The amount of interested parties receivable reaches 0.1 billion New Taiwan dollars or over 20% of paid-in capital: No such circumstance.

• 9) Engage in derivative instrument transaction: No such circumstance.

• 10) For business relations and major transaction between parent company and subsidiary and between subsidiaries, their circumstances and amounts are: Please refer to Attached table II.

• b. Information about shift investment business

Name, region and other information of invested company (excluding invested company in Chinese Mainland): Please refer to Attached table III

• c. Information about investment in Chinese Mainland

• 1) Basic profile: Please refer to Attached table IV.

• 2) Significant transactions that, directly or indirectly, through third regional business, transfers to invest in invested company in Chinese Mainland: No such circumstance.

d. Information about key shareholders

Information about key shareholders: Please refer to Attached table V.

14. Department information

• a. General information

The management of the Group has identified departments that should be reported based on the reporting information used to make decisions, which is to evaluate performance and allocate resources from the perspective of products as a whole; at present, the Company focuses on engineering business and construction business, and the operating results of other

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products are consolidated and expressed in “other operation departments”.

The Group's base of enterprise composition and department division, and department information are measured based on that there is no significant change in the period.

b. Information about department profit and loss

Information about reporting department of main operation decision maker

2021	Engineering Dept.	Construction Dept.	Park development department	Administrativ e support department	Other operation departments	Total
Department revenue Net operating profit of department (loss) Department depreciation and amortization	$2,850,431 ( 117,363) ( 814)	$344,565 18,184 ( 2,012)	$203,245 197,250 ( 493)	$ - ( 53,827) ( 5,533)	$216,503 23,716 ( 1,190)	$3,614,744 67,960 ( 10,042)

2020	Engineering Dept.	Construction Dept.	Administrative support department	Other operation departments	Total
Department revenue Net operating profit of department (loss) Department depreciation and amortization	$ 2,330,784 ( 45,168) ( 1,032)	$2,755,094 418,596 ( 1,229)	$ - ( 76,107) ( 2,944)	$ 131,713 ( 10,995) ( 1,697)	$5,217,591 286,326 ( 6,902)

c. Information about adjustment of department profit and loss

The Company should report that the net operating profit (loss) of departments is consistent with the net operating profit (loss) listed in the statements of comprehensive income, so there is no need for adjustment.

d. Information about product and labour service

External customer review mainly comes from engineering and construction business. For relevant revenue balance, please see 14(b).

e. Regional information

Regional information of the Group in 2021 and 2020:

2021 Revenue Non-current assets Taiwan $ 3,467,289 $ 192,135 Asia 16,502 - Europe and America 97,541 - Others 33,412 - Total $ 3,614,744 $ 192,135	2021	2021	2020	2020
	Revenue	Non-current assets	Revenue	Non-current assets
		$ 192,135 - - -	$ 5,128,908 16,966 55,185 16,532	$ 205,536 - - -
	$ 3,614,744	$ 192,135	$ 5,217,591	$ 205,536

-68-

Non-current assets refer to property, plant and equipment, investment property and other non-current property, but excluding financial instrument and deferred income tax assets.

f. Important information about customers

Important information about customers of the Group in 2021 and 2020:

Company A Company B Company C Company D	2021	2021	2020	2020
	Revenue	Department	Revenue	Department
	$ 972,494 525,528 130,885 183,238	Engineering Dept. Engineering Dept. Engineering Dept. Engineering Dept.	$ 662,077 399,187 301,711 195,689	Engineering Dept. Engineering Dept. Engineering Dept. Engineering Dept.

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APEX SCIENCE & ENGINEERING CORP. and subsidiaries

Marketable securities held at the end (excluding the parts controlled by investment subsidiaries, associated enterprises and joint venture)

December 31, 2021

Attached table I

Unit: NT$1,000 (unless otherwise noted)

Holdingcompany Types and names of securities(Note 1) Relationship with securities issuers (Note 2) Ledger account	Endingterm Remarks (Note 4) Number of shares Book value(Note 3) Percentage of ownership Fair value
APEX SCIENCE & ENGINEERING CORP. HOLY STONE ENTERPRISE CO., LTD... - Financial assets at fair value through other comprehensive income- non- current Chang Ji Construction Co., Ltd. APEX SCIENCE & ENGINEERING CORP. APEX Science & Engineering Corp. “ Chang Ji Construction Co., Ltd. BIG SUN Group - “	2,648,106 $ 7,044 16.07 $ 7,044 28,124,802 302,342 12.29 302,342(Note 5) 517,789 285 0.26 285

Note 1. “marketable securities” in this sheet refers to stocks, bonds, beneficiary certificates and the marketable securities derived from the above items that fall within the scope of International Accounting Standard 9 'Financial Instruments'.

Note 2. If marketable securities issuers are not interested persons, it's not needed to fill in the column.

Note 3. If it is measured at fair value, please fill in the book balance after adjustment by fair value evaluation and deduction of accumulated impairment in column B of book value; if not measured at fair value, please fill the original acquisition cost or book value after deduction of accumulated impairment from cost after amortization.

Note 4. All marketable securities have restricted users due to the provision of guarantees, pledged loans or other agreements, and the number of guarantees or pledged shares; the shares and amounts of guarantees or pledges and the restricted use conditions shall be indicated in the column “remarks”.

Note 5. In order to acquire financing credit limit from banks, Chang Ji used its 28,125,000 shares held in the Company as a pledge guarantee by June 30, 2021.

Attachment I Page 1

APEX SCIENCE & ENGINEERING CORP. and subsidiaries

For business relations and major transaction between parent company and subsidiary and between subsidiaries, their circumstances and amounts are: Please refer to Attached table II.

December 31, 2021

Addendum II

Unit: NT$1,000 (unless otherwise noted)

Number (Note 1) Trader name Transaction object Relation to trader (Note 2)	Transaction history
	Subject Amount Tradingconditions Ratio to consolidated gross operating revenue or total assets(Note 3)
0 APEX SCIENCE & ENGINEERING CORP. Chang Ji Construction Co., Ltd. 1 1 Chang Ji Construction Co., Ltd. APEX SCIENCE & ENGINEERING CORP. 2 1 Chang Ji Construction Co., Ltd. APEX SCIENCE & ENGINEERING CORP. 2	Advance collection of engineering fund $ 415,036 No significant difference from general manufacturers 5.08 Receivable engineering fund - already invoiced 162 No significant difference from general manufacturers 0.00 Project revenue 1,552 No significant difference from general manufacturers 0.04

Note 1. The information on the business transactions between parent company and its subsidiaries should be numbered in the serial number column. The method of filling is as follows:

• (1) For parent company, fill 0.

• (2) Subsidiaries are numbered sequentially starting from Arabic number 1 according to company type.

• Note 2. There are three types of relationships with the trader, and it is sufficient to indicate the type (if it is the same transaction between the parent-subsidiary or each subsidiary, there is no need to disclose it repeatedly. For example, for transaction between parent company and subsidiary, if parent company has made disclosure, the subsidiary does not have to disclose it repeatedly; for transaction between two subsidiaries, if one subsidiary has made disclosure, the other subsidiary does not have to disclose it repeatedly:

• (1) Parent company to parent company

• (2) Subsidiary to parent company

• (3) Subsidiary to subsidiary

• Note 3. As to the calculation of the ratios of the transaction amounts to consolidated gross operating revenue or total assets, if transaction amounts are liabilities, it should be calculated by the method of closing balance in consolidated total assets; if they are profit and loss items, it should be calculated by the method that middle cumulative amount in consolidated gross trading revenue.

Note 4. The important transactions in this Attached table may be determined as to whether for presentation by the Company according to the significance principle.

Attachment II Page 1

APEX SCIENCE & ENGINEERING CORP. and subsidiaries

Relevant information about name and region of invested company (excluding invested company in Chinese Mainland)

January 1 - December 31, 2021

Attached table III

Unit: NT$1,000 (unless otherwise noted)

Original investment amount Holding at the end of the period

									Current profit and loss	Investment profit and
Name of investment	Name of invested company		Main	End of the	End of last				of invested company	loss recognized for the
company	(Note 1 and 2)	Region	operatingitem	period	year	Number of shares	%	Book value	(Note 2(2))	period(Note 2(3))	Remark
APEX SCIENCE &	XINDIN ENGINEERING	Taiwan	Engineering	$ 8,000	$ 8,000	800,000	100.00	$ 20,973	$ 6,687	$ 6,687
ENGINEERING CORP.	CONSULTANTS CORP.		technical
			consultant,
			urban update
			reconstruction,
			management
			consultant,
			other
			consulting
			service
APEX SCIENCE &	REINFORCE ENERGY	The British	General	95,964	95,964	2,810,000	100.00	209,988	30,799	30,799
ENGINEERING CORP.	CO.,LTD	Virgin	investment
		Islands
APEX SCIENCE &	Chang Ji Construction Co.,	Taiwan	Construction	496,856	496,856	54,320,000	90.53	428,293	29,157	10,855
ENGINEERING CORP.	Ltd.		of civil and
			structural
			works and
			water
			conservancy
			projects, etc.

Note 1. If a public offering company has a foreign holding company and according to local laws and regulations, the consolidated financial report is the main financial report, the disclosure of the foreign invested company may only relate to news of the holding company.

Note 2. For situations not specified in Note 1, please fill as per the following provisions:

• (1) Columns such as “Name of invested company’, “Region’, “Main operating item’, “Original investment amount’ and “Holding at the end of the period’should be filled in based on the (public offering) Company’s reinvestment situation and each directly or indirectly controlled invested company’s re-investment in order, and indicate the relationship of each invested company with the Company (public offering) in the “remarks” column (if it is a subsidiary or a sub-subsidiary company).

• (2) In the column “Current profit and loss of invested company’, the invested company's profit and loss amounts for the period shall be filled.

• (3) In the second column “Investment profit and loss recognized for the period’, only profit and loss of each subsidiary for direct reinvestment recognized by this (public offering) Company, and each invested company evaluated by the equity method should be filled in, and the rest can be omitted. In filling in "current income/(loss) amount of each subsidiary listed for direct reinvestment", it should be confirmed that the amounts of profits and losses of each subsidiary for the period have included the investment profits and losses of its re-investment that should be recognized in accordance with regulations.

Attachment IIIPage 1

APEX SCIENCE & ENGINEERING CORP. and subsidiaries

Chinese Mainland Investment Information - Basic Profile

January 1 - December 31, 2021

Attached table IV

Unit: NT$1,000 (unless otherwise noted)

Name of mainland invested company Main operating items Paid-in capital Investment mode(Note 1) Accumulated investment amount remitted from Taiwan at the beginning of the current period

Investment amount remitted or recovered in the currentperiod Accumulated investment amount remitted from Taiwan at the end of the current period Current income/(loss) of the invested company The shareholding ratio of direct or indirect investment of the company Investment income/(loss) listed in the current period (Note 2) Closing investment book value Investment income remitted back as of the currentperiod Remark remitted recovered

Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd. Engaged in the production and sales of other LED displays and LED display indicator panels $ 197,100 2 $ 94,313

$ - ($20,564) $ 73,749 $ 67,126 46.00 $ 30,878 $ 189,301 $ 20,564 Note 2 (2) B

	Cumulative investment amounts in		Investment limit in Chinese
	Chinese Mainland remitted from	Investment limit approved by	Mainland specified by Investment
Companyname	Taiwan at the end of thisperiod	Investment Commission,MOEA	Commission,MOEA
APEX SCIENCE &	$ 73,749	$ 73,749	$17,987,484
ENGINEERING CORP.

Note 1. There are 3 investment types, which can be marked:

• (1) Directly go to Chinese Mainland to make investment

• (2) Re-invest Chinese Mainland through a third regional company (invested through REINFORCE ENERGY CO.,LTD)

• (3) Other method

• Note 2. Investment profit and loss column recognized in the period:

• (1) If in financing, there is no investment profit and loss, please specify

• (2) Profit and loss on investment's recognition base include three following types, which shall be specified

  • A. Financial report audited by international accounting firms working with ROC Accounting Firm

  • B. Financial report checked and approved by certified auditors of Taiwan parent company

  • C. Non-significant subsidiary, financial report not checked and approved by auditors

Attachment IVPage 1

Note 3. Figures of this Attached table are listed in New Taiwan dollar

Attachment IVPage 1

APEX SCIENCE & ENGINEERING CORP. and subsidiaries

Information about key shareholders

December 31, 2021

Attached table V

Name of Major Shareholders	Share
	Number of shares held(Ordinaryshares) Number of shares held(Preference shares) Percentage of ownership
Chang Ji Construction Co., Ltd. KUO, KUO-HUA CHIH, CHII-GUNG LIN, CHIEN-CHIH	28,124,802 - 12.29% 16,124,177 - 7.04% 15,547,189 - 6.79% 13,465,000 - 5.88%

• Note 1. (1) This sheet contains information of major shareholders. On the last business day of at the end of each quarter, Jibao Company calculates the companies held by shareholders as to the total amount of ordinary shares and preference shares held by shareholders that have been registered and delivered (including treasury shares) intangibly (over 5%). As to share capital recorded in the Company's financial report and the actual number of shares recorded and delivered, there may be differences due to different calculation base.

• (2) If aforesaid information is related to shareholders’ delivery of held shares to trust, trustees opens trust accounts for separate display. As for the insider equity declaration of shareholders holding more than 10% of the shares in accordance with the Securities Exchange Act, their shareholdings include the shares held by themselves plus the shares they delivered for trust and have the right to use the trust property, etc. Please refer to public information for insider equity declaration.

Attachment V Page 1