APEX — Audit Report / Information 2022

Nov 11, 2022

APEX SCIENCE & ENGINEERING CORP.

Parent Company Only Financial Statements and Independent Auditors' Report

For the Years Ended December 31, 2022 and 2021

(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.

Parent Company Only Financial Statements and Independent Auditor's Report for the years ended December 31, 2022 and 2021

Table of Contents

Item			Page
I.	Cover		1
II.	Table of Contents		2
III.	Independent Auditors' Report		3 ~ 5
IV.	Parent Company Only Balance Sheet		6 ~ 7
V.	Parent Company Only Statements of Comprehensive Income		8
VI.	Parent Company Only Statements of Changes in Equity		9
VII.	Parent Company Only Statements of Cash Flows		10 ~ 11
VIII.	Notes to Parent Company Only Financial Statements		12 ~ 69
	1	Company development and business scope	12
	2	Approval date and procedure of financial statements	12
	3	Application of newly promulgated and revised criteria and interpretation	12 ~ 13
	4	Summary description of crucial accounting policy	14 ~ 26
	5	Main source of major accounting judgment, estimate and assumption
		uncertainty	26
	6	Description of important accounting items	27 ~ 55
	7	Transactions of interested parties	56 ~ 57
	8	Assets in pledge	58
	9	Significant contingent liabilities and outstanding contractual commitments	58
	10	Major disaster loss	59
	11	Significant Events after the Balance Sheet Date	59
	12	Others	59 ~ 68
	13	Disclosure of notes	68
	14	Operation Department Information	69
IX.	List	of significant accounting items	70 ~ 83

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Independent Auditors’ Report

(2023) CSBZ No.22004243

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

Audit opinions

We have audited the accompanying financial statements of APEX SCIENCE & ENGINEERING CORP. (the Company), which comprise the balance sheet as of Dec. 31, 2022 and 2021, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financing statements present fairly, in all material respects, the financial position of the Company as of Dec. 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for 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 in 2022 and 2021. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements Section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended Dec.31, 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters of the Company's parent company only financial statements for the year ended Dec. 31 2022 are stated as follows:

Recognition of construction revenue

Explanation of the matter

Please refer to Notes 4(z), 5(b) and 6(u) for explanation of the accounting policies of construction revenue recognition, significant accounting estimates and relevant items.

The Company's main business items include the engineering-related business, and the construction revenue is recognized according to the stage of completion during the engineering contract period. The stage of completion is calculated according to the percentage of cost incurred from the date of signing of each engineering contract to the end date of the report period against the total cost under the contract, and all engineering costs to be invested in contract awarding, materials and labor is estimated on the basis of the owner's planning by taking into account the works added or reduced due to changes in the scope of works and combining with the market condition fluctuations. As the total cost estimate would affect the stage of completion and recognition of construction revenue and it includes complicated items, usually involves subjective judgment and is highly uncertain, we considered the recognition of construction revenue as a key audit matter.

Corresponding audit procedures

We performed the following audit procedures on the particular aspects indicated by key audit matters:

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1. We understood and evaluated the reasonableness of policies and procedures adopted for recognition of construction revenue.

2. We obtained the newly-increased engineering contract, confirmed the consistency between the total price used to calculate the construction revenue and the contractual stipulation, sampled and inspected the preliminary project budget checklist approved by the project management department and confirmed the consistency in basis used for estimate of the total cost and calculation of the stage of completion.

3. We verified the evidence documents of major works added or reduced in the corresponding period to confirm that changes in the estimate of the total cost have been recognized appropriately.

4. We obtained the details of cost invested in the corresponding period, sampled and inspected relevant vouchers, checked them against the items listed in accounts to confirm that the amount of cost used for calculation of the stage of completion is appropriate, and checked the accuracy of the percentage of completion.

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

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

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

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

Auditors' Responsibilities for the Audit of the Financial Statements

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

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

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

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

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1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2022 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 Financial Supervisory Commission Approval document No.: Jin Guang Zheng Shen No. 1090350620 Jin Guang Zheng Shen No. 1060025060

Mar. 13, 2023

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APEX SCIENCE & ENGINEERING CORP.

Parent Company Only Balance Sheet For the Years Ended December 31, 2022 and 2011

Unit: NT $1000

Assets	Notes	December31,2022 Amount % $ 183,927 2 61,856 1 204,938 3 1,693 - 92,832 1 57,569 1 3,664,990 44 2,820 - 587,521 7 107,690 1 2,243,339 27 7,209,175 87 5,647 - 660,880 8 102,866 1 2,249 - 64,849 1 60,142 1 165,173 2 1,061,806 13 $ 8,270,981 100	December31,2021	December31,2021
		Amount $ 183,927 61,856 204,938 1,693 92,832 57,569 3,664,990 2,820 587,521 107,690 2,243,339 7,209,175 5,647 660,880 102,866 2,249 64,849 60,142 165,173 1,061,806 $ 8,270,981	Amount $ 223,550 - 175,401 3,298 150,036 19,882 3,293,268 226 566,638 104,543 1,751,532 6,288,374 7,044 659,254 99,769 4,630 65,259 113,398 164,186 1,113,540 $ 7,401,914	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets at amortized cost - current 1140 Contract Assets - Current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable from related parties, net 1200 Other accounts receivable 1210 Other receivables from related parties 130X Inventory 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 Investment 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	6(a) 6(b) 6(u) 6(c) 6(c) 7 6(d) 7 6(e) and 8 6(f) 6(g) and 8 6(h) 6(i) 6(j), 7 and 8 6(k) and 8 6(bb) 8			3 - 2 - 2 - 45 - 8 1 24
				85
				- 9 1 - 1 2 2
				15
				100

(To be continued on the next page)

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APEX SCIENCE & ENGINEERING CORP. Parent Company Only Balance Sheet For the Years Ended December 31, 2022 and 2011

Unit: NT $1000

						December31,2022				December31,2021
	Liabilities and equity		Notes			Amount	%			Amount	%
	Current liabilities
2100	Short-term borrowings	6(i)			$	322,756		4	$	295,600	4
2110	Short term bills payable	6(m)				-		-		90,000	1
2130	Contract liabilities - current	6(u)				33,353		-		32,909	1
2150	Notes payable					177		-		3,069	-
2170	Accounts payable					78,077		1		123,652	2
2180	Accounts payable to related parties	7				2,263		-		14,485	-
2200	Other accounts payable					58,670		1		37,047	1
2230	Current tax liabilities					1,293		-		1,311	-
2280	Lease liabilities - current					1,841		-		2,420	-
2320	Long-term liabilities due within	6(p)
	one year or one business cycle					1,530,160	19			1,634,230	22
2399	Other current liabilities - others	6(n)				2,577,371	31			1,646,169	22
21XX	Total current liabilities					4,605,961	56			3,880,892	53
	Non-current liabilities
2530	Bonds payable	6(o)				497,673		6		497,081	7
2570	Deferred tax liabilities	6(bb)				31,177		-		25,353	-
2580	Lease liabilities - non-current					235		-		2,042	-
2600	Other non-current liabilities					320		-		740	-
25XX	Total non-current liabilities					529,405		6		525,216	7
2XXX	Total liabilities					5,135,366	62			4,406,108	60
	Equity
	Share capital	6(r)
3110	Ordinary share capital					2,287,135	28			2,287,135	31
	Capital surplus	6(s)
3200	Capital surplus					275,698		3		269,332	3
	Retained earnings	6(t)
3310	Legal capital reserve					290,234		4		279,960	4
3320	Special surplus reserve					23,118		-		22,686	-
3350	Unappropriated earnings					581,460		7		441,778	6
	Other equity
3400	Other equity			(		19,415 )		- (		23,118 )	-
3500	Treasury stock	6(r)		(		302,615 ) (		4 ) (		281,967 ) (	4 )
3XXX	Total equity					3,135,615	38			2,995,806	40
	Major contingent liabilities and	9
	unrecognized contract
	commitments
	Major subsequent events	11
3X2X	Total liabilities and equity				$	8,270,981	100		$	7,401,914	100

The accompanying notes are an integral part of the financial report. Please read them together.

President: KUO, KUO-HUA

Accounting Manager: WU, HSIU-LIN

Manager: KUO, KUO-HUA

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APEX SCIENCE & ENGINEERING CORP.

Parent Company Only Statements of Comprehensive Income For the Years Ended December 31, 2022 and 2021

Unit: NT $1000 (Except for earnings per share)

Item	Notes 6(u) $ 6(e)(z) (aa) ( 6(z) (aa) ( ( ( 12(b) ( ( 6(v) 6(w) 6(x) 6(y) ( 6(i) 6(bb) ( $ 6(h) ($ 6(i) 6(i) $ $ 6(cc) $ 6(cc) $		2022
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 loss 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 7070 Share of profits and losses of subsidiaries, affiliated enterprises and joint ventures recognized by using the equity method 7000 Total non-operating income and expenses 7900 Net profit before tax 7950 Income tax 8200 Net income for the period Other comprehensive income (loss) 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 8330 Share of profits and losses of subsidiaries, affiliated enterprises and joint ventures recognized by using the equity method - Items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translating the financial statements of foreign operations 8300 Other comprehensive income (net after tax) 8500 Total comprehensive income for the period Basic earnings per share 9750 Basic earnings per share Diluted earnings per share 9850 Diluted earnings per share		$ (
		$
		$
		$
		$

The accompanying notes are an integral part of the financial report. Please read them together.

President: KUO, KUO-HUA

Manager: KUO, KUO-HUA Accounting Manager: WU, HSIU-LIN

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APEX SCIENCE & ENGINEERING CORP.

Parent Company Only Statements of Changes in Equity For the Years Ended December 31, 2022 and 2021

Unit: NT $1000

For the Year Ended December 31, 2021 Balance as of January 1, 2021 Net income for the period Other comprehensive income for the period Total comprehensive income for the period Appropriation of earnings 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 stock Changes in percentage of ownership interests in subsidiaries Balance as of December 31, 2021 2022 Balance as of January 1, 2022 Net income for the period Other comprehensive income for the period Total comprehensive income for the period Appropriation of earnings in 2021: 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 stock Treasury stock repurchase Balance as of December 31, 2022	Notes		Ordinary share capital $ 2,287,135 - - - - - - - - $ 2,287,135 $ 2,287,135 - - - - - - - - $ 2,287,135		Capital s	urplus					Retained earnings	Unappropriated earnings $ 548,857 102,741 - 102,741 ( 31,520 ) 2,651 ( 180,951 ) - - $ 441,778 $ 441,778 206,934 - 206,934 ( 10,274 ) ( 432 ) ( 56,546 ) - - $ 581,460	Other	equity	equity		Treasurystock ($ 281,967 ) - - - - - - - - ($ 281,967 ) ($ 281,967 ) - - - - - - - ( 20,648 ) ($ 302,615 )	TOTAL
				Capital surplus - Treasurystock $ 246,654 - - - - - - 20,370 - $ 267,024 $ 267,024 - - - - - - 6,366 - $ 273,390	Capital surplus - Differences between the price of acquisition or disposal of shares of subsidiaries and the book value $ 2,132 - - - - - - - - $ 2,132 $ 2,132 - - - - - - - - $ 2,132	Capital surplus - Changes in the recognized ownership interests in subsidiaries		Capital surplus - Others		Legal capital reserve $ 248,440 - - - 31,520 - - - - $ 279,960 $ 279,960 - - - 10,274 - - - - $ 290,234	Special surplus reserve $ 25,337 - - - - ( 2,651 ) - - - $ 22,686 $ 22,686 - - - - 432 - - - $ 23,118		Exchange differences on translating the financial statements of foreign operations		Unrealized gains or losses on financial assets at fair value through other comprehensive income
	6(t) s 6(i) 6(i) 6(t) s 6(i) 6(r)					$ 47 - - - - - - - ( 47) $ - $ - - - - - - - - - $ -		$ 176 - - - - - - - - $ 176 $ 176 - - - - - - - - $ 176					($ 12,755 ) - ( 1,076 ) ( 1,076 ) - - - - - ($ 13,831 ) ($ 13,831 ) - 5,048 5,048 - - - - - ($ 8,783 )		($ 9,931) - 644 644 - - - - - ($ 9,287) ($ 9,287) - ( 1,345) ( 1,345) - - - - - ($ 10,632)			$ 3,054,125 102,741 ( 432 ) 102,309 - - ( 180,951 ) 20,370 ( 47 ) $ 2,995,806 $ 2,995,806 206,934 3,703 210,637 - - ( 56,546 ) 6,366 ( 20,648 ) $ 3,135,615

The accompanying notes are an integral part of the financial report. Please read them together.

President KUO, KUO-HUA

Accounting Manager: WU, HSIU-LIN

Manager: KUO, KUO-HUA

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APEX SCIENCE & ENGINEERING CORP. Parent Company Only Statements of Cash Flows For the Years Ended December 31, 2022 and 2021

Cash flows from operating activities Net income before tax for the period Adjustments for Losses of income and expenses Depreciation expenses (Investment properties included) Depreciation expenses of right-of-use assets Amortization expenses Amortization expenses of right-of-use assets Conversion of deferred sales expense into commission fee Interest expenses Interest income Share of profits of subsidiaries, affiliated enterprises and joint ventures recognized by using the equity method Expected credit impairment loss Gain on disposal of property, plant and equipment Changes in operating assets and liabilities Net changes in operating assets Contract assets Notes receivable Notes receivable from related parties, net Accounts receivable Accounts receivable from related parties, net Other accounts receivable Other receivables from related parties Inventory Prepayments Other current assets Net changes in operating liabilities Contract liabilities Notes payable Accounts payable Accounts payable to related parties Other accounts payable Other current liabilities Other non-current liabilities Cash generated from/(used in) operations Cash collected from interest income Cash paid for interest expenses Income tax paid for the period Net cash generated from operating activities

Unit: NT $1000 Notes For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 $ 267,543 $ 131,543 6(j)(k) (z) 2,643 2,506 6(z) 2,242 2,099 6(z) 1,697 1,268 6(z) 139 138 - 10 6(y) 9,982 14,842 6(v) ( 32,381 ) ( 61,263 ) 6(i) ( 37,282 ) ( 48,341 ) 12(b) 1,686 97 6(x) ( 205 ) ( 29 ) ( 29,537 ) 40,040 1,605 ( 1,720 ) - 39,830 55,518 334,216 ( 37,687 ) - ( 740,420 ) ( 1,858,256 ) ( 2,594 ) ( 226 ) ( 20,883 ) 239,950 ( 3,147 ) ( 13,792 ) 4,200 415,441 444 ( 64,744 ) ( 2,891 ) 607 ( 45,576 ) ( 161,557 ) ( 12,222 ) ( 15,793 ) 21,613 ( 29,852 ) 1,329,653 1,027,815 ( 420) ( 155) 733,720 ( 5,326 ) 2,628 40,708 ( 9,380 ) ( 14,131 ) ( 1,547) ( 8,573) 725,421 12,678

(To be continued on the next page)

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APEX SCIENCE & ENGINEERING CORP.

Parent Company Only Statements of Cash Flows For the Years Ended December 31, 2022 and 2021

Unit: NT $1000

Cash flows from investing activities Financial assets at amortized cost Acquisition of property, plant and equipment Increase in restricted assets Increase (decrease) in other non-current assets Cash dividend payments of the invested company evaluated with the equity method Proceeds from disposal of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from short-term borrowings Repayments of short-term borrowings Increase (decrease) in short-term notes payable Proceeds from long-term borrowings Repayments of long-term borrowings Issuance of corporate bonds Repayments of corporate bonds Repayment of the principal portion of lease liabilities Cash dividends distributed Treasury stock repurchase Net cash generated from (used in) financing activities Increase in cash and cash equivalents of the period Balance of cash and cash equivalents at the beginning of the period Balance of cash and cash equivalents at the end of the period

Notes For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 6(b) ( $ 61,856 ) $ - 6(j) ( 5,330 ) ( 1,683 ) ( 496,007 ) ( 617,426 ) ( 2,684 ) 87 6(i) 47,122 16,296 205 29 ( 518,550) ( 602,697) 1,724,339 3,039,358 ( 1,697,183 ) ( 3,132,530 ) ( 90,000 ) 65,000 1,767,040 1,554,670 ( 1,871,110 ) ( 708,620 ) 6(o) - 500,000 6(o) - ( 500,000 ) ( 2,386 ) ( 2,255 ) 6(t) ( 56,546 ) ( 180,951 ) 6(r) ( 20,648) - ( 246,494) 634,672 ( 39,623 ) 44,653 223,550 178,897 $ 183,927 $ 223,550

The accompanying notes are an integral part of the financial report. Please read them together.

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

Accounting Manager: WU, HSIU-LIN

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APEX SCIENCE & ENGINEERING CORP.

Notes to Parent Company Only Financial Statements For the Years Ended December 31, 2022 and 2021

Unit: NT $1000 (Unless otherwise noted)

1. Company development and business scope

APEX SCIENCE & ENGINEERING CORP. (hereinafter referred to as "the company") was established on August 9, 1976, formerly known as "APEX Engineering Co., Ltd." and changed its name to "APEX SCIENCE & ENGINEERING CORP." in 2001. The main operating items are mechanical engineering, instrument, and electrical engineering, environmental engineering, manufacturing, trading of electronicrelated products, and entrusting construction plants to build residential and commercial buildings, as well as development special zones. The Company's shares started for sale on Taiwan Stock Exchange Corporation from Nov. 1995.

2. Approval date and procedure of financial statements

The Independent Auditors' report was passed by Directors of board on March 13, 2023.

3. Application of newly promulgated and revised criteria and interpretation

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

The following table sets forth the standards and interpretations of the new issuance, amendment, and revision of the international financial reporting standards applicable and effective in 2022 approved by the FSC:

Newly promulgated/amended/revised standards and interpretations Amendment to IFRS 3 "index of conceptual framework" Amendment to IAS 16 "property, plant and equipment: price before reaching the intended state of use” Amendment to IAS 37 "loss-making contracts - the cost of performing contracts" Annual Improvements to IFRSs 2018-2020 Cycle	The effective date
	of issuance by IASB January 01, 2022 January 01, 2022 January 01, 2022 January 01, 2022

The company has assessed that the above standards and interpretations have no significant impact on the company's financial position and financial performance.

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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 2023 recognized by FSC:

	The effective date of
Newly promulgated/amended/revised standards and interpretations	issuance by IASB
Amendment to IAS 1 "disclosure of accounting policies"	January 01, 2023
Amendment to IAS 8 "definition of accounting evaluation"	January 01, 2023
Amendment to IAS 12 "deferred income tax related to assets and	January 01, 2023
liabilities arising from a single exchange"

The company has assessed that the above standards and interpretations have no significant impact on the company's financial position and 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 effective recognized by FSC:

	The effective date of
Newly promulgated/amended/revised standards and interpretations	issuance by IASB
Amendments to IFRS 10 and IAS 28 "sale or investment of assets	To be decided by IASB
between investors and their affiliates or joint ventures"
Amendment to IFRS 16 "Lease liabilities in sale-leaseback"	January 01, 2024
IFRS 17 "insurance contracts"	January 01, 2023
Amendments to IFRS 17 "insurance contracts"	January 01, 2023
Amendment to IFRS 17 "initial application of IFRS 17 and IFRS 9 -	January 01, 2023
comparative information"
Amendment to IAS 1 "current or non-current classification of	January 01, 2024
liabilities"
Amendment to IAS 1 "Non-current liabilities with contractual terms"	January 01, 2024

The company has assessed that the above standards and interpretations have no significant impact on the company's financial position and financial performance.

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4. Summary description of crucial accounting policy

It describes below the major accounting policies adopted for the preparation of this independent financial report. Unless otherwise noted, such policies will apply during reporting period.

• a. Declaration of conformity

This independent financial report is prepared under the standards for the preparation of financial reports of securities issuers.

• b. Basis of preparation

• 1) This independent financial report is prepared at historical cost except for the following important items:

Financial assets at fair value through other comprehensive income

• 2) It requires the use of some significant accounting estimates in the preparation of financial reports that comply with the international financial reporting standards, international accounting standards, interpretation, and interpretation announcements (hereinafter referred to as IFRSs) approved by the FSC. The management also needs to use its judgment in applying the company's accounting policies. Please refer to note V for details for items involving high judgment or complexity, or items involving major assumptions and estimates of individual financial reports.

• c. Foreign currency conversion

The items listed in the financial report of each independent in the company are measured in the currency of the main economic environment in which the independent operates (i.e. functional currency). This independent financial report is presented in the company's functional currency "New Taiwan dollar".

• 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/(loss) at fair value, are evaluated and adjusted at spot exchange rate on Balance Sheets day. The conversion

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difference due to the adjustment is recognized into other comprehensive income/(loss). 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 other exchange gains and losses are reported in "other gains and losses" in the income 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/(loss).

• d. Standards of classifying current and non-current assets and liabilities

• 1) It is usually longer than one year for the company's engineering projects period and land development operating. The assets and liabilities related to construction and construction contracts divide into current and non-current under the operating period, and the other assets and liabilities divide into 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.

  • 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 company classifies all assets that do not meet the above conditions as non-current.

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

• a) Excepted 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 company classifies all liabilities that do not meet the above conditions as non-current.

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e. 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) The discount has little impact on short-term accounts receivable and bills without interest payment, and the company measures them based on the original invoice amount.

• f.

Agency land development business

• 1) It is entrusted by the government to handle the development on its behalf, and some development cases are responsible for external sales.

• 2) During the agency period, the Company will pay for, on behalf of client, land 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 period-by-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. The service revenue from the agency shall list on a period-by-period basis in proportion to the input cost when entrusted to handle the operating of developing the industrial zone.

• 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 purchase price paid by the land purchasing manufacturer is credited to "other current liabilities - advance payment for the sale of industrial zone", which is offset with the land development funds receivable from the agent when the owner allocates the payment.

g. Financial assets impairment

The Company measures the allowance loss under the amount of 12-month expected credit loss if the credit risk has not increased significantly since the original list on each balance sheet date, after considering all reasonable and verifiable information (including forward-looking ones) on debt instrument investments at fair value through other comprehensive income/(loss) and financial assets at amortized cost. The allowance loss shall be measured under the expected amount of credit loss during the duration when the credit risk has increased significantly since the original recognition. The allowance for loss is measured under the amount of expected credit loss during the duration

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for accounts receivable or contract assets that do not include significant financial components.

• h. 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/(loss); 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) The company adopts settlement date accounting for financial assets at fair value through other comprehensive income/(loss) under trading practices.

• 3) The company is measured at its fair value and transaction cost at the time of the initial list, and subsequently measured at fair value:

Changes in the fair value of equity instruments list in other comprehensive profits and losses. When delisting, the cumulative benefits or losses previously listed in other comprehensive income/(loss) shall not be reclassified as income/(loss) and transferred to retained earnings. When the right to receive dividends is established, the economic benefits related to dividends are likely to flow in, and the number of dividends measure reliably, the company lists dividend income in income/(loss). The company lists dividend income in income/(loss) when the right to receive dividends is established, the economic benefits related to dividends are likely to flow in, and the number of dividends measures reliably.

• i.

Financial assets at amortized cost

• 1) Those meeting all the following conditions:

• a) The financial assets are held under the operating model for the purpose of collecting 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 amortized cost that conforms to trading practices, the Company implements accounting on settlement day.

• 3) The Company measures interest income at its fair value plus transaction costs on initial recognition, and subsequently recognizes interest income and impairment loss over the liquidity period using the effective interest method under the amortization procedure, and recognizes its gain or loss in profit or loss when derecognized.

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j. Financial assets are delisted

Financial assets will exclude when the company's contractual right to receive cash flows from financial assets expires.

• 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-in-progress goods include raw materials, direct labor costs, other direct costs and manufacture-related expenses, but exclude borrowing costs. It adopts the item-by-item comparison method when comparing the lower cost and net realizable value. Net realizable value refers to the balance of the estimated selling price in the normal course of operating after deducting the relevant variable selling expenses.

m. Investments accounted for using the equity method - subsidiaries and associated enterprises

• 1) Subsidiaries refer to all independent (including special purpose independent) that the company has the right to dominate its financial and operating policies, generally holding more than 50% of its voting shares directly or indirectly. The company's investment in subsidiaries in independent financial reports evaluate with the equity method.

• 2) It has been written of the unrealized income/(loss) between the company and its subsidiaries. The accounting policies of the subsidiaries have been adjusted as necessary and are consistent with the policies adopted by the company.

• 3) The company lists the share of income/(loss) of subsidiaries after the acquisition as current income/(loss), and the share of other comprehensive income/(loss) after the acquisition as other comprehensive income/(loss). The company will continue to list the loss under the shareholding ratio if the loss share listed by the company for a subsidiary is equal to or exceeds the equity in the subsidiary.

• 4) Affiliated enterprises refer to all independents over whom the company has significant influence but no control, generally holding more than 20% of the voting shares directly or indirectly. The company's investment in affiliated enterprises is treated by the equity method and listed at cost when obtained.

• 5) The company lists the share of profits and losses obtained by related enterprises as current income/(loss), and the share of other comprehensive income/(loss) obtained by related enterprises as other comprehensive income/(loss). The company will not list further losses if the loss share of the company to any affiliated enterprise is equal to or exceeds its rights and

~18~

interests in the affiliated enterprise (including any other unsecured receivables) unless the company has legal obligations, constructive obligations to the affiliated enterprise or has paid money on its behalf.

• 6) The company lists all equity changes as "capital surplus" under the shareholding ratio when there are equity changes in non-income/(loss) and other comprehensive income/(loss) of affiliated enterprises, and the shareholding ratio of affiliated enterprises is not affected.

• 7) Unrealized income/(loss) arising from transactions between the company and affiliated enterprises have been written off under their proportion of equity in affiliated enterprises; Unrealized losses are also written off unless evidence shows that the assets transferred by the exchange have been impaired. The accounting policies of affiliated enterprises have been adjusted as necessary to be consistent with the policies adopted by the company.

• 8) It is the same as that of the company for the accounting treatment of all amounts previously listed in other comprehensive income/(loss) related to the related enterprise when the company disposes of a related enterprise if it loses its significant impact on the related enterprise, and if it directly disposes of relevant assets or liabilities, that is, if the benefits or losses previously list as other comprehensive income/(loss) will be reclassified as income/(loss) when disposing of relevant assets or liabilities, the interest or loss is reclassified from equity into income/(loss) when the significant impact on the affiliated enterprise is lost. Only the amount previously listed in other comprehensive profits and losses shall transfer out in the above manner in proportion If it still has a significant impact on the affiliated enterprise.

• 9) The current income/(loss) and other comprehensive income/(loss) of independent financial reports shall be the same as the apportionment of current income/(loss) and other comprehensive income/(loss) to the owners of the parent company in the financial report prepared based on consolidation under the "standards for the preparation of financial reports by securities issuers", and the sovereign interests of independent financial reports shall be the same as the interests attributable to the owners of the parent company in the financial report prepared based on consolidation.

• 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) It is likely to flow into the company for subsequent costs are included in the carrying amount of assets or listed as a separate asset only when the future economic benefits related to the project and the project cost can measure 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

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each of property, plant and equipment is great, they should be separately depreciated.

• 4) The company examines the residual value, useful life, and depreciation method of various assets at the end date of each financial year. It shall be handled under the accounting estimation change provisions of International Accounting Standard No. 8 "changes and errors in accounting policies and accounting estimates" from the date of change if the expected values of residual value and useful life are different from the previous estimates, or the expected consumption pattern of future economic benefits contained in the assets has changed significantly.

Assets' durable periods:

Houses and buildings 50 ~ 55 years Building improvement 3 ~ 10 years Machinery equipment 3 ~ 8 years Transportation equipment 5 years Office equipment 3 years

• o. Lessee's lease transactions - the right-of-use assets/lease liabilities

• 1) Leased assets list as of right-of-use assets and lease liabilities on the date when they are available for use by the company. 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.

  • The subsequent interest method is measured by the amortized cost method, and the interest expense accrues during the lease period. The lease liability will reassess and the remeasurement will be adjusted to the right-of-use assets when the lease term or lease payment changes due to non-contract modification.

• 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.

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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

The company estimates the recoverable amount of assets with signs of impairment on the balance sheet date. The impairment loss list is when the recoverable amount is lower than its book value. A recoverable amount refers to the fair value of an asset less the cost to sell or its value in use, whichever is higher. The impairment loss reverses when the impairment of listed assets in previous years does not exist or decreases except for goodwill, but the booking amount of the assets increased by the reversal of the impairment loss does not exceed the booking amount of the assets after deducting depreciation or amortization if the impairment loss does not list.

r.

Borrowing

It refers to the long-term and short-term funds borrowed from banks. The company measures the amount after deducting the transaction cost from the fair value at the time of initial recognition. Subsequently, any difference between the price after deducting the transaction cost and the redemption value is measured within the borrowing period at the amortized cost with the effective interest method.

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 corporate bonds payable issued by the company shall measure at the fair value fewer transaction costs at the time of initial recognition, and the difference between the fair value and the redemption value shall list as the excess or discount of corporate bonds payable, and shall list as an addition or deduction of corporate bonds payable; Subsequently, the effective interest method adopts to list the amortized cost as the current income/(loss) during the bond circulation period as the adjustment item of "finance costs".

u. Delisting of financial liabilities

The company excludes financial liabilities when the obligations contained in the contract perform, cancel or expire.

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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/(loss) 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 company lists expenses when it can no longer revoke the offer of termination welfare or list the relevant restructuring costs, whichever is earlier. Benefits that are not expected to be fully settled 12 months after the balance sheet day should be discounted.

• 4) Employee dividends 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.

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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) The company calculates the current income tax under the tax rate that has been legislated or substantively legislated on the balance sheet date in the country where the operation and taxable income generate. Management regularly assesses the status of income tax declaration as per the regulations related to applicable income tax and, where applicable, assesses income tax liabilities based on expected tax payments to tax authorities. The income tax on unappropriated earnings shall be levied under the income tax law, and the income tax expense on unappropriated earnings shall list for the distribution of actual earnings after the year following the year in which the earnings generated are approved by the shareholders' meeting.

• 3) Deferred income tax adopts the balance sheet method and lists the temporary difference between the tax basis of assets and liabilities and their carrying amount in the independent 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. It will not list if the company can control the time point of the reversal of the temporary difference arising from the investment in subsidiaries and affiliated enterprises, and the temporary difference is likely not to be reversed in the foreseeable future. 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.

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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

Dividends are distributed to the shareholders of the company list in the financial report when the shareholders' meeting of the company decides to distribute dividends, and cash dividends list as liabilities.

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

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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 noncurrent assets listed in the sheet) at the time of occurrence, and amortized according to the consistency of commodities or labor 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 company provides engineering construction-related services. Income from labor 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 under the agreed payment schedule. It list as contract assets when the service provided by the company exceeds the customer's payable. It list as contract liabilities if the customer's payable exceeds the service provided by the company.

• b) 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.

• 5)

• Service revenue

• a) The Group offers services about agency land development. Income from labor 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 labor hours accounted for the

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estimated total labor 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 IV (VI) for the list of relevant revenue.

• Main source of major accounting judgment, estimate and assumption uncertainty

When the company prepares this independent financial report, the management has used its judgment to determine the accounting policies adopted and made accounting estimates and assumptions based on the reasonable expectation of future events under the situation at the balance sheet date. 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 company shall estimate the total cost of completion based on the characteristics of the project and various objective factors. The revenue confirmation is based on the estimation of the percentage of input cost, and the company regularly reviews the rationality of the estimation. It may cause changes in the estimated total cost of completion and affect the amount listed by the company affected by the changes in the industrial environment and construction conditions.

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6. Description of important accounting items

a. Cash and cash equivalents

Cash in hand and working capital Check deposit Current deposit	$	Dec. 31, 2022 1,254 7,004 175,669 183,927	$	Dec. 31, 2021 1,407 25,351 196,792 223,550
	$		$

• 1) It is very low the possibility of default because the credit quality of the company's financial institutions is good, and the company has dealings with multiple financial institutions to spread credit risk.

• 2) The company has appropriately reclassified the provision of cash as a pledge guarantee. Please refer to note VIII for details of the pledge guarantee.

b. Financial assets at amortized cost

Item Current items: Ordinary corporate bonds Less: Accumulated impairment TOTAL	$	Dec. 31, 2022 61,856 - 61,856	$	Dec. 31, 2021 - - -
	$		$

• 1) The details of financial assets at amortized cost presented in profit or loss are as follows:

Interest income	$	2022 1,007	$	2021 -

• 2) Under the condition of not taking into account collateral or other credit enhancements, the insured amounts that best represent the financial assets at amortized cost held by the Company in 2022 and 2021 were $61,856 and $0, respectively.

• 3) Please refer to Note 12 (2) for information on the credit risk of financial assets at amortized cost.

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c. Accounts receivable and notes receivable

Accounts receivable Notes receivable Less: Allowance for bad debts	$ (	Dec. 31, 2022 1,693 95,492 2,660) 94,525	$ (	Dec. 31, 2021 3,298 153,099 3,063) 153,334
	$		$

• 1) The company does not hold any collateral.

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

• 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	$	Dec. 31, 2022 94,695 2,490 - 97,185	$	Dec. 31, 2021 148,890 3,766 3,741 156,397
	$		$

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

• 4) The balance of accounts receivable and notes receivable as of December 31, 2022, and December 31, 2021, were generated by customer contracts. Furthermore, it was $485,927 for the balance of accounts receivable under customer contracts as of January 1, 2021.

• 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 Dec. 31, 2022 and 2021 were $1,693 and $3,298, respectively; The insured amounts that best represent the credit risk of the Group's accounts receivable on Dec. 31, 2022 and 2021 were $92,832 and $150,036, respectively.

d. Other accounts receivable

Receivable agency land development fund Interest receivable Other accounts receivable - Other	$ $	Dec. 31, 2022 3,662,497 418 2,075 3,664,990	$ $	Dec. 31, 2021 3,291,127 57 2,084 3,293,268

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• 1) The land development funds receivable from the agency are the contract signed by the company with the Jiayi county government in May 2013 to "Chiayi County Machouhou industrial Park Phase I". The development period is expected to be four years from the date of signing the contract. And the company signed a contract with the government of Jiayi County on the "Chiayi County Machouhou industrial Park Phase I" in October 2018 to entrust the development of the industrial park. The development period is expected to be six years from the date of signing the contract; The Group signed a contract with the Tainan Municipal Government on the "development, rental, sale and management of Cigu Science and Technology Industrial Park" in January 2021, and was entrusted to develop the industrial park. The development period is expected to be six years from the date of notification of performance.

• a) The details of land development funds receivable from the company refer to follows:

Machohou Industry Park Development Project - Phase I $ Machohou Industry Park Development Project - Later PhaseI Development of Cigu Science and Technology Industrial Zone $	Machohou Industry Park Development Project - Phase I $ Machohou Industry Park Development Project - Later PhaseI Development of Cigu Science and Technology Industrial Zone $	Dec. 31, 2022 746,005 2,603,888 312,604 3,662,497	$	Dec. 31, 2021 615,404 2,662,276 13,447 3,291,127		Dec. 31, 2022 Accumulated service revenue recognized Client $ 421,844 Chiayi County Government 461,292 “ - Tainan Municipal Government $ 883,136
	$		$

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• b) The changes in land development receivables of the company in 2022 and 2021 are as follows:

Machohou Industry Park Development Project - Phase I Machohou Industry Park Development Project - Later PhaseI Development of Cigu Science and Technology Industrial Zone Machohou Industry Park Development Project - Phase I Machohou Industry Park Development Project - Later PhaseI Development of Cigu Science and Technology Industrial Zone		Opening balance	Opening balance		2022 Increase for the Collected amount	2022 Increase for the Collected amount	2022 Increase for the Collected amount	2022 Increase for the Collected amount	2022 Increase for the Collected amount	Ending balance $ 746,005 2,603,888 312,604
					$		period 198,991 2,142,783 299,157		($ (
		$ 615,404 2,662,276 13,447
		$ 3,291,127			$		2,640,931		($
	Opening balance
			$			period 398,823 2,174,798 13,447		for the period ($ 370,688) ( 833,605) -
	$ 587,269 1,321,083 -
	$ 1,908,352		$			2,587,068		($ 1,204,293)

• 2) The company listed the prepaid interest of the land development funds receivable from the agency in 2022 and 2021, and the amount of capitalized interest expense offset is $60,968 and $46,622 respectively. Please refer to Note 6 (25) for details.

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e. 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 Less: Allowance for price drop loss Total	$	Dec. 31, 2022 11,006 23,047 10,713 2,997 9,487 74,841 1,338 390 458,320 592,139 4,618) 587,521	$	Dec. 31, 2021 14,309 9,199 10,774 3,981 10,434 74,841 1,338 386 450,020 575,282 8,644) 566,638
	(		(
	$		$

1) The cost of inventories listed by the company is:

Costs of inventories sold Benefit from price drop and dull of inventories Building costs Project costs Total	$ (	2022 194,733 4,026) - 362,528 553,235	$	2021 163,993 - 252,587 727,666 1,144,246
	$		$

• 2) Some inventories have been provided as collateral for bank loans, please refer to Note 8 for details.

• 3) The capitalized amounts of interest on inventories of the Company in 2022 and 2021 are $0.

f. Prepayment

Advance payment of engineering amount Tax retained Others	$	Dec. 31, 2022 26,142 24,663 56,885 107,690	$	Dec. 31, 2021 51,539 12,541 40,463 104,543
	$		$

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g. Other current assets

Project deposit and bid bond Restricted assets Others	$	Dec. 31, 2022 175 2,242,296 868 2,243,339	$	Dec. 31, 2021 4,875 1,746,289 368
	$		$	1,751,532

• 1) Restricted Assets The amount of $1,916,867 and $1,257,958 on Dec. 31, 2022 and Dec. 31, 2021 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.

• h. 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	$ (	Dec. 31, 2022 14,727 9,080) 5,647	$ (	Dec. 31, 2021 14,727 7,683) 7,044
	$		$

• 1) The company chose to classify securities investment as a strategic investment as financial assets at fair value through other comprehensive income/(loss). They were $5,647 and $7,044 respectively for the fair values of these investments as of December 31, 2022, and 2021.

• 2) Financial assets at fair value through other comprehensive income are recognized as profit and loss, and comprehensive income/(loss):

Financial instruments at fair value through other comprehensive income Changes of fair value recognized in other comprehensive income	($	Dec. 31, 2022 1,397)	$	Dec. 31, 2021 644

• 3) Please refer to note 12 (2) for information on the credit risk of financial assets at fair value through other comprehensive income.

~32~

i. Equity method is adopted for investment

2022 January 1 $ 659,254 Investment profit (loss) accounted for using the equity method 37,282 Investment earning distribution using the equity method ( 47,122) Long-term liabilities falling due less than one year 6,366 Changes in capital surplus - Changes in other equity 5,100 December 31 $ 660,880 1) Details of subsidiaries listed by equity method are as follows: Dec. 31, 2022 Chang Ji Construction Co., Ltd. $ 415,332 REINFORCE ENERGY CO. LTD. 224,194 XINDIN ENGINEERING CONSULTANTS CORP. 21,354 $ 660,880	$ ( ( (		2021 607,962 48,341 16,296) 20,370 47) 1,076) 659,254
	$
	$	Dec. 31, 2021 428,293 209,988 20,973
	$	659,254

1) Details of subsidiaries listed by equity method are as follows:

2) Subsidiaries

a) The basic information of the company's major subsidiaries is as follows:

COMPANY NAME Chang Ji Construction Co., Ltd. REINFORCE ENERGY CO. LTD.	COMPANY	Main operating property Taiwan The British Virgin Islands	Shareholding ratio Nature of relation Measurement method Dec. 31, 2022 Dec. 31, 2021 90.53% 90.53% Subsidiaries Equity method 100% 100% " "

~33~

• b) The summary financial information of the company's major subsidiaries is as follows: Balance Sheets

Balance Sheets
Current assets $ Non-current assets Current liabilities ( Non-current liabilities ( Total net assets $ Share in associated enterprise's net assets $ Book value in associated enterprise $ Current assets $ Non-current assets Total net assets $ Share in associated enterprise's net assets $ Book value in associated enterprise $ Statements of Comprehensive Income Revenue $ Current net income of continuing operating unit $ Other comprehensive income/(loss) (after-tax net amount) ( Total comprehensive income for the period $ Dividends received from affiliated enterprises $	$ ( ( $ $ $ $	Chang Ji Construction Co., Ltd. Dec. 31, 2022 Dec. 31, 2021 1,567,844 $ 1,221,408 312,805 329,059 1,087,911) ( 719,388) 511) ( 11,878) 792,227 $ 819,201 717,203 $ 741,623 415,332 $ 428,293 REINFORCE ENERGY CO. LTD. Dec. 31, 2022 Dec. 31, 2021 706 $ 20,687 223,488 189,301 224,194 $ 209,988 224,194 $ 209,988 224,194 $ 209,988 Chang Ji Construction Co., Ltd. 2022 2021s 2,095,674 $ 2,300,394 15,626 $ 29,157 12,599) ( 67,500) 3,027 ($ 38,343) 7,094 $ 22,500
	$
	$
	$
	Income $
			2022 2,095,674 15,626 12,599) 3,027 7,094	$
				$ (
	$			($
	$			$

~34~

Revenue Current net income of continuing operating unit Other comprehensive income/(loss) (after-tax net amount) Total comprehensive income for the period	$	REINFORCE ENERGY CO. 2022 - $ 29,120 $ 5,048 ( 34,168 $	REINFORCE ENERGY CO. 2022 - $ 29,120 $ 5,048 ( 34,168 $	REINFORCE ENERGY CO. 2022 - $ 29,120 $ 5,048 ( 34,168 $	LTD. 2021 -
			2022 - 29,120 5,048 34,168	$
	$			$ (	30,799 1,076) 29,723
	$			$

c) Please refer to the notes to note 4 (3) of the company's consolidated financial statements in 2022 for information on the company's subsidiaries.

j. Property, plant and equipment

(	Houses and	(	Machinery	Transportation Equipment Office equipment $ 4,548 $ 2,969 ( 3,177) ( 1,958) $ 1,371 $ 1,011 $ 1,371 $ 1,011 390 163 ( 302) ( 618) $ 1,459 $ 556 $ 4,330 $ 2,801 ( 2,871) ( 2,245) $ 1,459 $ 556	Total $ 125,843 ( 26,074) $ 99,769 $ 99,769 5,330 ( 2,233) $ 102,866 $ 129,799 ( 26,933) $ 102,866
	buildings $ 54,032 20,504) $ 33,528 $ 33,528 4,777 1,313) $ 36,992 $ 58,809 21,817) $ 36,992		equipment $ 435 435) $- $ - - - $- $ - - $-	Equipment $ 4,548 ( 3,177) $ 1,371 $ 1,371 390 ( 302) $ 1,459 $ 4,330 ( 2,871) $ 1,459
(
(

~35~

(	Houses and	(	Machinery	Transportation Equipment Office equipment $ 3,264 $ 3,310 ( 3,146) ( 1,806) $ 118 $ 1,504 $ 118 $ 1,504 1,462 221 ( 209) ( 714) $ 1,371 $ 1,011 $ 4,548 $ 2,969 ( 3,177) ( 1,958) $ 1,371 $ 1,011	Total $ 124,900 ( 24,719) $ 100,181 $ 100,181 1,683 ( 2,095) $ 99,769 $ 125,843 ( 26,074) $ 99,769
	buildings $ 54,032 19,371) $ 34,661 $ 34,661 - 1,133) $ 33,528 $ 54,032 20,504) $ 33,528		equipment $ 435 396) $ 39 $ 39 - 39) $- $ 435 435) $-
(		(
(		(

1) No interest capitalization of property, plant, and equipment in the years 2022 and 2021.

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

~36~

k. Investment property

January 1 Land Houses and buildings Cumulative depreciation January 1 Depreciation expense December 31 December 31 Land Houses and buildings Cumulative depreciation	$ (	2022 55,380 24,584 14,705) 65,259 65,259 410) 64,849 55,380 24,584 15,115) 64,849	$ (	2021 55,380 24,584 14,294) 65,670 65,670 411) 65,259 55,380 24,584 14,705) 65,259
	$		$
	$ (		$ (
	$		$
	$ (		$ (
	$		$

• 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	$	2022 1,831 410	$	2021 1,831 411
	$		$

• 2) They were $102,838 and $102,327 respectively for the fair values of the investment property held by the company as of December 31, 2022, and 2021, which were based on the evaluation results of independent evaluation experts, which adopted the comparative method. Based on the comparison target price, compare, analyze and adjust the evaluated price under its situation, price date, region, and independent factors.

• 3) For information about guarantee with investment property, please refer to Note 8.

~37~

l. Short-term borrowings

Nature of loan Bank loan Guaranteed loan $ Credit loan $ Nature of loan Bank loan Guaranteed loan $ Credit loan $	Nature of loan Bank loan Guaranteed loan $ Credit loan $ Nature of loan Bank loan Guaranteed loan $ Credit loan $	Dec. 31, 2022 40,000 282,756 322,756 Dec. 31, 2021 105,000 190,600 295,600	Interest rate range Collateral 1.97%-2.37% Inventory, land, houses and buildings (listed property, plant and equipment and investment property) " None Interest rate range Collateral 1.41%-1.80% Inventory, land, houses and buildings (listed property, plant and equipment and investment property) " None
	$

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

m. Short-term notes and bills payable

Commercial promissory notes payable Interest rate range	$	Dec. 31, 2022 - -	$	Dec. 31, 2021 90,000 0.44%

n. Other current liabilities

Advance collection of down payment for industry zone sold Deposits received - Tender deposit for land sale Others	$	Dec. 31, 2022 2,523,774 30,855 22,742 2,577,371	$	Dec. 31, 2021 1,470,905 155,704 19,560
	$		$	1,646,169

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 the First Phase of Machohou Industrial Park in Chiayi County" and the "Second-stage Entrusted Development of the Machohou Industrial Park in Chiayi

~38~

County". , Sales and Management Case" 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 (4) for details.

o. Payable company bonds

Payable company bonds Less: Discount price of payable company bonds Less: Due within one year or one operating cycle, or exercise of company bonds' redemption right	$ (	Dec. 31, 2022 500,000 2,327) 497,673 - 497,673	$ (	Dec. 31, 2021 500,000 2,919) 497,081 -
	$		$	497,081

• 1) The company raised and issued the first domestic secured ordinary corporate bonds in 2021 with the approval of the competent authority, with a total issuance amount of $500,000 and a coupon rate of 0.56%. The issuance period is five years. It was listed and traded on the OTC market of the ROC on November 9, 2021, and the circulation period is from November 9, 2021, to November 9, 2026. The Company's bonds were paid of one-off principal repayment when due.

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

~39~

p. Long-term loan

Nature of loan Borrowing period and repayment method Interest rate range Long-term bank credit loan Taiwan Cooperative Bank Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.69% Taiwan middle and small-sized enterprise banks Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.69% Chang Hwa Bank Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.69% Agricultural Bank of Taiwan Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.69% Hua Nan Commercial Bank, Ltd. Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.69% Land Bank of Taiwan Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.69% Taiwan Cooperative Bank Monthly payment of interests from Nov. 3, 2022 to Oct. 7, 2028 3.27%~3.4 1% Taiwan middle and small-sized enterprise banks Monthly payment of interests from Nov. 3, 2022 to Oct. 7, 2028 3.27%~3.4 1% Chang Hwa Bank Monthly payment of interests from Nov. 3, 2022 to Oct. 7, 2028 3.27%~3.4 1% Agricultural Bank of Taiwan Monthly payment of interests from Nov. 3, 2022 to Oct. 7, 2028 3.27%~3.4 1% The Shanghai Commercial & Savings Bank, Ltd. Monthly payment of interests from Nov. 3, 2022 to Oct. 7, 2028 3.27%~3.4 1% Bank of Taiwan Monthly payment of interests from Nov. 3, 2022 to Oct. 7, 2028 3.27%~3.4 1% Bank of Kaohsiung Monthly payment of interests from Nov. 3, 2022 to Oct. 7, 2028 3.27%~3.4 1%

Collateral Dec. 31, 2022 None $ 374,460 " 277,020 " 277,020 " 183,410 " 91,680 " 91,680 " 75,530 " 43,460 " 14,090 " 14,090 " 29,240 " 29,240 " 29,240

1,530,160

Less: Long-term loans due within one year or one operating period

( 1,530,160)

• $

~40~

Nature of loan Borrowing period and repayment method Interest rate range Long-term bank credit loan Taiwan Cooperative Bank Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.17% Taiwan middle and small-sized enterprise banks Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.17% Chang Hwa Bank Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.17% Agricultural Bank of Taiwan Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.17% Hua Nan Commercial Bank, Ltd. Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.17% Land Bank of Taiwan Monthly payment of interests from Apr. 13, 2020 to Feb. 12, 2026 3.17% Less: Long-term loans due within one year or one operating period	Collateral Dec. 31, 2021 None $ 472,410 " 349,520 " 349,520 " 231,400 " 115,690 " 115,690 1,634,230 ( 1,634,230) $-	Collateral Dec. 31, 2021 None $ 472,410 " 349,520 " 349,520 " 231,400 " 115,690 " 115,690 1,634,230 ( 1,634,230) $-
	None " " " " "
		1,634,230 ( 1,634,230) $-

• 1) In October 2019, the company signed a joint credit contract with credit-granting bank groups such as Cooperative Treasury commercial bank, CHB, Chang Hwa Bank, and Taiwan operating Bank as the execution fund of the "entrusted development, sale and management case of Late stage of Chiayi County Machouhou industrial Park" signed by the company 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 years from the date of first use. As of Dec. 31, 2022, the Company has used the performance guarantee amount of $775,800 and the loan amount of $1,295,270. 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:

• a) The financial ratios of the annual consolidated financial statements shall maintain as follows:

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

• b) Within 2 years from the first use day of this development project, it should complete the

~41~

first notice for sale or registration.

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

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

• e) 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.

• 2) In September 2022, the Company entered into a joint credit agreement with a syndicate of creditors, including Taiwan Cooperative Bank, for the Group to fund the implementation of the "Development, Rental, Sales and Management Plan for the Tainan Cigu Science and Technology Industrial Park" signed with the Tainan City Government in January 2021. The total credit limit is $2,487,000 (including the guaranteed limit of $487,000 and the intermediate loan limit of $2,000,000). As of December 31, 2022, the Company had utilized $487,000 of performance guarantees and $234,890 of borrowing facilities for the primary credit period of six years from the date of first use. 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:

• a) The financial ratios of the annual consolidated financial statements shall maintain as follows:

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

• b) 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 company did not violate the above commitments in 2022 and 2021.

• 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 labor pension system stipulated in the "Labor Pension Regulations", the Company and its domestic subsidiaries pay the labor pension at 6% of the salary to the employee's personal

~42~

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) The pension costs listed by the company under the above pension regulations were $4,207 and $4,282 respectively in 2022 and 2021.

r. Share capital

• 1) By Dec. 31, 2022, 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 yuan, 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	(	2022 (note) 226,189 2,000) 224,189		2021 (note) 226,189 -
				226,189

Note: The number of shares of the company held by subsidiaries is not deducted.

• 2) Treasury stock

• a) Reasons and number of shares withdrawn:

Reasons and number of	shares withdrawn:
		Dec. 31, 2022
Name of companies
holding share	Withdrawal cause	Number of shares	Book value
	Transfer of shares to
The Company	employees (Note 1)	2,525,000 shares	$	26,130
	Transfer of shares to
The Company	employees (Note 2)	2,000 thousand shares		20,648
	Safeguard
Subsidiary - Chang Ji	stockholders' equity	28,125,000 shares		255,837
			$	302,615

		Dec. 31,	2021
Name of companies
holding share	Withdrawal cause	Number of shares	Book value
	Transfer of shares to
The Company	employees (Note 1)	2,525,000 shares	$	26,130
	Safeguard
Subsidiary - Chang Ji	stockholders' equity	28,125,000 shares		255,837
			$	281,967

~43~

  - Note 1. On March 27, 2020, the Company approved the repurchase of 6,000 treasury shares through board resolution. By May 29, 2020 (the expiry of the execution period), a total of 2,525 treasury shares were repurchased, in total $26,130.

  - Note 2. On July 7, 2022, the Company approved the repurchase of 2,000 treasury shares through board resolution. By September 12, 2022 (the expiry of the execution period), a total of 2,000 treasury shares were repurchased, in total $20,648.

• b) 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.

• c) 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.

• d) 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.

• e) For pledge and guarantee information, please refer to Note 8 (2).

• 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. The Company shall also appropriate or reverse special reserves in accordance with laws or regulations stipulated by the competent authorities. With regard to the earnings and undistributed earnings of same period (including adjustment on undistributed earnings), the Board of Directors shall submit an earnings distribution proposal to distribute dividends to shareholders, subject to the approval at the shareholders' meeting.

~44~

• 2) Our dividend policy is as follows: The industrial life cycle of the company is at the growth period. In order to coordinate the Company's long-term financial planning for sustainable management and stable growth, 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 paidin 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) It shall handle under paragraph 1 of Article 41 of the securities and exchange law in line with the Order No. 1010047490 issued by the FSC stipulates that the accounting treatment of a public company's reinvested subsidiary holding shares of the parent company. Therefore, it shall calculate and set aside the same amount of special reserve for the listed, OTC, and emerging companies under the shareholding ratio for the difference between the market price of the parent company's shares held by the subsidiary at the end of the period and the book value. 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.

• 5) Surplus distribution

The company passed the following profit distribution projects for 2021 and 2020 by the resolution of the shareholders' meeting on July 20, 2021, and June 17, 2022:

Statutory surplus reserve Rotary special surplus reserve Cash dividends Total	$	Amount 10,274 432 56,546 67,252	2021 Dividends Per Share (NTD) $ 0.25	2021 Dividends Per Share (NTD) $ 0.25	$ (	2020 Amount Dividends Per Share (NTD) 31,520 2,651) 180,951 $ 0.80 209,820	2020 Amount Dividends Per Share (NTD) 31,520 2,651) 180,951 $ 0.80 209,820	2020 Amount Dividends Per Share (NTD) 31,520 2,651) 180,951 $ 0.80 209,820
							Per Share
				Share (NTD) $ 0.25			$	(NTD) 0.80
	$				$

~45~

• 6) On March 13, 2023, the Company’s board of directors passed the resolution on annual profit distribution plan for the year 2022. However, the 2022 earnings distribution project has yet to be decided by the 2023 shareholders' meeting.

The relevant surplus distribution is as follows:

Statutory surplus reserve Reversal of special reserve Cash dividends Stock Dividends Total	$ (

By March 13, 2023, the above-mentioned for surplus distribution proposal for the year 2022 has not been resolved by the shareholders' meeting.

u. Operating revenue

• 1) Subdivision of customer contract revenue

The revenue of the company comes from the provision of goods and services gradually listed over time and listed at a certain point in time. The revenue can divide into the following main product lines:

product lines:	product lines:
2022 Revenue recognition time point Revenue recognized at certain time point Revenue recognized step by step over time 2021 Revenue recognition time point Revenue recognized at certain time point Revenue recognized step by step over time		Sales revenue $ 279,876 - $ 279,876 Sales revenue $ 216,503 - $ 216,503		Construction			Project revenue	Service revenue $ - 252,658 $ 252,658 Service revenue $ - 176,444 $ 176,444	$	Total 279,876 606,129
				$
							$ - 353,471 $ 353,471 Project revenue
				$					$	886,005
									$	Total 464,573 824,528
				$	revenue 248,070 - 248,070
							$ - 648,084 $ 648,084
				$					$1,289,101

~46~

• 2) Contractual assets and contractual liabilities

• a) They are as follows for the contract assets and contract liabilities related to customer contract revenue listed by the company:

Contractual assets: Contractual assets - Construction contract clauses Contractual liabilities: Contractual liabilities - Construction contract clauses Contractual liabilities - Sales contract clauses Total	$	Dec. 31, 2022 204,938 Dec. 31, 2022 33,353 - 33,353	$	Dec. 31, 2021 175,401 Dec. 31, 2021 32,909 - 32,909	$	Jan. 01, 2021 215,441 Jan. 01, 2021 96,123 1,530 97,653
	$		$		$
	$		$		$

• 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	$	2022 -	$	2021 1,530

• c) As the company undertook the "partial replacement project of the second overseas oil unloading buoy submarine pipeline of Taoyuan refinery" of Taiwan CNPC Co., Ltd, both parties have a dispute over the project payment because the project is delayed due to factors that cannot attribute to climate, which has been established with Taiwan CNPC Co., Ltd. through mediation by the procurement appeal Review Committee of the Public Works Committee of the Executive Yuan, and the loss of $78,668 has listed in 2021.

• v. Interest income

Bank deposit interest Interest income from financial assets at amortized cost Other interest income	$	2022 1,959 1,007 29,415 32,381	$	2021 699 - 60,564 61,263
	$		$

~47~

w. Other income

x. y.	Rental income Other income Total Other interest and loss Conversion gains (losses) of net foreign currency exchange Interests in disposal of property, plant, and equipment Other losses Total Finance costs Interest expense: Bank loan Payment of interests for company bonds Discounted amortization of company bonds Others Less: capitalization amount of assets meeting the requirements Total	$	2022 2,708 4,019 6,727 2022 11,452 205 1,362) 10,295 2022 67,507 2,800 592 51 60,968) 9,982	$	2021 2,702 4,900 7,602 2021 527) 29 586) 1,084) 2021 54,928 5,330 1,125 81 46,622) 14,842
		$		$
		$ (		($ (
		$		($
		$ (		$ (
		$		$

z. Additional information about expense nature

Employee benefit expenses Depreciation expense (including investment properties) Depreciation expenses of right- of-use assets Amortization cost Amortization cost of right-of-use assets	~48~ Belong to operating costs $ 38,804 - - - -	2022 Belong to operating expenses $ 91,170 $ 2,643 2,242 1,697 139	Total 129,974 2,643 2,242 1,697 139
		$

Employee benefit expenses Depreciation expense (including investment properties) Depreciation expenses of right- of-use assets Amortization cost Amortization cost of right-of-use assets	Belong to operating	Belong to operating	2021 Belong to operating expenses $ 67,677 $ 2,506 2,099 1,268 138	Total 114,336 2,506 2,099 1,268 138
	$	costs 46,659 - - - -

aa. Employee benefit expenses

Salary Labor expense Pension expense Remuneration of Directors Other labor expense	Belong to operating costs $ 32,471 3,228 1,742 - 1,363 $ 38,804	Belong to operating costs $ 32,471 3,228 1,742 - 1,363 $ 38,804	Belong to operating costs $ 32,471 3,228 1,742 - 1,363 $ 38,804	Belong	Belong	2022 to operating	$	Total 106,706 8,252 4,207 7,505 3,304 129,974
		costs 32,471 3,228 1,742 - 1,363 38,804		$	expenses 74,235 5,024 2,465 7,505 1,941 91,170
	$			$			$

Salary Labor expense Pension expense Remuneration of Directors Other labor expense	Belong to operating costs $ 39,231 3,769 2,053 - 1,606 $ 46,659	Belong to operating costs $ 39,231 3,769 2,053 - 1,606 $ 46,659	2021 Belong to operating expenses $ 54,197 4,998 2,229 4,483 1,770 $ 67,677	2021 Belong to operating expenses $ 54,197 4,998 2,229 4,483 1,770 $ 67,677	$	Total 93,428 8,767 4,282 4,483 3,376 114,336
		costs 39,231 3,769 2,053 - 1,606 46,659		expenses 54,197 4,998 2,229 4,483 1,770 67,677
	$		$		$

• 1) The company shall allocate 8% of the remuneration of employees and no more than 2% of the remuneration of Director of Board under the articles of association of the company after deducting the accumulated losses under the profit status of the current year if the balance is still outstanding.

~49~

• 2) The estimated amount of employee remuneration of the company in 2022 and 2021 is $23,782 and $11,693 respectively; The estimated amount of remuneration for Director of Board is $5,945 and $2,923 respectively, and the above amount is recorded in the salary expense account. In 2022, 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 $23,782 and $5,945, of which employee remuneration was paid in cash. The employee remuneration $11,693 and the director remuneration $2,923 approved by the Board of Directors for the year 2021 are consistent with the amounts recognized in the annual report for the year 2021.

It can be inquired at the public information observatory for the information on the remuneration of employees and directors approved by the Director of Board of the company.

• 3) It was 116 and 118 respectively for the number of employees of the company on December 31, 2022, and 2021, of which the number of directors who were not concurrently employees was five persons.

• 4) The company's shares have been listed and traded on the stock exchange, the following information shall be added:

• a) It was $1,103 and $972 respectively for the average employee welfare expenses in 2022 and 2021.

• b) It was $961 and $827 respectively for The average employee salary expenses in 2022 and 2021.

• c) It is - 16.20% for the adjustment and change of average employee salary expenses.

• d) As the company has set up an audit committee, it does not apply to supervisor of board, and there is no need to disclose the remuneration information of supervisors.

• 5) Salary and remuneration policy of the company

• a) The overall salary level of employees takes external competitiveness and internal fairness as important considerations, and can effectively attract and retain talents.

  • i. It provides employee development motivation and drives the positive development of the company through the performance management system and employee compensation.

  • ii. It achieves the purpose of motivating employees in combination with the achievement of the company's long-term and short-term goals, the time invested by individuals, the positions held, and the overall work performance.

• b) Director: Director of Board: The remuneration of the rest of the directors only includes the meeting fare and the director's remuneration for annual surplus distribution except that the independent directors and Remuneration Committee of the company receive allowances. The director's remuneration is distributed under the articles of association and by the resolution of the director of board.

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• c) Manager: the payment standard and combination are divided into fixed salary and variable salary. It determines the responsibilities of the positions they hold, with reference to the level of similar positions in the industry, and is submitted to the Remuneration Committee and the director of board for approval.

bb. Income tax

• 1) Income tax expense

Components of income tax expense:

Income tax for the period: Income tax from gains of current period $ Undistributed surplus tax Overestimate number of income of previous years ( Total income tax for the period Deferred income tax: Original generation and return of temporary difference Total deferred income tax Income tax expense $	$ (	2022 - 1,774 247) 1,527 59,082 59,082 60,609	$	2021 2,784 5,385 -
				8,169 20,633 20,633 28,802
	$		$

• 2) Relationship of income tax expense with accounting profit

Calculation of income tax of pre-tax net profit at statutory tax rate (Note) Expenses and income exempted from tax under the tax law Land VAT Temporary difference not recognized as deferred income tax assets Deferred income tax assets' realizable evaluation changes Overestimate number of income of previous years Undistributed surplus tax Income tax expense	$ (	2022 53,508 2,363 - - 3,211 247) 1,774 60,609	$ ( (	2021 26,309 7,525) 2,784 318) 2,167 - 5,385 28,802
	$		$

Note: the tax rate is based on the tax rate applicable to the ROC.

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• 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 Unrealized foreign investment loss Unrealized impairment loss Unrealized conversion profit Loss offset Unpaid leave bonus Subtotal - Deferred income tax liabilities: Unrealized foreign investment profit ( Conversion difference of foreign operating agency ( Unrealized conversion profit Subtotal ( Total $	Temporary difference: - Deferred income tax assets: Unrealized bad debt loss $ Loss on price drop and dull of unrealized inventories Unrealized foreign investment loss Unrealized impairment loss Unrealized conversion profit Loss offset Unpaid leave bonus Subtotal - Deferred income tax liabilities: Unrealized foreign investment profit ( Conversion difference of foreign operating agency ( Unrealized conversion profit Subtotal ( Total $	January 1 677 1,729 317 84 - 110,528 63 113,398 22,217) 3,136) - 25,353) 88,045	2022 Recognized as profit orloss Recognized as other comprehensive income/(loss) ($ 395) $ - ( 805) - - - - - 381 - ( 52,464) - 27 - ( 53,256) - ( 5,824) - - - - - ( 5,824) - ($ 59,080) $-		December 31 $ 282 924 317 84 381 58,064 90 60,142 28,041) 3,136) - 31,177) $ 28,965
	( (			( (
	(			(
	$

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Temporary difference: - Deferred income tax assets: Unrealized bad debt loss $ Loss on price drop and dull of unrealized inventories Unrealized foreign investment loss Unrealized impairment loss Deferred recognized sales expenses under construction Loss offset Unpaid leave bonus Subtotal - Deferred income tax liabilities: Unrealized foreign investment profit ( Conversion difference of foreign operating agency ( Unrealized conversion profit Subtotal ( Total $	Temporary difference: - Deferred income tax assets: Unrealized bad debt loss $ Loss on price drop and dull of unrealized inventories Unrealized foreign investment loss Unrealized impairment loss Deferred recognized sales expenses under construction Loss offset Unpaid leave bonus Subtotal - Deferred income tax liabilities: Unrealized foreign investment profit ( Conversion difference of foreign operating agency ( Unrealized conversion profit Subtotal ( Total $	January 1 677 1,729 317 84 48 120,740 - 123,595 11,781) 3,136) - 14,917) 108,678	Recognized as profit orloss $ - - - - ( 48) ( 10,212) 63 ( 10,197) ( 10,436) - - ( 10,436) ($ 20,633)	2021 Recognized asother comprehensive income/(loss) December 31 $ - $ 677 - 1,729 - 317 - 84 - - - 110,528 - 63 - 113,398 - ( 22,217) - ( 3,136) - - - ( 25,353) $- $ 88,045
	( (
	(
	$			$

4) The effective period of the company's unused tax losses and the related amount of unlisted deferred income tax assets are as follows:

Occurrence year 2018 2020		Declared/ Authorized number 165,745 175,349 341,094		Dec. 31, 2022 Amount without	Dec. 31, 2022		Unlisted deferred income tax assets - - $-	Last	deduction
					deduction 114,969 175,349				year 2028 2030
	$			$	290,318

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Dec. 31, 2021

Occurrence	Occurrence	$	Declared/ Authorized number 47,167 131,026 47,655 37,887 10,737 165,745 175,349 615,566	Amount without deduction $ - 101,190 47,655 37,887 10,737 165,745 175,349 $ 538,563	Amount without	Amount without	Unlisted deferred income tax assets $ - - - - - - - $-	Last	deduction
	year 2012 2013 2014 2015 2016 2018 2020					deduction - 101,190 47,655 37,887 10,737 165,745 175,349 538,563			year 2022 2023 2024 2025 2026 2028 2030
		$		$

• 5) Deductible temporary differences not listed as deferred income tax assets by the company in addition to tax losses above item 4 described:

Deductible temporary differences	Dec. 31, 2022 $ 6,311	Dec. 31, 2021 $ 6,311

• 6) The company's profit-making enterprise income tax has been approved by the tax collection authority until 2020.

• cc. Earnings per Share

Basic earnings per share Current net profit attributable to shareholders of ordinary shares -Diluted earnings per share Impact of potential ordinary shares with dilution effect - Employee dividends Impact of current net profit and potential ordinary shares belonging to shareholders of ordinary shares	After-tax amount $ 206,934 - $ 206,934	After-tax amount $ 206,934 - $ 206,934	2022 Weighted average		Earnings per
			number of outstanding shares
			(thousand shares) 197,263 2,565		share (NTD) $ 1.05 $ 1.04
	$ 206,934 - $ 206,934
			199,828

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Basic earnings per share Current net profit attributable to shareholders of ordinary shares Diluted earnings per share Impact of potential ordinary shares with dilution effect - Employee dividends Impact of current net profit and potential ordinary shares belonging to shareholders of ordinary shares	After-tax amount $ 102,741 - $ 102,741	After-tax amount $ 102,741 - $ 102,741	2021 Weighted average number of outstanding shares	Earnings per
			(thousand shares) 198,064 1,528	share (NTD) $ 0.52 $ 0.51
	$ 102,741 - $ 102,741
			199,592

dd. Changes of liabilities from financing activities

Jan. 01, 2022 Changes of financing cash flow Other non- cash changes Dec. 31, 2022 Jan. 01, 2021 Changes of financing cash flow ( Other non- cash changes Dec. 31, 2021	Jan. 01, 2022 Changes of financing cash flow Other non- cash changes Dec. 31, 2022 Jan. 01, 2021 Changes of financing cash flow ( Other non- cash changes Dec. 31, 2021	Short-term	Short term bills payable $ 90,000 ( 90,000) - $- Short term bills payable $ 25,000 65,000 - $ 90,000	Short term bills payable $ 90,000 ( 90,000) - $- Short term bills payable $ 25,000 65,000 - $ 90,000	Long-term loans (including	Long-term loans (including	Long-term loans (including	Long-term loans (including
		borrowings $ 295,600 27,156 - $ 322,756 Short-term
					due within one year or one operating period) $ 788,180 846,050 -		due within one year or one operating period) $ 498,957 - ( 1,876) $ 497,081
								year or one operating period) 498,957 - 1,876) 497,081
		borrowings $ 388,772 93,172) - $ 295,600		payable 25,000 65,000 - 90,000
			$		$	1,634,230	$

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7. Transactions of interested parties

• a. Name and relationship of interested party

Name of interested party CHANG JI CONSTRUCTION CO., LTD. ( Chang Ji) Subsidiaries of the company XINDIN ENGINEERING CONSULTANTS CORP. ( XINDIN) Subsidiaries of the company

Relationship with the company Subsidiaries of the company

• b. Major transactions with interested parties

• 1) Operating revenue

  • a) The transaction price and collection terms of the company's sales to related parties are not significantly different from those of ordinary customers. The price of the project of the company's contracting relationship shall determine by both parties through negotiation; The collection terms are handled by monthly settlement, which is not significantly different from ordinary customers.

  • b) It is as follows for the project contract price and payment request of the Contractor's related parties of the company:

Chang Ji	Dec. 31, Total contract price $ 208,229	Dec. 31,	2022 Contract assets $ 58,796	Dec. 31, Total contract price	2021 Contract assets $ 95,787
				$ 510,922

• 2) Goods purchased

Project costs: Chang Ji Development cost of agent industrial zone: Chang Ji XINDIN Total	$	2022 13,962 1,634,828 11,009 1,645,837	$	2021 5,973 1,987,719 21,868 2,009,587
	$		$
	$		$

The transaction price and payment terms of the company's goods purchased from related parties are not significantly different from those of ordinary customers. The transaction price shall be determined by both parties through negotiation when the related party contracts the project of the company; Its payment terms are handled by monthly settlement, which is not significantly different from ordinary customers.

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3) Receivable amount of interested parties

Receivable amount of interested parties
Accounts receivable: Chang Ji $ Other accounts receivable: Chang Ji $ Payables to related parties Accounts payable: Chang Ji $ Property transaction Acquisition of property, plant and equipment XINDIN $	$	Dec. 31, 2022 57,569 2,820 Dec. 31, 2022 2,263 2022 -	$	Dec. 31, 2021 19,882 226 Dec. 31, 2021 14,485 2021 210
	$		$
	$		$
			$

4) Payables to related parties

• 5) Property transaction

6) Endorsements/commitments

• a) The project contract awarded by the company to Chang Ji will still pay the project funds of $11,392 and $32,680 in future years as of December 31, 2022, and 2021.

• 7) Leasing and property transactions

• a) The company leased the Zhonghe Xinmin Street office and Xingnan building office on Fuxing North Road to Chang Ji in 2022 and 2021. It was $840 for the rental income listed in 2022 and 2021.

• b) The company leased the Zhonghe Xinmin Street office to XINDIN in 2022 and 2021, and the rental income listed in 2022 and 2021 was $36 and $30, respectively.

• 8) Other current assets

The company and Chang Ji purchased adjacent land respectively. The company paid Chang Ji joint construction performance bond of $15,000 to facilitate joint construction and sub-sale of projects. It recovered in 2021 for the other current assets listed in the table because all projects had sold.

c. Remuneration of key managements

Remuneration of key managements
Salary and other short-term employee benefit Benefit after retirement Total	$	2022 29,554 488 30,042	$	2021 20,958 477 21,435
	$		$

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8. Assets in pledge

• a. The details of the guarantee provided for the company's assets are as follows:

Asset item Inventories - Property for sale Other current assets - Pledged deposit - Allowance for special account - Special account for trust - Project deposit and bid bond Property, plant and equipment Investment property Other non-current liabilities Refundable deposits Reserve account	Asset item Inventories - Property for sale Other current assets - Pledged deposit - Allowance for special account - Special account for trust - Project deposit and bid bond Property, plant and equipment Investment property Other non-current liabilities Refundable deposits Reserve account	Book value Dec. 31, 2022 Dec. 31, 2021 Guarantee purpose $ 46,500 $ 46,500 Guarantee for bank financing limit and guarantee for short-term notes payable 12,392 192,728 Project bond, performance bond and bank financing limit guarantee 218,388 193,762 Performance bond, bank financing line guarantee 2,011,516 1,359,799 Performance bond 175 4,875 Project deposit and bid bond 63,490 96,913 Guarantee for bank financing limit 64,849 65,259 Guarantee for bank financing limit 10,863 10,890 General deposit and golf pass 151,969 151,736 Payable company bonds $ 2,580,142 $ 2,122,462
		$ 2,580,142

• b. As of Dec. 31, 2022 and Dec. 31, 2021, Chang Ji pledged 28,125,000 shares of the Company (“treasury stock”) against a loan.

• Significant contingent liabilities and outstanding contractual commitments

Commitments

There are still major commitments and contingencies summarized as follows in addition to those mentioned in Notes 6 (7) and 7:

• a. Warranty

• 1) The company shall sign the entrustment guarantee contract or provide the pledge guarantee of certificate of deposit if the company entrusts the bank to provide joint and several guarantees for the bid deposit, performance bond, advance payment guarantee, and other project guarantees required for project contracting. It is $1,495,932 for the guarantee amount as of December 31, 2021.

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• 2) It was $185,315 the performance guarantee notes issued by the company due to the requirements of the project owner and the sale of land as of December 31, 2022.

• b. As of December 31, 2022, It is $501,684 for the project payment still payable in the next year for the contracted project contract signed by the company.

• c. By Dec. 31, 2022, the Group has signed the land purchase contract with a price of $548,986 and without transfer and paid $458,320 in accordance with the contract.

10. Major disaster loss

No such circumstance.

1. Significant Events after the Balance Sheet Date

2. a. On March 13, 2023, 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 2022. Please refer to Note 6 (20) 6. and Note 6 (27) for details.

3. b. 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. On March 13, 2023, the Company’s board of directors passed the resolution on canceling 2,525,000 treasure stocks with the amount of $25,250.

12. Others

• a. Capital management

The company's capital management objectives are to ensure the continued operation of the group, maintain the best capital structure, reduce capital costs, and provide remuneration to shareholders. The company may adjust the number of dividends paid to shareholders to maintain or adjust the capital structure, return capital to shareholders, issue new shares or sell assets to reduce debts. The company uses the debt to capital ratio to monitor its capital, which is calculated by dividing net debt by total capital. Net debt is calculated as total borrowings (including "current and non-current borrowings" reported in the independent balance sheet) less cash and cash equivalents. The total capital is calculated as the "equity" reported in the independent balance sheet and the net debt.

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As of December 31, 2022, and 2021, the debt capital ratio of the company is as follows:

b.	Total borrowing Less: Cash and cash equivalents Net liabilities Total equity Total capital Debt-to-capital ratio Financial instrument 1) Category of financial instruments Financial assets Financial assets at fair value through other comprehensive income Select the designated equity instrument investment Financial assets at amortized cost Cash and cash equivalents Financial assets at amortized cost Accounts receivable Notes receivable Accounts receivable-Related person Other accounts receivable Other accounts receivable-Related person Refundable deposits Other financial assets Financial liabilities Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Accounts payable-Related person Other accounts payable Payable company bonds (inclusive of company bonds mature within one year or one operating cycle) Long-term loan (inclusive of long-term loan mature within one year or one operating cycle) Deposits received	$ (	Dec. 31, 2022 2,350,589 183,927) 2,166,662 3,135,615 5,302,277 40.86% Dec. 31, 2022 5,647 183,927 61,856 1,693 92,832 57,569 3,664,990 2,820 10,863 2,394,440 6,476,637 322,756 - 177 78,077 2,263 58,670 497,673 1,530,160 41,362 2,531,138	$ (	Dec. 31, 2021 2,516,911 223,550) 2,293,361 2,995,806 5,289,167 43.36% Dec. 31, 2021 7,044 223,550 - 3,298 150,036 19,882 3,293,268 226 10,890 1,902,900 5,611,094 295,600 90,000 3,069 123,652 14,485 37,047 497,081 1,634,230 158,581 2,853,745
		$		$
		$		$
		$		$
		$		$
		$		$

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• 2) Risk management policy

The financial risks of the company are mainly the risks associated with investing in financial products and the exchange rate risk of foreign currency transactions. The company has always adopted the most strict control standards for the financial risks of various financial commodity investments. All financial investments and operations have been comprehensively evaluated for their possible market risks, credit risks, liquidity risks, and cash flow risks, and must choose the one with the least risk. The company also seeks optimized risk positions and maintains appropriate liquidity positions based on policy risk management objectives to achieve the best hedging strategy for the exchange rate risk of foreign currency transactions.

• 3) Significant financial risk - Nature and degree

• a) Market risk

Exchange rate risk

• i. As the company's operating involves several non-functional currencies, it is affected by exchange rate fluctuations. It is as follows for the information of foreign currency assets and liabilities with significant exchange rate fluctuations:

Foreign currency (thousand NTD) (Foreign currency: Functional currency) Financial assets Monetary item USD: NTD 5,200 Non-monetary items USD: NTD 7,300 Financial liabilities Monetary item USD: NTD 273	Foreign currency (thousand	Exchange	Exchange	Dec. 31, 2022 Book value (New Taiwan Dollars) Sensitivity analysis Change range Influence of profit and loss Influence of rights and interests $ 160,236 1% $ 1,602 $ - $ 224,194 1% $ - $ 2,242 $ 8,483 1% ($ 85) $ -	Dec. 31, 2022 Book value (New Taiwan Dollars) Sensitivity analysis Change range Influence of profit and loss Influence of rights and interests $ 160,236 1% $ 1,602 $ - $ 224,194 1% $ - $ 2,242 $ 8,483 1% ($ 85) $ -	Dec. 31, 2022 Book value (New Taiwan Dollars) Sensitivity analysis Change range Influence of profit and loss Influence of rights and interests $ 160,236 1% $ 1,602 $ - $ 224,194 1% $ - $ 2,242 $ 8,483 1% ($ 85) $ -	Dec. 31, 2022 Book value (New Taiwan Dollars) Sensitivity analysis Change range Influence of profit and loss Influence of rights and interests $ 160,236 1% $ 1,602 $ - $ 224,194 1% $ - $ 2,242 $ 8,483 1% ($ 85) $ -
						Influence of
							rights and interests $ - $ 2,242 $ -
			range 30.71 30.71 30.71	Dollars) $ 160,236 $ 224,194 $ 8,483

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Dec. 31, 2021

				Dec. 31,	Dec. 31,	2021	2021	2021	2021	2021
Foreign currency (thousand NTD) (Foreign currency: Functional currency) Financial assets Monetary item USD: NTD 2,298 Non-monetary items USD: NTD 7,586 Financial liabilities Monetary item USD: NTD 234	Foreign currency (thousand	Exchange		Book value (New Taiwan		Sensitivity analysis Change range Influence of profit and loss Influence of rights and interests 1% $ 638 $ - 1% $ - $ 2,100 1% ($ 66) $ -
								Influence of
								profit and loss $ 638 $ - ($ 66)	profit and	rights and interests $ - $ 2,100 $ -
			range 27.68 27.68 27.68	$ $ $	Dollars) 63,847 209,988 6,577		range 1% 1% 1%

• ii. Due to significant influence of exchange rate fluctuation, the Company recognizes aggregate amounts of all the exchange profits (losses) (including realized and unrealized) of monetary items as $11,452 and ($527) respectively in 2022 and 2021. Price risk

• The equity instruments to which the company is exposed to price risk are financial assets at fair value through other comprehensive income. The company disperses its investment portfolio under the limit set by the company to manage the price risk of equity instrument investment.

Interest rate risk of cash flow and fair value

The interest rate risk of the company comes from bank borrowings. Loans issued at floating interest rates expose the company to cash flow interest rate risk, which is partially offset by cash and cash equivalents held at floating interest rates. Loans issued at a fixed interest rate expose the company to fair value interest rate risk. The company's borrowings calculated at floating interest rates were denominated in New Taiwan dollars in 2022 and 2021, and the increased cash outflows were $18,529 and $20,198 respectively when the market interest rate increased by 1%.

• b)

• Credit risk

• i. Credit risk refers to the risk that the company will incur financial losses due to the failure of customers or counterparties of financial instruments to perform their contractual obligations. Each operating independent in the group shall conduct management and credit risk analysis under the company's internal explicit credit policy 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

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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.

• ii. In 2022 and 2021, 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.

• iii. The company adopts IFRS 9 to provide the following assumptions as to the basis for judging whether the credit risk of financial instruments has increased significantly since the original list:

• 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.

• iv. The company adopts IFRS9 to provide premise assumptions. It deems to have breached the contract when the contract payment is overdue for more than 90 days under the agreed payment terms.

• v. The company groups the accounts receivable, contract assets, and lease receivables of customers under the characteristics of customer types, and adopts a simplified method to estimate the expected credit loss based on the reserve matrix and loss rate method.

• vi. The company incorporated the prosperity observation report of the Taiwan Economic Research Institute into the consideration of future foresight and adjusted the loss rate established under the historical and current information of a specific period to estimate the allowance loss of accounts receivable. It is as follows for the preparation matrix and loss rate method as of December 31, 2022, and 2021:

Dec. 31, 2022 Expected loss ratio Total book value $ Allowance for loss Dec. 31, 2021 Expected loss ratio Total book value $ Allowance for loss	Overdue 1-120 days No overdue 0%-3.32% 3.32%-100% 93,002 $ 2,490 172 2,488 Overdue 1-120 days No overdue 0%-4.26% 4.26%-74.08% 145,592 $ 3,766 113 179	Overdue More than 121 days Total 100% $ - $ 95,492 - 2,660 Overdue More than 121 days Total 74.08%-100% $ 3,741 $ 153,099 2,771 3,063

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• vii. It is as follows for the statement of changes in the allowance for loss of receivables adopted by the company in a simplified way:

adopted by the company in a simplified way:
January 1 Impairment loss record Amounts written off due to failure to get back December 31 January 1 Impairment loss record Amounts written off due to failure to get back December 31	$ (	2022 Notes receivable 3,063 1,686 2,089) 2,660 2021 Notes receivable 7,017 97 4,051) 3,063
	$
	$ (
	$

• c) Liquidity risk

• i. The cash flow forecast implements by each operating independent in the company and summarized by the financial department of the company. The Finance Department monitors the prediction of the company's working capital demand, ensures sufficient funds to meet the needs of the operation, and maintains sufficient unspent loan commitments at any time to prevent the company from violating the relevant loan limits or terms. Such prediction takes into account the company's debt financing project, compliance with the debt terms, compliance with the financial ratio target of the internal balance sheet, and the requirements of external regulatory laws and regulations.

• ii. It is as follows for the details of the unused loan limit of the company:

Mature within a year Mature for over a year	$	Dec. 31, 2022 1,107,196 6,869,840 7,977,036	$	Dec. 31, 2021 550,085 4,365,770 4,915,855
	$		$

As of December 31, 2022 and 2021, in the Company's unutilized borrowing limit mature for more than one year, $6,469,840 and $4,365,770, are loan limits in execution of the Second-stage Entrusted Development of the Machohou Industrial Park in Chiayi County and the Cigu Technology Industrial Park Development, Rent, Sale and Management Project commissioned by the Tainan City Government specified in Note 6 (16).

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• iii. The following table shows the non-derivative financial liabilities of the company, grouped under the relevant maturity date, and analyzed under the remaining period from the balance sheet date to the contract maturity date. Contract cash flow presented in the following table is non-discounted amount.

• Non-derivative financial liabilities:

Dec. 31, 2022 Short-term borrowings $ Notes payable Accounts payable ( including related person) Other payables Rental liabilities Payable company bonds Long-term loan (inclusive of long- term loan mature within one year or one operating cycle) Deposits received Non-derivative financial liabilities: Dec. 31, 2021 Short-term borrowings $ Short-term notes and bills payable Notes payable Accounts payable ( including related person) Other payables Rental liabilities Payable company bonds Long-term loan (inclusive of long- term loan mature within one year or one operating cycle) Deposits received	Within 1 year 325,274 $ 177 41,787 58,670 1,855 3,993 55,430 40,854 Within 1 year 298,203 $ 90,000 3,069 89,620 37,047 2,467 3,985 - 155,703	1 to 5 years - - 38,553 - 238 511,477 1,668,389 508 1 to 5 years - - - 48,517 - 2,059 515,470 1,767,579 2,878

• 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. The fair values of the OTC stocks and beneficiary certificates invested by the company belong to Level 1.

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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. All equity instrument investments without an active market invested by the company belong to level 3.

• 2) For fair values of investment property measured with costs, please refer to Note 6 (11).

• 3) Financial instruments measuring not with fair value

• The carrying amount of the company's cash and equivalent cash equivalents, notes receivable, accounts receivable, other receivables, short-term loans, notes payable, accounts payable and other payables is a reasonable approximation of the fair value.

• 4) Financial and non-financial instruments measured at fair value are classified by the company under the nature, characteristics, risks, and fair value level of assets and liabilities. The relevant information is as follows:

• a) The company classifies the assets and liabilities under their nature. The relevant information is as follows:

information is as follows:
Dec. 31, 2022 Assets Repeatable fair value Equity securities of financial assets at fair value through other comprehensive income Dec. 31, 2021 Assets Repeatable fair value Equity securities of financial assets at fair value through other comprehensive income	$	Level 1 - Level 1 -	$	Level 2 - Level 2 -		$
	$		$			$

• b) As for the methods and assumptions used by the company to measure the fair value, they are described as follows:

• i. The breakdown is as follows according to the characteristics of the instrument in the case of the company applying the market quotation as the fair price input value (i.e. the first level):

Shares of listed (OTCBB listed) companies Market prices Closing price

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• 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 value obtained through the evaluation technology can calculate by referring to the current fair value of other financial instruments with substantially similar conditions and characteristics, the discounted cash flow method, or other evaluation technologies, including applying the model based on the market information available on the balance sheet date (e.g. the OTC center's reference yield curve and the average quotation of Reuters commercial promissory note interest rate).

• iii. The company adopts the evaluation technology widely used by market participants when evaluating non-standardized and less complex financial instruments, such as debt instruments without the active market, interest rate exchange contracts, exchange contracts, and options. 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 2022 and 2021.

• 6) The following are third-grade changes in 2022 and 2021:

January 1 Profit or loss recognized in other comprehensive income Unrealized evaluation loss through other comprehensive income/(loss) December 31	$ (	2022 7,044 1,397) 5,647	$	2021 6,400 644 7,044
	$		$

• 7) No level 3 shift-in and shift-out in 2022 and 2021.

• 8) The company's evaluation process for the fair value classified as level 3 makes the evaluation results close to the market state through independent source data, confirms that the data source is independent, reliable, consistent with other resources and represents the executable price, regularly calibrates the evaluation model, conduct backtracking test, update the input values and data required by the evaluation model and any other necessary fair value adjustment, which 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:

~67~

Fair value on Dec. 31, 2022 Evaluation technique Non-derivative equity instrument: Venture capital company shares' private equity fund investment $ 5,647 Net asset value method Fair value on December 31, 2021 Evaluation technique Non-derivative equity instrument: Venture capital company shares' private equity fund investment $ 7,044 Net asset value method	Significant unobservable input value N/A Significant unobservable input value N/A	Range (weighted average) - Range (weighted average) -	Relation between	Relation between	Relation between
			input value and fair value N/A Relation between	input value and
				input value and
					fair value N/A

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 paidin 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, location, and other relevant information of the invested company (except for the mainland invested companies) ： Please refer to Attached table III.

~68~

• 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.

1. Operation Department Information

N/A.

~69~

APEX SCIENCE & ENGINEERING CORP.

List of cash and cash equivalents Dec. 31, 2022

Unit: NT $1000

Item Summary Cash in hand and working capital Bank deposits: Check deposit Current deposit - USD US $2,174 (thousand yuan) with exchange rate 30.71 - NT$ - others	Amount $ 1,254 7,004 $ 66,756 108,797 116 175,669 $ 183,927

~70~

APEX SCIENCE & ENGINEERING CORP.

List of notes receivable and accounts receivable Dec. 31, 2022

Unit: NT $1000

Customer name General customers Company A Company B Company C Company D Others Subtotal Less: Allowance for bad debts Total Relate person Chang Ji Construction Co., Ltd.	Summary	$ (	Amount Remark 49,284 9,295 8,893 7,505 22,208 The balance of each sporadic customer does not exceed 5% of the balance of this account 97,185 2,660) 94,525 57,569
		$
		$

~71~

APEX SCIENCE & ENGINEERING CORP. List of construction in progress January 1, 2022, to December 31, 2022

Unit: NT $1000

Project case no. ATFC09 ATY21 ALNG18 ALNG19 ATU01 ACONP01 Others		Opening balance $ 520,312 450,157 170,865 340,968 217,564 208,229 2,343,733 $ 4,251,828	Project costs $ 25,157 23,812 229,663 316 1,821 - 82,743 $ 363,512	$ ( (	Project income/(loss) 719 25,786) 16,400 23 54 - 466) 9,056)	Transfer out after completion - - - - - - ( 2,338,344) ($ 2,338,344) Accounting contract assets Accounting reduction of contract liabilities	Transfer out after		Ending balance $ 546,188 448,183 416,928 341,307 219,439 208,229 87,666 $ 2,267,940 $ 1,380,151 $ 887,789
				($

~72~

APEX SCIENCE & ENGINEERING CORP.

List of Inventory Dec. 31, 2022

Unit: NT $1000

Item Goods Finished product Semi-finished product work-in-progress product Raw material property for sale To-be-constructed land property under construction Advance land payment Less: Allowance for price drop loss Total	Summary	$	Amount Cost Net realizable value 11,006 $ 10,547 23,047 22,780 10,713 9,396 2,997 2,997 9,487 7,463 74,841 74,841 1,338 1,338 390 390 458,320 458,320 592,139 $ 588,072 4,618) 587,521	Remark Note " "
		(
		$

Note: The market price listed in the table means that it is not lower than the cost due to the industry characteristics of the construction company, the market price of the property under construction is not easy to determine.

~73~

APEX SCIENCE & ENGINEERING CORP. - List of long term equity investment January 1, 2022, to December 31, 2022

Unit: NT $1000

Name Hsin Ting Engineering Consulting Co., Ltd. REINFORCE ENERGY CO., LTD. Chang Ji Construction Co., Ltd.	Opening balance Number of shares (shares) Amount 800,000 $ 20,973 2,810,000 209,988 54,320,000428,293 $ 659,254	Increase (decrease) in current	Increase (decrease) in current	Increase (decrease) in current	Increase (decrease) in current	Investment Profit (Loss) $ 381 29,120 7,781 $ 37,282	Investment Profit (Loss) $ 381 29,120 7,781 $ 37,282	Other equity $ - - 52	Other equity $ - - 52	Retained	Cash dividends $ - ( 19,962) ( 27,160) ($ 47,122)		Cumulative translation adjustment $ - 5,048 - $ 5,048	Ending balance Percentage of ownership Number of shares (shares) Amount 800,000 100% $ 21,354 2,810,000 100% 224,194 54,320,000 90.53% 415,332 $ 660,880	Ending balance Percentage of ownership Number of shares (shares) Amount 800,000 100% $ 21,354 2,810,000 100% 224,194 54,320,000 90.53% 415,332 $ 660,880	Ending balance Percentage of ownership Number of shares (shares) Amount 800,000 100% $ 21,354 2,810,000 100% 224,194 54,320,000 90.53% 415,332 $ 660,880	$	Net equity 21,354 224,194 792,227 1,037,775	Evaluation basis Equity method 〃 〃	Provision of	Provision of
		period Number of shares (shares) - $ - - $	period		Amount - - 6,366 6,366
				$
																					guarantee or pledge None 〃 〃
							(Loss) 381 29,120 7,781 37,282			earnings $ - - -
	800,000 2,810,000 54,320,000	- - -						$ - - 52						800,000 2,810,000 54,320,000	100% 100% 90.53%
				$		$		$ 52		$ -						$ 660,880	$

Note: The difference between the ending balance and the net equity value of each invested company includes the unrealized gross profit on sales and the amount of investment account for which the shares of the parent company held by subsidiaries are regarded as treasury shares and reversed for using the equity method.

~74~

Unit: NT $1000

APEX SCIENCE & ENGINEERING CORP. Short-term borrowings Dec. 31, 2022

Creditor Summary FIRST COMMERCIAL BANK Tian Mu Branch Credit loan Mega International Commercial Bank Jung Shan Branch Guaranteed loan TAIWAN COOPERATIVE BANK Da Tung Branch Credit loan Jih Sun International Bank Tun Hua Branch Credit loan FIRST COMMERCIAL BANK Tian Mu Branch Credit loan Hua Nan Bank Jisui Branch Credit loan Mega International Commercial Bank Jung Shan Branch Credit loan Far Estern International Bank Chongqing Branch Credit loan	Ending balance Contract Period Interest rate range $ 30,000 2022/10/28-2023/04/28 1.97%~2.37% 40,000 2022/10/11-2023/04/09 " 45,000 2022/10/18-2023/10/18 " 40,000 2022/10/26-2023/01/18 " 2,756 2022/09/08-2023/01/17 " 40,000 2022/11/11-2023/05/11 " 75,000 2022/11/28-2023/05/27 " 50,000 2022/12/16-2023/02/14 " $ 322,756	$	Line of credit Mortgage or guarantee Remark 40,000 None 40,000 Pledge fixed deposit, special account for provision and compensation, inventory, land, houses, and buildings (listed property, plant and equipment, and investment property) Please refer to note VIII for details. 45,000 None 50,000 “ 40,000 40,000 “ 75,000 “ 50,000 “ 380,000
		$

~75~

APEX SCIENCE & ENGINEERING CORP.

List of accounts payable Dec. 31, 2022

Unit: NT $1000

Supplier name General supplier Company A Company B Others Subtotal Relate person Chang Ji Construction Co., Ltd.	Summary	$	Amount Remark 14,782 8,729 54,566 The balance of each sporadic manufacturer does not exceed 5% of the balance of this account 78,077 2,263
		$
		$

~76~

APEX SCIENCE & ENGINEERING CORP. List of project funds received in advance January 1, 2022, to December 31, 2022

Unit: NT $1000

Project case no. ATFC09 ATY21 ALNG19 ALNG18 ATU01 ACONP01 Others	Opening balance $ 484,014 445,752 372,047 138,168 216,471 149,433 2,303,451 $ 4,109,336	Increase (decrease) in current period $ 63,986 2,432 - 163,552 1,790 - 93,603 $ 325,363	Transfer out after completion $ - - - - - - ( 2,338,344) ($ 2,338,344) Contract liabilities listed - construction contract payment Deduction of contract assets	Ending balance $ 548,000 448,184 372,047 301,720 218,261 149,433 58,710 $ 2,096,355 $ 921,142 $ 1,175,213
		$

~77~

Unit: NT $1000

APEX SCIENCE & ENGINEERING CORP. List of operating revenue January 1, 2022, to December 31, 2022

Item Sales revenue Less: Sales returns sales allowances Subtotal Project revenue Service revenue Total	Summary	$ ( (	Amount 281,896 1,314) 706) 279,876 353,471 252,658 886,005	Remark
		$

~78~

APEX SCIENCE & ENGINEERING CORP. List of Cost of goods sold January 1, 2022, to December 31, 2022

Unit: NT $1000

Item Beginning raw materials Plus: Purchase Others Less: Ending materials Cost of raw materials sold Transfer to operating expenses Consumable materials Direct labor Manufacturing overheads Manufacturing cost Plus: beginning WIP Less: ending WIP Cost of finished products Plus: beginning finished products Outsourcing expenses Other warehousing Less: Ending finished products Transfer to operating expenses Production and marketing cost Beginning commodity Plus: Goods purchased in current period Others Less: Ending goods Transfer to operating expenses Cost of goods sold Plus: Cost of raw materials sold Less: Benefit from inventory decline recovery Cost of goods sold	Summary	$ ( ( (	Amount 21,208 24,704 106 20,200) 861) 3,489) 21,468 6,894 1,518 29,880 3,981 2,997) 30,864 9,199 2,098 21 23,047) 801) 18,334 14,309 172,378 1,064 11,006) 1,206) 175,539 860 4,026) 190,707
		(
		( (
		( (
		(
		$

~79~

APEX SCIENCE & ENGINEERING CORP. List of project costs January 1, 2022, to December 31, 2022

Unit: NT $1000

Item Beginning construction materials Plus: Purchase Less: Ending construction materials Construction materials Direct labor Contract payment Construction expenses Project costs	Summary	$	Amount - 35,280 - 35,280 177 300,688 26,383 362,528
		$

~80~

APEX SCIENCE & ENGINEERING CORP.

List of construction costs January 1, 2022, to December 31, 2022

Unit: NT $1000

Item To-be-constructed land Beginning land to be built Plus: Purchase Less: Ending land to be built property under construction Beginning buildings under construction Plus: Purchase Less: Transferred to property for sale Ending buildings under construction Transfer to operating expenses property for sale Beginning property for sale Plus: Transfer in from property under construction Less: Ending property to be sold Total construction costs	$ (	Amount Subtotal 1,338 - 1,338) $ 386 4 - 390) - 74,841 - 74,841) $	Amount Subtotal 1,338 - 1,338) $ 386 4 - 390) - 74,841 - 74,841) $	Total - - - -
	(
	(
			$

~81~

APEX SCIENCE & ENGINEERING CORP. List of operating expenses January 1, 2022, to December 31, 2022

Unit: NT $1000

Subject Salary expenses Miscellaneous expenses Other operating expenses	$	Selling and marketing expenses 17,929 5,550 14,312 37,791	General and administrative expenses $ 66,276 11,633 21,793 $ 99,702	Research and development expenses $ - 139 2,612 $ 2,751	$	Total 84,205 17,322 38,717 140,244
	$		$	$	$

~82~

APEX SCIENCE & ENGINEERING CORP.

List of functional summary of employee welfare, depreciation, depletion, and amortization expenses incurred in the current period

Dec. 31, 2022

Unit: NT $1000

Please refer to notes 6 (26) and (27) for additional information on the nature of expenses and employee welfare expenses.

~83~

Apex Science & Engineering Corp. and Its Subsidiary Companies

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

Dec. 31, 2022

Attached table I

Unit: NT $1000 (Unless otherwise noted)

Holding company Type and name of marketable securities (Note 1) APEX SCIENCE & ENGINEERING CORP. HOLY STONE ENTERPRISE CO., LTD. Chang Ji Construction Co., Ltd. APEX SCIENCE & ENGINEERING CORP. Chang Ji Construction Co., Ltd. BIG SUN Group APEX SCIENCE & ENGINEERING CORP. Formosa Plastics Group (Cayman) Co., Ltd. APEX SCIENCE & ENGINEERING CORP. Mizuho Financial Group. Inc.	Relationship with securities issuers (Note 2) Ledger account - Financial assets at fair value through other comprehensive income- non-current The Company " - " - Financial assets at amortized cost - current - "	Ending te Number of shares Book value (Note 3) 2,648,106 $ 5,647 28,124,802 289,685 1,035,578 342 - 30,900 - 30,956	Ending te	rm Percentage of ownership 16.07 $ 12.29 0.26 - -	Fair value 5,647 289,685 342 30,900 30,956	Remarks
						(Note 4) (Note 5)

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 December 31, 2022.

Attached table I Page1

Apex Science & Engineering Corp. and Its Subsidiary Companies

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.

Jan. 1 - Dec. 31, 2022

Attached table II

Unit: NT $1000 (Unless otherwise noted)

Transaction history

	Transaction history
Number (Note 1) Trader name Transaction object 0 APEX SCIENCE & ENGINEERING CORP. Chang Ji Construction Co., Ltd. 1 Chang Ji Construction Co., Ltd. APEX SCIENCE & ENGINEERING CORP.	Relation to trader (Note 2) Subject Amount Trading conditions 1 Advance collection of engineering fund $ 149,433 No significant difference from general manufacturers 2 Advance collection of engineering fund 260,529 No significant difference from general manufacturers	Ratio to consolidated gross
		operating revenue or total assets (Note 3) 1.59% 2.78%
			assets (Note 3) 1.59% 2.78%

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, the subsidiaries need not repeatedly disclose if the parent company has disclosed the transactions between the parent company and its subsidiaries. The other subsidiaries need not repeatedly disclose if one subsidiaries of a subsidiary has been disclosed):

• (1) Parent company to a subsidiary.

• (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.

Attached table II Page1

Apex Science & Engineering Corp. and Its Subsidiary Companies

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

Jan. 1 - Dec. 31, 2022

	Jan. 1 - Dec. 31, 2022
Attached table III Name of investment company Name of invested company (Note 1 and 2) Region Main operating item APEX SCIENCE & ENGINEERING CORP. XINDIN ENGINEERING CONSULTANTS CORP. Taiwan Engineering technical consultant, urban update reconstruction, management consultant, other consulting service $ APEX SCIENCE & ENGINEERING CORP. REINFORCE ENERGY CO.,LTD The British Virgin Islands General investment industry APEX SCIENCE & ENGINEERING CORP. Chang Ji Construction Co., Ltd. Taiwan Construction of civil and structural works and water conservancy projects, etc.	Original investment amount End of the period End of last year 8,000 $ 8,000 95,964 95,964 496,856 496,856	Holding at the end of the period Number of shares % Book value 800,000 100.00 $ 21,354 2,810,000 100.00 224,194 54,320,000 90.53 415,332	Current profit and loss		Unit: NT $1000 (Unless otherwise noted) Investment profit and loss recognized for the period (Note 2(3)) Rem ark $ 381 29,120 7,781
			of invested company (Note 2(2)) $ 381 29,120 15,626
				(Note 2(2)) 381 29,120 15,626

• 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.

Attached table III Page1

Apex Science & Engineering Corp. and Its Subsidiary Companies

Chinese Mainland Investment Information - Basic Profile Jan. 1 - Dec. 31, 2022

Attached table IV

Unit: NT $1000

(Unless otherwise noted)

Name of invested company in Chinese Mainland Main operating item Paid-in capital 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	Investment mode (Note 1) 2	Investment mode (Note 1) 2	Accumulated investment amount	Amount of Investments Remitted or Repatriated for the Period remitted recovered $ - $ -	Accumulated investment amount remitted	Current income/(loss) of	The shareholding ratio of direct or indirect investment of the company 46.00	Investment income/(loss)	Investment income/(loss)	Closing investment book value $ 223,487	Investment income remitted back as of the current period Remark $ 20,564 Note 2 (2) B
			remitted from Taiwan at the beginning of the current period $ 73,749
					from Taiwan at			listed in the current period
					the end of the current period $ 73,749	the invested company $ 68,125
		(Note 1) 2							(Note 2) 31,337

COMPANY NAME APEX SCIENCE & ENGINEERING CORP.	Cumulative investment amounts in Chinese Mainland remitted from Taiwan at the end of this period $ 73,749	Investment limit approved by Investment Commission, MOEA $ 73,749	Investment limit approved by Investment Commission, MOEA $ 73,749	Investment limit in	Investment limit in
				Chinese Mainland
		$		$	specified by Investment Commission, MOEA 1,881,369
	$

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. The financial report is audited and certified by an international accounting firm that has a cooperative relationship with an accounting firm of the ROC.

  • B. The financial report was audited by a certified public accountant of the Taiwan parent company.

• C. It bases on a financial report that has not been audited by a CPA if the amount is not insignificant.

• Note 3. Figures of this addendum are listed in New Taiwan dollar

Attached table IV Page1

Apex Science & Engineering Corp. and Its Subsidiary Companies

Information about key shareholders

Dec. 31, 2022

Attached table V

Name of Major Shareholders Chang Ji Construction Co., Ltd. KUO,KUO-HUA CHIH, CHII-GUNG LIN, CHIEN-CHIH	Number of shares held (ordinary shares) 28,124,802 16,422,177 15,547,189 13,490,000	Share Number of shares held (preference shares) - - - -	Percentage of ownership
			12.29% 7.18% 6.79% 5.89%

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 a shareholder delivers its shareholding information to the trust, the aforesaid information shall be disclosed by the individual trustee who opened the trust account. 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.

Attached table V Page1