CATHAY RED - Audit Report / Information 2023

2501

CATHAY REAL ESTATE DEVELOPMENT CO., LTD. Parent Company Only Financial Statements Report of Independent Auditors For the year ended December 31, 2023 and December 31, 2022

Notice to Readers

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

Parent Company Only Financial Statements

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Index
Items Pages
1. Cover 1
2. Index 2
3. Independent Auditors’ Report Translated from Chinese 3-7
4. Parent Company Only Balance Sheets 8-9
5. Parent Company Only Statements of Comprehensive Income 10
6. Parent Company Only Statements of Changes in Equity 11
7. Parent Company Only Statements of Cash Flows 12
8. Notes to Parent Company Only Financial Statements 13-120
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Independent Auditors’ Report Translated from Chinese

To Cathay Real Estate Development Co., Ltd.

Opinion

We have audited the accompanying parent company only balance sheets of Cathay Real Estate Development Co., Ltd. (the “Company”) as of December 31, 2023 and 2022, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2023 and 2022, and notes to the parent company only financial statements, including the summary of significant accounting policies (together “the parent company only financial statements”).

In our opinion, based on our audits and the report of the other auditors (please refer to Other Matter) the parent company only financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and cash flows for the years ended December 31, 2023 and 2022, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of Cathay Real Estate Development Co., Ltd. in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the report(s) of the other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2023 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue Recognition

The Company is primarily engaged in entrusting construction company in construction and planning of public housing and commercial offices for sale and rental. Since the company’s sales revenue is classified as operating revenue based on sale of goods, the relevant profit and loss are recognized when the ownership transferred. Due to the significance of the real estate sales revenue in the parent company only financial statements, with respect to a significant proportion within operating revenue, and need to judge and determine performance obligation and the timing of satisfaction, the real estate sales revenue is determined to be a key audit matter.

The audit procedures we performed regarding real estate sales revenue recognition included but not limited to: evaluate the appropriateness of the real estate sales revenue recognition policies; realize the transaction process and perform the tests of control on the effectiveness of control points during internal control audit; select samples to perform transaction test of details and verify major clauses and conditions in the construction contract; review the transaction conditions and confirm the appropriateness of the timing the performance obligation is recognized.

We also assess whether the Company properly disclosed information relating the real estate sales revenue in the financial statement. Please refer Note 4 and Note 6.

Valuation of Construction Land

The construction land of the Company shall be measured at the lower of cost and net realized value, and the net realizable value of the construction land is determined based on the management’s judgement and estimation. Due to the significance of construction land in the parent company only financial statements, the valuation of construction land is determined to be a key audit matter.

The audit procedures we performed regarding construction land valuation included but not limited to: evaluate the appropriateness of the construction land accounting policies; realize the transaction process and perform tests of control on the effectiveness of control points during internal control audit; select samples to analyze the management valuation process and the key valuation parameters, and evaluate the reasonableness on the basis of working paper and relevant documentation corresponding to construction land valuation which included in inventories.

We also assess whether the Company properly disclosed information relating the construction land valuation in the financial statement. Please refer Notes 4, 5 and 6.

`－` Other Matter Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain associates and joint ventures accounted for using the equity method. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the reports of other auditors. As of December 31, 2023 and 2022, these associates and joint ventures under equity method amounted to NT$1,609,243 thousand and NT$1,533,972 thousand, respectively, representing 2.41% and 2.38% of the total assets, respectively. The related shares of profits from the associates and joint venture under the equity method amounted to NT$40,535 thousand and NT$14,128 thousand, respectively, representing 1.81% and 1.06% of the income before tax, respectively, for the years ended December 31, 2023 and 2022.

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

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the requirements of 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 parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the ability to continue as a going concern of the Company, 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 audit committee, are responsible for overseeing the financial reporting process of the Company.

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

Identify and assess the risks of material misstatement of the parent company only 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 ability to continue as a going concern of Cathay Real Estate Development Co., Ltd. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only 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 Cathay Real Estate Development Co., Ltd. to cease to continue as a going concern. 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 Cathay Real Estate Development Co., Ltd. to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the accompanying notes, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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.

Others

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2023 parent company only financial statements 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.

Hsu, Jung Huang Ma, Chun Ting Ernst & Young, Taiwan March 14, 2024

Notice to Readers

The accompanying parent company only financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.

Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Parent Company Only Balance Sheets

As of December 31, 2023 and 2022

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(Expressed in thousands of New Taiwan Dollars)
Assets As of December 31, 2023 As of December 31, 2022
Code Items Notes Amount ％ Amount ％
Current Assets
1100 Cash and cash equivalents 4, 6 (1) & 7 $3,110,974 5 $7,089,816 11
1120 Financial assets at fair value through other comprehensive income–current 4 & 6 (2) 2,926,542 4 2,558,725 4
1150 Notes receivable, net 4 & 6 (3), (19) 21,913 - 37,966 -
1170 Accounts receivable, net 4 & 6 (4), (19) 691,127 1 4,071 -
1180 Accounts receivable-related parties, net 4, 6 (4), (19) & 7 320 - 1,465 -
1200 Other receivables 7 2,439 - 11,163 -
130x Inventories 4, 6 (5), 7 & 8 39,180,977 59 33,776,123 52
1410 Prepayments 127,916 - 75,081 -
1470 Other non-current assets 30,526 - 27,401 -
1480 Incremental costs of obtaining contracts-current 4 & 6 (5), (18) 1,196,906 2 1,010,700 2
11xx Total current assets 47,289,640 71 44,592,511 69
Non-currents Assets
1517 Financial assets at fair value through other comprehensive income–non-current 4 & 6 (2) 493,512 1 647,654 1
1550 Investments accounted for using equity method 4, 6 (6), (26) & 7 7,347,224 11 7,057,852 11
1600 Property, plant and equipment 4, 6 (7), 7 & 8 91,738 - 103,550 -
1755 Right-of-use assets 4, 6 (20) & 7 31,817 - 22,650 -
1760 Investment properties, net 4 & 6 (8) 10,320,232 15 10,539,484 16
1780 Intangible assets 4 & 6 (9) 4,774 - 5,223 -
1840 Deferred tax assets 4 & 6 (24) 369,310 1 373,209 1
1900 Other non-currents assets 6 (10) & 7 862,478 1 1,168,825 2
15xx Total non-current assets 19,521,085 29 19,918,447 31
1xxx Total assets $66,810,725 100 $64,510,958 100
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(The accompanying notes are an integral part of these parent company only financial statements)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Parent Company Only Balance Sheets (continued)

As of December 31, 2023 and 2022

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(Expressed in thousands of New Taiwan Dollars)
Liabilities and Equity As of December 31, 2023 As of December 31, 2022
Code Items Notes Amount ％ Amount ％
Current Liabilities
2100 Short-term loans 4, 6 (11) & 7 $9,825,000 15 $11,800,000 18
2110 Short-term notes payable 4 & 6 (12) 1,498,104 2 1,994,580 3
2130 Contract liabilities - current 4 & 6 (18) 6,202,748 9 5,500,109 9
2150 Notes payable 8,639 - 41,609 -
2170 Accounts payable 1,005,586 2 731,476 1
2180 Accounts payable-related parties 7 1,375,404 2 659,476 1
2200 Other payables 210,702 - 465,984 1
2230 Current tax liabilities 4 77,851 - 42,032 -
2280 Lease liabilities-current 4, 6 (20) & 7 20,968 - 15,247 -
2300 Other current liabilities 89,849 - 32,962 -
2320 Long-term loans-current portion 4 & 6 (13) 7,580,000 12 4,150,000 7
21xx Total current liabilities 27,894,851 42 25,433,475 40
Non-current liabilities
2540 Long-term loans 4 & 6 (13) 12,380,241 19 14,271,550 22
2570 Deferred tax liabilities 4 & 6 (24) 10,049 - 10,049 -
2580 Lease liabilities-non-current 4, 6 (20) & 7 10,666 - 6,546 -
2600 Other non-current liabilities 6 (14) & 7 205,573 - 187,085 -
25xx Total non-current liabilities 12,606,529 19 14,475,230 22
2xxx Total liabilities 40,501,380 61 39,908,705 62
Equity 4
3100 Share capital
3110 Common stock 6 (15) 11,595,611 17 11,595,611 18
3200 Capital surplus 6 (16) 118,406 - 65,262 -
3300 Retained earnings 6 (17)
3310 Legal capital reserve 4,831,727 7 4,723,658 7
3320 Special capital reserve 504,189 1 504,189 1
3350 Undistributed earnings 8,824,081 13 7,491,441 12
Total retained earnings 14,159,997 21 12,719,288 20
3400 Other equity 435,331 1 222,092 -
3xxx Total equity 26,309,345 39 24,602,253 38
Total Liabilities and Equity $66,810,725 100 $64,510,958 100
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(The accompanying notes are an integral part of these parent company only financial statements)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Parent Company Only Statements of Comprehensive Income For the years ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars, except for earnings per share)

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(Expressed in thousands of New Taiwan Dollars)
2023 2022
Code Items Notes
Amount ％ Amount ％
4000 Operating revenues 4, 6 (8), (18), (20) & 7 $6,829,160 100 $14,126,629 100
5000 Operating costs 4, 6 (5), (8), (9), (14), (20), (21)& 7 (4,538,110) (66) (11,538,284) (82)
5900 Gross margin 2,291,050 34 2,588,345 18
5910 Unrealized sales profit - - (56,202) -
5920 Realized sales profit 41 - 41 -
5950 Gross margin, net 2,291,091 34 2,532,184 18
6000 Operating expenses 4, 6 (8), (9), (14), (20), (21)& 7
6200 Administrative expenses (607,880) (9) (1,272,805) (9)
6450 Expected credit profit (loss) 4 & 6 (19) 1 - - -
Total operating expenses (607,879) (9) (1,272,805) (9)
6900 Operating income 1,683,212 25 1,259,379 9
7000 Non-operating income and expenses 4, 6 (22) & 7
7100 Interest income 34,278 1 11,550 -
7010 Other revenue 133,080 2 619,119 5
7020 Other gains and losses (51,530) (1) 3,535 -
7050 Finance costs 7 (249,250) (4) (161,604) (1)
7070 Share of profit or loss of subsidiaries, associates and joint ventures 4 & 6 (6) 690,420 10 (405,289) (3)
Total non-operating income and expenses 556,998 8 67,311 1
7900 Income before Income tax 2,240,210 33 1,326,690 10
7950 Income tax expense 4 & 6 (24) (75,773) (1) (118,941) (1)
8200 Net income 2,164,437 32 1,207,749 9
8300 Other comprehensive income 6 (23), (24)
8310 Not to be reclassified to profit or loss in subsequent periods
8311 Remeasurements of defined benefit plans (421) - (5,322) -
[Valuation gain (losses) on equity instruments at fair value through]
8316 213,675 3 (1,355,894) (10)
other comprehensive income
8330 Share of the other comprehensive income of subsidiaries, (180) - (14,067) -
associates
and joint ventures accounted for using the equity method
[Income tax related to items not be reclassified to profit or loss in]
8349 84 - 1,064 -
subsequent periods
8360 To be reclassified to profit or loss in subsequent periods
8380 Share of the other comprehensive income of subsidiaries, 81 - 432 -
associates
and joint ventures accounted for using the equity method
Other comprehensive (losses) income, net of tax 213,239 3 (1,373,787) (10)
8500 Total comprehensive income (loss) $2,377,676 35 $(166,038) (1)
Earnings Per Share (In dollars) 6 (25) After tax After tax
9750 Basic earnings per share $1.87 $1.04
9850 Diluted earnings per share $1.87 $1.04
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(The accompanying notes are an integral part of these parent company only financial statements)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Parent Company Only Statements of Changes in Equity

For the years ended December 31, 2023 and 2022

								(Expressed in t	(Expressed in t	housands of New	Taiwan Dollars)
Code	Item	Capital stock	Capital surplus		Retained earnings			Other Equity			Total Equity
				Legal Capital Reserve	Special capital reserve	Unappropriate d Retained Earnings	Exchange differences resulting from translating the financial statements of a foreign operation	Unrealized (Losses) Gains from Financial Assets at Fair Value through Other Comprehensive Income	Remeasurements of Defined Benefit Plans	Revaluation Surplus for Property
		3100	3200	3310	3320	3350	3410	3420	3445	3460	3XXX
A1 B1 B5 C7 C17 D1 D3 D5 M5 Q1 Z1 B1 B5 C7 C17 D1 D3 D5 Z1	Balance as of January 1, 2022 Appropriation and distribution of earnings for the year 2021 Legal Capital Reserve Cash dividend of common stock Changes in equity of associates and joint ventures accounted for using equity method Changes in other capital surplus Net income for the year ended December 31, 2022 Other comprehensive income (loss), net of tax for the year ended December 31, 2022 Total comprehensive income (loss) Difference between consideration and carrying amount of subsidiaries acquired or disposed Disposal of equity instruments investments measured at fair value through other comprehensive income Balance as of December 31, 2022 Appropriation and distribution of earnings for the year 2022 Legal Capital Reserve Cash dividend of common stock Changes in equity of associates and joint ventures accounted for using equity method Changes in other capital surplus Net income for the year ended December 31, 2023 Other comprehensive income (loss), net of tax for the year ended December 31, 2023 Total comprehensive income (loss) Balance as of December 31, 2023	$11,595,611 - - - - - -	$38,846 - - 16,452 9,702 - -	$4,638,904 84,754 - - - - -	$504,189 - - - - - -	$7,191,237 (84,754) (695,737) - - 1,207,749 -	$- - - - - - 432	$1,451,654 - - - - - (1,354,056)	$17,171 - - - - - (20,163)	$- - - - - - -	$25,437,612 - (695,737) 16,452 9,702 1,207,749 (1,373,787)
		- - -	- 262 -	- - -	- - -	1,207,749 - (127,054)	432 - -	(1,354,056) - 127,054	(20,163) - -	- - -	(166,038) 262 -
		11,595,611 - - - - - -	65,262 - - 47,090 6,054 - -	4,723,658 108,069 - - - - -	504,189 - - - - - -	7,491,441 (108,069) (579,781) (143,947) - 2,164,437 -	432 - - - - - 81	224,652 - - - - - 206,202	(2,992) - - - - - 3,250	- - - - - - 3,706	24,602,253 - (579,781) (96,857) 6,054 2,164,437 213,239
		-	-	-	-	2,164,437	81	206,202	3,250	3,706	2,377,676
		$11,595,611	$118,406	$4,831,727	$504,189	$8,824,081	$513	$430,854	$258	$3,706	$26,309,345

(The accompanying notes are an integral part of these parent company only financial statements)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD. Parent Company Only Statements of Cash Flows For the years ended December 31, 2023 and 2022

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essed in thousands of New Taiwan Dollars)
Code Items 2023 2022
AAAA Cash flows from operating activities
A10000 Net income before tax $2,240,210 $1,326,690
A20000 Adjustments to reconcile profit or loss:
A20100 Depreciation 206,582 206,290
A20200 Amortization 3,201 2,591
A20300 Expected credit loss (gain) (1) -
A20900 Interest expenses 249,250 161,604
A21200 Interest income (34,278) (11,550)
A21300 Dividend income (61,287) (204,369)
A22400 Share of profit or loss of subsidiaries, associates and joint ventures (690,420) 405,289
A22500 Loss (gain) on disposal of property, plant and equipment (2,814) (4,279)
A23900 Unrealized sales profit (loss) - 56,202
A23700 Impairment loss on non-financial assets 52,089 -
A29900 Others - (281,818)
A30000 Changes in operating assets and liabilities
A31130 Decrease (increase) in notes receivable 16,053 (17,076)
A31150 Decrease (increase) in accounts receivable (687,055) 148,648
A31160 Decrease (increase) in accounts receivable-related parties 1,145 (566)
A31180 Decrease (increase) in other receivables 8,860 (9,016)
A31200 Decrease (increase) in inventories (5,079,587) 417,262
A31230 Decrease (increase) in prepayments (52,835) (70,535)
A31240 Decrease (increase) in other current assets (3,125) 23,342
A31270 Decrease (increase) in incremental costs of obtaining contracts (186,206) (233,553)
A31990 Decrease (increase) in other operating assets 89,057 (49,947)
A32125 Increase (decrease) in contract liabilities 702,639 873,047
A32130 Increase (decrease) in notes payable (32,970) (111,737)
A32150 Increase (decrease) in accounts payable 274,110 27,677
A32160 Increase (decrease) in accounts payable-related parties 715,928 659,306
A32180 Increase (decrease) in other payables (252,182) 286,270
A32230 Increase (decrease) in other current liabilities 56,887 (995,121)
A33000 Cash generated by (used in) operations (2,466,749) 2,604,651
A33100 Interest received 34,142 11,551
A33500 Income tax paid (35,971) (127,850)
AAAA Net cash generated by (used in) operating activities (2,468,578) 2,488,352
BBBB Cash flows from investing activities
B00010 Acquisition of financial assets at fair value through other comprehensive income - (669,589)
B00020 Disposal of financial assets at fair value through other comprehensive income - 1,846,000
B01800 Acquisition of investment accounted for using equity method (172,800) (4,997,840)
B02700 Acquisition of property, plant and equipment (18,624) (68,271)
B02800 Proceeds from disposal of property, plant and equipment 9,334 4,926
B04500 Acquisition of intangible assets (2,752) (3,173)
B06800 Decrease in other non-current assets 306,347 150,251
B07600 Dividends received 538,179 277,613
BBBB Net cash generated by (used in) investing activities 659,684 (3,460,083)
CCCC Cash flows from financing activities
C00100 Increase in short-term borrowings - 1,030,000
C00200 Decrease in short-term borrowings (1,975,000) -
C00500 Increase in short-term notes payable - 36,515
C00600 Decrease in short-term notes payable (496,476) -
C01600 Proceeds from long-term loans 5,898,691 9,231,550
C01700 Repayment of long-term loans (4,360,000) (3,038,685)
C04020 Cash payment for the principal portion of the lease liabilities (23,410) (28,442)
C04300 Increase in other non-current liabilities 18,067 614
C04500 Cash dividends (579,781) (695,737)
C05600 Interest paid (650,376) (371,285)
C09900 Other financing activities (1,663) (722)
CCCC Net cash generated by (used in) financing activities (2,169,948) 6,163,808
EEEE Net increase (decrease) in cash and cash equivalents (3,978,842) 5,192,077
E00100 Cash and cash equivalents, beginning of period 7,089,816 1,897,739
E00200 Cash and cash equivalents at the end of the period $3,110,974 $7,089,816
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(The accompanying notes are an integral part of these parent company only financial statements)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD. Notes to Parent Company Only Financial Statements For the years ended December 31, 2023 and 2022

(Amounts expressed in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. History and organization

Cathay Real Estate Development Co., Ltd. (the “Company”) was incorporated on December 1, 1964. The main businesses of the Company are entrusted the manufacturer to build residential and commercial buildings for leasing or selling.

The Company is located at 2F., No. 218, Sec. 2, Dunhua S. Rd., Da’an Dist., Taipei City 106, Taiwan (R.O.C.) and has been listed and traded on Taiwan Stock Exchange (TWSE) since October 1967.

2. Date and procedures of authorization of financial statements for issue

The parent company only financial statements for the years ended December 31, 2023 and 2022 were authorized for issue by the Board of Directors on March 14, 2024.

3. Newly issued or revised standards and interpretations

(1) Changes in accounting policies resulting from applying for the first-time certain standards and amendments:

The Company applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after January 1, 2023. The adoption of these new standards and amendments had no material impact on the Company.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, and not yet adopted by the Company as of the end of the reporting period are listed below.

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Effective Date
Items New, Revised or Amended Standards and Interpretations
issued by IASB
A Classification of Liabilities as Current or Non-current – Amendments to January 1, 2024
IAS 1
B Lease Liability in a Sale and Leaseback – Amendments to IFRS 16 January 1, 2024
C Non-current Liabilities with Covenants – Amendments to IAS 1 January 1, 2024
D Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7 January 1, 2024
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English Translation of Financial Statements Originally Issued in Chinese

A. Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

B. Lease Liability in a Sale and Leaseback – Amendments to IFRS 16

The amendments add seller-lessees additional requirements for the sale and leaseback transactions in IFRS 16, thereby supporting the consistent application of the standard.

C. Non-current Liabilities with Covenants – Amendments to IAS 1

The amendments improved the information companies provide about long-term debt with covenants. The amendments specify that covenants to be complied within twelve months after the reporting period do not affect the classification of debt as current or non-current at the end of the reporting period.

D. Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7

The amendments introduced additional information of supplier finance arrangements and added disclosure requirements for such arrangements.

The above-mentioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after January 1, 2024. The new or amended standards and interpretations have no material impact on the Company.

(3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and not yet adopted by the Company as of the end of the reporting period are listed below.

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Effective Date
Items New, Revised or Amended Standards and Interpretations
issued by IASB
A IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in To be determined
Associates and Joint Ventures” — Sale or Contribution of Assets between by IASB
an Investor and its Associate or Joint Ventures
B IFRS 17 “Insurance Contracts” January 1, 2023
C Lack of Exchangeability – Amendments to IAS 21 January 1, 2025
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English Translation of Financial Statements Originally Issued in Chinese

A. IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

B. IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after January 1, 2023 (from the original effective date of January 1, 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after January 1, 2023.

English Translation of Financial Statements Originally Issued in Chinese

C. Lack of Exchangeability – Amendments to IAS 21

These amendments specify whether a currency is exchangeable into another currency and, when it is not, to determining the exchange rate to use and the disclosures to provide. The amendments apply for annual reporting periods beginning on or after January 1, 2025.

The above-mentioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Company’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. The new or amended standards and interpretations have no material impact on the Company.

4. Summary of material accounting policies

(1) Statement of compliance

The parent company only financial statements of the Company for the years ended December 31, 2023 and 2022 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”).

(2) Basis of preparation

The Company prepares parent company only financial reports based on the Regulations Governing the Preparation of Financial Reports by Securities Issuers. According to the provisions of Article 21, the profit or loss during the period and other comprehensive income presented in parent company only financial reports shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports shall be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis. Therefore, the investment of subsidiaries is expressed as “investment using the equity method” and adjusted for necessary evaluation.

The parent company only financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The parent company only financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Foreign currency transactions

The Company’s parent company only financial statements are presented in NT$, which is also the Company’s functional currency.

English Translation of Financial Statements Originally Issued in Chinese

Transactions in foreign currencies are initially recorded by the Company’s functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Nonmonetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as of the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

A. Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
B. Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.
C. Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

(4) Translation of financial statements in foreign currency

Each foreign operation of the Company determines its function currency upon its primary economic environment and items included in the financial statements of each operation are measured using that functional currency. The assets and liabilities of foreign operations are translated into New Taiwan Dollars at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following partial disposals are accounted for as disposals: (a) when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and (b) when the retained interest after the partial disposal of an interest in a joint arrangement or a partial disposal of an interest in an associate that includes a foreign operation is a financial asset that includes a foreign operation.

English Translation of Financial Statements Originally Issued in Chinese

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. In partial disposal of an associate or jointly controlled entity that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(5) Current and non-current distinction

The following asset is classified as current. All other assets are classified as non-current:

A. The Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle.
B. The Company holds the asset primarily for the purpose of trading.
C. The Company expects to realize the asset within twelve months after the reporting period.
D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The following liability is classified as current. All other liabilities are classified as non-current:

A. The Company expects to settle the liability in its normal operating cycle.
B. The Company holds the liability primarily for the purpose of trading.
C. The liability is due to be settled within twelve months after the reporting period.
D. The Company does not have a right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

(6) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (including time deposits with maturing of less than 12 months).

(7) Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

English Translation of Financial Statements Originally Issued in Chinese

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

A. Financial instruments: Recognition and Measurement

The Company accounts for regular way purchase or sales of financial assets on the trade date.

The Company classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income based on both:

a. the Company’s business model for managing the financial assets and
b. the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as notes receivable, accounts receivable, financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

a. the financial asset is held within a business model whose objective is to hold financial assets to collect contractual cash flows and
b. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

a. purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
b. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

English Translation of Financial Statements Originally Issued in Chinese

Financial assets measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

a. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
b. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

a. A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
b. When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
c. Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:
i. For purchased or originated credit-impaired financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset.
ii. For financial assets that are not purchased or originated credit-impaired financial assets but subsequently become credit-impaired financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Company made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividend clearly represents a recovery of part of the cost of investment.

English Translation of Financial Statements Originally Issued in Chinese

B. Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on debt instrument investments measured at financial assets measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the statement of financial position.

The Company measures expected credit losses of a financial instrument in a way that reflects:

a. an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
b. the time value of money; and
c. reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The loss allowance is measured as follows:

a. at an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Company measures the loss allowance for a financial asset at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that condition is no longer met.
b. at an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.
c. for accounts receivable or contract assets arising from transactions within the scope of IFRS 15, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.
d. For lease receivables arising from transactions within the scope of IFRS 16, The Company measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Company needs to assess whether the credit risk on a financial asset has been increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

English Translation of Financial Statements Originally Issued in Chinese

C. Derecognition of financial assets

A financial asset is derecognized when:

a. the rights to receive cash flows from the asset have expired.
b. The Company has transferred the asset and substantially all the risks and rewards of the asset have been transferred
c. The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

D. Financial liabilities and equity

Classification between liabilities or equity

The Company classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Financial Liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through amortization process of the effective interest rate method.

Amortized cost is calculated by considering any discount or premium on acquisition and fees or transaction costs.

English Translation of Financial Statements Originally Issued in Chinese

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

E. Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(8) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

A. In the principal market for the asset or liability, or
B. In the absence of a principal market, in the most advantageous market for the asset or liability

The main or the most advantageous market must enter by the Company to conduct transaction.

An entity shall measure the fair value of an asset or a liability using the assumptions that market participants would use when pricing the asset or liability, if market participants act in their economic best interest.

A fair value measurement of a non-financial asset considers a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company adopts the appropriate valuation technique(s) to use when measuring fair value. The valuation technique(s) used should maximize the use of relevant observable inputs and minimize unobservable inputs.

English Translation of Financial Statements Originally Issued in Chinese

(9) Inventories

Inventories, including construction land, construction in progress and building and land for sale, are stated at the cost in the basis of the account. The construction land transfer to property under construction during actively developed and capitalize financial cost during actively developed or construction period.

Inventories are valued at lower of cost and net realizable value item by item. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

The Company's contract incremental cost is the commission generated by the acquisition of the presold house contract. The customer's signing of the presold contract has not fulfilled the performance obligation because the goods promised to have not been transferred to the customer. According IFRS 15, the sales commission is the incremental cost of acquisition the presold house contract. When the house is transferred to the customer and fulfill the performance obligation, the incremental cost of obtaining the contract is be amortized.

Rendering of services is accounted in accordance with IFRS 15 but not within the scoping of inventories.

(10) Investment accounted for using equity method

The Company's investment in subsidiaries is based on the provisions of Article 21 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and isexpressed in the equity method of investment and adjusted as necessary. The profit or loss during the period and other comprehensive income presented in the parent company only financial reports shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports shall be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis. These adjustments mainly consider the difference raised from the accounting of investment subsidiaries in accordance with IFRS No.10 and the applicable IFRS at different levels of parent company only reporting. These adjustments are recognized in the following subjects: Investments accounted for using the equity method, share of profit of associates and joint ventures, Share of other comprehensive income of associates and joint ventures. The Company's investment in related companies using equity method excluding the assets held for sale. The company is an associates company if it has significant influence. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture.

English Translation of Financial Statements Originally Issued in Chinese

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Company’s share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Company and the associate or joint venture are eliminated to the extent of the Company’s related interest in the associate or joint venture.

When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affects the Company’s percentage of ownership interests in the associate or joint venture, the Company recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a prorate basis.

When the associate or joint venture issues new shares, and the Company’s interest in an associate or a joint venture is reduced or increased as the Company fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in capital surplus and investments accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Company disposes the associate or joint venture.

The financial statements of the associate are prepared for the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

The Company determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures. If this is the case the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets. In determining the value in use of the investment, the Company estimates:

A. Its share of the present value of the estimated future cash flows expected to be generated by the associate, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment.

English Translation of Financial Statements Originally Issued in Chinese

B. The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Upon loss of significant influence over the associate or joint venture, the Company measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

(11) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Company recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment. When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings and facilities 5 to 50 years Leased assets 5 years Leasehold improvement The shorter of lease terms or economic useful lives Miscellaneous equipment 3 to 5 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

English Translation of Financial Statements Originally Issued in Chinese

(12) Investment properties

The Company’s owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal group that is classified as held for sale) in accordance with IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations, investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as right-of-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings 2 to 50 years

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

The Company transfers to or from investment properties when there is a change in use for these assets.

Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

(13) Leases

The Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether the contract, throughout the period of use, has both of the following:

A. the right to obtain substantially all of the economic benefits from use of the identified asset; and
B. the right to direct the use of the identified asset.

English Translation of Financial Statements Originally Issued in Chinese

For a contract that is, or contains, a lease, the Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate standalone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Company for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Company estimates the stand-alone price, maximizing the use of observable information.

Company as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Company recognizes right-of-use asset and lease liability for all leases which the Company is the lessee of those lease contracts.

At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

A. fixed payments (including in-substance fixed payments), less any lease incentives receivable;
B. variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
C. amounts expected to be payable by the lessee under residual value guarantees;
D. the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
E. payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Company measures the lease liability on an amortised cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

A. the amount of the initial measurement of the lease liability;
B. any lease payments made at or before the commencement date, less any lease incentives received;
C. any initial direct costs incurred by the lessee; and

English Translation of Financial Statements Originally Issued in Chinese

D. an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Company measures the right-ofuse asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Company measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the rightof-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Company applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Company accounted for as short-term leases or leases of lowvalue assets, the Company presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the income statement.

For short-term leases or leases of low-value assets, the Company elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

Company as a lessor

At inception of a contract, the Company classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Company recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Company allocates the consideration in the contract applying IFRS 15.

The Company recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

English Translation of Financial Statements Originally Issued in Chinese

(14) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

Computer software

The cost of computer software is amortized on a straight-line basis over the estimated useful life (3 years).

(15) Impairment of non-financial assets

The Company assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 “Impairment of Assets” may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

English Translation of Financial Statements Originally Issued in Chinese

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cashgenerating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(16) Revenue Recognition

The Company’s revenue arising from contracts with customers mainly includes sale of buildings and land. The accounting policies for the Company’s types of revenue are explained as follows:

Sales of buildings and lands

The Company entrusts construction companies in construction and planning of public housing is recognized as sales revenue in accordance with the IFRS 15 about the regulation of sales of goods. Therefore, the Company recognize profit and loss when the ownership transferred.

Before the recognition of the income, the down payment and installment received for the sale of the premises are recognized as contract liabilities in the current liabilities of the balance sheet.

(17) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(18) Retirement benefits plans

All regular employees of the Company are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Company.

English Translation of Financial Statements Originally Issued in Chinese

Therefore, fund assets are not included in the Company’s parent company only financial statements.

For the defined contribution plan, the Company will make a monthly contribution of no less than 6% of the monthly wages of the employee’s subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Remeasurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

A. the date of the plan amendment or curtailment, and
B. the date that the Company recognizes restructuring-related costs or termination benefits costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period because of contribution and benefit payment.

(19) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the shareholders’ meeting.

English Translation of Financial Statements Originally Issued in Chinese

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

A. Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
B. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

A. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination, affects neither the accounting profit nor taxable profit or loss at the time of the transaction, and does not give rise to equal taxable and deductible temporary differences at the time of the transaction.
B. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

English Translation of Financial Statements Originally Issued in Chinese

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(20) Business combinations

Business combinations are accounted for using the acquisition method. The consideration transferred, the identifiable assets acquired and liabilities assumed are measured at acquisition date fair value. For each business combination, the acquirer measures any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and are classified under administrative expenses.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognized at the acquisition-date fair value. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with IFRS 9 Financial Instruments either in profit or loss or as a change to other comprehensive income. However, if the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.

Goodwill is initially measured as the amount of the excess of the aggregate of the consideration transferred and the non-controlling interest over the net fair value of the identifiable assets acquired and the liabilities assumed. If this aggregate is lower than the fair value of the net assets acquired, the difference is recognized in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit or group of units to which the goodwill is so allocated represents the lowest level within the Company at which the goodwill is monitored for internal management purpose and is not larger than an operating segment before aggregation.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation. Goodwill disposed of in this circumstance is measured based on the relative recoverable amounts of the operation disposed of and the portion of the cash-generating unit retained.

English Translation of Financial Statements Originally Issued in Chinese

5. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s parent company only financial statements require management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

(1) Judgement

In the process of applying the Company’s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the consolidated financial statements:

Operating lease commitment-Company as the lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has signed real estate leases for investment property portfolios. Based on the assessment of its agreed terms, the Company still retains the significant risks and rewards of ownership of these properties and treats them as operating leases.

(2) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

A. Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flows model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

B. Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date less incremental costs that would be directly attributable to the disposal of the asset or cash generating unit. The value in use calculation is based on a discounted cash flow model. The cash flows projections are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

English Translation of Financial Statements Originally Issued in Chinese

C. Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate and changes of the future salary etc. Please refer to Note 6 for a detailed description of the assumptions used to measure defined benefit costs and defined benefit obligations.

D. Income taxes

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective company's domicile.

Deferred tax assets are recognized for all carryforward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies. As of December 31, 2023, the deferred income tax assets that the Company has not recognize, please refer to Note 6 for more details.

E. Inventory evaluation

Inventories are stated at the lower of cost and net realizable value, and the Company uses judgment and estimate to determine the net realizable value of inventory at the date of balance sheet. The Company estimates the net realizable value of inventory for market changes and unmarketable items at the date of balance sheet and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions of future demand within a specific time period, therefore it may cause material adjustments. Please refer to Note 6 for more details.

English Translation of Financial Statements Originally Issued in Chinese

F. Accounts receivables-estimation of impairment loss

The Company estimates the impairment loss of accounts receivables at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details.

6. Contents of significant accounts

(1) Cash and cash equivalents

	As of December 31,	As of December 31,
	2023	2022
Cash on hand and petty cash	$763	$290
Checking accounts and demand deposit	2,409,819	4,546,483
Cash equivalent-short-term notes	700,392	2,543,043
Total	$3,110,974	$7,089,816

The Company’s cash and cash equivalents were not pledged as collateral or restricted for uses.

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

	As of December 31,	As of December 31,
	2023	2022
Equity instruments investments measured at fair value
through other comprehensive income - current:
Listed company stocks	$2,926,542	$2,558,725
Equity instruments investments measured at fair value
through other comprehensive income - non-current:
Unlisted company’s stocks	$493,512	$647,654

The Company’s financial assets at fair value through over comprehensive income were not pledged as collateral or restricted for uses.

English Translation of Financial Statements Originally Issued in Chinese

The Company’s dividend income related to equity instrument investments measured at fair value through other comprehensive income for the years ended December 31, 2023 and 2022 are as follows:

	For the years ended	December 31,
	2023	2022
Related to investments held at the end of the reporting
period	$61,287	$204,369
Related to investments derecognized during the period	-	-
Dividends recognized during the period	$61,287	$204,369

In consideration of the Company’s investment strategy, the Company disposed and derecognized partial equity instrument investments measured at fair value through other comprehensive income. Details on derecognition of such investments for the years ended December 31, 2023 and 2022 are as follow:

	For the years ended	December 31,
	2023	2022
The fair value of the investments at the date of derecognition	$-	$1,913,515
The cumulative gain or loss on disposal reclassified
from other equity to retained earnings	-	(127,054)

(3) Notes receivable

	As of December	31,
	2023	2022
Notes receivable arising from operating activities	$21,913	$37,966
Less: loss allowance	-	-
Total	$21,913	$37,966

The Company’s notes receivables were not pledged as collateral or restricted for uses.

The Company adopted IFRS 9 for impairment assessment. Please refer to Note 6. (19) for more details on accumulated impairment. Please refer to Note 12 for more details on credit risk.

English Translation of Financial Statements Originally Issued in Chinese

(4) Accounts receivable and accounts receivable -related parties

	As of December	31,
	2023	2022
Accounts receivable	$691,127	$4,072
Less: loss allowance	-	(1)
Subtotal	691,127	4,071
Accounts receivable - related parties	320	1,465
Less: loss allowance	-	-
Subtotal	320	1,465
Total	$691,447	$5,536

The Company’s accounts receivable and accounts receivable- related parties were not pledged as collateral or restricted for uses.

Accounts receivables are generally on 30-365-day terms. The book value of the accounts receivables held by the Company were NT$691,447 thousand and NT$5,537 thousand as of December 31, 2023 and 2022, respectively. Please refer to Note 6. (19) for more details on impairment of accounts receivable. Please refer to Note 12 for more details on credit risk.

(5) Inventories

	As of December 31,	As of December 31,
	2023	2022
Construction land	$8,327,074	$11,024,182
Construction in progress	25,102,298	21,625,969
Buildings and land held for sale	4,567,716	761,803
Subtotal	37,997,088	33,411,954
Prepayment for land purchases	1,183,889	364,169
Total	$39,180,977	$33,776,123

A. Some of the construction in progress above was contracted by the Company’s subsidiary, San Ching Engineering Co., Ltd., for the years ended December 31, 2023 and 2022, the relevant transactions are detailed in Note 7.

English Translation of Financial Statements Originally Issued in Chinese

B. The net realizable value of the construction land held by the Company is based on the nature of the land, using either land development analysis approach, comparison method or announced current land value method. The land development analysis approach is based on the changes in land value the development and improvement bring according to the legal use and the intensity of use of the land. The approach estimates the total sales amount after development or construction, deducting the direct costs, indirect costs, capital interests and profits during the development period. The comparison method is evaluated based on the transaction price of similar lands in neighboring areas in the most recent year. The announced current land value method is based on the assessment of the current value of the land announced by the Department of Land Affairs, Ministry of the Interior.
C. Significant construction projects in progress were as follows:

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Total Contract Price
(budget cost, excluding Percentage of
Construction Project payment for land) Completion
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Construction Project	payment for land)	Completion
Liberty Stationery Corp	$2,471,862	97%
Cathay MOST+	1,890,000	59%
Cathay He He	1,104,762	58%
Cathay You Yang	1,158,464	48%
Cathay Xi Jing	1,133,333	48%
Cathay THE PARK	1,257,143	38%
Cathay You Jing	1,086,746	30%
Cathay Mei He	1,121,144	24%
Dunnan Lin Yuan	1,670,952	19%
Taoyuan City Central Road Section 2	2,057,515	18%
Cathay Pan Yun	1,127,429	16%
Cathay United Dunbei Urban Renewal Project	1,123,321	15%
Cathay Yi He	2,275,500	14%
Cathay Yong Cui	2,278,750	10%

D. Information regarding the total interests capitalized of the inventories were as follows:

	For the years ended December 31,	For the years ended December 31,
	2023	2022
Interest expense capitalized	$405,743	$224,484
Interest expense before capitalization	654,993	386,089
Monthly capitalization interest rate	0.1219%~0.2943%	0.0633%~0.1937%

English Translation of Financial Statements Originally Issued in Chinese

E. To successfully construct and deliver the building and housing to the customers, the Company uses the following trust accounts for the construction in progress:

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Construction Project Amount Trustee
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Construction Project	Amount	Trustee
Cathay Huai Wei Feng Nian	$1	Cathay United Bank
Cathay Chuan Qing	0	Cathay United Bank
Cathay Feng Shuo	55	Cathay United Bank
Cathay Xi Jing	1,661	Cathay United Bank
Cathay He He	992	Cathay United Bank
Cathay You Yang	15	Cathay United Bank
Cathay You Jing	5,017	Cathay United Bank
Cathay Shi Mei	250,040	Cathay United Bank
Cathay Yong Cui	409,155	Cathay United Bank
Dunnan Lin Yuan	435,265	Cathay United Bank
Cathay Min Le	92,151	Cathay United Bank
Cathay THE PARK	134,994	Cathay United Bank
Cathay MOST+	10,014	Cathay United Bank
Cathay Sen Lin Hui	0	Cathay United Bank
Cathay Mei He	143,488	Cathay United Bank
Cathay Pan Yun	264,742	Cathay United Bank
Cathay Yi He	196,195	Cathay United Bank
Cathay Yong Cui Joint Construction Party	286,933	Cathay United Bank

As of December 31, 2023, the Company has established a deed of trust with the bank for the construction above to help manage the funds of the presold customers paid. The trust period ends after the construction is completed and the first ownership registration of the property. The balance of the managed funds by the Company in accordance with the above trust deed is NT$2,230,718 thousand, which is equal to the amount receivable of the presold contract. There is no delay in the delivery of the trust account.

F. The costs of inventories recognized in expenses amount to NT$4,205,593 thousand and NT$11,212,557 thousand for the years ended to December 31, 2023 and 2022, including the inventory valuation losses NT$0 thousand for both the years ended December 31, 2023 and 2022.
G. Please refer to Note 8 for more details on inventory under pledged.
H. Incremental costs of obtaining contracts

The cost occurred for the acquisition of the customer's contract is the incremental cost of the contract. The incremental cost of the contract is amortized when the house is handed over to the customers.

English Translation of Financial Statements Originally Issued in Chinese

(6) Investment accounted for using equity method

The following table lists the investments for using the equity method of the Company:

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As of December 31,
2023 2022
Percentage of Percentage of
Investee Amount ownership (%) Amount ownership (%)
Investment in subsidiaries:
Cathay Real Estate Management Co., Ltd. $139,517 100% $129,694 100%
Cathay Healthcare Management Co., Ltd. 647,572 85% 620,212 85%
Cathay Hospitality Management Co., Ltd. 63,758 100% 94,135 100%
Cathay Hospitality Consulting Co., Ltd. 128,441 100% 160,739 100%
Cymbal Medical Network Co., Ltd. 172,373 100% 247,719 100%
Lin Yuan Property Management Co., Ltd. 73,857 51% 60,420 51%
Jinhua Realty Co., Ltd. 337,027 51% 338,639 51%
Bannan Realty Co., Ltd. 575,544 51% 578,138 51%
Sanchong Realty Co., Ltd. 1,761,939 66% 1,651,771 66%
Zhulun Realty Co., Ltd. 196,953 51% 200,287 51%
San Ching Engineering Co., Ltd. 2,978,397 100% 2,759,891 100%
Subtotal 7,075,378 6,841,645
Investment of associates:
Symphox information Co., Ltd. 95,494 11% 63,587 11%
San Hsiung Fongshan LaLaport Co., Ltd. 176,352 30% 152,620 30%
Subtotal 271,846 216,207
Total $7,347,224 $7,057,852
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The investment of subsidiaries is expressed by “Investment using the equity method” in the parent company only financial statements and their evaluation will be adjusted if necessary.

A. We did not audit the financial statements of certain associates and joint ventures accounted for using the equity method. As of December 31, 2023 and 2022, these associates and joint ventures under equity method amounted to NT$1,609,243 thousand and NT$1,533,972 thousand, respectively. The related shares of profits from the associates and joint venture under the equity method amounted to NT$40,535 thousand and NT$14,128 thousand, respectively, for the years ended December 31, 2023 and 2022.

English Translation of Financial Statements Originally Issued in Chinese

B. Changes of the investments accounted for using the equity method:

Zhulun Realty Co., Ltd. was established in 2022. After acquiring 100% shares of San Ching Engineering Co., Ltd. in May 2022, the Company gained control over the entity. After acquiring 30% shares of San Hsiung Fongshan LaLaport Co., Ltd. in October 2022, the Company had significant influence over it.

C. The Company acquired 100% of San Ching Engineering Co., Ltd.’s voting shares in May 2022. The transfer price of this transaction and the fair value of the originally held equity on the acquisition date was lower than the fair value of identifiable net asset. The difference was recognized as bargain purchase gains. Please refer to Note 6. (26).
D. The Company acquired 100% shares of San Ching Engineering Co., Ltd. in May 2022 and its investee: Symphox information Co., Ltd. was therefore deemed an associate as the Company has gained significant influence over the entity. The Company reclassified the investment from financial assets measured at fair value through other comprehensive income to investment accounted for using equity method.
E. Though the Company and one of the shareholders are the largest shareholders of Symphox information Co., Ltd., however after comprehensive assessment, the Company does not own the majority voting rights as the remaining voting rights holders are able to align and prevent the Company from ruling the relevant operation. Therefore, the Company does not control but owns significant influence over the above-mentioned associates.
F. There are no significant associates for the Company. The Company’s associate aggregately amounted respectively to NT$2,033,316 thousand and NT$1,815,568 thousand as of December 31, 2023 and 2022. The related shares of profits from the associates accounted for using the equity method were as follows:

	For the years ended	December 31,
	2023	2022
Net income (loss)	$277,260	$(20,930)
Other comprehensive income (after income tax)	2,609	1,301
Total comprehensive income	$279,869	$(19,629)

G. The Company’s investments accounted for using the equity method were not pledged as collateral or restricted.

English Translation of Financial Statements Originally Issued in Chinese

(7) Property, plant and equipment

	As of December 31,	As of December 31,
	2023	2022
Owner occupied property, plant and equipment	$26,687	$29,572
Property, plant and equipment leased out under operating
leases	65,051	73,978
Total	$91,738	$103,550

A. Owner occupied property, plant and equipment

		Buildings
		and	Leasehold	Miscellaneous
	Land	facilities	improvement	equipment	Total
Cost:
As of January 1, 2022	$1,346	$1,829	$21,495	$17,112	$41,782
Additions	-	-	7,461	20,243	27,704
Disposals	-	-	(1,140)	-	(1,140)
As of December 31, 2022	1,346	1,829	27,816	37,355	68,346
Additions	-	-	-	2,880	2,880
Disposals	-	-	-	-	-
As of December 31, 2023	$1,346	$1,829	$27,816	$40,235	$71,226
Depreciation and
impairment:
As of January 1, 2022	$-	$448	$20,259	$15,487	$36,194
Depreciation	-	36	620	3,064	3,720
Disposals	-	-	(1,140)	-	(1,140)
As of December 31, 2022	-	484	19,739	18,551	38,774
Depreciation	-	36	1,813	3,916	5,765
Disposals	-	-	-	-	-
As of December 31, 2023	$-	$520	$21,552	$22,467	$44,539
Net carrying amount:
As of December 31, 2023	$1,346	$1,309	$6,264	$17,768	$26,687
As of December 31, 2022	$1,346	$1,345	$8,077	$18,804	$29,572

English Translation of Financial Statements Originally Issued in Chinese

B. Property, plant and equipment leased out under operating leases

	Transportation
	equipment
Cost:
As of January 1, 2022	$117,648
Additions	40,567
Disposals	(17,203)
As of December 31, 2022	141,012
Additions	15,744
Disposals	(24,498)
As of December 31, 2023	$132,258
Depreciation and impairment:
As of January 1, 2022	$63,735
Depreciation	19,855
Disposals	(16,556)
As of December 31, 2022	67,034
Depreciation	20,028
Disposals	(19,855)
As of December 31, 2023	$67,207
Net carrying amount:
As of December 31, 2023	$65,051
As of December 31, 2022	$73,978

C. The major components of the Company’s buildings are mainly buildings, air-conditioning equipment and elevators, and are depreciated according to their durability years of 50, 5 and 15 years respectively.
D. The Company's Property, plant and equipment were not capitalized from financial costs.
E. The Company's, Property, plant and equipment were not pledged as collateral or restricted for uses.

English Translation of Financial Statements Originally Issued in Chinese

(8) Investment properties

	Land	Buildings	Total
Cost:
As of January 1, 2022	$7,154,606	$6,088,804	$13,243,410
Additions	-	49,947	49,947
Transferred form the buildings and
land held for sale	57,941	58,372	116,313
As of December 31, 2022	7,212,547	6,197,123	13,409,670
Additions	-	38,888	38,888
Transferred form the buildings and
land held for sale	39,462	41,014	80,476
Disposals	(32,783)	(232,169)	(264,952)
As of December 31, 2023	$7,219,226	$6,044,856	$13,264,082
Depreciation and impairment:
As of January 1, 2022	$-	$2,715,686	$2,715,686
Depreciation	-	154,500	154,500
Disposals	-	-	-
As of December 31, 2022	-	2,870,186	2,870,186
Depreciation	-	156,705	156,705
Impairment loss	-	52,089	52,089
Disposals	-	(135,130)	(135,130)
As of December 31, 2023	$-	$2,943,850	$2,943,850
Net carrying amount:
As of December 31, 2023	$7,219,226	$3,101,006	$10,320,232
As of December 31, 2022	$7,212,547	$3,326,937	$10,539,484
		For the years ended	December 31,
		2023	2022
Rental income from investment property		$345,015	$333,885
Less: Direct operating expenses from investment
property generating rental income		(100,555)	(101,116)
Direct operating expenses from investment
property not generating rental income		(40,964)	(46,180)
Total		$203,496	$186,589

English Translation of Financial Statements Originally Issued in Chinese

The investment properties held by the Company were not valued at fair value. The amounts of the fair value were only for disclosure. The fair value of the investment properties held by the Company were NT$17,712,867 thousand and NT$16,844,414 thousand as of December 31, 2023 and 2022, respectively, which were valued by an independent external appraisal expert and internal valuation. The evaluation method was comparison method and based on the recent actual deal price or the market transaction price of the real estate nearby.

Please refer to Note 8 for more details on property, plant and equipment under pledge.

(9) Intangible assets

	Computer
	software
Cost:
As of January 1, 2022	$41,256
Addition-acquired separately	3,173
As of December 31, 2022	44,429
Addition-acquired separately	2,752
As of December 31, 2023	$47,181
Amortization and impairment:
As of January 1, 2022	$36,615
Amortization	2,591
As of December 31, 2022	39,206
Amortization	3,201
As of December 31, 2023	$42,407
Net carrying amount:
As of December 31, 2023	$4,774
As of December 31, 2022	$5,223

Amortization expense of intangible assets were as follows:	Amortization expense of intangible assets were as follows:
	For the yearsended	December 31,
	2023	2022
Operating expenses	$3,201	$2,591

English Translation of Financial Statements Originally Issued in Chinese

(10) Other non-currents assets

	As of December 31,	As of December 31,
	2023	2022
Construction land	$18,425	$18,425
Prepaid expenses-equipment	185,639	45,463
Refundable deposits	642,150	1,088,673
Other non-current assets - other	16,264	16,264
Total	$862,478	$1,168,825

Due to legal restrictions, ownership of agricultural land can only be registered in the name of an individual. The above-mentioned construction land is an agricultural land acquired by the Company in the name of a third party. The details are disclosed as follows:

	As of December 31, Nature of	As of December 31, Nature of	Purpose of
Items	2023	Transaction 2022	Transaction	Securities
Land Serial No.137-2 etc., Northern		Purchases /		Mortgage
shi-zhi of Hou-tsuo section, San-		Sales	Development	setting and
zhi township, New Taipei City	$18,425	$18,425		commitment

(11) Short-term loan

	As of December 31,	As of December 31,
	2023	2022
Unsecured bank loans	$9,025,000	$11,180,000
Secured bank loans	800,000	620,000
Total	$9,825,000	$11,800,000
Interest rate (%)	1.76%~2.30%	1.33%~2.30%

Please refer to Note 6. (13) for more details on the Company’s unused lines of credits.

Please refer to Note 8 for more details on investment property pledged for secured bank loans.

(12) Short-term notes payable

	As of December 31,	As of December 31,
	2023	2022
Short-term notes payable	$1,500,000	$2,000,000
Less: unamortized discount	(1,896)	(5,420)
Net	$1,498,104	$1,994,580
Interest rate	1.60%~1.94%	1.48%

English Translation of Financial Statements Originally Issued in Chinese

(13) Long-term loans

Details of long-term loans as of December 31, 2023 and 2022 are as follows:

==> picture [448 x 468] intentionally omitted <==

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

As of
December 31, Interest rate Maturity date and terms of
Nature of Borrowings 2023 (%) repayment
Bank credit loans $15,220,550 1.75%~2.18% Effective August 2021 to July
2027, repayments on due day.
Bank secured loans 3,740,000 2.30% Effective November 2023 to
August 2026, repayments on due
day.
Long-term credit notes 999,691 1.41% Effective December 2023 to
payable February 2026, repayments on
due day.
Subtotal 19,960,241
Less: current portion (7,580,000)
Total $12,380,241
As of
December 31, Interest rate Maturity date and terms of
Nature of Borrowings 2022 (%) repayment
Bank credit loans $14,471,550 1.38%~2.10% Effective July 2020 to July 2027,
repayments on due day.
Secured bank loans 3,950,000 2.26%~2.30% Effective September 2022 to
August 2026, repayments on due
day.
Subtotal 18,421,550
Less: current portion (4,150,000)
Total $14,271,550
----- End of picture text -----

The Company’s unused total lines of credits amount to NT$20,320,760 thousand and NT$16,874,760 thousand as of December 31, 2023 and 2022, respectively.

Please refer to Note 8 for more details on inventory and investment property pledged for secured bank loans and notes.

English Translation of Financial Statements Originally Issued in Chinese

(14) Retirement benefits plans

Defined contribution plan

The Company adopted a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company would make monthly contributions to the employees’ individual pension accounts at the amounts not less than 6% of the employees’ monthly wages. The Company has made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

For the years ended December 31, 2023 and 2022, the expenses related to defined contribution plan amounted to NT$5,109 thousand and NT$4,772 thousand, respectively.

Defined benefits plan

The Company adopt a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company contribute an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Company assess the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the same year, the Company will make up the difference in one appropriation before the end of March the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under mandation, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from twoyear time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Company expects to contribute NT$7,742 thousand to its defined benefit plan during the 12 months beginning after December 31, 2023.

English Translation of Financial Statements Originally Issued in Chinese

As of December 31, 2023 and 2022, the average duration of defined benefit obligation of the Company was expected to be 7.4 years and 7.8 years.

Amounts for defined benefit plans to be recognized in profit or loss are summarized as follows:

	For the yearsended	December 31,
Current service cost	2023 $4,752	2022 $5,814
Net interest on the net defined benefit liability (asset)	817	506
Total	$5,569	$6,320

Reconciliation of the present value of the defined benefit obligation and fair value of plan assets of the defined benefit plan is as follows:

	December 31,	As of December 31,	January 1,
Present value of defined benefit obligation	2023 $139,063	2022 $135,036	2022 $154,202
Fair value of plan assets	(73,375)	(66,722)	(75,703)
Other non-current liabilities-accrued
pension liabilities (assets)
recognized on the balance sheets	$65,688	$68,314	$78,499

Reconciliation of net defined benefit liabilities (assets):

			Net defined
			benefit
	Defined benefits	Plan assets	liabilities
	obligation	fair value	(assets)
As of January 1, 2022	$154,202	$(75,703)	$78,499
Net defined benefit cost
Current service cost	5,814	-	5,814
Interest expense (income)	979	(473)	506
Subtotal	6,793	(473)	6,320
Remeasurements of defined benefit
liabilities/assets:
Actuarial gains and losses arising
from changes in financial
assumptions	(6,320)	-	(6,320)
Experience adjustment	10,306	-	10,306
Remeasurement of plan assets	-	1,336	1,336
Subtotal	3,986	1,336	5,322
Payments from the plan	(29,945)	18,004	(11,941)
Contributions by employer	-	(9,886)	(9,886)
As of December 31, 2022	135,036	(66,722)	68,314

English Translation of Financial Statements Originally Issued in Chinese

			Net defined
			benefit
	Defined benefits	Plan assets	liabilities
	obligation	fair value	(assets)
Net defined benefit cost
Current service cost	4,752	-	4,752
Interest expense (income)	1,647	(830)	817
Subtotal	6,399	(830)	5,569
Remeasurements of defined benefit
liabilities/assets:
Actuarial gains and losses arising
from changes in financial
assumptions	801	-	801
Experience adjustment	5,406	-	5,406
Remeasurement of plan assets	-	(5,786)	(5,786)
Subtotal	6,207	(5,786)	421
Payments from the plan	(8,579)	8,158	(421)
Contributions by employer	-	(8,195)	(8,195)
As of December 31, 2023	$139,063	$(73,375)	$65,688

The following significant actuarial assumptions are used to determine the present value of the defined benefit obligation:

	As of	December 31,
	2023	2022
Discount rate	1.18%	1.26%
Expected rate of salary increases	2.00%	2.00%

A sensitivity analysis for significant assumption:

	For	the years ended December	the years ended December	31,
	2023		2022
	Increase	Decrease	Increase	Increase
	defined	defined	defined	defined
	benefit	benefit	benefit	benefit
	obligation	obligation	obligation	obligation
Discount rate increases by 0.25%	$-	$2,503	$-	$2,566
Discount rate decreases by 0.25%	2,503	-	2,701	-
Future salary increases by 0.5%	4,867	-	5,131	-
Future salary decreases by 0.5%	-	4,728	-	4,861

English Translation of Financial Statements Originally Issued in Chinese

The sensitivity analysis above is based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analyses compared to the previous period.

(15) Common stock

The Company’s authorized capital was NT$ 20,000,000 thousand and issued capital was NT$ 11,595,611 thousand as at December 31, 2023 and 2022, respectively. The Company has issued 1,159,561 thousand shares as at December 31, 2023 and 2022, respectively, each at a par value of NT$10. Each share has one voting right and a right to receive dividends.

(16) Capital surplus

	As of December	31,
	2023	2022
Treasury share transactions	$10,407	$10,407
Difference between consideration and carrying amount
of subsidiaries acquired or disposed	262	262
Changes in equity of associates and joint ventures
accounted for using equity method	63,542	16,452
Others - overdue dividends	44,195	38,141
Total	$118,406	$65,262

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the Company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the Company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

(17) Retained earnings

A. Legal reserve

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

English Translation of Financial Statements Originally Issued in Chinese

B. Special reserve

The FSC on September 30, 2021 issued Order No. Financial-Supervisory-SecuritiesCorporate 1090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve.

At the first-time adoption of IFRSs, special reverse set aside by The Company was NT$504,189 thousand. As of December 31, 2023, there were no use, disposition or reclassification of related assets and there is no need to revolving special reserve to retained earnings.

C. Retained earnings and dividend policies

Pursuant to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be appropriated in the following order:

a. Payments of all taxes, if any
b. To offset prior year’s deficit, if any
c. To set aside 10% of the remaining amount as legal reserve after deducting items (a) and
d. To set aside special reserve, if required
e. The remaining amount (the “appropriable after-dividend earnings”), if any, combination with prior year’s accumulated unappropriated earnings is appropriated based on the appropriation of shareholders’ bonuses plan drafted by the board of directors under the ordinary shareholders’ meeting.

In response to the changes in the economy and the markets, The Company is developing towards diversified investment to increase profitability. Considering long-term financial planning and cash flows, the dividend policy adopts the residual dividend policy for stable growth and sustainable operation. According to the Company’s operating plan, capital investment and the shareholders' demand for cash inflows, and avoiding excessive inflationary capital, the surplus distribution is given priority by cash dividends, and the stock dividends are also issued, but the cash dividend distribution ratio cannot less than 50% of the total dividend.

D. For the years ended December 31, 2022 and 2021, the details of earnings distribution and dividends per share were resolved by the shareholder’s meeting on June 9, 2023 and June 17, 2022, were as follows:

English Translation of Financial Statements Originally Issued in Chinese

	Appropriation of earnings	Cash Dividend per share
	(In thousand NT dollars)	(NT dollars)
	2022 2021	2022 2021
Legal reserve	$108,069 $84,754
Common stock - cash dividend	579,781 695,737	$0.5 $0.6

E. Please refer to Note 6. (21) for details of bonus to employees and directors.

(18) Operating revenues

	For the years ended	December 31,
	2023	2022
Revenue from contracts with customers
Sales of buildings and land	$6,454,013	$13,757,825
Rental income	375,147	368,804
Total	$6,829,160	$14,126,629

The relevant information of the Company’s revenue are as follows:

A. Disaggregation of revenue

For the year ended December 31, 2023

For the year ended December 31, 2023
	Property and
	real estate
	investment
	development
	department
Sales of buildings and lands	$6,454,013
Rental income	375,147
Total	$6,829,160
Revenue recognition point:
At a point in time	$6,454,013
Over time	375,147
Total	$6,829,160
For the year ended December 31, 2022
	Property and
	real estate
	investment
	development
	department
Sales of buildings and lands	$13,757,825
Rental income	368,804
Total	$14,126,629

For the year ended December 31, 2022

English Translation of Financial Statements Originally Issued in Chinese

	Property and
	real estate
	investment
	development
	department
Revenue recognition point:
At a point in time	$13,757,825
Over time	368,804
Total	$14,126,629

B. Contract balances

Contract liabilities - current

		As of
	December 31,	December 31,	January 1,
	2023	2022	2022
Sales of goods	$6,202,748	$5,500,109	$4,627,062

For the years ended December 31, 2023 and 2022, the movement in the contract liabilities were as follows:

	For the years ended	December 31,
	2023	2022
Revenue recognized during the year that was
included in the balance at the beginning of the year	$(1,478,767)	$(1,694,373)
Increase in receipt in advance during the period	2,181,406	2,567,420

C. Assets recognized from the revenue from contracts with customers

Incremental costs of obtaining contracts
	As of December 31,
	2023	2022
Sales of buildings and lands	$1,196,906	$1,010,700

The amortized amount of the incremental cost of the Company’s acquisition of the contract for the years ended December 31, 2023 and 2022 were NT$126,758 thousand and NT$347,830 thousand, respectively.

(19) Expected credit losses/(gains)

	For the years ended	December 31,
	2023	2022
Operating expenses-expected credit losses/(gains)
Accounts receivable	$(1)	$-

English Translation of Financial Statements Originally Issued in Chinese

Please refer to Note 12 for information of credit risks.

The Company measures the loss allowance of receivables (including notes and accounts receivable) at an amount equal to lifetime expected credit losses. The Company considers the grouping of accounts receivable by counterparties’ credit rating, by geographical region and by industry sector and its loss allowance is measured by using a provision matrix. The details of the loss allowance measured was as follows:

As of December 31, 2023

	Neither				Past due
	past due		Within
	(Note)		1 month	1-3 months	3-9 months 9-12	months Over 1 year		Total
Gross carrying amount	$710,335		$3,025	$-	$-	$-	$-	$713,360
Loss rate		-	-	-	-	-	-
Lifetime expected credit
losses		-	-	-	-	-	-	-
Carrying Amount	$710,335		$3,025	$-	$-	$-	$-	$713,360

As of December 31, 2022

	Neither				Past due
	past due		Within
	(Note)		1 month	1-3 months	3-9 months 9-12	months Over 1 year		Total
Gross carrying amount	$37,067		$6,436	$-	$-	$-	$-	$43,503
Loss rate		-	0.01%	-	-	-	-
Lifetime expected credit
losses		-	1	-	-	-	-	1
Carrying Amount	$37,067		$6,435	$-	$-	$-	$-	$43,502

Note: The Company’s notes receivable is not overdue.

For the years ended December 31, 2023 and 2022, the movement in the provision for impairment of notes receivable and accounts receivable are as follows:

	Notes	Accounts
As of January 1, 2022	receivable $-	receivable $1
Addition/(reversal) for the current period	-	-
Amounts written off during the period as uncollectible	-	-
As of December 31, 2022	-	1
Addition/(reversal) for the current period	-	(1)
Amounts written off during the period as uncollectible	-	-
As of December 31, 2023	$-	$-

English Translation of Financial Statements Originally Issued in Chinese

(20) Operating leases

A. Company as a lessee

The Company leases various properties, including land and buildings. The lease term of each contract ranges from 2 to 3 years. No restrictions are imposed on the Company in this contract.

The effect that leases have on the financial position, financial performance and cash flows of the Company are as follows:

a. Amounts recognized in the balance sheet
(a) Right-of-use assets

The carrying amount of right-of-use asset

	As of December	31,
	2023	2022
Land	$6,879	$14,401
Buildings and facilities	24,938	8,249
Total	$31,817	$22,650

For the years ended December 31, 2023 and 2022, the Company’s additions to right-of-use assets amounting to NT$33,251 thousand and NT$14,280 thousand, respectively.

(b) Lease liabilities

	As of December	31,
	2023	2022
Lease liabilities	$31,634	$21,793
Current	$20,968	$15,247
Non-current	10,666	6,546

Please refer to Note 6.22.(4) D for the interest on lease liability recognized during the years ended December 31, 2023 and 2022 and refer to Note 12. (5) for the maturity analysis for lease liabilities as of December 31, 2023 and 2022.

b. Amounts recognized in the statement of comprehensive income

Depreciation charge for right-of-use assets

	For the years ended	December 31,
	2023	2022
Land	$7,522	$11,967
Buildings and facilities	16,562	16,248
Total	$24,084	$28,215

English Translation of Financial Statements Originally Issued in Chinese

c. Income and costs relating to leasing activities

	For the years ended	December 31,
	2023	2022
The expense relating to short-term leases	$56	$120
The expense relating to leases of low-value assets
(Not including the expense relating to short-term
leases of low-value assets)	-	-
The expense relating to variable lease payments
not included in the measurement of lease
liabilities	-	-

As of December 31, 2023 and 2022, the short-term lease portfolio promised by the Company and the types of lease targets related to the aforementioned short-term lease expenses are similar.

d. Cash outflow relating to leasing activities

During the years ended December 31, 2023 and 2022, the Company’s total cash outflow for leases amounting to NT$24,037 thousand and NT$28,937 thousand, respectively.

B. Company as a lessor

Please refer to Note 6 (8) for details on the Company’s owned investment properties. Leases of owned investment properties are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

	For the years ended	December 31,
	2023	2022
Lease income for operating leases
Income relating to fixed lease payments and
variable lease payments that depend on an index
or a rate	$375,147	$368,804

Please refer to Note 6. (8) for relevant disclosure of property, plant and equipment for operating leases under IFRS 16. For operating leases entered by the Company, the undiscounted lease payments to be received and a total of the amounts for the remaining years as of December 31, 2023 and 2022 are as follows:

English Translation of Financial Statements Originally Issued in Chinese

	As of December 31,	As of December 31,
	2023	2022
Not later than 1 year	$441,880	$325,657
Later than 1 year and not later than 2 years	338,298	200,287
Later than 2 year and not later than 3 years	294,953	145,172
Later than 3 year and not later than 4 years	272,698	123,256
Later than 4 year and not later than 5 years	250,236	105,170
Later than 5 years	749,987	743,339
Total	$2,348,052	$1,642,881

(21) Summary statement of employee benefits, depreciation and amortization expenses by function is as follows:

==> picture [441 x 187] intentionally omitted <==

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

Function For the year ended December 31, 2023 For the year ended December 31, 2022
Operating Operating Operating Operating
Description Cost Expense Total Cost Expense Total
Employee benefits expense
Salaries and wages $33,939 $162,333 $196,272 $30,582 $168,279 $198,861
Labor and health insurance - 14,921 14,921 - 14,775 14,775
Pension - 10,678 10,678 - 11,092 11,092
- -
Other employee benefits expense 8,249 8,249 7,710 7,710
Depreciation and depletion 176,733 29,849 206,582 174,355 31,935 206,290
Amortization - 3,201 3,201 - 2,591 2,591
----- End of picture text -----

A. On December 31, 2023 and 2022, the numbers of employees were 161 and 160 respectively, among which the numbers of directors who have not served as employees were both 4.
B. The average employee benefits expense for the years ended December 31, 2023 and 2022 were NT$1,413 thousand and NT$1,441 thousand, respectively. (“Total employee benefits expense for the year - Total director’s remuneration for the year” / “Number of employees for the year - Number of directors who have not served as employees for the year”)
C. The average salaries and wages for the years ended December 31, 2023 and 2022 were NT$1,250 thousand and NT$1,275 thousand, respectively (“Total salaries and wages for the year” / “Number of employees for the year - Number of directors who have not served as employees for the year”). The average salaries and wages decreased by 1.96% (“Average salaries and wages for the year - Average salaries and wages last year” / “Average salaries and wages last year”).
D. The Company established an audit committee instead of supervisors.

English Translation of Financial Statements Originally Issued in Chinese

E. The Company’s policy of salaries and wages for directors, managers and employees is as follows: In order to attract, keep and motivate talents for the balance of sustainable running and risk control, the Company follows “Directors’ Remuneration Guidelines”, “Managers’ Remuneration Guidelines”, employees’ salaries regulations and other related regulations to decide salaries and wages. Also, the Company comprehensively considers individuals’ responsibility, the market, contribution, performance and expected or realized risks. Related regulations are modified and reviewed on regular basis based on actual operation.
F. Employees’ Compensation and Directors’ Remuneration

According to the Company’s Articles of Incorporation, 0.1% to 1% and lower than 1% of the profit of the period should be distributed as compensation for employees and directors’ remuneration. However, if there is accumulated deficit, the deficit should be covered first. The Group may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation in the form of shares or in cash; and in addition, there to a report of such distribution is submitted to the shareholders’ meeting. Information on the board of directors’ resolution regarding the employee compensation can be obtained from the “Market Observation Post System” on the website of the TWSE.

The Company’s employees’ compensation and directors’ remuneration was NT$2,245 thousand and NT$2,400 thousand, estimated as 0.1% and lower than 1% of the Company’s net profit and recognized as compensation for employees and directors’ remuneration for the year ended December 31, 2023. The amount of employees’ compensation and directors' remuneration recognized in the year ended December 31, 2022 was NT$1,330 thousand and NT$2,400 thousand, respectively. The aforementioned amounts were listed under salary expenses. If the abovementioned employees’ compensation and directors’ remuneration estimations are different from the actual distributed amount resolved by the board of director’s meeting, the difference will be recognized as profit or loss in the next period.

The Company’s the board of director’s meeting on March 14, 2023 resolved to distribute NT$1,330 thousand and NT$2,400 thousand of employee’s and director’s compensation in cash. There are no material differences exist between the estimated amount in the financial statement of 2022 and the actual distribution.

English Translation of Financial Statements Originally Issued in Chinese

(22) Non-operating income and expenses

A. Interest income

	For the years ended	December 31,
	2023	2022
Deposit interest	$11,010	$2,060
Others	23,268	9,490
Total	$34,278	$11,550

B. Other income

	For the years ended	December 31,
	2023	2022
Dividend income	$61,287	$204,369
Bargain purchase gain	-	281,818
Other	71,793	132,932
Total	$133,080	$619,119

C. Other gains or losses

	For the years ended	December 31,
	2023	2022
Gains on disposal and abandon of property, plant and
equipment	$2,814	$4,279
Impairment loss	(52,089)	-
Other	(2,255)	(744)
Total	$(51,530)	$3,535

D. Finance costs

	For the years ended	December 31,
	2023	2022
Interest on borrowings from bank	$248,679	$161,229
Interest on lease liabilities	571	375
Total	$249,250	$161,604

English Translation of Financial Statements Originally Issued in Chinese

(23) Components of other comprehensive income

For the year ended December 31, 2023

				Income tax
				relating to
				components of
		Reclassification	Other	other	Other
	Arising during	adjustments	comprehensive	comprehensive	comprehensive
	the period	during the period	income, before tax	income	income, net of tax
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans	$(421)	$-	$(421)	$84	$(337)
Unrealized gains (losses) from equity instruments
investments measured at fair value through other
comprehensive income	213,675	-	213,675	-	213,675
Share of other comprehensive income of associates
and joint ventures accounted for using equity
method	(180)	-	(180)	-	(180)
Items that may be reclassified subsequently to profit
or loss:
Share of other comprehensive income of associates
and joint ventures accounted for using equity
method	81	-	81	-	81
Total	$213,155	$-	$213,155	$84	$213,239
For the year ended December 31, 2022
				Income tax
				relating to
				components of
		Reclassification	Other	other	Other
	Arising during	adjustments	comprehensive	comprehensive	comprehensive
	the period	during the period	income, before tax	income	income, net of tax
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans	$(5,322)	$-	$(5,322)	$1,064	$(4,258)
Unrealized gains (losses) from equity instruments
investments measured at fair value through other
comprehensive income	(1,355,894)	-	(1,355,894)	-	(1,355,894)
Share of other comprehensive income of associates
and joint ventures accounted for using equity
method	(14,067)	-	(14,067)	-	(14,067)
Items that may be reclassified subsequently to profit
or loss:
Share of other comprehensive income of associates
and joint ventures accounted for using equity
method	432	-	432	-	432
Total	$(1,374,851)	$-	$(1,374,851)	$1,064	$(1,373,787)

English Translation of Financial Statements Originally Issued in Chinese

(24) Income taxes

The components of income tax expenses are as follows:

Income tax expense (income) recognized in profit or loss

	For the years ended	December 31,
	2023	2022
Current income tax expense (income):
Current income tax payable	$91,367	$43,154
Current land value increment tax charge	4,219	117,520
Adjustments in respect of current income tax of prior
periods	(23,796)	-
Deferred tax expense (income):
Deferred tax expense (income) relating to origination
and reversal of temporary differences	3,983	(41,733)
Total income tax expense (income)	$75,773	$118,941

Income tax relating to components of other comprehensive income

	For the years ended	December 31,
	2023	2022
Deferred tax expense (income):
Remeasurements of defined benefit plans	$(84)	$(1,064)
Reconciliation between tax expense and the product of accounting profit		multiplied by
applicable tax rates was as follows:

applicable tax rates was as follows:
	For the years ended	December 31,
	2023	2022
Accounting profit before tax from continuing operations	$2,240,210	$1,326,690
Tax at the domestic rates applicable to profits in the
country concerned	$448,042	$265,338
Tax effect of revenues exempt from taxation	(474,668)	(341,476)
Tax effect of non-deductible expenses	102,334	103,405
Tax effect of deferred tax assets/liabilities	-	(70,140)
Surtax on undistributed retain earnings	19,642	3,352
Adjustments in respect of current income tax of prior
periods	(23,796)	-
Current land value increment tax	4,219	117,520
Tax effect of adjustments in accordance with tax laws	-	40,942
Total income tax expense (income) recognized in profit
or loss	$75,773	$118,941

English Translation of Financial Statements Originally Issued in Chinese

Deferred tax assets (liabilities) relate to the following:

For the year ended December 31, 2023

For the year ended December 31, 2023
			Deferred tax
			income
		Deferred tax	(expense)
		income	recognized in
		(expense)	other
	Beginning	recognized in	comprehensive	Ending
	balance	profit or loss	income	Balance
Temporary differences
Revaluations of investment property to
fair value as deem cost at the date of
transition to IFRS - land value
increment tax	$(10,049)	$-	$-	$(10,049)
Revaluations of investment property to
fair value as deem cost at the date of
transition to IFRS	88,450	(2,602)	-	85,848
Depreciation difference for tax purpose -
investment property	93,306	(2,744)	-	90,562
Depreciation difference for tax purpose
of property, plants and Equipment -
interest capitalization	2,041	(97)	-	1,944
Unrealized intragroup profits and losses	17,380	(8)	-	17,372
Allowance for loss	1,400	-	-	1,400
Allowance for loss of inventories price
falling	2,869	10,418	-	13,287
Non-current liability - defined benefit
liability	9,341	(609)	84	8,816
Accrued expenses over two years transfer
to revenue	7	-	-	7
Unrealized advertising fee	158,415	(8,341)	-	150,074
Deferred tax income/(expense)		$(3,983)	$84
Net deferred tax assets/(liabilities)	$363,160			$359,261
Reflected in balance sheet as follows:
Deferred tax assets	$373,209			$369,310
Deferred tax liabilities	$(10,049)			$(10,049)

English Translation of Financial Statements Originally Issued in Chinese

For the year ended December 31, 2022

For the year ended December 31, 2022
			Deferred tax
			income
		Deferred tax	(expense)
		income	recognized in
		(expense)	other
	Beginning	recognized in	comprehensive	Ending
	balance	profit or loss	income	Balance
Temporary differences
Revaluations of investment property to
fair value as deem cost at the date of
transition to IFRS - land value
increment tax	$(10,049)	$-	$-	$(10,049)
Revaluations of investment property to
fair value as deem cost at the date of
transition to IFRS	91,051	(2,601)	-	88,450
Depreciation difference for tax purpose -
investment property	96,051	(2,745)	-	93,306
Depreciation difference for tax purpose
of property, plants and Equipment -
interest capitalization	2,138	(97)	-	2,041
Unrealized intragroup profits and losses	6,148	11,232	-	17,380
Allowance for loss	1,400	-	-	1,400
Allowance for loss of inventories price
falling	2,869	-	-	2,869
Non-current liability - defined benefit
liability	11,378	(3,101)	1,064	9,341
Accrued expenses over two years transfer
to revenue	7	-	-	7
Unrealized advertising fee	119,370	39,045	-	158,415
Deferred tax income/(expense)		$41,733	$1,064
Net deferred tax assets/(liabilities)	$320,363			$363,160
Reflected in balance sheet as follows:
Deferred tax assets	$330,412			$373,209
Deferred tax liabilities	$(10,049)			$(10,049)

Unrecognized deferred tax assets

As of December 31, 2023 and 2022, the deferred tax assets that have not been recognized both amounted to NT$0.

The assessment of income tax returns

The Company’s income tax return has been assessed and approved by the tax authorities through 2021.

English Translation of Financial Statements Originally Issued in Chinese

(25) Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

	For the years ended	December 31,
	2023	2022
A. Basic earnings per share
Profit attributable to ordinary equity holders of the
Company (in thousand NT$)	$2,164,437	$1,207,749
Weighted average number of ordinary shares
outstanding for basic earnings per share (in
thousands)	1,159,561	1,159,561
Basic earnings per share (NT$)	$1.87	$1.04
B. Diluted earnings per share
Profit attributable to ordinary equity holders of the
Company (in thousand NT$)	$2,164,437	$1,207,749
Weighted average number of ordinary shares
outstanding for basic earnings per share (in
thousands)	1,159,561	1,159,561
Effect of dilution:
Employee compensation-stock (in thousands)	139	71
Weighted average number of ordinary shares
outstanding after dilution (in thousands)	1,159,700	1,159,632
Diluted earnings per share (NT$)	$1.87	$1.04

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of the financial statements.

English Translation of Financial Statements Originally Issued in Chinese

(26) Business combinations

Acquisition of San Ching Engineering Co., Ltd.

In May 2022, the Company acquired 100% of voting shares of San Ching Co., Ltd., which provides services such as construction project contracting and construction management. The Company acquired San Ching Engineering Co., Ltd. to reduce costs, enhance competitiveness, and expand real estate development projects.

The Company has elected to measure the acquiree’s non-controlling interest in proportion to the acquiree’s relative share of net identifiable assets recognized.

The fair value of the identifiable assets and liabilities of San Ching Engineering Co., Ltd. as at the date of acquisition were:

	Fair value
	recognized on the
	acquisition date
Assets
Cash and cash equivalents	$801,943
Contract assets	115,774
Accounts receivable	598,144
Other receivables	9,047
Current tax assets	23,266
Inventories	2,284,353
Prepayments	106,052
Other current assets	107,533
Financial assets measured at fair value through other comprehensive
income	15,300
Investment accounted for using equity method	540,531
Property, plant and equipment	6,302,922
Right-of-use assets	355,271
Investment properties	255,279
Intangible assets	498,206
Other non-currents assets	480,736
Subtotal	12,494,357

English Translation of Financial Statements Originally Issued in Chinese

	Fair value
	recognized on the
	acquisition date
Liabilities
Short-term loan	1,016,000
Short-term notes payable	1,394,784
Contract liabilities-current	952,986
Notes payable	3,477
Accounts payable	254,958
Other payables	313,766
Current tax liabilities	202,306
Long-term loans-current portion	282,398
Other current liabilities	1,356
Long-term loans	4,047,258
Lease liabilities (including non-current)	362,431
Other non-current liabilities	75,593
Subtotal	8,907,313
Identifiable net assets	$3,587,044
Bargain purchase gain is calculated as follows:
Purchase consideration	$1,800,000
Add: non-controlling interests at fair value	1,505,226
Less: identifiable net assets at fair value	(3,587,044)
Bargain purchase gain	$(281,818)
Analysis of cash flows on acquisition:
Cash paid	$1,800,000
Net cash acquired with the subsidiary	(801,943)
Net cash flow	$998,057

The above financial information is disclosed based on the merger information of the acquiring company.

From the acquisition date to December 31, 2022, San Ching Engineering Co., Ltd. contributed NT$267,011 thousand net income from continuing operations. If the combination had taken place at the beginning of the year, the net income from continuing operations for the Company would have been NT$1,084,063 thousand.

English Translation of Financial Statements Originally Issued in Chinese

7. Related party transactions

Information of the related parties that had transactions with the Company during the financial reporting period is as follows:

(1) Name and nature of relationship of the related parties

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Relationships with the
Name of the related parties
Company
----- End of picture text -----

Name of the related parties	Relationships with the Company
Cathay Hospitality Management Co., Ltd. (Cathay Hospitality)	Subsidiary
Cathay Hospitality Consulting Co., Ltd. (Cathay Hospitality Consulting)	Subsidiary
Bannan Realty Co., Ltd. (Bannan Realty)	Subsidiary
Sanchong Realty Co., Ltd. (Sanchong Realty)	Subsidiary
Zhulun Realty Co., Ltd. (Zhulun Realty)	Subsidiary
Lin Yuan Property Management Co., Ltd. (Lin Yuan Property)	Subsidiary
San Ching Engineering Co., Ltd. (San Ching Engineering)	Subsidiary (Note 1)
Cathay Life Insurance Co., Ltd. (Cathay Life Insurance)	Others
Cathay United Bank Co., Ltd. (Cathay United Bank)	Others
Cathay Century Insurance Co., Ltd. (Cathay Century Insurance)	Others
Lin Yuan Investment Co., Ltd. (Lin Yuan Investment)	Others
Nangang International One Co., Ltd. (Nangang One)	Others
Nangang International Two Co., Ltd. (Nangang Two)	Others
Wanda Investment Co., Ltd. (Wanda Investment)	Others
Baixing Investment Co., Ltd. (Baixing Investment)	Others
Yi Ru Enterprise Co., Ltd. (Yi Ru Enterprise)	Others
Wei Don Enterprise Co., Ltd. (Wei Don Enterprise)	Others
Wei Lin Enterprise Co., Ltd. (Wei Lin Enterprise)	Others
Cathay Real Estate Foundation (Cathay-Cultural Foundation)	Others
Hsien Fang Capital Co., Ltd. (Hsien Fang Capital)	Others
Cheng Dao Capital Co., Ltd. (Cheng Dao Capital)	Others
Hung Chih Capital Co., Ltd. (Hung Chih Capital)	Others
`○○`, Hsu	The spouse of key
	management personnel

Note 1: San Ching Engineering Co., Ltd. was acquired by the Company in May 2022 and became the Company’s subsidiary.

English Translation of Financial Statements Originally Issued in Chinese

(2) Significant transactions with the related parties

The Company's related party transactions would not be disclosed when the individual amount is less than 3 million.

A. Cash in banks and short-term loans

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For the year ended December 31, 2023
Interest
Name of the Maximum Ending Interest income
related parties Type amount balance rate (expenses)
Others:
Cathay United Bank Demand deposit $5,722,729 $1,703,560 0.51% $9,317
Checking accounts 2,884,685 7,026 - -
Securities accounts 1,098,654 37,140 0.01% 5
Short-term loan 2,420,000 800,000 1.93% (19,580)
For the year ended December 31, 2022
Interest
Name of the Maximum Ending Interest income
related parties Type amount balance rate (expenses)
Others:
Cathay United Bank Demand deposit $5,795,589 $1,755,869 0.01%~ $1,331
0.26%
Checking accounts 2,536,518 106,970 - -
Securities accounts 1,098,476 64,629 0.01% 6
Short-term loan 620,000 620,000 1.65% (10,472)
Purchase
Name of the For the years ended December 31,
related parties Type 2023 2022
Subsidiary:
San Ching Engineering Building constructing or
expansion $3,512,915 $3,222,474
San Ching Engineering Compensation for relocation 4,963 -
Others:
Cathay United Bank Management fee of trust
service 5,053 5,026
Cathay United Bank Compensation for relocation - 236,530
Lin Yuan Investment Urban renewal co-construction
landlord subsidies 6,720 6,720
Total $3,529,651 $3,470,750
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B. Purchase

English Translation of Financial Statements Originally Issued in Chinese

a. The purchase price to the above related parties was determined through agreement based on the market rates.
b. The total price of the commissioned construction and consultancy contracts signed by the Company and San Ching Engineering was NT$19,909,151 thousand and NT$14,231,767 thousand as of December 31, 2023 and 2022, respectively.

C. Sales

a. Sales revenue

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

Name of the For the years ended December 31,
related parties Type 2023 2022
Subsidiary:
Sanchong Realty Sales of construction land $- $3,471,000
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The transaction price and collection terms above were not significantly different from those with the non-related parties.

b. Rental income

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

Name of the For the years ended December 31,
related parties Type 2023 2022
Subsidiary:
Cathay Hospitality Office and vehicles rental $32,797 $32,489
Cathay Hospitality Office and vehicles rental 37,586 34,757
Consulting
Others:
Cathay Life Insurance Office and vehicles rental 6,609 7,566
Cathay United Bank Office rental 18,180 18,069
Total $95,172 $92,881
----- End of picture text -----

The rental period is 2 to 5 years and rents are collected monthly according to the contract.

D. Notes and accounts payable – related parties

The debt between the Company and the related parties (both uninterested) are as follows:

	As of December 31,	As of December 31,
Name of the related parties	2023	2022
Subsidiary:
San Ching Engineering	$1,373,956	$614,128
Others:
Cathay United Bank	139	44,924
Total	$1,374,095	$659,052

English Translation of Financial Statements Originally Issued in Chinese

E. Lease - related parties

a. Right-of-use assets

Right-of-use assets
	As of December 31,
	2023 2022
Others:
Cathay Life Insurance	$24,938 $8,249

The Company acquired right-of-use assets from Cathay Life Insurance amounting to NT$33,251 thousand and NT$1,246 thousand for the years ended December 31, 2023 and 2022, respectively.

b. Lease liabilities

b. Lease liabilities
	As of December 31,
	2023 2022
Others:
Cathay Life Insurance	$25,088 $8,327
c. Interest expenses
	For the years ended December 31,
	2023 2022
Others:
Cathay Life Insurance	$379 $248

F. Others

a. Other receivables

Name of the		As of December	31,
related parties	Type	2023	2022
Subsidiary:
Zhulun Realty	Business commission fee	$-	$8,863

b. Refundable deposits

Name of the		As of December	31,
related parties	Type	2023	2022
Others:
Cathay Life Insurance	Rent deposit	$4,414	$4,086
Lin Yuan Investment	Joint construction deposit	8,000	12,000
Total		$12,414	$16,086

English Translation of Financial Statements Originally Issued in Chinese

c. Guarantee deposits

Name of the		As of December	31,
related parties	Type	2023	2022
Others:
Cathay United Bank	Rent deposit	$4,482	$4,482

d. In 2023, the Company signed a housing contract for pre-sale construction with its related parties, Hsien Fang Capital Co., Ltd., Cheng Dao Capital Co., Ltd. and Hung Chih Capital Co., Ltd., in the total amount of NT$1,194,030 thousand, signed a housing contract for pre-sale construction with its related parties, ○○ , Hsu, in the total amount of NT$35,130 thousand, and in 2022, signed a housing contract for pre-sale construction with its related parties, Wanda Investment Co., Ltd., in the total amount of NT$789,480 thousand.

G. Other income

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Name of the For the years ended December 31,
related parties Type 2023 2022
Subsidiary:
Bannan Realty Business commission fee $6,429 $6,429
Sanchong Realty Business commission fee 11,750 13,450
Zhulun Realty Business commission fee 8,333 8,863
Others:
Cathay Life Insurance Management fee and 4,119 3,980
planning fee
Cathay United Bank Management fee and 4,890 4,847
planning fee
-
Nangang One Consulting service 28,160
-
Nangang Two Consulting service 35,840
Total $35,521 $101,569
Operating costs
Name of the For the years ended December 31,
related parties Type 2023 2022
Subsidiary:
Lin Yuan Property Management and repair and
maintenance expenses for
rental buildings $49,072 $40,677
Others:
Cathay Century Insurance expense for rental
buildings 6,306 6,723
Total $55,378 $47,400
----- End of picture text -----

H. Operating costs

English Translation of Financial Statements Originally Issued in Chinese

I. Service fee

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

Name of the For the years ended December 31,
related parties Type 2023 2022
Subsidiary:
San Ching Engineering Repairs and maintenance
expense, construction and
maintenance projects $14,782 $-
Operating expenses
Name of the For the years ended December 31,
related parties Type 2023 2022
Others:
Cathay Life Insurance Costs sharing for $2,907 $3,222
management fee and
utilities
Cathay-Cultural Donation - 5,000
Foundation
Total $2,907 $8,222
----- End of picture text -----

J. Operating expenses

K. Property transaction

The property transaction between the Company and the related parties are as follows:

For the year ended December 31, 2023: None.

For the year ended December 31, 2022:

Acquisition of financial assets

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Name of the related
parties Items Shares Subject matter Purchase price
Others:
Lin Yuan Investment Investment accounted for 10,000,000 Shares of San Ching $300,000
using equity method Engineering
Wanda Investment 〃 10,000,000 〃 300,000
Baixing Investment 〃 10,000,000 〃 300,000
Yi Ru Enterprise 〃 10,000,000 〃 300,000
Wei Don Enterprise 〃 10,000,000 〃 300,000
Wei Lin Enterprise 〃 10,000,000 〃 300,000
Total 60,000,000 $1,800,000
----- End of picture text -----

English Translation of Financial Statements Originally Issued in Chinese

L. Key management personnel compensation

	For the years ended	December 31,
	2023	2022
Short-term employee benefits	$32,552	$35,565
Post-employment benefits	216	232
Total	$32,768	$35,797

8. Pledged assets

The following assets were pledged to banks as collaterals for bank loans:

	As of December 31,	As of December 31,
Items	2023	2022	Secured liabilities
Inventories	$5,880,000	$6,405,600	Short-term loan & Long-term loan
Real estate	7,638,372	7,638,372	Short-term loan & Long-term loan
Total	$13,518,372	$14,043,972

Pledged or mortgaged assets are expressed in terms of collateral amounts.

9. Significant commitments and contingent liabilities

(1) Significant contract

Except for the information stated in Note 7.2. (2), the total amount of the construction contracts signed by the Company with non-related parties was NT$8,960,952 thousand, in which NT$3,518,308 thousand was unpaid as of December 31, 2023.

(2) Others

Guarantee notes issued for borrowings (financing) were NT$43,539,200 thousand as of December 31, 2023.

10.Significant disaster losses

None.

11.Significant subsequent events

None.

English Translation of Financial Statements Originally Issued in Chinese

12.Others

(1) Categories of financial instruments

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Financial Assets
As of December 31,
2023 2022
Financial assets measured at fair value through other
comprehensive income $3,420,054 $3,206,379
Financial assets at amortized cost:
Cash and cash equivalents 3,110,211 7,089,526
Notes receivable 21,913 37,966
Accounts receivable 691,447 5,536
Other receivables 2,439 11,163
Refundable deposits 642,150 1,088,673
Subtotal 4,468,160 8,232,864
Total $7,888,214 $11,439,243
Financial Liabilities
As of December 31,
2023 2022
Financial liabilities at amortized cost:
Short-term loan $9,825,000 $11,800,000
Short-term notes payable 1,498,104 1,994,580
Accounts payables 2,600,331 1,898,545
Long-term loans (including current portion) 19,960,241 18,421,550
Lease liabilities 31,634 21,793
Guarantee deposits 126,674 105,519
Total $34,041,984 $34,241,987
----- End of picture text -----

(2) Financial risk management objectives and policies

The Company’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Company identifies measures and manages the above-mentioned risks based on the Company’s policy and risk appetite.

The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at all times.

English Translation of Financial Statements Originally Issued in Chinese

(3) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in market price. Market risk comprises currency risk, interest rate risk and other price risk (such as equity instrument).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, and there are usually interdependencies between risk variables. However, the sensitivity analysis disclosed below does not consider the interdependencies between risk variables.

Foreign currency risk

The Company mainly engaged in various business activities in Taiwan, and the foreign currency held is not significant. Therefore, the Company’s risk due to changes in foreign currency exchange rates is not significant.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s investments with bank borrowings with variable interest rates.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit to decrease/increase by NT$11,323 thousand and NT$13,795 thousand for the years ended December 31, 2023 and 2022, respectively.

Equity price risk

The Company’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment objectives. The Company’s listed and unlisted equity securities are classified under financial assets measured at fair value through other comprehensive income. The Company manages the equity price risk through placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves all equity investments according to level of authority.

English Translation of Financial Statements Originally Issued in Chinese

When the price of the listed equity securities at fair value through other comprehensive income increases/decreases 5%, it could have impacts of NT$146,327 thousand and NT$127,936 thousand for the years ended December 31, 2023 and 2022 on the profit/loss or equity attributable to the Company.

Please refer to Note 12. (8) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from operating activities (primarily for Accounts receivable) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counterparties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Company’s internal rating criteria etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment.

As of December 31, 2023 and 2022, accounts receivable from top ten customers represented low percentage of the total accounts receivable of the Company. The credit concentration risk of other accounts receivable is insignificant.

Credit risk from balances with banks and other financial instruments is managed by the Company’s treasury in accordance with the Company’s policy. The Company only transacts with counterparties approved by the internal control procedures, which are banks, financial institutions and companies with good credit rating and with no significant default risk. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, bank loans and issuance of corporate bonds. The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amounts include the contractual interest. The undiscounted

English Translation of Financial Statements Originally Issued in Chinese

payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial instruments

		As of	December 31,	2023
	Less than
	1 year	2 to 3 years	4 to 5 years	> 5 years	Total
Borrowings	$19,282,703	$12,152,005	$458,316	$-	$31,893,024
Accounts payables	2,600,331	-	-	-	2,600,331
Lease liabilities	20,968	10,666	-	-	31,634
Guarantee deposits	60,831	17,309	7,320	41,214	126,674

		As of	December 31,	2022
	Less than
	1 year	2 to 3 years	4 to 5 years	> 5 years	Total
Borrowings	$18,248,078	$12,859,597	$1,683,572	$-	$32,791,247
Accounts payables	1,898,545	-	-	-	1,898,545
Lease liabilities	15,247	6,546	-	-	21,793
Guarantee deposits	56,096	19,612	6,572	23,239	105,519

(6) Reconciliation of liabilities arising from financing activities

Reconciliations of the liabilities for the year ended December 31, 2023:

			Long-term
			loans
			(including		Other	Total liabilities
	Short-term	Short-term	current	Lease	non-current	from financing
	loan	notes payable	portion)	liabilities	liabilities	activities
As of January 1, 2023	$11,800,000	$1,994,580	$18,421,550	$21,793	$187,085	$32,425,008
Cash flows	(1,975,000)	(496,476)	1,538,691	(23,981)	18,067	(938,699)
Non-cash changes
Interest on lease liabilities	-	-	-	571	-	571
Other (Note)	-	-	-	33,251	421	33,672
As of December 31, 2023	$9,825,000	$1,498,104	$19,960,241	$31,634	$205,573	$31,520,552

Note: Other lease liabilities are the remeasured amounts of other defined benefit plans for

newly added lease liabilities and other non-current liabilities that meet the lease recognition requirements.

English Translation of Financial Statements Originally Issued in Chinese

Reconciliations of the liabilities for the year ended December 31, 2022:

			Long-term
			loans
			(including		Other non-	Total liabilities
	Short-term	Short-term	current	Lease	current	from financing
	loan	notes payable	portion)	liabilities	liabilities	activities
As of January 1, 2022	$10,770,000	$1,958,065	$12,228,685	$35,955	$181,149	$25,173,854
Cash flows	1,030,000	36,515	6,192,865	(28,817)	614	7,231,177
Non-cash changes
Interest on lease liabilities	-	-	-	375	-	375
Other (Note)	-	-	-	14,280	5,322	19,602
As of December 31, 2022	$11,800,000	$1,994,580	$18,421,550	$21,793	$187,085	$32,425,008

Note: Other lease liabilities are the remeasured amounts of other defined benefit plans for newly added lease liabilities and other non-current liabilities that meet the lease recognition requirements.

(7) Fair values of financial instruments
A. The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Company to measure or disclose the fair values of financial assets and financial liabilities:

a. The carrying amount of cash and cash equivalents, Accounts receivable, accounts payable and other current liabilities approximate their fair value due to their short maturities.
b. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities and bonds) at the reporting date.
c. Equity instruments that are not actively traded in the market (including shares of publicly issued companies in an inactive market, and shares of undisclosed companies) are estimated by market method and are derived from market transactions of the same or comparable company equity instruments. The fair value is derived from the price and other relevant information (such as lack of liquidity discount factor, similar company stock price-to-earnings ratio, similar company's stock price-to-equity ratio).

English Translation of Financial Statements Originally Issued in Chinese

B. Fair value of financial instruments measured at amortized cost

The carrying amount of the Company’s financial instruments measured at amortized cost (including cash and cash equivalents, receivables, payables and other current liabilities) measured at amortized cost approximate their fair value.

(8) Fair value measurement hierarchy
A. Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

B. Fair value measurement hierarchy of the Company’s assets and liabilities

The Company does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis is as follows:

As of December 31, 2023
	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets measured at fair
value through other
comprehensive income
Stocks	$2,926,542	$-	$493,512	$3,420,054
As of December 31, 2022
	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets measured at fair
value through other
comprehensive income
Stocks	$2,558,725	$-	$647,654	$3,206,379

English Translation of Financial Statements Originally Issued in Chinese

The Company had no assets and liabilities recurring measured at fair value transferring between Level 1and Level 2 for the years ended December 31, 2023 and 2022.

Reconciliation for recurring fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

	Asset measured	at fair value
	through other comprehensive
	income- stocks
Beginning balance	2023 $647,654	2022 $355,116
Total gains and losses recognized for the year ended 31
Amount recognized in OCI	(154,142)	(89,497)
Additions	-	449,550
Disposals	-	(67,515)
Ending balance	$493,512	$647,654

Total gains and losses recognized in profit or loss is NT$154,142 thousand loss and NT$28,954 thousand loss for the years ended December 31, 2023 and 2022, respectively.

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of December 31, 2023

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Material Inputs and the fair value
Valuation unobservable Quantitative Inputs and the fair relationship’s sensitivity
technique inputs information value relationship analysis value relationship
----- End of picture text -----

	Valuation technique	Material unobservable inputs	Quantitative information	Inputs and the fair value relationship	Inputs and the fair value relationship’s sensitivity analysis value relationship
Financial assets`：`
Financial assets
measured at fair value
through other compre-
hensive income
Stocks	Market	Discount for	30%~50%	The higher the	10% increase (decrease) in
	approach	lack of		discount for lack of	the discount for lack of
		marketability		marketability, the	marketability would result
				lower the fair value	in decrease (increase) in
				of the stocks	the Company’s equity by
					NT$66,972 thousand
	Assets	P/E ratio of	0%~30%	The higher the P/E	10% increase (decrease) in
	approach	similar entities		ratio of similar	the P/E ratio of similar
				entities, the higher	entities would result in
				the fair value of the	increase (decrease) in the
				stocks	Company’s equity by
					NT$2,555 thousand

English Translation of Financial Statements Originally Issued in Chinese

As of December 31, 2022

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|||||||
|---|---|---|---|---|---|
|Financial assets|：|
|Financial|assets|
|measured at fair value|
|through other compre-|
|hensive income|
|Stocks|Market|Discount for|30%~50%|The higher the|10% increase (decrease) in|
|approach|lack of|discount for lack of|the discount for lack of|
|marketability|marketability, the|marketability would result|
|lower the fair value|in decrease (increase) in|
|of the stocks|the Company’s equity by|
|NT$66,892 thousand|
|Assets|P/E ratio of|0%~30%|The higher the P/E|10% increase (decrease) in|
|approach|similar entities|ratio of similar|the P/E ratio of similar|
|entities, the higher|entities would result in|
|the fair value of the|increase (decrease) in the|
|stocks|Company’s equity by|
|NT$2,560 thousand|

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(9) Significant assets and liabilities denominated in foreign currencies

The Company did not hold major foreign currency financial assets and liabilities as of December 31, 2023 and 2022, respectively.

(10) Capital management

The primary objective of the Company’s capital management is to maintains healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

13. OTHER DISCLOSURE

(1) Information on significant transactions

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||||
|---|---|---|
|No.|Items|Table|
|A Financings provided to others|None|
|B Endorsement/guarantee provided to others|None|

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English Translation of Financial Statements Originally Issued in Chinese

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No. Items Table
C Holding of securities at the end of the period
(excluding the portion held due to investment in a subsidiary or an associate, Table 1
and the portion held due to an interest in a joint venture)
D Individual securities acquired or disposed of with accumulated amount
None
exceeding NT$300 million or 20% of the paid-in capital
E Acquisition of property with the amount exceeding NT$300 million or 20% of
Table 2
the paid-in capital
F Disposal of property with amount exceeding NT$300 million or 20% of the
Table 3
paid-in capital
G Purchases or sales of goods from or to related parties exceeding NT$100
Table 4
million or 20% of the paid-in capital or more
H Receivables from related parties with amounts exceeding NT$100 million or
None
20% of the paid-in capital
I Derivative financial instruments undertaken None
J Significant intercompany transactions between consolidated entities Table 5
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(2) Information on investees

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No. Items Table
A Financings provided to others None
B Endorsement/guarantee provided to others None
C Holding of securities at the end of the period
(excluding the portion held due to investment in a subsidiary or an associate, Table 6
and the portion held due to an interest in a joint venture)
D Individual securities acquired or disposed of with accumulated amount
None
exceeding NT$300 million or 20% of the paid-in capital
E Acquisition of property with the amount exceeding NT$300 million or 20% of
None
the paid-in capital
F Disposal of property with amount exceeding NT$300 million or 20% of the
None
paid-in capital
G Purchases or sales of goods from or to related parties exceeding NT$100
Table 7
million or 20% of the paid-in capital or more
H Receivables from related parties with amounts exceeding NT$100 million or
Table 8
20% of the paid-in capital
I Derivative financial instruments undertaken None
J Names, locations and related information of investee companies Table 9
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English Translation of Financial Statements Originally Issued in Chinese

(3) Investment in Mainland China: None.
(4) Information on Major Shareholders: Please refer to Table 10.

14. OPERATING SEGMENT INFORMATION

The Company is not required to prepare operating segment information according to Article 22, Regulations Governing the Preparation of Financial Reports by Securities Issuers. The Company has disclosed the operating segment information in the consolidated financial statement.

English Translation of Financial Statements Originally Issued in Chinese

Table 1: Securities held as of December 31, 2023 (not including subsidiaries, associates and joint ventures)

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Unit: NT$1,000 ; Share
As of December 31, 2023
Type and Name of the Securities Relationship with the
Holding Company Financial Statement Account Percentage of Note
(Note) Issuer Shares Carrying Value Market Value
Ownership ( ％ )
Cathay Real Estate Stock － Financial assets at fair value through other
Others 63,968,129 $2,926,542 0.44% $2,926,542
Development Co., Ltd. Cathay Financial Holdings Co., Ltd. comprehensive income–current
Stock － Financial assets at fair value through other
〃 None 1,580,083 - 3.23% -
Gong Cheng Industrial Co. Ltd. comprehensive income–non-current
Stock －
〃 None 〃 2,000,000 25,501 10.00% 25,501
Gian Feng Investment Co., Ltd.
Stock －
〃 None 〃 3,448,276 78,828 1.72% 78,828
MetroWalk international Co., Ltd.
Stock －
〃 None 〃 30,314 45 3.33% 45
Budworth Investments Limited
Stock －
〃 Others 〃 27,465,000 178,797 7.85% 178,797
Nangang International One Co., Ltd.
Stock －
〃 Others 〃 32,460,000 210,341 8.12% 210,341
Nangang International Two Co., Ltd.
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Note ： Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

English Translation of Financial Statements Originally Issued in Chinese

Table 2: Acquisition of property with the amount exceeding NT$300 million or 20% of the paid-in capital

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(Expressed in thousands of New Taiwan Dollars)
Disclosure of Information on Previous Transfer of
Property is Required for Related Parties who are
Company Property Name TransactionDate Transaction Amount(Contract Price) Status of Payment (Tax Included) Counterparty Relationship withthe counterparty also the Counterparty References for Determining Price Purpose of Acquisition andCurrent Condition Others
Owner Relationship with Date of Amount
the Company Transfer
2 parcels of land including Land 1. Refer to the report of a professiona
Cathay Real Estate Development Co., Ltd. No. 475, Changming Section, 2023.07.07 $725,873 Installment by agreement Individual None - - - $- l real estate appraiser. Construction in Changming None
Section, Nantun District
Nantun District, Taichung City 2. As negotiated by both parties.
1. Refer to the report of a professional
Cathay Real Estate Development Co., Ltd. Land No. 1013 and 1014, BeiuanSection, North Dist., Tainan City 2023.09.08 920,000 Installment by agreement Individual None - - - - real estate appraiser. Construction in Beiuan Section,North District None
2. As negotiated by both parties.
2 parcels of land (including 1. Refer to the report of a professional Land held for construction site
Cathay Real Estate Development Co., Ltd. superficies), including Land No. 2023.12.15 1,000,000 Installment by agreement Legal entity None - - - - real estate appraiser. in Wanhe Section, Sanmin None
10, Wanhe Section, Sanmin
2. As negotiated by both parties. District, including buildings
District, Kaohsiung City
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English Translation of Financial Statements Originally Issued in Chinese

Table 3: Disposal of property with amount exceeding NT$300 million or 20% of the paid-in capital

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Expressed in thousands of New Taiwan Dollars)
Company Property Name TransactionDate Date of originalacquisition CarryingAmount Transaction Amount(Contract Price) Status of proceedscollection from disposalGain(Loss) Counterparty counterpartyRelationshipwith the Current ConditionAcquisition andPurpose of References for Determining Price Others
New Construction
Cathay Real Estate 81 parcels of public facilitiesreservations in 9 administrative districts 2023.04.26- 1979.08.20 $2,423 $735,946 [Installment by] $733,523 Engineering Office,Public Works None For theconsideration of 1. Refer to the report of a None
Development Co., Ltd. 2023.10.06 agreement professional real estate appraiser.
including Zhongshan District Department, Taipei overall operation
City Government
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English Translation of Financial Statements Originally Issued in Chinese

Table 4: Purchases or sales of goods from or to related parties exceeding NT$100 million or 20% of paid-in capital or more

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(Expressed in thousands of New Taiwan Dollars)
Differences in
transaction terms
Transaction Notes/accounts payable
Relationship compared to third party
Purchaser / Seller Counterparty with the transactions Note
counterparty Percentage of
Purchases Percentage of total
Amount total purchases Credit term Unit price Credit term Balance
(Sales) notes/accounts payable
(sales)
Cathay Real Estate San Ching Subsidiary Construction- $3,517,878 36.15% Not $- - $(1,373,956) 57.50% Note 2
Development Co., Ltd. Engineering Co., Ltd in-progress applicable
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Note 1：The notes/accounts payable of parent company only financial statements.

Note 2：Offset during the preparation of consolidated financial statements.

Note 3: The Company signed a housing contract for pre-sale construction with its related parties, Hsien Famg Capital Co., Ltd., Cheng Dao Capital Co., Ltd. and Hung Chih Capital Co., Ltd., in the total amount of NT$1,194,030 thousand.

English Translation of Financial Statements Originally Issued in Chinese

Table 5: Significant intercompany transactions between consolidated entities

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(Expressed in thousands of New Taiwan Dollars)
Transaction
No. (Note 1) Company name Counterparty Relationship Account Amount Transaction terms operating revenues or total assetsPercentage of consolidated total
(Note 2) (Note 3)
0 Cathay Real Estate Development Co., Ltd. Cathay Real Estate Management Co., Ltd. 1 Other non-current liability-deferred credits-gains on Inter-affiliate accounts 13,211 Regular 0.02%
0 Cathay Real Estate Development Co., Ltd. Cathay Real Estate Management Co., Ltd. 1 Realized gain-realized gain from inter-affiliate accounts 41 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Real Estate Management Co., Ltd. 1 Other income 95 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Healthcare Management Co., Ltd. 1 Rental Income 179 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Healthcare Management Co., Ltd. 1 Construction cost 67 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Healthcare Management Co., Ltd. 1 Other income 58 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Management Co., Ltd. 1 Rental Income 159 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Management Co., Ltd. 1 Operating expenses-miscellaneous expenses 36 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Management Co., Ltd. 1 Operating expenses-entertainment expenses 42 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Management Co., Ltd. 1 Construction cost 3 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Management Co., Ltd. 1 Operating expenses-advertising fee 600 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Management Co., Ltd. 1 Other income 29 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Consulting Co., Ltd. 1 Rental Income 425 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Consulting Co., Ltd. 1 Operating expenses-conference fee 138 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Consulting Co., Ltd. 1 Operating expenses-entertainment expenses 102 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Hospitality Consulting Co., Ltd. 1 Construction cost 2 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Cathay Food & Beverage Group Co., Ltd. 1 Operating expenses-entertainment expenses 119 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Lin Yuan Property Management Co., Ltd. 1 Accounts payable to related parties 807 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Lin Yuan Property Management Co., Ltd. 1 Operating expenses-miscellaneous expenses 876 Regular 0.01%
0 Cathay Real Estate Development Co., Ltd. Lin Yuan Property Management Co., Ltd. 1 Rental Income 45 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Lin Yuan Property Management Co., Ltd. 1 Lease costs 49,072 Regular 0.32%
0 Cathay Real Estate Development Co., Ltd. Lin Yuan Property Management Co., Ltd. 1 Other income 83 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Lin Yuan Property Management Co., Ltd. 1 Operating expenses-service fee 9 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Lin Yuan Property Management Co., Ltd. 1 Operating expenses-advertising fee 198 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Lin Yuan Property Management Co., Ltd. 1 Temporary debits 786 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Jinhua Realty Co., Ltd. 1 Other income 2,190 Regular 0.01%
0 Cathay Real Estate Development Co., Ltd. Jinhua Realty Co., Ltd. 1 Rental Income 168 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Jinhua Realty Co., Ltd. 1 Guarantee deposits received 41 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Jinhua Realty Co., Ltd. 1 Land held for construction site 30,259 Regular 0.04%
0 Cathay Real Estate Development Co., Ltd. Bannan Realty Co., Ltd. 1 Other income 6,429 Regular 0.04%
0 Cathay Real Estate Development Co., Ltd. Bannan Realty Co., Ltd. 1 Rental Income 96 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Bannan Realty Co., Ltd. 1 Guarantee deposits received 23 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Sanchong Realty Co., Ltd 1 Rental Income 150 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Sanchong Realty Co., Ltd 1 Guarantee deposits received 45 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Sanchong Realty Co., Ltd 1 Land held for construction site 56,202 Regular 0.07%
0 Cathay Real Estate Development Co., Ltd. Sanchong Realty Co., Ltd 1 Other income 11,750 Regular 0.08%
0 Cathay Real Estate Development Co., Ltd. Zhulun Realty Co., Ltd. 1 Rental Income 175 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Zhulun Realty Co., Ltd. 1 Guarantee deposits received 57 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. Zhulun Realty Co., Ltd. 1 Other income 8,333 Regular 0.05%
0 Cathay Real Estate Development Co., Ltd. Cymbal Medical Network Co., Ltd 1 Other income 11 Regular 0.00%
0 Cathay Real Estate Development Co., Ltd. San Ching Engineering Co., Ltd 1 Accounts payable to related parties 1,373,956 Regular 1.68%
0 Cathay Real Estate Development Co., Ltd. San Ching Engineering Co., Ltd 1 Other income 2,780 Regular 0.02%
1 Cathay Hospitality Consulting Co., Ltd. Cathay Food & Beverage Group Co., Ltd. 1 Temporary credits 557 Regular 0.00%
1 Cathay Hospitality Consulting Co., Ltd. Cathay Food & Beverage Group Co., Ltd. 1 Receipts under custody 10,710 Regular 0.01%
1 Cathay Hospitality Consulting Co., Ltd. Cathay Food & Beverage Group Co., Ltd. 1 Other income for hotel and restaurant services 28,986 Regular 0.19%
1 Cathay Hospitality Consulting Co., Ltd. Cathay Food & Beverage Group Co., Ltd. 1 Others receivables 12,169 Regular 0.01%
2 San Ching Engineering Co., Ltd Cathay Real Estate Development Co., Ltd. 2 Contract Assets 32,163 Regular 0.04%
2 San Ching Engineering Co., Ltd Cathay Real Estate Development Co., Ltd. 2 Contract Liability 928,993 Regular 1.13%
2 San Ching Engineering Co., Ltd Cathay Real Estate Development Co., Ltd. 2 Accounts Receivable-related parties 2,002,652 Regular 2.44%
2 San Ching Engineering Co., Ltd Cathay Real Estate Development Co., Ltd. 2 Construction income 3,655,321 Regular 23.61%
2 San Ching Engineering Co., Ltd Cathay Real Estate Development Co., Ltd. 2 Engineering costs 3,405,634 Regular 22.00%
2 San Ching Engineering Co., Ltd Jinhua Realty Co., Ltd. 3 Contract Liability 250,895 Regular 0.31%
2 San Ching Engineering Co., Ltd Jinhua Realty Co., Ltd. 3 Accounts Receivable-related parties 59,136 Regular 0.07%
2 San Ching Engineering Co., Ltd Jinhua Realty Co., Ltd. 3 Construction income 515,481 Regular 3.33%
2 San Ching Engineering Co., Ltd Jinhua Realty Co., Ltd. 3 Engineering costs 514,656 Regular 3.32%
2 San Ching Engineering Co., Ltd Sanchong Realty Co., Ltd 3 Contract Assets 27,998 Regular 0.03%
2 San Ching Engineering Co., Ltd Sanchong Realty Co., Ltd 3 Construction income 27,998 Regular 0.18%
2 San Ching Engineering Co., Ltd Sanchong Realty Co., Ltd 3 Engineering costs 27,124 Regular 0.18%
2 San Ching Engineering Co., Ltd Bannan Realty Co., Ltd. 3 Contract Assets 40,198 Regular 0.05%
2 San Ching Engineering Co., Ltd Bannan Realty Co., Ltd. 3 Construction income 40,198 Regular 0.26%
2 San Ching Engineering Co., Ltd Bannan Realty Co., Ltd. 3 Engineering costs 40,009 Regular 0.26%
3 Cathay Hospitality Management Co., Ltd. Cathay Hospitality Consulting Co., Ltd. 3 Accounts Receivable-related parties 21,178 Regular 0.03%
3 Cathay Hospitality Management Co., Ltd. Cathay Hospitality Consulting Co., Ltd. 3 Others receivables 1,179 Regular 0.00%
3 Cathay Hospitality Management Co., Ltd. Cathay Hospitality Consulting Co., Ltd. 3 Accounts payable to related parties 375 Regular 0.00%
3 Cathay Hospitality Management Co., Ltd. Cathay Hospitality Consulting Co., Ltd. 3 Other payable 629 Regular 0.00%
3 Cathay Hospitality Management Co., Ltd. Cathay Food & Beverage Group Co., Ltd. 3 Accounts payable to related parties 924 Regular 0.00%
4 Lin Yuan Property Management Co., Ltd. Cathay Healthcare Management Co., Ltd. 3 Repairs and maintenance income 345 Regular 0.00%
4 Lin Yuan Property Management Co., Ltd. Cathay Healthcare Management Co., Ltd. 3 Technical service income 643 Regular 0.00%
4 Lin Yuan Property Management Co., Ltd. Cathay Healthcare Management Co., Ltd. 3 Income for building management and maintenance fee 3,611 Regular 0.02%
4 Lin Yuan Property Management Co., Ltd. Cymbal Medical Network Co., Ltd 3 Income for building management and maintenance fee 89 Regular 0.00%
4 Lin Yuan Property Management Co., Ltd. San Ching Engineering Co., Ltd 3 Income for building management and maintenance fee 26,261 Regular 0.17%
4 Lin Yuan Property Management Co., Ltd. Cymlin Co., Ltd. 3 Income for building management and maintenance fee 1,467 Regular 0.01%
4 Lin Yuan Property Management Co., Ltd. Cymlin Co., Ltd. 3 Repairs and maintenance income 165 Regular 0.00%
4 Lin Yuan Property Management Co., Ltd. Cathay Hospitality Management Co., Ltd. 3 Income for building management and maintenance fee 354 Regular 0.00%
4 Lin Yuan Property Management Co., Ltd. Cathay Hospitality Consulting Co., Ltd. 3 Other operating income 3,004 Regular 0.02%
----- End of picture text -----

Note1 ： The Company and its subsidiaries are coded as follows ：

(1) The Company is coded "0".
(2) The subsidiaries are coded starting from "1" in the order.
Note2 ： The Types of the transactions are coded as follows:
(1) The Company to subsidiaries is coded "1".
(2) Subsidiaries to The Company is coded "2".
(3) Subsidiaries to Subsidiaries is coded "3".
Note3 ： The calculation for the Percentage of consolidated total operating revenues or total assets, if it recognized to assets or liabilities and it should be calculated by the ending balance for the consolidated assets.
If it recognized to profit or loss and it should be calculated by the ending balance for the consolidated revenue.

English Translation of Financial Statements Originally Issued in Chinese

Table 6: Securities held as of December 31, 2023 (not including subsidiaries, associates and joint ventures) (Investee information)

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Unit: NT$1,000 ; Share
As of December 31, 2023
Relationship
Holding Company Type and Name of the Securities (Note) Financial Statement Account Note
with the Issuer Percentage of
Shares Carrying Value Market Value
Ownership ( ％ )
Cathay Hospitality Stock － Financial assets at fair value
Others through other comprehensive 35,000 $227 0.01% $227
Management Co., Ltd.
Nangang International One Co., Ltd. income–non-current
Stock －
〃 Others 〃 40,000 259 0.01% 259
Nangang International Two Co., Ltd.
San Ching Engineering Stock －
None 〃 1,400,000 11,326 5.48% 11,326
Co., Ltd
China Construction Management Co., Ltd
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Note ： Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

English Translation of Financial Statements Originally Issued in Chinese

Table 7: Purchases or sales of goods from or to related parties exceeding NT$100 million or 20% of paid-in capital or more

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(Expressed in thousands of New Taiwan Dollars)
Differences in transaction terms
Transaction Notes/accounts payable
compared to third party transactions
Purchaser / Seller Counterparty Relationship withthe counterparty Percentage of Percentage oftotal Note
Purchases (Sales) Amount total purchases Credit term Unit price Credit term Balance notes/accounts
(sales)
payable
Jinhua Realty Co., Ltd. San Ching Engineering Co., Ltd Others Construction-in-progress $633,600 94.81% Not applicable $- - $- -
San Ching Engineering Co., Ltd Cathay Real Estate Development Co., Ltd. Parent Company Construction project (3,655,321) 44.22% Not applicable - - 2,002,652 96.22%
San Ching Engineering Co., Ltd Jinhua Realty Co., Ltd. Others Construction project (515,481) 6.24% Not applicable - - 59,136 2.84%
San Ching Engineering Co., Ltd Cathay Life Insurance Co., Ltd. Others Construction project (3,535,990) 42.78% Not applicable - - - -
Lin Yuan Property Management Co., Ltd. Cathay Life Insurance Co., Ltd. Others Technical services and repairsand maintenance services (1,018,269) 64.97% 90 days - - 2,343 7.48%
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Note 1：The notes/accounts payable of parent company only financial statements.

Note 2：Offset during the preparation of consolidated financial statements.

English Translation of Financial Statements Originally Issued in Chinese

Table 8: Accounts receivable from related parties exceeding NT$100 million or 20% of paid-in capital or more

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(Expressed in thousands of New Taiwan Dollars)
Overdue accounts receivable Accounts receivable
Balance of Amount of
Company with Relationship with from related parties from related parties
Counterparty accounts receivable Turnover ratio provision for Note
accounts receivable the counterparty recovered after the
from related parties Amount Method doubtful debts
period
San Ching Cathay Real Estate Parent Company $2,002,652 - $- - $459,197 - Note 1
Engineering Co., Ltd Development Co., Ltd.
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Note 1: The accounts receivable were mainly arising from revenue of construction projects and advance payment for construction projects. Note 2：Offset during the preparation of consolidated financial statements.

English Translation of Financial Statements Originally Issued in Chinese

Table 9: Names, locations and related information of investee companies (excluding Mainland China)

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Unit: NT$1,000 ; Share
Original cost At the end of period Investees Share of
Investor Investee Region Main Business Balance at December31, 2023 December 31, 2022Balance at Number ofshares Percentage CarryingAmount company netincome Profits/Losses Note
Construction
Cathay Real Estate Development Co., Ltd. Cathay Real Estate Management Co., Ltd. ROC $50,000 $50,000 5,000,000 100.00% $139,517 $42,688 42,688 Subsidiary
management
Cathay Real Estate Development Co., Ltd. Cathay Healthcare Management Co., Ltd. ROC Consultancy 467,500 467,500 46,750,000 85.00% 647,572 152,605 129,730 Subsidiary
Cathay Real Estate Development Co., Ltd. Cathay Hospitality Management Co., Ltd. ROC Service industry 1,740,000 1,740,000 25,000,000 100.00% 63,758 (34,486) (30,222) Subsidiary
Cathay Real Estate Development Co., Ltd. Cathay Hospitality Consulting Co., Ltd. ROC Service industry 1,300,000 1,300,000 60,000,000 100.00% 128,441 (38,064) (32,298) Subsidiary
Cathay Real Estate Development Co., Ltd. Cymbal Medical Network Co., Ltd ROC Wholesale of Drugs, 350,000 350,000 35,000,000 100.00% 172,373 (75,346) (75,346) Subsidiary
Medical Goods
Apartment building
Cathay Real Estate Development Co., Ltd. Lin Yuan Property Management Co., Ltd. ROC management service 68,809 68,809 1,530,000 51.00% 73,857 90,507 46,180 Subsidiary
industry
Housing and Building
Cathay Real Estate Development Co., Ltd. Jinhua Realty Co., Ltd. ROC Development and 408,000 408,000 40,800,000 51.00% 337,027 (3,161) (1,612) Subsidiary
Rental industry
Housing and Building
Cathay Real Estate Development Co., Ltd. Bannan Realty Co., Ltd. ROC Development and 586,500 586,500 58,650,000 51.00% 575,544 (5,087) (2,594) Subsidiary
Rental industry
Housing and Building
Cathay Real Estate Development Co., Ltd. Sanchong Realty Co., Ltd ROC Development and 1,834,800 1,716,000 183,480,000 66.00% 1,761,939 (13,077) (8,632) Subsidiary
Rental industry
Housing and Building
Cathay Real Estate Development Co., Ltd. Zhulun Realty Co., Ltd. ROC Development and 204,000 204,000 20,400,000 51.00% 196,953 (6,536) (3,333) Subsidiary
Rental industry
Construction
Cathay Real Estate Development Co., Ltd. San Ching Engineering Co., Ltd ROC 2,400,000 2,400,000 120,000,000 100.00% 2,978,397 736,476 603,115 Subsidiary
Contractor
Information software
Cathay Real Estate Development Co., Ltd. Symphox information Co., Ltd. ROC 67,515 67,515 5,489,000 11.00% 95,494 481,930 53,012 Associate
wholesaler
Cathay Real Estate Development Co., Ltd. San Hsiung Fongshan LaLaport Co., Ltd. ROC Department stores 204,000 150,000 204,000,000 30.00% 176,352 (100,893) (30,268) Associate
industry
Cathay Hospitality Consulting Co., Ltd. Cathay Food & Beverage Group Co., Ltd. ROC Service industry 115,000 15,000 11,500,000 100.00% 131,671 16,665 Note 3 Subsidiary
Cymbal Medical Network Co., Ltd Cymder Co., Ltd. ROC Manpower dispatch 120,000 120,000 12,000,000 100.00% 76,140 (16,079) Note 4 Subsidiary
and leasing industry
Cymbal Medical Network Co., Ltd Cymlin Co., Ltd. ROC Manpower dispatch 140,000 140,000 14,000,000 100.00% 92,457 (23,282) Note 4 Subsidiary
and leasing industry
San Ching Engineering Co., Ltd Cathay Power Inc ROC Solar-power 1,381,433 1,381,433 111,113,100 30.00% 1,432,891 235,441 70,803 Associate
generation industry
Information software
San Ching Engineering Co., Ltd Symphox information Co., Ltd. ROC 244,770 244,770 19,022,000 38.12% 328,579 481,930 183,713 Associate
wholesaler
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Note 1: If a public company has holding company in other country and had issued consolidated financial statement under local regulations, about these investee could disclosed their holding company’s relevant information. Note 2: If not belong to Note 1, filled in by the following rules:

(1) In “Investee”, “Region”, “Main Business”, “Original cost” and “At the end of period” columns should filled in in order follow the company invest directly or invest indirectly and explain each relationship in “Note” column.

(2) In“Investees company net income” column should filled in each investee net income.

(3) In“Share of Profits/Losses”column only need to filled in the company recognized each subsidiaries and the company under equity method’s profits or loss. Make sure it had contained each subsidiaries had contained their investee profit or loss in their net income.

Note 3: The investment gains and losses have been recognized under equity method by Cathay Hospitality Consulting Co., Ltd.

Note 4: The investment gains and losses have been recognized under equity method by Cymbal Medical Network Co., Ltd.

English Translation of Financial Statements Originally Issued in Chinese

Table 10: Information of major shareholder

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Shares
Total Shares Owned Percentage of Ownership ( ％ )
Shareholders
Employee Pension Management Committee of Cathay Life Insurance Co., Ltd. 288,067,626 24.84%
Wan Pao Development Co., Ltd. 204,114,882 17.60%
Cathay Life Insurance Co., Ltd. 68,646,584 5.92%
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English Translation of Financial Statements Originally Issued in Chinese CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

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Item Statement Index
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Item	Statement Index
Statement of Assets, Liabilities and Equity Items
Statement of cash and cash equivalents	1
Statement of financial assets at fair value through other comprehensive income-current	2
Statement of notes receivable	3
Statement of accounts receivable	4
Statement of inventories	5
Statement of inventories`－`construction in progress`－`buildings and land	5.1
Statement of changes in financial assets at fair value through other comprehensive income-non-current	6
Statement of changes in investments accounted for using equity method	7
Statement of changes in property, plant and equipment	Note 6 (7)
Statement of changes in accumulated depreciation of property, plant and equipment	Note 6 (7)
Statement of changes in accumulated impairment of property, plant and equipment	Note 6 (7)
Statement of changes in right-of-use assets	8
Statement of changes in accumulated depreciation of right-of-use assets	9
Statement of changes in investment property	Note 6 (8)
Statement of changes in accumulated depreciation of investment property	Note 6 (8)
Statement of changes in accumulated impairment of investment property	Note 6 (8)
Statement of changes in intangible assets	Note 6 (9)
Statement of deferred tax assets/liabilities	Note 6 (24)
Statement of other non-currents assets	10
Statement of short-term loans	11
Statement of short-term notes payable	12
Statement of contract liabilities-current	13
Statement of notes payable	14
Statement of accounts payable	15
Statement of other payables	16
Statement of lease liabilities	17
Statement of long-term loans	18
Statement of other non-current liabilities	19
Statement of Profit and Loss Items
Statement of operating revenues	20
Statement of operating costs	21
Statement of operating expenses	22
Statement of other income	Note 6 (22)
Statement of other gains and losses	Note 6 (22)
Statement of finance costs	Note 6 (22)
Statement of summary statement of current employee benefits, depreciation, depletion and amortization expenses by function	Note 6 (21)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Cash and Cash Equivalents

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Items Description Amount Note
Cash on hand and petty cash $763
Bank deposits 2,409,819
Cash equivalents Due date: January 9, 2024 700,392
Interest rate: 1.17%~1.21%
Total $3,110,974
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English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Financial Assets at Fair Value through Other Comprehensive Income - Current

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Fair Value
Number of Par Value Interest
Financial Instruments Description Total Acquisition Accumulated Unit Price
shares (NT$) Rate Total Note
(NT$)
Stock
Cathay Financial Holdings Co., Ltd. Listed stock 63,968,129 $10 $639,681 - $2,323,838 Not applicable $45.75 $2,926,542
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English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

3. Statement of Notes Receivable

As of December 31, 2023

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(Expressed in thousands of New Taiwan Dollars)
Items Description Amount Note
Rent Promissory note for rent $21,913
Less: loss allowance -
Net $21,913
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100

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

4. Statement of Accounts Receivable

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Items Description Amount Note
Third parties
Sales of real estate $690,126
Rent 96
Others 905 The amount of individual item
in others does not exceed 5%
of the account balance.
Subtotal 691,127
Less: loss allowance -
Net 691,127
Related parties
The amount of individual item
Other 320
in others does not exceed 5%
of the account balance.
Less: loss allowance -
Net 320
Total $691,447
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101

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

5. Statement of Inventories

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Amount
Net Realizable
Item Description Cost Note
Value
Land held for construction site $8,327,074 $17,307,416 Evaluation based on the lower of cost and net realizable value
Construction-in-progress Buildings and land 25,102,298 65,523,224 Evaluation based on the lower of cost and net realizable value
Please refer to Statement 5.1.
Buildings and land held for sale 4,567,716 5,729,660 Evaluation based on the lower of cost and net realizable value
Subtotal 37,997,088 88,560,300
It is presented at cost; however, the Company’s building prices for
Prepayment for land purchases 1,183,889 1,183,889
sale are greater than the estimated costs of buildings and land.
Net $39,180,977 $89,744,189
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102

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

5.1. Statement of Inventories － Construction in Progress－Buildings and Land

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Reduction Ending
Beginning
Addition Cost (Transfer to balance as of
Project name Balance as of Note
of Construction Building and December 31,
January 1, 2023
land held for sale) 2023
Taoyuan City Central Road Section 2 $2,028,516 $418,121 $- $2,446,637
Liberty Stationery Corp 2,337,425 790,440 - 3,127,865
Cathay Xi Jing 1,238,975 292,562 - 1,531,537
Cathay Shi Mei 1,357,863 139,131 - 1,496,994
Cathay Su 7,008 1,335,605 - 1,342,613
Cathay THE PARK 1,696,514 317,794 - 2,014,308
Cathay MOST+ 2,342,925 601,920 - 2,944,845
Cathay Sen Lin Hui 20,881 1,279,927 - 1,300,808
Cathay Yi He 1,194,124 248,494 - 1,442,618
Cathay Feng He 1,106,983 293,636 1,400,619 -
Cathay Feng Shuo 2,311,933 497,399 2,809,332 -
Cathay Chuan Qing 1,389,095 614,767 2,003,862 -
Cathay Huai Wei Feng Nian 994,134 741,133 1,735,267 -
Others 3,599,593 3,854,480 - 7,454,073
Total $21,625,969 $11,425,409 $7,949,080 $25,102,298
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103

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of changes in Financial Asset Measured at Fair Value through Other Comprehensive Income - Non-Current

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Unrealized
Beginning Balance as of evaluation Ending balance as of
Type and Name of the Securities January 1, 2023 Addition Disposal gains December 31, 2023 Guarantee or Note
and losses pledged
Shares Fair Value Shares Amount Shares Amount Amount Shares Fair Value
Stock
Gong Cheng Industrial Co., Ltd. 1,580,083 $- - $- - $- $- 1,580,083 $- None
MetroWalk international Co., Ltd. 3,448,276 108,586 - - - - (29,758) 3,448,276 78,828 "
Gian Feng Investment Co., Ltd. 2,000,000 25,551 - - - - (50) 2,000,000 25,501 "
Budworth Investment Limited 30,314 45 - - - - - 30,314 45 "
Nangang International One Co., Ltd. 27,465,000 232,809 - - - - (54,012) 27,465,000 178,797 "
Nangang International Two Co., Ltd. 32,460,000 280,663 - - - - (70,322) 32,460,000 210,341 "
Total $647,654 $- $- $(154,142) $493,512
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104

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Changes in Investments Accounted for Using the Equity Method

For the year ended December 31, 2023

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(Expressed in thousands of New Taiwan Dollars)
Beginning Balance as of January 1, 2023 Addition Disposal Ending balance as of December 31, 2023 Market Value
Type and Name of the Securities Percentage of Percentage of Unit Price Guarantee or Note
Shares Ownership Amount Shares Amount Shares Amount Shares Ownership Amount (NTD) Amount pledged
( ％ ) ( ％ ) (Note 10)
Cathay Real Estate Management Co., Ltd. 5,000,000 100.00% $129,694 - $42,688 (Note 1) - $32,865 (Notes 2 and 5) 5,000,000 100.00% $139,517 $27.90 $139,517 None
Cathay Healthcare Management Co., Ltd. 46,750,000 85.00% 620,212 - 130,724 (Notes 1 and 5) - 103,364 (Note 2) 46,750,000 85.00% 647,572 13.85 647,572 None
Cathay Hospitality Management Co., Ltd. 50,000,000 100.00% 94,135 - - 25,000,000 30,377 (Notes 1 and 6) 25,000,000 100.00% 63,758 1.32 63,758 None
Cathay Hospitality Consulting Co., Ltd. 60,000,000 100.00% 160,739 - - - 32,298 (Note 1) 60,000,000 100.00% 128,441 1.25 128,441 None
Cymbal Medical Network Co., Ltd 35,000,000 100.00% 247,719 - - - 75,346 (Note 1) 35,000,000 100.00% 172,373 4.92 172,373 None
Lin Yuan Property Management Co., Ltd. 1,530,000 51.00% 60,421 - 46,180 (Note 1) - 32,744 (Notes 2 and 5) 1,530,000 51.00% 73,857 48.25 73,857 None
Jinhua Realty Co., Ltd. 40,800,000 51.00% 338,639 - - - 1,612 (Note 1) 40,800,000 51.00% 337,027 9.00 337,027 None
Bannan Realty Co., Ltd. 58,650,000 51.00% 578,138 - - - 2,594 (Note 1) 58,650,000 51.00% 575,544 9.81 575,544 None
Sanchong Realty Co., Ltd 171,600,000 66.00% 1,651,771 11,880,000 118,800 (Note 4) - 8,632 (Note 1) 183,480,000 66.00% 1,761,939 10.60 1,761,939 None
Zhulun Realty Co., Ltd. 20,400,000 51.00% 200,286 - - - 3,333 (Note 1) 20,400,000 51.00% 196,953 9.65 196,953 None
San Ching Engineering Co., Ltd 120,000,000 100.00% 2,759,891 - 646,864 (Notes 1, 3, 5, 7 and 9) - 428,358 (Notes 2, 6 and 8) 120,000,000 100.00% 2,978,397 25.79 2,978,397 None
Symphox information Co., Ltd. 5,489,000 11.00% 63,587 - 64,414 (Notes 1, 3, 5, 7 and 9) - 32,507 (Notes 6 and 8) 5,489,000 11.00% 95,494 14.73 95,494 None
San Hsiung Fongshan LaLaport Co., Ltd. 150,000,000 30.00% 152,620 54,000,000 54,000 (Note 4) - 30,268 (Note 1) 204,000,000 30.00% 176,352 1.17 176,352 None
Total $7,057,852 $1,103,670 $814,298 $7,347,224 $7,347,224
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NOTE 1：Share of profit or loss of subsidiaries, associates and joint ventures and profit or loss from IFRS 16.

NOTE 2：Cash dividend from Investee.

NOTE 3：Recognition of cumulative translation adjustment of Investee.

NOTE 4：Increase of the investment in the current period.

NOTE 5：Remeasurements of defined benefit plans.

NOTE 6：Adjustment of unrealized gain or loss on financial instrument

NOTE 7：Revaluation surplus of properties of investees.

NOTE 8 ： Adjustments of changes of investees.

NOTE 9: Additional paid-in capital on investee company.

NOTE 10: The par value per share of all investments under equity method are NT$10, except for San Hsiung Fongshan LaLaport Co., Ltd. with NT$1 per share.

105

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Changes in Right-of-use Assets

For the year ended December 31, 2023

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(Expressed in thousands of New Taiwan Dollars)
Beginning Balance as of Ending balance as of
Item Addition Disposal Note
January 1, 2023 December 31, 2023
Land $28,505 $- $15,471 $13,034
Building 32,247 33,251 32,247 33,251
Total $60,752 $33,251 $47,718 $46,285
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106

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Changes in Accumulated Depreciation of Right-of-use Assets

For the year ended December 31, 2023

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(Expressed in thousands of New Taiwan Dollars)
Beginning Balance as of Ending balance as of
Item Addition Disposal Note
January 1, 2023 December 31, 2023
Land $14,104 $7,522 $15,471 $6,155
Building 23,998 16,562 32,247 8,313
Total $38,102 $24,084 $47,718 $14,468
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107

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Other Non-Current Assets

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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

Items Description Amount Note
Guarantee deposits paid
Third parties
Muzha Deposit $98,170
Beitou Daye Rd Deposit 172,209
Co-construction Project of Deposit 44,860
Cathay ChuanQing
Dunnan Lin Yuan Deposit 59,844
Beitou Cathay Yong-cui Deposit 74,710
Sanchong Deposit 55,260
Other 124,683 The amount of individual
item in others does not
exceed 5% of the account
balance.
Subtotal 629,736
Related parties
Other Deposit of Rent 12,414 The amount of individual
and construction item in others does not
exceed 5% of the account
balance.
Subtotal 12,414
Total 642,150
Land held for construction site The farm required in the 18,425
name of third party
Prepaid equipment 185,639
Other non-current assets 16,264
Total $862,478
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108

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

11. Statement of Short-Term Loans

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Ending balance
Type Bank as of December Period Interest rate Limited Guarantee or pledged Notes
31, 2023
Unsecured bank loans First Bank $1,575,000 Aug. 2023 to Aug. 2024 1.76%~2.30% $1,579,000 None Association guarantor is the Chairman of the Company
Hua Nan Bank 500,000 Dec. 2023 to Mar. 2024 1.76%~2.30% 500,000 None Association guarantor is the Chairman of the Company
Mega Bank 300,000 Dec. 2023 to Mar. 2024 1.76%~2.30% 500,000 None Association guarantor is the Chairman of the Company
Mizuho Bank 1,450,000 Aug. 2023 to Jun. 2024 1.76%~2.30% 1,450,000 None Association guarantor is the Chairman of the Company
Agricultural Bank of Taiwan 500,000 May 2023 to May 2024 1.76%~2.30% 500,000 None Association guarantor is the Chairman of the Company
Bank of China 1,500,000 Aug. 2023 to Jan. 2024 1.76%~2.30% 1,500,000 None Association guarantor is the Chairman of the Company
Chang Hwa Commercial Bank 1,000,000 May 2023 to Dec. 2024 1.76%~2.30% 1,000,000 None Association guarantor is the Chairman of the Company
DBS Bank 1,200,000 Dec. 2023 to Nov. 2024 1.76%~2.30% 1,200,000 None Association guarantor is the Chairman of the Company
Taishin International Bank 1,000,000 Oct. 2023 to Apr. 2024 1.76%~2.30% 1,000,000 None Association guarantor is the Chairman of the Company
Subtotal 9,025,000
Secured bank loans Cathay United Bank 800,000 Oct. 2023 to Mar. 2024 1.76%~2.30% 3,718,310 Investment property Association guarantor is the Chairman of the Company
Total $9,825,000
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109

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

12. Statement of Short-Term Notes Payable

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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

Amount
Items Bank Period Interest rate
unamortized
Issued amount Book value Note
discount
Short-term notes The Shanghai Commercial & Savings Bank Sep. 2023 to Mar. 2024 1.60%~1.94% $500,000 $1,470 $498,530
Mega Bills Dec. 2023 to Jan. 2024 1.60%~1.94% 1,000,000 426 999,574
Total $1,500,000 $1,896 $1,498,104
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110

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

13. Statement of Contract Liabilities-Current

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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

Items Description Amount Note
Advance Real Estate Receipts
Cathay Feng Shuo $337,139
Cathay Chuan Qing 384,918
Cathay Yong Cui 491,360
Cathay He He 349,471
Cathay Shi Mei 373,727
Cathay You Yong 344,425
Cathay Huai Wei Feng Nian 353,922
Dunnan Lin Yuan 684,459
Cathay THE PARK 512,543
Cathay MOST+ 515,571
Cathay Pan Yun 422,868
Cathay Yi He 449,331
Others Advance real estate 983,014 The amount of individual
receipts and rent item in others does not
exceed 5% of the account
balance.
Total
$6,202,748
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111

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

14. Statement of Notes Payable

As of December 31, 2023

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(Expressed in thousands of New Taiwan Dollars)
Items Description Amount Note
Shin Nan Natural Gas CO., Ltd Gas construction of Cathay Panyun $4,725
○○ , Kuo Payment to landowners 1,100
The amount of individual item
Other 2,814 in others does not exceed 5%
of the account balance.
Total $8,639
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112

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

15. Statement of Accounts Payable

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Items Description Amount Note
Transaction with third parties
Cathay Feng Ge Final cost payable $54,015
Cathay Feng He Final cost payable 91,546
Cathay Feng Shuo Final cost payable 135,532
Cathay Chuan Qing Final cost payable 189,125
Cathay Huai Wei Feng Nian Final cost payable 195,214
The amount of individual item
Other 340,154 in others does not exceed 5%
of the account balance.
Subtotal 1,005,586
Transaction with related parties
San Ching Engineering Co., Ltd. Final cost payable 1,373,956
and payables for warranty
The amount of individual item
Other 1,448 in others does not exceed 5%
of the account balance.
Subtotal 1,375,404
Total $2,380,990
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113

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Other Payable

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Items Description Amount Note
Payroll and bonus payable $74,025
Dividend payable 34,762
Dividend refundable 27,168
Interest payable 26,634
Tax payable 28,016
Other 20,097 The amount of individual item
in others does not exceed 5%
of the account balance.
Total $210,702
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114

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

17. Statement of Lease Liabilities

As of December 31, 2023

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(Expressed in thousands of New Taiwan Dollars)
Ending balance
Item Description Rental Period Discount Rate as of December Note
31, 2023
Land Advertising land Mar. 2021 to Jul. 2025 1.47%~1.85% $6,546
Building Office building Jul. 2023 to Jun. 2025 2.41% 25,088
Total $31,634
Current $20,968
Non-current 10,666
Total $31,634
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115

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Long-Term Loans

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Creditor Description Amount Period Interest Rate Guarantee or pledged Notes
Taishin International Bank $1,967,000 Oct. 2023 to May 2025 1.41%~2.18% None Association guarantor is the Chairman of the Company
Hua Nan Bank 6,250,000 Aug. 2021 to Jul. 2026 1.41%~2.18% None Association guarantor is the Chairman of the Company
Mega Bank 629,550 Nov. 2021 to Jul. 2027 1.41%~2.18% None Association guarantor is the Chairman of the Company
Chang Hwa Commercial Bank 2,150,000 Nov. 2021 to Sep. 2025 1.41%~2.18% None Association guarantor is the Chairman of the Company
Far Eastern International Bank 2,224,000 Aug. 2022 to Aug. 2026 1.41%~2.18% None Association guarantor is the Chairman of the Company
Shanghai Commercial & Savings Bank 2,999,691 Oct. 2023 to Feb. 2026 1.41%~2.18% None Association guarantor is the Chairman of the Company
KGI Bank 2,540,000 Nov. 2023 to Jun. 2024 2.30% Investment property Association guarantor is the Chairman of the Company
DBS Bank 1,200,000 Nov. 2023 to Aug. 2026 2.30% Inventory-construction land Association guarantor is the Chairman of the Company
Subtotal 19,960,241
Less : current portion (7,580,000)
Total $12,380,241
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116

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

19. Statement of Other Non-Current Liabilities

As of December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

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Items Description Amount Note
Net defined benefit liability $65,688
Guarantee deposits received
Third parties
KKCompany Technologies Housing deposit 12,634
Pte. Ltd., Taiwan Branch
(Singapore)
Home Media Group Ltd. Housing deposit 12,237
Cite Publishing Limited Housing deposit 11,253
Other Housing deposit 84,227 The amount of individual
item in others does not
exceed 5% of the account
balance.
Subtotal 120,351
Related parties
Other Housing deposit 6,323 The amount of individual
item in others does not
exceed 5% of the account
balance.
Subtotal 6,323
Total 126,674
Deferred credits- unrealized 13,211
gains on inter-affiliate accounts
$205,573
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117

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Operating Revenues

For the year ended December 31, 2023

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(Expressed in thousands of New Taiwan Dollars)
Items Description Amount Notes
Rental Income $375,147
Land Income 4,795,339
Building Income 1,658,674
Total $6,829,160
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118

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Operating Costs For the year ended December 31, 2023

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(Expressed in thousands of New Taiwan Dollars)
Items Description Amount Notes
Lease costs $332,517
Land costs 2,565,339
Building costs 1,640,254
Total $4,538,110
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119

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Statement of Operating Expenses For the year ended December 31, 2023

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(Expressed in thousands of New Taiwan Dollars)
Items Description Amount Notes
Selling expenses Advertising etc. $230,066
Salary and wages 182,820
Taxes 73,758
Other expenses 121,235 The amount of individual item
in others does not exceed 5%
of the account balance.
Total $607,879
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120

AI assistant

CATHAY RED — Audit Report / Information 2023

52129_rns_2023-11-14_5e81514a-a692-4410-b83f-e5c5308fcd3c.pdf

Notice to Readers

Parent Company Only Financial Statements

Independent Auditors’ Report Translated from Chinese

Opinion

Basis for Opinion

Key Audit Matters

Revenue Recognition

Valuation of Construction Land

－ Other Matter Making Reference to the Audits of Component Auditors

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

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Others

Notice to Readers

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD. Parent Company Only Statements of Cash Flows For the years ended December 31, 2023 and 2022

CATHAY REAL ESTATE DEVELOPMENT CO., LTD. Notes to Parent Company Only Financial Statements For the years ended December 31, 2023 and 2022

1. History and organization

2. Date and procedures of authorization of financial statements for issue

3. Newly issued or revised standards and interpretations

B. IFRS 17 “Insurance Contracts”

4. Summary of material accounting policies

(1) Statement of compliance

(2) Basis of preparation

(3) Foreign currency transactions

(4) Translation of financial statements in foreign currency

(5) Current and non-current distinction

(6) Cash and cash equivalents

(7) Financial instruments

Classification between liabilities or equity

Equity instruments

Financial Liabilities

English Translation of Financial Statements Originally Issued in Chinese

(8) Fair value measurement

(9) Inventories

(10) Investment accounted for using equity method

English Translation of Financial Statements Originally Issued in Chinese

English Translation of Financial Statements Originally Issued in Chinese

(11) Property, plant and equipment

(12) Investment properties

(13) Leases

Company as a lessee

(14) Intangible assets

Computer software

(15) Impairment of non-financial assets

(16) Revenue Recognition

Sales of buildings and lands

(17) Borrowing costs

(18) Retirement benefits plans

(19) Income taxes

Current income tax

English Translation of Financial Statements Originally Issued in Chinese

(20) Business combinations

5. Significant accounting judgements, estimates and assumptions

(1) Judgement

A. Fair value of financial instruments

B. Impairment of non-financial assets

C. Pension benefits

D. Income taxes

E. Inventory evaluation

6. Contents of significant accounts

English Translation of Financial Statements Originally Issued in Chinese

(4) Accounts receivable and accounts receivable -related parties

(5) Inventories

English Translation of Financial Statements Originally Issued in Chinese

(7) Property, plant and equipment

A. Owner occupied property, plant and equipment

(8) Investment properties

English Translation of Financial Statements Originally Issued in Chinese

(9) Intangible assets

(10) Other non-currents assets

(11) Short-term loan

(12) Short-term notes payable

English Translation of Financial Statements Originally Issued in Chinese

CATHAY RED Audit Report / Information 2023

`－` Other Matter Making Reference to the Audits of Component Auditors