CEC — Audit Report / Information 2021

Nov 2, 2021

Stock Symbol: 1535

China Ecotek Corporation

Standalone Financial Statements for the Years Ended December 31, 2021 and 2020 and Independent Auditors' Report

Address: 8F, No. 88, Chenggong 2nd Rd., Qianzhen Dist., Kaohsiung City Tel: (07)3336138

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Independent Auditors' Report

The Board of Directors and Shareholders China Ecotek Corporation

Opinion

We have audited the accompanying standalong financial statements of China Ecotek Corporation (The “Company”), which comprise the standalong balance sheets as of December 31, 2021 and 2020, and the standalong statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the the standalong financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying standalong financial statements present fairly, in all material respects, the standalong financial position of the Company as of December 31, 2021 and 2020, and its standalong financial performance and its standalong cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalong financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the standalong financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters of the Company's standalong financial statements for the year ended December 31, 2021 are stated as follows:

Assessment of the estimated total project cost

The Company has signed many construction contracts, and recognized construction revenues according to the percentage completion method during the contract period. If a construction

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contract is expected to result in a loss, the total loss resulting from the contract must be immediately recognized. Construction progress is calculated based on the actual construction costs incurred under each contract as a percentage of the estimated total construction cost of the project. The estimated total project cost involves a major accounting estimate, and affects the recognition of construction progress and revenues. Hence, the assessment of estimated total project cost is listed as a key audit matter. For relevant accounting policies, major accounting estimates, and explanations of determination, please refer to the Standalong Financial Statements Note 4 and Note 5.

Main audit procedures used to assess the estimated total project cost is as follows:

1. Understand control procedures for the assessment of the estimated total project cost, and conduct sampling inspections of the consistency between preparation process and internal controls.

2. Conduct a sampling inspection of documentation related to the assessment of the estimated total project cost for new projects and additions/reductions in the current year.

3. Conduct a sampling inspection to see if there are any major abnormalities between the actual total cost of projects concluded this year and their estimated total project cost, in order to verify the reasonableness of estimated total project cost. Conduct a sampling inspection of abnormal changes in estimated total cost, in order to determine the reasonableness of calculating the percentage of construction progress based on the estimated total project cost before the balance sheet date.

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

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

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

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

Auditors' Responsibilities for the Audit of the Standalong Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalong financial

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

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

1. Identify and assess the risks of material misstatement of the standalong 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 omission, misrepresentation, or the override of internal control.

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

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

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalong financial statements for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Yu-Hsiang Liu and Chao-Chun Wang.

Deloitte & Touche Taipei, Taiwan Republic of China

February 23, 2022

Notice to Readers

The accompanying standalone financial statements are intended only to present the standalone financial position, financial performance 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 standalone financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying standalone financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and standalone financial statements shall prevail.

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China Ecotek Corporation Balance Sheet December 31, 2021 and 2020

Code 1100 1110 1139 1140 1170 1180 1200 1220 130X 1476 1479 11XX 1510 1517 1550 1600 1755 1780 1840 1915 1920 1995 15XX 1XXX Code 2130 2170 2180 2200 2230 2250 2280 2399 21XX 2550 2570 2580 2640 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3XXX	In Thousand of NTD December 31, 2021 December 31, 2020 Assets Amount % Amount % Current assets Cash and cash equivalents (Notes 4, 6, and 14) $ 613,523 9 $ 1,448,110 22 Current financial assets at fair value through profit or loss (Notes 4 and 7) 218,977 4 66,109 1 Hedging financial assets - current (Notes 4 and 12) 748,517 11 668,153 10 Current contract assets (Notes 4, 23, and 29) 618,425 9 568,469 8 Accounts receivable (Notes 4 and 9) 104,035 2 174,025 3 Accounts receivable – related parties (Notes 4, 9, and 29) 684,886 10 896,635 13 Other receivables (Note 9) 6,360 - 358 - Current income tax assets (Note 25) 8,495 - 1,436 - Inventory (Notes 4 and 10) 6,214 - 5,947 - Other financial assets – current (Notes 12 and 30) 484,707 7 168,854 3 Other current assets (Note 13) 133,382 2 73,322 1 Total current assets 3,627,521 54 4,071,418 61 Noncurrent assets Noncurrent financial assets at fair value through profit or loss (Notes 4 and 7) 70,880 1 23,202 1 Noncurrent financial assets at fair value through other comprehensive income (Notes 4 and 8) 132,068 2 157,720 3 Investments recognized under the equity method (Notes 4 and 11) 2,085,965 31 1,998,844 30 Property, plant and equipment (Notes 4 and 15) 636,124 9 138,084 2 Right-of-use assets (Notes 4 and 16) 100,779 2 85,868 1 Intangible assets (Note 4) 3,956 - 4,479 - Deferred income tax assets (Note 25) 90,348 1 125,876 2 Advance payments for equipment - - 8,435 - Guarantee deposits paid 6,091 - 6,877 - Other noncurrent assets 47 - 1,076 - Total noncurrent assets 3,126,258 46 2,550,461 39 Total assets $ 6,753,779 100 $ 6,621,879 100 Liabilities and equityinterests Current liabilities Current contract liabilities (Notes 4, 23, and 29) $ 1,705,516 25 $ 1,637,156 25 Accounts payable (Note 17) 691,459 10 846,360 13 Accounts payable - related parties (Notes 17 and 29) 7,131 - 5,967 - Other payables (Notes 14 and 18) 528,781 8 498,367 7 Current income tax liabilities (Note 25) - - 3,202 - Liability provision – current (Notes 4, 14, and 19) 53,250 1 103,728 2 Current lease liabilities (Notes 4, 16, and 29) 35,301 1 27,853 - Other current liabilities (Note 18) 93,078 1 70,086 1 Total current liabilities 3,114,516 46 3,192,719 48 Noncurrent liabilities Liability provision – noncurrent (Notes 4, 14, and 19) 23,746 - 21,649 - Deferred income tax liabilities (Note 25) 57,674 1 28,794 - Noncurrent lease liabilities (Notes 4, 16, and 29) 64,212 1 56,475 1 Net defined benefit liability (Notes 4 and 20) 263,663 4 361,986 6 Total noncurrent liabilities 409,295 6 468,904 7 Total liabilities 3,523,811 52 3,661,623 55 Equity (Note 22) Capital – common stock 1,237,426 18 1,237,426 19 Capital surplus 628,374 9 628,374 9 Retained earnings Legal reserve 631,546 9 614,474 9 Special reserve 95,811 2 68,655 1 Undistributed earnings 693,450 10 507,138 8 Total retained earnings 1,420,807 21 1,190,267 18 Other equity (56,639) - (95,811) (1) Total equity 3,229,968 48 2,960,256 45 Total liabilities and equity interests $ 6,753,779 100 $ 6,621,879 100	In Thousand of NTD December 31, 2020	In Thousand of NTD December 31, 2020
		Amount	%
			22 1 10 8 3 13 - - - 3 1
		4,071,418	61
		23,202 157,720 1,998,844 138,084 85,868 4,479 125,876 8,435 6,877 1,076	1 3 30 2 1 - 2 - - -
		2,550,461	39
			100
			25 13 - 7 - 2 - 1
		3,192,719	48
		21,649 28,794 56,475 361,986	- - 1 6
		468,904	7
		3,661,623	55
		1,237,426	19
		628,374	9
		614,474 68,655 507,138	9 1 8
		1,190,267	18
		(95,811)	(1)
		2,960,256	45
			100

The accompanying notes are an integral part of these financial statements.

Chairman: Chung-Te Chen Managerial Officer: Chih-Feng Lee

Accounting Officer: Ya-Min Chuang

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China Ecotek Corporation Statement of Comprehensive Income January 1 to December 31, 2021 and 2020

In Thousand of NTD, Except EPS

2021 Code Amount Operating revenue (Notes 4, 14, 23, and 29) 4100 Sales revenue $ 84,797 4500 Construction revenue 7,992,593 4600 Technical service revenue 293,838 4000 Total operating revenue 8,371,228 Operating costs (Notes 10, 14, 24, and 29) 5110 Cost of goods sold 59,953 5500 Construction costs 7,368,033 5600 Technical service costs 247,782 5000 Total operating costs 7,675,768 5900 Gross profit 695,460 5910 Less: Unrealized gain from sale 23,804 5920 Plus: Realized gain from sale 10,277 5950 Realized gross profit from operations 681,933 Operating expenses (Note 24) 6100 Selling expenses 56,160 6200 Administrative expenses 369,894 6300 Research and development expenses 16,880 6000 Total operating expenses 442,934 6900 Operating profit 238,999 Non-operating income and expenses (Notes 11, 24, and 29) 7100 Interest income 5,842 7010 Other income 28,399 7020 Other profits and losses 13,728 7050 Financial costs (1,514) 7060 Share of income/losses of subsidiaries and affiliated enterprises recognized under the equity method 180,389 7000 Total 226,844 7900 Pre-tax profit 465,843 7950 Income tax expense (Notes 4 and 25) 61,963 8200 Net profit for the year 403,880 Other comprehensive income (Notes 20, 22, and 25) 8310 Items not reclassified as income 8311 Remeasurements of the net defined benefit (13,396)	2021	2020 % Amount 1 $ 62,654 95 8,273,401 4 291,277 100 8,627,332 1 44,878 88 7,874,810 3 231,519 92 8,151,207 8 476,125 - 21,608 - 7,223 8 461,740 1 49,907 4 357,417 - 10,031 5 417,355 3 44,385 - 8,685 1 24,151 - (3,822) - (1,766) 2 153,599 3 180,847 6 225,232 1 27,797 5 197,435 - (32,903)	2020
				%
				1 96 3
				100
				- 91 3
				94
				6 - -
				6
				1 4 -
				5
				1
				- - - - 2
				2
				3 -
				3
				(1)

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2021 Code Amount 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income (25,652) 8320 Share of other comprehensive income of subsidiaries and affiliated enterprise recognized under the equity method 29,398 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 7,810 8360 Components of other comprehensive income that will be reclassified to profit or loss 8368 Profit/loss from hedging instruments (17,363) 8370 Share of other comprehensive income of subsidiaries and affiliated enterprise recognized under the equity method 61,781 8399 Income tax related to components of other comprehensive income that may be reclassified to profit or loss (9,693) 8300 Other comprehensive income in the current year 32,885 8500 Total comprehensive income in the current year $ 436,765 Earnings per share (Note 26) 9750 Basic $ 3.26 9850 Diluted 3.25	2021	2020 % Amount (1) 19,052 - (18,615) - 2,892 - 624 1 (31,119) - 6,202 - (53,867) 5$ 143,568 $ 1.60 1.59	2020
				%
				- - - - - -
				(1)
				2

The accompanying notes are an integral part of these financial statements.

Chairman: Chung-Te Chen Managerial Officer: Chih-Feng Lee Accounting Officer: Ya-Min Chuang

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In Thousand of NTD

China Ecotek Corporation Statement of Changes in Equity January 1 to December 31, 2021 and 2020

														Other equityinterests	Other equityinterests
Code		Capital – common stock Shares (thousand shares) Amount				Capital surplus	Legal reserve		Retained earnings Special reserve Undistributed earnings		Total	Exchange differences arising from the translation of the financial statements of foreign operations		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Profit/loss from hedging instruments			Total		Total equity
A1	Balance at January 1, 2020	123,743$		1,237,426$		628,374$	600,939$		36,780$	530,315$	1,168,034$	(129,534)$		79,260$		(18,381)$		(68,655)$		2,965,179
	Appropriation and distribution of
	2019 earnings (Note 22)
B1	Legal reserve		-		-	-	13,535		-	(13,535)	-		-	-			-		-	-
B3	Special reserve		-		-	-		-	31,875	(31,875)	-		-	-			-		-	-
B5	Cash dividends		-		-	-		-	-	(148,491)	(148,491)		-	-			-		-	(148,491)
			-		-	-	13,535		31,875	(193,901)	(148,491)		-	-			-		-	(148,491)
D1	Net profit - 2020		-		-	-		-	-	197,435	197,435		-	-			-		-	197,435
D3	Other comprehensive income after tax - 2020		-		-	-		-	-	(27,494)	(27,494)	(26,815)		(2,080)		2,522		(26,373)		(53,867)
D5	Total comprehensive income - 2020		-		-	-		-	-	169,941	169,941	(26,815)		(2,080)		2,522		(26,373)		143,568
Q1	Disposal of equity instruments measured at fair value through
	other comprehensive income		-		-	-		-	-	783	783		-	(783)			-	(783)		-
Z1	Balance at December 31, 2020	123,743		1,237,426		628,374	614,474		68,655	507,138	1,190,267	(156,349)		76,397		(15,859)		(95,811)		2,960,256
	Appropriation and distribution of
	2020 earnings (Note 22)
B1	Legal reserve		-		-	-	17,072		-	(17,072)	-		-	-			-		-	-
B3	Special reserve		-		-	-		-	27,156	(27,156)	-		-	-			-		-	-
B5	Cash dividends		-		-	-		-	-	(167,053)	(167,053)		-	-			-		-	(167,053)
			-		-	-	17,072		27,156	(211,281)	(167,053)		-	-			-		-	(167,053)
D1	Net profit - 2021		-		-	-		-	-	403,880	403,880		-	-			-		-	403,880
D3	Other comprehensive income after tax - 2021		-		-	-		-	-	(9,093)	(9,093)	52,719		7,253		(17,994)		41,978		32,885
D5	Total comprehensive income - 2021		-		-	-		-	-	394,787	394,787	52,719		7,253		(17,994)		41,978		436,765
Q1	Disposal of equity instruments measured at fair value through
	other comprehensive income		-		-	-		-	-	2,806	2,806		-	(2,806)			-	(2,806)		-
Z1	Balance at December 31, 2021	123,743 $		1,237,426 $		628,374 $	631,546 $		95,811 $	693,450 $	1,420,807 $	(103,630)$		80,844 $		(33,853)$		(56,639)$		3,229,968

The accompanying notes are an integral part of these financial statements.

Chairman: Chung-Te Chen

Managerial Officer: Chih-Feng Lee

Accounting Officer: Ya-Min Chuang

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China Ecotek Corporation Cash Flow Statement January 1 to December 31, 2021 and 2020

In Thousand of NTD

Code			2021	2020
	Cash flow from operating activities
A10000	Net profit before tax	$	465,843 $	225,232
A20010	Revenues and expenses
A20100	Depreciation expense		51,839	49,981
A20200	Amortization expense		3,545	4,696
	Net gains on financial assets and
A20400	liabilities at fair value through profit or		(17,234)	(935)
	loss
A20900	Financial costs		1,514	1,766
A21200	Interest income		(5,842)	(8,685)
A21300	Dividend income		(26,400)	(23,360)
	Share of income/losses of subsidiaries and
A22300	affiliated enterprises recognized under the		(180,389)	(153,599)
	equity method
A22500	Income from disposal of property, plant and equipment		(117)	(187)
A23900	Unrealized sales margin		23,804	21,608
A24000	Realized sales margin		(10,277)	(7,223)
A29900	Liability provision		33,282	74,854
A29900	Others		(50)	-
A30000	Net changes in operating assets and liabilities
A31120	Hedging financial assets		(97,727)	(222,342)
A31125	Contract assets		(49,956)	99,450
A31150	Accounts receivable		69,990	93,996
A31160	Accounts receivable – related parties		211,749	44,769
A31180	Other receivables		(5,202)	59
A31200	Inventory		(267)	(35)
A31240	Other current assets		(22,594)	38,422
A32125	Contract liabilities		68,360	663,506
A32150	Accounts payable		(154,901)	235,397
A32160	Accounts payable - related parties		1,164	(23,770)
A32180	Other payables		29,995	65,316
A32200	Liability provision		(81,663)	(85,508)
A32230	Other current liabilities		18,761	(18,700)
A32240	Net defined benefit liability		(111,719)	(1,776)
A33000	Cash inflow generated from operating activities		215,508	1,072,932
A33500	Income tax paid		(9,699)	(27,812)
AAAA	Net cash inflow from operating activities		205,809	1,045,120
	Cash flow from investing activities
	Acquisition of financial assets at fair
B00010	value through other comprehensive		-	(3,976)
	income
B00020	Disposal of financial assets at fair value through other comprehensive income		-	4,580
B00100	Acquisition of financial assets at fair value through profit or loss		(1,027,226)	(65,952)
B00200	Disposal of financial assets at fair value through profit or loss		843,914	-
B01800	Acquisition of investments recognized under the equity method		(60,000)	(50,000)
B02300	Net cash inflow from disposal of subsidiaries		46,373	23,966

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Code			2021	2020
	Refunded payments for shares from
B02400	capital reduction of investee recognized		141	2,681
	under the equity method
B02700	Acquisition of property, plant and equipment		(509,214)	(22,830)
B02800	Proceeds from disposal of property, plant and equipment		120	192
B03700	Increase in guarantee deposits paid		(36,680)	-
B03800	Decrease in guarantee deposits		-	1,875
B04100	Increase in other receivables		(60)	-
B04500	Acquisition of intangible assets		(3,022)	(2,911)
B06500	Increase of other financial assets		(315,853)	(22,206)
B06700	Increase of other noncurrent assets		-	(231)
B06800	Decrease of other noncurrent assets		1,029	-
B07500	Interest received		5,102	10,452
B07600	Dividend received from affiliated enterprises		184,406	151,146
B07600	Other dividends received		26,400	23,360
BBBB	Net cash inflow (outflow) from investing activities		(844,570)	50,146
	Cash flow from financing activities
C00200	Decrease in short-term borrowings		-	(310,000)
C03000	Increase in guarantee deposits received		4,231	6,762
C04020	Repayments of lease liabilities		(31,490)	(30,973)
C04500	Distribution of cash dividends		(167,053)	(148,491)
C05600	Interest paid		(1,514)	(2,000)
CCCC	Net cash outflow from financing activities		(195,826)	(484,702)
EEEE	Net increase (decrease) in cash and cash equivalents		(834,587)	610,564
E00100	Cash and cash equivalents at beginning of period		1,448,110	837,546
E00200	Cash and cash equivalents at end of period	$	613,523 $	1,448,110

The accompanying notes are an integral part of these financial statements.

Chairman: Chung-Te Chen Managerial Officer: Chih-Feng Lee Accounting Officer: Ya-Min Chuang

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China Ecotek Corporation Notes to Financial Statements January 1 to December 31, 2021 and 2020 (All amounts are in thousand NTD, unless otherwise specified)

I. Company History

The Company was established in March 1993, and its main shareholder is China Steel Corporation (holds 44.76% shares; parent company with substantial control over the Company). The Company mainly engages in the planning, design, installation, maintenance, and environmental impact assessment for environmental protection equipment, co-generation equipment, and steel industry equipment.

The Company was listed on the Taiwan Stock Exchange in September 2001.

New Taiwan Dollar is both the functional currency and reporting currency of the Company.

• II. Date and Procedures of Approval of the Financial Statements

The standalone financial statements were released after being approved by the Board of Directors on February 23, 2022.

• III. Application of New Standards, Amendments, and Interpretations

• (I) Application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations, and SIC Interpretations (hereinafter collectively referred to as the "IFRSs") as endorsed and announced by the Financial Supervisory Commission (FSC) for the first time

  • The application of the IFRSs endorsed and announced by the FSC will not result in any major changes to the Company's accounting policy.

• (II) IFRSs endorsed by the FSC in 2022

Effective date by New, Revised or Amended Standards and International Accounting Interpretations Standards Board (IASB) "Annual Improvements to IFRSs 2018-2020" January 1, 2022 (Note 1) Amendments to References to the Conceptual January 1, 2022 (Note 2) Framework (amendments to IFRS 3) Property, Plant and Equipment: Proceeds before January 1, 2022 (Note 3) Intended Use (Amendments IAS 16) Onerous Contracts—Cost of Fulfilling a Contract January 1, 2022 (Note 4) (Amendments to IAS 37)

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• Note 1: The amendment to IFRS 9 is applicable to the exchange or revision of clauses for financial liabilities that occur in the annual reporting period beginning after January 1, 2022. The amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards is applicable to the annual reporting period beginning after January 1, 2022.

• Note 2: The amendment to acquisition date is applicable to mergers during annual reporting periods that begin after January 1, 2022.

• Note 3: The amendment is applicable to property, plant and equipment that reach the required location and status expected by management after January 1, 2021.

• Note 4: The amendment is applicable to contracts that have not been fully performed as of January 1, 2022.

As of the date the standalone financial statements were passed by the Board of Directors and released, the Company has determined that other amendments to standards and interpretations will not have a material impact on its financial position and financial performance.

• (III) New standards, interpretations, and amendments were issued by IASB but not yet included in the IFRSs as endorsed and announced by the FSC

New, Revised or Amended Standards and Interpretations Sale or contribution of assets between an investor and its associate or joint venture (amendments to IFRS 10 and IAS 28) IFRS 17 Insurance Contracts Amendments to IFRS 17 First application of IFRS 17 and IFRS 9 – Comparison of information (amendments to IFRS 17) Classification of Liabilities as Current or Noncurrent (Amendments to IAS 1) Disclosure of Accounting Policies (Amendments to IAS 1) Definition of Accounting Estimates (Amendments to IAS 8) Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12)

Effective date of the IASB (Note1) Not determined January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) 2January 1, 2023 (Note 3) January 1, 2023 (Note 4)

Note 1: Unless otherwise specified, the new, revised or amended standards

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and interpretations are effective at the beginning of the annual reporting period after the dates above.

• Note 2: Prospective application of the amendment in the annual reporting period starting after January 1, 2023.

• Note 3: The amendment is applicable to changes in accounting estimates that occur after the beginning of the annual reporting period after January 1, 2023.

• Note 4: Except for the deferred income tax recognized for the temporary difference in lease and decommissioning obligations on January 1, 2022, the amendment is applicable to all transactions that occurred after January 1, 2022.

As of the date the standalone financial statements were passed by the Board of Directors and released, the Company are still assessing the impact of other amendments to standards and interpretations on its financial position and financial performance, and will disclose the results once assessment is completed.

IV. Summarized Remarks on Significant Accounting Policies

• (I) Statement of compliance

• The consolidated financial statements were prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers."

• (II) Basis of preparation

• Except for financial instruments measured at fair value and net defined benefit liability recognized at defined benefit liabilities less fair value of assets of the defined benefit plans, these standalone financial statements have been prepared based on historical cost.

Fair value measurement can be divided into levels 1 to 3 based on the observability and importance of input values:

1. Level 1 input values: Refers to quoted prices (unadjusted) in active markets for identical assets or liabilities on the measurement date.

2. Level 2 input values: Refers to directly (i.e., prices) or indirectly (i.e., derived from prices) observable input values of assets or liabilities other than level 1 quoted prices.

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1. Level 3 input values: Refers to unobservable input values of assets or liabilities.

The Company used the equity method for subsidiaries and affiliated enterprises when preparing the standalone financial statements. For profit/loss, other comprehensive income, and equity in the current year in the standalone financial statements to match the profit/loss, other comprehensive income, and equity attributable to owners of the Company in the consolidated financial statements, "investments recognized under the equity method," "share of profits/losses of subsidiaries and affiliated enterprises under the equity method," "share of other comprehensive income of subsidiaries and affiliated enterprises under the equity method," and related equity items were adjusted for several accounting differences between the standalone and consolidated basis.

• (III) Classification of current and noncurrent assets and liabilities

Current assets include:

1. Assets that are held mainly for trading purposes;

2. Assets that will be realized within twelve months from the balance sheet date; and

3. Cash and cash equivalents (except those that are restricted as they will be swapped or used to repay liabilities more than 12 months after the balance sheet date).

Current liabilities include:

1. Liabilities that are held mainly for trading purposes;

2. Liabilities that are to be paid off within twelve months from the balance sheet date; and

3. Liabilities for which the repayment term cannot be extended unconditionally beyond 12 months after the balance sheet date.

Assets and liabilities that are not classified as current assets or current liabilities above are classified as noncurrent assets or noncurrent liabilities. The construction business of the Company has a business cycle longer than 1 year, so assets and liabilities of the construction business are divided into current and noncurrent according to standards of a normal business cycle.

• (IV) Foreign currencies

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When the Company was preparing the standalone financial statements, transactions denominated in currencies other than the functional currency (i.e., foreign currencies) are recorded after conversion into the functional currency using the exchange rate on the transaction date.

Foreign currency-denominated monetary items are converted using the closing rate on each balance sheet date. Except for currency translation difference resulting from hedging transactions against exchange rate risk, the currency translation difference resulting from settlement or conversion of monetary items is recognized as income or loss in the current year.

Foreign currency-denominated nonmonetary items carried at fair value are converted at exchange rates on the date of fair value measurement. Currency translation differences are also recognized in current profit or loss; for items that have fair value changes recognized in other comprehensive income, currency translation differences are recognized in other comprehensive income. Foreign currency-denominated nonmonetary items carried at historical costs are converted on the transaction date and are not re-converted.

If the Company disposes of all equity interests in a foreign operation, or dispose of a portion of equity interests in the subsidiary of a foreign operation but loses control, or the retained equity interest after disposing of an affiliated enterprise of a foreign operation is a financial asset accounted according to the accounting policy for financial instruments, all accumulated currency translation difference related to the foreign operation will be reclassified as profit or loss.

If disposal of a portion of equity interest in a foreign operation by a subsidiary does not result in loss of control, accumulated currency translation difference will be proportionally recognized as an equity transaction but not recognized as profit or loss. Accumulated currency translation difference is reclassified to gains/losses according to the percentage of foreign operations disposed of in any other part.

(V)

Inventory

Inventory includes raw materials and finished goods. Inventories are measured at cost and net realizable value, whichever is lower. Unless the inventories are in the same category, the cost and net realizable value is compared for each individual item. Net realizable value is the estimated selling price under normal

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circumstances, less the estimated cost of completion and selling expenses. The cost of inventories is calculated at its weighted average.

• (VI) Investments recognized under the equity method

The Company handles investments in subsidiaries and affiliated enterprises using the equity method.

1. Investment subsidiary

A subsidiary refers to an entity in which the Company exercises control. Under the equity method, investments are originally recognized at cost, and then its book value increases along with the Company's share of profits, losses and other comprehensive income of subsidiaries and profit distribution. Furthermore, changes to other equity interests of subsidiaries are recognized according to the Company's shareholding ratio.

Any change in the ownership interest that does not cause the Company to lose control of the subsidiary is accounted under the equity method. Difference between the book value of an investee and the fair value of considerations paid/received is directly recognized as equity.

When the Company's share of loss in a subsidiary is equal to or exceeds the Company's equity in the subsidiary (including the subsidiary's carrying amount under the equity method and other long-term equity interests that are part of the Company's net investment in the subsidiary), the loss is recognized according to the shareholding percentage.

When the Company assesses impairment, cash generating units are considered as a whole in financial statements and the recoverable amount is compared with the carrying amount. When the recoverable amount of assets increases, then impairment loss is reversed and recognized as gain. However, after reversal of impairment losses, the carrying amount of assets may not exceed the amortized carrying amount of assets before recognizing impairment loss. Goodwill impairment may not be reversed in subsequent periods.

When the Company loses control over a subsidiary, the Company measures the remaining investment in the former subsidiary based on the fair value on the date control was lost. The difference between the fair value of the remaining investment with the proceeds from disposal and

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the investment's carrying amount on the date control is lost is listed as profit or loss in the current year. All amounts previously recognized in other comprehensive income related to the subsidiary shall be accounted on the same basis as if the subsidiary had directly disposed of such assets or liabilities.

Unrealized gains from downstream transactions between the Company and subsidiaries are eliminated from the standalone financial statements. Gains/losses arising from upstream transactions between the Company and subsidiaries and transactions among subsidiaries were not within the scope of control exercised by the Company over subsidiaries, and were thus recognized in the standalone financial statements.

Investment in affiliated enterprises

An affiliated enterprise is an enterprise in which the Company has significant influence, but is not a subsidiary or a joint venture. Joint venture refers to an agreement between the Company with other companies to have joint control and rights over net assets.

The Company's investments in affiliated enterprises are recognized under the equity method. Under the equity method, investments in affiliated enterprises are originally recognized at cost, and then its book value increases along with the Company's share of profits, losses and other comprehensive income of affiliated enterprises and profit distribution. Furthermore, changes to equity interests of affiliated enterprises are recognized according to shareholding ratio.

When an affiliated enterprise issues new shares, if the Company does not subscribe for the shares according to its shareholding percentage and results in a change in shareholding percentage, which causes the net value of equity invested to increase or decrease, capital surplus – net value of equity of affiliated enterprises recognized under the equity method and investments recognized under the equity method will be adjusted according to the change. If ownership interest in an affiliated enterprise decreases due to not subscribing for or acquiring shares according shareholding ratio, all amounts previously recognized in other comprehensive income related to the affiliated enterprises will be reclassified according to the decreased percentage, and the basis for

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accounting treatment will be the same as if the affiliated enterprise had directly disposed of such assets or liabilities. If capital surplus needs to be decreased for the adjustment above and the balance of capital surplus from investments recognized under the equity method is insufficient, the difference is deducted from retained earnings.

When the Company is assessing impairment, the overall carrying amount of the investment is viewed as a single asset to compare the recoverable amount with carrying amount for impairment testing, and the impairment losses recognized is a part of the investment's carrying amount. Any reversal of impairment losses is recognized within the scope of increase in recoverable amount of the investment.

The Company stops using the equity method when the investee is no longer an affiliated enterprise, and retained interests in the original affiliated enterprise are measured at fair value. The difference between the fair value and proceeds from the disposal and carrying amount of the investment on the date the equity method is no longer used is listed as a profit or loss in the current year. All amounts previously recognized in other comprehensive income related to affiliated enterprises shall be accounted on the same basis as if the affiliated enterprise had directly disposed of such assets or liabilities.

Gains/losses arising from upstream, downstream, and lateral transactions between the Company and affiliated enterprises were not within the scope of control exercised by the Company over affiliated enterprises, and were recognized in the standalone financial statements.

(VII) Joint operations

Joint operations refers to an agreement between the Company with other companies to have joint control and rights over net assets and jointly responsible for liabilities.

When the Company obtains equity in operations that meet the definition of joint operations, it is handled according to the accounting policy for company mergers. However, this does not apply when the parties that share joint control before and after equity of the joint operations is obtained are under the non-temporary control of the same ultimate controller.

With regard to equity of joint operations, the Company recognizes:

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1. Its assets include the share of any jointly owned assets.

2. Its liabilities include the share of any jointly borne liabilities.

3. Its share of sales revenue from joint operations.

4. Its share of income from sale of joint operations.

5. Its expenses include the share of any jointly incurred expenses.

The Company handles assets, liabilities, revenues, and expenses related to joint operations they have an equity interest in according to the applicable standards. The Company sells or invests assets in joint operations, profits/losses from the transaction are only recognized with the scope of equity interests other parties have in the joint operations. When the Company purchases assets from the joint operations, the share of the profit/loss is not recognized until the asset is sold to a third party.

• (VIII) Property, plant and equipment

Property, plant and equipment are measured and recognized at cost after accumulated depreciation.

Property, plant and equipment under construction are recognized at cost. Costs include professional service fees and borrowing costs that meet the conditions for capitalization. When assets are completed and reach the expected state of use, they are classified to a suitable category under property, plant and equipment, and depreciation expenses are recognized.

• Depreciation is separately recognized for each major part of property, plant and equipment on a straight line basis. The Company reviews methods for estimating useful life in years, residual value, and depreciation, at a minimum, on the last day of each year, as well as the effect of prospective application of changes to accounting estimates.

When derecognizing property, plant and equipment, the difference between net disposal proceeds and the book value is recognized as gains or losses.

• (IX) Intangible assets

• Independently acquired Independently acquired intangible assets with a limited useful life is initially measured at cost, and subsequently measured at cost less accumulated amortization. Intangible assets are amortized on a straight-line basis during their useful life. The Company reviews methods for estimating useful life in years, residual value, and amortization, at a

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minimum, on the last day of each year, as well as the effect of prospective application of changes to accounting estimates. Intangible assets with an indefinite useful life are listed at cost less accumulated impairment losses.

1. Derecognition

When derecognizing intangible assets, the difference between net disposal proceeds and the book value is recognized as gains or losses in the current year.

• (X) Impairment of property, plant and equipment, right-of-use assets, intangible assets, and assets related to contract cost

The Company evaluates if there are any signs of impairment of property, plant and equipment, right-of-use assets, and intangible assets on each balance sheet date. If any signs of impairment exist, then the asset's recoverable amount is estimated. If the recoverable amount cannot be estimated on an individual basis, the Company will instead estimate recoverable amounts for the entire cash-generating unit. The recoverable amount of corporate assets is allocated to the smallest identifiable cash-generating group with a reasonable and consistent basis.

Recoverable amounts are determined as the higher of "fair value less cost to sell" or the "utilization value." If the recoverable amount of an individual asset or cash-generating unit is expected to be lower than its book value, the Company will reduce the book value of the asset or cash-generating unit down to the recoverable amount and recognize impairment loss.

Impairment losses of inventory, property, plant and equipment, and intangible assets recognized due to customer contracts are first recognized according to inventory impairment rules and the provision above. The book value of assets related to contract costs exceeding the balance of considerations that can be expected to be recovered from the provision of related products or professional services, minus directly related costs, is recognized as impairment loss. The book value of contract cost related assets is then calculated in the cash-generating unit to assess the impairment of the cash-generating unit.

When impairment losses are reversed, the book value of the asset, cash-generating unit, or contract cost related asset is increased to the revised recoverable amount. However, the increased book value may not exceed the

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asset, cash-generating unit, or contract cost related asset's book value in the previous year before impairment loss was recognized (less depreciation and amortization). Reversal of impairment losses is listed in income.

• (XI) Financial instruments

When the Company is a party to the contract, financial assets and financial liabilities are recognized in the balance sheet.

If financial assets and financial liabilities being recognized for the first time are not measured at fair value through profit or loss, then the are measured at fair value plus transaction costs that can be directly attributed to the acquisition or issuance of financial assets or financial liabilities. Transaction costs that can be directly attributed to the acquisition or issuance of financial assets or financial liabilities are immediately recognized as profit or loss.

1. Financial assets

2. Regular transactions of financial assets are recognized and derecognized using transaction date accounting.

3. (1) Type of measurement

   • Financial assets held by the Company include financial assets at fair value through profit or loss, financial assets at amortized cost, and equity instruments measured at fair value through other comprehensive income.

   • A. Financial assets at fair value through profit or loss

     • Financial assets at fair value through profit or loss are financial assets for which the fair value is required to be measured through profit or loss. Financial assets required to be measured at fair value through profit or loss includes investments in equity instruments not specified by the Company to be measured at fair value through other comprehensive income, and investments in liability instruments that do not qualify to be measured at amortized cost or are measured at fair value through other comprehensive income.

     • For "financial assets at fair value through profit or loss," any profit or loss (including any dividends generated by the financial assets) from the remeasurement of fair value is listed in income. Please refer to Note 28 for methods for determining fair value.

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• B. Financial assets at amortized cost

Financial assets that the Company invests in are classified as financial assets at amortized cost if they meet both of the conditions below:

• a. Held under a certain business model that aims to collect cash flow from the financial asset; and

• b. The contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After recognizing financial assets at amortized cost (including cash and cash equivalents, accounts receivable (including related parties), other receivables, other financial assets, and refundable deposits), they are measured at carrying amount determined using the effective interest rate method less any impairment losses. Any foreign exchange gains/losses are recognized in profit and loss.

Except for the two situations below, interest income is calculated by multiplying the effective interest rate with the financial asset's total carrying amount.

• a. For purchased or originated credit-impaired financial assets, interest income is calculated by multiplying the effective interest rate after credit adjustment by the amortized cost of the financial asset.

• b. For non-purchased or non-originated credit-impaired financial assets that subsequently become credit-impaired financial assets, interest income is calculated by multiplying the effective interest rate by the amortized cost of the financial asset.

Credit-impaired financial assets mean that the issuer or debtor has encountered major financial difficulties, defaulted, may very likely declare bankruptcy or other financial restructuring, or an active market for the financial asset has disappeared due to financial difficulties.

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Cash equivalents include highly liquid time deposits and commercial paper that can be converted into a specific amount of cash with low risk of value change within 3 months after being acquired. Cash equivalents are used to meet short-term cash commitments.

• C. Investments in equity instruments measured at fair value through other comprehensive income

The Company may make an irreversible decision during initial recognition to measure equity instruments, which are not held for trading and not recognized from mergers and acquisitions, at fair value through other comprehensive income.

Investments in equity instruments measured at fair value through other comprehensive income are measured at fair value, and subsequent changes to fair value are listed in other comprehensive income and accumulated in other equity. When disposing of investments, accumulated gains is directly transferred to retained earnings and not reclassified as income. Dividends from equity instruments measured at fair value through other comprehensive income are recognized in income when the Company is determined to have the right to receive the dividends, unless the dividends clearly represent the recovery of partial investment costs.

• (2) Impairment of financial assets and contract assets

The Company evaluates the impairment loss of financial assets (including accounts receivable) and contract assets at amortized cost using ECL on each balance sheet date.

A loss provision is recognized for lifetime ECL for accounts receivables and contract assets. For other financial assets, whether or not credit risk has significantly increased after the financial asset was recognized is first evaluated. If it has not significantly increased, then a loss provision is recognized for 12-month ECL. If it has significantly increased, then a loss provision is recognized for lifetime ECL.

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ECL is the weighted average credit loss using the risk of default as weights. 12-Month ECL is the ECL from potential default on the financial instrument within 12 months after the reporting date. Lifetime ECL is the ECL from potential default during the expected lifetime of the financial instrument.

For the purpose of internal credit risk management, the Company may deem a financial asset to be in default in the event of any one of the following situations without considering collateral:

• A. There is internal or external information showing that the debtor is no longer able to repay debts.

• B. More than 120 days late, unless there is reasonable information with evidence supporting that it is better to extend the deadline for determining default.

The impairment loss on all financial assets is recognized by lowering the book value of the loss provision.

• (3) Derecognition of financial assets

The Company derecognizes financial assets when the contractual rights to the cash inflow from the financial asset are terminated or when the Company transfers the financial assets with substantially all the risks and rewards of ownership to other enterprises.

When derecognizing a financial asset at amortized cost, the difference between book value and consideration received is recognized in gains or losses. When derecognizing investments in equity instruments at fair value through other comprehensive income, accumulated gains is directly transferred to retained earnings and not reclassified as income.

1. Equity instruments

Equity instruments issued by the Company are recognized at the price amount obtained less the direct flotation costs.

1. Financial liabilities

2. (1) Subsequent measurement

Financial liabilities are measured at amortized cost using the effective interest rate method.

• (2) Derecognition of financial liabilities

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When a financial liability is derecognized, any difference between its carrying amount and the paid consideration (including any transferred non-cash assets or liabilities assumed) is recognized in income or loss.

(XII) Hedge accounting

The Company engages in cash flow hedges using designated hedging tools (including non-derivative tools for avoiding exchange rate risk), and uses cash flow hedges for hedging against exchange rate risks of firm commitments. Gains and losses on the effective portion of designated hedging tools that are cash flow hedges are recognized in other comprehensive income. The ineffective portion is immediately recognized as profit or loss.

When a hedge is recognized as profit or loss, the amount originally recognized in other comprehensive income will be reclassified to profit or loss, and recognized under hedged items in the Statement of Comprehensive Income. However, when expected hedging transactions are recognized as non-financial assets or non-financial liabilities, the amount originally recognized in other comprehensive income will be transferred from equity to the original cost of the non-financial asset or liability.

The Company only extends or suspends hedge accounting when the hedging relationship no longer meets the criteria of hedge accounting. This includes the maturity, sale, termination, or exercise of hedging tools. The amount already recognized in other comprehensive income during the effective period of the hedge is still recognized in equity before the expected transaction occurs. When the expected transaction is no longer expected to occur, the amount originally recognized in other comprehensive income will be immediately recognized in profit or loss.

(XIII) Liability provision

The amount recognized as liability provision gives consideration to the risk and uncertainty of obligations. It represents the best estimate of the cash outlay needed to settle obligations on the balance sheet date. Liability provision is measured at the discounted cash flow required to settle obligations.

1. Onerous contracts of projects

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When the Company expects that unavoidable costs of fulfilling obligations of a construction contract will exceed the economic benefits expected to be obtained from the contract, the present obligation of the project's onerous contract is recognized as a liability provision.

Decommissioning and maintenance reserve

When equipment maintenance reserve is recognized as an expense in the current year according to commercial practices, and there is new information that makes it necessary to revise previous estimates, a change in accounting estimate is made to adjust the profit/loss in the current year. When maintenance costs are paid, the equipment maintenance reserve is first offset, and any shortfall is recognized as an expense in the current year.

(XIV) Revenue recognition

After the Company identifies its contractual obligations with each customer, it allocates the transaction price to each contractual obligation, and then recognizes revenue when each contractual obligation is fulfilled.

1. Sale of goods

2. Sales revenue is recognized when the Company fulfills contractual obligations by transferring goods to the customer (in principle, when the goods are shipped for domestic sales and when the goods are loaded on to the ship for exports).

Sales revenue is measured at the fair value of considerations (after commercial discounts and quantity discounts) agreed to by the Company with customers. For contracts in which the transfer of goods and collection of consideration is less than one year apart, the trading price of its significant financing component is not adjusted.

1. Construction revenue

2. Revenue from construction contracts is gradually recognized by the Company in the construction process. The costs incurred by construction are directly related to the fulfillment of contractual obligations, so the Company estimates progress based on the ratio of actual costs to the estimated total project cost. The Company gradually recognizes contract assets in the construction process, and lists them under accounts receivable when an invoice is issued. If the construction payment

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collected exceeds the amount recognized in revenue, the difference is recognized in contract liabilities. Pursuant to the terms and conditions of contracts, the purpose of construction retainage is to ensure that the Company completes all contractual obligations, and is recognized as a contract asset before the Company completes contract performance.

1. Provision of labor services

Revenue from the provision of labor services according to a contract is recognized according to the progress of contract completion.

(XV) Lease

On the date a contract is formed, the Company evaluates if the contract is (or includes) a lease.

Where the Company is the lessee

Except for low value asset leases and short-term leases, for which lease payments are recognized as expenses on a straight-line basis over the lease tenor, other leases are all recognized as right-of-use assets and lease liabilities from the start date of the lease.

Right-of-use assets are initially measured at cost (including the original amount of lease liabilities), and are subsequently measured at cost less accumulated depreciation and accumulated impairment loss, with adjustments made to the remeasurement of lease liabilities. Right-of-use assets are independently presented in the balance sheet.

Depreciation of right-of-use assets is recognized on a straight-line basis from the start date of the lease until the expiry of its useful life or lease tenor, whichever is earlier.

Lease liabilities (including fixed payments and variable lease payments determined by an index or rate) are initially measured at the present value of lease payments. If the interest rate implicit in a lease is easy to determine, then lease payments will be discounted using the interest rate. If the interest rate is not easy to determine, then the lessee's incremental borrowing rate of interest is used.

In subsequent periods, lease liabilities is measured at amortized cost using the effective interest rate method, and interest expense is recognized over the lease term. If there is a change to the lease tenor or the index or fee rate used to determine lease payments that results in a

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change in future lease payments, the Company will remeasure lease liabilities and adjust corresponding right-of-use assets. However, if the carrying amount of right-of-use assets has been reduced to zero, then the remaining remeasurement amount will be recognized in profit or loss. Lease liabilities are independently presented in the balance sheet.

Where the Company is the lessor

• Proceeds received for an operating lease are recognized as income on a straight-line basis over the lease tenor. All initial and direct costs incurred in relation to the negotiation and arrangement of operating leases are added to the book value of the lease asset, and recognized as gains using the straight-line basis over the lease tenor. Under an operating lease agreement, contingent rent is recognized as gains in the year of occurrence.

• (XVI) Borrowing costs

Borrowing costs that can be directly attributed to the acquisition, construction, or production of qualified assets shall be recognized as a part of asset costs, until almost all necessary activities for the asset to reach its expected state of use or sale.

If a specific loan is used for a temporary investment and obtains investment gains before a qualified capital expenditure occurs, the gains shall be deducted from borrowing costs that qualify for capitalization.

All other borrowing costs are recognized as losses in the year they occur.

(XVII) Employee benefits

1. Short-term employee benefits

2. Short-term employee benefits-related liabilities are measured at the undiscounted amount of the benefits expected to be paid in exchange for employee services.

3. Post-employment benefit

For defined contribution plans, pension contributions made by the Company over the course of employment are listed as expenses; The cost of defined benefits (including service cost, net interest, and number of remeasurement) for defined benefit plans is calculated using the projected unit credit method. Service costs (including service costs in

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the current period) and net interest accrued on net defined benefit liabilities are recognized as employee benefit expenses when they occur. The number of remeasurement (including calculation of income and losses and return on assets of the plans less interest) is recognized in other comprehensive income when it occurs and listed in retained earnings, and is not reclassified to profit or loss.

Net defined benefit liability is the deficit of contributions to defined benefit plans.

(XVIII) Income tax

Income tax expense is the sum of current income tax and deferred income tax.

1. Current income tax

The Company determines current income (loss) according to the regulations enacted by each income tax reporting jurisdiction, and calculates the income tax payable (recoverable) on this basis.

Income tax on undistributed earnings is calculated in accordance with the Income Tax Act and recognized in the year the resolution is adopted by the shareholders' meeting.

An adjustment to the income tax payable in the previous year is listed as the current income tax.

1. Deferred income tax

Deferred income tax is calculated based on the temporary difference between the book value of assets and liabilities from the taxable income that was calculated. Deferred income tax liabilities are generally recognized based on the taxable temporary difference, and deferred income tax assets are recognized when there is likely to be taxable income to offset the temporary difference.

Taxable temporary differences relating to subsidiaries, associated companies and joint ventures are recognized as deferred income tax liabilities, except in cases where the Company is able to control the timing of which temporary differences are reversed, and that such temporary differences are highly unlikely to reverse in the foreseeable future. Deductible temporary differences relating to these investments are recognized as deferred income tax assets only to the extent that sufficient

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taxable income can be earned to offset the temporary differences, and that reversal is expected to occur in the foreseeable future.

The book value of deferred income tax assets is reexamined on each balance sheet date, and the book value is reduced if it is not very likely there will be sufficient taxable income to recover all or a part of the assets. Those that were not recognized as deferred income tax assets are also reexamined on each balance sheet date, and the book value is increased if it is very likely there will be sufficient taxable income to recover all or a part of the assets.

Deferred income tax assets and liabilities are measured using the tax rate in the period in which liabilities are expected to be paid off or assets are expected to be realized. The tax rate is based on the tax rate and tax law that has been enacted or substantially enacted on the balance sheet date. The measurement of deferred income tax liabilities and assets reflects on the tax effects of the ways the Company expects to recover or pay off the book value of its assets or liabilities on the balance sheet date.

3.

Current and deferred income tax

Current and deferred income tax are recognized in profit or loss, except for items that are bound to be recognized under other comprehensive income or directly as other equity items.

• V. Significant Accounting Judgments, Estimates and Main Uncertainty Assumptions

When the Company adopts an accounting policy, management must make judgments, estimates, and assumptions based on historical experience and other factors for information that is difficult to obtain from other sources. Actual results may be different from estimates.

Management will continue to examine estimates and basic assumptions. If the adjustment to estimates only affects the current year, then the adjustment is recognized in the current year. If the adjustment to estimates affects the current period and future periods, then the adjustment is recognized in the current period and future periods.

Estimates and main uncertainty assumptions

Construction contracts

Income and costs of construction contracts are recognized according to the progress of the contract, which is determined based on the number of units that

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have been completed and installed as a percentage of the total number of units that will be completed for the contract or costs that have occurred as a percentage of the estimated total cost. For variable considerations, such as incentives and compensation, agreed to in the contract, the amount is only included in contract revenue when uncertainties are eliminated and it is highly unlikely that the amount included in accumulated revenue will be reversed. Since the estimated total number of units or total cost of a contract and contract items are assessed and determined by management based on the nature of the project, expected contract amount, construction period, construction, and technique, any changes to estimates due to changes in the construction situation may have a material impact on the calculation of progress and construction income/losses.

VI. Cash and cash equivalents

Cash and cash equivalents
		December31,2021		December31,2020
Petty cash and working capital	$	758	$	1,379
Bank check and demand deposits		192,787		216,731
Cash equivalents (Investments within
3 months of its original maturity date)
Commercial papers		419,978		1,030,000
Time deposits		-		200,000
	$	613,523	$	1,448,110
Financial instruments at fair value through		profit or loss
		December31,2021		December31,2020
Current
Compulsory measurement of fair value
through profit or loss
Non-derivative financial assets
Beneficiary certificates	$	204,981	$	50,012
Listed stock in Taiwan		-		16,097
Emerging stock in Taiwan		13,996		-
	$	218,977	$	66,109
Noncurrent
Compulsory measurement of fair value
through profit or loss
Non-derivative financial assets –
Unlisted stock in Taiwan	$	70,880	$	23,202

VII. Financial instruments at fair value through profit or loss

VIII. Financial instruments at fair value through other comprehensive income

December 31, 2021 December 31, 2020

Noncurrent

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IX.	Equity instrument investments Foreign investments – Unlisted stocks $ 132,068 $ 157,720 Accounts receivable and other receivables December31,2021 December31,2020 Accounts receivable (including from related parties) Measured at amortized cost $ 788,921 $ 1,070,660 Other receivables Technical service revenue receivable $ 3,258 $ - Interest receivable 1,098 358 Others 2,004 - $ 6,360 $ 358	157,720
		December31,2020

(I) Accounts receivable

The Company's receivables are measured at amortized cost. The Company carefully evaluates customers it does business with. All customers are companies with good credit and not expected to have major credit risk. The Company continues to monitor the financial position and overall credit exposure of customers, and obtains sufficient guarantee to mitigate the risk of asset loss when necessary.

The Company continuously monitors the collection of accounts receivable to ensure that appropriate action has been taken to recover overdue receivables. Furthermore, the Company will verify the recoverable amount of receivables on the balance sheet date to ensure that unrecoverable receivables already properly listed as impairment losses.

The customer's previous default record, current financial position, and industrial and economic trends are taken into consideration. to assess the risk and probability of credit loss.

If there is evidence that the trading counterparty has severe financial difficulty and the Company cannot reasonably expect to recover the amount, the Company will directly write off the accounts receivable, but will continue to seek to recover the amount, and any amount recovered will be recognized in income.

The Company measures the loss provision for receivables as follows:

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December 31, 2021

							31-60 days		61-365 days		More than
		Not	past due		1-30	days late	late		late		365 days late	Total
Total book value	$		785,978 $			323 $	2,620 $			- $	- $	788,921
Loss provision (lifetime
ECL)
				-		-		-		-	-	-
Amortized cost	$		785,978$			323$	2,620$			- $	- $	788,921
December 31, 2020
		Not	past due		1-30	days late	31-60 days late		61-365 days late		More than 365 days late	Total
Total book value	$	1,069,472 $				661 $		- $	527 $		- $	1,070,660
Loss provision (lifetime
ECL)				-		-		-		-	-	-
Amortized cost	$	1,069,472 $				661 $		- $	527$		- $	1,070,660

(II) Other receivables

The Company estimates the unrecoverable amount based on its historical experience and analysis of current financial position, and allocates a loss provision accordingly.

There was no loss provision balance as at December 31, 2021 and 2020.

X. Inventory

Inventory
		December31,2021		December31,2020
Raw materials	$	4,832	$	5,001
Finished goods		1,382		946
	$	6,214	$	5,947

Inventory-related cost of goods sold amounted to NT$59,953 thousand in 2021 and NT$44,878 thousand in 2020.

XI. Investments recognized under the equity method

		December 31,2021		December 31,2020
Investment subsidiary	$	1,024,778	$	1,064,940
Investment in affiliated enterprises		1,061,187		933,904
	$	2,085,965	$	1,998,844

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Investment subsidiary

Investment subsidiary
December Amount CEC Development Corporation $ 984,625 CEC International Corporation 40,116 China Ecotek India Private Limited 37 China Ecotek Construction Corporation - CEC Holding Company Limited(CHC) - $ 1,024,778	December	31, 2021 December Shareholding % Amount 100 $ 962,623 100 40,462 0.1 38 - 40,740 - 21,077 $ 1,064,940	December	31, 2020 Shareholding % 100 100 0.1 100 100	Notes
					Note 1 Note 2

• Note 1: The Board of Directors adopted the resolution to dissolve China Ecotek Construction Corporation in September 2020, and liquidation was completed in June 2021.

• Note 2: The Board of Directors adopted the resolution to dissolve CHC in April 2021, and liquidation was completed in May 2021.

Investment in affiliated enterprises

			December31,2021		December31,2020
Material affiliated enterprise
	China Steel Machinery	$	535,388	$	490,944
	Corporation (CSMC)
	China Steel Solar Tech Co., Ltd.		279,656		294,735
			815,044		785,679
Immaterial affiliated enterprise			246,143		148,225
		$	1,061,187	$	933,904
(I)	Material affiliated enterprise

Company name CSMC China Steel Solar Tech Co., Ltd.	Nature of business Production and sales of machinery and equipment, such as steel equipment, railway vehicles, transportation equipment, and power generators Solar power generation	Principal place of business Kaohsiung City Kaohsiung City	Shareholding and voting rights (%)	Shareholding and voting rights (%)
			December 31, 2021 26.02 20	December 31, 2020
				26.02 20

The financial information summarized below was prepared based on the consolidated financial statements of affiliated enterprises, which were prepared

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according to the IFRSs, and already reflects on adjustments made under the equity method.

CSMC

	CSMC
(II)	December 31,2021 December 31,2020 Current assets $ 4,052,379 $ 4,042,037 Noncurrent assets 1,417,579 1,052,958 Current liabilities (3,000,076) (3,038,066) Noncurrent liabilities (412,281) (170,134) Equity $ 2,057,601 $ 1,886,795 The Company's shareholding ratio (%) 26.02 26.02 Equity interests of the Company (carrying amount of investment) $ 535,388 $ 490,944 2021 2020 Operating revenue $ 6,002,090 $ 6,598,061 Net profit for the year $ 392,308 $ 239,750 Other comprehensive income (9,109) (1,839) Total comprehensive income $ 383,199 $ 237,911 China Steel Solar Tech Co., Ltd. December 31,2021 December 31,2020 Current assets $ 98,219 $ 303,574 Noncurrent assets 3,920,985 4,094,952 Current liabilities (692,403) (766,694) Noncurrent liabilities (1,421,350) (1,718,627) Equity $ 1,905,451 $ 1,913,205 The Company's shareholding ratio (%) 20 20 Equity interests of the Company $ 381,089 $ 382,641 Unrealized gains from downstream transactions (101,433) (87,906) Book value of investment by the Company $ 279,656 $ 294,735 2021 2020 Operating revenue $ 457,875 $ 480,149 Net profit for the year $ 128,163 $ 153,194 Other comprehensive income 1,859 (268) Total comprehensive income $ 130,022 $ 152,926 Summary of immaterial affiliated enterprises 2021 2020	December 31,2020
		2020

Share of the Company

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Net profit for the year	$	12,407	$	1,873
Other comprehensive income		27,351		(17,566)
Total comprehensive income	$	39,758	$	(15,693)

The CSC Group, which the Company is a member of, has 20% and above of voting rights of the investees above. Hence, the equity method is used for valuation.

Please refer to Table 6 Information on Investees and Table 7 Information on Investments in China for the nature of business, principal place of business, and country of registration of the investees above.

XII. Hedging financial assets and other financial assets

		December 31, 2021		December 31, 2020
Hedgingfinancial assets - current
Time deposits	$	513,134	$	527,285
Commercial papers		192,033		37,375
Demand deposits		43,350		103,493
	$	748,517	$	668,153

The Company purchases foreign currency bank deposits to pay for materials purchased from other countries for construction projects, in order to lower the cash flow risk generated by exchange rate fluctuations. Please refer to Note 28 for details.

XIII.	December 31, 2021 December 31, 2020 Other financial assets – current Time deposits more than 3 months from its original maturity date $ 234,000 $ 136,181 Restricted bank deposits (Note 30) 250,707 - Cash in banks for projects - 32,673 $ 484,707 $ 168,854 Other current assets December31,2021 December31,2020 Guarantee deposits paid $ 84,092 $ 46,626 Advance payments 26,302 11,930 Temporary and stand-in payments 22,988 14,766 $ 133,382 $ 73,322	December 31, 2020

XIV. Joint control operations

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Starting in March 2004, the Company and a foreign contractor were contracted to jointly operate and maintain water treatment equipment of Chengcing Lake water treatment plant for a 15-year period until February 2019. The Company obtained a new contract to February 2022, and the contract performance period was extended to February 2025 according to the agreement in the contract. The parties jointly perform operation and maintenance work according to the contract, and assets/liabilities and income/costs are shared by the Company (51%) and foreign contractor (49%). A bank account for working capital was opened in the Company's name. Items handled by the contractor include:

		December 31,2021		December 31,2020
Cash in banks	$	107,387	$	71,006
Temporary receipts (funds collected on behalf of the foreign company)		51,801		34,457

As of December 31, 2021 and 2020, the bank has provided Taiwan Water Corporation with a performance guarantee of NT$51,000 thousand.

The Company recognized the following amounts of assets, liabilities, revenue, and costs of joint operations in the financial statements:

(1) Assets
				December31,2021		December31,2020
Cash in banks			$	54,767	$	36,213
(2) Liabilities
				December 31,2021		December 31,2020
Liability provision			$	16,278	$	11,468
(including	current	and
noncurrent)
Other payables	(Note 18)			14,844		7,624
			$	31,122	$	19,092
(3) Revenues and costs
				2021		2020
Operating revenue			$	145,618	$	143,702
Operating costs				129,543		114,414
Gross profit			$	16,075	$	29,288

XV. Property, plant and equipment

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2021

2021
									Construction
									in progress
									and
					Machinery				equipment
					and	Transportation	Leasehold	Other	under
		Land		Buildings	equipment	equipment	improvements	facilities	acceptance	Total
Cost
Balance at January 1, 2021	$	37,454 $		96,469 $	99,982 $	5,865 $	63,113 $	43,320 $	- $ 346,203
Addition		491,694		-	19,122	1,234	-	5,518	500	518,068
Disposal			-	-	(1,127)	(432)	-	(6,170)	-	(7,729)
Balance at December 31, 2021	$	529,148 $		96,469 $	117,977 $	6,667 $	63,113 $	42,668 $	500 $ 856,542
Accumulated depreciation
Balance at January 1, 2021	$		- $	46,445 $	71,813 $	4,980 $	48,714 $	36,167 $	- $ 208,119
Depreciation expense			-	2,118	6,485	492	6,681	4,249	-	20,025
Disposal			-	-	(1,127)	(432)	-	(6,167)	-	(7,726)
Balance at December 31, 2021	$		- $	48,563 $	77,171 $	5,040 $	55,395 $	34,249 $	- $ 220,418
Net amount at December 31, 2021	$	529,148 $		47,906 $	40,806 $	1,627 $	7,718 $	8,419 $	500 $ 636,124

2020

2020
								Machinery				Construction
								and	Transportation	Leasehold	Other	in progress
					Land		Buildings	equipment	equipment	improvements	facilities	and	Total
C	o	s	t
Balance at	January 1,	2020		$	37,454 $		96,469 $	93,891 $	6,013 $	63,113 $	40,735 $	- $ 337,675
Addition						-	-	8,866	-	-	5,529	-	14,395
Disposal						-	-	(2,775)	(148)	-	(2,944)	-	(5,867)
Balance at	December	31, 2020		$	37,454 $		96,469 $	99,982 $	5,865 $	63,113 $	43,320 $	- $ 346,203
Accumulated depreciation
Balance at	January 1,	2020		$		- $	44,328 $	68,941 $	4,714 $	41,717 $	35,121 $	- $ 194,821
Depreciation expense						-	2,117	5,647	414	6,997	3,985	-	19,160
Disposal						-	-	(2,775)	(148)	-	(2,939)	-	(5,862)
Balance at	December	31, 2020		$		- $	46,445 $	71,813 $	4,980 $	48,714 $	36,167 $	- $ 208,119
Net amount at December 31, 2020				$	37,454 $		50,024 $	28,169 $	885 $	14,399 $	7,153 $	- $ 138,084

Depreciation of property, plant and equipment is recognized on a straight-line basis according to the following useful life in years:

Buildings
Main building	35-55 years
Renovation	10 years
Machinery and equipment	3-10 years
Transportation equipment	3-10 years
Leasehold improvements	4-10 years
Other facilities	3-10 years

XVI. Lease agreement

(I) Right-of-use assets

					December	31,2021		December31,2020
Book	value	of	right-of-use
assets
	Land			$		16,916	$	3,013
	Buildings					72,503		71,714

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				December31,2021		December31,2020
Machinery	and equipment			1,429		610
Transportation equipment				9,931		10,531
			$	100,779	$	85,868
				2021		2020
Addition of right-of-use assets			$	52,191	$	39,052
Depreciation	expense	of
right-of-use assets
Land			$	6,396	$	6,025
Buildings				17,312		16,543
Machinery	and equipment			456		1,186
Transportation equipment				7,650		7,067
			$	31,814	$	30,821

Except for the depreciation added and recognized above, there was no significant sub-lease and impairment of the Company's right-of-use assets in 2021 and 2020.

• (II) Lease liabilities

Lease liabilities
		December31,2021		December31,2020
Book value of lease liabilities
Current	$	35,301	$	27,853
Noncurrent	$	64,212	$	56,475

The annual discount rate (%) of lease liabilities is as follows:

Land Buildings Machinery and equipment Transportation equipment	December 31,2021 0.5625 0.5649~1.2742 0.5707 0.5641~0.9220	December 31,2020
		0.9233 0.9233-1.2742 0.8596-0.9233 0.5873-0.9233

• (III) Important lease activities and clauses

The Company leased factories, construction land, and offices for operations from non-related parties Pwu Diing Enterprise Co., Ltd., You Cheng Enterprise Co., Ltd., Port of Taichung, and Jye Chi Corporation, and the parent company CSC with a lease period of 3-10 years.

• (IV) Other lease information

Other lease information
		2021			2020
Short-term and lease expenses
of low value assets	$		7,030	$		11,243
Variable lease payments and
expenses not included in lease
liabilities	$		1,974	$		-

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Total cash outflow from leases

$

$ (43,199)

(41,318)

The Company chooses not to recognize right-of-use assets and lease liabilities from short-term leases and low value asset leases of buildings and transportation equipment that the Company is exempted from recognizing.

XVII. Accounts payable

Accounts payable (including related parties) of the Company are all due to operations, and the Company does not provide collateral to creditors for accounts payable (including related parties).

The Company established a financial risk management policy to ensure all payables are repaid within the credit period agreed to in advance, so interest does not need to be added.

Accounts payable include construction retainage in construction contracts. Interest is not accrued on construction retainage, and is paid after the retention period of the construction contract ends. The retention period is the normal business cycle of the Company, and is usually longer than 1 year.

XVIII. Other liabilities

XVIII.	Other liabilities
XIX.	December 31, 2021 December 31, 2020 C u r r e n t Other payables Wages and bonuses payable $ 444,491 $ 419,177 Employee bonuses and directors' remuneration payable 24,198 9,192 Equipment operation and maintenance expenses (Note 14) 14,844 7,624 Business tax payable 13,675 34,826 Others 31,573 27,548 $ 528,781 $ 498,367 Other current liabilities Temporary receipts $ 53,714 $ 36,397 Collections for third parties 21,416 19,972 Guarantee deposits received 17,948 13,717 $ 93,078 $ 70,086 Liability provision December 31, 2021 December 31, 2020	December 31, 2020
		December 31, 2020

Current

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		December 31, 2021		December 31, 2020
Onerous contracts of projects	$	23,638	$	63,730
Decommissioning and maintenance
reserve		29,612		39,998
	$	53,250	$	103,728
Noncurrent
Decommissioning and maintenance
reserve	$	23,746	$	21,649

		Onerous	Decommissioning
		contracts of	and maintenance
		projects	reserve	Total
Balance at January 1, 2021	$	63,730 $	61,647 $	125,377
Allocated in the current year		5,332	27,950	33,282
Paid in the current year		(45,424)	(36,239)	(81,663)
Balance at December 31, 2021	$	23,638 $	53,358 $	76,996
Balance at January 1, 2020	$	59,125 $	76,906 $	136,031
Allocated in the current year		59,655	15,199	74,854
Paid in the current year		(55,050)	(30,458)	(85,508)
Balance at December 31, 2020	$	63,730 $	61,647 $	125,377

XX. Post-employment benefits plan

• (I) Defined contribution plan

The Company uses the defined contribution plan managed by the government according to the Labor Pension Act, and contributes 6% of employees' monthly salaries to their individual pension account at the Bureau of Labor Insurance.

• (II) Defined benefit plan

The pension system implemented by the Company according to the Labor Standards Act of the R.O.C. is the defined benefit plan managed by the government. Payment of employee pensions is calculated based on the employee's years of service and 6-month average wage before the approved date of retirement. The Company makes monthly contributions equal to a certain percentage of employees' monthly salaries and wages to a dedicated account at the Bank of Taiwan under the name of the Supervisory Committee of Workers' Retirement Reserve Fund. Before the end of each year, if the balance in the dedicated account is insufficient to pay the retirement benefits of

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employees who are eligible for retirement in the following year, the deficit will be funded in one appropriation before the end of March in the following year. The dedicated account is managed by the Bureau of Labor Funds, Ministry of Labor. The Company does not have any right to influence its investment management strategy.

The defined benefit plan amounts listed in the standalone balance sheet is as follows:

follows:
		December 31,2021		December 31,2020
Present value of defined
benefit liabilities	$	618,862	$	606,408
Fair value of assets of the
plans		(355,199)		(244,422)
Net defined benefit liability	$	263,663	$	361,986

Changes in net defined benefit liabilities are as follows:

				Present value
				of defined	Fair value of
				benefit	assets of the		Net defined
				liabilities	plans		benefit liability
January 1, 2021			$	606,408$	(244,422)$		361,986
Service cost
Service cost	of	the
current year				12,841		-	12,841
Interest	expense
(income)				2,965	(1,190)		1,775
Listed in income				15,806	(1,190)		14,616
Number of remeasurement
Return on assets of		the
plans (except		for
amounts included in		net
interest)				-	(3,354)		(3,354)
Actuarial gains		–
Changes		in
demographic
assumptions				(673)		-	(673)
Actuarial losses		–
Experience adjustments				17,423		-	17,423
Recognized in	other
comprehensive	income			16,750	(3,354)		13,396
Benefits payment				(20,102)	17,929		(2,173)
Employer contributions				-	(124,162)		(124,162)
December 31, 2021			$	618,862 $	(355,199)$		263,663
January 1, 2020			$	558,249$	(227,390)$		330,859
Service cost
Service cost	of	the
current year				11,476		-	11,476
Interest	expense
(income)				4,160	(1,731)		2,429

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		Present value
		of defined		Fair value of
		benefit		assets	of the		Net defined
		liabilities		plans			benefit liability
Listed in income		15,636			(1,731)		13,905
Number of remeasurement
Return on assets of	the
plans (except	for
amounts included in	net
interest)			-		(7,121)		(7,121)
Actuarial loss	–
Changes	in
demographic
assumptions		937				-	937
Actuarial loss	–
Changes in financial
assumption		15,577				-	15,577
Actuarial losses	–
Experience adjustments		23,510				-	23,510
Recognized in other
comprehensive income		40,024			(7,121)		32,903
Benefits payment		(7,501)			7,401		(100)
Employer contributions			-	(15,581)			(15,581)
December 31, 2020	$	606,408$		(244,422)$			361,986
Summary of defined benefit		plans recognized in income and				loss	by function:
		2021					2020
Summary by function
Operating costs		$		8,920	$		7,777
Selling expenses				507			475
Administrative expenses				5,108			5,637
R&D expenses				81			16
		$		14,616	$		13,905

The Company is exposed to the following risks due to the pension system of the Labor Standards Act:

1. Investment risks

The Bureau of Labor Funds (BLF), Ministry of Labor (MOL) invests the labor pension fund in domestic (overseas) equity securities, bonds, and bank deposits at its own discretion and through mandated investments. However, the distributable amount of assets may not be lower than gains calculated using the interest rate for 2-year time deposits at local banks.

1. Interest rate risk

A decrease in government bond interest rate will cause the present value of defined benefit liabilities to increase. However, the return on assets of

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defined benefit plans will also increase, and the effect of the two on defined benefit liabilities will offset each other.

1. Salary risk

Calculation of the present value of defined benefit liabilities takes into consideration the future salaries of members of defined benefit plans. Hence, an increase in salaries of members of defined benefit plans will increase the present value of defined benefit liabilities.

The present value of defined benefit liabilities of the Company is calculated by a qualified actuary, and major assumptions on the measurement date are as follows:

Discount rate (%) Estimated salary growth ratio (%) Mortality rate Employee turnover rate (%) Disability rate	December31,2021 December 31, 2020 0.500 0.500 2.750 2.750 Sixth Taiwan Standard Ordinary Experience Mortality Table Fifth Taiwan Standard Ordinary Experience Mortality Table 0-4.0 0-4.0 10% of mortality rate 10% of mortality rate

If a reasonable change to a significant actuarial assumption occurs while all other assumptions remain the same, the amount of increase (decrease) in the present value of defined benefit liabilities is as follows:

		December 31,2021		December 31,2020
Discount rate
Increased 0.25%	$	(15,450)	$	(15,590)
Decreased 0.25%	$	16,016	$	16,188
Estimated salary growth ratio
Increased 0.25%	$	15,411	$	15,572
Decreased 0.25%	$	(14,950)	$	(15,081)

Since actuarial assumptions may be related, it is unlikely that only one assumption will change at a time, so the sensitivity analysis above might not reflect on actual changes in present value of defined benefit liabilities.

		December	31,2021		December31,2020
Amount expected to be
allocated within 1 year	$		14,000	$	14,000
Average time to maturity of
defined benefit liabilities		9.9 years			10.1 years

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XXI. Asset and liability maturity analysis

Assets and liabilities of the Company related to environmental protection projects are divided into current and noncurrent based on business cycle. Accounts are listed by amount expected to be collected or paid within 1 year or longer than 1 year after the balance sheet date:

balance sheet date:
		Within 1 year		After 1 year	Total
December 31, 2021
Assets
Current contract assets	$	410,370	$	208,055 $	618,425
Accounts receivable
(including from related
parties)		788,921		-	788,921
Restricted cash in banks
(listed under other financial
assets)		50,000		200,707	250,707
Guarantee deposits paid (listed
under other current assets)		74,711		9,381	84,092
	$	1,324,002	$	418,143$	1,742,145
Liabilities
Current contract liabilities	$	1,499,632	$	205,788 $	1,705,420
Accounts payable (including
related parties)		665,964		32,626	698,590
Liability provision – current		49,184		4,066	53,250
Guarantee deposits received
(listed under other current
liabilities)		12,445		5,503	17,948
	$	2,227,225	$	247,983$	2,475,208
		Within 1year		After 1year	Total
December 31,2020
Assets
Current contract assets	$	478,623	$	89,846 $	568,469
Accounts receivable (including
from related parties)		1,070,660		-	1,070,660
Project cash in banks (listed
under other financial assets)		32,673		-	32,673
Guarantee deposits paid (listed
under other current assets)		32,100		14,526	46,626
	$	1,614,056	$	104,372 $	1,718,428
Liabilities
Current contract liabilities	$	1,565,077	$	72,079 $	1,637,156
Accounts payable (including
related parties)		814,460		37,867	852,327
Liability provision – current		84,456		19,272	103,728
Guarantee deposits received		653		13,064	13,717

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(listed under other current liabilities)

$ 2,464,646 $ 142,282 $ 2,606,928

XXII. Equity

(I) Capital – common stock

				December 31,2021		December 31,2020
Authorized shares	(thousand
shares)				220,000		220,000
Authorized share capital			$	2,200,000	$	2,200,000
Current outstanding		shares
(thousand shares)				123,743		123,743
Issued capital			$	1,237,426	$	1,237,426

The Company's common shares have a face value of NT$10. Each share is entitled to one voting right and the right to receive dividends.

(II) Capital surplus

Capital surplus
		December31,2021		December31,2020
May be used to make up for
losses, distributed in cash, or
capitalized. (Note)
Issue premium	$	628,364	$	628,364
May only be used to
compensate for losses
Gains on the disposal of fixed assets		10		10
	$	628,374	$	628,374

Note: Capital surplus may be used to offset losses, and may also use be used to distribute cash dividends or capitalized when the company does not have any losses. However, capitalization of capital surplus is limited to a certain percentage of paid-in capital each year.

• (III) Retained earnings and dividend policy

Pursuant to the Articles of Incorporation, if there is a profit after year-end closing, after compensating for losses of previous years, it shall be distributed in the following order:

1. Appropriate 10% as the legal reserve, until the aggregate amount has reached the Company's paid-in capital.

2. Set aside or reverse a special reserve depending on operating needs and regulatory requirements.

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1. Where there are still distributable earnings, the board of directors shall then submit an earnings distribution proposal to the shareholders' meeting for approval of the distribution thereof.

The Company is in a high-tech engineering market with stable growth and also develops diverse strategies at the same time. The Company also expands the business operating foundation in the development of investment plans, including environmental protection and energy etc. During the establishment of

the proposal for distribution of earnings by the board of directors, it is necessary to consider the stability of dividends. Except when there is need for capital, the earnings distributed each year shall account for more than 50 percent of the distributable earnings, and where the shareholders' cash dividend shall not be less than 10 percent of the shareholders' dividend.

The legal reserve may be used to offset losses. When the Company does not have any losses, the amount of legal reserve that surpasses 25% of paid-in capital may be capitalized and may also be distributed in cash.

The Company passed the 2020 and 2019 earnings distribution below in the annual general meeting in August 2021 and June 2020, respectively:

				Dividends per	share
		Distribution of	earnings	(NTD)
		2020	2019	2020	2019
Legal reserve	$	17,072 $	13,535
Special reserve		27,156	31,875
Cash dividends		167,053	148,491$	1.35 $	1.2
	$	211,281 $	193,901

The Company passed the 2021 earnings distribution below in the Board meeting in February 2022:

meeting in February 2022:
Legal reserve Reversal of special reserve Cash dividends	Dividend distribution proposal $ 39,760 (39,172) 321,731 $ 322,319	Dividends per share (NTD)
		$ 2.6

The 2021 dividend distribution proposal will be resolved on in the annual general meeting in June 2022.

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(IV) Other equity interests

1. Exchange differences arising from the translation of the financial statements of foreign operations

			2021			2020
	Opening balance	$	(156,349)		$	(129,534)
	Generated in the current year
	Share of subsidiaries and
	affiliated enterprises
	recognized under the
	equity method			65,884		(33,142)
	Income tax on translation
	difference of subsidiaries
	and affiliated enterprises
	recognized under the
	equity method		(13,165)			6,327
	Other comprehensive income
	in the current year			52,719		(26,815)
	Closing balance	$	(103,630)		$	(156,349)
2.	Unrealized gains (losses) from financial			assets	measured at fair value
	through other comprehensive	income
			2021			2020
	Opening balance	$		76,397	$	79,260
	Generated in the current year
	Unrealized gains – Equity
	instruments		(25,652)			19,052
	Share of affiliated
	enterprises recognized
	under the equity method			27,775		(17,443)
	Income tax on unrealized
	gains			5,130		(3,689)
	Other comprehensive income
	in the current year			7,253		(2,080)
	Accumulated profits/losses
	from disposal of equity
	instruments transferred to
	retained earnings		(2,806)			(783)
	Closing balance	$		80,844	$	76,397
3.	Profit/loss from hedging instruments
			2021			2020
	Opening balance	$	(15,859)		$	(18,381)
	Generated in the current year
	Profit/loss from changes
	in fair value of hedging			1,358		8,445

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		2021		2020
tools – Exchange rate risk
Share of affiliated
enterprises recognized
under the equity method		(4,103)		2,023
Income tax on profit/loss
from changes in fair
value of hedging tools		(272)		(1,689)
Reclassification
adjustments
Profit/loss from changes
in fair value of hedging
tools – Exchange rate risk		(18,721)		(7,821)
Income tax on profit/loss
from changes in fair
value of hedging tools		3,744		1,564
Other comprehensive income
in the current year		(17,994)		2,522
Closing balance	$	(33,853)	$	(15,859)

XXIII. Revenues

The Company's operating revenues on the Statement of Comprehensive Income are all from contracts with customers, and have been divided according to economic factors.

(I) Contract balance

			December	31,	December 31,		January 1,
			2021		2020		2020
Accounts	receivable
(including	from related
parties)		$	788,921 $		1,070,660$		1,209,425
Current contract assets
Construction contracts		$	618,425$		568,469$		667,919
Current contract liabilities
Construction contracts		$	1,705,420 $		1,637,156 $		973,650
Sales	contracts			96		-	-
		$	1,705,516$		1,637,156$		973,650

Changes to contract assets and contract liabilities are mainly from the difference between the time contractual obligations are fulfilled and the customer makes payment.

Amounts of contract liabilities at the beginning of the year and contractual obligations fulfilled in the previous period recognized as income in the current year are as follows:

==> picture [400 x 56] intentionally omitted <==

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(II) Customer contracts not yet fully completed

As of December 31, 2021 and 2020, the total transaction price of contract performance obligations not yet fulfilled was NT$15,129,011 thousand and NT$8,652,941 thousand, respectively. The Company will gradually recognize revenue as construction is completed and contractual obligations are fulfilled. Revenue from some contracts is expected to be gradually recognized before the end of December 2026.

XXIV. Pre-tax profit

Pre-tax profit includes the following items:

(I)	Interest income
			2021			2020
	Cash in banks		$	3,831	$	5,469
	Others			2,011		3,216
			$	5,842	$	8,685
(II)	Other income
			2021			2020
	Dividend income		$	26,400	$	23,360
	Others			1,999		791
			$	28,399	$	24,151
(III)	Other profits and losses
			2021			2020
	Gains on financial assets and
	liabilities at fair value through
	profit or loss		$	17,234	$	935
	Net foreign	exchange
	gains/losses			(3,396)		(4,668)
	Others			(110)		(89)
			$	13,728	$	(3,822)
	The net foreign exchange gains/losses		above includes:
			2021			2020
	Total foreign exchange gains		$	764	$	11,404
	Total foreign exchange losses			(4,160)		(16,072)
	Net gain/loss		$	(3,396)	$	(4,668)
(IV)	Financial costs
			2021			2020
	Interest on lease liabilities		$	824	$	983
	Interest on loans from related
	parties (Note 29)			-		781
	Others			690		2
			$	1,514	$	1,766
(V)	Depreciation and amortization

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			2021		2020
	Property, plant and equipment	$	20,025	$	19,160
	Right-of-use assets		31,814		30,821
	Intangible assets		3,545		4,696
		$	55,384	$	54,677
	Summary of depreciation by
	function
	Operating costs	$	21,985	$	20,725
	Operating expenses		29,854		29,256
		$	51,839	$	49,981
	Summary of amortization by
	function
	Operating expenses	$	3,545	$	4,696
(VI)	Employee benefit expenses
			2021		2020
	Short-term employee benefits
	Salary	$	1,201,381	$	1,112,152
	Labor and health insurance		96,145		88,077
	Others		19,985		24,220
			1,317,511		1,224,449
	Post-employment benefit (Note
	20)
	Defined contribution plan		40,631		38,661
	Defined benefit plan		14,616		13,905
			55,247		52,566
	Employee benefit expenses	$	1,372,758	$	1,277,015
	Summary by function
	Operating costs	$	1,057,844	$	968,433
	Operating expenses		314,914		308,582
		$	1,372,758	$	1,277,015

(VII) Employee bonuses and directors' remuneration

The Articles of Incorporation stipulate that no less than 0.1% of pre-tax profit before distribution of employee bonuses and directors' remuneration shall be allocated as employee bonuses, and no more than 1% may be allocated as directors' remuneration. The Board of Directors adopted the following resolutions

in February 2022 and 2021 on employee bonuses and directors' remuneration in 2021 and 2020 (all distributed in cash):

		2021		2020
Employee bonuses	$	20,165	$	7,660
Directors'
remuneration		4,033		1,532

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Any changes to amounts after the standalone financial statements are passed and announced will be handled as changes to accounting estimates, and will be adjusted and recognized in the following year.

The amount of employee bonuses and directors' remuneration approved by the

Board of Directors in February 2021 and March 2020 and the amounts recognized in the 2020 and 2019 financial statements are as follows:

		2020	2020	2019	2019
		Employee	Directors'	Employee	Directors'
		bonuses	remuneration	bonuses	remuneration
Amount to be
distributed according
to the Board of
Directors resolution
(distributed in cash)	$	7,660$	1,532 $	4,072 $	814
Amount recognized in
standalone financial
statements	$	7,660$	1,532 $	4,115$	823

The actual amount distributed in 2019 was different from the amount recognized in the financial statements, and the difference was adjusted into the income/loss

in 2020.

For information on Board resolutions relating to employee bonuses and directors' remuneration, please go to the Market Observation Post System of the Taiwan Stock Exchange.

XXV. Income tax

• (I) Income tax recognized in profit or loss

Main income tax expenses are as follows:

		2021			2020
Income tax in the current year
Generated in the current
year	$		-	$		12,737
Adjustments in the
previous year			(562)			5,051
			(562)			17,788
Deferred income tax
Generated in the current
year			62,525			10,009
	$		61,963	$		27,797

Adjustments to accounting income and income tax expense in the current year are as follows:

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(II) (III) (IV)	2021 2020 Pre-tax profit $ 465,843 $ 225,232 Income tax expense on pre-tax profit calculated at the statutory tax rate $ 93,168 $ 45,046 Non-taxable income (30,643) (22,300) Adjustments in the previous year (562) 5,051 $ 61,963 $ 27,797 Income tax gains (expenses) recognized in other comprehensive income 2021 2020 Deferred income tax Remeasurements of the net defined benefit $ 2,680 $ 6,581 Investments in equity instruments measured at fair value through other comprehensive income 5,130 (3,689) Share of other comprehensive income of subsidiaries and affiliated enterprise recognized under the equity method (13,165) 6,327 Profit/loss from hedging instruments 3,472 (125) $ (1,883) $ 9,094 Current income tax assets and liabilities December31,2021 December31,2020 Current income tax assets Tax refunds receivable $ 8,495 $ 1,436 Current income tax liabilities Income tax payable $ - $ 3,202 Deferred income tax assets and liabilities Changes in deferred income tax assets and liabilities are as follows: 2021 Opening balance Listed in income Recognized in other comprehensive income Closing balance Deferred income tax assets Temporary difference Defined benefit plan $ 40,435 $ (22,344) $ 2,680 $ 20,771 Liability provision 8,335 (461) - 7,874 Book-tax difference of 12,792 (8,086) - 4,706	2020

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2021

2021
						Recognized in
						other
		Opening		Listed in		comprehensive	Closing
		balance		income		income	balance
Deferredincome taxassets
Temporary difference
construction revenues and
costs
Unrealized sales margin		17,581		2,705		-	20,286
Foreign investment losses		2,372		(2,372)		-	-
Currency translation
difference of foreign
operations		38,363			-	(13,165)	25,198
Losses carried forward			-	3,331		-	3,331
Others		5,998		(1,288)		3,472	8,182
	$	125,876$		(28,515)$		(7,013)$	90,348
Deferredincome tax liabilities
Temporary difference
Financial assets at fair
value through other
comprehensive income	$	28,794 $			- $	(5,130) $	23,664
Foreign investment gains			-	34,010		-	34,010
	$	28,794 $		34,010$		(5,130)$	57,674
2020
						Recognized in
						other
		Opening		Listed in		comprehensiv	Closing
		balance		income		e income	balance
Deferred income tax assets
Temporary difference
Defined benefit plan	$	34,209 $		(355) $		6,581 $	40,435
Liability provision		10,565		(2,230)		-	8,335
Book-tax difference of
construction revenues and
costs		11,765		1,027		-	12,792
Unrealized sales margin		14,704		2,877		-	17,581
Foreign investment losses		11,148		(8,776)		-	2,372
Currency translation
difference of foreign
operations		32,036			-	6,327	38,363
Others		8,675		(2,552)		(125)	5,998
	$	123,102 $		(10,009)$		12,783$	125,876
Deferred income tax liabilities
Temporary difference
Financial assets at fair
value through other
comprehensive income	$	25,105$			- $	3,689$	28,794

Other temporary differences above are mainly temporary differences between

cash flow hedges and net amount of unrealized foreign exchange gain/loss.

(V) Information on unused losses carried forward

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As of December 31, 2021, information on losses carried forward is as follows:

Unused balance $ 16,654	Final year for the carry forward
	2031

(VI) Approval of income tax

The Company's profit-seeking enterprise income tax returns up to 2019 have been approved by the tax authority.

XXVI. Earnings per share

Earnings and weighted average number of ordinary shares used to calculate EPS are as follows:

follows:
Numerator–Net profit in	the
current year
			2021		2020
Net profit for the year		$	403,880	$	197,435
Denominator–Number	of
shares
					Unit: thousand
					shares
			2021		2020
Weighted average number	of
ordinary shares used	to
calculate basic EPS			123,743		123,743
Dilutive potential ordinary
shares from employee bonuses			536		251
Weighted average number ordinary shares used	of to
calculate diluted EPS			124,279		123,994

If the Company choses to distribute employee bonuses in shares or cash, then it is assumed that all distribution will be in shares, which will dilute ordinary shares, and the diluted EPS is calculated based on the weighted-average number of ordinary shares

outstanding. When calculating the diluted EPS before deciding to distribute employee

bonuses in the following year, the potential dilution of ordinary shares will continue to be taken into consideration.

XXVII. Capital risk management

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The Company engages in capital management to ensure that it can maximize return for shareholders by optimizing the balance of liabilities and equity, under the premise that it is able to continue as a going concern.

The Company's capital structure consists of net liabilities (i.e., loans less cash and cash equivalents) and equity (i.e., share capital, capital surplus, retained earnings, and other equity interests). The Company is not required to comply with other external capital related regulations.

XXVIII. Financial instruments

• (I) Information on fair value

• Information on fair value – Financial instruments measured at fair value on a recurring basis

December 31, 2021

December 31, 2021
		L e v e l 1	L e v e l 2 L e v e l 3		T o t a l
Financial assets at fair value through
profit or loss
Beneficiary certificates	$	204,981 $	- $	- $	204,981
Emerging stock in Taiwan		-	-	13,996	13,996
Unlisted stock in Taiwan		-	-	70,880	70,880
	$	204,981 $	- $	84,876$	289,857
Financial assets at fair value through
othercomprehensiveincome
Unlisted stock overseas	$	- $	- $	132,068$	132,068
December31,2020
		L eve l 1	L eve l 2 L eve l3		T o t a l
Financial assets at fair value through
profit or loss
Beneficiary certificates	$	50,012 $	- $	- $	50,012
Listed stock in Taiwan		16,097	-	-	16,097
		Le v el 1	Le v el 2 Le v el3		T o t a l
Unlisted stock in Taiwan		-	-	23,202	23,202
	$	66,109$	- $	23,202 $	89,311
Financial assets at fair value through
othercomprehensiveincome
Unlisted stock overseas	$	- $	- $	157,720$	157,720

There was no transfer of level 1 and level 2 fair value measurements in 2021 and 2020.

1. Financial assets are adjusted at level 3 fair value measurement.

2021

Financial assets

Financial assets Financial assets at fair value at fair value Total

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				through profit	through other
				or loss	comprehensive
					income
Opening balance			$	23,202 $	157,720	$	180,922
Purchase				56,100	-		56,100
Disposal				(2,623)	-		(2,623)
Listed in income				8,197	-		8,197
Recognized	in	other
comprehensive income				-	(25,652)		(25,652)
Closing balance			$	84,876$	132,068	$	216,944
Other unrealized gains in
the current year			$	8,197		$	8,197
2020
					Financial assets
				Financial assets	at fair value
				at fair value	through other
				through profit	comprehensive
Financial	assets			or loss	income		Total
Opening balance			$	22,424 $	139,272	$	161,696
Listed in income				778	-		778
Recognized	in	other
comprehensive income				-	18,448		18,448
Closing balance			$	23,202 $	157,720	$	180,922
Other unrealized gains in
the current year			$	778		$	778

1. Valuation technique and input values for level 3 fair value measurement

2. (1) The fair value of emerging stock is estimated based on its closing price and taking into consideration its liquidity.

3. (2) The fair value of domestic unlisted stock is estimated based on the most recent net value of the investee or transaction price. The fair value of foreign unlisted stocks is estimated using the market approach.

4. (II) Financial instruments by category

		December31,2021		December31,2020
F i n a n c i a l a s s e t s
Financial assets at fair value
through profit or loss	$	289,857	$	89,311
Hedging financial assets		748,517		668,153
Financial assets at amortized
cost (Note 1)		1,983,694		2,741,485
Financial assets at fair value
through other comprehensive
income		132,068		157,720
F i n a n c i a l l i a b i l i t i e s
Measured at amortized cost
(Note 2)		1,245,319		1,364,411

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• Note 1: The balance includes cash and cash equivalents, accounts receivable (including related parties), other receivables, other financial assets, refundable deposits (the current portion is recognized in other current assets), and other financial assets at amortized cost.

• Note 2: The balance includes accounts payable (including related parties), other payables, and guarantee deposits received (current is listed under other current liabilities), and other financial liabilities at amortized cost.

• (III) The purpose and policy of financial risk management The Company's main financial instruments include financial assets for hedging, accounts receivable, equity investments, other financial assets, accounts payable, and lease liabilities. The financial management department provides services to sales units, coordinates operations in domestic and foreign financial markets, and analyzes exposure based on the level and extent of risks, in order to supervise and manage financial risks related to the Company's operations. Such risks include market risks (including exchange rate risk and interest rate risk), credit risk, and liquidity risk.

• Important financial activities of the Company are reviewed by the Board of Directors according to regulations and the internal control system. Internal auditors continue to review policy compliance and exposure. The Company has not used financial instruments (including derivative financial instruments) for speculative trading.

• Market Risk

  • (1) Foreign exchange risk

The Company purchases and sells goods denominated in foreign currencies, and is thus exposed to the risk of exchange rate fluctuations. The Company manages exposure to foreign exchange risk using foreign currency deposits and firm commitment opposite to exchange rate fluctuations within the scope permitted by policy. Please see Note 32 for the book value of the Company's major monetary assets not denominated in the functional currency on the balance sheet date.

The table below shows the Company's sensitivity analysis when

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NTD (the functional currency) appreciates/depreciates 1% against foreign currencies. A positive number is the amount that pre-tax profit or equity will increase when NTD depreciates 1% against RMB and USD. Pre-tax profit or equity will decrease the same amount when NTD appreciates 1% against RMB and USD.

		Effect	of	USD		Effect	of	RMB
		2021		2020		2021		2020
Profit/Loss	$	66	$	316	$	14	$	17
Equity		8,433		7,419		50		640

• (2) Interest rate risk

The book value of the Company's financial assets and liabilities that are exposed to interest rate risk on the balance sheet date is as follows:

follows:
		December 31, 2021	December 31, 2020
Has interest rate risk for
fair value
Financial liabilities	$	99,513 $	84,328
Has interest rate risk for
cash flow
Financial assets		209,621	312,462

The Company is exposed to interest rate risk due to financial assets with floating interest rates. The method for analyzing floating interest rate assets assumes that the amount of assets outstanding on the balance sheet date were outstanding throughout the year.

If interest rate increases/decreases 1% while all other variables remain the same, the Company's pre-tax profit will increase/decrease NT$2,096 thousand and NT$3,125 thousand in 2021 and 2020, respectively, and is mainly due to the Company's floating interest rate bank deposits and project-specific bank deposits (recognized in other financial assets - current).

1. Credit risk

Credit risk refers to the risk of financial loss to the Company arising from default by counterparties. As of the balance sheet date, the Company's greatest credit risk exposure to financial losses caused by transaction

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counterparties failing to fulfill their obligations is in the book value of financial assets recognized on the balance sheet.

Among the balance of the Company's accounts receivable, customers that account for over 10% of total accounts receivable are as follows:

		December	31, 2021		December 31, 2020
Customer A	$		530,923	$	640,553
Customer B			149,782		101,042
Customer C			3,248		147,522
	$		683,953	$	889,117

3. Liquidity risk

The Company manages and maintains a sufficient position of cash and cash equivalents or financial products that can easily be liquidated, and maintains a suitable credit limit through loan agreements with financial institutions to meet the needs of operations.

The table below provides the maturity analysis of remaining non-derivative financial liabilities for the repayment period agreed to by the Company. It is prepared based on the non-discounted cash flow (including principal and interest) of financial liabilities up to the earliest date that the liabilities may need to be repaid by the Company.

		Within 1 year	1 year and above	Total
December31,2021
Accounts payable
(including related parties)	$	665,964 $	32,626 $	698,590
Other payables		528,781	-	528,781
Lease liabilities		36,023	65,673	101,696
Guarantee deposits received		12,445	5,503	17,948
	$	1,243,213$	103,802 $	1,347,015
December31,2020
Accounts payable
(including related parties)	$	814,460 $	37,867 $	852,327
Other payables		498,367	-	498,367
Lease liabilities		27,755	58,293	86,048
Guarantee deposits received		653	13,064	13,717
	$	1,341,235$	109,224$	1,450,459

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4. Cash flow hedging

December 31, 2021

December 31, 2021
Hedginginstruments	Currency JPY $ USD EUR RMB	Contract amount	Time to maturity NA NA NA NA	Forward price	Line items on the balance sheet Hedging financial assets $ Hedging financial assets Hedging financial assets Hedging financial assets $	Book	value
						Assets 18,335 $ 711,183 13,953 5,046 748,517 $	Liabilities
Cash flow hedging Hedging deposits/Expected purchases Payment for equipment and construction		76,236 25,693 446 1,162		NA NA NA NA			- - - -
							-

2021 Hedging gains (losses) recognized in other comprehensive income Gains (losses) from ineffective hedges recognized in income Effect on comprehensive income Cash flow hedging Hedging deposits and commercial paper $ 1,086 $ -	Gains (losses) from ineffective hedges recognized in income	Amounts and items reclassified from equityto income/loss Line items recognized in ineffective hedges The hedged item has affected income/loss The hedged item is not expected to occur again - $ (14,977)$ -	Amounts and ite from equityto	ms reclassified income/loss
				The hedged item is not expected to occur again

December 31, 2020

Contract amount	Time to maturity	Forward price	Balance Sheet Line item	Book Assets $ 16,472 $ 584,136 3,502 64,043 $ 668,153 $ Amounts and ite from equityto	value
					Liabilities
			Hedging financial assets Hedging financial assets Hedging financial assets Hedging financial assets Line items recognized in ineffective hedges - $		- - - -
					-
					ms reclassified income/loss
				The hedged item has affected income/loss (6,257)$	The hedged item is not expected to occur again
					-

XXIX. Related Party Transactions

(I) Name and relationship of related parties

Name of related party

China Steel Corporation China Ecotek Vietnam Company Ltd. China Ecotek Construction Corporation Dragon Steel China Steel Machinery Corporation United Steel Engineering & Construction Corp. China Steel Solar Tech Co., Ltd. Chung Hung Steel C.S. Aluminum Corporation Steel Castle Technology Corporation China Steel Chemical Corporation

Relationship with the Company

Parent company Subsidiary Subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary

Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary

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Name of related party InfoChamp Systems Corp. China Steel Security Corporation CHC Resources Corporation China Steel Management Consulting Corporation Union Steel Development Corporation Universal Exchange Inc. Sing Da Marine Structure Corporation CSC Steel Sdn. Bhd. Betacera Inc. China Steel Structure Co., Ltd. China Steel Express Corporation Taiwan Intelligent Robotics Co., Ltd. Honley Auto. Parts Co., Ltd. Formosa Ha Tinh Steel Corporation Hua Eng Wire and Cable Co., Ltd. Great Grandeul Steel Co., Ltd. Chun Yu Co., Ltd.

Relationship with the Company Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Affiliated enterprise Other related parties The Company's director The Company's director The Company's supervisor before June 2020

(II) Business transaction

Business transaction
		2021		2020
Operatingrevenue
Parent company	$	5,893,134	$	5,783,963
Subsidiary		-		7,293
Fellow subsidiary
Dragon Steel		1,171,926		1,260,467
Others		339,811		565,591
Affiliated enterprise		550		550
Other stakeholders – Formosa Ha
Tinh Steel Corporation		39,834		159,765
The Company's supervisors		-		11
The Company's director		-		35
	$	7,445,255	$	7,777,675
P u r c h a s e o f g o o d s a n d
o u t s o u r c i n g f e e s
Parent company	$	18,356	$	10,670
Fellow subsidiary		346,023		271,895
The Company's supervisors		-		348

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		2021			2020
The Company's director			4,635			1,006
	$		369,014	$		283,919

The Company's operating revenues is mainly from construction revenues from the companies above, and the total contract price is negotiated based on the scale or nature of each project. The collection period is approximately 2-3 months after the invoice is issued. The Company's contracts with related parties is different from contracts with non-related parties, so there are no similar transactions for comparison.

Purchase of goods and outsourcing fees are negotiated based on the model or nature of the project, and payment is made within 1-2 months. The Company's transactions with related parties is different from non-related parties, so there are no similar transactions for comparison.

The balance of contract assets, contract liabilities, and accounts payable/receivable to/from related parties on the balance sheet date is as follows:

General ledger account	Type of relatedparty December 31,2021 December 31,2020 Parent company $ 423,437 $ 276,411 Fellow subsidiary Dragon Steel 28,778 85,995 Others 7,425 16,052 Other stakeholders – Formosa Ha Tinh Steel Corporation - 65,092 $ 459,640$ 443,550 Parent company $ 1,393,756 $ 1,068,097 Fellow subsidiary China Steel Solar Tech Co., Ltd. 54,012 275,722 Others 58,831 29,678 Other stakeholders – Formosa Ha Tinh Steel Corporation 18,569 495 $ 1,525,168$ 1,373,992 Parent company $ 530,923 $ 640,553	December 31,2020
Current contract assets Current contract liabilities Accounts receivable – related parties

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General ledger account	Type of relatedparty December 31,2021 December 31,2020 Subsidiary - 4,170 Fellow subsidiary Dragon Steel 149,782 101,042 China Steel Solar Tech Co., Ltd. 3,248 147,522 Others 644 935 Affiliated enterprise 289 144 Other stakeholders – Formosa Ha Tinh Steel Corporation - 2,232 The Company's director - 37 $ 684,886$ 896,635 Parent company $ - $ 58 Subsidiary 79 - Fellow subsidiary 7,052 5,909 $ 7,131 $ 5,967	December 31,2020
Accounts payable - related parties		4,170 101,042 147,522 935 144 2,232 37

No collateral was provided for outstanding payables to related parties and will be settled in cash. No guarantee was collected for receivables from related parties and no loss provision was allocated for receivables from related parties as of December 31, 2021 and 2020.

(III) Other transactions

1. Construction contracts

The balance of construction contracts not yet performed in operating revenues is listed below:

			December31,2021	December31,2020
Parent company		$	13,276,300 $	6,622,425
Fellow subsidiary			820,356	1,188,330
Other stakeholders	–
Formosa Ha Tinh	Steel
Corporation			20,926	54,747
		$	14,117,582 $	7,865,502

Accumulated balance of construction progress of construction contracts is listed

below:

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2.	December 31, 2021 December 31, 2020 Parent company $ 7,212,209 $ 4,782,746 Fellow subsidiary China Steel Solar Tech Co., Ltd. 1,037,745 2,312,234 Others 2,343,779 2,092,750 Other stakeholders – Formosa Ha Tinh Steel Corporation 1,664,480 2,226,807 $ 12,258,213$ 11,414,537 Lease agreement General ledger account Related party December 31, 2021 December 31, 2020 Lease liabilities (includes current and noncurrent) Parent company $ 19,545 $ 27,839 2021 2020 Type of relatedparty Interest expense Parent company $ 216$ 311 Rent expenses Parent company $ 2,217$ -	December 31, 2020	December 31, 2020
			4,782,746 2,312,234 2,092,750 2,226,807
			11,414,537
			December 31, 2020
			2020
			311
			-

The Company leases offices and production equipment from the parent company with a lease period of 3-5 years. The rent is based on the rent for similar assets and is paid quarterly or semi-annually according to the lease agreement.

Lease expenses are variable lease payments and expenses for short-term leases and low value asset leases of buildings and transportation equipment that are not included in lease liabilities.

1. Loans from related parties

The Company's short-term credit loans from the parent company were repaid in full in May 2020, interest expenses in 2020 was NT$781 thousand, and annual interest rate was 0.68%-0.69%.

• (IV) Compensation for management

2021

2020

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Short-term employee	benefits
(salary, dividends, and bonuses)		$	25,045	$	22,497
Post-employment benefit			36		-
		$	25,081	$	22,497

Remuneration of directors and management is decided by the Remuneration Committee based on individual performance and market trends.

XXX. Pledged Assets

The Company provides the following assets as guarantee for contract performance:

		December31,2021		December31,2020
Time deposits (recognized in other
financial assets – current)	$	250,707	$	-

XXXI. Significant Contingent Liabilities and Unrecognized Contractual Commitments

In addition to those described in other notes, the Company also has the following major commitments and contingencies on December 31, 2021:

• (I) The Company provided approximately NT$313,613 thousand in performance bond and warranty bond through a bank for construction contracts.

• (II) The Company provided approximately NT$231,082 thousand in notes as the performance bond and warranty bond for major projects.

• (III) The Company's balance of issued but unutilized L/C for the purchase of construction equipment is approximately NT$57,882 thousand.

XXXII. Information on Foreign Currency Assets and Liabilities with a Significant Impact

The following information is a summary of foreign currencies that are not the functional currency of the Company, and the exchange rate disclosed is the exchange rate for converting foreign currencies to the functional currency. Information on foreign currency financial assets and liabilities with a significant impact:

Unit: Foreign currencies (in thousands), exchange rate

Foreign Exchange rate Book value currencies

December 31, 2021

Foreign currency assets

-67-

Foreign currencies December31,2021 Monetary items USD $ 26,218 RMB 1,477 EUR 446 JPY 76,239 Nonmonetary items Financial assets at fair value through other comprehensive income USD 4,771 Foreign currency liabilities Monetary items USD 288 Foreign currencies December31,2020 Foreign currency assets Monetary items USD $ 21,789 RMB 22,516 EUR 100 JPY 59,618 Nonmonetary items Financial assets at fair value through other comprehensive income USD 5,538 Foreign currency liabilities Monetary items USD 169 RMB 7,494	Exchange rate Book value 27.6800 $ 725,705 4.3440 6,414 31.3200 13,958 0.2405 18,335 27.6800 132,068 27.6800 7,961 Exchange rate Book value 28.4800 $ 620,560 4.3770 98,553 35.0200 3,507 0.2763 16,472 28.4800 157,720 28.4800 4,820 4.3770 32,802	Book value
		725,705 6,414 13,958 18,335 132,068 7,961 Book value

The Company's net foreign exchange gain/loss (including realized and unrealized) was NT$3,396 thousand and NT$4,668 thousand in 2021 and 2020, respectively. Due to the large number of foreign currencies used for transactions, foreign exchange gain/loss cannot be individually disclosed for foreign currencies with a material impact.

XXXIII. Supplementary Disclosures

Matters required to be disclosed in 2021 are as follows:

• (I) Information on major transactions and (II) investees

• Lending to others: None.

• Providing endorsements or guarantees for others: None.

• Holding of negotiable securities at the end of the year (excluding investments in subsidiaries and affiliated enterprises): Table1.

-68-

1. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of paid-in capital: Table 2.

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

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

4. Purchase or sale of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: Table 4.

5. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Table 5.

6. Derivatives trading: None.

7. Other: The business relationship and major transactions between intra-group companies and amount: None.

8. Information on the investee: Table 6.

9. (III) Information on Investments in China

10. Name of investee in China, main business items, paid-in capital, investment style, outward/inward remittance, shareholding ratio, gain/loss in the current year, investment gains/losses recognized, book value of investments at end of year, income on investment remitted back to Taiwan, and limit on investments in China: Table 7.

11. Direct or indirect material transactions with investees in China through a third region, and the price, terms of payment, and unrealized gains:

12. (1) Amount and percentage of goods purchased and the ending balance and percentage of payables: None.

13. (2) Amount and percentage of goods sold and the ending balance and percentage of receivables: None.

14. (3) Property transaction amount and the profit or loss amount: None.

15. (4) Ending balance and purpose of endorsements/guarantees or collateral: None.

16. (5) Highest balance, ending balance and interest rate range of financing and total interest in the current year: None.

17. (6) Other transactions, such as the providing or accepting services, that have a material impact on current profit or loss or financial position: None.

-69-

• (IV) Information on major shareholders: Name of shareholder with 5% shareholding or above, number of shares held, and ratio: Table 8.

• XXXIV.Segment Information

The Company has already disclosed segment information in the consolidated financial statements, so it is not required to disclose such information in the standalone financial statements.

-70-

China Ecotek Corporation and Subsidiaries Negotiable securities held at the end of the year December 31, 2021

Table1

In Thousand of NTD

(unless otherwise specified)

Securities held by	Type and name of security	Relationship with securities issuer	General ledger account	End of the year	End of the year	End of the year	End of the year	Notes
				Number of shares/units	Book value	Shareholdin g ratio (%)	Fair value
The Company	Stock Yeong Long Technologies Co., Ltd. Ecotek Industrial Aquaculture Corp. Hsin Yu Energy Development Co., Ltd. Locus Cell Co., Ltd. Green Shepherd Corporation Stock Asia Pacific Energy Development Company Limited Stock JDV Control Valves Co., Ltd. Beneficiary certificates Fubon Chi-Hsiang Money Market Fund FSITC US Top 100 Bond Fund-A (TWD) PineBridge Taiwan Money Market Securities Investment Trust Fund PineBridge Global ESG Quantitative Bond Fund A (TWD) PineBridge Quantitative Diversified Income Fund A (TWD)	- The Company is its director - - - The Company is its director - - - - - -	Noncurrent financial assets at fair value through profit or loss Noncurrent financial assets at fair value through profit or loss Noncurrent financial assets at fair value through profit or loss Noncurrent financial assets at fair value through profit or loss Noncurrent financial assets at fair value through profit or loss Noncurrent financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss	440,000 74,681 391,249 4,000,000 784,000 2,212,590 352,000 3,164,609 1,007,692 9,447,478 982,422 500,000	$ 14,180 600 - 40,000 16,100 $ 70,880 $ 132,068 $ 13,996 $ 50,092 9,725 130,183 10,001 4,980 $ 204,981	1.13 19.30 0.16 2.00 5.55 11.11 1.19	$ 14,180 600 - 40,000 16,100 $ 70,880 $ 132,068 $ 13,996 $ 50,092 9,725 130,183 10,001 4,980 $ 204,981

-71-

China Ecotek Corporation and Subsidiaries Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of paid-in capital: From January 1 to December 31, 2021 Table 2

In Thousand of NTD

(unless otherwise specified)

Buying and selling company	Type and name of security	General ledger account	Counterpa rty	Relati onship	Beginningofyear	Beginningofyear	Purchased	Purchased	Sold	Sold	Sold	Sold	End of theyear	End of theyear	Note s
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Price	Carrying amount	Gain (loss) on disposal	Number of Shares	Amount
The Company	Beneficiary certificates – PineBridge Taiwan Money Market Securities Investment Trust Fund	Current financial assets at fair value through profit or loss	Non-relate d party	-	-	$ -	56,646,855	$ 780,061	47,199,377	$ 650,000	$ 649,878	$ 122	9,447,478	$ 130,183	Note

Note: The amount purchased and sold in the current period includes proceeds and valuation gains/losses.

-72-

China Ecotek Corporation and Subsidiaries Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more From January 1 to December 31, 2021

Table 3

In Thousand of NTD

(unless otherwise specified)

Acquiring company	Name of asset	Date of occurrence	Transaction amount	Payment	Counterparty	Relationship	Where the tradingcounterpartyis a relatedparty,data on theprevious transfer	Where the tradingcounterpartyis a relatedparty,data on theprevious transfer	Where the tradingcounterpartyis a relatedparty,data on theprevious transfer	Where the tradingcounterpartyis a relatedparty,data on theprevious transfer	Basis for price determination	Purpose for acquisition and usage	Other terms
							Owner	Relationship with related parties	Date of transfer	Amount (NT$1,000)
The Company	Land and building in special industrial district in Linyuan District, Kaohsiung	2021.03.22 (Note)	$490,903	Paid in full	Natural person	None	-	-	-	$-	Price negotiation, referenced the property appraiser's report	For operations	-

Note: The date of the Board of Directors resolution. The contract was signed on March 31, 2021.

-73-

China Ecotek Corporation and Subsidiaries Purchase or sale of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more From January 1 to December 31, 2021

Table 4

In Thousand of NTD

(unless otherwise specified)

				Transaction	Transaction		Differences in transaction	Differences in transaction	Receivables (Payables)	Receivables (Payables)
							terms compared to third party			As a
Purchaser/Seller	Counterparty	Relationship	Purchase (sales)	Amount	Percentage of total purchases (sales) (%)	Credit period	transactions		Balance	percentage of total accounts receivable (payable)	Notes
							Unit price	Credit period
The Company	China Steel Corporation Dragon Steel Corporation China Steel Solar Tech Co., Ltd. China Steel Machinery Corporation	Parent company Fellow subsidiary Fellow subsidiary Fellow subsidiary	Construction revenue Construction revenue Construction revenue Purchase of goods	$ (5,747,840) (1,154,986) (289,382) 245,267	(69) (14) (3) 3	Contract period Contract period Contract period Contract period	Note Note Note Note	Note Note Note Note	$ 530,923 149,782 3,248 -	67 19 - -

Note: Please refer to Note 29.

-74-

China Ecotek Corporation and Subsidiaries Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more December 31, 2021

Table 5

In Thousand of NTD

(unless otherwise specified)

Creditor	Counterparty	Relationship	Balance of receivables from related parties	Turnover rate (%)	Overdue receivables from related parties	Overdue receivables from related parties	Amount of receivables from related parties collected subsequent to the balance sheet date	Amount of loss provision
					Amount	Processing method
The Company	China Steel Corporation Dragon SteelCorporation	Parent company Fellow subsidiary	$ 530,923 149,782	10.06 9.34	$ - -	- -	$ 504,898 54,909	$ - -

-75-

China Ecotek Corporation and Subsidiaries Information on the investee From January 1 to December 31, 2021

Table 6

In Thousand of NTD

(unless otherwise specified)

Name of investment company	Name of investee	Location	Main business items	Initial investment amount	Initial investment amount	Shareholding at the end of year	Shareholding at the end of year	Shareholding at the end of year	Current profit (loss) of investee	Investment income (loss) recognized by the Company for the current year	Notes
						Number of Shares	Percentage (%)	Book value
				End of the currentyear	End of the previousyear
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company CEC Development Corporation CEC International Corporation	CEC Development Corporation CEC Holding Company Limited CEC International Corporation China Ecotek Construction Corporation China Steel Machinery Corporation Chiun Yu Investment Corporation Chi-Yi Investment Corporation Jiing-Cherng-Fa Investment Corporation United Steel International Development Corporation Hung-chuan Investment Corporation Ascentek Venture Capital Corporation China Steel Solar Tech Co., Ltd. Eminent III Venture Capital Corporation Pro-Ascentek Investment Corporation China Ecotek India Private Limited China Ecotek Vietnam Company Limited China Ecotek India Private Limited	Samoa Samoa Samoa Kaohsiung City Kaohsiung City Kaohsiung City Kaohsiung City Kaohsiung City British Virgin Islands Kaohsiung City Kaohsiung City Kaohsiung City Taipei City Kaohsiung City India Vietnam India	Investment Holding Investment Holding Investment Holding Construction Production and sales of machinery and equipment, such as steel equipment, railway vehicles, transportation equipment, and power generators General investment General investment General investment Investment Holding General investment General investment Solar power generation General investment General investment Construction and design services Construction and design services Construction and design services	$ 494,146 - 30,642 - 329,174 14,233 8,000 8,050 8,262 6,000 - 348,800 100,000 60,000 27 302,065 27,070	$ 494,146 163,779 30,642 25,000 329,174 14,233 8,000 8,050 8,262 6,000 141 348,800 100,000 - 27 302,065 27,070	17,000,000 - 10,000,000 - 35,204,170 1,196,000 800,000 805,000 300,000 600,000 - 34,880,000 10,000,000 6,000,000 5,000 - 4,995,000	100.00 - 100.00 - 26.02 40.00 40.00 35.00 0.61 30.00 - 20.00 5.52 5.00 0.10 100.00 99.90	$ 984,625 - 40,116 - 535,388 34,938 22,900 20,833 3,244 17,063 - 279,656 83,294 63,871 37 713,564 37,238	$ 38,824 296 991 154 392,308 10,029 468 1,292 (100,212) 466 - 128,163 130,326 20,687 1,073 34,196 1,073	$ 38,824 296 991 154 102,084 4,012 187 452 (611) 140 - 25,633 7,193 1,034 - 34,196 1,073	Subsidiary Subsidiary (Note) Subsidiary Subsidiary (Note) Subsidiary Subsidiary Subsidiary

Note: Please refer to Note 11.

-76-

China Ecotek Corporation and Subsidiaries Information on Investments in China From January 1 to December 31, 2021

Table 7

In Thousand of NTD (unless otherwise specified)

				Accumulated			Ald		P f
				investment	Investment amount remitted f i i h		ccumuate investment		ercentage o shares held	Investment	Investment	Investment
Investee in China	Main business	Paid-in capital	Investment method	amount remitted from	rom/to Tawan n te current year		amount	Current profit (loss) of	directly or	gains (losses) recognized in	carrying value at the end of	gains remitted back to Taiwan	Notes
Company name	items			Taiwan at the beginning of the year			remitted from Taiwan at the end of the year	investee	indirectly by the Company (%)	the current year (Note 3)	the current year	as of the end of the current year
					Remitted from Taiwan	Remitted back to Taiwan
Wuhan Hua De Environmental Protection Engineering Technology Ltd. Ningbo Hua Yang Aluminum Technology Ltd. Xiamen Mao Yu Import and Export Trading Ltd.	Engineering technology and consultation service Production and sale of aluminum products Equipment materials import and export	$ 110,720 1,356,320 166,080	Through investment in an existing company (CEC Development Corporation) in a third region for further investment in the Chinese company Through investment in an existing company (United Steel International Development Corporation) in a third region for further investment in the Chinese company Through investment in an existing company (CEC Development Corporation) in a third region for further investment in the Chinese company	$ 12,456 8,304 166,080	$ - - -	$ - - -	$ 12,456 8,304 166,080	$ 16,037 (99,468) 2,813	- 0.61 100.00	$ 4,811 (607) 2,813	$ - 3,188 178,791	$ - 665 -	Note 2

Name of inestment coman	Accumulated investment amount remitted from	Investment amount approved by the	The Company's limit on investments in
v py	Taiwan to China at the end of the current year	Investment Commission, MOEA	China (Note 1)
China Ecotek Cororation	$186840	$339128	$1937981
p	,	,	,,

Note 1: According to the Regulations Governing the Examination of Investment or Technical Cooperation in Mainland China announced by the Investment Commission on August 29, 2008, the Company's limit is

60% of its net value.

Note 2: Wuhan Hua De Environmental Protection Engineering Technology Ltd. Completed disposal in September 2021 and subsidiary CDC collected proceeds in December the same year, but the funds have not been remitted back to Taiwan as of December 31, 2021.

Note 3: Investment gains and losses recognized in the current year are in the Company's financial statements that were audited by a CPA.

-77-

China Ecotek Corporation Information on Major Shareholders December 31, 2021

Table 8

Name of major shareholder	Shares	Shares
	Number of sharesheld	Shareholding ratio (%)
China Steel Corporation Hua Eng Wire and Cable Co., Ltd.	55,393,138 11,843,730	44.76 9.57

• Note 1: Information on major shareholders in this table is based data from Taiwan Depository and Clearing Corporation, which calculated shareholders with 5% or more of the Company's non-physical ordinary shares on the last business day of the quarter. The share capital specified on the Company's standalone financial statements may be different from the actual number of non-physical shares due to different calculation basis.

• Note 2: If the shareholder in the data above put shares into a trust, it is listed as a separate trust account of the shareholder opened by the trustee. For shareholders who are reported as insiders in accordance with Securities and Exchange Act for holding more than 10% of shares, the shareholdings include the shares held by the shareholder plus shares placed in a trust in which the shareholder has control over trust assets. Please refer to the Market Observation Post System for data on reporting insider shareholding.

-78-

§List of Significant Accounting Items§

Item Detailed list of assets, liabilities, and equity Detailed list of cash and cash equivalents Detailed list of current financial assets at fair value through profit or loss Detailed list of hedging financial assets - current Detailed list of contract assets Detailed list of accounts receivable Detailed list of other financial assets – current Detailed list of other current assets Detailed list of changes to current financial assets at fair value through profit or loss – noncurrent Detailed list of changes to noncurrent financial assets at fair value through other comprehensive income Detailed list of changes to investments recognized under the equity method Detailed list of changes to property, plant and equipment Detailed list of changes to accumulated depreciation of property, plant and equipment Detailed list of changes to right-of-use assets and detailed list of changes to accumulated depreciation of right-of-use assets Detailed list of deferred income tax assets Detailed list of contract liabilities Detailed list of accounts payable Detailed list of other accounts payable Detailed list of liability provision – current Detailed list of lease liabilities Detailed list of other current liabilities Detailed list of liability provision – noncurrent Detailed list of deferred income tax liabilities Net defined benefit liability Detailed list of income and losses Detailed list of operating revenue Detailed list of operating costs Detailed list of operating expenses Summary of employee benefits, depreciation and amortization expenses by function

No./Index

List 1 List 2 List 3 Note 23 List 4 List 5 Note 13 List 6 List 7 List 8 Note 15 Note 15 List 9 Note 25 Note 23 List 10 Note 18 Note 19 List 11 Note 18 Note 19 Note 25 Note 20 List 12 List 13 List 14 List 15

-79-

China Ecotek Corporation Detailed list of cash and cash equivalents December 31, 2021

List 1 In Thousand of NTD (unless otherwise specified)

Annual Item Period interest rate Amount (%) Petty cash and working capital $ 758 Cash in banks Checking accounts and demand deposits 180,214 Foreign currency demand deposits (Note 1 and Note 2) 12,573 Cash equivalents (Investments within 3 months of its original maturity date) 2021.12.17Commercial papers 0.25 2022.01.13 419,978 $ 613,523

• Note 1: Foreign currency demand deposits include USD 406 thousand, JPY 3 thousand, EUR 1 thousand, and RMB 306 thousand.

• Note 2: The exchange rates for USD, EUR, CNY, and JPY are US$1=NT$27.68, EUR$1=NT$31.32, CNY$1=NT$4.344, and JPY$1=NT$0.2405.

-80-

China Ecotek Corporation Detailed list of current financial assets at fair value through profit or loss December 31, 2021

List 2

In Thousand of NTD (unless otherwise specified)

Name of financial instrument Stock JDV Control Valves Co., Ltd. Beneficiary certificates Fubon Chi-Hsiang Money Market Fund PineBridge Taiwan Money Market Securities Investment Trust Fund FSITC US Top 100 Bond Fund-A (TWD) PineBridge Global ESG Quantitative Bond Fund A (TWD) PineBridge Quantitative Diversified Income Fund A (TWD)	Fairvalue Numberofshares orunits Acquisitioncost Unitprice (NTD) Total amount 352,000 $ 5,337 $ 39.7600 $ 13,996 3,164,609 50,000 15.8288 50,092 9,447,478 130,122 13.7797 130,183 1,007,692 10,000 9.6511 9,725 982,422 10,000 10.1797 10,001 500,000 5,000 9.9608 4,980 $ 210,459 $ 218,977	Notes

Note: Fair value is calculated based on the fund's net value and closing prices of stocks on the balance sheet date and after considering liquidity.

-81-

China Ecotek Corporation Detailed list of hedging financial assets - current December 31, 2021

List 3 Item (Note) Time deposits USD $18,538 thousand Demand deposits JPY $76,236 thousand USD $217 thousand RMB $1,162 thousand EUR $446 thousand Commercial papers USD $6,938 thousand	Period 2021.01.07-2022.11.20 2021.10.05-2022.01.10	In Thousand of NTD (unless otherwise specified) Annual interest rate (%) Amount 0.18-0.40 $ 513,134 18,335 6,016 5,046 13,953 0.35 192,033 $ 748,517	In Thousand of NTD (unless otherwise specified) Annual interest rate (%) Amount 0.18-0.40 $ 513,134 18,335 6,016 5,046 13,953 0.35 192,033 $ 748,517
			513,134 18,335 6,016 5,046 13,953 192,033
			748,517

Note: The exchange rates for USD, EUR, CNY, and JPY are US$1=NT$27.68, EUR$1=NT$31.32, CNY$1=NT$4.344, and JPY$1=NT$0.2405.

-82-

China Ecotek Corporation Detailed list of accounts receivable December 31, 2021

December 31, 2021	r 31, 2021
List 4 Amount Overdue for 1 year and above Non-related party ADIMMUNE Corporation $ 51,332 $ - Taiwan Water Corporation 23,758 - Virbac (Taiwan) Co., Ltd. 9,923 - NIPPON CONVEYOR CO., LTD. 8,413 - Others (Note) 10,609 - $ 104,035$ - Related party China Steel Corporation $ 530,923 $ - Dragon Steel 149,782 - Others (Note) 4,181 - $ 684,886$ -	Overdue for 1 year and above	In Thousand of NTD Notes
		Construction payment Construction payment Construction payment Construction payment Construction payment and sales revenue Construction payment and sales revenue

Note: None of the balances exceed 5% of the balance

for this item.

-83-

China Ecotek Corporation Detailed list of other financial assets – current December 31, 2021

List 5 Item Time deposits more than 3 months from its original maturity date Time deposits NTD Restricted bank deposits Time deposits NTD	Period 2021.03.02- 2022.04.12 2021.12.10- 2022.03.21	In Thousand of NTD (unless otherwise specified) Annual interest rate (%) Amount 0.08-0.76 $ 234,000 0.25-0.37 250,707 $ 484,707

-84-

In Thousand of NTD

China Ecotek Corporation Detailed list of changes to current financial assets at fair value through profit or loss – noncurrent 2021

List 6

(unless otherwise specified)

	Beginning	ofyear		Addedin the	currentyear		Decreasein the	currentyear	currentyear	End	of	the year	Guarantee or collateral
Name	Numberofshares	Fair	value	Numberofshares	Fairvalue		Numberofshares		Fairvalue	Number of shares		Fair value (Note 1)	provided	Note s
Stock
Yeong Long Technologies Co.,
Ltd.	440,000	$	13,399	-	$	781	-	$	-	440,000	$	14,180	None
JDV Control Valves Co., Ltd.	525,000		9,203	-		7,416	525,000		16,619	-		-	None	Note 2
Ecotek Industrial Aquaculture
Corp.	74,681		600	-		-	-		-	74,681		600	None
FlexUP Technologies Corp.	650,000		-	-		-	650,000		-	-		-	None	Note 2
Hsin Yu Energy Development
Co., Ltd.	391,249		-	-		-	-		-	391,249		-	None
Green Shepherd Corporation	-		-	784,000		16,100	-		-	784,000		16,100	None
Locus Cell Co., Ltd.	-		-	4,000,000		40,000	-		-	4,000,000		40,000	None
		$	23,202		$	64,297		$	16,619		$	70,880

• Note 1: Please refer to Note 28 for the valuation method for determining fair value.

• Note 2: The decrease in the current year is due to the sale and reclassification to current financial assets at fair value through profit or loss.

-85-

China Ecotek Corporation Detailed list of changes to noncurrent financial assets at fair value through other comprehensive income 2021

			2021	2021
List 7 Name	Beginning ofyear		Addedin the currentyear		Decreasein the	currentyear	In Thousand of NTD (unless otherwise specified) End of the year Guarantee or collateral provided Number of shares Fair value (Note) Notes 2,212,590 $ 132,068 None
	Number of shares 2,212,590 $	Fair value	Number of shares - $	Fair value	Number of shares - $	Fair value	Number of shares 2,212,590 $	Fair value (Note)
Stock Asia Pacific Energy Development Company Limited		157,720		-		25,652		132,068	None

Note: Please refer to Note 28 for the valuation method for determining fair value.

-86-

China Ecotek Corporation Detailed list of changes to investments recognized under the equity method 2021

List 8

In Thousand of NTD

(unless otherwise specified)

Name Unlisted company CEC Development Corporation China Steel Machinery Corporation CEC Holding Company Limited CEC International Corporation China Ecotek Construction Corporation Chiun Yu Investment Corporation Chi-Yi Investment Corporation Jiing-Cherng-Fa Investment Corporation United Steel International Development Corporation Hung-chuan Investment Corporation Ascentek Venture Capital Corporation China Steel Solar Tech Co., Ltd. Eminent III Venture Capital Corporation China Ecotek India Private Limited Pro-Ascentek Investment Corporation	Openingbalance Number of Shares Amount 17,000,000 $ 962,623 35,204,170 490,944 14,860,000 21,077 10,000,000 40,462 2,500,000 40,740 1,196,000 23,898 800,000 16,098 805,000 15,286 300,000 3,884 600,000 11,996 14,112 1,035 34,880,000 294,735 10,000,000 76,028 5,000 38 - - $ 1,998,844	Added in the currentyear Number of Shares Amount - $ 22,002 - 44,444 - - - - - - - 11,040 - 6,802 - 5,547 - - - 5,067 - - - - - 7,266 - - 6,000,000 63,871 $ 166,039	Decrease in the currentyear Number of Shares Amount - $ - - - 14,860,000 21,077 - 346 2,500,000 40,740 - - - - - - - 640 - - 14,112 1,035 - 15,079 - - - 1 - - $ 78,918	Closingbalance Market price or net value of equity Number of Shares Amount 17,000,000 $ 984,625 984,625 35,204,170 535,388 535,388 - - - 10,000,000 40,116 40,116 - - - 1,196,000 34,938 34,938 800,000 22,900 22,900 805,000 20,833 20,833 300,000 3,244 3,244 600,000 17,063 17,063 - - - 34,880,000 279,656 381,089 10,000,000 83,294 83,294 5,000 37 37 6,000,000 63,871 63,871 $ 2,085,965 $ 2,187,398	Guarantee or collateral provided None None None None None None None None None None None None None None None	Notes

Note: Increases and decreases in the current year include increase in investments, refunded payments for shares due to capital reduction of investees, and proceeds collected for the liquidation of subsidiaries, which as investment gains/losses and equity-related adjustments recognized under the equity method, and the net amount of cash dividends.

-87-

China Ecotek Corporation Detailed list of changes to right-of-use assets 2021

	2021	2021
List 9 Item Cost Land $ Property and equipment Machinery and equipment Transportation equipment Total Accumulated depreciation Land Property and equipment Machinery and equipment Transportation equipment Total $	In Thousand of NTD Opening balance Increase in the currentyear Decrease in the currentyear Closing balance 15,064 $ 20,299 $ 15,064 $ 20,299 101,457 22,747 13,739 110,465 1,316 1,715 1,316 1,715 19,022 7,430 5,753 20,699 136,859$ 52,191 $ 35,872 153,178 12,051 $ 6,396 $ 15,064 3,383 29,743 17,312 9,093 37,962 706 456 876 286 8,491 7,650 5,373 10,768 50,991 $ 31,814 $ 30,406 52,399 85,868 $ 100,779
		153,178
		3,383 37,962 286 10,768
		52,399
		100,779

-88-

China Ecotek Corporation Detailed list of accounts payable December 31, 2021

List 10

In Thousand of NTD

Name of vendor		Amount	Part of retainage
Non-related party
Ho Hsiung Machinery Industrial Co., Ltd.	$	37,685 $	27,683
Chung-Yi Engineering Co., Ltd.		34,782	34,782
Others (Note)		618,992	241,043
	$	691,459$	303,508
Related party
Steel Castle Technology Corporation	$	4,322 $	3,897
InfoChamp Systems Corp.		1,104	501
Betacera Inc.		773	-
Union Steel Development Corporation		430	-
Others (Note)		502	223
	$	7,131$	4,621

Note: None of the balances exceed 5% of the balance for this item.

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China Ecotek Corporation Detailed list of lease liabilities December 31, 2021

List 11

In Thousand of NTD

(unless otherwise specified)

Item Land Buildings Machinery and equipment Transportation equipment Less: Current portion (Note 3)	Summary Leased land Leased plant and offices Construction equipment Corporate vehicle lease	Lease period (Note 2) 2021.07.01- 2024.06.30 2017.01.01- 2029.12.31 2021.05.01- 2026.04.30 2019.05.24- 2024.11.29	Discount rate (%) Note 1 $ Note 1 Note 1 Note 1 $	Balance
				16,940 70,795 1,377 10,401
				99,513 35,301
				64,212

Note 1: Please refer to Note 16.

• Note 2: Refers to the lease period defined in Paragraphs 18-21 of IFRS 16 and not the contract period.

• Note 3: Lease liabilities that will mature within one year shall be listed as current liabilities.

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China Ecotek Corporation Detailed list of operating revenue 2021

China Ecotek Corporation Detailed list of operating revenue 2021
List 12		In Thousand of NTD
Item		Amount
Sales revenue
Water treatment agent of power plant	$	29,929
Purchase of BOF Sublance TOS/TCS Probe by Dragon Steel		13,196
Others (Note)		41,672
		84,797
Construction revenue
Phase I transportation process of China Steel's new coal mine
closed structure		990,491
Others (Note)		7,002,102
		7,992,593
Technical service revenue
Operation of Chengcing Lake Water Treatment Plant		145,618
Operation and maintenance of Kinmen Taihu Water
Treatment Plant		47,871
IWI operation and maintenance project		45,699
Others (Note)		54,650
		293,838
	$	8,371,228

Note: There is no single amount that exceeds 10% of the amount for this item.

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China Ecotek Corporation Detailed list of operating costs 2021

		2021
List 13					In Thousand of NTD
	Item				Amount
Construction costs
Construction materials				$	1,597,203
Construction workers					982,872
Construction expenses					4,828,588
					7,408,663
Plus: Construction in progress at the beginning of the year					19,548,893
Net amount of	construction	profit	recognized
according to the percentage of completion					624,558
Construction costs recognized		according to the
percentage of completion					7,368,033
Liability provision	at the end of the year				23,638
Less: Construction in progress at the end of the			year		(20,022,321)
Offsets of construction payments collected in advance
recognized according to the percentage of			completion		(7,519,701)
Liability provision	at the beginning of the		year		(63,730)
					7,368,033
Technical service costs					247,782
Cost of goods sold					59,953
				$	7,675,768

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China Ecotek Corporation Detailed list of operating expenses 2021

List 14

In Thousand of NTD

					Research and
				Administrative	development
Item			Selling expenses	expenses	expenses		Total
Personnel
expenses		$	51,541 $	251,657 $	11,716 $		314,914
Depreciation	and
amortization			-	33,202	197		33,399
Repair and
maintenance
expenses			1,773	15,105		9	16,887
Professional
service fees			1,455	10,271	3,778		15,504
Traveling
expenses			196	6,052	103		6,351
Training
expenses			-	4,599		-	4,599
Utility expenses			-	4,055		-	4,055
Entertainment
expenses			5	2,921		6	2,932
Postal	and
telecom charges			-	2,886		-	2,886
Rental expenses			-	2,384		-	2,384
Others (Note)			1,190	36,762	1,071		39,023
		$	56,160$	369,894 $	16,880$		442,934

Note: None of the balances exceed 5% of the balance for this item.

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China Ecotek Corporation

Summary of employee benefits, depreciation and amortization expenses by function 2021 and 2020

List 15 In Thousand of NTD

2021 2020 Operating costs Operating expenses Total Operating costs Operating expenses Total Employee benefit expenses Salary $ 943,565 $ 244,724 $ 1,188,289 $ 862,841 $ 240,009 $ 1,102,850 Labor and health insurance 72,123 24,022 96,145 66,016 22,061 88,077 Pension 42,143 13,104 55,247 39,566 13,000 52,566 Director's remuneration - 13,092 13,092 - 9,302 9,302 Others 13 19,972 19,985 10 24,210 24,220 $ 1,057,844 $ 314,914 $ 1,372,758$ 968,433$ 308,582 $ 1,277,015 Depreciation expense $ 21,985 $ 29,854 $ 51,839 $ 20,725 $ 29,256 $ 49,981 Amortization expense $ - $ 3,545 $ 3,545 $ - $ 4,696 $ 4,696		2020
			Total

• Note 1: The Company had 1,188 and 1,203 employees, in which 10 directors were not concurrently employees, in 2021 and 2020, respectively.

Note 2: Additional information is disclosed below:

1. Average employee benefit expenses [(Total employee benefit expenses – Total director's remuneration)/(Number of employees – Number of directors who not concurrently employees)] was NT$1,154 thousand this year. Average employee benefit expenses [(Total employee benefit expenses – Total director's remuneration)/(Number of employees – Number of directors who not concurrently employees)] was NT$1,063 thousand in the previous year.

2. Average employee salary expenses [Total employee salary expenses/(Number of employees – Number of directors who not concurrently employees)] was NT$1,009 thousand this year.

3. Average employee salary expenses [Total employee salary expenses/(Number of employees – Number of directors who not concurrently employees)] was NT$924 thousand in th previous year.

4. Adjustments and changes to average employee salary expenses [(Average employee salary expenses in the current year – Average employee salary expenses in the previous year)/Average employee salary expenses in the previous year]: 9.20%.

5. There was no remuneration to supervisors this year, and remuneration to supervisors was NT$329 thousand in the previous year.

6. The Company's remuneration policy:

7. (1) Directors' remuneration policy:

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Director's remuneration is specified in Article 32 of the Articles of Incorporation. Where the Company has a profit for a fiscal year, no more than 1% of such profit shall be appropriated as directors' remuneration through a resolution of the board of directors' meeting. A sum shall be set aside in advance to pay down any outstanding cumulative losses of the Company before directors' remuneration can be allocated according to the above percentage.

• (2) President and vice presidents' remuneration policy

The Company's remuneration to the president and vice presidents is in accordance with the Remuneration Management Regulations and reported to the Board of Directors for approval. A certain proportion of profits in the previous year is allocated as a performance bonus that is distributed to all employees according to related regulations on rewards, and is directly related to business performance.

(3) Employees' remuneration policy:

Employees' remuneration mainly includes basic salary, performance bonuses, and employee bonuses.

• A. Remuneration standards are set based on supply and demand in the labor market and the industry standard. Basic salaries are in principle higher than the minimum required by the Ministry of Labor, and take into consideration the job, education, and relevant experience. Standards may be revised each year based on the consumer price index, salaries offered in the market, and the Company's business situation. Employees are evaluated for a raise each year based on the Company's business situation, their individual work performance, and the work performance of their unit.

• B. A certain proportion of profits in the previous year is allocated as a performance bonus that is distributed to all employees according to related regulations on rewards, and is directly related to business performance. Furthermore, employee bonuses is specified in Article 32 of the Articles of Incorporation. Where the Company has a profit for a fiscal year, no less than 0.1% of such profit shall be appropriated as employee bonuses through a resolution of the board of directors' meeting. The recipients of employee bonuses include employees of affiliates meeting certain criteria. A sum shall be set aside in advance to pay down any outstanding cumulative losses of the Company before employee bonuses can be allocated according to the above percentage.

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