CHAINQUI — Audit Report / Information 2023

Nov 13, 2023

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Stock Code:2509

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD.

Parent Company Only Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2023 and 2022

Address: 1F., No.201-1, Jixian Rd., Sanchong District, New Taipei City 241, Taiwan Telephone: (02)87918888

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

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Table of contents

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of material accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Assets pledged as security (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information 9. List of major account titles

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 電 話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳 真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網 址 Web kpmg.com/tw

Independent Auditors’ Report

To the Board of Directors of Chainqui Construction Development Co., Ltd.:

Opinion

We have audited the financial statements of Chainqui Construction Development Co., Ltd.(“the Company”), which comprise the balance sheet as of December 31, 2023 and 2022, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the reports of another auditor (please refer to Other Matter paragraph), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determind the matters described below to the key audit matters to be communicated in our report.

Inventory evaluation

Please refer to notes 4(g), 5 and 6(f) of the notes to the financial statements for the accounting policy on measuring inventory, assumptions used, and uncertainties considered in determining the net realizable value and the details of inventory.

(a) Description of key audit matter:

The inventory of the company is an important asset for operations, accounting for appropriately 40% of its total assets. Inventory valuation is in accordance with IAS2. If the net realizable value is inappropriately assessed, it will result in a misstatement of financial statements. Hence, the test on inventory valuation is one of the key assessments carried out in our audit of the Company’s financial statements.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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• (b) Audit procedures performed

The main audit procedures of the key audit matter mentioned above include:

‧Understanding the Company’s internal procedures and accounting treatments of inventories.

‧Acquiring, and random sampling of, the evaluation data relevant to the net realizable value of inventories at the reporting date, as well as examining the market price for the aforementioned data, and verifying the calculation of the net realizable value of inventories to evaluate the appropriateness of the valuation, to ensure they are consistent with the Company’ s recent sales agreements or the actual price registrations provided by the Ministry of the Interior.

We also considered whether the Company 's disclosure of inventory related information was appropriate.

Other Matter

We did not audit the financial statements of certain investees, which represented investments in other entities accounted for using the equity method of the Company. Those statements were audited by another auditor, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for those investments accounted for using the equity method, is based solely on the reports of another auditor. The investments accounted for using the equity method constituting 22% and 27% of total assets at December 31, 2023 and 2022, and the share of loss of subsidiaries and associates accounted for using the equity method constituting 50% and 34% of total loss before tax for the years then ended.

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

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

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

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

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1. 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.

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

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

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

5. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on these financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Tseng, Kuo-Yang and Huang, Hsin-Ting.

KPMG

Taipei, Taiwan (Republic of China) March 13, 2024

Notes to Readers

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

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

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

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD.

Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollar)

Assets Current assets: 1100 Cash and cash equivalents (Note 6(a)) 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 1150 Notes receivable and accounts receivable, net (Notes 6(d) and (t)) 1200 Other receivables, net (Note 6(e)) 1320 Inventories (for construction business), net (Notes 6(f) , 8 and 9) 1410 Prepayments 1476 Other current financial assets (Notes 6(k) and 8) 1478 Construction deposits paid (Notes 6(k) and 9) 1479 Other current assets 1480 Current assets recognized as incremental costs to obtain contract with customers (Note 6(k)) Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Notes 6(c) and 8) 1550 Investments accounted for using equity method (Notes 6(g) and 7) 1600 Property, plant and equipment (Notes 6(h) and 8) 1755 Right-of-use assets (Note 6(i)) 1760 Investment property, net (Notes 6(j) and 8) 1780 Intangible assets 1840 Deferred tax assets (Note 6(q)) 1975 Net defined benefit asset, non-current (Note (p)) 1980 Other non-current financial assets Total assets	December 31, 2023 Amount % $ 175,905 2 20,076 - 1,698 - 5,524 - 2,949,785 40 189,981 3 421,325 6 185,683 2 9,768 - 417,916 6 4,377,661 59 87,386 1 2,566,429 34 194,549 3 7,345 - 191,458 3 1,292 - 6,080 - 616 - 5,856 - 3,061,011 41 $ 7,438,672 100	December 31, 2022 Amount % 589,488 10 17,433 - 1,751 - 8,300 - 1,582,548 25 185,277 3 371,390 6 170,574 3 42,547 1 185,591 3 3,154,899 51 59,665 1 2,587,371 42 194,779 3 10,828 - 191,571 3 1,170 - 6,434 - - - 11,454 - 3,063,272 49 6,218,171 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (Note 6(l)) 2110 Short-term notes and bills payable (Note 6(m)) 2130 Current contract liabilities (Note 6(t)) 2150 Notes payable 2160 Notes payable to related parties (Note 7) 2170 Accounts payable 2180 Accounts payable to related parties (Note 7) 2200 Other payables (Note 6(p)) 2230 Current tax liabilities (Note 6(q)) 2280 Current lease liabilities (Note 6(n)) 2399 Other current liabilities, others Non-Current liabilities: 2580 Non-current lease liabilities (Note 6(n)) 2640 Net defined benefit liability, non-current (Note 6(p)) 2645 Guarantee deposits received Total liabilities Equity (Note 6(r)): 3100 Share capital 3200 Capital surplus 3300 Retained earnings 3400 Other equity Total equity Total liabilities and equity	December 31, 2023	December 31, 2023		December 31, 2022 Amount % 1,035,375 17 219,529 3 428,749 7 107,215 2 41,957 1 76,478 1 4,750 - 46,291 1 1,284 - 5,034 - 22,296 - 1,988,958 32 5,831 - 522 - 1,000 - 7,353 - 1,996,311 32 2,245,505 36 536,333 9 1,509,412 24 (69,390) (1) 4,221,860 68 6,218,171 100
			Amount	%

See accompanying notes to parent company only financial statements.

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

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD.

Statements of Comprehensive Income

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollar, Except Losses Per Share)

2023 Amount 4000 Operating revenue (Notes 6(o) , (t) and 7) $ 9,795 5000 Operating costs (Note 7) 1,242 Gross profit from operations 8,553 Operating expenses (Note 6(p)): 6100 Selling expenses 38,198 6200 Administrative expenses 55,527 Total operating expenses 93,725 Net operating loss (85,172) Non-operating income and expenses (Note 6(v)): 7100 Interest income 3,972 7010 Other income 6,685 7020 Other gains and losses, net (18,779) 7050 Finance costs, net (Note 6(f)) (22,939) 7070 Share of loss of subsidiaries, associates and joint ventures accounted for using equity method (129,402) Total non-operating income and expenses (160,463) Loss before income tax (245,635) 7951 Less: Income tax expenses (Note 6(q)) - Loss (245,635) 8300 Other comprehensive income: 8310 Items that may not be reclassified subsequently to profit or loss 8311 Gains on remeasurements of defined benefit plans (Note 6(p)) 468 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 27,721 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 4,953 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss - Total items that may not be reclassified subsequently to profit or loss 33,142 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation of foreign financial statements 1,907 8387 Unrealized losses of subsidiaries, associates and joint ventures accounted for using equity method that arose from investments in debt instruments measured at fair value through other comprehensive income (2,527) 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss (Note 6(q)) (354) Total items that may be reclassified to subsequently profit or loss (974) 8300 Other comprehensive income 32,168 8510 Comprehensive (loss) income $ (213,467) Losses per share (Note 6(s)) 9750 Basic losses per share $	2023	% 100 13 87 390 567 957 (870) 41 68 (192) (234) (1,321) (1,638) (2,508) - (2,508) 5 283 50 - 338 20 (26) 4 (10) 328 (2,180) (1.09)	2022	% 100 7 93 264 523 787 (694) 12 82 (31) (83) (619) (639) (1,333) (1) (1,332) 4 (269) 11 - (254) 1,983 - 397 1,586 1,332 - (0.67)
			Amount 11,339 850 10,489 29,887 59,355 89,242 (78,753) 1,363 9,338 (3,504) (9,365) (70,151) (72,319) (151,072) (147) (150,925) 463 (30,482) 1,215 - (28,804) 224,898 - (44,980) 179,918 151,114 189

See accompanying notes to parent company only financial statements.

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

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD.

Statements of Changes in Equity

For the years ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollar)

Balance at January 1, 2022 Loss for the year ended December 31, 2022 Other comprehensive income for the year ended December 31, 2022 Comprehensive loss for the year ended December 31, 2022 Appropriation and distribution of retained earnings: Legal reserve Special reserve Other changes in capital surplus: Other changes in capital surplus Balance at December 31, 2022 Loss for the year ended December 31, 2023 Other comprehensive income for the year ended December 31, 2023 Comprehensive loss for the year ended December 31, 2023 Appropriation and distribution of retained earnings: Reversal of special reserve Other changes in capital surplus: Other changes in capital surplus Balance at December 31, 2023	Share capital		Capital surplus				Retained earnings	Retained earnings	Retained earnings					Other equity	Other equity		Total other equity	Total equity 4,221,041 (150,925) 151,114 189 - - 630 4,221,860 (245,635) 32,168 (213,467) - 510 4,008,903
												Exchange differences on translation of foreign financial statements		Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
	Ordinary shares				Legal reserve		Special reserve	Unappropriated retained earnings			Total retained earnings
	$ 2,245,505 - - - - - - 2,245,505 - - - - - $ 2,245,505		535,703		534,197		192,700		932,977		1,659,874		(205,655) - 179,918 179,918 - - - (25,737) - 1,553 1,553 - - (24,184)		(14,386) - (29,267) (29,267) - - - (43,653) - 30,147 30,147 - - (13,506)		(220,041) - 150,651 150,651 - - - (69,390) - 31,700 31,700 - - (37,690)
			- -		- -		- -
			-		-		-
			- - 630		4,400 - -		- 27,341 -
			536,333 - -		538,597 - -		220,041 - -
			-		-		-
			- 510		- -
			536,843		538,597

See accompanying notes to parent company only financial statements.

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

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollar)

Cash flows from (used in) operating activities: Loss before tax Adjustments: Adjustments to reconcile profit: Depreciation expense Amortization expense Net loss on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss of subsidiaries, associates and joint ventures accounted for using equity method Loss on disposal of property, plant and equipment Gain on lease modification Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Net loss (gain) on financial assets or liabilities at fair value through profit or loss Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in other receivable Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Decrease (increase) in other financial assets Decrease (increase) in assets recognized as incremental costs to obtain contract with customers Increase in construction deposits paid Decrease (increase) in other operating assets Total changes in operating assets Changes in operating liabilities: Increase in contract liabilities (Decrease) increase in notes payable Increase in notes payable to related parties Increase (decrease) in accounts payable Increase (decrease) in accounts payable to related parties Increase (decrease) in other payable Increase (decrease) in other current liabilities Increase (decrease) in net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash outflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows used in operating activities	2023 $ (245,635) 7,665 533 1,109 22,939 (3,972) (3,352) 129,402 - (31) 154,293 (3,752) (309) 362 3,125 (1,218,380) (94,809) (6,884) 65 (232,325) (15,109) (616) (1,568,632) 636,177 (2,424) 317 6,961 (4,750) 54,178 73 (54) 690,478 (878,154) (723,861) (969,496) 3,972 3,352 (38,287) (1,633) (1,002,092)	2022 (151,072) 8,111 428 801 9,365 (1,363) (8,962) 70,151 32 (5) 78,558 13,635 (896) 22,704 17,833 (671,538) (14,651) (15,290) (266,763) (113,060) (49,280) - (1,077,306) 311,360 9,662 21,883 562 - (33,639) (6,407) (618) 302,803 (774,503) (695,945) (847,017) 1,363 8,962 (16,337) (110) (853,139)

See accompanying notes to parent company only financial statements.

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

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD.

Statements of Cash Flows (CONT’D)

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollar)

Cash flows from (used in) investing activities: Acquisition of investments accounted for using equity method Cash dividends received from investees accounted for using equity method Acquisition of property, plant and equipment Acquisition of intangible assets Acquisition of investment properties Increase in other current financial assets Decrease (increase) in other financial non-current assets Decrease in other non-current financial assets Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term notes and bills payable Decrease in short-term notes and bills payable Increase in guarantee deposits received Decrease in guarantee deposits received Payment of lease liabilities Net cash flows from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

See accompanying notes to parent company only financial statements.

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

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD.

Notes to the Financial Statements

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollar, Unless Otherwise Specified)

(1) Company history

Chainqui Construction Development Co., Ltd. (the “Company”) was founded in December 1972, and was listed on May 20, 1988, approved by the Financial Supervision and Administration Commission of the Executive Yuan.

The Company formerly known as Baogu Architecture Development Co., Ltd., it was changed to Chainqui Construction Co., Ltd. on June 16, 1998, and was later renamed Chainqui Construction Development Co., Ltd. on October 2, 2009, based on the resolution approved during the extraordinary general meeting.

The major business activities of the Company are the construction, sales, and leasing of residential and commercial buildings.

(2) Approval date and procedures of the financial statements:

The financial statements were authorized for issue by the Board of Directors on March 13, 2024.

(3) New standards, amendments and interpretations adopted:

• (a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2023:

• ●Amendments to IAS 1 “Disclosure of Accounting Policies”

• ●Amendments to IAS 8 “Definition of Accounting Estimates”

• ●Amendments to IAS 12 “ Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

The Company has initially adopted the new amendment, which do not have a significant impact on its financial statements, from May 23, 2023:

• ●Amendments to IAS 12 “International Tax Reform—Pillar Two Model Rules”

• (b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its financial statements:

• ●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

• ●Amendments to IAS 1 “Non-current Liabilities with Covenants”

(Continued)

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CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• ●Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”

• ●Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Company does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

• ●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• ●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”

• ●Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information”

• ●Amendments to IAS21 “Lack of Exchangeability”

(4) Summary of material accounting policies:

The material accounting policies presented in the financial statements are summarized below. The following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”).

• (b) Basis of preparation

• (i) Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

• 1) Financial instruments at fair value through profit or loss are measured at fair value;

• 2) Financial assets at fair value through other comprehensive income are measured at fair value;

• 3) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation.

• (ii) Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan Dollar (NTD), which is the Company’s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

(Continued)

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CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(c) Foreign currencies

• (i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

• 1) an investment in equity securities designated as at fair value through other comprehensive income;

• 2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

• 3) qualifying cash flow hedges to the extent that the hedges are effective.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to noncontrolling interests. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

• (d) Classification of current and non-current assets and liabilities

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

(Continued)

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CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• (i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is expected to be realized within twelve months after the reporting period; or

• (iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

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

An entity shall classify a liability as current when:

• (i) It is expected to be settled in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is due to be settled within twelve months after the reporting period; or

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

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(f) Financial instruments

Accounts receivable and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. Accounts receivable without a significant financing component is initially measured at the transaction price.

• (i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

(Continued)

12

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• ‧ It is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• ‧ Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• ‧ It is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

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

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

(Continued)

13

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

• 3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

• 4) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, guarantee deposit paid and other financial assets).

The Company measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

• ‧ Debt securities that are determined to have low credit risk at the reporting date; and

• ‧ Other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivable are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment as well as forwardlooking information.

The Company considers a financial asset to be in default when the financial asset is more than 365 days past due or the debtor is unlikely to pay its credit obligations to the Company in full.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘ investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’.

(Continued)

14

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

• ‧ Significant financial difficulty of the borrower or issuer;

• ‧ A breach of contract such as a default or being more than 365 days past due;

• ‧ The lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• ‧ It is probable that the borrower will enter bankruptcy or other financial reorganization; or

• ‧ The disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For individual customers, the Company has a policy of writing off the gross carrying amount when the financial asset is 365 days past due based on historical experience of recoveries of similar assets. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

• 5) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

(Continued)

15

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• (ii) Financial liabilities and equity instruments

• 1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

• 2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

• 3) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative, or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

• 4) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred, or liabilities assumed) is recognized in profit or loss.

• 5) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(Continued)

16

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. Cost includes the necessary expenses incurred to bring it to the available location and condition. The development cost of the properties and land includes construction costs, land costs, borrowing costs and project costs incurred during the development period. When the inventory cost is higher than the net realizable value, the cost should be reduced to the net realizable value, and the amount of the reduction should be recognized as the cost of goods sold in the current period.

The method for determining the net realizable value is as follows:

• (i) Land for construction: The net realizable value is estimated by the management authority based on the current market conditions.

• (ii) Construction in progress: The net realizable value is calculated based on the estimated selling price (according to the prevailing market conditions) reduced to the costs and sales expenses to be invested to completion.

• (iii) Properties and land for sale: the net realizable value is the estimated selling price (according to the prevailing market conditions) minus the estimated cost incurred when selling the properties and land.

(h) Investment subsidiaries

The subsidiaries in which the Company holds controlling interest are accounted for under equity method in the financial statements. Under equity method, the net income, other comprehensive income and equity in the non-consolidated financial statement are the same as those attributable to the owners of parent in the consolidated financial statements.

The changes in ownership of the subsidiaries are recognized as equity transaction.

(i) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

(Continued)

17

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• (j) Property, plant and equipment

• (i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

• (ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

• (iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

1)	Buildings	3~50 years
2)	Other facilities	3~15 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(k) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

• (iv) As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

(Continued)

18

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• －

• Fixed payments, including in-substance fixed payments;

• － Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• －

• －

• Amounts expected to be payable under a residual value guarantee; and

• Payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• －

• There is a change in future lease payments arising from the change in an index or rate; or

• － There is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or

• － There is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

• － There is a change of its assessment on whether it will exercise an extension or termination option; or

• －

• There is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

(Continued)

19

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

The Company has elected not to recognize right-of-use assets and lease liabilities for shortterm leases of office equipments that have a lease term of 12 months or less and leases of lowvalue assets, including office equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

For sale-and-leaseback transactions, the Company applies the requirements for determining when a performance obligation is satisfied in IFRS15 to determine whether the transfer of an asset is accounted for as a sale of the asset. If the transfer of an asset satisfies the requirement of IFRS15 to be accounted for as a sale of the asset, the Company derecognizes the transferred asset, then measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained. Accordingly, the Company recognizes only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. For leaseback transaction, the Company applies the lessee accounting policy. If the transfer of an asset does not satisfy the requirement of IFRS15 to be accounted for as a sale of the asset, the Company continues to recognize the transferred asset and recognizes the financial liability equal to the transfer proceeds.

(v) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

The lessor recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The lessor recognizes the interest income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor’ s net investment in the lease. The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(l) Intangible assets

(i) Recognition and measurement

Other intangible assets that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(Continued)

20

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

1) Software 5 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(m) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(Continued)

21

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(n) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

(o) Borrowing cost

It takes a long period of work to bring an asset to the condition ready for use or sale, during which borrowing costs directly attributable to the acquisition, construction, or manufacturing of a asset should be capitalized as the cost of the asset. All other borrowing costs are expensed in the current period. The cost of borrowing is composed of interest and other related costs incurred by borrowing.

(p) Revenue

(i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’ s main types of revenue are explained below.

1) Land development and sale of real estate

The Company develops and sells residential properties and usually sales properties in advance during construction or before construction begins. Revenue is recognized when control over the properties has been transferred to the customer. The properties have generally no alternative use for the Company due to contractual restrictions. However, an enforceable right to payment does not arise until legal title of a property has passed to the customer. Therefore, revenue is recognized at a point in time when the legal title has passed to the customer.

The revenue is measured at the transaction price agreed under the contract. For sale of readily available house, in most cases, the consideration is due when legal title of a property has been transferred. While deferred payment terms may be agreed in rare circumstances, the deferral never exceeds twelve months. The transaction price is therefore not adjusted for the effects of a significant financing component. For preselling properties, the consideration is usually received by installment during the period from contract inception until the transfer of properties to the customer. If the contract includes a significant financing component, the transaction price will be adjusted for the effects of the time value of money during the period, using the specific borrowing rate of the construction project. Receipt of a prepayment from a customer is recognized as contract liability. Interest expense and contract liability are recognized when adjusting the effects of the time value of money. Accumulated amount of contract liability is recognized as revenue when control over the property has been transferred to the customer.

(Continued)

22

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• 2) Services

The Company provides consulting and management services to customers. Revenue from services rendered is recognized in profit or loss in proportion to the stage of completion of the transaction at the reporting date.

3) Lease income

Lease income from the investment property is recognized in income on a straight-line basis over the lease term. Incentives granted to the Company to enter into the operating lease are spread over the lease term on a straight-line basis so that the lease income received is reduced accordingly.

4) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(ii) Contract costs

• 1) Incremental costs of obtaining a contract

The Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Company applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

2) Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Company recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

• a) The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify;

• b) The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and

• c) The costs are expected to be recovered.

(Continued)

23

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(q) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(Continued)

24

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• (r) Income tax

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

• (i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction (i) affects neither accounting nor taxable profits (losses) and (ii) does not give rise to equal taxable and deductible temporary differences;

• (ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

• (i) The Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) The same taxable entity; or

• 2) Different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(Continued)

25

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(s) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share are calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. Diluted earnings per share are calculated as the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

(t) Operating segments

The Company has disclosed segment information in the consolidated financial statements, so does not disclose such information in the Financial Statements.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

In preparing the financial statements, management has made judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

• (a) Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

(i) Valuation of inventories

Since the inventory is measured at a low cost and net realized value, the cost should be offset against the net realized value when the inventory cost is higher than the net realized value. The amount of deductible should be recognized as cost of sales. Please refer to Note 4 (g) for the method used in determining the net value of the net realization; also, please refer to note 6(f) for inventory evaluation.

(b) Assessment

The Company’ s accounting policies include measuring financial and non-financial assets and liabilities at fair value.

The Company’s financial instrument valuation group conducts independent verification on fair value by using data sources that are independent, reliable, and representative of exercise prices. This financial instrument valuation group also periodically adjusts valuation models, conducts backtesting, renews input data for valuation models, and makes all other necessary fair value adjustments to assure the rationality of fair value. Investment properties is regularly evaluated in according with the valuation methods and parameters announced by the FSC, or commissioned by an external appraiser.

(Continued)

26

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

The Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

• (i) Level 1: quoted prices (unadjusted) in active markets for identifiable assets or liabilities.

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

(iii) Level 3: inputs for the assets or liability that are not based on observable market data.

For any transfer within the fair value hierarchy, the impact of the transfer is recognized on the reporting date.

Please refer to notes listed as below for assumptions used in measuring fair value.

• (i) Note 6(j), Investment property

• (ii) Note 6(w), Financial instruments

(6) Explanation of significant accounts:

• (a) Cash and cash equivalents

Cash and cash equivalents
Cash on hand Checking accounts Demand deposits Foreign currency deposits Cash and cash equivalents	December 31, 2023 $ 291 10,213 162,618 2,783 $ 175,905	December 31, 2022
		320 72,121 514,271 2,776
		589,488

Please refer to Note 6(w) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Company.

• (b) Financial assets at fair value through profit or loss

• (i) The components of financial assets were as follows:

Current financial assets at fair value through profit or loss: Share of exchange-listed and OTC-listed companies Stock of emerging-listed companies Monetary fund Total	December 31, 2023 $ 20,056 20 - $ 20,076	December 31, 2022
		7,396 15 10,022
		17,433

(Continued)

27

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• (ii) For information on the Company’s hedge of credit, currency and interest rate of the financial instruments, please refer to Note 6(w).

• (iii) The Company loaned their financial asset at fair value through profit or loss to Yuan Securities for the purpose of earning interest revenue during the brokerage period, wherein the Company does not have the right to vote. The Company earned the total amounts of $25 thousand and $6 thousand in 2023 and 2022, respectively. The book value of the financial assets leased on December 31, 2023 and 2022 were $0 thousand and $7,379 thousand.

• (iv) As of December 31, 2023 and 2022, the financial assets at fair value through profit or loss of the Company had not been pledged as collateral.

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

December 31, 2023 Equity instruments at fair value through other comprehensive income: Domestic Listed Common Shares: Capital Securities Corp. $ 81,246 Taiwan High Speed Rail Corporation 6,140 Total $ 87,386	December 31, 2022
	53,915 5,750
	59,665

• (i) The Company holds these equity instrument as long-term strategic instrument instead of trading purpose and are accounted for under fair value through other comprehensive income.

• (ii) For the years ended December 31, 2023 and 2022, the dividends of $2,815 thousand and $8,887 thousand, respectively, related to equity investments at fair value through other comprehensive income were recognized.

• (iii) Please refer to Note 6(w) for credit and market risk information.

• (iv) The above financial assets had been pledged as collateral for its credit lines. Please refer to Note 8.

• (d) Notes and accounts receivable

December 31, 2023 Notes receivable $ 1,448 Accounts receivable 250 Less: Loss allowance - $ 1,698	December 31, 2022 1,139 3,024 (2,412) 1,751

(Continued)

28

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information. The loss allowance provision were determined as follows:

Current More than 365 days past due Current More than 365 days past due	December 31, 2023	December 31, 2023
	Gross carrying amount Weighted- average loss rate $ 1,698 0% - 100% $ 1,698 December 31, 2022		Loss allowance provision
			- -
			-
		Weighted- average loss rate 0% 100%	Loss allowance provision
			- 2,412
			2,412

The movement of allowance for expected credit losses are as follow:

Balance at January 1 Amounts written off Balance at December 31	For the years ended December 31	For the years ended December 31
	2023 $ 2,412 (2,412) $ -	2022
		2,412 - 2,412

As of December 31, 2023 and 2022, the aforementioned notes and accounts receivable of the Company had not been pledged as collateral.

For further credit risk information, please refer to Note 6(w).

(e) Other receivables

Other receivables Less: Loss allowance	December 31, 2023 $ 5,524 - $ 5,524	December 31, 2022 37,524 (29,224)
		8,300

(Continued)

29

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

For the years ended December 31, 2023 and 2022, the movement of allowance for other receivables ares as follows:

ares as follows:
Balance at January 1 Amounts written off Balance at December 31	For the years ended December 31
	2023 $ 29,224 (29,224) $ -	2022
		29,224 -
		29,224

For further credit risk information, please refer to Note 6(w).

• (f) Inventories

Prepayments for land Land held for development Construction in Progress Properties and land held for sale	December 31, 2023 $ 77,733 562,488 2,272,783 36,781 $ 2,949,785	December 31, 2022
		66,553 424,352 1,054,862 36,781
		1,582,548

• (i) There was no write-downs of inventories to net realizable value for the years ended December 31, 2023 and 2022.

• (ii) The information of capitalized interests was as follows:

Interest expenses Capitalized interest for construction in progress Capitalized interest rate		For the years ended December 31

• (iii) As of December 31, 2023, and 2022, the aforesaid inventories were pledged as collateral for its credit lines. Please refer to Note 8.

• (iv) As of December 31, 2023, and 2022, the recovery of inventories expected to exceed 12 months were as follows:

Inventories	December 31, 2023 $ 2,320,880	December 31, 2022
		1,545,767

(Continued)

30

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• (g) Investments accounted for using equity method

Investments accounted for using equity method of the Company were as follows:

Subsidiary	December 31, 2023 $ 2,566,429	December 31, 2022
		2,587,431

• (i) Subsidiaries

Please refer to the consolidated financial statement of 2023.

• (ii) As of December 31, 2023 and 2022, the Company did not provide any investments accounted for using equity method as collateral.

• (h) Property, plant and equipment

The movements in cost, depreciation, and impairment of property, plant and equipment of the Company for the years ended December 31, 2023 and 2022 were as follows:

Cost or deemed cost: Balance at January 1, 2023 Additions Balance at December 31, 2023 Balance at January1, 2022 Additions Disposals and obsolescence Balance at December 31, 2022 Depreciation and impairment loss: Balance at January 1, 2023 Depreciation for the year Balance at December 31, 2023 Balance at January 1, 2022 Depreciation for the year Disposals and obsolescence Balance at December 31, 2022 Carrying amounts: Balance at December 31, 2023 Balance at January 1, 2022 Balance at December 31, 2022	Land $ 165,905 - $ 165,905 $ 165,905 - - $ 165,905 $ - - $ - $ - - - $ - $ 165,905 $ 165,905 $ 165,905	Buildings 68,512 320 68,832 68,421 91 - 68,512 40,484 1,047 41,531 39,460 1,024 - 40,484 27,301 28,961 28,028	Other facilities 7,001 946 7,947 6,554 604 (157) 7,001 6,155 449 6,604 5,900 380 (125) 6,155 1,343 654 846	Total 241,418 1,266 242,684 240,880 695 (157) 241,418 46,639 1,496 48,135 45,360 1,404 (125) 46,639 194,549 195,520 194,779

As of December 31, 2023 and 2022, the property, plant and equipment was pledged as collateral for its credit lines, please refer to Note 8.

(Continued)

31

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(i) Right-of-use assets

The movements in costs, depreciation ,and impairment of vehicles leased by the Company were as follows:

follows:
		Vehicles
Cost:
Balance at January 1, 2023	$	15,936
Additions		6,111
Disposals		(12,712)
Balance at December 31, 2023	$	9,335
Balance at January 1, 2022	$	14,205
Additions		10,517
Disposals		(8,786)
Balance at December 31, 2022	$	15,936
Accumulated depreciation and impairment losses:
Balance at January 1, 2023	$	5,108
Depreciation for the year		4,198
Disposals		(7,316)
Balance at December 31, 2023	$	1,990
Balance as of January 1 2022	$	7,797
Depreciation for the year		4,905
Disposals		(7,594)
Balance at December 31, 2022	$	5,108
Carrying amount:
Balance at December 31, 2023	$	7,345
Balance at January 1, 2022	$	6,408
Balance at December 31, 2022	$	10,828

(j) Investment property

The movements in cost, depreciation, and impairment of investment property of the Company were as follows:

Cost or deemed cost: BalanceatJanuary 1, 2023 Acquisition BalanceatDecember 31, 2023 BalanceatDecember 31, 2022 (as beginning balance)	Land $ 117,927 - $ 117,927 $ 117,927	Buildings 94,831 1,858 96,689 94,831	Total
			212,758 1,858
			214,616
			212,758

(Continued)

32

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

Depreciation and impairment loss: BalanceatJanuary 1, 2023 Depreciation for the year BalanceatDecember 31, 2023 BalanceatJanuary 1, 2022 Depreciation for the year BalanceatDecember 31, 2022 Carrying amount: BalanceatDecember 31, 2023 BalanceatJanuary 1, 2022 BalanceatDecember 31, 2022 Fair value: BalanceatDecember 31, 2023 BalanceatJanuary 1, 2022 BalanceatDecember 31, 2022	Land $ - - $ - $ - - $ - $ 117,927 $ 117,927 $ 117,927	Buildings Total 21,187 21,187 1,971 1,971 23,158 23,158 19,385 19,385 1,802 1,802 21,187 21,187 73,531 191,458 75,446 193,373 73,644 191,571 $ 503,891 $ 556,715 $ 510,619	Total
			21,187 1,971
			23,158
			19,385 1,802
			21,187
			191,458
			193,373
			191,571

• (i) The investment property contains commercial buildings and land held for leasing. Please refer to Note 6(o) for other related information (including rental income and direct operating expenses arising from investment property that generate rental income).

• (ii) The fair value of investment properties (as measured or disclosed in the financial statements) was based on the actual selling price of the real estate transactions in similar district and type reported on the websites of the Ministry of the Interior and real-restate agencies. The inputs of levels of fair value hierarchy in determining the fair value is classified to Level 3.

(iii) Information for the aforesaid investment property pledged as collateral, please refer to Note 8.

• (k) Other current financial assets and other current assets

Other current financial assets: Reserve accounts Trust accounts Time deposit maturing more than three months Other current assets: Construction deposits paid Current incremental costs to obtain a contract with customers	December 31, 2023 $ 53,096 318,229 50,000 $ 421,325 $ 185,683 417,916 $ 603,599	December 31, 2022
		29,374 342,016 -
		371,390
		170,574 185,591
		356,165

(Continued)

33

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(i) Construction deposits paid

Construction deposits paid are majorly the guarantee of joint construction.

• (ii) Current incremental costs to obtain a contract with customers

The Company expects that incremental commission fees paid to intermediaries, and the bonus for the internal sales department are recoverable. The Company has therefore capitalized them as contract costs. Capitalized commission fees are amortized when the related revenues are recognized. For the years ended December 31, 2023 and 2022, the amortized expense were recognized as $0 for both period by the Company.

• (iii) As of December 31, 2023 and 2022, the other financial assets of the Company had been pledged as collateral, please refer to Note 8.

(l) Short-term borrowings

The short-term borrowings were summarized as follows:

Unsecured bank loans Secured bank loans Total Unused credit line Range of interest rates	December 31, 2023 $ 250,117 1,531,928 $ 1,782,045 $ 3,809,022 2.23%~3.40%	December 31, 2022
		322,375 713,000
		1,035,375
		3,798,950
		2.10%~2.93%

For the collateral for short-term borrowings, please refer to Note 8.

• (m) Short-term notes and bills payable

The short-term notes and bills payable were summarized as follows:

Commercial paper payable Less: Discount on short-term notes and bills payable Total	December 31, 2023 Guarantee or acceptance institution Range of interest rates (%) Amount Far Eastern International Bank 2.765% $ 80,000 China Bills Finance Corporation 2.738% 140,000 220,000 (293) $ 219,707
	Guarantee or acceptance institution Far Eastern International Bank China Bills Finance Corporation

(Continued)

34

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

Commercial paper payable Less: Discount on short-term notes and bills payable Total	December 31, 2022 Guarantee or acceptance institution Range of interest rates (%) Amount Far Eastern International Bank 2.838% $ 80,000 $ China Bills Finance Corporation 2.458%~2.508% 140,000 220,000 (471) $ 219,529
	Guarantee or acceptance institution Far Eastern International Bank China Bills Finance Corporation

For the collateral for short-term notes and bills payable, please refer to Note 8.

(n) Lease liabilities

The Company’s lease liabilities were as follows ：

The Company’s lease liabilities were as follows：
Current Non-current Please refer to Note 6(w) for maturity analysis.	December 31, 2023 $ 3,297 $ 4,089	December 31, 2022
		5,034
		5,831

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases	For the years ended December 31	For the years ended December 31
	2023 $ 136 $ 539	2022
		120
		283

The amounts recognized in the statement of cash flows for the Company was as follows:

Total cash outflow for leases	For the years ended December 31	For the years ended December 31
	2023 $ 4,838	2022
		5,264

The Company leases vehicles, with lease terms of one to three years.

The Company also leases office equipment with contract terms of one to three years. These leases are short-term and leases of low-value items. The recognition exemption provided by IFRS 16 was applied for the purpose of not recognizing right-of-use assets and lease liabilities for these leases.

(Continued)

35

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(o) Operating leases

The Company leases out its investment property. The Company has classified these leases as operating leases, because it does not transfer substantially all of the risks and rewards incidental to the ownership of the assets. Please refer to Note 6(j) that sets out information about the operating leases of investment property.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

Less than one year Between one to five years More than five years Total undiscounted lease payment	December 31, 2023 $ 6,793 10,294 10,353 $ 27,440	December 31, 2022
		4,959 18,481 361
		23,801

(i) For the years ended December 31, 2023 and 2022, the rental income from investment property were $4,574 thousand and $6,409 thousand, respectively.

(ii) For the years ended December 31, 2023 and 2022, the maintenance expenses for investment property were $974 thousand and $327 thousand, respectively.

(p) Employee benefits

(i) Defined benefit plans

The Company determined the movement in the present value of the defined benefit obligations and the fair value of plan assets as follows:

December 31, 2023 Present value of benefit obligations $ 27,554 Fair value of plan assets 28,170 Net defined benefit (assets) liabilities $ (616) The Company’s employee benefit liabilities were as follows:	December 31, 2023 Present value of benefit obligations $ 27,554 Fair value of plan assets 28,170 Net defined benefit (assets) liabilities $ (616) The Company’s employee benefit liabilities were as follows:	December 31, 2022
		27,380 26,858
		522
Short-term vacation liability (recorded under other payables)	December 31, 2023 $ 100	December 31, 2022
		100

			December	31,	December	31,
			2023		2022
Short-term vacation liability	(recorded under other	$		100		100
payables)

(Continued)

36

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for its employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, the minimum earnings shall be no less than the earnings attainable from two-year time deposits with the interest rates offered by local banks.

The Company’ s Bank of Taiwan labor pension reserve account balance accounted to $28,170 thousand as of December 31, 2023. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

• 2) Movements in the present value of the defined benefit obligations

The movements in the present value of the defined benefit obligations for the Company were as follows:

were as follows:
Defined benefit obligation at January 1 Current service costs and interest Remeasurements of the net defined benefit liabilities (assets) Defined benefit obligation at December 31	For the years ended December 31
	2023 $ 27,380 383 (209) $ 27,554	2022
		25,748 220 1,412
		27,380

• 3) Movements in the fair value of plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

	For	the years ended	the years ended	December 31
		2023		2022
Fair value of plan assets at January 1	$	26,858		24,145
Interest income			313	147
Remeasurements of the net defined benefit			259	1,875
liabilities (assets)
－Return on plan assets excluding interest income
Contributions paid by employer			740	691
Fair value of plan assets at December 31	$	28,170		26,858

(Continued)

37

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• 4) Expenses recognized in profit or loss

The Company’ s pension expenses recognized in profit or loss for the years ended December 31, 2023 and 2022 were as follows:

Current service costs Net interest of net liabilities (assets) for defined benefit obligations Operating costs and expenses	For the years ended December 31 2023 2022 $ 68 65 2 8 $ 70 73 $ 70 73	For the years ended December 31 2023 2022 $ 68 65 2 8 $ 70 73 $ 70 73
	2023 $ 68 2 $ 70 $ 70
		73
		73

• 5) Actuarial assumptions

The following are the Company’s principal actuarial assumptions of the present value of the defined benefit obligations:

Discount rates Future salary increases	December 31, 2023 December 31, 2022 % 1.15 % 1.15 % 2.50 % 2.50

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date for 2023 is $740 thousand.

The weighted-average duration of the defined benefit plan is 6.5 years.

• 6) Sensitivity Analysis

As of December 31, 2023, and 2022, the changes in the principal actuarial assumptions will impact the present value of the defined benefit obligations as follows:

December 31, 2023 Discount rate was changed by 0.25% Future salary increasing rate was changed by 1% December 31, 2022 Discount rate was changed by 0.25% Future salary increasing rate was changed by 1%	Impact on the present value of defined benefit obligations Increase Decrease $ (292) 300 1,238 (1,144) (323) 332 1,367 (1,254)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

(Continued)

38

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2023 and 2022.

(ii) Defined contribution plans

The Company allocate 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act. Under this defined contribution plan, the Company allocates a fixed amount to the Bureau of the Labor Insurance without additional legal or constructive obligations.

The Company’s pension costs under the defined contribution method were $2,377 thousand and $2,191 thousand for the years ended December 31, 2023 and 2022, respectively. Payment was made to the Bureau of Labor Insurance.

(q) Income Tax

• (i) The components of income tax for the years ended December 31, 2023 and 2022 were as follows:

Current tax expense Prior years income tax adjustment Tax (benefit) expense	For the years ended December 31 2023 2022 $ - (147) $ - (147)
	2023 $ - $ -

Reconciliations between income tax and loss before tax for 2023 and 2022 were as follows:

Loss before income tax Income tax using the Company’s domestic tax rate Capitalized borrowing costs difference between tax and fiscal reporting Losses on valuation of financial assets Investments losses on using equity method Changes in unrecognized temporary differences Current-year losses for which no deffered tax asset was recognized Others Total	For the years ended December 31 2023 2022 $ (245,635) (151,072) $ (49,127) (30,214) (2,631) (812) 222 160 25,880 14,018 (611) (259) 22,056 15,587 4,211 1,373 $ - (147)
	2023 $ (245,635) $ (49,127) (2,631) 222 25,880 (611) 22,056 4,211 $ -

• (ii) The amount of income tax recognized in other comprehensive income was as follow:

	For	the years ended	December 31
		2023	2022
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation	$	(354)	(44,980)

(Continued)

39

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(iii) Deferred tax assets and liabilities

• 1) Unrecognized deferred tax assets

Tax effect of deductible temporary differences The carryforward of unused tax losses	December 31, 2023 $ 3,114 38,039 $ 41,153	December 31, 2022
		3,547 15,587
		19,134

The R.O.C. Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can utilize the benefits therefrom.

As of December 31, 2023, the Company’s unused prior years loss carry forward and the expiry years of the loss carry forward were as follows:

Year of loss	The company’s unutilized loss Expiry year $ 79,917 2032 110,279 2033 $ 190,196
2022 2023

• 2) Recognized deferred tax assets

Changes in the amount of deferred tax assets for the years ended December 31, 2023 and 2022 were as follows:

Deferred tax assets: Balance on January 1, 2023 Recognized in other comprehensive income Balance on December 31, 2023 Balance on January 1, 2022 Recognized in other comprehensive income Balance on December 31, 2022	Exchange differences on translation of foreign financial statements
	$ 6,434 (354) $ 6,080 $ 51,414 (44,980) $ 6,434

(iv) The Corporation’s income tax return for the year 2021 had been examined by the tax authority.

(Continued)

40

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(r) Capital and other equity

(i) Share Capital

As of December 31, 2023 and 2022, the number of authorized ordinary shares were all 298,000 thousand shares, with a par value of $10 per share. The total value of the authorized ordinary shares amounted to $2,980,000 thousand; and the outstanding shares consisted 224,551 thousand. All issued shares were paid up upon issuance.

(ii) Capital surplus

The components of the capital surplus were as follows:

The components of the capital surplus were as follows:
Additional paid-in capital arising from share Treasury stock transactions Other	December 31, 2023 $ 346,236 60,315 130,292 $ 536,843	December 31, 2022
		346,236 60,315 129,782
		536,333

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess the par value should not exceed 10% of the total common stock outstanding.

(iii) Retained earnings

The Company's article of incorporation stipulate that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

The Company is in the mature stage of its construction industry business. To ensure market competitiveness, the Company still has to consistently invest in its capital to expand its operation activities and search new opportunity for growth.

The Company adopts the dividend policy determined by considering the budget for the coming year. The distribution ratios of cash may not be less than 10% of total dividends. When the debt ratio of the annual financial statements is higher than 50% or when the Company has major expenditure plan, which exceeds 10% of the amount of paid-in capital, the stock dividends has to be redistributed.

(Continued)

41

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

1) Legal reserve

When a Company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of the paid-in capital may be distributed.

2) Special reserve

In accordance with the requirements issued by the FSC, a portion of earnings shall be allocated as special reserve during earnings distribution. If the Company has already reclassified a portion of earnings to special reserve under the preceding subparagraph, it shall make supplemental allocation of special reserve for any difference between the amount it has already allocated and the amount of the current-period total net reduction of other shareholders' equity. An equivalent amount of special reserve shall be allocated from the after-tax net profit in the period, plus items other than after-tax net profit in the period, that are included in the undistributed current-period earnings and the undistributed prior-period eanrings. A portion of undistributed prior-period earnings shall be reclassified to spectial earnigns reserve (and does not qualify for eanrings distribution) to account for cumulative changes to the net reduction of other shareholders' equity perrtaining to prior periods. Amounts of subsequent reversals pertining to the net reduction of other shareholders’ equity shall qualify for additional distributioins.

3) Earnings Distribution

The Company’s general meeting of the shareholders, on June 7, 2023 and June 8, 2022, resolved not to distribate 2022 and 2021 earnings due to a loss suffered by the Company.

(iv) Other comprehensive income accumulated in reserves, net of tax

Balance at January 1, 2023 Exchange differences on foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance at December 31, 2023 Balance at January 1, 2022 Exchange differences on foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance at December 31, 2022	Exchange differences on translation of foreign financial statements $ (25,737) 1,553 - $ (24,184) $ (205,655) 179,918 - $ (25,737)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (43,653) - 30,147 (13,506) (14,386) - (29,267) (43,653)	Total (69,390) 1,553 30,147 (37,690) (220,041) 179,918 (29,267) (69,390)

(Continued)

42

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(s) Losses per share

The basic losses per share and diluted losses per shares were calculated as follows:

Basic losses per share Losses attributable to ordinary shareholders of the Company Weighted-average number of ordinary shares	For the years ended December 31 2023 2022 $ (245,635) (150,925) 224,551 224,551 $ (1.09) (0.67)
	2023 $ (245,635) 224,551 $ (1.09)

Only basic losses per share is disclosed for 2023 as there ae no potentially dilutive common shares for 2023 and the potential common share for 2022 has an anti-dilutive effect.

(t) Revenue from contracts with customers

• (i) Details of revenue

Major products/services lines: Rental of land and building Service revenue	For the years ended December 31	For the years ended December 31
	2023 $ 4,574 5,221 $ 9,795	2022
		6,409 4,930
		11,339

(ii) Contract balances

December 31, 2023 Notes receivable $ 1,448 Accounts receivable 250 Less: Allowance for impairment - Total $ 1,698 Contract liabilities-Sales of land and building $ 1,061,024 Contract liabilities-Rental of land and building - Contract liabilities-Other 3,902 Total $ 1,064,926	December 31, 2022 1,139 3,024 (2,412) 1,751 424,032 28 4,689 428,749	January 1, 2022 243 25,728 (2,412) 23,559 117,360 29 - 117,389

1) For details on notes and accounts receivable and allowance for impairment, please refer to Note 6(d).

• 2) The amount of revenue recognized for the years ended December 31, 2023 and 2022 that was included in the contract liabilities at the beginning of the period were all $28 thousand.

(Continued)

43

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• 3) The major change in the balance of contract assets and contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received. There are no significant changes for the years ended December 31, 2023 and 2022.

(u) Remuneration of employees and directors

The Company’s articles of incorporation require that earnings shall first be offset against any deficit, then, a minimum of 1% will be distributed as employee remuneration and a maximum of 5% will be allocated as directors’ remuneration.

The distribution of remuneration to employees and directors shall be determined by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors. The aforesaid distribution shall be submitted to the shareholders' meeting.

Employees who entitled to receive the above mentioned employee remuneration, in shares or cash, include the employees of the subsidiaries of the Company who meet certain specific requirements.

For the years ended December 31, 2023 and 2022, the Company had accumulated losses and remuneration of employees and directors was not required to be estimate. The amounts are calculated by the net profit before tax excluding employees’ and directors’ remuneration, of each yaer multiplied by the percentage of employees’ and directors' remuneration as specified in the Company’s Article of Incorporation. The amounts are accounted for under operating expenses in 2023 and 2022. The differences between the estimated amounts in the financial statements and the actual amounts approved by the Board of directors, if any, shall be accounted for as a chante in accounting estimate and recognized in next year.

The Company’s employee remuneration and directors’ remuneration for 2023 and 2022 were both in the amounts of $0 as no profit was made during both years, which was no different from the actual distribution. Relevant information is available on the Market Observation Post System website.

• (v) Non-operating income and expenses

(i) Interest income

The details of interest income were as follows:

The details of interest income were as follows:
Interest income from bank deposits Other interest income	For the years ended December 31
	2023 $ 3,866 106 $ 3,972	2022
		1,304 59
		1,363

(Continued)

44

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(ii) Other income

The details of other income were as follows:

The details of other income were as follows:
Dividend income Other income	For the years ended December 31
	2023 $ 3,352 3,333 $ 6,685	2022
		8,962 376
		9,338

(iii) Other gains and losses

The details of other gain and losses were as follows:

Foreign exchange gains Losses on financial assets at fair value through profit or loss Gains on lease modifications Other revenue and expenses	For the years ended December 31 2023 2022 $ 1 893 (1,109) (801) 31 5 (17,702) (3,601) $ (18,779) (3,504)
	2023 $ 1 (1,109) 31 (17,702) $ (18,779)

(iv) Finance costs

The details of finance costs were as follows:

The details of finance costs were as follows:
Interest expense	For the years ended December 31
	2023 $ 22,939	2022
		9,365

(w) Financial instruments

• (i) Credit risk

• 1) Credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

Since the Company had a large number of unrelated customers, there were no concentration of credit risk.

(Continued)

45

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

3) Receivables and debt securities

For credit risk exposure of note and trade receivables, please refer to Note 6(d).

Other financial assets at amortized cost are other receivables, all of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses.

(ii) Liquidity risk

The following are the contractual maturities of financial liabilities, excluding the estimated interest payment and the impact of netting agreements.

December 31, 2023 Non-derivative financial liabilities Non-interest bearing liabilities Lease Liabilities Floating rate liabilities Fixed rate liabilities December 31, 2022 Non-derivative financial liabilities Non-interest bearing liabilities Lease Liabilities Floating rate liabilities Fixed rate liabilities	Carrying amount $ 331,885 7,386 1,782,045 219,707 $ 2,341,023 $ 276,691 10,865 1,035,375 219,529 $ 1,542,460	Contractual cash flows 331,885 7,559 1,886,264 220,000		Within 6 months	6-12 months		1-2 years	3-5 years	More than 5 years
				321,005 1,701 292,267 220,000 834,973 276,691 2,966 31,198 220,000 530,855	- 1,626 693,893 -		- 4,232 295,845 - 300,077 - 6,052 401,792 - 407,844	10,880 - 604,259 - 615,139 - - 126,967 - 126,967	- - - -
		2,445,708			695,519				-
		276,691 11,127 1,222,516 220,000			- 2,109 180,815 -				- - 481,744 -
		1,730,334			182,924				481,744

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

• (iii) Market risk

1) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 50 basis points when reporting to management internally, which also represents the Company management's assessment of the reasonably possible interest rate change.

(Continued)

46

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

If the interest rate had increased or decreased by 50 basis points, with all other variable factors remaining constant, the Company’ s net income would have increased or decreased by $5,204 thousand and $716 thousand for the years ended December 31, 2023 and 2022. This is mainly due to the Company’s bank deposits and borrowings at variable rates.

• 2) Other market price risk

Price of securities at reporting date Increasing 10% Decreasing 10%	For the years ended December 31 2023 2022 Other comprehensive income after tax Net income Other comprehensive income after tax Net income $ 8,739 2,008 5,967 741 $ (8,739) (2,008) (5,967) (741)	For the years ended December 31 2023 2022 Other comprehensive income after tax Net income Other comprehensive income after tax Net income $ 8,739 2,008 5,967 741 $ (8,739) (2,008) (5,967) (741)
	2023
	Other comprehensive income after tax $ 8,739 $ (8,739)	Net income
		2,008

• (iv) Fair value of financial instruments

• 1) Categories of financial instruments and fair value hierarchy

The fair value of financial assets and liabilities at fair value through profit or lossand financial assets at fair value through other comprehensive income is mesured on a recurring basis. The book value and fair value of the Company's financial assets and liabilities were as follows (including the information on fair value hierarchy, but excluding the measurements that have similarities to fair value, and those fair value that cannot be reliably measured, or inputs that are unobservable in the active markets):

Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Stock of exchange-listed and OTC-listed companies Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts recivable Other receivables Construction deposits paid Other financial assets Subtotal Total		December 31, 2023	December 31, 2023	December 31, 2023
	Book Value		Fair Value
		Level 1 20,076 87,386 - - - - - - 107,462	Level 2 - - - - - - - - -	Level 3 - - - - - - - - -	Total 20,076
	$ 20,076 $ 87,386 $ 175,905 1,698 5,524 185,683 427,181 795,991 $ 903,453
					87,386
					- - - - -
					-
					107,462

(Continued)

47

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

Financial liabilities measured at amortized cost Short-term borrowings Short-term notes and bills payable Notes and accounts payable (including related parties) Other payables Lease liabilities Guarantee depostis received Total Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Stock of exchange-listed and OTC-listed companies Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts recivable Other receivables Construction deposits paid Other financial assets Subtotal Total Financial liabilities measured at amortized cost Short-term borrowings Short-term notes and bills payable Notes and accounts payable (including related parties) Other payables Lease liabilities Guarantee depostis received Total			December 31, 2023	December 31, 2023	December 31, 2023
	Book Value			Fair Value
			Level 1 Level 2 Level 3 - - - - - - - - - - - - - - - - - - - - - December 31, 2022			Total - - - - - -
	$ 1,782,045 219,707 230,504 101,381 7,386 1,451 $ 2,342,474
						-
		Book Value		Fair Value
			Level 1 17,433 59,665 - - - - - - 77,098 - - - - - - -	Level 2 - - - - - - - - - - - - - - - -	Level 3 - - - - - - - - - - - - - - - -	Total 17,433
	$ 17,433 $ 59,665 $ 589,488 1,751 8,300 170,574 382,844 1,152,957 $ 1,230,055 $ 1,035,375 219,529 230,400 46,291 10,865 1,000 $ 1,543,460
						59,665
						- - - - -
						-
						77,098
						- - - - - -
						-

(Continued)

48

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• 2) Valuation techniques for financial instruments measured at fair value

Financial instruments traded in active markets are based on quoted market prices. Market prices quoted from main exchanges and over-the-counter are the basis of fair value of equity instruments and credit instrument traded in active markets.

If the quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have a quoted price in an active market. If a financial instrument does not accord with the definition aforementioned, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of non-active market.

The Company’s financial instruments, such as stock of listed companies and beneficiary certificates, are trade in active markets, and the fair value is based on quoted market prices.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using a valuation technique that can be extrapolated from either similar financial instrument, the discounted cash flow method, or other valuation techniques, including models, is calculated based on available market data at the reporting date.

If the financial instruments held by the Company have no active market, the fair value is estimated through the comparable market organization method. The main assumption behind this is that the estimated pre-tax, pre-depreciation, and pre-amortization earnings of the investee company is added to the earnings multiplier derived from the comparable quoted price of the listed company. The estimate has adjusted the lack of discount on the market liquidity of the equity securities.

• 3) There were no transfers from each level for the years ended December 31, 2023 and 2022.

• 4) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Company’ s financial instruments that use Level 3 inputs to measure fair value include “Financial assets measured at fair value through other comprehensive income– equity investments” . The Company uses “Net asset value method” as the evaluation technique.

• (x) Financial risk management

• (i) Overview

The Company has been exposed to the following risks from its financial instruments:

• 1) credit risk

• 2) liquidity risk

(Continued)

49

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

3) market risk

The following likewise discusses the Company’ s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks’ exposures, please refer to the respective notes in the accompanying financial statements.

• (ii) Structure of risk management

The Company's finance department provides financial service to all business units, overseeing operations in domestic and international markets. Risk supervision and management are based on internatl risk reports analyzing risk levels and breadth. While the Company has regulation for derivative financial instruments, operations focus on low-risk investments, avoiding speculative trading. Internal auditors ensure policy compliance and review internal control systems regularly.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers.

• 1) Accounts receivable and other receivables

The Company's credit risk exposure is mainly affected by each client's conditions. The receivables to the Company's real estate development and sale business are mostly from individuals, and the receivables are mainly paid by means of remittance, money orders, and loans from banks, so the associated credit risk is low.

The Company maintains an allowance account for losses to reflect estimates of losses incurred on accounts receivable and investments. The main components of the allowance account include specific loss components associated with individual material exposures and a portfolio of losses created for losses on similar asset groups that are incurred but unidentitied. The allowance account for the portfolio of losses is determined based on historical data on payments for similar financial assets.

2) Investment

The exposure to credit risk for the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company does not expect any counterparty above fails to meet its obligations, hence there is no significant credit risk arising from the counterparties.

3) Guarantee

In accordance with the Company’ s policy, the Company may act as a guarantor, if necessary, for its business operation. The Company does not provide guarantees to external parties; otherwise, the Company provides guarantees for its subsidiaries, with amounting to $221,347 thousand and $216,860 thousand, respectively, for the years ended December 31, 2023 and 2022.

(Continued)

50

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(iv) Liquidity risk

The Company manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company’s management supervises the banking facilities and ensures compliance with the terms of the loan agreements.

Loans and borrowings from the bank form an important source of liquidity for the Company. As of December 31, 2023 and 2022, the Company’ s unused credit line were amounted to $3,809,022 thousand and $3,798,950 thousand, respectively.

(v) Market risk

Market risk is a risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices that will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

All such transactions are carried out within the policy compliance and internal regulations.

• 1) Interest rate risk

The Company’s interest rate risk arises from short-term borrowings and bank deposits bearing floating interest rates. Please refer to Notes 6(w) for details.

2) Other market price risk

The Company is exposed to equity price risk due to investments in equity securities of exchange-listed and OTC-listed companies. Please refer to Notes 6(w) for details.

(y) Capital management

The Board’s policy is to maintain a strong capital base in order to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, capital surplus and retained earnings. The Board of Directors monitors the return on capital, as well as the level of dividends to ordinary shareholders. The Company’s debt to equity ratios at the balance sheet date were as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Adjusted capital Debt to equity ratios	December 31, 2023 $ 3,429,769 (175,905) 3,253,864 4,008,903 $ 7,262,767 % 44.80	December 31, 2022 1,996,311 (589,488) 1,406,823 4,221,860 5,628,683 % 24.99

(Continued)

51

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

The increase in the debt-to-capital ratio on December 31, 2023 was mainly due to increasing total liabilities from the collecting of pre-sale proceeds from property projects and increased borrowings for operational needs.

(7) Related-party transactions:

(a) Names and relationship with related parties

The following are entities that have had transactions with the Company and the Company’ s subsidiaries during the periods covered in the financial statements.

Name of related party Relationship with the Company PAO-SHIN INVESTMENT CO., LTD. The Company’s subsidiary CHAIN-HUNG APARTMENT BUILDING The Company’s subsidiary MANAGEMENT AND MAINTENANCE LTD. CYUAN-SHIH-HAO SUPERMARKET LTD. The Company’s subsidiary CASTLE ROCK INVESTMENT The Company’s subsidiary S.A.(SAMOA) CHAINQUI HOLDING CO., LTD.(SAMOA) The Company’s subsidiary CHAINQUI CONSTRUCTION CO., The Company’s subsidiary LTD.(SAMOA) CHAIN-DA DEVELOPMENT CO., LTD. The Company’s subsidiary CHIA-YUAN CREATE CO., LTD. The Company’s subsidiary DAHO SECURITY CO., LTD. The Company’s subsidiary PROFIT ASIA LTD. The Company’s subsidiary NEW MOMENTUM LTD. The Company’s subsidiary NOAH INVESTMENT CAPITAL LIMITED The Company’s subsidiary (SAMOA) ZENITH GLOBAL CAPITAL LIMITED The Company’s subsidiary (SAMOA) LEXY STAR INTERNATIONAL CO., LTD The Company’s subsidiary CHAINQUI DEVELOPMENT USA LLC The Company’s subsidiary CHAINQUI DEVELOPMENT BELLTOWN The Company’s subsidiary LLC

CHAINQUI DEVELOPMENT VIRGINIA The Company’s subsidiary LLC

CHAINQUI DEVELOPMENT ROOSEVELT The Company’s subsidiary GALORE DEVELOPMENT GROUP INC. The Company’s subsidiary CHAINQUI DEVELOPMENT SEATTLE, The Company’s subsidiary LLC

CHAINQUI DEVELOPMENT WALLING The Company’s subsidiary FORD, LLC

(Continued)

52

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

Name of related party Relationship with the Company CHAINQUI DEVELOPMENT The Company’s subsidiary HARBORVIEW, LLC GLOBAL INDUSTRIAL CO., LTD. The entity's chairman is the Company's director (other related parties) CHAIN-DA INVESTMENT CO., LTD. The entity's chairman is the Company's director (other related parties) CHAIN-CHAN INVESTMENT CO., LTD. The entity's chairman is the Company's director (other related parties) CHAIN-I INVESTMENT CO., LTD. Same chairman with the Company (other related parties) CHAIN QUI CULTURAL & The entity's chairman is the Company's director EDUCATIONAL FOUNDATION (other related parties)

• (b) Significant transactions with related parties

• (i) Purchase

Project contracting

The purchasing amount from related parties were as follow:

Relationship 2023 Subsidiary— Chia-Yuan Create Co., Ltd. 2022 Subsidiary— Chia-Yuan Create Co., Ltd.	Name	Contract price (before tax) $ 1,400,498 $ 1,400,498	Purchasing in current period 221,429 140,363	Accumulated amount
	Xin Zhuang Section, Taipei port Xin Zhuang Section, Taipei port			453,086
				231,657

The project contracted by the Company to the related parties is followed by the contracting operation regulations and based on the project budget plus reasonable management fees and profits, then approval by supervisor.

The payment terms do not have the significant difference between related parties and other industries.

(Continued)

53

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(ii) Payables to Related Parties

The payables to related parties were as follows:

Account Relationship Note payables Subsidiary—Chia-Yuan Create Co., Ltd. Note payables Subsidiary Account payables Subsidiary—Chia-Yuan Create Co., Ltd.	December 31, 2023 $ 42,215 59 - $ 42,274	December 31, 2022
		41,957 - 4,750
		46,707

(iii) Lease

The details of office rented to related parties were as follows:

For the years ended December 31 Relationship 2023 2022 Subsidiary $ 396 441 Other related parties 120 120 $ 516 561 Guarantees and endorsements As of December 31, 2023, and 2022, the Company provided the guarantee and endorsement fo its subsidiary as follows: December 31, 2023 December 31, 2022 CHAINQUI HOLDING CO., LTD. (SAMOA) $ 221,347 216,860		For the years ended December 31	For the years ended December 31
			2022
			441 120
			561
			216,860

(iv) Guarantees and endorsements

As of December 31, 2023, and 2022, the Company provided the guarantee and endorsement for its subsidiary as follows:

As of December 31, 2023 and 2022, the Company provided land held for development to CHAINQUI HOLDING CO., LTD.(SAMOA) as collateral for its bank loan. The bank valued the land at fair value as collateral value. Please refer to Note 13(a) for details.

(v) Acquisitioins of other assets

As of December 31, 2023 and 2022, the Company has increased the capital of CHAINQUI HOLDING CO., LTD (SAMOA) by $105,449 thousand and $96,826 thousand, respectively, according to the shareholding ratio.

• (c) Key management personnel compensation

Short-term employee benefits

For the years ended December 31	For the years ended December 31
2023 $ 21,905	2022
	21,409

(Continued)

54

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(8) Assets pledged as security:

The book values of the Company’s pledged assets were as follows:

Pledged assets Object Restricted assets (recognized as other financial assets－ current) Reserve account, performance bond and trust account Non-current financial assets at fair value through other comprehensive income Short-term borrowing Properties and land held for sale Short-term notes and bills payable Land held for development Short-term borrowing for the Company and the subsidiary Construction in Progress Short-term borrowing Property, plant and equipment Short-term borrowing Investment properties Short-term borrowing	December 31, 2023 $ 371,325 87,386 36,081 560,193 2,130,141 175,960 178,586 $ 3,539,672	December 31, 2022
		371,390 - 36,081 342,592 976,749 176,270 180,220
		2,083,302

(9) Commitments and contingencies:

• (a) Significant commitments and contingencies were as follows:

• (i) As of December 31, 2023, and 2022, the total prices of property sale contracts signed with the customers were as follows:

The contract prices (before tax) Amount received	December 31, 2023 $ 8,737,272 $ 1,061,024	December 31, 2022
		3,501,936
		424,032

• (ii) As of December 31, 2023, and 2022 the refundable deposit notes the Company had issued for short-term loans, commercial papers payable and land development corporations were as follows:

follows:
The refundable deposits notes	December 31, 2023 $ 514,000	December 31, 2022
		414,000

• (iii) The price of construction contract and the unpriced project payments according to the contracting project between the Company and the vendor were as follow:

The price of construction contract (before tax) The unpriced project payments	December 31, 2023 $ 3,384,637 $ 1,485,352	December 31, 2022
		2,873,381
		2,138,622

(Continued)

55

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• (iv) The unrecognized contract commitments of purchasing land held for development and undertaking urban renewal project, as well as entering into a collaborative development and integration agreement, were as follow:

Obtaining inventories (construction industry) $	December 31, 2023 152,060

(b) Other

As of December 31, 2023 and 2022, the refundable deposits paid, through cooperation with the land owners, amounted to $185,683 thousand and $170,574 thousand, respectively.

• (c) Significant contingent liability: None.

(10) Losses due to major disasters: None

(11) Subsequent events: None

(12) Other:

A summary of employee benefits, depreciation, depletion and amortization expenses, categorized by function, were as follows:

By function By item	For the year ended 2023	For the year ended 2023	For the year ended 2023	For the year ended 2022	For the year ended 2022	For the year ended 2022
	Operating Cost	Operating expense	Total	Operating Cost	Operating expense	Total
Employee benefit Salary Health and labor insurance Pension Remuneration of director Others Depreciation Amortization	$ 1,375 106 66 - 31 1,972 -	46,968 4,981 2,381 14,700 1,826 5,693 533	48,343 5,087 2,447 14,700 1,857 7,665 533	1,881 182 118 - 59 1,801 -	42,024 4,563 2,146 15,686 1,722 6,310 428	43,905 4,745 2,264 15,686 1,781 8,111 428

For the years ended December 31, 2023 and 2022, the information on the number of employees and employee benefit expense of the Company were as follows:

Number of employees Number of directors (non-employee) Average employee benefit expense Average employee salary expense Percentage of average employee salary expense Remuneration of supervisors	2023 63 5 $ 995 $ 834 % 2.58 $ -	2022
		59
		5
		976
		813
		% 10.01
		-

(Continued)

56

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

The information of the Company salary’s policy (include directors, supervisors, managers and employees) is as follow:

• (a) Independent director

• (i) Regardless of the Company’s profit or loss, independent directors’ salary and remuneration need to be paid on monthly basis and be adjusted according to the value of his/her participation in the contribution to Company’s operation.

• (ii) According to the Company policy, the independent directors cannot participate in the distribution of director's compensation.

• (iii) According to the needs of the actual execution of the business, the Company has to pay for the traffic allowance.

• (b) Other directors and supervisors

• (i) The Company pay directors and supervisors’ remuneration, according to the value of his/her participation in the contribution to Company’s operation.

• (ii) Directors’ remuneration is allocated at a rate specified in the Company’ s Articles of Incorporation.

• (iii) According to the needs of the actual execution of the business, the Company has to pay for the traffic allowance.

• (c) Managerial officers

• (i) The monthly fixed salary is determined by salary level of each rank.

• (ii) According to the result of the operation performance assessment, the Company distribute the performance bonus.

• (iii) Year-end bonuses will be paid based on the results of employee performance appraisal.

• (iv) Employees’ remuneration is allocated at a rate specified in the Company’ s Articles of Incorporation.

• (v) Traffic allowance and supervisor allowance are paid in accordance to job-level standards.

• (d) Other employees

The salary of the Company's employees is handled in accordance with the regulations of the “job level table” and “job salary benchmark table”. The employee salary is divided into recurring and non-recurring salaries.

• (i) Recurring salaries include basic salaries, duties allowance, meal allowance and other allowance.

• (ii) Non-recurring salaries include overtime pay, year-end bonus, project bonus, performance bonus and employee’s remuneration.

(Continued)

57

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(13) Other disclosures:

• (a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

• (i) Loans to other parties: None

• (ii) Guarantees and endorsements for other parties:

		(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)	(In thousands of New Taiwan Dollar)
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0	The Company	Chainqui Holding Co., Ltd. (SAMOA)	2	4,008,903	233,638	221,347	128,126	362,589	% 5.52	6,013,354	Y	N	N

• Note a: In accordance with the Company’s related regulations, the limit on endorsements and guarantees for any single entity is 50% of the Company’s net worth based on the latest financial statement and the limit on accumulated amount of transactions of endorsements and guarantees is 150% of the Company’s net worth based on the latest financial statements.

• Note b: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories:

  • (a) Having business relationship.

  • (b) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.

  • (c) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.

  • (d) The endorsed/guaranteed parent company directly or indirectly owns more than 90% voting shares of the endorser/guarantor subsidiary.

  • (e) Mutual guarantee of the trade as required by the construction contract.

  • (f) Due to joint venture, each shareholder provides endorsements/guarantees parent company in proportion to its ownership.

  • (g) Under the Consumer Protection Act, performance guarantees for pre-sale contracts for companies in the same industry.

• (iii) Securities held as of December 31, 2023 (excluding investment in subsidiaries, associates and joint ventures):

(In thousands of New Taiwan Dollar)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Note
				Shares/Units	Carrying value	Percentage of ownership (%)	Fair value
The Company	Stock- Capital Securities Corporation	-	Non-current financial assets at fair value through other comprehensive income	4,969,171	81,246	% 0.23	81,246	pledged 4,969,171 shares
"	Stock- Taiwan High Speed Rail Corporation	-	"	200,000	6,140	% -	6,140	pledged 200,000 shares
"	Stock- Firich Enterprises Co.,Ltd.	-	Current financial assets at fair value through profit or loss	272,547	8,572	% 0.09	8,572	-

(Continued)

58

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Note
				Shares/Units	Carrying value	Percentage of ownership (%)	Fair value
The Company	Stock- HD Renewable Energy Co., Ltd.	-	Current financial assets at fair value through profit or loss	88,000	11,484	% 0.09	11,484	-
"	Stock- Tiga Gaming Inc.	-	"	1,000	20	% -	20	-
"	Stock-Era Communications Co., Ltd.	-	Non-current financial assets at fair value through other comprehensive income	16,545	-	% 0.01	-	-
"	Stock-Taiwan On Line Co., Ltd.	-	"	803,582	-	% 11.97	-	-
"	Stock-Spring House Entertainment Technology Inc.	-	"	412,812	-	% 2.80	-	-
Chain-Da Development Co., Ltd.	Stock-Yuanta Japan Leaders Equity Fund A Non-Dividend	-	Current financial assets at fair value through profit or loss	500,000	5,000	% -	5,000	-
Pao-Shin Investment Co., Ltd.	Stock- O-Bank Co., Ltd.	-	Non-current financial assets at fair value through other comprehensive income	3,115,430	31,092	% 0.10	31,092	pledged 3,084,000 shares
"	Stock- Firich Enterprises Co.,Ltd.	-	Current financial assets at fair value through profit or loss	71,719	2,256	% 0.02	2,256	-
"	Stock-Taiwan On Line Co., Ltd.	-	Non-current financial assets at fair value through other comprehensive income	511,480	-	% 7.62	-	-
"	Stock- Era Communications Co., Ltd.	-	"	46,880	-	% 0.04	-	-
ZENITH GLOBAL CAPITAL S.A. (SAMOA)	U.S. Treasury 4.125 15 AUG 2053	-	"	3,250,000	101,248	% -	101,248
"	GOER INTERNATIONAL CO., LTD.	-	"	180,000	-	% 18.00	-	-

Note1: Please refer to Note 6 (b) for the Company’s lending of equity instrument.

• (iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None

• (v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None

• (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollar)

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
Chia-Yuan Create Co., Ltd.	The Company	Parent Company	Sale	(344,902)	% (100.00)	50% with cash and the other 50% with a 30- day promissory note	No ordinary transaction can be compared to	Non- comparable	42,215	100.00%	Note1
The Company	Chia-Yuan Create Co., Ltd.	Subsidiary	Purchase	221,429	16.20%	〃	〃	〃	(42,215)	(18.31)%	Note2

Note 1:The contracted company recognized its construction revenue through percentage of completion method.

• Note 2:The contracting company records its purchase price through estimates of amount of purchase through number of trials.

(Continued)

59

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None

• (ix) Trading in derivative instruments: None

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2023:

(In thousands of New Taiwan Dollar)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2023	December 31, 2022	Shares	Percentage of ownership	Carrying value
The Company	Chain-Hung Apartment Building Management and Maintenance Ltd.	Taiwan	Mansions management Services	10,000	10,000	999,996	% 99.99	9,342	383	383
"	Pao-Shin Investment Co., Ltd.	Taiwan	Investing activities	164,640	164,640	17,999,991	% 99.99	127,145	7,069	(7,949)
"	Cyuan-Shih-Hao Supermarket Ltd.	Taiwan	Conduct of supermarket	25,710	25,710	2,571,000	% 75.00	27,636	1,642	1,230
"	Chain-Da Development Co., Ltd.	Taiwan	Constructing, selling, and leasing of residential and commercial buildings.	82,000	82,000	8,200,000	% 82.00	100,610	(1,053)	(863)
"	CASTLE ROCK INVESTMENT S.A. (SAMOA)	SAMOA	Investing activities	508,229	508,229	16,206,000	% 100.00	527,067	14,042	14,042
"	CHAINQUI HOLDING CO., LTD (SAMOA)	SAMOA	Investing activities	2,092,187	1,986,738	67,760,000	% 100.00	1,603,683	(137,784)	(137,784)
"	CHAINQUI CONSTRUCTION CO., LTD (SAMOA)	SAMOA	Investing activities	174,773	174,773	5,650,000	% 100.00	170,946	1,539	1,539
Pao-Shin Investment Co., Ltd.	MEN'S FOCUS COMPANY	Taiwan	Magazine distribution industry	10,000	10,000	1,000,000	% 43.48	-	-	Exempted from disclosure
"	Chia-Yuan Create Co., Ltd.	Taiwan	Constructing activities	98,879	98,879	11,500,000	% 100.00	122,329	9,977	〃
"	New Momentum LTD.	SAMOA	Investing activities	415	415	-	% 100.00	-	-	〃
"	Profit Asia LTD.	SAMOA	Investing activities	431	431	-	% 100.00	-	-	〃
Chia-Yuan Create Co., Ltd.	Da-Ho Security Co., Ltd.	Taiwan	Secrurity services	40,000	40,000	4,000,000	% 100.00	39,008	31	〃
CASTLE ROCK INVESTMENT S.A. (SAMOA)	NOAH INVESTMENT CAPITAL LIMITED (SAMOA)	SAMOA	Investing activities	489,976	489,976	15,624,000	% 91.83	511,231	15,160	〃
NOAH INVESTMENT CAPITAL LIMITED (SAMOA)	ZENITH GLOBAL CAPITAL S.A. (SAMOA)	SAMOA	Investing activities	526,533	526,533	16,782,000	% 82.74	550,330	18,348	〃
ZENITH GLOBAL CAPITAL S.A. (SAMOA)	LEXY STAR INTERNATIONAL CO., LTD.	Malaysia	Investing activities	416,042	416,042	13,700,000	% 100.00	471,568	17,523	〃
CHAINQUI HOLDING CO., LTD (SAMOA)	CHAINQUI DEVELOPMENT USA LLC	U.S.A	Investing activities	2,177,565	2,063,677	70,345,000	% 100.00	1,720,090	(130,174)	"
CHAINQUI DEVELOPMENT USA LLC	CHAINQUI DEVELOPMENT BELLTOWN LLC	U.S.A	Investing activities	1,115,238	1,115,238	36,410,000	% 100.00	870,698	(71,549)	〞
"	CHAINQUI DEVELOPMENT VIRGINIA, LLC	U.S.A	Constructing, selling, and leasing of residential and commercial buildings.	969,672	855,784	30,960,000	% 100.00	787,026	(52,285)	〃
"	CHAINQUI DEVELOPMENT ROOSEVELT, LLC	U.S.A	Constructing, selling, and leasing of residential and commercial buildings.	54,855	54,855	1,800,000	% 100.00	54,412	(592)	〃
CHAINQUI CONSTRUCTION CO., LTD(SAMOA)	GALORE DEVELOPMENT GROUP INC.	U.S.A	Investing activities	173,310	173,310	5,600,000	% 50.00	169,495	3,160	〃
GALORE DEVELOPMENT GROUP INC.	CHAINQUI DEVELOPMENT SEATTLE, LLC	U.S.A	Investing activities	341,085	341,085	11,100,000	% 100.00	336,487	3,180	〃
CHAINQUI DEVELOPMENT SEATTLE, LLC	CHAINQUI DEVELOPMENT WALLINGFORD, LLC	U.S.A	Constructing, selling, and leasing of residential and commercial buildings.	160,083	160,083	5,150,000	% 100.00	168,261	4,434	〃
CHAINQUI DEVELOPMENT SEATTLE, LLC	CHAINQUI DEVELOPMENT HARBORVIEW, LLC	U.S.A	Constructing, selling, and leasing of residential and commercial buildings.	178,188	178,188	5,850,000	% 100.00	167,318	(809)	Exempted from disclosure

(Continued)

60

CHAINQUI CONSTRUCTION DEVELOPMENT CO., LTD. Notes to the Financial Statements

• (c) Information on investment in mainland China: None

• (d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Chain-I Investment Co., Ltd.	28,463,661	% 12.67
Chain-Chan Investment Co., Ltd.	21,447,410	% 9.55
Chain-Da Investment Co., Ltd.	16,257,347	% 7.23
Yu-Ching Construction Co., Ltd.	15,762,552	% 7.01
Lee Yung-Yi	12,403,271	% 5.52

(14) Segment information:

Please refer to the consolidated financial statements of 2023.

61

Chainqui Construction Development Co., Ltd.

Statement of inventories

December 31, 2023

(Expressed in thousands of New Taiwan Dollar)

Item Prepayment for land: Zhong Zheng Cheng Zhong Section Xindian Shisizhang Wenzai Zun Wenquan Section Luzhou north area Land held for development: Sanzhi Dahu Section (Formerly named Hou Cuo Section, Little Shi Zi North Section 216-13, 216- 26, 216-25, 221, little Tu De Gong Pit Section 39.65) Sanchong Chang Shou Section Sanchong Da Tong South Road Section Sanchong Zheng Min Section Wanhua Fuxing Section 4th Subsection Less: Allowance for valuation loss Construction in Progress: Xinzhuang Zhong Xiao Section Bali Taipei Port Section Xinyi Sanxing Section Chong Qing South Road Gui Yang II Daan Section Xinhai Section 4th Subsection Properties and land held for sale: He Ti Section, Gutin District Wei Feng Total

Amount Collateral $ 24,228 None 5,504 〃 31,924 〃 5,942 〃 10,135 〃 77,733 384,143 Pledged to Taichung Commercial Bank 208 None 213 〃 1,874 〃 217,601 Pledged to Cathy United Bank 604,039 (41,551) 562,488 636,380 Pledged to Taiwan Cooperation Bank 682,563 Pledged to Wugu Framers’ Association Bank 462,037 Pledged to First Bank 98,420 Pledged to Cathy United Bank 20,276 None 40,760 None 332,347 Pledged to Taipei Fubon Bank 2,272,783 700 None 36,081 Pledged to China Bills Finance Cooperation 36,781 $ 2,949,785

62

Chainqui Construction Development Co., Ltd.

Statement of other current financial assets

December 31, 2023

(Expressed in thousands of New Taiwan Dollar)

Please refer to Note 6(k) for related information.

63

Chainqui Construction Development Co., Ltd.

Statement of changes in investments accounted for using equity method

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollar)

Entity Chain-Hung Apartment Building Management and Maintenance Ltd. PAO-SHIN INVESTMENT CO., LTD. CHAIN SHIH HAO INDUSTRIAL CO., LTD. CHAINDA DEVELOPMENT CO., LTD. CASTLE ROCK INVESTMENT S.A (SAMOA) CHAINQUI HOLDING CO., LTD (SAMOA) CHIANQUI CONSTRUCTION Total	Beginning Balance Share Amount 999,996 $ 8,959 17,999,991 130,141 2,571,000 27,728 8,200,000 101,473 16,206,000 515,802 64,310,000 1,633,811 5,650,000 169,457 $ 2,587,371	Addition Share Amount - 383 - 4,953 - 1,230 - - - 14,042 3,450,000 107,656 - 1,539 129,803	Deduction Share Amount - - - 7,949 - 1,322 - 863 - 2,777 - 137,784 - 50 150,745	Ending Balance	Ending Balance		Market price or total equity amount	Market price or total equity amount	Valuation basis Equity method 〞 〞 〞 〞 〞 〞	Collateral Amount
	Share	Share - - - - - 3,450,000 -	Share - - - - - - -	Share 999,996 17,999,991 2,571,000 8,200,000 16,206,000 67,760,000 5,650,000	Shareholding ratio % 99.99 % 99.99 % 75.00 % 82.00 % 100.00 % 100.00 % 100.00	Amount	Price per share	Total amount 9,388 158,236 36,849 122,694 527,067 1,603,683 170,946 2,628,863
	999,996 17,999,991 2,571,000 8,200,000 16,206,000 64,310,000 5,650,000					9,342 127,145 27,636 100,610 527,067 1,603,683 170,946	9.39 8.79 10.75 12.27 32.52 23.67 30.26			- - - - - - - -
						2,566,429

Note 1: In 2023, the investment and the gain from investment accounted for using equity method increased by $105,449 thousand and $17,194 thousand, respectively; and the recognized comprehensive profits amounted to $7,160 thousand (including the deferred tax assets of other comprehensive income of $421 thousand).

Note 2: In 2023, the loss from investments accounted for using equity method and the cash dividend decreased by $146,596 thousand and $1,322 thousand, respectively; and the recognized comprehensive loss accounted to$2,827 thousand (including the deferred tax assets of other comprehensive income of $67 thousand).

Note 3: The net value of investment gain amounting to $17,194 thousand and the investment loss of $146,596 thousand resulted in a loss from investments accounted for using equity method amounting to $129,402 thousand.

64

Chainqui Construction Development Co., Ltd.

Statement of short-term borrowings

December 31, 2023

(Expressed in thousands of New Taiwan Dollar)

Bank	Type of borrowings Unsecured Secured Unsecured 〃 〃 Secured 〃 Unsecured Secured 〃 〃 〃 〃	Ending Balance $ 59,000 110,000 50,000 20,000 35,000 262,928 264,000 86,117 20,000 200,000 160,000 420,000 95,000 $ 1,782,045	Contract period	Range of interest rates	Credit Line Mortgage 59,000 None 2,690,000 Construction-in- progress 50,000 None 20,000 None 35,000 None 733,950 Construction-in- progress 300,000 〃 138,000 None 120,000 Construction-in- progress 216,000 Investment Property 160,000 Investment Property 420,000 Property, plant and equipment, and construction-in- progress 100,000 Property, plant and equipment, and financial assets at fair value through other comprehensive income 5,041,950
Taiwan Cooperative Bank Taiwan Cooperative Bank Hua Tai Bank Sanchong Hua Nan Bank Ximen Shanghai Commercial Bank First Bank Minquan Wugu Framers' Association Bank Taichuang Commerical Bank Cathy United Bank, Dongmen Taichung Commercial Bank Taiwan Business Bank, Jianguo Cathy United Bank, Dongmen Shin Kong Commercial Bank Total			2023.11.28~2024.11.27 2023.04.06~2027.08.31 2023.07.28~2024.07.28 2023.11.08~2024.02.07 2023.03.01~2024.03.01 2021.12.20-2025.12.20 2022.03.31-2027.03.31 2021.12.21~2025.11.23 2023.10.06~2028.01.10 2021.10.21~2025.11.23 2023.09.15~2024.03.15 2023.01.10~2028.06.28 2023.10.05~2024.02.22	2.47% 2.76% 2.81% 3.4% 2.91% 2.35% 2.64% 2.65%~3.15% 2.45% 2.55%~3.05% 2.23%~2.28% 2.44%~2.81% 2.51%~2.76%

65

Chainqui Construction Development Co., Ltd.

Statement of current contract liabilities

December 31, 2023

(Expressed in thousands of New Taiwan Dollar)

Item Payments received in advance for sales of land and buildings 〃 〃 〃 Other	Summary Amount Bali Taipei Port Section $ 101,773 Xinyi Sanxing Section 197,851 Xinzhuang Zhong Xiao Section 677,620 Daan Section 83,780 Note 3,902 $ 1,064,926

Note: The amount of each item does not exceed 5% of the amount of the subject

Statement of operating revenue

For the year ended December 31, 2023

Item Other operating revenue Other operating revenue Net operating revenue	Summary Rent revenue in investment property Service revenue	Amount Note $ 4,574 5,221 $ 9,795

66

Chainqui Construction Development Co., Ltd.

Statement of operating costs

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollar)

Item Operating cost Other operating cost Net operating cost	Summary Building cost Depreciation and others	Amount Note $ (1,704) 2,946 $ 1,242

Statement of operating expenses

Item Salaries Insurance expense Depreciation expense Service expense Other expense (Note) Total	Selling Expenses $ 27,153 2,843 540 - 7,662 $ 38,198		Administrative Expenses 29,661 2,278 5,153 5,622 12,813 55,527	Total
				56,814 5,121 5,693 5,622 20,475
				93,725

Note: The amount of each item does not exceed 5% of the amount of the subject