2530

Delpha Construction Co., Ltd. and Subsidiaries
Consolidated Financial Statements
For The Years Ended December 31, 2025 And 2024
With Independent Auditors’ Report

Address: 16F, No. 460, Sec. 5, Chenggong Rd., Neihu Dist., Taipei City
Tel.: (02)2632-8877

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

Table of Contents

Item	Page
I. Cover	1
II. Table of Contents	2
III. Representation Letter	3
IV. Independent Auditors’ Report	4-9
V. Consolidated Balance Sheets	10-11
VI. Consolidated Statements of Comprehensive Income	12
VII. Consolidated Statements of Changes in Equity	13
VIII. Consolidated Statements of Cash Flows	14
IX. Notes to the Consolidated Financial Statements
1. History and organization	15
2. Date and procedures of authorization of financial statements for issue	15
3. Newly issued or revised standards and interpretations	15-20
4. Summary of significant accounting policies information	21-45
5. Significant accounting judgements, estimates and assumptions	45-47
6. Description of Significant Account Titles	47-83
7. Related-Party Transactions	83-85
8. Assets pledged as security	85
9. Significant contingencies and unrecognized contractual commitments	86
10. Losses due to major disasters	86
11. Significant subsequent events	86
12. Others	86-100
13. Additional Disclosure
(1) Information on Significant Transactions	100,104-107
(2) Information on Investees	101,108
(3) Information on Investment in Mainland China	101
14. Segment information	101-103

Representation Letter

The entities included in the consolidated financial statements as of December 31, 2025 and for the year then ended prepared under the International Financial Reporting Standards, No.10 are the same as the entities to be included in the combined financial statements of the Company, if any to be prepared, pursuant to the Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises (referred to as "Combined Financial Statements"). Also, the footnotes disclosed in the Consolidated Financial Statements have fully covered the required information in such Combined Financial Statements. Accordingly, the Company did not prepare any other set of combined financial statements than the Consolidated Financial Statements.

Very truly yours,

Delpha Construction Co., Ltd

Chairman: Cheng Ssu-Tsung

March 30, 2026

EY安永

安永聯合會計師事務所

11012 台北市基隆路一段333號9樓
9F, No. 333, Sec. 1, Keelung Road, Taipei City, Taiwan, R.O.C.

Tel: 886 2 2757 8888
Fax: 886 2 2757 6050
ey.com/zh_tw

Independent Auditors’ Report

To Delpha Construction Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Delpha Construction Co., Ltd. (the “Company”) and its subsidiaries (the “Group”) as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2025 and 2024, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2025 and 2024, and their consolidated financial performance and cash flows for the years ended December 31, 2025 and 2024, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed and became effective by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by 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 Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

A member firm of Ernst & Young Global Limited

EY安永

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2025 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of inventories

The inventories of Delpha Construction Co., Ltd. and its subsidiaries mainly consist of construction land, properties under development, and properties held for sale. As of December 31, 2025, the net inventories of Delpha Construction Co., Ltd. and its subsidiaries was NT$25,787,701 thousand, representing approximately 84% of the total consolidated assets, which is significant for the consolidated financial statements. Additionally, due to the real estate development industry being susceptible to various factors such as policies, tax reform, and market conditions, the management faced a higher level of difficulty and risk in inventory valuation. The accountants considered the valuation of inventories to be significant for the consolidated financial statements and have therefore determined this a key audit matter for this fiscal year.

Our audit procedures included (but were not limited to) evaluating the appropriateness of the inventory valuation accounting policies; obtaining the net realizable value estimation data and investment return analysis for projects of Delpha Construction Co., Ltd. and its subsidiaries, which included appraisal reports provided by professional institutions. We assessed the professional competence, qualification, and objectivity of the external experts appointed by the Group, and understood and evaluated the valuation methods and key assumptions and parameters used in the appraisal reports. For parts not covered by professional institution appraisals, we selected samples to reference contracts of presold properties, researched recent actual transaction prices, and compared them with market transaction prices of similar properties in nearby areas (which included the real estate transaction price inquiry service from the Ministry of the Interior and real estate brokerage websites) to assess the reasonableness of the provision for inventory obsolescence. Additionally, we considered the appropriateness of the disclosures regarding inventory valuation in Notes 5 and 6 of the consolidated financial statements.

A member firm of Ernst & Young Global Limited

EY安永

Sales revenue and cost recognition

Delpha Construction Co., Ltd. and its subsidiaries primarily engage in the business of commissioning construction contractors to build public residential housing and commercial buildings, which are then presold. As the revenue recognition from the sale of properties by Delpha Construction Co., Ltd. and its subsidiaries involves determining the point in time when control is transferred to the customer, and given that revenue from property sales constitutes a significant proportion of the operating revenue and has a substantial impact on the consolidated financial statements, we have determined this to be a key audit matter.

The audit procedures for the revenue recognition of property sales by Delpha Construction Co., Ltd. and its subsidiaries, included (but were not limited to) evaluating the appropriateness of the accounting policy for revenue recognition from property sales; understanding the revenue recognition process of the property transactions during the audit of internal controls and performing tests of control points to confirm the effectiveness; selecting samples to perform test of details of transactions, as well as reviewing significant terms of property sale contracts to identify performance obligations; examining property transfer and handover documentation to confirm the completion of the transfer of ownership, while also verifying transaction terms and matching them with corresponding documents to ascertain the appropriateness of the timing of revenue recognition upon satisfaction of performance obligations through the transfer of control.

We also assessed whether Delpha Construction Co., Ltd. and its subsidiaries have appropriately disclosed information related to the revenue recognition from property sales in the consolidated financial statements, as detailed in Notes 4 and 6 to the consolidated financial statements.

A member firm of Ernst & Young Global Limited

EY安永

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

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

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

Those charged with governance, including audit committee or supervisors, are responsible for overseeing the financial reporting process of the Company and its subsidiaries.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 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 consolidated financial statements.

A member firm of Ernst & Young Global Limited

EY安永

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company and its subsidiaries.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Company and its subsidiaries. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and its subsidiaries to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company and its subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.

A member firm of Ernst & Young Global Limited

EY安永

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 2025 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Others

We have audited and expressed an unqualified opinion including on the parent company only financial statements of the Company as of and for the years ended December 31, 2025 and 2024.

Lin, Su-wen

Huang, Chien-Che

Ernst & Young, Taiwan

March 30, 2026

Notice to Readers

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

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

A member firm of Ernst & Young Global Limited

Delpha Construction Co., Ltd. and Subsidiaries
Consolidated Balance Sheets
December 31, 2025 and 2024

(In Thousands of New Taiwan Dollars)

			December 31, 2025		December 31, 2024
Code	Assets	Notes	Amount	%	Amount	%
	Current assets
1100	Cash and cash equivalents	4, 6	$3,206,058	10	$935,773	3
1150	Notes receivable, net	4, 6	4,668	-	7,499	-
1170	Accounts receivable, net	4, 6, 7	5,029	-	245,267	1
1200	Other receivables	4, 6	86	-	9,034	-
1220	Current tax assets		19	-	8	-
130x	Inventories	4, 6	25,787,701	84	25,120,538	86
1410	Prepayments		234,821	1	320,032	1
1476	Other current financial assets	4, 6	764,812	3	1,755,541	6
1479	Other current assets-others		51,817	-	14,974	-
1480	Current assets recognized as incremental costs to obtain contract with customers	4, 6	393,091	1	510,630	2
11xx	Total current assets		30,448,102	99	28,919,296	99
	Non-current assets
1517	Non-current financial assets at fair value through other comprehensive income	4, 6	28,516	-	2,262	-
1600	Property, plant and equipment	4, 6	115,087	1	117,709	1
1755	Right-of-use assets	4, 6	2,826	-	4,836	-
1780	Intangible assets	4, 6	13,439	-	13,618	-
1840	Deferred tax assets	4, 6	1,465	-	1,448	-
1920	Guarantee deposits paid		72,893	-	12,851	-
1975	Net defined benefit assets-non-current	4, 6	9,895	-	8,398	-
1990	Other non-current assets-others		5,552	-	5,552	-
15xx	Total non-current assets		249,673	1	166,674	1
1xxx	Total assets		$30,697,775	100	$29,085,970	100

(Please refer to the accompanying notes to the consolidated financial statements)

Delpha Construction Co., Ltd. and Subsidiaries

Consolidated Balance Sheets (Continued)

December 31, 2025 and 2024

(In Thousands of New Taiwan Dollars)

			December 31, 2025		December 31, 2024
Code	Liabilities and Equity	Notes	Amount	%	Amount	%
	Current liabilities
2100	Short-term borrowings	4, 6, 8	$6,909,213	23	5,624,651	19
2110	Short-term notes and bills payable	6	500,333	2	199,778	1
2130	Current contract liabilities	6, 7	2,938,080	10	3,539,646	12
2150	Notes payable	7	193,090	-	315,515	1
2170	Accounts payable	7	640,678	2	447,544	2
2200	Other payables		791,906	3	204,167	1
2230	Current tax liabilities		207,832	-	349,303	1
2250	Current provisions	4, 6	1,651	-	1,418	-
2280	Current lease liabilities	4, 6	2,875	-	4,865	-
2310	Advance receipts		243	-	3,877	-
2320	Long-term borrowings, current portion	6, 8	6,665,590	22	4,971,780	17
2399	Other current liabilities-others		218,190	-	43,649	-
21xx	Total current liabilities		19,069,681	62	15,706,193	54
	Non-current liabilities
2503	Non-current financial liabilities at fair value through profit or loss	4, 6	6,692	-	-	-
2530	Bonds payable	6	1,179,768	4	-	-
2540	Long-term borrowings	6, 8	135,170	-	2,651,890	9
2645	Guarantee deposits received		2,378	-	2,400	-
25xx	Total non-current liabilities		1,324,008	4	2,654,290	9
2xxx	Total liabilities		20,393,689	66	18,360,483	63
31xx	Equity attributable to owners of parent
3100	Common shares	6
3110	Ordinary shares		8,399,880	28	8,399,880	30
3130	Convertible bond conversion rights		12,677	-	-	-
	Total common shares		8,412,557	28	8,399,880	30
3200	Capital surplus	6	1,030,625	3	1,257,618	4
3300	Retained earnings	6
3310	Legal reserve		663,252	2	450,661	2
3320	Special reserve		1,459	-	-	-
3350	Unappropriated retained earnings		(26,313)	-	391,146	1
	Total retained earnings		638,398	2	841,807	3
3400	Other equity interest		4,167	-	372	-
31xx	Total equity attributable to owners of parent		10,085,747	33	10,499,677	36
36xx	Non-controlling interests	6	218,339	1	225,810	1
3xxx	Total equity		10,304,086	34	10,725,487	37
	Total liabilities and equity		$30,697,775	100	$29,085,970	100

(Please refer to the accompanying notes to the consolidated financial statements)

Delpha Construction Co., Ltd. and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2025 and 2024

(In Thousands of New Taiwan Dollars)

Code	Item	Notes	For the year ended		For the year ended
			December 31, 2025		December 31, 2024
			Amount	%	Amount	%
4000	Operating revenue	4, 6	$6,339,127	100	$6,095,261	100
5000	Operating costs	6, 7	(3,742,923)	(59)	(3,583,851)	(59)
5900	Gross profit from operating		2,596,204	41	2,511,410	41
6000	Operating expenses	6, 7
6100	Selling expenses		(293,611)	(5)	(312,869)	(5)
6200	Administrative expenses		(156,582)	(2)	(153,306)	(3)
6450	Expected credit gains(losses)	4, 6	4,284	-	(4,350)	-
	Total operating expenses		(445,909)	(7)	(470,525)	(8)
6900	Net operating income (loss)		2,150,295	34	2,040,885	33
7000	Non-operating income and expenses
7010	Other income	6	9,324	-	4,947	-
7100	Interest income	6	26,412	-	13,916	-
7020	Other gains (losses)	6	(597)	-	-	-
7050	Finance costs	6	(57,574)	(1)	(26,788)	-
	Total non-operating income and expenses		(22,435)	(1)	(7,926)	-
7900	Profit before tax		2,127,860	33	2,032,959	33
7950	Income tax expense	4, 6	(433,978)	(7)	(410,537)	(6)
8200	Net profit		1,693,882	26	1,622,422	27
8300	Other comprehensive income	4, 6
8310	Components of other comprehensive income that will not be reclassified to profit or loss:
8311	Remeasurements of defined benefit plans	4, 6	1,365	-	1,176	-
8316	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income		3,795	-	(741)	-
	Total other comprehensive income (loss), net of tax		5,160	-	435	-
8500	Total comprehensive income		$1,699,042	26	$1,622,857	27
8600	Profit (loss), attributable to:
8610	Owners of parent		$1,701,353	27	$1,629,482	27
8620	Non-controlling interests	6	(7,471)	-	(7,060)	-
			$1,693,882	27	$1,622,422	27
8700	Comprehensive income attributable to:
8710	Owners of parent		$1,706,513	27	$1,629,917	27
8720	Non-controlling interests	6	(7,471)	-	(7,060)	-
			$1,699,042	27	$1,622,857	27
	Earnings per share (in dollars)	6
9750	Basic earnings per share		$2.03		$1.94
9850	Diluted earnings per share		$1.99		$1.94

(Please refer to the accompanying notes to the consolidated financial statements)

Delpha Construction Co., Ltd. and Subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2025 and 2024

(In Thousands of New Taiwan Dollars)

Item	Equity attributable to owners of parent								Non-controlling interests	Total equity
	Ordinary shares	Convertible bond conversion rights	Capital surplus	Retained earnings			Other equity interest items	Total equity attributable to owners of parent
				Legal reserve	Special reserve	Unappropriated earnings (accumulated profit or loss)	Unrealized gain (loss) on financial assets at fair value through other comprehensive income
Balance as of January 1, 2024	$8,399,880	$-	$1,257,440	$275,584	$-	$511,255	$1,113	$10,445,272	$232,870	$10,678,142
Legal reserve appropriated	-	-	-	175,077	-	(175,077)	-	-	-	-
Cash dividends of ordinary shares	-	-	-	-	-	(1,575,690)	-	(1,575,690)	-	(1,575,690)
Capital surplus transferred from unclaimed dividends	-	-	178	-	-	-	-	178	-	178
Net profit	-	-	-	-	-	1,629,482	-	1,629,482	(7,060)	1,622,422
Other comprehensive income	-	-	-	-	-	1,176	(741)	435	-	435
Total comprehensive income	-	-	-	-	-	1,630,658	(741)	1,629,917	(7,060)	1,622,857
Balance as of December 31, 2024	$8,399,880	$-	$1,257,618	$450,661	$-	$391,146	$372	$10,499,677	$225,810	$10,725,487
Balance as of January 1, 2025	$8,399,880	$-	$1,257,618	$450,661	$-	$391,146	$372	$10,499,677	$225,810	$10,725,487
Legal reserve appropriated	-	-	-	212,591	-	(212,591)	-	-	-	-
Special reserve appropriated	-	-	-	-	1,459	(1,459)	-	-	-	-
Cash dividends of ordinary shares	-	-	-	-	-	(1,906,127)	-	(1,906,127)	-	(1,906,127)
Due to reconnection of equity component of convertible bonds issued	-	-	82,218	-	-	-	-	82,218	-	82,218
Cash dividends to shareholders from Capital Surplus	-	-	(335,995)	-	-	-	-	(335,995)	-	(335,995)
Capital surplus transferred from unclaimed dividends	-	-	(3)	-	-	-	-	(3)	-	(3)
Conversion of Convertible Bonds	-	12,677	26,787	-	-	-	-	39,464	-	39,464
Net profit	-	-	-	-	-	1,701,353	-	1,701,353	(7,471)	1,693,882
Other comprehensive income	-	-	-	-	-	1,365	3,795	5,160	-	5,160
Total comprehensive income	-	-	-	-	-	1,702,718	3,795	1,706,513	(7,471)	1,699,042
Balance as of December 31, 2025	$8,399,880	$12,677	$1,030,625	$663,252	$1,459	$(26,313)	$4,167	$10,085,747	$218,339	$10,304,086

(Please refer to the accompanying notes to the consolidated financial statements)

Delpha Construction Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(In Thousands of New Taiwan Dollars)

Item	For the year ended December 31, 2025	For the year ended December 31, 2024
	Amount	Amount
Cash flows from operating activities:
Profit (loss) before tax	$2,127,860	$2,032,959
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation expense	5,398	5,311
Amortization expense	2,278	1,414
Expected credit loss (gain)	(4,284)	4,350
Net losses (gains) on financial assets and financial liabilities measured at fair value through profit or loss	(5,084)	-
Interest income	(26,412)	(13,915)
Dividend income	(641)	(1,553)
Interest expense	57,574	26,788
Gains (losses) on disposal of property, plant and equipment	-	9
Gain on lease modification	(3)	-
Changes in operating assets and liabilities:
Decrease (increase) in notes receivable	2,831	2,891
Decrease (increase) in accounts receivable	244,522	136,032
Decrease (increase) in other receivable	8,948	(9,031)
Decrease (increase) in inventories	(199,878)	(4,238,012)
Decrease (increase) in prepayments	(40,983)	8,307
Decrease (increase) in other financial assets	990,729	(1,089,030)
Decrease (increase) in other current assets	(36,843)	(8,780)
Decrease (increase) in net defined benefit assets	(132)	(87)
Decrease (increase) in assets recognized as incremental costs to obtain contract with customers	117,539	(49,839)
Increase (decrease) in contract liabilities	(601,566)	1,395,802
Increase (decrease) in notes payable	(122,425)	(63,374)
Increase (decrease) in accounts payable	193,134	199,617
Increase (decrease) in other payable	(41,621)	13,032
Increase (decrease) in provisions	233	158
Increase (decrease) in receipts in advance	(3,634)	9
Increase (decrease) in other current liabilities	174,541	(8,982)
Cash inflow (outflow) generated from operations	2,842,081	(1,655,924)
Interest received	26,412	13,915
Dividends received	641	1,553
Interest paid	(385,121)	(305,800)
Income taxes refund (paid)	(575,477)	(156,463)
Net cash flows from (used in) operating activities	1,908,536	(2,102,719)
Cash flows from investing activities:
Acquisition of financial assets measured at fair value through profit or loss	(22,459)	-
Acquisition of property, plant and equipment	(692)	(5,309)
Acquisition of intangible assets	(305)	(2,208)
Increase in guarantee deposits paid	(60,042)	(4,325)
Decrease in prepayments for equipment	-	470
Net cash flows from (used in) investing activities	(83,498)	(11,372)
Cash flows from financing activities:
Increase in short-term borrowings	1,284,562	1,508,875
Increase in short-term notes and bills payable	300,555	99,839
Proceeds from long-term borrowings	140,130	2,030,135
Repayments of long-term borrowings	(963,040)	(126,400)
Increase (Decrease) in guarantee deposits received	(22)	700
Repayments of lease liabilities	(2,159)	(2,151)
Proceeds from issuing bonds	1,297,355	-
Cash dividends paid	(1,612,131)	(1,575,690)
Other financing activities	(3)	178
Net cash flows from (used in) financing activities	445,247	1,935,486
Net increase in cash and cash equivalents	2,270,285	(178,605)
Cash and cash equivalents at the beginning of period	935,773	1,114,378
Cash and cash equivalents at the end of period	$3,206,058	$935,773

(Please refer to the accompanying notes to the consolidated financial statements)

Delpha Construction Co., Ltd. and Subsidiaries
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Stated)

History and organization

Delpha Construction Co., Ltd. (the "Company") was incorporated in December 1960 with the approval of the Ministry of Economic Affairs. The Company and its subsidiaries (collectively, the "Group") primarily engaged in building commercial buildings by commissioning construction building companies, selling and leasing of public housing, development of specific professional areas, interior decoration, property rent/sale real estate agency, and the operation of and investment in related businesses. The Company's stocks were listed on the TWSE in 1995. And the address is registered at 16F, No. 460, Sec. 5, Chenggong Rd., Neihu Dist., Taipei City.

Date and procedures of authorization of financial statements for issue

The consolidated financial statements of the Company and its subsidiaries ("the Group") for the years ended 2025 and 2024 were authorized for issue by the Company's board of directors (hereinafter the "Board of Directors") on March 30, 2026.

Newly issued or revised standards and interpretations

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

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission ("FSC") and become effective for annual periods beginning on or after January 1, 2025. The adoption of these new standards and amendments had no material impact on the Group.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board ("IASB") which have been endorsed by FSC, and not yet adopted by the Group as at the date when the Group's financial statements were authorized for issue, are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	IFRS 17 “Insurance Contracts”	January 1, 2023
b	Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7	January 1, 2026
c	Annual Improvements to IFRS Accounting Standards – Volume 11	January 1, 2026
d	Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7	January 1, 2026

(a) IFRS 17 "Insurance Contracts"

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

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

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

(b) Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7

The amendments include:

(1) Clarify that a financial liability is derecognized on the settlement date and describe the accounting treatment for settlement of financial liabilities using an electronic payment system before the settlement date.

(2) Clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features.

(3) Clarify the treatment of non-recourse assets and contractually linked instruments.

(4) Require additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESG-linked), and equity instruments classified at fair value through other comprehensive income.

(1) Amendments to IFRS 1
The amendments mainly improve the consistency in wording between first-time adoption of IFRS and requirements for hedge accounting in IFRS 9.

(2) Amendments to IFRS 7
The amendments update an obsolete cross-reference relating to gain or loss on derecognition.

(3) Amendments to Guidance on implementing IFRS 7
The amendments improve some of the wordings in the implementation guidance, including the introduction, disclosure of deferred difference between fair value and transaction price and credit risk disclosures.

(4) Amendments to IFRS 9
The amendments add a cross-reference to resolve potential confusion for a lessee applying the derecognition requirements and clarify the term "transaction price".

(5) Amendments to IFRS 10

The amendments remove the inconsistency between paragraphs B73 and B74.

(6) Amendments to IAS 7

The amendments remove a reference to "cost method" in paragraph 37 of IAS 7.

(d) Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7

The amendments include:

(1) Clarify the application of the 'own-use' requirements.
(2) Permit hedge accounting if these contracts are used as hedging instruments.
(3) Add new disclosure requirements to enable investors to understand the effect of these contracts on a company's financial performance and cash flows.

The abovementioned standards and amendments are applicable for annual periods beginning on or after 1 January 2026 and have no material impact on the Group.

(3) Standards or interpretations issued, revised or amended, by IASB which have not been endorsed by FSC, and not yet adopted by the Group as at the date when the Group's financial statements were authorized for issue, are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
b	IFRS 18 “Presentation and Disclosure in Financial Statements”	1 January 2027 (Note)
c	Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures (IFRS 19)	1 January 2027
d	Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 and IAS 29)	1 January 2027

Note: On 25 September 2025, the FSC announced in a press release that Taiwan will adopt IFRS 18 in 2028.

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

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

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

(b) IFRS 18 “Presentation and Disclosure in Financial Statements”

IFRS 18 replaces IAS 1 Presentation of Financial Statements. The main changes are as below:

(1) Improved comparability in the statement of profit or loss (income statement) IFRS 18 requires entities to classify all income and expenses within their statement of profit or loss into one of five categories: operating; investing; financing; income taxes; and discontinued operations. The first three categories are new, to improve the structure of the income statement, and requires all entities to provide new defined subtotals, including operating profit or loss. The improved structure and new subtotals will give investors a consistent starting point for analyzing entities’ performance and make it easier to compare entities.

(2) Enhanced transparency of management-defined performance measures IFRS 18 requires entities to disclose explanations of those entity-specific measures that are related to the income statement, referred to as management-defined performance measures.

(3) Useful grouping of information in the financial statements

IFRS 18 sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes. The changes are expected to provide more detailed and useful information. IFRS 18 also requires entities to provide more transparency about operating expenses, helping investors to find and understand the information they need.

This new standard and its amendments permit subsidiaries without public accountability to provide reduced disclosures when applying IFRS Accounting Standards in their financial statements. IFRS 19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for subsidiaries that elect to apply it.

(d) Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 and IAS 29)

The amendments include:

(1) Clarify that when the entity’s functional currency is that of a non-hyperinflationary economy but its presentation currency is the currency of a hyperinflationary economy, the entity shall translate its results and financial position using the closing rate at the date of the most recent statement of financial position.

(2) In the above circumstances, when the presentation currency ceases to be hyperinflationary economy, the entity shall not retranslate amounts that arose before the beginning of the reporting period.

(3) When the entity’s functional currency and presentation currency are the currency of a hyperinflationary economy, the entity shall apply the relevant accounting treatment in accordance with paragraph 34 of IAS 29.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Group is still currently determining the potential impact of the new or amended standards and interpretations listed under (b), it is not practicable to estimate their impact on the Group at this point in time. The remaining new or amended standards and interpretations have no material impact on the Group.

Summary of significant accounting policies information

(1) Statement of compliance

The consolidated financial statements of the Group for the years ended December 31, 2025 and 2024 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”) and International Financial Reporting Standards, International Accounting Standards, and Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by the FSC.

(2) Basis of preparation

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

(3) Basis of consolidation

Preparation principle of consolidated financial statement

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

(a) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee).

(b) Exposure, or rights, to variable returns from its involvement with the investee, and;

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) The contractual arrangement with the other vote holders of the investee.

(b) Rights arising from other contractual arrangements.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, if without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Group loses control of a subsidiary, it:

(a) Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
(b) Derecognizes the carrying amount of any non-controlling interest;
(c) Recognizes the fair value of the consideration received;
(d) Recognizes the fair value of any investment retained;
(e) Reclassifies the parent's share of components previously recognized in other comprehensive income to profit or loss, or transfer directly to retained earnings if required by other IFRSs;
(f) Recognizes any resulting difference in profit or loss.

The consolidated entities are listed as follows:

Name of investor	Subsidiary	Main businesses	Percentage of ownership (%)
			December 31, 2025	December 31, 2024
The Company	Huachien Development Co., Ltd. (“Huachien“)	Development, sales, and rental business	58.36%	58.36%
The Company	Huajian Construction Co., Ltd. (“Huajian”)	Construction business	100%	100%

(4) Foreign currency transactions

The Group’s consolidated financial statements are presented in NT$, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

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

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

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

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

(5) Current and non-current distinction

An asset is classified as current when:

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

A liability is classified as current when:

(a) The Group expects to settle the liability in its normal operating cycle.
(b) The Group holds the liability primarily for the purpose of trading
(c) The liability is due to be settled within twelve months after the reporting period
(d) The Group 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 the issue of equity instruments do not affect its classification.

The Group engages in the development of public housings by commissioning construction building companies and the sales of residential and commercial buildings. The operating cycle is longer than 1 year (generally 3 years). Therefore, the classification of current and non-current assets and liabilities related to construction business is based on operating cycle.

(6) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 3 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(7) Financial instruments

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

Financial assets and financial liabilities within the scope of IFRS 9 "Financial Instruments" are recognized initially at fair value plus or minus, in the case of investments at fair value through profit or loss, directly attributable transaction costs.

A. Financial assets: Recognition and Measurement

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

The Group classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

(a) The Group's business model for managing the financial assets and
(b) The contractual cash flow characteristics of the financial assets.

Financial assets reassured at amortized cost

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

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

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

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

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

Financial assets measured at fair value through other comprehensive income

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

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

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

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.

(b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

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

(i) Purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

(ii) financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

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

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

B. Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the balance sheet.

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

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

The loss allowance is measured as follows:

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

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

C. Derecognition of financial assets

A financial asset is derecognized when:

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

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

D. Financial liabilities and equity

Classification between liabilities or equity

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

Equity instruments

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

Compound instruments

The Group evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore, the Group assesses if the economic characteristics and risks of the put and call options contained in the convertible bonds are closely related to the economic characteristics and risk of the host contract before separating the equity element.

For the liability component excluding the derivatives, its fair value is determined based on the rate of interest applied at that time by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost before the instrument is converted or settled.

For the embedded derivative that is not closely related to the host contract (for example, if the exercise price of the embedded call or put option is not approximately equal on each exercise date to the amortized cost of the host debt instrument), it is classified as a liability component and subsequently measured at fair value through profit or loss unless it qualifies for an equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IFRS 9 “Financial Instruments”.

Transaction costs are apportioned between the liability and equity components of the convertible bond based on the allocation of proceeds to the liability and equity components when the instruments are initially recognized.

On conversion of a convertible bond before maturity, the carrying amount of the liability component being the amortized cost at the date of conversion is transferred to equity.

Financial liabilities

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

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss.

A financial liability is classified as held for trading if:

(a) It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;

(b) On initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or

(c) It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

(a) It eliminates or significantly reduces a measurement or recognition inconsistency; or
(b) A group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the Group is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of financial liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

Financial liabilities at amortized cost

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

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

Derecognition of financial liabilities

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

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

E. Offsetting of financial assets and financial liabilities

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

(8) Derivatives instruments

The derivative instruments held or issued by the Group are used to hedge foreign exchange risk and interest rate risk. Those derivatives that are designated and qualify as effective hedging instruments are presented on the balance sheet as hedging financial assets or liabilities. Derivatives that are not designated as effective hedges are presented on the balance sheet as financial assets or financial liabilities measured at fair value through profit or loss.

Derivative instruments are initially recognized at fair value on the trade date of the derivative contract and are subsequently measured at fair value. When the fair value of a derivative instrument is positive, it is recognized as a financial asset; when the fair value is negative, it is recognized as a financial liability. Changes in the fair value of derivative instruments are recognized directly in profit or loss. However, when derivatives are used for hedging purposes, the effective portion is recognized in profit or loss or in equity, depending on the type of hedge.

When the host contract is a non-financial asset or a financial liability, and an embedded derivative within the host contract has economic characteristics and risks that are not closely related to those of the host contract, and the host contract is not measured at fair value through profit or loss, the embedded derivative shall be separated and accounted for as an independent derivative instrument.

(9) Fair value measurement

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

(a) In the principal market for the asset or liability, or
(b) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

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

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(10) Inventories

Inventories are stated at acquisition or construction costs. The allocation of construction cost to land and buildings sold and unsold is based on relative price or size of land. The interests paid prior to the completion of construction projects are capitalized as cost of inventories in accordance with IFRS 23 “Borrowing Costs”.

Inventories are valued at lower of cost and net realizable value. Inventory write-downs are made item by item, except where it may be appropriate to group similar or related items. Abnormal spoilage of inventories, losses on inventory valuation and obsolescence, and gains from price recovery should be recognized in the period incurred. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

The Group acquires specific rights of superficies and land-use rights for its future development on lands. These rights on land meet the definitions of inventories in Paragraphs 6 and 8 in IAS2, Inventories. Therefore, the royalties for registration of superficies are recognized as construction costs and will be transferred to operating cost based on the ratio of area sold to total area when the construction is completed. The rent expenses after establishment of superficies, are deemed as necessary expenses incurred for the establishment and shall be recognized as expenses in the period incurred, no matter they incur in the construction periods or operation periods.

The Group's contract incremental cost is the commission generated by entering into the presold house contracts. When the customers enter into the presold contract, the Group has not fulfilled the performance obligation because the goods promised have not been transferred to the customer. According IFRS 15, the sales commission is the incremental cost of concluding the presold house contract. When the performance obligation is met by transferring the house to the customer, the incremental cost of concluding the contract is amortized.

(11) Investments accounted for using the equity method

The Group’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Group has significant influence. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture.

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

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

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

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

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

(a) Its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate or joint venture and the proceeds on the ultimate disposal of the investment; or
(b) The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 “Impairment of Assets”.

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

(12) Property, plant and equipment

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

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

Buildings	5~50 years
Transportation equipment	5~8 years
Office Equipment	3~5 years
Other equipment	5~8 years
Leasehold improvements	The shorter of lease terms or economic useful lives

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

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

(13) Leases

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

(a) The right to obtain substantially all of the economic benefits from use of the identified asset; and
(b) The right to direct the use of the identified asset.

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

Group as a lessee

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

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

(a) Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
(b) Variable lease payments that depend on an index or a rate, initially measured using the index or rate as of the commencement date.
(c) Amounts expected to be payable by the lessee under residual value guarantees;

(d) The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
(e) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

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

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

(a) The amount of the initial measurement of the lease liability;
(b) Any lease payments made at or before the commencement date, less any lease incentives received;
(c) Any initial direct costs incurred by the lessee; and
(d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

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

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

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

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

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

Group as a lessor

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

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

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

(14) Intangible assets

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

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

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

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

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

Goodwill

The goodwill generated from combination and acquisitions within the Group is not amortized. In addition to regular impairment testing conducted each year, impairment testing should also be performed if there are indications that the carrying amount cannot be recovered. If economic facts or changes in the environment result in impairment of goodwill, a loss should be recognized for the impaired portion, and this impairment loss cannot be reversed thereafter.

The accounting policy information regarding intangible assets of the Group is as follows:

	Goodwill	Computer software
Useful life	Not sure	Five years
Depreciation method used	Not amortized	Straight-line method
Internally generated or externally acquired	externally acquired	externally acquired

(15) Impairment of non-financial assets

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

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

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

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

(16) Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probably that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

If the obligations occur over a period of time, the liabilities for tax payments are recognized progressively.

(17) Revenue recognition

The Group’s revenue arising from contracts with customers are primarily related to sale of land and buildings. The accounting policies are explained as follows:

The Group constructs and sells residential and commercial buildings by presales. Sales are recognized when control of the assets is transferred to the customers. The assets, subject to the restrictions prescribed in the presale contracts, are not under control of the Group. However, the Group has the legally enforceable right to payment only after the transfer of the ownership to the customers. Therefore, the Group recognizes revenue when the transfer of the ownership is completed and receive payments from customers based on the fixed consideration contract terms, for which the customers make fixed payments according to agreed schedules. Consideration received (or will be received) from customers prior to the Group having satisfied its performance obligations are accounted for as contract liabilities.

Where the contract explicitly or implicitly contains a financing component which provided a significant financial benefit to customs or the Group, the Group adjusts the transaction price to reflect the time value of money. For contracts where the period between the payment and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a significant financing component.

The Group recognizes the incremental costs (mainly comprised of sales commissions) of obtaining a contract with a customer as an asset if the Group expects to recover those costs. The assets are amortized on a systematic basis that is consistent with the Group’s revenue recognition. The Group recognizes an impairment loss to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Group expects to receive less the cost that have not been recognized as expenses. The incremental costs of obtaining a contract are recognized as an expense when incurred if the amortization period of the assets is less than one year.

(18) Borrowing costs

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

(19) Government grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

Where the Group receives non-monetary grants, the asset and the grant are recorded gross at nominal amounts and released to the statement of comprehensive income over the expected useful life and pattern of consumption of the benefit of the underlying asset by equal annual installments. Where loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as additional government grant.

(20) Post-employment benefits

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

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan, and recognizes expenses in the period.

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

(a) The date of the plan amendment or curtailment, and
(b) The date that the Group recognizes restructuring-related costs or termination benefit.

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

(21) Income tax

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

Current income tax

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

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders' Meeting.

Deferred tax

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

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

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

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

(a) Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

(b) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

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

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

According to the temporary exception provided in the Amendments to IAS 12 "International Tax Reform-Pillar Two Model Rules," the deferred tax assets and liabilities related to Pillar Two income tax is not be recognized, and their related information is not disclosed.

(22) Business combinations and goodwill

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

When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as of the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

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

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

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

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

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

5. Significant accounting judgements, estimates and assumptions

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

Estimates and assumptions

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

(1) Valuation of inventory

Inventories are stated at the lower of cost or net realizable value, and the Group uses judgment and estimate to determine the net realizable value of inventory at the end of each reporting period. The Group estimates the net realizable value of inventory for obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumption of future demand within a specific time horizon and therefore could result in significant changes. Please refer to Note 6 for more details.

(2) Fair value of financial instruments

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

(3) Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate and changes of the future salary etc.

(4) Income tax

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

Deferred tax assets are recognized for all carryforward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

6. Description of Significant Account Titles

(1) Cash and equivalents

	As of
	December 31, 2025	December 31, 2024
Cash on hand and working capital	$2,040	$2,040
Check deposits and demand deposits	3,204,018	933,733
Total	$3,206,058	$935,773

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

Item	As of
	December 31, 2025	December 31, 2024
Equity instrument investments measured at fair value through other comprehensive income
Listed stocks	$26,887	$-
Unlisted stocks	1,629	2,262
Total	$28,516	$2,262
Current	$-	$-
Non-current	28,516	2,262
Total	$28,516	$2,262

Financial assets at fair value through other comprehensive income were not pledged.

(3) Notes receivables

Item	As of
	December 31, 2025	December 31, 2024
Notes receivables arising from operating activities	$4,668	$7,499
Notes receivables arising from non-operating activities	-	-
Subtotal (total carrying amount)	4,668	7,499
Less: loss allowance	-	-
Total	$4,668	$7,499

Notes receivables were not pledged.

The Group follows the requirement of IFRS 9 to assess the impairment. Please refer to Note 6.(19) for more details on loss allowance and Note 12 for details on credit risk management.

(4) Accounts receivables and accounts receivables-related parties

	As of
	December 31, 2025	December 31, 2024
Accounts receivables	$5,029	$249,617
Less: loss allowance	-	(4,350)
Subtotal	5,029	245,267
Accounts receivables from related parties	-	-
Less: loss allowance	-	-
Subtotal	-	-
Total	$5,029	$245,267

The Group uses a simplified approach to estimate expected credit losses for all notes receivable and trade receivables, which involves the measurement of expected credit losses across the assets' lifetimes. For the measurement, these notes receivable and trade receivables are grouped based on shared credit risk characteristics, such as product type and customer ratings, and include forward-looking information. For information related to the allowance for losses as of December 31, 2025 and 2024, please refer to Notes 6.(19). For information related to credit risk, please refer to Note 12.

(5) Other receivables

	As of
	December 31, 2025	December 31, 2024
Other receivables	$16,331	$25,279
Less: loss allowance	(16,245)	(16,245)
Total	$86	$9,034

Please refer to Note 6.(19) for more details on loss allowance of other receivables for the years ended December 31, 2025 and 2024. Please refer to Note 12 for more details on credit risk management.

(6) Inventories

	As of
	December 31, 2025	December 31, 2024
Land and buildings held for sale	$186,569	$268,116
Land held for construction site and construction in progress	25,783,588	25,106,975
Land held for floor-area-ratio transfer	140,261	20,513
Prepayment for land purchases	55,753	103,404
Less: Allowance for inventory valuation loss	(378,470)	(378,470)
Total	$25,787,701	$25,120,538

A. Details of land and buildings held for sale were as follows:

Project name	As of
	December 31, 2025	December 31, 2024
Delpha Dream House A	$1,762	$1,762
Delpha Living’s Home A	1,192	1,192
Athens Era A	456	456
Athens Era B	1,722	1,722
Shitan Section Case A	63,527	63,527
Xinbi Section Case A	7,513	76,646
Xinzhan Section	-	122,811
Qingxi Section Case B	110,397	-
Total	$186,569	$268,116

B. Details of Land held for construction site and Construction in progress:

Project name	As of
	December 31, 2025	December 31, 2024
Shulin Case	$198,192	$198,192
Delpha Living’s Home B	9,153	9,153
Xindian He Feng Case	632,155	632,155
Fu De Section Case B	423	423
Xinguang Road Case B	2,217	2,217
Huaisheng Urban Renewal Project	1,502,874	1,469,976
Yun He Jie Case B	1,712	1,712
Wenlin N. Road Case	494,890	494,890
Xinbi Section Case B	1,384,334	1,045,893
Lejie Section Case B	1,038,691	765,262
Lejie Section Case C	1,217,192	1,150,627
Qingxi Section Case B	-	2,121,820
Shanjie Section	-	924,779
Wuri New High-Speed Railway Section	9,180,058	7,820,220
Qing'an Section	1,306,455	1,048,411
Sanzuowu Section	715,692	554,362
Taiyuan Road Renewal project	1,254,174	1,253,400
Fuxi section case	357,400	338,750
Yixin section Case	1,097,303	1,044,055
Longfu Section Case A	479,737	468,177
Longfu Section Case B	164,997	160,663
Longfu Section Case C	1,538,163	1,538,163
Longyi Section Case A	250,590	243,901
Longyi Section Case B	389,927	209,944
Longyi Section Case C	157,630	-
Fengming Section Case A	2,002,943	1,609,830
Yongyi Section	406,686	-
Total	$25,783,588	$25,106,975

C. Details of land held for floor-area-ratio transfer are as follows:

Project name	As of
	December 31, 2025	December 31, 2024
Zheng Ying Section	$261	$261
Lejie Section Case C	-	18,991
Huaisheng Urban Renewal Project	140,000	-
Yixin section Case	-	1,261
Total	$140,261	$20,513

D. Details of prepayment for land purchases are as follows:

Project name	As of
	December 31, 2025	December 31, 2024
Huaisheng Urban Renewal Projec	$55,753	$-
Longyi Section Case B	-	53,404
Longyi Section Case C	-	50,000
Total	$55,753	$103,404

E. The amounts capitalized as interest for construction land and construction in progress for the years ended December 31, 2025 and 2024 were NT$342,885 thousand and NT$282,600 thousand respectively, with the corresponding capitalization rates being 3.20% and 2.72%.

F. Please refer to Note 8 for more details on inventories pledged as secured liabilities.

G. Cost incurred on inventories for the years ended December 31, 2025 and 2024 were as follows:

	For the year ended December 31
	2025	2024
Cost of selling land and buildings	$3,742,923	$3,583,851
Inventory valuation losses	-	-
Total	$3,742,923	$3,583,851

H. Current assets recognized as incremental costs to obtain contract with customers:

The cost incurred for entering into contracts with customers is the incremental cost of the contract. The incremental cost of the contract is amortized when the house is handed over to the customers.

(7) Other financial assets

Items	As of
	December 31, 2025	December 31, 2024
Bank deposits-Guarantee accounts	$9,995	$29,331
Bank deposits-Trust accounts	754,817	1,726,210
Total	$764,812	$1,755,541
Current	$764,812	$1,755,541
Non-current	-	-
Total	$764,812	$1,755,541

Other financial assets included deposits from presold housings and lands held in trust accounts. Please refer to Note 8 for more details on other current financial assets under pledge.

(8) Property, plant and equipment

	Land	Buildings	Transportation equipment	Office Equipment	Leasehold Improvements	Others	Total
Cost:
As of January 1, 2025	$94,331	$40,025	$3,842	$12,846	$1,851	$370	$153,265
Additions	-	105	-	587	-	-	692
Disposal and scrap	-	-	-	(56)	-	-	(56)
Transfer	-	-	-	(756)	-	-	(756)
As of December 31, 2025	$94,331	$40,130	$3,842	$12,621	$1,851	$370	$153,145
As of January 1, 2024	$94,331	$38,925	$2,257	$10,751	$1,851	$370	$148,485
Additions	-	1,100	1,585	2,624	-	-	5,309
Disposal and scrap	-	-	-	(53)	-	-	(53)
Transfer	-	-	-	(476)	-	-	(476)
As of December 31, 2024	$94,331	$40,025	$3,842	$12,846	$1,851	$370	$153,265
Depreciation and impairment:
As of January 1, 2025	$-	$22,903	$1,451	$9,081	$1,851	$270	$35,556
Depreciation	-	1,150	440	1,702	-	22	3,314
Disposal and scrap	-	-	-	(56)	-	-	(56)
Transfer	-	-	-	(756)	-	-	(756)
As of December 31, 2025	$-	$24,053	$1,891	$9,971	$1,851	$292	$38,058
As of January 1, 2024	$-	$21,845	$1,104	$8,053	$1,593	$248	$32,843
Depreciation	-	1,058	347	1,548	258	22	3,233
Disposal and scrap	-	-	-	(44)	-	-	(44)
Transfer	-	-	-	(476)	-	-	(476)
As of December 31, 2024	$-	$22,903	$1,451	$9,081	$1,851	$270	$35,556
Net carrying amount as at December 31, 2025	$94,331	$16,077	$1,951	$2,650	$-	$78	$115,087
December 31, 2024	$94,331	$17,122	$2,391	$3,765	$-	$100	$117,709

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

(9) Intangible assets

	Computer software	Goodwill	Total
Cost:
As of January 1, 2025	$2,208	$11,410	$13,618
Additions	305	-	305
As of December 31, 2025	$2,513	$11,410	$13,923
As of January 1, 2024	$-	$11,410	$11,410
Additions	2,208	-	2,208
As of December 31, 2024	$2,208	$11,410	$13,618
Amortization and impairment:
As of January 1, 2025	$-	$-	$-
Amortization	484	-	484
As of December 31, 2025	$484	$-	$484
As of January 1, 2024	$-	$-	$-
Amortization	-	-	-
As of December 31, 2024	$-	$-	$-
Net carrying amount as at:
December 31, 2025	$2,029	$11,410	$13,439
December 31, 2024	$2,208	$11,410	$13,618

The amortization of recognized intangible assets is as follows:

	December 31, 2025	December 31, 2024
Administrative expenses	$484	$-

No impairment of goodwill was recognized.

(10) Short-term borrowings

	As of
	December 31, 2025	December 31, 2024
Unsecured bank borrowings	$2,105,143	$1,792,123
Secured bank borrowings	4,804,070	3,832,528
Total	$6,909,213	$5,624,651
Range of interest rates	2.49%~3.25%	2.49%~3.15%

Please refer to Note 8 for more details on part of inventories and property, plant and equipment pledged as security for short-term borrowings.

(11) Short-term notes payable

	Acceptance agencies	As of
		December 31, 2024	December 31, 2023
Short-term notes and bills payable	Notes and bills of Mega Bank	$100,000	$100,000
Short-term notes and bills payable	Notes and bills of IBFC	301,400	100,000
Short-term notes and bills payable	Notes and bills of ETFC	100,000	-
Less: unamortized discount		(1,067)	(222)
Total		$500,333	$199,778
Range of interest rates		1.65%~2.86%	2.00%~2.33%

The Group's short-term notes payables were not pledged.

(12) Financial liabilities at fair value through profit or loss

	As of
	December 31, 2025	December 31, 2024
Held for trading:
Embedded derivatives	$6,692	$-
Current	$-	$-
Non-current	6,692	-
Total	$6,692	$-

(13) Bonds Payable

	As of
	December 31, 2025	December 31, 2024
Liability component:
Face value of convertible bonds	$1,260,700	$-
Less: Discounts on bonds payable	(80,932)	-
Net amount	$1,179,768	$-
Embedded derivative financial instruments	$6,692	$-
Equity component	$82,218	$-

A. On June 23, 2025, the Company issued the third domestic zero coupon unsecured convertible bonds. Upon evaluation, the terms of the convertible bonds included a liability component, embedded derivatives (a call option and a put option) and an equity component (an option for conversion into issuer's ordinary shares). The terms of the bonds are as follows:

a. Issue amount: NT$500,000 thousand

b. Period: June 23, 2025~June 23, 2028

c. Important redemption clauses:

(a) The Company may redeem the bonds in whole in cash, from the day after 3 months of the issuance (September 24, 2025) and prior to 40 days before the maturity date (May 14, 2028), at the face value of the bonds if the closing price of the Company's ordinary shares on the Taiwan Stock Exchange (TWSE) is at least 130% of the conversion price for a period of 30 consecutive trading days provided that the Company notifies the bondholders within 30 business days.

(b) The Company may redeem the bonds in full, from the day after 3 months of the issuance (September 24, 2025) 40 days prior to the maturity date (May 14, 2028), at the face value of the bond if the amount of the Company's outstanding shares is less than 10% of the original issuance amount.

(c) If the Company executes early redemption clauses of the bonds and the deadline for the bondholders to request conversion is the second business day after the Taipei Exchange termination date.

(d) If the bondholders do not reply in writing to the Company's stock agency before the bond recovery base date stated in the " bond redemption notification letter ", the Company will redeem the convertible bonds held by such bondholder at the bond face value. The converted bonds will be recovered in cash within seven days after the bond recovery base date.

(e) The bondholders can execute put option after two years from issuance date. Bondholders have the right to require the Company to redeem the convertible bonds by cash within forty days before bond sell-back base date. The redemption value is the bonds face value plus interest.

d. Terms of Exchange:

(a) Underlying Securities: Common shares of the Company

(b) Exchange Period: The bonds are exchangeable at any time on or after September 24, 2025, and prior to June 23, 2028 into common shares of the Company.

(c) Exchange Price and Adjustment: The exchange price was originally NT$34.7 per share. The exchange price will be subject to adjustments upon the occurrence of certain events set out in the indenture. The exchange price as of 31 December 2025 was NT$32.2 per share.

(d) Redemption on the Maturity Date: On the maturity date, the Company will redeem the bonds that remain outstanding at the principal amount.

e. As of December 31, 2025, the third bonds issued had not yet been converted into common stock.

B. On June 30, 2025, the Company issued the fourth domestic zero coupon unsecured convertible bonds. Upon evaluation, the terms of the convertible bonds included a liability component, embedded derivatives (a call option and a put option) and an equity component (an option for conversion into issuer's ordinary shares). The terms of the bonds are as follows:

a. Issue amount: NT$800,000 thousand

b. Period: June 30, 2025~June 30, 2028

c. Important redemption clauses:

(a) The Company may redeem the bonds in whole in cash, from the day after 3 months of the issuance (October 1, 2025) and prior to 40 days before the maturity date (May 21, 2028), at the face value of the bonds if the closing price of the Company’s ordinary shares on the Taiwan Stock Exchange (TWSE) is at least 130% of the conversion price for a period of 30 consecutive trading days provided that the Company notifies the bondholders within 30 business days.

(b) The Company may redeem the bonds in full, from the day after 3 months of the issuance (October 1, 2025) to 40 days prior to the maturity date (May 21, 2028), at the face value of the bond if the amount of the Company’s outstanding shares is 10% lower than the original total issuance amount.

(c) If the Company executes early redemption clauses of the bonds and the deadline for the bondholders to request conversion is the second business day after the Taipei Exchange termination date.

(d) If the bondholders do not reply in writing to the Company's stock agency before the bond recovery base date stated in the "bond redemption notification letter", the Company will redeem the convertible bonds held by such bondholder at the bond face value. The converted bonds will be recovered in cash within seven days after the bond recovery base date.

d. Terms of Exchange:

(a) Underlying Securities: Common shares of the Company

(b) Exchange Period: The bonds are exchangeable at any time on or after October 1, 2025, and prior to June 30, 2028 into common shares of the Company.

(c) Exchange Price and Adjustment: The exchange price was originally NT$32.5 per share. The exchange price will be subject to adjustments upon the occurrence of certain events set out in the indenture. The exchange price as of 31 December 2025 was NT$30.2 per share.

(d) Redemption on the Maturity Date: On the maturity date, the Company will redeem the bonds that remain outstanding at the principal amount.

e. As of December 31, 2025, the Company’s outstanding fourth unsecured convertible bonds had an approved conversion amount of NT$39,300 thousand, resulting in the issuance of 1,268 thousand shares of common stock. The excess of the net carrying amount to be derecognized upon conversion (including the par value of the convertible bonds, discount, conversion option, and redemption option values, among others) over the par value of the common stock issued amounted to NT$26,787 thousand and was recognized as an addition to capital surplus.

(14) Long-term borrowings

Details of long-term borrowings as at December 31, 2025 and December 31, 2024 are as follows:

Type	As of December 31, 2025	Interest Rate (%)	Maturity date and terms of repayment
Long-term secured borrowings	$6,470,760	2.56%~3.50%	Effective May 2021 to August 2029, repayments on due day.
Long-term unsecured borrowings	330,000
Less: current portion	(6,665,590)
Total	$135,170
Type	As of December 31, 2024	Interest Rate (%)	Maturity date and terms of repayment
Long-term secured borrowings	$7,268,670	2.56%~3.50%	Effective May 2021 to August 2029, repayments on due day.
Long-term unsecured borrowings	355,000
Less: current portion	(4,971,780)
Total	$2,651,890

The unused total borrowing limits of the Company as of 2025 and December 31, 2024 were approximately $4,420,607 thousand and $5,751,159 thousand, respectively.

Please refer to Note 8 for more details on the mortgage rights established on certain land and buildings pledged as security for long-term borrowings.

(15) Post-employment benefits

Defined contribution plan

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

Expenses under the defined contribution plan for the years ended December 31, 2025 and 2024 were NT$4,320 and NT$3,829, respectively.

Defined benefits plan

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

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under a mandate, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Group does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Group expects to contribute NT$0 thousand to its defined benefit plan during the 12 months beginning after December 31, 2025.

As of December 31, 2025 and 2024, the Group’s defined benefit plans are both expected to expire in 2032.

Pension costs recognized in profit or loss are as follows:

	For the year ended December 31
	2025	2024
Current service cost	$-	$-
Net interest of net defined benefit assets	(133)	(87)
Total	$(133)	$(87)

Reconciliations of assets of the defined benefit obligation and plan assets at fair value are as follows:

	As of
	December 31, 2025	December 31, 2024
Defined benefit obligation	$12,324	$13,793
Plan assets at fair value	(22,219)	(22,191)
Net defined benefit asset - non-current recognized amount	$(9,895)	$(8,398)

Reconciliations of net liabilities (assets) of the defined benefit plan

	Defined		Net defined benefit
	benefits obligation	Plan assets Fair Value	liabilities (assets)
As of January 1, 2024	$12,787	$(19,922)	$(7,135)
Interest expenses (income)	155	(242)	(87)
Subtotal	12,942	(20,164)	(7,222)
Remeasurements of defined benefit liabilities(assets):
Actuarial losses (gains) arising from changes in financial assumptions	683	-	683
Experience adjustments	168	-	(168)
Remeasurements of defined benefit assets	-	(2,027)	(2,027)
Subtotal	851	(2,027)	(1,176)
As of December 31, 2024	$13,793	$(22,191)	$(8,398)
Interest expenses (income)	218	(350)	(132)
Subtotal	14,011	(22,541)	(8,530)
Remeasurements of defined benefit liabilities(assets):
Actuarial losses (gains) arising from changes in financial assumptions	246	-	246
Experience adjustments	(81)	-	(81)
Remeasurements of defined benefit assets	-	(1,530)	(1,530)
Subtotal	165	(1,530)	(1,365)
Benefits paid	(1,852)	1,852	-
As of December 31, 2025	$12,324	$(22,219)	$(9,895)

The principal assumptions used in determining the Group's defined benefit plan are shown below:

	As of
	December 31, 2025	December 31, 2024
Discount rate	1.34%	1.58%
Expected rate of salary increases	4.00%	4.00%
Expected long-term rate of return on plan assets	1.34%	1.58%

Sensitivity analysis for significant actuarial assumptions is shown below:

	For the year ended December 31, 2025		For the year ended December 31, 2024
	Defined benefits obligation increase	Defined benefits obligation decrease	Defined benefits obligation increase	Defined benefits obligation decrease
Discount rate increases by 0.5%	$-	$504	$-	$561
Discount rate decreases by 0.5%	535	-	595	-
Future salary increases by 0.5%	518	-	578	-
Future salary decreases by 0.5%	-	494	-	551

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

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

(16) Equity

A. Common stock

As of December 31, 2025, December 31, 2024, the Company’s authorized capital was all $12,000,000 thousand, and the Paid-up capital was all $8,399,880 thousand with 839,988 thousand shares, respectively, each at a par value of $10. Each share has one voting right and a right to receive dividends.

The Company’s fourth domestic unsecured convertible bonds had conversion applications totaling NT$39,300 thousand during the fourth quarter of 2025, resulting in the issuance of 1,268 thousand shares of common stock. The Board of Directors resolved on February 12, 2026, to set February 23, 2026, as the record date for the capital increase. Accordingly, as of December 31, 2025, the related amount was recognized under the account “Bonds Conversion Rights Certificates.”

B. Capital surplus

	As of
	December 31, 2025	December 31, 2024
Additional paid-in capital	$911,909	$1,247,904
Conversion Premium on Convertible Bonds	26,787	-
Exercise disgorgement	1	1
Share options – components of income recognized arising from the issuance of convertible bonds	82,218	-
Cash dividend unclaimed for over five years	1,123	1,126
Share of changes in net assets of associates and joint ventures accounted for using the equity method	8,587	8,587
Total	$1,030,625	$1,257,618

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

C. Retained earnings and dividend policies

According to the Company’s Articles of Incorporation amended on June 26, 2025, current quarter’s earnings, if any, shall be distributed in the following order:

a. Payment of all taxes and dues;
b. Offset prior years' operation losses;
c. Set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve;
d. Set aside or reverse special reserve in accordance with law and regulations; and
e. The Company may, by a resolution adopted at a meeting attended by two-thirds or more of the directors and approved by a majority of the directors present, distribute all or part of dividends and bonuses, capital surplus, or statutory earnings reserve in cash, and shall report such distribution to the shareholders' meeting. Any distribution made through the issuance of new shares shall be subject to approval by the shareholders' meeting prior to distribution.

If the Company has a surplus in the current quarter (including the previous period), and after items a to d listed above, the Board of Directors will propose a distribution plan to the shareholders' meeting. The distribution plan allows for the distribution of shareholder dividends ranging from 1% to 100% of the distributable profits for the year. However, the cash dividend shall not be less than 10% of the total shareholder dividends. If the distributable profits are lower than 5% of the Company's paid-in capital, no distribution will be made.

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

According to existing regulations, when the Company distributing distributable earnings, it shall set aside to special reserve, from the profit/loss of the current period and the undistributed earnings from the previous period, an amount equal to "other net deductions from shareholders' equity for the current fiscal year, provided that if the company has already set aside special reserve in the first-time adoption of the IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders' equity. For any subsequent reversal of other net deductions from shareholders' equity, the amount reversed may be distributed from the special reserve.

On March 31, 2021, the FSC issued No. Financial-Supervisory-Securities-Corporate-1090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders' equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the special reserve in the amount equal to the reversal may be released for earnings distribution.

The Company's Board of Directors resolved on November 12, 2025, August 12, 2025, May 12, 2025, and March 26, 2025, to allocate and distribute the earnings for the third quarter of 2025, the second quarter of 2025, the first quarter of 2025, and the fourth quarter of 2024, respectively, as well as the dividends per share, as follows:

	Appropriation of earnings	Dividend per share (NT$)
	Third quarter of 2025	Third quarter of 2025
Legal reserve	$68,283	$-
Special reserve	1,280	-
Common stock -cash dividend	629,991	0.75
	(Note)
	Appropriation of earnings	Dividend per share (NT$)
	Second quarter of 2025	Second quarter of 2025
Legal reserve	$103,432	$-
Special reserve	179	-
Common stock -cash dividend	923,987	1.1
	Appropriation of earnings	Dividend per share (NT$)
	First quarter of 2025	First quarter of 2025
Legal reserve	$1,879	$-
Common stock -cash dividend	-	-
	Appropriation of earnings	Dividend per share (NT$)
	Fourth quarter of 2024	Fourth quarter of 2024
Legal reserve	$38,997	$-
Common stock -cash dividend	352,149	0.41923168

Note:

As of December 31, 2025, the cash dividend was not yet paid. Accordingly, the Company classified the amount under current liabilities – other payables.

The Company's earnings distribution plans, approved at the shareholders' meetings held on June 25, 2024, are as follows:

	The years ended December 31,
	2023
Legal Reserve	$51,126
Common stock-cash dividend:
First half-year distribution (no distribution)	$-
Third quarter distribution	-
Fourth quarter distribution	453,594

The Company's earnings distribution plan, approved at the shareholders' meetings held on June 26, 2025, was as follows:

	The years ended December 31,
	2024
Legal reserve	$162,948
Common stock - cash dividend :
First quarter distribution	$167,997
Second quarter distribution	470,393
Third quarter distribution	483,706
Fourth quarter distribution	352,149

The Company's shareholders approved at the annual shareholders' meeting held on June 26, 2025, a cash distribution of NT$335,995 thousand from capital surplus arising from share premium in excess of par value. The distribution amounted to NT$0.4 per share. The record date, payment date, and other related matters shall be determined separately by the Chairman.

Please refer to Note 6.(21) for details on employees' compensation and remuneration to directors and supervisors.

D. Non-controlling interests

	For the year ended December 31,
	2025	2024
Beginning balance	$225,810	$232,870
Profit (loss) attributable to non-controlling interest	(7,471)	(7,060)
Ending balance	$218,339	$225,810

(17) Operating revenue

	For the year ended December 31,
	2025	2024
Revenue from contracts with customers
Revenue from sales of buildings	$2,977,708	$3,035,423
Revenue from sales of Land	3,351,046	3,051,040
Sales of land and buildings	6,328,754	6,086,463
Rental Revenue	10,373	8,798
Total	$6,339,127	$6,095,261

Analysis of revenue from the Group's contracts with customers during the years ended December 31, 2025 and 2024 are as follows:

A. Disaggregation of revenue

For the year ended December 31, 2025

	The Company	Huachien	Huajian	Total
Sales of land and buildings	$6,328,754	$-	$-	$6,328,754
Rental Revenue	1,992	8,381	-	10,373
Total	$6,330,746	$8,381	$-	$6,339,127
Timing of revenue recognition:
At a point in time	$6,328,754	$-	$-	$6,328,754
Over time	1,992	8,381	-	10,373
Total	$6,330,746	$8,381	$-	$6,339,127

For the year ended December 31, 2024

	The Company	Huachien	Huajian	Total
Sales of land and buildings	$6,086,463	$-	$-	$6,086,463
Rental Revenue	127	8,671	-	8,798
Total	$6,086,590	$8,671	$-	$6,095,261
Timing of revenue recognition:
At a point in time	$6,086,463	$-	$-	$6,086,463
Over time	127	8,671	-	8,798
Total	$6,086,590	$8,671	$-	$6,095,261

B. Contract balances

Contract liabilities – current

	As of
	December 31, 2025	December 31, 2024	January 1, 2024
Sales of land and buildings	$2,938,080	$3,539,646	$2,143,844

The significant changes in the Group's balances of contract liabilities for the years ended December 31, 2025 and 2024 are as follows:

	For the year ended December 31
	2025	2024
The opening balance transferred to revenue	$(888,796)	$(847,493)
Increase in receipts in advance during the period (excluding the amount incurred and transferred to revenue during the period)	292,990	2,245,305
Refund from contract cancellation	(5,760)	(2,010)
Total	$(601,566)	$1,395,802

C. Transaction Price Allocated to Remaining Performance Obligations

As of December 31, 2025, the total transaction price allocated to the Group's remaining (including partially unsatisfied) performance obligations amounted to NT$16,556,290 thousand, which is expected to be recognized as revenue from 2026 to 2028.

D. Assets recognized from costs as a result of entering into or performing a contract

Incremental costs of obtaining contracts

	As of
	December 31, 2025	December 31, 2024
Sales of land and buildings	$393,091	$510,630

(18) Expected credit losses(gains)

	For the year ended December 31,
	2025	2024
Operating expenses – expected credit losses/(gains)
Notes receivable	$-	$-
Accounts receivables	(4,284)	4,350
Subtotal	(4,284)	4,350
Non-operating income and expenses - expected credit losses/(gains)
Other receivables	-	-
Total	$(4,284)	$4,350

Please refer to Note 12 for more details on credit risk.

The Group measures the loss allowance of its contract assets and accounts receivables (including note receivables and accounts receivables) at an amount equal to lifetime expected credit losses. The assessment of the Group's loss allowance during the years ended December 31, 2025 and 2024 is as follows:

i. the Group considers the grouping of accounts receivables by counterparties' credit rating, by geographical region and by industry sector and its loss allowance is measured by using a provision matrix. Due to the approximate equality of individual loss rates within the Group, we do not differentiate between subgroups. Details are as follows:

As of December 31, 2025

	Not yet due (Note)	Overdue				Total
		<=90 days	91-180 days	181-365 days	>=365 days
Gross carrying amount	$9,697	$-	$-	$-	$-	$9,697
Loss rate	-%	-%	-%	-%	100%
Lifetime expected credit losses	-	-	-	-	-	-
Subtotal	$9,697	$-	$-	$-	$-	$9,697

As of December 31, 2024

	Not yet due (Note)	Overdue				Total
		<=90 days	91-180 days	181-365 days	>=365 days
Gross carrying amount	$252,714	$42	$10	$-	$4,350	$257,116
Loss rate	-%	-%	-%	-%	100%
Lifetime expected credit losses	-	-	-	-	(4,350)	(4,350)
Subtotal	$252,714	$42	$10	$-	$-	$252,766

The movement in the provision for impairment of note receivable, accounts receivable and other receivables during the years ended December 31, 2025 and 2024 is as follows:

	Other receivables	Notes receivable	Accounts receivables
Bal. as of January 1, 2025	$16,245	$-	$4,350
Addition/(reversal) for the current period	-	-	(4,284)
Bal. as of December 31, 2025	-	-	(66)
January 1, 2024	$16,245	$-	$-
Addition/(reversal) for the current period	-	-	4,350
Bal. as of December 31, 2024	$16,245	$-	$4,350

(19) Leases

A. Group as a lessee

The Group leases various properties, including real estate such as land and buildings. The lease terms range from 1 to 5 years. Except for certain leased assets that are not allowed to be subleased, lent, pledged, or used by others through other indirect methods, no additional restrictions have been imposed on.

The Group's leases effect on the financial position, financial performance and cash flows are as follow:

(A) Amounts recognized in the balance sheet

a. Right-of-use assets

The carrying amount of right-of-use assets

	As of
	December 31, 2025	December 31, 2024
Buildings	$2,625	$4,594
Office equipment	201	242
Total	$2,826	$4,836

During the years ended December 31, 2025 and 2024, the Group's additions to right-of-use assets amounting to $267 thousand and $6,197 thousand, respectively.

b. Lease liabilities

	As of
	December 31, 2025	December 31, 2024
Leases liabilities	$2,875	$4,865
Current	$2,875	$4,865
Non-current	-	-

Please refer to Note 6.(22)(d) for the interest on lease liabilities recognized during the years ended December 31, 2025 and 2024 and refer to Note 12.(5) Liquidity Risk Management for the maturity analysis for lease liabilities.

(B) Amounts recognized in the statement of comprehensive income

Depreciation charge for right-of-use assets

	For the year ended December 31,
	2025	2024
Buildings	$1,969	$2,029
Office equipment	115	49
Total	$2,084	$2,078

	For the year ended December 31,
	2025	2024
The expenses relating to short-term leases	$718	$695
The expenses relating to leases of low-value assets (Not including the expenses relating to short-term leases of low-value assets)	1,128	1,214

(D) Cash outflow relating to leasing activities

During the years ended December 31, 2025 and 2024, the Group’s total cash outflows for leases amounting to NT$4,005 thousand and NT$4,060 thousand, respectively.

B. Group as a lessor

Please refer to Note 6. (8) for details on the Group’s owned property, plant and equipment (buildings). The Group has entered into leases on certain equipment with lease terms range from one year to five years. Leases of owned property, plant and equipment are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets..

	For the year ended December 31,
	2025	2024
Lease income for operating leases
Income relating to lease payments	$10,372	$8,798

Please refer to Note 6.(8) for relevant disclosure of property, plant and equipment (buildings) for operating leases under IFRS 16. For operating leases entered by the Group, the undiscounted lease payments to be received and a total of the amounts for the remaining years as of December 31, 2024 are as follow:

	As of
	December 31, 2025	December 31, 2024
Not later than one year	$6,624	$6,803
Later than one year but not later than two years	3,657	1,760
Later than two years but not later than three years	2,743	-
Later than three years but not later than four years	-	-
Later than four years but not later than five years	-	-
Later than five years	-	-
Total	$13,024	$8,563

(20) Summary statement of employee benefits, depreciation and amortization expenses by function:

	For the year ended December 31,
	2025			2024
	Operating costs	Operating expenses	Total amount	Operating costs	Operating expenses	Total amount
Employee benefits expense
Salaries	$56,960	$75,095	$132,055	$48,654	$65,533	$114,187
Labor and health insurance contribution	-	8,745	8,745	-	8,130	8,130
Pension	-	4,187	4,187	-	3,742	3,742
Other employee benefits expense	6,209	5,466	11,675	7,230	7,416	14,646
Depreciation	448	4,950	5,398	471	4,840	5,311
Amortization	1,098	1,180	2,278	1,032	382	1,414

According to Article 28 of the Company's Articles of Incorporation, $0.5\%$ of profit of the current year is distributable as employees' compensation and no higher than $2\%$ of profit of the current year is distributable as remuneration to directors and supervisors. In addition to basic salaries, the Company provides bonuses based on operational performance to motivate and retain outstanding employees. Annual salary adjustments are based on employees' job grades and performance evaluations, and are benchmarked against industry salary levels. The Company may provide a monthly remuneration to its directors, which is deliberated by the Remuneration Committee and determined by the Board of Directors. The remuneration of the Company's managers is determined by the Board of Directors after deliberation by the Company's Compensation Committee. The remuneration of the managers is determined by the Board of Directors in accordance with the statutory procedures set forth in the Company's Compensation Committee bylaws. Information on the Board of Directors' resolution regarding the employees' compensation and remuneration to directors and supervisors can be obtained from the "Market Observation Post System" on the website of the TWSE.

For the years ended December 31, 2025, the Company's compensation to employees and directors remuneration were determined based on profit in the amount of $21,775 thousand and $1,999 thousand, respectively. For the years ended December 31, 2024, the Company's compensation to employees and directors remuneration were determined based on profit in the amount of $20,484 thousand and $1,999 thousand, respectively.

The Company's Board of Directors resolved on March 26, 2025, to distribute employee compensation and directors' remuneration for the year ended December 31, 2024, in cash in the amounts of NT$20,484 thousand and NT$1,999 thousand, respectively. There was no material difference between these amounts and the expenses recognized in the financial statements for the year ended December 31, 2024.

(21) Non-operating income and expenses

(a) Other income

	For the year ended December 31,
	2025	2024
Dividend income	$641	$1,553
Income from name change fees	597	1,114
Default Income	7,487	-
Others	599	2,280
Total	$9,324	$4,947

(b) Interest income

	For the year ended December 31
	2025	2024
Interest on bank deposits	$26,410	$13,915
Other interest income	2	-
Total	$26,412	$13,915

(c) Other gains and losses

	For the year ended December 31,
	2025	2024
Foreign exchange losses (gains), net	$(11)	$9
Other Losses (Litigation Settlement Costs)	(4,000)	-
Other Losses (Landowner Compensation)	(1,673)	-
Lease contract modification benefits	3	-
Gains (losses) on disposal of property, plant and equipment	-	(9)
Gains (losses) on financial liabilities at fair value through profit or loss	5,084	-
Total	$(597)	$-

(d) Finance costs

	For the year ended December 31,
	2025	2024
Interest on borrowings from bank	$384,449	$309,307
Interest on bonds payable	15,872	-
Interest on lease liabilities	98	81
Imputed interest on deposit	40	-
Less: Capitalized interests	(342,885)	(282,600)
Total finance costs	$57,574	$26,788

(22) Components of other comprehensive income

Year ended December 31, 2025 components of other comprehensive income

	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income (expenses)	Other comprehensive income, net of tax
Not to be reclassified to profit or loss in subsequent periods:
Remeasurements of defined benefit plans	$1,365	$-	$1,365	$-	$1,365
Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income	3,795	-	3,795	-	3,795
Total	$5,160	$-	$5,160	$-	$5,160

Year ended December 31, 2024 components of other comprehensive income

	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income (expenses)	Other comprehensive income, net of tax
Not to be reclassified to profit or loss in subsequent periods:
Remeasurements of defined benefit plans	$1,176	$-	$1,176	$-	$1,176
Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income	(741)	-	(741)	-	(741)
Total	$435	$-	$435	$-	$435

(23) Income tax

The major components of income tax expense (income) for the years ended 2025 and 2024 are as follows:

Income tax expense (income) recognized in profit or loss

	For the year ended December 31,
	2025	2024
Current income tax expense (income):
Current income tax charge	$410,549	$400,527
Land value increment tax	23,771	10,000
Deferred tax expense (income):
Deferred tax expense (income) relating to origination and reversal of temporary differences	(17)	10
Adjustments in respect of current income tax of prior periods	(325)	-
Total income tax expense	$433,978	$410,537

Reconciliation between income tax expense and the product of accounting profit multiplied by the applicable tax rate of the parent company as follows:

	For the year ended December 31,
	2025	2024
Accounting profit (loss) before tax from continuing operations	$2,127,860	$2,032,959
Tax at the domestic rates applicable to profits in the country concerned	$432,516	$413,022
Land value increment tax	23,771	10,000
Tax effect of revenues exempt from taxation	(25,060)	(12,797)
Tax effect of non-deductible expenses from taxation	352	3,843
Recognition of previously unrecognized tax losses	(271)	(305)
Change in unrecognized temporary differences	2,995	(3,553)
Imposition of a 5% income tax on undistributed earnings	-	327
Adjustments in respect of current income tax of prior periods	(325)	-
Total income tax (benefit) expense recognized in profit or loss	$433,978	$410,537

Deferred tax assets (liabilities) related to the following:

The year ended December 31,2025

	Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Ending balance
Temporary differences
Provision for liabilities - current	$117	$41	$-	$158
Defined benefit liabilities, non-current	1,333	(27)	-	1,306
Unrealized exchange gains or losses	(2)	3	-	1
Deferred tax income (expense)		$17	$-
Net deferred tax assets (liabilities)	$1,448			$1,465
Balance sheet items as follows:
Deferred tax assets	$1,448			$1,465
Deferred tax liabilities	$-			$-

The year ended December 31,2024

	Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Ending balance
Temporary differences
Provision for liabilities - current	$82	$35	$-	$117
Defined benefit liabilities, non-current	1,350	(17)	-	1,333
Unrealized exchange gains or losses	26	(28)	-	(2)
Deferred tax income (expense)		$(10)	$-
Net deferred tax assets (liabilities)	$1,458			$1,448
Balance sheet items as follows:
Deferred tax assets	$1,458			$1,448
Deferred tax liabilities	$-			$-

The following table contains information of the unused tax losses of the Group:

Year	Tax losses for the period	Unused tax losses as of		Expiration year
		December 31, 2025	December 31, 2024
2017	$46,828	$1,844	$3,234	2027
2020	21,444	2,197	2,197	2030
2021	68,686	2,701	2,701	2031
2022	1,252	1,252	1,252	2032
2023	753	753	753	2033
Total		$8,747	$10,137

Unrecognized deferred tax assets

As of December 31, 2025, and 2024, the total amount of deferred tax assets not recognized by the Group amounted to NT$106,881 thousand and NT$104,164 thousand, respectively.

The assessment of income tax returns

As of December 31, 2025, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

	The assessment of income tax returns
The Company	Assessed and approved up to 2023
Subsidiaries-Huachien	Assessed and approved up to 2024
Subsidiaries-Huajian	Assessed and approved up to 2023

(24) Earnings per share

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

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

	The year ended December 31
	2025	2024
(1) Basic earnings per share
Profit attributable to ordinary equity holders of the Company (in thousand NT$)	$1,701,353	$1,629,482
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands)	839,988	839,988
Basic earnings per share (NT$)	$2.03	$1.94
(2) Diluted earnings per share
Profit attributable to ordinary equity holders of the Company (in thousand NT$)	$1,701,353	$1,629,482
Less: Interest expense from convertible bonds (in thousand NT$)	12,697	-
Unrealized gains (losses) from Embedded derivative financial liabilities	(4,563)	-
Profit attributable to ordinary equity holders of the Company after dilution (in thousand NT$)	$1,709,487	$1,629,482
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands)	839,988	839,988
Effect of dilution:
Employee compensation - stock (in thousands)	1,278	597
Convertible Bonds(in thousands)	19,831	-
Weighted average number of ordinary shares outstanding after dilution (in thousands)	861,097	840,585
Diluted earnings per share (NT$)	$1.99	$1.94

(Note: Including shares for which conversion into common shares has been applied and which are recorded under the account of bond conversion rights certificates.)

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

(25) Subsidiaries that have material non-controlling interests

Financial information of subsidiaries that have material non-controlling interests are provided below:

Proportion of equity interest held by non-controlling interests:

Name of subsidiaries	Country of Incorporation and operation	As of
		December 31, 2025	December 31, 2024
Huachien	Taiwan	41.64%	41.64%
		As of
		December 31, 2025	December 31, 2024
Accumulated balances of material non-controlling interest:
Huachien		$218,339	$225,810
		The year ended December 31,
		2025	2024
Profit/(loss) allocated to material non-controlling interest:
Huachien		$(7,471)	$(7,060)

Dividends paid to material non-controlling interest:

	The year ended December 31,
	2025	2024
Huachien	$-	$-

The summarized financial information of these subsidiaries is provided below. This information is based on amounts before inter-company eliminations.

Summarized information of profit or loss for the year ended December 31, 2025:

	Huachien
Operating revenue	$8,381
Net profit (loss) for the period from continuing operations	$(17,943)
Total comprehensive (loss) income for the period	$(17,943)

Summarized information of profit or loss for the year ended December 31, 2024:

	Huachien
Operating revenue	$8,671
Net profit (loss) for the period from continuing operations	$(16,954)
Total comprehensive (loss) income for the period	$(16,954)

Summarized information of financial position as at December 31, 2025:

	Huachien
Current assets	$1,264,054
Non-current assets	61,958
Current liabilities	(810,197)
Non-current liabilities	(1,653)

Summarized information of financial position as at December 31, 2024:

	Huachien
Current assets	$1,269,247
Non-current assets	64,227
Current liabilities	(51,074)
Non-current liabilities	(750,296)

Summarized cash flow information as at December 31, 2025:

	Huachien
Operating activities	$(16,301)
Investing activities	-
Financing activities	10,378
Net increase/(decrease) in cash and cash equivalents	$(5,923)

Summarized cash flow information for the year ended December 31, 2024:

	Huachien
Operating activities	$(15,857)
Investing activities	-
Financing activities	21,418
Net increase/(decrease) in cash and cash equivalents	$5,561

7. Related Party Transactions

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

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

Name	Relationship with the Company
Pauguo Real Estate Management Co., Ltd.	Substantive related party
Masada Technology Co., Ltd.	Substantive related party
Everdura Technology Co., Ltd.	Substantive related party
Ms. Wu	The Group’s managers
Ms. Chien	The Group’s managers
Ms. Li	The Group's Chief Auditor
Ms. Huang	Substantive related party
Mr. Chen	Substantive related party
Ms. Hou	Substantive related party

(2) Significant transactions with related parties

(a) Sales

	The year ended December 31,
	2025	2024
Ms. Wu	$19,647	$-
Ms. Chien	19,739	-
Ms. Li	19,673	-
Ms. Hou	10,299	-
Total	$69,358	$-

Sales to related parties are priced based on negotiations between the parties with reference to prevailing market conditions. For certain related-party customers, the collection period is within 30 days from the date of notification.

(b) Purchase:

	The year ended December 31,
	2025	2024
Masada Technology Co., Ltd.	$70,473	$9,387
Everdura Technology Co., Ltd.	29,466	-
Total	$99,939	$9,387

Purchases from related parties by the Group are priced based on negotiations between the parties with reference to prevailing market conditions. The payment terms for purchases from related parties are comparable to those offered to general suppliers, with payment periods ranging from 90 to 180 days.

	The year ended December 31,
	2025	2024
Finance costs
Pauguo Real Estate Management Co., Ltd.	$1,448	$1,571

(d) Administrative expenses:

	The year ended December 31,
	2025	2024
Miscellaneous expenses
Pauguo Real Estate Management Co., Ltd.	$8	$16
Finance costs
Pauguo Real Estate Management Co., Ltd.	$819	$-

(e) Notes payable and Accounts payable:

	The year ended December 31,
	2025	2024
Notes payable
Masada Technology Co., Ltd.	$13,299	$6,427
Everdura Technology Co., Ltd.	8,100	-
Total	$21,399	$6,427

(f) Other payables

	For the year ended December 31,
	2025	2024
Ms. Wu	$95	$-
Ms. Chien	142	-
Ms. Li	273	-
Total	$510	$-

(g) Notes receivable

	For the year ended December 31,
	2025	2024
Notes receivables
Ms. Chien	$1,824	$-
Ms. Li	714	-
Total	$2,538	$-

(h) Pre-received payment for property :

	The year ended December 31,
Pre-received payment for property	2025	2024
Ms. Wu	$-	$3,020
Ms. Chien	-	1,020
Ms. Li	-	3,050
Ms. Huang	2,790	1,860
Mr. Chen	2,140	1,430
Total	$4,930	$10,380

Key management personnel compensation

	The year ended December 31,
	2025	2024
Salary and other short-term employee benefits	$7,189	$11,649

8. Assets pledged as security

The following table lists assets of the Group pledged as security:

Items	Secured liabilities	Carrying amount
		December 31, 2025	December 31, 2024
Inventory
Available-for-sale land	Short-term borrowings	$20,266	$20,266
Available-for-sale housing	Short-term borrowings	43,260	43,260
Land held for construction site	Short-term, Long-term borrowings	15,583,883	16,502,912
Land held for floor-area-ratio transfer	Short-term borrowings	-	18,991
Construction in progress	Short-term, Long-term borrowings	7,754,777	6,698,057
Property, plant and equipment
Land	Short-term borrowings	94,331	94,331
Buildings	Short-term borrowings	16,079	17,123
Other equipment	Short-term borrowings	28	28
Other current financial assets	Trust account, Reserve account	764,812	1,736,147
Total		$24,277,436	$25,131,115

Significant contingencies and unrecognized contractual commitments

(1) As of December 31, 2025, the Group’s guarantee notes received from the contractors and customers amounted to $280,680 thousand.

(2) As of December 31, 2025, the contracts the Company signed for the pre-sale of properties with customers amounted to $16,465,880 thousand (tax included), and $2,927,100 thousand (tax included) has been received according to the contract term and conditions.

(3) As of December 31, 2025, the total price of the contracts on the sale of the remaining housing units that the Group has signed with such units not handed over is $90,410 thousand, and the payments received as per the contracts amounted to $10,980 thousand.

(4) As of December 31, 2025, the Group signed material and construction contracts with contractors in the amount of $9,104,963 thousand, of which $2,239,743 thousand was unpaid.

Losses due to major disasters

None.

Significant subsequent events

(1) The Company’s board of directors resolved in March 2025 to approve a proposal to enter into an additional construction contract with the subsidiary, Huajian Construction Co., Ltd, with respect to a new building project on the land located in Fuxi Section, Guanyin District, Taoyuan City. The total contract amount shall not exceed $1,006,048 thousand.

Other

(1) Financial instruments

A. Categories of financial instruments

Financial assets

	As of
	December 31, 2025	December 31, 2024
Financial assets measured at fair value through other comprehensive income
Investments in designated equity instrument	$28,516	$2,262
Financial assets reassured at amortized cost
Cash and equivalent	$3,206,058	$935,773
Notes receivable	4,668	7,499
Accounts receivables	5,029	245,267
Other receivables	86	9,034
Other financial assets	764,812	1,755,541
Guarantee deposits paid	72,893	12,851
Total	$4,053,546	$2,965,965

Financial liabilities

	As of
	December 31, 2025	December 31, 2024
Financial liabilities at amortized cost
Short-term borrowings	$6,909,213	$5,624,651
Short-term notes and bills payable	500,333	199,778
Notes payable	193,090	315,515
Accounts payable	640,678	447,544
Other payables	791,906	204,167
Bonds payable	1,179,768	-
Long-term borrowings (including current portion)	6,800,760	7,623,670
Guarantee deposits received	2,378	2,400
Leases liabilities	2,875	4,865
Subtotal	$17,021,001	$14,422,590
Financial liabilities at fair value through profit or loss	6,692	-
Total	$17,027,693	$14,422,590

B. Financial risk management objectives and policies

The Group's principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Group identifies measures and manages the aforementioned risks based on the Group's policy and risk appetite.

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

(3) Market risk

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

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

Foreign currency risk

The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities (when revenue or expense are denominated in a different currency from the Group's functional currency) and the Group's net investments in foreign subsidiaries.

The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Group also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group's profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Group's foreign currency risk is mainly related to the volatility in the exchange rates for USD. The information of the sensitivity analysis is as follows:

When NTD strengthens/weakens against foreign currency USD by 5%, the profit for the years ended December 31, 2025 and 2024 is increased/decreased by $49 thousand and $41 thousand, respectively, the equity is increased/decreased by $49 thousand and $70 thousand, respectively.

Interest rate risk

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

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into interest rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 1% of interest rate in a reporting period could cause the profit for the years ended December 31, 2025 and 2024 to increase/decrease by $5,519 thousand and $10,798 thousand, respectively.

Equity price risk

The fair value of the Group’s listed and unlisted equity securities and conversion rights are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group’s listed and unlisted equity securities are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income, while conversion rights of the Euro-convertible bonds issued are classified as financial liabilities at fair value through profit or loss as it does not satisfy the definition of an equity component. The Group manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a regular basis. The Group’s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, a change of 10% in the price of the unlisted equity securities measured at fair value through profit or loss could increase/decrease the Group’s profit for the years ended December 31, 2025 and 2024 by $2,852 thousand and $226 thousand, respectively.

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

(4) Credit risk management

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

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

The main account receivables of the Group consist of installment payments to be collected from customers for the sale of real estate. Based on the customer’s past payment history and an assessment by the management, no significant credit risks were identified.

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

(5) Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, bank borrowings and finance leases. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial liabilities

	Less than 1				Total
	year	1 to 3 years	3 to 5 years	over 5 years	amount
As of December 31, 2025
Short-term borrowings	$2,147,837	$5,007,575	$-	$-	$7,155,412
Short-term notes and bills payable	502,467	-	-	-	502,467
Accounts and other payables	1,625,674	-	-	-	1,625,674
Long-term borrowings (including current portion)	676,740	5,429,692	1,059,976	-	7,166,408
Leases liabilities	2,130	745	-	-	2,875
Guarantee deposits received	1,738	640	-	-	2,378
As of December 31, 2024
Short-term borrowings	$4,192,440	$1,556,007	$-	$-	$5,748,447
Short-term notes and bills payable	200,222	-	-	-	200,222
Accounts and other payables	967,226	-	-	-	967,226
Long-term borrowings (including current portion)	3,204,517	2,888,901	1,947,513	-	8,040,931
Leases liabilities	2,044	2,821	-	-	4,865
Guarantee deposits received	1,594	806	-	-	2,400

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for the years ended December 31, 2025:

	Short-term notes and					Financial liabilities at fair value
	Short-term borrowings	bills payable	Long-term borrowings	Leases liabilities	Guarantee deposits received	Bonds payable	through profit or loss	Total liabilities from financing activities
As of January 1, 2025	$5,624,651	$199,778	$7,623,670	$4,865	$2,400	$-	$-	$13,455,364
Cash flows	1,284,562	300,555	(822,910)	(2,159)	(22)	1,200,536	11,957	1,972,519
Non-cash changes	-	-	-	169	-	(20,768)	(5,265)	(25,864)
As of December 31, 2025	$6,909,213	$500,333	$6,800,760	$2,875	$2,378	$1,179,768	$6,692	$15,402,019

Reconciliation of liabilities for the years ended December 31, 2024:

	Short-term notes and					Financial liabilities at fair value
	Short-term borrowings	bills payable	Long-term borrowings	Leases liabilities	Guarantee deposits received	Bonds payable	through profit or loss	Total liabilities from financing activities
As of January 1, 2024	$4,115,776	$99,939	$5,719,935	$738	$1,700	$-	$-	$9,938,088
Cash flows	1,508,875	99,839	1,903,735	(2,151)	700	-	-	3,510,998
Non-cash changes	-	-	-	6,278	-	-	-	6,278
As of December 31, 2024	$5,624,651	$199,778	$7,623,670	$4,865	$2,400	$-	$-	$13,455,364

(7) Fair values of financial instruments

(a) The methods and assumptions applied in determining the fair value of financial instruments:

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

a. The carrying amount of cash and cash equivalents, trade receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.

b. Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).

c. Fair value of debt instruments without market quotations, bank loans, bonds payable and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the GreTai Securities Market, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)

(b) Fair value of financial instruments measured at amortized cost

Other than cash and cash equivalents, trade receivables, accounts payable and other current liabilities whose carrying amount approximate their fair value, the fair value of the Group's financial assets and financial liabilities measured at amortized cost is listed in the table below:

	Carrying amount as of		Fair value as of
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Financial liabilities
Bonds payable	$1,179,768	$-	$1,186,519	$-

(Note: The embedded derivative instruments identified by the Group arising from the issuance of convertible bonds have been separated from the host contracts and are accounted for at fair value through profit or loss. Relevant contractual information regarding this transaction is detailed in Note 6.)

Please refer to Note 12.(8) for fair value measurement hierarchy for financial instruments of the Group.

(8) Derivative Instruments

Information on the derivative instruments held by the Company as of December 31, 2025 and 2024 that do not meet the criteria for hedge accounting and remain outstanding is as follows:

The embedded derivative identified by the Company arising from the issuance of convertible bonds has been separated from the host contract and is accounted for as a financial instrument measured at fair value through profit or loss. Contractual information related to this transaction is provided in Note 6.

(9) Fair value measurement hierarchy

(a) Fair value measurement hierarchy

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

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

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

(b) Fair value measurement hierarchy of the Group’s assets and liabilities

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

As of December 31, 2025

	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through other comprehensive income
Listed stocks	$26,887	$-	$-	$26,887
Unlisted stocks	$-	$-	$1,629	$1,629
Financial liabilities:
Financial liabilities measured at fair value through profit or loss
Embedded derivatives	$-	$-	$6,692	$6,692

As of December 31, 2024

	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through other comprehensive income
Unlisted stocks	$-	$-	$2,262	$2,262
Financial liabilities:
Financial liabilities measured at fair value through profit or loss
Embedded derivatives	$-	$-	$-	$-

Transfers between Level 1 and Level 2 during the period

During the years ended December 31, 2025 and 2024, the Group's assets and liabilities measured at repetitive fair value did not experience any transfer between fair value Level I and II.

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy

Adjustments to the balance of assets and liabilities for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows

	Assets	Liabilities
	At fair value through other comprehensive income	At fair value through profit or loss
	Stocks	Derivatives
Beginning balances as of January 1, 2025	$2,262	$-
Total gains and losses recognized for the years ended December 31, 2025:
Amount recognized in profit or loss (presented in “other profit or loss”)	-	(5,084)
Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income)	(633)	-
Acquisition/issues for the years ended December 31, 2025	-	11,957
Disposal/settlements for the years ended December 31, 2025	-	(181)
Transfer in/(out) of Level 3	-	-
Ending balances as of December 31, 2025	$1,629	$6,692
	Assets	Liabilities
	At fair value through other comprehensive income	At fair value through profit or loss
	Stocks	Derivatives
Beginning balances as of January 1, 2024	$3,003	$-
Total gains and losses recognized for the years ended December 31, 2024:
Amount recognized in profit or loss (presented in “other profit or loss”)	-	-
Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income)	(741)	-
Acquisition/issues for the years ended December 31, 2024	-	-
Disposal/settlements for the years ended December 31, 2024	-	-
Transfer in/(out) of Level 3	-	-
Ending balances as of December 31, 2024	$2,262	$-

Total gains and losses recognized in profit or loss for the years ended December 31, 2025 and 2024 in the Table above, the gains and losses related to assets on hands as of December 31, 2025 and 2024 amounted to $(5,084) thousand and $0 thousand, respectively.

Total gains and losses recognized in profit or loss for the years ended December 31, 2025 and 2024 in the Table above confine gains and losses related to assets on hands as of December 31, 2025 and 2024 in the amount of $ 3,795 thousand and $(741) thousand, respectively.

Information on significant unobservable inputs to valuation

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

As of December 31, 2025

	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
Financial assets:
Financial assets at fair value through other comprehensive income
Venture capital company stocks	Net asset value method	discount for lack of marketability	40%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group’s equity by $271 thousand
Financial liabilities:
At fair value through profit or loss
Embedded derivatives	Binomial Tree Model	Volatility	24.71%~34.71%	The higher the Volatility, the Higher the fair value of the embedded derivatives	5% increase (decrease) in Volatility, would result in increase (decrease) in the Group’s profit or loss by $528 thousand($654 thousand)

As of December 31, 2024:

	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
Financial assets:
Financial assets at fair value through other comprehensive income
Venture capital company stocks	Net asset value method	discount for lack of marketability	40%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group's equity by $377 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Group’s Financial & Accounting Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s accounting policies at each reporting date.

(c) Fair value measurement hierarchy of the Group’s assets and liabilities not measured at fair value but for which the fair value is disclosed

As of December 31, 2025:

None

As of December 31, 2024:

None

(9) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

	As of December 31, 2025
	Foreign currency	Foreign exchange rate	NTD
Financial assets
Monetary items:
USD	$31.31	31.430	$984
Non-monetary items:
USD	$31.46	31.430	$989
	As of December 31, 2024
	Foreign currency	Foreign exchange rate	NTD
Financial assets
Monetary items:
USD	$25	32.785	$813
Non-monetary items:
USD	$43	32.785	$1,405

The above information is disclosed based on the carrying amount of foreign currency (after conversion to functional currency).

(10) Capital management

The Group's capital management aims to ensure the ability as a going concern, so as to provide returns to shareholders and benefits to other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

To maintain or adjust the capital structure, the Group may adjust the dividends paid to shareholders, reduce capital to refund shareholders, or issue new shares or sell assets to pay off liabilities.

In line with the approaches adopted by its competitors, the Group manages capital on the basis of its debt-to-capital ratio, which is calculated by dividing net liabilities by total capital. Net liabilities are the total liabilities presented in the balance sheet less cash and cash equivalents. Total capital is the total component of equity (i.e., share capital, capital surplus, retained earnings, other equity interest, and noncontrolling interests) plus net liabilities.

The administrative authority uses appropriate net liabilities/(total equity plus net liabilities) or other financial ratios to determine the Group's optimal capital to ensure that financing is available at a reasonable cost.

The debt-to-capital ratio is as follows:

	As of
	December 31, 2025	December 31, 2024
Total liabilities	$20,393,689	$18,360,509
Less: Cash and cash equivalents	(3,206,058)	(935,773)
Net liabilities	17,187,631	17,424,710
Total equity	10,304,086	10,725,487
Capital after adjustment	27,491,717	28,150,197
Debt-to-capital ratio	62.52%	61.90%

13. Additional Disclosure

(1) Information on significant transactions (certain transactions were eliminated upon consolidation)

No.	Items	Footnote
1	Financial provided to others.	None
2	Endorsements/guarantees provided to others.	Table 1
3	Marketable securities held (not including subsidiaries, assonates and joint ventures).	None
4	Total purchases from or sales to related parties of at least NTD 100 million or 20 percent of capital stock.	Table 2
5	Receivables due from related parties amounting to at least NTD 100 million or 20 percent of capital stock.	Table 3
6	Derivatives instruments transactions.	None
7	Significant intercompany transactions between consolidated entities.	Table 4

(2) Information on investees: Please refer to Table 5 for more details.

(3) Information on investments in mainland China: No such circumstances.

Segment information

For management purposes, the Group is organized into business units based on their products and services and has three reportable operating segments as follows:

(1) Construction Department: This department is mainly responsible for entrusting construction contractors and developing public residential housing and commercial buildings for lease or sale.

(2) Movable and Immovable Property Investment and Development Department: Primarily responsible for the development, leasing, and sale of residential properties and buildings, as well as the development of specialized districts.

(3) Building Department: This department is responsible for contracting, managing, and investing in civil and architectural engineering projects.

No operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on pretax operating profit or loss and is measured based on significant accounting policies information consistent with those in the consolidated financial statements. However, income taxes are managed on a group basis and are not allocated to operating segments.

Transfer pricing between operating segment are on an arm's length basis in a manner similar to transactions with third parties.

101

A. Information on the reportable segment's profit or loss, assets, and liabilities

	For the year ended December 31, 2025
	Construction Department	Movable and Immovable Property Investment and Development Department	Building Department	Adjustment and elimination	Total amount
Revenue
Net revenue from external customers	$6,330,746	$8,381	$-	$-	$6,339,127
Net intersegment
Revenue	314	-	2,588,295	(2,588,609)	-
Total revenue	$6,331,060	$8,381	$2,588,295	$(2,588,609)	$6,339,127
Segment profit	$2,124,046	$(17,943)	$56,481	$(34,724)	$2,127,860
Segment assets	$29,451,803	$1,326,012	$1,633,424	$(1,713,464)	$30,697,775
Segment liabilities	$19,366,056	$811,850	$1,157,320	$(941,537)	$20,393,689

Reconciliation and elimination eliminated inter-segment income, profit and loss, and departmental assets and liabilities.

	For the year ended December 31, 2024
	Construction Department	Movable and Immovable Property Investment and Development Department	Building Department	Adjustment and elimination	Total amount
Revenue
Net revenue from external customers	$6,086,590	$8,671	$-	$-	$6,095,261
Net intersegment
Revenue	314	-	2,697,169	(2,697,483)	-
Total revenue	$6,086,904	$8,671	$2,697,169	$(2,697,483)	$6,095,261
Segment profit	$2,029,924	$(16,954)	$52,139	$(32,150)	$2,032,959
Segment assets	$28,006,710	$1,337,734	$1,418,805	$(1,677,253)	$29,085,970
Segment liabilities	$17,507,007	$805,630	$990,101	$(942,255)	$18,360,483

Reconciliation and elimination eliminated inter-segment income, profit and loss, and departmental assets and liabilities.

B. Reconciliation for reportable segment revenue, profit or loss, assets, liabilities, and other significant items

The external revenue, segment profit or loss, and total assets provided to the chief operating decision maker are measured using the same methods as those used in the financial statements for revenue, net profit after tax, and total assets, thus no adjustments are required.

C. Geographical Information: The Group does not have any foreign operating segments.

D. Significant Customer Information: The property is sold (or leased) to the general consumer market, therefore, there is no principal customer.

103

Delpha Construction Co., Ltd. and Subsidiaries

Notes to unaudited consolidated financial statements (continued)

Table 1: Endorsements/guarantees provided to others
(In Thousands of New Taiwan Dollars)

No.	Endorsement/ Guarantee Provider	Guaranteed Party		Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party	Maximum Balance for the period	Ending Balance	Amount Actually Drawn	Amounts of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowable	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China
		Company name	Nature of relationship
0	The Company	Huajian	2	$2,017,149	$550,000	$350,000	$350,000	$-	3.47%	$5,042,874	Y	N	N

The numbers filled in for the endorsements/guarantees provided by the group or subsidiaries are as follows:
(1) The Company is "0".
(2) The subsidiaries are numbered in order starting from "1".

The following code represents the relationship with the company:

(1) A company with which it does business.
(2) A company in which the public company directly and indirectly holds more than 50% of the voting shares.
(3) A company that directly and indirectly holds more than 50% of the voting shares in the public company.
(4) A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.
(5) A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.
(6) A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
(7) Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

(1) The amount of endorsement/guarantee shall not exceed 50% of net worth per latest financial statements of the Company; the limits on endorsement/guarantee amount provided to each guaranteed party shall not exceed 20% of the net worth per latest financial statements of the Company.
(2) Provision of endorsement and guarantee provided for a single entity which is having business dealings shall keep the amount no more than 20% of net assets recorded in the latest financial statements of the Company.
(3) The amount of the Company's and its subsidiaries' endorsement/guarantee shall not exceed 50% of net worth per latest financial statements of the Company; the limits on endorsement/guarantee amount provided to each guaranteed party shall not exceed 20% of the net worth per latest financial statements of the Company.

The highest balance during the year for the provision of endorsement and guarantee to others.

The amount approved by the board of directors, however, if the board of directors authorizes the chairman of the board of directors to make a decision in accordance with paragraph 8, Article 12 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, it refers to the amount decided by the chairman of the board.

The actual amount drawn down within the range of the endorsement and guarantee to others by the Company.

Fill in "Y" for endorsement/guarantee provided by listed parent companies to subsidiaries and vice versa, and for ones provided to subsidiaries in Mainland China.

Delpha Construction Co., Ltd. and Subsidiaries
Notes to unaudited consolidated financial statements (continued)

Table 2: Total purchases from or sales to related parties of at least NTD 100 million or 20% of the paid-in capital
(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship	Transaction Details				Abnormal Transaction Terms Different From Regular Transactions		Notes/Accounts Receivable (Payable)		Remark
			Purchase /Sale	Amount	% to Total	Payment Term	Unit price	Credit period	Ending Balance	% to Total
The Company	Huajian	Subsidiary	Purchase	$2,727,723	72.82% (Individual financial statements)	Installment payment in accordance with the contract	-	-	$(941,536)	94.36%	Note 4
Huajian	The Company	Parent company	Sale	(2,588,295)	100% (Individual financial statements)	Payment collected as per the schedule in contracts	-	-	941,536	100%	Note 5

Note 1: If terms of related party transactions are different from general transactions, explain the differences and reasons in the 'Unit price' and 'Credit period' columns.
Note 2: In case related-party transaction terms involve advance receipts (prepayments) transactions, explain in the remark section the reasons, contractual provisions, related amounts, and differences in types of transactions compared to third-party transactions.
Note 3: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20% of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.
Note 4: The amounts of purchases are calculated based on the estimate for each period.
Note 5: It is the construction revenue recognized in sales using the percentage of completion method.

Delpha Construction Co., Ltd. and Subsidiaries

Notes to consolidated financial statements (continued)

Table 3: Receivables from related parites amounting to at least NTD 100 million or 20% of the paid-in capital
(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship	Ending Balance	Turover Ratio	Overdue
					Amount	Action Taken
Huajian	The Company	Parent Company	$941,536
(Note3)	-	$-	-	$377,315	$-

Please fill in the column according to the respective categories of accounts receivable from related parties, notes receivable, other receivables, etc.

The paid-in capital refers to the paid-in capital of the parent company. If the issuer's stocks have no par value or a per-share par value of less than NTD 10, the 20% transaction amount rule regarding paid-in capital shall be calculated based on 10% of the equity attributable to the owners of the parent company on the balance sheet.

Eliminated upon consolidation.

106

Delpha Construction Co., Ltd. and Subsidiaries

Notes to consolidated financial statements (continued)

Table 4: Significant intercompany transactions between consolidated entities
(In Thousands of New Taiwan Dollars)

No. (Note 1)	Company Name	Counter-party	Nature of Relationship	Intercompany Transactions
				Financial Statement Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets
1	Huajian	The Company	2	Contract assets	$235,301	Note 4	0.77%
1	Huajian	The Company	2	Notes receivable and accounts receivable	941,536	Note 4	3.07%
1	Huajian	The Company	2	Operating revenue	2,588,295	Note 4	40.83%

Note 1: The numbers filled in represent:
(1) The company is "0".
(2) The subsidiaries are numbered in order starting from "1".

Note 2: The following lists the three types of intercompany transactions
(one transaction between parent company and subsidiary or between subsidiaries could be disclosed only once.)
(1) Transactions from parent company to subsidiary is "1".
(2) Transactions from subsidiary to parent company is "2".
(3) Transactions between subsidiaries is "3".

Note 3: The percentage of transaction amount over consolidated total revenue or total asset is calculated based on:
(1) Account balance at end of period over consolidated total assets if the transaction account belongs to balance sheet.
(2) Accumulated interim amount over consolidated net revenue if the transaction account belongs to comprehensive income statement.

Note 4: The price of the construction works entrusted by the Company to the related parties is agreed upon by both parties, and the amount is paid in installments as per the contract.

107

Delpha Construction Co., Ltd. and Subsidiaries

Notes to consolidated financial statements (continued)

Table 5: Information on investees
Information on investees over which the Company has control or significant influence:
(In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Region	Main business and products	Original Investment Amount		Balance at The End of Period			Net Income (Loss) of The Investee	Share of Profits (Loss) of Investee
				December 31, 2025	December 31, 2024	Shares (In Thousands)	Percentage of Ownership	Carrying Value
The Company	Huachien	16F, No. 460, Section 5, Chenggong Road, Neihu District, Taipei City	Development, sales, and rental business	$704,993	$704,993	18,208	58.36%	$300,064	$(17,943)	$(10,472)
The Company	Huajian	16F, No. 460, Section 5, Chenggong Road, Neihu District, Taipei City	Construction business Development, sales, and rental business, and Wholesale of Building Materials	339,000	339,000	42,015	100.00%	345,852	45,195	7,848

AI assistant

DELPHA — Audit Report / Information 2026

52142_rns_2026-05-26_ef1d2229-4bd9-4851-a7b0-e3f5d8023b03.pdf

Representation Letter

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Valuation of inventories

Sales revenue and cost recognition

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Others

Notice to Readers

Financial assets reassured at amortized cost

Financial assets measured at fair value through other comprehensive income

Financial asset measured at fair value through profit or loss

B. Impairment of financial assets

Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at amortized cost

Derecognition of financial liabilities

E. Offsetting of financial assets and financial liabilities

(12) Property, plant and equipment

Group as a lessor

(14) Intangible assets

Goodwill

(15) Impairment of non-financial assets

5. Significant accounting judgements, estimates and assumptions

Estimates and assumptions

(1) Valuation of inventory

6. Description of Significant Account Titles

(1) Cash and equivalents

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

Defined contribution plan

Defined benefits plan

Note:

B. Contract balances

(21) Non-operating income and expenses

(a) Other income

(b) Interest income

(c) Other gains and losses

Unrecognized deferred tax assets

The assessment of income tax returns

(24) Earnings per share

7. Related Party Transactions

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

(2) Significant transactions with related parties

(a) Sales

(b) Purchase:

8. Assets pledged as security

Interest rate risk

Equity price risk

Transfers between Level 1 and Level 2 during the period

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy

Information on significant unobservable inputs to valuation

13. Additional Disclosure

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DELPHA Audit Report / Information 2026