EGST — Annual Report 2021

Dec 29, 2021

Evergreen Steel Corporation

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

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Evergreen Steel Corporation

Opinion

We have audited the accompanying balance sheets of Evergreen Steel Corporation (the “Company”), as of December 31, 2021 and 2020, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the related notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

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

Basis for Opinion

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

Key Audit Matters

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

The key audit matters identified in the Company’s financial statements for the year ended December 31, 2021 are described as follows:

Contract Revenue Recognition

The Company’s contract revenue mainly comes from providing steel structure engineering contracting business; during the contract period, the project revenue is recognized based on the degree of completion. Contract revenue recognition from construction depends on the degree of completion of the contract which involves subjective judgment which may result in profit or loss or certain risks that are not recognized in the correct period. Therefore, we identified the contract revenue recognition with risk characteristics as a key audit matter.

• 1 -

The main audit procedures that we performed for testing the contract revenue recognition are as follows:

1. We obtained an understanding of the design and implementation of the Company’s contract revenue evaluation method and control system by performing control tests.

2. We selected samples of the contract revenue with risk characteristics in current year which are subject to detailed tests including checking the price accepted by the customer’s with construction contracts, assessing the adequacy of the contract cost estimation, recalculating the degree of completion, and verifying correctness of the contract revenue recognition.

3. We performed analytical review of contract revenue and performed a retrospective review of construction costs.

Refer to Note 4 to the financial statements for the accounting policy on the assessment of construction contracts. Refer to Notes 5 and 23 for critical accounting judgments and key sources of estimation uncertainty.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

• 2 -

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

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

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

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

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

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

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

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

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

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

• 3 -

The engagement partners on the audits resulting in this independent auditors’ report are Ching-Hsia Chang and Yung-Hsiang Chao.

Deloitte & Touche Taipei, Taiwan Republic of China

March 21, 2022

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying 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 financial statements shall prevail.

• 4 -

EVERGREEN STEEL CORPORATION

BALANCE SHEETS DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at amortized cost - current (Notes 4, 8 and 30) Contract assets - current (Notes 4, 21, 23 and 29) Notes receivable, net (Notes 4 and 21) Trade receivables, net (Notes 4, 9 and 21) Trade receivables from related parties, net (Notes 4, 9, 21 and 29) Other receivables (Note 29) Inventories (Notes 4, 10 and 21) Other current assets (Note 15) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 7) Investments accounted for using equity method (Notes 4 and 11) Property, plant and equipment (Notes 4, 12 and 30) Right-of-use assets (Notes 4 and 13) Investment properties (Notes 4 and 14) Intangible assets (Note 4) Deferred tax assets (Notes 4 and 25) Refundable deposits Net defined benefit assets - non-current (Notes 4 and 20) Other non-current assets (Note 15) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 16) Short-term bills payable (Note 16) Contract liabilities - current (Notes 4, 21 and 23) Notes payable, net (Note 21) Trade payable, net (Notes 17 and 21) Other payables (Notes 18 and 29) Current tax liabilities (Notes 4 and 25) Provisions - current (Notes 4 and 19) Lease liabilities - current (Notes 4 and 13) Current portion of long-term borrowings (Note 16) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 16) Deferred tax liabilities (Notes 4 and 25) Lease liabilities - non-current (Notes 4 and 13) Net defined benefit liabilities - non-current (Notes 4 and 20) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY (Note 22) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translation of the financial statements of foreign operations Unrealized gain on financial assets at fair value through other comprehensive income Total other equity Treasury shares Total equity TOTAL		2021 Amount % $ 739,752 3 3,600 - 3,272,392 12 38,159 - 1,540,748 5 32,275 - 21,796 - 3,143,166 11 56,829 - 8,848,717 31 12,743,751 45 4,106,942 15 2,383,645 9 26,378 - 7,823 - 5,688 - 32,094 - 7,071 - 548 - 16,636 - 19,330,576 69 $ 28,179,293 100 $ 100,000 - 449,937 2 1,380,717 5 390,502 2 1,638,382 6 214,832 1 105,662 - 61,408 - 13,626 - - - 32,892 - 4,387,958 16 500,000 2 70,667 - 11,278 - - - 436 - 582,381 2 4,970,339 18 4,199,820 15 1,340,352 5 2,294,939 8 6,839,705 24 9,134,644 32 (470) - 8,584,546 30 8,584,076 30 (49,938) - 23,208,954 82 $ 28,179,293 100		2020
				Amount % $ 663,913 3 3,600 - 4,190,973 22 126,225 1 511,911 2 151,094 1 14,925 - 988,027 5 164,470 1 6,815,138 35 6,328,925 33 3,648,702 19 2,384,518 12 20,479 - 7,823 - 3,561 - 17,842 - 6,683 - - - 79,647 1 12,498,180 65 $ 19,313,318 100 $ 690,000 4 1,799,171 9 323,755 2 349,566 2 1,132,183 6 147,118 1 68,835 - 60,792 - 8,756 - 300,000 2 32,031 - 4,912,207 26 300,000 2 65,995 - 9,738 - 23,033 - 530 - 399,296 2 5,311,503 28 3,994,260 21 396,542 2 2,190,673 11 6,347,269 33 8,537,942 44 (648) - 1,166,832 6 1,166,184 6 (93,113) (1) 14,001,815 72 $ 19,313,318 100

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

• 5 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 23 and 29) OPERATING COSTS (Notes 10, 20, 24 and 29) GROSS PROFIT OPERATING EXPENSES (Notes 20, 24 and 29) Selling and marketing expenses General and administrative expenses Expected credit loss Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income Other income (Notes 24 and 29) Other gains and (losses) (Note 24) Finance costs (Note 24) Share of profit of subsidiaries Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 25) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 20) Unrealized gain on investments in equity instruments at fair value through other comprehensive income		2021 Amount % $ 11,614,440 100 (10,394,215) (90) 1,220,225 10 (297,454) (3) (139,938) (1) (39,722) - (477,114) (4) 743,111 6 6,086 - 151,502 1 1,615 - (16,607) - 530,361 5 672,957 6 1,416,068 12 (137,808) (1) 1,278,260 11 282 - 7,607,619 66		2020
				Amount % $ 7,263,895 100 (6,460,683) (89) 803,212 11 (230,668) (3) (120,279) (2) (13,277) - (364,224) (5) 438,988 6 4,515 - 125,302 1 (8,029) - (19,147) - 594,715 8 697,356 9 1,136,344 15 (92,695) (1) 1,043,649 14 (1,069) - 994,491 14 (Continued)

• 6 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of the other comprehensive income of subsidiaries accounted for using the equity method Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 25) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Income tax relating to items that may be reclassified subsequently to profit or loss (Note 25) Other comprehensive (loss) income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 26) Basic Diluted		2021 Amount % $ 690 - (57) - 7,608,534 66 60 - 118 - 178 - 7,608,712 66 $ 8,886,972 77 $ 3.11 $ 3.11		2020
				Amount % $ 399 - 214 - 994,035 14 341 - (68) - 273 - 994,308 14 $ 2,037,957 28 $ 2.65 $ 2.65

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

(Concluded)

• 7 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2020 Appropriation of 2019 earnings Legal reserve Cash dividends to shareholders Net profit for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020, net of income tax Total comprehensive income for the year ended December 31, 2020 Disposal of treasury shares Subsidiary receives dividend from the parent company Changes in percentage of ownership interests in subsidiaries Disposal of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT DECEMBER 31, 2020 Appropriation of 2020 earnings Legal reserve Cash dividends to shareholders Dividends from claims extinguished by prescription Net profit for the year ended December 31, 2021 Other comprehensive income for the year ended December 31, 2021, net of income tax Total comprehensive income for the year ended December 31, 2021 Issuance of ordinary shares for cash Disposal of treasury shares Disposal of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT DECEMBER 31, 2021	Share Capital Ordinary Shares (In Thousands) Amount Capital Surplus 399,426 $ 3,994,260 $ 356,431 - - - - - - - - - - - - - - - - - 26,603 - - 4,998 - - 8,510 - - - 399,426 3,994,260 396,542 - - - - - - - - 100 - - - - - - - - - 20,556 205,560 837,090 - - 106,620 - - - 419,982 $ 4,199,820 $ 1,340,352	Retained Earnings Legal Reserve Unappropriated Earnings $ 2,095,929 $ 6,192,425 94,744 (94,744) - (793,071) - 1,043,649 - (456) - 1,043,193 - - - - - - - (534) 2,190,673 6,347,269 104,266 (104,266) - (872,378) - - - 1,278,260 - 915 - 1,279,175 - - - - - 189,905 $ 2,294,939 $ 6,839,705	Other Equity Exchange Differences on Translation of the Financial Unrealized Gain （Loss）on Financial Assets at Fair Value Through Other Statements of Foreign Operations Comprehensive Income Treasury Shares $ (921) $ 171,807 $ (119,045) - - - - - - - - - 273 994,491 - 273 994,491 - - - 25,932 - - - - - - - 534 - (648) 1,166,832 (93,113) - - - - - - - - - - - - 178 7,607,619 - 178 7,607,619 - - - - - - 43,175 - (189,905) - $ (470) $ 8,584,546 $ (49,938)	Total Equity $ 12,690,886 - (793,071) 1,043,649 994,308 2,037,957 52,535 4,998 8,510 - 14,001,815 - (872,378) 100 1,278,260 7,608,712 8,886,972 1,042,650 149,795 - $ 23,208,954
	Ordinary Shares (In Thousands) 399,426 - - - - - - - - - 399,426 - - - - - - 20,556 - - 419,982

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

• 8 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss recognized on trade receivables Finance costs Interest income Dividend income Ordinary shares transferred to employees at cost Share of profit of subsidiaries Gain on disposal of property, plant and equipment Net loss on disposal of inventories Impairment loss on investment properties Realized gain on the transactions with subsidiaries Gain on lease modification Changes in operating assets and liabilities Decrease (increase) in contract assets Decrease (increase) in notes receivable Increase in trade receivables Increase in other receivables Increase in inventories Decrease (increase) in other current assets Increase in net defined benefit assets Increase in contract liabilities Increase in notes payable Increase in trade payables Increase in other payables Increase (decrease) in provisions Decrease in deferred revenue Increase (decrease) in other current liabilities Decrease in net defined benefit liabilities Cash generated from (used in) operations Interest received Interest paid Income tax paid Net cash generated from (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity the method	2021 $ 1,416,068 144,241 3,278 39,722 16,607 (6,086) (122,674) 39,660 (530,361) (5,124) 2,159 - (955) (7) 878,682 88,066 (909,841) (6,832) (2,157,298) 107,641 (267) 1,056,962 40,936 506,199 68,029 616 (94) 861 (23,033) 647,155 6,047 (16,922) (110,499) 525,781 (5,240) 657,812 (1)	2020 $ 1,136,344 137,612 4,310 13,277 19,147 (4,515) (100,549) - (594,715) (1,173) 5,622 3,417 (1,273) - (1,431,890) (73,764) (333,821) (669) (354,910) (134,736) - 26,247 122,821 178,304 25,984 (2,740) (94) (969) (21,371) (1,384,104) 4,252 (18,766) (21,259) (1,419,877) (1,543) 1,646 (101,004) (Continued)

• 9 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Payments for intangible assets Decrease in other non-current assets Dividends received Dividends received from subsidiaries Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Repayments of) proceeds from short-term borrowings (Repayments of) proceeds from bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Increase in guarantee deposits Repayment of principal portion of lease liabilities Repayments of cash dividend Proceeds from issuance of ordinary shares Dividends from claims extinguished by prescription Net cash (used in) generated from financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2021 $ (130,112) 5,177 (388) (5,405) 63,011 122,674 764,627 1,472,155 (590,000) (1,349,234) 300,000 (400,000) - (13,575) (872,378) 1,002,990 100 (1,922,097) 75,839 663,913 $ 739,752	2020 $ (118,771) 663 (2,507) (1,105) 18,113 100,549 539,260 435,301 490,000 1,399,302 600,000 (150,000) 45 (9,825) (793,071) - - 1,536,451 551,875 112,038 $ 663,913

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

(Concluded)

• 10 -

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

EVERGREEN STEEL CORPORATION

1. GENERAL INFORMATION

Evergreen Steel Corporation (the “Company”) was incorporated in January 1973 as a company limited by shares under the Company Law of the Republic of China. The Company is mainly engaged in the steel structure engineering business. The Company’s steel structure engineering business mainly includes engineering projects of factories, tall buildings and bridges. On January 13, 2020, the Company was approved by the Taipei Exchange (TPEx) for domestic initial public offering, and its ordinary shares were listed and traded on the Emerging Stock Board. Since April 12, 2021, the Company’s shares have been listed on the Taiwan Stock Exchange.

The financial statements are presented in the Company’s functional currency, New Taiwan dollars.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Company’s board of directors on March 21, 2022.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies.

• b. The IFRSs endorsed by the FSC for application starting from 2022

Effective Date New IFRSs Announced by IASB “Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 1) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 2) Amendments to IAS 16 “Property, Plant and Equipment - Proceeds January 1, 2022 (Note 3) before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 4) Contract”

• Note 1: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• 11 -

• Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

The Company has assessed that the application of other standards and interpretations will not have a material impact on the Company’s financial position and financial performance.

• c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

Effective Date Announced by IASB (Note 1)

To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note 4: Except for deferred taxes that will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

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

The amendments clarify that for a liability to be classified as non-current, the Company shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Company will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Company must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

• 12 -

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Company’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Company’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32 “Financial Instruments: Presentation”, the aforementioned terms would not affect the classification of the liability.

• 2) Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments specify that the Company should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

• Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;

• The Company may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and

• Not all accounting policy information relating to material transactions, other events or conditions is itself material.

The amendments also illustrate that accounting policy information is likely to be considered as material to the financial statements if that information relates to material transactions, other events or conditions and:

• a) The Company changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;

• b) The Company chose the accounting policy from options permitted by the standards;

• c) The accounting policy was developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS that specifically applies;

• d) The accounting policy relates to an area for which the Company is required to make significant judgments or assumptions in applying an accounting policy, and the Company discloses those judgments or assumptions; or

• e) The accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.

• 3) Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments define that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Company may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Company uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are changes in accounting estimates unless they result from the correction of prior period errors.

• 13 -

Except for the above impact, as of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

• b. Basis of preparation

The financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities (assets) which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

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

• 3) Level 3 inputs are unobservable inputs for an asset or liability.

When preparing the parent company only financial statements, the Company used the equity method to account for its investments in subsidiaries. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same as the amounts attributable to the owners of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries, the share of other comprehensive income of subsidiaries, as appropriate, in the parent company only financial statements.

• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period; and

• 14 -

• 3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

The Company engages in the construction business, which has an operating cycle of over one year, and the normal operating cycle applies when considering the classification of the Company’s construction-related assets and liabilities.

d. Foreign currencies

In preparing the Company’s financial statements, transactions in currencies other than the Company’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting the financial statements, the assets and liabilities of the Company’s foreign operations (including subsidiaries, associates and branches in other countries that use currencies which are different from the currency of the Company) are translated into New Taiwan dollars using the exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences are recognized in other comprehensive income.

e. Inventories

Inventories consist of raw materials, supplies and inventory in transit. Inventories are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

• f. Investments in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Company.

Under the equity method, investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary. The Company also recognizes the changes in the Company’s share of equity of subsidiaries attributable to the Company.

• 15 -

Changes in the Company’s ownership interest in a subsidiary that do not result in the Company losing control of the subsidiary are accounted for as equity transactions. The Company recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years.

Profit or loss resulting from downstream transactions is eliminated in full only in the parent company only financial statements. Profit and loss resulting from upstream transactions and transactions between subsidiaries is recognized only in the parent company only financial statements and only to the extent of interests in the subsidiaries that are not related to the Company.

When the Company subscribes for additional new shares of a subsidiary at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the subsidiary. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Company’s ownership interest is reduced due to its additional subscription of the new shares of the subsidiary, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that subsidiary is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

g. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss.

Except for freehold land which is not depreciated, the depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

h. Investment properties

Investment properties are properties held to earn rental and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

For a transfer of classification from investment properties to property, plant and equipment, the deemed cost of an item of property for subsequent accounting is its carrying amount at the end of owner-occupation.

• 16 -

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

• i. Intangible assets

• 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

• 2) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

• j. Impairment of property, plant and equipment, right-of-use and intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use and intangible assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

• k. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to an acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss (FVTPL)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

• 1) Financial assets

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

• 17 -

• a) Measurement category

Financial assets are classified into the following categories: Financial assets at amortized cost and investments in equity instruments at FVTOCI.

• i. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii) 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.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents and trade receivables at amortized cost, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

• i) Purchased or originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

• ii) Financial asset that is not credit impaired on purchase or origination but has subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

Cash equivalents which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

• ii. Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

• 18 -

• b) Impairment of financial assets and contract assets

The Company recognizes a loss allowance for expected credit losses on financial assets and contract assets at amortized cost (including trade receivables).

The Company always recognizes lifetime expected credit losses (ECLs) for trade receivables and contract assets. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amount through a loss allowance account.

• c) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

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

Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.

3) Financial liabilities

• a) Subsequent measurement

All the financial liabilities are measured at amortized cost using the effective interest method.

• 19 -

b) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

l. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

1) Onerous contracts

Onerous contracts are those in which the Company’s unavoidable costs of meeting the contractual obligations exceed the economic benefits expected to be received from the contract. The present obligations arising under onerous contracts are recognized and measured as provisions.

2) Warranties

The contractual obligation of the warranty expenditure is expected to occur during the warranty period after the completion of the construction contracts. The Company sets out the provisions according to the warranty expenditure expected to occur during the warranty period. If the preparation is not enough, the current year’s expenses shall be included.

m. Revenue recognition

The Company identifies contracts with the customers, allocates transaction price to the performance obligations and recognizes revenue when the performance obligations are satisfied.

1) Construction contracts revenue

The Company recognizes revenue over time during the construction process. Because the cost of unit of the installation completion of the construction is directly related to fulfilling performance obligation, the Company uses the cost of unit of installation as the estimated total output incurred. The cost ratio is used to measure the progress of the completion, and after the inspection of the installation of the construction, income and cost are relatively recognized. The Company gradually recognizes contract assets during the construction process and transfers the amount to accounts receivable when issuing invoices. If the payment received for the construction project exceeds the amount, the difference is recognized as contract liability. The project retention fund is withheld by the customer as stated in the contract to ensure that the Company completes all contractual obligations and is recognized as contract assets until the Company satisfies the performance obligations.

2) Revenue from the rendering of services

Revenue from the rendering of services comes from providing container repair, renovation and storage services. Such service revenue is recognized when performance obligations are satisfied.

• 20 -

n. Leases

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

1) The Company as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

2) The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

o. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered services entitling them to the contributions.

• 21 -

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses, and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• p. Share-based payment arrangements

The stock option granted to employees is expensed on a straight-line basis over the vesting period, based on the Company’s best estimates of the number of shares that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options. It is recognized as an expense in full at the grant date if vested immediately. The grant date of issued ordinary shares for cash which are reserved for employees is the date on which the employees are informed.

• q. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

• 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• 22 -

• 3) Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Construction Contracts

Contract revenue and costs are recognized by reference to the stage of completion of each contract. The stage of completion of a contract is measured based on the proportion of contract costs incurred for work performed to date as the estimated total contract costs. Under the IFRS 15, incentives and penalties are considered as variables and shall be included in the contract revenue only when it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The estimated total output unit, contract costs and contractual items are assessed and determined by management based on the nature of the work, expected sub-contracting charges, construction periods, processes, methods, etc., for each construction contract. Changes in these estimates might affect the calculation of the percentage of completion and related profit and loss from the construction contracts. Refer to Note 23 for related information.

6. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash on hand Checking accounts and demand deposits Cash equivalent Time deposits		December 31
		2021 $ 2,815 170,937 566,000 $ 739,752	2020 $ 2,815 95,098 566,000 $ 663,913

• 23 -

7. FINANCIAL ASSETS AT FVTOCI

FINANCIAL ASSETS AT FVTOCI
Non-current Domestic investments Listed shares and emerging market shares Unlisted shares Foreign investments Unlisted shares		December 31
		2021 $ 11,798,423 824,115 121,213 $ 12,743,751	2020 $ 5,298,293 881,433 149,199 $ 6,328,925

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes.

The Company sold its investments in 2021 and 2020, and transferred a gain (loss) of $189,905 thousand and $(534) thousand, respectively, from other equity to retained earnings.

8. FINANCIAL ASSETS AT AMORTIZED COST

FINANCIAL ASSETS AT AMORTIZED COST
Current Pledge deposits		December	31
		2021 $ 3,600	2020 $ 3,600

Refer to Note 30 for information relating to investments in financial assets at amortized cost pledged as security.

9. TRADE RECEIVABLES

TRADE RECEIVABLES
Trade receivables (including trade receivables from related parties) At amortized cost Gross carrying amount Less: Allowance for impairment loss		December 31
		2021 $ 1,573,023 - $ 1,573,023	2020 $ 663,182 (177) $ 663,005

The average credit period on sales of goods is 0 to 120 days. In determining the recoverability of a trade receivable, the Company considers the changes in the credit quality of the trade receivable since the date of credit was initially granted to the end of the reporting period. The allowance for impairment loss refers to the past arrears records of the counterparty and the analysis of its current financial status to estimate the amount that cannot be recovered.

• 24 -

The Company applies the simplified approach for the allowance of expected credit loss prescribed by IFRS 9, which permits the use of a lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated using a provision matrix approach considering the past default experience of the debtor and an analysis of the debtor’s current financial positions.

The Company writes off a trade receivable when there is evidence indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery of the receivable, e.g. when the debtor has been placed under liquidation, or when the trade receivables are over 365 days past due, whichever occurs earlier. The Company directly recognizes the impairment loss of related accounts receivable. The Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the Company’s aging of trade receivables.

December 31, 2021

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost		Amount WithoutSign of Default Amount with Sign of 0 to 60 Days 61 to 90 Days 91 to 120 Days Over 120 Days Default - - - - - $ 1,422,296 $ 150,706 $ 21 $ - $ - - - - - - $ 1,422,296 $ 150,706 $ 21 $ - $ -	Total $ 1,573,023 - $ 1,573,023

December 31, 2020

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost		Amount Without Sign of Default Amount with Sign of 0 to 60 Days 61 to 90 Days 91 to 120 Days Over 120 Days Default 0.02% 0.53% 10% - - $ 657,567 $ 5,575 $ 40 $ - $ - (144) (29) (4) - - $ 657,423 $ 5,546 $ 36 $ - $ -	Total $ 663,182 (177) $ 663,005

The above is an aging analysis based on the account opening date.

The above aging schedule was based on the ledger date. The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance (reversed) Balance at December 31	2021 $ 177 (177) $ -	2020 $ - 177 $ 177

• 25 -

10. INVENTORIES

INVENTORIES
Raw material Supplies Inventory in transit		December 31
		2021 $ 3,141,252 1,914 - $ 3,143,166	2020 $ 979,728 1,096 7,203 $ 988,027

The costs of inventories recognized as operating cost for the years ended December 31, 2021 and 2020 was $10,261,039 thousand and $6,342,473 thousand, respectively.

The cost of goods sold which included the inventory write-downs and disposals were as follow:

Inventory write-downs Loss of inventory scrapped and physical inventories	2021 $ 2,159 - $ 2,159	2020 $ 2,995 2,627 $ 5,622

11. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments in Subsidiaries

Investments in Subsidiaries
Name of Subsidiaries Hsin Yung Enterprise Corporation Super Max Engineering Enterprise Co., Ltd. Ever Ecove Corporation Ming Yu Investment Corporation Hsin Yung Enterprise Corporation Super Max Engineering Enterprise Co., Ltd. Ever Ecove Corporation Ming Yu Investment Corporation		December 31
		2021 2020 $ 2,174,561 $ 1,753,091 919,737 825,841 763,964 780,765 248,680 289,005 $ 4,106,942 $ 3,648,702 Proportion of Ownership and Voting Rights
		December 31
		2021 2020 68.46% 68.46% 48.13% 48.13% 50.06% 50.06% 100.00% 100.00%

• a. Ever Ecove Corporation handled a cash capital increase at the end of November 30, 2020. The Company did not subscribe for new shares based on the shareholding ratio. After the capital increase, the shareholding ratio dropped from 70% to 50.06%.

• b. The investments in subsidiaries accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2021 and 2020 was based on the subsidiaries’ audited financial statements for the years then ended.

• 26 -

12. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2021 Additions Disposals Reclassification Balance at December 31, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Disposals Depreciation expense Balance at December 31, 2021 Carrying amount at December 31, 2021 Cost Balance at January 1, 2020 Additions Disposals Reclassification Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Disposals Depreciation expense Reclassification Balance at December 31, 2020 Carrying amount at December 31 2020	Freehold Land Land Improvements $ 1,375,099 $ 156,372 - - - - - - $ 1,375,099 $ 156,372 $ - $ 123,390 - - - 4,608 $ - $ 127,998 $ 1,375,099 $ 28,374 $ 1,375,099 $ 156,372 - - - - - - $ 1,375,099 $ 156,372 $ - $ 118,688 - - - 4,702 - - $ - $ 123,390 $ 1,375,099 $ 32,982	Buildings Machinery and Equipment Transportation Equipment $ 1,479,390 $ 767,675 $ 61,246 1,585 24,770 9,005 - (14,544 ) - - 79,647 - $ 1,480,975 $ 857,548 $ 70,251 $ 892,039 $ 408,178 $ 44,352 - (13,707 ) - 45,474 68,360 5,678 $ 937,513 $ 462,831 $ 50,030 $ 543,462 $ 394,717 $ 20,221 $ 1,395,575 $ 739,008 $ 63,786 3,519 1,010 767 - (4,774 ) (3,307 ) 80,296 32,431 - $ 1,479,390 $ 767,675 $ 61,246 $ 848,075 $ 344,708 $ 41,149 - (4,501 ) (3,307 ) 43,758 67,971 6,510 206 - - $ 892,039 $ 408,178 $ 44,352 $ 587,351 $ 359,497 $ 16,894	Other Equipment $ 51,873 15,105 (1,014 ) - $ 65,964 $ 39,178 (1,014 ) 6,028 $ 44,192 $ 21,772 $ 53,915 954 (2,790 ) (206) $ 51,873 $ 36,634 (2,789 ) 5,539 (206) $ 39,178 $ 12,695	Total $ 3,891,655 50,465 (15,558 ) 79,647 $ 4,006,209 $ 1,507,137 (14,721 ) 130,148 $ 1,622,564 $ 2,383,645 $ 3,783,755 6,250 (10,871 ) 112,521 $ 3,891,655 $ 1,389,254 (10,597 ) 128,480 - $ 1,507,137 $ 2,384,518

The above items of property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives as follows:

Land improvements 3-10 years Buildings 2-55 years Machinery and equipment 3-20 years Transportation equipment 5 years Other equipment 3-5 years

Property, plant and equipment pledged as collateral for bank borrowings were set out in Note 30.

• 27 -

13. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Land Other equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Other equipment		**December **	**31 **
	2021 2020 $ 24,503 $ 19,476 1,875 1,003 $ 26,378 $ 20,479 For the Year Ended December 31
		2021 $ 20,925 $ 13,139 954 $ 14,093	2020 $ 3,617 $ 8,128 1,004 $ 9,132

Except for the aforementioned addition and recognized depreciation, the Company did not have significant sublease or impairment of right-of-use assets for the years ended December 31, 2021 and 2020.

b. Lease liabilities

Lease liabilities
Carrying amount Current Non-current		December	31
		2021 $ 13,626 $ 11,278	2020 $ 8,756 $ 9,738

Range of discount rates for lease liabilities was as follows:

December	31
2021		2020
0.878%-1.1%		1.1%

• c. Material lease-in activities and terms (the Company as lessee)

The Company leases land and equipment for the use of plants and manufacturing with lease term of 2 to 3 years. The Company does not have bargain purchase options to acquire the leasehold land at the end of the lease term. In addition, the Company is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

• 28 -

d. Other lease information

Expenses relating to short-term leases and low-value asset leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 14,586 $ 28,398	2020 $ 9,961 $ 20,011

14. INVESTMENT PROPERTIES

Cost Balance at January 1, 2021 Additions Balance at December 31, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Impairment loss Balance at December 31, 2021 Carrying amount at December 31, 2021 Cost Balance at January 1, 2020 Additions Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Impairment loss Balance at December 31, 2020 Carrying amount at December 31, 2020

Amount $ 150,995 - $ 150,995 $ (143,172) - $ (143,172) $ 7,823 $ 150,995 - $ 150,995 $ (139,755) (3,417) $ (143,172) $ 7,823

The valuation was arrived by reference to market evidence of transaction prices for similar properties, it is fair value is as followed:

Fair value		December	31
		2021 $ 17,441	2020 $ 15,028

• 29 -

15. OTHER ASSETS

15.	OTHER ASSETS
16.	Current Prepayments Prepaid expense Tax credit Non-current Prepayments for equipment BORROWINGS a. Short-term borrowings Unsecured borrowings Line of credit borrowings Interest rate range b. Short-term bills payable Commercial paper Less: Unamortized discounts on short-term bills payable Interest rate range			December 31
				2021 2020 $ 37,396 $ 96,349 15,546 19,881 3,887 48,240 $ 56,829 $ 164,470 $ 16,636 $ 79,647 December 31
				2021 2020 $ 100,000 $ 690,000 0.83% 0.88%-0.9% December 31
			2021 2020 $ 450,000 $ 1,800,000 (63) (829) $ 449,937 $ 1,799,171 0.848% 0.848%-0.868%

Promissory institution included China Bills Finance Corporation, Mega Bills Finance Co., Ltd. and International Bills Finance Corporation.

• 30 -

c. long-term borrowings

long-term borrowings
Secured borrowings Bank loans Unsecured borrowings Bank loans Expiry period Interest rate range		December 31
	2021 $ 500,000 - $ 500,000 2024 0.89%-0.92%		2020 $ 580,000 20,000 $ 300,000 2021-2024 0.89%-1%

Please refer to Note 30 for details of the collaterals pledged for the above long-term borrowings.

17. TRADE PAYABLES

The average credit period on purchases of certain goods was 30 to 90 days. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

Retentions payable on construction contracts which are included in trade payables and are not bearing interest and are expected to be paid at the end of retention periods, which are within the normal operating cycle of the Company, usually more than twelve months after the reporting period. Refer to Note 21 for maturity analysis of retentions payable.

18. OTHER LIABILITIES

OTHER LIABILITIES
Current Other payables Payable for transportation fees Payable for annual leave Payable for tax Payable for compensation of employees and remuneration of directors Payable for insurance expenses Payable for salaries or bonus Payable for repairs and maintenance Payable for professional fees Others		December 31
		2021 $ 57,228 30,105 29,969 12,141 10,624 8,595 5,624 4,042 56,504 $ 214,832	2020 $ 37,745 28,164 - 10,745 10,516 6,907 4,664 3,388 44,989 $ 147,118

• 31 -

19. PROVISIONS

PROVISIONS
Current Warranties* Onerous contract - loss on construction	For the Year Ended December 31
		2021 $ 61,070 338 $ 61,408	2020 $ 60,723 69 $ 60,792

• The contractual obligation of the warranty expenditure is expected to occur during the warranty period after the completion of the construction contracts.

20. RETIREMENT BENEFIT PLANS

• a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plan adopted by the Company in accordance with the Labor Standards Act is operated by the government of ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company contribute amounts equal to 6% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy.

The amounts included in the independent balance sheets in respect of the Company’s defined benefit plans were as follows:

plans were as follows:
Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities (assets)		December 31
		2021 $ 339,563 (340,111) $ (548)	2020 $ 349,257 (326,224) $ 23,033

• 32 -

Movements in net defined benefit liabilities were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of		Benefit
	Obligation	the Plan Assets	Liability (Asset)
Balance at January 1, 2021	$ 349,257	$ (326,224)	$	23,033
Service cost
Current service cost	5,220	-		5,220
Net interest expense (income)	1,746	(1,698)		48
Recognized in profit or loss	6,966	(1,698)		5,268
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(4,135)		(4,135)
Actuarial loss - changes in demographic
assumptions	7,949	-		7,949
Actuarial loss - changes in financial
assumptions	(3,414)	-		(3,414)
Actuarial loss - experience adjustments	(682)	-		(682)
Recognized in other comprehensive income	3,853	(4,135)		(282)
Contributions from the employer	-	(26,236)		(26,236)
Benefits paid	(18,182)	18,182		-
Company paid	(2,331)	-		(2,331)
Balance at December 31, 2021	$ 339,563	$ (340,111)	$	(548)
Balance at January 1, 2020	$ 355,637	$ (312,301)	$	43,336
Service cost
Current service cost	5,435	-		5,435
Net interest expense (income)	2,667	(2,445)		222
Recognized in profit or loss	8,102	(2,445)		5,657
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(9,869)		(9,869)
Actuarial loss - changes in financial
assumptions	7,478	-		7,478
Actuarial loss - experience adjustments	3,460	-		3,460
Recognized in other comprehensive income	10,938	(9,869)		1,069
Contributions from the employer	-	(27,029)		(27,029)
Benefits paid	(25,420)	25,420		-
Balance at December 31, 2020	$ 349,257	$ (326,224)	$	23,033

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

Operating cost Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 2,631 2,637 $ 5,268	2020 $ 2,899 2,758 $ 5,657

• 33 -

Through the defined benefit plans under the Labor Standards Act, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets shall not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s) Expected rate(s) of salary increase Turnover rate	December 31
	2021 2020 0.625% 0.5% 2% 2% 3%-7.5% 3%-7.5%

If possible reasonable change in each of the significant actuarial assumptions occur and all other assumptions remain constant, the present value of the defined benefit obligation will decrease (increase) as follows:

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		December	31
		2021 $ (6,807) $ 7,027 $ 6,810 $ (6,631)	2020 $ (7,478) $ 7,730 $ 7,483 $ (7,278)

The sensitivity analysis previously presented may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that change in assumptions will occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plan for the next year Average duration of the defined benefit obligation		December	31
		2021 $ 26,197 8.2 years	2020 $ 26,834 8.8 years

• 34 -

21. MATURITY ANALYSIS OF ASSETS AND LIABILITIES

The current/non-current classification of the Company’s assets and liabilities relating to steel structure business was based on its operating cycle. The amount expected to be recovered or settled within one year after reporting period and more than one year after reporting period for related assets and liabilities are as follows:

Within 1 Year More Than 1 Year December 31, 2021 Assets Notes receivable $ 38,136 $ - Trade receivables 1,539,150 - Inventories 3,141,925 - Contract assets - current 1,791,378 1,481,014 $ 6,510,589 $ 1,481,014 Liabilities Notes payable $ 15,269 $ - Trade payables 1,481,001 141,896 Contract liabilities - current 1,380,717 - $ 2,876,987 $ 141,896 December 31, 2020 Assets Notes receivable $ 126,203 $ - Trade receivables 635,261 - Inventories 986,652 - Contract assets - current 3,468,046 722,927 $ 5,216,162 $ 722,927 Liabilities Notes payable $ 931 $ - Trade payables 907,412 212,977 Contract liabilities - current 298,877 24,878 $ 1,207,220 $ 237,855

Total $ 38,136 1,539,150 3,141,925 3,272,392 $ 7,991,603 $ 15,269 1,622,897 1,380,717 $ 3,018,883 $ 126,203 635,261 986,652 4,190,973 $ 5,939,089 $ 931 1,120,389 323,755 $ 1,445,075

• 35 -

22. EQUITY

• a. Share capital

Ordinary shares

Ordinary shares
Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		**December 31 **
		2021 440,000 $ 4,400,000 419,982 $ 4,199,820	2020 440,000 $ 4,400,000 399,426 $ 3,994,260

On December 21, 2020, the board of directors resolved a cash capital increase by issuing 20,556 thousand new shares with a par value $10, and the base date of capital increase was April 8, 2021. The change of registration was completed on April 28, 2021.

The above cash capital increase proposal retains 10% of the cash capital increase shares, which totaled 2,056 thousand shares, for employees’ subscription. The Company recognized salary expenses and capital surplus - employee share options of $39,660 thousand on the grant date.

• b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Issuance of ordinary shares Treasury share transactions Consolidation excess Only be used to offset a deficit Changes in percentage of ownership interests in subsidiaries (2) Expired employee share options Unclaimed dividends		December 31	December 31
		2021 $ 834,988 439,828 51,956 8,510 4,877 193 $1,340,352	2020 $ - 333,208 51,956 8,510 2,775 93 $ 396,542

• 1) Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and to once a year).

• 2) Such capital surplus arises from the effects of changes in ownership interests in subsidiaries resulting from equity transactions other than actual disposals or acquisitions or from changes in capital surplus of subsidiaries accounted for using the equity method.

• 36 -

• c. Retained earnings and dividend policy

Under the dividends policy as set forth in the Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on distribution of compensation of employees and remuneration of directors before and after amendment, refer to f. employee benefits expense in Note 24.

The Company’s dividend policy also stipulates to meet present and future development projects and takes into consideration the investment environment, funding requirements, international or domestic competitive conditions while simultaneously meeting shareholders’ interests. When there is no cumulative loss, the parent company shall distribute dividends at no less than 50% of the net profit. The dividends may be distributed by either cash or shares, and cash dividends shall not be less than 50% of the total dividends.

Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of earnings for 2020 and 2019 which were approved in the shareholders’ meetings on July 23, 2021 and June 18, 2020, respectively, were as follows:

Legal reserve Cash dividends	Appropriation of Earnings For the Year Ended December 31 2020 2019 $ 104,266 $ 94,744 872,378 793,071	Dividends Per Share (NT$)
		For the Year Ended December 31
		2020 2019 $ 2.09 $ 2

The appropriations of earnings for 2021, which were proposed by the Company’s board of directors on March 21, 2022, were as follows:

March 21, 2022, were as follows:
	Appropriation		Dividends Per
	of	Earnings	Share (NT$)
Legal reserve	$	146,908
Cash dividends		1,251,274	$ 3

The appropriation of earnings for 2021 is subject to resolution in the shareholders’ meeting to be held on June 10, 2022.

• 37 -

d. Treasury shares

Treasury shares
		Shares Held by
		Subsidiary -
	Shares	Ming Yu
	Transferred to	Investment
	Employees	Corporation		Total
	(In Thousands	(In Thousands		(In Thousands
	of Shares)	of	Shares)	of Shares)
Number of shares at January 1, 2021	2,891		2,499	5,390
Additions	-		-	-
Less	-		(2,499)	(2,499)
Number of shares at December 31, 2021	2,891		-	2,891
Carrying amount at December 31, 2021	$ 49,938	$	-	$ 49,938
Number of shares at January 1, 2020	2,891		4,000	6,891
Additions	-		-	-
Less	-		(1,501)	(1,501)
Number of shares at December 31, 2020	2,891		2,499	5,390
Carrying amount at December 31, 2020	$ 49,938	$	43,175	$ 93,113

For the years ended December 31, 2021 and 2020, the Company’s shares were held by its subsidiary-Ming Yu Investment Corporation. Ming Yu Investment Corporation sold 2,499 and 1,501 thousand shares to unrelated parties.

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as the rights to dividends and to vote. The subsidiaries holding treasury shares, however, are bestowed shareholders’ rights, except the rights to participate in any share issuance for cash and to vote.

23. REVENUE

REVENUE
Construction contract revenue Revenue from container repair	For the Year Ended December 31
		2021 $ 11,449,741 164,699 $ 11,614,440	2020 $ 7,117,905 145,990 $ 7,263,895

• 38 -

a. Contact balances

Contact balances
Contract assets Properties construction Retention receivable Less: Allowance for impairment loss Contract liabilities Properties construction		December 31
		2021 $ 1,471,732 1,878,608 (77,948) $ 3,272,392 $ 1,380,717	2020 $ 3,036,146 1,192,876 (38,049) $ 4,190,973 $ 323,755

The movements of the loss allowance of retention receivables were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 38,049 39,899 $ 77,948	2020 $ 24,949 13,100 $ 38,049

• b. Partially completed contracts

As of December 31, 2021 and 2020, the transaction price allocated to contract performance obligations that have not been completed totaled NT$14,884,417 thousand and NT$15,905,650 thousand. The Group shall gradually recognize revenues based on the completion status of the projects. The revenues from the contracts are expected to be recognized before the end of 2023.

24. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS

a. Other income

Dividends income Rental income Others (Note 29)	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2021 $ 122,674 7,642 21,186 $ 151,502	2020 $ 100,549 8,452 16,301 $ 125,302

• 39 -

b. Other gains and losses

Other gains and losses
Gain on disposal of property, plant and equipment Net foreign exchange gains (losses) Impairment loss on investment properties Others Finance costs Interest on bank loans Interest of commercial paper Interest on lease liabilities	For the Year Ended December 31
	2021 2020 $ 5,124 $ 1,173 31 (89) - (3,417) (3,540) (5,696) $ 1,615 $ (8,029) For the Year Ended December 31
		2021 $ 10,668 5,702 237 $ 16,607	2020 $ 11,742 7,180 225 $ 19,147

• c. Finance costs

d. Depreciation and amortization

Property, plant and equipment Right-of-use assets Intangible assets An analysis of deprecation by function Operating costs Operating expenses An analysis of amortization by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2021 $ 130,148 14,093 3,278 $ 147,519 $ 138,437 5,804 $ 144,241 $ 271 3,007 $ 3,278	2020 $ 128,480 9,132 4,310 $ 141,922 $ 132,138 5,474 $ 137,612 $ 1,306 3,004 $ 4,310

• 40 -

e. Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans (Note 20) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2021 $ 14,880 5,268 654,611 $ 674,759 $ 315,934 358,825 $ 674,759	2020 $ 13,881 5,657 537,361 $ 556,899 $ 285,751 271,148 $ 556,899

• f. Compensation of employees and remuneration of directors

According to the Articles of Incorporation of the Company, the Company accrued compensation of employees and remuneration of directors at rates of no less than 0.5% and no higher than 2%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and the remuneration of directors for the years ended December 31, 2021 and 2020, which were approved by the Company’s board of directors on March 21, 2022 and March 10, 2021, respectively, are as follows:

Accrual rate

Accrual rate
Compensation of employees Remuneration of directors Amount	For the Year Ended December 31
	2021 2020 0.50% 0.50% 0.35% 0.44%

Amount
Compensation of employees Remuneration of directors	**For the Year Ended December 31 **
	2021 Cash $ 7,141 5,000	2020
		Cash $ 5,745 5,000

If there is a change in the amounts after the annual independent financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate in the following year.

• 41 -

The Company held board of directors’ meetings on March 10, 2021 and March 16, 2020, and those meetings resulted in the actual amounts of the remuneration of directors paid for 2020 and 2019 to differ from the amounts recognized in the financial statements for the years ended December 31, 2020 and 2019, respectively. The differences were adjusted to profit and loss in the following year.

Amounts approved in the board of directors’ meeting Amounts recognized in the annual financial statements	For the Year Ended December 31	For the Year Ended December 31
	2020 Compensation of Employees Remuneration of Directors $ 5,745 $ 5,000 $ 5,745 $ 5,000	2019
		Compensation of Employees Remuneration of Directors $ 5,407 $ 6,819 $ 5,407 $ 7,000

Information on the compensation of employees and remuneration of directors resolved by the Company’s board of directors in 2021 and 2020 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

25. INCOME TAXES

• a. Income tax recognized in profit or loss

Major components of tax expense (revenue) recognized in profit or loss are as follows:

Current tax In respect of the current year Income tax on unappropriated earning Adjustments for prior years Deferred tax In respect of the current year Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2021 $ 148,027 783 (1,483) 147,327 (9,519) $ 137,808	2020 $ 87,586 2,507 - 90,093 2,602 $ 92,695

A reconciliation of accounting profit and income tax expense is as follows:

Profit before tax Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Tax-exempt income Income tax on unappropriated earning Loss on investments Unrecognized temporary differences Adjustments for prior years’ tax Others Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 1,416,068 $ 283,214 4 (130,607) 783 (4,069) (9,913) (1,483) (121) $ 137,808	2020 $ 1,136,344 $ 227,269 695 (139,053) 2,507 - 1,277 - - $ 92,695

• 42 -

b. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2021

Deferred tax assets Temporary differences Bad debts in excess of the limit Payable for annual leave Unrealized loss on inventories Defined benefit plans Unrealized exchange loss Provision for warranties Exchange differences on translation of the financial statements of foreign Deferred tax liabilities Temporary differences Reserve for land value increment tax Unrealized exchange gain	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income $ - $ 9,285 $ - 5,632 389 - - 4,455 - 41 (41) - 24 (23) - 12,145 69 - - - 118 $ 17,842 $ 14,134 $ 118 $ 65,995 $ - $ - - 4,615 57 $ 65,995 $ 4,615 $ 57	Closing Balance $ 9,285 6,021 4,455 - 1 12,214 118
		$ 32,094
		$ 65,995 4,672
		$ 70,667

For the year ended December 31, 2020

Deferred tax assets Temporary differences Defined benefit plans Payable for annual leave Unrealized exchange loss Provision for warranties	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income Closing Balance $ 4,102 $ (4,275) $ 214 $ 41 4,906 726 - 5,632 - 24 - 24 11,223 922 - 12,145 $ 20,231 $ (2,603) $ 214 $ 17,842 (Continued)

• 43 -

Deferred tax liabilities Temporary differences Reserve for land value increment tax Unrealized exchange gain	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income Closing Balance $ 65,995 $ - $ - $ 65,995 1 (1) - - $ 65,996 $ (1) $ - $ 65,995 (Concluded)

c. Deductible temporary differences for which no deferred tax assets have been recognized in the balance sheets

Deductible temporary differences Impairment loss on financial assets Loss on market price decline Unrealized gain on the transactions with subsidiaries		December 31	December 31
		2021 $ 124,736 - - $ 124,736	2020 $ 145,079 20,114 1,739 $ 166,932

• d. Income tax assessments

The income tax of the Company through 2019 has been assessed by the Tax Authorities.

26. EARNINGS PER SHARE

EARNINGS PER SHARE
Basic earnings per share Diluted earnings per share	Units: NT$ Per Share **For the Year Ended December 31 **
		2021 $ 3.11 $ 3.11	2020 $ 2.65 $ 2.65

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share are as follows:

Net profit for the year

Profit for the year	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 1,278,260	2020 $ 1,043,649

• 44 -

Shares

Unit: In Thousand Shares

	Unit: In Thousand Shares	Unit: In Thousand Shares	Unit: In Thousand Shares
Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Weighted average number of ordinary shares outstanding in the computation of diluted earnings per share	**For the Year Ended December 31 **
		2021 410,803 153 410,956	2020 394,011 159 394,170

The Company may settle the compensation paid to employees in cash or shares; therefore, the Company assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

27. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Company’s overall strategy remains unchanged.

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity attributable to owners of the Company (comprising issued capital, reserves, retained earnings and other equity).

The Company is not subject to any externally imposed capital requirements.

28. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments not measured at fair value

Management believes that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

• 45 -

• b. Fair value of financial instruments measured at fair value on a recurring basis

• 1) Fair value hierarchy

Fair value hierarchy as of December 31, 2021

Level 1 Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares $ 11,798,423 Unlisted shares - ROC - Unlisted shares in other country - $ 11,798,423 Fair value hierarchy as of December 31, 2020 Level 1 Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares $ 5,298,293 Unlisted shares - ROC - Unlisted shares in other country - $ 5,298,293	Level 2 $ - - - $ - Level 2 $ - - - $ -	Level 3 $ - 824,115 121,213 $ 945,328 Level 3 $ - 881,433 149,199 $ 1,030,632	Total $ 11,798,423 824,115 121,213 $ 12,743,751 Total $ 5,298,293 881,433 149,199 $ 6,328,925
Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares Unlisted shares - ROC Unlisted shares in other country

There were no transfers between Levels 1 and 2 in the current and prior periods.

• 2) Reconciliation of Level 3 fair value measurements of financial instruments: None

• 3) Valuation techniques and inputs applied for Level 2 fair value measurement: None

• 4) Valuation techniques and inputs applied for Level 3 fair value measurement: The fair values of unlisted equity securities - ROC were determined using market approach. The market approach is used to arrive at their par values for which the recent financing activities of investees, the market transaction prices of the similar companies and market conditions are considered.

• c. Categories of financial instruments

Financial assets Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities measured at amortized cost (2) Lease liabilities	December 31
	2021 2020 $ 2,383,401 $ 1,475,523 12,743,751 6,328,925 3,199,762 4,659,473 24,904 18,494

• 46 -

• 1) The balances included financial assets at amortized cost, which comprise cash and cash equivalents, notes receivable, trade and other receivables, financial assets at amortized cost and refundable deposits.

• 2) The balances included financial liabilities measured at amortized cost, which comprise notes payable and trade payables, other payables, guarantee deposits received, short-term borrowings, short-term bills payable, current portion of long-term borrowings and long-term borrowings.

d. Financial risk management objectives and policies

The Company’s major financial instruments include equity investments, trade receivable, trade payables, borrowings and lease liabilities. The Company’s Corporate Treasury function coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

There had been no change to the Company’s exposure to market risks or the manner in which these risks were managed and measured.

• a) Foreign currency risk

The Company had foreign currency sales and purchases, which exposed the Company to foreign currency risk.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the year are set out in Note 32.

Sensitivity analysis

The Company was mainly exposed to the Currency USD and Currency RMB.

The Company analyzes its sensitivity’s increase and decrease in New Taiwan dollars (the functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the year for a 5% change in foreign currency rates.

• b) Interest rate risk

The Company was exposed to interest rate risk because entities in the Company borrowed funds at both fixed and floating interest rates.

• 47 -

The carrying amount of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows.

Fair value interest rate risk Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities Sensitivity analysis	December 31
	2021 2020 $ 574,841 $ 2,807,665 574,312 571,875 500,000 300,000

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2021 and 2020 would have increased/decreased by $372 thousand and $1,359 thousand, respectively, which was mainly attributable to the Company’s exposure to interest rates on its variable-rate bank borrowings, time deposits and demand deposits.

c) Other price risk

The Company was exposed to equity price risk through its investments in listed equity securities. The Company’s equity price risk was mainly concentrated on equity instruments operating in Taiwan industry sector quoted in the Taiwan Stock Exchange.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 3% higher/lower, pre-tax profit for years ended December 31, 2021 and 2020 would have increased/decreased by $382,313 thousand and $189,868 thousand, respectively, as a result of the changes in fair value of financial assets as FVTOCI.

The Company’s sensitivity to equity prices increased due to the impact of equity price fluctuations.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. At the end of the reporting period, the Company’s maximum exposure to credit risk which may cause a financial loss to the Company due to failure of counterparties to discharge an obligation and financial guarantees provided by the Company could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

• 48 -

In order to minimize credit risk, management of the Company is responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowances are made for irrecoverable amounts. In this regard, management believes the Company’s credit risk was significantly reduced.

The Company’s concentration of credit risk of 42% and 45% of total trade receivables as of December 31, 2021 and 2020, respectively, was related to the Company’s five largest customers. The credit concentration risk of the remaining trade receivables is relatively insignificant.

3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Company’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Company relies on bank borrowings as a significant source of liquidity. As of December 31, 2021 and 2020, the Company had available unutilized bank loan facilities set out in (b) below.

• a) Liquidity and interest rate risk tables for non-derivative financial liabilities

The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed upon repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The tables included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To the extent that interest flows are at floating rates, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

December 31, 2021 Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities	Less than 1 Year $ 2,007,859 13,793 - 549,958 $ 2,571,610	1-5 Years $ 141,965 11,339 510,066 - $ 663,370	5+ Years $ - - - - $ -

• 49 -

December 31, 2020

Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities	Less than 1 Year $ 1,613,362 8,908 326,622 2,489,719 $ 4,438,611	1-5 Years $ 216,101 9,835 349,051 308,147 $ 883,134	5+ Years $ - - 1,261,543 - $ 1,261,543

b) Financing facilities

Unsecured bank facility Amount used Amount unused Secured bank facility Amount used Amount unused		December 31	December 31
		2021 $ 1,051,335 5,732,665 $ 6,784,000 $ 600,000 780,000 $ 1,380,000	2020 $ 2,510,000 3,985,000 $ 6,495,000 $ 580,000 800,000 $ 1,380,000

29. TRANSACTIONS WITH RELATED PARTIES

In addition to information disclosed elsewhere in the other notes, details of transactions between the Company and other related parties are disclosed below.

• a. Related parties and their relationships

Related Party Relationship with the Company Evergreen International Corporation Investor that has significant influence over the Company EVA Airways Corporation Related party in substance Evergreen Security Corporation Related party in substance Ever Accord Construction Corporation Related party in substance Evergreen Logistics Corporation Related party in substance Evergreen Marine Corporation Related party in substance Hsin Yung Enterprise Corporation Subsidiary Super Max Engineering Enterprise Co., Ltd. Subsidiary Ever Ecove Corporation Subsidiary Ming Yu Investment Corporation Subsidiary

• 50 -

b. Sales of goods

Related Party Related party in substance	For the Year Ended	For the Year Ended	December 31
		2021 $ 666,239	2020 $ 507,493

The sales conditions for related parties in substance were not significantly different from those sales made to the Company’s usual price list. There was no comparable sales price between non-related parties and related party in substance for repairing containers.

• c. Other income

Other income
Related Party Subsidiaries	For the Year Ended		December 31
		2021 $ 2,603	2020 $ 3,008

• d. Purchases of goods and expenses

Related Party Investors that has significant influence over the Company Substances Related party in substance	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2021 $ 8,434 - 14,960 $ 23,394	2020 $ 9,886 15 15,832 $ 25,733

The purchases to related parties had no significant differences with other non-related parties.

e. Contract assets

Related Party Related party in substance		December 31	December 31
		2021 $ 108,229	2020 $ 303,337

For the years ended December 31, 2021 and 2020, impairment loss of $4,654 thousand and $2,652 thousand, respectively, was recognized for contract assets from related parties.

• f. Receivables from related parties

Trade receivables

Related Party Related party in substance Other receivables Related Party Subsidiaries		December 31	December 31
		2021 2020 $ 32,275 $ 151,094 December 31
		2021 $ 126	2020 $ 126

• 51 -

The outstanding trade receivables from related parties are unsecured.

• g. Payables to related parties

Other payables

Related Party Investors that has significant influence over the Company Related party in substance Subsidiaries		December 31	December 31
		2021 $ 1,368 1,301 - $ 2,669	2020 $ 1,733 1,257 15 $ 3,005

The outstanding trade payables to related parties are unsecured.

• h. Lease arrangements

Line Item Related Party Right-of-use assets Investors that has significant influence over the Company Lease liabilities Investors that has significant influence over the Company		December 31	December 31
		2021 $ - $ -	2020 $ 1,004 $ 1,015

The Company rents other equipment from Evergreen International Corporation for $85 thousand per month, and the lease terms is from January 2019 to December 2021. However, the Company terminated the agreement in advance in May 2021, and recognized the gain on lease modification of $7 thousand.

• i. Compensation of key management personnel

Short-term employee benefits Post-employment benefits Share-based payments	For the Year Ended	For the Year Ended	December 31
		2021 $ 22,879 933 656 $ 24,468	2020 $ 21,548 1,704 - $ 23,252

30. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, letters of credit issuance, projects performance and performance guarantees, etc.

performance and performance guarantees, etc.
Property, plant, and equipment, net Financial assets at amortized cost		**December 31 **
		2021 $ 1,946,935 3,600 $ 1,950,535	2020 $ 1,995,432 3,600 $ 1,999,032

• 52 -

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Company as of December 31, 2021 and 2020 were as follows:

a. As of December 31, 2021 and 2020, unused letters of credit for purchasing of materials are as follows:

Currency NTD USD	December 31
	2021 2020 $ 283,947 $ 472,963 - 984

32. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Company’ significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between the foreign currencies and the respective functional currencies were as follows:

December 31, 2021

Unit: In Thousands of Foreign Currencies/New Taiwan Dollars

	Foreign	Foreign		Carrying	Carrying
	Currency		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	119	27.68 (USD:NTD)	$	3,289
Non-monetary items
Investments accounted for using the equity
method
RMB		3,785	4.344 (RMB:NTD)		16,444
Financial liabilities
Monetary items
RMB		949	4.344 (RMB:NTD)		4,121

• 53 -

December 31, 2020

Unit: In Thousands of Foreign Currencies/New Taiwan Dollars

	Foreign	Foreign		Carrying
	Currency		Exchange Rate	Amount
Financial assets
Non-monetary items
Investments accounted for using the equity
method
RMB	$	2,939	4.377 (RMB:NTD)	$ 12,866
Financial liabilities
Monetary items
RMB		1,094	4.377 (RMB:NTD)	4,789

33. SEPARATELY DISCLOSED ITEMS

• a. Information on significant transactions and information on investees:

• 1) Financing provided: None.

• 2) Endorsements/guarantees provided: See Table 1 below.

• 3) Marketable securities held (excluding investment in subsidiaries, associates and jointly controlled entities): See Table 2 below.

• 4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: See Table 3 below.

• 5) Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: None.

• 6) Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None.

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 4 below.

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.

• 9) Trading in derivative instruments: None.

• 10) Information on investees: See Table 5 below.

• 54 -

• b. Information on investments in mainland China:

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. See Table 6 below.

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: None.

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

  • c) The amount of property transactions and the amount of the resultant gains or losses.

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purpose.

  • e) The highest balance, the ending balance, the interest rate range, and total current period interest with respect to financing of funds.

  • f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receipt of services.

• c. Information on major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder: See Table 7 attached.

34. OTHERS

The Company’s assessment of COVID-19 has little impact on the overall operations; however, the international epidemic is still uncertain. The Company will continue to pay attention to the development of the epidemic and take relevant counter measurements to alleviate the impact on the Company’s operations.

• 55 -

TABLE 1

EVERGREEN STEEL CORPORATION

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note 1)	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limit on Endorsement/ Guaranteed Amount Provided to Each Guarantee Party	Maximum Amount Endorsed/ Guaranteed During the Period	Ending Balance	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China	Note
		Name	Relationship
0	Evergreen Steel Corporation	Ever Ecove Corporation	Subsidiary	$ 11,604,477	$ 3,087,000	$ 3,087,000	$ 2,142,000	$ -	13.30	$ 11,604,477	Y	-	-	Note 2
1	Ming Yu Investment Corporation	Evergreen Steel Corporation	Parent Company	4,973,591	1,201,220	1,201,220	1,201,220	-	483.04	4,973,591	-	Y	-	Note 3

• Note 1: The Company and its subsidiaries are numbered as follows:

• a. “0” for the Company.

• b. Subsidiaries are numbered from “1”.

• Note 2: The limit on endorsements or guarantees provided to each guaranteed party is up to 50% of the net worth value of the latest financial statements of the Company. However, the amount of the Company’s endorsements or guarantees for subsidiaries holding more than 50% of the shares is not limited by the above ratio, but the maximum shall not exceed 50% of the net value of the most recent financial statements of the Company.

• Note 3:

• According to endorsement or guarantee provided regulation formulated by subsidiaries, the total amount of endorsement or guarantee that the Company is allowed to provide is up to 2,000% of the net worth value of the latest financial statements of the Company.

Note 4: The limit on endorsements or guarantees provided to each guaranteed party is up to 50% of the net worth value of the latest financial statements of the Company. However, the amount of endorsements or guarantees for subsidiaries is not limited by the above ratio, but the maximum shall not exceed 200% of the net value of the most recent financial statements of the Company.

• 56 -

TABLE 2

EVERGREEN STEEL CORPORATION

MARKETABLE SECURITIES HELD DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2021	December 31, 2021		Note
				Number of Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
Evergreen Steel Corporation	Ordinary shares EVA Airways Corporation Shin Kong Financial Holding Co., Ltd. Evergreen Marine Corporation Taiwan High Speed Rail Corporation Taiwan Terminal Services Corporation Taiwan Aerospace Corporation Pacific Resources Corporation Taiwan Incubator SME Development Corporation. Evergreen Heavy Industrial Corp. (Malaysia) Berhad Dongwei Transportation Co., Ltd. Ever Accord Construction Corporation UNI Airways Corporation Evergreen Security Corporation	Investee of the Company’s mainly shareholders - Investee of the Company’s mainly shareholders - Investee of the Company’s mainly shareholders - - - - - Investee of the Company’s mainly shareholders Investee of the Company’s mainly shareholders Investee of the Company’s mainly shareholders	Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current	206,973 7,931 38,262 16,000 100 5,503 591 7,689 6,679 660 7,500 56,475 10	$ 5,784,889 87,641 5,452,293 473,600 1,035 62,522 - 65,342 121,213 7,940 70,755 616,375 146	3.99 0.06 0.72 0.28 1.00 4.06 2.56 10.90 13.39 18.86 12.50 14.99 0.05	$ 5,784,889 87,641 5,452,293 473,600 1,035 62,522 - 65,342 121,213 7,940 70,755 616,375 146

• 57 -

TABLE 3

EVERGREEN STEEL CORPORATION

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance (Note)	Beginning Balance (Note)	Acquisition	Acquisition		Disposal	Disposal		Ending Balance (Note)	Ending Balance (Note)
					Number of Shares (In Thousands)	Amount	Number of Shares (In Thousands)	Amount	Number of Shares (In Thousands)	Amount	Carrying Amount	Gain (Loss) on Disposal	Number of Shares (In Thousands)	Amount
Evergreen Steel Corporation	Ordinary shares - EVA Airways Corporation	Financial assets at FVTOCI - non-current	-	Related party in substance	240,604	$ 3,478,403	100	$ 1,576	33,731	$ 653,692	$ 487,664	$ 166,028	206,973	$ 2,992,315

Note: Valuation adjustments at year-end are not included.

• 58 -

TABLE 4

EVERGREEN STEEL CORPORATION

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Purchaser/Seller	Related Party	Relationship		Transaction Details	Transaction Details		Differences in Transaction Terms Compared to Third Party Transactions	Differences in Transaction Terms Compared to Third Party Transactions	Notes/Accounts (Payable) or Receivable	Notes/Accounts (Payable) or Receivable	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Evergreen Steel Corporation	Ever Accord Construction Corporation Evergreen Marine Corporation	Related party in substance Related party in substance	Sale Sale	$ 512,308 153,929	4.41 1.33	30-60 days 15-45 days	No significant difference Note 2	No significant difference No significant difference	$ - 32,273	- 2.00	Note 1

Note 1: The amount of contract assets of $106,275 thousand was generated by the transaction between the Company and its related party in substance.

Note 2: No similar prices on revenue from containers repair to compare with related party in substance.

• 59 -

TABLE 5

EVERGREEN STEEL CORPORATION

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ACCOUNTED FOR FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2021	Balance as of December 31, 2021	Balance as of December 31, 2021	Net Income (Losses) of the Investee	Share of Profits/ Losses of Investee	Note
				December 31, 2021	December 31, 2020	Shares (In Thousands)	Percentage of Ownership (%)	Carrying Amount
Evergreen Steel Corporation Super Max Engineering Enterprise Co., Ltd.	Hsin Yung Enterprise Corporation Super Max Engineering Enterprise Co., Ltd. Ever Ecove Corporation Ming Yu Investment Co., Ltd. Kun Lin Engineering Co., Ltd.	Taiwan Taiwan Taiwan Taiwan Taiwan	Waste treatment, disposal and cogeneration Waste collection, treatment and disposal Waste treatment, disposal and cogeneration Investment activities Planning of wastewater, air and noise prevention; design, construction, sale, operation and maintenance of related equipment	$ 992,666 594,441 801,000 239,487 18,000	$ 992,666 594,440 801,000 239,487 18,000	99,267 24,147 80,100 10,350 5,000	68.46 48.13 50.06 100.00 50.00	$ 2,174,561 919,737 763,964 248,680 157,509	$ 603,995 293,409 (33,444) (7,597) 63,782	$ 413,493 141,208 (16,743) (7,597) 31,891	Subsidiary Subsidiary Subsidiary Subsidiary Accounted for using the equity method

Note: Refer to Table 6 for information on investments in mainland China.

• 60 -

TABLE 6

EVERGREEN STEEL CORPORATION

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Foreign Currency Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital		Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Investment of Flows	Investment of Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2021	Net Income (Losses) of the Investee Company	Percentage of Ownership	Share of Profits (Losses)	Carrying Amount as of December 31, 2021	Accumulated Inward Remittance of Earnings as of December 31, 2021	Note
							Outflow	Inflow
Kunshan Weisheng Environmental Equipment Engineering Co., Ltd.	Design, manufacture and installation of waste water, waste gas equipment and various piping		$ 11,072 (US$ 400)		c	$ 11,072 (US$ 400)	$ -	$ -	$ 11,072 (US$ 400)	$ 22,995 (RMB 5,297)	24.07	$ 5,533	$ 16,444	$ 42,296 (US$ 1,528)
Accumulated Investments in Mainland China as of December 31, 2021		Investment Amount Authorized by the Investment Commission, MOEA				Upper Limit on Investment
$ 11,072 (US$ 400)		$ 11,072 (US$ 400) (Note 3)				$ 15,769,516

Note 1: Investment methods are classified into the following three categories:

• a. Directly invest in a company in Mainland China.

• b. Through investing in an existing company in the third area, which then invested in the investee in Mainland China. c. Others.

Note 2: The amount was recognized based on the audited financial statements.

• Note 3: Investments approved by the Ministry of Economic Affairs, ROC are as follows:

Name of Investee Date Order No. Kunshan Weisheng Environmental Equipment Engineering Co., Ltd. 2007.6.15 09600201610 Kunshan Weisheng Environmental Equipment Engineering Co., Ltd. 2008.1.25 09700027430 Kunshan Weisheng Environmental Equipment Engineering Co., Ltd. 2008.7.22 09700252240	Approved Amounts US$ 200 US$ 100 US$ 100 US$ 400

• 61 -

TABLE 7

EVERGREEN STEEL CORPORATION

INFORMATION ON MAJOR SHAREHOLDERS DECEMBER 31, 2021

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Evergreen International Corporation EVA Airways Corporation Continental Engineering Corp. Chang, Kuo-Hua Chang, Kuo-Ming Chang, Kuo-Cheng Chang Yung-Fa Foundation	91,101,257 38,201,625 25,645,907 25,008,820 25,008,820 25,008,820 25,008,820	21.69 9.09 6.10 5.95 5.95 5.95 5.95

• Note 1: The information on the major shareholder listed in the table above is based on the total number of ordinary and preference shares (including treasury shares) owned by the shareholder at a minimum shareholding percentage of 5%, and which have been delivered as non-physical securities to the Taiwan Depository & Clearing Corporation on the last business day at the end of the quarter. The actual number of shares delivered as non-physical securities and the number of shares recorded in the Company’s financial statements may be different due to differences in the basis of preparation and calculation.

• Note 2: According the above information, the delivery of shares to the trust by shareholders is disclosed by the individual trustee who opened the trust account. In accordance with the Securities Exchange Act, shareholders who acquire more than 10% of shareholding have to disclose their insider ownerships, including their own shares held and those delivered to the trust over which shareholders have the right to make decisions on trust property, etc. Information on insider ownership declaration is available at the Market Observation Post System website of the Taiwan Stock Exchange.

• 62 -

EVERGREEN STEEL CORPORATION

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item Major Accounting Items in Assets, Liabilities and Equity Statement of cash and cash equivalents Statement of trade receivables Statement of inventories Statement of FVTOCI - non-current Statement of changes in investments accounted for using equity method Statement of changes in property, plant and equipment Statement of changes in accumulated depreciation of property, plant and equipment Statement of changes in investment properties Statement of changes in accumulated depreciation of investment properties Statement of deferred income tax assets Statement of trade payable Statement of other payable Statement of deferred income tax liabilities Major Accounting Items in Profit or Loss Statement of net revenue Statement of operating cost Statement of selling and marketing expenses Statement of general and administrative expenses Statement of labor, depreciation and amortization by function

Statement Index

1 2 3 4 5 Note 12 Note 12 Note 14 Note 14 Note 25 6 Note 18 Note 25 7 8 9 9 10

• 63 -

STATEMENT 1

EVERGREEN STEEL CORPORATION

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Remark Cash on hand Cash in banks Checking accounts and demand deposits Note Time deposits	Amount $ 2,815 170,937 566,000 $ 739,752

Note: Includes US$119 thousand at $27.68.

• 64 -

STATEMENT 2

EVERGREEN STEEL CORPORATION

STATEMENT OF TRADE RECEIVABLE DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Client Name Client A Client B Client C Client D Client E Client F Others (Note)	Amount $ 310,421 247,941 137,217 86,049 83,590 79,149 628,656 $ 1,573,023

Note: The amount of individual client included in others does not exceed 5% of the account balance.

• 65 -

STATEMENT 3

EVERGREEN STEEL CORPORATION

STATEMENT OF INVENTORIES DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Raw materials Supplies		Amount
		Cost Net Realizable Value $ 3,156,992 $ 3,141,252 8,447 1,914 $ 3,165,439 $ 3,143,166

• 66 -

STATEMENT 4

EVERGREEN STEEL CORPORATION

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Investees EVA Airways Corporation Shin Kong Financial Holding Co., Ltd. Evergreen Marine Corporation Taiwan High Speed Rail Corporation Taiwan Terminal Services Corporation Taiwan Aerospace Corporation Pacific Resources Corporation. Taiwan Incubator SME Development Corporation Evergreen Heavy Industrial Corp. (Malaysia) Berhad Dongwei Transportation Co., Ltd. Ever Accord Construction Corporation UNI Airways Corporation Evergreen Security Corporation	Balance at January 1, 2021 Number of Shares (In Thousands) Amount 240,604 $ 3,163,939 7,934 69,903 38,262 1,557,251 16,000 507,200 100 818 5,503 61,534 2,625 - 7,689 62,142 6,679 149,199 660 6,641 7,500 49,066 56,475 701,091 10 141 $ 6,328,925	Additions in Investment (Note 1) Number of Shares (In Thousands) Amount 100 $ 3,108,614 447 22,607 - 3,895,042 - - - 217 - 988 - - - 3,200 - - - 1,299 - 21,689 - - - 5 $ 7,053,661	Decrease in Investment (Note 2) Number of Shares (In Thousands) Amount (33,731) $ (487,664) (450) (4,869) - - - (33,600) - - - - (2,034) - - - - (27,986) - - - - - (84,716) - - $ (638,835)	Balance at December 31, 2021 Number of Shares (In Thousands) Amount Collateral 206,973 $ 5,784,889 N/A 7,931 87,641 N/A 38,262 5,452,293 N/A 16,000 473,600 N/A 100 1,035 N/A 5,503 62,522 N/A 591 - N/A 7,689 65,342 N/A 6,679 121,213 N/A 660 7,940 N/A 7,500 70,755 N/A 56,475 616,375 N/A 10 146 N/A $ 12,743,751
	Number of Shares (In Thousands) 240,604 7,934 38,262 16,000 100 5,503 2,625 7,689 6,679 660 7,500 56,475 10	Number of Shares (In Thousands) 100 447 - - - - - - - - - - -	Number of Shares (In Thousands) (33,731) (450) - - - - (2,034) - - - - - -	Number of Shares (In Thousands) 206,973 7,931 38,262 16,000 100 5,503 591 7,689 6,679 660 7,500 56,475 10

Note 1: The increase in investment based on purchase of financial assets at FVTOCI was 547 thousand shares which amounted to $5,240 thousand; and unrealized (loss) gain on financial assets at FVTOCI was $7,048,421 thousand.

Note 2: The decrease in investment from disposal of financial assets at FVTOCI was 34,181 thousand shares which amounted to $492,533 thousand; and unrealized (loss) gain on financial assets at FVTOCI was $146,302 thousand, and investee capital reduction to cover accumulated deficit reduced 2,034 thousand ordinary shares.

• 67 -

STATEMENT 5

EVERGREEN STEEL CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investees Hsin Yung Enterprise Corporation (Note 1) Super Max Engineering Enterprise Co., Ltd. (Note 2) Ever Ecove Corporation (Note 3) Ming Yu Investment Corporation (Note 4)	Balance at January 1, 2021 Shares (In Thousands) Amount 99,267 $ 1,753,091 16,098 825,841 80,100 780,765 10,350 289,005 $ 3,648,702	Additions in Investment Shares (In Thousands) Amount - $ 504,483 8,049 982 - - - 187,272 $ 692,737	Increase Decrease in Investment (Decrease) in Shares Using the (In Thousands) Amount Equity Method - $ (496,506) $ 413,493 - (48,294) 141,208 - (58) (16,743) - (220,000) (7,597) $ (764,858) $ 530,361	Balance at December 31, 2021 Market Value Shares or Net Assets (In Thousands) % Amount Value Collateral 99,267 68.46 $ 2,174,561 $ 2,174,561 N/A 24,147 48.13 919,737 919,737 N/A 80,100 50.06 763,964 763,964 N/A 10,350 100.00 248,680 248,680 N/A - $ 4,106,942 $ 4,106,942
	Shares (In Thousands) 99,267 16,098 80,100 10,350	Shares (In Thousands) - 8,049 - -	Shares (In Thousands) - - - -	Shares (In Thousands) % 99,267 68.46 24,147 48.13 80,100 50.06 10,350 100.00 -

• Note 1: The increase in the transactions with subsidiaries that was realized was $1,739 thousand; investment based on the proportion of unrealized (losses) gains on financial assets at FVTOCI was $502,744 thousand. The decrease in investment based on the proportion of net defined benefit was $173 thousand; and based on issued cash dividends was $496,333 thousand.

• Note 2: The increase in investment based on the proportion of net defined benefits was $921 thousand; and investment based on shares of subsidiary capital increase was $1 thousand, and on the proportion of foreign currency exchange was $60 thousand. The decrease in investment was based issued cash dividends was $48,294 thousand.

Note 3: The decrease in investment based on the proportion of net defined benefit was $58 thousand.

• Note 4: The increase in invested company due to the sale of treasury shares was $149,795 thousand (reversal accounted for using equity method); investment based on the proportion of unrealized (losses) gains on financial assets at FVTOCI was $37,477 thousand. The decrease in investment based on issued cash dividends was $220,000 thousand.

• 68 -

STATEMENT 6

EVERGREEN STEEL CORPORATION

STATEMENT OF TRADE PAYABLES DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Client Name Client A Client B Client C Others	Amount Note $ 247,110 235,729 111,252 1,044,291 Note $ 1,638,382

Note: The amount of individual client included in others does not exceed 5% of the account balance.

• 69 -

STATEMENT 7

EVERGREEN STEEL CORPORATION

STATEMENT OF NET REVENUE FOR THE YEARS ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Tonnage Construction contract revenue 214,233 Revenue from container repair - Less: Sales return	Amount $ 11,449,741 168,944 (4,245) $ 11,614,440

• 70 -

STATEMENT 8

EVERGREEN STEEL CORPORATION

STATEMENT OF OPERATING COST FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Inventory balance at the beginning of the year Add: Purchases, net Less: Inventory balance at the end of the year Others Materials consumed Direct labor Manufacturing expenses Manufacturing cost Other cost of goods sold Add: Sales of material Loss on disposal of inventories Less: Sales scraps Cost of goods sold for manufacturing sector Invested construction cost Other cost of goods sold Add: Others Loss on disposal of inventories Less: Sales scraps Cost of goods sold for construction sector

Amount $ 3,404 17,042 (3,286) (3,113) 14,047 53,636 65,904 133,587 47 16 (474) 133,176 10,341,591 2,865 2,143 (85,560) 10,261,039 $ 10,394,215

• 71 -

STATEMENT 9

EVERGREEN STEEL CORPORATION

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Selling and Marketing Expenses General and Administrative Expenses Payroll and related expenses $ 232,527 $ 81,427 Insurance expenses 24,424 5,157 Others (not exceeding 5%) 40,503 53,354 $ 297,454 $ 139,938	Total $ 313,954 29,581 93,857 $ 437,392

• 72 -

STATEMENT 10

EVERGREEN STEEL CORPORATION

STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

Labor cost Salary Labor and health insurance Pension Board compensation Others Depreciation Amortization	2021	Total $ 555,436 42,105 20,148 12,520 44,550 $ 674,759 $ 144,241 $ 3,278	2020
	Classified as Cost of Goods Sold Classified as Operating Expenses $ 254,002 $ 301,434 24,613 17,492 9,737 10,411 - 12,520 27,582 16,968 $ 315,934 $ 358,825 $ 138,437 $ 5,804 $ 271 $ 3,007		Classified as Cost of Goods Sold Classified as Operating Expenses $ 233,599 $ 221,682 21,096 16,425 9,684 9,854 - 12,967 21,372 10,220 $ 285,751 $ 271,148 $ 132,138 $ 5,474 $ 1,306 $ 3,004	Total $ 455,281 37,521 19,538 12,967 31,592 $ 556,899 $ 137,612 $ 4,310

Note:

1. As of December 31, 2021 and 2020, the Company had 596 and 570 employees, respectively. Among them 7 directors did not serve concurrently as employees for both years.

2. a. For the years ended December 31, 2021 and 2020, the average labor cost was $1,124 thousand and $966 thousand, respectively.

3. b. For the years ended December 31, 2021 and 2020, the average salary was $943 thousand and $809 thousand, respectively.

4. c. The change in average salary was 16.56%.

5. d. The Company had set an independent director, so it did not have supervisors for the years ended December 31, 2021 and 2020.

6. e. The remuneration policies of the Company’s directors, managers and employees are described as follows:

   • 1) General directors and independent directors

In accordance with the Articles of Incorporation and the remuneration payment regulations for directors, if the Company has distributable profit of the current year, the ratio set for directors’ remuneration shall not be higher than 2% of distributable profit; and in the total amount of directors’ remuneration, individual directors’ remuneration shall be allocated according to the degree of each directors’ participation in the operation of the Company and the value of their contributions, as well as take into account the general pay levels of the industry.

• 2) Remuneration of the general manager and the vice general manager is regulated in accordance with the remuneration payment regulations for managerial officers and is paid according to the Company’s overall operating situation and the results of personal performance assessment.

• 3) Fixed remuneration of the Company’s employees is paid in accordance with the salary standard of each position and is adjusted according to the Company’s revenue status, the general pay levels of the market and personal performance. In addition, variable remuneration such as employees’ compensation and year-end bonus is paid in accordance with the Articles of Incorporation or the Company’s operating result and personal performance.

• 4) Remuneration of the directors and managerial officers shall be reviewed by the Company’s remuneration committee and approved by the board of directors.

• 73 -