EGST — Audit Report / Information 2021

Dec 29, 2021

Evergreen Steel Corporation and Subsidiaries

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

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2021 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard No. 10 “Consolidated Financial Statements”. In addition, the information required to be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Consequently, Evergreen Steel Corporation did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

EVERGREEN STEEL CORPORATION

By

KENG-LI LIN Chairman

March 21, 2022

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Evergreen Steel Corporation

Opinion

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

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and 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 Consolidated Financial Statements section of our report. We are independent of the Group 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 consolidated financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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The key audit matters identified in the Group’s consolidated 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 contract 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.

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 25 for critical accounting judgments and key sources of estimation uncertainty.

Other Matter

We have also audited the parent company only financial statements of Evergreen Steel Corporation as of and for the years ended December 31, 2021 and 2020 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, IAS, IFRIC and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’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 Group 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 Group’s financial reporting process.

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Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 consolidated financial statements.

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

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

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 Group’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 Group’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 consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated 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 Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

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

Deloitte & Touche Taipei, Taiwan Republic of China March 21, 2022

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated 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 consolidated financial statements are those generally applied in the Republic of China.

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

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EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED 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 32) Contract assets - current (Notes 4, 23, 25 and 31) Notes receivable, net (Notes 4 and 23) Trade receivables, net (Notes 4, 9 and 23) Trade receivables from related parties, net (Notes 4, 9, 23 and 31) Other receivables (Note 27) Inventories (Notes 4, 10 and 23) Other current assets (Note 17) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 7) Financial assets at amortized cost - non-current (Notes 4, 8 and 32) Investments accounted for using equity method (Notes 4 and 12) Property, plant and equipment (Notes 4, 13 and 32) Right-of-use assets (Notes 4 and 14) Investment properties (Notes 4, 15 and 32) Intangible assets (Notes 4 and 16) Deferred tax assets (Notes 4 and 27) Refundable deposits Net defined benefit assets - non-current (Notes 4 and 22) Other non-current assets (Note 17) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 18) Short-term bills payable (Note 18) Contract liabilities - current (Notes 4, 23 and 25) Notes payable, net (Note 23) Trade payable, net (Notes 19 and 23) Other payables (Notes 20 and 31) Current tax liabilities (Notes 4 and 27) Provisions - current (Notes 4 and 21) Lease liabilities - current (Notes 4 and 14) Current portion of long-term borrowings (Note 18) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 18) Deferred tax liabilities (Notes 4 and 27) Lease liabilities - non-current (Notes 4 and 14) Net defined benefit liabilities - non-current (Notes 4 and 22) Guarantee deposits received Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 24) 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 attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL		2021 Amount % $ 4,313,668 13 32,894 - 3,272,392 10 38,159 - 1,747,619 5 32,645 - 28,443 - 3,161,609 9 63,520 - 12,690,949 37 13,771,717 40 37,602 - 157,509 1 3,220,187 9 26,378 - 103,528 - 4,223,106 12 61,366 - 9,784 - 3,522 - 181,339 1 21,796,038 63 $ 34,486,987 100 $ 100,000 - 449,937 2 1,388,916 4 394,003 1 1,740,979 5 445,656 1 214,091 1 61,408 - 13,626 - - - 60,890 - 4,869,506 14 3,194,646 10 71,262 - 11,278 - 8,579 - 25,399 - 23,791 - 3,334,955 10 8,204,461 24 4,199,820 12 1,340,352 4 2,294,939 6 6,839,705 20 9,134,644 26 (470) - 8,584,546 25 8,584,076 25 (49,938) - 23,208,954 67 3,073,572 9 26,282,526 76 $ 34,486,987 100		2020
				Amount % $ 4,219,283 18 23,452 - 4,190,973 17 126,910 - 745,136 3 151,458 1 43,468 - 1,008,758 4 175,797 1 10,685,235 44 6,775,512 28 - - 150,799 1 3,408,410 14 20,479 - 105,530 1 2,739,716 11 42,114 - 8,003 - - - 117,404 1 13,367,967 56 $ 24,053,202 100 $ 690,000 3 1,799,171 7 382,809 2 355,383 1 1,172,977 5 406,764 2 175,916 1 60,792 - 8,756 - 300,000 1 56,897 - 5,409,465 22 1,693,469 7 66,187 1 9,738 - 36,024 - 25,234 - 15,516 - 1,846,168 8 7,255,633 30 3,994,260 16 396,542 2 2,190,673 9 6,347,269 26 8,537,942 35 (648) - 1,166,832 5 1,166,184 5 (93,113) - 14,001,815 58 2,795,754 12 16,797,569 70 $ 24,053,202 100

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

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EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED 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 25 and 31) OPERATING COSTS (Notes 10, 22, 26 and 31) GROSS PROFIT OPERATING EXPENSES (Notes 22, 26 and 31) 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 26 and 31) Other gains (losses) (Note 26) Finance costs (Note 26) Share of profit of associates (Note 12) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 27) 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 22) Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 27)		2021 Amount % $ 13,608,597 100 (11,252,685) (83) 2,355,912 17 (314,054) (2) (248,198) (2) (39,722) - (601,974) (4) 1,753,938 13 24,858 - 172,044 1 (11,470) - (16,630) - 31,891 - 200,693 1 1,954,631 14 (350,369) (2) 1,604,262 12 2,213 - 7,839,240 57 (443) - 7,841,010 57		2020
				Amount % $ 9,349,649 100 (7,323,348) (78) 2,026,301 22 (246,318) (3) (232,940) (2) (12,731) - (491,989) (5) 1,534,312 17 26,171 - 166,139 2 2,279 - (19,176) - 25,090 - 200,503 2 1,734,815 19 (330,556) (4) 1,404,259 15 (270) - 1,058,881 11 54 - 1,058,665 11 (Continued)

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EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

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

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Income tax related to items that may be reclassified subsequently to profit or loss (Note 27) Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company Non-controlling interests EARNINGS PER SHARE (Note 28) Basic Diluted		2021 Amount % $ (181) - 423 - 242 - 7,841,252 57 $ 9,445,514 69 $ 1,278,260 9 326,002 3 $ 1,604,262 12 $ 8,886,972 65 558,542 4 $ 9,445,514 69 $ 3.11 $ 3.11		2020
				Amount % $ 711 - (142) - 569 - 1,059,234 11 $ 2,463,493 26 $ 1,043,649 11 360,610 4 $ 1,404,259 15 $ 2,037,957 22 425,536 4 $ 2,463,493 26 $ 2.65 $ 2.65
		$		$
		$		$
		$		$
		$		$
		$		$

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

(Concluded)

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EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED 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 and distribution of 2019 retain earnings Legal reserve Cash dividend 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 Cash dividends distributed by subsidiaries Disposal of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT DECEMBER 31, 2020 Appropriation and distribution of 2020 retain earnings Legal reserve Cash dividend 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 Changes in percentage of ownership interests in subsidiaries Cash dividends distributed by subsidiaries Disposal of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT DECEMBER 31, 2021				Equity Attributable toOwners of theCompany	Equity Attributable toOwners of theCompany	Total Non-controlling Interests $ 12,690,886 $ 2,154,672 - - (793,071 ) - 1,043,649 360,610 994,308 64,926 2,037,957 425,536 52,535 - 4,998 - 8,510 490,486 - (274,940 ) - - 14,001,815 2,795,754 - - (872,378 ) - 100 - 1,278,260 326,002 7,608,712 232,540 8,886,972 558,542 1,042,650 - 149,795 - - (1 ) - (280,723 ) - - $ 23,208,954 $ 3,073,572	Total Equity $ 14,845,558 - (793,071 ) 1,404,259 1,059,234 2,463,493 52,535 4,998 498,996 (274,940 ) - 16,797,569 - (872,378 ) 100 1,604,262 7,841,252 9,445,514 1,042,650 149,795 (1 ) (280,723 ) - $ 26,282,526
		ShareCapital 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 Translation of the Financial Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Statements of Foreign Operations Comprehensive Income Treasury Stock $ (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)
		Shares (In Thousands) 399,426 - - - - - - - - - - 399,426 - - - - - - 20,556 - - - - 419,982

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

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EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED 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 (investment properties included) 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 associates Gain on disposal of property, plant and equipment Net loss on disposal of inventories Impairment loss on investment properties Gain on lease modification Changes in operating assets and liabilities Decrease (increase) in contract assets Decrease (increase) in notes receivable Increase in trade receivables Decrease (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 Increase in other current liabilities Decrease in net defined benefit liabilities Increase in other non-current liabilities Cash generated from 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 Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost	2021 $ 1,954,631 397,178 4,465 39,722 16,630 (24,858) (140,612) 39,660 (31,891) (3,913) 2,159 - (7) 878,682 88,751 (883,493) 14,905 (2,155,010) 112,277 (848) 1,006,107 38,620 568,002 37,357 616 3,993 (27,906) 8,275 1,943,492 24,978 (53,418) (326,390) 1,588,662 (5,240) 848,274 (47,844) 800	2020 $ 1,734,815 393,341 7,017 12,731 19,176 (26,171) (103,458) - (25,090) (573) 4,122 3,417 - (1,431,890) (74,010) (355,455) (22,616) (355,339) (142,906) - 34,020 128,064 182,001 50,916 (18,340) 8,546 (26,191) 4,264 391 26,207 (30,977) (285,189) (289,568) (1,543) 1,646 (9,562) 990 (Continued)

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EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED 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 Increase in other non-current assets Other dividends received Dividends received from associates Net cash used in 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 Proceeds from disposal of treasury shares (Decrease) Increase in non-controlling interests Dividends paid to non-controlling interests 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 $ (194,488) 5,541 (1,781) (1,449,532) (63,935) 140,612 25,000 (742,593) (590,000) (1,349,234) 1,601,177 (400,000) 165 (13,575) (872,378) 1,002,990 149,795 (1) (280,723) 100 (751,684) 94,385 4,219,283 $ 4,313,668	2020 $ (149,939) 854 (465) (1,828,619) (12,052) 103,458 27,000 (1,868,232) 490,000 1,399,302 1,791,127 (150,000) 8,909 (9,825) (788,073) - 52,535 498,996 (274,940) - 3,018,031 860,231 3,359,052 $ 4,219,283

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

(Concluded)

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

EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

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 and environmental protection business. The Company’s steel structure engineering business mainly includes engineering projects of factories, tall buildings and bridges. The Company’s reinvestment on environmental protection business includes general and business waste treatment and cogeneration. 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 consolidated financial statements are presented in the Company’s functional currency, New Taiwan dollars.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated 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 Group’s accounting policies.

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

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

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• 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.

• 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 Group has assessed that the application of other standards and interpretations will not have a material impact on the Group’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.

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• 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 Group 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 Group will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Group must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Group’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 Group’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 Group 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 Group 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 Group 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 Group 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 Group is required to make significant judgments or assumptions in applying an accounting policy, and the Group 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.

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• 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 Group may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Group 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.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’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 consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

• b. Basis of preparation

The consolidated 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.

• 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.

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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

• 3) Liabilities for which the Group 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 Group 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 Group’s construction-related assets and liabilities.

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the parent company and the entities controlled by the parent company (i.e., its subsidiaries). When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the parent company. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the parent company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the parent company.

See Note 11 and Table 6 for detailed information on subsidiaries (including the percentages of ownership and main businesses).

• e. Foreign currencies

In preparing the financial statements of each individual entity, transactions in currencies other than the entity’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.

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For the purpose of presenting the consolidated financial statements, the functional currencies of the parent company and its foreign operations (including subsidiaries and associates that use currencies which are different from the currency of the parent company) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the parent company and non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e., a disposal of the Group’s entire interest in a foreign operation, or a disposal involving the loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

f. Inventories

Inventories consist of raw materials, supplies and inventory in transit. Inventories are stated at the lower of cost and 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 the weighted-average cost on the balance sheet date.

g. Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence and that is not a subsidiary nor an interest in a joint venture.

Investments in associates and joint ventures are accounted for using the equity method.

Under the equity method, investments in an associate and joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the Group’s share of equity of associates and joint ventures attributable to the Group.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

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When the Group subscribes for additional new shares of an associate and a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate and joint venture. The Group 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 Group’s ownership interest is reduced due to its additional subscription of the new shares of the associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture 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.

The entire carrying amount of the investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is deducted from the investment and the carrying amount is net of impairment loss. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

Profits and loss resulting from the Group’s downstream, upstream and sidestream transactions with its associates and joint ventures are recognized in the Group’s consolidated financial statements only to the extent of interests in the associate that are not related to the Group.

h. 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 of 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 methods are reviewed at the end of each reporting period, with the effects of any changes in estimates 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.

• i. 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 property, plant and equipment to investment properties, the deemed cost of an item of property for subsequent accounting is its carrying amount at the end of owner-occupation.

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.

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j. 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 lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.

When the Group has a right to charge for the usage of concession infrastructure (as a consideration for providing construction services in a service concession arrangement), it recognizes this as an intangible asset. The intangible asset is subsequently measured at cost less accumulated amortization and any accumulated impairment loss.

• 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.

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

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset 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 such assets 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 Group 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. Reversals of impairment loss are recognized in profit or loss.

• l. Financial instruments

Financial assets and financial liabilities are recognized the Group 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 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.

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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 Group 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 Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

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• b) Impairment of financial assets and contract assets

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

The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables and contract assets. For all other financial instruments, the Group 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 Group 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 amounts through a loss allowance account.

• c) Derecognition of financial assets

The Group 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 Group 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 Group are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Group’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 parent company’s own equity instruments.

3) Financial liabilities

• a) Subsequent measurement

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

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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.

m. 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 Group’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 Group 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.

• n. Revenue recognition

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

1) Construction contracts revenue

The Group 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 Group 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 Group 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 Group completes all contractual obligations and is recognized as contract assets until the Group satisfies the performance obligations.

2) Energy revenue

The Group signed Commission of Waste Incineration with Taoyuan City Government to deliver general waste from city government and general industrial waste from private enterprise. During operation, the Group will charge waste treatment service fee and recognize revenue from waste treatment. Meanwhile, it will bring out revenue of power generation from Taiwan Power Company.

3) Service concession revenue

The Group signed “Building, Operation and Transfer of Taoyuan City Biomass Energy Center Protocol” with Taoyuan City Government to build and operate infrastructure of biomass energy center. During operation phase, the Group recognizes revenue from waste treatment and power generation when actually providing the services of anaerobic digestion and heat treatment.

• 22 -

• 4) Revenue from the rendering of services

• a) The Group recognized service revenue from waste treatment as the service being provided.

• b) 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.

o. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than those stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

• p. Leases

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

• 1) The Group 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 Group as lessee

The Group 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 consolidated 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 Group uses the lessee’s incremental borrowing rate.

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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 Group 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 consolidated balance sheets.

q. 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.

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 Group’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.

• r. Share-based payment arrangements

The stock option granted to employees is expensed on a straight-line basis over the vesting period, based on the Group’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.

• s. 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.

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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 Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• 3) Current and deferred taxes 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 Group’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 units, total 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 25 for related information.

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6. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash on hand Checking accounts and demand deposits Cash equivalent Time deposits Commercial paper		December 31
		2021 $ 3,138 365,088 3,590,198 355,244 $ 4,313,668	2020 $ 3,145 410,868 3,512,292 292,978 $ 4,219,283

7. FINANCIAL ASSETS AT FVTOCI

Non-current Domestic investments Listed shares and emerging market shares Unlisted shares Foreign investments Unlisted shares		December 31	December 31
		2021 $ 12,826,389 824,115 121,213 $ 13,771,717	2020 $ 5,744,880 881,433 149,199 $ 6,775,512

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

The Group 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 Domestic investments Pledge deposits Restricted bank deposits Non-current Domestic investments Pledge deposits		December	31
		2021 $ 20,661 12,233 $ 32,894 $ 37,602	2020 $ 17,091 6,361 $ 23,452 $ -

Refer to Note 32 for information relating to investments in financial assets at amortized cost pledged as security.

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9. TRADE RECEIVABLES

Trade receivables (including trade receivables from related parties) At amortized cost Gross carrying amount Less: Allowance for impairment loss		**December 31 **	**December 31 **
		2021 $ 1,780,264 - $ 1,780,264	2020 $ 896,771 (177) $ 896,594

The average credit period on sales of goods is 0 to 120 days. In determining the recoverability of a trade receivable, the Group 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 bad debts 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.

The Group 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 Group 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 Group directly recognizes the impairment loss of related accounts receivable. The Group 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 Group’s aging of trade receivables.

December 31, 2021

December 31, 2021
Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost		Amount Without Sign of Default		Amount with Over 120 Sign of Days Default - - $ - $ - - - $ - $ -	Total $ 1,780,264 -
		0 to 60 Days 61 to 90 Days - - $ 1,629,537 $ 150,706 - - $ 1,629,537 $ 150,706	91 to 120 Days - $ 21 - $ 21
					$ 1,780,264

• 27 -

December 31, 2020

December 31, 2020
Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Amount Without Sign of Default		Amount with Over 120 Sign of Days Default - - $ - $ - - - $ - $ -	Total $ 896,771 (177) $ 896,594
	0 to 60 Days 61 to 90 Days 0.02% 0.49% $ 890,842 $ 5,889 (144) (29) $ 890,698 $ 5,860	91 to 120 Days 10% $ 40 (4) $ 36

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:

receivables were as follows:
Balance at January 1 Less: Net remeasurement of loss allowance Balance at December 31	For the Year Ended December 31
		2021 $ 177 (177) $ -	2020 $ 546 (369) $ 177

10. INVENTORIES

Raw material Supplies Inventory in transit		December 31	December 31
		2021 $ 3,141,252 20,357 - $ 3,161,609	2020 $ 979,728 21,827 7,203 $ 1,008,758

The cost 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 is as follows:

Inventory write-downs Loss of inventory scrapped and physical inventories	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 2,159 - $ 2,159	2020 $ 1,495 2,627 $ 4,122

• 28 -

11. SUBSIDIARIES

• a. Subsidiaries included in the consolidated financial statements

Investor Investee Main Business The parent company Hsin Yung Enterprise Corporation Waste treatment, disposal and cogeneration Super Max Engineering Enterprise Co., Ltd. Waste collection, treatment and disposal Ever Ecove Corporation Waste treatment, disposal and cogeneration Ming Yu Investment Corporation Investment activities	% of Ownership December 31 2021 2020 Remark 68.46 68.46 - 48.13 48.13 1) 50.06 50.06 2) 100.00 100.00 -

Remark:

• 1) The Company holds a 48.13% interest in Super Max Engineering Enterprise Co., Ltd. The Company occupies more than half of the board’s seats and has the practical ability to direct the relevant activities of Super Max Engineering Enterprise Co., Ltd. Therefore, the Company deems it a subsidiary.

• 2) 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. Subsidiaries excluded from the consolidated financial statements: None.

12. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

December 31 2021 2020 Associates that are not individually material Kun Lin Engineering Co., Ltd. $ 157,509 $ 150,799 Proportion of Ownership and Voting Rights December 31 Name of Associate 2021 2020 Kun Lin Engineering Co., Ltd. 50% 50% Aggregate Information of Associates That Are Not Individually Material		December 31
	2021 2020 $ 157,509 $ 150,799 Proportion of Ownership and Voting Rights
	**December 31 **

The Group’s share of: Net income for the year	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 31,891	2020 $ 25,090

• 29 -

The Group holds 50% of the issued share capital of Kun Lin Engineering Co., Ltd and controls 50% of the voting power in general meetings. According to the agreement made by the shareholders, the other shareholders control the composition of the board of directors of Kun Lin Engineering Co., Ltd and, therefore, the Group does not have control over them. The directors of the Company, however, consider that the Group does exercise significant influence over Kun Lin Engineering Co., Ltd; therefore, the Group accounts them as associates.

13. 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 Transferred to investment properties 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	Free $ 1	hold Land Land Improvements Buildings Machinery and Equipment Transportation Equipment Other Equipment ,797,045 $ 164,600 $ 2,490,931 $ 4,732,313 $ 109,799 $ 90,242 - - 1,585 48,391 17,337 30,421 - - - (16,124 ) (703 ) (2,936 ) - - - 84,407 - (3,450) ,797,045 $ 164,600 $ 2,492,516 $ 4,848,987 $ 126,433 $ 114,277 - $ 129,356 $ 1,729,623 $ 3,988,749 $ 74,729 $ 54,063 - - - (14,496 ) (703 ) (2,936 ) - 5,519 97,501 257,502 11,433 9,128 - $ 134,875 $ 1,827,124 $ 4,231,755 $ 85,459 $ 60,255 ,797,045 $ 29,725 $ 665,392 $ 617,232 $ 40,974 $ 54,022 Freehold Land Land Improvements Buildings Machinery and Equipment Transportation Equipment $ 1,845,363 $ 164,600 $ 2,405,334 $ 4,694,521 $ 108,289 - - 5,300 15,244 4,917 - - - (9,883 ) (3,407 ) - - 80,297 32,431 - (48,318) - - - - $ 1,797,045 $ 164,600 $ 2,490,931 $ 4,732,313 $ 109,799 $ - $ 123,743 $ 1,634,073 $ 3,737,062 $ 66,575 - - - (9,608 ) (3,401 ) - 5,613 95,344 261,295 11,555 - - 206 - - $ - $ 129,356 $ 1,729,623 $ 3,988,749 $ 74,729 $ 1,797,045 $ 35,244 $ 761,308 $ 743,564 $ 35,070	Property under Construction $ - 15,797 - - $ 15,797 $ - - - $ - $ 15,797 Other Equipment $ 82,376 11,957 (3,885 ) (206 ) - $ 90,242 $ 49,754 (3,885 ) 8,400 (206) $ 54,063 $ 36,179	$	Total $ 9,384,930 113,531 (19,763 ) 80,957 $ 9,559,655 $ 5,976,520 (18,135 ) 381,083 $ 6,339,468 $ 3,220,187 Total 9,300,483 37,418 (17,175 ) 112,522 (48,318) 9,384,930 5,611,207 (16,894 ) 382,207 - 5,976,520 3,408,410
	$ 1
	$
	$
	$ 1
				$
				$
				$
				$

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 5-7 years Other equipment 3-8 years

• 30 -

Due to the changes in the use of certain real estate, property, plant and equipment and investment property held by the Group, the net amount of some property, plant and equipment was $48,318 thousand which was transferred to investment property for the year ended December 31, 2020.

Property, plant and equipment pledged as collateral for bank borrowings were set out in Note 32.

14. 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 Group did not have significant sublease or impairment of right-of-use assets for the years ended December 31, 2021 and 2020.

b. Lease liabilities

Carrying amount Current Non-current Range of discount rates for lease liabilities was as follows:		**December **	**31 **
		2021 $ 13,626 $ 11,278	2020 $ 8,756 $ 9,738

December	31
2021		2020
0.878%-1.1%		1.1%

• 31 -

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

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

d. Other lease information

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
		2021 $ 18,718 $ 32,530	2020 $ 14,812 $ 24,862

15. INVESTMENT PROPERTIES

Cost Balance at January 1, 2021 Additions Balance at December 31, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Balance at December 31, 2021 Carrying amount at December 31, 2021 Cost Balance at January 1, 2020 Transfers from property, plant and equipment Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Impairment losses recognized Depreciation expense Balance at December 31, 2020 Carrying amount at December 31, 2020

Amount $ 302,004 - $ 302,004 $ (196,474) (2,002) $ (198,476) $ 103,528 $ 253,686 48,318 $ 302,004 $ (191,055) (3,417) (2,002) $ (196,474) $ 105,530

For the year ended December 31, 2020, the reclassification of real estate, plant and equipment were set out in Note 13.

• 32 -

The investment properties are depreciated using the straight-line method in 50 years.

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

fair value is as followed:
Fair value		December 31
		2021 $ 190,503	2020 $ 200,106

All of the Group’s investment property were held under freehold interests. The investment properties pledged as collateral for bank borrowings were set out in Note 32.

16. INTANGIBLE ASSETS

Service concession arrangements* Computer software		December 31	December 31
		2021 $ 4,216,463 6,643 $ 4,223,106	2020 $ 2,734,183 5,533 $ 2,739,716

• The subsidiary - Ever Ecove Corporation signed a construction contract of “Building, Operation and Transfer of Taoyuan City Biomass Energy Center” with Taoyuan City Government, and the price of the right to charge public service users which was built by Ever Ecove Corporation, is classified as intangible assets - service concession arrangements. The construction period was from October 2018 to October 2021. Ever Ecove Corporation was able to apply to Taoyuan City Government for a one-time extension. The extension period is limited to 1 year with the consent of Taoyuan City Government. Upon completion of construction, Ever Ecove Corporation shall provide operational services until October 2043. Upon expiration of the service concession arrangement, Ever Ecove Corporation shall return the right of management according to the contract and transfer the ownership of the built biomass energy center and related auxiliary facilities to Taoyuan City Government free of charge.

17. OTHER ASSETS

OTHER ASSETS
Current Prepayments Prepaid expenses Tax credit Non-current Prepayments for equipment		December 31
		2021 $ 38,896 18,204 6,420 $ 63,520 $ 181,339	2020 $ 96,949 28,779 50,069 $ 175,797 $ 117,404

• 33 -

18. BORROWINGS

a. Short-term borrowings

Unsecured borrowings Line of credit borrowings Interest rate range Short-term bills payable Commercial paper Less: Unamortized discounts on short-term bills payable Interest rate range			**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%

b. Short-term bills payable

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

• c. Long-term borrowings

Secured borrowings Bank loans Unsecured borrowings Bank loans Less: Current portion of long-term borrowing Unamortized discount Expiry period Interest rate range		December 31	December 31
		2021 $ 3,210,000 - 3,210,000 - (15,354) $ 3,194,646 2024-2034 0.89%-1.79%	2020 $ 1,990,000 20,000 2,010,000 (300,000) (16,531) $ 1,693,469 2021-2034 0.89%-1.79%

Please refer to Note 32 for details of the collaterals pledged for the above long-term borrowings.

• 34 -

19. TRADE PAYABLES

The average credit period on purchases of certain goods was 30 to 90 days. The Group 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 Group, usually more than twelve months after the reporting period. Refer to Note 23 for maturity analysis of retentions payable.

20. OTHER LIABILITIES

OTHER LIABILITIES
Current Other payables Payables for equipment Payable for transportation fees Payable for tax Payable for repairs and maintenance Payable for annual leave Payable for compensation of employees and remuneration of directors Payable for insurance expenses Payable for salaries or bonus Payable for professional fees Others		**December 31 **
		2021 $ 138,970 57,228 41,237 38,432 38,384 28,753 12,773 8,598 5,816 75,465 $ 445,656	2020 $ 90,524 47,442 11,567 79,162 36,017 27,545 20,107 6,909 8,299 79,192 $ 406,764

21. PROVISIONS

PROVISIONS
Current Warranties* Onerous contract - loss on construction		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.

22. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Group 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.

• 35 -

b. Defined benefit plans

The defined benefit plan adopted by the Group 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 Group 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 Group 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 Group 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 Group has no right to influence the investment policy and strategy.

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

Present value of defined benefit obligation Fair value of plan assets Net defined benefit asset Net defined benefit liability		**December 31 **	**December 31 **
		2021 $ 425,921 $ (420,864) $ (3,522) $ 8,579	2020 $ 446,051 $ (410,027) $ - $ 36,024

Movements in net defined benefit liability were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of		Benefit	Net Defined
	Obligation	the Plan Assets	Liability		Benefit Asset
Balance at January 1, 2021	$ 446,051	$ (410,027)	$	8,549	$	27,475
Service cost
Current service cost	6,756	-		1,264		5,492
Net interest expense
(income)	2,062	(1,972)		29		61
Recognized in profit or loss	8,818	(1,972)		1,293		5,553
Remeasurement
Return on plan assets
(excluding amounts
included in net interest)	-	(5,426)		(439)		(4,987)
Actuarial loss - changes in
demographic assumptions	8,783	-		834		7,949
Actuarial loss - changes in
financial assumptions	(4,906)	-		(640)		(4,266)
Actuarial loss - experience
adjustments	(664)	-		707		(1,371)
Recognized in other
comprehensive income	3,213	(5,426)		462		(2,675)
						(Continued)

• 36 -

	Present Value	Present Value
	of the Defined			Net Defined
		Benefit	Fair Value of		Benefit	Net	Defined
	Obligation		the Plan Assets	Liability		Benefit Asset
Contributions from the
employer	$	-	$ (33,022)	$	(1,478)	$	(31,544)
Benefits paid		(29,583)	29,583		-		-
Company paid		(2,578)	-		(247)		(2,331)
Balance at December 31, 2021	$	425,921	$ (420,864)	$	8,579	$	(3,522)
Balance at January 1, 2020	$	458,782	$ (396,837)	$	61,945	$	-
Service cost
Current service cost		7,184	-		7,184		-
Net interest expense
(income)		3,346	(3,015)		331		-
Recognized in profit or loss		10,530	(3,015)		7,515		-
Remeasurement
Return on plan assets
(excluding amounts
included in net interest)		-	(12,662)		(12,662)		-
Actuarial loss - changes in
financial assumptions		10,511	-		10,511		-
Actuarial loss - experience
adjustments		2,421	-		2,421		-
Recognized in other
comprehensive income		12,932	(12,662)		270		-
Contributions from the
employer		-	(33,706)		(33,706)		-
Benefits paid		(36,193)	36,193		-		-
Balance at December 31, 2020	$	446,051	$ (410,027)	$	36,024	$	-
						(Concluded)

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

plans is as follows:
Operating cost Operating expenses	For the Year Ended December 31
		2021 $ 3,319 3,527 $ 6,846	2020 $ 3,865 3,650 $ 7,515

Through the defined benefit plans under the Labor Standards Act, the Group 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.

• 37 -

• 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 0.375%-0.625% 0.29%-0.5% 2%-3% 2%-3% 0.1%-7.5% 0.1%-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 $ (8,307) $ 8,574 $ 8,312 $ (8,097)	2020 $ (9,316) $ 9,625 $ 9,320 $ (9,070)

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 2020 $ 30,150 $ 33,441 4.2-8.2 years 4.5-8.8 years

• 38 -

23. MATURITY ANALYSIS OF ASSETS AND LIABILITIES

The current/non-current classification of the Group’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

• 39 -

24. 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 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.

• 40 -

• 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 26.

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 appropriation 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.

• 41 -

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.

25. REVENUE

REVENUE
Construction contract revenue Revenue from waste treatment Energy revenue Revenue from container repair	For the Year Ended December 31
		2021 $ 11,449,741 1,565,346 428,811 164,699 $ 13,608,597	2020 $ 7,117,905 1,642,248 443,506 145,990 $ 9,349,649

• 42 -

a. Contact balances

Contract assets Properties construction Retention receivable Less: Allowance for impairment loss Contract liabilities Properties construction Waste treatment		December 31	December 31
		2021 $ 1,471,732 1,878,608 (77,948) $ 3,272,392 $ 1,380,717 8,199 $ 1,388,916	2020 $ 3,036,146 1,192,876 (38,049) $ 4,190,973 $ 323,755 59,054 $ 382,809

The movements of the loss allowance of contract assets are 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.

26. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS

• a. Other income

Other income
Dividends income Rental income Others (Note 31)	For the Year Ended		December 31
		2021 $ 140,612 13,022 18,410 $ 172,044	2020 $ 103,458 12,973 49,708 $ 166,139

• 43 -

b. Other gains and losses

Gain on disposal of property, plant and equipment Net foreign exchange gains and (losses) Impairment loss on investment properties Others c. Finance costs Interest on bank loans Interest on commercial paper Interest on lease liabilities Less: Amounts included in the cost of qualifying assets Information about capitalized interest is as follows: Capitalized interest amount Capitalization rate d. Depreciation and amortization Property, plant and equipment Investment property 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 December 31	For the Year Ended December 31	For the Year Ended December 31
	2021 2020 $ 3,913 $ 573 (11,349) 11,128 - (3,417) (4,034) (6,005) $ (11,470) $ 2,279 For the Year Ended December 31
	2021 2020 $ 49,014 $ 25,953 5,702 7,180 237 225 (38,323) (14,182) $ 16,630 $ 19,176 For the Year Ended December 31
	2021 2020 $ 38,323 $ 14,182 1.3%-1.79% 1.3%-1.79% For the Year Ended December 31
		2021 $ 381,083 2,002 14,093 4,465 $ 401,643 $ 383,902 13,276 $ 397,178 $ 867 3,598 $ 4,465	2020 $ 382,207 2,002 9,132 7,017 $ 400,358 $ 380,612 12,729 $ 393,341 $ 2,791 4,226 $ 7,017

• 44 -

e. Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans (Note 22) 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 $ 18,923 6,846 797,037 $ 822,806 $ 385,226 437,580 $ 822,806	2020 $ 17,733 7,515 685,946 $ 711,194 $ 353,591 357,603 $ 711,194

• 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 Compensation of employees Remuneration of directors	**For the Year Ended December 31 **
	2021 2020 0.50% 0.50% 0.35% 0.44% 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 consolidated annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate in the following year.

• 45 -

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.

27. INCOME TAXES

• a. Income tax recognized in profit or loss

Major components of tax expense 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 $ 364,473 2,226 (2,133) 364,566 (14,197) $ 350,369	2020 $ 307,556 9,321 15 316,892 13,664 $ 330,556

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 Additional income tax under the Alternative Minimum Tax Act Income tax on unappropriated earning Loss on investments Unrecognized deductible 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 $ 1,954,631 $ 390,926 651 (34,453) 6,984 2,226 (4,069) (9,642) (2,133) (121) $ 350,369	2020 $ 1,734,815 $ 346,963 (3,453) (25,624) 1,256 9,321 - 1,277 15 801 $ 330,556

• 46 -

b. Current tax assets and liabilities

Current tax assets and liabilities
Current tax assets Tax refund receivable Current tax liabilities Income tax payable		December 31
		2021 $ - $ 214,091	2020 $ 30,262 $ 175,916

c. 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 Defined benefit plans Payable for annual leave Amortization of repairs and maintenance expenses Unrealized exchange losses Unrealized provisions Unrealized expenses Unrealized loss on inventories Bad debts in excess of the limit Government grants Exchange differences on translation of the financial statements of foreign operations Loss carryforwards Deferred tax liabilities Temporary differences Unrealized exchange gains Reserve for land value increment tax Defined benefit plans	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income $ 2,613 $ (1,012) $ 93 6,903 392 - 3,701 (84) - 24 1,303 - 12,145 69 - 8,303 (1,885) - - 4,455 - - 9,285 - - 553 - - - 423 8,425 5,660 - $ 42,114 $ 18,736 $ 516 $ 192 $ (192) $ - 65,995 - - - 4,731 536 $ 66,187 $ 4,539 $ 536	Closing Balance $ 1,694 7,295 3,617 1,327 12,214 6,418 4,455 9,285 553 423 14,085 $ 61,366 $ - 65,995 5,267 $ 71,262

• 47 -

For the year ended December 31, 2020

Deferred tax assets Temporary differences Defined benefit plans Payable for annual leave Amortization of repairs and maintenance expenses Unrealized exchange gains or losses Unrealized provisions Unrealized expenses Loss on market price decline Loss carryforwards Deferred tax liabilities Temporary differences Unrealized exchange gains or losses Reserve for land value increment tax	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income $ 7,797 $ (5,238) $ 54 6,141 762 - 3,675 26 - 265 (241) - 14,343 (2,198) - 16,672 (8,369) - 300 (300) - 6,340 2,085 - $ 55,533 $ (13,473) $ 54 $ 1 $ 191 $ - 65,995 - - $ 65,996 $ 191 $ -	Closing Balance $ 2,613 6,903 3,701 24 12,145 8,303 - 8,425 $ 42,114 $ 192 65,995 $ 66,187

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

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

e. Income tax assessments

The income tax of the Group through 2019, except 2019, have been assessed by the Tax Authorities.

• 48 -

28. EARNINGS PER SHARE

Units: NT$ Per Share

	Units: NT$ Per Share	Units: NT$ Per Share	Units: NT$ Per Share
Basic earnings per share Diluted earnings 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

Net profit for the year
Profit for the year attributable to owners of the Company Shares	**For the Year Ended December 31 **
		2021 $ 1,278,260	2020 $ 1,043,649

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 Group may settle the compensation paid to employees in cash or shares; therefore, the Group 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.

29. CAPITAL MANAGEMENT

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

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

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

• 49 -

30. 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.

• 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 $ 12,826,389 Unlisted shares - ROC - Unlisted shares in other country - $ 12,826,389 Fair value hierarchy as of December 31, 2020 Level 1 Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares $ 5,744,880 Unlisted shares - ROC - Unlisted shares in other country - $ 5,744,880	Level 2 $ - - - $ - Level 2 $ - - - $ -	Level 3 $ - 824,115 121,213 $ 945,328 Level 3 $ - 881,433 149,199 $ 1,030,632	Total $ 12,826,389 824,115 121,213
			$ 13,771,717
			Total $ 5,744,880 881,433 149,199
Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares Unlisted shares - ROC Unlisted shares in other country
			$ 6,775,512

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.

• 50 -

c. Categories of financial instruments

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 $ 6,234,915 $ 5,287,448 13,771,717 6,775,512 6,217,083 6,337,336 24,904 18,494

• 1) The balances included financial assets at amortized cost, which comprise cash and cash equivalents, notes receivable, trade receivables 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 Group’s major financial instruments include equity investments, trade receivable, trade payables, borrowings and lease liabilities. The Group’s Corporate Treasury function coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group 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 Group’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 Group’s exposure to market risks or the manner in which these risks were managed and measured.

a) Foreign currency risk

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

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the year are set out in Note 35.

Sensitivity analysis

The Group was mainly exposed to the Currency USD, Currency EUR and Currency JPY.

• 51 -

The following table details the Group’s sensitivity to an increase and a decrease in New Taiwan dollars (i.e., 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. The positive numbers in the following table indicate the amount of increase in net profit before tax when the New Taiwan Dollars depreciates by 5% relative to the relevant currencies; when the New Taiwan Dollars appreciates by 5% relative to the relevant foreign currencies, its impact on the net profit before tax will be The negative number of the same amount.

Profit or loss		USD Impact For the Year Ended December 31 2021 2020 $ 735 $ 293		EUR Impact For the Year Ended December 31 2021 2020 $ 762 $ 5,363		JPY Impact	JPY Impact
						For the Year Ended December 31
		2021 $ 735*		2021 $ 762*		2021 $ 2,668*	2020 $ 2,582*

• This was mainly attributable to the exposure on outstanding demand deposits in USD, EUR and JPY in cash flow hedges at the end of the year.

• b) Interest rate risk

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

The carrying amount of the Group’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 assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	**December 31 **
	2021 2020 $ 855,586 $ 904,424 574,841 2,807,665 3,354,491 3,242,038 3,194,646 1,693,469

Sensitivity analysis

The sensitivity analyses below were determined based on the Group’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 Group’s pre-tax profit for the years ended December 31, 2021 and 2020 would have increased/decreased by $799 thousand and $7,743 thousand, respectively, which was mainly attributable to the Group’s exposure to interest rates on its variable-rate bank borrowings, time deposits and demand deposits.

• 52 -

c) Other price risk

The Group was exposed to equity price risk through its investments in listed equity securities. The Group’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 $413,152 thousand and $203,265 thousand, respectively, as a result of the changes in fair value of financial assets as FVTOCI.

The Group’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 Group. At the end of the reporting period, the Group’s maximum exposure to credit risk which may cause a financial loss to the Group due to failure of counterparties to discharge an obligation and financial guarantees provided by the Group could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

In order to minimize credit risk, management of the Group 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 Group 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 Group’s credit risk was significantly reduced.

The Group’s concentration of credit risk of 41% and 30% of total trade receivables as of December 31, 2021 and 2020, respectively, was related to the Group’s five largest customers. The credit concentration risk of the remaining trade receivables is relatively insignificant.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’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 Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2021 and 2020, the Group 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 Group’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 Group 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.

• 53 -

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

b)	Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities December 31, 2020 Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities Financing facilities Unsecured bank facility Amount used Amount unused Secured bank facility Amount used Amount unused	Less than 1 Year $ 2,305,205 13,793 48,495 549,958 $ 2,917,451 Less than 1 Year $ 1,613,362 8,908 326,622 2,489,719 $ 4,438,611		1-5 Years 5+ Years $ 167,295 $ - 11,339 - 1,334,080 2,223,030 - - $ 1,512,714 $ 2,223,030 1-5 Years 5+ Years $ 216,101 $ - 9,835 - 349,051 1,261,543 308,147 - $ 883,134 $ 1,261,543 **December 31 **	1-5 Years 5+ Years $ 167,295 $ - 11,339 - 1,334,080 2,223,030 - - $ 1,512,714 $ 2,223,030 1-5 Years 5+ Years $ 216,101 $ - 9,835 - 349,051 1,261,543 308,147 - $ 883,134 $ 1,261,543 **December 31 **
				2021 $ 1,051,335 6,362,665 $ 7,414,000 $ 3,660,000 1,930,000 $ 5,590,000	2020 $ 2,510,000 4,759,360 $ 7,269,360 $ 1,990,000 3,450,000 $ 5,440,000

• 54 -

31. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed below.

• a. Related parties and their relationships

Related Party Evergreen International Corporation EVA Airways Corporation Evergreen Security Corporation Ever Accord Construction Corporation Evergreen Logistics Corporation Evergreen Marine Corporation Kun Lin Engineering Corporation	Relationship with the Company
	Investor that has significant influence over the Group Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Associate

• b. Sales of goods

Sales of goods
Related Party Investors that have significant influence over the Group Related party in substance	For the Year Ended		December 31
		2021 $ 746 667,487 $ 668,233	2020 $ 825 508,750 $ 509,575

The sales conditions for related parties in substance were not significantly different from those sales made to the Group’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

Related Party Associate d. Purchases of goods and expenses Related Party Investors that have significant influence over the Group Related party in substance	**For the Year Ended **	**For the Year Ended **	**December 31 **
	2021 $ 180 For the Year Ended		2020 $ 200 December 31
		2021 $ 9,425 20,497 $ 29,922	2020 $ 12,005 21,080 $ 33,085

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

• 55 -

e. Contract assets

Contract assets
Related Party Related party in substance		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 Investors that has significant influence over the Group Related party in substance		December 31	December 31
		2021 $ 157 32,488 $ 32,645	2020 $ 156 151,302 $ 151,458

The outstanding trade receivables from related parties are unsecured.

• g. Payables to related parties

Other payables

Other payables
Related Party Investors that has significant influence over the Group Related party in substance		December 31
		2021 $ 1,479 2,505 $ 3,984	2020 $ 2,074 2,398 $ 4,472

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 Group Lease liabilities Investors that has significant influence over the Group		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.

• 56 -

• i. Compensation of key management personnel

Compensation of key management personnel
Short-term employee benefits Post-employment benefits Share-based payments	For the Year Ended December 31
		2021 $ 44,384 932 656 $ 45,972	2020 $ 36,214 7,494 - $ 43,708

32. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, provisional attachment and performance guarantees, etc.:

Property, plant, and equipment, net Investment properties Financial assets at amortized cost		December 31	December 31
		2021 $ 2,274,924 95,705 70,496 $ 2,441,125	2020 $ 2,335,640 97,706 23,452 $ 2,456,798

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group 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

• b. The Group’s unrecognized contractual commitments for the construction of intangible assets service concession arrangements are as follows:

concession arrangements are as follows:
Currency NTD JPY EUR USD	December 31
	2021 2020 $ 1,066,408 $ 1,908,254 583,346 1,318,425 1,633 6,209 668 2,257

• 57 -

c. For acquisition of property, plant and equipment, unrecognized commitments were as follows:

Currency NTD EUR	December 31
	2021 2020 $ 40,289 $ - 1,283 -

34. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

For capacity planning, the subsidiary - Super Max Company added an incinerator production line on March 15, 2022, which was approved by the board of directors. The investment amount is about NT$920 million. The case has been approved by the Environmental Protection Administration and approved by the Industry Development Bureau on record.

35. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group’ significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies of the entities in the Group 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 Currency/New Taiwan Dollars

		Foreign		Carrying	Carrying
	Currency		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	531	27.68 (USD:NTD)	$	14,698
EUR		487	31.32 (EUR:NTD)		15,238
JPY		221,854	0.2405 (JPY:NTD)		53,356
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

• 58 -

December 31, 2020

Unit: In Thousands of Foreign Currency/New Taiwan Dollars

		Foreign		Carrying	Carrying
	Currency		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	206	28.48 (USD:NTD)	$	5,859
EUR		3,063	35.02 (EUR:NTD)		107,263
JPY		186,930	0.2763 (JPY:NTD)		51,649
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

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

• 6) Disposals 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) Intercompany relationships and significant intercompany transactions: See Table 5 below.

• 11) Information on investees: See Table 6 below.

• 59 -

• 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 7 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 8 attached.

• 60 -

37. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Group’s reportable segments were as follows:

a. Segment revenue and results

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segments:

For the year ended December 31, 2021 Revenue from external customers Segment income Administration cost Interest income Other income Other gains and losses Finance costs Share of profit of associates and joint ventures accounted for using the equity method Profit before tax For the year ended December 31, 2020 Revenue from external customers Inter-segment revenue Segment revenue Segment income Administration cost Interest income Other income Other gains and losses Finance costs Share of profit of associates and joint ventures accounted for using the equity method Profit before tax	Steel Structures $ 11,449,741 $ 769,394 $ 7,117,905 - $ 7,117,905 $ 468,087	Hsin Yung Enterprise Corporation Super Max Engineering Enterprise Co., Ltd. $ 1,238,459 $ 755,699 $ 717,890 $ 317,861 $ 1,320,230 $ 765,524 - 15 $ 1,320,230 $ 765,539 $ 785,474 $ 331,002	Ever Ecove Corporation $ - $ (29,391) $ - - $ - $ (26,303)	Others $ 164,698 $ 21,706 $ 145,990 - $ 145,990 $ 19,839	Eliminations $ - $ 4,702 $ - (15) $ (15) $ 5,425	Total $ 13,608,597 1,802,162 (48,224 ) 24,858 172,044 (11,470 ) (16,630 ) 31,891 $ 1,954,631 $ 9,349,649 - 9,349,649 1,583,524 (49,212 ) 26,171 166,139 2,279 (19,176 ) 25,090 $ 1,734,815

Segment profit represented the profit before tax earned by each segment without headquarters’ administrative cost, interest income, other income, other gains and losses, finance costs, the share of profit of associates or income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

• b. Revenue from major products: Refer to Note 25.

c. Geographical information

The Group has no revenue-generating unit that operates outside the ROC; therefore, it is not necessary to disclose information that distinguishes revenue from external customers and non-current assets by location of assets.

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d. Information on major customers

The customer accounted for at least 10% of the Group’s total operating revenue:

Customer A Customer B Customer C	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021* $ 2,108,545 - - $ 2,108,545	2020* $ - 1,411,577 1,029,610 $ 2,441,187

• The income did not meet at least 10% of the total income of the Group for the years ended December 31, 2021 and 2020.

38. OTHERS

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

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TABLE 1

EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

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/ Guarantee 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.

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TABLE 2

EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

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 Hsin Yung Enterprise Corporation Super Max Engineering Enterprise Co., Ltd.	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 Evergreen Marine Corporation P.T. Super Max Indonesia	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 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 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 7,214 -	$ 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 1,027,966 -	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 0.14 11.00	$ 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 1,027,966 -

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TABLE 3

EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

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.

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TABLE 4

EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

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 Transaction	Differences in Transaction Terms Compared to Third Party Transaction	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 Group and its related party in substance

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

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TABLE 5

EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars)

No. (Note 1)	Investee Company	Counterparty	Relationship (Note 2)	Transaction Details	Transaction Details	Transaction Details
				Financial Statement Accounts	Amount	Payment Terms	% of Total Sales or Assets (Note 3)
0	Evergreen Steel Corporation	Hsin Yung Enterprise Corporation Hsin Yung Enterprise Corporation Ever Ecove Corporation	a a a	Miscellaneous income Gain on disposal of property, plant and equipment Miscellaneous income	$ 3,007 784 515	According to mutual agreements According to mutual agreements According to mutual agreements	0.02 0.01 -
1	Hsin Yung Enterprise Corporation	Ever Ecove Corporation	c	Rental income	360	According to mutual agreements	-

Note 1: The parent company and its subsidiaries are coded as follows:

• a. The parent company is coded “0”.

• b. The subsidiaries are coded consecutively beginning from “1” in the order presented in the table above.

Note 2: Nature of relationships are coded as follows:

• a. From the parent company to its subsidiary.

• b. From a subsidiary to its parent company.

• c. Between subsidiaries.

• Note 3: The percentage calculation is based on the consolidated total operating revenue or total assets. For balance sheet items, each item’s end-of-period balance is shown as a percentage to the consolidated total assets as of December 31, 2021. For profit or loss items, cumulative amounts are shown as percentages to the consolidated total operating revenue for the year ended December 31, 2021.

Note 4: The table above only discloses related-party transactions which are material.

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TABLE 6

EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

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 Corporation 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 7 for information on investments in mainland China.

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TABLE 7

EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

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	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 Profit (Loss)	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 gas equipment and	and installation of waste water, waste 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 Amount US$ 200 US$ 100 US$ 100
	US$ 400

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TABLE 8

EVERGREEN STEEL CORPORATION AND SUBSIDIARIES

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 Corporation 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 consolidated 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 shares 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.

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