Stock Code:2542

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors ’ Report For the Years Ended December 31, 2020 and 2019

Address: 10F., No.267, Lequn 2nd Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.) Telephone: (02)2755-5899

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

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

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Representation Letter

The entities that are required to be included in the combined financial statements of Highwealth Construction Corp. as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Highwealth Construction Corp. and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Highwealth Construction Corp. Chairman: JENG, JR-LUNG Date: March 19, 2021

Independent Auditors ’ Report

To the Board of Directors of Highwealth Construction Corp.:

Opinion

We have audited the consolidated financial statements of Highwealth Construction Corp. and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, 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 with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), interpretations developed by the International Financial Reporting Interpretations Committee ( “ IFRIC ” ) or the former Standing Interpretations Committee (“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 Certification of Financial Statements by Certified Public Accountants and the 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 Certified Public Accountants Code of Professional Ethics in Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the year ended December 31, 2020 of the Group. 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.

1. Revenue recognition

Please refer to note 4(q) and 6(y) of the consolidated financial statements for the accounting policy on revenue recognition and the details of revenue.

Description of key audit matter

The real estate industry, in which the Group is into, has a higher tendency of revenue fluctuation, therefore the management has set up relevant internal control procedures. The Group's sales revenue was $22,657,004 thousand in 2020, whether revenue is presented fairly has a significant impact on financial statement. Therefore, the recognition of sales revenue is one of the most important evaluation in performing our audit procedures.

4-1

Auditing procedures performed

Our principal audit procedures included testing the effectiveness of the design and implementing the internal control system of sales revenue. Inspection of sales contracts, bank account transaction record and real estate ownership transfer document, etc.. Testing the samples of sales transaction before and after the end of the year to ensure the correctness of sales revenue.

2. Inventory valuation

“ ” Please refer to note 4(h)、Note 5 Revenue and 6(e) of the consolidated financial statements for the accounting policies on measuring inventory, assumption used and uncertainties considered in determining the net realizable value and the details of inventory.

Description of key audit matter

As of December 31, 2020, inventory of the Group valued $132,633,229 thousand, constituting 73% of the consolidated total assets, which was presented with lower of cost or net realizable value method. The judgment of net realizable value of inventory relies on management since the Group focuses on real estate industry, which is not only deeply affected by politics, economics, and revolution of housing and land taxation, but also an industry involving a large portion of capital infusion and long-term payback. Thus, the valuation of inventory is one of the most important evaluation in performing our audit procedures.

Auditing procedures performed

Our principal audit procedures included understanding the Group’s operating and accounting procedures for inventory valuation. Obtain the Group management ’ s data of inventory valuation, inspecting and recalculating the net realizable value of inventory to ensure if it is adequate. The net realizable value can be assessed in both ways: through reviewing the recent selling price of the premises, or by inquiring the selling price of premises nearby from the “Actual Selling Price of Real Estate” website.

Other Matter

Highwealth Construction Corp. has prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, 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 Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed 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.

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

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

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with 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 auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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 auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
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.
Obtain sufficient appropriate audit evidence regarding the financial information of the 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 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.

4-3

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 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 audit resulting in this independent auditors’ report are Yilien Han and Ti-Nuan Chien.

KPMG

Taipei, Taiwan (Republic of China) March 19, 2021

Notes to Readers

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

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousand of New Taiwan Dollars)

December 31, 2020 Amount % $ 10,538,810 6 270,366 - 14,027 - 1,524,590 1 244,242 - 132,633,229 73 602,091 - 1,787,896 1 12,310,906 8 191,218 - 2,445,546 1	December 31, 2020	December 31, 2020	December 31, 2020
	Amount	%	Amount
162,562,921 90
553,139 - 128,595 - 1,164,500 1 446,755 - 4,503,417 3 25,692 - 47,365 - 11,148,989 6 106,098 - 119,887 -
18,244,437 10
$ 180807358 100

$ 180,807,358 100 147,823,545 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

2020	% 100 72	2019
Amount $ 24,463,018 17,611,739		Amount 23,798,201 17,148,864
6,851,279	28	6,649,337
1,451,014 1,263,908	6 5	1,673,787 1,469,558
2,714,922	11	3,143,345
4,136,357	17	3,505,992
22,762 165,185 (115,742) (887,416) (4,989)	- 1 - (4) -	33,660 230,343 1,089,374 (902,991) (4,606)
(820,200)	(3)	445,780
3,316,157 492,903	14 2	3,951,772 462,755
2,823,254	12	3,489,017
(213) 2,775 -	- - -	(322) 22,474 -
2,562	-	22,152
51 -	- -	(149) -
51	-	(149)
2,613	-	22,003
$ 2,825,867	12	3,511,020
$ 2,645,801 177,453	11 1	3,029,789 459,228
$ 2,823,254	12	3,489,017
$ 2,648,414 177,453	11 1	3,051,792 459,228
$ 2,825,867	12	3,511,020
$	2.11
$	1.80

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

								Equity attributable to owners	Equity attributable to owners	of parent	of parent
										Total other equity interest
	Share capital						Retained earnings				Unrealized gains
									Exchange		(losses) on	financial
									differences on		assets measured at
									translation of		fair value	through				Total equity
	Common		Capital				Unappropriated	Total retained	foreign financial		other comprehensive		Total other equity			attributable to	Non-controlling
	stock		surplus		Legal reserve		retained earnings	earnings	statements		income		interest	Treasury	stock	owners of parent	interests		Total equity
Balance on January 1, 2019	$ 11,666,266		304,459		6,307,154		15,458,602	21,765,756		344		510,083	510,427	(66,761)		34,180,147	5,922,001		40,102,148
Effects of retrospective application	-		-		-		(14,959)	(14,959)	-		-		-	-		(14,959)		(140)	(15,099)
Equity at beginning of period after adjustments	11,666,266		304,459		6,307,154		15,443,643	21,750,797		344		510,083	510,427	(66,761)		34,165,188	5,921,861		40,087,049
Profit (loss)	-		-		-		3,029,789	3,029,789	-		-		-	-		3,029,789	459,228		3,489,017
Other comprehensive income	-		-		-		(322)	(322)	(149)			22,474	22,325	-		22,003	-		22,003
Total comprehensive income	-		-		-		3,029,467	3,029,467	(149)			22,474	22,325	-		3,051,792	459,228		3,511,020
Appropriation and distribution of retained earnings in 2018:
Legal reserve appropriated	-		-		685,614		(685,614)	-	-		-		-	-		-	-		-
Cash dividends of ordinary share	-		-		-		(4,083,194)	(4,083,194)	-		-		-	-		(4,083,194)	-		(4,083,194)
Appropriation and distribution of retained earnings for the period from Jnauary 1, 2019 to September 30, 2019
Legal reserve appropriated	-		-		234,535		(234,535)	-	-		-		-	-		-	-		-
Cash dividends of ordinary share	-		-		-		(2,333,257)	(2,333,257)	-		-		-	-		(2,333,257)	-		(2,333,257)
Conversion of convertible bonds		22		81	-		-	-	-		-		-	-		103	-		103
Adjustments of capital surplus for company's cash dividends received by subsidiaries	-		119,934		-		-	-	-		-		-	-		119,934	-		119,934
Difference between consideration and carrying amount of subsidiaries acquired or disposed	-		-		-		(507,223)	(507,223)	-		-		-	-		(507,223)	-		(507,223)
Changes in ownership interests in subsidiaries	-		-		-		-	-	-		-		-	(17,049)		(17,049)		17,049	-
Changes in non-controlling interests	-		-		-		-	-	-		-		-	-		-	(2,351,250)		(2,351,250)
Disposal of investments in equity instruments designated at fair value through other comprehensive income	-		-		-		125	125	-			(125)	(125)	-		-	-		-
Balance on December 31, 2019	11,666,288		424,474		7,227,303		10,629,412	17,856,715		195		532,432	532,627	(83,810)		30,396,294	4,046,888		34,443,182
Profit (loss)	-		-		-		2,645,801	2,645,801	-		-		-	-		2,645,801	177,453		2,823,254
Other comprehensive income	-		-		-		(213)	(213)		51		2,775	2,826	-		2,613	-		2,613
Total comprehensive income	-		-		-		2,645,588	2,645,588		51		2,775	2,826	-		2,648,414	177,453		2,825,867
Appropriation and distribution of retained earnings:
Legal reserve appropriated	-		-			68,444	(68,444)	-	-		-		-	-		-	-		-
Cash dividends of ordinary share	-		-		-		(1,166,629)	(1,166,629)	-		-		-	-		(1,166,629)	-		(1,166,629)
Stock dividends of ordinary share	1,166,628		-		-		(1,166,628)	(1,166,628)	-		-		-	-		-	-		-
Conversion of convertible bonds		70,053	203,150		-		-	-	-		-		-	-		273,203	-		273,203
Adjustments of capital surplus for company’ｓcash dividends received by subsidiaries	-		53,304		-		-	-	-		-		-	-		53,304	-		53,304
Difference between consideration and carrying amount of subsidiaries acquired or disposed	-		-		-		(79,797)	(79,797)	-		-		-	-		(79,797)	-		(79,797)
Changes in ownership interests in subsidiaries	-			5	-		-	-	-		-		-		(2,758)	(2,753)		2,753	-
Changes in other capital surplus	-		(112)		-		-	-	-		-		-	-		(112)	-		(112)
Changes in non-controlling interests	-		-		-		-	-	-		-		-	-		-	(548,500)		(548,500)
Balance at December 31, 2020	$ 12,902,969		680,821		7,295,747		10,793,502	18,089,249		246		535,207	535,453	(86,568)		32,121,924	3,678,594		35,800,518

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousand of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss of associates and joint ventures accounted for using equity method Gain on disposal of property, plan and equipment Gain on disposal of investment properties Gain on lease modifications Gain on disposal of non-current assets classified as held for sale Impairment loss on non-financial assets Gain to the rights transferred of the sale and leaseback Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Decrease on financial assets or liabilities at fair value through profit or loss Decrease (increase) in contract assets Increase in notes receivable Decrease (increase) in accounts receivable Increase in inventories Increase in prepayments Decrease (increase) in other current and non-current assets Increase in other financial assets Increase in assets recognised as incremental costs to obtain contract with customers Total changes in operating assets Changes in operating liabilities: Increase in contract liabilities Decrease in notes payable Increase (decrease) in accounts payable Increase (decrease) in other payables Increase (decrease) in provisions Increase (decrease) in other financial liabilities Increase (decrease) in other current liabilities Increase in net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Income taxes paid Net cash flows from (used in) operating activities	2020 $ 3,316,157 228,483 14,340 4,680 (40,633) 887,416 (22,762) (15,166) 4,989 (1,836) (112,057) (141) - 250,000 -	2019 3,951,772 207,983 10,682 1,819 (46,363) 902,991 (33,660) (10,564) 4,606 (1,091) (162,047) (254) (886,639) 57,000 (62,116)
	1,197,313	(17,653)
	399,526 36,276 (43,426) 177,278 (25,699,587) (38,679) 39,905 (6,815,107) (887,143)	47,094 (8,379) (5,885) (134,532) (13,959,363) (230,282) (97,131) (1,111,018) (787,152)
	(32,830,957)	(16,286,648)
	4,575,045 (3,917) 274,913 (62,191) 24,069 (5,130) 737,916 264	2,846,221 (12,355) (56,644) 216,454 (80,979) 77,155 (138,897) 239
	5,540,969	2,851,194
	(27,289,988)	(13,435,454)
	(26,092,675)	(13,453,107)
	(22,776,518) (250,706)	(9,501,335) (757,284)
	(23,027,224)	(10,258,619)

8-1

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (CONT ’ D)

For the years ended December 31, 2020 and 2019

(Expressed in Thousand of New Taiwan Dollars)

Cash flows from (used in) investing activities: Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method Proceeds from disposal of non-current assets classified as held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Proceeds from disposal of intangible assets Proceeds from disposal of investment properties Increase in prepayments for business facilities Interest received Dividends received Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase in short-term loans Decrease in short-term loans Increase (decrease) in short-term notes and bills payable Proceeds from issuing bonds Repayments of bonds Proceeds from long-term debt Repayments of long-term debt Payment of lease liabilities Increase in other financial liabilities (includes current) Cash dividends paid Interest paid Changes in non-controlling interests Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year	2020 - (42,000) 913,876 (83,275) 4,695 (15,351) 43 154,093 (106,098) 20,526 15,166	2019 491 - 1,286,739 (455,847) 231,682 (10,380) - 518,330 - 30,049 10,564
	861,675	1,611,628
	44,588,960 (26,635,600) 4,107,552 5,000,000 - 550,000 (1,288,936) (53,740) (924,769) (2,795,749) (1,958,120) (112,828)	30,917,734 (16,492,233) (122,782) 5,900,000 (2,000,000) 682,200 (615,457) (50,132) (2,737,259) (7,237,596) (1,671,366) (750,765)
	20,476,770	5,822,344
	44 (1,688,735) 12,227,545	(114) (2,824,761) 15,052,306
	$ 10,538,810	12,227,545

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

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

(1) Company history

Highwealth Construction Corp. (the “Company”) was incorporated in Jaunary 1980 as a company limited by shares under the Company Act of the Republic of China (R.O.C.). The Group’s registered address is 10F, No.267, Lequn 2nd Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.) The consolidated financial statements of the Group as of and for the year ended December 31, 2020 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The Group primarily engages in the business of construction, sales, and leasing of residential and commercial buildings, please refer to note 14 for the Group’s main business activities.

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

The consolidated financial statements were authorized for issuance by the Board of Directors on March 19, 2021.

(3) New standards, amendments and interpretations adopted:

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

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2020:

Amendments to IFRS 3 “Definition of a Business”
Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”
Amendments to IAS 1 and IAS 8 “Definition of Material”
Amendments to IFRS 16 “COVID-19-Related Rent Concessions”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its consolidated financial statements:

Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform － ” Phase 2

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The following new and amended standards, which may be relevant to the Group, have been issued by IASB, but have yet to be endorsed by the FSC:

Standards or		Effective date per
Interpretations	Content of amendment	IASB
Amendments to IAS 1	The amendments aim to promote consistency	January 1, 2023
“Classification of Liabilities as	in applying the requirements by helping
Current or Non-current”	companies determine whether, in the
	statement of balance sheet, debt and other
	liabilities with an uncertain settlement date
	should be classified as current (due or
	potentially due to be settled within one year)
	or non-current.
	The amendments include clarifying the
	classification requirements for debt a
	company might settle by converting it into
	equity.
Amendments to IAS 37	The amendments clarify that the‘costs of	January 1, 2022
“Onerous Contracts－Cost	fulfilling a contract’comprises the costs
of Fulfilling a Contract”	that relate directly to the contract as follows:
	●the incremental costs – e.g. direct labor
	and materials; and
	●an allocation of other direct costs – e.g. an
	allocation of the depreciation charge for an
	item of property, plant and equipment used
	in fulfilling the contract.

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

The consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language consolidated financial statements, the Chinese version shall prevail.

The following significant accounting policies have been applied consistently to all periods presented in the consolidated financial statements unless otherwise specified.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”) and the IFRSs, IAS, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the FSC.

(b) Basis of preparation
(i) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following significant accounts.

1) Financial instruments measured at fair value through profit or loss are measured at fair value;
2) Fair instruments measured at fair value through other comprehensive income are measured at fair value;
3) The defined benefit liabilities (assets) is recognized as the fair value of the plan assets less the present value of defined benefit obligation and the upper limit impact mentioned in Note 4(r).
(ii) Functional and presentation currency

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

(c) Basis of consolidation
(i) Principles of preparing consolidated financial statements

The consolidated financial statements comprise the Company and its subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances. Changes in the Group’s ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the adjustment of non-controlling interest and its consideration is recognized as owner's equity.

(ii) List of subsidiaries in the consolidated financial statements:

Name of investor	Subsidiaries	Principal activity	Shareholding	Shareholding	Description
			December 31, 2020	December 31, 2019
The Company The Company The Company The Company The Company The Company The Company The Company The Company	Qi Yu Construction Co., Ltd. Ju Feng Hotel Management Co., Ltd. Highwealth Property Management Co., Ltd. Xingfuyu Trading (Xiamen) Co., Ltd. Quan Xiang Trading (Shanghai) Co., Ltd. Run Long Construction Co., Ltd. Bo Yuan Construction Co., Ltd. Yi chi Enterprise Co., Ltd. Bi chiang Enterprise Co., Ltd.	Constrction Industry Residence and Buildings Lease Construction Residence and Buildings Lease Construction Real estate broker agent and real estate commerce Wholesale of construction Material Wholesale of construction Material Waste treatment、 Residence and Buildings Lease Construction Residence Buildings Lease Construction, and Department sotres Residence and Buildings Lease Construction Residence and Buildings Lease Construction	100.00% 100.00% 100.00% 100.00% 100.00% 5.72% (Note) 100.00% 100.00% 100.00%	100.00% 100.00% 100.00% 100.00% 100.00% 5.28% (Note) 100.00% 100.00% 100.00%	The Company hold more than 50% interest of the subsidiary directly The Company hold more than 50% interest of the subsidiary directly The Company hold more than 50% interest of the subsidiary directly The Company hold more than 50% interest of the subsidiary directly The Company hold more than 50% interest of the subsidiary directly The Company doesn’t hold more than 50% of interest directly and indirectly but have substantial controlling power and considered as subsidiary The Company hold more than 50% interest of the subsidiary directly The Company hold more than 50% interest of the subsidiary directly The Company hold more than 50% interest of the subsidiary directly

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Name of investor	Subsidiaries	Principal activity	Shareholding	Shareholding	Description
			December 31, 2020	December 31, 2019
The Company QI Yu QI Yu Qi Yu Guang Yang Run Long Construction	Highwealth Construction Corp. Guang Yang Investment Co., Ltd. Yuan Sheng International Co., Ltd. Run Long Construction Co. Run Long Construction Co. Jin Jyun Construction Co., Ltd.	Construction Industry、Residence and Buildings Lease Construction Investment industry Wholesale of construction Material Waste treatment、 Residence and Buildings Lease Construction Waste treatment、 Residence and Buildings Lease Construction Construction Industry、Residence and Buildings Lease Construction	100.00% 100.00% 100.00% 5.02% (Note) 5.62% (Note) 100.00%	100.00% 100.00% 100.00% 5.02% (Note) 5.45% (Note) 100.00%	The Company hold more than 50% interest of the subsidiary directly Qi Yu hold more than 50% interest of the subsidiary directly Qi Yu hold more than 50% interest of the subsidiary directly Qi Yu doesn’t hold more than 50% of interest directly and indirectly but have substantial controlling power and considered as subsidiary Guang Yang doesn’t hold more than 50% of interest directly and indirectly but have substantial controlling power and considered as subsidiary Run Long hold more than 50% interest of the subsidiary directly

Note: The Group’s shareholdings change because the Group invested or disposed of shareholdings of Run Long Construction during 2020.

(iii) List of subsidiaries which are not included in the consolidated financial statements: None

(d) Foreign currencies
(i) Currencies transaction

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date.

Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

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

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) A financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
3) Qualifying cash flow hedges to the extent that the hedge is effective.
(ii) Foreign operation

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

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

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

(e) Current and non-current distinction

An asset is classified as current when

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

A liability is classified as current when

(i) The Group expects to settle the liability in its normal operating cycle;
(ii) The Group holds the liability primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting period;

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

(f) Cash and cash equivalents

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

(g) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

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

1) Financial assets measured at amortized cost

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

It is held within a business model whose objective is to hold assets to collect contractual cash flows; and
Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) Fair value through other comprehensive income

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

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

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

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

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

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

3) Fair value through profit or loss (FVTPL)

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

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

4) Business model assessment

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

5) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (“ECL”) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and accounts receivable, other receivable,guarantee deposit paid and other financial assets), debt investments measured at FVOCI, accounts receivable measured at FVOCI and contract assets.

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

Debt securities that are determined to have low credit risk at the reporting date; and
Other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for account receivables and contract assets are always measured at an amount equal to lifetime ECL.

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

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

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

Significant financial difficulty of the borrower or issuer；
A breach of contract such as a default or being more than 90 days past due；
The lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider；
It is probable that the borrower will enter bankruptcy or other financial reorganization；or
The disappearance of an active market for a security because of financial difficulties.

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

The gross carrying amount of a financial asset is written off either partially or in full to extent that there is no realistic prospect of recovery. The Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

6) Derecognition of financial assets

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

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Financial liabilities and equity instruments
1) Classification of debt or equity instruments

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

2) Equity instruments

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

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

4) Compound financial instruments

Compound financial instruments issued by the Group comprise convertible bonds denominated in NTD that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.

The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.

Interest related to the financial liability is recognized in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.

5)

Financial liabilities

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

6) Derecognition of financial liabilities

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

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

7) Offsetting of financial assets and liabilities

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

(h) Inventories

(i) Construction industry

Inventories are measured at the lower of cost and net realizable value. The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The methods of determining the net realizable value are as follows:

1) Construction site

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses, or estimated by recent market value (development analytical method or comparison method).

2) Construction in progress

Net realizable value is the estimated selling price (prevailing market condition) less the estimated costs and selling expenses to complete, heeded.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

3) Real estate held for sale

Net realizable value is the estimated selling price (refer to the market condition estimated by authority) in the ordinary course of business, less the estimated selling costs and selling expenses needed to sell the real estate.

(ii) Manufacturer and Other Industries

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(i) Non-current assets held for sale

Non-current assets or disposal groups comprising assets and liabilities that are highly probable to be recovered primarily through sale rather than through continuing use, are reclassified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter, generally, the assets or disposal groups are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to assets not within the scope of IAS 36 – Impairment of Assets. Such assets will continue to be measured in accordance with the Group’s accounting policies. Impairment losses on assets initially classified as held for sale and any subsequent gains or losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of the cumulative impairment loss that has been recognized.

Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortized or depreciated, and any equity-accounted investee is no longer equity accounted.

(j) Joint Arrangements

A joint arrangement is an arrangement in which two or more parties have joint control. The IFRS classifies joint arrangements into two types — joint operations and joint ventures, which have the following characteristics(a) the participants are bound by a contractual arrangement; and (b) the contractual arrangement gives two or more of those parties joint control of the arrangement. IFRS 11 “Joint Arrangements” defines joint control as the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities (ie activities that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint ventures) have rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. A joint venture shall recognize its interest in a joint venture as an investment and shall account for that investment using the equity method in accordance with IAS 28 “Investments in Associates and Joint Ventures”, unless the entity is exempted from applying the equity method as specified in that Standard.

When assessing the classification of a joint arrangement, the Group considers the structure and legal form of the arrangement, the terms in the contractual arrangement, and other facts and circumstances. When the facts and circumstances change, the Group reevaluates whether the classification of the joint arrangement has changed

(k) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is initially recognized at cost and then subsequently measured at cost less depreciation and accumulated impairment loss. The depreciation expense is appropriated in accordance with the depreciable amount after the initial recognition. The deprecation methods, useful lives, and residual values of investment property are same as the practice of the property, plant, and equipment.

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

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

(l) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

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

(iii) Depreciation

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

eriods are as follows:
1) Buildings	3～50 years
2) Equipment	3～6 years
3) Transportation equipment	5 years
4) Office equipment	3～8 years
5) Other equipment	2～10 years

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

(iv) Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner occupied to investment property.

(m) Lease
(i) Identifying a lease

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

1) The contract involves the use of an identified asset – this may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) The Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) The Group has the right to direct the use of the asset throughout the period of use only if either:
The Group has the right to direct how and for what purpose the asset is used throughout the period of use; or
The relevant decisions about how and for what purpose the asset is used are predetermined and:
- － The Group has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
- － The Group designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) As a lessee

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

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

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

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

1) Fixed payments; including in-substance fixed payments;
2) Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
3) Amounts expected to be payable under a residual value guarantee; and
4) Payments for purchase or termination options that are reasonably certain to be exercised.

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

1) There is a change in future lease payments arising from the change in an index or rate; or
2) There is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or
3) There is a change of its assessment on whether it will exercise an option to purchase the underlying assets, extension or termination option; or
4) There is a change of its assessment of lease period on whether it will exercise on termination option; or
5) There are any lease modifications

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

If an arrangement contains lease and non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

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

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

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of office equipment of low-value assets, The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

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

As a practical expedient, the Group elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

－ The rent concessions occurring as a direct consequence of the COVID-19 pandemic;
－ The change in lease payments that resulted in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
－ Any reduction in lease payments that affects only those payments originally due on, or before, June 30, 2021; and
－
There is no substantive change in other terms and conditions of the lease.

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iii) As lessor

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

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

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

The Group recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs incurred in negotiating and arranging an operating lease is added to the net investment of the lease asset. The interest income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the lease. The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(n) Intangible assets

(i) Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

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

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iii) Amortization

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

han goodwill, from the date that they are available for	use.
1) Patent and trademark	1～10 years
2) Computer software	1～3 years

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

(o) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

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

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

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

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

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

(p) Provisions

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

A provision for warranties is recognized when the constructions are completed. The provision is based on historical warranty data, and a weighting of all possible outcomes against their associated probabilities. When warranty expense occurs, it would be written off the warranty provision which was recognized before, or warranty expense would be recognized as expense in the current period.

(q) Revenue
(i) Revenue from contracts with customers

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

1) Net Tenant-Counter Sales (Commissions Income)

Revenue generated when the Group acts as the agent rather than the consigner in a transaction. Tenant-Counter revenue is recognized on a net commission basis.

2) Customer loyalty program

The Group operates a customer loyalty program to its retail customers. Retail customers obtain points for purchases made, which entitle them to discount on future purchases. The Group considers that the points provide a material right to customers that they would not receive without entering a contract. Therefore, the promise to provide points to the customer is a separate performance obligation. The transaction price is allocated to the product and the points on a relative stand-alone selling price basis. Management estimates the stand-alone selling price per point on the basis of the discount granted when the points are redeemed and on the basis of the likelihood of redemption, based on past experience. The stand-alone selling price of the product sold is estimated based on the retail price. The Group has recognized contract liability at the time of sale based on the principle mentioned above. Revenue from the award points is recognized when the points are redeemed or when they expire.

3) Land development and sale of real estate

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

4) Construction contracts

The Group enters into contracts to build residential properties, commercial buildings and public constructions. Because its customer controls the asset as it is constructed, the Group recognizes revenue over time based on the construction costs incurred to date as a proportion of the total estimated costs of the contract. The consideration promised in the contract includes fixed and variable amounts. The customer pays the fixed amount based on a payment schedule. For some variable considerations (for example, a penalty payment calculated based on delay days) the Group recognizes revenue only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If the Group has recognized revenue, but not issued a bill, then the entitlement to consideration is recognized as a contract asset. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional.

If the Group cannot reasonably measure its progress towards complete satisfaction of the performance obligation of a construction contract, the Group shall recognize revenue only to the extent of the costs expected to be recovered.

A provision for onerous contracts is recognized when the Group expects the unavoidable costs of performing the obligations under a construction contract exceed the economic benefits expected to be received under the contract.

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management.

For residential properties, and public constructions, the Group offers a standard warranty to provide assurance that they comply with agreed upon specifications and has recognized warranty provisions for this obligation; please refer to note 6(s).

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

5) Revenue from services

Revenue from services rendered is recognized in profit or loss in proportion to the stage of completion of the transaction at the reporting date. If the Group has recognized revenue, but not issued a bill, then the entitlement to consideration is recognized as a contract asset.

The contract asset is transferred to receivables when the entitlement to payment becomes unconditional.

6) Financing components

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

(ii) Contract costs

1) Incremental costs of obtaining a contract

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

2) Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Group recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria: the costs relate directly to a contract or to an anticipated contract that the Group can specifically identify; the costs generate or enhance resources of the Group that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and the costs are expected to be recovered.

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(r) Employee benefits

(i) Defined contribution plans

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

(ii) Defined benefit plans

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

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

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

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

(iii) Short-term employee benefits

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

(s) Income Taxes

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

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

(i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
(ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) Taxable temporary differences arising on the initial recognition of goodwill.

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

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

(i) The Group has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either
1) The same taxable entity; or
2) Different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

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

Earnings per share

The Group disclose the Company’s basic and diluted earnings per share attributable to ordinary equity holders of Company. The basic earnings per share is calculated based on the profit attributable to the ordinary shareholders of the Company divided by weighted average number of ordinary shares outstanding. The diluted earnings per share is calculated based on the profit attributable to ordinary shareholders of the Company, divided by weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as remuneration of employees and employee stock options.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Each operating segment consists of standalone financial information.

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

The preparation of the consolidated financial statements in conformity with the Regulations Governing the preparation of Financial Reports by securities, Issuers, the Regulations and the IFRSs endorsed by the FSC, requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

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

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

(a) Judgment regarding control of subsidiaries

Although the Group owns less than half of Run Long Construction Co., Ltd. and has less than half its voting rights, management has determined that the Group controls the entity. Therefore, Run Long Construction Co., Ltd. is considered a subsidiary.

The information for the assumptions of uncertainty and the estimation have significant risks on amount of assets and liabilities that have reflected the effect of the Covid-19 and will result in significant adjustments in the following year is as follows:

(a) Inventory valuation

Inventories are measured at the lower of cost and net realizable value. The Group’s evaluate the selling price in the market is below the cost, and write off the cost of inventory to net realizable value. The estimation of net realizable value is based on current market conditions. Please refer note 6(e) for inventory valuation.

The Group’ accounting policies and disclosures included financial and non-financial assets and liabilities measured at fair value. The Group’ s financial instrument valuation group conducts independent verification on fair value by using data sources that are independent, reliable, and representative of exercise prices. This valuation group also periodically adjusts valuation models, conducts back testing, renews input data for valuation models, and makes all other necessary fair value adjustments to assure the rationality of fair value. The fair value measurement of investment property is based on the website of ’ Department of Land Administration and estate agency s website or the close deal in similar district.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

Level 1: quoted prices (unadjusted) in active markets for identifiable assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the assets or liabilities that are not based on observable market data.

The transfers policy between levels of the fair value hierarchy

If there are any movements of financial instruments measured at fair value between Level 1, Level 2, and Level 3, the Group recognizes the movement at the reporting date. Please refer notes as follows:

(a) Note 6(l) Investment property.

(b) Note 6(ab) Financial instruments.

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Bank overdrafts used for cash management purposes Demand Deposits Time Deposits Cash and cash equivalent	December 31, 2020 $ 7,035 10,501,775 30,000	December 31, 2019 4,856 12,122,689 100,000 12,227,545
	$ 10,538,810

Please refer Note 6(ab) for the disclosure of the Group’s financial assets and liabilities interest risk and sensitivity analysis.

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

			December 31,	December 31,
			2020	2019
Mandatorily measured at fair value through profit or loss:
	Stocks listed on domestic markets	$	263,550	629,443
	Call options and conversion options		6,816	-
Total		$	270,366	629,443
(i)	For the net gain or loss on fair value on financial	instruments at FVTPL, please refer to note
	6(aa).

(ii) As of December 31, 2020, and 2019, the gain or loss due to acquisition and disposal on financial assets at fair value through profit and loss of the Group was $11,009 thousand, $410,535 thousand, $0 and $47,094 thousand, respectively.
(iii) For credit risk and market risk; please refer to note 6(ab).

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iv) As of December 31, 2020 and 2019, the financial assets at fair value through profit and loss of the Group had been pledged as collateral for long-term borrowings; please refer to note 8.
(c) Financial assets at fair value through other comprehensive income

Equity investments at fair value through other comprehensive income: Unlisted Common Share	December 31, 2020 December 31, 2019 $ 553,139 550,364

(i) Equity investments at fair value through other comprehensive income

The Group designated the investments shown above as equity investment at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term for strategic purposes and not hold for sale.

As of December 31, 2019, the Group has sold its shares at a fair value of $491 thousand, and the Group realized a gain of $125 thousand, which were recognized as other comprehensive income, and thereafter, were reclassified to retained earnings.

(ii) For credit risk and market risk, please refer to note 6(ab).
(iii) As of December 31, 2020 and 2019, the financial assets at fair value through other comprehensive income of the Company hadn ’ t pledged as collateral for long term borrowings.
(d) Note and account receivables, net

Note receivables Trade receivables Less: Loss allowance	December 31, 2020 $ 1,529,570 246,934 7,672	December 31, 2019 1,486,144 424,212 2,992
	$ 1,768,832	1,907,364

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

Current 365 days past due	December 31, 2020	December 31, 2020	December 31, 2020	Loss allowance Provision - 7,672 7,672
	Gross carrying amount $ 1,768,832 7,672	Weighted-aver age loss rate
		- 100%
	$ 1,776,504

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Current 365 days past due	December 31, 2019	December 31, 2019	December 31, 2019	Loss allowance Provision - 2,992 2,992
	Gross carrying amount $ 1,907,364 2,992	Weighted-aver age loss rate
		- 100%
	$ 1,910,356

The movement in the allowance for notes and accounts receivable was as follows：

Balance on January 1 Impairment losses reversed Amounts written off Balance on December 31	For the years ended December 31 2020 2019 $ 2,992 5,003 4,680 1,819 - (3,830) $ 7,672 2,992

The aforementioned notes and trade receivables of the Group had been pledged as collateral for long-term borrowings; please refer to note 8.

(e) Inventories

Spare parts Raw materials and consumables Finished goods Total Properties and land held for sale Land held for construction sites Construction in progress Prepaid for land purchase Total In total	December 31, 2020 $ 10,598 1,696 4,881	December 31, 2019 11,129 804 7,291
	17,175	19,224
	$ 14,033,182 25,368,907 92,903,286 310,679	16,283,008 20,681,957 67,877,847 1,105,778
	132,616,054	105,948,590
	$ 132,633,229	105,967,814

For the years ended December 31, 2020 and 2019, the cost of good sold recognized in consolidated comprehensive income amounted to $16,054,535 thousand and $16,805,736 thousand, respectively. For the years ended December 31, 2020 and 2019 because parts of properties and land held for sale had been sold, the factor led to net realizable value below cost has been gone, the increase in net realizable value write-off the amount of cost of good sold $7,886 thousand and $44,951 thousand, respectively.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019, the Group has changed the usage of partial asset, and reclassified properties and land held for sale to property, plant and equipment and investment property according to definition. Please refer to Note 6(j) and (l).

For the years ended December 31, 2020 and 2019, construction in progress of the Group is calculated using a capitalization rate 1.85% ～ 1.99% and 2.04% ～ 2.10%, respectively. For capitalized interest, please refer to note 6(aa).

As of December 31, 2020, and 2019, the inventories of the Group had been pledged as collateral for bank borrowings, please refer to note 8.

(f) Non-current assets held for sale

Based on the resolution made during the Board Meeting on November 26, 2020, and December 24, 2020, the Group expected to dispose the land and building on JinTai section, Zhongshan Dist. in Taipei City, and the selling process had been proceeded. Therefore, the Group reclassified the property and building to non-current assets held for sale. As of December 31, 2020, the carrying value of non-current assets held for sale was $1,787,896 thousand, which the contract amount for the sale-and-leased-back was $3,688,880 thousand (include taxes).

The Group disposed the land and buildings in DeChang section, Yingge district by the resolution of the Board of directors on September 25, 2019. Following the resolution, the land and buildings were presented as a disposal group held for sale. Moreover, no impairment loss resulting from measuring at the lower of carrying amount of property, plant and equipment and fair value to sell shall be disclosed.

The total contract price for the sales of the above land and plant was $1,299,474 thousand (tax included). As of December 2019, the transfer process was completed and relevant payments were received. For the profit or loss on the disposal, please refer to note 6(aa).

The Group’s non-current assets held for sale had been pledged as collateral for bank borrowings, please refer to note 8.

(g) Investments accounted for using equity method

The components of investments accounted for using the equity method at the reporting date were as follows:

Joint ventures	December 31, 2020 $ 128,595	December 31, 2019 91,584

The Group’s financial information for investments accounted for using the equity method that are individually insignificant was as follows:

Carrying amount of individually insignificant associates’ equity	December 31, 2020 December 31, 2019 $ 128,595 91,584

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Attributable to the Group: Profit (loss) from continuing operations Comprehensive income	For the year ended December 31 2020 2019 $ (4,989) (4,606) $ (4,989) (4,606)	For the year ended December 31 2020 2019 $ (4,989) (4,606) $ (4,989) (4,606)
	2020 $ (4,989) $ (4,989)
		(4,606)

Guoyu Building Materials Co., Ltd., a joint venture of the Group, made a cash capital increase of $120,000 thousand in 2020 for expanding its operations and development, and the Group acquired $42,000 thousand based on its shareholding ratio.

(h) Changes in a parent's ownership interest in a subsidiary

Acquisition of additional equity of subsidiary

The Group acquired Run Long Construction Co., Ltd’s shares with cash in 2020 and 2019.

The effects of the changes in shareholdings were as follows:

Carrying amount of non-controlling interest on acquisition Consideration paid to non-controlling interests Retained Earnings	For the years ended December 31 2020 2019 $ 33,031 243,542 (112,828) (750,765) $ (79,797) (507,223)
	2020 $ 33,031 (112,828)
	$ (79,797)

(i) Material non-controlling interests of subsidiaries

The material non-controlling interests of subsidiaries were as follows:

Subsidiaries	Main operation place	Percentage of non- controlling interests	Percentage of non- controlling interests
		December 31, 2020	December 31, 2019
Run Long Construction Co., Ltd	Taiwan	83.64%	84.25%

The following information of the aforementioned subsidiaries have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Included in this information are the fair value adjustment made during the acquisition and relevant difference in accounting principles between the Group as at the acquisition date. Intra-group transactions were not eliminated in this information

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Financial information summary of Run Long Construction Co., Ltd was as follows:

Current asset Non-Current asset Current Liability Noncurrent Liability Net assets Non-controlling interests Sales revenue Net income Other comprehensive income Comprehensive income Profit, attributable to non-controlling interests Comprehensive income, attributable to non-controlling interests Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Dividends to NCI	December 31, 2020 December 31, 2019 $ 32,877,608 24,473,681 3,920,382 4,645,698 (23,527,423) (12,901,157) (8,199,631) (10,703,294) $ 5,070,936 5,514,928 $ 3,678,594 4,046,888 For the years ended December 31 2020 2019 $ 7,656,236 4,198,656 $ 117,248 655,920 49,668 15,535 $ 166,916 671,455 $ 177,453 459,228 $ 177,453 459,228 For the years ended December 31 2020 2019 $ (4,268,952) (6,070,319) 269,114 1,301,788 4,011,701 3,047,307 $ 11,863 (1,721,224) $ 515,797 2,107,708
	2020 $ (4,268,952) 269,114 4,011,701
	$ 11,863
	$ 515,797

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(j) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2020 and 2019, were as follows:

Land $ 1,345,199 - - - - (859,907) -	Buildings and construction 1,172,772 4,673 - (69,903) - (799,841) -	Machinery and equipment 3,634 1,699 - - - - -	Other equipment Constructio n inprogress 940,163 1,666 76,903 - (53,274) - 69,903 - 1,666 (1,666) - - (7) -	Total 3,463,434 83,275 (53,274) - - (1,659,748) (7)
$ 485,292	307,701	5,333	1,035,354 -	1,833,680
$ 1,729,702 12,636 44,143 (59,142) - (1,878) (380,262) -	1,432,792 15,952 - (94,175) 5,209 (1,742) (185,264) -	243,487 - - (239,853) - - - -	214,889 374,719 - - 319,586 92,118 (46,058) - 459,962 (465,171) - - (8,194) - (22) -	3,995,589 28,588 455,847 (439,228) - (3,620) (573,720) (22)
$ 1,345,199	1,172,772	3,634	940,163 1,666	3,463,434
$ 3,850 571 - - - - -	186,065 32,474 - - (27,188) (77,132) -	3,634 177 - - - - -	230,237 - 89,729 - 250,000 - (50,415) - 27,188 - - - (10) -	423,786 122,951 250,000 (50,415) - (77,132) (10)
$ 4,421	114,219	3,811	546,729 -	669,180

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Land $ 3,279 571 - - - - -	Buildings and construction 317,394 37,047 - (2,630) (131) (165,615) -	Machinery and equipment 242,045 532 - (238,943) - - -	Other equipment Constructio n inprogress 143,930 - 77,234 - 57,000 - (39,908) - - - (8,005) - (14) -
$ 3,850	186,065	3,634	230,237 -
$ 480,871	193,482	1,522	488,625 -
$ 1,726,423	1,115,398	1,442	70,959 374,719
$ 1,341,349	986,707	-	709,926 1,666

(i) In order to manage activating strategies of assets and obtain the maximum effectiveness, the Group transferred the assets to the non-current assets held for sale in 2020 and 2019. Please refer to note 6 (f) and (e) for details.
(ii) The lease improvement includes the renovation cost for the mall operations, etc. Based on the assessment in 2020 and 2019, the carrying amount was determined to be higher than its recoverable amount so an impairment loss $250,000 thousand and $57,000 thousand was recognized. Please refer to note 6(aa).
(iii) As of December 31, 2020, and 2019, the property, plant and equipment of the Group had been pledged as collateral for bank borrowings, please refer to note 8.

(k) Right-of-use assets

The Group leases assets including land and transportation equipment. Information about leases for which the Group as a lessee was presented below:

Cost: Balance on January 1, 2020 Additions Lease Improvement Balance on December 31, 2020	Land	Buildings	Transportation equipment	Total 654,283 11,567 (23,951 641,899
	$ 29,682 622,715 11,567 - (23,951) -		1,886 - - 1,886
	$ 17,298 622,715

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Balance on January 1, 2019 Effects of retrospective application Balance on January 1, 2019 after adjustments Additions Lease Improvement Balance on December 31, 2019 Depreciation and impairment losses: Balance on January 1, 2020 Depreciation Lease Improvement Balance on December 31, 2020 Balance on January 1, 2019 Effects of retrospective application Balance on January 1, 2019 after adjustments Depreciation Lease Improvement Balance on December 31, 2019 Carrying amounts: Balance on December 31, 2020 Balance on December 31, 2019	Land	Buildings	Transportation equipment Total - - 1,886 619,402
	$ - - 9,167 608,349
	9,167 608,349 20,515 24,279 - (9,913)		1,886 619,402 - 44,794 - (9,913)
	$ 29,682 622,715		1,886 654,283
	$ 13,254 147,301 11,928 42,258 (21,483) -		1,519 162,074 367 54,553 - (21,483)
	$ 3,699 189,559		1,886 195,144
	$ - - 2,674 109,090		- - 891 112,655
	2,674 109,090 10,580 41,248 - (3,037)		891 112,655 628 52,456 - (3,037)
	$ 13,254 147,301		1,519 162,074
	$ 13,599 433,156		- 446,755
	$ 16,428 475,414		367 492,209

(l) Investment Property

Land and improvement $ 2,500,256 120,736 (22,087) (111,356)	Buildings and construction 2,286,588 117,377 (20,485) (100,665)	Total 4,786,844 238,113 (42,572) (212,021)
$ 2,487,549	2,282,815	4,770,364
$ 2,313,388 337,037 1,878 (152,047)	2,215,444 281,776 1,742 (212,374)	4,528,832 618,813 3,620 (364,421)
$ 2,500,256	2,286,588	4,786,844

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Land and improvement $ 40,818 - - -	Buildings and construction 182,427 50,979 (536) (6,741)	Buildings and construction 182,427 50,979 (536) (6,741)	Total 223,245 50,979 (536) (6,741)
$ 40,818	226,129		266,947
$ 40,818 - - -	150,291 40,143 131 (8,138)		191,109 40,143 131 (8,138)
$ 40,818	182,427		223,245
$ 2,446,731	2,056,686		4,503,417
$ 2,272,570	2,065,153		4,337,723
$ 2,459,438	2,104,161		4,563,599
		$ 7,047,090
		$ 6,780,482
		$ 7,593,261

The investment property includes several commercial buildings owned by the Group for renting to the third party. Please refer to note 6(t) and (y) for more information.

The fair value measurement of investment property is based on the website of Department of Land Administration and estate agency’s website or the close deal in similar district. The fair value measurement for investment property has been categorized as a level 3 fair value based on the inputs to the valuation technique used.

As of December 31, 2020 and 2019, the Group’s investment property had been pledged as collateral for bank borrowings, please refer to note 8.

(m) Other current assets and other non-current assets

Other current financial assets Current incremental costs to obtaining a contract Other non-current financial assets	December 31, 2020 $ 12,310,906 2,445,546 11,148,989	December 31, 2019 5,487,384 1,558,403 10,224,220 17,270,007
	$ 25,905,441

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(i) Other financial asset

Other financial assets include trust account for presale of properties and land, restricted deposit, performance guarantee, reserve account for corporation bonds and construction deposit.

(ii) Current incremental costs to obtaining a contract

The Group expects that incremental commission fees paid to intermediaries, and the bonus for the internal sales department are recoverable. The Group has therefore capitalized them as contract costs. Capitalized commission fees are amortized when the related revenues are recognized. For the years ended December 31, 2020 and 2019, the Group recognized $446,621 thousand and $540,800 thousand of selling expense.

(iii) As of December 31, 2020, and 2019, the other financial assets of the Group had pledged as collateral for long-term borrowings, please refer to note 8.
(n) Short-term borrowings

December 31, 2020 $ 6,769,325 68,021,680 (18,818)	December 31, 2020 $ 6,769,325 68,021,680 (18,818)	December 31, 2019 11,769,668 45,067,977 (19,809)

$ 74,772,187		56,817,836
	1.23%~2.14%	1.43%~2.40%

(i) The issue of bank loan and repayment

For the years ended December 31, 2020 and 2019, the incremental amounts are $44,588,960 thousand and $30,917,734 thousand, respectively; the repayment amounts are $26,635,600 thousand and $16,994,324 thousand, respectively. Please refer to note 6(aa).

(ii) Collateral for bank Loans

The Group had pledged as the collateral for bank borrowings, please refer to note 8.

(o) Short-term notes and bills payable

Commercial paper payable Less: Discount on short-term notes and bills payable Total	December 31, 2020	December 31, 2020	Amount $ 8,339,900 (7,197) $ 8,332,703
	Guarantee or acceptance institute	Range of interest rate
	Financial institute	0.398%~1.82%

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Commercial paper payable Less: Discount on short-term notes and bills payable Total	December 31, 2019	December 31, 2019	Amount $ 4,236,200 (11,049) $ 4,225,151
	Guarantee or acceptance institute	Range of interest rate
	Financial institute	0.648%~1.838%

The Group had pledged as collateral for short-term notes and bills payable, please refer to note 8.

(p) Long-term borrowings

The Group’s long-term borrowings details, conditions and provisions were as follows:

	December	31, 2020	Amount $ 178,918 5,353,173 (1,995,648)
Currency	Range of interest rate	Maturity
TWD TWD	1.85% 1.44%~1.94% December	2025 2021~2038 31, 2019
			$ 3,536,443
			Amount $ 214,442 6,056,585 (257,788)
Currency	Range of interest rate	Maturity
TWD TWD	2.45%~2.48% 1.69%~2.25%	2022~2030 2021~2038
			$ 6,013,239

(i) The issue of bank loan and repayment

The amount issued for the years ended December 31, 2020 and 2019 are $550,000 thousand and $682,200 thousand, respectively; the repayment amounts are $1,288,936 thousand and $615,457 thousand, respectively, please refer to note 6(aa).

(ii) Collateral for bank Loans

The Group had pledged as collateral for bank loans, please refer to note 8.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(q) Bonds payable

The details of the Group’s bonds payable were as follows:

Secured ordinary corporate bond-current Secured convertible bonds- non-current Secured ordinary corporate bond- non-current Total	December 31, 2020 $ 8,462,758 10,114,500 15,284,997	December 31, 2019 - 10,270,574 18,804,417 29,074,991
	$ 33,862,255

(i) The Group issued a secured ordinary corporate bond amounting to $5,000,000 thousand $2,500,000 thousand, $5,000,000 thousand, and $2,000,000 thousand dollars with an interest rate of 0.53%, 0.90%, 1.15%, and 1.00% in December 2020, May 2018, April and November, 2016, respectively. The secured ordinary corporate bond was issued for 5 years, interest paid annually, repayment of principal and interest at maturity.

Subsidiaries issued a secured ordinary corporate bond amounting to $5,900,000 thousand, $1,500,000 thousand, and $2,000,000 thousand dollars with an interest rate of 0.78%-0.85%, 0.96%, and 0.98% in 2019, December 2016, and August 2017, respectively. The secured ordinary corporate bond was issued for 5 years, interest paid annually, repayment of principal and interest at maturity.

(ii) The Group’s details of secured convertible bonds were as follows:

Secured convertible bonds Discount on bonds payable-unamortized amount Accumulated convertible amount Ending balance: bonds payable Derivative-call option and convertible option (FVPL)	December 31, 2020 $ 10,577,820 (185,335) (277,985)	December 31, 2019 10,577,820 (307,140) (106)
	$ 10,114,500	10,270,574
	$ 6,816	-

In June 2017, the Group issued a secured 5-year convertible bond with zero interest for $10,577,820 with the following conditions:

1) The conversion price was $57.1 per share, when it comes to adjusting conversion price of subsidiary’s common share, it should adhere to the Group’s conversion rules. The conversion price change with formula within issuance details. These secured convertible bonds do not have reset feature.
2) At any time within three months after the issuance date till 40 days before maturity date, the subsidiary would repurchase the bond at the face value if the close price of the subsidiary’s ordinary share price exceeded 30% of the bond's conversion price for successive 30 days, or the outstanding value of bonds was lower than 10% of the total issuance value.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

  - 3) The bondholders can execute put options after three years from the issuance date, the redemption value is 103.7971% of the bond value (the real yield is 1.25%).

  - 4) Unless the bond has been redeemed before maturity, repurchased and cancelled or converted, the bonds will be redeemed by the Group on the maturity date at 106.4082% of the principal amount of the bond (the real yield is 1.25%).

(iii) For the details of collateral of secured convertible bonds and bonds payable, please refer to note 8.
(iv) Please refer to note 6(aa) for the interest expense for the years ended December 31, 2020 and 2019.
(r) Lease liabilities

The carrying amount of lease liabilities were as follows：

Current Non-current	December 31, 2020 $ 62,057	December 31, 2019 65,209 500,586
	$ 458,956

For the maturity analysis, please refer to Note 6(ab).

The amounts recognized in profit or loss were as follows：

Interest on lease liabilities Expenses relating to short-term and low-value leases	For the years ended December 31 2020 2019 $ 10,824 11,102 $ 138,999 145,484

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

Total cash outflow for leases	For the years ended December 31 2020 2019 $ 203,563 206,718

(i) Real estate leases

As of December 31, 2020, and 2019, the Group leases land and buildings for its office, reception center, parking lot, and department store. The leases of reception center typically run for a period of 2-3 years, of 5 years for office space, of 20 years for parking lot, and of 16 years for department store.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

The Group leases transportation equipment, with lease terms of three years.

The Group also leases office equipment, short-term reception center, and Outdoor advertising. These leases are short-term and leases of low value items. The Group has elected not to recognize right of use assets and lease liabilities for these leases.

(iii) Sale-and-leaseback

In November 2019, the Group sold its property, plant and equipment and leased back for 5 years. The Group recognized gains to the rights transferred of the sale and leaseback, please refer to Note 6(aa).

(s) Provisions

Balance on January 1, 2020 Provisions added at current period Balance on December 31, 2020 Balance on January 1, 2019 Provisions added at current period Provisions used at current period Provisions reversed at current period Balance on December 31, 2019	Warranty $ 124,907 30,780 $ 155,687 $ 199,841 13,395 (3,511) (84,818) $ 124,907

The Group’s warranty provision is related to construction contract. The warranty measured by the historical record; the Group expects most of the liabilities will realize within 1-3 years after construction completion.

(t) Operating lease

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

Less than one year One to two years Two to three years Three to four years Four to five years More than five years Total undiscounted lease payments	December 31, 2020 $ 90,206 71,030 60,641 51,864 31,880 6,225	December 31, 2019 88,599 70,720 62,586 54,049 27,213 16,994
	$ 311,846	320,161

The rental income from investment property for the years ended December 31, 2020 and 2019 are $89,944 thousand and $90,074 thousand.

(u) Employee benefits

(i) Defined benefit plans

The expenses recognized in profit or loss for the Group were as follows:

The present value of defined benefit plans Fair value of plan asset Net defined benefit liability	December 31, 2020 $ 77,631 (36,927)	December 31, 2019 75,056 (34,642)
	$ 40,704	40,414

1) Composition of plan assets

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

The Group’s Bank of Taiwan labor pension reserve account balance amounted to $36,927 thousand as of December 31, 2020. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) Movements in present value of the defined benefit obligations

The movement in present value of the defined benefit obligations for the Group were as follows:

Defined benefit obligations atJanuary 1 Current service cost and interest Remeasurements loss (gain): －Return on plan assets excluding interest income －Actuarial loss (gain) arising from: Defined benefit obligationsat December 31	For the years ended December 31 2020 2019 $ 75,056 72,320 1,326 1,415 2,295 668 (1,046) 653 $ 77,631 75,056
	2020 $ 75,056 1,326 2,295 (1,046)
	$ 77,631

The details of the Group’s employee’s benefit liability were as follows:

Short-term paid leave liability	December 31, 2020 $ 6,373	December 31, 2019 13,084

3) Movements of defined benefit plan assets

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

Fair value of plan assetsat January 1 Remeasurements loss (gain): －Return on plan assets excluding interest income Contributions paid by the employer Expected return on defined plan assets Fair value of plan assets at December 31	For the years ended December 31 2020 2019 $ 34,642 32,334 1,036 999 898 923 351 386 $ 36,927 34,642
	2020 $ 34,642 1,036 898 351
	$ 36,927

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Group were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations Administration expense	For the years ended December 31 2020 2019 $ 576 570 399 459	For the years ended December 31 2020 2019 $ 576 570 399 459
	2020 $ 576 399
	$ 975	1,029
	$ 975	1,029

5) Actuarial valuations

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	December 31, 2020 0.625% 2.00%~3.00%	December 31, 2019 1% 2.00%~3.00%

The expected allocation payment to be made by the Group to the defined benefit plans for the one-year period after the reporting date is $874 thousand.

The weighted average lifetime of the defined benefits plans is 11.10 ～ 12.93 years.

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2020 Discount rate Future salary increasing rate December 31, 2019 Discount rate Future salary increasing rate	Influences of defined benefit obligations Increase 0.25％ Decrease 0.25％ $ (1,938) 1,924 2,000 (1,874) (2,061) 2,132 2,062 (2,005)	Influences of defined benefit obligations Increase 0.25％ Decrease 0.25％ $ (1,938) 1,924 2,000 (1,874) (2,061) 2,132 2,062 (2,005)
	Increase 0.25％ $ (1,938) 2,000 (2,061) 2,062
		1,924 (1,874) 2,132 (2,005)

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

(ii) Defined contribution plans

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

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $44,365 thousand and $43,188 thousand for the years ended December 31, 2020 and 2019, respectively.

(v) Income tax

(i) Income tax expense

The components of income tax expense for the years ended December 31, 2020 and 2019 were as follows:

as follows:
Current tax expense Current period Land value increment tax Additional 10% surtax on unappropriated earnings Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Income tax expense	For the years ended December 31 2020 2019 $ 344,786 51,231 182,033 333,819 - 88,601 (27,760) 30,620
	2020 $ 344,786 182,033 - (27,760)
	499,059	504,271
	(6,156)	(41,516)
	$ 492,903	462,755

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The reconciliation of income tax expense and profit before tax for the years ended December 31, 2020 and 2019 were as followed:

Profit before tax Income tax expense at domestic statutory tax rate Land tax exempt income Book –tax difference between recognition time Book –tax difference of capitalization Book –tax difference between deferred sales commission Land value increment tax Financial assets measured at fair value through profit and loss Reversal of deferred tax liabilities Impairment loss Pay an extra 10% income tax on all unappropriated earnings Adjustment for prior periods Others Total	For the years ended December 31 2020 2019 $ 3,316,157 3,951,772	For the years ended December 31 2020 2019 $ 3,316,157 3,951,772
	2020 $ 3,316,157
	663,231 (506,642) 51,360 (76,264) 100,378 182,033 (8,127) - 50,000 - (27,760) 64,694	790,354 (954,519) 119,612 (69,777) 101,036 333,819 (9,273) (56,503) 11,400 88,601 30,620 77,385
	$ 492,903	462,755

(ii) Deferred tax asset and liability recognized

Changes in the amount of deferred tax assets and liabilities for the years ended December 31, 2020 and 2019 were as follows:

Deferred tax asset:

Investment property impairment	Warranty	Others	Total 41,209 6,156
$ 11,242 -	24,980 6,156	4,987 -
$ 11,242	31,136	4,987	47,365
$ 11,242 -	39,967 (14,987)	4,987 -	56,196 (14,987)
$ 11,242	24,980	4,987	41,209

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Deferred tax liabilities:

Provision for land value increment tax	Others	Total 191,553
$ 191,213	340
$ 191,213	340	191,553
$ 247,716 (56,503)	340 -	248,056 (56,503)
$ 191,213	340	191,553

(iii) The Group’s income tax had been examined by the tax authorities till 2018, while the 2017 income tax had not yet been examined. Except for, Highwealth Property Co., Ltd. and Yuan Sheng International Co., Ltd, other domestic subsidiaries’ income tax had been examined by the tax authorities till 2018, and the Highwealth’s and Yuan Sheng’s income tax had been examined by the tax authorities till 2019.

(w) Capital and other equity

(i) Ordinary shares

As of December 31, 2020, and 2019, the number of authorized ordinary shares were amounted $20,000,000 thousand with par value of $10 per share. As of that date, the paid-in capital were $12,902,969 thousand and $11,666,288 thousand, respectively.

As of 2020 and 2019, the reconciliation of the Group’s outstanding shares as follows:

Balance on January 1 Capital surplus increase Convertible corporation bonds transferred Balance on December 31, 2020	Ordinary Shares 2020 2019 1,166,629 1,166,627 116,633 - 7,005 2	Ordinary Shares 2020 2019 1,166,629 1,166,627 116,633 - 7,005 2
	1,290,267	1,166,629

A resolution was passed during the general meeting of shareholders held on June 10, 2020 for the issuance of 100 new shares per thousand shares by retained earnings and capital surplus, amounting to $1,166,628 thousand. The Group has received approval from the Financial Supervisory Commission for this capital increase on August 3, 2020. In addition, a resolution was passed during the Board Meeting, to set October 1, 2020 as the date of capital increase, and completed the requisition in October 16, 2020.

For the years ended December 31, 2020 and 2019, due to the convertible bonds’ holder exercised the convert option, the Group issuance of 7,005 thousand new shares and 2 thousand new shares with the amount of $70,053 thousand and $22 thousand, respectively. Among the 7,005 thousand shares had not performed the registration.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Capital surplus

Capital surplus
Treasury share transactions Difference arising from subsidiary’s equity Conversion of bonds Capital surplus-premium from merger Donation from shareholders Other	December 31, 2020 $ 432,357 33,530 203,231 62 3,284 8,357	December 31, 2019 379,053 33,525 81 62 3,396 8,357
	$ 680,821	424,474

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

(iii) Retained earnings

In accordance with the Group’s articles of incorporation, which were approved during the general meeting of shareholders held on June 10, 2020, after paying the income taxes, the Group’s net earnings should first be used to offset the prior years’ deficits. Of the remaining balance, 10% is to be appropriated as legal reserve, and in accordance with the regulations of the competent authority or reversal appropriated retained earnings. And then any remaining profit, together with any undistributed retained earnings, shall not be distributed less than 20% as shareholders’ dividends proposed by the Board of Directors to be submitted to the stockholders’ meeting for approval. The cash dividends should not be less than 10% of the total dividends.

As the Group distributes dividends or legal reserves and part or all of paid-in capital in cash, the Group should hold a Board meeting to pass the resolution by more than half of the directors present at the Board meeting, which requires a quorum of two third of all the directors. The resolution should be submitted to the Shareholder’s meeting.

In addition, on June 10, 2019, before the general meeting of shareholders made a resolution to amend the articles of incorporation that the Group would distribute surplus earning and offset loss at the end of each quarter. If there are earnings at final accounts of each quarter, the Group shall distribute earnings in accordance with the abovementioned procedures.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

1) Legal reserve

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

2) Special reserve

In accordance with Rule No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders’ equity. Similarly, a portion of unappropriated earnings prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

3) Earnings distribution

Earnings distribution for the years ended December 31, 2020 and 2019 was decided by the resolution adopted, at the general meeting of shareholders held on June 10, 2020 and 2019, respectively. The relevant dividend distributions to shareholders were as follows:

2019, respectively. The relevant	dividend distributions to shareholders were as follows:	dividend distributions to shareholders were as follows:
Dividends distributed to ordinary shareholders: Cash Stock Total	For the years ended December 31 2019 2018 Amount per share (dollars) Total amount Amount per share (dollars) Total amount $ 3.0 3,499,886 3.5 4,083,194 1.0 1,166,628 - - $ 4,666,514 4,083,194
		4,083,194

Earnings distribution for second and third quarters of 2019 was decided by the resolution adopted, at the general meeting of shareholders held on August 13, 2019 and November 13, 2019, respectively. The dividend distributions to shareholders were $1,166,628 thousand and $1,166,629 thousand, respectively. Earnings distribution of 2020 was decided by the resolution adopted, at the general meeting of shareholders held on March 19, 2021. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to ordinary shareholders: Cash	For the years ended December 31 2020 Amount per share (dollars) Total amount $ 2.0 2,581,927
	Amount per share (dollars)
	$ 2.0

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iv) Treasury shares
1) In accordance with Securities and Exchange Act requirements as stated above, the number of shares repurchased should not exceed 10 percent of all shares outstanding. ’
Also, the value of the repurchased shares should not exceed the sum of the Group s retained earnings, share premium, and realized capital reserves. As of December 31, 2020, the Group hadn't repurchased any share.
2) Prior to Company ACT amendment in 2001, Subsidiaries of the Group, Ju Feng Hotel Management Co., Ltd, Highwealth Property Co., Ltd. and Qi Yu Construction Co., Ltd. held part of the Company’s shares for investment purpose. Run Long Construction Co., Ltd., the subsidiary that the Company has control over, and acquired 11,950 thousand of the Company’s shares for investment purpose in the open market in 2015 and obtained 1,195 shares for stock dividend from retained earnings in 2020. As of December 31, 2020 and 2019, the market price per share were $45.85 and $46.3, respectively.

The details of the treasury shares held by subsidiaries are as followed:

Subsidiary Ju Feng Hotel Management Co., Ltd. Highwealth Property Co., Ltd. Qi Yu Construction Co., Ltd. Run Long Construction Co., Ltd.		December	December 31, 2019 Shares (thousand) Book value 4,162 1,733 8,045 10,850 2,495 - 11,950 71,227 26,652 83,810
			Shares (thousand) 4,162 8,045 2,495 11,950
		29,317 $ 86,568	26,652

(v) Other equity items

Balance on January 1, 2020 Exchange differences on foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance at December 31, 2020	Exchange differences on translation of foreign financial statements $ 195 51 - $ 246	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total 532,627 51 2,775 535,453
		532,432 - 2,775 535,207

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Balance on January 1, 2019 Exchange differences on foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2019	Exchange differences on translation of foreign financial statements $ 344 (149) - - $ 195	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 510,083 - 22,474 (125) 532,432	Total 510,427 (149) 22,474 (125) 532,627

(x) Earnings per share
(i) Basic earnings per share

The Group’s Basic earnings per share is calculated by profit attributable to ordinary shareholders of the Group for 2020 and 2019 are $2,645,801 thousand and $3,029,789 thousand, respectively, and the weighted average number of ordinary shares outstanding are 1,254,563 thousand shares and 1,253,974 thousand shares respectively. For related calculation are as follows:

1) Profit attributable to ordinary shareholders of the Group

		For	the years ended	December 31
			2020	2019
	Profit attributable to ordinary shareholders	$	2,645,801	3,029,789
2)	Weighted-average number of ordinary shares (diluted)
		For	the years ended	December 31
			2020	2019
	Ordinary shares outstanding at January 1		1,166,629	1,166,627
	Treasury shares		(29,317)	(29,317)
	Effect of conversion of convertible notes		588	1
	Stock dividends		116,663	116,663
	Weighted-average number of ordinary shares at		1,254,563	1,253,974
	December 31

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Diluted earnings per share

The Group’s diluted earnings per share is calculated by profit attributable to ordinary shareholders of the Group for 2020 and 2019 are $2,739,518 thousand and $3,122,453 thousand respectively. After adjusting the effect of dilution of ordinary share, the weighted average number of ordinary shares for 2020 and 2019 are 1,521,657 thousand and 1,486,976 thousand shares, respectively. For related calculation are as follows:

1) Profit attributable to ordinary shareholders of the Group (diluted)

Profit attributable to ordinary shareholders of the Group	For the years ended December 31 2020 2019 $ 2,739,518 3,122,453
	2020 $ 2,739,518

2) Weighted-average number of ordinary shares

Weighted-average number of ordinary shares (basic) Effect of conversion of convertible bonds Effect of restricted employee shares unvested Weighted-average number of ordinary shares (diluted)	For the years ended December 31 2020 2019 1,254,563 1,253,974 266,076 232,016 1,018 986 1,521,657 1,486,976
	2020 1,254,563 266,076 1,018
	1,521,657

(y) Revenue from contracts with customers
(i) Disaggregation of revenue

For the year ended December 31, 2020 Sales of real estate department Construction contractor department Department store Total $ 22,755,194 1,583,139 124,685 24,463,018	For the year ended December 31, 2020 Sales of real estate department Construction contractor department Department store Total $ 22,755,194 1,583,139 124,685 24,463,018	For the year ended December 31, 2020 Sales of real estate department Construction contractor department Department store Total $ 22,755,194 1,583,139 124,685 24,463,018	For the year ended December 31, 2020 Sales of real estate department Construction contractor department Department store Total $ 22,755,194 1,583,139 124,685 24,463,018
Sales of real estate department $ 22,755,194	Construction contractor department 1,583,139	Department store 124,685
$ 22,657,004 - - - 98,190	- 1,577,561 - - 5,578	- - 68,657 46,358 9,670	22,657,004 1,577,561 68,657 46,358 113,438
$ 22,755,194	1,583,139	124,685	24,463,018
$ 98,190 22,657,004	1,583,139 -	8,308 116,377	- 93,018
$ 22,755,194	1,583,139	124,685	24,463,018

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the year ended December 31, 2019 Sales of real estate department Construction contractor department Department store Total $ 23,317,788 367,305 113,108 23,798,201	For the year ended December 31, 2019 Sales of real estate department Construction contractor department Department store Total $ 23,317,788 367,305 113,108 23,798,201	For the year ended December 31, 2019 Sales of real estate department Construction contractor department Department store Total $ 23,317,788 367,305 113,108 23,798,201	For the year ended December 31, 2019 Sales of real estate department Construction contractor department Department store Total $ 23,317,788 367,305 113,108 23,798,201
Sales of real estate department $ 23,317,788	Construction contractor department 367,305	Department store 113,108
$ 23,213,650 - - - 104,138	- 361,693 - - 5,612	- - 61,461 46,052 5,595	23,213,650 361,693 61,461 46,052 115,345
$ 23,317,788	367,305	113,108	23,798,201
$ 91,329 23,226,459	367,305 -	2,283 110,825	460,917 23,337,284
$ 23,317,788	367,305	113,108	23,798,201

For net tenant-counter income, the Group acts as an agent not a consignor. This decision was made by the management depending on the following factors:

1) The Group could earn a fixed or discretionary amount.
2) The Group could not determine the sale price of the products it sells.

(ii) Contract balances

Contract assets- Construction Less: Allowance for impairment Total Contract liabilities- Construction Contract liabilities-Sales of real estate Contract liabilities-Advance receipt Contract liabilities-Gift certificates and reward points Total	December 31, 2020 $ 14,027 -	December 31, 2019 50,303 -	January 1, 2019 41,924 -
	$ 14,027	50,303	41,924
	$ - 11,609,186 9,017 73,877 $ 11,692,080	126,565 6,037,956 8,786 29,852 6,203,159	312 3,354,352 2,274 - 3,356,938

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

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

As of January 1, 2020, and 2019, the beginning balance of contract liabilities that were accounted for as 2020 and 2019, revenue amounts to $759,416 thousand and $2,016,184 thousand.

The major change in the balance of contract assets and liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received. There were no other significant changes for the year ended December 31, 2020 and 2019.

As of December 31, 2020, and 2019, customer loyalty program was allocated $208 thousand and $562 thousand.

(z) Employee compensation and directors’ and supervisors’ remuneration

In accordance with the articles of incorporation, the Group should contribute no less than 0.1% of the profit as employee compensation and less than 1% as directors’ and supervisors’ remuneration when there is profit for the year. However, if the Group has accumulated deficits, the profit should be reserved to offset the deficit. The recipients of shares and cash may include the employees of the Company’s affiliated companies who meet certain conditions.

The remunerations to employees amounted to both $36,000 thousand and the remunerations to directors amounted to $7,500 thousand and $8,400 thousand, respectively, for the years ended December 31, 2020 and 2019. These amounts were calculated using the Group’s net income before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage which is stated under the Group ’ s proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. For relevant information, please refer to the Market Observation Post System Website. For the year ended December 31, 2020 and 2019, there is no difference between the estimate amounts in consolidated financial statements and the actual abovementioned distributed amounts.

(aa) Non-operating income and expense
(i) Interest income

For the years ended December 31, 2020 and 2019 interest income were as follows:

For the years ended December 31, 2020 and 2019 interest	income were as follows:
Interest income Construction deposits paid Bank deposits and Notes interest Other	For the years ended December 31 2020 2019 $ 2,344 3,681 13,193 22,918 7,225 7,061 $ 22,762 33,660
	2020 $ 2,344 13,193 7,225
	$ 22,762

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Other income

For the years ended December 31, 2020 and 2019 revenue were as follows:

Contract termination income Dividend income Other income	For the years ended December 31 2020 2019 $ 20,296 18,788 15,166 10,564 129,723 200,991	For the years ended December 31 2020 2019 $ 20,296 18,788 15,166 10,564 129,723 200,991
	2020 $ 20,296 15,166 129,723
	$ 165,185	230,343

(iii) Other gains and losses

For the years ended December 31, 2020 and 2019 other gains and losses were as follows:

Foreign exchange losses Gain on disposal of property, plant and equipment Gains on disposal of investments Gains on financial assets and liabilities at fair value through profit or loss Gains to the rights transferred of the sale and leaseback Impairment loss on disposals of property, plant and equipment Gain on disposals of non-current assets held for sale Other Income Other expenses	For the years ended December 31 2020 2019 $ (343) (1,930) 1,836 1,091 112,057 162,047 40,633 46,363 - 62,116 (250,000) (57,000) - 886,639 141 254 (20,066) (10,206) $ (115,742) 1,089,374
	2020 $ (343) 1,836 112,057 40,633 - (250,000) - 141 (20,066)
	$ (115,742)

(iv) Finance costs

For the years ended December 31, 2020 and 2019 details of finance cost of the Group were as follows:

Interest expense Bank loans and collateral Amortization on discounted corporate bond Interest on corporate bond Other financial expenses Less: capitalized interest	For the years ended December 31 2020 2019 $ 1,764,392 1,508,072 109,298 117,730 181,915 173,731 35,752 16,792 (1,203,941) (913,334) $ 887,416 902,991
	2020 $ 1,764,392 109,298 181,915 35,752 (1,203,941)
	$ 887,416

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ab) Financial instruments
(i) Credit risk
- 1) Credit risk exposure

The financial instrument’s biggest credit risk exposure is same as the carrying amount of the financial assets.

2) The Group has a vast client base that is not connected; thus, the ability to concentrate the credit risk is limited.
3) Receivables and debt securities

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

Other financial assets at amortized cost includes other receivables (classified as other financial assets-current). All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses.

The loss allowance provision as of December 31, 2020 and 2019 was determined as follows:

Balance at December 31, 2020 (as beginning balance) Balance at December 31, 2019 (as beginning balance)	Other receivables $ 8,235 $ 8,235

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

December 31, 2020 Non derivative financial liabilities: Secured loans Unsecured loans Short-term transaction instrument payables Other financial liability－current Convertible bond (Including less than 1 year) Ordinary corporate bonds Notes payable, accounts payable and other payables Lease liabilities	Contractual cash flows	Within 1year	1-5 years	Over 5 years 15,243,444 - - - - - 28 309,989
	$ 75,816,751 7,071,335 8,339,900 93,917 10,362,835 24,369,754 8,544,752 580,268	6,623,040 6,087,947 8,339,900 - - 8,666,100 8,505,617 58,431	53,950,267 983,388 - 93,917 10,362,835 15,703,654 39,107 211,848
	$ 135,179,512	38,281,035	81,345,016	15,553,461

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2019 Non derivative financial liabilities: Secured loans Unsecured loans Short-term transaction instrument payables Other financial liability－current Convertible bond (Including less than 1 year) Ordinary corporate bond Notes payable, accounts payable and other payables Lease liabilities	Contractual cash flows	Within 1year	1-5 years	Over 5 years 5,107,658 217,659 - - - - 870 357,307
	$ 54,843,929 12,245,673 4,240,045 99,047 10,640,714 19,420,202 9,483,339 635,347	9,206,254 6,908,739 4,240,045 - - 182,820 9,424,775 65,408	40,530,017 5,119,275 - 99,047 10,640,714 19,237,382 57,694 212,632
	$ 111,608,296	30,028,041	75,896,761	5,683,494

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

(iii) Market risk
1) Exposure to foreign currency risk: None.
2) Interest rate analysis

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

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.5% when reporting to management internally, which also represents the Group management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 0.5% basis points, the Group’s interest expense would have increased / decreased by $443,185 thousand and $336,570 thousand for the years ended December 31, 2020 and 2019. Taking into account that capitalized interest of profit may decrease or increase by $188,055 thousand and $167,327 thousand, respectively. This is mainly due to the Group’s borrowing at variable rates.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

3) Other market price risk

For the years ended December 31, 2020 and 2019, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

For the years ended December 31	For the years ended December 31	For the years ended December 31
2020
Other comprehensive income after tax $ 55,314	Net income
$ (55,314)	(26,355) (55,036)	(62,944)

(iv) Information of fair value
1) Valuation techniques for financial instruments measured at fair value

The fair value of financial assets and liabilities at fair value through profit or loss, and financial assets at fair value through other comprehensive income is measured on a recurring basis. The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	December 31, 2020	December 31, 2020	December 31, 2020	Total 6,816 263,550
Book Value $ 6,816 263,550		Fair Value
	Level 1 - 263,550	Level 2 6,816 -	Level 3 - -
$ 270,366	263,550	6,816	-	270,366
$ 553,139	-	553,139	-	553,139
$ 10,538,810 1,768,832 12,310,906 11,148,989	- - - -	- - - -	- - - -	- - - -
$ 35,767,537	-	-	-	-

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020	Total - - - - - - -
Book Value $ 74,772,187 8,332,703 8,544,752 521,013 93,917 33,862,255 5,532,091		Fair Value
	Level 1 - - - - - - -	Level 2 - - - - - - -	Level 3 - - - - - - -
$ 131,658,918	-	-	-	-
	December 31, 2019			Total 629,443
Book Value $ 629,443		FairValue
	Level 1 629,443	Level 2 -	Level 3 -
$ 550,364	-	550,364	-	550,364
$ 12,227,545 1,907,364 5,487,384 10,224,220	- - - -	- - - -	- - - -	- - - -
$ 29,846,513	-	-	-	-
$ 56,817,836 4,225,150 9,483,339 565,795 99,047 29,074,991 6,271,027	- - - - - - -	- - - - - - -	- - - - - - -	- - - - - - -
$ 106,537,185	-	-	-	-

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) Valuation techniques for financial instruments not measured at fair value

The Group’s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

a) Financial assets measured at amortized cost (debt investment that has no active markets) and financial liabilities measured at amortized cost.

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

3) Valuation techniques for financial instruments measured at fair value
a) Non-derivative financial instruments

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm ’ s-length basis. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

The fair value of financial assets, which is regarded as being quoted in an active market, held by the Group is disclosed as follows sorted by character:

i) A financial instrument being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm ’s-length basis. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

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

b) Derivative financial instruments

Measurement of the fair value of derivative instruments is based on the valuation techniques generally accepted by market participants such as the discounted cash flow or option pricing models. Fair value of forward currency is usually determined by the forward currency exchange rate.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

4) Transfers between Level 1 and Level 2

Stock held by the Group quoted in an active market is sorted to Level 1. There is no difference regarding valuation techniques for the year ended December 31, 2020 and 2019. There is no transfer between first and second level measured at fair value in 2020 and 2019.

(ac) Financial risk management
(i) Overview

The Group have exposures to the following risks from its financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

The following likewise discusses the Group’s exposure information, objectives, policies and processes for measuring and managing the above mentioned risks.

(ii) Structure of risk management

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group ’ s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

(iii) Credit risk

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

1) Trade and other receivable

The Group’s credit risk is affected by its clients. Accounts receivable generated by selling real estate has a lower credit risk since the payment is completed by the masses with transferring, check, or loans form the bank.

The Group discloses the estimation of accounts receivables’ and other receivables’ loss with allowance for bad debt account. Allowance for bad debt account is composed with specific losses and batch of unrecognized losses components. Unrecognized losses components are determined by historically statistical data from similar financial assets.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) Investments

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

3) Guarantees

The Group’s policy is to provide financial guarantees to subsidiaries that directly and indirectly hold more than 50% of the voting shares and companies with business relations. At December 31, 2020, the situation about the Group provided guarantees to wholly owned subsidiaries, please refer to note 13(a). As of December 31, 2019, the Group did not provide any guarantee externally.

(iv) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group ’ s reputation.

(v) Market risk

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

(ad) Capital management

The Group’s objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return on shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the dividend payment to the shareholders, reduce the capital for redistribution to shareholders, issue new shares, or sell assets to settle any liabilities.

The Group and other entities in the same industry use the debt-to-equity ratio to manage capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity plus net debt.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

As of 2020, the Group’s capital management strategy is consistent with the prior year as of 2019. The gearing ratio is maintained so as to ensure an “A” credit rating and ensure financing at reasonable cost. The Group’s debt-to-equity ratio at the end of the reporting period as of December 31, 2020, is as follows:

December 31, 2020 $ 145,006,840 (10,538,810)	December 31, 2020 $ 145,006,840 (10,538,810)	December 31, 2019 113,380,363 (12,227,545)
134,468,030 35,800,518		101,152,818 34,443,182
$ 170,268,548		135,596,000
	78.97%	74.60%

(ae) Investing and financing activities not affecting current cash flow

The Group’s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2020 and 2019, were as follows:

(i) By the lease to get the right-of-use asset, please refer to notes 6(k).
(ii) For conversion of convertible bonds to ordinary shares, please refer to notes 6(q) and 6(w).

(7) Related-party transactions:

(a) Name and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements.

Name of related party	Relationship with the Group
Tsai,○○	The subsidiary’s key management personnel
Chen,○○	Key management personnel
Fan,○○	Director of the Group
Jeng,○○	The second immediate family of the director of the Group
Wu,○○	The second immediate family of the key management personnel
Huang,○○	Spouse of key management personnel of the Group
Lin,○○	Key management personnel
Da Li Investment Co., Ltd.	The subsidiary of the entity’s chairman is the key management
	personnel of the Group
Goyu Building Material Co., Ltd	The entity is a joint venture under the Group’s joint
	arrangement

Taichung Highwealth Culture and Same president with the Group Art Foundation

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(b) Significant transactions with related parties

(i) Operating revenue

The sales price from related parties are summarized as follows:

Chen○○ Fan○○ Lin○○ Wu○○ Total	Revenue recognized December 31, 2020 December 31, 2019 $ - - - - - - 7,329 -	Revenue recognized December 31, 2020 December 31, 2019 $ - - - - - - 7,329 -	Prepayment for selling real estate December 31, 2020 December 31, 2019 514 - 952 - 143 - - -	Prepayment for selling real estate December 31, 2020 December 31, 2019 514 - 952 - 143 - - -
	December 31, 2020 $ - - - 7,329		December 31, 2020 514 952 143 -
	$ 7,329	-	1,609	-

The contract amount for selling the real estate to the related parties was $30,509 thousand (including tax), and the selling price and receivable term do not have significant different from unrelated parties.

(ii) Purchase

The purchases price from related parties are summarized as follows:

The entity is a joint venture under the Group’s joint arrangement
		2020
	$ 45,072

The terms and pricing of purchase transactions with related parties were not significantly different from those offered by other vendors.

(iii) Payables to related parties

The payables to related parties were as follows:

Accounted items Categories Accounts payable Other related parties	December 31, 2020 December 31, 2019 $ 1,358 6,929

(iv) Leases
1) The Group rented the staff dormitory from related parties were as follows:

Other related parties	Rent income For the years ended December 31 2020 2019 $ 420 420
	2020 $ 420

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) The Group leased offices to related parties were as follows:

Other related parties	Rent expense For the years ended December 31 2020 2019 $ 41 41
	2020
	$ 41

(v) Others

1) In September, 2008, The Group sold a portion of land to Tsai, ○○ with a land developing plan at $5,000 thousand, recorded within other payables. The Group would repurchase the land without any interest if the plan was not completed within three years. Both parties agreed lengthening the expiry date unconditionally in October 20, 2011. As of December 31, 2020, and 2019, other payables were both $5,000 thousand.
2) In 2019, the Group donated $5,000 thousand dollars to Taichung Highwealth Culture and Art Foundation for its promotion and Art Foundation for its promotion and development.
3) The Group sold the premises to other related parties for the amount of $19,667 thousand in 2019.
(c) Key management personnel transaction

Key management personnel compensation comprised:

Key management personnel compensation comprised:
Short-term employee benefits	For the years ended December 31 2020 2019 $ 98,166 100,763
	2020
	$ 98,166

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2020 $ 180,000 60,849 102,068,232 22,567,819 446,754 4,448,333 1,244,613	December 31, 2019 242,450 - 78,536,141 14,921,013 2,083,061 4,520,192 - 100,302,857
Financial assets at FVTPL－current Notes receivable Inventories (construction) Other financial assets－current and non-current Property, plant and equipment Investment property at net value Non－current assets for sale	Mortgage Mortgage Mortgage, issuing commercial paper and bonds payable Mortgage, issuing commercial paper, performance bond, real estate trust account and bond payable Mortgage and bonds payable Mortgage, issuing commercial paper and bonds payable Mortgage and bonds payable
		$ 131,016,600

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

As of December 31, 2020, and 2019, the book value of pledged assets providing undrawn guaranteed loan are $4,350,292 thousand and $7,268,070 thousand, respectively. For the years ended December 31, 2020 and 2019, the Group provided $1,157,804 thousand and $305,980 thousand of notes receivable of presale cases and $9,307 thousand and $50,007 thousand of shares of its subsidiaries as collateral for the bank loan.

(9) Commitments and contingencies:

(a) Unrecognized contractual commitments
(i) Contract price signed with clients were as follows:

Amount of signed contracts Received amount from contracts Outstanding checks received from presale cases	December 31, 2020 $ 106,494,954	December 31, 2019 66,361,406
	$ 11,609,186	6,037,956
	$ 6,089,383	2,999,155

(ii) Unrecognized commitments generated by signing contracts for purchasing land for construction, building bulk, and investment properties are as follows:

Acquisition of inventory (construction)	December 31, 2020 $ 4,014,262	December 31, 2019 9,843,319

(iii) Construction contract price signed by subsidiaries is as follows:

Amount of signed contracts Received amount from contracts	December 31, 2020 $ 651,791	December 31, 2019 3,373,750
	$ 358,878	501,236

(iv) As of December 31, 2020, and 2019, due to the Group had not recognize the transaction of sale and lease back, the expect rent expense to be paid in the future is $483,946 thousand, and the expect lease term is January, 2021 to July, 2026.

(b) Others

As of December 31, 2020, and 2019, the refundable deposit paid for cooperation cases are $411,649 thousand and $414,642 thousand, respectively.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(10) Losses Due to Major Disasters: None

(11) Subsequent Events:

The resolution passed during the board meeting on March 19, 2021, the Group decided to donate 712,500 thousand shares, and amounting to $548,139 thousand of Li Shon Investment Co., Ltd., owned by the Group to other related party-Taichung Highwealth Culture and Art Foundation.

(12) Other:

A summary of current-period employee benefits, depreciation, and amortization, by function, were as follows:

follows:
By function By item	For the years ended December 31
	2020			2019
	Operating cost	Operating Expense	Total	Operating cost	Operating Expense	Total
Employee benefits
Salary	$ 290,394	738,594	1,028,988	271,361	748,197	1,019,558
Labor and health insurance	26,910	63,736	90,646	14,611	76,322	90,933
Pension	14,022	31,318	45,340	7,610	36,607	44,217
Others	11,414	33,936	45,350	8,919	26,684	35,603
Depreciation (Note)	64,559	155,863	220,422	61,860	138,839	200,699
Depletion	-	-	-	-	-	-
Amortization	2,300	12,040	14,340	937	9,745	10,682

Note: In 2020 and 2019, depreciation expense was excluded $8,061 thousand and $7,284 thousand renovation subsidies for public facilities in department stores.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

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

(i) Loans to other parties: None
(ii) Guarantees and endorsements for other parties:

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationshi p with the Company
0	The company	Qi Yu Construction Co.,Ltd	2	$ 32,121,924	7,846,000	7,546,000	4,113,000	-	23.49%	64,243,848	Y	N	N
0	The company	Bo Yuan Construction Co.,Ltd	2	32,121,924	1,086,788	965,917	465,917	-	3.01%	64,243,848	Y	N	N
0	The company	Yuan Sheng International Co.,Ltd	2	32,121,924	200,000	200,000	100,000	-	0.62%	64,243,848	Y	N	N
1	Yi Chi Enterprise Co.,Ltd	The company	3	32,121,924	1,907,700	1,907,700	1,907,700	1,907,700	5.94%	64,243,848	N	Y	N
2	Run Long Construction Co.,Ltd.	Jin Jyun construction CO.,Ltd.	2	1,014,187	200,000	-	-	-	- %	2,535,468	Y	N	N
3	Qi Yu Construction Co., Ltd.	Goya Building Material Co.,Ltd.	6	32,121,924	42,000	42,000	3,500	-	0.13%	64,243,848	N	N	N
3	Qi Yu Construction Co., Ltd.	Yuang Sheng International Co.,Ltd.	2	32,121,924	100,000	100,000	39,992	-	0.31%	64,243,848	Y	N	N

Note 1: The numbering is as follows:

1.“0” represents the parent company.
Subsidiaries are sequentially numbered from 1 by company.
Note 2: The relationship between the guarantee and the guarantor are as follows:
Transactions between the companies.
The Company directly or indirectly holds more than 50% voting right.
When other companies directly or indirectly hold more than 50% voting rights of the Company.
The Company directly or indirectly holds more than 90% voting right.
A company that is mutually protected under contractual requirements based on the needs of the contractor.
A company that is endorsed by all the contributing shareholders in accordance with their shareholding ratio due to joint investment relationship.
Under the Consumer Protection Act, performance guarantees for pre-sale contracts for companies in the same industry.

Note 3: The Company, Yi Chi Enterprise Co., Ltd., and Qi Yu construction Co., Ltd. endorsed the operation method for the total amount of guarantees and the limit for endorsement of a single enterprise:

The total amount of guarantee for external endorsement shall not exceed 200% of the net value of the company.
The guarantee amount for a single enterprise endorsement shall not exceed 100% of the current net value of the company.
Note 4: The Run Long Construction Co., Ltd. endorsed the operation method for the total amount of guarantee s and the limit for endorsement of a single enterprise;
The total amount of guarantee for external endorsement shall not exceed 50% of the net value of Run Long Construction Co., Ltd.
The guarantee amount for a single enterprise endorsement shall not exceed 20% of the current net value of Run Long Construction Co., Ltd.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Highest Percentage of ownership (%)	Note
				Shares/Units (thousand)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Stock-Li Shuo investment Co., Ltd.	-	Financial assets at fair value through other comprehensive income－ non-current	712,500	$ 548,139	19.00%	548,139	19.00%
〃	Stock-Shin Kong Rral Estate Management Co., Ltd.	-	Financial assets at fair value through other comprehensive income－ non-current	500,000	5,000	1.67%	5,000	1.67%
〃	Stock- Da-Li Development Co., Ltd.	-	Financial assets at fair value through profit or loss－ current	8,785,010	263,550	2.31%	263,550	3.91%
Ju Feng Hotel Management Co., Ltd.	Stock- Highwealth Construction Corp.	Ultimate Parent Company	Financial assets at fair value through other comprehensive income－ non-current	4,578,348	209,917	0.36%	209,917	0.36%	Note 2
Highwealth Real Estate Co., Ltd.	Stock- Highwealth Construction Corp.	Ultimate Parent Company	Financial assets at fair value through other comprehensive income－ non-current	8,849,291	405,740	0.69%	405,740	0.69%	Note 2
Qi Yu Construction Co., Ltd.	Stock- Highwealth Construction Corp.	Ultimate Parent Company	Financial assets at fair value through other comprehensive income－ non-current	2,744,601	125,840	0.21%	125,840	0.21%	Note 2
〃	Company Debt- China Rebar Co.,Ltd.	-	Financial assets at amortized cost－ current	3	-	- %	-	- %	Note 1
Run Long Construction Co., Ltd.	Stock-Highwealth Construction Corp.	Ultimate Parent Company	Financial assets at fair value through other comprehensive income-current	13,145,000	602,698	1.02%	602,698	1.04%	Note 2

Note 1: Recognized as impairment loss.

Note 2: Reconciliated in the preparation of consolidated report.

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

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter-party	Relationship with the Company	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	References for determining price	Purpose of acquisition and current condition
							Owner	Relationship with the Company	Date of transfer	Amount
The Company	Hui Guo Section	February 26, 2020	$ 8,375,890	8,375,890	Da○Industrial Co., Ltd.	Non－related party	-	-	-	-	Public Bidding	Plan for construction
〃	Shi Zheng Hui Min Second	March 3, 2020	4,356,155	4,356,155	Mr. Yang, other 7 people, and Ju○ constructionCo.,Ltd.	〃	-	-	-	-	Appraisal	〃
〃	Hui Guo Section	August 5, 2020	3,220,262	3,220,262	Mr. Chang and other 2 people	〃	-	-	-	-	〃	〃
〃	Zhong Road Fifth	September 8, 2020	2,490,499	2,490,499	Mr. Huang, other 13 people and Gao○ Investment Co.,Ltd.	〃	-	-	-	-	〃	〃
Run Long Construction Co., Ltd.	Hsinchu Guang Wu Section	March 3, 2020	1,981,707	65,000	Gao○Investment Co., Ltd., Mr. Chang and other3 people	〃	-	-	-	-	〃	〃

Note: The transaction included the right to apply for building permit.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:

Name of company	Type of property	Transaction date	Acquisition date	Book value	Transaction amount (including tax)	Gain from disposal (Note)	Counter-party	Nature of relationship	Purpose of disposal	Price reference	Other terms
The Company	Properties and land held for sale	January 10, 2020	July 19, 2016	3,412,167	5,235,116	About 1,790 million	Ya○International Development、Xin○ Real Estate and Hai ○International Development	Non related parties	Business purpose	Appraisal	None
The Company	Investment Property、Plant and Equipment	December 24, 2020	Not applicable	445,739	1,246,370	About 635 million (Note 2)	Tai○Insurance Co., Ltd.	〃	〃	〃	Will sell in the way of sales－ and-least back
Qi Yu Construction Co.,Ltd.	Property、Plant and Equipment	December 24, 2020	December 25, 2015	1,186,501	1,220,800	(164,144) (Note 3)	Tai○Insurance Co., Ltd.	〃	〃	〃	〃
Run Long Construction Co.,Ltd.	Properties and land held for sale	September 2, 2020	Not applicable	Not applicable due to sale of inventory	736,380	Not applicable due to sale of inventory	Chuan○Insurance Co., Ltd.	〃	〃	〃	None
Run Long Construction Co., Ltd.	Property、Plant and Equipment	December 24, 2020	December 25, 2015	1,187,386	1,221,710	(165,479) (Note 3)	Tai○Insurance Co., Ltd.	〃	〃	〃	Will sell in the way of sales－ and-least back

Note 1: Cost and Expenditure of disposal incurred were excluded.

Note 2: Excluded the unrealized gains or losses amounted about 1,636 million.

Note 3: Had recognized impairment losses and classified as other gains and losses in 2020 financial reports of Run Long Construction Co., Ltd. and Qi Yu Construction Co., Ltd.
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company	Related party	Nature of relationship	Transactiondetails	Transactiondetails	Transactiondetails	Transactiondetails	Transactions with terms differentfromothers	Transactions with terms differentfromothers	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company	Qi Yu Construction Co., Ltd	Investee accounted for using equity method	Contracting project	$ 7,266,482	21.27%	Pay by contract terms	-	-	(1,055,035)	(61.64)%	Note 2
The Company	Jin Jyun Construction Co., Ltd	Investee accounted for using equity method	Contracting project	2,055,676	6.02%	Pay by contract terms	-	-	(199,391)	(11.65)%	Note 2
Qi Yu Construction Co., Ltd	The Company	The ultimate parent of the company	Contracted project	(6,478,224)	(72.69)%	Receive by contract terms	-	-	1,055,035	75.50%	Note 1
Qi Yu Construction Co., Ltd	Run Long Construction Co., Ltd	Investee accounted for using equity method	Contracted project	(2,373,024)	(26.63)%	Receive by contract terms	-	-	531,969	33.32%	Note 1
Run Long Construction Co., Ltd	Qi Yu Construction Co., Ltd	Investee accounted for using equity method	Contracting project	2,619,754	30.60%	Pay by contract terms	-	-	(531,969)	(41.33)%	Note 2
Run Long Construction Co., Ltd	Jin Jyun Construction Co., Ltd	Investee accounted for using equity method	Contracting project	1,117,126	13.05%	Pay by contract terms	-	-	(284,628)	(22.11)%	Note 2
Jin Jyun Construction Co., Ltd	The Company	The ultimate parent of the company	Contracted project	(2,173,880)	(42.18)%	Receive by contract terms	-	-	199,391	14.27%	Note 1
Jin Jyun Construction Co., Ltd	Run Long Construction Co., Ltd	Investee accounted for using equity method	Contracted project	(1,442,394)	(27.99)%	Receive by contract terms	-	-	284,628	50.84%	Note 1
Yuan Sheng International Co., Ltd.	The Company	The ultimate parent of the company	Contracted project	(159,656)	(72.02)%	Receive by contract terms	-	-	74,566	57.90%	Note 1

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Note 1: The contracted company recognizes its construction revenue through percentage of completion method, and the amount of sales included.

Note 2: The contracting company records its import price through estimates of amount of purchase through number of trials. Note 3: Reconciliated in the preparation of consolidated report.

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue	Overdue	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
Qi Yu Construction Co., Ltd	The company	The ultimate parent of the company	$ 1,055,035	6.67	-	-	1,054,975	-
〃	Run Long Construction Co., Ltd	Investee accounted for using equity method	531,969	5.39	-	-	326,732	-
Jin Jyun Construction Co., Ltd	The company	The ultimate parent of the company	199,391	7.14	-	-	183,014	-
〃	Run Long Construction Co., Ltd	Investee accounted for using equity method	284,628	6.83	-	-	284,628	-

(ix) Trading in derivative instruments: None
(x) Business relationships and significant intercompany transactions:

No.	Name of company	Name of counter-party	Nature of relationship	Intercompany transactions	Intercompany transactions	Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0	The Company	Qi Yu Construction Co., Ltd	1	Accounts payable	$ 1,055,035	Same with peer terms	61.64%
			1	Operating Cost	7,266,482	Same with peer terms	21.27%
		Jin Jyun Construction Co., Ltd	1	Accounts payable	199,391	Same with peer terms	11.65%
			1	Operating Cost	2,055,676	Same with peer terms	6.02%
		Yuan Sheng International Co., Ltd.	1	Accounts payable	74,566	Same with peer terms	4.36%
			1	Operating Cost	57,144	Same with peer terms	0.17%
1	Qi Yu Construction Co., Ltd	The Company	2	Accounts Receivable	1,055,035	Same with peer terms	75.50%
			2	Operating Revenue	6,478,224	Same with peer terms	72.69%
		Run Long Construction Co., Ltd	3	Accounts Receivable	531,969	Same with peer terms	33.32%
			3	Operating Revenue	2,373,024	Same with peer terms	26.63%
2	Run Long Construction Co., Ltd	Qi Yu Construction Co., Ltd	3	Accounts payable	531,969	Same with peer terms	41.33%
			3	Operating Cost	2,619,754	Same with peer terms	30.60%
		Jin Jyun Construction Co., Ltd	3	Accounts payable	284,628	Same with peer terms	22.11%
			3	Operating Cost	1,117,126	Same with peer terms	13.05%
4	Jin Jyun Construction Co., Ltd	The Company	2	Accounts Receivable	199,391	Same with peer terms	14.27%
			2	Operating Revenue	2,173,880	Same with peer terms	42.18%
		Run Long Construction Co., Ltd	3	Accounts Receivable	284,628	Same with peer terms	50.84%
			3	Operating Revenue	1,442,394	Same with peer terms	27.99%
	Yuan Sheng International Co., Ltd.	The Company	2	Accounts Receivable	74,566	Same with peer terms	56.01%
			2	Operating Revenue	159,656	Same with peer terms	72.02%

Note 1: The numbering is as follows:

“0” represents the parent company
Subsidiaries are sequentially numbered from 1 by company

Note 2: Relation between related parties are as follows:

Parent company and its subsidiaries
Subsidiaries and its parent company
Subsidiaries and its subsidiaries

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2020 (excluding information on investees in Mainland China):

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31,2020	Balance as of December 31,2020	Balance as of December 31,2020	Highest Percentage of wnership	Net income (losses) of investee	Share of profits/losses of investee
				December 31,2020	December 31,2019	Shares (thousand)	Percentage of wnership	Carrying value
The Company	Ju Feng Hotel Management Co.,Ltd.	Taiwan	Residential and building development,rental and sales	$ 12,000	12,000	1,200,000	100.00%	29,449	100.00%	4,690	(3,634)
〃	Highwealth Property Co.,Ltd.	Taiwan	Real estate brokerage, real estate trading	25,000	25,000	2,500,000	100.00%	53,318	100.00%	15,479	378
〃	Qi Yu Construction Co., Ltd	Taiwan	Construction, housing and building development rental services etc.	1,530,041	1,530,041	205,000,000	100.00%	1,553,351	100.00%	8,147	5,004
〃	Run Long Construction Co., Ltd.	Taiwan	Environmental protection technology, real estate development, rental and sales industries,etc.	861,910	779,424	21,153,600	5.72%	(588,202)	5.72%	117,248	(12,296)
〃	Yi Chi Enterprise Co., Ltd.	Taiwan	Residential and building development, rental services, etc.	2,423,152	2,423,152	2,200,000	100.00%	2,436,161	100.00%	(1,131)	(1,131)
〃	Bi Jiang Enterprise Co., Ltd.	Taiwan	Residential and building development, rental services, etc.	1,302,900	1,302,900	7,200	100.00%	1,264,737	100.00%	(33,880)	(33,880)
〃	Highwealth Construction Co.	Taiwan	Construction, housing and building development rental services etc.	5,000	5,000	500,000	100.00%	1,302	100.00%	(1,720)	(1,720)
〃	Bo Yuan Construction Co., Ltd	Taiwan	Residential and building development, rental services, etc.	930,000	930,000	73,700,000	100.00%	541,710	100.00%	(429,713)	(429,713)
Qi Yu Construction Co., Ltd	Guang Yang Investment Co., Ltd.	Taiwan	Investment	284,050	284,050	29,900,000	100.00%	327,698	100.00%	6,630	Expempt from disclosure
〃	Yuan Sheng InternationalCo.,Ltd.	Taiwan	Wholesale of Building Materials	78,484	78,484	8,100,000	100.00%	140,110	100.00%	8,425	〃
〃	Run Long Construction Co., Ltd.	Taiwan	Environmental protection technology, real estate development, rental and sales industries,etc.	803,226	803,226	18,572,400	5.02%	253,598	5.02%	117,248	〃
〃	Goyu Building Materials Co.,Ltd.	Taiwan	Wholesale of Building Materials	140,000	98,000	14,000,000	35.00%	128,595	35.00%	(13,585)	〃
Guang Yang Investment Co., Ltd.	Run Long Construction Co., Ltd.	Taiwan	Environmental protection technology, real estate development, rental and sales industries,etc.	428,405	398,063	20,792,415	5.62%	327,634	5.62%	117,248	〃
Run Long Construction Co., Ltd.	Jin Jyun Construction Co., Ltd.	Taiwan	Construction, housing and building development rental services etc.	518,300	518,300	50,000,000	100.00%	619,822	100.00%	143,791	〃

Note : Reconciliated in the preparation of consolidated report, while Goyu Construction is investment adopted equity method.

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment (Note1)	Accumulated outflow of investment from Taiwan as of January1,2019	Investmentflows	Investmentflows	Accumulated outflow of investment from Taiwan as of December31,2020	Net income (losses) of the investee	Percentage of ownership	Highest percentage of ownership	Investment income (losses) (Note2)	Book value	Accumu-lated remittance of earnings in current period
					Outflow	Inflow
Chuan Xiang Commercial Co.	Constructio n material, furniture, metalparts	$ 26,555 USD 900,000	(1)	26,555 USD 900,000	-	-	26,555 USD 900,000	(443)	100.00%	100.00%	(443)	1,704	-
Shin Fu Yu Commercial Co.	Constructio n material wholesale	27,104 USD 900,000	(1)	27,104 USD 900,000	-	-	27,104 USD 900,000	(155)	100.00%	100.00%	(155)	1,571	-

Note: Reconciliated in the preparation of consolidated report.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of December 31, 2020	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
53,659 `(`USD1,800,000`)`	53,659 `(`USD1,800,000`)`	19,273,154 (Note)

  - Note 1: 3 types of investment method are as follows:

     1. Directly investing in the mainland area

     2. Investing in the mainland through companies in another country (Please note the name of the investing company from the other country)

     3. Other methods

  - Note 2: Profit and loss recognized from investment for the current period:

     1. If it is in preparation, and has no investment profit or loss, it should be noted

     2. The basis for profit or loss from investment are as follows:

     - A. The international accounting firm which has cooperative relationships with the CPA in the Republic of China verifies its financial statements

     - B. Financial statement of the parent company is verified by the Taiwanese accountant

     - C. Others

(iii) Significant transactions: None
(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Xing Ri Sheng Investment Co., Ltd.	98,837,849	7.76%
Ear Winner Investment Co., Ltd.	78,938,890	6.11%

(14) Segment information:

(a) General information

The Group has three reportable segments listed as follows. The reportable segments are the Group’ s strategic divisions. They offer different products and services and are managed separately because they require different technology and marketing strategies. The chief operating decision maker of the Group reviews internal management report at least quarterly. Information about reportable segments of the Group is detailed below.

(i) Developing segment is responsible for developing new constructing or rental opportunities.
(ii) Constructing segment is responsible for constructing buildings.
(iii) Department stores manages department stores, supermarkets, and international import and export trade.

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(b) Information about reportable segments and their measurement and reconciliations

	For the year ended December 31, 2020	For the year ended December 31, 2020	For the year ended December 31, 2020	For the year ended December 31, 2020	Total 24,463,018 - 22,762
Developing segment $ 22,755,194 141,343 20,498	Constructing segment 1,583,139 12,704,930 1,737	Department store 124,685 12,309 475	Other segment - - 91	Reconciliation and elimiation - (12,858,582) (39)
$ 22,917,035	14,289,806	137,469	91	(12,858,621)	24,485,780
$ 868,754 104,976 (550,977) $ 3,113,564	990 27,892 15,396 278,645	17,605 109,641 - (422,169)	107 314 2,802 6,032	(40) - 527,790 340,085	887,416 242,823 (4,989) 3,316,157
$ 5,914,922 18,872 $ 182,660,461	850,001 139,592 8,197,909	- 46,012 210,695	327,634 - 472,920	(6,963,962) 248 (10,734,627)	128,595 204,724 180,807,358
$ 139,612,464	7,840,261	1,077,227	702	(3,523,814)	145,006,840
	For the year ended December 31, 2019				Total 23,798,201 - 33,660
Developing segment $ 23,317,788 136,923 30,147	Constructing segment 367,305 8,382,988 2,323	Department store 113,108 5,290 359	Other segment - - 863	Reconciliation and elimiation - (8,525,201) (32)
$ 23,484,858	8,752,616	118,757	863	(8,525,233)	23,831,861
$ 880,329 104,261 224,993 $ 4,389,077	9,103 28,950 17,061 267,808	20,684 85,133 - (237,139)	2,294 328 35,796 35,073	(9,419) (7) (273,244) (503,047)	902,991 218,665 4,606 3,951,772
$ 5,923,202 89,152 $ 149,019,944	932,709 7,008 8,170,701	- 388,380 448,958	337,850 - 515,341	(7,102,177) (4,883) (10,331,399)	91,584 479,657 147,823,545
$ 107,594,097	7,423,691	893,321	1,314	(2,532,060)	113,380,363

(Continued)

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(c) Geographic information:

The Group’s revenues are all generated from domestic business.

(d) Major customers:

The Group does not have revenues from a single customer that exceeds 10% of the consolidated operating revenues in 2019.

operating revenues in 2019.
Construction Department－Ya○Shin International Development Construction Department－Shin○Real Estate	For the year ended December 31
	2020 $ 2,340,682 2,340,682
	$ 4,681,364

AI assistant

Highwealth — Annual Report 2020

52150_rns_2020-11-12_fecece13-0f84-4e8d-921b-75aa432401c0.pdf

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

Representation Letter

Independent Auditors ’ Report

Opinion

Basis for Opinion

Key Audit Matters

1. Revenue recognition

Description of key audit matter

Auditing procedures performed

2. Inventory valuation

Description of key audit matter

Auditing procedures performed

Other Matter

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

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

KPMG

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousand of New Taiwan Dollars)

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousand of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (CONT ’ D)

For the years ended December 31, 2020 and 2019

(Expressed in Thousand of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) List of subsidiaries in the consolidated financial statements:

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(f) Cash and cash equivalents

(g) Financial instruments

(i) Financial assets

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

6) Derecognition of financial assets

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) Equity instruments

3) Treasury shares

4) Compound financial instruments

5)

Financial liabilities

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

6) Derecognition of financial liabilities

(h) Inventories

HIGHWEALTH CONSTRUCTION CORP. AND SUBSIDIARIES

Highwealth Annual Report 2020