HUAKU — Audit Report / Information 2021

Nov 8, 2021

Huaku Development Co., Ltd.

PARENT COMPANY ONLY FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS'

REPORT

December 31, 2021 and 2020

(Stock Code: 2548)

This financial report has not been reviewed or certified by an accountant

Company Address: 7F, No. 456, Sec. 4, Xinyi Rd., Xinyi Dist., Taipei City, Taiwan (R.O.C.) Tel: (02)2758-2828

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HUAKU DEVELOPMENT CO., LTD.

Parent Company Only Financial Statements and Independent Auditors' Report December 31,

2021 and 2020

Table of Contents

Items I. Cover II. Contents III. Independent Auditors' Report IV. Parent Company Only Balance Sheet V. Parent Company Only Statement of Comprehensive Income VI. Parent Company Only Statement of Changes in Equity VII. Parent Company Only Statement of Cash Flows VIII. Notes for Parent Company Only Financial Statements (I) Company History (II) Approval Date and Procedure of Financial Statements (III) Application of New and Amended Standards and Interpretations (IV) Statements on Significant Accounting Policies and Their Summary (V) Primary Sources of Uncertainties in Significant Accounting Judgments, Estimates, and Assumptions (VI) Descriptions of Material Accounting Items (VII) Related-Party Transactions (VIII) Pledged Assets (IX) Significant Commitments and Contingencies (X) Significant Disaster Losses (XI) Significant Subsequent Events (XII) Others (XIII) Matters Disclosed in Notes 1. Related Information on Significant Transactions 2. Related Information on Investees 3. Information on Investments in Mainland China 4. Information on Major Shareholders (XIV) Information on Operating Segments IX. Schedule of Significant Accounting Items

Page Number

1 2~3 4~7 8~9 10 11 12 13~45 13 13 13~14 14~21 21 21~37 38~39 39 39~40 40 40 40~44 44~45 44 44~45 45 45 45 46~54

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Independent Auditors' Report

(111) Cai-Shen-Bao-Zi No. 21003609

To Huaku Development Co., Ltd.,

Audit Opinions

The auditors have audited the Parent Company Only Balance Sheet of Huaku Development Co., Ltd. as of December 31, 2021 and 2020, the Parent Company Only Statement of Comprehensive Income, Parent Company Only Statement of Changes in Equity, Parent Company Only Statement of Cash Flows, and Notes for Parent Company Only Financial Statements (including Statements on Significant Accounting Policies and Their Summary) for the period of January 1 to December 31, 2021 and 2020.

In our opinion, based on our audits and other independent auditors’ reports (please refer to Other Matter sections), the aforementioned Parent Company Only Financial Statements present fairly, in all material respects, the financial position of Huaku Development Co., Ltd. as of December 31, 2021 and 2020, and its financial performance and consolidated cash flows for the periods from January 1 to December 31, 2021 and 2020.

Basis of Audit Opinions

We have performed the auditing in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Generally Accepted Auditing Standards of ROC. Our responsibilities under those standards are further described in the section of Responsibility of Certified Public Accountants for Auditing Financial Statements. We are independent from Huaku Development Co., Ltd. in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled other responsibilities in accordance with the requirements stated in The Norm. Based on our auditing results and other independent auditors' reports, we believe that we have obtained sufficient and appropriate audit evidence to serve as the basis for our opinion.

Key Audit Matters

The key audit matters are those that we consider the most important according to our professional judgment when auditing the parent company only financial statements of Huaku Development Co., Ltd. for 2021. The said matters have been expressed when the financial statements were audited as a whole and when the audit opinions took form. Any personal opinion on any of the said matters is not expressed.

Key audit matters of the parent company only financial statements of Huaku Development Co., Ltd. for 2021 are as follows:

The Appropriateness of Recognition Timing of Building and Land Sales Revenue

Description of the Matter

Please refer to Note 4 (21) of the Notes for Parent Company Only Financial Statements for the accounting policies of the construction industry on operating revenue and Note 6 (16) for descriptions of accounting items.

The sales revenue of the construction industry is recognized when the real estate completes the transfer of ownership and the actual delivery of the housing. Since there is a large number of sales of premises in the construction industry, in order to confirm the validity of the recognition timing of the sales revenue, the Company needs to examine the transfer of ownership and delivery housing data one by one to recognize the

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sales revenue, which usually involves tremendous manual efforts. Therefore, we listed the closing date of sales revenue of real estate as one of the most important matters to audit.

Corresponding Audit Procedures

The corresponding audit procedures we took for the specific aspects described in the aforementioned audit matters are as follows:

• Interview with regulatory authority to understand and review the procedures for the recognition of building and land sales revenue and to adopt it consistently with the attribution period of financial statements.

• Conducting evaluation and validation of the appropriateness of the regulatory authority concerning the period of attribution of sales revenue of building and land before and after the closing date for a certain period, including the verification of the transfer date specified on the land registration and house ownership certificate as well as the date of the transfer date on the agreement signed by the client for handing over of property to confirm the accuracy of the recognition timing of building and land sales revenue.

Other Matters—Mentioning of the Audit Result of Other Certified Public Accountants (CPAs)

The financial statements of parts of the investments made by Huaku in 2021 and 2020 using the equity method have not been audited by PwC Taiwan but by other CPAs. Therefore, the opinions on the parent company only financial statements listed above concerning the amount listed in the financial statements of such companies and the relevant information disclosed in Note 13 are based on the audit reports of the other CPAs. The amounts of investment accounted for using the equity method in the aforementioned companies were NT$41,057 thousand and NT$41,057 thousand as of December 31, 2021 and 2020, which constitute 0.097% and 0.114% of total assets, respectively. For the aforementioned companies, the recognized comprehensive income are NT$4,853 thousand and NT$5,603 thousand for the years ended December 31, 2021 and 2020, which constitute 0.166% and 0.201% of total comprehensive income, respectively.

Responsibility of the Management and the Governance Units for the Parent Company Only Financial Statements

The responsibility of the management was to act in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers to fairly represent the Company's financial status and also to maintain necessary internal control with regard to the compilation of the parent company only financial statements, so as to ensure such financial statements did not contain any material misstatement due to fraud or errors.

When the parent company only financial statements were in the process of preparation, the responsibility of the management also included the assessment of the going concern capacity of Huaku Development Co., Ltd., disclosure of related matters, and the adoption of the accounting basis of going concern, unless the management intended to liquidate or suspend the operation of Huaku Development Co., Ltd., or if there was no other option except liquidation or suspension of the company's operation.

The governing units of Huaku Development Co., Ltd. (including the Audit Committee) bear the responsibility to oversee the financial reporting process.

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Responsibility of Certified Public Accountants for Auditing Parent Company Only Financial Statements

Our objective when auditing the parent company only financial statements was to obtain reasonable assurance whether they contained any material misstatement due to fraud or errors and issue the auditors' report. Reasonable assurance refers to high level of assurance. However, auditing work carried out in accordance with the Generally Accepted Auditing Standards of ROC does not necessarily guarantee the detection of material misstatement in parent company only financial statements. Misstatements may be caused by fraud or errors. If the individual amounts or sums that the material misstatement involved may be reasonably expected to affect the financial decision making of users of the parent company only financial statements, such misstatement will be considered material.

We conducted the auditing according to the Generally Accepted Auditing Standards of ROC, and also exercised our professional judgment and remained professionally skeptical. We have also executed the following tasks:

1. Identified and evaluated the risk of material misstatements due to fraud or errors in the consolidated financial statements; designed and carried out appropriate countermeasures for the evaluated risk, and obtained sufficient and appropriate evidence as the basis for the audit opinions. As fraud can involve conspiracy, forgery, intentional omissions, false statements or transgressions of internal control, the risk of failing to detect material misstatements resulting from fraud is higher than the risk of failing to identify those coming from errors.

2. Achieved the necessary understanding of the internal control relevant to auditing verifications in order to design the auditing procedures appropriate for the given context. Nevertheless, the purpose of this is not to express an opinion on the effectiveness of Huaku Development Co., Ltd.'s internal control.

3. Evaluated the appropriateness of the accounting policies adopted by the management and the reasonableness of its accounting estimates and relevant disclosures.

4. Formed a conclusion pertaining to the appropriateness of the accounting basis of going concern adopted by the management of Huaku Development Co., Ltd.; determined whether material uncertainty exists or not on events or conditions which may significantly impact the going concern of Huaku Development Co., Ltd. If we thought such material uncertainty existed for such events or conditions, we must point it out in the auditors' report to remind users of the parent company only financial statements to look out for related disclosures in the parent company only financial statements, or to revise our audit opinions if such disclosures were inappropriate. Our conclusion was established according to the audit evidence obtained by the date of the auditors' report. However, future events or conditions may cause Huaku Development Co., Ltd. to lose the capacity of going concern.

5. Evaluated the overall expression, structure and contents of the parent company only financial statements (including relevant Notes), and whether the parent company only financial statements fairly represent relevant transactions and events.

6. Obtained sufficient and appropriate audit proof of the financial information of Huaku Development Co., Ltd.'s constituents so as to express opinions on the parent company only financial statements. We were responsible for guiding, supervising and executing the audit work for the Company and also establishing the auditor's opinion on the parent company only financial statements.

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We communicated with the governance units on the planned audit range and time, as well as material audit discoveries (including significant internal control defects found in the audit process).

We provided the governance units with a statement assuring the personnel of our accounting firm who are subject to independent regulations had acted according to the Norm of Professional Ethics for Certified Public Accountant of the Republic of China to remain neutral and also communicate with them about all relations and other matters (including related preventive measures) that could affect the independence of certified public accountants.

Based on the result of our discussion with the governance units, we decided on the matters to be regarded as key audit matters when auditing the 2021 parent company only financial statements of Huaku Development Co., Ltd. We have clearly described the said matters in the auditors' report, except certain matters whose public disclosure is prohibited by law, or certain matters we decided not to communicate under extremely rare circumstances because disclosure of such matters can be reasonably expected to lead to negative effects that would be greater than the public good they might bring.

PwC Taiwan

Wang, Fang-Yu

CPA

Lin, Se-Kai

Financial Supervisory Commission Approval Document, Reference No.: FSC Zheng-Sheng-Zi No. 1030027246

Former Securities and Futures Bureau, FSC Approved Document, Reference No.: FSC Zheng-Sixth-Zi No. 0960072936

March 9, 2022

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This financial report has not been reviewed or certified by an accountant

Huaku Development Co., Ltd. Parent Company Only Balance Sheet December 31, 2021 and 2020

Unit: NT$ thousands

Assets	Notes 6 (1) 6 (2) and 7 6 (2)(10) and 8 6 (10) and 8 6 (3) and 8 6 (4) and 8 6 (5) 6 (6) and 8 6 (22) 6 (2)(10) and 8	December31,2021 Amount % $ 2,335,264 6 7,840 - 202,443 - 26,231 - 33,812,306 80 5,171 - 221,249 1 1,280,144 3 37,890,648 90 942,638 2 200,555 - 18,207 - 251,817 1 19,680 - 99,403 - 2,849,570 7 7,636 - 4,389,506 10 $ 42,280,154 100	December31,2020	December31,2020
		Amount $ 2,335,264 7,840 202,443 26,231 33,812,306 5,171 221,249 1,280,144 37,890,648 942,638 200,555 18,207 251,817 19,680 99,403 2,849,570 7,636 4,389,506 $ 42,280,154	Amount $ 375,894 70,704 178,432 66,390 28,409,266 37,792 278,883 1,728,419 31,145,780 911,280 194,457 10,243 254,278 19,922 76,746 3,275,805 8,546 4,751,277 $ 35,897,057	%
Current assets 1100 Cash and cash equivalents 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 130X Inventories 1410 Prepayments 1478 Construction refundable deposits 1479 Other current assets—others 11XX Total current assets Non-current assets 1550 Investment accounted for using the equity method 1600 Property, plant, and equipment 1755 Right-of-use assets 1760 Investment properties, net 1840 Deferred income tax assets 1920 Refundable deposits 1930 Long-term notes and accounts receivable 1990 Other non-current assets—others 15XX Total non-current assets 1XXX Total assets				1 - 1 - 79 - 1 5
				87
				2 1 - 1 - - 9 -
				13
				100

(Continued on Next Page)

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This financial report has not been reviewed or certified by an accountant

Liability and equity	December 31, 2021 December 31, 2020 Notes Amount % Amount % 6 (7) $ 8,852,000 21 $ 2,667,000 7 6 (8) 2,230,921 5 3,231,800 9 6 (16) 3,726,040 9 3,468,155 10 7 2,403 - 25,954 - 298,030 1 220,156 1 7 963,659 2 974,243 3 425,986 1 419,469 1 473,801 1 142,535 - 6,808 - 7,354 - 6 (10) 2,511,848 6 2,127,103 6 6 (9) 233,808 1 204,578 1 19,725,304 47 13,488,347 38 6 (10) 4,072,369 10 4,897,478 14 6 (22) 2,280 - 3,180 - 11,626 - 3,020 - 6 (11) 34,778 - 37,694 - 29,391 - 15,063 - 6 (3) 26,389 - 58,952 - 4,176,833 10 5,015,387 14 23,902,137 57 18,503,734 52 6 (12) 2,768,127 6 2,768,127 8 6 (13) 77,678 - 75,875 - 6 (14) 3,709,291 9 3,431,492 9 11,817,684 28 11,109,357 31 6 (15) 6,087 - 9,322 - 6 (12) ( 850) - ( 850) - 18,378,017 43 17,393,323 48 9 $ 42,280,154 100 $ 35,897,057 100	December 31, 2020	December 31, 2020
			%
Current liabilities 2100 Short-term loans 2110 Short-term notes and bills payable 2130 Contract liabilities—current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable—related parties 2200 Other payables 2230 Current income tax liabilities 2280 Lease liabilities—current 2320 Longterm liabilities due within one year or one operating cycle 2399 Other current liabilities—others 21XX Total current liabilities Non-current liabilities 2540 Long-term loans 2570 Deferred income tax liabilities 2580 Lease liabilities—non-current 2640 Net defined benefit liabilities—non-current 2645 Guarantee deposits received 2670 Other non-current liabilities—other 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Share capital from common stock Additional paid-in capital 3200 Additional paid-in capital Retained earnings 3310 Legal reserves 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity Material commitments and contingencies 3X2X Total liabilities and equity			7 9 10 - 1 3 1 - - 6 1
			38
			14 - - - - -
			14
			52
			8 - 9 31 - -
			48
			100

The Notes for Parent Company Only Financial Statements are part of the Parent Company Only Financial Statements and should be read together.

Chairman: Chung, Long-Chang

Manager: Jason Hung

Accounting Supervisor: Liu, Jo-Mei

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This financial report has not been reviewed or certified by an accountant

HUAKU DEVELOPMENT CO., LTD.

Parent Company Only Statement of Comprehensive Income December 31, 2021 and 2020

Unit: NT$ thousands (except for earnings per share in New Taiwan dollars)

Items

2021 2020 Notes Amount % Amount % 6 (16) and 7 $ 13,517,526 100 $ 11,295,781 100 6 (17) (18) and 7 ( 9,322,632) ( 69) ( 7,551,403) ( 67) 4,194,894 31 3,744,378 33 6 (17) (18) and 7 ( 249,918) ( 2) ( 172,512) ( 1) ( 459,657) ( 3) ( 420,858) ( 4) ( 709,575) ( 5) ( 593,370) ( 5) 3,485,319 26 3,151,008 28 6 (19) 59,958 1 71,904 1 6 (20) and 7 62,333 1 45,842 1 755 - 1,261 - 6 (21) ( 97,707) ( 1) ( 104,307) ( 1) 6 (5) 57,581 - 33,162 - 82,920 1 47,862 1 3,568,239 27 3,198,870 29 6 (22) ( 648,066) ( 5) ( 418,805) ( 4) $ 2,920,173 22 $ 2,780,065 25 6 (11) $ 3,331 - ($ 1,916) - 977 - ( 542) - 6 (22) ( 666) - 383 - 3,642 - ( 2,075) - 6 (15) ( 4,044) - 8,673 - 6 (15) (22) 809 - ( 1,735) - ( 3,235) - 6,938 - $ 407 - $ 4,863 - $ 2,920,580 22 $ 2,784,928 25 6 (23) $ 10.56 $ 10.05 6 (23) $ 10.50 $ 10.00

4000 Operating revenue 5000 Operating costs 5950 Net gross profit Operating expenses 6100 Selling expenses 6200 Administrative expenses 6000 Total operational expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Financial cost 7070 Shares of profit (loss) of subsidiaries, associates, and joint ventures accounted for using the equity method 7000 Total non-operating income and expenses 7900 Pre-tax profit 7950 Income tax expense 8200 Net income Other comprehensive income (net) Items not to be reclassified to profit or loss 8311 Remeasurements of defined benefit plans 8330 Shares of profit (loss) of subsidiaries, associates, and joint ventures accounted for using the equity method—items not to be reclassified to profit or loss 8349 Income tax related to items not reclassified 8310 Total amount of items not to be reclassified to profit or loss Items that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax associated with items that may be reclassified 8360 Total amount of items that may be reclassified to profit of loss 8300 Other comprehensive income (net) 8500 Total comprehensive income Basic earnings per share 9750 Total basic earnings per share Diluted earnings per share 9850 Total diluted earnings per share

The Notes for Parent Company Only Financial Statements are part of the Parent Company Only Financial Statements and should be read together.

Manager: Jason Hung

Chairman: Chung, Long-Chang

Accounting Supervisor: Liu, Jo-Mei

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This financial report has not been reviewed or certified by an accountant

HUAKU DEVELOPMENT CO., LTD. Parent Company Only Statement of Changes in Equity December 31, 2021 and 2020

Unit: NT$ thousands

Notes 2020 Balance as of January 1, 2020 Net income Other comprehensive income 6 (15) Total comprehensive income Appropriation and distribution of retained earnings 6 (14) Legal reserves Cash dividends Cash dividends received by subsidiaries from the Company Balance as of December 31, 2020 2021 Balance as of January 1, 2021 Net income Other comprehensive income 6 (15) Total comprehensive income Appropriation and distribution of retained earnings 6 (14) Legal reserves Cash dividends Cash dividends received by subsidiaries from the Company Dividends not claimed by shareholders over time Balance as of December 31, 2021	Notes		Share capital from common stock	Additionalpaid-incapital	Additionalpaid-incapital	Additionalpaid-incapital	Additionalpaid-incapital	Additionalpaid-incapital	Additionalpaid-incapital		Retained	earnings	Exchange differences on translation of foreign financial statements	Treasury stocks		Totalequity
				Premium of convertible corporate bonds			Treasury stock transaction		Others		Legal reserves	Unappropriated retained earnings
			$ 2,768,127 - - - - - - $ 2,768,127 $ 2,768,127 - - - - - - - $ 2,768,127		$ 46,100 - - - - - - $ 46,100 $ 46,100 - - - - - - - $ 46,100		$ 27,416 - - - - - 1,308 $ 28,724 $ 28,724 - - - - - 1,220 - $ 29,944		$ 1,051 - - - - - - $ 1,051 $ 1,051 - - - - - - 583 $ 1,634		$ 3,117,405 - - - 314,087 - - $ 3,431,492 $ 3,431,492 - - - 277,799 - - - $ 3,709,291	$ 10,721,549 2,780,065 ( 2,075 ) 2,777,990 ( 314,087 ) ( 2,076,095 ) - $ 11,109,357 $ 11,109,357 2,920,173 3,642 2,923,815 ( 277,799 ) ( 1,937,689 ) - - $ 11,817,684	$ 2,384 - 6,938 6,938 - - - $ 9,322 $ 9,322 - ( 3,235 ) ( 3,235 ) - - - - $ 6,087	($ 850 ) - - - - - - ($ 850 ) ($ 850 ) - - - - - - - ($ 850 )	$ 16,683,182 2,780,065 4,863 2,784,928 - ( 2,076,095 ) 1,308 $ 17,393,323 $ 17,393,323 2,920,173 407 2,920,580 - ( 1,937,689 ) 1,220 583 $ 18,378,017

The Notes for Parent Company Only Financial Statements are part of the Parent Company Only Financial Statements and should be read together.

Chairman: Chung, Long-Chang

Manager: Jason Hung

Accounting Supervisor: Liu, Jo-Mei

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This financial report has not been reviewed or certified by an accountant

HUAKU DEVELOPMENT CO., LTD.

Parent Company Only Statement of Cash Flows December 31, 2021 and 2020

Unit: NT$ thousands

Cash flow from operating activities Current net profit before tax Adjusted items Income and expense items Shares of profit (loss) of subsidiaries and associates accounted for using the equity method Amortization Depreciation expenses Interest expense Interest income Gain on disposal of property, plant, and equipment Changes in assets and liabilities relating to operating activities Net change in assets relating to operating activities Notes and accounts receivable, net Other receivables Inventories Prepayments Restricted deposits Other current assets—other Long-term installment accounts receivable Net change in liabilities relating to operating activities Notes payable Accounts payable Accounts payable—related parties Other payables Advance receipt Accrued pension liabilities Other current liabilities—others Contract liabilities Realized amount of unrealized revenue within this period Cash (outflow) inflow generated from operations Dividends received Interest received Interest paid Income tax paid Cash (outflow) inflow from operating activities, net Cash flow from investment activities Subsidiary liquidation and capital return to shareholders Distribution of employee compensation to subsidiaries Proceeds from acquisition of property, plant, and equipment Proceeds from disposal of property, plant, and equipment Decrease in construction performance deposit Increase in refundable deposits Decrease in other non-current assets Cash (outflow) inflow from investment activities, net Cash flow from financing activities Increase (Decrease) in short-term loans (Decrease) Increase in short-term bills payable Long-term loans borrowed Long-term loans repaid Redemption of lease principal Increase (Decrease) in guarantee deposits received Cash dividends paid Dividends not claimed by shareholders over time Cash inflow (outflow) from financing activities, net Increase (Decrease) in cash and cash equivalents for the year Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year

Notes 2021 2020 $ 3,568,239 $ 3,198,870 6 (5) ( 57,581 ) ( 33,162 ) 6 (17) 2,166 1,923 6 (17) 16,210 15,421 6 (21) 97,707 104,307 6 (19) ( 59,958 ) ( 71,904 ) ( 755 ) - 27,579 ( 48,599 ) 40,159 ( 39,244 ) ( 5,301,316 ) ( 1,049,408 ) 32,621 33,688 428,597 170,498 17,740 ( 159,273 ) 437,509 464,043 ( 23,551 ) ( 626,784 ) 77,874 ( 56,412 ) ( 10,584 ) 100,807 6,517 6,734 ( 26,900 ) ( 248 ) 415 576 56,130 ( 144,245 ) 257,885 243,396 ( 32,563 ) ( 35,095 ) ( 445,860 ) 2,075,889 60,852 48,749 6 (19) 59,958 71,904 6 (21) ( 201,064 ) ( 181,680 ) ( 317,316 ) ( 805,017 ) ( 843,430 ) 1,209,845 - 20,000 ( 36,475 ) ( 20,324 ) ( 10,892 ) ( 3,311 ) 762 - 57,633 153,333 ( 22,657 ) ( 497 ) 683 - ( 10,946 ) 149,201 6 (24) 6,185,000 ( 940,290 ) 6 (24) ( 1,000,879 ) 210,166 6 (24) 1,989,982 2,620,107 6 (24) ( 2,430,346 ) ( 1,894,344 ) 6 (24) ( 7,233 ) ( 7,261 ) 6 (24) 14,328 ( 6,500 ) 6 (14)(24) ( 1,937,689 ) ( 2,076,095 ) 583 - 2,813,746 ( 2,094,217 ) 1,959,370 ( 735,171 ) 375,894 1,111,065 $ 2,335,264 $ 375,894

The Notes for Parent Company Only Financial Statements are part of the Parent Company Only Financial Statements and should be read together.

Chairman: Chung, Long-Chang

Manager: Jason Hung

Accounting Supervisor: Liu, Jo-Mei

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This financial report has not been reviewed or certified by an accountant

HUAKU DEVELOPMENT CO., LTD. Notes for Parent Company Only Financial Statements December 31, 2021 and 2020

Unit: NT$ thousands (Unless specified otherwise)

• I. Company History

Huaku Development Co., Ltd. (“the Company”) was established in April 1989. It is engaged mainly in the contract construction, leasing, and sales of public housings, commercial buildings, and general-purpose plants and warehouses. The common shares of the Company have been listed on the Taiwan Stock Exchange since August 26, 2002.

• II. Approval Date and Procedure of Financial Statements

The parent company only financial statements were approved and issued on March 9, 2022 by the Board of Directors.

III. Application of New and Amended Standards and Interpretations

(I) Effects of the adoption of new and amended IFRSs endorsed by the Financial Supervisory Commission ("FSC"):

1. The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2021:

Effective date by International New standards, interpretations and amendments Accounting Standards Board

Amendments to IFRS 4 "Temporary Exemption January 1, 2021 from Applying IFRS 9"

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, January 1, 2021 and IFRS 16 "Interest Rate Benchmark Reform – Phase II"

Amendments to IFRS 16 "Covid-19-Related Rent April 1, 2021 (Note) Concessions beyond 30 June, 2021"

Note: The FSC allows its early application on January 1, 2021.

1. The Company assessed the effects of adopting the aforementioned standards and interpretations, and has found no significant effects on the Company's financial position and financial performance.

(II) Effect of the new issuance of or amendments to IFRSs as endorsed by the FSC but not yet adopted

1. The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2022:

New standards, interpretations and amendments Amendments to IFRS 3 "Reference to the Conceptual Framework" Amendments to IAS 16 "Property, Plant and Equipment – Proceeds before Intended Use" Amendments to IAS 37 "Onerous Contracts — Cost of Fulfilling a Contract" Annual Improvements to IFRSs 2018-2020 Cycle	Effective date by International Accounting Standards Board
	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

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This financial report has not been reviewed or certified by an accountant

1. The Company assessed the effects of adopting the aforementioned standards and interpretations and found no significant effects on the Company's financial position and financial performance.

(III) Effects of IFRSs issued by IASB but not yet endorsed by the FSC

1. The following table summarizes the new, amended, revised standards and interpretation of IFRSs that have been issued by IASB but not yet endorsed by the FSC:

New standards, interpretations and amendments

Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture"

IFRS 17 "Insurance Contracts"

Amendments to IFRS 17 "Insurance Contracts"

Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9—Comparative Information”

Amendments to IAS 1 "Classify Debt as Current or Non‐current"

Amendments to IAS 1 "'Disclosure of Accounting Policies"

Amendments to IAS 8 "Definition of Accounting Estimates"

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

1. The Company assessed the effects of adopting the aforementioned standards and interpretations, and has found no significant effects on the Company's financial position and financial performance. The quantitative impacts will be disclosed when the assessment is complete.

IV. Statements on Significant Accounting Policies and Their Summary

The principal accounting policies applied in the preparation of the parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(I) Statement of Compliance

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

(II) Preparation Basis

1. Except for the following significant items, these parent company only financial statements have been prepared under the historical cost convention:

2. (1) Financial assets measured at fair value through profit or loss.

3. (2) Defined benefit liability derived from retirement plan assets less the present value of net defined benefit obligation.

4. Critical accounting estimates are required in preparing a set of financial statements in compliance with the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations, and SIC Interpretations (collectively referred to as "IFRSs"). When the Company adopts the accounting policies, the management is required to exercise judgments on highly judgmental or complex items or significant assumptions and estimates with regards to this parent company only financial report. Please refer to Note 5 for details.

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This financial report has not been reviewed or certified by an accountant

(III) Foreign Currency Translation

All items on the parent company only financial statements of each entity of the Company are measured at the currency of the principal economic environment in which the entity operates (i.e., functional currency). The parent company only financial statements are presented in NTD, which is the Company’s functional presentation currency.

1. Foreign currency transaction and balance

2. (1) Foreign currency transaction is translated to the functional currency by using the spot exchange rate on the trade date or measurement date. Any translation differences occurred is to be recognized in the current profit or loss.

3. (2) Balances of monetary assets and liabilities denominated in foreign currencies are adjusted at the spot exchange rates prevailing at the balance sheet date. Exchange gains or losses arising from such adjustments are recognized in profit or loss.

4. (3) For non-monetary assets and liabilities denominated in foreign currency, if they are measured at FVTPL, they are adjusted using the spot exchange rate prevailing at the balance sheet date and any exchange differences arising therefrom are recognized in profit or loss; if they are measured at FVOCI, they are adjusted using the spot exchange rate prevailing at the balance sheet date and any exchange differences arising therefrom are recognized in other comprehensive income; if they are not measured at fair value, they are measured at the historical exchange rates on initial transaction dates.

5. (4) All other foreign exchange gains and losses are presented in the statement of comprehensive income within "other gains and losses".

6. Translation from foreign operations

7. (1) The operating results and financial position of the Company, subsidiaries, and associates that have a functional currency different from the presentation currency are translated into the presentation currency by applying the following approaches:

   • A. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the end of the financial reporting period;

   • B. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

   • C. All resulting exchange differences are recognized in other comprehensive income.

8. (2) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. However, if the Company still retains partial interests in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in these foreign operations.

(IV) Classification of Current and Non-current Assets and Liabilities

The Company is engaged in subcontract construction, leasing, and sales of buildings or plants business. The operating cycle is usually longer than one year. The classification criteria for current or non-current of assets and liabilities related to the construction projects is based on the operating cycle. The classification criteria for current or non-current of other items are as follows:

1. Assets that meet one of the following criteria are classified as current assets:

2. (1) Assets that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

3. (2) Liabilities held primarily for trading purposes;

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• (3) Assets that are expected to be realized within 12 months after the balance sheet date;

• (4) Cash, excluding those that are restricted, or to be exchanged or used to settle liabilities at least 12 months after the balance sheet date.

The Company classifies all assets not meeting the aforesaid criteria as non-current assets.

1. Liabilities that meet one of the following criteria are classified as current liabilities:

2. (1) Liabilities that are expected to be settled within the normal operating cycle;

3. (2) Liabilities held primarily for trading purposes;

4. (3) Liabilities that are expected to be settled within 12 months after the balance sheet date;

5. (4) Liabilities for which the repayment date cannot be extended unconditionally to more than 12 months after balance sheet date. Settlement by the issue of equity instruments based on transaction party's choice does not impact classification.

The Company classifies all liabilities not meeting the aforesaid criteria as non-current liabilities.

(V) Cash equivalents

Cash equivalents refer to investments that are short-term, highly liquid, subject to a low risk of changes in value, and readily convertible to a known amount of cash. Time deposits satisfying the aforementioned definition and for which the objective of holding is to meet the short-term operating cash commitment are classified as the cash equivalent.

(VI)

Accounts Receivables and Notes Receivables

1. It refers to receivables and notes of which the contractual right to consideration for goods sold or services rendered is unconditional.

2. At initial recognition, the Company measures the financial assets at fair value. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss.

(VII) Impairment of Financial Assets

• The Company measures the loss allowance for financial assets and accounts receivable containing significant financial components or loan commitment and financial guarantee contract measured at amortized cost after taking into account all reasonable and provable information (including forward-looking information) at each balance sheet date; where the credit risk has not significantly increased since initial recognition, the loss allowance is measured at the 12-month expected credit losses; where the credit risk has increased significantly since initial recognition, the loss allowance is measured at full lifetime expected credit losses; and where they are accounts receivables or contract assets that do not comprise any significant financing components, the loss allowance is measured at full lifetime expected credit losses.

(VIII) Derecognition of Financial Assets

The Company derecognizes an asset when its contractual rights to receive cash flows from the financial asset expire.

(IX) Lease Transactions for the Lessors—Operating Leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term.

(X)

Inventories

1. Including buildings and land held for construction, construction in progress and buildings and land held for sale are initially recorded at cost. The construction profit or loss is recognized with the completed contract method. The buildings and land held

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for construction is transferred to the premise under construction when it is actively developed, and the related interest is capitalized during the period from the active development or construction to the completion of the work.

1. The specific land rights acquired by the Company and its right to construct residential buildings on that land are leased for the profession of the construction. It complies with the definition of IAS 2.6 and IAS 2.8 and recognizes the land use rights acquired as inventory costs.

2. At the end of the period, inventories are evaluated at the lower of cost or net realizable value, and the individual item approach is used in the comparison of cost and net realizable value. The calculation of net realizable value is based on the estimated selling price in the normal course of business, net of estimated costs of completion and estimated selling expenses.

(XI) Investments Accounted for Using the Equity Method—Subsidiaries /Associates

1. Subsidiaries refer to all entities controlled by the Company. The Company controls an entity when the Company is exposed, 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.

2. Unrealized gains or losses arising from the transactions between the Company and its subsidiaries have already been eliminated. Accounting policies of subsidiaries are adjusted, when necessary, to remain consistent with those of the Company.

3. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company's share of losses in a subsidiary equals or exceeds its equity in the subsidiary, the Company shall continue to recognize losses in proportion to its shareholding percentage in such a subsidiary.

4. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20% or more of the voting power of the investee. The Company's investments in associates are accounted for using the equity method and are initially recognized at cost upon acquisition.

5. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. If the Company’s share of losses in an associate equals or exceeds its interest in the associate (including any other unsecured receivables), the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

6. When changes in an associate's equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.

7. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are adjusted, when necessary, to remain consistent with those of the Company.

8. When the Company disposes its investment in an associate and loses significant influence over the said associate, the accounting treatment for amounts previously recognized in other comprehensive income in relation to the associate are the same as the one required if the relevant assets or liabilities were directly disposed of. That is, if gain/loss previously recognized in other comprehensive income will be reclassified

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to profit or loss upon disposal of relevant assets or liabilities, such gain/loss will be reclassified from equity to profit or loss when the Company loses significant influence over the associate. If it still retains significant influence over this associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

1. According to "Regulations Governing the Preparation of Financial Statements by Securities Issuers," the allocated amount in income (loss) of parent company only financial reports, consolidated financial reports prepared, and other comprehensive income (loss) attributable to shareholders of the parent company are the same. Shareholders’ equity in parent company only financial reports and equity attributable to shareholders of parent company in consolidated financial reports are the same.

(XII) Property, plant, and equipment

1. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

2. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other amount of repairs and maintenance fee are recognized as current profit or loss when they are incurred.

3. Land is not depreciated. The cost model is applied to other property, plant and equipment, and these are depreciated using the straight-line method to allocate their cost over their estimated useful lives. If the property, plant, and equipment comprise any significant components, they are depreciated individually.

4. The Company reviews each asset's residual values, useful lives and depreciation methods at the end of each financial year. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" from the date of the change. Except that the useful life of the real estate property is 30 years, the useful life of all other assets is 3 to 5 years.

(XIII) Lease Transactions for the Lessees—Right-of-Use Assets / Lease Liabilities

1. Lease assets are recognized as right-of-use assets and lease liabilities on the date when they are available for use by the Company. When the lease contract is a short-term lease or lease of a low-value asset, the lease payments are recognized as an expense on a straight-line basis over the lease term.

2. The lease liabilities are recognized as the present value of the lease payments that have not been paid at the lease commencement date discounted at the Company's incremental borrowing rate of interest. The lease payments include:

3. (1) Fixed payments, less any lease incentives receivable;

4. (2) Variable lease payments that depend on an index or a rate; The lease liability is measured at amortized cost using the effective interest method subsequently, and the interest expense is appropriated during the lease period. When the non-contractual modification causes a change in the lease period or lease payment, the subsequent lease liability will be reassessed, and re-measurements will be used to adjust the right-of-use assets.

5. The right-of-use asset is recognized at cost at the lease commencement date. The cost comprises:

6. (1) The amount equal to the lease liability at its initial recognition;

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• (2) Lease payments made at or before the commencement of the lease;

• (3) Any initial direct costs incurred by the lessee; and

• (4) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

The subsequent measurement adopts the cost model, and depreciation expenses are recognized at the earlier of the expiration date of the right-of-use asset or the lease period. When the lease liability is reassessed, the right-of-use asset will adjust any remeasurement of the lease liability.

(XIV) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Investment property is depreciated on a straight-line basis over its economic durable service life; the useful life is 66 years.

(XV) Impairment of Non-financial Assets

The Company assesses at each balance sheet date the recoverable amounts of those assets for which there is an indication that they are impaired. An impairment loss is recognized for the amount when the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior periods no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

(XVI) Accounts Payables and Notes Payables

1. Accounts payables and notes payables refer to the debts incurred by purchase of materials, goods, or services on credit, and the notes payables incurred by both operating and non-operating activities.

2. However, short-term accounts/notes payables without interest payment, given insignificant effects of their discounting, are subsequently measured at the invoice price.

(XVII) Provisions

Provisions are prepared for warranty. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date.

(XVIII) Employee Benefits

1. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid and should be recognized as expenses in the period when the employees render service.

1. Pensions

2. (1) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in future payments.

• (2) Defined benefit plans

• A. The net obligation under a defined benefit plan is defined as the present value of pension benefits that employees will receive on retirement for their services with the Company in the current period or prior periods. The amount recognized is the present value of the defined benefit obligation at

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the balance sheet date less the fair value of plan assets. The net defined benefit obligation is computed by independent actuaries every year using the projected unit credit method. The discount rate employed is the market yields on government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the defined benefit plan.

• B. The re-measured amount of defined benefit plans is recognized in other comprehensive income as it arises and presented in retained earnings.

• C. Expenses associated with past service costs are recognized immediately in profit or loss.

• Compensation to employees and remuneration to directors and supervisors

Compensation to employees and remuneration to directors and supervisors are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligations and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Company will calculate the number of shares based on the closing price on the day before the resolution in the Board meeting.

(XIX) Income Tax

1. Income tax expense comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

2. The income tax expenses are calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company operates and generates taxable income. For the income tax levied on the unappropriated retained earnings in accordance with the Income Tax Act, it will be recognized as income tax for unappropriated retained earnings based on the actual distribution of surplus after the surplus distribution proposal is adopted at the shareholders' meeting in the year following the year of which the said surplus is generated.

3. Deferred income tax adopts the balance sheet approach. It is recognized as the temporary difference between the tax bases of assets and non-consolidated liabilities and their carrying amounts in the balance sheet at the reporting date. The deferred income tax is not recognized if it arises from initial recognition of an asset or liability in a transaction (other than a business combination) that, at the time of the transaction, affects neither accounting nor taxable profit (or loss). Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and tax laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

4. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

5. Current income tax assets and liabilities are offset when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same

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taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(XX) Distribution of dividends

Dividends to be distributed to shareholders of the Company are recognized when they are resolved by the Board of Directors' Meeting; Distribution in cash dividends is recognized as a liability, whilst distribution in stock dividends is recognized as stock dividends to be distributed, which is transferred to common share on the date when new shares are issued.

(XXI) Revenue Recognition

Property sales

1. The Company is principally engaged in the subcontract construction, leasing, and sales of property, and the recognition of revenue is based on the transferring of property ownership. For the contracted sales of residential contracts, subject to the terms of the contract, the real property has no other use for the Company, but until the legal ownership of the real property is transferred to the customer, the Company has an freely enforceable right to the contractual amount and therefore revenue is recognized when ownership or use rights are transferred to the customer.

2. Part of the Company's sales contracts includes variable consideration of price concessions. The Company takes the expected value or the most probable amount as an appropriate estimate of the variable consideration.

3. The Company's sales contract of pre-sale houses contains provisions for advance payment from customers, and the time between advance receipt and commodity ownership transfer is longer than one year. According to IFRS 15, if the Company judges that there are significant financing components in an individual pre-sale home contract, it shall adjust the amount of the commitment consideration and recognize the interest cost. In addition, IFRS 15 states that companies should determine the significance of the financing component only at the contract level, rather than the financial level at the portfolio level.

4. V. Primary Sources of Uncertainties in Significant Accounting Judgments, Estimates, and Assumptions

When preparing the parent company only financial statements, management of the Company had determined its accounting policies based on its judgments and made accounting estimates and assumptions based on a rational expectation of future events depending on the circumstances at the balance sheet date. If there is any difference between any significant accounting estimates and assumption made and actual results, the historical experience, and other factors will be taken into account in order to continue assessment and adjustment. The Company does not have an important judgment on the adoption of accounting policies, and significant accounting estimates and assumptions, which are at risk of significant changes in the carrying amount of assets and carrying amount of liabilities in the next financial year.

VI. Descriptions of Material Accounting Items

(I) Cash and cash equivalents

Cash on hand and revolving fund Checking deposits and demand deposits	December 31, 2021 $ 40 2,335,224 $ 2,335,264	December 31, 2020
		$ 40 375,854 $ 375,894

1. The Company deals with financial institutions having high credit quality. The Company also deals with various financial institutions in order that credit risks can be diversified. Therefore, the expected risk of default is pretty low.

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1. The Company's restricted use of the pre-sale construction projects trust fund have been listed under "Other current assets - other." Please refer to Notes 6 (4) and 8 for details.

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(II) Notes and accounts receivable

Notes receivable Within 1 year Accounts receivable Within 1 year Over 1 year (Note) Notes receivable Within 1 year Accounts receivable Within 1 year Over 1 year (Note)	December 31, 2021 $ 7,840 202,443 2,849,570 $ 3,059,853 December 31, 2020 $ 70,704 178,432 3,275,805 $ 3,524,941	Amount of accounts receivable guaranteed $ - 128,569 2,813,320 $ 2,941,889 Amount of accounts receivable guaranteed $ - 140,043 3,198,078 $ 3,338,121	Guaranteed loan amount
			$ - 128,569 2,813,320
			$ 2,941,889
			Guaranteed loan amount
			$ - 140,043 3,198,078
			$ 3,338,121

• Note: The Company's long-term installment accounts receivables over one year are listed under the item "long-term notes and accounts receivable."

• The Company signed a credit agreement with Mega International Commercial Bank secured with the installment accounts receivables arising from the partial sale of "Huaku New World" in installments as collateral. Please refer to Note 6 (10) and Note 8 for details. The Company's information on secured loans with accounts receivable as collateral is as above.

• The balances of receivables (including notes receivables) contracted by the Company and clients as of December 31, 2021, December 31, 2020 and January 1, 2020 were $3,056,043, $3,519,046, and $3,937,010, respectively.

• Interest income recognized by the Company in profit or loss in 2021 and 2020 was $59,582 and $70,904, respectively.

• The notes and accounts receivable above are non-overdue and non-impaired notes and accounts.

• Without considering the collateral or other credit enhancements held, the most representative of the Company's receivable notes and counts credit risk exposure as of December 31, 2021 and 2020 is the carrying amount of each period of receivable notes and counts and long-term installment accounts receivable.

• For credit risk of accounts receivables and notes receivables, please refer to Note 12 (2).

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(III)

Inventories

Buildings and land held for sale Huaku Royal Highness Hwaku Sky Garden Huaku Innovation Fortune Center Huaku New World Huaku Sweet Garden Less: Allowance for valuation loss Construction in progress Huaku Garden Mansion Huaku Bella Vita Huaku National Landmark (formerly Xinzhuang Factory & Office Building Project) Huaku Moon River Huaku Happy Fortune Center (formerly Innovation Fortune II) Huaku Zhongyuan Landmark (formerly Zhonghe Factory & Office Building) Huaku Wenling (formerly Wenlin North Road Project) Huaku Daan Educational Institution Huaku Royal Highness Huaku Innovation Fortune Center Huaku FIT (Finance and IT Center) Park Mansion Land held for construction Nangang Yucheng Project Wenlin North Road Project II Tiding Avenue Project (Formerly Zhonghe Residential Project) Guangpu Hsinchu Project, Second Phase Zhuangtian Road, Taishan Project Xinyi Guangfu Project Zhengda Xindian Project Dunnan Project Huaku Happy Fortune Center (formerly Innovation Fortune II) Huaku Zhongyuan Landmark (formerly Zhonghe Factory & Office Building Project) Huaku Wenling (formerly Wenlin North Road Project) Huaku Daan Educational Institution Others Advance for land and others Taichung Jingmao Road Project Fuxing S. Road Urban Renewal Project Floor area and road land Less: Allowance for valuation loss	December 31, 2021 $ 1,324,869 1,152,823 615,802 16,318 - 3,109,812 ( 9,461) 3,100,351 3,937,509 2,872,556 2,723,038 1,862,225 1,854,024 1,480,778 1,194,871 598,905 - - - - 16,523,906 4,535,225 2,223,340 1,882,842 1,506,697 1,217,040 1,040,653 559,544 562,421 198,834 - - - - 105,090 13,831,686 288,121 47,983 33,566 369,670 ( 13,307) 356,363 $ 33,812,306	December 31, 2020
		$ - 2,603,958 - 58,345 49,394 2,711,697 ( 28,679) 2,683,018 3,163,927 2,500,316 2,334,658 1,599,986 - - - - 2,437,122 2,136,056 1,932,562 908,802 17,013,429 - - - 1,495,756 624,641 1,101,244 451,279 - 198,834 1,500,812 1,447,664 1,155,742 557,019 158,205 8,691,196 - - 36,846 36,846 ( 15,223) 21,623 $ 28,409,266

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1. Huaku New World

2. (1) In 2013, the Company signed the "Training Institute, MOF, And Its Surrounding State-Owned Land Cooperative Development Contract" with the National Property Administration, MOF, obtained the right to land and paid the rights amounted to $1.388 billion, and the lease period was 70 years. This project (Huaku New World) was recognized as revenue when land and house use rights were transferred to customers.

3. (2) Some units follow the Company's policy of leasing, are transferred to the "Investment Property" item after completion of registration.

4. (3) Please refer to 6(10) for details of the information on the property of this project provided as guarantee.

5. On June 4, 2010, the Company signed a contract to sell part of the land held in Sanyu Section of Taipei City (Huaku Sky Garden Project) to Tsai, a non-related person. The full land price of the sales transaction has received and the ownership transfer procedure has completed, only because after the sale of the land as mentioned earlier, the Company immediately signed a contract with the buyer for the joint land construction, land sales, and joint construction contracts should be treated as the same transaction; therefore, its gain on disposal was regarded as unrealized and deferred. The Company transfers unrealized benefits as revenue based on the proportion of sales. As of December 31, 2021 and 2020, the unrealized amounts were $26,389 and $58,952, respectively, which were listed under "other non-current liabilities - other."

6. The amount of interest capitalized in the Company's inventories for 2021 and 2020 is $103,357 and $77,373, respectively, and the net interest rate margin range within the capitalized interest is 0.66% ~ 0.83% and 0.53% ~ 1.39%, respectively.

7. The cost of inventories recognized as expenses and losses by the Company in 2021 and 2020 were $9,347,320 and $7,577,464, respectively, including the cost of goods sold recognized from cost adjusted to net realizable value ($21,134) and ($10,890), respectively. The net realizable value of inventories recovered due to the sale and transfer of some inventories whose net realizable value was lower than their cost.

8. Please refer to Note 8 for details of the pledge of inventories by the Company.

(IV) Other current assets

Restricted bank deposits Incremental costs for obtaining contracts Other current assets	December 31, 2021 $ 950,172 326,749 3,223 $ 1,280,144	December 31, 2020
		$ 1,378,769 315,864 33,786 $ 1,728,419

The restricted bank deposits are the Company's pre-sale project trust loans; please refer to Notes 8 and 9 for details.

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(V) Investment accounted for using the equity method

Subsidiaries: Pin Shing Construction Co., Ltd. Chengdu Wancheng Duobao Real Estate Co., Ltd. Chengdu Huaku Real Estate Co., Ltd. Associates: Taiwan Digit Automated Control Co., Ltd. Huapu Construction Co., Ltd.		December 31, 2021 $ 375,706 129,536 409,802 22,294 5,300 $ 942,638		December 31, 2020 $ 347,213 128,284 408,572 22,073 5,138 $ 911,280	Shareholding percentage
					100.00% 80.00% 80.00% 40.00% 50.00%

1. For information about the subsidiaries of the Company, please refer to Note 4 (3) of the Company's 2021 Notes for Consolidated Financial Statements.

2. For the carrying amounts of the Company's non-significant associates as of December 31, 2021 and 2020, please refer to the table above; the operating results are as follows:

follows:
Net Income from continuing operations Other comprehensive income Total comprehensive income	2021 $ 5,235 - $ 5,235	2020
		$ 5,077 - $ 5,077

1. The unrealized gross profit from upstream transactions of the Company for the years ended December 31, 2021 and 2020 was $89,748 and $93,529, respectively, which was eliminated as a deduction of "investments accounted for using the equity method".

2. The investees that the Company holds more than 50% of the voting shares or with de facto control have been included as entities in the Company's consolidated financial statements.

(VI) Investment Property

Buildings January 1 Transferred in for the period Depreciation expenses December 31	2021
	$ 254,278 1,633 ( 4,094) $ 251,817

1. Investment properties are for the use of lessees. The lease term of the leased real estate lasts until 2030. The rental income and direct operating expenses of the investment properties are as follows:

Rental revenue from investment property	2021 $ 9,344	2020 $ 9,350

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Direct operating expenses incurred by investment property generating rental revenue in the current period

$

6,006

$ 6,188 $

1. The fair value of the investment property held by the Company as of December 31, 2021 and 2020 was $572,777 and $557,543, respectively, which refers to the recent transaction price with comparative similarity of the regions in which the investment property is located.

2. The maturity analysis of the lease payments of leasing by the Company under operating leases is listed as follows:

operating leases is listed as follows:
Within 1 year 2 to 5 years Over 5 years	December 31, 2021 $ 9,430 39,236 20,799 $ 69,465	December 31, 2020
		$ 9,418 38,505 30,960 $ 78,883

(VII) Short-term loans

Loan type Bank loans Secured bank borrowings Credit loans Loan type Bank loans Secured bank borrowings Credit loans	December 31, 2021 $ 7,002,000 1,850,000 $ 8,852,000 December 31, 2020 $ 2,417,000 250,000 $ 2,667,000	Interest rate range 1.08%~1.35% 1.00%~1.10% Interest rate range 1.15%~1.37% 1.10%	Collateral
			Inventories— buildings and land None Collateral
			Inventories— buildings and land None

(VIII) Short-term notes and bills payable

Loan type Short-term notes and bills payable Less: Discount on short-term bills payable Net Interest rate range	December 31, 2021 $ 2,232,000 ( 1,079) $ 2,230,921 0.99%~1.35%	December 31, 2020
		$ 3,232,000 ( 200)
		$ 3,231,800 0.91%~1.37%

(IX) Other current liabilities - others

Warranty provisions Payment collection	December 31, 2021 $ 106,403 75,426	December 31, 2020
		$ 108,283 61,894

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Others

51,979 $ 233,808	34,401
	$ 204,578

(X)	Long-term loans Loan type	Loan period and repayment method	Interest rate range	Collateral	December 31, 2021 $ 1,349,400 350,000 1,937,000 2,947,817 6,584,217 ( 2,511,848) $ 4,072,369 December 31, 2020
	Long-term bank loans Credit loans Loans secured by accounts receivable Less: Long-term loans due within one year or one operating cycle Loan type Credit loans Loans secured by accounts receivable Less: Long-term loans due within one year or one operating cycle Credit loans	From June 2020 to June 2022; the interest is paid on a monthly basis From June 2020 to July 2022; the interest is paid on a monthly basis From June 2021 to June 2023; the interest is paid on a monthly basis. From June 2017 to September 2039; the interest is paid on a monthly basis Loan period and repayment method From July 2019 to July 2021; the interest is paid on a monthly basis From June 2020 to June 2022; the interest is paid on a monthly basis From June 2020 to July 2022; the interest is paid on a monthly basis From June 2017 to September 2039; the interest is paid on a monthly basis	0.88%~1.10% 1.89% Interest rate range 0.92%~1.10 % 1.89%	None None None Read Note for details Collateral None None None Read Note for details
					$ 1,107,200 2,076,000 500,000 3,341,381 7,024,581 ( 2,127,103) $ 4,897,478

The Company’s unused balance of loan limit as of December 31, 2021 and 2020 were

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$8,557,052 and $12,290,056, respectively.

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Accounts receivable / Loans secured by other receivables

The Company signed the secured loans agreement use account receivable as collateral with the Mega International Commercial Bank. The Company utilized the installment accounts receivable from the Company's sale of Huaku New World project, the rights of the building site, and the construction and its subsidiaries as collateral to obtain a loan amount of NT$6 billion, and the loan period is 20 years. Please refer to Note 6 (2) for details. The main terms of the agreement are as follows:

1. The loan period of each account receivable shall not exceed 20 years from the date when the funds are used.

2. The used amount mentioned above shall be circulated from the date of first use to the date of expiration of five years, and the unspent balance of loans shall be automatically canceled at that time.

3. During the duration of the secured loans use account receivable as collateral, the Company shall maintain all the following financial ratios on the basis of the annual consolidated financial statements audition certified by the accountant, which shall be checked once a year:

4. (1) Current ratio: no less than 100%.

5. (2) Debt ratio (total liabilities/tangible net worth): no greater than 230%.

(XI) Pensions

1. In compliance with the requirements set forth in the Labor Standards Act, the Company has stipulated a defined benefit pension plan, which is applicable to the years of service rendered by regular employees prior to, and after (if employees elect to continue to apply the Labor Standards Act), the implementation of the Labor Pension Act on July 1, 2005. Pension payments for employees qualified for the aforementioned retirement criteria are calculated in accordance with the years of service rendered and the average salaries or wages of the last six months prior to retirement. Two bases are given for each full year of service over the first 15 years, and one base is given for an additional year of service thereafter, provided that the total bases do not exceed 45. The Company contributes on a monthly basis 2% of the total salary (wages) as the pension fund, which is deposited in a designated account with the Bank of Taiwan under the name of the Supervisory Committee of Workers’ Retirement Fund. Prior to the end of each annual period, the Company assesses the balance of the aforementioned designated account for the labor pension fund. If the balance is determined insufficient to pay off the pension amount computed by the aforementioned approach for employees qualified for retirement within next year, the Company will make a lump sum contribution to make up the shortfall before the end of March of the following year.

2. (1) Amounts recognized on the balance sheets are as follows:

Present value of the defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31, 2021 ($ 73,900) 39,122 ($ 34,778)	December 31, 2020
		($ 77,509) 39,815 ($ 37,694)

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(2) Changes in net defined benefit liabilities are as follows:

2021 Balance as of January 1 Current service cost Interest (expense) revenue Remeasurement: Return on plan assets (excluding amounts included in interest revenue or expenses) Effect of changes in demographic assumptions Effect of changes in financial assumptions Experience adjustment Provision of pension funds Payment of pension Balance as of December 31 2020 Balance as of January 1 Current service cost Interest (expense) revenue Remeasurement: Return on plan assets (excluding amounts included in interest revenue or expenses) Effect of changes in demographic assumptions Effect of changes in financial assumptions Experience adjustment Provision of pension funds Payment of pension Balance as of December 31	Present value of the defined benefit obligation ($ 77,509) ( 363) ( 189) ( 78,061) - ( 70) 1,857 933 2,720 - 1,441 ($ 73,900) Present value of the defined benefit obligation ($ 73,295) ( 347) ( 468) ( 74,110) - - ( 2,046) ( 1,353) ( 3,399) - - ($ 77,509)	Fair value of plan assets $ 39,815 - 94 39,909 611 - - - 611 - ( 1,398) $ 39,122 Fair value of plan assets $ 38,093 - 239 38,332 1,483 - - - 1,483 - - $ 39,815	Net defined benefit liabilities
			($ 37,694) ( 363) ( 95)
			( 38,152)
			611 ( 70) 1,857 933 3,331 - 43 ($ 34,778)
			Net defined benefit liabilities
			($ 35,202) ( 347) ( 229)
			( 35,778)
			1,483 - ( 2,046) ( 1,353)
			( 1,916)
			- - ($ 37,694)

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• (3) The fund asset of the Company's defined benefit pension plan ("the Fund") is entrusted to the Bank of Taiwan, which manages, or entrusts others to manage, the Fund in accordance with entrusted items enumerated in Article 6 of the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund (i.e., deposit in domestic or foreign institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, and investment in domestic or foreign real estate and its securitization products) to the extent of limitations on investment percentage and amount as stipulated in the Fund’s annual utilization plan. The status of utilization of the Fund is subject to supervision by the Labor Pension Fund Supervisory Committee. With regard to utilization of the Fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. In case any deficiency in the earnings arises, Treasury Funds can be used to cover the deficits after the approval of the competent authority. Since the Company has no right to participate in the operation and management of the Fund, it is not able to disclose the classification of the fair value of plan assets as required in IAS 19.142. For the composition of the fair value of the Fund in total as of December 31, 2021, and 2020, please refer to the various labor pension utilization reports issued by the government.

• (4) Actuarial assumptions on pensions are summarized as follows:

Discount rate Future salary increases	2021 0.65% 2.00%	2020
		0.25%
		2.00%

The assumptions for the future mortality rate are based on the published statistics and experience of each country.

Effects of changes in the principal actuarial assumptions on present value analysis of defined benefit obligation are as follows:

December 31, 2021 Effect on present value of defined benefit obligation December 31, 2020 Effect on present value of defined benefit obligation	Discount rate Increase of 0.25% Decrease of 0.25% ($ 1,131) $ 1,16 ($ 1,290) $ 1,326	Discount rate Increase of 0.25% Decrease of 0.25% ($ 1,131) $ 1,16 ($ 1,290) $ 1,326	Future salary increases	Future salary increases
	Increase of 0.25% ($ 1,131) ($ 1,290)		Increase of 0.25% $ 1,143 $ 1,303	Decrease of 0.25%
		$ 1,16 $ 1,326		($ 1,120)
				($ 1,274)

The sensitivity analysis above is based on other conditions that are unchanged but only one assumption is changed. In practice, many changes in assumptions may be linked together. The method used for the sensitivity analysis and calculation of the net defined benefit pension liability is the same. The method of analyzing sensitivity and the method of calculate net pension liability in the balance sheet are the same.

The method and assumptions used for the preparation of the sensitivity analysis for the current period are the same as those used in the previous period.

• (5) The Company expects to make a contribution of $0 to the pension plans for the

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year ended December 31, 2022.

• (6) As of December 31, 2021, the pension plan's weighted average duration was 6 years. The maturity analysis of the pension payments is as follows:

Within 1 year 1-2 years 2-5 years Over 5 years	$ 9,465 2,796 18,962 45,407 $ 76,630

1. Starting from July 1, 2005, the Company has set up a defined contribution plan for all employees with ROC citizenship in accordance with the Labor Pension Act. For the employees of the Company who choose to apply the labor pension system as defined in the Labor Pension Act, the Company has made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts. The benefits accrued are paid monthly or in a lump sum upon termination of employment. For the years ended December 31, 2021 and 2020, the net pension costs recognized under the defined contribution plan aforementioned were $3,137 and $2,945, respectively.

(XII) Share capital

1. As of December 31, 2021, the Company’s authorized capital was $5,000,000, and the paid-in capital was $2,768,127 with a par value of NT$10 per share. Share payments for the Company’s issued stocks have been collected in full. The number of outstanding shares of the Company at the beginning and the end of the period is 276,812,726 shares.

2. Treasury stock

3. (1) The Company had no treasury stock transactions for the years ended December 31, 2021, and 2020.

4. (2) As of December 31, 2021, and 2020, the Company's subsidiary Pin Shing Construction Co., Ltd., held the Company's shares for the purpose of investment profit; the details are as follows:

profit; the details are as follows:
Number of shares (thousand shares) Carrying amounts	December 31, 2021 174 $ 850	December 31, 2020
		174 $ 850

- (XIII) Additional paid in capital

According to the Company Act, additional paid-in capital including the income derived from issuing shares at a premium and from endowments, in addition to being used to covering deficit, where there is no accumulated deficit in a company, shall be distributed by issuing new shares to shareholders in proportion to the number of shares being held or by cash. In addition, according to relevant provisions of the Securities Exchange Act, when allocating capital from the aforementioned additional paid-in capital, the combined capitalized amount each year shall not exceed 10 percent of the paid-up capital. A company shall not use the additional paid-in capital to make good its capital loss, unless the surplus reserve is insufficient to make good such loss.

(XIV) Retained earnings

1. According to the Company's Articles of Incorporation, after offsetting any loss of prior years and paying all taxes and dues, 10% of the annual net income shall be set aside as legal reserves. The remaining net income and the unappropriated retained earnings from prior years can be allocable earnings. The aforementioned distributable

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earnings shall be distributed as a dividend by the board of directors and then submitted to the shareholders' meeting for report.

1. Legal reserves may only be used for offsetting deficits and issuing new shares or distributing cash in proportion to shareholders’ original holdings. However, when new shares are issued or cash is distributed, the amount shall be limited to 25% of the reserves in excess of the paid-in capital.

2. The Company may allocate earnings only after providing special reserve for debt balance in other equity on the date of balance sheet, and the reversal of debit balance in other equity, if any, may be stated into allocable earnings.

3. The distribution of earnings for 2020 and 2019, which were proposed and approved in the annual shareholders’ meetings on August 3, 2021 and May 26, 2020, respectively, are as follows: The Company's proposal for earnings distribution for 2020 is as follows:

The Company's earnings distribution plan in 2020 is in accordance with the "Measures for Public Companies to Postpone Shareholders' Meetings for Pandemic Prevention" announced by the Financial Supervisory Commission, resulting in the shareholders' meeting originally scheduled on May 25, 2021 was stopped, and the shareholders' meeting was held on August 3, 2021 by the resolution of the Board of Directors.

	Directors.
			2020					2019
				Dividends per					Dividends per
			Amount		share (NT$)	Amount			share	(NT$)
	Legal reserves	$	277,799			$	314,087
	Cash dividends		1,937,689	$	7	2,076,095			$	7.5
5.	As of March 9, 2022, the Company's			earnings distribution plan for				2021 had not been
	approved by the Board		of Directors.
Oth	er equity
					2021				2020
Exchange differences on translation of
foreign financial statements
January 1				$		9,322	$			2,384
-	The Company			(		4,044)				8,673
-	Tax amount of the	Company				809	(			1,735)
December 31				$		6,087	$			9,322

• (XV) Other equity

(XVI) Operating revenue

Revenue from contract with customers Others	2021 $ 13,497,761 19,765 $ 13,517,526	2020
		$ 11,275,410 20,371 $ 11,295,781

1. Segments of revenue from contracts with customers

The Company's revenue is derived from the provision of goods and services that are transferred at a certain point in time, or gradually transferred over time. The revenue

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can be subdivided into the following major product lines and geographical regions:

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2021 Timing of revenue recognition - Revenue recognized at a specific timing - Gradually transferred revenue over time 2020 Timing of revenue recognition - Revenue recognized at a specific timing - Gradually transferred revenue over time		Taiwan	Total $ 13,497,761 19,765 $ 13,517,526 Total $ 11,275,410 20,371 $ 11,295,781
	Sales of construction	Others $ - 19,765 $ 19,765 Taiwan
	$ 13,497,761 - $ 13,497,761
	Sales of construction	Others $ - 20,371 $ 20,371
	$ 11,275,410 - $ 11,275,410

1. The aggregate amount of the transaction price and the estimated recognized revenue year of the sales contract signed by the Company as of December 31, 2021, which had not yet satisfied its performance obligations, are as follows:

Estimated recognized revenue year 2022-2023	Amount of contracts signed $ 20,515,849

1. Contract liabilities The contract liabilities related to contract revenues recognized by the Company are listed as follows:

isted as follows:
Contract liability—current: Contract liabilities—advance land receipts Contract liabilities—advance building receipts	December 31, 2021 $ 2,463,020 1,263,020 $ 3,726,040	December 31, 2020 $ 2,530,096 938,059 $ 3,468,155	January 1, 2020
			$ 2,266,249 958,510
			$ 3,224,759

• (1) The Company's sales contract of pre-sale houses contains provisions for advance payment from customers, and the time between advance receipt and commodity ownership transfer is longer than one year. According to IFRS 15, contract liabilities related to sales of pre-sale homes were recognized as current liabilities.

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• (2) Provision for opening contract liabilities

Opening balance for contract liabilities recognized as pre-sale construction contract	2021 $ 1,245,112	2020
		$ 1,735,176

(XVII) Additional information regarding the nature of expenses

Construction costs Employee benefit expenses Depreciation and amortization Advertising expenses Taxation Rental expenses Other costs and expenses Operating cost and operating expenses	2021	2020 $ 7,551,403 268,720 17,344 172,526 66,834 650 67,296 $ 8,144,773
	$ 9,318,538 288,767 18,376 250,583 80,860 680 74,403 $ 10,032,207

(XVIII)	Employee benefit expenses Wages and salaries Directors' remuneration Labor and health insurance expenses Pension expenses Other personnel cost	2021 $ 214,118 47,722 11,079 3,552 12,296 $ 288,767	2020 $ 209,342 43,328 1,555 3,521 10,974 $ 268,720

1. As stated in the Articles of Incorporation, if there is any remaining profits after deducing the accumulated deficits from the profits of the year, the Company shall allocate 3%-5% of the remaining profits as compensation to employees, and no greater than 2% of the remaining profits as remuneration to directors and supervisors.

2. For the years ended December 31, 2021 and 2020, the Company recognized compensation to employees amounted to $111,750 and $100,180, respectively, and remuneration to

3. directors amounted to $44,700 and $40,070, respectively, all presented under payroll expense.

Based on the profitability of the year ended in 2021, it is estimated to allocate 3% and 1.2%, respectively, and the estimated amounts were in alignment with the amount decided by the Board of Directors. The aforementioned employee compensation would be paid in cash.

The Company's 2020 employee bonus and directors' remuneration are consistent with the amounts recognized in the financial statements for the year ended December 31, 2020.

Information regarding employees' salary and remuneration to directors approved by the board of directors of the Company can be found at the Market Observation Post System (MOPS) website.

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(XIX) (XX) (XXI) (XXII)	Interest income Interests on bank deposits Interest income from financial assets at amortized cost Other income Contract default income from the buyers Advertising service income Other income Financial cost Interest expense—bank loans - Bank loans - Installment accounts receivable - Lease liabilities Financial expenses Less: Amount capitalized of qualified assets Income Tax 1. Income tax expense (1) Components of income tax expense: Current income tax: Income tax incurred in the current period Land value increment tax recognized in income tax in the current period Tax on undistributed surplus earnings Under(Over)-estimated provision of the prior year's income tax Total current income tax Deferred income tax: Recognition and reversal of temporary differences Income tax expense			2021	2020 $ 1,000 70,904 $ 71,904 2020 $ - 42,436 3,406 $ 45,842 2020 $ 72,911 70,776 132 37,861 181,680 ( 77,373) $ 104,307 2020 $ 247,424 153,674 37,627 17,529) 421,196 2,391) $ 418,805
				$ 376 59,582
				$ 59,958
				2021
				$ 18,068 40,427 3,838
				$ 62,333
				2021

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	(2) Income tax (expense) amounts associated with	other	comprehensive	comprehensive	income:
			2021		2020
	Currency translation differences	$	809	($	1,735)
	Remeasurement of defined benefit obligations	(	666)		383
		$	143	($	1,352)
2.	Relationship between income tax expense and accounting		profit:
			2021		2020
	Income tax expense at the statutory rate	$	713,651	$	639,775
	Effect of non-recognition by law	(	16,249)	(	12,568)
	Effect from tax-exempt income	(	127,991)	(	379,783)
	Recognition and reversal of temporary differences	(	515)	(	2,391)
	Tax on undistributed surplus earnings		28,125		37,627
	Under(Over)-estimated provision of the prior year's
	income tax	(	152)	(	17,529)
	Land value increment tax recognized in income tax
	for the current period		51,197		153,674
	Income tax expense	$	648,066	$	418,805

3.	Deferred tax assets and liabilities resulting from temporary differences are as follows: 2021 January 1 Recognized in profit and loss Recognized in other comprehensive income December 31 Deferred income tax assets Construction warranty reserve $ 2,600 $ 400 $ - $ 3,000 Unrealized expenses 8,175 24 - 8,199 Remeasurements from defined benefit plans 9,147 - ( 666 ) 8,481 19,922 424 ( 666 ) 19,680 Deferred income tax liabilities Exchange differences on translation of foreign operations ( 2,331) - 809 ( 1,522) Book-tax difference in retirement pensions ( 849) 91 - ( 758) ( 3,180) 91 809 ( 2,280) Total $ 16,742 $ 515 $ 143 $ 17,400	Deferred tax assets and liabilities resulting from temporary differences are as follows: 2021 January 1 Recognized in profit and loss Recognized in other comprehensive income December 31 Deferred income tax assets Construction warranty reserve $ 2,600 $ 400 $ - $ 3,000 Unrealized expenses 8,175 24 - 8,199 Remeasurements from defined benefit plans 9,147 - ( 666 ) 8,481 19,922 424 ( 666 ) 19,680 Deferred income tax liabilities Exchange differences on translation of foreign operations ( 2,331) - 809 ( 1,522) Book-tax difference in retirement pensions ( 849) 91 - ( 758) ( 3,180) 91 809 ( 2,280) Total $ 16,742 $ 515 $ 143 $ 17,400	Deferred tax assets and liabilities resulting from temporary differences are as follows: 2021 January 1 Recognized in profit and loss Recognized in other comprehensive income December 31 Deferred income tax assets Construction warranty reserve $ 2,600 $ 400 $ - $ 3,000 Unrealized expenses 8,175 24 - 8,199 Remeasurements from defined benefit plans 9,147 - ( 666 ) 8,481 19,922 424 ( 666 ) 19,680 Deferred income tax liabilities Exchange differences on translation of foreign operations ( 2,331) - 809 ( 1,522) Book-tax difference in retirement pensions ( 849) 91 - ( 758) ( 3,180) 91 809 ( 2,280) Total $ 16,742 $ 515 $ 143 $ 17,400	Deferred tax assets and liabilities resulting from temporary differences are as follows: 2021 January 1 Recognized in profit and loss Recognized in other comprehensive income December 31 Deferred income tax assets Construction warranty reserve $ 2,600 $ 400 $ - $ 3,000 Unrealized expenses 8,175 24 - 8,199 Remeasurements from defined benefit plans 9,147 - ( 666 ) 8,481 19,922 424 ( 666 ) 19,680 Deferred income tax liabilities Exchange differences on translation of foreign operations ( 2,331) - 809 ( 1,522) Book-tax difference in retirement pensions ( 849) 91 - ( 758) ( 3,180) 91 809 ( 2,280) Total $ 16,742 $ 515 $ 143 $ 17,400
		Recognized in profit and loss $ 400 24 - 424 - 91 91 $ 515	Recognized in other comprehensive income $ - - ( 666 ) ( 666 ) 809 - 809 $ 143	December 31
				$ 3,000 8,199 8,481 19,680 ( 1,522) ( 758)
				( 2,280)
				$ 17,400

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January 1 Deferred income tax assets Construction warranty reserve $ 4,000 Unrealized expenses 4,499 Book-tax difference in retirement pensions ( 964) Remeasurements from defined benefit plans 8,764 16,299 Deferred income tax liabilities Exchange differences on translation of foreign operations ( 596) Book-tax difference in retirement pensions - ( 596) Total $ 15,703		2020	2020
		Recognized in profit and loss ($ 1,400 ) 3,676 964 - 3,240 - ( 849 ) ( 849 ) $ 2,391	Recognized in other comprehensive income $ - - - 383 383 ( 1,735 ) - ( 1,735 ) ($ 1,352 )	December 31
				$ 2,600 8,175 - 9,147 19,922 ( 2,331) ( 849)
				( 3,180)
				$ 16,742

1. The difference between the Company's finance income and taxable income is mainly caused by the tax exemption from land transaction tax, etc.

2. The tax authorities have examined income tax returns of the Company through the year ended December 31, 2019.

(XXIII) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employee remuneration Profit attributable to common stock shareholders plus assumed conversion of all dilutive potential common stocks		2021
	Amount after tax $ 2,920,173 - $ 2,920,173	Weighted average number of common shares outstanding (shares in thousands) 276,638 1,422 278,060	Earnings per share (NT$)
			$ 10.5
			$ 10.5

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Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employee remuneration Profit attributable to common stock shareholders plus assumed conversion of all dilutive potential common stocks		2020
	Amount after tax $ 2,780,065 - $ 2,780,065	Weighted average number of common shares outstanding (shares in thousands) 276,638 1,404 278,042	Earnings per share (NT$)
			$ 10.05
			$ 10.00

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(XXIV) Changes in liabilities from financing activities

January 1 Changes in cash flows from financing activities Payment of interest expense (Note 1) Other non-cash changes December 31 January 1 Changes in cash flows from financing activities Payment of interest expense (Note 1) Other non-cash changes December 31				2021
	Short-term loans $ 2,667,000 6,185,000 - - $ 8,852,000	Long-term loans (Note 2) $ 7,024,581 ( 440,364 ) - - $ 6,584,217	Short-term notes and bills payable $ 3,231,800 ( 1,000,879 ) - - $ 2,230,921	Guarantee deposits received $ 15,063 14,328 - - $ 29,391 2022	Lease liabilities $ 10,374 ( 7,233 ) ( 159 ) 15,452 $ 18,434	Dividends payable $ . ( 1,937,689 ) - 1,937,689 $ -	Total liabilities from financing activities
							$ 12,948,818 2,813,163 ( 159 ) 1,953,141
							$ 17,714,963
	Short-term loans $ 3,607,290 ( 940,290 ) - - $ 2,667,000	Long-term loans (Note 3) $ 6,298,818 725,763 - - $ 7,024,581	Short-term notes and bills payable $ 3,021,634 210,166 - - $ 3,231,800	Guarantee deposits received $ 21,563 ( 6,500 ) - - $ 15,063	Lease liabilities $ 17,635 ( 7,261 ) ( 132 ) 132 $ 10,374	Dividends payable $ - ( 2,076,095 ) - 2,076,095 $ -	Total liabilities from financing activities
							$ 12,966,940 ( 2,094,217 ) ( 132 ) 2,076,227
							$ 12,948,818

Note 1: Statement of cash flows from operating activities

Note 2: It includes $2,511,848 long-term loans due within one year or one operating cycle, accounted for under the item “Long-term liabilities due within one year or one operating cycle.”

• Note 3: It includes $2,127,103 long-term loans due within one year or one operating cycle, accounted for under the item “Long-term liabilities due within one year or one operating cycle.”

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VII. Related-Party Transactions

(I) Name and relationship of related parties

Name of related party Pin Shing Construction Co., Ltd. Chengdu Wancheng Duobao Real Estate Co., Ltd. Chengdu Huaku Real Estate Co., Ltd. Taiwan Digit Automated Control Co., Ltd. Huapu Construction Co., Ltd. Full Come Foundation Eng. Ltd. Huaku Education Foundation Zhongshan Investment Co., Ltd. Jason Hung Ho, Ping-Hsing Yang, Chih-Wei	Relationship with the Company
	Subsidiary Subsidiary Subsidiary Associates Associates Associates Other related parties Other related parties The main management of the Company The main management of the Company The main management of the Company

(II) Significant transactions between related parties

1. Sales

During the years of 2021 and 2020, the board of directors of the Company resolved to sell the projects developed and constructed by the Company to the related parties, and the total transaction amount including tax were $0 and $46,850, respectively.

2. Purchases and commitments

Purchases and commitments
Subsidiary Associates	2021	2020 $ 2,316,459 27,482 $ 2,343,941
	$ 2,893,812 55,198 $ 2,949,010

• (1) The contraction project entrusted by the Company to Pin Shing Construction Co., Ltd. was in compliance with the contract, and the payment period was approximately 120 days; the payment period to non-related parties is approximately within one month or 45 days.

• (2) As of December 31, 2021, the total price of the uncompleted project construction contracts signed between the Company and Pin Shing Construction Co., Ltd. was $6,022,545, and the amount of unrecognized construction payments was $3,745,165.

3. Notes and accounts receivable

Notes and accounts receivable
Subsidiary Notes and accounts payable Subsidiary Associates	December 31, 2021 $ 952,587 11,072 963,659	December 31, 2021 $ 12,740 December 31, 2020
		$ 970,828 5,915 $ 976,743

1. Notes and accounts payable

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The accounts payable to related parties are mainly from the purchase transaction. The accounts payables are non-interest bearing.

1. Donation expenses

5. Donation expenses	5. Donation expenses	5. Donation expenses	5. Donation expenses
2021 2020 Other related parties $ 1,000 $ 2,000 6. Administrative fees income (recognized as"Other income") 2021 2020 Subsidiary $ 1,714 $ 1,714 7. Property transaction 2021 Proceeds from disposal (Loss) gain from disposal The key management $ 762 $ 762 Information on the remunerations of the key management 2021 2020 Short-term employee benefits $ 111,417 $ 101,248				2020
				$ 2,000
				2020
		$ 1,714 2021		$ 1,714
	Proceeds from disposal (Loss) gain from disposal $ 762 $ 762 the key management 2021 2020 $ 111,417 $ 101,248		(Loss) gain from disposal
			$	762
				2020 $ 101,248
Short-term employee benefits

(III) Information on the remunerations of the key management

VIII. Pledged Assets

The Company's assets pledged as collateral are as follows:

			Carrying	amounts	amounts	amounts
	Pledged assets	December 31,			December 31,		Purpose of the pledge
			2021			2020
Installment accounts receivable							Loans secured by accounts receivable
-	Accounts receivable	$	128,56	$		140,04
-	Long-term notes and		2,704,71			3,131,354
	accounts receivable
Other	installments receivable						Loans secured by accounts receivable
-	Other receivables		5,92			3,260
-	Long-term notes and		108,604			66,724
	accounts receivable
Other	current assets
-	Restricted bank deposits		950,17			1,378,769Pre-sale construction project trust
							fund
Inventories			25,335,16			24,231,229Short-term loans and commercial
							papers payable
Investment property			251,817			254,27	Loans secured by accounts receivable
		$	29,484,97	$		29,205,657

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IX. Significant Commitments and Contingencies

(I) As of December 31, 2021, the total value of the engineering contract signed between the Company and non-related parties amounted to $1,011,215 and the amount not yet estimated is $667,096.

(II) As of December 31, 2021, the Company had signed letters of trust deed with the trustee financial institution for the project of construction in progress, and the relevant project names and trust banks were as follows:

Project name	Trust bank
Huaku Deyue Huaku National Landmark Huaku Bella Vita Huaku Garden Mansion Huaku Moon River	E.SUN Commercial Bank, Ltd. CTBC Bank Co., Ltd. Hua Nan Commercial Bank, Ltd. CTBC Bank Co., Ltd. E.SUN Commercial Bank, Ltd.

The Group has processed the registrations of transferring the values trust or real estate development trust to the financial institution that undertakes the assurance for the construction as mentioned above projects.

X. Significant Disaster Losses

None.

XI. Significant Subsequent Events

None.

XII. Others

(I) Capital security risk management

The objective of the Company's capital management is to ensure that the Company can continue as a going concern, that an optimal capital structure is maintained to lower the cost of capital, and that rewards are provided to shareholders. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. The Company regulates the borrowing amount based on the progress of the project and the funds required for the operation.

(II) Financial instruments

1. Categories of financial instruments

Financial assets Financial assets/loans and receivables measured at amortized cost Cash and cash equivalents Notes receivable Accounts receivable (including long-term accounts receivable for more than one year) Other receivables Refundable deposits Other financial assets	December 31, 2021 December 31, 2020 $ 2,335,26 $ 375,894 7,84 70,704 3,052,01 3,454,237 26,23 66,390 320,65 355,629 950,17 1,378,769

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$

6,692,17 $

5,701,623

Financial liabilities Financial liabilities measured at amortized costs Short-term loans Short-term notes and bills payable Notes payable Accounts payable Other payables Long-term borrowings (including due within one year or one operating cycle) Guarantee deposits received Lease liabilities	December 31, 2021 December 31, 2020 $ 8,852,000$ 2,667,00 2,230,92 3,231,80 2,403 25,95 1,261,689 1,194,39 425,986 419,46 6,584,217 7,024,58 29,39 15,06 $ 19,386,607 $ 14,578,26 $ 18,434 $ 10,37

2. Risk management policy

• (1) The Company's daily operations are affected by various financial risks, e.g., market risks (including exchange rate risk, interest rate risk, and price risk), credit risk, and liquidity risk.

• (2) The risk management process is carried out by the finance department of the Company in accordance with the opinions of the board of directors. Through cooperation with each of the Company's operating units, the finance department is responsible for identifying, evaluating, and hedging financial risks.

• (3) The Company does not undertake derivatives for hedging financial risks.

• Nature and degree of significant financial risks

• (1) Market risk

Foreign currency risk

• A. The Company operates internationally. The main currency is NTD. Foreign currency risk arises from recognized assets and liabilities and net investments in foreign operations. The management of the Company has established policies to manage the foreign currency risk of functional currencies. The Company manages its overall foreign currency risk through the finance department. The Company had no foreign currency assets or liabilities as of December 31, 2021 and 2020.

• B. Due to the significant impact of exchange rate fluctuations on the monetary items of the Company, the aggregated (loss) gains (including realized and unrealized) of exchanges for the years ended December 31, 2021 and 2020 were $0 and ($6), respectively.

Price risk

The Company has no equity instruments exposed to price risk, and has no commodity exposed to price risk.

Cash flow interest rate risk and fair value interest rate risk

• A. The Company's interest rate risks come from short-term and long-term loans. Loans with floating interest rates expose the group to cash flow interest rate risks, of which a portion is offset by the cash held with floating interest rates. For the years ended December 31, 2021 and 2020, the Company's borrowings at floating interest rate were denominated in NTD.

~46~

• B. The Company simulates a number of scenarios and analyzes interest rate risk, including consideration of refinancing, extending contracts of existing positions, and other available financings to calculate the impact of changes in specific interest rates on profit or loss.

• C. When all other factors remain unchanged, the maximum impact of a 1% change in interest rate on the financial costs of 2021 and 2020 is to increase or decrease of $176,682 and $129,236, respectively. The two payments of $29,478 and $33,414 in 2021 and 2020, respectively, were due to the Company's contract of the loan secured by account receivable with the bank. As the interest income generated by the installment sales will be directly deposited by the purchaser into the bank loan account of the Company to repay the interest expenses arising from the above-mentioned factoring contract. Therefore, there wa no need for the Company to undertake the risk of interest rate changes arising from this transaction. The simulation is done on a quarterly basis to verify that the maximum loss potential is within the limit given by the management.

• (2) Credit risk

• A. Credit risk of the Company refers to the risk of financial loss of the Company caused by the client or counterparties of financial instruments fail to fulfill their contractual obligations. It mainly comes from the counterparty unable to pay off the accounts payable according to the collection conditions.

• B. The Company establishes credit risk management from the group perspective. Only banks and financial institutions with an independent credit rating of at least "A" can be accepted for trading by the Company.

• C. The Company mainly engages in the lease and sale of public housings, plants as well as the sale of premises. Revenue is recognized when the full contract payments are collected, and the transfer of ownership and the actual delivery of the house are completed. Therefore, the amount of accounts receivable arising from the sale of real estate should be of petty proportion and not much chance of non-recovery. The Company also implements individual management and regular tracking of receivables arising from special trading. In addition, the Company classifies customers' accounts receivable and installment accounts receivable based on customer characteristics, and use the simplified preparation matrix, the company estimates the expected credit loss and adjusts the loss rate established by historical and current information during a specific period to assess the allowance loss of installments receivable. The Company's assessed credit impairment losses as of December 31, 2021 and 2020 were not significant.

• D. No written-off debts with recourse existed as of December 31, 2021 and 2020.

• (3) Liquidity risk

• A. The cash flow forecast is performed and compiled by the finance department. The Company's finance division monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

• B. The Company's non-derivative financial liabilities are analyzed based on the remaining period from the date of balance sheet to the contract expiration date; the derivative financial liabilities are analyzed based on the fair value at the date of balance sheet.

Except for notes payable with undiscounted contract cash flow amount that

~47~

is approximately equal to its book value and matures within one year, the amount of undiscounted contractual cash flow of other financial liabilities is as follows:

Non-derivative financial

liabilities:

December 31, 2021 Short-term loans Short-term notes and bills payable Accounts payable Other payables Lease liabilities Long-term borrowings (including due within one year or one operating cycle) Loans secured by accounts receivable Non-derivative financial liabilities: December 31, 2020 Short-term loans Short-term notes and bills payable Accounts payable Other payables Lease liabilities Long-term borrowings (including due within one year or one operating cycle) Loans secured by accounts receivable	Within 1 Year 1-3 years Over 3 years $ 2,018,627$ 5,281,86 $ 1,771,17 1,300,000 932,00 955,497 91,32 214,86 260,712 102,76 62,50 6,936 7,83 3,91 2,399,930 1,263,86 178,645 343,02 3,262,82 Within 1 Year 1-3years Over 3years $ 279,752$ 2,420,47 $ 50,51 200,000 3,022,00 10,00 969,423 224,97 359,433 59,77 26 7,392 10,41 2,012,902 1,706,24 205,040 379,27 3,909,92	Over 3 years

• C. The Company did not expect a maturity analysis of which the cash flows timing would be significantly earlier, or the actual amount would be significantly different.

(III) Fair value information

1. The following states the definition of different levels of valuation techniques used to measure the fair value of financial and non-financial instruments:

2. Level 1: Level 1 inputs are (unadjusted) quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

3. Level 2: Observable inputs for the asset or liability, either directly or indirectly, other than quoted market prices included within Level 1,

4. Level 3: Unobservable inputs for the asset or liability. The financial products

~48~

invested by the Company belong to this level.

1. For fair value information of investment property measured at cost, please refer to Note 6 (6).

2. For the years ended December 31, 2021 and 2020, the Company did not hold financial and non-financial instruments measured at fair value.

3. Financial instruments not measured at fair value, including cash and cash equivalents, notes and accounts receivable, other receivables refundable deposits, restricted bank deposits, short-term loans, short term notes and bills payable, bills payable, accounts payable, other payables, long-term borrowings, guarantee deposit received, are reasonable approximations of fair values.

4. (IV) Due to the coronavirus disease (COVID-19) pandemic in 2021, the Company cooperated with various pandemic prevention measures promoted by the government, subject to the restriction on the number of persons, that the sale and handover of the completed buildings and land held for sale, the schedule of the construction in progress, and the pre-sale of individual projects are all ongoing. As the Company's working capital is still sufficient and the collection of construction sales is normal, the operating segments of the Group are also operating normally. It has been assessed that the coronavirus disease (COVID-19) pandemic has no material impact on the financial position and financial performance of the Company in 2021.

XIII. Matters Disclosed in Notes

(I) Related Information on Significant Transactions

1. Financing provided to others: None.

2. Endorsements/guarantees provided to others: None.

3. Marketable securities held at the end of the period (excluding subsidiaries, associates and joint ventures): Please refer to Table 1

4. Accumulated to buy or sell the same marketable securities amount to NT$300 million or more than 20% of the paid-up capital: None.

5. Acquisition of real estate properties at prices of at least NT$300 million or 20% of paid-in capital: Table 2.

6. Disposal of real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: Please refer to Table 3.

7. Purchases from and sales to related parties amounted to at least NT$100 million or exceeding 20% of paid-in capital: Please refer to Table 4.

8. Receivables from related parties amounted to at least NT$100 million or exceeding 20% of paid-in capital: Please refer to Table 5.

9. Information on the derivative financial instrument transactions: None.

10. Parent-subsidiary and subsidiary-subsidiary business relations and significant transactions and amounts thereof: Please refer to Table 6.

(II) Related information on investees

Name, location, and information on investee companies (not including investee companies in mainland China): Please refer to Table 7.

(III) Information on investments in mainland China

1. Investee information: Please refer to Table 8.

2. Significant transactions with investee companies in mainland China, either directly or indirectly via a third region: None.

(IV) Information on Major Shareholders

Name, number of shares and percentage of ownership of shareholders with a shareholder percentage of at least 5%: Please refer to Table 9.

~49~

XIV. Information on Operating Segments

Not applicable.

(Blank Below)

~50~

Huaku Development Co., Ltd. Schedule of Inventories December 31, 2021

Unit: NT$ thousands

Items Buildings and land held for sale Construction in progress Huaku Garden Mansion Huaku Bella Vita Huaku National Landmark (formerly Xinzhuang Factory & Office Building Project) Huaku Moon River Huaku Happy Fortune Center (formerly Innovation Fortune II) Huaku Zhongyuan Landmark (formerly Zhonghe Factory & Office Building Project) Huaku Wenling (formerly Wenlin North Road Project) Huaku Daan Educational Institution Land held for construction Nangang Yucheng Project Wenlin North Road Project II Tiding Avenue Project (Formerly Zhonghe Residential Project) Guangpu Hsinchu Project, Second Phase Zhuangtian Road, Taishan Project Zhengda Xindian Project Xinyi Guangfu Project Dunnan Project Others Advance for land Taichung Jingmao Road Project Fuxing S. Road Urban Renewal Project Floor area and road land	Amount Cost Market price (Note) $ 3,100,351 $ 4,936,633 $ 3,937,509 $ 3,937,509 2,872,556 2,872,556 2,723,038 2,723,038 1,862,225 1,862,225 1,854,024 1,854,024 1,480,778 1,480,778 1,194,871 1,194,871 598,905 598,905 16,523,906 16,523,906 4,535,225 4,535,225 2,223,340 2,223,340 1,882,842 1,882,842 1,506,697 1,506,697 1,217,040 1,217,040 1,040,653 1,040,653 562,421 562,421 559,544 559,544 198,834 198,834 105,090 105,090 13,831,686 13,831,686 288,121 288,121 47,983 47,983 336,104 336,104 20,259 20,259 $ 33,812,306 $ 35,648,588	Note
	Cost $ 3,100,351 $ 3,937,509 2,872,556 2,723,038 1,862,225 1,854,024 1,480,778 1,194,871 598,905 16,523,906 4,535,225 2,223,340 1,882,842 1,506,697 1,217,040 1,040,653 562,421 559,544 198,834 105,090 13,831,686 288,121 47,983 336,104 20,259 $ 33,812,306

Note: Due to the industry characteristics of a construction company, the market prices of the construction in progress and the land held for construction are listed at the lower of the cost and net realization value.

~51~

~52~

Huaku Development Co., Ltd.

Statement of Changes in Construction in Progress

January 1 to December 31, 2021

Unit: NT$ thousands

Project name Huaku Royal Highness Huaku Innovation Fortune Huaku FIT (Finance and IT) Park Mansion Huaku Garden Mansion Huaku Bella Vita Huaku National Landmark (formerly Xinzhuang Factory & Office Building) Huaku Moon River Huaku Happy Fortune Center (Innovation Fortune II) Huaku Zhongyuan Landmark (formerly Zhonghe Factory & Office Building) Huaku Wenling (formerly Wenlin North Road) Huaku Daan Educational Institution	Opening balance $ 2,437,122 2,136,056 1,932,562 908,802 3,163,927 2,500,316 2,334,658 1,599,986 - - - - $ 17,013,429	Additions	in the period Interest capitalized $ 5,252 7,021 3,993 685 10,139 8,560 10,229 5,272 7,416 6,359 4,981 2,421 $ 72,328	Transfers in the period Transferred from land held for construction. Sold in the period Project completed and transferred $ - $ - ($ 3,375,441) - - ( 2,778,163) - - ( 2,432,539) - - ( 1,329,589) - - - - - - - - - - - - 1,766,304 ( 5,526 ) - 1,447,664 - - 1,181,031 - - 557,019 - - $ 4,952,018 ($ 5,526 ) ($ 9,915,732)	Transfers in the period Transferred from land held for construction. Sold in the period Project completed and transferred $ - $ - ($ 3,375,441) - - ( 2,778,163) - - ( 2,432,539) - - ( 1,329,589) - - - - - - - - - - - - 1,766,304 ( 5,526 ) - 1,447,664 - - 1,181,031 - - 557,019 - - $ 4,952,018 ($ 5,526 ) ($ 9,915,732)	Closing balance
		Investment cost $ 933,067 635,086 495,984 420,102 763,443 363,680 378,151 256,967 85,830 26,755 8,859 39,465 $ 4,407,389		Transferred from land held for construction. $ - - - - - - - - 1,766,304 1,447,664 1,181,031 557,019 $ 4,952,018	Sold in the period $ - - - - - - - - ( 5,526 ) - - - ($ 5,526 )
						$ - - - - 3,937,509 2,872,556 2,723,038 1,862,225 1,854,024 1,480,778 1,194,871 598,905 $ 16,523,906

~53~

Huaku Development Co., Ltd.

Statement of Changes in Investments Using the Equity Method January 1 to December 31, 2021

Unit: NT$ thousands

Name Chengdu Wancheng Duobao Real Estate Co., Ltd. Chengdu Huaku Real Estate Co., Ltd. Pin Shing Construction Co., Ltd. Taiwan Digit Automated Control Co., Ltd. Huapu Construction Co., Ltd.	Opening balance Increase Decrease Shares Amount Shares Amount Shares Amount $ 128,284 $ $ 408,572 35,000,00 347,213 4 800,00 22,073 500,00 5,138 $ 911,280 $ 5 $	Other adjustments (Note 2) ($ 966) ( 3,078) ( 17,327) ( 4,800) ( 52) ($ 26,223 )	Closing balance

Note 1: The difference between the net equity value and the long-term equity investment balance is mainly due to the unrealized internal interests arising from the written off upstream transactions and the adjustment of the associate company's holding of the Company's stock transactions.

Note 2: Other adjustments are the financial statements translation differences from the foreign operations, the subsidiaries collect cash dividends from the Company and account for capital reserve, distribution of cash dividends from the subsidiaries, and the recognition of the pension actuarial calculations profit and loss on pensions from the subsidiaries.

~54~

Huaku Development Co., Ltd.

Short-term Notes and Bills Payable

December 31, 2021

Unit: NT$ thousands

Items Commercial paper payable Commercial paper payable	Institution of guarantee or acceptance CTBC Bank Co., Ltd. The Shanghai Commercial & Savings Bank, Ltd.	Contract duration 2021/12/16～2022/3/16 2021/12/30～2022/3/30	Coupon rate 0.20% 0.39%		Amount	Carrying amounts $1,931,206 299,715 $2,230,921	Collateral
				Amount issued $ 1,932,000 300,000 $ 2,232,000	Unamortized trade payables for discount on short-term notes and bills $ 794 285 $ 1,079
							Guarantee for properties under construction None

~55~

Huaku Development Co., Ltd. Statements of Operating Revenue

January 1 to December 31, 2021

Items Revenue from sales of buildings and land Revenue from sales of land Revenue from sales of buildings Sale returns and allowances Rental income	Unit: NT$ thousands Summary Amount $ 9,256,765 4,249,705 ( 8,709) 13,497,761 19,765 $ 13,517,526

~56~

Huaku Development Co., Ltd. Statement of Operating Cost

January 1 to December 31, 2021

Unit: NT$ thousands

Items Beginning inventory Buildings and land held for sale Construction in progress Land held for construction Advance for land and building capacity Add: Purchases Invested construction expense Rental costs Capitalization of interest Less: Inventory, ending Buildings and land held for sale Construction in progress Land held for construction Advance for land and building capacity Add: Allowance for valuation loss Operating costs	Amount	Amount
	Sub-total $ 2,711,697 17,013,429 8,691,196 36,846 ( 3,109,812) ( 16,523,906) ( 13,831,686) ( 369,670)	Total
		$ 28,453,168 14,304,680 313,541 4,094 103,357 ( 33,835,074) ( 21,134)
		$ 9,322,632

~57~

Huaku Development Co., Ltd. Statement of Operating Expenses January 1 to December 31, 2021

Unit: NT$ thousands

Items Selling expenses Advertising expenses Commission expense Other expenses Administrative expenses Wages and salaries Depreciation expenses Donation expense Taxation Warranty repair cost Insurance expenses Other expenses Total	Amount $ 119,003 122,733 8,182 249,918 265,392 12,116 11,575 80,860 12,142 13,445 64,127 459,657 $ 709,575	Note

~58~

Huaku Development Co., Ltd.

Statement of Non-operating Income and Expenses

January 1 to December 31, 2021

Unit: NT$ thousands

Items Shares of profit (loss) of subsidiaries, associates, and joint ventures accounted for using the equity method Interest income Financial cost Other income—others	Amount $ 57,581 59,958 ( 97,707) 63,088 $ 82,920	Note

~59~

Huaku Development Co., Ltd.

Summary Table of Personnel, Depreciation, Depletion and Amortization Expenses for the Current Period January 1 to December 31, 2021

Unit: NT$ thousands

Employee benefit expenses Wages and salaries Labor and health insurance expenses Pension expenses Directors' remuneration Other employee benefit expenses Depreciation expenses Depletion expenses Amortization expenses		2021	Total $ 214,118 11,079 3,552 47,722 12,296 $ 288,767 $ 16,210 $ - $ 2,166			2020
	Operating costs $ - - - - - $ - $ 4,094 $ - $ -	Operating expenses $ 214,118 11,079 3,552 47,722 12,296 $ 288,767 $ 12,116 $ - $ 2,166		Operating costs $ - - - - - $ - $ - $ - $ -	Operating expenses $ 209,342 1,555 3,521 43,328 10,974 $ 268,720 $ 15,421 $ - $ 1,923		Total
							$ 209,342 1,555 3,521 43,328 10,974
							$ 268,720
							$ 15,421
							$ -
							$ 1,923

1. The numbers of employees of the Company for the years ended December 31, 2021 and 2020 were 80 and 80, respectively. Among which the numbers of directors who were not part-time employees were 7 and 7, respectively.

3. The Company has disclosed the following information according to the above table:

4. (1) The Company's average employee benefit expenses for the years ended December 31, 2021 and 2020 were $3,302 and $3,088, respectively.

5. (2) The Company's average employee salary expenses for the years ended December 31, 2021 and 2020 were $2,933 and $2,868, respectively.

6. (3) The average adjustment of employee salaries was 2%.

7. (4) The Company's remunerations for the years ended December 31, 2021 and 2020 were both $0. (Note)

8. (5) The Company's remuneration policies are as follows:

9. a. Pursuant to Article 29-1 of the Articles of Incorporation, the Company shall allocate 3% - 5% of the annual profit, if any, as employee compensation, and a maximum of 2% shall be allocated as the directors' remuneration. However, in case the Company still has accumulated deficits, the amount of accumulated deficits should be deducted from such earnings before the balance is calculated for distribution.

10. b. The directors' remuneration is allocated by the Company's directors in accordance with the Articles of Incorporation and with reference to the price index, industry practice, results of operations, and financial position, and is approved by the shareholders' meeting on the allocation of directors' remuneration from annual earnings.

11. c. The amount of remuneration paid to the managers of the Company was reviewed by the Compensation Committee and then submitted to the board of directors for approval based on the directors' duties, contributions, annual operating performance of the Company, and consideration of future risks of the Company.

12. d. The remuneration package of the Company's employees includes monthly salary, bonuses, and employee compensation. The standards for employees' salary are approved based on their current positions, educational and professional experience, professional knowledge, and market value. Employees' bonuses and remuneration are determined in accordance with the total amount allocated by the Articles of Incorporation, the Company's annual operating performance, professional contribution, and performance appraisal results.

~60~

Note: The Company has established the Audit Committee; therefore, there is no remuneration for supervisors.

~61~

Huaku Development Co., Ltd.

Marketable Securities Held at the End of the Period (Excluding Subsidiaries, Associates and Joint ventures)

December 31, 2021

Table 1

Unit: NT$ thousands (Unless specified otherwise)

Holder Company Pin Shing Construction Co., Ltd. Chengdu Wancheng Duobao Real Estate Co., Ltd. Chengdu Huaku Real Estate Co., Ltd.	Type and Name of Marketable Securities Huaku Development Co., Ltd. Financial products Financial products	Relationship with the Security Issuer (Note 1) Parent company None None	Financial Statement Account Financial assets at fair value through profit or loss—current Adjustment of valuation Financial assets at fair value through profit or loss—current Financial assets at fair value through profit or loss—current		End	of the Period	Fair Value $ 15,936 $ 92,136 76,237 $ 168,373	Note
				Shares 174,354 - -	Carrying Amount (Note 2) $ 1,388 14,548 $ 15,936 $ 92,136 76,237 $ 168,373	Shareholding percentage 0.06% - -
								Note 3

Note 1: If the securities issuer is not a related party, the field may be left blank.

• Note 2: For securities measured at fair value, the carrying amount should be the balance after the adjustment of fair value valuation and the deduction of accumulative impairment. For securities not measured at fair value, the carrying amount should be the balance of original acquisition cost or amortized cost less accumulated impairment.

Note 3: Listed as treasury stock.

Table 1 Page 1

Huaku Development Co., Ltd. Acquisition of Real Estate Reaching NT$300 Million or 20% of Paid-in Capital or More January 1 to December 31, 2021

Table 2

Unit: NT$ thousands (Unless specified otherwise)

Real Estate Acquired by Huaku Development Co., Ltd.	Name of Property Inventories - land (Wenlin North Road Project II) Inventories - land (Zhengda Xindian Project) Inventories - land (Tiding Avenue Project) Inventories - land (Guangpu Hsinchu II Project) Inventories - land (Nangang Yucheng Project) Inventories - land (Taichung Jingmao Road Project)	Date of Occurrence 2021.3.19 2021.2.9-202 1.5.18 (Note 1) 2021.7.8 2020.12.25-2 021.10.29 (Note 2) 2021.9.23 2021.12.20	Transaction Amount $ 1,807,182 $ 400,159 $ 1,863,310 $ 527,984 $ 4,488,000 $ 2,880,180	Payment Status $ 1,807,182 $ 400,159 $ 1,863,310 $ 527,984 $ 4,488,000 $ 288,020	Counterparty 14 persons including Person A 15 persons including Person B 4 persons including Person C 5 persons including person D Department of Land, Taipei City Government 2 persons including person E	Relationship None None None None None None	Information on Prior Transaction If the Counterparty Is Related Owner Relationship with the Issuer Transfer Date Amount N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A	Information on Prior Transaction If the Counterparty Is Related Owner Relationship with the Issuer Transfer Date Amount N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A	Information on Prior Transaction If the Counterparty Is Related Owner Relationship with the Issuer Transfer Date Amount N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A	Reference for Price Determination Zhan-Mao Real Estate Appraisers Firm's appraisal amount for the project is $1,809,469. Cushman & Wakefield and DTZ Real Estate Appraisers Firm's appraisal amount for the project is $1,744,624. Zhan-Mao Real Estate Appraisers Firm's appraisal amount for the project is $411,482. Zhan-Mao Real Estate Appraisers Firm's appraisal amount for the project is $1,850,006. Cushman & Wakefield and DTZ Real Estate Appraisers Firm's appraisal amount for the project is $1,801,372. Zhan-Mao Real Estate Appraisers Firm's appraisal amount for the project is $531,731. Based on public auction price Zhan-Mao Real Estate Appraisers Firm's appraisal amount for the project is $2,902,879. Cushman & Wakefield and DTZ Real Estate Appraisers Firm's appraisal amount for the project is $2,919,096.	Purpose and Situation Construction land Construction land Construction land Construction land Construction land Construction land	Other Agreement Terms
							Owner N/A N/A N/A N/A N/A N/A	Relationship with the Issuer	Transfer Date N/A N/A N/A N/A N/A N/A
								N/A N/A N/A N/A N/A N/A				N/A N/A N/A N/A N/A N/A

Note 1: This project refers to accumulatively obtained amounts, reaching NT$300 million or 20% of paid-in capital or more, from counterparties of different transactions during the above-mentioned period. Note 2: This project refers to accumulatively obtained amounts, reaching NT$500 million, from counterparties of different transactions during the above-mentioned period.

Table 2 Page 1

Huaku Development Co., Ltd.

Disposal of Real Estate Reaching NT$300 Million or 20% of Paid-in Capital or More

January 1 to December 31, 2021

Table 3

Unit: NT$ thousands (Unless specified otherwise)

Company that Disposed Real Estate Huaku Development Co., Ltd. Huaku Development Co., Ltd. Huaku Development Co., Ltd. Huaku Development Co., Ltd. Huaku Development Co., Ltd. Huaku Development Co., Ltd. Huaku Development Co., Ltd. Huaku Development Co., Ltd.	Name of Property Inventory—premises for sale Inventory—premises for sale Inventory—premises under construction Inventory—premises under construction Inventory—premises under construction Inventory—premises under construction Inventory—premises under construction Inventory—premises under construction	Transaction Date / Date of Occurrence of the Event N/A N/A N/A N/A N/A N/A N/A N/A	Original Acquisition Date Not applicable to pre-sale premises Not applicable to pre-sale premises Not applicable to pre-sale premises Not applicable to pre-sale premises Not applicable to pre-sale premises Not applicable to pre-sale premises Not applicable to pre-sale premises Not applicable to pre-sale premises	Carrying Amount N/A N/A N/A N/A N/A N/A N/A N/A	Transaction Amount 371,275 366,986 1,223,580 1,788,480 660,000 3,400,000 1,176,330 502,640	Price Collection Status Has charged $129,942 in accordance with the contract (Note) Has charged $366,986 in accordance with the contract Has charged $1,223,580 in accordance with the contract Has charged $1,345,000 in accordance with the contract Has charged $660,000 in accordance with the contract Has charged $3,400,000 in accordance with the contract Has charged $137,380 in accordance with the contract Has charged $50,280 in accordance with the contract	Gain (Loss) on Disposal N/A N/A N/A N/A N/A N/A N/A N/A	Counterparty Person A Person B Person C 5 in total, including Person C and Person D Person E Person F 3 in total, including Person G Person H	Relationship None None None None None None None None	Purpose of Disposal For gaining profits For gaining profits For gaining profits For gaining profits For gaining profits For gaining profits For gaining profits For gaining profits	Reference for Price Determination Zhan-Mao Real Estate Appraisers Firm's appraisal amount for the project is $4,523,987. Zhan-Mao Real Estate Appraisers Firm's appraisal amount for the project is $1,991,581. Yu Fong Real Estate Appraisers Firm's appraisal amount for the project is $1,185,701. Lian-Bang Real Estate Appraisers Firm's appraisal amount for the project is $1,186,280. Yu Fong Real Estate Appraisers Firm's appraisal amount for the project is $4,297,491. Lian-Bang Real Estate Appraisers Firm's appraisal amount for the project is $4,294,965. Lian-Bang Real Estate Appraisers Firm's appraisal amount for the project is $628,148. Savills Real Estate Appraisers Firm's appraisal amount for the project is $3,369,652. Zhan-Mao Real Estate Appraisers Firm's appraisal amount for the project is $3,366,437. Yu Fong Real Estate Appraisers Firm's appraisal amount for Building B exclude parking spaces is $3,387,600. Lian-Bang Real Estate Appraisers Firm's appraisal amount for the project is $464,317.	Other Agreement Terms
												N/A N/A N/A N/A N/A N/A N/A N/A

Note: The Company had received $92,816 in accordance with the contract in 2020 and has fully received $37,126 in the current period.

Table 3 Page 1

Huaku Development Co., Ltd.

Purchases or Sales of Goods from or to Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

January 1 to December 31, 2021

Table 4

Table 4
Supplier (Buyer) Huaku Development Co., Ltd. Pin Shing Construction Co., Ltd.	Counterparty Pin Shing Construction Co., Ltd. Huaku Development Co., Ltd.	Relationship Subsidiary Parent company		Transaction Details		Payment Term Within 120 days Within 120 days	Reasons for and Status of Differences in Transaction Terms Compared to Arms-Length Transaction Unit Price Payment Term Contract-based pricing General suppliers are within one month or 45 days. Contract-based pricing General customers settle monthly within 30 days.	Unit: NT$ thousands (Unless specified otherwise) Notes and Accounts Receivable (Payable) Balance Ratio to the Total Notes/Accounts Receivable (Payable) Note ($ 952,587) 75 952,587 100
			Purchase/Sale Purchase Sales	Amount $ 2,893,812 ($ 2,893,812)	Ratio to the Total Purchase/Sale Amount 20 100		Unit Price Contract-based pricing Contract-based pricing	Balance ($ 952,587) 952,587

Table 4 Page 1

Huaku Development Co., Ltd.

Receivables from Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

January 1 to December 31, 2021

Table 5 Company Name Pin Shing Construction Co., Ltd.	Counterparty Huaku Development Co., Ltd.	Relationship Parent company	Balance of Accounts Receivable from the Related Party $ 952,587	Turnover Rate Note	Overdue Amount Action Taken $ -	Unit: NT$ thousands (Unless specified otherwise) Amount Collected Subsequent to the Balance Sheet Date Allowance for Doubtful Accounts $ 951,357 $ -	Unit: NT$ thousands (Unless specified otherwise) Amount Collected Subsequent to the Balance Sheet Date Allowance for Doubtful Accounts $ 951,357 $ -
					Amount $
							$ -

Note: This column is not applicable to the construction engineering industry.

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Huaku Development Co., Ltd.

Significant Inter-company Transactions

January 1 to December 31, 2021

Table 6

Unit: NT$ thousands (Unless specified otherwise)

Company Name Huaku Development Co., Ltd. Huaku Development Co., Ltd. Pin Shing Construction Co., Ltd. Pin Shing Construction Co., Ltd.	Counterparty Pin Shing Construction Co., Ltd. Pin Shing Construction Co., Ltd. Huaku Development Co., Ltd. Huaku Development Co., Ltd.	Relationship with the Counterparty Parent company to subsidiary Parent company to subsidiary Subsidiary to parent company Subsidiary to parent company			Transaction Details
			Account Purchase Accounts payable Sales Accounts receivable	Amount $ 2,893,812 952,587 2,893,812 952,587	Terms Contract-based pricing within 120 days Contract-based pricing within 120 days Contract-based pricing within 120 days Contract-based pricing within 120 days	Ratio to the Consolidated Revenue or Total Assets
						21% 2% 21% 2%

Table 6 Page 1

Huaku Development Co., Ltd.

Information on Invested Companies (Not Including Investee Companies in Mainland China)

January 1 to December 31, 2021

Table 7

Table 7
Investor Company Huaku Development Co., Ltd. Huaku Development Co., Ltd. Huaku Development Co., Ltd. Pin Shing Construction Co., Ltd.	Investee Company Pin Shing Construction Co., Ltd. Taiwan Digit Automated Control Co., Ltd. Huapu Construction Co., Ltd. Full Come Foundation Eng. Ltd.	Place of Registration Taiwan Taiwan Taiwan Taiwan	Main Businesses Contracting civil engineering and hydraulic engineering projects Engineering monitoring Leasing, sales and development of residential and commercial buildings Professional construction industry of foundation engineering	Initial Investment Amount Shares Held as End of the Current Period End of the Prior Year Shares $ 264,18 $ 264,18 35,000,000 8,00 8,00 800,000 5,00 5,00 500,000 16,00 16,00 1,043,804	Shares Held as	at the End of the Period Ratio Carrying Amount 100 $ 375,706 40 22,294 50 5,300 33.03 13,463	Current Profit or Loss of the Investee Company $ 34,439 12,553 428 ( 1,159 )	Investment Gain (Loss) Recognized in the Current Period $ 45,820 5,021 214 ( 382 )	Unit: NT$ thousands (Unless specified otherwise) Note
						Ratio 100 40 50 33.03
									Subsidiary An investee accounted for using the equity method An investee accounted for using the equity method An investee company of subsidiary accounted for using equity method

Table 7 Page 1

Huaku Development Co., Ltd.

Information on Investments in Mainland China

January 1 to December 31, 2021

Table 8 Investee in Mainland China Chengdu Huaku Real Estate Co., Ltd. Chengdu Wancheng Duobao Real Estate Co., Ltd. Company Name Huaku Development Co., Ltd.	Main Businesses Property development Property development Accumulated Remitted Investment Amount from Taiwan to Mainland China—End of the Current Period $ 366,398	Paid-up Capital $ 412,680 21,720 Investment Amounts Authorized by Investment Commission, MOEA $ 1,303,502	Investment Method Note 1 Note 1 Ceiling on Investment in Mainland China Imposed by the Investment Commission, MOEA $ 11,026,810	Accumulated Investment Amount of Remittance from Taiwan—Beginn ing of the Current Period $ 366,398 -	Exported or Recovered Investment Amount of the Current Period Remitted Recovered - $ -	Accumulated Investment Amount of Remittance from Taiwan—End of the Current Period $ 366,398 -	Current Profit or Loss of the Investee Company $ 5,384 2,773	Shareholding Percentage from Direct or Indirect Investment 80 80	Investment Profit or Loss Recognized in the Current Period (Note 2) $ 4,308 2,218	Unit: NT$ thousands (Unless specified otherwise) Book Value of Investment at the End of the Current Period Accumulated Repatriation of Investment Income as of the End of the Period Note $ 409,802 $ 48,158 Note 4 129,536 287,183 Note 3	Unit: NT$ thousands (Unless specified otherwise) Book Value of Investment at the End of the Current Period Accumulated Repatriation of Investment Income as of the End of the Period Note $ 409,802 $ 48,158 Note 4 129,536 287,183 Note 3
					Remitted - -
											Note 4 Note 3

Note 1: Direct investment in a company in mainland China

• Note 2: Based on the valuation and disclosure of the company's financial statements audited by a CPA in the same period

• Note 3: On August 29, 2014, the company was approved by the Chengdu Investment Promotion Committee to reduce the capital by RMB 115 million. In October 2017, all the Group's holdings of RMB 92 million had been fully remitted back. In addition, on April 20, 2018, with the approval of the Chengdu Investment Promotion Commission, the company reduced its capital by RMB 110 million. In February 2019, all the Group's holdings of RMB 88 million had been fully remitted back.

• Note 4: On April 20, 2018, with the approval of the Chengdu Investment Promotion Commission, the company reduced its capital by RMB 35 million. In March 2019, all the Group's holdings of RMB 28 million had been fully remitted back. In addition, on April 23, 2019, with the approval of the Chengdu Investment Promotion Commission, the company reduced its capital by RMB 20 million. In August 2019, all the Group's holdings of RMB 16 million had been fully remitted back.

Note 5: The amount shall be listed in NTD.

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Huaku Development Co., Ltd.

Information on Major Shareholders

December 31, 2021

Table 9

Shareholder's Name Zhongshan Investment Co., Ltd. Newland Investment Co., Ltd. Taiwan Life Insurance Co., Ltd.	Shares	(Note)
	Number of Shares 19,600,000 14,690,982 14,087,000	Shareholding percentage
		7.08% 5.30% 5.08%

Note: The above information is provided by Taiwan Depository & Clearing Corporation (TDCC).

Table 9 Page 1