Hung Ching - Annual Report 2021 | FinancialReports.eu

Stock Code: 2527

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Consolidated Financial Statements and Independent Auditors' Report For the Years Ended December 31, 2021 and 2020

Address: 10F, No. 420, Sec. 1, Keelung Rd., Taipei City, Taiwan Tel:(02)2691-5899

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

ITEM	PAGE	NUMBER OF FINANCIAL STATEMENT NOTES
1. Cover 2. Table of Contents 3. Declaration of Consolidated Financial Statements of Affiliates 4. Independent Auditors' Report 5. Consolidated Balance Sheets 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to Consolidated Financial Statements a. Company History b. Date and Procedures of Authorization of Financial Statements c. Application of New and Amended Standards and Interpretations d. Summary of Significant Accounting Policies e. Primary Sources of Uncertainties in Major Accounting Judgments, Estimates, and Assumptions f. Details of Significant Accounts g. Related Party Transactions h. Pledged Assets i. Significant Contingent Liabilities and Unrecognized Contract Commitments j. Significant Disaster Loss k. Significant Events after the Balance Sheet Date l. Other m. Supplementary Disclosures 1) Information on Significant Transactions 2) Information on Invested Companies 3) Information on Investments in Mainland China 4) Information on Major Shareholders n. Segment Information	1 2 3 4-7 8 9-10 11 12-13 14 14 14-16 16-25 26 26-52 52-55 55 - - - - 55, 58-65 55, 58-65 55-56, 66 56, 67 56-57	- - - - - - - - 1 2 3 4 5 6~26 27 28 - - - - 29 29 29 29 30

Declaration of Consolidated Financial Statements of Affiliates

The entities of the Company that are required to be included in the consolidated financial statements of affiliates as of and for the year ended December 31, 2020 (from January 1 to December 31, 2020), under the "Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" are the same as those included in the consolidated financial statements of parent company and its subsidiary prepared in conformity with the International Financial Reporting Standard 10. In addition, the information required to be disclosed in the consolidated financial statements of affiliates is included in the consolidated financial statements of parent company and its subsidiary. Consequently, we do not prepare a separate set of consolidated financial statements of affiliates.

Hereby certify

Company Name: Hung Ching Development & Construction Co., Ltd.

Person in Charge: Wen-Hsiang Chien

March 4, 2022

Independent Auditors' Report

To: The Board of Directors and Shareholders Hung Ching Development & Construction Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of the Hung Ching Development & Construction Co., Ltd. and its subsidiaries (the "Group"), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the consolidated statements of comprehensive income, changes in equity, and cash flows for the years then ended, and the notes to consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

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

Key audit matters for the Group's consolidated financial statements for the year ended December 31, 2021 are stated as follows:

Sales Revenue of Building and Land Related Party Transactions

For the year ended December 21, 2021, revenue from sale of real estate was NT$6,662,600 thousand, representing 95% of the total operating revenue and being material in the consolidated financial statements, and it is one of the major revenue sources of the Group. Although the customers of the real estate sold are unspecified, the transaction amounted to NT$2,362,000 thousand for the sale of the E building factory in Kaohsiung Industrial Park II to an investor with significant influence. Considering that the transactions with related parties are more controllable and the reasonableness of the terms of the related party transactions and their commercial substance shall have a significant impact on the presentation of these transactions in the consolidated financial statements. Therefore, it has been deemed as one of key audit matters by us to determine whether or not the recognition of revenue from sale of real estate has met the requirements of revenue recognition. Please refer to Notes 4, 21 and 27 of the consolidated financial statements.

The main audit procedures performed on the specific levels in respect of the above-mentioned key audit matter for the audit of the year are as follows:

1 We understood and tested the design and operating effectiveness of the internal controls related to the sales cycle.
2 We obtain sales contracts from related parties to understand the purpose, price and payment terms of the transactions and to evaluate whether the transactions are commercially reasonable and the basis for pricing.
3 Issuance of letters of inquiry regarding related party sales transactions.

Other Matters

We have also audited the parent company only financial statements of Hung Ching Construction Development Co., Ltd. as of and for the years ended December 31, 2021 and 2020 on which we have issued an unmodified opinion

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

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

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1 Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
3 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
4 Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
6 -
5 Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
6 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our opinion to the Group.

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

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

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

Deloitte & Touche Certified Public Accountant Shiuh-Ran Cheng

Certified Public Accountant Wang-Sheng Lin

Financial Supervisory Commission Approval Document No.: Financial-Supervisory-Securities-Auditing1010028123

Financial Supervisory Commission Approval Document No.: Financial-Supervisory-Securities-Auditing1060023872

March 28, 2022

Hung Ching Development & Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheets December 31, 2021 and 2020

U December31,2021 Amount % $ 392,789 2 17,161 - 3,494 - 21,886 - 5,279 - 1,130 - 7,796,545 44 34,470 - 361 - 7,153 - 8,280,268 46 4,699,925 26 1,251,471 7 11,909 - 3,412,823 19 392 - 62,001 - 851 - 255,084 2 9,694,456 54 $17,974,724 100 $ 1,827,000 10 2,356,803 13 122,109 1 114 - 635,780 4 - - 203,756 1 89,777 1 3,274 - 206,744 1 16,426 - 5,461,783 31 1,825,004 10 9,409 - 25,578 - 1,859,991 10 7,321,774 41 2,703,060 15 324,528 2 828,158 5 347,554 2 2,872,626 16 4,048,338 23 3,686,626 20 ( 455,812) ( 3 ) 10,306,740 57 346,210 2 10,652,950 59 $17,974,724 100	nit: In Thousands of New Taiwan Dollars December31,2020	nit: In Thousands of New Taiwan Dollars December31,2020
Amount $ 392,789 17,161 3,494 21,886 5,279 1,130 7,796,545 34,470 361 7,153 8,280,268 4,699,925 1,251,471 11,909 3,412,823 392 62,001 851 255,084 9,694,456 $17,974,724 $ 1,827,000 2,356,803 122,109 114 635,780 - 203,756 89,777 3,274 206,744 16,426 5,461,783 1,825,004 9,409 25,578 1,859,991 7,321,774 2,703,060 324,528 828,158 347,554 2,872,626 4,048,338 3,686,626 ( 455,812) 10,306,740 346,210 10,652,950 $17,974,724	Amount $ 573,529 17,111 3,760 14,629 11,606 915 8,077,436 305,218 3,680 - 9,007,884 3,587,830 726,370 15,085 3,463,063 - 62,438 2,960 192,252 8,049,998 $17,057,882 $ 2,813,000 1,839,777 419,889 8,791 784,879 250 297,813 22,249 2,972 495,085 11,320 6,696,025 2,018,173 12,805 26,977 2,057,955 8,753,980 2,703,060 312,561 789,043 318,492 1,700,053 2,807,588 2,575,136 ( 455,812) 7,942,533 361,369 8,303,902 $17,057,882	%
		4 - - - - - 47 2 - -
		53
		21 4 - 20 - 1 - 1
		47
		100
		16 11 2 - 5 - 2 - - 3 -
		39
		12 - -
		12
		51
		16
		2
		5 2 10
		17
		15
		( 3 )
		47 2
		49
		100

The accompanying notes are an integral part of the consolidated financial statements. Chairman: Wen-Hsiang Chien Manager: Chia-Pei Chou Accounting Supervisor: Fang-Ying Chen

Hung Ching Development & Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2021 and 2020

Unit: In Thousands of New Taiwan Dollars, Except Earnings Per Share in Dollars

2021	2020
Amount $ 6,662,600 152,233 - 120,693 54,690 6,990,216 4,408,795 115,285 60,547 60,786 4,645,413 2,344,803 252,154 340,696 592,850 1,751,953 204,108 ( 76,151 ) ( 89,236 ) 38,721 1,790,674	Amount $ 3,164,448 144,612 621 110,638 51,611 3,471,930 2,149,246 116,358 71,495 57,449 2,394,548 1,077,382 251,556 305,052 556,608 520,774 99,762 4,591 ( 115,891) ( 11,538 ) 509,236	%
		91 4 - 3 2
		100
		62 3 2 2
		69
		31
		7 9
		16
		15
		3 - ( 3 )
		-
		15

(Continued from the previous page)

2021	2020
Amount $ 186,655 1,604,019 1,112,095 ( 756 ) 151 1,111,490 $ 2,715,509 $ 1,619,178 ( 15,159 ) $ 1,604,019 $ 2,730,668 ( 15,159 ) $ 2,715,509 $ 6.19 $ 6.15	Amount $ 135,500 373,736 ( 80,023 ) 1,736 ( 347 ) ( 78,634 ) $ 295,102 $ 391,153 ( 17,417 ) $ 373,736 $ 312,519 ( 17,417 ) $ 295,102 $ 1.49 $ 1.49	%
		4
		11
		( 3 ) - -
		( 3 )
		8 11 -
		11
		9 ( 1 )
		8

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

Chairman: Wen-Hsiang Chien Manager: Chia-Pei Chou Accounting Supervisor: Fang-Ying Chen

10 -

Hung Ching Development & Construction Co., Ltd. and Subsidiaries Consolidated Statements of Changes in Equity For the years ended December 31, 2021 and 2020

Unit: In Thousands of New Taiwan Dollars

		EQUITY ATT	RIBUTABLE TO	OWNERS OF TH	ECOMPANY		Total equity
Share capital Number of Shares (In Thousand Shares) Amount 270,306 $ 2,703,060 - - - - - - - - - - - - 270,306 2,703,060 - - - - - - - - - - - - 270,306 $ 2,703,060	Capital Surplus $ 297,175 - - - - - 15,386 312,561 - - - - - 11,967 $ 324,528		Retained earnings	Unappropriated earnings $ 1,867,950 ( 74,209 ) 1,710 ( 486,551 ) 391,153 - - 1,700,053 ( 39,115 ) ( 29,062 ) ( 378,428 ) 1,619,178 - - $ 2,872,626	Otherequity Exchange differences on translating the financial statements of foreign operations Unrealized gain (loss) on financial assets at fair value through other comprehensive income ( $ 6,642 ) $ 2,660,412 - - - - - - - - 1,389 ( 80,023 ) - - ( 5,253 ) 2,580,389 - - - - - - - - ( 605 ) 1,112,095 - - ( $ 5,858 ) $ 3,692,484	Treasury shares ( $ 455,812 ) - - - - - - ( 455,812 ) - - - - - - ( $ 455,812 )
					Exchange differences on translating the financial statements of foreign operations ( $ 6,642 ) - - - - 1,389 - ( 5,253 ) - - - - ( 605 ) - ( $ 5,858 )
Number of Shares (In Thousand Shares) 270,306 - - - - - - 270,306 - - - - - - 270,306		Legal reserve $ 714,834 74,209 - - - - - 789,043 39,115 - - - - - $ 828,158	Special reserve $ 320,202 - ( 1,710 ) - - - - 318,492 - 29,062 - - - - $ 347,554
							$ 8,479,965 - - ( 486,551 ) 373,736 ( 78,634 ) 15,386
							8,303,902 - - ( 378,428 ) 1,604,019 1,111,490 11,967
							$ 10,652,950

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

Manager: Chia-Pei Chou

Chairman: Wen-Hsiang Chien

Accounting Supervisor: Fang-Ying Chen

11 -

Hung Ching Development & Construction Co., Ltd. and Subsidiaries Consolidated Statements of Cash Flows For the years ended December 31, 2021 and 2020

Code
CASH FLOWS FROM OPERATING
ACTIVITIES
A00010
Profit before income tax for the year

A20010
Adjustments for:
A20100
Depreciation expenses
A20300
Expected credit loss

A29900
Amortization of long-term
prepayments
A22500
Gain (Loss) on disposal and scrap of
property, plant and equipment
A22700
Gain on disposal of investment
properties
A23200
Gain on disposal of investments
accounted for using equity
method
A23700
Gain on reduce inventory to market
(Gain from price recovery of
inventory)
A20400
Gain (Loss) on financial assets and
liabilities at fair value through
profit or loss, net
A20900
Finance costs
A21200
Interest income

A21300
Dividend income

A30000
Changes in operating assets and
liabilities, net
A31110
Financial assets at FVTPL
A31125
Contract assets
A31130
Notes receivable
A31150
Trade receivables

A31160
Trade receivables from related
parties
A31180
Other receivables
A31200
Inventories
A31230
Prepayments
A31270
Incremental costs of obtaining a
contract
A31240
Other current assets
A32125
Contract liabilities

A32130
Notes payable

A32150
trade payables

A32160
Trade payables to related parties

A32180
Other payables

A32230
Other current liabilities
(Continued on the next page)

Unit: In Thousands of New Taiwan Dollars
2021
2020
$ 1,790,674
$ 509,236
141,043
139,342
(
12,075 )
-
6,718
6,628
-
27
-
(
6,748 )
(
713 )
-
(
198,911 )
(
258,348 )
(
50 )
(
226 )
89,236
115,891
(
1,152 )
(
1,129 )
(
184,974 )
(
88,175 )
-
209
-
3,198
2,375
2,275
(
7,257 )
21,297
6,327
115
11,860
(
363 )
440,304
1,167,411
102,470
78,881
(
7,153 )
-
3,319
(
1,360 )
(
297,780 )
308,457
(
8,677 )
8,787
(
158,216 )
(
131,031 )
(
250 )
250
(
92,605 )
(
19,772 )
5,106
(
9,537)

12 -

(Continued from the previous page)

Code A33000 Cash generated from operations A33300 Interest paid A33500 Income tax paid AAAA Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES B00030 Capital reduction and return of shares payment of financial assets at fair value through other comprehensive income B01900 Acquisition of long-term investment in shares accounted for using the equity method B02700 Acquisition of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Decrease (Increase) in refundable deposits B04500 Acquisition of intangible assets B05400 Acquisition of investment properties B05500 Sales of investment properties B06700 Decrease (Increase) in other non-current assets B07500 Interest received B07600 Other dividends received BBBB Net cash flows generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES C00100 Increase (Decrease) in short-term borrowings C00500 Increase (Decrease) in short-term bills payable C01600 Repayments of long-term borrowings C04020 Repayment for principal of lease liabilities C03000 Increase (Decrease) in guarantee deposits received C04500 Distribution of Cash Dividend CCCC Net cash used in financing activities DDDD EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES EEEE Increase (decrease) in Cash and Cash Equivalents for the year E00100 Cash and cash equivalents, beginning of year E00200 Cash and cash equivalents, end of year	2021 $ 1,629,619 ( 101,064 ) ( 118,539 ) 1,410,016 - 713 ( 377,222 ) - ( 77,341 ) ( 428 ) ( 8,300 ) - 7,827 1,152 184,974 ( 268,625 ) ( 986,000 ) 517,026 ( 481,510 ) ( 3,094 ) ( 1,399 ) ( 366,461 ) ( 1,321,438 ) ( 693 ) ( 180,740 ) 573,529 $ 392,789	2020
		$ 1,845,315 ( 133,244 ) ( 238,699 )
		1,473,372
		8,738 - ( 3,651 ) 18 19,954 - ( 7,219 ) 17,981 ( 7,344 ) 1,129 88,175
		117,781
		274,000 ( 757,351 ) ( 332,890 ) ( 3,240 ) 1,353 ( 471,165 )
		( 1,289,293 )
		1,604
		303,464 270,065
		$ 573,529

The accompanying notes are an integral part of the consolidated financial statements. Chairman: Wen-Hsiang Chien Manager: Chia-Pei Chou Accounting Supervisor: Fang-Ying Chen

13 -

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Notes to Consolidated Financial Statements

January 1 to December 31, 2020 and 2021

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

1. Company History

The Company, incorporated in 1986 with shares listed on the Taiwan Stock Exchange, mainly engaged in appointment of contractors to build public housing developments and commercial buildings for leasing and selling and in and management and investment of other relevant business.

The consolidated financial statements are presented in the Company's functional currency, the New Taiwan dollar.

The investment framework and the shareholding percentage of the consolidated company as of December 31, 2021 is as follows:

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Construction Co., Ltd.
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Shanghai Youhong Shanghai You
Engineering Chang Property
Technical
Management Co.,
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Ltd.
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2. Date and Procedures of Authorization of Financial Statements

The consolidated financial statements were approved by the Board of Directors and authorized for issue on March 4, 2022.

3. Application of New and Amended Standards and Interpretations

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission (FSC).
14 -

The application of the amendments to the IFRSs endorsed and issued into effect by the FSC will not have a significant effect on the Company's accounting policies.

b. The IFRSs endorsed by the FSC for application in 2022

The IFRSs endorsed by the FSC for application in 2022
New,Revised or Amended Standards andInterpretations "Annual Improvements to IFRS Standards 2018–2020" Amendment to IFRS 3 "Reference to the Conceptual Framework" Amendment to IAS 16 "Property, Plant and Equipment - Proceeds before Intended Use" Amendment to IAS 37 "Onerous Contracts–Cost of Fulfilling a Contract"	Effective Date Issued by IASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

Note 1. Amendment to IFRS 9 is effective to exchanges of a financial liability or modifications of terms incurred during the annual periods beginning on or after January 1, 2022. Amendment to IAS 41 "Agriculture" is effective to fair value measurements for annual periods beginning on or after January 1, 2022. Amendment to IFRS 1 "First-time Adoption of IFRS" is retrospectively effective for annual periods beginning on or after January 1, 2022.
Note 2. This amendment shall be applied to business combinations for which the acquisition date is beginning on or after January 1, 2022.
Note 3. This amendment shall be applied to the property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 4. The amendment shall be applied to contracts for which the Group has not yet fulfilled all its obligations on or after January 1, 2022.

As of the date the accompanying consolidated financial statements were authorized for issue, the consolidated company continues in evaluating the impact on its financial position and financial performance as a result of the aforementioned standards or interpretations. The related impact will be disclosed when the evaluation has been completed.

c. IFRSs issued by the IASB but not yet endorsed and issued into effect by the FSC

IFRSs issued by the IASB but not yet endorsed and issued into	effect by the FSC
New,Revised or Amended Standards andInterpretations 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" Amendment to IFRS 17 Amendment to IFRS 17 “Initial Application of IFRS 17 and IFRS 9—Comparative Information” Amendment to IAS 1 "Classification of Liabilities as Current or Noncurrent" Amendment to IAS 1 "Disclosure of Accounting Policies" Amendment to IAS 8 "Definition of Accounting Estimates" Amendment to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective Date Issued by IASB(Note1)
	To be determined January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

IFRSs issued by the IASB but not yet endorsed and issued into

effect by the FSC

New,Revised or Amended Standards andInterpretations
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"
Amendment to IFRS 17
Amendment to IFRS 17 “Initial Application of IFRS 17 and
IFRS 9—Comparative Information”
Amendment to IAS 1 "Classification of Liabilities as
Current or Noncurrent"
Amendment to IAS 1 "Disclosure of Accounting Policies"
Amendment to IAS 8 "Definition of Accounting Estimates"
Amendment to IAS 12 “Deferred Tax related to Assets and
Liabilities arising from a Single Transaction”

Effective Date Issued by
IASB(Note1)

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

15 -
Note 1. Unless stated otherwise, the aforementioned New, Revised or Amended Standards and Interpretations are effective for annual periods beginning on or after their respective effective dates.
Note 2. The amendment shall be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 3. This amendment shall be applied to changes in accounting policies and changes in accounting estimates that occur for annual periods beginning on or after January 1, 2023.
Note 4. The amendment applies to transactions occurring after January 1, 2022, except for the recognition of deferred income tax on temporary differences in lease and decommissioning obligations at January 1, 2022.

4. Summary of Significant Accounting Policies

a. Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and IFRSs endorsed and issued into effect by the FSC.

b. Basis of Preparation

The accompanying consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value.

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

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities on the measurement date;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.
c. Standards for Classification of Current and Noncurrent Assets and Liabilities

Current assets include:

1) Assets held for trading purposes;
2) Assets expected to be realized within 12 months after the balance sheet date; and
3) Cash and cash equivalents, excluding those that are restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Obligations incurred for trading purposes;
2) Obligations expected to be settled within 12 months from the balance sheet date (liabilities with long-term refinancing or rearrangement of payment terms completed after the balance sheet date and before the publication of the financial statements are also deemed as current liabilities); and
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3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of an obligation that could, at the option of the counterparty, result in its settlement by the issuance of equity instruments, do not affect its classification.

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

The consolidated company is engaged in the construction business, which has an operating cycle of over one year. The normal operating cycle applies when considering the classification of current or non-current for the construction-related assets and liabilities.

d. Basis of Consolidation

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

Refer to Note XI and Table VIII for detailed information on subsidiaries, including percentages of ownership and main businesses.

e. Foreign Currency

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

Monetary items denominated in foreign currencies are translated at the rates prevailing on each date of balance sheets. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction (i.e., not retranslated).

For the purpose of presenting the consolidated financial statements, the assets and liabilities of the consolidated company's foreign operations (including subsidiaries that operate in countries or use currencies different from that of the Company) are translated into the New Taiwan dollar using the exchange rate of each balance sheet date. Income and expense items are translated using the average exchange rates of the current period, with exchange differences arising therefrom recognized in other comprehensive income and attributed respectively to owners of the Company and to non-controlling interests.

f. Inventories

Inventories comprise real estate under development, real estate held for development, building and land held for sale and merchandise inventory. Inventory is stated at the lower of cost or net realizable value. Comparing costs with net realizable value is based on individual item. Net realizable value represents the estimated selling price of inventories less the estimated cost of completion and the estimated cost necessary to make the sale. The cost of inventories is calculated using the weighted average method, except that the actual costs incurred in the construction of the real estate inventory are transferred to current operating costs in proportion of floor space to the recognition of revenue from sales of real estate.

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g. Investment in affiliate enterprises

Associates are entities over which the consolidated company has major influence but they are neither a subsidiary nor joint ventures.

The consolidated company uses equity method for investment in associates.

Under the equity method, the investment in associates is initially treated at cost and adjusted thereafter for the post-acquisition change in the consolidated company's interest in profit and loss, shares in other comprehensive income and profit distribution by the associates. In addition, changes in the interests in associates are recognized based on the shareholding percentage.

Any excess of acquisition cost over the consolidated company's share of an associate's or a joint venture's identifiable assets and liabilities measured at the fair value on the date of acquisition is recognized as goodwill. The goodwill shall be included in the carrying amount of the investment but not allowed for amortization. If the consolidated company's share of the net fair value of the identifiable assets and liabilities exceeds acquisition cost, the excessive amount is recognized immediately in profit or loss.

When the consolidated company's share of loss derived from the investment of an affiliate equals or exceeds the consolidated company's interest (including the carrying amount of the investment and other long-term substantial interests in the associate's net asset in proportion to ownership percentage), the consolidated company shall cease recognizing losses further. The consolidated company shall only recognize additional losses and liabilities within the scope of occurred legal obligations, constructive obligations, or payments made on behalf of the associates.

To assess impairment, the consolidated company has to consider the overall carrying amount (including goodwill) of the investment as a single asset to compare the recoverable and carrying amounts. The cost of impairment identified is to be deemed as part of the carrying amount of the investment. Any reversal of the impairment loss is recognized only to the extent of the subsequent increases in the recoverable amount of investment.

Profit or loss in up- and downstream transactions between the consolidated company and the associates or transactions between associates shall only be recognized in the Consolidated Financial Statements when it is not related to the Company's interest in the associates.

h. Property, plant and equipment

Property, plant and equipment are recognized at cost, and then measured at cost less accumulated depreciation and accumulated impairment.

Freehold land is not depreciated.

The depreciation of property, plant and equipment is separately recognized using the straight-line method over their useful lives to each significant part. The Company reviews the estimated useful lives, residual values and depreciation method at least at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.

Upon disposal of property, plant and equipment, the difference between the net sales proceeds and the carrying amount of the asset is recognized in profit or loss.

i. investment properties

Investment property is a property held to earn rental and/or for capital appreciation. Investment property also includes land held for future use that is currently undetermined.

Investment property is initially measured at cost, including transaction costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation

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and accumulated impairment loss. Depreciation of investment properties is recognized using the straight-line method.

Upon disposal of investment properties, the difference between the net sales proceeds and the carrying amount of the asset is recognized in profit or loss.

j. Contract cost-related assets

Sales service fees paid for sales of real estate under exclusive sales contract of property held for sale are only incurred at the time of obtaining a client's contract, and are recognized as an additional cost of obtaining the contract to the extent the amounts are recoverable, and are written off when the legal ownership of the real estate is passed to the client.

k. Impairment of tangible and intangible assets (excluding goodwill) and related assets of contract costs

On each balance sheet date, the consolidated company reviews the carrying amounts of its tangible and intangible assets (excluding goodwill) to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. If corporate assets can be allocated to cash-generating units with a reasonable and consistent basis, then they are allocated to their individual cash-generating units. Otherwise, they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

For intangible assets with indefinite life and that are not yet available for use, they are subject to annual impairment test at the time there are indications of impairment.

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

For customer contracts applicable to IFRS 15, an impairment loss on inventory, property, plant and equipment, and intangible asset related to the contracts with customers shall be recognized in accordance with the applicable standards of inventory impairment and the above-mentioned principles. Then, the impairment loss is recognized to the extent that the carrying amount of the assets related to contract costs exceeds the remaining amount of consideration that the Company expects to receive in exchange for related goods or services less the direct costs related to providing those goods or services. The assets related to the contract costs are then included in the carrying amount of the cash-generating unit to which they belong for the purpose of evaluating impairment of that cash-generating unit.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset, cash-generating unit or assets related to contract costs is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount, less any amount of amortization or depreciation, that would have been determined had no impairment loss been recognized on the asset in prior years. A reversal of an impairment loss is recognized in profit or loss.

l. Financial Instruments

Financial assets and liabilities shall be recognized in the consolidated balance sheets when the consolidated company becomes a party to the contractual provisions of the instruments.

While financial assets and liabilities are initially recognized, transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are

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added to or deducted from the fair value of those financial assets and financial liabilities that are not measured at fair value through profit or loss. Transaction costs directly attributable to the acquisition or issue of financial assets or financial liabilities measured at fair value through profit or loss are recognized immediately in profit or loss.

1) Financial assets

Regular way transactions of financial assets are recognized and derecognized on a settlement date basis.

a) Category of measurement

Financial assets held by the consolidated company are classified into the following categories: financial assets at fair value through profit or loss (FVTPL), financial assets at amortized cost, and investments in equity instruments at fair value through other comprehensive income (FVTOCI).

i. Financial asset at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily required to measure at FVTPL includes investments in equity instruments that are not designated as FVTOCI, and investments in debt instruments that do not meet the criteria of amortized cost or FVTOCI.

Financial asset at FVTPL is measured at fair value, and any dividends or interests from such financial assets are recognized in other revenues. Any remeasurement gain or loss on such financial assets are recognized in other gain or loss. Fair value is determined in the manner described in Note 26.

ii. Financial asset measured at amortized cost

The consolidated company's investments in financial assets that meet the following two conditions are subsequently measured at amortized cost:

i) Within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii) The contractual terms give rise to cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets measured at amortized cost, including cash and cash equivalents, notes receivable, trade receivable, and other receivable, are measured at amortized cost of total carrying amount determined by the effective interest method less any impairment loss. Any foreign exchange gain/loss is recognized in profit or loss.

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

i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and
ii) Financial assets that are not credit-impaired on purchase or origination but have subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.
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Credit-impaired financial assets are those where the issuer or debtor has experienced major financial difficulties, defaults, the debtor is likely to file for bankruptcy or other financial restructuring, or disappearance of an active market for the financial assets due to financial difficulties.

Cash equivalents comprise time deposits that will mature within 3 months after the acquisition date, that are highly liquid and readily convertible to known amount of cash, and that are subject to an insignificant risk of changes in value. Cash equivalents are used to satisfy short-term cash commitments.

iii. Investments in equity instruments at FVTOCI

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

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

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

b) Impairment of financial assets

On each date of balance sheets, the consolidated company evaluates a loss allowance for financial assets at amortized cost (including trade receivable) based on expected credit loss.

The loss allowances for notes receivable and trade receivable are recognized at an amount equal to lifetime expected credit losses. Other financial assets are first evaluated whether or not the credit risk has increased significantly since initial recognition. If it has not increased significantly, a loss allowance is recognized at an amount equal to expected credit loss within 12 months. If it has increased significantly, a loss allowance is recognized at an amount equal to expected credit loss over the expected life.

Expected credit losses are the weighted average credit losses resulting from a risk of default events as the weight. Expected credit losses within 12 months represent the expected credit losses resulting from possible default events of a financial instrument within 12 months after the reporting date. Expected credit loss over the expected life represent the expected credit losses resulting from all possible default events of a financial instrument over the expected life.

For the purpose of internal credit risk management, the consolidated company, without considering the collateral it holds, determines that the following circumstances represent a default in financial assets:

i. There are internal or external information showing that the borrower is no longer able to pay off the debt.
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ii. Where the debt is overdue more than 365 days, unless there is reasonable and authenticated information showing that the delayed default basis is more appropriate.

An impairment loss of all financial assets is recognized with a corresponding adjustment to their carrying amount through a loss allowance account.

c) Derecognition of financial assets

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

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of equity instruments measured at FVTOCI in its entirety, the cumulative gain or loss will not be reclassified to profit or loss; instead, it will be transferred to retained earnings.

2) Equity instruments

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

The equity instrument issued by the consolidated company shall be recognized by the payment for acquisition net of the direct cost of issuance.

The repurchase of equity instruments issued by the consolidated company is recognized in equity as a deduction. The purchase, sale, issuance, or write-off of the consolidated company's own equity instruments is not recognized in profit or loss.

3) Financial liabilities
a) Subsequent measurement

All financial liabilities are subsequently measured either at amortized cost using effective interest method, except below situations.

b) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including liabilities of any transferred noncash asset or afforded liabilities, is recognized in profit or loss.

m. Revenue Recognition

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

1) Revenue from sales building and land

The consolidated company is principally engaged in appointments and management of contractors for the construction and sales of real estate, and the revenue is recognized when the legal ownership of the real estate is passed to the client. For the signed contract of residence sale, subject to the commercial practice, the real estate has no other use for the consolidated company. As the legal ownership of the real estate is passed to the client, the consolidated company has an enforceable right to the contractual amount and

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therefore revenue is recognized when the legal ownership of the real estate is passed to the client

2) Revenue from construction contracts

The consolidated company gradually recognizes revenue over the period for the real estate construction contracts of which the real estate is governed under the client's control during construction. Due to the direct correlation between the construction cost incurred and the completion of performance obligations, the consolidated company measured the progress of completion by the percentage of the actual cost incurred over the total estimated costs. The consolidated company gradually recognizes contract assets during the construction process, and they are transferred to trade receivable when the invoices are issued. If the payment for construction received exceeds the revenue recognized to date, the consolidated company recognizes a contract liability for the difference. Certain payments retained by the customer as specified in the contract is intended to ensure that the consolidated company adequately completes all its contractual obligations. Such retainage receivables are recognized as contract assets until the consolidated company satisfies its performance obligations.

If the outcome of the performance obligations cannot be measured reliably, construction revenue is recognized only to the extent of the costs incurred for satisfaction of performance obligations that are expected to be recovered.

3) Service revenue

Service revenue is recognized when services are provided.

Revenue from a contract to provide services is recognized with reference to the stage of completion of the contract. The stage of completion of the contract is monthly recognized during the contract period.

n. Lease

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

1) The consolidated company as lessor

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

When the consolidated company subleases the right-of-use asset, the classification of the sublease is determined by the right-of-use asset (instead of the underlying asset). However, if the main lease is a short-term lease where the recognition exemption is applicable to the consolidated company, the sublease is classified as an operating lease.

After lease-related incentives are deducted, the rental income from operating lease is recognized on a straight-line basis over the term of the lease. The initial direct costs arising from acquisition of operating leases is added to the carrying amount of the underlying assets; and an expense is recognized for the lease on a straight-line basis over the lease term.

When a lease includes both land and building elements, the consolidated company assesses the classification of each element separately as a financial or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the lessee. The lease payments are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of a contract. If the allocation of the lease payments can be made

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reliably, each element is accounted for separately in accordance with its lease classification. If the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

2) The consolidated company as lessee

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

Right-of-use assets are measured initially at cost, which comprises the initial measurement of lease liabilities, the lease payments paid before the lease start date less the lease incentives received, the initial direct cost, and the estimated cost of restoring underlying assets. Subsequent measurement is calculated as cost less accumulated depreciation and accumulated impairment loss and adjusted for changes in lease liabilities as a result of remeasurement. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

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

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and payments of penalties for terminating the lease reflected during the lease term less lease incentives received. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the consolidated company uses the lessee's incremental borrowing rate.

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

o. Borrowing Costs

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

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

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

p. Employee Benefits
1) Short-term employee benefits expense

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

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2) Post-Retirement Benefits

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

q. Income Tax

Income tax expense is the sum of current income tax and deferred income tax.

1) Current tax

According to the Income Tax Law of the ROC, an additional income tax on unappropriated earnings was surcharged in the year approved by the shareholders' meeting.

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

2) Deferred income tax

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

Deferred tax liabilities are generally recognized for all taxable temporary differences while deferred tax assets are recognized as it is very likely that taxable profits will be available against tax credits which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the timing of the reversal of the temporary difference and it is very likely that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investment and equity are only recognized to the extent that it is very likely that there will be sufficient taxable profit against which to utilize the benefit of the temporary differences that are expected to reverse in the foreseeable future.

The carrying amount of deferred tax asset is reviewed on each date of balance sheets and it is reduced to the extent that it is no longer very likely that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets not originally recognized are also reviewed on each date of balance sheets, and their carrying amount is recognized to the extent that it is very likely that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is realized, and this tax rates is based on the tax rates and tax laws that have been enacted or substantively enacted on the date of balance sheet. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the consolidated company expects to recover or settle the carrying amount of its assets and liabilities on the date of balance sheet.

3) Current and deferred income tax

Current and deferred income taxes are recognized in profit or loss, unless when they relate to items that are recognized in other comprehensive income or directly recorded in equity, the current and deferred income tax are separately recognized in other comprehensive income or directly recorded in equity.

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5. Primary Sources of Uncertainties in Major Accounting Judgments, Estimates, and Assumptions

In the application of the consolidated company's accounting policies, the management is required to make judgments, estimates and assumptions based on historical experience and other factors that are considered to be relevant for the items that are not readily apparent from other sources. Actual results may differ from these estimates.

The management will constantly review the estimations and underlying assumptions. If an amendment of estimates only affects the current period, it shall be recognized in the period of amendment; if an amendment of accounting estimates affects the current year and future periods, it shall be recognized in the period of amendment and future periods.

Key Sources of Estimation and Assumption Uncertainty

Estimated impairment loss of inventory

The consolidated company regularly assesses the carrying amounts of the inventories to determine, in accordance with the accounting policy, that the inventories are stated at the lower of cost or net realizable value. The consolidated company estimates the net realizable value based on the most recent average selling prices of similar inventories and its historical experiences. Changes in the net realizable value will increase or decrease the amount of the Company's inventories.

6. Cash and Cash Equivalents

Cash on hand and working capital Bank demand deposits Bank time deposits with original maturity date within 3 months	December 31, 2021 $ 1,635 371,154 20,000 $ 392,789	December 31, 2020	December 31, 2020
			$ 2,800 550,729 20,000 $ 573,529

The market interest rate intervals of bank deposits on the balance sheet date are as follows:

Bank deposits Financial assets at FVTPL- current Financial assets held for trading-current Fund beneficiary certificates	December 31, 2021 0.01%-0.35% December 31, 2021 $ 17,161	December 31, 2020	December 31, 2020
		0.01%-0.35% December 31, 2020
			$ 17,111

7. Financial assets at FVTPL - current

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8. Notes receivable, trade receivables - net, trade receivables from related parties and other receivable

receivable
Measured at amortized cost Notes receivable Installment notes receivable Less: long-term installment notes receivable Installment notes receivable - current portion Trade receivables Trade receivables from related parties Other receivables Less: Allowance for Bad Debts	December 31, 2021 $ 1,385 2,960 851 2,109 $ 3,494 $ 21,886 5,279 $ 27,165 $ 2,465 1,335 $ 1,130	December 31, 2020
			$ 2,971 3,749 2,960 789 $ 3,760 $ 14,629 11,606 $ 26,235 $ 14,325 13,410 $ 915

a. Notes and trade receivable

The consolidated company mainly engaged in appointments of construction contractors to build public housing developments for leasing and selling. As a result, the trade receivables of the consolidated company arose from the purchase of building and land sold by the consolidated company's clients and the collection terms of the receivables are in accordance with the sales contracts. In the case of trade receivable arising from the lack of loan facilities from clients, the consolidated company may, after assessing their credit status and repayment ability, collect the amounts by instalments of bills receivable based on agreed terms.

In addition to trade receivable of real estate, the consolidated company has trade receivable arising from rental with lease guarantee deposits received in advance. In assessing the recoverability of trade receivable, the consolidated company considers any change in the credit quality of the trade receivable from the original credit date to the balance sheet date, and estimates the irrecoverable amounts by reference to past default records and the current financial condition of the clients and industrial economic conditions. The lease guarantee deposits received by the consolidated company at the balance sheet date are sufficient to cover potential default losses.

The consolidated company applies the simplified approach of IFRS 9 and recognizes allowance for uncollectible accounts for trade receivable as lifetime expected credit losses for the duration of contract. The lifetime expected credit loss is determined the provision matrix which refers to past default records and the current financial condition of the clients and industrial economic conditions. Due to the historical experience of credit losses of the consolidated company, there is no significant difference in the loss patterns of different

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client's groups. Therefore, the provision matrix does not further distinguish the customer base, and only sets the expected credit loss rate based on the overdue days of trade receivable.

The consolidated company writes off trade receivable when there is information indicating that the debtor is experiencing in severe financial difficulty and there is no realistic prospect of recovery. The consolidated company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, they are recognized in profit or loss.

The consolidated company's loss allowance for trade receivable based on the provision matrix were as follows:

December 31, 2021

Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization December 31, 2020 Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization	Not overdue - $ 27,165 - $ 27,165 Not overdue - $ 26,235 - $ 26,235	Due over 365 days 100% $ - - $ - Due over 365 days 100% $ - - $ -		Total
				$ 27,165 - $ 27,165 Total
				$ 26,235 - $ 26,235

b. Other receivables

The consolidated company's loss allowance for other receivable was as follows:

December 31, 2021

December 31, 2021
Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization		Not overdue - $ 1,130 - $ 1,130	Due over 365 days 100% $ 1,335 1,335 $ -	Counterparty in trading shown the indication of default events 100% $ - - $ -		Total
						$ 2,465 1,335 $ 1,130

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December 31, 2020

December 31, 2020
Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization		Not overdue - $ 915 - $ 915	Due over 365 days 100% $ 1,335 1,335 $ -	Counterparty in trading shown the indication of default events			Total
					100% $ 12,075 12,075 $ -		$ 14,325 13,410 $ 915

Counterparty in trading shown the indication of default events was associate of the consolidated company.

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

Balance, beginning of year Less: Impairment loss reversed for the period Balance, end of year	For the Year Ended December 31, 2021 $ 13,410 12,075 $ 1,335	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
			$ 13,410 - $ 13,410

9. Inventories, net

Real estate under development Real estate held for development Building and land held for sale Prepayments for land Merchandise inventory	December 31, 2021 $ 1,897,462 3,767,624 1,858,949 212,645 59,865 $ 7,796,545	December 31, 2020	December 31, 2020
			$ 1,850,092 1,468,198 4,699,658 - 59,488 $ 8,077,436

Real estate under development

Real estate under development
ProjectItem Hsinchu Fu Baitian Tucheng Mingde Sec. Kaohsiung K13 Plant Kaohsiung K18 Plant Kaohsiung K27 Plant Kaohsiung 2nd Park E Building Plant	December31,2021 $ 1,021,159 440,594 343,565 82,561 9,583 - $ 1,897,462	December31,2020
			$ 405,914 315,456 5,106 - - 1,123,616 $ 1,850,092

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Real estate held for development

Real estate held for development
ProjectItem Beitun Intercontinental Sec. Banqiao Puqian Sec. and Zhonghe Guangfu Sec. Lianhua Sec., Hsinchu City Tucheng Yuanhe Sec. Beitou Enlightened Sec. Banqiao Guoguang Sec. (Capacity Transfer purpose) Xizhi Jinlong Sec. Nangang South Central Sec. Xizhi Fude Sec. (Capacity Transfer purpose) Tucheng Leli Sec. and Xuelin Sec. (Capacity Transfer purpose) Building and land held for sale Project Item Yanping South Rd. Di Jing Garden Xizhi Li Garden ASE Center Peony Tucheng ASE Residence Earl Seventh generation Bo City Xinzhuang Fuduxin Ronghua	December31,2021 $ 1,668,197 1,074,116 622,607 234,670 78,409 55,927 16,886 10,877 5,689 246 $ 3,767,624 December 31,2021 $ 1,657,808 82,126 44,732 34,473 25,202 6,423 5,550 2,635 $ 1,858,949	December31,2020
		$ - 1,074,116 - 211,208 93,249 55,927 16,886 10,877 5,689 246 $ 1,468,198 December 31,2020
			$ 2,375,808 272,215 57,954 43,778 979,751 49,642 6,720 913,790 $ 4,699,658

Building and land held for sale

The Company passed the resolution of the Board of Directors in April 2021 to purchase land in the Intercontinental Sec., Beitun District, Taichung City for a total price of $1,658,800 thousand held by non-related natural person, the payment was completed, and the transfer was completed on July 7, 2021.

The Company passed the resolution of the Board of Directors in September 2021 to participate in the public auction of the land held by the Hsinchu County Government in the Lianhua Sec., Hsinchu City, Hsinchu County for a total bid price of $622,568 thousand, the payment was completed, and the transfer was completed on November 16, 2021.

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The Company passed the resolution of the Board of Directors in December 2021 to purchase land in Huiguo Sec., Xitun District, Taichung City for a total price of $708,818 thousand. $212,645 thousand was paid as of December 31, 2021, and the transfer was completed on February 15, 2022.

As of December 31, 2021 and 2010, inventories of $7,190,969 thousand and $4,266,869 thousand, respectively, are expected to be recovered after more than 12 months.

The relevant amounts of operating cost and inventory were as follows:

Cost of Goods Sold Other operating costs The abovementioned cost of goods sold includes Loss on reduce inventory to market (Gain from price recovery of inventory)	For the Year Ended December 31, 2021 $ 4,408,795 6,529 $ 4,415,324 ($ 198,911)	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
	(	(	$ 2,149,246 5,425 $ 2,154,671 $ 258,348)

For the years ended December 31, 2021, loss on reduce inventory to market (gain from price recovery of inventory) was provided (reversed) mainly due to the construction project of Xinzhuang Fuduxin and the land in Beitou Enlightened Sec. For the year ended December 31, 2020, gain from price recovery of inventory was reversed mainly due to the construction project of Xinzhuang Fuduxin.

Please refer to Note 28 for the amount of inventory pledged by the consolidated company as collateral against its secured borrowings.

10. Financial Assets at FVTOCI, Net

Investments in equity instruments at FVTOCI

Non-current Domestic investment Listed (OTC) stock	December 31,2021 $ 4,699,925	December 31,2020	December 31,2020
			$ 3,587,830

The consolidated company invested in equity instruments pursuant to its medium-term and longterm strategies for the purpose of making a profit; thus, the consolidated company elected to designate these investments to be measured at FVTOCI.

Please refer to Note 28 for information about investments in equity instruments at FVTOCI pledged as collateral.

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11. Subsidiaries

Subsidiaries included in the consolidated financial statements

The entities of the consolidated financial statements are as follows:

Name of Investor Company The Company Hung Ching Co., Limited Shanghai Youhong Engineering Technical Consulting Co., Ltd. Superb First Co., Ltd.	Name of Subsidiary Hung Ching Kwan Co., Ltd. (Hung Ching Kwan) Fuhua engineering Co., Ltd. (Fuhua engineering) Hung Ching New Co., Ltd. (Hung Ching New) ASE WeMall Management and Consulting Co., Ltd. (ASE WeMall M&C Co.) Hung Ching Co., Limited Superb First Co., Ltd. Shanghai Youhong Engineering Technical Consulting Co., Ltd. Shanghai Hong Rong Property Management Co., Ltd. Shanghai You Chang Property Management Co., Ltd.	Business Nature Leasing of mall and office building Contractor of construction projects Retailer of household equipment and supplies Consultant of operation and management in department stores and parking lots General investment General investment Technical consulting services of electronic engineering and architectural engineering Consulting services of property management and construction and technical consulting services of architectural engineering Consulting services of property management and construction and technical consulting services of architectural engineering	Percentage of Ownership and Voting Rights December 31, 2021 December 31, 2020 63.5% 63.5% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%	Note
			December 31, 2021 63.5% 100% 100% 100% 100% 100% 100% 100% 100%
				Note Note Note Note Note Note Note Note Note

Note: It was compiled into the consolidated financial statement with the financial statements audited by the certified public accountant for the same period.

12. Property, plant and equipment, net

Cost Balance as of January 1, 2020 Addition Disposal Net exchange difference Balance as of December 31, 2020 Accumulated depreciation and impairment Balance as of January 1, 2020 Disposal Depreciation expenses Net exchange difference Balance as of December 31, 2020 Net as of December 31, 2020 (Continued on the next page)		Land $ 205,648 - - - $ 205,648 $ - - - - $ - $ 205,648	Buildings and Property $ 988,549 - - 194 $ 988,743 $ 460,647 - 16,072 66 $ 476,785 $ 511,958		Other Equipment $ 33,149 3,651 905 ) 50 $ 35,945 $ 25,499 860 ) 2,496 46 $ 27,181 $ 8,764		Total
				( (		( (	$ 1,227,346 3,651 905 ) 244 $ 1,230,336 $ 486,146 860 ) 18,568 112 $ 503,966 $ 726,370

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(Continued from the previous page)

Cost Balance as of December 31, 2021 Addition Disposal Prepayments Net exchange difference Balance as of December 31, 2021 Accumulated depreciation and impairment Balance as of December 31, 2021 Disposal Depreciation expenses Net exchange difference Balance as of December 31, 2021 Net as of December 31, 2021	$ 205,648 326,221 - 139,810 - ( $ 671,679 $ - - - - ( $ - $ 671,679	$ 988,743 49,175 - ( 28,468 89) ( $ 1,066,297 $ 476,785 - ( 18,391 29) ( $ 495,147 $ 571,150	$ 35,945 1,826 54 ) ( - 20) ( $ 37,697 $ 27,181 54 ) ( 1,945 17) ( $ 29,055 $ 8,642	$ 1,230,336 377,222 54 ) 168,278 109) $ 1,775,673 $ 503,966 54 ) 20,336 46) $ 524,202 $ 1,251,471

Property, plant and equipment of the consolidated company are depreciated by straight-light method using the estimated useful lives as follows:

Buildings and Property 20 to 60 years Other Equipment 2 to 10 years

Please refer to Note 28 for information about the amount of property, plant and equipment - net pledged by the consolidated company as collateral for borrowings.

13. Lease Arrangements

a. Right-of-use assets

December 31, 2021 December 31, 2020 Carrying amount of right-of-use assets Buildings $ 11,909 $ 15,085 For the Year Ended For the Year Ended December 31, 2021 December 31, 2020 Depreciation expense of right-of-use assets Buildings $ 3,176 $ 3,176

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b. Lease liabilities

Lease liabilities
Carrying amount of lease liabilities Current Non-current Ranges of discount rates for lease liabilities are Buildings	December31,2021 $ 3,274 $ 9,409 as follows: December31,2021 1.89%	December31,2020
		$ 2,972 $ 12,805 December31,2020
		1.89%

c. Major lease activities and terms

The consolidated company leases several buildings for the use of offices with lease terms of 1 to 5 years. The consolidated company does not have bargain purchase options to acquire the leasehold buildings at the end of the lease terms.

d. Other lease information

Please refer to Note 15 for the operating lease agreements to rent its own merchandise inventory and investment properties by the consolidated company.

Expenses relating to short-term leases and low-value asset leases Total cash (outflow) for leases	For the Year Ended December 31, 2021 $ 10,924 ($ 14,284)	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
	(	(	$ 10,460 $ 13,700)

The consolidated company leases certain office equipment and certain equipment which qualify as short-term leases and low-value asset leases. The consolidated company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

14. Investment properties, net

14. Investment properties, net
Cost Balance as of January 1, 2020 Addition Disposal Balance as of December 31, 2020 Accumulated depreciation and impairment Balance as of January 1, 2020 Disposal Depreciation expenses Balance as of December 31, 2020 Net as of December 31, 2020 (Continued on the next page)		Land $ 725,735 - 15,113) $ 710,622 $ - - - $ - $ 710,622
	(

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(Continued from the previous page)

Cost Balance as of January 1, 2021 Addition Reclassification from inventories Balance as of December 31, 2021 Accumulated depreciation and impairment Balance as of January 1, 2021 Depreciation expenses Balance as of December 31, 2021 Net as of December 31, 2021	$ 710,622 - 29,634 $ 740,256 $ - - $ - $ 740,256	$ 3,733,441 8,300 29,357 $ 3,771,098 $ 981,000 117,531 $ 1,098,531 $ 2,672,567	$ 4,444,063 8,300 58,991 $ 4,511,354 $ 981,000 117,531 $ 1,098,531 $ 3,412,823

The investment property of the consolidated company includes the mall of Tucheng ASE, the building of Hotel J Metropolis held by the Company, and the exhibition hall of Asehome Design Center held by the subsidiary of Hung Ching Kwan.

Investment properties of the consolidated company are depreciated by straight-light method using the estimated useful lives as follows:

Buildings and Property 49 to 60 years Air-conditioning equipment and others 5 to 25 years

The fair value of the investment property is derived by reference to appraisal report evaluated by appraisal company of non-related party and to the actual price registration of in the adjacent area by the management. Evaluation of fair value is shown below:

Fair value	December31,2021 $ 8,508,254	December31,2020	December31,2020
			$ 7,628,790

The operating lease is to lease merchandise inventory and investment property owned by the consolidated company leases with lease terms of 1 to 20 years. The lessee does not have bargain purchase options to acquire the leasehold buildings at the end of the lease terms.

As of December 31, 2021 and 2020, the guarantee deposits received by the consolidated company in accordance with operating lease agreements amounted to $25,578 thousand and $26,977 thousand, respectively.

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The total future lease payments to be received of operating lease commitments (excluding variable lease payments) are as follows:

variable lease payments) are as follows:
1st Year 2nd Year 3rd Year 4th Year 5th Year Over 5 years	December 31,2021 $ 75,962 50,705 39,494 35,957 31,556 114,953 $ 348,627	December 31,2020
			$ 58,604 34,841 28,244 22,245 21,178 133,397 $ 298,509

The consolidated company held freehold interests in all of its investment properties. Please refer to Note 28 for the amount of investment properties - net pledged by the consolidated company as collateral for borrowings.

15. Other assets

Current prepayments Tax overpaid retained for offsetting the future tax payable Prepayments for construction and purchases Prepayments for building and land Prepaid expenses Other current assets Payments on behalf of others Temporary payments Non-current Refundable deposit Long-term prepaid expenses Long-term other receivable (Note 19) Other	December 31,2021 $ 14,190 17,668 - 2,612 $ 34,470 $ 330 31 $ 361 $ 232,237 19,719 - 3,128 $ 255,084	December 31,2020	December 31,2020
			$ 48,803 86,094 168,278 2,043 $ 305,218 $ 3,648 32 $ 3,680 $ 154,896 26,102 8,126 3,128 $ 192,252

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16. Borrowings

a. Short-term borrowings

a. Short-term borrowings
Bank credit loans Bank secured loan (Note 28) Interest rate of bank credit loans Interest rate of bank secured loans b. Short-term bills payable, net Commercial paper payable (Note 28) Less: Discount on short-term bills payable Interest rate c. Long-term borrowings, net Bank secured loan (Note 28) Bank of Taiwan I (1) Bank of Taiwan II (2) DBS Bank and another bank (3) Less: Current portion matured in one year Long-term borrowings Interest rate	December 31, 2021 $ 500,000 1,327,000 $ 1,827,000 1.46%-1.70% 0.94%-1.48% December 31,2021 $ 2,362,900 6,097 $ 2,356,803 1.378%-1.748% December 31,2021 $ 1,956,710 75,038 - 2,031,748 206,744 $ 1,825,004 1.67%	December 31, 2020
		$ 1,353,750 1,459,250 $ 2,813,000 1.40%-1.88% 0.94%-1.88% December 31,2020
		$ 1,841,000 1,223 $ 1,839,777 1.328%-1.938% December 31,2020
			$ 2,111,120 124,038 278,100 2,513,258 495,085 $ 2,018,173 1.67%-1.90%

1) The maturity date of the consolidated company's loan from Bank of Taiwan I is May 16, 2033 with repayment method of interests paid monthly and principal paid by installments starting the third year, and with Tucheng mall as collateral.
2) The maturity date of the consolidated company's loan from Bank of Taiwan II is June 19, 2023 with repayment method of interests paid monthly and principal paid by installments starting the second year, and with Tucheng mall as collateral.
3) The maturity date of the consolidated company's loan from DBS Bank and another bank is May 16, 2021 with repayment method of interests paid monthly and principal paid by the date of maturity, and with Tucheng mall as collateral.
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17. Trade payable

Trade payable classified as construction retainage payable for construction contracts were $143,022 thousand and $181,017 thousand as of December 31, 2021 and 2020, respectively. Construction retainage received, which is interest free, will be paid for each construction contract at the end of the construction retainage period. This retainage period is the consolidated company's normal operating cycle, which normally exceeds one year.

18. Other current liabilities

Other current liabilities
Advance rental Receipts on behalf of others Guarantee deposits received Other	December 31,2021 $ 6,064 5,691 4,550 121 $ 16,426	December 31,2020
			$ 5,795 2,157 3,250 118 $ 11,320

19. Post-retirement benefit plans

The consolidated company adopted a pension plan under the Labor Pension Act, which is a government-managed defined contribution plan. The Company has made monthly contributions equal to 6% of each employee's monthly salary to employees' individual pension accounts of Bureau of Labor Insurance.

The subsidiary, Fuhua engineering, has fund deposits of defined benefit plan at competent authority which was applied for refund on November 22, 2021, and the balance of the fund amounted to $8,126 thousand as of December 31, 2020 , recorded as other non-current asset.

In accordance with the relevant endowment insurance system of the People's Republic of China, Shanghai Youhong Engineering Technical Consulting Co., Ltd. Shanghai Hong Rong Property Management Co., Ltd., and Shanghai You Chang Property Management Co., Ltd. allocate fund of the endowment insurance according to a certain proportion of the salary each year, and contribute them to the designated institutions stipulated by the government of the People's Republic of China. Contributed fund is managed by the labor department of the local government.

20. Equity

a. Share capital

Ordinary shares

Authorized shares (In Thousand Shares) Authorized share capital Issued and fully paid shares (In Thousand Shares) Issued share capital	December 31,2021 540,306 $ 5,403,060 270,306 $ 2,703,060	December 31,2020	December 31,2020
			540,306 $ 5,403,060 270,306 $ 2,703,060

The par value of the issued ordinary shares is $10 per share. Each share is entitled to one voting right and right of receiving dividend.

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b. Capital surplus

Capital surplus
To offset a deficit, to distribute as cash dividends or stock dividends Additional paid-in capital Treasury stock transaction	December 31,2021 $ 148,999 175,529 $ 324,528	December 31,2020
			$ 148,999 163,562 $ 312,561

The abovementioned capital surplus may be used to offset a deficit or to be distributed as cash dividends or stock dividends; however, the stock dividends have a limitation up to a certain percentage of the paid-in capital per year.

c. Retained earnings and dividend policy

According to the Company's Articles of Incorporation of the earnings distribution policy, the Company shall make appropriations from its net income (less any deficit), if any, to pay the taxes in comply with the laws, offset its accumulated deficit, set aside a legal reserve at 10% of the remaining earnings while no more set-aside if the legal reserve is up to the Company's paid-in capital, and then set aside or reverse a special reserve in accordance with the relevant laws or regulations. Of the remainder, together with any unappropriated earnings of prior years, shall be proposed by the Board of Directors as a plan for the distribution of the remaining undistributed earnings, and the shareholders shall resolve such plan in the shareholders' meeting for distribution of dividends to shareholders. For the policies on employees' compensation and remuneration of directors, which is stipulated in the Company's Articles of Incorporation, please refer to Note 22(7).

The Company's current industrial development is in a mature period while the business development is still at a growth stage with investment plans and funding requests in the coming years. Therefore, in addition to the abovementioned policies, the distribution of earnings shall be based on at least 20% by cash dividends and the remainder shall be distributed in the form of stock dividends as distribution of shareholders' dividends and bonuses for the year. However, if the Company obtains sufficient funds from external parties to meet its funding requests for the year, the proportion of cash dividends distributed above shall be increased to 40% on a discretionary basis.

As stated in the preceding paragraph, the Company may determine the most appropriate dividend policy and payment method depending on the actual operation of the year and taking into account the capital budget planning for the subsequent year.

The Company shall set aside a legal reserve until it equals the Company's paid-in capital. Legal reserve may be used to offset deficit. If the company has no deficit and the legal reserve has exceeded 25% of the company's paid-in capital, the excess may be transferred to capital or distributed in cash.

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The appropriations of earnings for 2020 and 2019 had been approved in Hung Ching Co.'s shareholders' meetings on July 15, 2021 and June 18, 2020, respectively, and they were as follows:

follows:
Legal reserve Legal reserve (reversal) Cash dividends	Appropriationof Earnings For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 $ 39,115 $ 74,209 29,062 ( 1,710 ) 378,428 486,551	DividendsPerShare ($)
	For the Year Ended December 31, 2020 $ 39,115 29,062 378,428	For the Year Ended December 31, 2020 $ 1.40	For the Year Ended December 31, 2019
			$ 1.80

The appropriations of earnings and dividends per share for the year ended December 31, 2021 had been proposed by the Company's board of directors on March 4, 2022, and they were as follows:

were as follows:
Legal reserve Special reserve Cash dividends	Appropriation of Earnings $ 161,918 ( 102,572 ) 810,918	Dividends Per Share ($)
		$ 3.00

The appropriations of earnings for the year ended December 31, 2021 is subject to the resolution of the shareholders in the shareholders' meeting to be held on June 27, 2022.

d. Special reserve

Special reserve
Balance, beginning of year Special capital reserve provided (reversed) Balance, end of year	For the Year Ended December31,2021 $ 318,492 29,062 $ 347,554	For the Year Ended December31,2020
		(	$ 320,202 1,710) $ 318,492

A special capital reserve shall be provided for the difference between the market price of the Company's shares held by the subsidiaries and the book value in proportion to their shareholdings and may be subsequently reversed as a result of the recovery of the market price.

e. Other equity

1) Exchange differences on translating the financial statements of foreign operations

Balance, beginning of year Exchange differences on translating the net assets of foreign operations Related income tax from gain on translating the net assets of foreign operations Balance end of year	For the Year Ended December 31, 2021 ( $ 5,253 ) ( 756 ) 151 ($ 5,858)	For the Year Ended December 31, 2020
		( $ 6,642 ) 1,736 ( 347) ($ 5,253)

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2) Unrealized gain (loss) on financial assets at FVTOCI

Balance, beginning of year Recognized for the year Unrealized gain (loss) - equity instruments Balance end of year	For the Year Ended December 31, 2021 $ 2,580,389 1,112,095 $ 3,692,484	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
		(	$ 2,660,412 80,023) $ 2,580,389

f. Treasury Shares

(Unit: In Thousand Shares)

Reasons for repurchase For the Year Ended December 31, 2021 Shares of the Company held by subsidiaries For the Year Ended December 31, 2020 Shares of the Company held by subsidiaries	Number of shares, beginning of year 8,548 8,548	Increase for the year - -	Decrease for the year - -	Number of shares, end of year	Number of shares, end of year
					8,548 8,548

Information on shares of the Company held by subsidiaries on the balance sheet date is as follows:

follows:
Name of Subsidiary December 31, 2021 Hung Ching New December 31, 2020 Hung Ching New	Number of Shares held (In Thousand Shares) 8,548 8,548	Carrying amount $ 266,688 $ 164,116	Market price
				$ 266,688 $ 164,116

The shares of the Company held by subsidiaries, which are considered as treasury shares, are bestowed shareholders' rights, except for the rights to participate in any share issuance for cash and to vote.

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21. Revenue

a. Contract balances

22.	December 31,2021 Notes receivable (Note 8) $ 3,494 Trade receivable (Note 8) $ 21,886 Trade receivables from related parties (Note 8) $ 5,279 Long-term notes receivable (Note 8) $ 851 Contract liabilities – current Building and land for sale $ 109,170 Merchandise sales 12,939 $ 122,109 b. Subdivision of revenue from client contracts Detailed information on the revenue is described in Note 30. Net income from continuing operation a. Other income For the Year Ended December 31, 2021 Interest Revenue of bank deposit $ 1,152 Dividend income 184,974 Gain on reversal of expected credit loss 12,075 Other 5,907 $ 204,108 b. Other gains and losses For the Year Ended December 31, 2021 Gain (loss) on disposal of property, plant and equipment $ - Gain (Loss) on disposal of investment properties - Profit and loss on disposal of investments accounted for using the equity method 713 Gain (loss) on financial assets at FVTPL 50 Other loss ( 76,914) ($ 76,151)	December 31,2020
		$ 3,760 $ 14,629 $ 11,606 $ 2,960 $ 413,174 6,715 $ 419,889 For the Year Ended December 31, 2020
		$ 1,129 88,175 - 10,458 $ 99,762 For the Year Ended December 31, 2020
		( $ 27 ) 6,748 - 226 ( 2,356) $ 4,591

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c. Finance costs

Finance costs
Interest on bank loans Interest on lease liabilities Less: Amounts included in the cost of required assets Interest rate on interest capitalization	For the Year Ended December 31, 2021 $ 99,346 266 10,376 $ 89,236 1.46%-1.66%	For the Year Ended December 31, 2020
		$ 133,651 324 18,084 $ 115,891 1.40%-1.96%

d. Depreciation and amortization

Depreciation and amortization
Property, plant and equipment Right-of-use assets investment properties Long-term prepayment expenses (recorded as other non-current assets) Intangible assets Total Depreciation expenses summarized by function Operating Costs Operating Expenses Amortization expenses summarized by function Operating Costs Operating expenses – amortization expense	For the Year Ended December 31, 2021 $ 20,336 3,176 117,531 6,682 36 $ 147,761 $ 97,017 44,026 $ 141,043 $ 317 6,401 $ 6,718	For the Year Ended December 31, 2020
			$ 18,568 3,176 117,598 6,628 - $ 145,970 $ 96,956 42,386 $ 139,342 $ 369 6,259 $ 6,628

e. Direct operating expenses of investment properties

Direct operating expenses of investment properties generating rental revenue Employee benefits expense Short-term employee benefits expense Post-Retirement Benefits Defined contribution plans Other employee benefits Total employee benefit expenses Summarized by function Operating Costs Operating Expenses	For the Year Ended December 31,2021 $ 110,824 For the Year Ended December 31, 2021 $ 225,620 5,134 24,702 $ 255,456 $ 82,273 173,183 $ 255,456	For the Year Ended December 31,2020	For the Year Ended December 31,2020
		$ 113,637 For the Year Ended December 31, 2020
			$ 154,463 4,152 17,951 $ 176,566 $ 44,096 132,470 $ 176,566

f. Employee benefits expense

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g. Employees' compensation and remuneration of directors

The Company accrued employees' compensation and remuneration of directors at the rates of 1% to 7% and no higher than 3% for employees' compensation and for remuneration of directors of net profit before tax, respectively. The employees' compensation and remuneration of directors for the years ended December 31, 2021 and 2020, which were approved by the Company's Board of Directors on March 4, 2022 and March 5, 2020, respectively, were as follows:

respectively, were as follows:
Accrual rates Employees' compensation Remuneration of directors	For the Year Ended December 31, 2021 2.50% 1.00%	For the Year Ended December 31, 2020
		3.16% 1.58%

Amount

Amount
Employees' compensation Remuneration of directors	For the Year Ended December 31, 2021 Cash Stock $ 46,230 $ - 18,492 -	For the Year Ended December 31, 2020
	Cash $ 46,230 18,492	Cash $ 16,946 8,473	Stock
			$ - -

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

There was no difference between the actual amount paid of employees' compensation and remuneration of directors and the amount recognized in the parent company only financial statements for the years ended December 31, 2020 and 2019.

Information on the employees' compensation and remuneration of directors resolved by the Company's board of directors for the years ended December 31, 2021 and 2020 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

23. Income Tax from Continuing Operations

a. Income tax expense recognized in profit and loss account

Major components of income tax expense are as follows:

Current tax In respect of the current year Surcharges on unappropriated earnings Land value increment tax Adjustments for prior years Deferred income tax In respect of the current year Income tax expenses recognized in profit or loss	For the Year Ended December 31,2021 $ 90,545 26 97,814 ( 2,318) 186,067 588 $ 186,655	For the Year Ended December 31,2020	For the Year Ended December 31,2020
	(	(	$ 14,086 9,152 112,741 1,037) 134,942 558 $ 135,500

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A reconciliation of accounting profit and current income tax expense is as follows: For the Year Ended December 31,2021 For the Year Ended December 31,2020 Net income from continuing operation $ 1,790,674 $ 509,236 Income tax expenses from income before income tax calculated at the statutory rate $ 370,215 $ 148,243 Land value increment tax 97,814 112,741 Fees that cannot be deducted from taxes 885 4,823 Non-taxable income ( 287,203 ) ( 185,554 ) Unrecognized deductible temporary differences ( 1,878 ) 36,852 Unrecognized loss carryforward $ 9,114 $ 10,280 Surcharges on unappropriated earnings 26 9,152 Income tax expenses from previous years adjusted for the year ( 2,318) ( 1,037) Income tax expenses recognized in profit or loss $ 186,655 $ 135,500	A reconciliation of accounting profit and current income tax expense is as follows: For the Year Ended December 31,2021 For the Year Ended December 31,2020 Net income from continuing operation $ 1,790,674 $ 509,236 Income tax expenses from income before income tax calculated at the statutory rate $ 370,215 $ 148,243 Land value increment tax 97,814 112,741 Fees that cannot be deducted from taxes 885 4,823 Non-taxable income ( 287,203 ) ( 185,554 ) Unrecognized deductible temporary differences ( 1,878 ) 36,852 Unrecognized loss carryforward $ 9,114 $ 10,280 Surcharges on unappropriated earnings 26 9,152 Income tax expenses from previous years adjusted for the year ( 2,318) ( 1,037) Income tax expenses recognized in profit or loss $ 186,655 $ 135,500	A reconciliation of accounting profit and current income tax expense is as follows: For the Year Ended December 31,2021 For the Year Ended December 31,2020 Net income from continuing operation $ 1,790,674 $ 509,236 Income tax expenses from income before income tax calculated at the statutory rate $ 370,215 $ 148,243 Land value increment tax 97,814 112,741 Fees that cannot be deducted from taxes 885 4,823 Non-taxable income ( 287,203 ) ( 185,554 ) Unrecognized deductible temporary differences ( 1,878 ) 36,852 Unrecognized loss carryforward $ 9,114 $ 10,280 Surcharges on unappropriated earnings 26 9,152 Income tax expenses from previous years adjusted for the year ( 2,318) ( 1,037) Income tax expenses recognized in profit or loss $ 186,655 $ 135,500
	( (	$ 509,236 $ 148,243 112,741 4,823 185,554 ) 36,852 $ 10,280 9,152 1,037) $ 135,500

The tax rate for entities of the consolidated company that apply the Income Tax Act of the Republic of China is 20%. The tax rate applicable to subsidiaries in China area is 25%.

b. Income tax recognized in other comprehensive income

Deferred income tax Reverse to other comprehensive Income (Loss) -Translating of foreign operations	For the Year Ended December 31, 2021 $ 151	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
		(	$ 347)

c. Deferred tax assets

The movements of deferred tax assets were as follows:

For the Year Ended December 31, 2021 Deferred tax assets Financial assets at FVTOCI Property, plant and equipment investment properties Exchange differences of foreign operations Other For the Year Ended December 31, 2020 Deferred tax assets Financial assets at FVTOCI Property, plant and equipment investment properties Exchange differences of foreign operations Other		Balance, beginning of year $ 34,209 13,307 13,497 1,313 112 $ 62,438 $ 34,209 13,662 13,753 1,660 59 $ 63,343	Recognized in profit and loss $ - ( 355 ) ( 262 ) - 29 ($ 588) $ - ( 355 ) ( 256 ) - 53 ($ 558)	Recognized in other comprehensive income $ - - - 151 - $ 151 $ - - - ( 347 ) - ($ 347)	Balance, end of year	Balance, end of year
			( ( ( ( ( (	( (		$ 34,209 12,952 13,235 1,464 141 $ 62,001 $ 34,209 13,307 13,497 1,313 112 $ 62,438

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d. Amounts of loss carryforward and deductible temporary differences for which no deferred tax assets have been recognized in the balance sheet

Loss carryforward Expired in 2021 Expired in 2022 Expired in 2023 Expired in 2024 Expired in 2025 Expired in 2026 Expired in 2027 Expired in 2028 Expired in 2029 Expired in 2030 Expired in 2031 Deductible temporary differences	December 31,2021 $ - 24,697 16,127 126,098 34,595 40,506 41,562 50,292 45,723 47,176 40,948 $ 467,724 $ 196,141	December 31,2020	December 31,2020
			$ 14,957 20,177 16,127 126,098 34,595 40,506 41,562 56,388 45,723 46,984 - $ 443,117 $ 207,816

e. Income tax assessments

The Company's annual income tax return of a profit-seeking enterprise have been assessed by the tax authorities through the 2019 annual income tax return of a profit-seeking enterprise.

24. Earnings Per Share

Numerator and denominator used in the computation of earnings per share (EPS) are as follows:

Amount

	Amount
For the Year Ended December 31, 2021 Basic EPS Net income to calculate basic EPS Effect of dilutive potential ordinary share: Employees' compensation Diluted EPS Net income to calculate diluted EPS	(numerator) after tax after tax $ 1,619,178 - $ 1,619,178	Shares (denominator) (In Thousand Shares) 261,758 1,628 263,386	EPS($)
			after tax
			$ 6.19 $ 6.15

(Continued on the next page)

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(Continued from the previous page)

For the Year Ended December 31, 2020

For the Year Ended December 31, 2020
Basic EPS Net income to calculate basic EPS Effect of dilutive potential ordinary share: Employees' compensation Diluted EPS Net income to calculate diluted EPS	$ 391,153 - $ 391,153	261,758 1,017 262,775	$ 1.49
			$ 1.49

If the consolidated company offered to settle the employees' compensation in cash or shares, the consolidated company presumes that the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees as compensation at their meeting in the following year.

25. Management of Risks in Capital

The consolidated company conducts management of risks in capital to ensure that each entity of the group would continue as a going concern with the premise of optimizing the balances of debt and equity, and to maximize shareholders' equity. The overall strategy of the consolidated company has no significant change.

The consolidated company's capital structure consists of the consolidated company's net debt (which is borrowings less cash and cash equivalents) and equity attributable to the owners of the consolidated company (which are share capital, capital surplus, retained earnings, and other equity items).

The consolidated company is not subject to any other external capital requirements.

The key management of the consolidated company annually reviews the capital structure of the group, including the capital costs of various categories and related risks. Based on recommendations of the key management, the consolidated company will balance its overall capital structure through dividends distribution, new stock issuance, shares repurchase, and new debts issuance or old debts repayment, etc.

26. Financial Instruments

a. Information on Fair value - Financial instruments measured at fair value on a recurring basis 1) Fair Value Hierarchy

December 31, 2021

December 31, 2021
Financial asset at FVTPL Fund beneficiary certificates Financial assets at FVTOCI Investments in equity instruments Domestic listed (OTC) stock		Level 1 $ 17,161 $4,699,925		Level 2 $ - $ -		Level 3 $ - $ -		Total
								$ 17,161 $4,699,925

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December 31, 2020

December 31, 2020
Financial asset at FVTPL Fund beneficiary certificates Financial assets at FVTOCI Investments in equity instruments Domestic listed (OTC) stock		Level 1 $ 17,111 $3,587,830		Level 2 $ - $ -		Level 3 $ - $ -		Total
								$ 17,111 $3,587,830

There was no transfer between Level 1 and Level 2 for the years ended December 31, 2021 and 2020.

2) Reconciliation of Level 3 fair value measurement of financial instruments

For the Year Ended December 31, 2021

For the Year Ended December 31, 2021
Financial assets Beginning and ending balance of the year	at FVTOCI
	Equityinstruments
		$ -

For the Year Ended December 31, 2020

For the Year Ended December 31, 2020
Financial assets Balance, beginning of year Recognized in other comprehensive income (unrealized gain (loss) on FVTOCI) Return on capital reduction Balance, end of year	at FVTOCI
	Equityinstruments
	(	$ 4,913 3,825 8,738) $ -

3) Valuation techniques and inputs applied for Level 3 fair value measurement

The foreign limited liability partnership is estimated at fair value based on estimated future cash flows of the disposal proceeds less costs of disposal.

b. Categories of financial instruments

Categories of financial instruments
Financial assets Financial asset at FVTPL Fund beneficiary certificates financial assets at amortized cost (Note 1) Financial assets at FVTOCI Investments in equity instruments Financial liabilities Measured at amortized cost (Note 2)	December 31,2021 $ 17,161 657,666 4,699,925 7,085,329	December 31,2020
		$ 17,111 762,295 3,587,830 8,287,995

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Note 1. The balances included financial assets measured at amortized cost which comprise cash and cash equivalents, notes receivable, trade receivable - net, trade receivables from related parties, other receivables, long-term notes receivable and refundable deposits (recorded in other non-current assets), etc.
Note 2. The balances included financial liabilities measured at amortized cost which comprise short-term borrowings, short-term bills payable - net, notes payable, trade payable, trade payables to related parties, other payable, long-term borrowings - current portion, long-term borrowings - net, guarantee deposits, etc.
c. Financial risk management objectives and policies

The consolidated company's major financial instruments included equity investments, loans and receivable, trade payable, short-term bills payable, and borrowings, etc. The consolidated company's Finance division provides services to each unit of the business, coordinates access to domestic financial markets, and monitors and manages the financial risks relating to the operations of the consolidated company through internal risk reports that analyze exposures by degree and magnitude of risks. These risks include market risk (including interest rate risk and other price risk), credit risk and liquidity risk.

The consolidated company manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Internal auditors review the compliance policies and risk exposure limits on an ongoing basis.

1) Market risk

As the consolidated company is rarely engaged in foreign currency transactions, exposure to exchange rate risk for fluctuations in market exchange rates is minimal. At this stage, the consolidated company's dedicated unit reviews the assets and liabilities that are affected by exchange rates only on a regular basis.

Therefore, the consolidated company's activities exposed it primarily to the financial risks of changes in interest rates and other price risk.

a) Interest rate risk

The consolidated company is exposed to interest rate risk because entities in the consolidated company borrow funds at both fixed and floating interest rates. The consolidated company manages interest rate risk by maintaining an appropriate combination of fixed and floating interest rates. The consolidated company regularly assesses the fluctuation of interest rates by adjusting the affected positions to align them with interest rate views and risk preferences established to ensure the most cost-effective hedging strategies are adopted.

The carrying amounts of financial assets and financial liabilities of the Company with exposures to interest rate on the balance sheet dates are as follows:

Interest rate risk with fair value Financial liabilities Interest rate risk with cash flow Financial assets Financial liabilities	December31,2021 $ 2,356,803 391,083 3,858,748	December31,2020
		$ 1,839,777 561,862 5,326,258

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Sensitivity analysis

The consolidated company used the interest rate risk of non-derivatives financial instruments at the balance sheet date as basis. Facing the risk of changes in floating interest rates of financial assets and in market interest rates of financial liabilities, the consolidated company uses 1% increase or decrease in market interest rates as a reasonable risk assessment for reporting changes in interest rates to the management. If the market interest rate had been 1% higher and all other variables were held constant, the consolidated company's pre-tax income for the years ended December 31, 2021 and 2020 would decrease by $34,677 thousand and $47,644 thousand, respectively.

b) Other price risk

The consolidated company was exposed to equity price risk through its investments on equity securities of listed and OTC companies. This equity investment is not held for trading but a strategic investment. The consolidated company does not actively trade these investments. Equity price risk of the consolidated company is mainly concentrated on equity instruments in semiconductor packaging industry of the Taiwan Stock Exchange. Besides, the consolidated company has appointed a dedicated unit to regularly monitor the price risk and assess when it is necessary to increase the risk hedging position.

Sensitivity analysis

If equity prices had been 10% lower, no impact would incur on the consolidated company's pre-tax income for the year ended December 31, 2021 and 2020. The consolidated company's pre-tax other comprehensive income for the years ended December 31, 2021 and 2020 would have decreased by $469,993 thousand and $358,783 thousand, respectively, due to changes in fair value of financial assets at FVTOCI.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the consolidated company. As of the balance sheet date, the consolidated company's maximum exposure to credit risk due to failure to discharge an obligation by the counterparties arises from the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets.

The policies adopted by the consolidated company are to trade with reputed counterparties only. If necessary, sufficient collateral must be obtained to reduce the risk of financial losses. Credit risk of the consolidated company is evaluated against contracts with positive fair value at the balance sheet date. The trading counterparties of consolidated company are financial institutions and organizations of company with good credit standing, so no significant credit risk is expected to incur.

To reduce credit risk, the management of the consolidated company has delegated a dedicated team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is properly taken to recover overdue debts. Moreover, the consolidated company reviews the recoverable amount of each individual trade receivable on the balance sheet date to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes that the consolidated company's credit risk has been significantly reduced.

The consolidated company's trade receivables consist of a large number of clients, mainly in Taiwan and Mainland China. The consolidated company has no concentration

50 -

of credit risk as it has transactions with different clients. The consolidated company continuously assesses the financial position of its clients of the trade receivable.

3) Liquidity risk

The Board of Directors bears the ultimate liability for the liquidity risk management of the consolidated company. The consolidated company has established an appropriate liquidity risk management framework to meet its management demand for short-term, mid-term, and long-term funding and liquidity. The consolidated company manages liquidity risk by maintaining adequate financing limit with banks and reserving flexibility of fundraising in the capital market as well as continuously monitoring the expected and actual cash flows and the maturity portfolio of financial assets and liabilities.

a) Table of liquidity risk

The following tables detail the analysis of the consolidated company's remaining contractual maturities for its non-derivative financial liabilities with agreed repayment periods. The tables were drawn up based on the undiscounted cash flows (including principal and estimated interest) of financial liabilities from the earliest date on which the consolidated company may be required to pay.

non-derivative financial liabilities Short-term borrowings Short-term bills payable, net Notes and trade payable Other payables Lease liabilities Long-term borrowings			December 31,2021	December 31,2021	December 31,2021
	Within 6 Months $ 1,450,790 2,362,900 284,932 133,368 1,680 119,628 $ 4,353,298		6 Months ~ 1 Year $ 384,436 - 299,660 68,965 1,800 120,488 $ 875,349		Above 1 Year $ - - 51,302 1,423 9,642 2,164,310 $ 2,226,677	T	o t a l
							$ 1,835,226 2,362,900 635,894 203,756 13,122 2,404,426 $ 7,455,324

Additional information about the maturity analysis for lease liabilities:

Less than 1year $ 3,480	1-5 years 5-10 years $ 9,642 $ - December 31, 2020	1-5 years 5-10 years $ 9,642 $ - December 31, 2020	Total
			$ 13,122
Within 6 Months $ 2,201,347 1,841,000 276,875 250 271,147 1,680 399,647 $ 4,991,946	6 Months ~ 1 Year $ 621,829 - 395,535 - 26,666 1,680 134,093 $ 1,179,803	Above 1 Year $ - - 121,260 - - 13,122 2,421,820 $ 2,556,202	Total
			$ 2,823,176 1,841,000 793,670 250 297,813 16,482 2,955,560 $ 8,727,951

Additional information about the maturity analysis for lease liabilities:

Lease liabilities	Less than 1 year $ 3,360		1-5 years $ 13,122		5-10 years $ -		Total
							$ 16,482

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b) Financing facilities

The bank loans are a significant source of liquidity for the consolidated company. As of December 31, 2021 and 2020, the consolidated company's amount of unused bank financing facilities amounted to $4,098,000 and $2,378,000, respectively.

27. Related Party Transactions

In preparing the consolidated financial statements, all transactions, account balances, income and expenses between the Company and its subsidiaries (which are the Company's related parties) have been eliminated in full and are not disclosed in this note accordingly. Except for those disclosed in other notes, the material transactions between the Company and other related parties are as follows.

a. Names and relationships of related parties

Name of related party

Advanced Semiconductor Engineering, Inc. and its subsidiaries Jason C.S. Chang Richard H.P. Chang

Wealthy Joy Co., Ltd., Taiwan Branch (British Virgin Islands) (Wealthy Joy)

Hooyai Hotel Co.

Relationship with the Company

Investor having significant influence Investor having significant influence Investor having significant influence Substantial related party

Non-associates starting December 22, 2021

b. Operating revenue

Item Sales Revenue of Building and Land Rental revenue Revenue from construction contracts Service revenue	Category and name of related party Investor having significant influence Advanced Semiconductor Engineering, Inc. Investor having significant influence Advanced Semiconductor Engineering, Inc. Affiliates Hooyai Hotel Co. Substantial related party Wealthy Joy Investor having significant influence Advanced Semiconductor Engineering, Inc. Investor having significant influence Advanced Semiconductor Engineering, Inc. and its subsidiaries	For the Year Ended December 31,2021 $ 2,362,000 $ 9,314 6,367 200 $ 15,881 $ - $ 94,524	For the Year Ended December 31,2020	For the Year Ended December 31,2020
				$ - $ 9,314 - - $ 9,314 $ 621 $ 107,422

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The consolidated company and its subsidiaries' transaction terms for related parties are comparable with those for third parties.

The consolidated company has entered into certain lease agreements with investors and associates having significant influence, and the rentals are received monthly or annually with rent terms expired one after another before March 31, 2022.

c. Receivables from related parties (excluding loans to related parties)

Item Trade receivables from related parties	Category and name of related party Investor having significant influence Advanced Semiconductor Engineering, Inc. and its subsidiaries Jason C.S. Chang	December 31, 2021 $ 5,279 - $ 5,279	December 31, 2020	December 31, 2020
				$ 11,084 522 $ 11,606

The consolidated company and its subsidiaries' transaction terms for related parties are comparable with those for third parties.

The outstanding balances of payables from related parties is not collateralized. No loss allowance was set aside for receivables from related parties for the years ended December 31, 2021 and 2020.

d. Payable from related party (excluding borrowings from related parties)

Item Trade payables to related parties	Category and name of related party Investor having significant influence Jason C.S. Chang		December 31, 2021 $ -		December 31, 2020
					$ 250

The Company and its subsidiaries' transaction terms for related parties are comparable with those for third parties.

The outstanding balance of payables from related parties is not collateralized.

e. Endorsements/guarantees

Real estate of subsidiary is provided for the amount of the consolidated company's endorsements/guarantees. Please refer to Appendix 1.

f. Compensation of key management personnel

Short-term employee benefits expense Post-Retirement Benefits	For the Year Ended December 31, 2021 $ 56,076 933 $ 57,009	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
			$ 56,866 873 $ 57,739

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The remuneration of directors and other members of key management personnel, as determined by the remuneration committee, was based on the individual performance and market trends.

g. Jason C.S. Chang and Richard H.P. Chang both provided notes and real estate as collateral for short-term notes issued by the Company for the years ended December 31, 2021 and 2020.
h. In May 2011, the Company entered into the Tucheng land co-construction and split-sales contract with Jason C.S. Chang, whereby Jason C.S. Chang provided the land subject to the Contract, and the Company contributed capital and land for the co-construction of the residential building and shopping mall of Tucheng. Per the contract, the distribution ratio of sales proceeds is 20% for Jason C.S. Chang and 80% for the Company. In November 2018, the Company's Board of Directors approved the lease of the land of Tucheng mall for the portion held by Jason C.S. Chang, and in March 2022, the Company agreed with Jason C.S. Chang and the Board of Directors resolved to grant rent-free until the end of 2022. The lease agreement will be entered with both parties reach agreement in 2023. In addition, in respect of the abovementioned co-construction projects, Jason C.S. Chang provided the Company with his ownership of the co-construction land as collateral of the bank loans for the construction projects.
i. The Company acquired the land of major road entrance and exit for the expected coconstruction development project from Luchu Development Corporation, a subsidiary of Advanced Semiconductor Engineering, Inc., at a purchase price of $57,522 thousand and the transfer of ownership of the land was completed in November 2017. Per the letter of intent of the co-construction, the distribution ratio of sales proceeds shall be agreed upon after the Company obtains the construction license and after appraisal by both parties, and then an agreement of co-construction and split-sales shall be entered into.
j. The Company and Advanced Semiconductor Engineering, Inc. signed a co-development contract pursuant to the spirit of co-construction in June 2020 with agreements that the Company leases the self-constructed plants, of which Advanced Semiconductor Engineering, Inc. and its associates own the right of first refusal upon completion of the construction, and the final transaction price will be the selling price less the distribution ratio of coconstruction valued by experts.
k. The Company passed the resolution of the Board of Directors in June 2021 to dispose the plant of Kaohsiung 2nd Park E Building for Advanced Semiconductor Engineering, Inc. with a total price of $2,362,000 thousand. The payment was fully received, and the transfer was completed on July 23, 2021.
l. The Company and Advanced Semiconductor Engineering, Inc. signed a jointly-constructed with house divided contract in August 2021. It is agreed that the Company and Advanced Semiconductor Engineering, Inc. shall provide funds and part of the plant land respectively, and jointly build the plant in the mode of jointly-constructed with house divided. In addition, the two parties shall negotiate with a professional appraisal agency to evaluate the distribution ratio of jointly-construction rights value. After the completion of the construction of the plant, Advanced Semiconductor Engineering, Inc. and its affiliates have the right of first refusal to purchase the property rights acquired by the Company in accordance with the jointly-construction distribution ratio.
m. The Company and Ase Electronics Inc. signed a jointly-constructed with house divided contract in August 2021. It is agreed that the Company and Ase Electronics Inc. shall provide funds and leased land respectively, and jointly build the plant in the mode of jointlyconstructed with house divided. In addition, the two parties shall negotiate with a professional appraisal agency to evaluate the distribution ratio of jointly-construction rights
54 -

value. After the completion of the construction of the plant, Ase Electronics Inc. and its affiliates have the right of first refusal to purchase the property rights acquired by the Company in accordance with the jointly-construction distribution ratio.

28. Pledged Assets

The following assets of the consolidated company, listed by net carrying amount, were provided to banks as collateral for short-term borrowings, short-term bills payable - net, long-term borrowings - current portion, and long-term borrowings.

Inventories, net Financial assets at FVTOCI - non-current, net Property, plant and equipment, net Investment properties, net	December 31, 2021 $ 3,447,292 4,617,308 1,032,687 3,083,102	December 31, 2020
		$ 1,999,870 3,524,762 500,989 3,278,632

29. Supplementary Disclosures

a. Relevant Information on a. Significant transactions and b. Invested companies
1) Financing provided to others: None
2) Endorsements/guarantees provided for others: Appendix 1
3) Marketable securities held at year end (excluding investment in subsidiaries, associates and joint ventures): Appendix 2
4) Marketable securities acquired or disposed of at costs or prices at least NT$300 million or 20% or greater of the paid-in capital: None
5) Acquisition of real estate at costs of at least NT$300 million or 20% or greater of the paid-in capital: Appendix 3
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital or more: Appendix 4
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% or greater of the paid-in capital: Appendix 5
8) Receivables from related parties amounting to at least NT$100 million or 20% or greater of the paid-in capital: Appendix 6
9) Trading in derivative instruments: None
10) Others: Business relationships, situations, and amounts of significant inter-company transactions: Appendix 7.
11) Information on investee companies: Appendix 8.
c. Information on Investments in Mainland China
1) Information on any investee in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, shareholding percentage, net income of investee, investment gain (loss) recognized in the current period, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area: Appendix 9.
55 -
2) Significant transactions directly or indirectly through third region with investee companies in mainland China, and their prices, terms of payment, unrealized gain or loss: None
- a) Purchase amount and percentage, and the ending balance and percentage of the related payables: None
- b) Sales amount and percentage, and the ending balance and percentage of the related receivables: None
- c) Property transaction amounts and the resulting gain or loss: None
- d) Ending balances and the purposes of endorsements/guarantees or collateral provided: None
- e) The maximum remaining balance, ending balance, range of interest rate and total amount of current interest of financing facilities: None
- f) Other transactions having a significant impact on profit or loss or financial position for the period, such as provision or receipt of service: None
d. Information on Major Shareholders: List of all shareholders with ownership of 5 % or greater showing the names and the number of shares and percentage of ownership held by each shareholder. (Appendix 10)

30. Segment Information

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance, and the reportable segments of the consolidated company are as follows:

Real estate development - sales of residential and commercial property and plant Construction - building of residential and commercial property and plant

Lease - lease of investment property

a. Segment revenue and operation results

For the Year Ended December 31, 2021 Revenue from external clients Intersegment revenue Segment revenue Intercompany elimination Consolidated revenue Segment income Operating Expenses NON-OPERATING INCOME AND EXPENSES Net income before tax from continuing operations For the Year Ended December 31, 2020 Revenue from external clients Intersegment revenue Segment revenue Intercompany elimination Consolidated revenue Segment income Operating Expenses NON-OPERATING INCOME AND EXPENSES Net income before tax from continuing operations		Real estate development $ 6,662,600 - $ 6,662,600 $ 2,253,805 $ 3,164,448 - $ 3,164,448 $ 1,015,202		Construction $ - 1,576,104 $ 1,576,104 $ - $ 621 1,089,722 $ 1,090,343 $ 621		Lease $ 152,233 1,848 $ 154,081 $ 36,948 $ 144,612 1,800 $ 146,412 $ 28,254		Other $ 175,383 43,635 $ 219,018 $ 54,050 $ 162,249 48,294 $ 210,543 $ 33,305		Total
									$ 6,990,216 1,621,587 8,611,803 (1,621,587) 6,990,216 2,344,803 ( 592,850 ) 38,721 $ 1,790,674 $ 3,471,930 1,139,816 4,611,746 (1,139,816) 3,471,930 1,077,382 ( 556,608 ) ( 11,538) $ 509,236

56 -

The transaction conditions of intersegment revenue are decided by the two parties through negotiation.

Segment profit represents the profits made by each segment, excluding the general and administrative costs of headquarters and remuneration of directors that shall be amortized, share of profit of associates accounted for using equity method, dividend revenue, interest income, foreign exchange gain (loss), gain (loss) on valuation of financial products, finance costs, and income tax expenses. Such measurement amounts are provided to the chief business decision makers to allocate resources to segments and to evaluate their performance.

b. Major products and service revenue

The analysis of major products and service revenue of the Company's consolidated continuing operation is as follows:

continuing operation is as follows:
Real estate development Construction Lease Other	For the Year Ended December 31, 2021 $ 6,662,600 - 152,233 175,383 $ 6,990,216	For the Year Ended December 31, 2020
			$ 3,164,448 621 144,612 162,249 $ 3,471,930

c. Information on classification by area

The Company mainly operates in two geographical areas, Taiwan and China.

Information on the Company's revenues of continuing operations from external clients classified by the location of the business operation and the non-current assets classified by location of the asset are as follows:

Taiwan China		Revenuefromexternalclients For the Year Ended December 31, 2021 For the Year Ended December 31, 2020 $ 6,869,523 $ 3,361,292 120,693 110,638 $ 6,990,216 $ 3,471,930	Revenuefromexternalclients For the Year Ended December 31, 2021 For the Year Ended December 31, 2020 $ 6,869,523 $ 3,361,292 120,693 110,638 $ 6,990,216 $ 3,471,930		NON-CURRENT ASSETS	NON-CURRENT ASSETS	NON-CURRENT ASSETS
		For the Year Ended December 31, 2021 $ 6,869,523 120,693 $ 6,990,216			December 31, 2021 $ 4,924,539 7,991 $ 4,932,530		December 31, 2020
							$ 4,390,119 9,611 $ 4,399,730

Non-current assets include Financial assets at FVTOCI - non-current - net and deferred tax assets

d. List of major clients

Among the sales revenue of real estate development amounted to $6,662,600 thousand and $3,164,448 thousand for the years ended December 31, 2021 and 2020, respectively, $2,362,000 thousand and $0 thousand were derived from the Group's largest customer, respectively.

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Appendix 1

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Endorsements/Guarantees Provided for Others

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Code	Company Name of Endorsements/guarantees Provider	PartiesBeingEndorsed/guaranteed	PartiesBeingEndorsed/guaranteed	Limits on Endorsement/ Guarantee Provided for a Single Entity (Note 1)	Maximum Amount Endorsed/ Guaranteed in the current period	Outstanding Balance of Endorsement/ Guarantee - Ending	Actual Amount Used	Amount of Endorsed/ Guaranteed Secured with Collateral (Note 2)	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Maximum Limit on Endorsement/ Guarantee Limit (Note 1)	Endorsement/ Guarantee Provided by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Provided by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Provided on Behalf of Companies in Mainland China
		Company Name	Relationship
1	Hung Ching Kwan	The Company	Subsidiary of the Company	$ 1,421,222	$ 1,000,000	$ 1,000,000	$ -	$ 1,000,000	105.54%	$ 1,421,222	N	Y	N

Note 1. It was calculated based on 150% of the net value of shareholders' equity of Hung Ching Kwan's financial statements audited by the certified public accountant as of December 31, 2021. Note 2. Real estate provided by Hung Ching Kwan as collateral

58 -

Appendix 2

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Marketable Securities Held at Year End

December 31, 2021

Unit: In Thousands of New Taiwan Dollars or Foreign Currency

Name of Holding Company	Type and Name of Marketable Security	Relationship with the Issuer of Marketable Security	Account Title	Year end	Year end	Year end		Note
				Shares (In Thousand Shares)/ Number of Shares/ Unit	Carrying amount	Shareholding Percentage %	Fair value
The Company Hung Ching New	Stock ASE Industrial Holding Co., Ltd. Other-Limited liability partnership Ripley Cable Holdings I, L.P. Stock Hung Ching Development & Construction Co., Ltd. Fund Yuanta Polaris Wan Tai Fund TCB US Short Duration High Yield Bond Fund - A non-dividend-paying (TWD)	Major shareholder of the Company － Parent Company －－	Financial assets at FVTOCI - non-current, net Financial assets at FVTOCI - non-current, net Financial assets at FVTOCI - non-current, net Financial assets at FVTPL - current Financial assets at FVTPL - current	44,131 - 8,548 927 300	$ 4,699,925 - 266,688 14,164 2,997	1.0 4.1 3.2 - -	$ 4,699,925 - 266,688 14,164 2,997	Note 1 and 2 Note 3 Note 2 Note 4 Note 4

Note 1. Of which 43,355 thousand shares (net carrying amount of $4,617,308 thousand) were provided to financial institutions as financial guarantees.

Note 2. Market price was calculated based on the closing price as of December 31, 2021.

Note 3. Investment in foreign limited liability partnership; Fair value is estimated based on future cash flows of expected disposal proceeds less costs of disposal. Note 4. Market price was calculated based on the net value as of the last transaction date in December, 2021.

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Appendix 3

Hung Ching Development & Construction Co., Ltd. and Invested Company

Acquisition of real estate at costs of at least NT$300 million or 20% or greater of the paid-in capital:

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Acquirer of Real Estate	Name of Property	Date of Occurrence	Transaction Amount	Payment Status	Counterparty	Relationship	Information on prior transaction if the	Information on prior transaction if the	counterparty i	s a related party	Reference for Price Determination	Purpose and Use	Other Agreement Terms
							Owner	Relationship with the Issuer	Transfer Date	Amount
The Company The Company The Company The Company	Real estate in Dunhua Sec., Songshan District Land in Intercontinental Sec., Beitun District, Taichung Land in Lianhua Sec., Zhubei City, Hsinchu Land in Huiguo Sec., Xitun District, Taichung	2020.11.13 2021.04.23 2021.09.17 2021.12.10	$ 535,668 1,658,800 622,568 $ 708,818	Fully paid Fully paid Fully paid Paid $ 212,645	Non-related natural person Non-related natural person Hsinchu County Government Non-related natural person	None None None None	- - - -	- - - -	- - - -	$ - - - $ -	Negotiation and appraisal reports of two parties (appraised value amounted to $498,616 thousand by CBRE Real Estate Appraisers Joint Firm) Negotiation and appraisal reports of two parties (appraised value amounted to $1,539,103 thousand by Savills Real Estate Appraisers Joint Firm; $1,514,158 thousand by CBRE Real Estate Appraisers Firm) Public auction of the land held by the Hsinchu County Government Negotiation and appraisal reports of two parties (appraised value amounted to $609,867 thousand by Savills Real Estate Appraisers Joint Firm; $632,833 thousand by CBRE Real Estate Appraisers Firm)	Property, plant and equipment (Note 2) Inventory replenishment of land (Note 3) Inventory replenishment of land (Note 4) Inventory replenishment of land (Note 5)	None None None None

Note 1. The transaction amount is a before tax price.

Note 2. The transfer was completed on January 5, 2021.

Note 3. The transfer was completed on July 7, 2021.

Note 4. The transfer was completed on November 16, 2021.

Note 5. The transfer was completed on February 15, 2022.

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Appendix 4

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital or more

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Company that Disposed Real Estate	Name of Property	Date of Occurrence	Original Acquisition Date	Carrying Amount	Transaction Amount	Price Collection Status	Disposal Gain or Loss	Counterparty	Relationship	Purpose of Disposal	Reference for Price Determination	Other Agreement Terms
The Company	Kaohsiung 2nd Park E Building	2021.06.10	2021.05.15	$ 1,754,850	$ 2,362,000	Fully received	$ 607,150	Advanced Semiconductor Engineering, Inc.	Major shareholder of the Company	－	Appraisal reports ($2,458,241 thousand by Savills Real Estate Appraisers Firm; $2,266,136 thousand by CBRE Real Estate Appraisers Firm) and negotiation of two parties	None

Note 1. The transaction amount is a before tax price.

Note 2. The transfer was completed on July 23, 2021.

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Appendix 5

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Total purchases from or sales to related parties amounting to at least NT$100 million or 20% or greater of the paid-in capital

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Buyer/Seller	Counterparty	Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Terms and Reasons of Abnormal Transaction	Terms and Reasons of Abnormal Transaction	Notes/Trade Receivable (Payable)	Notes/Trade Receivable (Payable)	Note
			Purchase/ Sales	Amount	% to Total Purchases or Sales	Payment Terms	Unit Price	Payment Terms	Balance	% to Total Notes/Trade Receivable (Payable)
The Company Fuhua engineering	Fuhua engineering The Company	Subsidiaries Parent Company	Purchase Sales	$ 1,617,647 ( 1,576,104 )	81.43% ( 100.00% )	In comply with the terms of contracts In comply with the terms of contracts	$ - -	－－	( $ 896,251 ) 896,251	94.13% 100.00%	Note 1 and 2 Note 1 and 2

Note 1. Payment for construction

Note 2. The difference between the purchases and sales of Fuhua engineering and the Company was due to the recognition of related revenue and cost by Fuhua engineering under the percentage of completion method. Note 3. Wholly eliminated when preparing consolidated financial statements.

62 -

Appendix 6

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Receivables from related parties amounting to at least NT$100 million or 20% or greater of the paid-in capital December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Company recording receivables	Counterparty	Relationship	Balance of receivables from related parties	Turnover rate	Overdue balance of receivables from related parties	Overdue balance of receivables from related parties	Amount received of receivables from related parties after the balance sheet date	Allowance for Bad Debts
					Amount	Action taken
Fuhua engineering	The Company	Parent Company	$ 896,251	Note 1	$ -	－	$ 239,500	$ -

Note 1. In comply with the collection term of the contract. Not applicable.
Note 2. Wholly eliminated when preparing consolidated financial statements.
63 -

Appendix 7

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Business Relationships, Situations, and Amounts of Significant Inter-company Transactions

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Code (Note 1)	Name of Trader	Counterparty of Trade	Relationship with Trader (Note 2)	Transaction Details (Notes 3 and 5)	Transaction Details (Notes 3 and 5)	Transaction Details (Notes 3 and 5)
				Account	Amount	Terms and Conditions	Percentage of total consolidated revenue or total consolidated assets (%)
0 0 0 0 1 1 1 1 2 3 4	Hung Ching Development & Construction Co., Ltd. Hung Ching Development & Construction Co., Ltd. Hung Ching Development & Construction Co., Ltd. Hung Ching Development & Construction Co., Ltd. Fuhua engineering Fuhua engineering Fuhua engineering Fuhua engineering ASE WeMall M&C Co. Shanghai Hong Rong Logistics Management Co., Ltd. Shanghai You Chang Logistics Management Co., Ltd.	Fuhua engineering Fuhua engineering Fuhua engineering ASE WeMall M&C Co. Hung Ching Development & Construction Co., Ltd. Hung Ching Development & Construction Co., Ltd. Hung Ching Development & Construction Co., Ltd. Hung Ching Development & Construction Co., Ltd. Hung Ching Development & Construction Co., Ltd. Shanghai You Chang Logistics Management Co., Ltd. Shanghai Hong Rong Logistics Management Co., Ltd.	1 1 1 1 2 2 2 2 2 3 3	Trade payables to related parties Inventories, net Cost of building and land for sale Operating Expenses Trade receivables from related parties Revenue from construction contracts Construction costs Inventories, net Service revenue Service revenue Service costs	$ 896,251 204,577 256,846 22,857 896,251 1,576,104 1,462,519 61,316 22,857 17,827 17,827	Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4	4.99 1.14 3.67 0.33 4.99 22.55 20.92 0.34 0.33 0.26 0.26

Note 1. Information on business transactions between the parent and subsidiaries shall be indicated in the code column as follows:

Parent company is "0."
The subsidiaries are numbered in order starting from "1."

Note 2. Trader's relationship with the following three categories (just mark the category number):

The parent to subsidiary.
Subsidiary to the parent.
Between subsidiaries.

Note 3. On whether to calculate the percentage of transaction amount to the consolidated total revenue or total assets, the percentage of transaction amount to the year-end balance of the consolidated total assets shall be calculated if a transaction belongs to the assets and liabilities account, whereas the percentage of accumulated transaction amount for the year to the consolidated total revenue shall be calculated if a transaction belongs to the profit and loss account.

Note 4. The Company and its subsidiaries' transaction terms for related parties are comparable with those for third parties.

Note 5. Transaction amounted to more than $5,000 thousand.

64 -

Appendix 8

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Information on Investee Companies, Location, ... etc.

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars or Foreign Currency

Name of Investor Company	Investee company	Location	Main businesses	Initial investment amount	Initial investment amount	Held at year end	Held at year end	Held at year end	Investee company's income in the current period	Investment gain (loss) recognized in the current period (Note 1)	Note
				End of the Current Period	End of the Previous Period	Number of Shares (In Thousand Shares)	Ratio %	Carrying amount
The Company	Hung Ching Kwan Fuhua engineering Hung Ching Co., Limited Hung Ching New Superb First Co., Ltd. ASE WeMall M&C Co. Hooyai Hotel Co.	Taipei City Taipei City Hong Kong Taipei City Seychelles Taipei City Hsinchu City	Leasing of mall and office building Contractor of construction projects General investment Retailer of household equipment and supplies General investment Management consulting business General hotels and restaurants	$ 907,441 539,077 8,251 ( HK$ 2,325 ) 179,996 16,608 ( US$ 600 ) 5,000 -	$ 907,441 539,077 8,251 ( HK$ 2,325 ) 179,996 16,608 ( US$ 600 ) 5,000 14,672	82,495 65,000 1,099 46,300 600 500 -	63.5 100.0 100.0 100.0 100.0 100.0 -	$ 601,272 682,998 82,008 ( HK$ 23,107 ) 48,114 42,101 ( US$ 1,521 ) 5,000 -	( $ 41,487 ) 73,073 10,838 (HK$ 3,008 ) 6,833 11,356 ( US$ 405 ) 380 -	( $ 26,328 ) 217,827 10,838 (HK$ 3,008 ) ( 5,134 ) 11,356 ( US$ 405 ) 380 -	Note 2 Note 3 Note 4

Note 1. It was calculated based on the financial statements of investees companies audited by the certified public accountant for the same period.

Note 2. The investment gains recognized in the current period included unrealized gains of $61,316 thousand and realized gains of $206,070 thousand of upstream transactions.

Note 3. The investment gains and losses recognized in the current period include the Company's cash dividends received by subsidiary amounted to $11,967 thousand.

Note 4. The consolidated company has discontinued the recognition of losses and disposed it in December 22, 2021 as the associate had negative equity as of December 31, 2019.

Note 5. Except for the profit or loss in the current period and investment gain or loss recognized in the current period of the investee companies were based on the average exchange rate for the year ended December 31, 2021 of HKD$1=NT$3.603, US$1=NT$28.009 and RMB$1=NT$4.341, the amounts shown in this table are translated into NTD at the exchange rates by the end of December of HKD$1=NT$3.549, US$1=NT$27.680 and RMB$1=NT$4.344.

Note 6. Please refer to Appendix 9 for information on investments in Mainland China

Note 7. Wholly eliminated when preparing consolidated financial statements.

65 -

Appendix 9

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Information on Investments in Mainland China

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars or Foreign Currency, Unless Otherwise Specified

Investee Companies in Mainland	Main businesses	Paid-in Capital	Paid-in Capital	Method of Investmen t	Accumulated Outward Remittance for Investment from Taiwan - Beginning of the Period	Outward/Inward Re the curre	Outward/Inward Re the curre	mittance of Funds in nt period	Accumulated Outward Remittance for Investment from Taiwan - End of the Period	Investee company's income in the current period	Shareholdin g Percentage of Direct or Indirect Investment	Investment Gain (Loss) Recognized in the current period (Note 4)	Carrying Amount of Investment - End of the Period	Accumulated Repatriation of Investment Income by the End of the Current Period
						Outward		Inward
Shanghai Youhong Engineering Technical Consulting Co., Ltd. Shanghai Hong Rong Property Management Co., Ltd. Shanghai You Chang Property Management Co., Ltd.	Technical consulting services of electronic engineering and architectural engineering Consulting services of property management and construction and technical consulting services of architectural engineering Consulting services of property management and construction and technical consulting services of architectural engineering	$ 8,251 ( HK$ 2,325 ) 2,172 ( RMB$ 500 ) 16,608 ( US$ 600 )		Note 1 Note 2 Note 3	$ 8,251 ( HK$ 2,325 ) - 16,608 ( US$ 600 )	$ - - -		$ - - -	$ 8,251 ( HK$ 2,325 ) - 16,608 ( US$ 600 )	$ 10,838 ( HK$ 3,008 ) 3,848 ( RMB$ 887 ) 11,356 ( US$ 405 )	100.00% 100.00% 100.00%	$ 10,838 ( HK$ 3,008 ) 3,848 ( RMB$ 887 ) 11,356 ( US$ 405 )	$ 82,008 ( HK$ 23,107 ) 30,485 ( RMB$ 7,018 ) 42,101 ( US$ 1,521 )	$ - - -

Accumulated O Investment from Ta End	utward Remittance fo iwan to Mainland Ch of the Period	r ina -	Investme Inves	nt Amounts Authorized by the tment Commission, MOEA			Upper Limit on Investme	Investment on the Company's nts in Mainland China
$ ( US$	64,190 2,319 )			$ 65,574 ( US$ 2,369 )			$ 6,391,770 (Not 5)

Note 1. Shanghai Youhong Engineering Technical Consulting Co., Ltd. was invested through the investee company, Hung Ching Co., Ltd.

Note 2. It was invested by Shanghai Youhong Engineering Technical Consulting Co., Ltd. with its own capital, and the Company did not remit the funds separately.

Note 3. Shanghai You Chang Property Management Co., Ltd. was invested through the investee company, Superb First Co., Ltd.

Note 4. Investment income in the current period was calculated based on the financial statements audited by the certified public accountant for the same period.

Note 5. In accordance with the "Principles for Review of Investment or Technical Cooperation in the Mainland China" of the Investment Commission, it regulates the higher of 60% of the Company's net value or consolidated net value.

Note 6. Except for the profit or loss in the current period and investment gain or loss recognized in the current period of the investee companies were based on the average exchange rate for the year ended December 31, 2021 of HKD$1=NT$3.603, US$1=NT$28.009 and RMB$1=NT$4.341, the amounts shown in this table are translated into NTD at the exchange rates by the end of December of HKD$1=NT$3.549, US$1=NT$27.680 and RMB$1=NT$4.344.

Note 7. Wholly eliminated when preparing consolidated financial statements.
66 -

(Appendix 10)

Hung Ching Development & Construction Co., Ltd.

Information on Major Shareholders December 31, 2021

Major Shareholder's name	Shares	Shares
	Number of Shares held	Shareholding Percentage (%)
Morgan Stanley & Co. International Plc, Value Investing Company with HSBC as custodian Advanced Semiconductor Engineering, Inc. Brilliant Capital Profits Limited with HSBC as custodian	84,360,669 68,629,782 22,433,200	31.20 25.38 8.29

Note 1. Information on major shareholders in this table is provided by Taiwan Depository & Clearing Corporation according to information on shareholders holding at least 5% or greater of ordinary shares and preferred shares (including treasury shares) that have been issued and delivered without physical registration by the Company on the last business day at the end of the current quarter. Share capital indicated in the Company's consolidated financial statements may differ from the actual number of shares that have been issued and delivered without physical registration as a result of different basis of preparation.
Note 2. If a shareholder delivers its shareholding information to the trust, the aforesaid information shall be disclosed by the individual trustee who opened the trust account. For a shareholder who declares its shareholdings as an insider holding more than 10% of shares in accordance with the Securities and Exchange Act, such shareholding information shall include shares held by the shareholder and those delivered to the trust over which the shareholder has the right to determine the use of trust property. For information on declaration of shareholdings by insiders, please visit the Market Observation Post System.
67 -

AI assistant

Hung Ching — Annual Report 2021

52140_rns_2021-11-12_b14e4f3f-842c-4b43-8400-013e2cc82ad6.pdf

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Consolidated Financial Statements and Independent Auditors' Report For the Years Ended December 31, 2021 and 2020

TABLE OF CONTENTS

Declaration of Consolidated Financial Statements of Affiliates

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

Other Matters

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Hung Ching Development & Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheets December 31, 2021 and 2020

Hung Ching Development & Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2021 and 2020

(Continued from the previous page)

Hung Ching Development & Construction Co., Ltd. and Subsidiaries Consolidated Statements of Changes in Equity For the years ended December 31, 2021 and 2020

Hung Ching Development & Construction Co., Ltd. and Subsidiaries Consolidated Statements of Cash Flows For the years ended December 31, 2021 and 2020

(Continued from the previous page)

Hung Ching Development & Construction Co., Ltd. and Subsidiaries

Notes to Consolidated Financial Statements

January 1 to December 31, 2020 and 2021

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

1. Company History

2. Date and Procedures of Authorization of Financial Statements

3. Application of New and Amended Standards and Interpretations

4. Summary of Significant Accounting Policies

iii. Investments in equity instruments at FVTOCI

b) Impairment of financial assets

2) Equity instruments

n. Lease

q. Income Tax

1) Current tax

3) Current and deferred income tax

5. Primary Sources of Uncertainties in Major Accounting Judgments, Estimates, and Assumptions

Key Sources of Estimation and Assumption Uncertainty

Estimated impairment loss of inventory

6. Cash and Cash Equivalents

7. Financial assets at FVTPL - current

8. Notes receivable, trade receivables - net, trade receivables from related parties and other receivable

a. Notes and trade receivable

December 31, 2021

b. Other receivables

December 31, 2020

9. Inventories, net

Real estate under development

Real estate held for development

Building and land held for sale

10. Financial Assets at FVTOCI, Net

Investments in equity instruments at FVTOCI

11. Subsidiaries

Subsidiaries included in the consolidated financial statements

12. Property, plant and equipment, net

(Continued from the previous page)

13. Lease Arrangements

b. Lease liabilities

c. Major lease activities and terms

d. Other lease information

14. Investment properties, net

(Continued from the previous page)

15. Other assets

16. Borrowings

17. Trade payable

18. Other current liabilities

19. Post-retirement benefit plans

20. Equity

Ordinary shares

b. Capital surplus

e. Other equity

2) Unrealized gain (loss) on financial assets at FVTOCI

f. Treasury Shares

21. Revenue

a. Contract balances

c. Finance costs

d. Depreciation and amortization

e. Direct operating expenses of investment properties

f. Employee benefits expense

Amount

23. Income Tax from Continuing Operations

Hung Ching Annual Report 2021