Hung Ching - Annual Report 2021 | FinancialReports.eu

Stock Code: 2527

Hung Ching Development & Construction Co., Ltd.

Parent Company Only 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 parent company only 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 parent company only financial statements, the Chinese version shall prevail.

§TABLE OF CONTENTS§

ITEM	PAGE	NUMBER OF FINANCIAL STATEMENT NOTES
1. Cover 2. Table of Contents 3. Independent Auditors’ Report 4. Parent Company Only Balance Sheets 5. Parent Company Only Statements of Comprehensive Income 6. Parent Company Only Statements of Changes in Equity 7. Parent Company Only Statements Of Cash Flows 8. Notes to parent company only 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. Transactions with related parties 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 9. Statements of Major Accounting Subjects	1 2 3-6 7 8-9 10 11-12 13 13 13-14 15-24 24 24-45 46-49 49 - - - - 49, 51-57 49, 51-57 50, 58 50, 59 - 60-71	- - - - - - - 1 2 3 4 5 6 - 24 25 26 - - - - 27 27 27 27 - -

Independent Auditors' Report

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

Opinion

We have audited the accompanying parent company only financial statements of the Hung Ching Development & Construction Co., Ltd. (the “Company”), which comprise the parent company only balance sheets as of December 31, 2021 and 2020, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2021 and 2020, and its parent company only financial performance and its parent company only 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 Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company's parent company only financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the parent

company only 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 Company's parent company only 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 parent company only financial statements, and it is one of the major revenue sources of the parent company. 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, 19 and 25 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:

We understood and tested the design and operating effectiveness of the internal controls related to the sales cycle.
We obtained 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.
Issuance of letters of inquiry regarding related party sales transactions.

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

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

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only 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 parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
5 Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
5 -
6 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Company audit. We remain solely responsible for our opinion to the Company.

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 parent company only 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. Parent Company Only Balance Sheets December 31, 2021 and 2020

Unit: December31,2021 Amount % $ 237,351 1 2,299 - 9,432 - 1,400 - 911 - 7,337,858 42 22,382 - 7,153 - 330 - 7,619,116 43 4,699,925 27 1,461,493 8 577,043 3 2,939,862 17 392 - 61,860 - 851 - 253,285 2 9,994,711 57 $ 17,613,827 100 $ 1,577,000 9 2,356,803 13 109,170 1 - - 55,893 - 896,251 5 177,743 1 70,734 1 206,744 1 15,288 - 5,465,626 31 1,825,004 10 16,457 - 1,841,461 10 7,307,087 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 21 ( 455,812 ) ( 2 ) 10,306,740 59 $ 17,613,827 100	In Thousands of New Taiwan Dollars December31,2020	In Thousands of New Taiwan Dollars December31,2020
Amount $ 237,351 2,299 9,432 1,400 911 7,337,858 22,382 7,153 330 7,619,116 4,699,925 1,461,493 577,043 2,939,862 392 61,860 851 253,285 9,994,711 $ 17,613,827 $ 1,577,000 2,356,803 109,170 - 55,893 896,251 177,743 70,734 206,744 15,288 5,465,626 1,825,004 16,457 1,841,461 7,307,087 2,703,060 324,528 828,158 347,554 2,872,626 4,048,338 3,686,626 ( 455,812 ) 10,306,740 $ 17,613,827	Amount $ 438,522 3,158 13,344 1,922 619 7,720,844 292,909 - 3,647 8,474,965 3,587,830 1,295,343 35,057 2,972,066 - 62,326 2,960 180,734 8,136,316 $ 16,611,281 $ 2,562,000 1,839,777 413,174 8,791 63,142 962,743 268,966 9,152 495,085 10,177 6,633,007 2,018,173 17,568 2,035,741 8,668,748 2,703,060 312,561 789,043 318,492 1,700,053 2,807,588 2,575,136 ( 455,812 ) 7,942,533 $ 16,611,281	%
		3 - - - - 46 2 - -
		51
		22 8 - 18 - - - 1
		49
		100
		15 11 3 - - 6 2 - 3 -
		40
		12 -
		12
		52
		16
		2
		5 2 10
		17
		16
		( 3 )
		48
		100

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

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

Hung Ching Development & Construction Co., Ltd. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2021 and 2020

Hung Ching Development & Construction Co., Ltd. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2021 and 2020	Hung Ching Development & Construction Co., Ltd. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2021 and 2020	Hung Ching Development & Construction Co., Ltd. PARENT COMPANY ONLY 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 Code Amount % Amount % OPERATING REVENUE (Notes 19 and 25) 4100 Sales Revenue of Building and Land $ 6,662,600 98 $ 3,164,448 96 4300 Rental revenue 107,504 2 102,004 3 4800 Other operating revenue 34,057 - 34,083 1 4000 Total operating revenue 6,804,161 100 3,300,535 100 OPERATING COSTS (Notes 20) 5110 Costs of building and land for sale (Note 8) 4,665,641 69 2,217,439 67 5300 Rental costs 108,217 2 109,093 3 5800 Other operating costs 36,737 - 34,066 1 5000 Total operating costs 4,810,595 71 2,360,598 71 5900 Gross operating profit 1,993,566 29 939,937 29 OPERATING EXPENSES (Notes 20 and 25) 6100 Selling and marketing expenses 252,182 4 251,566 8 6200 General and administrative expenses 204,594 3 176,087 5 6000 Total operating expenses 456,776 7 427,653 13 6900 Net Operating Income 1,536,790 22 512,284 16 Non‑operating income and expenses 7010 Other income (Notes 20) 199,913 3 95,101 3 7020 Other gains and losses (Notes 20) ( 76,055 ) ( 1 ) 4,737 - 7050 Finance costs (Notes 20) ( 85,117 ) ( 1 ) ( 111,483 ) ( 3 ) 7060 Share of loss (profit) of associates accounted for under equity method 208,939 3 10,339 - 7000 Total non-operating income and expenses 247,680 4( 1,306 ) -
	Amount $ 3,164,448 102,004 34,083 3,300,535 2,217,439 109,093 34,066 2,360,598 939,937 251,566 176,087 427,653 512,284 95,101 4,737 ( 111,483 ) 10,339 ( 1,306 )	%
		96 3 1
		100
		67 3 1
		71
		29
		8 5
		13
		16
		3 - ( 3 ) -
		-

(Continued on the next page)

(Continued from the previous page)

2021	2020
Amount $ 1,784,470 165,292 1,619,178 1,112,095 ( 756 ) 151 1,111,490 $2,730,668 $ 6.19 $ 6.15	Amount $ 510,978 119,825 391,153 ( 80,023 ) 1,736 ( 347) ( 78,634) $ 312,519 $ 1.49 $ 1.49	%
		16 4
		12
		( 3 ) - -
		( 3)
		9

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

Hung Ching Development & Construction Co., Ltd. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2021 and 2020

Unit: In Thousands of New Taiwan Dollars

Share capital Number of Shares (In Thousand Shares) Amount 270,306 $ 2,703,060 - - - - - - - - - - - - 270,306 2,703,060 - - - - - - - - - - - - 270,306 $ 2,703,060		Retained earnings	Other equity 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	Total equity
			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
				$ 8,101,179 - - ( 486,551 ) 391,153 ( 78,634 ) 15,386
				7,942,533 - - ( 378,428 ) 1,619,178 1,111,490 11,967
				$10,306,740

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

Chairman: Wen-Hsiang Chien

Manager: Chia-Pei Chou

Accounting Supervisor: Fang-Ying Chen

10 -

Hung Ching Development & Construction Co., Ltd. PARENT COMPANY ONLY 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
A23200
Gain (Loss) on disposal and scrap of
property, plant and equipmen

A23700
Loss on reduce inventory to market
(Gain from price recovery of
inventory)

A20900
Finance costs
A21200
Interest income

A21300
Dividend income

A22300
Share of loss (profit) of associates
accounted for under equity
method

A22500
Gain (Loss) on disposal of
investment properties
A30000
Changes in operating assets and
liabilities, net
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
A33000
Cash generated from operations
A33300
Interest paid

A33500
Income tax paid

AAAA
Net cash generated from operating
activities

Unit: In Thousands of New Taiwan Dollars
2021
2020
$ 1,784,470
$ 510,978
101,406
99,247
(
12,075 )
-
5,165
5,861
(
713 )
-
(
198,911 )
(
258,348 )
85,117
111,483
(
94 )
(
73 )
(
184,974 )
(
88,175 )
(
208,939 )
(
10,339 )
-
(
6,748 )
2,968
2,719
3,912
17,779
522
(
360 )
11,783
(
446 )
762,960
1,383,635
102,249
77,195
(
7,153 )
-
3,317
(
1,659 )
(
304,004 )
309,676
(
8,791 )
8,787
(
16,366 )
(
9,045 )
(
287,053 )
(
428,030 )
(
89,771 )
(
19,361 )
5,111
(
7,910)
1,550,136
1,696,866
(
96,945 )
(
129,160 )
(
103,093)
(
211,759)
1,350,098
1,355,947

(Continued on the next page)

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(Continued from the previous page)

Code 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 B04500 Acquisition of intangible assets B05400 Acquisition of investment properties B03700 Decrease (Increase) in refundable deposits B02800 Proceeds from disposal of investment properties B06700 Increase in other non-current assets B07500 Interest received B07600 Dividends received from subsidiaries 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 C03000 Increase (Decrease) in guarantee deposits received C04500 Distribution of Cash Dividend CCCC Net cash used in financing activities 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 $ - 713 ( 377,117 ) ( 428 ) ( 6,802 ) ( 77,382 ) - ( 298 ) 94 54,000 184,974 ( 222,246) ( 985,000 ) 517,026 ( 481,510 ) ( 1,111 ) ( 378,428) ( 1,329,023) ( 201,171 ) 438,522 $ 237,351	2020
		$ 8,738 - ( 224 ) - - 20,188 17,981 ( 6,364 ) 73 123,000 88,175
		251,567
		248,000 ( 757,351 ) ( 332,890 ) 1,123 ( 486,551)
		( 1,327,669)
		279,845 158,677
		$ 438,522

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

12 -

Hung Ching Development & Construction Co., Ltd.

Number of Financial Statement Notes

January 1 to December 31, 2021 and 2020

(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 parent company only financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. Date and Procedures of Authorization of Financial Statements

The parent company only financial statements were approved by the Board of Directors and authorized for issue on March 5, 2021.

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).

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
Effective Date Issued by
New, Revised or Amended Standards and Interpretations IASB
"Annual Improvements to IFRS Standards 2018–2020" January 1, 2022 (Note 1) Amendment to IFRS 3 "Reference to the Conceptual Framework" January 1, 2022 (Note 2)
Amendment to IAS 16 "Property, Plant and Equipment - January 1, 2022 (Note 3) Proceeds before Intended Use"
Amendment to IAS 37 "Onerous Contracts–Cost of January 1, 2022 (Note 4) Fulfilling a Contract"
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.
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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 parent company only financial statements were authorized for issue, the 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

New, Revised or Amended Standards and Effective Date Issued by IASB Interpretations (Note 1) Amendments to IFRS 10 and IAS 28 "Sale or To be determined Contribution of Assets between an Investor and its Associate or Joint Venture" IFRS 17 "Insurance Contracts" January 1, 2023 Amendment to IFRS 17 January 1, 2023 Amendment to IFRS 17 “Initial Application of IFRS January 1, 2023 17 and IFRS 9—Comparative Information” Amendment to IAS 1 "Classification of Liabilities as January 1, 2023 Current or Noncurrent" Amendment to IAS 1 "Disclosure of Accounting January 1, 2023 (Note 2) Policies" Amendment to IAS 8 "Definition of Accounting January 1, 2023 (Note 3) Estimates" Amendment to IAS 12 “Deferred Tax related to Assets January 1, 2023 (Note 4) and Liabilities arising from a Single Transaction”

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.

14 -

4. Summary of Significant Accounting Policies

a. Statement of Compliance

The accompanying parent company only 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 parent company only 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.

In preparing the parent company only financial statements, the Company's investments in subsidiaries and associates are accounted for using the equity method. In order to agree with the amount of net income, other comprehensive income and equity attributable to shareholders of the consolidated financial statements of this year, the differences of the accounting treatment between the parent company only basis and the consolidated basis are adjusted under the heading of "investments accounted for using equity method", "share of profits of subsidiaries, associates, and joint ventures, share of other comprehensive income of subsidiaries, associates, and joint ventures" in the parent company only financial statements, and other related equity items.

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
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.
15 -

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

The Company is engaged in the construction business, which has an operating cycle of over 1 year. The normal operating cycle applies when considering the classification of current or non-current for the construction-related assets and liabilities.

d. 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 parent company only financial statements, the assets and liabilities of the 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.

e. Inventories

Inventories comprise real estate under development, real estate held for development, and building and land held for sale. 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 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.

f. Investments accounted for using the equity method

The Company uses equity method for investment in subsidiaries and associates.

1) Investments in subsidiaries

Subsidiaries are entities controlled by the Company.

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

The unrealized profit or loss in downstream transactions between the Company and the subsidiary shall be eliminated in the parent company only financial statements. Profit or loss generated in upstream transactions between the Company and the subsidiaries or transactions between the subsidiaries shall only be recognized in the Parent Company Only Financial Statements when it is not related to the Company's interest in the subsidiaries.

2) Investment in affiliate enterprises

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

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The Company uses equity method for investment in associates.

Under the equity method, the investment is initially treated at cost and adjusted thereafter for the post-acquisition change in the Company's interest in profit and loss, shares in other total 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 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 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 Company's share of loss derived from the investment of an affiliate equals or exceeds the 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 Company shall cease recognizing losses further. The 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 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 Company and the associates or transactions between associates shall only be recognized in the Parent Company Only Financial Statements when it is not related to the Company's interest in the associates.

g. 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.

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

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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.

i. 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.

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

On each balance sheet date, the 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.

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.

k. Financial Instruments

Financial assets and liabilities shall be recognized in the parent company only balance sheet when the 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 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

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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 Company are classified into the following categories: financial assets at amortized cost and investments in equity instruments at fair value through other comprehensive income (FVTOCI).

i. Financial asset measured at amortized cost

The 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, 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.

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.

ii. Investments in equity instruments at FVTOCI

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

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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 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 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.
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 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.

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2) Equity instruments

Debt and equity instruments issued by the 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 Company shall be recognized by the payment for acquisition net of the direct cost of issuance.

The repurchase of equity instruments issued by the Company is recognized in equity as a deduction. The purchase, sale, issuance, or write-off of the 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.

l. Revenue Recognition

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

The 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 Company. As the legal ownership of the real estate is passed to the client, the Company has an enforceable right to the contractual amount and therefore revenue is recognized when the legal ownership of the real estate is passed to the client.

m. Lease

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

1) The Company as lessor

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

When the 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 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.

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When a lease includes both land and building elements, the 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 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 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 parent company only 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 Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line item in the parent company only balance sheets.

n. 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.

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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.

o. 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.

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.

p. 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

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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.

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

In the application of the 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 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 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

ash
Cash on hand and working capital Bank demand deposits	December 31, 2021 $ 1,027 236,324 $ 237,351	December 31, 2020
			$ 2,034 436,488 $ 438,522

The interest rates intervals on bank deposits as of December 31, 2021 and 2020 were both 0.04%.

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7. Notes receivable, Trade receivables - net, Trade receivables from related parties and other 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	December31,2021 $ 190 2,960 851 2,109 $ 2,299 $ 9,432 1,400 $ 10,832 $ 2,246 1,335 $ 911	December31,2020	December31,2020
			$ 2,369 3,749 2,960 789 $ 3,158 $ 13,344 1,922 $ 15,266 $ 14,029 13,410 $ 619

a. Notes and trade receivable

The 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 Company arose from the purchase of building and land sold by the 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 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 Company has trade receivable arising from rental with lease guarantee deposits received in advance. In assessing the recoverability of trade receivable, the 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 Company at the balance sheet date are sufficient to cover potential default losses.

The 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 Company, there is no significant difference in the loss patterns of different 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 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.

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The 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 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	Not overdue - $ 10,832 - $ 10,832	AR aging of and more than 365 days 100% $ - - $ -		Total
				$ 10,832 - $ 10,832

December 31, 2020
Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization	Not overdue - $ 15,266 - $ 15,266	AR aging of and more than 365 days 100% $ - - $ -		Total
				$ 15,266 - $ 15,266

b. Other receivables

The Company's loss allowance for other receivable were 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 December 31, 2020 Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization	Not overdue - $ 911 - $ 911 Not overdue - $ 619 - $ 619	AR aging of and more than 365 days 100% $ 1,335 1,335 $ - AR aging of and more than 365 days 100% $ 1,335 1,335 $ -	Counterparty in trading shown the indication of default events 100% $ - - $ - Counterparty in trading shown the indication of default events 100% $ 12,075 12,075 $ -	Total
				$ 2,246 1,335 $ 911 Total
				$ 14,029 13,410 $ 619

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Counterparty in trading shown the indication of default events was associate of the 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

8. Inventories, net

Real estate under development Real estate held for development Building and land held for sale Prepayments for land Real estate under development Project Item Hsinchu Fu Baitian Tucheng Mingde Sec. Kaohsiung K13 Plant Kaohsiung K27 Plant Kaohsiung K18 Plant Kaohsiung 2nd Park E Building Plant Real estate held for development Project Item 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)	December 31,2021 $ 1,431,270 3,767,624 1,926,319 212,645 $ 7,337,858 December 31,2021 $ 941,864 413,334 63,349 8,598 4,125 - $ 1,431,270 December 31,2021 $ 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 31,2020	December 31,2020
		$ 1,399,910 1,468,198 4,852,736 - $ 7,720,844 December 31,2020
		$ 200,307 253,684 4,014 - - 941,905 $ 1,399,910 December 31,2020
			$ - 1,074,116 - 211,208 93,249 55,927 16,886 10,877 5,689 246 $ 1,468,198

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Building and land held for sale

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	December 31,2021 $ 1,720,284 83,740 44,732 34,473 26,080 6,423 5,550 5,037 $ 1,926,319	December 31,2020
			$ 2,466,909 277,562 57,954 43,778 1,013,923 49,642 6,720 936,248 $ 4,852,736

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.

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 2020, inventories of $6,769,721 thousand and $4,067,331 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 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 $ 4,665,641 ($ 198,911)	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
	(	(	$ 2,217,439 $ 258,348)

For the years ended December 31, 2020 and 2019, loss on reduce inventory to market (gain from price recovery of inventory) was provided (reversed) mainly due to the construction project of Xinzhuang Fuduxin. 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 26 for the amount of inventory pledged by the Company as collateral against its secured borrowings.

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9. Financial assets at FVTOCI, net

Investments in equity instruments at FVTOCI

Non-current Domestic investment Listed (OTC) stock	December31,2021 $ 4,699,925	December31,2020	December31,2020
			$ 3,587,830

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

Please refer to Note 26 for information about investments in equity instruments at FVTOCI pledged as collateral.

10. Investments accounted for using the equity method

Investments in subsidiaries

Non-Listed (Non-OTC) Company Hung Ching Kwan Fuhua engineering Hung Ching Co., Limited Hung Ching New Superb First Co.,Ltd. ASE WeMall M&C Co.	December31,2021 $ 601,272 682,998 82,008 48,114 42,101 5,000 $ 1,461,493	December31,2020	December31,2020
			$ 627,600 509,171 71,700 51,281 30,971 4,620 $ 1,295,343

The percentage of equity ownership and voting rights of the Company in the associates were as below:

Hung Ching Kwan Co., Ltd. Fuhua engineering Hung Ching Co., Limited Hung Ching New Superb First Co., Ltd. ASE WeMall M&C Co.	December31,2021 63.5% 100% 100% 100% 100% 100%	December31,2020
		63.5% 100% 100% 100% 100% 100%

The share of profit or loss and other comprehensive loss of the subsidiaries accounted for using the equity method for the years ended December 31, 2021 and 2020 was calculated based on the financial statements of subsidiaries audited by the certified public accountant for the same period.

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11. Property, plant and equipment, net

Cost Balance as of January 1, 2020 Addition Balance as of December 31, 2020 Accumulated depreciation and impairment Balance as of January 1, 2020 Depreciation expenses Balance as of December 31, 2020 Balance as of December 31, 2020, net Cost Balance as of January 1, 2021 Addition Prepayments 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		Land $ 13,401 - $ 13,401 $ - - $ - $ 13,401 $ 13,401 326,221 139,810 $ 479,432 $ - - $ - $ 479,432	Buildings and Property $ 136,578 - $ 136,578 $ 116,409 545 $ 116,954 $ 19,624 $ 136,578 49,175 28,468 $ 214,221 $ 116,954 2,858 $ 119,812 $ 94,409		Other Equipment $ 6,805 224 $ 7,029 $ 4,460 537 $ 4,997 $ 2,032 $ 7,029 1,721 - $ 8,750 $ 4,997 551 $ 5,548 $ 3,202		Total
							$ 156,784 224 $ 157,008 $ 120,869 1,082 $ 121,951 $ 35,057 $ 157,008 377,117 168,278 $ 702,403 $ 121,951 3,409 $ 125,360 $ 577,043

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

Buildings and Property 31 to 60 years Other Equipment 5 to 10 years

Please refer to Note 26 for information about the amount of property, plant and equipment - net pledged by the consolidated company as collateral for borrowings.

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12. Investment properties, net

Investment properties, net
			Land			Buildings			Total
Cost
Balance as of January 1, 2020		$	549,521		$	2,958,303		$	3,507,824
Disposal	(		15,113)	(		715)	(		15,828)
Balance as of December 31, 2020		$	534,408		$	2,957,588		$	3,491,996
Accumulated depreciation and
impairment
Balance as of January 1, 2020		$	4,250		$	422,110		$	426,360
Disposal	(		4,250 )	(		345 )	(		4,595 )
Depreciation expenses			-			98,165			98,165
Balance as of December 31, 2020		$	-		$	519,930		$	519,930
Balance as of December 31, 2020, net		$	534,408		$	2,437,658		$	2,972,066
Cost
Balance as of January 1, 2021		$	534,408		$	2,957,588		$	3,491,996
Addition			-			6,802			6,802
Reclassification from inventories			29,634			29,357			58,991
Balance as of December 31, 2021		$	564,042		$	2,993,747		$	3,557,789
Accumulated depreciation and
impairment
Balance as of January 1, 2021		$	-		$	519,930		$	519,930
Depreciation expenses			-			97,997			97,997
Balance as of December 31, 2021		$	-		$	617,927		$	617,927
Net as of December 31, 2021		$	564,042		$	2,375,820		$	2,939,862

The investment property of the Company includes the mall of Tucheng ASE and the building of Hotel J Metropolis held by the Company.

Investment properties of the 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 20 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:

==> picture [460 x 30] intentionally omitted <==

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.

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As of December 31, 2021 and 2020, the guarantee deposits received by the consolidated company in accordance with operating lease agreements amounted to $16,457 thousand and $17,568 thousand, respectively.

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

1st Year 2nd Year 3rd Year 4th Year 5th Year Over 5 years	December 31, 2021 $ 57,844 47,982 38,943 35,957 31,557 114,953 $ 327,236	December 31, 2020	December 31, 2020
			$ 40,202 32,728 28,244 22,245 21,178 133,397 $ 277,994

The Company held freehold interests in all of its investment properties. Please refer to Note 26 for the amount of investment properties - net pledged by the Company as collateral for borrowings.

13. 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 Non-current Refundable deposit Long-term prepaid expenses Other	December 31,2021 $ 5,964 14,760 - 1,658 $ 22,382 $ 330 $ 230,972 19,185 3,128 $ 253,285	December 31,2020	December 31,2020
			$ 42,807 80,729 168,278 1,095 $ 292,909 $ 3,647 $ 153,590 24,016 3,128 $ 180,734

14. Borrowings

a. Short-term borrowings

Short-term borrowings
Bank credit loans Bank secured loan (Note 26) Interest rate of bank credit loans Interest rate of bank secured loans	December 31,2021 $ 500,000 1,077,000 $ 1,577,000 1.46%-1.70% 0.94%-1.48%	December 31,2020
			$ 1,353,750 1,208,250 $ 2,562,000 1.40%-1.88% 0.94%-1.88%

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b. Short-term bills payable, net

Commercial paper payable (Note 26) Less: Discount on short-term bills payable Interest rate Long-term borrowings, net Secured loan (Note 26) 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 $ 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	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%

c. Long-term borrowings, net

1) The maturity date of the 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 3rd year, and with Tucheng mall as collateral.
2) The maturity date of the 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 2nd year, and with Tucheng mall as collateral.
3) The maturity date of the 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.

15. Trade payables

Trade payable classified as construction retainage payable for construction contracts were $0 thousand and $4,199 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 Company’s normal operating cycle, which normally exceeds one year.

16. Other current liabilities

Other current liabilities
Advance rental Receipts on behalf of others Guarantee deposits received Other	December 31,2021 $ 5,913 4,814 4,550 11 $ 15,288	December 31,2020
			$ 5,519 1,394 3,250 14 $ 10,177

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17. Post-retirement benefit plans

The Company adopted a pension plan under the Labor Pension Act, which is a governmentmanaged 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.

18. Equity

a. Share capital

Ordinary shares

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
			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.

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 20(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.

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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.

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	Appropriation of 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	Dividends Per Share($)
	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 Legal reserve (reversal) 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 December 31,2021 $ 318,492 29,062 $ 347,554	For the Year Ended December 31,2020
		(	$ 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.

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e. Other equity items

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)

2) Unrealized gain (loss) on financial assets at fair value through other comprehensive income

income
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
		(	$ 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 theyear - -	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	Carryingamount $ 266,688 $ 164,116		Marketprice
				$ 266,688 $ 164,116

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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.

19. Revenue

Contract balances

Contract balances
Notes receivable (Note 7) Trade receivable (Note 7) Trade receivables from related parties (Note 7) Long-term notes receivable (Note 7) Contract liabilities – current Building and land for sale	December 31,2021 $ 2,299 $ 9,432 $ 1,400 $ 851 $ 109,170	December 31,2020
			$ 3,158 $ 13,344 $ 1,922 $ 2,960 $ 413,174

Detailed information on the revenue is described in Note 30.

20. Net income from continuing operation

a. Other income

Other income
Interest Revenue of bank deposit Dividend income Gain on reversal of expected credit loss Others	For the Year Ended December 31,2021 $ 94 184,974 12,075 2,770 $ 199,913	For the Year Ended December 31,2020
			$ 73 88,175 - 6,853 $ 95,101

b. Other gains and losses

Gain (Loss) on disposal of investment properties Profit and loss on disposal of investments accounted for using the equity method Other loss Finance costs Interest on bank loans Less: Amounts included in the cost of required assets Interest rate on interest capitalization	For the Year Ended December 31,2021 $ - 713 ( 76,768) ($ 76,055) For the Year Ended December 31,2021 $ 95,493 10,376 $ 85,117 1.46%-1.66%	For the Year Ended December 31,2020
		$ 6,748 - ( 2,011) $ 4,737 For the Year Ended December 31,2020
		$ 129,567 18,084 $ 111,483 1.40%-1.96%

c. Finance costs

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d. Depreciation and amortization

Depreciation and amortization
For the Year Ended December 31,2021 Property, Plant and Equipment $ 3,409 investment properties 97,997 Long-term prepayment expenses (recorded as other non-current assets) 5,129 Intangible assets 36 Total $ 106,571 Depreciation expenses summarized by function Operating Costs $ 97,928 Operating Expenses 3,478 $ 101,406 Amortization expenses summarized by function Operating expenses – amortization expense $ 5,165 Direct operating expenses of investment properties For the Year Ended December 31,2021 Direct operating expenses of investment properties generating rental revenue $ 108,217 Employee benefits expense For the Year Ended December 31,2021 Short-term employee benefits $ 67,463 Post-Retirement Benefits Defined contribution plans 1,897 Other employee benefits 8,623 Total employee benefit expenses $ 77,983 Summarized by function Operating Costs $ 1,832 Operating Expenses 76,151 $ 77,983	For the Year Ended December 31,2020
	$ 1,082 98,165 5,861 - $ 105,108 $ 98,165 1,082 $ 99,247 $ 5,861 For the Year Ended December 31,2020
	$ 109,093 For the Year Ended December 31,2020
		$ 58,733 1,945 6,768 $ 67,446 $ 1,832 65,614 $ 67,446

e. Direct operating expenses of investment properties

f. Employee benefits expense

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

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approved by the Company's Board of Directors on March 4, 2022 and March 5, 2020, respectively, were as follows:

Accrual rates

Accrual rates
Employees' compensation Remuneration of directors	For the Year Ended December31,2021 2.50% 1.00%	For the Year Ended December31,2020
		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.

21. Income Tax from Continuing Operations

a. Income tax expense recognized in profit and loss account

Major components of income tax expense are as follows:

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 $ 70,735 - 97,814 ( 3,874) 164,675 617 $ 165,292	For the Year Ended December 31,2020
	(	(	$ - 9,152 112,741 2,679) 119,214 611 $ 119,825

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

A reconciliation of accounting profit and current income tax expense	is as follows:	is as follows:
For the Year Ended December 31,2021 Net income from continuing operation $ 1,784,470 Income tax expenses from income before income tax calculated at the statutory rate $ 356,894 Land value increment tax 97,814 Fees that cannot be deducted from taxes 3,032 Non-taxable income ( 286,239 ) Unrecognized deductible temporary differences ( 2,335 ) Income tax expenses from previous years adjusted for the year ( 3,874 ) Surcharges on unappropriated earnings - Income tax expenses recognized in profit or loss $ 165,292 Income tax recognized in other comprehensive income For the Year Ended December 31,2021 Deferred income tax Reverse to other comprehensive Income (Loss) -Translating of foreign operations $ 151	For the Year Ended December 31,2020
	$ 510,978 $ 102,196 112,741 4,399 ( 143,411 ) 37,427 ( 2,679 ) 9,152 $ 119,825 For the Year Ended December 31,2020
	(	$ 347)

b. Income tax recognized in other comprehensive income

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 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	Balance, beginning of year $ 34,209 13,307 13,497 1,313 $ 62,326 $ 34,209 13,662 13,753 1,660 $ 63,284	Recognized in profit and loss $ - ( 355 ) ( 262 ) - ($ 617) $ - ( 355 ) ( 256 ) - ($ 611)	Recognized in other comprehensive income $ - - - 151 $ 151 $ - - - ( 347) ($ 347)	Balance, end ofyear	Balance, end ofyear
			( (		$ 34,209 12,952 13,235 1,464 $ 61,860 $ 34,209 13,307 13,497 1,313 $ 62,326

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

Deductible temporary differences	December 31,2021 $ 23,978	December 31,2020	December 31,2020
			$ 26,313

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.

22. Earnings Per Share

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

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 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	Amount (numerator) after tax after tax $ 1,619,178 - $ 1,619,178 $ 391,153 - $ 391,153	Shares (denominator) (In Thousand Shares) 261,758 1,628 263,386 261,758 1,017 262,775		EPS($)
				after tax
				$ 6.19 $ 6.15 $ 1.49 $ 1.49

If the Company offered to settle the employees' compensation in cash or shares, the 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.

23. Management of Risks in Capital

The Company conducts management of risks in capital to ensure that each entity of the Company 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 Company has no significant change.

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

The Company is not subject to any other external capital requirements.

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

24. 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 assets at FVTOCI Investments in equity instruments Domestic listed (OTC) stock December 31, 2020 Financial assets at FVTOCI Investments in equity instruments Domestic listed (OTC) stock	Level 1 $4,669,925 Level 1 $3,587,830	Level 2 $ - Level 2 $ -	Level 3 $ - Level 3 $ -	Total
				$4,669,925 Total
				$3,587,830

December 31, 2020

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

Financial Assets Beginning and ending balance of the year 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	FVTOCI	FVTOCI
	Equity instruments
		$ - at FVTOCI
	Equity instruments
	(	$ 4,913 3,825 8,738) $ -

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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 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 $ 483,216 4,699,925 7,116,445	December 31,2020
		$ 614,115 3,587,830 8,239,495

Note 1. The balances included financial assets measured at amortized cost which comprise cash, 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 Company’s major financial instruments included equity investments, loans and receivable, trade payable, short-term bills payable, and borrowings, etc. The 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 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 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 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 Company’s dedicated unit reviews the assets and liabilities that are affected by exchange rates only on a regular basis.

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

a) Interest rate risk

The Company is exposed to interest rate risk because entities in the Company borrow funds at both fixed and floating interest rates. The Company manages interest rate risk by maintaining an appropriate combination of fixed and floating interest rates. The 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.

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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	December 31,2021 $ 2,356,803 236,253 3,608,748	December 31,2020
		$ 1,839,777 427,621 5,075,258

Sensitivity analysis

The 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 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 $33,725 thousand and $46,476 thousand, respectively.

b) Other price risk

The 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 Company does not actively trade these investments. Equity price risk of the Company is mainly concentrated on equity instruments in semiconductor packaging industry of the Taiwan Stock Exchange. Besides, the 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 Company. As of the balance sheet date, the 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 parent company only balance sheet.

The policies adopted by the 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 Company is evaluated against contracts with positive fair value at the balance sheet date. The trading counterparties of 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 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 Company reviews the recoverable amount of each individual trade

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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 Company’s credit risk has been significantly reduced.

The Company’s trade receivables consist of a large number of clients, mainly in Taiwan and Mainland China. The Company has no concentration of credit risk as it has transactions with different clients. The 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 Company. The 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 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 Company’s remaining contractual maturities for its non-derivative financial liabilities with agreed repayment periods. The tables was drawn up based on the undiscounted cash flows (including principal and estimated interest) of financial liabilities from the earliest date on which the Company may be required to pay.

non-derivative financial liabilities Short-term borrowings Short-term bills payable, net Notes and trade payable Trade payables to related parties Other payables Long-term borrowings, net			December31,2021	December31,2021	December31,2021
	Within6Months $ 1,200,565 2,362,900 55,893 822,904 110,238 119,628 $ 4,672,128		6 Months ~ 1 Year $ 384,436 - - - 66,082 120,488 $ 571,006		Above1 Year $ - - - 73,347 1,423 2,164,310 $ 2,239,080		Total
							$ 1,585,001 2,362,900 55,893 896,251 177,743 2,404,426 $ 7,482,214

non-derivative financial liabilities Short-term borrowings Short-term bills payable, net Notes and trade payable Trade payables to related parties Other payables Long-term borrowings, net			December31,2020	December31,2020	December31,2020
	Within6Months $ 1,950,017 1,841,000 71,933 962,743 243,547 399,647 $ 5,468,887		6 Months ~ 1 Year $ 621,829 - - - 25,419 134,093 $ 781,341		Above1 Year $ - - - - - 2,421,820 $ 2,421,820		Total
							$ 2,571,846 1,841,000 71,933 962,743 268,966 2,955,560 $ 8,672,048

b) Financing facilities

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

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25. Related Party Transactions

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

Names and relationships of related parties
Name of related party Fuhua engineering Co., Ltd. Hung Ching Kwan Co., Ltd. Hung Ching New Co., Ltd. ASE WeMall Management and Consulting Co., Ltd. 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
	Subsidiaries Subsidiary Subsidiary Subsidiaries Investor having significant influence Investor having significant influence Investor having significant influence Substantial related party Non-associates starting December 22, 2021

b. Operating revenue

Operating revenue
Item Sales Revenue of Building and Land Rental revenue	Category and name of related party Investor having significant influence Advanced Semiconductor Engineering, Inc. Investor having significant influence Advanced Semiconductor Engineering, Inc. Substantial related party Wealthy Joy Associates Hooyai Hotel Co. Subsidiaries Hung Ching Kwan Co., Ltd. Fuhua engineering Co., Ltd. Hung Ching New Co., Ltd. ASE WeMall Management and Consulting Co., Ltd.	For the Year Ended December 31, 2021 $ 2,362,000 $ 8,114 200 6,367 57 489 57 48 $ 15,332	For the Year Ended December 31, 2020
				$ - 8,114 - - 57 453 57 - $ 8,681

The 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.

46 -

c. Purchase

For the Year Ended For the Year Ended Category and name of related party December 31, 2021 December 31, 2020 Subsidiaries Fuhua engineering Co., Ltd. $ 1,617,647 $ 864,851

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

The Company’s real estate under development are mainly contracted with subsidiaries of the Company for construction.

d. 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. Jason C.S. Chang	December 31, 2021 $ 1,400 - $ 1,400	December 31, 2020	December 31, 2020
				$ 1,400 522 $ 1,922

The 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.

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

Item Trade payables to related parties	Category and name of related party Subsidiaries Fuhua engineering Co., Ltd. Investor having significant influence Jason C.S. Chang		December 31, 2021 $ 896,251 - $ 896,251		December 31, 2020
					$ 962,493 250 $ 962,743

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.

f.
Transactions with other related parties

ASE WeMall Management and Consulting Co., Ltd. provided management services to the Company for Tucheng mall, and the management fees recognized and paid for the years ended December 31, 2021 and 2020 were $22,857 thousand and $23,757 thousand, respectively.

47 -
g. Endorsements/guarantees

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

h. Compensation of key management personnel

Short-term employee benefits Post-Retirement Benefits	For the Year Ended December 31,2021 $ 34,542 776 $ 35,318	For the Year Ended December 31,2020	For the Year Ended December 31,2020
			$ 35,770 718 $ 36,488

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.

i. 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.
j. 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.
k. 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.
l. 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.
m. 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.
n. 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
48 -

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.

o. 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 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.

26. Pledged Assets

The following assets of the 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 4,617,308 541,361 2,725,364	December 31,2020
		$ 1,994,524 3,524,762 - 2,875,261

27. 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) Information on investees: Appendix 7
49 -
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 8.
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 9）
50 -

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	Parties Being Endorsed/guaranteed	Parties Being Endorsed/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 Co., Ltd.	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

51 -

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 Co., Ltd.	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 fair value through profit or loss - 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.

52 -

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.

53 -

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.

54 -

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 Co., Ltd.	Fuhua engineering Co., Ltd. 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.

55 -

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 Co., Ltd.	The Company	Parent Company	$ 896,251	Note 1	$ -	－	$ 239,500	$ -

Note 1. In comply with the collection term of the contract. Not applicable.

56 -

Appendix 7

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 Co., Ltd. Fuhua engineering Co., Ltd. Hung Ching Co., Limited Hung Ching New Co., Ltd. Superb First Co., Ltd. ASE WeMall Management and Consulting Co., Ltd. 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 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 8 for information on investments in Mainland China

57 -

Appendix 8

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	Shareholding 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 T End	utward Remittance fo aiwan 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 )			$ 6,391,770Note 5.

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

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.
58 -

Appendix 9

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.
59 -

§STATEMENTS OF MAJOR ACCOUNTING SUBJECTS§

ITEM
Major Accounting Items in Assets, Liabilities and Equity
Statement of cash
Statement of Inventories
Statement of Prepayments
Statement of other current assets
Statement of financial assets at fair value through other
comprehensive income - non-current
Statement of changes in investments accounted for using
the equity method
Statement of changes in property, plant and equipment
Statement of changes in investment properties
Statement of deferred tax assets
Statement of other non-current assets
Statement of short-term borrowings
Statement of short-term bills payable
Statement of other current liabilities
Statement of long-term borrowings
Major Accounting Items in Profit or Loss
Statement of operating revenue
Statement of operating cost
Statement of marketing expenses
Statement of general and administrative expenses
Statement of other gains and losses, net
Statement of finance costs
Summary Statement of Current Period Employee Benefits,
Depreciation, Depletion and Amortization Expenses by
Function

CODE / INDEX

Statement 1
Statement 2
Note 13
Note 13
Statement 3
Statement 4
Note 11
Note 12
Note 21
Note 13
Note 14, Statement 5
Note 14, Statement 6
Note 16
Note 14, Statement 7
Statement 8
Statement 8
Statement 9
Statement 9
Note 20
Note 20
Note 20, Statement 10

60 -

Statement 1

Hung Ching Development & Construction Co., Ltd.

Statement of cash

December 31 , 2021

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

Item Petty cash and cash on hand Bank deposits Time deposits Check deposits	Summary		Amount
			$ 1,027 236,253 71 $ 237,351

61 -

Statement 2

Hung Ching Development & Construction Co., Ltd.

Statement of changes in inventories, net

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Construction Project Real estate under development Hsinchu Fu Baitian Tucheng Mingde Sec. Kaohsiung K13 Plant Kaohsiung K27 Plant Kaohsiung K18 Plant Kaohsiung 2nd Park E Building Plant Real estate held for development Beitun Intercontinental Sec. Banqiao Puqian Sec. and Zhonghe Guangfu Sec. Lianhua Sec., Hsinchu 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) Xizhi Balian Sec. - Qidai (Note 2) Xizhi North Peak Sec. - Peony (Note 2) Building and land held for sale Yanping South Rd. Di Jing Garden Xizhi Li Garden ASE Center Peony Tucheng ASE Residence Earl Seventh generation Bo City Xinzhuang Fuduxin Ronghua Prepayments for land Total	Balance, beginning of year $ 200,307 253,684 4,014 - - 941,905 1,399,910 - 1,074,116 - 211,208 93,249 55,927 16,886 10,877 5,689 246 - - 1,468,198 2,466,909 277,562 57,954 43,778 1,013,923 49,642 6,720 936,248 4,852,736 - $ 7,720,844	Increase for the year (Decrease) $ 741,557 159,650 59,335 8,598 4,125 812,945 1,786,210 1,668,197 - 622,607 23,462 - - - - - - - - 2,314,266 ( 746,625 ) ( 193,822 ) ( 13,222 ) ( 9,305 ) ( 987,843 ) ( 43,219 ) ( 1,170 ) ( 1,085,971) ( 3,081,177) 212,645 $ 1,231,944	Reclassification and others (Note 1) $ - - - - - ( 1,754,850) ( 1,754,850) - - - - ( 14,840 ) - - - - - - - ( 14,840) - - - - - - - 154,760 154,760 - ($ 1,614,930)	Balance, end of year	Balance, end of year
		( ( ( ( ( ( ( ( (	( ( ( ( (		$ 941,864 413,334 63,349 8,598 4,125 - 1,431,270 1,668,197 1,074,116 622,607 234,670 78,409 55,927 16,886 10,877 5,689 246 - - 3,767,624 1,720,284 83,740 44,732 34,473 26,080 6,423 5,550 5,037 1,926,319 212,645 $ 7,337,858

Note 1. It includes the building and land held for sale transferred from completion and sold amounted to $1,754,850 thousand, loss on reduce inventory to market provided to the real estate held for development amounted to $14,840 thousand, gain from price recovery of inventory reversed from the buildings and land held for sale amounted to $213,751 thousand, and the investment properties from the buildings and land held for sale amounted to $58,991 thousand.

Note 2. The carrying amount is zero, net of allowance for loss on reduce inventory to market,

Note 3. The carrying amount of inventories amounted to $3,447,292 thousand was provided as collateral for short-term bills payable and long-term borrowings.

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Statement 3

Hung Ching Development & Construction Co., Ltd.

Statement of financial assets at fair value through other comprehensive income - non-current

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars/ In Thousand Shares

Name Domestic listed stock ASE Industrial Holding Co., Ltd.	Balance, beginning of year Shares Fair value 44,131 $ 3,587,830	Balance, beginning of year Shares Fair value 44,131 $ 3,587,830	Changes for the year Shares Amount - $ -	Changes for the year Shares Amount - $ -	Unrealized gain (loss) on financial products $ 1,112,095	Balance, end of year Shares Fair value 44,131 $ 4,699,925	Guarantee or pledge
	Shares 44,131		Shares -			Shares 44,131
							Note 1

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

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Statement 4

Hung Ching Development & Construction Co., Ltd.

Statement of changes in investments accounted for using the equity method

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars/ In Thousand Shares

Investee Companies Non-listed (Non-OTC) stock Hung Ching Kwan Co., Ltd. Fuhua engineering Co., Ltd. Hung Ching Co., Limited Hung Ching New Co., Ltd. Superb First Co., Ltd ASE WeMall Management and Consulting Co., Ltd. Hooyai Hotel Co.	Balance,beginningofyear Shares Amount 82,495 $ 627,600 65,000 509,171 1,099 71,700 46,300 51,281 600 30,971 500 4,620 828 - $ 1,295,343	Balance,beginningofyear Shares Amount 82,495 $ 627,600 65,000 509,171 1,099 71,700 46,300 51,281 600 30,971 500 4,620 828 - $ 1,295,343	Changes for	Changes for	theyear Amount $ - - - 11,967 - - - $ 11,967	Cash dividends $ - ( 44,000 ) - ( 10,000 ) - - - ($ 54,000)	Investment gain (loss) recognized ( $ 26,328 ) 217,827 10,838 ( 5,134 ) 11,356 380 - $ 208,939	Cumulative translation adjustments $ - - ( 530 ) - ( 226 ) - - ($ 756)	Balance,end ofyear Shares Shareholding % Amount 82,495 63.5 $ 601,272 65,000 100.0 682,998 1,099 100.0 82,008 46,300 100.0 48,114 600 100.0 42,101 500 100.0 5,000 - - - $ 1,461,493	Balance,end ofyear Shares Shareholding % Amount 82,495 63.5 $ 601,272 65,000 100.0 682,998 1,099 100.0 82,008 46,300 100.0 48,114 600 100.0 42,101 500 100.0 5,000 - - - $ 1,461,493	Balance,end ofyear Shares Shareholding % Amount 82,495 63.5 $ 601,272 65,000 100.0 682,998 1,099 100.0 82,008 46,300 100.0 48,114 600 100.0 42,101 500 100.0 5,000 - - - $ 1,461,493		Market price or net value of ownership $ 601,272 865,937 82,008 314,802 42,101 5,000 - $ 1,911,120	Remark
	Shares 82,495 65,000 1,099 46,300 600 500 828		Shares - - - - - - ( 828 )						Shares 82,495 65,000 1,099 46,300 600 500 -	Shareholding % 63.5 100.0 100.0 100.0 100.0 100.0 -
														Note 1 Note 1 and 2 Note 1 Note 1 and 3 Note 1 Note 1 Note 1 and 4

Note 1. The net value of ownership was calculated based on the net carrying amount of the financial statements audited by the certified public accountant for the same period.

Note 2. The investment gains recognized under the equity method included unrealized and realized gains on upstream transactions for the year amounted to $61,316 thousand and $206,070 thousand, respectively. Net value of the equity includes cumulative unrealized gains on upstream transactions amounted to $182,939 thousand.

Note 3. The change for the year was the cash dividend of $11,967 thousand paid by the Company to Hung Ching New Co., Ltd. for the year. Net value of equity includes the carrying amount of the Company’s shares held by subsidiaries.

Note 4. The 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.

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Statement 5

Hung Ching Development & Construction Co., Ltd.

Statement of short-term borrowings

December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Type of borrowings and creditor Credit loans DBS Bank Mega Bank JihSun Bank JihSun Bank Cathay United Bank Chang Hwa Bank Hua Nan Bank Hua Nan Bank Guaranteed loans Shin Kong Bank Shin Kong Bank Bank of Taiwan Bank of Taiwan Bank of Taiwan Bank of Shanghai Bank of Shanghai DBS Bank JihSun Bank Chang Hwa Bank Hua Nan Bank Taipei Fubon Bank	Maturityof borrowings 2021/12/13-2022/02/17 2021/12/10-2022/06/08 2021/09/11-2022/09/11 - - - - - 2021/12/09-2022/01/10 - 2021/11/11-2022/05/10 2021/11/11-2022/05/10 - 2021/09/08-2022/09/08 - 2021/12/13-2022/02/17 - - - -	Interest rate(%) 1.48 1.46 1.70 - - - - - 1.43 - 0.94 1.44 - 1.37 - 1.48 - - - -	Balance,end ofyear $ 140,000 30,000 330,000 - - - - - 500,000 180,000 - 380,000 267,000 - 50,000 - 200,000 - - - - 1,077,000 $ 1,577,000	Financingfacilities $ 160,000 60,000 330,000 13,750 30,000 30,000 20,000 30,000 673,750 180,000 200,000 390,000 300,000 500,000 70,000 10,000 200,000 41,250 80,000 50,000 350,000 2,371,250 $ 3,045,000	Collateral
					None None None None None None None None Financial assets at fair value through other comprehensive income - ASE Industrial Holding Stock Hung Ching Kwan Co., Ltd. provided real estate. Richard H.P. Chang provided certificate of time deposit. Financial assets at fair value through other comprehensive income - ASE Industrial Holding Stock Inventory - real estate held for development Financial assets at fair value through other comprehensive income - ASE Industrial Holding Stock Financial assets at fair value through other comprehensive income - ASE Industrial Holding Stock Inventory - real estate held for development Financial assets at fair value through other comprehensive income - ASE Industrial Holding Stock Financial assets at fair value through other comprehensive income - ASE Industrial Holding Stock Financial assets at fair value through other comprehensive income - ASE Industrial Holding Stock investment properties

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Statement 6

Hung Ching Development & Construction Co., Ltd.

Statement of short-term bills payable

December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Guarantee Agency Commercial paper payable International bills Taching Bills Taching Bills China Bills DBS Bank DBS Bank DBS Bank TCB Bills DBS Bank DBS Bank DBS Bank TCB Bills Mega Bills Grand Bills Shin Kong Bank Mega Bills	Issuanceperiod 2021/12/10-2022/02/17 2021/12/17-2022/02/17 2021/12/24-2022/02/22 2021/12/17-2022/02/17 2021/12/08-2022/03/08 2021/12/08-2022/03/08 2021/12/08-2022/03/08 2021/12/17-2022/02/17 2021/12/07-2022/03/07 2021/12/07-2022/03/07 2021/12/08-2022/03/08	Interest rate interval(%) 1.70 1.588 1.588 1.678 1.48 1.398 1.48 1.748 1.55 1.55 1.378			Amount	Carryingamount $ 59,866 249,478 139,677 49,890 199,457 219,435 219,402 39,908 706,018 99,720 373,952 - - - - - $ 2,356,803	Financingfacilities $ 100,000 250,000 250,000 400,000 200,000 220,000 220,000 55,000 708,000 100,000 374,900 280,000 650,000 135,000 600,000 500,000 $ 5,042,900	Collateral
			Total issued amount $ 60,000 250,000 140,000 50,000 200,000 220,000 220,000 40,000 708,000 100,000 374,900 - - - - - $ 2,362,900		Unamortized discount $ 134 522 323 110 543 565 598 92 1,982 280 948 - - - - - $ 6,097
								Financial assets at fair value through other comprehensive income - ASE Industrial Holding Co. Stock Financial assets at fair value through other comprehensive income - ASE Industrial Holding Co. Stock Financial assets at fair value through other comprehensive income - ASE Industrial Holding Co. Stock Financial assets at fair value through other comprehensive income - ASE Industrial Holding Co. Stock Inventory - real estate held for development Inventory - real estate held for development Inventory - real estate held for development Property, Plant and Equipment Financial assets at fair value through other comprehensive income - ASE Industrial Holding Co. Stock Jason C.S. Chang provided real estate. Inventories Hung Ching Kwan Co., Ltd. provided real estate. Jason C.S. Chang provided real estate.

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Statement 7

Hung Ching Development & Construction Co., Ltd.

Statement of long-term borrowings

December 31, 2021

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

Name Guaranteed loans Bank of Taiwan Bank of Taiwan	Borrowings Duration 2018/05/16-2033/05/16 2018/06/19-2023/06/19	Repayment Method Note 1 Note 2	Annual interest rate (%) 1.665 1.665	Maturing within one year $ 156,927 49,817 $ 206,744	Maturing over one year $ 1,799,783 25,221 $ 1,825,004		Balance $ 1,956,710 75,038 $ 2,031,748	Collateral or Pledge
								investment properties investment properties

Note 1. Repayment method of interests paid monthly and principal paid by installments starting the 3rd year

Note 2. Repayment method of interests paid monthly and principal paid by installments starting the 2nd year

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Statement 8

Hung Ching Development & Construction Co., Ltd.

Statement of operating revenue and cost

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Item Construction and planning business Kaohsiung 2nd Park E Building Tucheng ASE Residence Xizhi Li Garden ASE Di Jing Garden Hung Ching Ronghua Peony Disct. Qidai Disct. Bo City Gain from price recovery of inventory Lease business Other business	Construction and planning revenue, net $ 2,362,000 1,509,902 217,242 15,161 1,491,530 1,019,552 6,356 40,268 589 - 6,662,600 107,504 34,057 $ 6,804,161	Construction and planning cost	Construction and planning cost
		(	$ 1,754,850 987,843 193,822 13,222 775,151 1,085,970 9,305 43,219 1,170 198,911) 4,665,641 108,217 36,737 $ 4,810,595

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Statement 9

Hung Ching Development & Construction Co., Ltd.

Statement of operating expenses

January 1 to December 31, 2021

Unit: In Thousands of New Taiwan Dollars

Item Advertising expenses Taxation Salary (Note 1) Miscellaneous fees Consultant fee Other (Note 2)		Selling and marketing expenses $ 235,529 29 8,978 3,493 - 4,153 $ 252,182	General and administrative expenses $ 2,994 18,397 58,689 62,327 22,857 39,330 $ 204,594		Total
					$ 238,523 18,426 67,667 65,820 22,857 43,483 $ 456,776

Note 1. Salary expenses include pension expenses, employees’ compensation, and remuneration of directors.

Note 2. The amount of each item does not exceed 5% of the account balance.

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Statement 10

Hung Ching Development & Construction Co., Ltd.

STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION January 1 to December 31, 2021 and 2020

Unit: In Thousands of New Taiwan Dollars

Employee Benefits Expenses Salary expenses Labor and health insurance premiums Pension expenses Remuneration of directors Other Employee Benefits Expenses Depreciation expenses Amortization expenses		For the Year	Ended December 31, 2021 Belongs to operating expenses Total $ 45,842 $ 47,456 3,973 4,083 1,818 1,897 20,007 20,007 4,511 4,540 76,151 77,983 3,478 101,406 5,165 5,165 $ 84,794 $ 184,554	Ended December 31, 2021 Belongs to operating expenses Total $ 45,842 $ 47,456 3,973 4,083 1,818 1,897 20,007 20,007 4,511 4,540 76,151 77,983 3,478 101,406 5,165 5,165 $ 84,794 $ 184,554	Ended December 31, 2021 Belongs to operating expenses Total $ 45,842 $ 47,456 3,973 4,083 1,818 1,897 20,007 20,007 4,511 4,540 76,151 77,983 3,478 101,406 5,165 5,165 $ 84,794 $ 184,554		For the Year	Ended December 31, 2020	Ended December 31, 2020	Ended December 31, 2020	Ended December 31, 2020
		Belongs to operating cost $ 1,614 110 79 - 29 1,832 97,928 - $ 99,760		Belongs to operating expenses $ 45,842 3,973 1,818 20,007 4,511 76,151 3,478 5,165 $ 84,794			Belongs to operating cost $ 1,614 110 79 - 29 1,832 98,165 - $ 99,997		Belongs to operating expenses $ 47,286 3,725 1,866 9,833 2,904 65,614 1,082 5,861 $ 72,557		Total
											$ 48,900 3,835 1,945 9,833 2,933 67,446 99,247 5,861 $ 172,554

Note 1. The average numbers of employees for the years ended December 31, 2021 and 2020 were 48 and 49, respectively. Among which the numbers of directors who were not part-time employees were 7 and 8, respectively.
Note 2. The average employee benefits expenses were $1,414 thousand for the year. ([Total employee benefit expenses for the current year - Total directors' remuneration] / [Number of employees for the current year - Number of directors who do not serve as employees]) The average employee benefits expenses were $1,405 thousand for the prior year. ([Total employee benefit expenses for the previous year - Total directors' remuneration] / [Number of employees for the previous year - Number of directors who do not serve as employees])
Note 3. The average employees’ salary expenses were $1,157 thousand for the year. (Total employee salary expenses for the current year / [Number of employees for the current year - Number of directors who do not serve as employees]) The average employees’ salary expenses were $1,193 thousand for the prior year. (Total employee salary expenses for the previous year / [Number of employees for the previous year - Number of directors who do not serve as employees])
Note 4. The change in the average employees’ salary expenses was 3%. ([The average employee salary expense for the current year - The average employee salary expense for the previous year]/The average employee salary expense for the previous year).
Note 5. The Company had established the Audit Committee to replace the role of supervisors on July 13, 2017, and was not applicable to disclose information on remuneration of supervisors.
Note 6. The Company's salary policies are as follows:
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(1) In accordance with Article 23 of the Articles of Incorporation of the Company, if the Company has profit for the year, then 1% to 7% shall be appropriated as the employee compensation resolved by the Board of Directors to distribute by shares or cash to those employees of the Company who meet specified conditions. The aforementioned profit may also be resolved by the Board of Directors to provide directors’ remuneration for no more than 3% of appropriation. The allocation of employee compensation and Directors’ remuneration shall be reported to the shareholders' meeting.

When there are accumulated deficit, the Company shall reserve amounts to offset the appropriate amounts before providing employee compensation and Directors’ remuneration based on the abovementioned proportion.

The remuneration of independent directors of the Company is fixed for each individual on an annual basis, except for those with a term of less than one year, in proportion to the actual number of days they have been appointed; The part-time remuneration for the independent directors of the Company who also serve on the Compensation and Remuneration Committee of the Company is also fixed for each individual on an annual basis, except for those with a term of less than one year, in proportion to the actual number of days they have held.

(2) The amount of employee compensation paid to the managers of the Company was reviewed by the Compensation and Remuneration Committee and then submitted to the Board of Directors for approval based on the job title, contributions, operating performance of the Company for the year, and consideration of future risks of the Company.
(3) The employee salary package of the Company includes monthly salary, bonuses, and employee compensation. The standards for employees' salary are approved based on the job title, education and work experiences, professional knowledge, and market values. Employee compensation are determined in accordance with the total amount allocated by the Articles of Incorporation, operating performance of the Company for the year, contribution of the job title, and results of performance evaluation.
71 -

AI assistant

Hung Ching — Annual Report 2021

52140_rns_2021-11-12_4023451a-b76f-4866-8e54-16b402e014bf.pdf

Hung Ching Development & Construction Co., Ltd.

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

§TABLE OF CONTENTS§

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Hung Ching Development & Construction Co., Ltd. Parent Company Only Balance Sheets December 31, 2021 and 2020

Hung Ching Development & Construction Co., Ltd. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2021 and 2020

(Continued from the previous page)

Hung Ching Development & Construction Co., Ltd. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2021 and 2020

Hung Ching Development & Construction Co., Ltd. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended December 31, 2021 and 2020

(Continued from the previous page)

Hung Ching Development & Construction Co., Ltd.

Number of Financial Statement Notes

January 1 to December 31, 2021 and 2020

(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

e. Inventories

b) Impairment of financial assets

2) The Company as lessee

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

6. Cash

7. Notes receivable, Trade receivables - net, Trade receivables from related parties and other receivable

a. Notes and trade receivable

December 31, 2021

b. Other receivables

8. Inventories, net

Building and land held for sale

9. Financial assets at FVTOCI, net

10. Investments accounted for using the equity method

Investments in subsidiaries

11. Property, plant and equipment, net

12. Investment properties, net

13. Other assets

14. Borrowings

a. Short-term borrowings

b. Short-term bills payable, net

c. Long-term borrowings, net

15. Trade payables

16. Other current liabilities

17. Post-retirement benefit plans

18. Equity

Ordinary shares

e. Other equity items

f. Treasury Shares

19. Revenue

Contract balances

20. Net income from continuing operation

a. Other income

b. Other gains and losses

c. Finance costs

d. Depreciation and amortization

e. Direct operating expenses of investment properties

f. Employee benefits expense

g. Employees' compensation and remuneration of directors

Accrual rates

Amount

21. Income Tax from Continuing Operations

b. Income tax recognized in other comprehensive income

c. Deferred tax assets

22. Earnings Per Share

23. Management of Risks in Capital

24. Financial Instruments

Sensitivity analysis

b) Other price risk

Sensitivity analysis

2) Credit risk

3) Liquidity risk

a) Table of liquidity risk

b) Financing facilities

25. Related Party Transactions

Hung Ching Annual Report 2021