Hung Ching - Audit Report / Information 2020

Stock Code: 2527

Hung Ching Development & Construction Co., Ltd.

Parent Company Only Financial Statements and Independent Auditors' Report For the Years Ended December 31, 2020 and 2019

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

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

						NUMBER OF
						FINANCIAL
						STATEMENT
		ITEM			PAGE	NOTES
I.	Cover				1	-
II.	Table of Contents				2	-
III.	Independent Auditors’ Report				3 ~ 5	-
IV.	Parent	Company Only Balance Sheets			6	-
V.	Parent	Company Only Statements	Of		7 ~ 8	-
	Comprehensive Income
VI.	Parent	Company Only Statements	Of Changes In		9	-
	Equity
VII.	Parent	Company Only Statements	Of Cash Flows		10 ~ 11	-
VIII.	Notes To Parent Company Only Financial
	Statements
	(I).	Company History			12	1
	(II).	Date and Procedures of Authorization of			12	2
		Financial Statements
	(III).	Application of New	and	Amended	12 ~ 13	3
		Standards and Interpretations
	(IV).	Summary of Significant		Accounting	14 ~ 23	4
		Policies
	(V).	The Primary Sources of	Uncertainties in		23	5
		Major Accounting Judgments, Estimates,
		and Assumptions
	(VI).	Details of Significant Accounts			23 ~ 46	6 - 24
	(VII).	Related Party Transactions			46 ~ 49	25
	(VIII). Pledged Assets				49	26
	(IX).	Significant Contingent	Liabilities and		-	-
		Unrecognized Contract Commitments
	(X).	Significant Disaster Loss			-	-
	(XI).	Significant Events after the Balance Sheet			-	-
		Date
	(XII).	Others			-	-
	(XIII). Supplementary Disclosures
		a. Information on Significant			49~50, 51 ~ 55	27
		Transactions
		b. Information on Invested Companies			49~50, 51 ~ 55	27
		c. Information on Investments in			50, 56	27
		Mainland China
		d. Information on Major Shareholders			50, 57	27
	(XIV). Segment Information				-	-
IX.	Statements of Major Accounting Subjects				58 ~ 68	-

Independent Auditors' Report

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, 2020 and 2019, 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, 2020 and 2019, 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, 2020. 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, 2020 are stated as follows:

Sales Revenue of Building and Land

For the year ended December 21, 2020, revenue from sale of real estate was $3,164,448 thousand, representing 96% 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 Company. 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 Note 4 and 19 of the parent company only 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:

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We understood and tested the design and operating effectiveness of the internal controls related to the sales cycle.
Obtaining the details of building and land for sales for the whole year: (1) sampling and verifying the contracts signed by the buyers and sellers to confirm the contract price and transaction target; (2) sampling and verifying the registration date of the transfer of property ownership to verify that the property ownership has been transferred to the purchaser.

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 parent company only 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:

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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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 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.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only 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 Company's parent company only financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Deloitte & Touche Certified Public Accountant Certified Public Accountant Wang-Sheng Lin Shiuh-Ran Cheng

Financial Supervisory Commission Approval Financial Supervisory Commission Approval Document No.: Document No.: Financial-Supervisory-Securities-Auditing-10 Financial-Supervisory-Securities-Auditing-1060 10028123 023872

March 29, 2021

Hung Ching Development & Construction Co., Ltd.

Parent Company Only Balance Sheets December 31, 2020 and 2019

Unit: In Thousands of New Taiwan Dollars

Code 1100 1150 1172 1180 1200 130X 1429 1479 11XX 1517 1550 1600 1760 1840 1930 1990 15XX 1XXX Code 2100 2110 2130 2150 2170 2180 2219 2230 2320 2399 21XX 2540 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX	ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Notes receivable (Notes 7 and 19) Trade receivables, net (Notes 7 and 19) Trade receivables from related parties (Notes 7, 19 and 25) Other receivables (Notes 7) Inventories, net (Notes 5, 8, 25, and 27) Prepayments (Note 13) Other current assets (Note 13) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current, net (Notes 9 and 27) Investments accounted for using equity method (Note 10) Property, plant and equipment, net (Notes 11 and 20) Investment properties, net (Notes 5, 12, 20, and 27) Deferred tax assets (Notes 21) Long-term notes receivable (Notes 7 and 19) Other non-current assets (Notes 13 and 20) Total non-current assets TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 14 and 27) Short-term bills payable, net (Notes 14, 25, and 27) Contract liabilities (Notes 19) Notes payable Trade payables (Notes 15) Trade payables to related parties (Notes 25) Other payables Current tax liabilities Long-term borrowings - current portion (Notes 14 and 27) Other current liabilities (Notes 16) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings, net (Notes 14 and 27) Guarantee deposits received (Note 12) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 18) Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity Total equity and liabilities		December 31, 2020 Amount ％ $ 438,522 3 3,158 - 13,344 - 1,922 - 619 - 7,720,844 46 292,909 2 3,647 - 8,474,965 51 3,587,830 22 1,295,343 8 35,057 - 2,972,066 18 62,326 - 2,960 - 180,734 1 8,136,316 49 $ 16,611,281 100 $ 2,562,000 15 1,839,777 11 413,174 3 8,791 - 63,142 - 962,743 6 268,966 2 9,152 - 495,085 3 10,177 - 6,633,007 40 2,018,173 12 17,568 - 2,035,741 12 8,668,748 52 2,703,060 16 312,561 2 789,043 5 318,492 2 1,700,053 10 2,807,588 17 2,575,136 16 455,812) ( 3) 7,942,533 48 $ 16,611,281 100		December 31, 2019	December 31, 2019
			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		Amount $ 158,677 7,366 31,123 1,562 173 8,817,702 370,104 1,988 9,388,695 3,676,591 1,390,882 35,915 3,081,464 63,284 1,471 200,419 8,450,026 $ 17,838,721 $ 2,314,000 2,597,128 103,498 4 61,842 1,390,773 287,920 101,697 135,267 18,087 7,010,216 2,710,881 16,445 2,727,326 9,737,542 2,703,060 297,175 714,834 320,202 1,867,950 2,902,986 2,653,770 455,812) 8,101,179 $ 17,838,721	％
		(		(		1 - - - - 50 2 - 53 21 8 - 17 - - 1 47 100 13 14 1 - - 8 2 1 1 - 40 15 - 15 55 15 2 4 2 10 16 15 ( 3) 45 100

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, 2020 and 2019

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

Code OPERATING REVENUE (Notes 19 and 25) 4100 Sales Revenue of Building and Land 4300 Rental revenue 4800 Other operating revenue 4000 Total operating revenue OPERATING COSTS (Notes 20) 5110 Costs of building and land for sale (Note 8) 5300 Rental costs 5800 Other operating costs 5000 Total operating costs 5900 Gross operating profit OPERATING EXPENSES (Notes 20 and 25) 6100 Selling and marketing expenses 6200 General and administrative expenses 6000 Total operating expenses 6900 Net Operating Income NON-OPERATING INCOME AND EXPENSES 7010 Other income (Notes 20) 7020 Other gains and losses (Notes 20) 7050 Finance costs (Notes 20) 7060 Share of loss (profit) of associates accounted for under equity method 7000 Total non-operating income and expenses	For the Year Ended December 31,2020 Amount ％ $ 3,164,448 96 102,004 3 34,083 1 3,300,535 100 2,217,439 67 109,093 4 34,066 1 2,360,598 72 939,937 28 364,307 11 176,087 5 540,394 16 399,543 12 95,101 3 4,737 - ( 111,483 ) ( 3 ) 10,339 - ( 1,306) -	For the Year Ended December 31,2020 Amount ％ $ 3,164,448 96 102,004 3 34,083 1 3,300,535 100 2,217,439 67 109,093 4 34,066 1 2,360,598 72 939,937 28 364,307 11 176,087 5 540,394 16 399,543 12 95,101 3 4,737 - ( 111,483 ) ( 3 ) 10,339 - ( 1,306) -	For the Year Ended December 31,2020 Amount ％ $ 3,164,448 96 102,004 3 34,083 1 3,300,535 100 2,217,439 67 109,093 4 34,066 1 2,360,598 72 939,937 28 364,307 11 176,087 5 540,394 16 399,543 12 95,101 3 4,737 - ( 111,483 ) ( 3 ) 10,339 - ( 1,306) -	For the Year Ended December 31,2019	For the Year Ended December 31,2019	For the Year Ended December 31,2019	For the Year Ended December 31,2019
		Amount $ 3,164,448 102,004 34,083 3,300,535 2,217,439 109,093 34,066 2,360,598 939,937 364,307 176,087 540,394 399,543 95,101 4,737 111,483 ) 10,339 1,306)			Amount $ 6,127,832 101,714 35,053 6,264,599 4,889,888 108,561 37,989 5,036,438 1,228,161 335,517 196,713 532,230 695,931 114,979 76 ) 122,940 ) 158,173 150,136		％
	( (			( (		98 2 - 100 78 2 - 80 20 6 3 9 11 2 - ( 2 ) 3 3

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Code 7900 Income before income tax 7950 Income tax expense (Note 21) 8200 NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME/(LOSS) 8310 Items that will not be reclassified subsequently to profit or loss: 8316 Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translating the financial statements of foreign operations 8399 Income tax related to items that will be reclassified (Note 21) 8300 Other comprehensive income/(loss) for the year, net of income tax 8500 TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR EARNINGS PER SHARE (Note 22) 9710 Basic 9810 Diluted	For the Year Ended December 31, 2020 Amount ％ $ 398,237 12 7,084 - 391,153 12 ( 80,023 ) ( 3 ) 1,736 - ( 347) - ( 78,634) ( 3) $ 312,519 9 $ 1.49 $ 1.49	For the Year Ended December 31, 2020 Amount ％ $ 398,237 12 7,084 - 391,153 12 ( 80,023 ) ( 3 ) 1,736 - ( 347) - ( 78,634) ( 3) $ 312,519 9 $ 1.49 $ 1.49	For the Year Ended December 31, 2020 Amount ％ $ 398,237 12 7,084 - 391,153 12 ( 80,023 ) ( 3 ) 1,736 - ( 347) - ( 78,634) ( 3) $ 312,519 9 $ 1.49 $ 1.49	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
		Amount $ 398,237 7,084 391,153 80,023 ) 1,736 347) 78,634) $ 312,519 $ 1.49 $ 1.49			Amount $ 846,067 103,976 742,091 1,098,855 3,735 ) 747 1,095,867 $ 1,837,958 $ 2.84 $ 2.82		％
	( ( (			(			14 2 12 17 - - 17 29

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, 2020 and 2019

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 Unrealized gain (loss) on financial assets at fair value through other comprehensive income Exchange differences on translating the financial statements of foreign operations ( $ 3,654 ) $ 1,561,557 - - - - - - - - ( 2,988 ) 1,098,855 - - ( 6,642 ) 2,660,412 - - - - - - - - 1,389 ( 80,023 ) - - ($ 5,253) $ 2,580,389	Totalequity
			Exchange differences on translating the financial statements of foreign operations ( $ 3,654 ) - - - - ( 2,988 ) - ( 6,642 ) - - - - 1,389 - ($ 5,253)
Number of Shares (In Thousand Shares) 270,306 - - - - - - 270,306 - - - - - - 270,306	Legal reserve $ 672,961 41,873 - - - - - 714,834 74,209 - - - - - $ 789,043	Special reserve $ 300,542 - 19,660 - - - - 320,202 - ( 1,710 ) - - - - $ 318,492
				$ 6,577,331 - - ( 324,367 ) 742,091 1,095,867 10,257 8,101,179 - - ( 486,551 ) 391,153 ( 78,634 ) 15,386 $ 7,942,533

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

Manager: Chia-Pei Chou

Accounting Supervisor: Fang-Ying Chen

Chairman: Wen-Hsiang Chien

Hung Ching Development & Construction Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended December 31, 2020 and 2019

Unit: In Thousands of New Taiwan Dollars

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 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 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	For the Year Ended December 31, 2020 $ 398,237 99,247 - 5,861 ( 258,348 ) 111,483 ( 73 ) ( 88,175 ) ( 10,339 ) ( 6,748 ) 2,719 17,779 ( 360 ) ( 446 ) 1,383,635 77,195 ( 1,659 ) 309,676 8,787 ( 9,045 ) ( 428,030 ) ( 19,361 ) ( 7,910) 1,584,125 ( 129,160 ) ( 99,018) 1,355,947	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
	( ( ( ( ( ( ( ( ( ( ( ( ( (	( ( ( ( ( ( ( ( ( (	$ 846,067 99,533 13,410 4,317 393,878 122,940 180 ) 110,269 ) 158,173 ) - 577 81,842 11,627 100 3,123,562 132,191 1,352 ) 41,145 ) 23,471 ) 20,088 ) 282,281 ) 115,320 4,263 4,312,668 189,704 ) 122,543) 4,000,421

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Code CASH FLOWS FROM INVESTING ACTIVITIES B00030 Capital reduction and return of shares payment of financial assets at fair value through other comprehensive income B02700 Acquisition of property, plant and equipment B03700 Decrease (Increase) in refundable deposits B01800 Acquisition of investments accounted for using the equity method 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 generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES C00100 Increase (Decrease) in short-term borrowings C00500 Decrease in short-term bills payable C01600 Repayments of long-term borrowings C03000 Increase 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	For the Year Ended December 31, 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	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
	( ( ( ( ( (	( ( ( ( ( ( ( ( (	$ - - 94,785 ) 18,593 ) - 18,076 ) 180 65,000 110,269 43,995 152,000 ) 1,738,331 ) 1,914,692 ) 1,049 324,367) 4,128,341) 83,925 ) 242,602 $ 158,677

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

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Hung Ching Development & Construction Co., Ltd.

Notes to parent company only Financial Statements For the years ended December 31, 2020 and 2019 (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 2021

New,Revised or Amended Standards andInterpretations	EffectiveDateIssued byIASB
Amendment to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 - “Interest Rate Benchmark Reform - Phase 2” Amendment to IFRS 16, "Covid-19-Related Rent Concessions"	Effective on the issued date Effective for annual reporting periods beginning on or after January 1, 2021 Effective for annual reporting periods beginning on or after June 1, 2020

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.

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

Effective Date Issued by IASB New, Revised or Amended Standards and Interpretations (Note 1) Annual Improvements to IFRS Standards 2018–2020 January 1, 2022 (Note 2) Amendment to IFRS 3 "Reference to the Conceptual Framework" January 1, 2022 (Note 3) Amendments to IFRS 10 and IAS 28 "Sale or Contribution of To be determined 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 IAS 1 "Classification of Liabilities as Current January 1, 2023 or Noncurrent" Amendment to IAS 1 "Disclosure of Accounting Policies" January 1, 2023 (Note 6) Amendment to IAS 8 "Definition of Accounting Estimates" January 1, 2023 (Note 7) Amendment to IAS 16 "Property, Plant and Equipment - January 1, 2022 (Note 4) Proceeds before Intended Use" Amendment to IAS 37 "Onerous Contracts–Cost of Fulfilling January 1, 2022 (Note 5) a Contract"

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: 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 3: This amendment shall be applied to business combinations for which the acquisition date is beginning on or after January 1, 2022.
Note 4: 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 5: The amendment shall be applied to contracts for which the Company has not yet fulfilled all its obligations on or after January 1, 2022.
Note 6: The amendment shall be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 7: 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.

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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.

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

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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) Investment in subsidiary

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 associates

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

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

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

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.

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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 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:
(a) Within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
(b) 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:

(a) 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
(b) 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

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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.

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 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.

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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.

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 non-cash 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.

Leases

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

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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.

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 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 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

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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.

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.

Employee Benefits

1) Short-term employee benefits
- Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for 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 income 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.

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

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

Cash and Cash Equivalents
Cash on hand and working capital Bank demand deposits	December31,2020 $ 2,034 436,488 $ 438,522	December31,2019
			$ 1,151 157,526 $ 158,677

The interest rates intervals on bank deposits as of December 31, 2020 and 2019 were 0.04% and 0.08% respectively.

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

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	December31,2020 $ 2,369 3,749 ( 2,960) 789 $ 3,158 $ 13,344 1,922 $ 15,266 $ 14,029 13,410 $ 619	December31,2019
	(	(	$ 4,298 4,539 1,471) 3,068 $ 7,366 $ 31,123 1,562 $ 32,685 $ 13,583 13,410 $ 173

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. 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:

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December 31, 2020

December 31, 2020
Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization December 31, 2019 Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization	AR aging less than 365 days - $ 15,266 - $ 15,266 AR aging less than 365 days - $ 32,685 - $ 32,685	AR aging of and more than 365 days 100% $ - - $ - AR aging of and more than 365 days 100% $ - - $ -	Total
			$ 15,266 - $ 15,266 Total
			$ 32,685 - $ 32,685

b. Other receivables

The Company's loss allowance for other receivable were as follows:

December 31, 2020

December 31, 2020
Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization	AR aging less than365 days - $ 619 - $ 619	AR aging of and more than 365 days 100% $ 1,335 1,335 $ -	Counterparty in trading shown the indication of defaultevents 100% $ 12,075 12,075 $ -		Total
					$ 14,029 13,410 $ 619

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

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December 31, 2019

December 31, 2019
Expected credit loss rate Total carrying amount Allowance for loss (lifetime expected credit losses) Costs after amortization	AR aging less than365 days - $ 173 - $ 173	AR aging of and more than 365 days 100% $ 1,335 1,335 $ -	Counterparty in trading shown the indication of default events 100% $ 12,075 12,075 $ -		Total
					$ 13,583 13,410 $ 173

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 Add: Impairment loss recognized for the year Balance, end of year	For the Year Ended December31,2020 $ 13,410 - $ 13,410	For the Year Ended December31,2019	For the Year Ended December31,2019
			$ - 13,410 $ 13,410

8. Inventory, net

Real estate under development Real estate held for development Building and land held for sale Real estate under development Project Item Xinzhuang Fuduxin Kaohsiung 2nd Park E Building Plant Tucheng Mingde Sec. Hsinchu Fu Baitian Kaohsiung K13 Plant Real estate held for development ProjectItem Banqiao Puqian Sec. and Zhonghe Guangfu Sec. Tucheng Mingde Sec. Tucheng Yuanhe Sec.	December31,2020 $ 1,399,910 1,468,198 4,852,736 $ 7,720,844 December31,2020 $ - 941,905 253,684 200,307 4,014 $ 1,399,910 December31,2020 $ 1,074,116 - 211,208	December31,2019
		$ 1,656,777 1,697,931 5,462,994 $ 8,817,702 December31,2019
		$ 1,474,939 180,696 - - 1,142 $ 1,656,777 December31,2019
		$ 1,074,116 229,733 211,208

(Continued on the next page)

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(Continued from the previous page)

Project Item 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)	December31,2020 $ 93,249 55,927 16,886 10,877 5,689 246 $ 1,468,198	December31,2019	December31,2019
			$ 93,249 55,927 16,886 10,877 5,689 246 $ 1,697,931

Building and land held for sale ProjectItem Yanping South Rd. Di Jing Garden Tucheng ASE Residence Xinzhuang Fuduxin Ronghua Xizhi Li Garden ASE Center Earl Seventh generation Peony Bo City	December31,2020 $ 2,466,909 1,013,923 936,248 277,562 57,954 49,642 43,778 6,720 $ 4,852,736	December31,2019	December31,2019
			$ 2,533,015 2,371,247 - 374,060 71,432 60,652 45,868 6,720 $ 5,462,994

As of December 31, 2020 and 2019, inventories of $4,067,331 thousand and $6,810,427 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 December31,2020 $ 2,217,439 ($ 258,348)	For the Year Ended December31,2019	For the Year Ended December31,2019
	(		$ 4,889,888 $ 393,878

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.

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

Investments in equity instruments at FVTOCI
Non-current Domestic investment Listed (OTC) stock Foreign investment Limited liability partnership	December31,2020 $ 3,587,830 - $ 3,587,830	December31,2019
			$ 3,671,678 4,913 $ 3,676,591

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

Investment in subsidiaries Investments in associates a. Investments in subsidiaries Non-Listed (Non-OTC) 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.	December31,2020 $ 1,295,343 - $ 1,295,343 December31,2020 $ 627,600 509,171 71,700 51,281 30,971 4,620 $ 1,295,343	December31,2019	December31,2019
		$ 1,390,882 - $ 1,390,882 December31,2019
			$ 657,849 592,092 72,156 45,642 19,586 3,557 $ 1,390,882

a. Investments in subsidiaries

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

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.	December 31, 2020 63.5% 100% 100% 100% 100% 100%	December 31, 2019
		63.5% 100% 100% 100% 100% 100%

Superb First Co., Ltd. was established in November 2018. In July 2019, the Company invested US$600 thousand and Superb First Co., Ltd. invested US$600 thousand in Shanghai You Chang Property Management Ltd. Co. The abovementioned investments were approved by the Investment Commission in July 2019.

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, 2020 and 2019 was calculated

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based on the financial statements of subsidiaries audited by the certified public accountant for the same period.

b. Investments in associates

December 31, 2020 December 31, 2019 Investment in associates that are not individually material Hooyai Hotel Co. $ - $ -

The percentage of equity ownership and voting rights of the Company in the associates were both 46% on the balance sheet date.

Information of associates not individually material is summarized as follows:

The Company's share Net loss for the year OTHER COMPREHENSIVE INCOME/(LOSS) Total comprehensive income	For the Year Ended December 31, 2020 $ - - $ -	For the Year Ended December 31, 2019
		( $ 4,521 ) - ($ 4,521)

The Company has discontinued the recognition of losses as the associate had negative equity as of December 31, 2019.

The share of profit and loss and other comprehensive income of the associates accounted for using the equity method and the Company for the years ended December 31, 2020 and 2019 were recognized based on the financial statements of associates audited by the certified public accountant for the same period.

11. Property, Plant and Equipment, Net

Cost Balance as of January 1, 2019 Balance as of December 31, 2019 Accumulated depreciation and impairment Balance as of January 1, 2019 Depreciation expenses Balance as of December 31, 2019 Balance as of December 31, 2019, net		Land $ 13,401 $ 13,401 $ - - $ - $ 13,401	Buildings and Property $ 136,578 $ 136,578 $ 115,864 545 $ 116,409 $ 20,169		Other Equipment $ 6,805 $ 6,805 $ 3,651 809 $ 4,460 $ 2,345		Total
							$ 156,784 $ 156,784 $ 119,515 1,354 $ 120,869 $ 35,915

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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		Land $ 13,401 - $ 13,401 $ - - $ - $ 13,401	Buildings and Property $ 136,578 - $ 136,578 $ 116,409 545 $ 116,954 $ 19,624		Other Equipment $ 6,805 224 $ 7,029 $ 4,460 537 $ 4,997 $ 2,032		Total
							$ 156,784 224 $ 157,008 $ 120,869 1,082 $ 121,951 $ 35,057

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

Buildings and Property 60 years Other Equipment 5 to 10 years

No above mentioned property, plant and equipment was pledged by the Company as collateral for borrowings.

12. Investment properties, net

Cost Balance as of January 1, 2019 Balance as of December 31, 2019		Land $ 549,521 $ 549,521		Buildings $ 2,958,303 $ 2,958,303		Total
						$ 3,507,824 $ 3,507,824

(Continued on the next page)

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(Continued from the previous page)

		Land		Buildings		Total
Accumulated depreciation and
impairment
Balance as of January 1, 2019	$	4,250	$	323,931	$	328,181
Depreciation expenses		-		98,179		98,179
Balance as of December 31, 2019	$	4,250	$	422,110	$	426,360
Balance as of December 31, 2019, net	$	545,271	$	2,536,193	$	3,081,464
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

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 20 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 [450 x 24] intentionally omitted <==

The operating lease is to lease merchandise inventory and investment property owned by the Company leases with lease terms of 1 to 15 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, 2020 and 2018, the guarantee deposits received by the Company in accordance with operating lease agreements amounted to $17,568 thousand and $16,445 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 The Company held freehold interests in all of 26 for the amount of investment properties - borrowings. 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, 2020 December 31, 2019 $ 40,202 $ 38,565 32,728 32,914 28,244 28,526 22,245 24,074 21,178 20,073 133,397 139,617 $ 277,994 $ 283,769 its investment properties. Please refer to Note net pledged by the Company as collateral for December31,2020 December31,2019 $ 42,807 $ 96,530 80,729 269,204 168,278 - 1,095 4,370 $ 292,909 $ 370,104 $ 3,647 $ 1,988 $ 153,590 $ 173,778 24,016 23,513 3,128 3,128 $ 180,734 $ 200,419	December 31, 2019	December 31, 2019
			$ 96,530 269,204 - 4,370 $ 370,104 $ 1,988 $ 173,778 23,513 3,128 $ 200,419

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

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	December31,2020 $ 1,353,750 1,208,250 $ 2,562,000 1.40%-1.88% 0.94%-1.88%	December31,2019
			$ 1,078,250 1,235,750 $ 2,314,000 1.40%-1.88% 1.04%-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 1 year Long-term borrowings Interest rate	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%	December 31, 2019	December 31, 2019
		$ 2,600,000 2,872 $ 2,597,128 1.768%-1.988% December 31, 2019
			$ 2,200,000 172,208 473,940 2,846,148 135,267 $ 2,710,881 1.89%-1.91%

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 payable

Trade payable classified as construction retainage payable for construction contracts were $4,199 thousand and $23,712 thousand as of December 31, 2020 and 2019, 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	December31,2020 $ 5,519 1,394 3,250 14 $ 10,177	December31,2019
			$ 6,341 6,135 5,600 11 $ 18,087

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17. Post-retirement benefit plans

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

18. Equity

a. Share capital

Ordinary shares

Share capital Ordinary shares
Authorized shares (In Thousand Shares) Authorized share capital Issued and fully paid shares (In Thousand Shares) Issued share capital	December31,2020 540,306 $ 5,403,060 270,306 $ 2,703,060	December31,2019
			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	December31,2020 $ 148,999 163,562 $ 312,561	December31,2019
			$ 148,999 148,176 $ 297,175

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 company appropriates and reverses special reserves in accordance with the regulations of Financial-Supervisory-Securities-Fa's Letter No. 1010012865, Financial-Supervisory-Securities-Fa's Letter No. 1010047490, and Financial-Supervisory-Securities-Fa's Letter No. 1030006415 issued by the FSC and the directive titled "Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs".

The appropriations of earnings for 2019 and 2018 had been approved in Hung Ching Co.’s shareholders’ meetings on June 18, 2020 and June 27, 2019, respectively, and they were as follows:

were as follows:
Legal reserve Legal reserve (reversal) Cash dividends	Appropriation of Earnings For the Year Ended December 31, 2019 For the Year Ended December 31, 2018 $ 74,209 $ 41,873 ( 1,710 ) 19,660 486,551 324,367	Dividends Per Share ($)
	For the Year Ended December 31, 2019 $ 74,209 ( 1,710 ) 486,551	For the Year Ended December 31, 2019 $ 1.80	For the Year Ended December 31, 2018
			$ 1.20

The appropriations of earnings and dividends per share for the year ended December 31, 2020 had been proposed by the Company’s board of directors on March 5, 2021, and they were as follows:

were as follows:
Legal reserve Special reserve Cash dividends	Appropriation of Earnings $ 39,115 29,062 378,428	Dividends Per Share ($)
		$ 1.40

The appropriations of earnings for the year ended December 31, 2020 is subject to the resolution of the shareholders in the shareholders’ meeting to be held on June 28, 2021.

d. Special reserve

pecial reserve
Balance, beginning of year Special capital reserve provided (reversed) Balance, end of year	For the Year Ended December 31, 2020 $ 320,202 ( 1,710) $ 318,492	For the Year Ended December 31, 2019
	(		$ 300,542 19,660 $ 320,202

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

1) Exchange differences on translating the financial statements of foreign operations	oreign operations	oreign operations
For the Year Ended December31,2020 For the Year Ended December31,2019 Balance, beginning of year ( $ 6,642 ) ( $ 3,654 ) Exchange differences on translating the net assets of foreign operations 1,736 ( 3,735 ) Related income tax from gain on translating the net assets of foreign operations ( 347) 747 Balance, end of year ($ 5,253) ($ 6,642) 2) Unrealized gain (loss) on financial assets at FVTOCI For the Year Ended December31,2020 For the Year Ended December31,2019 Balance, beginning of year $ 2,660,412 $ 1,561,557 Recognized for the year Unrealized gain (loss) - equity instruments ( 80,023) 1,098,855 Balance, end of year $ 2,580,389 $ 2,660,412 Treasury Shares (Unit: In Thousand Shares) Reasonsfor repurchase Number of shares, beginning of year Increase for the year Decrease for the year Number of shares, end of year For the Year Ended December 31, 2020 Shares of the Company held by subsidiaries 8,548 - - 8,548 For the Year Ended December 31, 2019 Shares of the Company held by subsidiaries 8,548 - - 8,548	For the Year Ended December31,2019
	( $ 3,654 ) ( 3,735 ) 747 ($ 6,642) For the Year Ended December31,2019
		8,548 8,548

2) Unrealized gain (loss) on financial assets at FVTOCI
f. Treasury Shares
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Information on shares of the Company held by subsidiaries on the balance sheet date is as follows:

follows:
Name of Subsidiary December 31, 2020 Hung Ching New Co., Ltd. December 31, 2019 Hung Ching New Co., Ltd.	Number of Shares held (In Thousand Shares) 8,548 8,548	Carrying amount $ 164,116 $ 193,178	Market price
				$ 164,116 $ 193,178

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 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	December31,2020 $ 3,158 $ 13,344 $ 1,922 $ 2,960 $ 413,174	December31,2019	December31,2019
			$ 7,366 $ 31,123 $ 1,562 $ 1,471 $ 103,498

Detailed information on the revenue is described in Note 31.

20. Net income from continuing operation

a. Other income

Interest Revenue of bank deposit Dividend income Other Other gains and losses Gain (Loss) on disposal of investment properties Other loss	For the Year Ended December31,2020 $ 73 88,175 6,853 $ 95,101 For the Year Ended December31,2020 $ 6,748 ( 2,011) $ 4,737	For the Year Ended December31,2019	For the Year Ended December31,2019
		$ 180 110,269 4,530 $ 114,979 For the Year Ended December31,2019
	(	( (	$ - 76) $ 76)

b. Other gains and losses
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c. Finance costs

For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Interest on bank loans $ 129,567 $ 188,249 Less: Amounts included in the cost of required assets 18,084 65,309 $ 111,483 $ 122,940 Interest rate on interest capitalization 1.40%-1.96% 1.68%-2.32%

d. Depreciation and amortization

Depreciation and amortization
Property, plant and equipment Investment properties Long-term prepayment expenses (recorded as other non-current assets) Total Depreciation expenses summarized by function OPERATING COSTS OPERATING EXPENSES Amortization expenses summarized by function Operating expenses – amortization expense	For the Year Ended December31,2020 $ 1,082 98,165 5,861 $ 105,108 $ 98,165 1,082 $ 99,247 $ 5,861	For the Year Ended December31,2019
			$ 1,354 98,179 4,317 $ 103,850 $ 98,179 1,354 $ 99,533 $ 4,317

e. Direct operating expenses of investment properties

For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Direct operating expenses of investment properties generating rental revenue $ 109,093 $ 108,561

f. Employee benefits expense

Employee benefits expense
Short-term employee benefits expense Post-Retirement Benefits Defined contribution plans Other employee benefits Total employee benefit expenses Summarized by function Inventories, net OPERATING EXPENSES	For the Year Ended December31,2020 $ 57,119 1,866 6,629 $ 65,614 $ - 65,614 $ 65,614	For the Year Ended December31,2019
			$ 62,360 1,711 7,886 $ 71,957 $ 2,518 69,439 $ 71,957

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g. Employees’ compensation and remuneration of directors
The Company accrued employees’ compensation and remuneration of directors at the rates of 1% to 7% and no higher than 3% for employees’ compensation and for remuneration of directors of net profit before tax, respectively. The employees’ compensation and remuneration of directors for the years ended December 31, 2020 and 2019, which were approved by the Company’s Board of Directors on March 5, 2021 and March 6, 2020, respectively, were as follows:

Accrual rates

Accrual rates
Employees' compensation Remuneration of directors Amount Employees' compensation Remuneration of directors	For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 4% 4% 2% 1.75% For the Year Ended December 31,2020 For the Year Ended December 31,2019 Cash Stock Cash Stock $ 16,946 $ - $ 35,907 $ - 8,473 - 15,709 -		For the Year Ended December 31, 2019
	Cash	Cash		Stock $ - -
	$ 16,946 8,473	$ 35,907 15,709

If there is a change in the amounts after the parent company only 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, 2019 and 2018.

Information on the employees’ compensation and remuneration of directors resolved by the Company’s board of directors for the years ended December 31, 2020 and 2019 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:

Current tax In respect of the current year Surcharges on unappropriated earnings Adjustments for prior years Deferred income tax In respect of the current year Changes in tax rate Income tax expenses recognized in profit or loss	For the Year Ended December 31, 2020 $ - 9,152 ( 2,679) 6,473 611 - 611 $ 7,084	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
	(		$ 97,167 5,990 215 103,372 604 - 604 $ 103,976

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

Net income from continuing operation Income tax expenses from income before income tax calculated at the statutory rate Fees that cannot be deducted from taxes Non-taxable income Unrecognized deductible temporary differences Income tax expenses from previous years adjusted for the year Surcharges on unappropriated earnings Income tax expenses recognized in profit or loss	For the Year Ended December31,2020 $ 398,237 $ 79,647 4,399 ( 121,029 ) 37,594 ( 2,679 ) 9,152 $ 7,084	For the Year Ended December31,2019
		$ 846,067 $ 169,213 81,658 ( 155,675 ) 2,575 215 5,990 $ 103,976

b. Income tax recognized in other comprehensive income

Deferred income tax Reverse to other comprehensive Income (Loss) Translating of foreign operations	For the Year Ended December31,2020 ($ 347)	For the Year Ended December31,2019	For the Year Ended December31,2019
	(		$ 747

c. Deferred Tax Assets

The movements of deferred tax assets were as follows:

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 13,662 13,753 1,660 $ 63,284	Recognized in profit andloss $ - ( 355 ) ( 256 ) - ($ 611)	Recognized in other comprehensive income $ - - - ( 347) ($ 347)	Balance, end ofyear	Balance, end ofyear
		( ( (	( (		$ 34,209 13,307 13,497 1,313 $ 62,326

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For the Year Ended December 31, 2019 Deferred tax assets Financial assets at FVTOCI Property, plant and equipment Investment properties Exchange differences of foreign operations	Balance, beginning of year $ 34,209 14,017 14,002 913 $ 63,141	Recognized in profit andloss $ - ( 355 ) ( 249 ) - ($ 604)	Recognized in other comprehensive income $ - - - 747 $ 747	Balance, end ofyear	Balance, end ofyear
		( ( (			$ 34,209 13,662 13,753 1,660 $ 63,284

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	December31,2020 $ 26,313	December31,2019	December31,2019
			$ 26,267

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 2018 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, 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 For the Year Ended December 31, 2019 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 $ 391,153 - $ 391,153 $ 742,091 - $ 742,091	Shares (denominator) (In Thousand Shares) 261,758 1,017 262,775 261,758 1,683 263,441		EPS ($)
				aftertax
				$ 1.49 $ 1.49 $ 2.84 $ 2.82

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

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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.

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, 2020 Financial assets at FVTOCI Investments in equity instruments Domestic listed (OTC) stock December 31, 2019 Financial assets at FVTOCI Investments in equity instruments Domestic listed (OTC) stock Foreign limited liability partnership		Level 1 $3,587,830 Level 1 $3,671,678 - $3,671,678		Level 2 $ - Level 2 $ - - $ -		Level3 $ - Level3 $ - 4,913 $ 4,913		Total
								$3,587,830 Total
								$3,671,678 4,913 $3,676,591

There was no transfer between Levels 1 and Level 2 for the years ended December 31, 2020 and 2019.

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2) Reconciliation of Level 3 fair value measurement of financial instruments
For the Year Ended December 31, 2020

For the Year Ended December 31, 2020
Financial assets Balance, beginning of year Recognized in other comprehensive income (unrealized gain (loss) on FVTOCI) Return on capital reduction Balance, end of year For the Year Ended December 31, 2019 Financial assets Beginning and ending balance of the year	FVTOCI
	Equity instruments
	(	$ 4,913 3,825 8,738) $ - FVTOCI
	Equity instruments
		$ 4,913

For the Year Ended December 31, 2019

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)	December31,2020 $ 614,115 3,587,830 8,239,495	December31,2019
		$ 374,150 3,676,591 9,519,860

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
43 -

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.

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:

follows:
Interest rate risk with fair value Financial liabilities Interest rate risk with cash flow Financial assets Financial liabilities Sensitivity analysis	December 31, 2020 $ 1,839,777 427,621 5,075,258	December 31, 2019
		$ 2,597,128 157,475 5,160,148

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 Company’s pre-tax income for the years ended December 31, 2020 and 2019 would decrease by $46,476 thousand and $50,027 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.

44 -

Sensitivity analysis

If equity prices had been 10% lower, no impact would incur on the Company’s pre-tax income for the year ended December 31, 2020 and 2019. The Company’s pre-tax other comprehensive income for the years ended December 31, 2020 and 2019 would have decreased by $358,783 thousand and $367,168 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 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.

45 -

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			December 31, 2020	December 31, 2020
		Within 6 Months $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	Above 1 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

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			December 31, 2019	December 31, 2019
		Within 6 Months $2,037,896 2,600,000 61,846 1,390,773 236,303 62,921 $6,389,739	6 Months ~ 1 Year $ 283,111 - - - 51,617 125,568 $ 460,296	Above 1 Year $ - - - - - 3,239,094 $3,239,094		Total
					$2,321,007 2,600,000 61,846 1,390,773 287,920 3,427,583 $ 10,089,129

b) Financing facilities

The bank loans are a significant source of liquidity for the Company. As of December 31, 2020 and 2019, the Company's amount of unused bank financing facilities amounted to $2,378,000 and $4,762,700, respectively.

25. Transactions with related parties

Except for those disclosed in other notes, the material transactions between the Company and other related parties are as follows.

a. Names and relationships of related parties

Name of related party 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 Hooyai Hotel Co.

Relationship with the Company Subsidiary Subsidiary Subsidiary Subsidiary

Investor having significant influence

Investor having significant influence Investor having significant influence Associates

46 -

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. Associates Hooyai Hotel Co. Investor having significant influence Advanced Semiconductor Engineering, Inc. Subsidiary Hung Ching Kwan Co., Ltd. Fuhua engineering Co., Ltd. Hung Ching New Co., Ltd.	For the Year Ended December 31, 2020 $ - $ - 8,114 57 453 57 $ 8,681	For the Year Ended December 31, 2019
				$ 2,326,000 $ 8,400 9,970 57 57 57 $ 18,541

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

The Company has entered into certain lease agreements with significant investors, subsidiaries, and associates, and the rentals are received monthly or annually with rent terms expired one after another before December 31, 2025.

c. Purchases

Purchases
Category andname of related party Subsidiary Fuhua engineering Co., Ltd.	For the Year Ended December31,2020 $ 864,851	For the Year Ended December31,2019
			$ 1,365,924

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.

47 -

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, 2020 $ 1,400 522 $ 1,922	December 31, 2019	December 31, 2019
				$ 1,562 - $ 1,562

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, 2020 and 2019.

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

Item Trade payables to related parties	Category and name of related party Subsidiary Fuhua engineering Co., Ltd. Investor having significant influence Jason C.S. Chang		December 31, 2020 $ 962,493 250 $ 962,743		December 31, 2019
					$ 1,390,773 - $ 1,390,773

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, 2020 and 2019 were $23,757 thousand and $19,829 thousand, respectively.

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 expense Post-Retirement Benefits	For the Year Ended December31,2020 $ 35,770 718 $ 36,488	For the Year Ended December31,2019	For the Year Ended December31,2019
			$ 31,593 611 $ 32,204

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.

48 -
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, 2020 and 2019.
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 2020, the Company agreed with Jason C.S. Chang and the Board of Directors resolved to grant rent-free until the end of 2020. The lease agreement will be entered with both parties reach agreement in 2021. 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 co-construction 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 a 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 co-construction valued by experts.

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.

current portion, and long-term borrowings.
Inventories, net Financial assets at FVTOCI - non-current, net Investment properties, net	December 31, 2020 $ 1,994,524 3,524,762 2,875,261	December 31, 2019
		$ 4,549,399 3,607,136 2,901,021

27. Supplementary disclosures

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
49 -
5) Acquisition of real estate at costs of at least NT$300 million or 20% or greater of the paid-in capital: None
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital or more: None
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 3
8) Receivables from related parties amounting to at least NT$100 million or 20% or greater of the paid-in capital: Appendix 4
9) Trading in derivative instruments: None
10) Information on investees: Appendix 5
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 6
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 of major shareholder: 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 7)
50 -

Hung Ching Development & Construction Co., Ltd. and Subsidiaries Endorsements/Guarantees Provided for Others

January 1 to December 31, 2020

Appendix 1

Unit: In Thousands of New Taiwan Dollars

Code	Company Name of Endorsements/guarantees Provider	Parties BeingEndorsed/guaranteed	Parties BeingEndorsed/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	$ 1,483,452	$ 1,000,000	$ 1,000,000	$ 200,000	$ 1,000,000	101.12%	$ 1,483,452	N	Y	N

Note 1. It was calculated based on 150% of the net value of shareholders' equity of Hung Ching Kwan Co., Ltd. 's financial statements audited by the certified public accountant as of December 31, 2020. Note 2. Real estate provided by Hung Ching Kwan Co., Ltd. as collateral

51 -

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

Marketable Securities Held at Year End

December 31, 2020

Appendix 2 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		Remark
				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	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 fair value through profit or loss - current Financial assets at fair value through profit or loss - current	44,131 - 8,548 927 300	$ 3,587,830 - 164,116 14,142 2,969	1.0 4.1 3.2 - -	$ 3,587,830 - 164,116 14,142 2,969	Note 1 and 2 Note 3 Note 2 Note 4 Note 4

Note 1. Of which 43,355 thousand shares (net carrying amount of $3,524,762 thousand) were provided to financial institutions as financial guarantees.

Note 2. Market price was calculated based on the closing price as of December 31, 2020.

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, 2020.

52 -

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, 2020

Appendix 3

Unit: In Thousands of New Taiwan Dollars

Buyer/Seller	Counterparty	Relationship	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)	Remark
			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	Subsidiary Parent Company	Purchase Sales	$ 864,851 ( 1,089,722 )	93.86% ( 99.94% )	In comply with the terms of contracts In comply with the terms of contracts	$ - -	－－	( $ 962,493 ) 962,493	93.02% 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 Co., Ltd. under the percentage of completion method.

53 -

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, 2020

Appendix 4

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 relatedparties	Overdue balance of receivables from relatedparties	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	$ 962,493	Note 1	$ -	－	$ 390,843	$ -

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

54 -

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

Relevant Information on Information on Investee Companies, location, ..... etc.

January 1 to December 31, 2020

Appendix 5

Unit: In Thousands of New Taiwan Dollars or Foreign Currency

Name of Investor Company	Investee company	Location	Main businesses	Initial invest	ment amount		Held at year end		Investee company's income in the current period	Investment gain (loss) recognized in the currentperiod(Note 1)	Remark
				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 HotelCo.	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 andrestaurants	$ 907,441 539,077 8,540 (HK$2,325) 179,996 17,088 (US$600) 5,000 14,672	$ 907,441 539,077 8,540 (HK$2,325) 179,996 17,088 (US$600) 5,000 14,672	82,495 65,000 1,099 46,300 600 500 828	63.5 100.0 100.0 100.0 100.0 100.0 46.0	$ 627,600 509,171 71,700 (HK$19,521) 51,281 30,971 (US$1,087) 4,620 -	( $ 47,666 ) 49,470 ( 1,625 ) (HK$-427) 10,939 10,818 (US$366) 1,063 ( 8,559 )	( $ 30,249 ) 34,779 ( 1,625 ) (HK$-427) ( 4,447 ) 10,818 (US$366) 1,063 -	Note 2 Note 3 Note4

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

Note 2. The investment gains recognized in the current period included unrealized gains of $84,377 thousand and realized gains of $69,686 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 $15,386 thousand.

Note 4. The consolidated company has discontinued the recognition of losses 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, 2020 of HKD$1=NT$3.809, US$1=NT$29.549 and RMB$1=NT$4.282, the amounts shown in this table are translated into NTD at the exchange rates by the end of December of HKD$1=NT$3.673, US$1=NT$28.480 and RMB$1=NT$4.377.

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

55 -

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

Information on Investments in Mainland China

January 1 to December 31, 2020

Appendix 6

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

Investee Companies in Mainland	Main businesses	Pa	id-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan - Beginning of thePeriod	Ou	tward/Inward Remittance	of Funds in the currentperiod	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 Ltd. Co. Shanghai Hong Rong Property Management Ltd. Co. Shanghai You Chang Property Management Ltd. Co.	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	$ (HK$2,3 (RMB$5 (US$600	8,540 25) 2,189 00) 17,088 )	Note 1 Note 2 Note 3	$ 8,540 (HK$2,325) - 17,088 (US$600)	$	- - -	$ - - -	$ 8,540 (HK$2,325) - 17,088 (US$600)	( $ 1,625 ) (HK$-427) 2,217 (RMB$518) 10,818 (US$366)	100.00% 100.00% 100.00%	( $ 1,625 ) (HK$-427) 2,217 (RMB$518) 10,818 (US$366)	$ 71,700 (HK$19,521) 26,837 (RMB$6,131) 30,971 (US$1,087)	$ - - -
									tments in
Accumulated Outward Rem Mainland Ch	ittance for Investment from Ta ina- End ofthePeriod	iwan to	Investment Amou	nts Authorized MO	by the Investment Commissio EA	n,	Upper Limit on Inves	tment on the Company's Inves Mainland China	tments in
$ (US$2,31	66,045 9)			$ (US$2,369)	67,469		$	4,982,341 (Note 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 Ltd. Co. with its own capital, and the Company did not remit the funds separately.

Note 3. Shanghai You Chang Property Management Ltd. Co. 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, 2020 of HKD$1=NT$3.809, US$1=NT$29.549 and RMB$1=NT$4.282, the amounts shown in this table are translated into NTD at the exchange rates by the end of December of HKD$1=NT$3.673, US$1=NT$28.480 and RMB$1=NT$4.377.
56 -

Hung Ching Development & Construction Co., Ltd. Information on Major Shareholders December 31, 2020

Appendix 7

Major Shareholder's name	Shares	Shares
	Number of Shares held	Shareholding Percentage(%)
Advanced Semiconductor Engineering, Inc. Morgan Stanley & Co. International Plc, Value Investing Company with HSBC as custodian Brilliant Capital Profits Limited with HSBC as custodian	68,629,782 44,200,805 22,433,200	25.38 16.35 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.
57 -

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

58 -

Hung Ching Development & Construction Co., Ltd. Statement of cash

December 31, 2020

	Statement of cash December 31, 2020	Statement of cash December 31, 2020	Statement of cash December 31, 2020
Statement 1 Item Petty cash and cash on hand Bank Deposits Time deposits Check deposits	Unit: In Thousands of New Taiwan Dollars, Unless Otherwise Specified Summary Amount $ 2,034 427,621 8,867 $ 438,522
			$ 2,034 427,621 8,867 $ 438,522

59 -

Hung Ching Development & Construction Co., Ltd. Statement of changes in inventories, net January 1 to December 31, 2020

Statement 2

Unit: In Thousands of New Taiwan Dollars

Construction Project Real estate under development Xinzhuang Fuduxin Kaohsiung 2nd Park E Building Plant Tucheng Mingde Sec. Hsinchu Fu Baitian Kaohsiung K13 Plant Real estate held for development Banqiao Puqian Sec. and Zhonghe Guangfu Sec. Tucheng Mingde Sec. 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 Tucheng ASE Residence Xinzhuang Fuduxin Ronghua Xizhi Li Garden ASE Center Earl Seventh generation Peony Bo City Total	Balance, beginning of year $ 1,474,939 180,696 - - 1,142 1,656,777 1,074,116 229,733 211,208 93,249 55,927 16,886 10,877 5,689 246 - - 1,697,931 2,533,015 2,371,247 - 374,060 71,432 60,652 45,868 6,720 5,462,994 $ 8,817,702	Increase (decrease) for the year $ 132,242 761,209 23,951 200,307 2,872 1,120,581 - - - - - - - - - - - - ( 66,106 ) ( 1,357,324 ) ( 929,281 ) ( 96,498 ) ( 13,478 ) ( 11,010 ) ( 2,090 ) - ( 2,475,787) ($ 1,355,206)	Reclassification and others (Note 1) ( $ 1,607,181 ) - 229,733 - - ( 1,377,448) - ( 229,733 ) - - - - - - - - - ( 229,733) - - 1,865,529 - - - - - 1,865,529 $ 258,348		Balance, end of year
		( ( ( ( ( ( ( ( (	( ( ( (		$ - 941,905 253,684 200,307 4,014 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 1,013,923 936,248 277,562 57,954 49,642 43,778 6,720 4,852,736 $ 7,720,844

Note 1. Including real estate under development recognized and transferred from real estate held for development amounted to $229,733 thousand, building and land held for sale recognized and transferred from real estate under development amounted to $1,607,181 thousand, and gain from price recovery of inventory reversed from building and land held for sale amounted to $258,348 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 $1,994,524 thousand was provided as collateral for short-term bills payable and long-term borrowings.

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Hung Ching Development & Construction Co., Ltd.

Statement of financial assets at fair value through other comprehensive income - non-current January 1 to December 31, 2020

		January 1 to December 31, 2020	January 1 to December 31, 2020
Statement 3 Name Domestic listed stock ASE Industrial Holding Co., Ltd. Foreign limited liability partnership Ripley Cable Holdings I, L.P.	Balance, beginningofyear Shares Fair value 44,131 $ 3,671,678 - 4,913 $ 3,676,591	Changes for theyear(Note 2) Shares Amount - $ - - ( 8,738) ($ 8,738)		Unrealized gain (loss) on financial products ( $ 83,848 ) 3,825 ($ 80,023)	Unit: In Thousands of New Taiwan Dollars/ In Thousand Shares Balance, end ofyear Guarantee orpledge Shares Fair value 44,131 $ 3,587,830 Note 1 - - － $ 3,587,830
	Shares 44,131 -	Shares - -			Shares 44,131 -
			( (			Note 1 －

Note 1. 43,355 thousand shares (net carrying amount of $3,524,762 thousand) were provided to financial institutions as financial guarantees. Note 2. The change for the year represented the partial refund of investment held in foreign limited liability partnerships amounted to $8,738 thousand.

61 -

Hung Ching Development & Construction Co., Ltd.

Statement of changes in investments accounted for using the equity method January 1 to December 31, 2020

Statement 4 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, beginning of year Shares Amount 82,495 $ 657,849 65,000 592,092 1,099 72,156 46,300 45,642 600 19,586 500 3,557 828 - $1,390,882	Balance, beginning of year Shares Amount 82,495 $ 657,849 65,000 592,092 1,099 72,156 46,300 45,642 600 19,586 500 3,557 828 - $1,390,882	Changes for the year Shares Amount - $ - - - - - - 15,386 - - - - - - $ 15,386	Changes for the year Shares Amount - $ - - - - - - 15,386 - - - - - - $ 15,386	Cash dividends $ - ( 117,700 ) - ( 5,300 ) - - - ($ 123,000)	Investment gain (loss) recognized ( $ 30,249 ) 34,779 ( 1,625 ) ( 4,447 ) 10,818 1,063 - $ 10,339	Cumulative translation adjustments $ - - 1,169 - 567 - - $ 1,736	Unit: In Thousands of New Taiwan Dollars/ In Thousand Shares Balance, end of year Market price or net value of ownership Shares Shareholding % Amount Remark 82,495 63.5 $ 627,600 $ 627,600 Note 1 65,000 100.0 509,171 836,864 Note 1 and 2 1,099 100.0 71,700 71,700 Note 1 46,300 100.0 51,281 215,397 Note 1 and 3 600 100.0 30,971 30,971 Note 1 500 100.0 4,620 4,620 Note 1 828 46.0 - ( 7,070) Note 1 and 4 $1,295,343 $1,780,082	Unit: In Thousands of New Taiwan Dollars/ In Thousand Shares Balance, end of year Market price or net value of ownership Shares Shareholding % Amount Remark 82,495 63.5 $ 627,600 $ 627,600 Note 1 65,000 100.0 509,171 836,864 Note 1 and 2 1,099 100.0 71,700 71,700 Note 1 46,300 100.0 51,281 215,397 Note 1 and 3 600 100.0 30,971 30,971 Note 1 500 100.0 4,620 4,620 Note 1 828 46.0 - ( 7,070) Note 1 and 4 $1,295,343 $1,780,082	Unit: In Thousands of New Taiwan Dollars/ In Thousand Shares Balance, end of year Market price or net value of ownership Shares Shareholding % Amount Remark 82,495 63.5 $ 627,600 $ 627,600 Note 1 65,000 100.0 509,171 836,864 Note 1 and 2 1,099 100.0 71,700 71,700 Note 1 46,300 100.0 51,281 215,397 Note 1 and 3 600 100.0 30,971 30,971 Note 1 500 100.0 4,620 4,620 Note 1 828 46.0 - ( 7,070) Note 1 and 4 $1,295,343 $1,780,082	Unit: In Thousands of New Taiwan Dollars/ In Thousand Shares Balance, end of year Market price or net value of ownership Shares Shareholding % Amount Remark 82,495 63.5 $ 627,600 $ 627,600 Note 1 65,000 100.0 509,171 836,864 Note 1 and 2 1,099 100.0 71,700 71,700 Note 1 46,300 100.0 51,281 215,397 Note 1 and 3 600 100.0 30,971 30,971 Note 1 500 100.0 4,620 4,620 Note 1 828 46.0 - ( 7,070) Note 1 and 4 $1,295,343 $1,780,082
	Shares 82,495 65,000 1,099 46,300 600 500 828		Shares - - - - - - -					Shares 82,495 65,000 1,099 46,300 600 500 828	Shareholding % 63.5 100.0 100.0 100.0 100.0 100.0 46.0
											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 $84,377 thousand and $69,686 thousand, respectively. Net value of the equity includes cumulative unrealized gains on upstream transactions amounted to $327,693 thousand.
Note 3. The change for the year was the cash dividend of $15,386 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 as the associate had negative equity as of December 31, 2019.

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Hung Ching Development & Construction Co., Ltd. Statement of short-term borrowings December 31, 2020

Unit: In Thousands of New Taiwan Dollars

			December 31, 2020
Statement 5 Type of borrowings and creditor Credit loans DBS Bank DBS Bank JihSun Bank JihSun Bank JihSun Bank Hua Nan Bank Mega Bank Chang Hwa Bank Cathay United Bank Guaranteed loans DBS Bank JihSun Bank Hua Nan Bank Chang Hwa Bank Bank of Shanghai Shin Kong Bank Shin Kong Bank Bank of Taiwan Bank of Taiwan Bank of Taiwan Taipei Fubon Bank	Maturity of borrowings 2020/12/04-2021/01/04 2020/12/04-2021/01/04 2020/09/15-2021/09/15 2020/09/15-2021/09/15 2020/09/15-2021/09/15 2020/11/18-2021/01/18 2020/07/08-2021/01/04 - - 2020/12/04-2021/01/04 2020/09/15-2021/09/15 2020/11/18-2021/01/18 2020/09/30-2021/09/08 - 2020/11/23-2021/01/20 - 2020/01/20-2021/05/19 2020/11/20-2021/05/19 - 2020/12/16-2021/01/15	Interest rate (%) 1.60 1.60 1.55 1.40 1.65 1.88 1.46 - - 1.60 1.20 1.88 1.61 - 1.55 - 1.44 0.94 - 1.80	Balance, end of year $ 500,000 300,000 200,000 13,750 280,000 30,000 30,000 - - 1,353,750 160,000 41,250 50,000 80,000 - 110,000 - 217,000 380,000 - 170,000 1,208,250 $ 2,562,000	Financing facilities $ 500,000 300,000 200,000 13,750 280,000 50,000 60,000 30,000 30,000 1,463,750 200,000 41,250 50,000 80,000 10,000 120,000 200,000 271,000 390,000 600,000 350,000 2,312,250 $ 3,776,000	Unit: In Thousands of New Taiwan Dollars Collateral
					None None None None None None None None None Inventory - real estate under 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 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 Hung Ching Kwan Co., Ltd. provided real estate. Financial assets at fair value through other comprehensive income - ASE Industrial Holding Stock Richard H.P. Chang provided bills. Inventory - real estate held for development Investment properties

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Hung Ching Development & Construction Co., Ltd. Statement of short-term bills payable December 31, 2020

Statement 6 Guarantee Agency Commercial paper payable International bills International bills TCB Bills Taching Bills China Bills Bank of Shanghai Shin Kong Bank Grand Bills Mega Bills Mega Bills	Issuance period 2020/12/16-2021/01/08 2020/11/18-2021/01/08 2020/12/22-2021/01/19 2020/12/22-2021/01/19 2020/12/16-2021/01/19 2020/12/22-2021/01/19 2020/12/09-2021/01/08 2020/12/15-2021/01/13 2020/12/15-2021/01/13 2020/12/15-2021/01/13	Interest rate interval (%) 1.888 1.888 1.768 1.750 1.800 1.328 1.678 1.788 1.850 1.938			Amount	Carrying amount $ 245,898 29,988 179,834 179,836 149,859 69,952 199,926 94,940 649,572 39,972 $ 1,839,777	Financing facilities $ 246,000 70,000 275,000 330,000 370,000 70,000 600,000 145,000 650,000 500,000 $ 3,256,000	Unit: In Thousands of New Taiwan Dollars Collateral
			Total issued amount $ 246,000 30,000 180,000 180,000 150,000 70,000 200,000 95,000 650,000 40,000 $ 1,841,000		Unamortized discount $ 102 12 166 164 141 48 74 60 428 28 $ 1,223
								Inventory - building and land held for sale 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 and Inventory - real estate held for development 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 Hung Ching Kwan Co., Ltd. provided real estate. Inventory - building and land held for sale Jason C.S. Chang provided real estate. Jason C.S. Chang provided real estate.

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Hung Ching Development & Construction Co., Ltd. Statement of long-term borrowings December 31, 2020

Statement 7

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

Name Guaranteed loans Bank of Taiwan Bank of Taiwan DBS Bank O-Bank	Borrowings Duration 2018/05/16-2033/05/16 2018/06/19-2023/06/19 2018/05/16-2021/05/16 2018/05/16-2021/05/16	Repayment Method Note 1 Note 2 Note 3 Note 3	Annual interest rate (%) 1.67 1.67 1.90 1.71	Maturing within one year $ 154,344 62,641 267,100 11,000 $ 495,085	Maturing over one year $ 1,956,776 61,397 - - $ 2,018,173		Balance $ 2,111,120 124,038 267,100 11,000 $ 2,513,258	Collateral or Pledge
								Investment properties Investment properties Inventory - building and land held for sale Inventory - building and land held for sale

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 Note 3. Repayment method of interests paid monthly and principal paid by the date of maturity

65 -

Hung Ching Development & Construction Co., Ltd. Statement of operating revenue and cost January 1 to December 31, 2020

Statement 8 Unit: In Thousands of New Taiwan Dollars

Item Construction and planning business Tucheng ASE Residence Xizhi Li Garden ASE Di Jing Garden Hung Ching Ronghua Peony Disct. Qidai Disct. Gain from price recovery of inventory Lease business Other business	Construction and planning revenue, net $ 2,029,220 118,001 22,758 127,946 855,635 638 10,250 - 3,164,448 102,004 34,083 $ 3,300,535	Construction and planning cost	Construction and planning cost
		(	$ 1,357,323 96,498 13,478 66,106 929,281 2,091 11,010 258,348) 2,217,439 109,093 34,066 $ 2,360,598

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Hung Ching Development & Construction Co., Ltd. Statement of operating expenses January 1 to December 31, 2020

Statement 9

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 $ 229,997 112,772 9,475 7,398 - 4,665 $ 364,307	General and administrative expenses $ 3,844 32,050 49,510 36,470 22,857 31,356 $ 176,087		Total
					$ 233,841 144,822 58,985 43,868 22,857 36,021 $ 540,394

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.

Hung Ching Development & Construction Co., Ltd. STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION

For the years ended December 31, 2020 and 2019

Statement 10

Unit: In Thousands of New Taiwan Dollars

Employee Benefits Expenses Salary expenses Labor and health insurance premiums Pension expenses Remuneration Other Employee Benefits Expenses Depreciation expenses Amortization expenses		For the Year Ended December 31, 2020 Belongs to operating cost Belongs to operating expenses Total $ - $ 47,286 $ 47,286 - 3,725 3,725 - 1,866 1,866 - 9,833 9,833 - 2,904 2,904 - 65,614 65,614 98,165 1,082 99,247 - 5,861 5,861 $ 98,165 $ 72,557 $ 170,722	For the Year Ended December 31, 2020 Belongs to operating cost Belongs to operating expenses Total $ - $ 47,286 $ 47,286 - 3,725 3,725 - 1,866 1,866 - 9,833 9,833 - 2,904 2,904 - 65,614 65,614 98,165 1,082 99,247 - 5,861 5,861 $ 98,165 $ 72,557 $ 170,722	For the Year Ended December 31, 2020 Belongs to operating cost Belongs to operating expenses Total $ - $ 47,286 $ 47,286 - 3,725 3,725 - 1,866 1,866 - 9,833 9,833 - 2,904 2,904 - 65,614 65,614 98,165 1,082 99,247 - 5,861 5,861 $ 98,165 $ 72,557 $ 170,722	For the Year Ended December 31, 2020 Belongs to operating cost Belongs to operating expenses Total $ - $ 47,286 $ 47,286 - 3,725 3,725 - 1,866 1,866 - 9,833 9,833 - 2,904 2,904 - 65,614 65,614 98,165 1,082 99,247 - 5,861 5,861 $ 98,165 $ 72,557 $ 170,722		For the Year Ended December 31, 2019	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
		Belongs to operating cost $ - - - - - - 98,165 - $ 98,165		Belongs to operating expenses $ 47,286 3,725 1,866 9,833 2,904 65,614 1,082 5,861 $ 72,557			Belongs to operating cost $ 2,198 156 121 - 43 2,518 98,179 - $ 100,697		Belongs to operating expenses $ 42,563 3,215 1,590 17,599 4,472 69,439 1,354 4,317 $ 75,110		Total
											$ 44,761 3,371 1,711 17,599 4,515 71,957 99,533 4,317 $ 175,807

Note 1. As of December 31, 2020 and 2019, the Company had 49 employees, of which 8 directors were not concurrently serving as employees for both years.
Note 2. The average employee benefits expenses were $1,361 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 $1,326 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 $1,153 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 $1,092 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 6%. ([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:
(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.

AI assistant

Hung Ching — Audit Report / Information 2020

52140_rns_2020-11-16_30cf0a67-44c4-4530-b11b-aa0e0c679a0b.pdf

TABLE OF CONTENTS

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

Sales Revenue of Building and Land

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, 2020 and 2019

Hung Ching Development & Construction Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2020 and 2019

(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, 2020 and 2019

Hung Ching Development & Construction Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended December 31, 2020 and 2019

(Continued from the previous page)

Notes to parent company only Financial Statements For the years ended December 31, 2020 and 2019 (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

k. Financial Instruments

b) Impairment of financial assets

c) Derecognition of financial assets

l.

1) The Company as lessor

2) The Company as lessee

n.

Borrowing Costs

Income Tax

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

Key Sources of Estimation and Assumption Uncertainty

Estimated impairment loss of inventory

6. Cash and Cash Equivalents

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

December 31, 2020

8. Inventory, net

(Continued from the previous page)

9. Financial assets at FVTOCI, net

Investments in equity instruments at FVTOCI

10. Investments Accounted for Using the Equity Method

a. Investments in subsidiaries

11. Property, Plant and Equipment, Net

12. Investment properties, net

(Continued from the previous page)

13. Other assets

14. Borrowings

a. Short-term borrowings

b. Short-term bills payable, net

15. Trade payable

16. Other current liabilities

17. Post-retirement benefit plans

18. Equity

Ordinary shares

c.

Retained earnings and dividend policy

d. Special reserve

e. Other equity items

19. Revenue

20. Net income from continuing operation

c. Finance costs

d. Depreciation and amortization

e. Direct operating expenses of investment properties

f. Employee benefits expense

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

a) Interest rate risk

b) Other price risk

Sensitivity analysis

2) Credit risk

3) Liquidity risk

Hung Ching Audit Report / Information 2020