Kung Sing Engineering Corporation and Subsidiaries
Consolidated Financial Statements and
Review Report of Independent Accountants
March 31, 2025 and 2024

(Stock Code 5521)

*This financial report is only an English translation, and has not been reviewed or checked by an accountant

Address: 8F., No. 102, Sec. 4, Civic Blvd., Da-an Dist.,
Taipei City 106, Taiwan (R.O.C.)
TEL:(02)2751-4188

Contents... 1

Review Report of Independent Auditors Translated from Chinese ... 3
Introduction ... 3
Scope of Review ... 3
Basis for Qualified Conclusion ... 3
Qualified Conclusion ... 4

Consolidated Balance Sheets ... 5

Consolidated Statements of Comprehensive Income ... 7

Consolidated Statements of Changes in Equity ... 8

Consolidated Statements of Cash Flows ... 9

Notes to the Consolidated Financial Statements ... 12
1. History of the Company ... 12
2. The Date and Procedure of Authorization for Issuance of the Financial Statements ... 12
3. Application of New Standards, Amendments and Interpretations ... 12
4. Summary of Significant Accounting Policies ... 14
5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty ... 17
6. Details of Significant Accounts ... 18
7. Related Party Transactions ... 34
8. Pledged Assets ... 35
9. Significant Contingent Liabilities and Unrecognized Contract Commitments ... 36
10. Significant Losses from Natural Disaster ... 40
11. Significant Events after the Balance Sheet Date ... 40
12. Others ... 41
13. Supplementary Disclosure ... 50
14. Segments Information ... 52

Table 1 ... 54

2
Table 2 ... 55
Table 3 ... 56

Review Report of Independent Auditors Translated from Chinese

To the Boards of Directors and Stockholders of Kung Sing Engineering Corporation

Introduction

We have reviewed the consolidated balance sheets of Kung Sing Engineering Corporation and its subsidiaries (the "Group") as at March 31, 2025 and 2024, as well as the consolidated statements of comprehensive income, the consolidated statement of changes in equity and of cash flows for the three months then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and International Accounting Standard No. 34 "Interim Financial Reporting" as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statements of Republic of China Verification Standard No. 2410 " Review of Financial Information Performed by the Independent Auditor of the Entity" in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in Note 4 (3) of the consolidated financial statements, the financial statements of certain insignificant subsidiaries were not reviewed by independent accountants. Those statements reflect total assets of NT$639,251 thousand and NT$1,467,062 thousand constituting 5.6% and 17.3% of the total consolidated assets; the total liabilities of NT$17,394 thousand and NT$32,152 thousand constituting 0.3% and 1.0% of the total consolidated liabilities as at March 31, 2025 and 2024, respectively, and the net loss of total comprehensive income of NT$1,988 thousand and NT$1,676 thousand, constituting 37.9% and 1.9% of the consolidated total comprehensive income for the three-month periods then ended, respectively.

Qualified Conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries been reviewed by independent accountants, that we might have become aware of had it not been for the situation described above, based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2025 and 2024, and of its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and International Accounting Standard No. 34 "Interim Financial Reporting" as endorsed by the Financial Supervisory Commission.

Accountant
Lin, Se-kai
Wen, Ya-fang
For and on behalf of PricewaterhouseCoopers, Taiwan
May 9, 2025

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Balance Sheets

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of March 31, 2025 and 2024 are reviewed, not audited)

Assets	Note	March 31, 2025		December 31, 2024		March 31, 2024
		Amount	%	Amount	%	Amount	%
Current assets
1100	Cash and cash equivalents	6(1)	$ 1,091,850	10	$ 1,912,422	16	$ 1,801,722	21
1110	Financial assets at fair value through profit or loss - current	6(2)	-	-	-	-	17,630	-
1136	Financial assets at amortised cost - current	6(3),8	4,893,304	43	5,087,824	42	1,947,335	23
1140	Contract assets-current	6(20)	3,079,698	27	2,692,801	22	2,440,178	29
1170	Accounts receivable, net	6(4)	155,463	1	352,689	3	98,974	1
1200	Other receivables	7	15,031	-	25,870	-	7,475	-
1210	Other receivables - related parties		39,161	-	38,733	-	47,861	1
1220	Current tax assets		2,173	-	2,135	-	1,404	-
130X	Inventories	6(5),8	357,018	3	357,018	3	450,150	5
1410	Prepayments		111,252	1	75,723	1	62,023	1
1479	Other current assets-other	8	-	-	-	-	46,000	1
1482	Fulfilling contract cost-net current	6(6)	696,081	6	560,241	5	512,899	6
11XX	Total current assets		10,441,031	91	11,105,456	92	7,433,651	88
Non-current assets
1517	Financial assets at fair value through other comprehensive income-non-current	6(7)	91,723	1	89,349	1	141,132	2
1600	Property, plant and equipment	6(8), 8	505,302	5	514,829	4	512,281	6
1755	Right-of-use assets	6(9)	127,306	1	121,989	1	128,303	1
1760	Investment property, net	8	151,143	1	151,578	1	152,884	2
1780	Intangible assets		5,726	-	6,072	-	6,111	-
1840	Deferred income tax assets		21,999	-	32,338	-	38,680	-
1900	Other non-current assets	6(11)	67,120	1	56,365	1	44,954	1
15XX	Total non-current assets		970,319	9	972,520	8	1,024,345	12
1XXX	Total assets		$11,411,350	100	$ 12,077,976	100	$ 8,457,996	100

Kung Sing Engineering Corporation and Subsidiaries
Consolidated Balance Sheets
(Expressed in thousands of New Taiwan dollars)
(The balance sheets as of March 31, 2025 and 2024 are reviewed, not audited)

Liabilities and Equity	Note	March 31, 2025		December 31, 2024		March 31, 2024
		Amount	%	Amount	%	Amount	%
Current liabilities
2100	Short-term borrowings	6(12)	$ 590,000	5	$ 840,000	7	$ 610,000	7
2130	Contract liabilities-current	6(20)	3,056,124	27	3,424,369	28	700,474	8
2150	Notes payable		544,935	5	567,609	5	263,175	3
2170	Accounts payable	6(13)	1,427,651	12	1,242,846	10	966,017	11
2200	Other payables		65,308	-	101,217	1	48,077	1
2250	Provisions for liabilities-current	6(15)	2,946	-	2,946	-	2,576	-
2280	Lease liabilities-current		38,382	-	47,421	1	68,084	1
2320	Long-term liabilities due within one year or one operating cycle	6(14)	81,162	1	145,113	1	132,160	2
2399	Other current liabilities - other	7	66,344	1	137,696	1	190,100	2
21XX	Total current liabilities		5,872,852	51	6,509,217	54	2,980,663	35
Non-current liabilities
2540	Long-term borrowings	6(14)	51,147	1	88,610	1	56,311	1
2550	Provisions for liabilities-non-current	6(15)	666	-	666	-	4,234	-
2570	Deferred income tax liabilities	6(27)	3,014	-	2,624	-	-	-
2580	Lease liabilities-non-current		88,262	1	76,164	-	70,222	1
2600	Other non-current liabilities		25,072	-	25,112	-	34,933	-
25XX	Total non-current liabilities		168,161	2	193,176	1	165,700	2
2XXX	Total liabilities		6,041,013	53	6,702,393	55	3,146,363	37
Equity
	Share capital	6(17)
3110	Common stock		4,922,802	43	4,922,802	41	4,922,802	58
	Capital surplus	6(18)
3200	Capital surplus		519	-	519	-	519	-
	Retained earnings	6(19)
3310	statutory surplus reserve		90,871	1	90,871	1	84,592	1
3350	Undistributed earnings		320,918	3	328,538	3	219,084	3
	Other equity	6(7)
3400	Other equity		35,227	-	32,853	-	84,636	1
3XXX	Total equity		5,370,337	47	5,375,583	45	5,311,633	63
	Significant contingent liabilities and unrecognized contract commitments	9
	Significant events after the balance sheet date	11
3X2X	Total liabilities and equity		$11,411,350	100	$ 12,077,976	100	$8,457,996	100

The accompanying notes are an integral part of these Individual financial statements.

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

(Unaudited)

Items	Note	Three months ended March 31
		2025		2024
		Account	%	Account	%
4000 Operating revenue	6(20)	$ 2,153,534	100	$ 1,501,698	100
5000 Operating cost	6(25)(26)	( 2,051,032)	( 95)	( 1,432,285)	( 96)
5900 Gross profit		102,502	5	69,413	4
Operating expenses	6(25)(26)
6100 Selling expenses		( 730)	-	( 512)	-
6200 General and administrative expenses		( 67,819)	( 3)	( 48,374)	( 3)
6450 expected credit impairment losses	6(20),12(2)	( 49,403)	( 3)	( 119,379)	( 8)
6000 Total operating expenses		( 117,952)	( 6)	( 168,265)	( 11)
6900 Operating income		( 15,450)	( 1)	( 98,852)	( 7)
Non-operating income and expenses
7100 Interest income	6(21)	9,415	-	1,523	-
7010 Other income	6(22),7	2,055	-	5,432	-
7020 Other gains and losses	6(23)	13,341	1	( 292)	-
7050 Financial costs	6(24)	( 6,252)	-	( 5,531)	-
7000 Total non-operating income and expenses		18,559	1	1,132	-
7900 Net profit before tax		3,109	-	( 97,720)	( 7)
7950 Income tax expenses	6(27)	( 10,729)	-	( 1,613)	-
8200 Net profit for the period		($ 7,620)	-	($ 99,333)	( 7)
Other comprehensive income (net)
Components of other comprehensive income that will not be reclassified to profit or loss
Unrealized gains and losses from investments in equity instruments measured at fair value through other comprehensive income	6(7)	$ 2,374	-	$ 10,867	1
8300 Other comprehensive income (net)		$ 2,374	-	$ 10,867	1
8500 Total comprehensive income for the period		($ 5,246)	-	($ 88,466)	( 6)
Net profit (loss) attributable to:
9750 Basic earnings per share	6(28)	($	0.02)	($	0.20)
9850 Diluted earnings per share	6(28)	($	0.02)	($	0.20)

The accompanying notes are an integral part of these Individual financial statements.

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Changes in Equity

For the Three Months Ended March 31, 2025 and 2024

(Expressed in thousands of New Taiwan dollars)

(Unaudited)

	Note	Equity attributable to owners of the parent
		Retained earnings			Unrealized gains and losses from finical assets at fair value through other comprehensive income	Total equity
		Common stock	Capital surplus	statutory surplus reserve			Undistributed earnings
For the three months ended March 31, 2024
Balance at January 1, 2024		$4,922,802	$519	$84,592	$318,417	$73,769	$5,400,099
Net loss for the current period		-	-	-	(99,333)	-	(99,333)
Other comprehensive income for the period	6(7)	-	-	-	-	10,867	10,867
Total comprehensive income for the period		-	-	-	(99,333)	10,867	(88,466)
Balance at March 31, 2024		$4,922,802	$519	$84,592	$219,084	$84,636	$5,311,633
For the three months ended March 31, 2025
Balance at January 1, 2025		$4,922,802	$519	$90,871	$328,538	$32,853	$5,375,583
Net loss for the current period		-	-	-	(7,620)	-	(7,620)
Other comprehensive income for the period	6(7)	-	-	-	-	2,374	2,374
Total comprehensive income for the period		-	-	-	(7,620)	2,374	(5,246)
Balance at March 31, 2025		$4,922,802	$519	$90,871	$320,918	$35,227	$5,370,337

The accompanying notes are an integral part of these individual financial statements.

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2025 and 2024

(Expressed in thousands of New Taiwan dollars)

(Unaudited)

	Note	For the three months ended March 31
		2025	2024
Cash Flows from Operating Activities
Net profit (net loss) before tax for the period		$ 3,109	($ 97,720)
Adjustments
Adjustments to reconcile profit
Losses on financial assets at fair value through profit or loss	6(23)	-	1,195
Depreciation (including right-of-use assets and investment property)	6(23)(25)	31,358	26,637
Amortization	6(25)	666	657
Expected credit impairment losses	12(2)	49,403	119,379
Interest expense	6(24)	6,252	5,531
Interest income	6(21)	( 9,415)	( 1,523)
Lease Modification Benefit	6(23)	( 12,885)	-
Changes in operating assets and liabilities
Net changes in operating assets
Contract assets		( 436,300)	( 516,404)
Accounts receivable		197,226	253,485
Other receivables		19,747	( 720)
Other receivables - related parties		( 428)	( 300)
Prepayments		( 35,529)	( 2,306)
Cost of fulfilling contracts		( 135,840)	31,834
Net defined benefit assets		( 1,949)	( 953)
Net changes in operating liabilities
Contract liabilities		( 368,245)	( 44,483)
Notes payable		( 25,000)	( 107,670)
Accounts payable		184,805	112,796
Other payables		( 35,469)	( 13,997)
Provisions for liabilities		-	( 68,488)
Other current liabilities		2,228	( 2,456)
Net defined benefit liabilities		-	( 423)
Cash outflows generated from operations		( 566,266)	( 305,929)
Interest received		506	1,475
Interest paid		( 6,692)	( 5,539)

Income tax paid	(	38)	(	30)
Net cash outflows from operating activities	(	572,490)	(	310,023)
(Continued)

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2025 and 2024

(Expressed in thousands of New Taiwan dollars)

(Unaudited)

	Notes	For the three months ended March 31
		2025	2024
Cash Flows from Investing Activities
To acquire financial assets at amortised cost		($ 909,010)	($ 799,014)
Disposal of financial assets at amortised cost		1,103,530	1,523,953
Proceeds from acquisition of property, plant and equipment	6(29)	( 5,555)	( 7,474)
Proceeds from acquisition of intangible assets	6(29)	( 320)	( 396)
Increased margin deposit		( 2,308)	( 17,394)
Decreased deposits		370	66,819
Net cash inflows from investing activities		186,707	766,494
Cash Flows from Financing Activities
Borrow short-term borrowings	6(30)	150,425	250,000
Repayment of short-term borrowings	6(30)	( 400,425)	( 300,000)
Repayment of long-term borrowings	6(30)	( 101,414)	( 46,675)
Increase in deposits received	6(30)	2,001	9,153
Decrease in deposits received	6(30)	( 75,621)	( 26,313)
Lease liability principal payments	6(30)	( 9,755)	( 7,164)
Net cash outflow from financing activities		( 434,789)	( 120,999)
Increase (decrease) in cash and cash equivalents during the period		( 820,572)	335,472
Cash and cash equivalents balance at beginning of the period		1,912,422	1,466,250
Cash and cash equivalents balance at end of the period		$ 1,091,850	$ 1,801,722

The accompanying notes are an integral part of these individual financial statements.

Kung Sing Engineering Corporation and Subsidiaries
Notes to the Consolidated Financial Statements
March 31, 2025 and 2024
(Expressed in thousands of New Taiwan dollars, unless otherwise indicated)
(Unaudited)

History of the Company
(1) Kung Sing Engineering Corporation (the "Company") was established in February 1947. The main business activities of the Company and its subsidiaries (the "Group") are the construction and repairing of roads and bridges as well as development of house and building.
(2) The Company's shares had been listed and traded on Taipei Exchange since November 18, 1999 and was officially terminated on December 18, 2012 then have been listed and traded on the Taiwan Stock Exchange.
The Date and Procedure of Authorization for Issuance of the Financial Statements
The consolidated financial statements were reported to and issued by the Board of Directors on May 9, 2025.
Application of New Standards, Amendments and Interpretations
(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards ("IFRS") as endorsed by the Financial Supervisory Commission ("FSC")

New standards, interpretations and amendments endorsed by the FSC effective from 2025 are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 21, "Lack of convertibility"	January 1, 2025

The above-mentioned standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group's assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 9 and IFRS7, “Amendments to the classification and measurement of financial instruments”	January 1, 2026

The Financial Supervisory Commission recognizes that this amendment allows enterprises to apply the application guidance of Section 4.1 of IFRS 9 (Classification of Financial Assets) in advance and apply the provisions of Paragraphs 20B, 20C and 20D of IFRS 7 at the same time. The amendments are explained as follows:

A. Clarify and add further guidance on assessing whether financial assets meet the SPPI criterion, including contractual terms that modify cash flows based on contingencies (e.g. interest rates linked to ESG objectives), instruments with non-recourse features, and contractually linked instruments.

B. Newly added are that certain instruments with contractual terms that can change their cash flows (such as certain instruments with features related to achieving environmental, social and governance (ESG) objectives) should disclose a description of the nature of the contingency; quantitative information about the range of changes in the contractual cash flows that may arise from such contractual terms; and the aggregate carrying amount of the financial assets and the amortized cost of the financial liabilities under such contractual terms.

The above-mentioned standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group's assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 9 and IFRS 7, "Amendments to the Classification and Measurement of Financial Instruments".	January 1, 2026
Amendments to IFRS 9 and IFRS 7, "Contracts involving natural electricity".	January 1, 2026
Amendments to IFRS 10 and IAS 28, "Sale or Contribution of Assets between an Investor and Its Associate or Joint Venture"	To be determined by International Accounting Standards Board
IFRS 17, "Insurance Contracts"	January 1, 2023
Amendments to IFRS 17, "Insurance Contracts"	January 1, 2023
Amendments to IFRS 17, "Initial application of IFRS 17 and IFRS 9 - comparative information"	January 1, 2023
Amendments to IFRS 18, "Presentation and disclosure of financial statements"	January 1, 2027

International Financial Reporting Standard 19
"Subsidiaries without Public Accountability: Discovery"
January 1, 2027
Annual Improvements to International Financial Reporting Standards - Volume 11
January 1, 2026

Except for the IFRS 18 “Presentation and Disclosure of Financial Statements” which will be disclosed after the assessment is completed, the Group has assessed that the above standards and interpretations have no significant impact on the Group’s financial position and financial results.

IFRS 18 "Presentation and Disclosures in Financial Statements" replaces IAS 1 and updates the structure of the consolidated income statement, adds disclosures on management performance measurement, and strengthens the summary applied to the main financial statements and notes. and segmentation principles.

4. Summary of Significant Accounting Policies

Except for the following explanations of the compliance statement, basis of preparation, basis of consolidation and new additions, the significant accounting policies are the same as Note 4 of the 2024 consolidated financial statements. Unless otherwise stated, these policies apply consistently throughout all reporting periods.

(1) Compliance statement

A. The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standards 34, “Interim financial reporting” as endorsed by the FSC.

B. This consolidated financial report should be read in conjunction with the 2024 consolidated financial report.

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

a. Financial assets at fair value through profit or loss.
b. Financial assets at fair value through other comprehensive income.
c. Defined benefit liabilities recognized based on the net amount of pension plan assets deduct present value of defined benefit obligation.

B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the "IFRSs"), requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of the consolidated financial statements

The preparation principles of this consolidated financial report are the same as the 2024 consolidated financial report.

B. Subsidiaries included in the consolidated financial statements

Investor	Subsidiary	Business nature	Ownership (%)			Note
			March 31, 2025	December 31, 2024	March 31, 2024
The Company	Chan Pang Industrial Co., Ltd.	Houses and buildings development, leasing and general investment	100	100	100	Note1-2
As above	Kung Sing Development Co., Ltd.	Houses and buildings development and leasing	100	100	100	Note2

Note 1: In order to simplify its investment structure, the Group resolved to cease operations on December 13, 2024 in accordance with Article 128-1 of the Company Law and to dissolve and liquidate its subsidiary, Chan Pang Industrial Co., Ltd., in accordance with the law. As of the date of review of the report, the liquidation procedures of the subsidiary have not been completed.

Note 2 : Does not meet the definition of a material subsidiary, so the financial statements at March 31, 2025 and 2024 were not reviewed by accountants.

C. Subsidiaries not included in the consolidated financial statements None.
D. Adjustments for subsidiaries with different balance sheet dates None.
E. Significant restrictions on subsidiaries' ability to transfer funds to parent company None.
F. Subsidiaries that have non-controlling equity that are material to the Group None.

(4) Classification of current and non-current items

As the operating cycle for construction contracts usually exceeds one year, the Group uses the operating cycle as its criteria for classifying current and non-current assets and liabilities related to construction contracts. For other assets and liabilities, the criterion is one year:

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

a. Assets that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
b. Assets held mainly for trading purposes;
c. Assets that are expected to be realized within twelve months from the balance sheet date;
d. Cash or cash equivalents, unless restricted from exchange or use in settlement of liabilities for at least twelve months after the reporting period.

Those that do not meet the above-mentioned criteria are classified as non-current assets.

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

a. Liabilities that are expected to be settled within the normal operating cycle;
b. Liabilities arising mainly from trading purposes;
c. Liabilities that are to be settled within twelve months from the balance sheet date;
d. There is no right to defer the settlement of liabilities until at least twelve months after the reporting period.

Those that do not meet the above-mentioned criteria are classified as non-current liabilities.

(5) Leasing arrangements (lessee)-right-of-use assets/ lease liabilities

A. Lease assets are recognized in a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low value assets, lease payments are recognized in expense on a straight-line basis over the lease term.

B. Lease liabilities are recognized at present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments conclude:

(a) Fixed payments deducts any lease incentives receivable.
(b) Variable lease payments depend on an index or a rate.

The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost, including the amount of the initial measurement of lease liability and any initial direct costs incurred by the lessee.

The right-of-use asset is measured subsequently using the cost model and is

depreciated from the commencement date to the earlier of the end of the asset's useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized in an adjustment to the right-of-use asset.

D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize the difference between remeasured lease liability in profit or loss. For all other lease modifications, the lease liability is remeasured by adjusting the right-of-use asset accordingly.

(6) Pension

Pension costs during the interim period are based on the pension cost rate determined by actuarial calculations at the end of the previous financial year. Calculated from the beginning of the year to the end of the current period. If there are major market changes and major reductions, liquidations or other major one-time events after the closing date, adjustments will be made and relevant information will be disclosed in accordance with the aforementioned policies.

(7) Income tax

The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of the consolidated financial statements requires management to make critical judgements in applying the Group's accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The related information is addressed below:

Construction contract

Engineering revenue and costs are primarily generated from construction works undertaken and when the outcome of the construction contracts can be estimated reliably, revenue is recognised progressively over time based on the proportion of construction costs incurred to date to the estimated total costs.

The estimated total cost is obtained through evaluation and judgment by management based on the nature of different projects, estimated contract amounts, construction periods, construction works and construction methods. As it involves subjective judgment, it has a high degree of estimation uncertainty, which may affect the recognition of project revenue. Please refer to Note 6(20) for

details of the transaction price for the Group's construction contracts for which performance obligations have not yet been fulfilled.

6. Details of Significant Accounts

(1) Cash and cash equivalents

	March 31, 2025	December 31, 2024	March 31, 2024
Check deposits and demand deposits	$ 1,079,411	$ 1,849,724	$ 1,792,163
time deposit	-	50,000	-
Cash on hand and revolving funds	12,439	12,698	9,559
	$ 1,091,850	$ 1,912,422	$ 1,801,722

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. There has no cash pledged to others.

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

	March 31, 2025	December 31, 2024	March 31, 2024
Mandatory financial assets at fair value through profit or loss deposits
Listed company stock	$ -	$ -	$ 29,597
Evaluation Adjustment	-	-	( 11,967)
	$ -	$ -	$ 17,630

A. The Group's financial assets measured at fair value through profit or loss are recognized in profit or loss from January 1 to March 31, 2025 and 2024 in net (loss) NT$ 0 and NT($1,195)
B. The financial assets measured at fair value through profit or loss held by the Group have not been provided as pledge guarantees.
C. Please refer to Note 12 (2) for information on the credit risk information of financial assets measured at fair value through profit or loss.

(3) Financial assets at amortised cost – current

	March 31, 2025	December 31, 2024	March 31, 2024
Reserve account deposits	$ 4,740,331	$ 4,942,745	$ 1,784,845
pledged time deposit	152,973	145,079	162,490
	$ 4,893,304	$ 5,087,824	$ 1,947,335

A. The breakdown of financial assets measured at amortised cost recognised in profit or loss is as follows:

For the three months For the three months

interest income

ended March 31, 2025 ended March 31, 2024

$ 7,870 $ 323

B. Without considering other credit enhancements, the exposure amount that best represents the Group's holdings of financial assets with the greatest credit risk measured at amortized cost is its book value.
C. Please refer to Note 8 for details of the circumstances in which the Group provides financial assets measured at amortized cost as pledges.
D. Please refer to Note 12(2) for information on the credit risk of financial assets measured by amortized cost.

(4) Accounts Receivable

	March 31, 2025	December 31, 2024	March 31, 2024
Accounts Receivable	$ -	$ 7,619	$ -
Project receivable	155,463	345,070	98,974
	$ 155,463	$ 352,689	$ 98,974

A. The project receivables of the Group are from government agencies, public enterprises and private institutions, etc., and the receivables have not been overdue or impaired. Please refer to Note 12 (2) for the credit risk information of related accounts receivable.
B. The accounts receivable balances on March 31, 2025, December 31, 2024 and March 31, 2024 are all due to customer contracts, and the accounts receivable of customer contracts on January 1, 2024 are new NT$352,459.

(5) Inventory

	March 31, 2025	December 31, 2024	March 31, 2024
Buildings and land held for sale	$ 226,513	$ 226,513	$ 319,645
Construction in progress	130,505	130,505	130,505
	$ 357,018	$ 357,018	$ 450,150

A. The inventory cost recognized as expense for the three months ended March 31, 2025 and 2024 was NT$0.
B. For information on the guarantee provided by the Group's inventory, please refer to Note 8 for details.

(6) Cost of fulfilling contracts

	March 31, 2025	December 31, 2024	March 31, 2024
Prepayment for materials and construction	$ 430,651	$ 461,700	$ 413,633
Prepayment for construction insurance	265,430	98,541	99,266
	$ 696,081	$ 560,241	$ 512,899

(7) Financial assets at fair value through other comprehensive income-non-current

Items	March 31, 2025	December 31, 2024	March 31, 2024
Equity instruments
Non-listed stocks	$ 56,496	$ 56,496	$ 56,496
Valuation adjustments	35,227	32,853	84,636

$	91,723	$	89,349	$	141,132

A. The Group chooses to classify the equity instruments of strategic investment as financial assets at fair value through other comprehensive income. The fair value of the investments at March 31, 2025, December 31, 2024 and March 31, 2024 were NT$91,723, NT$89,349 and NT$141,132, respectively.

B. The details of financial assets measured at fair value through other comprehensive profit and loss recognized in profit and loss and comprehensive profit and loss are as follows::

	For the three months ended March 31
	2025	2024
Fair value recognized in other comprehensive income	$ 2,374	$ 10,867

C. The credit risk related information of the financial assets at fair value through other comprehensive income is described in Note 12 (2).

(8) Property, plant and equipment

	2025
	Land	Buildings and structures	Machinery equipment	Others	Total
January 1
Cost	$ 342,826	$ 247,869	$ 105,157	$ 80,764	$ 776,616
Accumulated depreciation and impairment	( 81,980)	( 123,941)	( 26,018)	( 29,848)	( 261,787)
	$ 260,846	$ 123,928	$ 79,139	$ 50,916	$ 514,829
January 1
Additions	-	-	365	649	1,014
Depreciation expense	-	( 2,401)	( 4,652)	( 3,488)	( 10,541)
March 31	$ 260,846	$ 121,527	$ 74,852	$ 48,077	$ 505,302
March 31
Cost	$ 342,826	$ 247,869	$ 105,522	$ 81,413	$ 777,630
Accumulated depreciation and impairment	( 81,980)	( 126,342)	( 30,670)	( 33,336)	( 272,328)
	$ 260,846	$ 121,527	$ 74,852	$ 48,077	$ 505,302
	2024
---	---	---	---	---	---
	Land	Buildings and structures	Machinery equipment	Others	Total
January 1
Cost	$ 342,826	$ 248,741	$ 105,821	$ 58,255	$ 755,643
Accumulated depreciation and impairment	( 81,980)	( 115,210)	( 15,864)	( 21,290)	( 234,344)

	$ 260,846	$ 133,531	$ 89,957	$ 36,965	$ 521,299
January 1	$ 260,846	$ 133,531	$ 89,957	$ 36,965	$ 521,299
Additions	-	-	-	996	996
Depreciation expense	-	( 2,401)	( 5,061)	( 2,552)	( 10,014)
disposition-cost	-	( 872)	-	( 2,876)	( 3,748)
Disposal - depreciation	-	872	-	2,876	3,748
March 31	$ 260,846	$ 131,130	$ 84,896	$ 35,409	$ 512,281
March 31
Cost	$ 342,826	$ 247,869	$ 105,821	$ 56,375	$ 752,891
Accumulated depreciation
and impairment	( 81,980)	( 116,739)	( 20,925)	( 20,966)	( 240,610)
	$ 260,846	$ 131,130	$ 84,896	$ 35,409	$ 512,281

A. The real estate, plant and equipment held by the Group are based on the evaluation results of independent evaluation experts. The evaluation is based on the comparative method and the cost method or the income method, which is a third-level fair value. The main assumptions of the income approach are as follows:

	March 31, 2025	December 31, 2024	March 31, 2024
Income capitalization rate	1.32%	1.32%	1.68%

B. Please refer to Note 8 for the information on the Group's collateral provided by property, plant and equipment.

(9) Leasing arrangements-lessee

A. The Group leases various assets, including lands, buildings and transportation equipment. Lease contracts are typically made for periods of 2-10 years. Lease terms are negotiated on an individual basis and contain a wide range of different clauses and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. Some of the land, buildings and transportation equipment leased by the Group have a lease period of no more than 12 months, and some of the low-value underlying assets leased are first aid equipment.
C. The changes of right-of-use assets are as follows:

	2025
	Land	Buildings	Transportation equipment	Total
January 1	$ 56,058	$ 64,047	$ 1,884	$ 121,989
Add	24,456	475	-	24,931
Lease Modification	768	-	-	768

D. The information on profit and loss accounts relating to lease contracts is as follows:

Items affect profit or loss for the period	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Interest expense on lease liabilities	$ 774	$ 830
Expenses for short-term rental contracts	4,813	3,473
Fees for leasing low-value assets	7	24
Lease Modification Benefit	12,885	-

E. The Group's total lease cash outflows for the three months ended March 31, 2025 and 2024 were NT$15,349 and NT$11,211, respectively.

(10) Investment property

	2025
	Land	Buildings and structures
January 1
Cost	$ 115,734	$ 115,202
Accumulated depreciation and impairment	-	( 79,358)
	$ 115,734	$ 35,844
January 1	$ 115,734	$ 35,844
Depreciation expense	-	( 435)
March 31	$ 115,734	$ 35,409
March 31
Cost	$ 115,734	$ 115,202
Accumulated depreciation and impairment	-	( 79,793)
	$ 115,734	$ 35,409

	2024
	Land	Buildings and structures	Total
January 1
Cost	$ 115,734	$ 115,202	$ 230,936
Accumulated depreciation and impairment	-	( 77,617)	( 77,617)
	$ 115,734	$ 37,585	$ 153,319
January 1	$ 115,734	$ 37,585	$ 153,319
Depreciation expense	-	( 435)	( 435)
March 31	$ 115,734	$ 37,150	$ 152,884
March 31
Cost	$ 115,734	$ 115,202	$ 230,936
Accumulated depreciation and impairment	-	( 78,052)	( 78,052)
	$ 115,734	$ 37,150	$ 152,884

A. Rental income and direct operating expense from the investment property are shown below:

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Rental income from investment property	$ 936	$ 765
Direct operating expense arising from the investment property that generated rental income in the period	$ 432	$ 432
Direct operating expense arising from the investment property that did not generate rental income in the period	$ 23	$ 23

B. The analysis of the due date of the lease payments leased out by the Group under operating leases is as follows:

	March 31, 2025	December 31, 2024	March 31, 2024
Within a year	3,321	2,974	4,566
2-5 year	3,400	4,062	7,670
	$ 6,721	$ 7,036	$ 12,236

C. The fair value of the investment property held by the Group at March 31, 2025, December 31, 2024 and March 31, 2024 were NT$386,514, NT$386,514 and NT$330,288, respectively, based on the evaluation results of independent evaluation experts. The evaluation was calculated by comparative method, cost method, land development analysis method and income method and classified as the level 3 fair value. The main assumption of the income method is as follows:

March 31, 2025

December 31, 2024

March 31, 2024

D. Please refer to Note 8 for the information on the Group's collateral provided by investment property.

(11) Other non-current assets

	March 31, 2025	December 31, 2024	March 31, 2024
Refundable deposits	$ 40,095	$ 38,156	$ 41,893
Prepayment for equipment	11,955	5,088	2,108
Net defined benefit assets	15,070	13,121	953
	$ 67,120	$ 56,365	$ 44,954

(12) Short-term borrowings

Type	March 31, 2025	December 31, 2024	March 31,2024
Secured borrowings	$ 590,000	$ 840,000	$ 610,000
Interest rate range	2.11%~2.49%	2.11%~3.00%	1.98%~2.36%

A. Please refer to Note 8 for details of the pledge collateral of short-term borrowings.

(13) accounts payable

Type		March 31, 2025	December 31, 2024	March 31,2024
Project	payment
payable		$ 852,654	$ 729,127	$ 595,867
Project	retainage
payable		574,753	513,475	369,906
accounts payable		244	244	244
		$ 1,427,651	$ 1,242,846	$ 966,017

(14) Long-term borrowings

Type of borrowings	Repayment period	March 31, 2025	December 31, 2024	March 31, 2024
Medium-term secured borrowings	Amortized from 2022 to 2027	$ 56,338	$ 57,615	$ 61,401
	After the project remittance ratio reaches 20%, it will be repaid in installments according to 30%	-	41,170	127,070

	75,971	134,938	-
Subtotal	132,309	233,723	188,471
Deduct: due within one year	( 81,162)	( 145,113)	( 132,160)
	$ 51,147	$ 88,610	$ 56,311
Interest rate range	2.10%~2.62%	2.10%~2.63%	2.49%~2.50%

A. KSC078 Joint Loan Case

a. On November 16, 2023, the Group signed a long-term unsecured joint loan, project performance bond and project advance payment repayment guarantee joint credit contract with six financial institutions including Taipei Fubon Commercial Bank and Cooperative Bank Commercial Bank, with a total limit of NT$ 3,200,000, and the credit period is until January 19, 2033. The main restriction is that the financial ratios of the annual consolidated financial statements should be maintained as follows:

(a) The current ratio (current assets/current liabilities) must not be less than 100%.

(b) Liabilities ratio (total liabilities/ tangible net worth) shall not be greater than 200%.

(c) Interest protection multiples [(income before tax+ interest expense+ depreciation and amortization)/ interest expense paid in the period] shall not be less than 200%.

(d) Tangible net worth (net value-intangible assets) shall not be less than NT$4,000,000

b. As of March 31, 2025, the undrawn loan amount for this joint loan case was NT$700,000, and the undrawn guarantee amount was NT$52,885.

B. KSC081 Joint Loan Case

a. On June 18, 2024, the company signed a joint credit agreement with ten financial institutions including Taiwan Cooperative Bank for long-term unsecured joint lending, project performance bond and project prepayment repayment guarantee, with a total amount of NT$5,900,000. On March 17, 2034, the main restriction is that the financial ratios in the annual consolidated financial statements shall be maintained as follows:

(a) Current ratio (current assets/ current liabilities) shall not be less than 100%.

(b) Liabilities ratio (total liabilities/ tangible net worth) shall not be greater than 200%.

(c) Interest protection multiples [(income before tax+ interest expense+ depreciation and amortization)/ interest expense paid in the period] shall not be less than 200%.

(d) Tangible net worth (net value-intangible assets) shall not be less than NT$4,000,000

b. As of March 31, 2025, the undrawn loan amount for this joint loan case was NT$1,350,000, and the undrawn guarantee amount was NT$1,668,013.

C. KSC082 Joint Loan Case

a. On March 13, 2025, the Group signed a long-term unsecured joint loan, project performance bond and project advance payment repayment guarantee joint credit contract with eight financial institutions including the Land Bank of Taiwan, with a total amount of NT$3,200,000. The credit period is until March 20, 2035. The main restrictive terms are that the financial ratios of the annual consolidated financial statements should be maintained as follows:

(a) The current ratio (current assets/current liabilities) must not be less than 100%.

(b) Liabilities ratio (total liabilities/ tangible net worth) shall not be greater than 200%.

(c) Interest protection multiples [(income before tax+ interest expense+ depreciation and amortization)/ interest expense paid in the period] shall not be less than 200%.

(d) Tangible net worth (net value-intangible assets) shall not be less than NT$4,000,000

b. As of March 31, 2025, the undrawn loan amount for this joint loan case was NT$710,000, and the undrawn guarantee amount was NT$915,656.

D. As of March 31, 2025, In addition to the above-mentioned KCS078, KCS081 and KCS082 joint loan case, the Group's unutilized loan amount is NT$40,000.

E. Please refer to Note 12 (2) C. c. for details of the liquidity risks.

F. Please refer to Note 8 for details of the pledge collateral of long-term borrowings.

(15) Provisions for liabilities

	Warranty
	2025	2024
January 1	$ 3,612	$ 75,298
Use in the current period	-	( 252)
Reversal in the current period	-	( 68,236)
March 31	$ 3,612	$ 6,810
Recognized as:
Provisions for liabilities-current	$ 2,946	$ 2,576
Provisions for liabilities-non-current	$ 666	$ 4,234

The Group's warranty provision of liabilities is mainly related to the construction contracts, and is estimated upon historical warranty data. The warranty provision of liabilities is expected to expire from 2025 to 2027.

(16) Net defined benefit assets

A. Nefined benefit plan

a. The Company has a defined benefit pension plan in accordance with the "Labor Standards Act", covering all regular employees' service years prior to the enforcement of the "Labor Pension Act" on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension

mechanism under the Labor Standards Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31 every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Company will make contributions to cover the deficit by next March.

b. From January 1 to March 31, 2025 and 2024, the pension cost recognized by the Group according to the pension method mentioned above is divided into NT$19 and NT$34.

c. The Group expects to pay NT$925 for the retirement plan in 2025, and NT$1,930 has been paid as of March 31, 2025.

B. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the "New Plan") under the Labor Pension Act (the "Act"), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under the defined contribution pension plans of the Group for the three months ended March 31, 2025 and 2024 were NT$3,901 and NT$2,664, respectively

(17) Common stock

As of March 31, 2025 and 2024, the Company's authorized capital was NT$6,000,000, divided into 600,000 thousand shares. The paid-up capital was NT$4,922,802. The par value per share is NT$10. The payment of issued shares of the Company has been received. The number of outstanding ordinary shares of the Company at the beginning of the period and at the end of the period was 492,280 thousand shares.

(18) Capital surplus

Pursuant to the R.O.C. Company Law, capital surplus arising from paid-up capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-up capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(19) Retained earnings

A. The Company's Articles of Incorporation stipulates that if there is a surplus in the annual final accounts, the tax should be paid first to make up for the previous year's losses, and 10% of the remaining amount shall be set aside as legal reserve. If there is still a surplus plus beginning distributable surplus, the Board of Directors will propose some resolution and decide by Board of Shareholders. The shareholder dividends are distributed in two ways: stock dividends and cash dividends. The proportion of cash dividends is not less than 10% of the total shareholder dividends. When necessary, the surplus distribution could be set aside as special reserve before the dividend distribution.

B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve exceeds 25% of the Company's paid-in capital.

C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

D. On May 9, 2025, the company proposed the 2024 earnings distribution proposal by the board of directors, and on June 25, 2024, the 2023 earnings distribution proposal was approved by the shareholders' meeting. as follows:

	2024	2023
Provision of statutory surplus reserve	$ 1,640	$ 6,279

The above-mentioned information on the distribution of earnings passed by the board of directors and the resolutions of the shareholders' meeting can be inquired at the Public Information Observatory.

E. As of the review date of this report, the company's 2024 annual profit distribution plan has not yet been resolved by the shareholders' meeting.

(20) Operating revenue

A. Details of customer contract revenue

The Group's revenue is derived from providing control over the project that is gradually transferred over time and generates related revenue in each reportable segment:

Timing of revenue recognition

March 31, 2025	Project contracting	Real estate sales	Other	Total
Income recognized over time	$ 2,153,329	$ -	$ 205	$ 2,153,534
Revenue recognized at a certain point in time	-	-	-	-
	$ 2,153,329	$ -	$ 205	$ 2,153,534

March 31, 2024	Project contracting	Real estate sales	Other	Total
Income recognized over time	$ 1,501,492	$ -	$ 206	$ 1,501,698
Revenue recognized at a certain point in time	-	-	-	-
	$ 1,501,492	$ -	$ 206	$ 1,501,698

B. Contract assets and liabilities

The Group recognized the following customer contract revenue-related contract assets and liabilities:

	March 31, 2025	December 31, 2024	March 31, 2024
Contract assets:
Construction contract	$ 2,829,989	$ 2,486,628	$ 2,509,032
Project retention receivables	950,514	857,575	582,548
Deduct: allowance for loss	( 700,805)	( 651,402)	( 651,402)
	$ 3,079,698	$ 2,692,801	$ 2,440,178
Contract liabilities :
Construction contract	$ 3,056,124	$ 3,424,369	$ 700,474

(a) The Group's project retention money arising from construction contracts is expected to be recovered as follows:

	March 31, 2025	December 31, 2024	March 31, 2024
2025	$ 12,013	$ 9,885	$ 122
2026	763,751	709,162	525,772
After 2027 (inclusive)	174,750	138,528	56,654
	$ 950,514	$ 857,575	$ 582,548

(b) Changes in the Group's contract assets and contract liabilities are mainly due to differences in the degree of completion of construction performance obligations and the timing of customer payments over time. The Group has undertaken more government engineering projects since the first quarter of 2024, and has received advance payment for projects under the contracts, resulting in an increase in contract liabilities.

In 2025 and from January 1 to March 31, 2024, due to the re-evaluation of the future recoverability of the invested construction costs based on recent court judgments, etc., the Group has set aside asset impairment losses of NT$49,403 and NT$119,379, respectively. For changes in assets, please refer to Note 12(2) and Note 9 for details of the progress of the relevant litigation.

(c) The Group's contract liabilities on January 1, 2024 were NT$744,957, and the contract liabilities recognized as revenue from January 1 to March 31, 2025 and 2024 were respectively NT$695,443 and NT$80,845.

(d) Transaction price to non-performance obligation

As of March 31, 2025, December 31, 2024 and March 31, 2024, the total transaction price of the Group's unfulfilled performance obligations was NT$73,047,173, NT$74,571,532 and NT$62,973,039, respectively. Revenue will be gradually recognized as the construction of bridges and their connecting roads, railway civil engineering, electromechanical, ports, etc. is completed. These projects are expected to be completed from 2025 to 2033.

(e) Please refer to Note 12 (2) for details of the contract assets credit risk.

(21) Interest income

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Interest income from financial assets measured at amortised cost	$ 7,870	$ 323
Bank deposit interest income	1,485	1,142
Other interest income	60	58
	$ 9,415	$ 1,523

(22) Other income

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
rental income	$ 1,102	$ 1,367
Litigation compensation income	-	1,263
Income from refund of litigation and referee fees	-	1,898
Other income - other	953	904
	$ 2,055	$ 5,432

Our company and Taichung Port Branch have reached a litigation settlement in the lawsuit over compensation for delayed construction period and additional construction fees for the "Taichung Port Pier 106 New Construction Project" after filing a lawsuit with the Taichung District Court in June 2022. It is agreed that Taichung Port Branch will pay the Company NT$1,326 (tax included) in settlement and recognize litigation compensation income of NT$1,263.

(23) Other gains and losses

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Lease Modification Benefit	$ 12,885	$ -
Foreign exchange gains	891	1,338
Losses on financial assets at fair value through profit or loss	-	(1,195)

Investment propertydepreciation expense	( 435)	( 435)
	$ 13,341	($ 292)

(24) Financial cost

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Interest expense
Bank loan	$ 5,478	$ 4,701
Interest expense on lease liability	774	830
	$ 6,252	$ 5,531

(25) Additional information on the nature of expenses

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Engineering cost	$ 1,882,311	$ 1,307,379
Employee benefit expense	165,495	122,042
Performance bond fee	29,694	15,249
Depreciation expense of right-of-use assets	20,382	16,188
Depreciation of property, plant and equipment	10,541	10,014
Amortization expense of intangible assets	666	657
	$ 2,109,089	$ 1,471,529

(26) Employee benefit expense

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Wages and salaries	$ 142,108	$ 104,539
Labor and health insurance fees	13,453	9,498
Pension costs	3,882	2,698
Directors' remunerations	590	545
Other personnel expenses	5,462	4,762
	$ 165,495	$ 122,042

A. In accordance with the Company's Articles of Incorporation, if there is a balance after deducting accumulated deficits from profit, the Company shall distribute bonus to the employees and pay remuneration to the directors that should be $3\% - 5\%$ and not be higher than $3\%$ , respectively, of the total distributed amount.

B. The estimated amount of employee compensation for the Company from January 1 to March 31, 2025 is NT$166, and the estimated amount of director compensation is NT$50. Due to operating losses from January 1 to March 31, 2024, no employee compensation or director compensation was estimated.

From January 1 to March 31, 2025, the estimated rates are 5% and 1.5% respectively based on the profit situation up to the end of the period.

C. Employees' compensation and directors' remuneration for 2024 were NT$1,090 and NT$0 as resolved at the meeting of Board of Directors and in agreement with those amounts recognized in the 2024 financial statements.

The aforementioned employee remuneration was paid in cash and as of May 9, 2025, has not yet been paid.

Information of the remuneration of employees and directors approved by the Board of Directors of the Company can be obtained from the "Market Observation Post System".

(27) Income tax

A. Income tax expense

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Current tax on profits for the year
Retained Earnings Tax	$ -	$ -
Previous years (high) underestimate	-	-
Current income tax	-	-
Deferred tax:
Origination and reversal of temporary differences	10,729	1,613
	$ 10,729	$ 1,613

B. The Group's profit-seeking enterprise income tax has been approved by the tax collection authorities:

	Income tax approved year
The Company	2022
Kung Sing Development Co., Ltd.	2023
Chan Pang Construction Co., Ltd.	2023

(28) Loss per share

	For the three months ended March 31, 2025
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	loss per share (NTD)
Basic/diluted loss per share
Net profit attributable to ordinary shareholders of the parent company for the period	($ 7,620)	492,280	$ ( 0.02)

For the three months ended March 31, 2024

	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	loss per share (NTD)
Basic/diluted loss per share
Net profit attributable to ordinary shareholders of the parent company for the period	($ 99,333)	492,280	$ ( 0.20)

Due to the company's losses from January 1 to March 31, 2025 and 2024, if the impact of employee compensation is included, it will have an anti-dilution effect, so it is not included in the calculation of diluted loss per share.

(29) Supplemental cash flow information

Investment activities with only partial cash payments:

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Purchase of property, plant and equipment	$ 1,014	$ 996
Add: Prepayment for equipment at the end of the period	11,955	2,108
Add: Notes payable at the beginning of the period	1,052	4,860
Deduct: Prepayment for equipment at the beginning of the period	( 5,088)	-
Deduct: Notes payable at the end of the period	( 3,378)	( 490)
Cash paid during the period	$ 5,555	$ 7,474
Purchase of intangible assets	$ 320	$ 1,373
Deduct: Notes payable at the end of the period	-	( 977)
Cash paid during the period	$ 320	$ 396

(30) Changes in liabilities from financing activities

	2025
	Short-term borrowings	Long-term borrowings	Lease liabilities	Deposits received	Total liabilities from financing activities
January 1	$ 840,000	$ 233,723	$ 123,585	$ 161,300	$ 1,358,608
Changes in cash flow from financing activities	( 250,000)	( 101,414)	( 9,755)	( 73,620)	( 434,789)
New in this issue	-	-	24,931	-	24,931
Interest expense paid (Note)	-	-	( 774)	-	( 774)
Changes in other non-cash items	-	-	( 11,343)	-	( 11,343)

March 31

$ 590,000	$ 132,309	$ 126,644	$ 87,680	$ 936,633

2024

	Short-term borrowings	Long-term borrowings	Lease liabilities	Deposits received	Total liabilities from financing activities
January 1	$ 660,000	$ 235,146	$ 97,996	$ 229,183	$ 1,222,325
Changes in cash flow from financing activities	( 50,000)	( 46,675)	( 7,164)	( 17,160)	( 120,999)
New in this issue	-	-	47,474	-	47,474
Interest expense paid (Note)	-	-	( 550)	-	( 550)
Changes in other non-cash items	-	-	550	-	550
March 31	$ 610,000	$ 188,471	$ 138,306	$ 212,023	$ 1,148,800

7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties	Relationship with the Group
Pan,ying-jiuan	Key member of the management
Ting ch’êng-chih	Key member of the management
Chen, huang-ming	Key member of the management
Chiang, chi-ching	Key member of the management
Ch’uan fu Investment Co., Ltd.	Serving as a director of the company
Pan, jun-rong	Other related party

(2) Significant transactions with related parties

A. Endorsement and guarantees

a. Part of the borrowings amount of the Group was endorsement guarantee provided by the Group's key members of management and other related parties. As of March 31, 2025, December 31, 2024, and March 31, 2024, the total amounts guaranteed by related parties are NT$18,964,251, NT$17,240,249, and NT$11,552,251 respectively.

b. On March 31, 2025, December 31, 2024 and March 31, 2024, the Group based on the joint creation of part of the borrowing quota from the bank, which was jointly established by the Group and others.

The mutual endorsement guarantee provided by the related parties in accordance with the loan contract is NT$55,685, NT$55,685 and NT$108,000, while the actual disbursements were NT$55,685, NT$55,685 and NT$74,078 respectively.

c. For information on the Group's provision of inventories as guarantee for loans from other related parties, please refer to Note 8 for details.

B. Joint construction and separate sale

The Group signed a joint construction contract with other related parties. By

means of joint construction and separate sale, the land of Daihudi subsection, Ankeng section, Sindian Dist. is provided by other related parties, and the houses are constructed by the Group. The construction project was completed in 2018. At March 31, 2025, December 31, 2024 and March 31, 2024, the Group paid the joint construction cost NT$39,161, NT$38,733 and NT$47,861 on other related parties behalf and recognized in “Other receivables-Relevant person”. Receipts from other related parties are calculated as $0, $0 and $9,538, listed as "Other Current Liabilities".

C. Rental income (table "Other income")

	March 31, 2025	March 31, 2024
Other related persons	$ 23	$ 23

The Group leases part of its office space to related parties, and the calculation and collection methods are equivalent to those of non-related parties.

(3) The compensation of key member of the management

	For the three months ended March 31, 2025	For the three months ended March 31, 2024
Short-term employee benefits	$ 7,734	$ 6,303
Post-employment benefits	264	143
	$ 7,998	$ 6,446

Pledged Assets

The details of the pledged assets are as follows:

Items	Book value			Purpose
	March 31, 2025	December 31, 2024	March 31, 2024
Measured at amortized costfinancial assets	$ 4,893,304	$ 5,087,824	$ 1,947,335	Provided to owners as a guarantee of project performance, short-term borrowings and litigation
Inventory - Properties for sale	226,513	226,513	319,645	Provide loan guarantees to related parties
Other current assets - Refundable deposits	-	-	25,000	Project deposit
Property, plant and equipment	298,710	300,744	306,843	Short-term borrowings guarantee
Investment property	101,973	102,339	103,437	Long-term and short-term borrowings guarantee
	$ 5,520,500	$ 5,717,420	$ 2,702,260

Significant Contingent Liabilities and Unrecognized Contract Commitments

(1) As of March 31, 2025, the Group had issued but not yet used the funds for construction projects of NT$0, and the amount of bank guarantees for performance, advance payment and warranty was NT$8,647,623.

(2) As of March 31, 2025, the amount of notes issued by the Group due to the lease contracts was NT$19,354.

(3) The engineering litigation judgment and status as of March 31, 2025:

A. The Company won the tender for the Muzha Extension (Neihu line) CB410 Section Project put out by the Eastern District Project Office (First District Project Office for now), Department of Rapid Transit Systems, Taipei City Government. Both sides signed the project procurement contract on June 12, 2003. The Company has completed all projects and received the qualification approval from the Eastern District Project Office in December 2012. However, after the commencement of construction on June 16, 2003, various factors that are not attributable to the Company have affected the implementation of the aforementioned projects. The Eastern District Project Office approved 278 and 122 days extensions of time with the total number of 400 days. The related costs and expense increased due to the extensions of time. According to the contract, it should be adjusted to increase the project payment to indemnify. In December 2010, the Company filed a lawsuit with the Taipei District Court to the Eastern District Project Office for payment of indemnification of extensions of time and the prejudgment interest. The related judgments are as follows:

(a) The trial court judged that the First District Project Office shall pay the Company NT$17,723 and 386 thousand US dollars and the prejudgment interest and dismissed other suits.

(b) Both the Company and the First District Project Office appealed against the judgment. The court of second instance has not yet rendered a judgment.

B. The Company won the tender for the Linkou Thermal Power Plant Refurbishment and Expansion Project-Diversion Dike of Water Outlet, Northern Jetty, Coal Unloading Pier, Connection Bridge and Other Associated Facilities Construction Project put out by the Northern Construction Office, Department of Nuclear and Fossil Power Projects, Taiwan Power Company. Both sides signed the project procurement contract on June 3, 2010. The Company has completed all projects and received the qualification approval from the Northern Construction Office. However, after the commencement of construction on June 14, 2010, various factors such as adverse weather conditions, rough sea, obstruction from fishermen, typhoon, the Chinese New Year and design modification that are not attributable to the Company have affected the implementation of the critical path of the project. The Northern Construction Office approved 19 times extensions of time with the total number of 568.5 days and the Company early completed the project at August 17, 2017. Therefore, the actual extensions of time is 561 days. Besides, after the commencement of construction, fishermen had repeatedly protested against Taipower from April 2011 to February 2013 and thus the Company changed the construction methods, resulted in increase of performance cost of construction ships halt and rubble land transportation. The related costs and expense increased due to the extensions of time and fishermen protest. According to the contract, it should be adjusted to increase the project payment to indemnify. In February 2020, the company filed a lawsuit with the New Taipei District Court in accordance with the law to request the Northern Construction Department to pay the extension of

the construction period, the compensation due to the fishermen's protest and the interest on the delay. The above-mentioned project delay lawsuit was dismissed by the court of second instance in November 2021. The company was dissatisfied with the above judgment and was later sent back to the High Court for further hearing by the Supreme Court on September 17, 2022. The company and the Northern Construction Department reached a settlement on November 27, 2023, and the Northern Construction Department paid the company NT$20,000, and the amount has been fully recovered on January 25, 2024. In April 2022, the third-instance court rejected the fishermen's appeal against the lawsuit, and the entire case came to an end.

C. The company won the bid for the "Integrated Coal Bunker System Project of the Linkou Power Plant Renovation and Expansion Project" from the Taiwan Power Nuclear Power Engineering Office. The two parties signed a project procurement contract on May 10, 2012, and the company has completed all projects. It passed the inspection and acceptance by the Nuclear Engineering Office on April 21, 2022.

(a) However, in September 2012, Taipower Company re-contracted the related projects of the "coal conveying belt system" at the same project site to another engineering company (hereinafter referred to as "Company A") for detailed design and construction. On July 6, 2014, the company was instructed to hand over part of the project land for the common use of Company A, resulting in a lack of space for the original design and construction, thus resulting in related costs. In July 2021, the company filed a petition with the Taipei District Court for Taipower to increase the payment for the project. Due to the transfer of jurisdiction from the Taipei District Court to the Taoyuan District Court for trial. On April 23, 2025, the Company and the Nuclear Engineering Department agreed to settle the dispute by having the Nuclear Engineering Department pay the Company NT$31,753.

(b) After the company completed the B-column coal bunker in November 2016, Taipower Corporation considered it necessary to use it first. After the five cylindrical coal bunkers of column B started to operate, the B4 cylindrical coal bunker transverse beam (Transverse Beam) was damaged since May 26, 2017. Taipower Company instructed the company to repair, strengthen the structure and add the transverse beam structure. For matters such as stainless steel cladding on the surface, the back-end electric company only paid additional construction costs for the additional surface stainless steel cladding part of the horizontal beam structure, and did not pay additional fees for repairing and structural reinforcement in accordance with its instructions. In August 2021, the company filed a petition with the Taipei District Court for Taipower to increase the payment for the project. Due to the transfer of jurisdiction from the Taipei District Court to the Taoyuan District Court for trial, as of the date of the audit report, the court of first instance has not yet made a judgment.

(c) The original completion date of the project was June 19, 2016. However, due to the typhoon, the delay in the provision of information by the interface manufacturer, and the delay in the delivery of the land, the work had to be carried out and the project was delayed until the end of the construction

period. On March 23, 2021, the party actually completed the overall project, and the actual extension of the construction period was 1,738 days, which eventually resulted in an increase in contract performance costs such as site management fees and shared head office management fees. In August 2021, the company filed a petition with the Taipei District Court for Taipower to increase the payment for the project. Due to the transfer of jurisdiction from the Taipei District Court to the Taoyuan District Court for trial. On April 23, 2025, the Company and the Nuclear and Fire Department agreed to reach a settlement with the Nuclear and Fire Department paying the Company NT$86,139.

D. The company won the bid for the "New Construction of Suhua Highway Guanyin Tunnel on the Taiwan-Kowloon Line" (hereinafter referred to as the "Guanyin Tunnel") and the "Taiwan-Kowloon Line Suhua Highway Guanyin Tunnel" (hereinafter referred to as the "Guanyin Tunnel") and the "Taiwan-Kowloon Line". Suhua Highway Gufeng Tunnel New Construction" (hereinafter referred to as "Gufeng Tunnel"), the two parties signed a project contract on October 18, 2011. Our company won the bid for Guanyin Tunnel and Gufeng Tunnel, which were publicly tendered by the General Administration of Highways. Our company has completed all The project has passed the acceptance inspection in February and August 2020 respectively.

(a) The company was instructed by the owner to thicken the clapboard and shorten the spacing of the clapboard, resulting in a huge increase in the cost of the project and an increase in the construction cost due to the geological differences in the work area. Appeal to the General Administration of Highways to increase the payment for the project. According to the judgment of the first-instance court in March 2022, the General Administration of Highways should pay the company NT$9,766 and delayed interest. The company was dissatisfied with the results of these judgments and appealed to the Taiwan High Court in April 2022. As of the date of reviewing the report, the court of second instance has not yet made a judgment.

(b) Since the construction of Guanyin Tunnel and Gufeng Tunnel started on November 1, 2011, due to the influence of factors that cannot be attributed to the company, such as typhoons, collapse, changes in laws and designs, etc. during the construction period, the construction has been approved by the General Administration of Highways. The number of days of extension is 1,141 days and 1,363 days respectively. The Company has increased related costs due to the extension of the above construction period. In November 2020, the company applied to the Yilan District Court to request the General Administration of Highways to pay compensation for the extension of the construction period. As of the date of the inspection report, the court of first instance has not yet made a judgment.

(c) During the construction of the Gufeng Tunnel, the General Administration of Highways has handled contract changes several times. Among them, the Company and the General Administration of Highways could not reach an agreement on the price of each project for some contract changes, resulting in the negotiation. In response to the price difference of insufficient payment

from the General Administration of Highways, the company filed a petition with the Yilan District Court in July 2021 for the General Administration of Highways to increase the payment for the project. As of the date of the inspection report, the court of first instance has not yet made a judgment.

(d) Due to the various excavation work of Guanyin Tunnel and Gufeng Tunnel, the current conditions are affected by factors such as "land acquisition, building demolition, Hanben cultural relics, harsh geological conditions in the tunnel, etc." The operation could not proceed smoothly according to the original approved overall construction plan. As a result, the cost of labor and equipment for various tunnel excavation projects has increased significantly. In July 2021, the company petitioned the Yilan District Court to increase the project payment from the Highway Administration. It was rejected by the first instance court in April 2025. The Company is dissatisfied with the above judgment and plans to appeal within 20 days of receiving the judgment.

(e) After the excavation of the Guanyin Tunnel and the Gufeng Tunnel began in June 2012, it was discovered that the original designed tunnel earthwork classification was significantly different from the actual conditions, and the actual geological conditions were different from those assumed by the defendant in the original design. The difference is so great that the related costs and expenses increase and cannot be measured. In November 2020, the company petitioned the Yilan District Court for the Highway Administration to increase payment for the project. On March 25, 2024, the court of first instance ruled that the Highway Administration should pay the company NT$50,130 and delay interest. The Company was dissatisfied with the results of these judgments and appealed to the High Court in April 2024. As of the date of review of the report, the court of second instance has not made a decision.

(f) The Guanyin Tunnel and Gufeng Tunnel have to pay extra electricity charges due to the multiple extension of the construction period, and the project contract only includes electricity charges for the "tunnel excavation" project, but other non-excavation projects do not include electricity charges, which are missing items. As a result, the related costs and expenses have increased and cannot be priced. In July 2021, the company applied to the Yilan District Court to request the General Administration of Highways to increase the payment for the project. According to the first-instance judgment on March 29, 2023, the General Administration of Highways should pay the company NT$10,228 and its delayed interest. The company refused to accept the judgment and appealed to the High Court in April 2023. As of the date of reviewing the report, the High Court The court has yet to decide.

The Group measured the recoverable amount of contract assets and recognized the difference in impairment loss. Please refer to Note 12 (2) for details.

The Group measures assets impairment amount during the financial reporting periods according to litigation progress, possible request amount and materiality, but the final amount will be determined after the conclusion of the relevant cases. The Group will actively defend the aforementioned litigation cases that are still in progress. Due to the unpredictable nature of legal cases, there is currently no accurate estimate of possible losses (in case). And the Company has made necessary adjustments in appropriate ways. The Company wouldn't rule out the possibility of inability to win in all related

cases. Although the judgment amount will affect the recoverability of the contract assets, it wouldn't affect the normal operation of the Company.

Significant Losses from Natural Disaster
None.
Significant Events after the Balance Sheet Date
For the details of 2023 earnings distribution of the Company, please refer to Note 6 (19).

Others

(1) Capital management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the debt-to-capital ratio. This ratio is calculated as net debt divided by total capital. The net debt is calculated as total borrowings include "Current and non-current borrowings" as shown in the consolidated balance sheet deduct cash. Total capital is calculated as "Equity" as shown in the consolidated balance sheet add net debt.

The Group's strategy in 2025 remains the same as in 2024, and the Group is committed to maintaining the debt-to-capital ratio under 50%. The Group's debt-to-capital ratio is as follows:

	March 31, 2025	December 31, 2024	March 31, 2024
Total borrowing	$ 722,309	$ 1,073,723	$ 798,471
Deduct: Cash and cash equivalents	( 1,091,850)	( 1,912,422)	( 1,801,722)
Net debt (A)	$ -	$ -	$ -
Total equity(B)	$ 5,370,337	$ 5,375,583	$ 5,311,633
Total capital (C=A+B)	$ 5,370,337	$ 5,375,583	$ 5,311,633
Debt-to-capital ratio (A/C)	-	-	-

(2) Financial risk of financial instruments

A. Category of financial instruments

	March 31, 2025	December 31, 2024	March 31, 2024
Financial assets
Financial assets at fair value through profit or loss
Financial assets measured at fair value through profit or loss	$ -	$ -	$ 17,630
Financial assets at fair value through other comprehensive income
Select designated equity instrument investments	$ 91,723	$ 89,349	$ 141,132
Financial assets at amortized cost
Cash	$ 1,091,850	$ 1,912,422	$ 1,801,722
Financial assets at amortized cost	4,893,304	5,087,824	1,947,335
Accounts receivable	155,463	352,689	98,974
Contract assets (construction retention)	950,514	857,575	582,548
Other receivables(Including related persons)	54,192	64,603	55,336
Other current assets	-	-	46,000
Refundable deposits(Other non-current assets)	40,095	38,156	41,893
	$ 7,185,418	$ 8,313,269	$ 4,573,808

Financial liabilities	March 31, 2025	December 31, 2024	March 31, 2024
Financial liabilities at amortized cost
Short-term borrowings	$ 590,000	$ 840,000	$ 610,000
Notes payable	544,935	567,609	263,175
Accounts payable	1,427,651	1,242,846	966,017
Other payables	65,308	101,217	48,077
Other current liabilities	62,608	136,188	177,090
Long-term borrowings (including due within one year)	132,309	233,723	188,471
Other non-current liabilities	25,072	25,112	34,933
	$ 2,847,883	$ 3,146,695	$ 2,287,763
Lease liabilities (including due within one year)	$ 126,644	$ 123,585	$ 138,306

B. Risk management policies

The Group's daily operations expose it to a variety of financial risks including market risk, credit risk and liquidity risk. Risk management is performed by the finance department of the Group under policies approved by the Board of Directors.

C. Nature and degrees of significant financial risks

a. Market risk:

Foreign exchange rate risk

(a) The Group's business involves certain non-functional currencies, mainly Renminbi, and is therefore subject to exchange rate fluctuations. Information on foreign currency assets and liabilities with significant exchange rate fluctuations is as follows:

(Foreign currency: functional currency)	March 31, 2025
	Amount (in thousands)	Exchange rate	Book value
Financial assets
Monetary items
CNY : TWD	$ 12,050	4.57	$ 54,433
EUR: TWD	181	35.97	6,511
USD : TWD	27	33.21	913
(Foreign currency: functional currency)	December 31, 2024
---	---	---	---
	Amount (in thousands)	Exchange rate	Book value
Financial assets
Monetary items
CNY : TWD	$ 11,998	4.48	$ 53,727
EUR: TWD	462	34.14	15,782
USD : TWD	37	32.79	1,198

	March 31, 2024
(Foreign currency: functional currency)	Amount (in thousands)	Exchange rate	Book value
Financial assets
Monetary items
CNY : TWD	$ 11,883	4.41	$ 52,382
EUR: TWD	764	34.46	26,333
USD : TWD	36	32.00	1,156

(b) The realized and unrealized exchange gains (losses) arising from foreign exchange variation on the monetary items held by the Group for the three months ended March 31, 2025 and 2024 were NT$891 and NT$1,338, respectively.

(c) The appreciation or depreciation of major foreign currency monetary items impacted the Group's profit and loss at the end of the financial statements period. When the New Taiwan dollar appreciates or depreciates by 1%, the Group's income will decrease or increase by NT$619 and NT$799, respectively for the three months ended March 31, 2025 and 2024.

Price risk

(a) The equity instruments that the Group is exposed to price risk are held on a through-profit or loss basis. Financial assets measured at fair value and measured at fair value through other comprehensive income of financial assets.

(b) The Group mainly invests in equity instruments issued by domestic companies, the price of these equity instruments the price will be affected by the uncertainty of the future value of the investment target. If the price of these equity instruments increases or decreases by 1%, and all other factors remain unchanged, the after-tax net profit for 2025 and 2024 from January 1 to March 31 is measured at fair value through profit or loss. The profit or loss of the equity instrument will increase or decrease NT$0 and NT$176 respectively; the other comprehensive profit or loss will increase or decrease NT$917 and NT$1,411 respectively.

Cash flow and fair value interest rate risk

The long-term and short-term borrowings borrowed by the Group are floating-rate debts and are not expected to generate significant interest rate risk. Changes in market interest rate will cause the effective interest rate of borrowing to change, which will cause fluctuations in future cash flows. Calculated based on the Group's borrowings balance at March 31, 2025 and 2024, if the market interest rate increases or decreases by 0.25%, the Group's cash outflow will increase or decrease by NT$451 and NT$499, respectively.

b. Credit risk

(a) The Group's credit risk arises from the failure of customers or counterparties to financial instruments to fulfill their contracts. The risk of financial loss to the Group due to contractual obligations mainly comes from the inability of the counterparty to clear repayment of accounts receivable and construction retention receivables paid according to the payment terms and classified as amortized Financial assets measured at post-cost. In addition, the Group's investment through profit and loss is measured at fair value the trading partners of large amount of financial assets and certificates of deposit are financial institutions with good credit quality. The possibility of default is expected to be very low.

(b) The Group adopts the assumptions under IFRS 9, that is, if the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. And the default occurs when the contract payments are past due over 30 days after final acceptance by owners.

(c) The debtors of the Group's accounts receivable and contract assets are mainly government units or state-owned enterprises, etc. The Group applies the simplified approach to estimate expected credit loss under the loss rate methodology basis. The loss rate methodology at March 31, 2025, December 31, 2024 and March 31, 2024 is as follows:

$\odot$ general accounts:

March 31, 2025	Accounts receivable	Contract retention	Total
Total book value	$ 155,463	$ 950,514	$ 1,105,977
Loss allowance	$ -	$ -	$ -
December 31, 2024	Accounts receivable	Contract retention	Total
Total book value	$ 352,689	$ 857,575	$ 1,210,264
Loss allowance	$ -	$ -	$ -
March 31, 2024	Accounts receivable	Contract retention	Total
Total book value	$ 98,974	$ 582,548	$ 681,522
Loss allowance	$ -	$ -	$ -

Note: The above-mentioned accounts receivable and engineering retentions of the Group are not past due and are not recognized as the amount of allowance for loss is not significant.

\odot
Loss allowances are made when there are specific impairment indicators:

	March 31, 2025	December 31, 2024	March 31, 2024
	Contract assets	Contract assets	Contract assets
Total book value	$ 2,829,989	$ 2,486,628	$ 2,509,032
Loss allowance	$ 700,805	$ 651,402	$ 651,402

(d) The statement of changes in loss allowance for contract assets used simplified approach is as follows:

	2025	2024
January 1	$ 651,402	$ 563,560
Provision for impairment loss	49,403	131,656
Loss recovery benefit (Note)	-	( 12,277)
Write-offs in this period	-	( 31,537)
March 31	$ 700,805	$ 651,402

Note: The Group settled the lawsuit "New construction of the outlet diversion embankment, north breakwater, coal unloading dock, connecting bridge and related facilities of the Linkou Power Plant Renewal and Expansion Project", and the settlement amount exceeded the deduction of contract assets that had been recognized The amount of impairment loss is due to the recognition of impairment recovery benefits. Please refer to Note 9 (3) B for relevant explanations.

c. Liquidity risk

(a) Cash flow forecasting is performed in the operating entities of the Group and aggregated by the financial department. The Group's financial department monitors rolling forecasts of the Group's liquidity requirements to ensure that has sufficient cash to support operating requirements. The detail of unused borrowing amount is as follows:

	March 31, 2025	December 31, 2024	March 31, 2024
Floating rate
Due within one year	$ 1,070,000	$ 520,000	$ 600,000
Due beyond one year	2,800,000	2,090,000	1,140,000
	$ 3,870,000	$ 2,610,000	$ 1,740,000

(b) The Group's non-derivative financial liabilities are analyzed by the remaining period at the balance sheet date to contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

March 31, 2025

Less than 1 year

1-2 years

2-3 years

Beyond 3 years

Short-term borrowings	$ 593,399	$ -	$ -	$ -
Notes payable	544,935	-	-	-
Accounts payable	1,226,069	95,169	84,620	21,793
Other payables	65,308	-	-	-
Lease liabilities(including due within one year)	41,003	21,743	17,912	55,308
Long-term borrowings (including due within one year)	83,194	6,580	45,941	-
Non-derivative financial liabilities:
December 31, 2024	Less than 1 year	1-2 years	2-3 years	Beyond 3 years
Short-term borrowings	$ 848,739	$ -	$ -	$ -
Notes payable	567,609	-	-	-
Accounts payable	1,074,625	84,156	71,357	12,708
Other payables	101,217	-	-	-
Lease liabilities(including due within one year)	49,894	16,521	13,640	52,618
Long-term borrowings (including due within one year)	148,398	43,013	47,570	-
Non-derivative financial liabilities:
March 31, 2024	Less than 1 year	1-2 years	2-3 years	Beyond 3 years
Short-term borrowings	$ 613,538	$ -	$ -	$ -
Notes payable	263,175	-	-	-
Accounts payable	637,295	282,468	41,083	5,171
Other payables	48,077	-	-	-
Lease liabilities(including due within one year)	70,312	18,681	10,431	47,409
Long-term borrowings (including due within one year)	134,361	6,560	6,542	45,858

(3) Fair value information

A. The different levels of evaluation techniques used to measure the fair value of financial and non-financial instruments are defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market refers to a market where asset or liability transactions occur with sufficient frequency and quantity to provide pricing information on a continuous basis. The fair value of the Group's investment in financial assets at fair value through other comprehensive income is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the asset or liability that are not based on observable market data. Part of the fair value of the Group's investment in financial assets at fair value through other comprehensive income is included in Level 3.

B. The Group's investment properties measured at cost are regularly evaluated by external experts commissioned by the Group's finance department. Please refer to Note 6(10) for the fair value information.
C. Financial instruments not measured at fair value

The carrying amounts of the Group's cash and cash equivalents, accounts receivable, other receivables, deposits (listed as other current assets and other non-current assets), long-term and short-term loans, notes payable, accounts payable, other payables, other current liabilities and deposits are reasonable approximations of fair value.

D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

March 31, 2025	Level 1	Level 2	Level 3	Total
Assets
Repetitive fair value
Financial assets measured at fair value through other comprehensive income-equity securities	$ -	$ -	$ 91,723	$ 91,723
December 31, 2024	Level 1	Level 2	Level 3	Total
Assets
Repetitive fair value
Financial assets measured at fair value through other comprehensive income-equity securities	$ -	$ -	$ 89,349	$ 89,349
March 31, 2024	Level 1	Level 2	Level 3	Total
Assets
Repetitive fair value
Financial assets at fair value through profit or loss - listed company stocks	$ 17,630	$ -	$ -	$ 17,630
Financial assets measured at fair value through other comprehensive income-equity securities	-	-	141,132	141,132
	$ 17,630	$ -	$141,132	$ 158,762

E. The methods and assumptions the Group used to measure fair value are as follows:

a. The Group used market quotation (closing price) as the inputs of fair values (that is, Level 1).

b. Except for the above-mentioned financial instruments with active markets, the fair value of the other financial instruments (that is, Level 3) is evaluated according to the evaluation model.

The output of the evaluation model is estimated value, and the evaluation technique may not reflect all the factors in financial instruments that the Group holds. Therefore, the estimated value of the evaluation model will be appropriately adjusted according to additional parameters, such as liquidity risk. According to the Group's fair value evaluation model management policy and related control procedures, the management holds that it is

appropriate and necessary to present the fair value of the financial instruments fairly in the balance sheet. The price information and parameters used in the evaluation process are carefully evaluated and appropriately adjusted to current market conditions.

c. The Group's fair value of equity securities classified as Level 3 are regularly evaluated by the financial department of the Group or evaluated by an external appraiser. The information of evaluation models is as follows:

	Fair value at March 31, 2025	Valuation technique	Significant unobservable inputs	Discount rate	Relationship of inputs to fair value
Unlisted shares	$ 88,018	comparable transaction method	Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value.
	3,705	Net assets value method	NA	NA	NA
	$ 91,723
	Fair value at December 31, 2024	Valuation technique	Significant unobservable inputs	Discount rate	Relationship of inputs to fair value
Unlisted shares	$ 85,737	comparable transaction method	Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value.
	3,612	Net assets value method	NA	NA	NA
	$ 89,349
	Fair value at March 31, 2024	Valuation technique	Significant unobservable inputs	Discount rate	Relationship of inputs to fair value
Unlisted shares	$ 137,496	comparable transaction method	Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value.
	3,636	Net assets value method	NA	NA	NA
	$ 141,132

F. There was no transfer between level 1 and level 2 for the three months ended March 31, 2025 and 2024.
G. The table below shows the changes in level 3 for the three months ended March 31, 2025 and 2024:

	2024	2023
January 1	$ 89,349	$ 130,265
Recognized in unrealized investment income of equity instruments measured by fair value through other comprehensive income	2,374	10,867
March 31	$ 91,723	$ 141,132

H. There was no transfer into or out from the level 3 for the three months ended March 31, 2025 and 2024.
I. The evaluation model and evaluation parameters selected by the Group after careful evaluation, but the use of different evaluation models or evaluation parameters may lead to different evaluation results. For financial assets classified as land-based, if the evaluation parameters change, the impact on other comprehensive gains and losses for the current period is as follows:

	Input value	Change	March 31, 2025		December 31, 2024
			Recognized in other comprehensive profit or loss		Recognized in other comprehensive profit or loss
			favorable change	unfavorable change	favorable change	unfavorable change

monetary assets
Equity Instrument	fluidity	±5%	$ 6,289	($ 6,286)	$ 6,127	($ 6,124)
					March 31, 2024
					Recognized in other comprehensive profit or loss
	Input value	Change			favorable change	unfavorable change
monetary assets
Equity Instrument	fluidity	±5%			$ 9,820	($ 9,820)

13. Supplementary Disclosure

(1) Significant transactions information

A. Loans to others: None.
B. Endorsement and guarantee for others: Please refer to Table 1.
C. Significant securities held at the end of the period (excluding investments in subsidiaries and affiliated companies): Please refer to Table 2.
D. The amount of goods purchased or sold with related parties reaches NT$100 million or 20% or more of the paid-in capital: None
E. Amounts due from related parties exceeding NT$100 million or 20% or more of paid-in capital: None
F. Business relations and major transactions between parent and subsidiary companies.

(2) Information of reinvestment business

Names, locations and other information of investee companies (investees in Mainland China excluded): Please refer to Table 3.

(3) Information of investments in Mainland China
A. Basic information of investing in Mainland companies: None.
B. Significant transactions, either directly or indirectly through a third area business, with reinvesting investee companies in the Mainland: None.

Segments Information

(1) General information

A. The management of the Group has identified which segments should be reported based on the information used by the operating decision makers.
B. The Group's operating decision makers operate and manage from a company perspective.

(2) Segments information

The Group's operating decision makers assess the performance of operating segments based on segment revenue. Segment income refers to the after-tax profit or loss of each operating department, which allows the chief operating decision maker to allocate resources to each segment and evaluate its performance.

The reportable segment information provided to the chief operating decision maker is as follows:

For the three months ended March 31, 2025:

	Kung Sing	Chan Pang	Kung Sing Development	Adjustment and charge off	Total
External income	$ 2,151,535	$ -	$ 1,999	$ -	$ 2,153,534
Internal segmental income	-	-	-	-	-
Segmental income	$ 2,151,535	$ -	$ 1,999	$ -	$ 2,153,534
Segments after-tax income	($ 5,632)	$ -	($ 1,988)	$ -	($ 7,620)
Depreciation, impairment and amortization	$ 81,427	$ -	$ -	$ -	$ 81,427
Interest income	$ 9,356	$ -	$ 59	$ -	$ 9,415
Interest expense	$ 6,239	$ -	$ 13	$ -	$ 6,252
Segments assets	$ 10,772,098	$ 590,236	$ 652,816	($ 603,800)	$ 11,411,350

For the three months ended March 31, 2024:

	Kung Sing	Chan Pang	Kung Sing Development	Adjustment and charge off	Total
External income	$ 1,501,492	$ -	$ 206	$ -	$ 1,501,698
Internal segmental income	-	-	-	-	-
Segmental income	$ 1,501,492	$ -	$ 206	$ -	$ 1,501,698
Segments after-tax income	($ 97,657)	($ 700)	($ 976)	$ -	($ 99,333)
Depreciation, impairment and amortization	$ 146,107	$ 566	$ -	$ -	$ 146,673
Interest income	$ 356	$ 1,167	$ -	$ -	$ 1,523
Interest expense	$ 5,510	$ 21	$ -	$ -	$ 5,531
Segments assets	$ 6,990,934	$ 832,196	$ 656,932	($ 22,066)	$ 8,457,996

(3) Adjustment information of segmental income

A. The external income reported to the chief operating decision maker is measured in consistent with the income in the income statements.

B. The reportable segment evaluates the performance of the operating segment based on after-tax profit or loss. Please refer to Note 14(2) for details on the reconciliation and elimination of the total profit or loss and the after-tax profit or loss of the continuing operations of the enterprise.

C. The total amount of assets provided to the chief operating decision makers is consistent with the measurement of the assets in the financial statements. The adjustment and charge off of the assets of the reportable segments in the period, please refer to Note 14 (2) for details.

Kung Sing Engineering Corporation and Subsidiaries

Endorsements and Guarantees for Others
For the Three Months Ended March 31, 2025
(Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

Table 1

Party being endorsed/guaranteed
				Limit on endorsements/guarantees provided for a single party (Note 2)	Maximum endorsements/guarantees amount for the period	Endorsements/guarantees balance amount at March 31, 2025	Used amount	Amount of endorsements/guarantees secured with collateral	Ratio of accumulated endorsement/guarantee amount to net asset value	Ceiling on total amount of endorsements/guarantees provided (Note 2)	Provision of endorsements/guarantees by parent company to subsidiary	Provision of endorsements/guarantees to the party in Mainland China
No.	Endorser/guarantor	Company name	Relationship with the endorser/guarantor
1	Kung Sing Development	Pan, jun-rong	Note 2	$ 9,845,604	$ 55,685	$ 55,685	$ 55,685	$ 55,685	1.04	$ 19,691,208	N	N	N

Note 1: According to "Regulations of Endorsement Guarantee Implementation", the aggregate amount of endorsements/guarantees provided by the Company shall not exceed octuple paid-up capital of the Company and the amount of endorsements/guarantees provided by the Company for any single entity shall not exceed quadruple paid-up capital of the Company. According to "Regulations of Endorsement Guarantee Implementation", the aggregate amount of endorsements/guarantees provided by the subsidiary shall not exceed octuple paid-up capital of the parent company and the amount of endorsements/guarantees provided by the subsidiary for any single entity shall not exceed quadruple paid-up capital of the parent company.
Note 2: Inter-insurance companies based on contractual requirements for inter-departmental or co-creation between contractors.

Kung Sing Engineering Corporation and Subsidiaries

Significant securities held at the end of the period (Excluding investment subsidiaries and affiliated companies)

March 31, 2025

(Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

Table 2

Securities held by	Types and names of securities	Relationship with the securities issuer	Account title	At March 31, 2025
				Number of shares (thousand shares)	Book value	Ownership (%)	Fair value
The Company	Kung Ting
Steel Co., Ltd.	None	Financial assets at fair value through other comprehensive income - non-current	3,240	$ 88,018	18.00	$ 88,018	Note 2

Note 1: The disclosure standard is that the book value is NT$6,000 or more.
Note 2: Unpledged security.

Kung Sing Engineering Corporation and Subsidiaries

Names, Locations and Other Information of Investees Companies (Investees in Mainland China Excluded)

March 31, 2025

(Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

Table 3

Investor	Investee	Location	Main business activities	Initial investment amount		Hold at the end of the period			Profit and loss of the investee for the period	Investment gains and losses recognized for the period	Footnote
				Balance at March 31, 2025	Balance at December 31, 2024	Number of shares (thousand shares)	Ownership (%)	Book value
The Company	Chan Pang Industrial Co., Ltd.	Taiwan	Construction and development of buildings and houses and general investment	$ 1,938	$ 590,000	59,000	100	$ 2,074	$ -	$ -	Note
As above	Kung Sing Development Co., Ltd.	Taiwan	Construction and development of buildings and houses	673,400	673,400	70,000	100	620,083	( 1,988)	( 1,988)	Subsidiary

Note: Chan Pang Industrial Co., Ltd. was dissolved with the consent of the directors on December 13, 2024, and the share capital of NT$588,062 was returned.

AI assistant

KSECO — Interim / Quarterly Report 2025

52482_rns_2026-04-07_afb86b95-ffca-43cc-83a0-f876f3a3707e.pdf

Contents

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Balance Sheets

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Changes in Equity

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Cash Flows

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Cash Flows

4. Summary of Significant Accounting Policies

(1) Compliance statement

6. Details of Significant Accounts

(1) Cash and cash equivalents

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

(3) Financial assets at amortised cost – current

C. KSC082 Joint Loan Case

(15) Provisions for liabilities

(16) Net defined benefit assets

A. Nefined benefit plan

(20) Operating revenue

B. Contract assets and liabilities

(27) Income tax

(28) Loss per share

(29) Supplemental cash flow information

(30) Changes in liabilities from financing activities

7. Related Party Transactions

(1) Names of related parties and relationship

(2) Significant transactions with related parties

A. Endorsement and guarantees

B. Joint construction and separate sale

Price risk

Cash flow and fair value interest rate risk

(3) Fair value information

13. Supplementary Disclosure

Kung Sing Engineering Corporation and Subsidiaries

Kung Sing Engineering Corporation and Subsidiaries

Kung Sing Engineering Corporation and Subsidiaries

Names, Locations and Other Information of Investees Companies (Investees in Mainland China Excluded)

More from KSECO

KSECO Interim / Quarterly Report 2025