Kung Sing Engineering Corporation and Subsidiaries
Consolidated Financial Statements and
Review Report of Independent Accountants
September 30, 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

For the Nine Months Ended September 30, 2025 and 2024 ... 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 ... 41
8. Pledged Assets ... 42
9. Significant Contingent Liabilities and Unrecognized Contract Commitments ... 42
10. Significant Losses from Natural Disaster ... 47
11. Significant Events after the Balance Sheet Date ... 47
12. Others ... 47
13. Supplementary Disclosure ... 57
14. Segments Information ... 58

2
Table 1 ... 60
Table 2 ... 61
Table 3 ... 62

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 September 30, 2025 and 2024, and the consolidated statements of comprehensive income for the three months and nine months then ended, as well as the consolidated statement of changes in equity and of cash flows for the nine 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 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 Republic of China Verification Standard No. 2410 " Review of Financial Information Performed by the Independent Auditor of the Entity". 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$631,257 thousand and NT$1,378,889 thousand constituting 4.8% and 13.8% of the total consolidated assets; the total liabilities of NT$13,619 thousand and NT$20,052 thousand constituting 0.2% and 0.4% of the total consolidated liabilities as at September 30, 2025 and 2024, respectively, and the net loss of total comprehensive income of NT$811 thousand, NT$1,697 thousand, NT$4,133 thousand and net income NT$7,962 thousand, constituting (0.8%), (3.3%), (2.4%), and (34.0%) of the consolidated total comprehensive income for the three-month and nine-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 September 30, 2025 and 2024, and of its consolidated financial performance for the three-month and nine-month periods then ended and its consolidated cash flows for the nine months then ended in accordance with "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and International Accounting Standard 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
November 11, 2025

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Balance Sheets

September 30, 2025, December 31, 2024 and September 30, 2024

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of September 30, 2025 and 2024 are reviewed, not audited)

	September 30,		December 31, 2024		September 30,
		2025		2024		2024
Assets	Note	Amount	%	Amount	%	Amount	%
Current assets
1100	Cash and cash equivalents	6(1)	$ 1,347,415	10	$ 1,912,422	16	$ 1,626,085
1136	Financial assets at amortized cost-current	6(2),8	6,917,230	53	5,087,824	42	3,058,689
1140	Contract assets-current	6(19)	2,552,547	19	2,692,801	22	3,090,528
1170	Accounts receivable, net	6(3)	160,275	1	352,689	3	166,990
1200	Other receivables		23,298	-	25,870	-	38,066
1210	Other receivables-Relevant person	7	39,735	-	38,733	-	37,934
1220	Current tax assets		3,111	-	2,135	-	2,218
130X	Inventories	6(4),8	357,018	3	357,018	3	357,018
1410	Prepayments		93,035	1	75,723	1	79,201
1479	Other current assets-other	8	-	-	-	-	133,600
1482	Fulfilling contract cost-net current	6(5)	762,639	6	560,241	5	439,782
11XX	Total current assets		12,256,303	93	11,105,456	92	9,030,111
Non-current assets
1517	Financial assets at fair value through other comprehensive income-non-current	6(6)	76,963	-	89,349	1	100,430
1600	Property, plant and equipment	6(7), 8	494,898	4	514,829	4	510,646
1755	Right-of-use assets	6(8)	130,969	1	121,989	1	111,016
1760	Investment property, net	6(9), 8	150,272	1	151,578	1	152,013
1780	Intangible assets		6,275	-	6,072	-	6,119
1840	Deferred income tax assets		8,096	-	32,338	-	32,205
1900	Other non-current assets	6(10)	81,690	1	56,365	1	55,336
15XX	Total non-current assets		949,163	7	972,520	8	967,765
1XXX	Total assets		$13,205,466	100	$ 12,077,976	100	$ 9,997,876
		(Continued)

Kung Sing Engineering Corporation and Subsidiaries
Consolidated Balance Sheets
September 30, 2025, December 31, 2024 and September 30, 2024
(Expressed in thousands of New Taiwan dollars)
(The balance sheets as of September 30, 2025 and 2024 are reviewed, not audited)

Liabilities and Equity	Note	September 30, 2025		December 31, 2024		September 30, 2024
		Amount	%	Amount	%	Amount	%
Current liabilities
2100	Short-term borrowings	6(11)	$ 757,000	6	$ 840,000	7	$ 690,000	7
2130	Contract liabilities-current	6(19)	4,454,679	34	3,424,369	28	1,544,849	15
2150	Notes payable		472,096	4	567,609	5	323,391	3
2170	Accounts payable	6(12)	1,507,211	11	1,242,846	10	1,359,943	14
2200	Other payables		160,763	1	101,217	1	61,243	1
2230	Current income tax liability		-	-	-	-	1,850	-
2250	Provisions for liabilities-current	6(14)	600	-	2,946	-	6,144	-
2280	Lease liabilities-current		30,020	-	47,421	1	47,514	-
2320	Long-term liabilities due within one year or one operating cycle	6(13)	36,677	-	145,113	1	254,465	3
2399	Other current liabilities- Other		66,343	1	137,696	1	139,221	1
21XX	Total current liabilities		7,485,389	57	6,509,217	54	4,428,620	44
Non-current liabilities
2540	Long-term borrowings	6(13)	48,504	-	88,610	1	94,448	1
2550	Provisions for liabilities-non-current	6(14)	666	-	666	-	666	-
2570	Deferred tax liabilities		3,619	-	2,624	-	-	-
2580	Lease liabilities-non-current		103,165	1	76,164	-	65,014	1
2600	Other non-current liabilities		18,454	-	25,112	-	32,433	-
25XX	Total non-current liabilities		174,408	1	193,176	1	192,561	2
2XXX	Total liabilities		7,659,797	58	6,702,393	55	4,621,181	46
Equity
	Share capital	6(16)
3110	Common stock		4,922,802	37	4,922,802	41	4,922,802	49
	Capital surplus	6(17)
3200	Capital surplus		519	-	519	-	519	-
	Retained earnings	6(18)
3310	statutory surplus reserve		92,511	1	90,871	1	90,871	1
3350	Undistributed earnings		509,370	4	328,538	3	318,569	3
	Other equity	6(6)
3400	Other equity		20,467	-	32,853	-	43,934	1
3XXX	Total equity		5,545,669	42	5,375,583	45	5,376,695	54
	Significant contingent liabilities and unrecognized contract commitments	9
	Significant post-period events
3X2X	Total liabilities and equity		$13,205,466	100	$ 12,077,976	100	$9,997,876	100

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

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

For the Nine Months Ended September 30, 2025 and 2024

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

Items	Note	Three months ended September 30				Nine months ended September 30
		2025		2024		2025		2024
		Account	%	Account	%	Account	%	Account	%
4000 Operating revenue	6(19)	$ 2,218,163	100	$ 1,992,517	100	$ 7,020,993	100	$ 5,137,587	100
5000 Operating cost	6(24)(25)	( 2,028,183)	( 91)	( 1,893,460)	( 95)	(6,569,753)	(94)	(4,908,045)	(96)
5900 Gross profit		189,980	9	99,057	5	451,240	6	229,542	4
Operating expenses	6(24)(25)
6100 Selling expenses		( 447)	-	( 837)	-	( 1,717)	-	( 2,287)	-
General and administrative expenses		( 88,027)	( 4)	( 65,269)	( 3)	( 233,050)	( 3)	( 176,737)	( 4)
6450 losses	6(19),12(2)	-	-	-	-	( 49,403)	( 1)	( 119,379)	( 2)
6000 Total operating expenses		( 88,474)	( 4)	( 66,106)	( 3)	( 284,170)	( 4)	( 298,403)	( 6)
6900 Operating income		101,506	5	32,951	2	167,070	2	( 68,861)	( 2)
Non-operating income and expenses
7100 Interest income	6(20)	9,147	-	2,477	-	34,351	1	14,622	-
7010 Other income	6(21),7	2,041	-	77,413	4	10,818	-	85,337	2
7020 Other gains and losses	6(22)	2,304	-	( 1,486)	-	8,515	-	4,917	-
7050 Financial costs	6(23)	( 6,255)	-	( 7,353)	(1)	( 19,089)	-	( 19,260)	-
Total non-operating income and expenses		7,237	-	71,051	3	34,595	1	85,616	2
7900 Net profit before tax		108,743	5	104,002	5	201,665	3	16,755	-
7950 Income tax expenses	6(26)	6,153	-	( 5,012)	-	( 19,193)	( 1)	( 10,324)	-
8200 Net profit for the period		$ 114,896	5	$ 98,990	5	$ 182,472	2	$ 6,431	-
Other comprehensive income (net)
Components of other comprehensive income that will not be reclassified to profit or loss(2)
Unrealized gains and losses from investments in equity instruments measured at fair value through other
8316 comprehensive income	6(6)	($ 9,392)	-	($ 47,763)	(2)	($ 12,386)	-	($ 29,835)	-
Other comprehensive income		($ 9,392)	-	($ 47,763)	(2)	($ 12,386)	-	($ 29,835)	-
8300 (net)
Total comprehensive income		$ 105,504	5	$ 51,227	3	$ 170,086	2	($ 23,404)	-
8500 for the period
9750 Basic earnings per share	6(27)	$	0.23	$	0.20	$	0.37	$	0.01
9850 Diluted earnings per share	6(27)	$	0.23	$	0.20	$	0.37	$	0.01

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 Nine Months Ended September 30, 2025 and 2024

(Expressed in thousands of New Taiwan dollars)

(Unaudited)

	Note	Common stock	Capital surplus	Retained earnings		Unrealized gains and losses from finical assets at fair value through other comprehensive income	Total equity
				statutory surplus reserve	Undistributed earnings
For the nine months ended September 30, 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		-	-	-	6,431	-	6,431
Other comprehensive income for the period	6(6)	-	-	-	-	( 29,835)	( 29,835)
Total comprehensive income for the period		-	-	-	6,431	( 29,835)	( 23,404)
Earnings Appropriation and Distribution:
Appropriation of statutory surplus reserve	6(18)			6,279	( 6,279)	-	-
Balance at September 30, 2024		$4,922,802	$ 519	$ 90,871	$ 318,569	$ 43,934	$ 5,376,695
For the nine months ended September 30, 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		-	-	-	182,472	-	182,472
Other comprehensive income for the period	6(6)	-	-	-	-	( 12,386)	( 12,386)
Total comprehensive income for the period		-	-	-	182,472	( 12,386)	170,086
Earnings Appropriation and Distribution:
Appropriation of statutory surplus reserve	6(18)			1,640	( 1,640)	-	-
Balance at September 30, 2025		$4,922,802	$ 519	$ 92,511	$ 509,370	$ 20,467	$ 5,545,669

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 Nine Months Ended September 30, 2025 and 2024

(Expressed in thousands of New Taiwan dollars)

(Unaudited)

	Note	For the nine months ended September 30
		2025	2024
Cash Flows from Operating Activities
Net profit before tax		$ 201,665	$ 16,755
Adjustments
Adjustments to reconcile profit
Benefits of financial assets measured at fair value through profit or loss	6(22)	-	( 2,429)
Depreciation (including right-of-use assets and investment property)	6(22)(24)	79,673	80,940
Amortization	6(24)	2,032	2,010
Expected credit impairment losses	12(2)	49,403	119,379
Interest expense	6(23)	19,089	19,260
Interest income	6(20)	( 34,351)	( 14,622)
dividend income	6(21)	( 276)	( 33,179)
Gains on lease modifications	6(22)	( 12,885)	( 274)
Changes in operating assets and liabilities
Net changes in operating assets
Contract assets		90,851	( 1,166,754)
Accounts receivable		192,414	185,469
Other receivables		11,476	( 30,414)
Other receivables- Relevant person		1,002	9,627
Inventories		-	93,132
Prepayments		( 17,312)	( 19,484)
Other current assets		-	( 68,000)
Cost of fulfilling contracts		( 202,398)	104,951
Net defined benefit assets		( 4,976)	( 3,355)
Net changes in operating liabilities
Contract liabilities		1,030,310	799,892
Notes payable		( 94,761)	( 45,987)
Accounts payable		264,365	506,722
Other payables		59,415	( 971)
Provisions for liabilities		( 2,346)	( 68,488)
Other current liabilities		2,271	( 12,433)
Net defined benefit liabilities		-	( 423)
Cash outflows generated from operations		1,634,661	471,324
Interest received		23,443	13,677
Dividends received		( 18,958)	( 19,128)
Interest paid		276	33,179

Income tax paid
( 2,279) ( 1,230)

Tax refund
7,347 -
Net cash outflows from operating
activities
1,644,490 497,822
(Continued)

Kung Sing Engineering Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2025 and 2024

(Expressed in thousands of New Taiwan dollars)

(Unaudited)

	Notes	For the nine months ended September 30
		2025	2024
Cash Flows from Investing Activities
Disposal of financial assets at fair value through profit or loss		$ -	$ 21,254
To acquire financial assets at amortised cost		( 5,348,387)	( 4,773,645)
Disposal of financial assets at amortised cost		3,518,981	4,387,230
Proceeds from acquisition of property, plant and equipment	6(28)	( 37,013)	( 32,469)
Proceeds from acquisition of intangible assets	6(28)	( 2,366)	( 2,734)
Increased margin deposit		( 17,279)	( 7,475)
Decreased deposits		21,432	35,288
Net cash inflows from investing activities		( 1,864,632)	( 372,551)
Cash Flows from Financing Activities
Borrow short-term borrowings	6(29)	1,507,425	1,320,000
Repayment of short-term borrowings	6(29)	( 1,590,425)	( 1,290,000)
Repayment of long-term borrowings	6(29)	-	400,000
repay long-term loan	6(29)	( 148,542)	( 286,233)
Increase in deposits received	6(29)	2,654	12,997
Decrease in deposits received	6(29)	( 82,936)	( 73,559)
Lease liability principal payments	6(29)	( 33,041)	( 48,641)
Net cash (outflows) inflow from financing activities		( 344,865)	34,564
Increase in cash and cash equivalents (decrease) during the period		( 565,007)	159,835
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		$ 1,347,415	$ 1,626,085

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

Kung Sing Engineering Corporation and Subsidiaries
Notes to the Consolidated Financial Statements
September 30, 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 November 11, 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

The new standards, interpretations and revisions applicable in 2026 recognized by FSC are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 9 and IFRS 7, “Revision of Classification and Measurement of Financial Instruments”	January 1, 2026
Amendments to IFRS 9 and IFRS 7, “Contracts involving natural electricity”	January 1, 2026
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
Annual Improvements to IFRS Accounting Standards - Volume 11	January 1, 2026

Save for the impact of the amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments", which will be disclosed upon completion of the assessment, the Group has assessed that the above standards and interpretations have no material impact on the Group's financial position and financial performance.

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

B. Newly added requirements include that certain instruments with contractual provisions that may vary their cash flows (such as certain instruments with features related to achieving environmental, social and governance (ESG) goals) should disclose a qualitative description of the nature of the contingency, quantitative information on the range of variations in the contractual cash flows that may arise from such contractual provisions, and the aggregate carrying amount of the financial assets and the amortized cost of the financial liabilities under such contractual provisions.

C. The recognition and de-recognition dates for certain financial assets and liabilities are clarified. A new provision allows an enterprise to be deemed to have discharged its financial liability before the settlement date when a financial liability (or part of a financial liability) is settled in cash using an electronic payment system if and only if the enterprise initiates a payment instruction that results in the following circumstances:

a. The enterprise does not have the ability to revoke, stop or cancel a payment order;

b. The enterprise is unable to obtain the cash required for settlement due to the payment instruction;

c. The settlement risk associated with this electronic payment system is not significant.

D. The updated option specifies that equity instruments (FVOCI) designated by irrevocable option as measured at fair value through other comprehensive income or loss should disclose their fair value per class, instead of disclosing their fair value information per underlying asset. The amount of fair value gains or losses recognized in other comprehensive income during the reporting period should also be disclosed, separately showing the amount of fair value gains or losses related to investments excluded during the reporting period, the amount of fair value gains or losses related to investments still held at the end of the reporting period, and the accumulated gains or losses transferred to equity during the reporting period due to the exclusion of investments.

(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 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
Amendments to IFRS 18, “Presentation and Disclosure of Financial Statements”	January 1, 2027
Amendments to IFRS 19, “Subsidiaries without public responsibility: disclosure”	January 1, 2027

Note: In a press release dated September 25, 2025, the Financial Supervisory Commission (FSC) announced that publicly traded companies will be subject to International Financial Reporting Standard 18 (IFRS 18) starting in 2028. Furthermore, if a company has a need to apply IFRS 18 ahead of schedule, it may choose to do so after the FSC approves IFRS 18.

Except for the following IFRS No. 18 "Presentation and Disclosure of Financial Statements" which is yet to be evaluated, the Group has assessed that the above standards and interpretations have no significant impact on the Group's financial position and financial performance.

IFRS 18 "Presentation and Disclosures in Financial Statements" replaces IFRS 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.

Summary of Significant Accounting Policies

The significant accounting policies are the same as Note 4 of the 2024 consolidated financial statements, except for the following statement of compliance, basis of preparation, basis of consolidation and new additions. 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. Certain welfare assets recognized at the net amount of retirement fund assets less the present value of certain welfare obligations.

B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed and release takes effect 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
Basis for preparation of the consolidated financial statements
The preparation principles of this consolidated financial report are the same as those of the 2024 consolidated financial report.

B. Subsidiaries included in the consolidated financial statements

Investor	Subsidiary	Business nature	Ownership (%)			Note
			September 30, 2025	December 31, 2024	September 30, 2024
The Company	Chan Pang Industrial Co., Ltd.	Houses and buildings development, leasing and general investment	-	100	100	Note1
As above	Kung Sing Development Co., Ltd.	Houses and buildings development and leasing	100	100	100	Note2

Note 1: To simplify its investment structure, the Group decided, in accordance with Article 128-1 of the Companies Law, to cease operations on December 13, 2024, and to

dissolve and liquidate its subsidiary, Chan Pang Industrial Co., Ltd. The liquidation process and deregistration were completed in September 2025.

Note 2: The financial statements for September 30, 2025 and 2024 have not been reviewed by accountants because they do not meet the definition of a significant subsidiary.

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 that are held mainly for trading purposes;
c. Expected to be achieved within twelve months after the reporting period
d. Cash, except exchangeable at least 12 months after the balance sheet date or restricted in paying off liabilities.

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. The debtor shall be paid within twelve months following the reporting period.
d. Does not have the right to defer the settlement of the liability for 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

The pension cost during the interim period is based on the pension cost rate determined by the actuarial basis 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

Construction revenue and costs are primarily generated from contracted construction works. When the outcome of a construction contract can be estimated reliably, revenue is recognised gradually over time based on the proportion of construction costs incurred to date to the estimated total costs.

Estimated total costs are derived from management's assessment and judgment based on the nature of the project, estimated contract value, construction period, construction execution, and construction methods. This involves subjective judgment and carries a high degree of estimation uncertainty, which may affect the recognition of construction revenue. Please refer to Note 6(19) 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

	September 30, 2025	December 31, 2024	September 30, 2024
Check deposits and demand deposits	$ 1,335,504	$ 1,849,724	$ 1,610,946
time deposit	-	50,000	-
Cash on hand and revolving funds	11,911	12,698	15,139
	$ 1,347,415	$ 1,912,422	$ 1,626,085

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 and cash equivalents pledged to others.

(2) Financial assets at amortized cost-current

	September 30, 2025	December 31, 2024	September 30, 2024
Reserve account deposits	$ 6,812,892	$ 4,942,745	$ 2,947,246
Pledged time deposits	104,338	145,079	111,443
	$ 6,917,230	$ 5,087,824	$ 3,058,689

A. The details of financial assets at amortized cost recognized in profit (loss):

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Interest income	$ 7,151	$ 324
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Interest income	$ 27,313	$ 6,734

B. Without considering other credit enhancements, the book value is the maximum exposure amount of financial asset credit risk that could best represent the financial assets at amortized cost held by the Group.

C. Please refer to Note 8 for details of the pledge collateral of financial assets at amortized cost.

D. The credit risk related information of the financial assets at amortized cost is described in Note 12 (2).

(3) Accounts receivable

	September 30, 2025	December 31, 2024	September 30, 2024
Accounts receivable	$ -	$ 7,619	$ 10,692
Project receivable	160,275	345,070	156,298
	$ 160,275	$ 352,689	$ 166,990

A. The objects of the Group's project receivables are government agencies, public enterprises and private institutions, etc., and the funds have not been overdue or impaired. Please refer to Note 12 (2) for the relevant credit risk information of accounts receivable.

B. The accounts receivable balances on September 30, 2025, December 31, 2024 and September 30, 2024 are all due to customer contracts, and the accounts receivable of customer contracts on January 1, 2024 are new NT$352,459.

(4) Inventory

	September 30, 2025	December 31, 2024	September 30, 2024
Buildings and land held for sale	$ 226,513	$ 226,513	$ 226,513
Construction in progress	130,505	130,505	130,505
	$ 357,018	$ 357,018	$ 357,018

A. The cost of inventories recognised by the Group as at 2025 and 2024, three-month and nine-month periods then ended were NT$0, NT$46,250, NT$0 and NT$97,710 respectively.

B. For information on the guarantee provided by the Group with inventories, please refer to Note 8 for details.

(5) Cost of fulfilling contracts

	September 30, 2025	December 31, 2024	September 30, 2024
Prepayment for materials and construction	$ 477,508	$ 461,700	$ 338,358
Prepayment for construction insurance	285,131	98,541	101,424
	$ 762,639	$ 560,241	$ 439,782

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

Items	September 30, 2025	December 31, 2024	September 30, 2024
Equity instruments
Non-listed stocks	$ 56,496	$ 56,496	$ 56,496
Valuation adjustments	20,467	32,853	43,934
	$ 76,963	$ 89,349	$ 100,430

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 September 30, 2025, December 31, 2024 and September 30, 2024 were NT$76,963, NT$89,349 and NT$100,430, respectively.

B. The details of equity instruments at fair value through other comprehensive income are as follows:

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Changes in fair value recognised in other comprehensive income	($ 9,392)	($ 47,763)
Dividend income recognized in profit or loss is still held by the end of the current period	$ 276	$ 32,634
	For the nine months ended September 30, 2025	For the nine months ended September 30,2024
Changes in fair value recognised in other comprehensive income	($ 12,386)	($ 29,835)
Dividend income recognized in profit or loss is still held by the end of the current period	$ 276	$ 32,634

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

(7) Property, plant and equipment

	2025
	Land	Buildings and structures	Machinery equipment	Transport and other equipment	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	$ 260,846	$ 123,928	$ 79,139	$ 50,916	$ 514,829
Additions	990	-	1,893	9,007	11,890
Depreciation expense	-	( 7,203)	( 13,975)	( 10,643)	( 31,821)
September 30	$ 261,836	$ 116,725	$ 67,057	$ 49,280	$ 494,898
September 30
Cost	$ 343,816	$ 247,869	$ 107,050	$ 89,771	$ 788,506
Accumulated depreciation and impairment	( 81,980)	( 131,144)	( 39,993)	( 40,491)	( 293,608)
	$ 261,836	$ 116,725	$ 67,057	$ 49,280	$ 494,898
	2024
---	---	---	---	---	---
	Land	Buildings and structures	Machinery equipment	Transport and other equipment	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	-	-	7,125	12,408	19,533
Depreciation expense	-	( 7,202)	( 14,766)	( 8,218)	( 30,186)
Disposals -cost	-	( 872)	-	( 2,876)	( 3,748)
Disposals - depreciation	-	872	-	2,876	3,748
September 30	$ 260,846	$ 126,329	$ 82,316	$ 41,155	$ 510,646
September 30	$ 342,826	$ 247,869	$ 112,946	$ 67,787	$ 771,428
Cost	( 81,980)	( 121,540)	( 30,630)	( 26,632)	( 260,782)
Accumulated depreciation and impairment	$ 260,846	$ 126,329	$ 82,316	$ 41,155	$ 510,646

A. The real estate 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:

B. For information on guarantees provided by the Group with respect to property, plant and equipment, please refer to Note 8 for details.

(8) 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. The lease period of the machinery equipment and transportation equipment leased by the Group does not over 12 months.
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
Additions	26,997	27,761	-	54,758
Lease Modification	768	-	-	768
Depreciation expense	( 35,184)	( 9,729)	( 1,633)	( 46,546)
September 30	$ 48,639	$ 82,079	$ 251	$ 130,969
	2024
---	---	---	---	---
	Land	Buildings	Transportation equipment	Total
January 1	$ 19,101	$ 69,185	$ 8,731	$ 97,017
Additions	56,122	6,977	-	63,099
	348	-	-	348
Depreciation expense	( 36,741)	( 9,130)	( 3,577)	( 49,448)
September 30	$ 38,830	$ 67,032	$ 5,154	$ 111,016

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

Items affect profit and loss for the period	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Interest expense on lease liabilities	$ 881	$ 710
Expense on short-term assets lease contracts	10,742	4,317
Fees for leasing low-value assets	38	37
Gains on lease modifications	-	-
Items affect profit and loss for the period	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Interest expense on lease liabilities	$ 2,616	$ 2,304
Expense on short-term assets lease contracts	20,141	10,964
Fees for leasing low-value assets	51	68
Gains on lease modifications	12,885	274

Because the lessors of the land leased by the Group indirectly used the land during the lease term, they were exempted from some payment obligations at the end of the lease term. The Group recognizes the profit or loss arising from the change in lease payments due to the rent reduction as other benefits and losses.

F. The Group's total lease cash outflows for the nine months ended September 30, 2025 and 2024 were NT$55,849 and NT$61,977, respectively.

(9) Investment property

	2025
	Land	Buildings and structures	Total
January 1
Cost	$ 115,734	$ 115,202	$ 230,936
Accumulated depreciation and impairment	-	( 79,358)	( 79,358)
	$ 115,734	$ 35,844	$ 151,578
January 1	$ 115,734	$ 35,844	$ 151,578
Depreciation expense	-	( 1,306)	( 1,306)
September 30	$ 115,734	$ 34,538	$ 150,272
September 30
Cost	$ 115,734	$ 115,202	$ 230,936
Accumulated depreciation and impairment	-	( 80,664)	( 80,664)
	$ 115,734	$ 34,538	$ 150,272
	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	-	( 1,306)	( 1,306)
September 30	$ 115,734	$ 36,279	$ 152,013
September 30
Cost	$ 115,734	$ 115,202	$ 230,936
Accumulated depreciation and impairment	-	( 78,923)	( 78,923)
	$ 115,734	$ 36,279	$ 152,013

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

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Rental income from investment property	$ 890	$ 1,146
Direct operating expense arising from the investment property that generated rental income in the period	$ 428	$ 453
Direct operating expense arising from the investment property that did not generate rental income in the period	$ 23	$ 24
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Rental income from investment property	$ 2,956	$ 3,112
Direct operating expense arising from the investment property that generated rental income in the period	$ 1,504	$ 1,506
Direct operating expense arising from the investment property that did not generate rental income in the period	$ 124	$ 92

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

	September 30, 2025	December 31, 2024	September 30, 2024
2024	$ -	$ -	$ 872
2025	887	2,974	2,914
2026	2,634	2,634	2,634
2027	686	686	686
2028 and beyond	742	742	742
	$ 4,949	$ 7,036	$ 7,848

C. The fair value of the investment property held by the Group at September 30, 2025, December 31, 2024 and September 30, 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:

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

(10) Other non-current assets

	September 30, 2025	December 31, 2024	September 30, 2024
Refundable deposits	$ 34,004	$ 38,156	$ 43,905
prepaid equipment	29,589	5,088	8,076
Net defined benefit assets	18,097	13,121	3,355
	$ 81,690	$ 56,365	$ 55,336

(11) Short-term borrowings

Type	September 30, 2025	December 31, 2024	September 30,2024
	$ 757,000	$ 840,000	$ 690,000
Interest rate range	2.28%-3.00%	2.11%~3.00%	2.11%-2.52%

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

(12) Accounts payable

		September 30, 2025	December 31, 2024	September 30,2024
Project	payment
payable		$ 789,319	$ 729,127	$ 902,542
aProject	retainage
payable		717,648	513,475	457,157
Accounts payable		244	244	244
		$ 1,507,211	$ 1,242,846	$ 1,359,943

(13) Long-term borrowings

Type of borrowings	Repayment period	September 30, 2025	December 31, 2024	September 30, 2024
Medium-term secured borrowings	Amortized from 2022 to 2027	$ 53,763	$ 57,615	$ 58,883
	After the project remittance ratio reaches 20%, it will be repaid in installments according to 30% of the project payment for each phase.	-	41,170	135,170
Medium-term secured borrowings	Repayable in installments based on 15% of each project payment	31,418	134,938	154,860
Subtotal		85,181	233,723	348,913
Deduct: due within one year		( 36,677)	( 145,113)	( 254,465)
		$ 48,504	$ 88,610	$ 94,448
Interest rate range		2.10%~2.66%	2.10%~2.63%	2.10%~2.63%

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 September 30, 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 September 30, 2025, the undrawn loan amount for this joint loan case was NT$1,350,000, and the undrawn guarantee amount was NT$13,709.

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 September 30, 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 September 30, 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.

(14) Provisions for liabilities

	Warranty
	2025		2024
January 1	$	3,612	$ 75,298
New in the current period		-	( 252)

Reversal in the current period	(	2,346)	(	68,236)
September 30	$	1,266	$	6,810
Recognized as:
Provisions for liabilities-current	$	600	$	6,144
Provisions for liabilities-non-current	$	666	$	666

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.

(15) Net defined benefit assets (liabilities)

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. For the years ended July 1, 2025 and September 30, 2024, and January 1, 2025 and September 30, 2024, the retirement (benefit) costs recognized by the Group in accordance with the above-mentioned retirement pension law were NT($19), NT$34, NT($57) and NT$102, respectively.
c. The Group expects to pay NT$925 to the retirement plan in 2025, and as of September 30, 2025, NT$4,920 has been paid (including the amount due in the previous year).

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. From July 1 to September 30, 2025 and 2024, and from January 1 to September 30, 2025 and 2024, the pension costs recognized by the Group in accordance with the above pension measures are NT$4,207, NT$3,532, NT$12,148 and NT$9,370.

(16) stock

As of September 30, 2025, December 31, 2024, and September 30, 2024, the Company's registered capital was NT$6,000,000, divided into 600,000 shares, with paid-in capital of NT$4,922,802, par value NT$10 per share. Payments for the Company's issued shares have been received. The number of outstanding common shares of the Company at the beginning and end of each period was 492,280,000.

(17) 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.

(18) 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. The Company's 2024 and 2023 surplus distribution proposals passed by the shareholders' meeting on June 26, 2025 and June 25, 2024 are as follows:

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

For the above-mentioned situations where the shareholders' meeting has decided not to distribute the profits, please go to the public information observation account to inquire.

(19) Operating revenue

A. Details of customer contract revenue

The Group's revenue comes from the gradual transfer of control over products or services over time or at a certain point in time, and related revenue is generated in each reportable segment:

July 1, 2025 to September 30,

2025	Project contracting	real estate sales	Other	total
Income recognized over time	$ 2,217,957	$ -	$ 206	$ 2,218,163
Revenue recognized at a certain point in time	-	-	-	-
	$ 2,217,957	$ -	$ 206	$ 2,218,163
July 1, 2024 to September 30,
2024	Project contracting	real estate sales	Other	total
Income recognized over time	$ 1,936,159	$ -	$ 205	$ 1,936,364
Revenue recognized at a certain point in time	-	56,153	-	56,153
	$ 1,936,159	$ 56,153	$ 205	$ 1,992,517
January 1, 2025 to September 30,
2025	Project contracting	real estate sales	Other	total
Income recognized over time	$ 7,020,376	$ -	$ 617	$ 7,020,993
Revenue recognized at a certain point in time	-	-	-	-
	$ 7,020,376	$ -	$ 617	$ 7,020,993
January 1, 2024 to September 30,
2024	Project contracting	real estate sales	Other	total
Income recognized over time	$ 5,020,061	$ -	$ 616	$ 5,020,677
Revenue recognized at a certain point in time	-	116,910	-	116,910
	$ 5,020,061	$ 116,910	$ 616	$ 5,137,587

B. Contract assets and liabilities

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

	September 30, 2025	December 31, 2024	September 30, 2024
Contract assets:
Construction contract	$ 2,192,221	$ 2,486,628	$ 3,012,444
Project retention receivables	1,061,131	857,575	729,486
Deduct: allowance for loss	(700,805)	(651,402)	(651,402)

	$ 2,552,547	$ 2,692,801	$ 3,090,528
Contract liabilities :
Construction contract	$ 4,454,679	$ 3,424,369	$ 1,544,849

(a) The expected recovery situation of project retention derives from construction contracts is as follows:

	September 30, 2025	December 31, 2024	September 30, 2024
2025	21,234	9,885	1,320
2026	680,889	709,162	728,166
After 2027 (inclusive)	359,008	138,528	-
	$ 1,061,131	$ 857,575	$ 729,486

(b) Changes in the Group's contract assets and contract liabilities primarily reflect differences over time in the degree of completion of construction performance obligations and the timing of customer payments. The Group's contract liabilities increased due to the increase in government project contracts awarded since the first quarter of 2024, resulting in advance payments received under the contracts.

The Group has reassessed the future recoverability of its project costs from July 1 to September 30, 2025 and 2024, and from January 1 to September 30, 2025 and 2024, based on recent court decisions and other factors. The Group has recorded asset impairment losses of NT$0, NT$0, NT$49,403, and NT$119,379, respectively, resulting in changes in contract assets. Please refer to Notes 9 and 12(2) for details on the progress of the related litigation.

(c) The Group's contractual liabilities as at 1 January 2024 were NT$744,957. The recognized revenue of contract liabilities at the beginning of the period of NT$467,458, NT$78,971, NT$2,100,838, and NT$222,946 for the three months and nine months ended September 30, 2025 and 2024, respectively.

(d) Transaction price to non-performance obligation

As of September 30, 2025, December 31, 2024 and September 30, 2024, the total transaction price of the Group's unfulfilled performance obligations was NT$69,822,262, NT$74,571,532 and NT$76,411,211, 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.

(20) Interest income

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Interest income from financial assets measured at amortized cost	$ 7,151	$ 324

Interest from bank deposits	1,956	1,282
Other interest income	40	42
deferred interest income	-	829
	$ 9,147	$ 2,477
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Interest income from financial assets measured at amortized cost	$ 27,313	$ 6,734
Interest from bank deposits	6,894	6,916
Other interest income	144	143
deferred interest income	-	829
	$ 34,351	$ 14,622

(21) Other income

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Irental income	$ 1,032	$ 1,004
Ldividend income	276	33,179
RLitigation compensation income	-	42,857
Other income-others	733	373
	$ 2,041	$ 77,413
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Irental income	$ 3,407	$ 4,000
Ldividend income	276	33,179
RLitigation compensation income	-	44,120
Court fees refund income	2,290	1,898
Revenue from the sale of construction waste	3,103	268
Other income-others	1,742	1,872
	$ 10,818	$ 85,337

Our company and the Taichung Port Branch were involved in additional lawsuits over the extension of the construction period of the "Taichung Port 106 Pier New Project" and additional litigation. After petitioning the Taichung District Court in June 2022, the two parties reached a settlement and agreed to be settled by the Taichung Port Branch. The company was paid NT$1,326 (tax included) for settlement and recognized as litigation compensation income of NT$1,263.
In April 2023, the Supreme Court sent the company and the Railway Bureau to the High Court for review due to the "Taiwan Taoyuan International Airport Linked Rapid Transit System Construction Plan CE02 Construction Standard" construction delay compensation lawsuit. Later, the two parties agreed that the Railway Bureau The company was paid NT$45,000 (tax included) to settle the case and recognized litigation compensation income of NT$42,857.

(22) Other gains and losses

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Foreign Currency Exchange Gains	$ 2,685	$ 1,337
Losses on financial assets measured at fair value through profit or loss	-	(2,387)
Depreciation expense of investment real estate	(436)	(436)
Others	55	-
	$ 2,304	($ 1,486)
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Lease Modification Benefit	$ 12,885	$ 274
Foreign exchange (loss) gain	(3,119)	3,520
Gains (losses) on financial assets measured at fair value through profit or loss for the current period	-	2,429
Depreciation expense of investment real estate	(1,306)	(1,306)
Others	55	-
	$ 8,515	$ 4,917

(23) Financial cost

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Interest expense
Bank loan	$ 5,275	$ 6,643
Interest expense on lease liability	881	710
Other financial expenses	99	-
	$ 6,255	$ 7,353
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Interest expense
Bank loan	$ 15,864	$ 16,956
Interest expense on lease liability	2,616	2,304
Other financial expenses	609	-
	$ 19,089	$ 19,260

(24) Additional information on the nature of expenses

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Engineering cost	$ 1,870,956	$ 1,700,511
Employee benefit expense	171,418	143,825
Performance guarantee fee	32,879	-
Depreciation expense of right-of-use assets	11,954	16,682
Depreciation of property, plant and equipment	10,722	9,866
Amortization expense of intangible assets	686	668
	$ 2,098,615	$ 1,871,552
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Engineering cost	$ 6,074,215	$ 4,404,539
Employee benefit expense	513,043	396,874

Performance guarantee fee	94,291	-
Depreciation expense of right-of-use assets	46,546	49,448
Depreciation of property, plant and equipment	31,821	30,186
Amortization expense of intangible assets	2,032	2,010
	$ 6,761,948	$ 4,883,057

(25) Employee benefit expense

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Wages and salaries	$ 141,099	$ 122,412
Labor and health insurance fees	12,963	11,235
Pension expense	4,188	3,566
Directors' remuneration	5,633	842
Other personnel expenses	7,535	5,770
	$ 171,418	$ 143,825
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Wages and salaries	$ 431,747	$ 338,064
Labor and health insurance fees	39,850	31,403
Pension expense	12,091	9,472
Directors' remuneration	8,590	2,292
Other personnel expenses	20,765	15,643
	$ 513,043	$ 396,874

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. At least $50\%$ of the total employee compensation should be allocated to frontline employees.
B. The estimation amount of the employees' compensation for the three months and nine months ended September 30, 2025 and 2024 were NT$6,002, NT$523, NT$10,958, and NT$523, respectively; the estimation amount of the directors' remuneration were NT$5,088, NT$262, NT$6,575, and NT$262, respectively.

From January 1, 2025 to September 30, 2025, the employee remuneration and director's remuneration are estimated at 5% and 3% based on the profit as of the current 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.

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".

(26) Income tax

A. Income tax (benefit) expense

Income tax (benefit)expense components

	For the three months ended September 30, 2025	For the three months ended September 30, 2024
Current tax:
Undistributed surplus investment	($ 6,408)	$ -
Current income tax	( 6,408)	-
Deferred tax:
Origination and reversal of temporary differences	255	5,012
	($ 6,153)	$ 5,012
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Current tax:
Current income tax	$ 27	$ -
Undistributed surplus increases	738	2,826
Undistributed surplus investment	( 6,408)	-
High estimates for previous years	( 401)	( 591)
Current income tax	( 6,044)	2,235
Deferred tax:
Origination and reversal of temporary differences	25,237	8,089
	$ 19,193	$ 10,324

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

	Income tax approved year
The Company	2023
Kung Sing Development Co., Ltd.	2023

(27) Earnings per share

	For the three months ended September 30, 2025
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	Earnings per share (in dollars)
Basic/diluted earnings per share
Net profit attributable to ordinary shareholders of the parent company for the period	$ 114,896	$ 492,280	$ 0.23
Diluted earnings per share
Effect from dilutive potential ordinary shares-employees’ compensation	-	498
Profit attributable to ordinary shareholders of the parent plus effect from potential ordinary shares	$ 114,896	492,778	$ 0.23
	For the three months ended September 30, 2024
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	Earnings per share (in dollars)
Basic earnings per share
Net profit attributable to ordinary shareholders of the parent company for the period	$ 98,990	492,280	$ 0.20
Diluted earnings per share
Effect from dilutive potential ordinary shares-employees’ compensation	-	43
Profit attributable to ordinary shareholders of the parent plus effect from potential ordinary shares	$ 98,990	492,323	$ 0.20
	For the nine months ended September 30, 2025
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	Earnings per share (in dollars)
Basic/diluted loss per share
Net loss attributable to ordinary shareholders of the parent company for the period	$ 182,472	492,280	$ 0.37
Diluted earnings per share

Effect from dilutive potential ordinary shares-employees' compensation

933

Profit attributable to ordinary shareholders of the parent plus effect from potential ordinary shares

$ 182,472 493,213 $ 0.37

For the nine months ended September 30, 2024

	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	Earnings per share (in dollars)
Basic earnings per share
Net profit attributable to ordinary shareholders of the parent company for the period	$ 6,431	492,280	$ 0.01
Diluted earnings per share
Effect from dilutive potential ordinary shares-employees' compensation		104
Profit attributable to ordinary shareholders of the parent plus effect from potential ordinary shares	$ 6,431	492,384	$ 0.01

(28) Supplemental information of cash flows

Investing activities that are only partially paid in cash:

	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Acquisition of real estate, plant and equipment	$ 11,890	$ 19,533
Add: Prepayment for equipment at the end of the period	29,589	8,076
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)	-
Less: Notes payable at the end of the period	( 430)	-
Cash paid for the period	$ 37,013	$ 32,469
Purchase of intangible assets	$ 2,236	$ 2,734
Add: Beginning Accounts Payable	130	-
Deduct: Less: Notes payable at the end of the period	-	-
Cash paid for the period	$ 2,366	$ 2,734

(29) 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	( 83,000)	( 148,542)	( 33,041)	( 80,282)	( 344,865)
New in this issue	-	-	54,758	-	54,758
Interest expense paid (Note)	-	-	( 2,616)	-	( 2,616)
Changes in other non-cash items	-	-	( 9,501)	-	( 9,501)
September 30	$ 757,000	$ 85,181	$ 133,185	$ 81,018	$ 1,056,384
	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	30,000	113,767	( 48,641)	( 60,562)	34,564
New in this issue	-		63,099		63,099
Interest expense paid (Note)	-	-	( 2,304)	-	( 2,304)
Changes in other non-cash items	-	-	2,378	-	2,378
September 30	$ 690,000	$ 348,913	$ 112,528	$ 168,621	$ 1,320,062

Note: Tabular cash flow from operating activities

7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties	Relationship with the Group
Directors, General Manager and Deputy General Manager, etc.	Key member of the management Serving as a director of the company
Ch'uan fu Investment Co., Ltd.	Other related party
Pan, jun-rong

(2) Significant transactions with related parties

A. Endorsement and guarantees

a. The Group's loans, letters of credit and guarantees under bank financing contracts are jointly and severally guaranteed by some of the Group's key management members and other related parties. As of September 30, 2025, December 31, 2024 and September 30, 2024, the total amount guaranteed by related parties is NT$16,641,486, NT$17,620,249 and NT$16,752,251, respectively.

b. The borrowings amount of mutual endorsement guarantee provided by the Group and other related parties in accordance with the borrowings contract were NT$55,685, NT$55,685, NT$55,685 at September 30, 2025, December 31, 2024 and September 30, 2024. The actual usage amount was NT$55,685, NT$55,685, NT$55,685 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 entered into a joint development contract with other related parties. Through joint development and sale, Mr. Pan, another related party, provided land located in Dahudi Street, Ankeng Section, Xindian District, for which the Group constructed houses. The project was completed in 2018. As of September 30, 2025, December 31, 2024, and September 30, 2024, the Group paid NT$39,735, NT$38,733, and NT$37,934 respectively on behalf of Mr. Pan, another related party, for joint development costs, and recognized these amounts in "Other Receivables – Related Parties".

C. Rental income (table "Other income")

	For the three months ended June 30, 2025	For the three months ended June 30, 2024
Other related persons	$ -	$ -
	For the nine months ended June 30, 2025	For the nine months ended June 30, 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 September 30, 2025	For the three months ended September 30, 2024
Short-term employee benefits	$ 9,328	$ 4,208
Post-employment benefits	118	117
total	$ 9,446	$ 4,325
	For the nine months ended September 30, 2025	For the nine months ended September 30, 2024
Short-term employee benefits	$ 22,528	$ 14,815
Post-employment benefits	357	400
total	$ 22,885	$ 15,215

Pledged Assets

The details of the pledged assets are as follows:

Items	Book value			Purpose
	September 30, 2025	December 31, 2024	September 30, 2024
Financial assets at amortized cost	$ 6,917,230	$ 5,087,824	$ 3,058,689	Provided to banks and owners as a guarantee of short-term borrowings and tender bond
Inventory - Properties for sale	226,513	226,513	226,513	Provide loan guarantees to related parties
Other current assets - deposit deposit	-	-	133,600	Project deposit
Property, plant and equipment	294,643	300,744	302,777	Short-term borrowings guarantee
Investment property	101,242	102,339	102,705	Long-term and short-term borrowings guarantee
	$ 7,539,628	$ 5,717,420	$ 3,824,284

Significant Contingent Liabilities and Unrecognized Contract Commitments

(1) As of September 30, 2025, the Group had issued but not yet used the funds for construction projects of NT$67,450 and the amount of bank guarantees for performance, advance payment and warranty was NT$10,301,927.

(2) As of September 30, 2025, the amount of notes issued by the Group due to the lease contracts was NT$8,762.

(3) The engineering litigation judgment and status as of September 30, 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. The amount was fully recovered on June 6, 2025.

(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. The amount was fully recovered on June 6, 2025.

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 was dissatisfied with the above judgment and appealed to the High Court in May 2025. As of the date of review report, the second-instance court has not yet made a 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
None.
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:

	September 30, 2025	December 31, 2024	September 30, 2024
Total borrowing	$ 842,181	$ 1,073,723	$ 1,038,913
Deduct: Cash and cash equivalents	( 1,347,415)	( 1,912,422)	( 1,626,085)
Net debt (A)	$ -	$ -	$ -
Total equity(B)	$ 5,545,669	$ 5,375,583	$ 5,376,695
Total capital (C=A+B)	$ 5,545,669	$ 5,375,583	$ 5,376,695
Debt-to-capital ratio (A/C)	-	-	-

(2) Financial risk of financial instruments

A. Category of financial instruments

	September 30, 2025	December 31, 2024	September 30, 2024
Financial assets
Financial assets at fair value through other comprehensive income
Select designated equity instrument investments	$ 76,963	$ 89,349	$ 100,430
Financial assets at amortized cost
Cash and cash equivalents	$ 1,347,415	$ 1,912,422	$ 1,626,085
Financial assets at amortized cost	6,917,230	5,087,824	3,058,689
Accounts receivable	160,275	352,689	166,990
Contract assets (construction retention)	1,061,131	857,575	729,486
Other receivables(Including related persons)	63,033	64,603	76,000
Refundable deposits (Other current assets)	-	-	133,600
Other non-current assets	34,004	38,156	43,905
	$ 9,583,088	$ 8,313,269	$ 5,834,755

Financial liabilities	September 30, 2025	December 31, 2024	September 30, 2024
Financial liabilities
Financial liabilities at amortized cost
Short-term borrowings	$ 757,000	$ 840,000	$ 690,000
Notes payable	472,096	567,609	323,391
Accounts payable	1,507,211	1,242,846	1,359,943
Other payables	160,763	101,217	61,243
Deposit deposit (Other current liabilities)	62,564	136,188	136,188
Long-term borrowings (including due within one year)	85,181	233,723	348,913
Deposit deposit (Other non-current liabilities)	18,454	25,112	32,433
	$ 3,063,269	$ 3,146,695	$ 2,952,111
Lease liabilities (including due within one year)	$ 133,185	$ 123,585	$ 112,528

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 business of the Group involves a number of non-functional currencies, mainly in RMB and is affected by foreign exchange rate fluctuations. Information of foreign currency assets and liabilities affected by significant exchange rate fluctuations is as follows:

(Foreign currency: functional currency)	September 30, 2025
	Amount (in thousands)	Exchange rate	Book value
Financial assets
Monetary items
CNY : TWD	$ 12,080	4.27	$ 51,593
EUR: TWD	278	35.77	9,949
	December 31, 2024
(Foreign currency: functional currency)	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
	September 30, 2024
(Foreign currency:	Amount
functional currency)	(in thousands)	Exchange rate	Book value
Financial assets
Monetary items
CNY : TWD	$ 11,998	4.52	$ 54,265
EUR: TWD	54	35.38	1,919

(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 and nine months ended September 30, 2025 and 2024 were NT$2,685, NT$1,337, NT($3,119), and NT$3,520, 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$615 and NT$562, respectively for the nine months ended September 30, 2025 and 2024.

Price risk

(a) The Group's equity instruments exposed to price risk are financial assets held at fair value through profit or loss and financial assets at fair value through other comprehensive profit or loss.

(b) The Group primarily invests in equity instruments issued by domestic companies, the prices of which are subject to uncertainty regarding future value. All else being equal, a 1% increase or decrease in price would result in an increase or decrease of NT$770 and NT$1,004 respectively in the Group's net profit after tax for the periods from January 1 to September 30, 2025 and 2024, due to other comprehensive income or loss.

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 September 30, 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$1,579 and NT$1,948, 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 September 30, 2025, December 31, 2024 and September 30, 2024 is as follows:

$\odot$ general account :

September 30, 2025	Accounts receivable	Contract retention	Total
Total book value	$ 160,275	$ 1,061,131	$ 1,221,406
Loss allowance	$ -	$ -	$ -
December 31, 2024	Accounts receivable	Contract retention	Total
---	---	---	---
Total book value	$ 352,689	$ 857,575	$ 1,210,264
Loss allowance	$ -	$ -	$ -
September 30, 2024	Accounts receivable	Contract retention	Total
---	---	---	---
Total book value	$ 166,990	$ 729,486	$ 896,476
Loss allowance	$ -	$ -	$ -

Note: The Group's accounts receivable in the above table are not overdue. Because the amount of the allowance for loss is not significant, it is not recognized.

⑤
Provision for loss due to individual signs of impairment :

	September 30, 2025	December 31, 2024	September 30, 2024
	Contract assets	Contract assets	Contract assets
Total book value	$ 2,192,221	$ 2,486,628	$ 3,012,444
Allowance for losses	$ 700,805	$ 651,402	$ 651,402

(d) The simplified table of changes in contract assets and allowance for losses on deposits of the Group is as follows:

	2025	2024
January 1	$ 651,402	$ 563,560
Provision for impairment loss	49,403	131,656
Loss reduction and recovery benefits (Note)	-	( 12,277)
Quantity written off in the current period	-	( 31,537)
September 30	$ 700,805	$ 651,402

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". As 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:

	September 30, 2025	December 31, 2024	September 30, 2024
Floating rate
Due within one year	$ 740,000	$ 520,000	$ 620,000
Due beyond one year	2,800,000	2,090,000	2,090,000
	$ 3,540,000	$ 2,610,000	$ 2,710,000

(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:

September 30, 2025	Less than 1 year	1-2 years	2-3 years	Beyond 3 years
Short-term borrowings	$ 766,833	$ -	$ -	$ -
Notes payable	472,096	-	-	-
Accounts payable	1,225,497	115,016	103,195	63,503
Other payables	160,763	-	-	-
Lease liabilities
(including due within one year)	33,000	24,025	20,624	66,181
Long-term borrowings
(including due within one year)	38,176	49,224	-	-

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:

September 30, 2024	Less than 1 year	1-2 years	2-3 years	Beyond 3 years
Short-term borrowings	$ 698,824	$ -	$ -	$ -
Notes payable	323,391	-	-	-
Accounts payable	973,592	315,057	65,026	6,268
Other payables	61,243	-	-	-
Lease liabilities
(including due within one year)	49,317	15,588	10,856	44,465
Long-term borrowings
(including due within one year)	259,343	47,640	49,220	-

(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 evaluated periodically by external experts commissioned by the Group’s finance department. For information on their fair value, please refer to Note 6 (9).

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

D. Information regarding financial and non-financial instruments measured at fair value, based on the nature, characteristics, and risks of the assets, is as follows:

September 30, 2025	Level 1	Level 2	Level 3	Total
Assets
Repetitive fair value
Financial assets measured at fair value through other comprehensive income-equity securities	$ -	$ -	$ 76,963	$ 76,963
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
September 30, 2024	Level 1	Level 2	Level 3	Total
Assets
Repetitive fair value
Financial assets measured at fair value through other comprehensive income-equity securities	$ -	$ -	$ 100,430	$ 100,430

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 September 30, 2025	Valuation technique	Significant unobservable inputs	Discount rate	Relationship of inputs to fair value
Unlisted shares	$ 73,399	comparable transaction method	Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value.
	3,564	Net assets value method	NA	NA	NA
	$ 76,963
	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 September 30, 2024	Valuation technique	Significant unobservable inputs	Discount rate	Relationship of inputs to fair value
Unlisted shares	$ 96,908	comparable transaction method	Discount for lack of marketability	30%	The higher the multiplier, the higher the fair value. The higher the discount

	Net assets value method	NA	NA	for lack of marketability, the lower the fair value.
3,522
$
100,430

F. There was no transfer between level 1 and level 2 for the three months ended September 30, 2025 and 2024.
G. The table below shows the changes in level 3 for the three months ended September 30, 2025 and 2024:

	2025	2024
January 1	$ 89,349	$ 130,265
Recognized in unrealized investment income of equity instruments measured by fair value through other comprehensive income	( 12,386)	( 29,835)
September 30	$ 76,963	$ 100,430

H. There was no transfer into or out from the level 3 for the nine months ended September 30, 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	September 30, 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%	$ 5,242	($ 5,242)	$ 6,127	($ 6,124)
					September 30, 2024
					Recognized in other comprehensive profit or loss
					favorable change	unfavorable change
monetary assets
Equity Instrument	fluidity	±5%			$ 6,924	($ 6,921)

Supplementary Disclosure
(1) Significant transactions information

A. Loans to others: None.
B. Endorsement and guarantee for others: Please refer to Table 1.
C. Significant marketable securities held at the end of the period (excluding investments in subsidiaries and affiliated companies): Please refer to Table 2.
D. Purchases or sales of goods from related parties exceeding NT$100 million or 20% of paid-up capital: None.

E. Receivables from related parties exceeding NT$100 million or 20% of paid-up capital: None.

F. Business relationship and major transactions between parent and subsidiary companies: None

(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 operational decision-makers assess the performance of each operating segment based on segment revenue. Segment revenue refers to the after-tax profit or loss of each operating segment, used by the Chief Operating Officer (CBO) for resource allocation and performance evaluation.

The reportable segment information provided to the CBO includes:

For the nine months ended September 30, 2025:

	Kung Sing	Chan Pang Industrial	Kung Sing Development	Adjustment and charge off	Total
External income	$ 7,016,703	$ -	$ 4,290	$ -	$ 7,020,993
Internal segmental income	-	-	-	-	-
Segmental income	$ 7,016,703	$ -	$ 4,290	$ -	$ 7,020,993
Segments after-tax income	$ 186,594	$ 11	($ 4,133)	$ -	$ 182,472
Depreciation, impairment and amortization	$ 131,108	$ -	$ -	$ -	$ 131,108
Interest income	$ 33,562	$ -	$ 789	$ -	$ 34,351
Interest expense	$ 19,076	$ -	$ 13	$ -	$ 19,089
Segment assets	$ 12,574,209	$ -	$ 646,995	($ 15,738)	$ 13,205,466

For the nine months ended September 30, 2024:

	Kung Sing	Chan Pang Industrial	Kung Sing Development	Adjustment and charge off	Total
External income	$ 5,019,652	$ -	$ 117,935	$ -	$ 5,137,587
Internal segmental income	-	-	-	-	-
Segmental income	$ 5,019,652	$ -	$ 117,935	$ -	$ 5,137,587
Segments after-tax income	($ 2,845)	($ 1,070)	$ 9,032	$ 1,314	$ 6,431
Depreciation, impairment and amortization	$ 200,630	$ 1,699	$ -	$ -	$ 202,329
Interest income	$ 10,353	$ 3,883	$ 386	$ -	$ 14,622
Interest expense	$ 19,204	$ 56	$ -	$ -	$ 19,260
Segment assets	$ 8,618,987	$ 738,552	$ 656,075	($ 15,738)	$ 9,997,876

(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 reporting department assesses the performance of its operating units based on after-tax profit and loss. For details regarding the reconciliation and offsetting of total profit and loss with the after-tax profit and loss of the company's continuing operations, please refer to Note 14(2).

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 Nine Months Ended September 30, 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 September 30, 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	1.00	$ 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 quadruple paid-up capital of the parent company and the amount of endorsements/guarantees provided by the subsidiary for any single entity shall not exceed double 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

Holding of Marketable Securities at September 30, 2025 (Investment in Subsidiaries, Affiliates and Joint Ventures Excluded)

September 30, 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 September 30, 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	$ 73,399	18.00	$ 73,399	Note 2

Note 1: The disclosure standard is for amounts exceeding NT$6,000.
Note 2: No pledge guarantee.

Kung Sing Engineering Corporation and Subsidiaries

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

September 30, 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 September 30, 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	$ -	$ 590,000	-	-	$ -	$ 11	$ 11	Note
As above	Kung Sing Development Co., Ltd.	Taiwan	Construction and development of buildings and houses	673,400	673,400	70,000	100	617,938	( 4,132)	( 4,132)	Subsidiary

Note: Chan Pang Industrial Co., Ltd. was dissolved on December 13, 2024 with the approval of its board of directors, and completed the liquidation process and deregistration in September 2025.

AI assistant

KSECO — Interim / Quarterly Report 2025

52482_rns_2026-04-07_a85e0a57-3abb-4266-8ae0-7b94e3421dcc.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

For the Nine Months Ended September 30, 2025 and 2024

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

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

Construction contract

6. Details of Significant Accounts

(1) Cash and cash equivalents

(2) Financial assets at amortized cost-current

(5) Cost of fulfilling contracts

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

(8) Leasing arrangements-lessee

C. KSC082 Joint Loan Case

(14) Provisions for liabilities

(15) Net defined benefit assets (liabilities)

(19) Operating revenue

A. Details of customer contract revenue

B. Contract assets and liabilities

(21) Other income

(26) Income tax

(28) Supplemental information of cash flows

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

C. Rental income (table "Other income")

Price risk

Cash flow and fair value interest rate risk

b. Credit risk

(3) Adjustment information of segmental income

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