KTC — Audit Report / Information 2023

Nov 13, 2023

Stock Code: 2524

King’s Town Construction Co., Ltd.

Parent Company Only Financial Statements and Independent Auditors’ Report

2023 and 2022

Address: 12F., No. 150, Bo’ai 2nd Rd., Zuoying Dist., Kaohsiung City

Tel: (07)558-6368

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

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King’s Town Construction Co., Ltd.

Table of Contents

Item I. Cover Page II. Table of Contents III. Independent Auditors’ Report IV. Parent Company Only Balance Sheets V. Parent Company Only Statements of Comprehensive Income VI. Parent Company Only Statements of Cash Flows VII. Parent Company Only Statement of Cash Flows VIII. Notes to Parent Company Only Financial Statements (I) Company History (II) Approval Date and Procedures of the Financial Statements (III) Application of New, Revised, and Amended Standards and Interpretations (IV) Summary of Significant Accounting Policies (V) Main Source of Significant Accounting Judgment, Estimation, and Assumption Uncertainties (VI) Descriptions of Material Accounting Items (VII) Related Party Transactions (VIII) Pledged Assets (IX) Significant Contingent Liabilities and Unrecognized Contract Commitments (X) Significant Disaster Loss (XI) Significant Subsequent Events (XII) Others (XIII) Supplementary Disclosure 1. Information on significant transactions 2. Information on reinvestment 3. Information on Investments in Mainland China 4. Information on major shareholders (XIV) Operating Segment Financial Information IX. Statements of significant accounting subjects

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1 2 3-8 9-10 11 12 13 14 14 14-15 16-40 40-41 41-77 78-85 85 86-89 89 89 89-97 97-101 102 102 103 103 104-124

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Independent Auditors’ Report

March 14, 2024 (2024) ShineWing Taiwan Audit Report No. 011

To: King’s Town Construction Co., Ltd.

Audit opinion

We have audited the accompanying Parent Company Only Balance Sheet of King’s Town Construction Co., Ltd. as of December 31, 2023 and 2022, and its Parent Company Only Statement of Comprehensive Income, Parent Company Only Statement of Changes in Equity, Parent Company Only Statement of Cash Flows and Notes to Parent Company Only Financial Statements (including a summary of significant accounting policies) for the periods from January 1 to December 31, 2023 and 2022.

In our opinion, the Parent Company Only Financial Statements mentioned above have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers in all material aspects, and are considered to have reasonably expressed the parent company only financial conditions of King’s Town Construction Co., Ltd. as of December 31, 2023 and 2022, as well as the parent company only financial performance and parent company only cash flows for the periods from January 1 to December 31, 2023 and 2022.

Basis for Opinions

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the Parent Company Only Financial Statements are free of material misstatement. We are independent of King’s Town Construction Co., Ltd. in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believed that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Parent Company Only Financial Statements of King’s Town Construction Co., Ltd. for the year ended December 31, 2023. These matters were addressed in the context of our audit of the Parent Company Only Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Parent Company Only Financial Statements of King’s Town Construction Co., Ltd. for the year ended December 31, 2023 are stated as follows:

Inventory evaluation

Refer to Note IV(IX) to the Parent Company Only Financial Statements for accounting policies regarding inventory valuation; Note V(II) for the uncertainty of accounting estimates and assumptions regarding inventory valuation; and Note VI(V) for details of inventory accounting subjects.

The inventories of King’s Town Construction Co., Ltd. are material to the Parent Company Only Balance Sheet. Inventories are evaluated in accordance with IFRS, IAS, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission. Inventories include properties held for sale, land, projects under development, construction sites, and prepaid land payments, and are stated at the lower of cost or net realizable value. An incorrect assessment of the net realizable value may result in a misrepresentation in the financial statements. Therefore, we have identified inventory evaluation as one of the key audit matters for the year.

Our auditing procedures include, but are not limited to, considering the impact of changes in external market factors on the sales prices. The properties held for sale are evaluated based on the comparison with recent nearby transaction conditions or the contract prices of sales made recently by King’s Town Construction Co., Ltd. Due to the high uncertainty of future input costs and the difficulty in obtaining comparable sales prices for lands and projects under construction, an investment return analysis form for each case is sampled and selected for review and compared with market conditions to assess if the net realizable value is reasonable. With regard to construction sites, they are entrusted with the appraisal reports provided by the external real estate appraiser to understand and inquire

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about the valuation method, and test the input values of multiple indicators used in the appraisal report, and whether the disclosure of the relevant information is appropriate. It also confirms the time point at which the expert completes the conclusion of the work, and considers whether there are changes in economic conditions that may affect conclusions after the period.

Recognition of revenue from the sale of real estate

Refer to Note IV(XVIII) for the accounting policies on revenue and cost recognition and Note VI(XXIV) to the Parent Company Only Financial Statements for the details of revenue recognition. Revenue from the sale of real estate in the construction industry is recognized when the transfer of title to the real estate is completed and the actual delivery of the real estate is made. The appropriateness of the timing of revenue recognition is material to the financial statements as a whole. Since there are many parties involved in the sale of real estate, and considering that many people are involved in the interdepartmental aggregation and transmission of transfer and delivery information and that there may be gaps in the periods, we have recognized the revenue from the sale of real estate of King’s Town Construction Co., Ltd. as one of the key audit matters for the year.

We conducted our audits to test the effectiveness of the design and implementation of internal control systems over the revenue and collection processes of King’s Town Construction Co. Ltd. We also reviewed the appropriateness of the vesting period of the proceeds from the sale of real estates for the period immediately preceding and following the period end date to ensure that the proceeds from the sale of premises meet the criteria for revenue recognition.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

The Management is responsible for the preparation and fair presentation of the Parent Company Only Financial Statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as the management determines is necessary to enable the preparation of the Parent Company Only Financial Statements to be free from significant misstatement whether due to fraud or error.

In preparing the Parent Company Only Financial Statements, the management is responsible for assessing the ability of King’s Town Construction Co. Ltd. as a going concern, disclosing, as

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applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate King’s Town Construction Co. Ltd. or to create operations, or has no realistic alternative but to do so.

The governance unit of King’s Town Construction Co. Ltd. (including the Audit Committee or supervisors) is responsible for supervising the financial reporting process.

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

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

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

1. Identify and assess the risks of material misstatement of the Parent Company Only Financial Statements, whether due to fraud or error, design, and perform audit procedures responsive risks, and obtain evidence that is sufficient and appropriate to provide a basis of our opinion. The risk of not detecting a significant misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control effective in King’s Town Construction Co., Ltd. and its subsidiaries.

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1. Evaluate the appropriateness of accounting policies used and the reasonability of accounting estimates and related disclosures made by the management

2. Conclude the appropriateness of the use of the going concern basis of accounting by the management, and based on the audit evidence obtained, whether a significant uncertainty exists related to events or conditions that may cast significant doubt on King’s Town Construction Co., Ltd. and its ability to continue as a going concern. If we conclude that a significant uncertainty exists, we are required to draw attention in auditor’s report to the related disclosures in the Parent Company Only Financial Statements or, if such disclosure are inappropriate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause King’s Town Bank Co., Ltd. to cease to continue as a going concern.

3. Evaluate the overall expression, structure, and content of the Parent Company Only Financial Statements (including related notes) and whether the Parent Company Only Financial Statements include the relevant transactions and events expressed adequately.

4. Obtain sufficient and appropriate audit evidence for the parent company only financial information of the King’s Town Construction Co. Ltd. to express an opinion on the Parent Company Only Financial Statements. We are responsible for guiding, supervising, and implementing of the group audit. We remain solely responsible for our opinion on the Parent Company Only Financial Statements.

We communicated matters with the governing body, including the planned scope and timing of the audit, as well as the material audit findings (including material deficiencies in internal control identified during our audit).

We also provide a statement to the governance unit that the personnel of the CPA Firm who are subject to the regulation of independence are indeed complying with the independence requirements in accordance with the Code of Professional Ethics. Also, they communicate to the governance unit all relationships and matters (including related protective measures) that may be considered as affecting our independence.

We use the matters communicated with the governance unit to decide the Key Audit Matters for the

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audit of the 2023 Parent Company Only Financial Statements of King’s Town Construction Co., Ltd. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

ShineWing Taiwan CPA: Chuang, Shu-Yuan

CPA:Jackson Jwo

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Financial Supervisory Commission Approval No. Financial Supervisory Commission Approval No. FSC Letter Jin-Guan-Zheng-Shen No. 1070345892 FSC Letter Jin-Guan-Zheng-Shen No. 1070345892

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King’s Town Construction Co., Ltd. Parent Company Only Balance Sheets December 31, 2023 and 2022

Assets 11XX Current assets 1100 Cash and cash equivalents 1150 Net notes receivable 1170 Net trade receivables 1200 Other receivables 1210 Other receivables - related parties 1320 Inventories 1410 Prepayments 1470 Other current assets 1476 Other financial assets - current 11XX Total current assets 15XX Non-current assets 1510 Financial assets at fair value through profit and loss 1550 Investments accounted for using the equity method 1600 Property, plant, and equipment 1755 Net right-of-use assets 1760 Net investment properties 1780 Intangible assets 1840 Deferred tax assets 1920 Refundable deposits 1930 Long-term notes and trade receivable 15xx Total non-current assets 1xxx Total assets	Note VI.(I) VI.(III) VI.(III) VI.(IV) VI.(IV).VII VI.(V), VIII VI(VI) VI.(VII) VI.(VIII), VIII VI.(II) VI.(IX) VI.(X) VI.(XI) VI.(XII), VII, VIII VI.(XIII) VI.(XXXI) VIII VI.(III)	December 31, 2023 Amount % $530,843 1.44 16,676 0.05 2,500 0.01 7,964 0.02 141 0.00 34,788,812 94.14 451,904 1.22 108,283 0.29 54,012 0.15 $35,961,135 97.32 $82 0.00 120,532 0.33 15,934 0.04 67,004 0.18 563,942 1.53 154,443 0.42 18,352 0.05 30,619 0.08 20,000 0.05 $990,908 2.68 $36,952,043 100.00	Unit: NT$ thousand December 31, 2022	Unit: NT$ thousand December 31, 2022
		Amount	Amount	%
		$530,843 16,676 2,500 7,964 141 34,788,812 451,904 108,283 54,012	$531,329 15,000 886 2,609 109 32,662,856 571,681 114,624 96,254	1.52 0.04 0.00 0.01 0.00 93.37 1.63 0.33 0.28
		$35,961,135	$33,995,348	97.18
		$82 120,532 15,934 67,004 563,942 154,443 18,352 30,619 20,000	$82 85,617 4,047 61,646 625,192 158,626 19,770 30,106 2,785	0.00 0.24 0.01 0.17 1.79 0.45 0.06 0.09 0.01
		$990,908	$987,871	2.82
		$36,952,043	$34,983,219	100.00

(Continued)

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King’s Town Construction Co., Ltd. Parent Company Only Balance Sheets December 31, 2023 and 2022

Liabilities and equity	Note	December 31, 2023	December 31, 2023	Unit: NT$ thousand December 31, 2022	Unit: NT$ thousand December 31, 2022
		Amount	%	Amount	%
21XX Current liabilities 2100 Short-term borrowings 2110 Short-term bills payable 2130 Contract liabilities - current 2150 Notes payable 2160 Notes payable - related parties 2170 Trade payables 2180 Trade payables - related parties 2200 Other payables 2220 Other payables - related parties 2230 Current tax liabilities 2250 Provisions - current 2280 Lease liabilities - current 2322 Long-term borrowings due within one operating cycle 2335 Collection 2399 Other current liabilities - others 21XX Total current liabilities 25XX Non-current liabilities 2540 Long-term borrowings 2570 Deferred tax liabilities 2580 Lease liabilities - non-current 2611 Long-term notes payable 2640 Net defined benefit liabilities - non-current 2645 Deposits received 25xx Total non-current liabilities 2XXX Total liabilities 3XXX Equity 3110 Share capital - ordinary shares 3211 Paid-in capital - ordinary shares premium 3300 Retained earnings 3310 Legal reserve 3350 Unappropriated earnings 3300 Total retained earnings 3XXX Total equity Total liabilities and equity	VI.(XIV), VII, VIII VI.(XIV), VII, VIII VI.(XXIV) VII VII VII VI.(XV) VI.(XIX) VI.(XVIII), VII, VIII VI.(XVI) VI.(XVII) VI.(XVIII), VII, VIII VI.(XXXI) VI.(XIX) VI.(XX) VI.(XXIX) VI.(XXI) VI.(XXII) VI.(XXIII) VI.(XXIII)	$3,756,950 4,587,399 679,814 88,089 143,115 2,690 85,714 41,473 101 51,861 45,488 1,282 146,936 50,421 4,346	10.17 12.41 1.84 0.24 0.39 0.01 0.23 0.11 0.00 0.14 0.12 0.00 0.40 0.14 0.01	$4,401,950 3,734,677 586,417 47,687 80,011 26,381 0 40,744 783 138,450 51,779 1,134 1,030,393 72,878 8,499	12.58 10.67 1.68 0.14 0.23 0.08 0.00 0.12 0.00 0.40 0.15 0.00 2.94 0.21 0.02
		$9,685,679	26.21	$10,221,783	29.22
		$9,434,801 3,987 68,013 7,595 18,757 5,196	25.53 0.01 0.19 0.02 0.05 0.01	$7,382,157 17,121 62,373 0 19,557 5,202	21.10 0.05 0.18 0.00 0.06 0.01
		$9,538,349	25.81	$7,486,410	21.40
		$19,224,028	52.02	$17,708,193	50.62
		$3,694,196 8,082 1,776,451 12,249,286	10.00 0.02 4.81 33.15	$3,690,564 0 1,681,444 11,903,018	10.55 0.00 4.81 34.02
		$14,025,737	37.96	$13,584,462	38.83
		$17,728,015	47.98	$17,275,026	49.38
		$36,952,043	100.00	$34,983,219	100.00

Chairperson: Tianye Investment Co., Ltd.

(Please refer to the accompanying notes in the financial report)

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Representative: Tsai, Tien-Tsan Manager: Tsai, Tien-Tsan Accountant Officer: Liang, Su-Ying

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King’s Town Construction Co., Ltd.

Parent Company Only Statements of Comprehensive Income January 1 to December 31, 2023 and 2022

Code	Account titles	Note	2023		Unit: NT$ thousand 2022	Unit: NT$ thousand 2022
			Amount	%	Amount	%
4000 4110 4190 4100 5000 5900 6000 6100 6200 6000 6900 7000 7100 7010 7020 7050 7070 7000 7900 7950 8200 8300 8310 8311 8349 8300 8500 9750 9850	Operating revenue Sales revenue Sales discounts and allowances Net sales Operating costs Gross profit Operating expenses Selling and marketing expenses General and administrative expenses Total operating expenses Operating income Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of profit or loss of subsidiaries accounted for using the equity method Total non-operating income and expenses Income before tax Income tax expense Current net income Other comprehensive income Items not reclassified to profit or loss Remeasurements of defined benefit plans Incomes tax expense (gain) related to titles not subject to reclassification Other comprehensive income (after tax) Total comprehensive income Basic earnings per share (NT$) Diluted earnings per share (NT$)	VI.(XXIV), VII VI.(XXXII) VI.(XXV) VI.(XXVI) VI.(XXVII) VI.(XXVIII) VI.(IX) VI.(XXXI) VI.(XXIX) VI.(XXXI) VI.(XXXIII) VI.(XXXIII)	$2,291,398 0	100.00 0.00	$3,149,195 (90)	100.00 (0.00)
			$2,291,398 1,159,708	100.00 50.61	$3,149,105 1,316,516	100.00 41.81
			$1,131,690 191,066 115,543	49.39 8.34 5.04	$1,832,589 293,070 123,507	58.19 9.31 3.92
			$306,609	13.38	$416,577	13.23
			$825,081	36.01	$1,416,012	44.96
			$2,124 872 (25) (318,198) (15,085)	0.09 0.04 0.00 (13.89) (0.66)	$841 2,520 (160) (230,056) (29,483)	0.03 0.08 0.00 (7.31) (0.94)
			($330,312)	(14.42)	($256,338)	(8.14)
			$494,769 52,728	21.59 2.30	$1,159,674 150,000	36.82 4.76
			$442,041	19.29	$1,009,674	32.06
			($957) (191)	(0.04) (0.01)	$309 62	0.01 0.00
			($766)	(0.03)	$247	0.01
			$441,275	19.26	$1,009,921	32.07
			$1.20		$2.73
			$1.20		$2.73

Chairperson: Tianye Investment Co., Ltd.

(Please refer to the accompanying notes in the financial report) Representative: Tsai, Tien-Tsan Manager: Tsai, Tien-Tsan

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Manager: Tsai, Tien-Tsan

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Accountant Officer: Liang, Su-Ying

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King’s Town Construction Co., Ltd. Parent Company Only Statements of Cash Flows January 1 to December 31, 2023 and 2022

Unit: NT$ thousand

Code	Account name Summary	Share capital	Capital surplus	Retained earnings	Retained earnings	Retained earnings	Treasury shares	Total equity
				Legal reserve	Unappropriated earnings	Total
A1 B1 B9 D1 D3 D5	Balance as of January 1, 2022 Profit appropriation and distribution in 2021 Employee compensation to capital increase Net income in 2022 Other comprehensive income in 2022 Total comprehensive income in 2022	$3,717,590 5,414	$13,865 14,048	$1,513,033 168,411	$11,121,358 (168,411) 1,009,674 247	$12,634,391 0 0 1,009,674 247	$0	$16,365,846 0 19,462 1,009,674 247
					1,009,921	1,009,921	0	$1,009,921
L1 L3	Treasury stock repurchase Cancellation of treasury shares	(32,440)	(27,913)		(59,850)	(59,850)	(120,203) 120,203	(120,203) 0
Z1	Balance as of December 31, 2022	$3,690,564	$0	$1,681,444	$11,903,018	$13,584,462	$0	$17,275,026
A1 B1 B9 D1 D3 D5	Balance as of January 1, 2023 Profit appropriation and distribution in 2022 Employee compensation to capital increase Net income in 2023 Other comprehensive income in 2023 Total comprehensive income in 2023	$3,690,564 3,632	$0 8,082	$1,681,444 95,007	$11,903,018 (95,007) 442,041 (766)	$13,584,462 0 0 442,041 (766)	$0	$17,275,026 0 11,714 442,041 (766)
					441,275	441,275	0	441,275
Z1	Balance as of December 31, 2023	$3,694,196	$8,082	$1,776,451	$12,249,286	$14,025,737	$0	$17,728,015

(Please refer to the accompanying notes in the financial report)

Chairperson: Tianye Investment Co., Ltd.

Representative: Tsai, Tien-Tsan

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Manager: Tsai, Tien-Tsan

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Accountant Officer: Liang, Su-Ying

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King’s Town Construction Co., Ltd. and subsidiaries Parent Company Only Statement of Cash Flows From January 1 to December 31, 2023 and 2022

	K	ing’s Town Construction Co., Ltd. and subsidiaries Parent Company Only Statement of Cash Flows From January 1 to December 31, 2023 and 2022
Code AAAA Cash flow from operating activities: A10000 Current year net profit before tax A20000 Adjustment items: A20010 Revenue, expense and loss that do not affect the cash flows: A20100 Depreciation expenses and other operating expenses A20200 Amortization expenses A20900 Interest expenses A21200 Interest income A21300 Dividend income A22300 Share of profit or loss of subsidiaries accounted for using the equity method A20010 Total revenue, expense and loss that do not affect the cash flows: A30000 Changes in operating assets and liabilities A31000 Net changes in operating assets A31130 Decrease (increase) in notes receivable A31150 (Increase) decrease in trade receivable A31180 Increase in other receivables A31200 Increase in inventories A31230 (Increase) decrease in prepayments A31240 (Increase) decrease in other current assets A31000 Total net changes in operating assets A32000 Net change in operating liabilities A32125 Increase in contract liabilities - current A32130 Gain (loss) in notes payable A32150 Increase (decrease) in trade payable A32180 Increase in other payables A32200 Increase (decrease) in provisions A32230 Decrease in other current liabilities A32240 Decrease in net defined benefit liabilities A32000 Total net changes in operating liabilities A33000 Cash outflow from operating activities A33100 Interest received A33200 Dividend received A33300 Interest paid A33500 Income tax paid AAAA Net cash outflows from operating activities	January 1, 2023 to December 31, 2023	January 1, 2022 to December 31, 2022 BBBB Cash flow from investing activities: $1,159,674 B01800 Acquisition of investment accounted for using the equity method B02700 Acquisition of property, plant, and equipment B03700 Increase in refundable deposits $63,709 B03800 Decrease in refundable deposits 4,260 B04500 Acquisition of intangible assets 230,056 B06500 (Increase) Decrease in other financial assets (841) BBBB Net cash outflow from investing activities (179) 29,483 $326,488 CCCC Cash flows from financing activities: C00100 Proceeds from short-term borrowing $33,897 C00200 Repayments of short-term borrowings 129,160 C00500 Proceeds from short-term bills payable (2,502) C00600 Repayments of short-term bills payable (1,164,092) C01600 Proceeds from long-term borrowings (28,777) C01700 Repayments of long-term borrowings (23,705) C03000 Increase in deposits received ($1,056,019) C03100 Decrease in deposits received C04020 Repayment of the principal portion of lease $24,849 C04800 Treasury stock repurchase cost (44,105) CCCC Net cash inflow from financing activities (564,976) 12,305 7,071 (12,354) (2,541) EEEE Decrease in current cash and cash equivalent ($579,751) E00100 Cash and cash equivalent at the beginning of the period ($149,608) E00200 Cash and cash equivalent at the end of the period 836 179 (224,278) (209,124) ($581,995)	($50,000) (939) (705) 192 0 42,242	Unit: NT$ thousand ($50,000) (3,770) (2,745) 5,010 (430) (30,098)
	$494,769
	$66,444 4,183 318,198 (2,124) (24) 15,085
			($9,210)	($82,033)
			$29,500,650 (30,145,650) 21,133,900 (20,283,200) 2,483,350 (1,314,163) 880 (886) (1,134) 0	$13,324,150 (12,577,450) 17,651,000 (17,812,600) 894,400 (1,136,883) 1,517 (592) (1,115) (120,203)
	$401,762
	($18,891) (1,614) (5,374) (2,140,534) 118,997 6,341
	($2,041,075)
	$93,397 111,101 62,023 7,932 (6,291) (26,610) (1,757)
			$1,373,747	$222,224
			($486) 531,329	($441,804) 973,133
	$239,795
	($904,749) 2,111 24 (311,567) (150,842)		$530,843	$531,329
	($1,365,023)

Chairperson: Tianye Investment Co., Ltd.

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(Please refer to the accompanying notes in the financial report)

Representative: Tsai, Tien-Tsan Manager: Tsai, Tien-Tsan

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Accountant Officer: Liang, Su-Ying

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King’s Town Construction Co., Ltd.

Notes to Parent Company Only Financial Statements

2023 and 2022

(In Thousands of New Taiwan Dollars, unless otherwise specified)

I. Company History

King’s Town Construction Co., Ltd (hereinafter referred to as the “Company”) was incorporated in 1985. The place of registration are located at 12F., No. 150, Bo’ai 2nd Rd., Zuoying Dist., Kaohsiung City/ The Company started trading on Taiwan Stock Exchange Corporation on October 18, 1994. The Company mainly engages in residential and building development, lease and sale, development of specific professional areas and zoning and rezoning agency business.

II. Approval Date and Procedures of the Financial Statements

The Parent Company Only financial statements were approved for publication by the Board of Directors on March 14, 2024.

• III. Application of New, Revised, and Amended Standards and Interpretations

• (I) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) as endorsed by the Financial Supervisory Commission (“FSC”) are as follows:

International Financial Reporting Standards (IFRS), International Accounting Standards

(IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations applicable endorsed by the FSC in 2023:

Item	New, Revised, and Amended Standards and Interpretations	Effective Date of Issuance by the IASB
1	Amendments to IAS 1 - Disclosure Initiative-Accounting Policies	January 1, 2023
2	Amendments to IAS 8 - Definition of Accounting Estimates	January 1, 2023
3	Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction	January 1, 2023
4	Amendments to IAS 12 - International Tax Reform-Pillar Two Model Rules	May 23, 2023

The Company assessed the effects of adopting the aforementioned standards and interpretations, and has found no significant effects on the Company’s financial position and financial performance.

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• (II) Effects of not yet applying the newly-announced and revised IFRSs endorsed by FSC:

• New, revised, and amended standards and interpretations of IFRSs endorsed by the

FSC and are applicable in 113:

Item	New, Revised, and Amended Standards and Interpretations	Effective Date of Issuance by the IASB
1	Amendmentsto IAS 16 - Lease liability in a sale and leaseback	January 1, 2024
2	Amendment to IAS 1 - Classification of Liabilities as Current or Non-current	January 1, 2024
3	Amendment to IAS 1 -Non-current Liabilities with Covenants	January 1, 2024
4	Amendment to IAS 7 and IFRS 7 - Supplier Finance Arrangements	January 1, 2024

1. TheCompanyassessed the effects of adopting the aforementioned standards and

   • interpretations, and has found no significant effects on the Company’s financial position and financial performance.

2. (III) Effects of IFRSs issued by IASB but not yet endorsed by FSC:

3. The following new, amended, revised standards and interpretation of IFRSs that

have been issued by IASB but not yet endorsed by the FSC:

Item	New, Revised, and Amended Standards and Interpretations	Effective Date of Issuance by the IASB
1	Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and Its Associate or Joint Venture”	Currently awaiting a decision by the IASB
2	IFRS 17 Insurance Contracts	January 1, 2023
3	Amendment to IFRS 17-Insurance Contracts	January 1, 2023
4	Amendments to IFRS 17 - Initial Application of IFRS 17 and IFRS 9 - Comparative Information	January 1, 2023
5	Amendment to IAS 21 - Lack of Exchangeability	January 1, 2025

1. The Company has continued to assess the effects of the above standards and interpretations on its financial position and performance, and will disclose related impacts upon completion of the assessment.

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• IV. Summary of Significant Accounting Policies

• The significant accounting policies applied in the preparation of these Parent Company Only Financial Statements are set out below. Unless otherwise specified, the policies shall be applicable to all reporting periods presented.

• (I) Compliance Statement

  • The Parent Company Only Financial Statements are prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

• (II) Basis of Preparation

  1. Except for the following significant items, these Parent Company Only Financial Statements have been prepared on the historical cost basis: Historical costs are usually determined by the fair value of consideration paid for assets acquired.

     • (1) Financial assets and liabilities at fair value through profit or loss are measured at fair value.

     • (2) Defined benefit liability derived from retirement plan assets less the present value of net defined benefit obligation.

  2. The preparation of Parent Company Only Financial Report in compliance with International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), interpretations, and explanatory announcements endorsed by the FSC requires the use of certain significant accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. Please refer to Note V for items involving in a higher degree of judgment or complexity or items involving in significant assumptions and estimates to the Parent Company Only Financial Statements.

  3. Functional currency and presentation currency

     • The Company takes the currency of the main economic environment in which each business operates as its functional currency. The Parent Company Only Financial Statements are presented in the New Taiwan dollar, the Company’s functional currency. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

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• (III) Foreign Currency Trading

• Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

• Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the end of the reporting period. Exchange differences arising upon re-translation on the balance sheet date are recognized in profit or loss.

• The balances of non-monetary assets and liabilities denominated in foreign currencies are adjusted at the exchange rates prevailing at the end of the reporting period. If the balances are measured at fair value through profit or loss, the resulting exchange differences are recognized in profit or loss; if the balances are measured at fair value through other comprehensive profit or loss, the resulting exchange differences are recognized in other comprehensive income items; if the balances are not measured at fair value, they are measured at the historical exchange rates at the dates of initial transactions.

• All other exchange gains and losses shall be presented under “Other gains and losses” in the Income Statement.

• (IV) Standards for Assets and Liabilities Classified as Current and Non-current The Company is engaged in the construction of houses for sale by contractors, and its business cycle is longer than one year. As such, assets and liabilities related to the construction business are classified as current or non-current by reference to its normal operating cycle; the operating cycle is based on a three-year period. In addition to the above paragraph:

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

  • (1) Assets that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle.

  • (2) Assets held primarily for trading purposes.

  • (3) Assets that are expected to be realized within 12 months after the end of thereportingperiod.

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  - (4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the end of thereportingperiod.

     - The Company classifies all the assets that do not meet the above-mentioned criteria as non-current.

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

   • (1) Liabilities that are expected to be settled within the normal operating cycle.

   • (2) Assets held primarily for trading purposes.

   • (3) Liabilities that are expected to be settled within 12 months after the end of thereportingperiod.

   • (4) Liabilities with a repayment schedule that cannot be unconditionally deferred till at least 12months after the end date of the reportingperiod. The terms of a liability which may result in the settlement of an equity instrument at the option of the counterparty will not affect its classification. The Company classifies all liabilities that do not meet the above conditions as non-current.

2. (V) Cash and cash equivalents

Cash includes inventory cash and bank deposit. Cash equivalents refer to the short-term and highly liquidity investment that can be converted into quota cash at any time with little risk of value change. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

• (VI) Financial Instruments

Financial assets and liabilities will be recognized in the parent company only balance sheets when the Company becomes a party to the contract of the financial instrument. When showing the original financial assets and liabilities, if their fair value was not assessed based on profit or loss, it is the fair value plus the cost of transaction, that is, of its acquisition or issuance of the financial assets or financial liabilities. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

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• (VII) Financial assets

Where the purchase or sale of financial assets is in line with conventional trading practices, the accounting treatment of all purchases and sales of financial assets classified in the same way by the Company shall be consistently on the trade date or the settlement date.

1. Types of measurement

2. Financial assets held by the Company are classified as financial assets at fair value through profit or loss, financial assets at amortized cost, and investments in equity instruments at fair value through other comprehensive income.

3. The Company reclassifies all affected financial assets from the first day of the next reporting period only when there is a change in the operating model for managing financial assets.

4. A. Financial assets at fair value through profit or loss

   • Financial assets measured at fair value through profit or loss are those not measured at amortized cost or at fair value through other comprehensive income. Upon initial recognition, the Company may irrevocably designate financial assets that meet the criteria for measurement at amortized cost or at fair value through other comprehensive income as measured at fair value through profit or loss, to eliminate or significantly reduce an accounting mismatch.

Financial assets at fair value through profit or loss are measured at fair value; any re-measurement profit or loss (including any dividends or interests derived from such financial assets) is recognized in profit or loss. Please refer to Note XII for the determination of fair value.

• B. Financial assets at amortized cost

When the Company’s investments in financial assets satisfy the following two conditions simultaneously and they are not designated as at fair value through profit or loss, they are classified as financial assets at amortized cost:

• (1) Financial assets held based on the business model of collecting contract cash flow.

• (2) The terms of the contract of the financial assets generate a cash flow on a specified date that is solely for the payment of interest on the principal and the amount of principal outstanding.

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Subsequent to initial recognition, financial assets at amortized cost (including cash and cash equivalents, notes receivable and trade receivable), other receivables (including related parties) and refundable deposits), are subsequently measured at amortized cost where the initially recognized amount plus or minus the accumulated amortization calculated by the effective rate method and is adjusted for any loss allowance. Any interest income, foreign currency exchange gains and losses and impairment losses are recognized in profit and loss. When derecognition, gain or loss is recognized in profit and loss.

Interest income is calculated at the value of effective interest rate times the gross carrying amount of financial assets.

• C.Financial assets at fair value through other comprehensive income

A debt investment is measured at fair value through other comprehensive income/(loss) if it meets both of the following conditions and is not designated as at fair value through profit or loss:

• (1) The objective of the Consolidated Company’s business model is achieved both by collecting contractual cash flows and selling financial assets.

• (2) The terms of the contract of the financial assets generate a cash flow on a specified date that is solely for the payment of interest on the principal and the amount of principal outstanding.

The Company may, at initial recognition, make an irrevocable decision to designate an equity instrument that is neither held for trading to be measured at fair value through other comprehensive income. Subsequent changes in fair value are reported in other comprehensive income. The preceding selection is made on an instrument-by-instrument basis.

They are recognized initially at fair value plus directly attributable transaction costs and subsequently measured at fair value. Foreign currency translation profit and loss on investments in debt instruments, interest income and impairment losses calculated using the effective interest method, and dividend income from investment in equity instruments (except those expressly specified as recovery of parts of the investment cost) are recognized in profit or loss. Changes in the other carrying amount are recognized based on the unrealized profits and losses on financial assets measured at fair value through other comprehensive profit and loss. When performing derecognition, the

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cumulative profit or loss of investments in debt instruments are reclassified from equity to profit or loss; the cumulative profit or loss of investments in equity instruments are reclassified from equity to retained earnings and not to profit or loss.

The dividend income of equity investment shall be recognized on the date when the Company is entitled to receive dividends (usually the ex-dividend date).

1. Impairment of financial assets

The Company recognizes at the end of each reporting period for financial assets (including cash and cash equivalents, notes receivable and accounts receivable (including long-term notes receivable and accounts receivable), other receivables (including related parties) and refundable deposits, investments in debt instruments at fair value through other comprehensive income, and expected credit losses of contract assets as the allowance for loss.

Allowances shall be appropriated for notes receivable, trade receivables, and other receivables for expected credit losses for the duration of their existence. Financial assets at amortized cost and investments in debt instruments measured at fair value through other comprehensive income/(loss) are first evaluated to determine whether there is a significant increase in credit risk since original recognition. If there is no significant increase, an allowance for loss is recognized based on the expected credit losses for the 12 months following the reporting date, and if there is a significant increase, an allowance for loss is recognized based on the expected credit losses arising from all probable defaults during existence period. In determining whether the credit risk of a financial asset has increased significantly since the initial recognition, the Company considers reasonable and verifiable information which is available without excessive cost or effort, including qualitative and quantitative information, as well as analysis based on the Company’s historical experience, credit assessments and forward-looking information.

Expected credit losses are the weighted estimates of the probability of credit losses over the expected duration of a financial instrument. The credit loss is measured by the present value of all cash shortfall, that is, the difference between the cash flows that the Company can collect under the contract and the cash flows that the Company expects to receive. Expected credit losses are discounted at the effective

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interest rate on the financial asset.

The 12-month expected credit losses represent the expected credit losses arising from the possible default of the financial instrument in the 12 months after the reporting date, and the expected credit losses during the lifetime represent the expected credit losses arising from all possible defaults of the financial instrument during the expected existence period.

At the end of each reporting period, the Company assesses whether there is a credit impairment on financial assets measured at amortized cost and on investments in debt instruments measured at fair value through other comprehensive income/(loss). When there is one or more events arising that will bring unfavorable influence to expected future cash flow, there is already credit impairment to the financial asset. The evidence for credit impairment of financial assets includes the observable data for the following events:

• (1) Material financial hardship for borrower or issuer;

• (2) Default, such as arrearage or delinquency for more than 365 days;

• (3) Compromise made by the Company to borrower that would not be considered before, because of economic or contract reason related to borrower’s financial difficulty;

• (4) The borrower is most likely to file for bankruptcy or conduct other financial arrangement; or

• (5) Disappearance of active market for the financial asset due to financial difficulty.

The loss allowance for all financial assets shall be reduced from the carrying amount of the asset, provided that, the loss allowance for the debt instrument investments measured at fair value through other comprehensive income shall be recognized in other comprehensive income, which does not reduce their carrying amounts.

When the Company cannot reasonably anticipate the recovery of financial assets in whole or in part, it directly reduces the total carrying amount of its financial assets. The Company analyzes the timing and amount of the write-off on the basis of whether it is reasonably expected to be recovered. The Company expects that the amount written off will not be materially reversed. However, the written-off financial assets may still be enforced to comply with the procedures for the Company to recover the overdue amount.

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1. Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights derived from the cash flows of the financial asset are invalid, or it has transferred a financial asset and virtually has transferred all the risks and rewards of the ownership of the asset to another enterprise, or virtually has neither transferred nor retained the ownership of all of the risks and rewards and nor retained the control of the financial asset.

On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received is recognized in profit or loss. On derecognition of an equity instrument measured at fair value through other comprehensive income/(loss), the cumulative gain or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

• (VIII) Classification Tools for Financial Liabilities and Equity

• Financial liabilities and equity instruments

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

1. Equity instruments

Equity instruments refer to any contracts containing the Company’s residual interest after subtracting liabilities from assets.

Equity instruments issued by the Company are recognized based on the price obtained less direct issuance costs.

The repurchase of equity instruments issued by the Company is recognized in equity as a deduction. The purchase, sale, issuance, or write-off of the Company’s equity instruments are not recognized in profit or loss.

1. Financial liabilities

Financial liabilities are classified as amortized costs or the fair value measurement through profit or loss. Financial liabilities, if held for trading, derivatives or designated at the time of initial recognition, are classified as the fair value measurement through profit or loss. Financial liabilities at fair value through profit or loss are measured at fair value, and the related net gains and losses, including any interest expense, are recognized in profit or loss.

Financial liabilities measured at amortized cost include account payables and

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borrowings, which, after initial recognition, are subsequently measured using the effective interest method. Interest income and foreign currency profit or loss are recognized as profit or loss. Any profit or loss at the time of derecognize is also recognized in profit and loss.

1. Derecognition of financial liabilities

The Company derecognizes financial liabilities when the contractual obligations have been fulfilled, canceled or matured. When the terms of financial liabilities are modified and there is a significant difference in the cash flow of the revised liabilities, the original financial liabilities will be derecognized and new financial liabilities will be recognized at fair value based on the revised terms.

When financial liabilities are derecognized, the difference between their carrying amount and the paid consideration (including any transferred non-cash assets or liabilities assumed) shall be recognized in profit or loss.

1. Offsetting of financial assets and liabilities

The Company presents financial assets and liabilities on a net basis when the Company has the legally enforceable right to offset and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

(IX) Inventories

Inventories consist of land and construction in progress, properties held for sale, construction sites and prepaid land. Prepaid land is transferred to construction sites upon transfer of ownership, and construction sites are transferred to land and buildings under construction upon active development. Upon completion of the construction, the sold portion is transferred to operating costs and the unsold portion is transferred to land held for sale, using the construction area ratio, when revenue is recognized from the sale of the premises.

Inventories are measured at the lower of cost ornet realizable value and are compared on a line-by-line basis to determine the lower of cost or net realizable value. The cost includes all necessary expenditures and capitalized borrowing costs to get an asset in place and in conditions ready for use.

The net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated cost necessary to make the sale. The measurement of net realizable value is as follows:

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• (1) Construction sites: The net realizable value is estimated by real estate appraisers, where for non-road use land, the published land current value appreciation ratio by land administration authorities is adopted as the objective basis for land price adjustment and the criterion for present value assessment. For land designated for road use, the overall value is assessed using the comparative method of valuation.

• (2) Construction-in-progress: The net realizable value is calculated on the basis of the expected selling price (based on the current market conditions) less cost of construction completion and selling costs.

• (3) Buildings and land held for sale: The NRV is the estimated selling price (based on the current market conditions) minus the estimated costs and selling expenses incurred during the sale of the property.

• (X) Investments accounted for using the equity method

The Company has adopted the equity method for investments in subsidiaries. Subsidiaries refer to entities controlled by the Company.

The Company’s investments in subsidiaries is expressed as “investment using the equity method” and evaluated and adjusted as necessary in accordance with Article 21 of the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, so that the current profit and loss and other comprehensive profit and loss of the Parent Company Only Financial Reports are the same as the apportionment of the current profit and loss and other comprehensive income attributable to the owners of the parent company in the financial reports prepared on a consolidated basis, and the owner’s equity of the Parent Company Only Financial Reports is the same as the owner’s equity attributable to the owners of the parent company in the financial reports prepared on the consolidated basis.

Under the equity method, the investment is initially recognized at cost. The carrying amount of investment is adjusted thereafter for the post-acquisition changes in the Company’s share of profit or loss and other comprehensive income and profit distribution of the subsidiaries. In addition, the Company also recognizes changes in other interests in subsidiaries in proportion to the Company’s ownership.

When a change in the Company’s ownership interests in a subsidiary does not cause it

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to lose control of the subsidiary, it shall be accounted for as an equity transaction. The difference between the carrying amount of the investments and the fair value of the consideration paid or received is recognized directly in equity.

When the Company loses control over a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date of loss of control, and takes it as the initially recognized fair value of the financial asset or the initially recognized cost of the investments in associates or joint ventures. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. The Company accounted for all amounts recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the Company had directly disposed of the related assets and liabilities.

When the Company’s share of losses of a subsidiary exceeds its equity in said subsidiary (which includes any carrying amount of the investment accounted for by the equity method and long-term equity that, in substance, forms part of the Company’s net investment in said subsidiary), the Company continues recognizing its share of further losses.

The unrealized profit or loss in downstream transactions between the Company and the subsidiary shall be eliminated in the Parent Company Only Financial Statements. The gains and losses arising from the countercurrent and side current transactions between the Company and its subsidiaries shall be recognized in the Parent Company Only Financial Statements only to the extent not related to the Company’s equity in the subsidiaries.

(XI) Property, plant, and equipment

1. Recognition and measurement

Property, plant and equipment are recognized and measured at cost, less accumulated depreciation and accumulated impairment. Cost includes expenditure that is directly attributed to the acquisition of the asset. The cost of self-constructed

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assets includes raw materials and direct labor, any other directly attributable costs to bring the asset to a serviceable condition for its intended use, the cost of dismantling and removing the item and restoring the site, and the cost of borrowings to capitalize the eligible assets.

When property, plant and equipment contain different components, and it is more appropriate to adopt different depreciation rate or method when it is significant when compared with the total cost, they are deemed as independent items (main components) for treatment.

The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized as profit or loss.

2. Subsequent costs

Subsequent expenditure for property, plant and equipment is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Company. The carrying amount of those parts that are replaced is derecognized. Ongoing repairs and maintenance for property, plant and equipment are expensed as incurred.

3. Depreciation

The depreciation is calculated in straight-line method by capital cost less scrap value based on service years, and evaluated according to individual material components. If the service years of one component are different from other parts, this part will be separately recognized as depreciation. The depreciation charge for each period shall be recognized in profit or loss.

The useful lives of the Company’s major assets are as follows

Transportation Equipment 3~5 years Other Equipment 3~6 years

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Depreciation methods, useful lives, and residual values are audited at each reporting date. If expectations differ from the previous estimates, the change is accounted for as a change in accounting estimate.

• (XII) Lease

• Identifying a lease

The Company assesses whether the contract is (or includes) a lease on the date of its establishment. If a contract is signed to have the control over the use of identified assets transferred for a period of time in exchange for a consideration, it is (or includes) a lease. In order to assess whether a contract is signed to have the control over the use of identified assets transferred for a period of time, the Company assesses whether there are the following two factors throughout the period of use:

• (1) rights to nearly all economic benefits of the identified asset have been received; and

• (2) the control over the right to use the identified asset.

For contracts that are (or include) leases, the Company will treat each lease component in the contract individually, and to separately treat them from the non-lease components in the contracts. Where a contract includes a lease component and one or more additional lease or non-lease components, the company allocates the consideration in the contract to the lease component on the basis of the relative separate price of each lease component and the aggregate separate price of non-lease components. The comparison single unit price of the lease and non-lease components will be decided upon the prices separately received by the lessor (or supplier) for such components. If observable single unit prices are not readily available, the Company will maximize the use of observable information to estimate their respective single unit prices.

1. Where the Company is a lessee:

Except that the lease payments of the low value subject-matter assets and

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short-term leases applicable to recognition exemption are recognized as expenses on a straight-line basis during the lease period, other leases are recognized as right-of-use assets and lease liabilities on the lease commencement date.

The right-of-use asset is initially measured at cost, which includes the initial measured amount of the lease liability, adjusts any lease benefits paid on or before the inception of the lease, and adds the initial direct cost incurred and the estimated cost of dismantling, removing the underlying asset and restoring its location or underlying asset, and deducting any leasing incentives received.

Right-of-use assets are subsequently depreciated on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the Company regularly assesses whether the right-of-use asset is impaired and treats any impairment loss that has occurred, as well as cooperating to adjust the right-of-use asset when the lease liability is remeasured.

Lease liabilities are measured at the present value of the lease payments outstanding at the inception date of the lease. If the implicit interest rate of lease is easy to determine, the interest rate is used to discount the lease payment. If the interest rate is not easy to determine, the Company’s incremental borrowing rate shall be used.

The lease payments comprise as follows:

• (1) fixed payments, including in-substance fixed lease payments;

• (2) Variable lease payments dependent upon certain indicators or rates are measured by the indicators or rates used at the inception of the lease;

• (3) amounts expected to be payable by the lessee under residual value guarantees; and

• (4) an option to purchase the underlying asset if it is reasonably certain to be exercised, and penalty payments for terminating the lease.

The lease liability subsequently accrues interest with the effective interest method,

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and its amount is measured when the following occurs:

• (1) changes in future lease payments resulting from changes in an index or a rate used to determine those payments;

• (2) changes in the amounts expected to be payable under a residual value guarantee;

• (3) changes in the assessment of the purchase option;

• (4) change in the assessment of the lease term resulting from extension or termination of the exercise of the purchase option; or

• (5) lease modifications of the underlying asset, scope, and other terms and conditions.

When the lease liability is remeasured due to the aforementioned changes in the index or rate used to determine lease payments, changes in the residual value guarantee amount, and changes in the evaluation of purchase, extension or termination options, the carrying amount of the right-of-use asset shall be adjusted accordingly, and when the carrying amount of the right-of-use asset is reduced to zero, the remaining remeasured amount is recognized in profit or loss.

The changes in (iv) and (v) decreases the scope of a lease. When a lease modification decreases the scope of a lease, the carrying value of the right-of-use asset is decreased to reflect partial of full termination of the lease liability, and any gain or loss resulting from the aforementioned derecognition is immediately recognized in profit or loss.

The Company records right-of-use assets and lease liabilities defined as not investment properties in a single line item in the balance sheets.

For the short-term lease of transportation equipment and the lease of low-value underlying assets, the Company chooses not to recognize the right-of-use assets and lease liabilities, but recognizes the relevant lease payments as expenses on a straight line basis during the lease term in instead.

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1. Where the Company is a lessor:

A lease is classified as a finance lease when the terms of the lease transfer substantially all the risks and rewards incidental to the ownership of the subject asset to the lessee; otherwise, it is classified as an operating lease.

If the Company is a sublessor, it will handle the main lease and sub-lease transactions separately, and use the right-of-use assets generated by the main lease to evaluate the classification of the sub-lease transactions. If the main lease is a short-term lease and the recognition exemption applies, the sublease transaction should be classified as an operating lease.

Under finance leases, lease payments include fixed payment, substantially fixed payment and variable lease payment depending on index or rate. Net investment in leases is measured at the present value of lease receivables plus original direct costs and expressed as finance lease receivables. Financing income is allocated to each accounting period to reflect the fixed rate of return on the unexpired net lease investment of the Company in each period.

Under operating leases, lease payments after deducting lease incentives are recognized as revenue on a straight-line basis over the relevant lease term. The initial direct costs arising from acquisition of operating leases is added to the carrying amount of the underlying assets; and an expense is recognized for the lease on a straight-line basis over the lease term.

(XIII) Investment properties

Investment property is real estate held for rent or for capital appreciation or both (including real estate under construction for such purposes). Investment property also includes land that has not yet been determined for future use. and is considered to be held for capital appreciation.

Investment property is initially measured at costs (including transaction costs) and is subsequently measured at costs less accumulated depreciation and accumulated impairment losses.

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The Company provides depreciation on a straight-line basis, which is the balance of the asset cost less the residual value over the estimated useful life of the investment real estate. The useful life of investment property buildings and construction is 5 to 45 years.

The cost of self-constructed investment property includes the cost of raw materials and construction, any other costs directly attributable to bringing the investment property to a serviceable condition, and the capitalized cost of borrowings.

Investment property is derecognized when it is disposed of or permanently ceased to be used and no future economic benefits are expected from the disposal. The amount of gain or loss arising from the derecognition of investment property is the difference between the net disposal price and the carrying amount of the asset and is recognized in profit or loss for the period.

When the use of investment property is changed, the reclassification is based on the carrying amount of the property at the time of the change of use.

(XIV) Intangible assets

The intangible assets acquired by the Company with limited useful life are measured at cost less accumulated amortization and accumulated impairment.

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenses are recognized as profit or loss upon occurrence.

Intangible assets are amortized on a straight-line basis according to the following estimated benefit years from the time they reach a serviceable condition:

Land use rights : 50 years (subject to contract)

Computer software : 5 years

The residual value, amortization period, and amortization method for an intangible asset with a finite useful life shall be audited at least annually at each fiscal year-end. Any change shall be accounted for as a change in accounting estimate.

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(XV) Impairment of Non-financial Assets

The Company assesses at the end of each reporting period whether there is any indication that the carrying amount of non-financial assets (other than inventories and deferred income tax assets) may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.

The purpose of the impairment test, a group of assets whose cash inflow is mostly independent of other individual assets or asset groups, is regarded as the smallest identifiable asset group.

The recoverable amount is the higher of the fair value of an individual asset or cash-generating unit, less costs to dispose, and its value in use. When evaluating the value in use, the estimated future cash flow is converted to the present value at a pre-tax discount rate, which should reflect the current market assessment of the time value of money and the specific risks for the asset or cash-generating unit.

If the recoverable amount of individual asset or the cash-generating unit is lower than its carrying amount, the carrying amount of the asset or the cash-generating unit shall be reduced to the recoverable amount and the impairment loss shall be recognized immediately in loss for the year.

If an impairment loss is reversed subsequently, the carrying amount of the individual asset or cash generating unit is raised to its recoverable amount, provided that the increased carrying amount shall not exceed the carrying amount that would have been determined had no impairment loss been recognized in prior years. The reversed impairment loss is recognized immediately in profit or loss for the year.

(XVI) Trade and Notes Payables

Trade and notes payables are obligations to be paid for raw materials, goods or services obtained from suppliers in the normal course of business. They are measured at fair value on initial recognition and subsequently measured at amortized cost using the effective interest method, except for short-term accounts payable and notes that are

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unpaid interest, which are subsequently measured at the original invoice amount because the effect of discounting is immaterial.

(XVII) Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that the Company will be required to settle the obligation and the amount of the obligation can be reliably estimated.

Provisions are measured at the best estimate including risks and uncertainties of the expenditure required to settle the obligation on the last day of the reporting period. If provisions are measured at the estimated cash flows to settle the present obligation, the carrying amount of such provisions is equivalent to the present value of such cash flows.

The provision for warranty is estimated based on the contractual agreements and management’s best estimate (based on historical warranty experience) of future economic outflows resulting from the project maintenance and warranty obligations.

(XVIII) Revenue and cost recognition

1. Sales of premises

The Company is principally engaged in the construction and sales of property, and the recognition of revenue is based on the transferring of property ownership. For the contracted sales of residential units, due to contract restrictions, the Company usually does not apply the piece of real estate to other purposes. However, the Company gains an enforceable right to payments for completed performance obligations when the legal ownership of the property is transferred to the customer, and the property has been physically delivered. Therefore, the Company recognizes revenue at the point in time when the legal ownership of the property is transferred to the customer and the property has been physically delivered. However, revenue is also recognized if only one of these conditions is met within the reporting period, despite that the other occurs in the subsequent period.

Revenue is measured based on the transaction price of the contractual agreements. When sales happen after construction is completed, in most cases, consideration is made upon transfer of legal ownership; however, in some cases, payment of

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accounts may be deferred under contractual agreements, and if a material financial component is included, the transaction price is adjusted to reflect the impact of the material financial component. When sales happen before construction is completed, consideration is payable in installments during the period from signing a contract to transfer of legal ownership of the real property. If a significant financing component is included in the contract, the installments are discounted at the interest rate of the construction loan to reflect the effect of time value of money. Prepayments are recognized as a contract liability, and discounts reflecting the effect of time value of money are recognized as interest expenses and contract liabilities. The accumulated contract liabilities are reclassified as revenue upon the transfer of legal ownership.

1. Financial composition

The Company’s sales contract of pre-sale homes contains provisions for advance payment from customers, and the time between advance receipt and commodity ownership transfer is longer than one year. According to IFRS 15, if the Company judges that there are significant financing components in an individual pre-sale home contract, it shall adjust the amount of the commitment consideration and recognize the interest cost. In addition, IFRS 15 states that companies should determine the significance of the financing component only at the contract level, rather than the financial level at the portfolio level.

1. Rental revenue

Revenue from lease is recognized when an asset is actually used in lease, provided that it is probable the economic benefits will flow to the Company and the amount of revenue can be measured reliably. The related costs are recognized in line with revenues.

1. Incremental costs of obtaining contracts

If the Company expects to recover the incremental cost for acquiring the customer contract, the cost will be recognized as asset. The incremental cost of acquiring contract is cost that will arise in acquiring customer contract and will not arise otherwise. The contract acquisition cost no matter the contract will happen or not is recognized as expense, unless the cost is explicitly collectable from customer no matter the contract is acquired or not.

If the increment cost of acquiring contract is recognized by asset and the asset amortization period is within one year by Company using practical expediency

35

method, the incremental cost will be recognized as expense upon occurrence.

(XIX) Borrowing costs

• (1) Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are included as part of the cost of the asset until substantially all of the activities necessary to bring the asset to its intended state of use have been completed.

Special loans, such as investment income from temporary investments prior to capitalization, are deducted from the cost of loans eligible for capitalization. Except for the above, other borrowing costs are recognized in profit and loss in the year they are incurred.

  - (2) Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. When there is no evidence of the possibility that some or all the facility will be drawn down, the fee is recognized as a prepayment and amortized over the period of the facility to which it relates.

• (XX) Employee Benefit

• Defined contribution plans

Obligations for contributions to defined contribution pension plan are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

2. Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of a defined benefit pension plan is calculated separately for each plan by estimating the amount discounted to present value of the future benefit that employees have earned in return for their service in the current and prior periods. The fair value of any plan assets are deducted. The calculation is performed annually by a qualified actuary using the projected unit credit method. The discount rate is the yield on the reporting date on corporate bonds or government bonds that have maturity dates

36

approximating the terms of the Consolidated Company’s obligations and are denominated in the same currency in which the benefits are expected to be paid.

The costs of defined benefits under the defined benefit pension plan include service cost, net interest, and the remeasurement amount. The cost of services (including the cost of services of the current period) and the net interest of the net defined benefit liabilities (assets) are recognized as employee benefit expenses. Remeasurement (comprising actuarial gains and losses, and return on plan assets net of interests) is recognized in other comprehensiveincome and included in retained earnings, andis not recycled to profit or loss insubsequent periods, costs related to prior service costs are recognized immediately in profit or loss.

Net defined benefit liabilities (assets) are the deficit of the contribution made according to the defined benefit pension plan. A net defined benefit asset shall not exceed the present value of the contributions to be refunded from the plan, or the reductions in future contributions.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately in profit or loss.

3. Employees’ compensation and remuneration of directors

Employees compensation and remuneration to directors shall be recognized as expenses and liabilities where there are legal or constructive obligations and the amounts can be reasonably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. In addition, if employees compensation is issued in stock, the number of shares shall be calculated based on the closing price of the day prior to the resolution of the board of directors.

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(XXI) Income Tax

Income tax expenses include the tax in the current year and deferred income tax. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes shall be recognized in profit or loss.

Current taxes include tax payables and tax deduction receivables on taxable income (deficits) for the year calculated using the statutory tax rate on the reporting date or the actual legislative tax rate, as well as adjustments of income tax payable or tax refund receivable for prior years. The additional business income tax levied on the undistributed earnings is recognized as income tax expense on the date when the distribution of earnings is resolved in the Shareholders’ Meeting.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. The temporary difference for the following conditions will not be recognized as deferred income tax:

1. Assets and liabilities that are initially recognized but are not related to a business combination which have no effect on net income or taxable gains (losses) at the time of the transaction.

2. Temporary differences arising from equity investments in subsidiaries, affiliates or joint ventures, the time for reverse of which may be controlled by the Company and where there is a high probability that such temporary differences will not be reversed.

3. Initial recognition of goodwill.

Deferred income tax is measured at the tax rate at the time of reversal of expected temporary differences based on the statutory or substantive legislative tax rate at the reporting date.

Deferred tax assets and liabilities may be offset against each other if the following criteria are met:

1. The entity has the legal right to settle tax assets and liabilities on a net basis; and

2. The taxing of deferred tax assets and liabilities fulfils one of the scenarios below;

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• (1) Levied by the same taxing authority; or

• (2) Levied by different taxing authorities, but where each such authority intends to settle tax assets and liabilities (where such amounts are significant) on a net basis every year of the period of expected asset realization or debt liquidation, or where the timing of asset realization and debt liquidation is matched.

Unused tax losses, unused income tax credits transferred in later period and deductible temporary differences are recognized as deferred income tax assets to the extent that future tax income is likely to be available, and are reassessed at each reporting date and reduced to the extent that the relevant income tax benefit is not likely to be realized, or reversed on the amount originally reduced to the extent that there is likely to be sufficient taxable income.

(XXII) Segment information

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses.

(XXIII)Earnings per share

The Company presents the basic and diluted earnings per share of shareholders of common stock equity. The basic earnings per share are calculated based on the profit attributable to the ordinary shareholder of the Company divided by the weighted average number of ordinary shares outstanding. The diluted earnings per share is calculated based on the profit attributable to ordinary shareholders of the Company, divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares. If the employees’ compensation is paid in the form of stock, it is classified as potential ordinary shares. If the potential ordinary shares are dilutive, diluted earnings per share is disclosed in addition to simple earnings per share. Diluted earnings per share assumes that all dilutive potential ordinary shares are outstanding during the period, so the current net income and the number of outstanding ordinary shares are adjusted for the effect of dilutive potential ordinary shares.

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(XXIV)Dividend distribution

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities. Stock dividends are recorded as stock dividends to be distributed and reclassified to ordinary shares on the base date of new share issuance.

V. Main Source of Significant Accounting Judgment, Estimation, and Assumption Uncertainties The preparation of these Parent Company Only Financial Statements requires management to make critical judgments for applying the Company’s accounting policies with critical assumptions and estimates concerning future events. If there is any difference between any significant accounting estimates and assumption made and actual results, the historical experience and other factors will be taken into account in order to continue assessment and adjustment. 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. Please see below for the description of significant accounting judgments, estimation and assumption uncertainties.

• (I) Measurement of fair value for investment properties

When assessing the fair value of investment properties, the Company adopts the income approach, which involves calculating the rental income based on the existing lease contracts and the duration of use. The amount is then discounted using the Company’s incremental borrowing rate as the valuation basis. Any changes in market or economic conditions that result in changes in rental income or interest rates may lead to future fluctuations.

• (II) Inventory evaluation

As inventories are measured at the lower of cost and net realizable value, the Company shall determine the net realizable value of inventories at the end of the reporting period using judgments and estimates.

The Company evaluates the amounts of normal inventory consumption, obsolete inventories or if market selling prices are lower than costs at the end of the reporting period, and writes down the cost of inventories to the net realizable value. This inventory valuation is primarily basedon the nature of inventory, the actual selling

40

prices of neighboring regions inquired, the selling prices ofunits sold, the return on investment analysis form or the valuation report provided by an external real property appraiser, and is therefore subject to significant changes.

• (III) Provisions

Provisions are provisions for post-sale warranty liabilities, which are the present value of the Company’s management’s best estimate of future economic outflows resulting from warranty obligations. The estimates are based oncontractual agreements and management’s historical warranty experience, and are subject to adjustment due to construction materials, construction methods or other events that affect product quality. These estimates are primarily based on economic outflows over the future warranty period and are subject to change.

• VI. Descriptions of Material Accounting Items

(I) Cash and cash equivalents

Cash and cash equivalents
Item Cash on hand and petty cash Demand deposits Checking deposits Total	December 31, 2023 $70 530,672 101 $530,843	December 31, 2022
		$58 531,244 27
		$531,329

1. The Company possesses good credit with financial institutions, and contacts with several financial institutions to diversify credit risk, anticipated possibility of default is very low, the exposure cash amount on maximum credit risks at the end of the reporting period is same as cash equivalents

2. The Company’s pre-sale construction project trust funds and other portions with restriction on use are classified under Other financial assets – current. Please refer to Note VI(VIII) and Note VIII for details.

3. For the disclosed information on the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Company, please refer to Note XII.

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• (II) Financial assets at fair value through profit or loss

Item December 31, 2023 December 31, 2022 Non-current Domestic unlisted stocks (venture $82 $82 capital)

1. The Company’s investment in domestic unlisted stocks has been designated as investments at fair value through profit or loss.

2. The Company’s financial assets measured at fair value through profit or loss recognized no valuation gains in both 2023 and 2022, amounting to NT$0 thousand. Additionally, there were no disposals of these assets in 2023 and 2022.

3. The Company has disclosed the credit and interest rate risks associated with financial instruments in Note XII.

4. None of the financial assets of the Company has been pledged as collateral.

5. (III) Note and trade receivables

Note and trade receivables
Item Notes receivable Less than 1 year Over 1 year Total Trade receivables Less than 1 year Over 1 year Less: Allowance for losses Total	December 31, 2023	December 31, 2022
	$16,676 20,000	$15,000 2,785
	$36,676	$17,785
	$2,500 0 0	$886 22 (22)
	$2,500	$886

1. Long-term notes receivable of the Company that are due in more than one year are classified under non-current assets as long-term notes receivable and other receivables.

2. The Company’s long-term notes receivable of more than one year represent advance payments from customers for decoration work. The period of one to three

42

years is due to the time required for design and construction for the purchase of the rough housing units, and revenue is recognized upon completion and acceptance of the decoration.

1. The Company applies the simplified approach on the estimation of expected credit losses for all notes receivable (including long-term notes receivable) and trade receivables, that is, a loss allowance is recognized based on the lifetime of expected credit losses. To measure the expected credit losses, notes and accounts receivables were grouped based on shared characteristics of credit risk on remaining payments before due date, and forward-looking information was incorporated as well. The expected credit loss of notes receivable (including long-term notes receivable) and trade receivables of the Company is as follows:

Not overdue Less than 90 days Overdue 91 ~ 150 days Over 365 days Total Not overdue Less than 90 days Overdue 91 ~ 150 days Over 365 days Total	December 31, 2023	December 31, 2023	December 31, 2023
	Carrying amount of notes receivable(including long-term notes receivable)and trade receivables	Weighted average expected credit loss ratio	Allowance for expected credit losses during the period
	$39,098 35 43 0		$0 0 0 0
	$39,176		$0
	Carrying amount of notes receivable(including long-term notes receivable)and trade receivables	Weighted average expected credit loss ratio	Allowance for expected credit losses during the period
	$18,671 0 0 22	0% 0% 0% 100%	$0 0 0 22
	$18,693		$22

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The changes in the allowance for losses on notes and trade receivables of the Company were as follows

Company were as follows
Beginning balance Decrease in the current period Ending balance	December 31, 2023 $22 (22) $0	December 31, 2022
		$22 0
		$22

1. The decrease in the current period is due to the collection of overdue receivable loans.

2. The majority of the credit period of the Company’s receivables is the date of transfer of ownership of the premises to the bank, or the date of credit card payment for the premises to the bank. Prepayments for decorations involve customers issuing long-term notes receivable that are contingent on design and construction; revenue is recognized only after the decoration is completed and inspected. The Company is in the construction industry and has a large and unrelated customer base, so the concentration of credit risk is limited. Please refer to Note XII for related credit risk information.

3. The Company’s notes receivable (including long-term notes receivable) and accounts receivable were not discounted or provided as collaterals.

(IV) Other receivables

Item Other receivables Other receivables - related parties: Total	December 31, 2023 $7,964 141 $8,105	December 31, 2022 $2,609 109 $2,718

1. Other receivables - related parties consist of sales expenses to be shared with landlords and payments due from related parties for sold gift boxes.

2. The Company’s other receivables were assessed not to be impaired and were not past due.

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(V) Inventories

Inventories
Item	December 31, 2023	December 31, 2022
Buildings held for sale	$5,042,191	$4,586,949
Land held for sale	1,837,571	1,473,555
Land under construction	2,821,180	2,703,979
Construction in progress	2,401,690	2,249,500
Land held for construction	21,900,303	20,847,402
Prepayment for land	786,044	801,638
Less: Allowance for reduction to valuation	(167)	(167)
Total	$34,788,812	$32,662,856
Item	December 31, 2023	December 31, 2022
1. Buildings held for sale
King’s Town	$1,754,647	$1,860,268
King’s Town Hyatt	614,839	612,673
Hua Shang	114,478	114,478
Yiwen Court	59,364	190,091
Ju Dan	105,137	135,930
Tian Feng	145,518	145,518
Shi Shang King’s Town	13,569	20,360
Mei Shu Huang Ju	1,187,493	1,243,664
King’s Town Garden	119,870	216,641
Xiang King’s Town	0	4,194
Yue He Di	42,965	42,965
Fu+	884,144	0
Other projects	167	167
Total	$5,042,191	$4,586,949
Less: Allowance for reduction to valuation	(167)	(167)
Net	$5,042,024	$4,586,782

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Item 2. Land held for sale King’s Town King’s Town Hyatt Yiwen Court Ju Dan Tian Feng Shi Shang King’s Town Mei Shu Huang Ju King’s Town Garden Xiang King’s Town Yue He Di Fu+ Total	December 31, 2023 $178,947 44,555 32,094 62,663 62,443 8,946 783,810 54,048 0 41,853 568,212 $1,837,571	December 31, 2022
		$194,590 44,598 99,233 83,855 62,443 13,423 831,196 98,095 4,269 41,853 0
		$1,473,555

Item 3. Land under construction and construction in progress Kaohsiung Fuhe Section No. 698-1 Kaohsiung Longzhong Section No. 191 Kaohsiung Ai Qun No.2748 (King’s Town World of Heart) Kaohsiung Bohsiao Section No.1140 (Jing Wu Tong) Tainan Yuguang Section No. 880, 4 in total Total	December 31, 2023 Land under construction Construction in progress Total $358,073 $136,210 $494,283 370,653 186,598 557,251 1,001,698 1,775,817 2,777,515 655,287 245,852 901,139 435,469 57,213 492,682 $2,821,180 $2,401,690 $5,222,870	December 31, 2023 Land under construction Construction in progress Total $358,073 $136,210 $494,283 370,653 186,598 557,251 1,001,698 1,775,817 2,777,515 655,287 245,852 901,139 435,469 57,213 492,682 $2,821,180 $2,401,690 $5,222,870	December 31, 2023 Land under construction Construction in progress Total $358,073 $136,210 $494,283 370,653 186,598 557,251 1,001,698 1,775,817 2,777,515 655,287 245,852 901,139 435,469 57,213 492,682 $2,821,180 $2,401,690 $5,222,870
		Construction in progress	Total
		$136,210 186,598 1,775,817 245,852 57,213	$494,283 557,251 2,777,515 901,139 492,682
		$2,401,690	$5,222,870

Item 3. Land under construction and construction in progress Kaohsiung Fuhe Section No. 698-1 Kaohsiung Ai Qun No.2748 (King’s Town World of Heart) Kaohsiung Xindu Section 163 (Fu +) Kaohsiung Bohsiao Section No.1140 (Jing Wu Tong) Total	December 31, 2022	December 31, 2022	December 31, 2022
	Land under construction	Construction in progress	Total
	$353,729 1,001,698 693,265 655,287	$121,525 1,305,230 766,252 56,493	$475,254 2,306,928 1,459,517 711,780
	$2,703,979	$2,249,500	$4,953,479

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Item 4. Land held for construction Kaohsiung Chenggong Section No. 60-1, 62-64 and others Kaohsiung Longzhong Section No. 191 Kaohsiung Longzhong Section No.129-3,129-4 Kaohsiung Longzhong Section No.128-4, etc,3in total Kaohsiung Qinghai No.229 Kaohsiung Qinghai No.126 Kaohsiung Qinghai No.127 Kaohsiung Qinghai No.128 Kaohsiung Longzhong Section No.128-3 Kaohsiung Lantian Middle Section No.30-2 Kaohsiung Xingnan Section No.11 Kaohsiung Longzhong Section No.22 Kaohsiung Xinmin No.160 Kaohsiung Xinmin No.159 Tainan Yuguang Section No. 880, 4 in total Kaohsiung Qiaotou Shixing Section No.924 Kaohsiung Shixing Section 925, 2 in total Kaohsiung Shixing Section927,3in total Kaohsiung Shixing Section 928, 3 in total Kaohsiung Qiaotou Shixing Section No. 967 Kaohsiung Qiaotou Shixing Section No.968 Kaohsiung Longdong Section No.1 Tainan Kanjiao North Section No.820 Kaohsiung Xindu Section No.49 Kaohsiung Xinzhuang12Sub-section No.1167and1175 Tainan Kanjiao North Section No.913 Kaohsiung Shinkang Section No.25 and 29 Kaohsiung Shinkang Section No. 25-1 and 29-1 Kaohsiung Shinkang Section No. 26 Kaohsiung Shinkang Section No. 30 Kaohsiung Shinkang Section No. 31 Transferable land and deformed land Total	December 31, 2023 $864,273 0 1,610,110 716,926 4,278,594 685,719 662,012 379,145 52,266 757,742 259,585 1,998,033 792,708 828,072 0 14,055 112,196 84,625 $107,554 6,640 42,794 513,991 3,398,920 46,653 617,961 0 188,458 188,548 34,123 59,256 12,058 2,587,286 $21,900,303	December 31, 2022
		$862,995 370,653 1,610,110 716,926 4,278,594 685,719 662,012 379,145 52,266 757,742 259,585 1,998,033 792,708 828,072 435,469 14,055 112,196 84,625 $107,554 6,640 42,794 513,991 3,385,666 46,653 614,152 13,130 0 0 0 0 0 1,215,917
		$20,847,402

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Item	December 31, 2023	December 31, 2022
5. Prepayment for land
Tainan Anan District, Caohu Phase I	$201,677	$201,677
Kaohsiung Chenggong Section No. 65.66	335,361	0
Tainan Kanjiaonan No. 19-1 and others	4,995	0
Transferable land and deformed land	244,011	599,961
Total	$786,044	$801,638
6. The information related to interest capitalization is as follows:
	December 31, 2023	December 31, 2022
The amount of capitalized interest	$122,630	$81,087

1. The land purchased or sold in Kaohsiung City and Tainan City is recorded as prepaid land at the time of signing the contract and paying for each installment and is transferred to the land for future construction after the transfer.

2. Please refer to Note VIII to the financial statements for the pledge of premises for sale, premises under construction and construction sites.

3. Cost of goods sold related to inventories amounted to NT$1,080,517 thousand and NT$1,240,485 thousand in 2023 and 2022, respectively; neither of which included NT$0 thousand and NT$375 thousand of inventory write-down benefit in 2023 and 2022, respectively.

(VI) Prepayments

Prepayments
Item	December 31, 2023	December 31, 2022
Prepaid expenses Input tax Total	$451,769 135	$571,542 139
	$451,904	$571,681

Prepaid expenses consist of prepayments for various services, costs related to construction in progress and insurance premiums.

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(VII) Other current assets

Other current assets
Item	December 31, 2023 $1,381 106,902 $108,283	December 31, 2022
Payments on behalf of others Incremental costs of obtaining contracts Total		$4,396 110,228
		$114,624

The incremental costs for obtaining a contract are the commission paid by the Company to agencies for obtaining real estate sales and purchase contracts which is expected to be recovered. These costs are recognized as assets and amortized over the period when the revenue from the sale of the properties is recognized. In 2023 and 2022, amortization expenses of NT$17,861 thousand and NT$0 thousand, respectively, were recognized under selling expenses.

(VIII) Other financial assets - current

Other financial assets - current
Item	December 31, 2023 $54,012	December 31, 2022
Restricted bank deposits		$96,254

Other financial assets - current are the pre-sale project construction trust funds, advance payment performance trust and reserve account the Company, which are pledged as collateral for bank deposits. Please refer to Note VIII for details.

• (IX) Investments accounted for using the equity method

Name of Investee	December 31, 2023	December 31, 2023	December 31, 2022	December 31, 2022
	Amount	Shareholding	Amount	Shareholding
H2O Hotel Co., Ltd. (H2O Hotel)	$120,532	100%	$85,617	100%

• (1) For information about the Company’s subsidiaries, please refer to the 2023 Consolidated Financial Statements of the Company.

• (2) Aggregate financial information of the Company’s associates is as follows.

Current assets Non-current assets Current liabilities Non-current liabilities	H2O Hotel Co., Ltd. (H2O Hotel)	H2O Hotel Co., Ltd. (H2O Hotel)
	December 31, 2023 $136,936 1,569,751 (111,420) (1,569,417)	December 31, 2022
		$101,137 2,322,499 (92,000) (2,314,310)

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H2O Hotel Co., Ltd. (H2O Hotel)

	H2O Hotel Co., Ltd. (H2O Hotel)	td. (H2O Hotel)
Net assets Comprehensive Income Statement Net Operating Revenue Gross profit Net Income Other comprehensive income/(loss) (after tax) Total comprehensive income	December 31, 2023 December 31, 2022 $25,850 $17,326 H2O Hotel Co., Ltd. (H2O Hotel)	December 31, 2022
		$17,326
	December 31, 2023 $304,949 $128,783 ($41,476) $0 ($41,476)	December 31, 2022
		$270,060
		$89,971
		($58,757)
		$0
		($58,757)

(3) The investment income or loss recognized under the equity method is based on the financial statements of the subsidiaries for the same period audited by a certified public accountant, and the share of investment income or loss is recognized based on the holding period. In December 2023 and December 2022, H2O Hotel Co., Ltd. increased its capital by cash in the amount of NT$50,000 thousand in both years, all of which was invested by the Company. The investment cost of the investment in H2O Hotel Co., Ltd. was NT$490,000 thousand and NT$440,000 thousand as of December 31, 2023 and 2022, respectively. The share of loss recognized for the subsidiary was NT$41,476 thousand and NT$58,757 thousand in 2023 and 2022, respectively.

(4) The Company leases real estate to its subsidiary, H2O Hotel Co., Ltd. which is classified as a right-of-use asset and lease liability under IFRS 16 as of January 1, 2019, while the Company is classified as an operating lease, resulting in a difference in profit or loss recognition, the amount of which affects the Company’s share of benefit recognized using the equity method in 2023 and 2022, respectively The difference affects the Company’s share of benefit recognized under the equity method by NT$26,391 thousand and NT$29,274 thousand in 2023 and 2022, respectively.

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• (5) There is no provision of guarantees by the invested subsidiary.

(X) Property, plant, and equipment

Cost 2023/01/01 Increase Re-classification 2023/12/31 2022/01/01 Increase Disposal and obsolescence 2022/12/31 Accumulated depreciation and impairment 2023/01/01 Depreciation 2023/12/31 2022/01/01 Depreciation Disposal and obsolescence 2022/12/31 Net carrying amount 2023/12/31 2022/12/31 2022/01/01	Transportation Equipment	Office Equipment	Other Equipment	Total
	$3,770 939 0	$0 0 0	$713 0 14,578	$4,483 939 14,578
	$4,709	$0	$15,291	$20,000
	$0 3,770 0	$4,892 0 (4,892)	$1,231 0 (518)	$6,123 3,770 (5,410)
	$3,770	$0	$713	$4,483
	$52 702	$0 0	$384 2,928	$436 3,630
	$754	$0	$3,312	$4,066
	$0 52 0	$4,239 653 (4,892)	$712 190 (518)	$4,951 895 (5,410)
	$52	$0	$384	$436
	$3,955	$0	$11,979	$15,934
	$3,718	$0	$329	$4,047
	$0	$653	$519	$1,172

The Company didn’t pledge any property, plant and equipment as collateral.

• (XI) Right-of-use assets

• Major lease activities and terms

  • (1) The Company acquired the land right of the Kaohsiung Municipal Government located at No. 22, Longbei Section, Gushan District for the construction of a tourist hotel for a period of 50 years and agreed that the Company shall not assign, mortgage, lease or lend the land to others for construction use except with the prior consent of the Kaohsiung Municipal Government, and upon the termination of the continuance period, the Company shall have no contractual preferential rights to acquire all the leased land. In 2023 and 2022, adjustments were made in accordance with changes in the consumer price index.

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1. Below is the carrying amounts of right-of-use assets and their recognized depreciation expenses:

depreciation expenses:
Cost of right-of-use assets Balance as of January 1, 2023 Remeasurement Balance as of December 31, 2023 Balance as of January 1, 2022 Remeasurement Balance as of December 31, 2022 Depreciation of right-of-use assets Balance as of January 1, 2023 Current depreciation Balance as of December 31, 2023 Balance as of January 1, 2022 Current depreciation Balance as of December 31, 2022 Carrying amount Balance as of December 31, 2023 Balance as of December 31, 2022	Land
	$67,754 6,922
	$74,676
	$65,760 1,994
	$67,754
	$6,108 1,564
	$7,672
	$4,544 1,564
	$6,108
	$67,004
	$61,646

1. Please refer to Note VI(XIX) for the description of lease liabilities.

2. (XII) Investment properties

Investment properties
Cost 2023/01/01 2023/12/31 2022/01/01 2022/12/31 Accumulated depreciation 2023/01/01 Current depreciation 2023/12/31 2022/01/01 Current depreciation 2022/12/31 Net carrying amount 2023/12/31 2022/12/31 2022/01/01	Buildings
	$971,633
	$971,633
	$971,633
	$971,633
	$346,441 61,250
	$407,691
	$285,191 61,250
	$346,441
	$563,942
	$625,192
	$686,442

1. Investment real estate were acquired from the Kaohsiung City Government for the construction of a tourist hotel at Longbei Section No. 22, and leased to a subsidiary

52

upon completion. The rental income from investment real estate and direct operating expenses were as follows:

Rental income from investment properties(recorded as operating income) Direct operating expenses from investment properties that generate rental income in the current period	January 1 to December 31, 2023 January 1 to December 31, 2022 $44,286 $37,143 75,815 76,026

1. The fair value of investment properties as of December 31, 2023 and 2022 was NT$1,258,489 thousand and NT$2,023,410 thousand, respectively. These valuations were determined by the Company’s management using the rental income from lease contracts signed in each respective year, discounted at the incremental borrowing rate. These amounts are categorized as Level 3 fair values.

2. Please refer to Note VIII to the financial statements for the guarantees provided by investment properties.

3. Please refer to Note VI(XIX) for information on investment properties and land held by the Company for construction and premises for sale that are leased to others under operating leases.

(XIII) Intangible assets

Intangible assets
Cost Balance as of January 1, 2023 Balance as of December 31, 2023 Balance as of January 1, 2022 Increase Balance as of December 31, 2022 Accumulated amortization and impairment Balance as of January 1, 2023 Amortization Balance as of December	Land use rights $200,020 $200,020 $200,020 0 $200,020 $42,003 4,001 $46,004	Other intangible assets $1,940 $1,940 $1,510 430 $1,940 $1,331 182 $1,513	Total
			$201,960
			$201,960
			$201,530 430
			$201,960
			$43,334 4,183
			$47,517

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31, 2023 Balance as of January 1, 2022 Amortization Balance as of December 31, 2022 Net carrying amount Balance as of December 31, 2023 Balance as of December 31, 2022 Balance as of January 1, 2022	Land use rights $38,003 4,000 $42,003 $154,016 $158,017 $162,017	Other intangible assets $1,071 260 $1,331 $427 $609 $439	Total
			$39,074 4,260
			$43,334
			$154,443
			$158,626
			$162,456

Other intangible assets include computer software and systems.

1. Amortization expense for the Company’s intangible assets for 2023 and 2022 is

reported in the following items

reported in the following items
Item	2023 2022
Other operating costs Operating expenses Total	$4,001 $4,000 182 260
	$4,183 $4,260

1. In July 2012, the Company entered into a land right deed with the Kaohsiung City Government for the establishment of the land at Lot 22, Sec. 22, Longbei, Kaohsiung City, with a royalty amount of $200,020 thousand for the period from July 2012 to July 2062 for the operation of a tourist hotel.

2. As of the end of each reporting period, none of the intangible assets of the Company has been pledged as collateral.

3. (XIV) Short-term borrowings/short-term bills payable

1. Bank borrowings Secured loans Unused limit Interest rate range Repayment period 2. Short-term bills payable Less: Discount on short-term bills payable Net Interest rate range Unused limit	December 31, 2023 $3,756,950 $997,050 2.55%~2.89% 2024/01/19~2027/05/16 $4,591,100 (3,701) $4,587,399 1.558%~2.838% $2,918,550	December 31, 2022
		$4,401,950
		$592,050
		2.233%~2.85%
		2023/02/09~2024/11/25
		$3,740,400 (5,723)
		$3,734,677
		1.468%~2.743%
		$1,417,845

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The Company pledged its own assets and related parties’ real estate and stocks as collateral for bank loans and commercial paper, please refer to Notes VII and VIII.

• (XV) Provisions - current

Provisions - current
Balance as of January 1, 2023 Reduced liability provision for the period Balance as of December 31, 2023 Balance as of January 1, 2022 Increased liability provision for the period Balance as of December 31, 2022	Warranty provision
	$51,779 (6,291)
	$45,488
	$44,708 7,071
	$51,779

Provisions represents post-sale warranty expenses. The provision for warranty is based

on historical experience and management’s judgment of the present value of estimated future economic outflows, which are expected to be incurred within five years after the completion of the housing units.

(XVI) Collection

Collection
Item Land collections Building collections Decoration collections Collections - others Total Other current liabilities - others Item Tax payable	December 31,2023 $10,236 18,356 14,094 7,735 $50,421 December 31,2023 $4,346	December 31,2022
		$19,790 32,686 14,094 6,308
		$72,878
		December 31,2022
		$8,499

(XVII) Other current liabilities - others

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(XVIII)Long-term borrowings

Nature of borrowings Long-term bank borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings	Borrowing period, repayment method and interest rate range From March 2020 to December 2028, interest is payable monthly in a lump sum at maturity with floating interest rates of 2.73% and 2.405% as of December 31, 2023 and 2022, respectively. From June 2019 to June 2026, interest is payable monthly in a lump sum at maturity with floating interest rates of 2.7% and 2.325% as of December 31, 2023 and 2022, respectively. The borrowing period is 15 years from July 2017 to July 2032 (including a grace period of 2 years). Interest is payable monthly during the grace period and the principal is repayable at the end of the grace period by the interest method with a floating interest rate of 2.24% and 2.00% on December 31, 2023 and 2022, respectively. Borrowings due within one year recognized were NT$46,936 thousand and NT$46,393 thousand as of December 31, 2023 and 2022, respectively. From January 2022 to January 2027, interest is payable monthly in a lump sum at maturity with floating interest rates of 2.50% and 2.25% as of December 31, 2023 and 2022, respectively. From January 2022 to January 2027, interest is payable monthly in a lump sum at maturity with floating interest rates of 2.50% and 2.25% as of December 31, 2023 and 2022, respectively.	December 31, 2023 $1,591,250 547,200 439,207 184,395 176,035	December 31, 2022
			$1,675,000 576,000 485,150 194,100 185,300

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Nature of borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings	Borrowing period, repayment method and interest rate range Interest is payable on a monthly basis from October 2021 to October 2026. There is a grace period of three years from the initial drawdown date, and starting from the 37th month, $100,000 thousand of principal is repaid every six months, with the remainder due in a lump sum payment at maturity. The floating interest rates are 2.55% and 2.425% as of December 31, 2023 and 2022, respectively. Borrowings due within one year were NT$100,000 thousand and NT$0 as of December 31, 2023 and 2022, respectively. From December 2022 to December 2027, interest is payable monthly in a lump sum at a floating rate of 2.46% and 2.335% as of December 31, 2023 and 2022, respectively. From May 2023 to May 2026, interest is payable monthly in a lump sum at maturity with a floating rate of 2.2438% as of December 31, 2023. From May 2023 to May 2026, interest is payable monthly in a lump sum at maturity with a floating rate of 2.2438% as of December 31, 2023. From June 2023 to June 2025, interest is payable monthly in a lump sum at maturity with a floating rate of 2.688985% as of December 31, 2023. From December 2023 to July 2027, interest is payable monthly in a lump sum at maturity with a floating rate of 2.602% as of December 31, 2023. From March 2023 to September 2027, interest is payable monthly in a lump sum at maturity with a floating rate of 3.002% as of December 31, 2023.	December 31, 2023 2,000,000 $415,000 1,200,700 50,000 627,300 181,200 139,900	December 31, 2022
			2,000,000 $415,000 0 0 0 0 0

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Nature of borrowings Borrowing period, repayment method and interest rate range Secured borrowings From March 2020 to March 2025, interest is payable monthly in a lump sum at maturity with floating interest rates of 2.27% and 2.035% as of December 31, 2023 and 2022, respectively. Secured borrowings From October 2019 to January 2023, then extended to October 2025, with NT$158 million repaid every four months from October 2022 to October 2023 and the rest payable monthly in a lump sum at maturity with floating interest rates of 2.675% and 2.055%-2.425% as of December 31, 2023 and 2022, respectively. Borrowings due within one year were transferred to NT$474,000 thousand as of December 31, 2022. Secured borrowings From July 2023 to July 2028, interest is payable monthly in a lump sum at maturity with a floating rate of 3.05% as of December 31, 2023. Secured borrowings From May 2019 to November 2023, interest is payable monthly in a lump sum at maturity with floating interest rates of 2.035% as of December 31, 2022 , respectively. Borrowings due within one year were transferred to NT$510,000 thousand as of December 31, 2022. In June of 2023, due to the investment in construction projects for collateralized land, it was reclassified as short-term borrowing based on its nature. Total Less: Net long-term borrowings due within one year or one operating cycle Use this segment Net Unused limit	December 31, 2023 1,240,000 598,000 $191,550 0 $9,581,737 (146,936) $9,434,801 $7,360,170	December 31, 2022
		1,280,000 1,092,000 $0 510,000
		$8,412,550 (1,030,393)
		$7,382,157
		$3,798,600

Long-term bank borrowings were secured by the Company’s own assets and real estate provided by related parties; please refer to Notes VII and VIII for details.

• (XIX) Lease agreements

• The Company’s lease liabilities are as follows

December 31, 2023 December 31, 2022

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Current $1,282 Non-current $68,013 Please refer to Note XII for maturity analysis.	$1,134
	$62,373

The Company remeasured its lease liabilities due to changes in the consumer price index, adjusting the lease consideration accordingly during the period of January 1 to December 31 of 2022 and 2023. There were no significant issuance, repurchases, or repayments of lease liabilities caused by new or terminated leases.

1. The amount of leases recognized in profit or loss was as follows

Interest expense – lease obligations payable Short-term lease expenses Expense on leases with low-value underlying assets Total cash flows on lease	2023 $419 $1,418 $224 $3,177	2022
		$771
		$5,092
		$217
		$7,029

The Company selects to apply recognition exemptions to leases of vehicles and low-value business machines that qualify as short-term leases, and does not recognize the related right-of-use assets and lease liabilities for the said leases.

1. Lessor lease (recorded as operating income)

2. (1) The Company leases investment properties, premises for sale and construction sites, which are classified as operating leases because almost all the risks and remuneration attached to the ownership of the underlying assets have not been transferred.

3. (2) The Company recognized fixed lease payments and rent income dependent on index or rate changes under operating lease agreements (recorded as operating income) of NT$82,920 thousand and NT$67,380 thousand for the years from January 1 to December 31, 2023 and 2022, respectively.

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• (3) The maturity analysis of lease payments under operating leases of the Company to report the total undiscounted lease payments to be received in the

future is presented as follows:

future is presented as follows:
Within 1 year 1 to 2 years 2 to 3 years 3 to 5 years Over 5 years Non-discounted future cash flows of lease	December 31, 2023 $74,866 26,156 18,101 20,004 7,843 $146,970	December 31, 2022
		$58,446 96,584 29,152 32,711 16,131
		$233,024

• (4) The Company has one signed lease that is not included in the above table. The lease for the period from October 1, 2019 to February 28, 2035 is currently in litigation with the lessee as described in Note IX, therefore, this lease has been collected since it was signed and thus is not included in the above table.

• (5) The Company holds lands for construction provided for lease as a parking lot for a period ranging from 7 to 15 years. The rent is charged at 73% to 75% of the operating income of the leased property, which is not included in the above undiscounted rental payment since the monthly revenue is calculated according to the actual number and time of parking and is variable.

(XX) Long-term notes payable

Long-term notes payable
Long-term notes payable Less: Discount on long-term notes payable Total	December 31, 2023 $7,595 0 $7,595	December 31, 2022
		$0 0
		$0

As of December 31, year 2023, the long-term notes payable were issued for the gas piping projects of construction works in progress, with maturity dates in July 2026 and January 2027, respectively.

• (XXI) Share capital

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1. As of December 31, 2023 and December 31, 2022, the Company’s total authorized share capital was both NT$5,000,000 thousand, with a par value of NT$10, and its paid-in capital were NT$3,694,196 thousand and NT$3,690,564 thousand, respectively, with 369,419 thousand and 369,056 thousand common shares issued, respectively, and payments for all issued shares have been received. Quantities of the Company’s outstanding ordinary shares at the beginning and end of the periods were deemed reconciled as follows: (Unit: thousand shares)

Number of shares outstanding at the beginning of the period (in thousands) Cancellation of repurchase treasury shares (in thousands) Employee compensation to capital increase (in thousands) Number of shares outstanding at the beginning of the period (in thousands)	2023 369,056 0 363 369,419	2022
		371,759 (3,244) 541
		369,056

1. On March 29, 2023, the Board of Directors of the Company resolved to distribute NT$11,714 thousand in employee compensation for 2022 through the issuance of shares. The number of shares to be distributed was calculated based on the closing price of NT$32.25 per share on the day before the Board’s resolution, resulting in the issuance of 363,221 new shares. This capital increase was filed with the Financial Supervisory Commission on July 6, 2023, and was approved in a Board of Directors meeting on August 10, 2023, with the same date set as the capital increase record date. The registration of this transaction with the Ministry of Economic Affairs was completed on September 4, 2023.

2. On March 23, 2022, the Board of Directors of the Company resolved to distribute NT$19,462 thousand in employee compensation for 2021 through the issuance of shares. The number of shares to be distributed was calculated based on the closing price of NT$35.95 per share on the day before the Board’s resolution, resulting in the issuance of 541,356 new shares. This capital increase was filed with the Financial Supervisory Commission on August 1, 2022, and was approved in a

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Board of Directors meeting on August 11, 2022, with August 15, 2022, set as the capital increase record date. The registration of this transaction with the Ministry of Economic Affairs was completed on September 12, 2022.

1. On July 8, 2022, the Company’s Board of Directors resolved to repurchase 5,000 thousand shares of the Company’s common stock. The repurchased shares will be retired and the actual number of repurchased shares is 3,244 thousand, and on November 10, 2022, the Board of Directors resolved to set November 10, 2022 as the base date for the capital reduction, which involved canceling 3,244 thousand treasury shares. The changes were registered with the Ministry of Economic Affairs on November 25, 2022.

2. Treasury shares

3. (1) On July 8, 2022, the Company’s Board of Directors resolved to repurchase 5,000 thousand shares of treasury shares in accordance with Article 28-2 of the Securities and Exchange Act to protect the Company’s credit and shareholders’ rights. 3,244 thousand shares were repurchased from July 11 to September 7, 2022, at an average purchase price of NT$37.06 per share and repurchase costs of NT$120,217 thousand.

4. (2) According to the Securities and Exchange Act, the number of shares outstanding repurchased by the Company shall not exceed 10% of the number of issued shares, and the total amount repurchased shall not exceed the sum of the Company’s retained earnings, share premium, and realized capital surplus. Based on March 31, 2022, the maximum number of shares that the Company may repurchase is 37,175.9 thousand shares and the maximum amount of shares to be purchased is NT$12,886,644 thousand.

5. (3) Treasury shares held by the Company may be neither pledged nor assigned rights in accordance with the Securities and Exchange Act

6. (4) On November 10, 2022, the Company’s Board of Directors resolved to retire 3,244 thousand treasury shares previously repurchased, with an original total

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amount of NT$120,217 thousand. After deducting NT$14 thousand for handling fees, the net amount was NT$120,203 thousand. The record date for the capital reduction was set as November 10, 2022, resulting in the retirement of 3,244 thousand issued shares. Upon retirement, the face value of the shares is first offset against the capital stock, and any difference between the book value of the treasury shares and their face value is adjusted in the capital reserves in proportion to the retirement ratio. Any shortfall is then offset against retained earnings.

(XXII) Capital surplus

Capital surplus
Shares premium	December 31, 2023 $8,082	December 31, 2022
		$0

In accordance with the Company Act, capital surplus must first be used to cover losses before new shares or cash can be issued in proportion to the shareholders’ original shares. The realized capital surplus referred to in the preceding paragraph includes the proceeds from the issuance of shares in excess of par value and the proceeds from the receipt of gifts. In accordance with the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital surplus may be capitalized in an amount not exceeding 10% of the paid-in capital each year.

(XXIII) Retained earnings

Based on the Articles of Incorporation, the annual earnings of the Company shall be first appropriated to pay taxes and offset accumulated losses before allocating 10% of the remaining earning to the legal reserve (not applicable where accumulated legal reserve has reached the amount required by law and regulations) and a special reserve in accordance to CMP’s operating needs and pursuant to the applicable law and regulations. Any retained earnings available for distribution together with accumulated undistributed retained earnings may be proposed by the Board of Directors to appropriate and be resolved at the Annual General Meeting. The percentage of cash dividends shall not be less than 10% of the total amount distributed. The percentage

63

shall be determined by the board of directors after considering the financial condition of the Company, except that no cash dividends may be paid when the debt ratio in the annual financial statements exceeds 50%. The ratio of stock dividends and cash dividends mentioned in the preceding paragraph shall be adjusted according to the relevant laws and regulations and regulations. The adjustment shall be proposed by the Board of Directors and submitted to the shareholders’ meeting for resolution. Please refer to Note VI(XXX) for the employee compensation distribution policy set forth in the Articles of Incorporation.

1. Legal reserve

According to the Company Act, after-tax surplus profits shall first set aside 10% of said profits as legal reserve, unless legal reserve equals to the paid-in capital. Legal reserve funds can be used to offset company losses. When there are no losses, the distribution of new shares or cash can be decided by a shareholder meeting resolution, based on the proportion of the shareholders’ existing shares. However, the distribution of new shares or cash is limited to the portion of the reserve that exceeds 25% of the paid-in capital amount.

1. Dividend distribution

The Company held its annual general shareholders’ meetings on June 28, 2023, and June 23, 2022, during which the distribution of profits for 2022 and 2021 was approved, respectively. It was resolved to allocate the statutory reserve as required, with no distribution of the remaining profits.

1. The proposal of distribution of earnings for 2023 was approved by the Company’s board of directors on March 14, 2024, but has not yet been resolved by the shareholders’ meeting; the proposal is as follows:

For related information, please visit the Market Observation Post System or other channels.

(XXIV) Operating revenue

2023 2022

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Land revenue $1,101,511 Building revenue 1,106,967 Rental revenue 82,920 Return and discount of premises revenue 0 Total $2,291,398 1. Revenue breakdown 2023 Major regional markets Taiwan $2,291,398 2023 Major products/service Sales of premises $2,208,478 Rental revenue 82,920 Total $2,291,398 2023 Timing of revenue recognition: At a fixed point in time $2,208,478 Performance obligations fulfilled over time 82,920 Total $2,291,398 2. Contract balance December 31, 2023 December 31, 2022 Notes receivable $16,676 $15,000 Long-term notes receivable 20,000 2,785 Trade receivables 2,422 908 Less: Allowance for losses 0 (22) Total $39,098 $18,671 Contract liabilities - Sale of premise $678,540 $585,115 Contract liabilities - Advances from rent 1,274 1,302 Total $679,814 $586,417	Land revenue $1,101,511 Building revenue 1,106,967 Rental revenue 82,920 Return and discount of premises revenue 0 Total $2,291,398 1. Revenue breakdown 2023 Major regional markets Taiwan $2,291,398 2023 Major products/service Sales of premises $2,208,478 Rental revenue 82,920 Total $2,291,398 2023 Timing of revenue recognition: At a fixed point in time $2,208,478 Performance obligations fulfilled over time 82,920 Total $2,291,398 2. Contract balance December 31, 2023 December 31, 2022 Notes receivable $16,676 $15,000 Long-term notes receivable 20,000 2,785 Trade receivables 2,422 908 Less: Allowance for losses 0 (22) Total $39,098 $18,671 Contract liabilities - Sale of premise $678,540 $585,115 Contract liabilities - Advances from rent 1,274 1,302 Total $679,814 $586,417	Land revenue $1,101,511 Building revenue 1,106,967 Rental revenue 82,920 Return and discount of premises revenue 0 Total $2,291,398 1. Revenue breakdown 2023 Major regional markets Taiwan $2,291,398 2023 Major products/service Sales of premises $2,208,478 Rental revenue 82,920 Total $2,291,398 2023 Timing of revenue recognition: At a fixed point in time $2,208,478 Performance obligations fulfilled over time 82,920 Total $2,291,398 2. Contract balance December 31, 2023 December 31, 2022 Notes receivable $16,676 $15,000 Long-term notes receivable 20,000 2,785 Trade receivables 2,422 908 Less: Allowance for losses 0 (22) Total $39,098 $18,671 Contract liabilities - Sale of premise $678,540 $585,115 Contract liabilities - Advances from rent 1,274 1,302 Total $679,814 $586,417	Land revenue $1,101,511 Building revenue 1,106,967 Rental revenue 82,920 Return and discount of premises revenue 0 Total $2,291,398 1. Revenue breakdown 2023 Major regional markets Taiwan $2,291,398 2023 Major products/service Sales of premises $2,208,478 Rental revenue 82,920 Total $2,291,398 2023 Timing of revenue recognition: At a fixed point in time $2,208,478 Performance obligations fulfilled over time 82,920 Total $2,291,398 2. Contract balance December 31, 2023 December 31, 2022 Notes receivable $16,676 $15,000 Long-term notes receivable 20,000 2,785 Trade receivables 2,422 908 Less: Allowance for losses 0 (22) Total $39,098 $18,671 Contract liabilities - Sale of premise $678,540 $585,115 Contract liabilities - Advances from rent 1,274 1,302 Total $679,814 $586,417			$1,497,063 1,584,752 67,380 (90) $3,149,105 2022
			$2,291,398			$3,149,105
			2023			2022
			$2,208,478 82,920			$3,081,725 67,380
			$2,291,398			$3,149,105
			2023			2022
			$2,208,478 82,920			$3,081,725 67,380
			$2,291,398			$3,149,105
		31,				January 1, 2022
	$16,676 20,000 2,422 0		$15,000 2,785 908 (22)			$36,682 15,000 130,068 (22)
	$39,098		$18,671			$181,728
	$678,540 1,274		$585,115 1,302			$560,581 987
	$679,814		$586,417			$561,568

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• (1) The amount from the opening contract liabilities recognized in operating income was NT$130,693 thousand and NT$181,939 thousand from January 1 to December 31, 2023 and 2022, respectively.

• (2) The changes in contract liabilities primarily arise from the differences between the timing of the Company transferring goods or services and fulfilling performance obligations, and the timing of customer payments.

• (3) The Company’s contracts for the sale of pre-sale premises and advances from gift cards contain provisions for pre-receipt of payments from customers, and the time interval between the pre-receipt and the transfer of merchandise control is longer than one year. According to IFRS 15, contract liabilities related to sales of pre-sale of premises and advances from gift cards contracts were recognized.

(XXV) Interest income

Interest income
	2023		2022
Interest on bank deposits		$2,086		$808
Interest income from corporate bond investments		34		0
Other interest income		4		33
Total interest income		$2,124		$841

The Company designated its investments in domestic corporate bonds as financial assets measured at fair value through profit or loss. These were disposed of by

December 31, 2023, resulting in a balance of zero at the end of the period.

(XXVI) Other income

Other income
Dividend income Other income-others Total	2023 $24 848 $872	2022
		$179 2,341
		$2,520

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(XXVII) Other gains and losses

(XXVII) Other gains and losses
	2023	2022
Miscellaneous Expenses	($25)	($160)
(XXVIII) Finance costs
	2023	2022
Interest expenses
Bank borrowings	$440,828	$311,143
Less: Capitalization of interest	(122,630)	(81,087)
Finance costs	$318,198	$230,056

(XXIX) Post-retirement benefit plans

1. Defined contribution plans

Since July 1, 2005, the Company has adopted a defined contribution retirement plan in accordance with the Labor Pension Act. Regarding the portion of the retirement pension system prescribed by the “Labor Pension Act” applicable to employee, the Company contributes 6% of employees’ monthly salaries to the individual accounts of the Bureau of Labor Insurance. Under the plan, the Company has no legal or agreed obligation to make additional contributions after making fixed contributions to the Bureau of Labor Insurance. The Company recognized an expense of NT$1,561 thousand and NT$1,450 thousand in the parent

company only statements of comprehensive income in 2023 and 2022, respectively.

respectively.
Selling and marketing expenses - Retirement benefits expenses General and administrative expenses - Retirement benefits expenses	2023 $261 $1,300	2022
		$250
		$1,200

2. Defined benefit plans

In compliance with the requirements set forth in the Labor Standards Act, the Company has stipulated a defined benefit pension plan, which is applicable to the years of service rendered by regular employees prior to, and after (if employees elect to continue to apply the Labor Standards Act), the implementation of the

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Labor Pension Act on July 1, 2005. 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 sets aside 2% of the employee’s total salary each month as pension funds and deposit it to the designated account under the name of the Labor Pension Funds Supervisory Committee at the Bank of Taiwan. Before the end of each year, the Company shall assess the balance in the designated account. If the total available amount of the appropriation is less than the amount required for the payment of pensions to all the employees who are eligible to retire in the following year, calculated according to the above method, the Company will make up the deficiency in one single appropriation before the end of March in the following year. The designated account shall be accepted by the agency determined by the central competent authority, so the Company has no right to participate in the use of pension fund.

(1) The amount of retirement benefits expenses recognized in the parent company

only statement of income for the defined benefit plans were as followed:

Service costs for the current period Net interest on defined benefit liabilities (assets) Recognized in profit or loss Remeasurements Compensation on plan assets (excluding net interest on net defined benefit liabilities (assets)) Actuarial losses (gains) - experience adjustments Actuarial losses (gains) - changes in financial assumptions Recognized in other comprehensive income	2023 $139 291 $430 ($270) 955 272 $957	2022
		$147 112
		$259
		($2,131) 1,921 (99)
		($309)

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• (2) Retirement benefits expenses recognized in profit or loss for the aforementioned

defined benefit plans were included as follows:

Selling and marketing expenses General and administrative expenses Total	2023 $42 388 $430	2022
		$24 235
		$259

• (3) The amounts recognized in the parent company only balance sheet for obligations

from defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31, 2023 $46,209 (27,452) $18,757	December 31, 2022
		$48,912 (29,355)
		$19,557

• (4) The changes in the present value of the defined benefit obligation were as follows:

Beginning balance Service costs for the current period Interest expenses Remeasurements Actuarial losses(gains) -experience adjustments Actuarial losses (gains) - changes in population assumptions Benefits paid on plan assets Ending balance	2023 $48,912 139 639 955 272 (4,708) $46,209	2022 $46,737 147 206 1,921 (99) 0 $48,912

• (5) Change in fair value of plan assets were as follows:

Change in fair value of plan assets were	as follows:
Fair value of plan assets at the beginning of the period Expected return on plan assets Remeasurements of plan assets (excluding net interest included in net defined benefit liabilities (assets)) Contribution by the employer Actual payment of employee benefits Fair value of plan assets at the end of the period	2023 $29,355 348 270 2,187 (4,708) $27,452	2022
		$24,330 94 2,131 2,800 0
		$29,355

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• (6) The fund asset of the Company’s defined benefit pension plan (hereinafter referred to as the “Fund”) is entrusted to the Bank of Taiwan, which manages, or entrusts others to manage, the Fund in accordance with entrusted items enumerated in Article 6 of the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (i.e. deposit in domestic or foreign institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, and investment in domestic or foreign real estate and its securitization products) to the extent of limitations on investment percentage and amount as stipulated in the Fund’s annual utilization plan. The status of utilization of the Fund is subject to supervision by the Labor Pension Fund Supervisory Committee. With regard to utilization of the Fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. In case any deficiency in the earnings arises, Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company is not entitled to participate in the operation and management of the fund, it is not possible to disclose the classification of the fair value of the plan assets in accordance with paragraph 142 of IAS 19. For the composition of the fair value of the fund in total as of the years ended December 31, 2023 and 2022, please refer to the various labor pension utilization reports issued by the government.

The Company’s contributions to the pension funds were deposited with Bank of Taiwan, were as follows:

f Taiwan, were as follows:
	December 31, 2023 $27,452	December 31, 2022
		$29,355

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(7) The present value of the Company’s defined benefit obligations is calculated by certified actuaries. The major assumptions on the assessment date were as follows:

follows:
Discount rate Growth rate of future salary	December 31, 2023 1.375% 3.000%	December 31, 2022
		1.500% 3.000%

If changes occur in major actuarial assumptions with other assumptions unchanged, the present value of defined benefit obligations will increase (decrease) as follows:

(decrease) as follows:
Discount rate Increase by 0.25% Decrease by 0.25% Expected salary increase rate Increase by 0.25% Decrease by 0.25%	December 31, 2023 ($541) $554 $530 ($520)	December 31, 2022
		($593)
		$590
		$584
		($570)

With other assumptions unchanged, above sensitivity analysis analyzes effects

of changes in single assumption. In practice, many changes in assumptions may be linked together. The sensitivity analysis is consistent with the methodology used to calculate the net pension liability on the balance sheet.

The Company is expected to make a contribution payment of NT$287 thousand to the defined benefit plans for the one year period after the reporting date of 2023.

The weighted average period of the defined benefit plan is 8.67 years.

The maturity analysis of the pension payments is as follows:

Under 1 year 1 to 2 years 2 to 5 years Over 5 years	$12,420 4,476 10,640 13,195
	$40,731

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(XXX) Employee bonus and remuneration to directors

The Company’s Articles of Incorporation stipulates that, after annual earnings first offset against any deficit, a minimum of 1% shall be allocated as employee compensation and a maximum of 2% as directors’ remuneration. However, when the Company has accumulated losses, it should reserve an amount in advance to offset these losses. The distribution can be made in the form of cash or stocks for employees. The Board of Directors shall resolve to distribute in the form of shares or cash to employees who meet specific criteria, and the distribution of employee compensation and remuneration to directors shall be reported to the shareholders’ meeting.

The amounts provided for employee compensation were NT$4,998 thousand and NT$11,714 thousand for 2023 and 2022, and the amounts provided for directors’ compensation were both NT$0, which were estimated by multiplying the Company’s net income before income taxes for the period before employee and directors’ compensation by one percent of employee compensation as specified in the Company’s Articles of Incorporation, and remuneration to directors was NT$0 thousand and was reported as operating expenses for the period.

On March 14, 2024, the Board of Directors resolved to distribute NT$4,998 thousand for employee compensation and NT$0 for director’s remuneration for 2023, and on March 29, 2023, the Board of Directors resolved to distribute NT$11,714 thousand for employee compensation and NT$0 for director compensation for 2022. There was no difference from the amounts recognized as expenses in 2023 and 2022.

The aforementioned amounts are distributed in shares and the number of shares is calculated based on the closing price on the day before the Board of Directors’ resolution.

For information on the Company’s remunerations for employees and directors as resolved by the Board of Directors, please visit the “Market Observation Post System”.

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(XXXI) Income Tax

1. Income tax expense

(1) Major components of income tax expenses were as follows:

Major components of income tax expenses were as follows:
2023 Current income tax expenses Incurred this year Income Tax $9,279 Land value increment tax 12,221 Unappropriated earnings 42,753 Deferred tax Occurrence and reversal of temporary differences (11,525) Income tax expense $52,728 Income tax recognized in other comprehensive income 2023 Deferred income tax gains (expense) Remeasurements of defined benefit obligations ($191)	2022 $62,902 18,112 75,596 (6,610) $150,000 2022
	$62

(2) Income tax recognized in other comprehensive income

2. Reconciliation of income tax expense to accounting profit.

Income before tax Income tax calculated at the statutory tax rate applicable to the Company Tax-exempt proceeds from land transactions Losses recognized under the equity method Impact of income tax adjustments according to tax laws Occurrence and reversal of temporary differences 5% levy on unappropriated earnings Land value increment tax Income tax expense	2023 $494,769 $98,955 (101,111) 3,017 8,418 (11,525) 42,753 12,221 $52,728	2022
		$1,159,674
		$231,935 (174,847) 5,897 (83) (6,610) 75,596 18,112
		$150,000

1. The breakdown of deferred income tax assets and liabilities was as follows:

Balance on January 1 (1) January 1 to December 31, 2023 A. Deferred tax assets Prepayments $5,503 Warranty provision payable 10,356 Net defined benefit liabilities - non-current 3,911 Total deferred tax assets $19,770	Recognized in profit or loss $0 (1,258) (351) ($1,609)	Recognized in other comprehensive income $0 0 191 $191	Balance on December 31
			$5,503 9,098 3,751
			$18,352

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Balance on January 1 B. Deferred tax liabilities Inventories $17,121 (2) January 1 to December 31, 2022 A. Deferred tax assets Prepayments $5,503 Warranty provision payable 8,942 Net defined benefit liabilities - non-current 4,481 Total deferred tax assets $18,926 B. Deferred tax liabilities Inventories $22,825	Recognized in profit or loss ($13,134) $0 1,414 (508)	Recognized in other comprehensive income $0 $0 0 (62) ($62) $0	Balance on December 31 $3,987 $5,503 10,356 3,911
	$906		$19,770
	($5,704)		$17,121

1. The Company’s business income tax settlement and declaration up until 110 have

been approved.

(XXXII) The summary of employee benefits, depreciation, and amortization expenses by

function is as follows:

function is as follows:
By function By nature	2023			2022
	Operation costs	Operation expenses	Total	Operation costs	Operation expenses	Total
Employee benefit expenses
Salary expenses	0	46,507	46,507	0	52,286	52,286
Labor and health insurance expenses	0	4,349	4,349	0	3,495	3,495
Retirement benefits expenses	0	1,991	1,991	0	1,709	1,709
Remuneration to Directors	0	2,704	2,704	0	2,500	2,500
Other employee benefits	0	3,741	3,741	0	4,497	4,497
Depreciation expenses	65,600	844	66,444	62,814	895	63,709
Amortization expenses	4,001	182	4,183	4,000	260	4,260

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1. Additional information on the number of employees and employee benefit expenses

for 2023 and 2022 is as follows:

for 2023 and 2022 is as follows:
Number of employees Number of directors who do not serve as employees Average employee benefit expenses Average employee salary expenses Average adjustment of employee salary expenses	2023 48 6 $1,347 $1,107 -17.45%	2022
		44
		5
		$1,589
		$1,341
		-16.08%

1. The Company has established the Audit Committee to replace the supervisors in accordance with the regulations.

2. Remuneration policy for directors and executives:

3. (1) The remuneration policy for the Directors of the Company is as follows:

The main components include remuneration and transportation expenses for attending various meetings. According to Article 16 of the Company’s bylaws, the Directors are entitled to receive remuneration for the performance of their duties, regardless of the Company’s profitability. The amount of such compensation shall be determined by the Board of Directors in accordance with the customary levels within the industry. The amount of transportation expenses shall be determined by the Board of Directors.

• (2) The remuneration policy for executives is as follows:

The remuneration for executives is determined based on the position held and the responsibilities undertaken, referencing industry standards. It also takes into account factors such as the individual’s education, experience, work performance, work evaluations, market salary levels, years of service, and the specific position held. Additionally, remuneration is flexibly adjusted based on operational conditions, and annual salary adjustments are determined according to each executive’s rank and performance evaluation, with specific salary adjustment items and amounts formulated accordingly.

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1. The remuneration policy for employees is as follows:

The remuneration for employees is determined based on the position held and the responsibilities undertaken, referencing industry standards. It also takes into account factors such as the individual’s education, experience, work performance, work evaluations, market salary levels, years of service, and the specific position held. Additionally, remuneration is flexibly adjusted based on operational conditions, and annual salary adjustments are determined according to each executive’s rank and performance evaluation, with specific salary adjustment items and amounts formulated accordingly.

(XXXIII) Earnings per share

The calculation of earnings per share and the weighted-average number of common shares outstanding were as follows:

1. Basic earnings per share

Basic earnings per share
Profit attributable to the holders of ordinary shares of the Company calculation of diluted earnings per share (in thousands) Basic earnings per share (NT$) Diluted earnings per share Attributable to the ordinary shares of the Company Profit attributable to holders (diluted) calculation of diluted earnings per share (in thousands) Effect of potentially dilutive ordinary shares: Impact on employee remuneration Weighted average number of ordinary shares outstanding used for calculation of diluted earnings per share (in thousands) Diluted earnings per share		2023 $442,041 369,333 $1.20 2023 $442,041 369,333 244 369,577 $1.20	2022 $1,009,674 369,680 $2.73 2022 $1,009,674
			369,680 364
			370,044
			$2.73

2. Diluted earnings per share

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If the Company chooses to offer employee compensation or share profits in the form of cash or stock, while calculating diluted earnings per share, and assuming that the compensation is paid in the form of stock, the dilutive potential common shares will be included in the weighted average number of outstanding shares to calculate diluted earnings per share. Weighted average number of ordinary shares outstanding used for calculation of diluted earnings per share (thousand shares) The dilutive effect of such potential common shares shall continue to be considered when calculating diluted earnings per share before the number of shares to be distributed as employee compensation is approved at the Board of Directors’ meeting in the following year.

(XXXIV) Changes in liabilities from financing activities

Reconciliation of liabilities from financing activities was as follows:

Short-term borrowings Face value of short-term bills payable Long-term borrowings Deposits received Lease liabilities Liabilities from the financing activities Short-term borrowings Face value of short-term bills payable Long-term borrowings Deposits received Lease liabilities Liabilities from the financing activities	2023/01/01	Cash flows	Non-cash changes	2023/12/31
	$4,401,950 3,740,400 8,412,550 5,202 63,507	($645,000) 850,700 1,169,187 (6) (1,134)	$0 0 0 0 6,922	$3,756,950 4,591,100 9,581,737 5,196 69,295
	$16,623,609	$1,373,747	$6,922	$18,004,278
	2022/01/01	Cash flows	Non-cash changes	2022/12/31
	$3,655,250 3,902,000 8,655,033 4,277 62,628	$746,700 (161,600) (242,483) 925 (1,115)	$0 0 0 0 1,994	$4,401,950 3,740,400 8,412,550 5,202 63,507
	$16,279,188	$342,427	$1,994	$16,623,609

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VII. Related Party Transactions

• (I) Names of related parties and their relationship

Name

Relationship with the Company Relative within the second degree of kinship of the Chairman of the Company is the Chairman of such company. The Company’s Chairman is the supervisor of such company The Company’s Chairman is the chairman of such company Subsidiary of the Company Associate of the Company Chairman of the Company The spouse of the Chairman of the Company and the directors of the Company

Chieh Chih Construction Co., Ltd. Baihong Construction Co., Ltd. King’s Town Construction Co., Ltd. H2O Hotel Co., Ltd. (H2O Hotel) Yangmin International Catering Co., Ltd. Tsai, Tien-Tsan Meiyun S. Tsai

• (II) Significant transactions with related parties

• Rental revenue

Rental revenue
Name H2O Hotel Co., Ltd. (H2O Hotel)	2023		2022
	Amount	Percentage of sales of the Company	Amount	Percentage of sales of the Company
	$46,006	2.00%	$38,517	1.22%

(1) The Company and H2O Hotel Co., Ltd. entered into a lease agreement for the use of investment properties, premises for sale and construction sites for the business and staff quarters of H2O Hotel Co., Ltd.

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(2) The lease details are as follows:

Lessee	Lease subject	Lease period	Rent Collection Status	2023	2022
H2O Hotel Co., Ltd. (H2O Hotel) H2O Hotel Co., Ltd. (H2O Hotel) H2O Hotel Co., Ltd. (H2O Hotel)	1F., No. 366, Minghua Rd., Gushan Dist., Kaohsiung City (Longbei Section No. 22) 8 levels at No. 300, Funong Rd., Gushan Dist., Kaohsiung City, 1 building in total (Longzhong Section No. 128-3) No. 620, Meishu E. 2nd Rd., Gushan Dist., Kaohsiung City (Mei Shu Huang Ju)	2019/02/ 01~2025/ 01/31 2019/02/ 01~2025/ 01/31 2019/09/ 01~2027/ 08/31	The monthly rental income of NT$6,500 thousand (including business tax) is collected by bank transfer on a monthly basis. Due to the pandemic, the rent was reduced by half from January to June, 2023 and from January to December, 2022. Starting from July, 2023, the rent has been changed to NT$4,500 thousand with reference to the rental market in nearby areas. The monthly rent is NT$32 thousand (including business tax), which is determined based on the rental market rates of the nearby area. Rent is collected monthly via bank transfer. The rent will be calculated from November 1, 2019 at NT$158 thousand per month (including business tax). The rent is determined	$44,286 $366 1,354	$37,143 $366 903

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Lessee	Lease subject	Lease period	Rent Collection Status	2023	2022
H2O Hotel Co., Ltd. (H2O Hotel) Total	No. 623, Mengzi Rd., Zuoying Dist., Kaohsiung City (King’s Town Garden)	2020/09/ 01~2027/ 08/31 contract terminated on 2022/12/ 1	based on the rental market rates of the nearby area, and is collected monthly via bank transfer. Due to the pandemic, the rent was reduced by half from January to June, 2023, and from January to December, 2022. The monthly rent is NT$10 thousand (including business tax), which is determined based on the rental market rates of the nearby area. Rent is collected monthly via bank transfer.	0	105
				$46,006	$38,517

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1. Contracting work (Purchases)

Chieh Chih Construction Co., Ltd. and Baihong Construction Co., Ltd. are related parties of the Company, and the Company’s projects are contracted by these two companies. The contract price is based on the cost of the two companies plus appropriate profit, and the payment terms are similar to those of a general contractor, but the actual date of cashing the notes is subject to the Company’s capital situation.

• (1) In 2023 and 2022, the Company entrusted Chien-Chih Construction Co., Ltd. to contract for various construction sites, accounting for 19.49% and 24.03% of the Company’s total contracted work amount, respectively, and the contract prices and current shipments were as follows:

Site name Kaohsiung Fuhe Section No. 698-1 Renovation Kaohsiung Ai Qun No. 2748 (King’s Town World of Heart) Kaohsiung Bohsiao Section No. 1140 (Jing Wu Tong) Total	Contract price(including tax)	Purchases	Purchases
		2023	2022
	$2,486,986 $2,014,000 $1,405,500	$0 407,652 159,076	$0 538,121 9,524
		$566,728	$547,645

• (2) In 2023 and 2022, the Company entrusted EPILEDS Construction Co., Ltd. with the contracted construction projects, accounting for 11.47% and 7.94% of the total contracted construction amount of the Company, respectively. The contract price and the current purchase price were as follows:

Site name Kaohsiung Fuhe Section No. 698-1 Structural Engineering Kaohsiung Longzhong Section No. 191 Kaohsiung Xindu Section 163 (Fu +) Tainan Yuguang Section No.880,3in total Total	Contract price(including tax) $2,006,214 $1,072,320 $970,200 $1,377,360	Purchases	Purchases
		2023	2022 $0 0 180,992 0 $180,992
		$0 57,146 276,311 0
		$333,457

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1. Land held for construction

2. (1) The Company purchased 82 plots of road-use land from related party Tsai, Tian-Tsan, located at Ren De Zhong Cuo Section, plot no. 718, among others. The contract was signed on November 1, 2022, with an original total contract price of NT$230,772 thousand. This price included the transaction price with a related party plus the necessary interest on capital, with payments made according to the contract terms. Due to some of the land being occupied, a refund of NT$1,452 thousand was processed, resulting in a net payment of NT$229,320 thousand for the land. The transfer of ownership was completed in January, 2023.

3. (2) The Company purchased 174 plots of road-use land from related parties Tsai, Tian-Tsan, Meiyun S. Tsai, and other related parties, located at You Chang Section, Third Subsection 1061 and other plots. The contract was signed on November 11, 2022, with a total contract price of NT$305,995 thousand. This price was determined based on the transaction price with related parties plus the necessary interest on capital, with payments made according to the contract terms. The transfer of ownership was completed in March 2023.

4. The following is a summary of the receivables and payables between the Company and related parties:

and related parties:
Name of project and related party	December 31, 2023		December 31, 2022
	Balance	Percentage	Balance	Percentage
(1) Other receivables Meiyun S. Tsai King’s Town Construction Co., Ltd. Other related parties Total	$109 25 7	1.34% 0.31% 0.09%	$109 0 0	4.01% 0.00% 0.00%
	$141	1.74%	$109	4.01%

Other receivables represent receivables from landlords for their share of sales costs.

• (2) Notes payable

82

Name of project and related party	December 31, 2023	December 31, 2023	December 31, 2022	December 31, 2022
	Balance	Percentage	Balance	Percentage
Chieh Chih Construction Co., Ltd. Baihong Construction Co., Ltd. Total (3) Trade payables Baihong Construction Co., Ltd. (4) Other payables H2O Hotel Co., Ltd. (H2O Hotel) Yangmin International Catering Co., Ltd. Total	$40,011 103,104	17.31% 44.59%	$65,003 15,008	50.90% 11.75%
	$143,115	61.90%	$80,011	62.65%
	$85,714	96.96%	$0	0.00%
	$4 97	0.01% 0.23%	$749 34	1.80% 0.08% 1.88%
	$101	0.24%	$783

1. Lease expenses

Lease expenses	Lease expenses
Price payment Lease expenses 2023 2022 King’s Town Construction Co., Ltd. $1,029 The lease expenses are as follows: Lessor Lease subjects Lease period Rent payment status 2023 King’s Town Construction Co., Ltd. 12F., No. 150, Bo’ai 2nd Rd., Zuoying Dist., Kaohsiung City 2021/07/01 ～ 2022/06/30 2022/07/01 ～ 2023/06/30 2023/07/01 ～ 2024/06/30 The monthly rent is NT$90 thousand (including business tax), which is determined based on the rental market rates of the nearby area. Rent is paid monthly via bank transfer. $1,029		Price payment
		2023			2022
			$1,029			$1,029
			Rent payment status		2023	2022
King’s Town Construction Co., Ltd.	12F., No. 150, Bo’ai 2nd Rd., Zuoying Dist., Kaohsiung City		The monthly rent is NT$90 thousand (including business tax), which is determined based on the rental market rates of the nearby area. Rent is paid monthly via bank transfer.		$1,029	$1,029

1. Others

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• (1) The Chairman of the Company and Director Meiyun S. Tsai provided the Company with loans from banks secured by their own assets, land plots no. 551 and 554 in the Shi Jia Section, amounting to NT$1,000,000 thousand as of December 31, 2023 and 2022, respectively.

• (2) Director Meiyun S. Tsai of the Company and other related parties provided their own assets, land at Guo Tian Zi Section 687 and other plots, as collateral for the Company to issue commercial paper through a bills finance company. As of December 31 in 2023 and 2022, the amounts of commercial paper issued were NT$350,000 thousand and NT$450,000 thousand, respectively.

• (3) The Chairman of the Company and Director Meiyun S. Tsai provided land at Qinghai Lot No. 216 and the Company’s construction site, Qinghai Lot No. 229, as joint collateral for loans from the bank and the issuance of commercial paper. As of December 31 in 2023 and 2022, the loan amounts were NT$1,591,250 thousand and NT$1,675,000 thousand, respectively, with the amount of commercial paper issued being NT$1,675,000 thousand for both years.

• (4) The Company’s investment in subsidiaries is described in Note VI(IX).

• (5) In 2023 and 2022, the Company paid the related party, H2O Hotel Co., Ltd., expenses such as hospitality and venue fees, which were recorded as NT$953 thousand and NT$1,009 thousand for social networking, and NT$150 thousand and NT$15 thousand for miscellaneous expenses, respectively.

• (6) In 2023 and 2022, the Company paid compensation to related parties Tsai, Tien-Tsan, Meiyun S. Tsai and other related parties for the demolition of buildings, which was recorded as construction in progress - miscellaneous expenses of NT$0 thousand and NT$1,239 thousand, respectively.

• (7) The Company’s related party, Chien-Chih Construction Co., Ltd., provided guaranteed promissory notes for the construction work, which were recorded

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as NT$678,061 thousand and NT$429,362 thousand as of December 31, 2023, and 2022, respectively.

• (8) The Company’s related party, Baihong Construction Co., Ltd., provided guaranteed promissory notes for the projects, which were recorded as NT$580,155 thousand and NT$134,566 thousand as of December 31, 2023, and 2022, respectively.

• Information on remuneration to the management

Short-term employee benefits	2023 $19,050	2022
		$21,969

VIII. Pledged Assets

The carrying values of the Company’s assets pledged as collateral for loans and short-term notes issued were as follows:

Name of assets Buildings and land held for sale Construction in progress Land held for construction Investment properties Other financial assets - current Refundable deposits Total	Secured subject Collateralized borrowing and issuance of commercial promissory notes Collateralized borrowing and issuance of commercial promissory notes Collateralized borrowing and issuance of commercial promissory notes Secured borrowings Advances from construction project trust funds and performance bond Disaster management guarantee	December 31, 2023 $5,565,214 5,222,870 19,266,364 563,942 54,012 27,046 $30,699,448	December 31, 2022
			$4,129,718 4,953,479 17,098,597 625,192 96,254 27,019
			$26,930,259

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• IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

• As of December 31, 2023, the total contract value (including tax) of the construction contracts that had been signed was NT$10,362,380 thousand, with an outstanding payment amount of NT$8,537,243 thousand.

• In 2019, the Company leased the premises for sale on first basement level and the first and second level of Hua Shang Building to a fitness company, which caused dissatisfaction of the residents and convened the 2019 second temporary meeting of the sub-owners, and amended its management regulations to prohibit the establishment of specific industries, including gymnasiums. The Company believes that it has infringed upon the Company’s right to use its assets; therefore, it filed a civil lawsuit against the “Hua Shang Building Management Committee” to confirm that the resolution shown by the defendant “Hua Shang Building Management Committee” at the 2019 second temporary meeting of the owners of the Hua Shang Building on November 23, 2019 is invalid. The first instance of the case was conducted by the District Court in Qiaotou, Taiwan and, based on 2020 Su Zi No. 1202 document, the Company was judged as winning in the lawsuit partially, and the defendant “Hua Shang Building Management Committee” submitted an appeal within the statutory period (Case Number: 2022 Shang Zi No. 62). The result of the case is still pending in court.

• In 2019, the Company leased premises for sale on the first basement level and the first and second level of Hua Shang Building to World Fitness Asia Limited (H.K.) Taiwan Branch. As a result, the Taiwan branch of Hong Kong Business World Fitness Co., Ltd. was unable to operate due to a dispute arising from the residents’ dissatisfaction with the Company’s act of leasing the land to the fitness company. The company filed a lawsuit against the Consolidated Company for damages in the amount of NT$27,710 thousand, including NT$6,591 thousand, NT$574 thousand for the refund of the deposit and NT$20,545 thousand for the loss of the member who failed to fulfill the membership agreement. On November 28, 2022, the Kaohsiung District Court ruled that the Company should pay NT$3,137 thousand plus interest to the plaintiff for the case (Case number: 2023 Chong

86

Shang Zi No. 27). The Company has filed an appeal during the legal period, and the result of the case is still pending.

1. In 2020, the Company leased premises for sale on the first basement level and the first and second level of Hua Shang Building to World Fitness Asia Limited (H.K.) Taiwan Branch. As a result, the Taiwan branch of Hong Kong Business World Fitness Co., Ltd. was unable to operate due to a dispute arising from the residents’ dissatisfaction with the Company’s act of leasing the land to the fitness company. Therefore, a lawsuit was filed against World Fitness Asia Limited (H.K.) Taiwan Branch, seeking NT$1,045 thousand in rent and NT$3,150 thousand in restitution damages, totaling NT$4,195 thousand. On May 12, 2022, the Taiwan Kaohsiung District Court denied the Company’s request for the case (Case number: 2021 Su Zi No. 780). The Company has filed an appeal (Case number: 2022 Shang Zi No. 200) during the legal period, and the result of the case is still pending.

2. The Company was the litigation agent for the first trial of a lawsuit for damages for repair of building damage between Kaicheng Construction Co., Ltd. and Wujia Ruichun Community Management Committee. The management committee requested NT$1000 thousand for damages against the Company. The case (Case number: Shen Su Zi No. 1126 of 2020) has been rejected and closed, and civil judgment has been issued, by Kaohsiung District Court in Taiwan. The Management Committee appealed again, and the case (Case number: Shang Yi Zi No. 7 of 2022) was ruled by the Kaohsiung branch of Taiwan High Court on August 23, 2023, as not eligible for appeal.

3. In 2016, the “Xi Nian Lai Building Management Committee” claimed that the residents’ assets were damaged due to the tilting of the Xi Nian Lai Building resulting from the Company’s project construction. Therefore, it filed a lawsuit for damages against the Company, requesting to repair the damage to the Xi Nian Lai Building, such as the renovation and repair of the main elevator engine bed, structural reinforcement and restoration of the tilting state of the Xi Nian Lai Building, to remove the underground sewage treatment pipe diameter of the land No. 1133 at the Lindeguan Section and return the land, and to pay the restoration costs of NT$33,903 thousand plus interest of NT$2,669

87

thousand, totaling NT$36,572 thousand. The case (Case No. Shen Su Zi No. 1977 of 2016) is currently being heard by the Kaohsiung District Court in Taiwan, and the outcome of the case is still pending.

1. The Company has signed the Tainan Rende Smart Technology Park Cooperative Development Project with SanDi Properties Co., Ltd., to develop in the way of “joint investment and construction” for 83 parcels of land including Plot No. 820 at Kanjiao North Section, Rende District, Tainan City, and 4 parcels of land including Plot No. 32 at Kanjiao Southern Section, Rende District, Tainan City, covering an area of 111,797.54 square meters. Both parties shall invest in the construction and bear the profits and losses and risks related to the planning, construction and sales of the project in proportion of 50% as joint venture. The Company acted as the “host operator” of this project to handle and represent externally for the execution of this joint venture project.

2. The Company signed the Contract for Cooperative Development of Tainan Rende Smart Technology Park with SanDi Properties Co., Ltd., and acts as joint constructors with SanDi Properties Co., Ltd., and they provide guarantee to each other for financing.

3. As of the years ended December 31, 2023 and 2022, the Company’s financing endorsement/guarantee is as follows:

Endorser/Guarantor King’s Town Construction Co., Ltd.	Endorsee/Guarantee SanDi Properties Co., Ltd.	December 31, 2023 $2,000,000	December 31, 2022 $2,000,000	Guarantee purpose
				Loan financing credit guarantee

1. As of December 31, 2023 and December 31, 2022, the Company had entrusted banks to issue price performance guarantee for the pre-sale cases with a guarantee amount of NT$18,580.

2. X. Significant Disaster Loss

None.

• XI. Significant Subsequent Events

None.

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XII. Others

• (I) Capital Risk Management

The objective of the Company’s capital management is to ensure that the Consolidated Company can continue as a going concern, that an optimal capital structure is maintained to lower the cost of capital, and that returns are provided to stockholders. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. The Company regulates the borrowing amount based on the progress of the project and the funds required for the operation.

• (II) Financial Instruments

• Since the carrying amounts of the Company’s financial instruments not measured at fair value (including cash and cash equivalents, notes and account receivables, other receivables, other financial assets, refundable deposits, long-term notes receivable and accounts receivable, bank borrowings, short-term bills payable, notes payable, accounts payables, other payables, leasing liabilities and deposits received) are the reasonable approximation of fair value, detailed information on financial instruments measured at fair value can be found in Note VI(II) and Note XII(II)3.(4)D, E. Detailed information on these financial instruments has been disclosed in their respective individual notes.

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Financial assets Financial assets at fair value through profit or loss Domestic unlisted stocks Financial assets at amortized cost Cash and cash equivalents Net notes receivable and trade receivables (including related parties) Other receivables (including related parties) Other financial assets (including current and non-current) Refundable deposits Long-term notes and trade receivable Subtotal Total Financial liabilities Measured at amortized cost Short-term borrowings Short-term bills payable Notes payable and trade payables (including related parties) Other payables (including related parties) Long-term borrowings (including long-term borrowing due within one operating cycle) Lease liabilities (including current) Long-term notes payable Deposits received Total	December 31, 2023 $82 $530,843 19,176 8,105 54,012 30,619 20,000 $662,755 $662,837 $3,756,950 4,587,399 319,608 41,574 9,581,737 69,295 7,595 5,196 $18,369,354	December 31, 2022 $82 $531,329 15,886 2,718 96,254 30,106 2,785 $679,078 $679,160 $4,401,950 3,734,677 154,079 41,527 8,412,550 63,507 0 5,202
		$16,813,492

1. Financial risk management policy

(1) The Company’s daily operations are subject to a number of financial risks, including market risk (including interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial position and financial performance.

• (2) Financial risk management of the Company is carried out by its finance department based on the policies approved by the Board of Directors. Through

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cooperation with the Company’s operating units, the finance department is responsible for identifying, evaluating and hedging financial risks.

• (3) The Company does not undertake derivatives for hedging financial risks.

• Significant financial risks and degrees of financial risks

• (1) Market risks

  • A. Price risks

The Company invests mainly in domestic unlisted equity instruments (venture capital funds). These equity instruments are classified as financial assets at fair value through profit or loss in the balance sheet. The Company is not exposed to price risk of equity instruments as the amount of its investment is not material. The Company is not exposed to commodity price risk. The Company is not exposed to price risks from products.

• B. Cash flow and fair value interest rate risk

The Company’s interest rate risks come from short-term borrowings, financing commercial paper and long-term borrowings. Loans with floating interest rates expose the Company to cash flow interest rate risks, of which a portion is offset by the cash held with floating interest rates. Borrowings issued at fixed rates exposed the Company to fair value interest rate risk. During 2023 and 2022, the Company’s borrowings at floating interest rate were denominated in the NTD.

The Company simulates a number of scenarios and analyzes interest rate risk, including consideration of refinancing, extending contracts of existing positions, and other available financing options to calculate the impact of changes in specific interest rates on profit or loss.

Based on the simulations performed, the impact on post-tax profit of a 1% shift would be a maximum increase or decrease of NT$99,251 thousand and NT$96,042 thousand for 2023 and 2022, respectively. The simulation

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is done on a quarterly basis to verify that the maximum loss potential is within the limit given by the management.

• (2) Credit risks

• A. Credit risk refers to the risk of financial loss of the Company arising from default by clients or counterparties of financial instruments on the contractual obligations. Credit risk mainly derives from cash and cash equivalents, derivative financial instruments, and deposits within banks and financial institutions, as well as trade receivables not yet collected in cash and committed transactions. The banks and financial institutions with which transactions are conducted are all of good credit standing, therefore, the credit risk associated with deposits held at these financial institutions is considered limited.

• B. The Company primarily engages in the business of renting and selling residential properties and land. Revenue from the sale of properties is recognized when the full contract price is received, the transfer of ownership is completed, and the property is physically handed over. Consequently, the amount of receivables arising from property sales should be minimal, and the likelihood of non-recovery is low. The Company classifies customers’ trade receivables and installment receivable based on customer characteristics. Using the simplified approach of preparation matrix, the Company estimates the expected credit loss and adjusts the loss rate established by historical and current information during a specific period to assess the allowance loss of installments receivable. The Company’s assessed credit impairment losses on December 31, 2023 and 2022 were not significant.

• C. No written-off debts with recourse existed as of December 31, 2023 and 2022.

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(3) Liquidity risks

• A. The cash flow forecast is performed by each operating entity of the Company and compiled by the Company’s finance department. The Company’s finance department monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

• B. The following table presents the Company’s non-derivative financial liabilities grouped by the relevant maturity dates, which are analyzed based on the remaining period from the end of the reporting period to the contractual maturity date. The contractual cash flow amounts disclosed in the table below are undiscounted amounts.

Non-derivative financial liabilities December 31, 2023 Short-term borrowings Short-term bills payable Notes payable and trade payables (including related parties) Other payables Provisions - current Long-term borrowings (including long-term borrowing due within one operating cycle) Lease liabilities (including current)	Within 6 months	6 to 12 months	1 to 3 years	Over 3 years
	$2,714,466 4,591,100 319,484 36,560 7,650 145,618 1,233	$560,414 0 0 5,013 4,500 245,158 1,233	$26,010 0 3,255 0 18,400 6,603,699 4,932	$514,894 0 4,464 1 17,850 3,309,194 87,335

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Non-derivative financial liabilities December 31, 2022 Short-term borrowings Short-term bills payable Notes payable and trade payables (including related parties) Other payables (including amounts due to related parties) Provisions - current Long-term borrowings (including long-term borrowing due within one operating cycle) Lease liabilities (including current)	Within 6 months	6 to 12 months	1 to 3 years	Over 3 years
	$3,321,950 3,734,677 153,804 41,527 14,331 339,081 565	$600,000 0 151 0 3,973 691,312 569	$480,000 0 0 0 16,884 2,293,615 2,328	$0 0 124 0 16,591 5,088,542 60,045

• C. The Company does not expect that the cash flows for the maturity analysis will occur at a significantly earlier time point or that actual amounts will be significantly different.

• (4) Information on fair value

• A. The different levels of inputs used in the valuation techniques for measuring the fair value of financial and non-financial instruments have been defined as follows:

  • Level 1: The quoted price in an active market for identical assets or liabilities available to the enterprise at the measurement date. A market is regarded as active where transactions for the asset or liability take place with sufficient frequency and volume to

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provide pricing information on an ongoing basis. The fair value of the Company’s investments in listed stocks, beneficiary certificates, and derivatives with quoted prices in an active market are all Level 1 inputs.

• Level 2: The inputs are observable for the asset or liability, either directly or indirectly, excluding quoted prices included within Level 1. The fair values of certain derivative instruments and equity instruments invested by the Company are all Level 2 inputs.

• Level 3: The unobservable input value of an asset or liability. The Company’s investments in certain derivative instruments and investments in equity instruments with no active market are all level 3 inputs. Details of changes in Level 3 fair value hierarchy

Investments in equity instruments without an active market December 31, 2023 (i.e., January 1, 2023) $82 December 31, 2022 (i.e., January 1, 2022) $82

• B. For information on the fair value of investment properties measured at cost, please refer to Note VI (XII).

• C. For financial instruments with active markets, their fair value is measured at the market quoted prices on balance sheet date. When quoted prices can be obtained immediately and regularly from stock exchanges and regulatory agencies, and such quoted prices represent actual and regular market transactions under normal conditions, the markets are deemed active markets. The financial assets held by the Company are equity instruments without an active market, designated as financial assets - current measured at fair value through profit or loss. Due to their minimal amount, they are valued at cost, which corresponds to Level 3 of the fair

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value hierarchy. However, if the net asset value method is used as the valuation technique for fair value, there is no impairment.

• D. Below states the information on the Company’s financial instruments measured at fair value that have been classified in accordance with the nature, characteristics, risks and fair values of assets or liabilities as of December 31, 2023 and 2022:

December 31, 2023

Level 1 Level 2 Level 3 Total

Assets Repetitive fair value Valuation gain (loss) on financial assets measured Financial assets - non-current Domestic unlisted stocks (Venture $0 $0 $82 $82 Capital Fund) December 31, 2022 Level 1 Level 2 Level 3 Total

Assets Repetitive fair value Valuation gain (loss) on financial assets measured Financial assets - non-current Domestic unlisted stocks (Venture $0 $0 $82 $82 Capital Fund)

• E. The methods and assumptions used by the Company to measure fair value are explained as follows:

• (1) The fair value of the Company’s domestic listed stocks and beneficiary certificates are input based on the closing price and net value of the market price, respectively (i.e. Level 1).

• (2) In addition to the aforementioned financial instruments with an active market, the fair value of other financial instruments is acquired by valuation technique or by reference to the counterparty quotes. The

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current fair value of financial instruments obtained through valuation techniques, discounted cash flow method or other valuation techniques, including the use of models based on market information available at the end of the reporting period (i.e. Level 3).

• (3) In 2023 and 2022, the Company did not experience any transfers between Level 1 and Level 2 of the fair value hierarchy.

• (4) In 2023 and 2022, there was no transfers into or out of Level 3.

XIII. Supplementary Disclosure

(I) Information on significant transactions was as follow:

ormation	on significant transactions was as follow:
No.	Summary	Description
1	Loaning to others.	None
2	Endorsements/guarantees to others.	Table I
3	Marketable securities held at the end of the period. (Excluding investment in Subsidiaries and Associates)	Table II
4	Cumulative amount of the stock of the same marketable securities purchased or sold totaling NT$300 million or more than 20% of thepaid-in capital.	None
5	Acquisition of real estate totaling NT$300 million or more than 20% of thepaid-in capital:	Table III
6	Disposal of real estate totaling NT$300 million or more than 20% of thepaid-in capital.	None
7	Purchases or sales with related parties totaling NT$100 million or more than 20% of the paid-in capital.	Table IV
8	Receivables from related party totaling NT$100 million or more than 20% of thepaid-in capital.	None
9	Engaging in derivatives trading.	None

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Table I

King’s Town Construction Co., Ltd.

Details on endorsements/guarantees to others. December 31, 2023

Unit: NT$ thousand

No. (Note 1)	Name of Endorser/ Guarantor	Object of Endorsements/Guarantees	Object of Endorsements/Guarantees	Amount of Endorsements/ Guarantees for a Single Enterprise (Note 3)	Maximum Balance of Endorsements/ Guarantees in Current Period	Ending Balance of Endorsements/ Guarantees	Actual Drawdown	Amount of Endorsements/ Guarantees by Property	Ratio of Accumulated Endorsements/ Guarantees to the Net Worth of the Most Recent Financial Statement	Aggregate Endorsement/ Guarantee Limit (Note 3)	Guarantee Provided by Parent Company to a Subsidiary	Guarantee Provided by a Subsidiary to Parent Company	Guarantee Provided to Subsidiaries in Mainland China
		Name of Company	Relationship (Note 2)
0	King’s Town Construction Co., Ltd.	SanDi Properties Co., Ltd.	5	5,318,405	2,000,000	2,000,000	2,000,000	0	11.28%	8,864,008	N	N	N

Note1: Instructions for the number column:

• (1) The Company is “0”.

• (2) The investee companies are numbered in order starting from “1”.

• Note2: Listed below are the 7 types of companies to which the Company may provide endorsement/guarantee:

• (1) A company with which it does business.

• (2) A company in which the Company directly and indirectly holds more than 50 percent of the voting shares.

• (3) A company that directly and indirectly holds more than 50 percent of the voting shares in the Company.

• (4) A company in which the Company directly and indirectly holds more than 90 percent of the voting shares.

• (5) A company for which the peers or co-constructors guarantee mutually as agreed in the contract.

• (6) A company that is endorsed and guaranteed by all shareholders based on their shareholding ratio due to the joint investment relationship.

• (7) The joint and several guarantee for the performance of the pre-sale house sales contract between the peers in accordance with the Consumer Protection Act.

Note3:

• (1) The total amount of the endorsement guarantees of the Company and its subsidiaries as a whole is limited to less than 50% of the net value of the Company.

• (2) When the Company and its subsidiaries as a whole endorse a single enterprise, the maximum amount shall not exceed thirty percent of the net value of the Company, and shall not exceed fifty percent of the paid-up capital of the enterprise. With the exception of a subsidiary of the Company which holds 100% of the equity interest.

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Table II

King’s Town Construction Co., Ltd. Marketable securities held (excluding investments in subsidiaries and associates) December 31, 2023

December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2023
				Unit: NT$ thousand
Securities holding company	Type and name of securities	Relationship with issuer of securities	Ledger account	Ending balance				Remark
				Number of shares (shares)	Carrying amount	Shareholding Ratio (%)	Fair value
King’s Town Construction Co., Ltd.	Huazhi Venture Capital	None	Financial assets at fair value through profit and loss	8,152	$82	1.63%	$82

• ＊ Hua Chih Venture Capital, due to its lack of significance, is valued at cost as its fair value. However, even when using the net asset value method as the valuation technique for fair value, there is no impairment observed.

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Table III

King’s Town Construction Co., Ltd.

Acquisition of real estate totaling NT$300 million or more than 20% of the paid-in capital.

Unit: NT$ thousand

Acquirer of real estate	Name of property	Date of occurrence	Transaction amount	Payment collection status	Counterparty	Relations hip with the Company	Information on prior transaction if the counterparty is related	Information on prior transaction if the counterparty is related	Information on prior transaction if the counterparty is related	Information on prior transaction if the counterparty is related	Basis or reference for price setting	Purpose of acquisition and usage status	Other agreements
							Owner	Relationship with the issuer	Transfer date	Amount
King’s Town Construction Co., Ltd.	Cost equivalent land in the rezoning of self-administe red municipal land at Caohu, Annan District, Tainan City (I)	2020/12/17	$395,000	Actual payment of NT$195,000	Natural person Chung, Chun	None	－	－	－	－	Real estate valuation report by professional valuation firm	Land held for construction for business operations
King’s Town Construction Co., Ltd.	Kaohsiung City, Lingya District, Chenggong Section, Land Plots No. 65 and 66.	2023/08/29	$334,410	Actual payment of NT$334,410	First Commercial Bank Ltd.	None	－	－	－	－	Real estate valuation report by professional valuation firm	Land held for construction for business operations

The transfer of the above cost equivalent land in the rezoning of self-administered municipal land at Caohu, Annan District, Tainan City (I) and

land plots No. 65 and 66 at Chenggong Section, Lingya District, Kaohsiung City, is not yet completed by the end of December 2023, therefore they were recorded as land prepayments.

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Table IV

King’s Town Construction Co., Ltd. Purchases or sales with related parties totaling NT$100 million or more than 20% of the paid-in capital

Unit: NT$ thousand

Name of company	Counterparty	Relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transaction with terms different from others	Transaction with terms different from others	Notes and trade receivable (payable)	Notes and trade receivable (payable)	Remark
			Purchase (sale)	Amount	Percentage of total purchase/ (sales)	Payment term			Balance	Percentage of total notes/ trade receivable (payable)
							Unit price	Payment term
King’s Town Constr uction Co., Ltd.	Chieh Chih Constructi on Co., Ltd.	Relative within the second degree of kinship of the Chairman of the Company is the Chairman of such company.	Purchases	$566,728	19.49%	Subject to contract	－	－	Notes payable NT$40,011 Account payable NT$0	17.31% 0.00%
King’s Town Constr uction Co., Ltd.	Baihong Constructi on Co., Ltd.	The Company’s Chairman is the supervisor of such company	Purchases	$333,457	11.47%	Subject to contract	－	－	Notes payable NT$103,104 Account payable NT$85,714	44.59% 96.96%

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(II) Information on reinvestment:

Name of Investor	Name of Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Ending balance	Ending balance	Ending balance	Profit (Loss) of investee for the period	Investment profit (loss) recognized	Remark
				Ending balance for the current period	End of last year	Shares (in thousand)	Percentage (%)	Carrying amount
King’s Town Construction Co., Ltd.	H2O Hotel Co., Ltd.	No. 366, Minghua Rd., Gushan Dist., Kaohsiung City	Hotel and restaurant	$490,000	$440,000	49,000	100%	$120,532	($41,476)	($15,085)	I

Note1: The Company recognized a loss share of NT$41,476 thousand in the investee company. In addition, due to the lease of real estate to a subsidiary, H2O Hotel Co., Ltd., the leasing subsidiary was classified as a right-of-use asset and lease liability under IFRS 16 as of January 1, 2019, while the Consolidated Company was classified as an operating lease, resulting in a difference in profit or loss recognition, which affected the Company’s share of profit recognized using the equity method. The difference affected the Company’s share of benefit recognized under the equity method by NT$26,391 thousand.

• (III) Disclosure of information on investments in Mainland China:

None.

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• (IV) Information on major shareholders:

Information on major shareholders:
Name of major shareholders	Shareholding (shares)	Shareholding
Tsai,Tien-Tsan	85,577,838	23.16%
TiangangInvestment Co.,Ltd.	63,328,801	17.14%
Tianye Investment Co.,Ltd.	49,652,072	13.44%
Chien-Chih Construction Co.,Ltd.	31,651,513	8.56%
Tsai	23,616,339	6.39%
Meiyun S. Tsai	20,209,951	5.47%

  - (1) The major shareholders in this table are shareholders holding more than 5% of the common and preference shares that have completed delivery of non-physical registration (including treasury shares) on the last business day of each quarter calculated by the Taiwan Depository & Clearing Corporation. However, the share capital recorded in the Company’s financial report and the number of shares actually delivered by the company without physical registration may differ due to calculation basis.

  - (2) For the above are shares entrusted by the shareholders, the information thereto shall base on the shares disclosed by the individual trust account of opened by the trustees. For information on shareholders, who declare to be insiders holding more than 10% of shares in accordance with the Securities and Exchange Act, and their shareholdings include their shareholdings plus their delivery of trust and shares with the right to make decisions on trust property, please refer to MOPS.

• XIV. Operating Segment Financial Information

• N/A

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King’s Town Construction Co., Ltd. Statements of Accounting Items

2023

(In Thousands of New Taiwan Dollars, unless otherwise specified)

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Statements of significant accounting subjects

Item Statements of assets, liabilities and equity Items Statement s of cash and cash equivalents Statement of financial assets at fair value through profit or loss - non-current Statement of buildings and land held for sale Statement of changes in construction in progress Statement of changes in land held for construction Statement of prepaid premises Statement of prepayments, other current assets and other financial assets - current Statement of change in long-term equity investments accounted for using the equity method Statement of change in property, plant and equipment Statement of change in property, plant and equipment Statement of change in right-of-use assets Statement of change in accumulated depreciation and accumulated impairment of right-of-use assets Statement of change in investment properties Statement of change in accumulated depreciation of investment properties Statement of change in intangible assets Statement of change in accumulated depreciation of intangible assets Statement of short-term loans Statement of short-term bills payable Statement of contract liabilities - current Statement of other payables Statement of provisions Statement of collections Statement of long-term borrowings Statement of lease liabilities Statement of profit or loss items Statement of operating revenue Statement of operating costs Statement of selling and marketing expenses Statement of general and administrative expenses

Number/Index

Statement I Statement II Statement III Statement IV Statement V Statement VI Statement VII Statement VIII Note VI.(X) Note VI.(X) Note VI.(XI) Note VI.(XI) Note VI.(XII) Note VI.(XII) Note VI.(XIII) Note VI.(XIII) Statement IX Statement X Statement XI Statement XII Note VI.(XV) Note VI.(XVI) Statement XIII Statement XIV Statement XV Statement XVI Statement XVII Statement XVIII

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Statement I

King’s Town Construction Co., Ltd. Statement s of cash and cash equivalents December 31, 2023

Item Cash Bank deposits Total	Summary Cash on hand and petty cash Demand deposits Checking deposits	Amount Remark $70 530,672 101 $530,843

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Statement II

King’s Town Construction Co., Ltd. Statement of change in financial assets at fair value through profit or loss - non-current December 31, 2023

[Increase in the current ] Decrease in the[Guarantee ] Beginning balance Ending balance period current period or pledge Investee[ Number of ] Amount[Number of ] Amount[Number ] Amount Category[Number ] Shareholding Amount shares shares of shares of shares Huazhi 8,152 $82 0 $0 0 $0[ Ordinary ] 8,152 1.63% $82 None Venture shares Capital Co,, Ltd.

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Statement III

King’s Town Construction Co., Ltd. Statement of buildings and land held for sale December 31, 2023

Item King’s Town King’s Town Hyatt Hua Shang Yiwen Court Ju Dan Tian Feng Shi Shang King’s Town Mei Shu Huang Ju King’s Town Garden Yue He Di Fu + Other projects Subtotal Less: Allowance for reduction to valuation Net	Summary	Amount Cost Net realizable value $1,933,594 $6,940,487 659,394 853,932 114,478 343,104 91,458 158,127 167,800 336,447 207,961 431,849 22,515 52,686 1,971,303 3,718,300 173,918 345,715 84,818 135,079 1,452,356 1,975,027 167 0 $6,879,762 $15,290,753 (167) $6,879,595	Remark
		Cost
		$1,933,594 659,394 114,478 91,458 167,800 207,961 22,515 1,971,303 173,918 84,818 1,452,356 167	Pledged to financial institutions None None None None Pledged to financial institutions None Pledged to financial institutions None None Pledged to financial institutions None
		$6,879,762 (167)
		$6,879,595

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Statement IV

King’s Town Construction Co., Ltd. Statement of changes in construction in progress December 31, 2023

Construction name	Beginning balance	Current increase	Current increase		Current decrease	Ending balance	Remark
		Land under construction	Construction costs	Capitalized interest	Completion and transfer out
Kaohsiung Fuhe Section No. 698-1 Kaohsiung Longzhong Section No. 191 Kaohsiung Ai Qun No. 2748 (King’s Town World of Heart) Kaohsiung Shindu Section 163 (Fu +) Kaohsiung Bohsiao Section No. 1140 (Jing Wu Tong) Tainan Yuguang Section No. 880, 4 in total Total	$475,254 0 2,306,928 1,459,517 711,780 0	$4,344 370,653 0 0 0 435,469	$2,250 182,775 415,840 201,870 168,749 53,494	$12,435 3,823 54,747 24,805 20,610 3,719	$0 0 0 (1,686,192) 0 0	$494,283 557,251 2,777,515 0 901,139 492,682	Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions
	$4,953,479	$810,466	$1,024,978	$120,139	($1,686,192)	$5,222,870

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Statement V

King’s Town Construction Co., Ltd. Statement of changes in land held for construction December 31, 2023

Construction name	Beginning balance		Current increase	Current increase	Current decrease	Current decrease	Current decrease	Ending balance	Remark
		Land costs	Capitalized interest	Re-classificatio n	Transferred to construction in progress	For Sale	Re-classificatio n
Kaohsiung Chenggong Section No. 60-1, 62-64 and others Kaohsiung Longzhong Section No. 191 Kaohsiung Longzhong Section No. 129-3, 129-4 Kaohsiung Longzhong Section No. 128-4, etc, 3 in total Kaohsiung Qinghai No. 229 Kaohsiung Qinghai Section No. 126 Kaohsiung Qinghai Section No. 127 Kaohsiung Qinghai Section No. 128 Kaohsiung Longzhong Section No. 128-3 Kaohsiung Lantian Middle Section No. 30-2 Kaohsiung Xingnan Section No. 11 Kaohsiung Longzhong Section No. 22 Kaohsiung Xinmin Section No. 160 Kaohsiung Xinmin Section No. 159 Tainan Yuguang Section No.880, 4 in total Kaohsiung Qiaotou Shixing Section No. 924	$862,995 370,653 1,610,110 716,926 4,278,594 685,719 662,012 379,145 52,266 757,742 259,585 1,998,033 792,708 828,072 435,469 14,055	$1,278 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	$0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	$0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	$0 370,653 0 0 0 0 0 0 0 0 0 0 0 0 435,469 0	$0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	$0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	$864,273 0 1,610,110 716,926 4,278,594 685,719 662,012 379,145 52,266 757,742 259,585 1,998,033 792,708 828,072 0 14,055	Pledged to financial institutions None Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions None Pledged to financial institutions

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Statement V

King’s Town Construction Co., Ltd.

Statement of changes in land held for construction (Continued) December 31, 2023

Construction name	Beginning balance		Current increase	Current increase	Current decrease	Current decrease	Current decrease	Ending balance	Remark
		Land costs	Capitalized interest	Re-classificatio n	Transferred to construction in progress	For Sale	Re-classificatio n
Kaohsiung Shixing Section 925, 2 in total Kaohsiung Shixing Section 927, 3 in total Kaohsiung Shixing Section 928, 3 in total Kaohsiung Qiaotou Shixing Section No. 967 Kaohsiung Qiaotou Shixing Section No. 968 Kaohsiung Longdong Section No. 1 Tainan Kanjiao North Section No. 820 Kaohsiung Xindu Section No. 49 Kaohsiung Xinzhuang 12 Sub-section No. 1167 and 1175 Tainan Kanjiao North Section No. 913 Kaohsiung Shinkang Section No.25 and 29 Kaohsiung Shinkang Section No. 25-1 and 29-1 Kaohsiung Shinkang Section No. 26 Kaohsiung Shinkang Section No. 30 Kaohsiung Shinkang Section No. 31 Transferable land and deformed land	112,196 84,625 107,554 6,640 42,794 513,991 3,385,666 46,653 614,152 13,130 0 0 0 0 0 1,215,917	0 0 0 0 0 0 0 0 3,809 124 187,844 187,853 34,034 59,114 12,058 1,379,437	0 0 0 0 0 0 0 0 0 0 614 695 89 142 0 1,553	0 0 0 0 0 0 13,254 0 0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9,621	0 0 0 0 0 0 0 0 0 13,254 0 0 0 0 0 0	112,196 84,625 107,554 6,640 42,794 513,991 3,398,920 46,653 617,961 0 188,458 188,548 34,123 59,256 12,058 2,587,286	Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions None Pledged to financial institutions None Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions Pledged to financial institutions None
	$20,847,402	$1,865,551	$3,093	$13,254	$806,122	$9,621	$13,254	$21,900,303

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Statement VI

King’s Town Construction Co., Ltd. Statement of change in prepaid premises December 31, 2023

Name of project/construction	Beginning balance	Current	increase	Current decrease Transfer of land held for construction Ending balance $0 $201,677 188,168 0 188,246 0 34,038 0 59,114 0 12,058 0 0 335,361 0 4,995 1,383,706 244,011 $1,865,330 $786,044
		Cost	Capitalized interest
Tainan Anan District, Caohu Phase I Kaohsiung Shinkang Section No. 25.29 Kaohsiung Shinkang Section No. 25-1 and 29-1 Kaohsiung Shinkang Section No. 26 Kaohsiung Shinkang Section No. 30 Kaohsiung Shinkang Section No. 31 Kaohsiung Chenggong Section No. 65.66 Tainan Kanjiaonan No. 19-1 and others Transferable land and deformed land Subtotal	$201,677 0 0 0 0 0 0 0 599,961	$0 187,845 187,852 34,034 59,114 12,058 334,410 4,995 1,024,830	$0 323 394 4 0 0 951 0 2,926
	$801,638	$1,845,138	$4,598

112

Statement VII

King’s Town Construction Co., Ltd.

Statement of prepayments, other current assets and other financial assets - current December 31, 2023

Item	Summary	Amount	Remark
Prepaid expenses Subtotal Input tax Toto prepayments Payments on behalf of others Incremental costs of obtaining contracts Total other current assets Other financial assets - current	Prepaid construction expenses Others Business tax not yet filed at the end of December 2023 Management fees and payments on behalf Commission paid to the agent for obtaining the agreement for sale and purchase of premises which the Company expects to recover Advances from construction project trust funds and performance bond	$446,621 5,148
		$451,769
		$135
		$451,904
		$1,381 106,902
		$108,283
		$54,012

113

Statement VIII

King’s Town Construction Co., Ltd.

Long-term equity investments accounted for using the equity method December 31, 2023

Investee	Beginning balance	Beginning balance	Increase in the current period	Increase in the current period	Increase in the current period	Decrease in the current period (Note 1)	Decrease in the current period (Note 1)	Ending balance	Ending balance		Net equity	Net equity	Guarantee or pledge	Remark
	Shares (in thousand)	Amount	Shares (in thousand)	Amount	Share of profit or loss recognized using the equity method in accordance with IFRS 16	Shares (in thousand)	Amount	Shares (in thousand)	Shareholding	Amount	Total	Unit price (Dollar)
H2O Hotel Co., Ltd. (H2O Hotel)	44,000	$85,617	5,000	$50,000	$26,391	0	($41,476)	49,000	100.00%	$120,532	$25,850	0.53	None

Note1: The decrease in this period is due to the recognition of investment losses under the equity method.

114

Statement IX

King’s Town Construction Co., Ltd. Statement of short-term loans December 31, 2023

Type of Loans Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Total	Summary	Ending balance	Contract period	Interest rate range	Line of credit	Pledge or guarantee
	Financial institution borrowings Financial institution borrowings Financial institution borrowings Financial institution borrowings Financial institution borrowings	$550,000 1,283,500 1,000,000 413,450 510,000	2023//11/15 ~2024/10/09 2023/12/20~ 2024/01/09 2023/12/20~ 2024/01/09 2023/12/20~ 2024/01/09 2019/05/16~ 2027/05/16	2.59378% 2.79%~2.89% 2.79% 2.79% 2.55%	$800,000 1,365,000 1,260,000 489,000 840,000	Buildings held for sale: King’s Town Construction in progress: King’s Town World of Heart Land provided by related parties Land held for construction: Lantian Middle Section No. 30-2 Construction in progress: Jing Wu Tong
		$3,756,950			$4,754,000

115

Statement X

King’s Town Construction Co., Ltd. Statement of short-term bills payable December 31, 2023

Item	Guarantor/accepting institution	Contract period	Interest rate range	Issued amount	Unamortized discount on short-term bills payable	Carrying amount $1,673,904 575,623 349,500 350,206 282,114 367,628 94,928 204,846 398,793 289,857 $4,587,399	Pledge or guarantee
Issuance of commercial paper Issuance of commercial paper Issuance of commercial paper Issuance of commercial paper Issuance of commercial paper Issuance of commercial paper Issuance of commercial paper Issuance of commercial paper Issuance of commercial paper Issuance of commercial paper Total	Mega Bank - Lingyarong Co., Ltd. Mega Bank - Lingyarong Co., Ltd. China Bills Finance Corp. China Bills Finance Corp. DBS BANK DBS BANK Grand Bills Finance Corp. Grand Bills Finance Corp. Taiwan Finance Corporation Taiwan Finance Corporation	2023/09/08~ 2024/01/16 2023/09/08~ 2024/01/16 2023/12/26~ 2024/02/05 2023/12/12~ 2024/02/05 2023/11/02~ 2024/01/26 2023/11/02~ 2024/01/26 2023/12/12~ 2024/01/11 2023/12/12~ 2024/01/11 2023/10/11~ 2024/01/09 2023/11/23~ 2024/01/09	2.50% 2.35% 2.838% 2.728% 1.558% 1.558% 2.828% 2.778% 2.688% 2.638%	$1,675,000 576,000 350,000 350,700 282,400 368,000 95,000 205,000 399,000 290,000	$1,096 377 500 494 286 372 72 154 207 143		Land held for construction - Qinghai Section No. 229 and private land provided by related parties Land held for construction - Longzhong Section No. 22 Private land provided by related parties Buildings and land held for sale: Mei Shu Huang Ju Construction in progress - Yuguang Section No. 880, 4 in total Construction in progress - Longzhong Section 191 Land held for construction - Xingnan Section No. 11 Buildings and land held for sale - Tian Feng Buildings and land held for sale: Mei Shu Huang Ju Buildings and land held for sale - Fu +
				$4,591,100	$3,701

116

Statement XI

King’s Town Construction Co., Ltd. Statement of contract liabilities - current December 31, 2023

Item Sale of premises Advance Rent	Summary King’s Town King’s Town Hyatt Yiwen Court Mei Shu Huang Ju King’s Town Garden World of Heart Fu + Jing Wu Tong Subtotal American Institute in Taiwan Li Yu Chu Co., Ltd. Shih Yu Food And Drink Co., Ltd. Jingzhi Yuehe Bao Sheng Parking Subtotal Total	Amount Remark $47,409 37,235 9,257 93,922 9,933 454,011 8,635 18,138 $678,540 $770 86 45 68 305 $1,274 $679,814

117

Statement XII

King’s Town Construction Co., Ltd. Statement of other payables December 31, 2023

Item Salary payable Bonuses payable to employees Interest expense payable Others Total	Summary December salary and year-end bonus Employee compensation accruals for 2023 December interest expense Labor costs, labor and health insurance premiums, labor pension, welfare payments, and rent expense, etc.	Amount Remark $9,879 4,998 15,653 (Including trade payable from other related parties of NT$101 thousand) 11,044 $41,574

118

Statement XIII

King’s Town Construction Co., Ltd. Statement of long-term borrowings December 31, 2023

				December	31, 2023
			Amount
Type of Loans	Summary	Due within one operating cycle	Due over one operating cycle	Total	Contract period	Interest rate range	Line of credit	Pledge or guarantee
Secured borrowings	Financial institution borrowings	$0	$1,591,250	$1,591,250	2020/03/11- 2028/12/31	2.73%	$1,591,250	Land held for construction - Qinghai Section No. 229 and private land
								provided by related parties
Secured borrowings	Financial institution borrowings	0	547,200	547,200	2019/06/28- 2026/06/30	2.70%	1,022,200	Land held for construction - Longzhong Section No. 22
Secured borrowings	Financial institution borrowings	0	0	0	2021/07/15- 2027/06/30	-	4,235,000	Construction in progress - Fuhe Section No. 698-1
Secured borrowings	Financial institution borrowings	46,936	392,271	439,207	2017/07/17- 2032/07/17	2.24%	439,207	Investment properties Longbei Section No. 22
Secured borrowings	Financial institution borrowings	0	184,395	184,395	2022/01/10- 2027/01/10	2.50%	230,000	Land held for construction - Section 924, 9 in total
Secured borrowings	Financial institution borrowings	0	176,035	176,035	2022/01/10- 2027/01/10	2.50%	220,000	Land held for construction - Longdong Section No. 1
Secured borrowings	Financial institution borrowings	100,000	1,900,000	2,000,000	2021/10/26- 2026/10/26	2.55%	2,000,000	Land held for construction - Kanjiao North Section No. 820
Secured borrowings	Financial institution borrowings	0	415,000	415,000	2022/12/06- 2027/12/06	2.46%	570,000	Land held for construction - Longzhong Section No. 128-3, etc, 4 in total
Secured borrowings	Financial institution borrowings	0	1,200,700	1,200,700	2023/05/16- 2026/05/16	2.2438%	2,000,000	Land held for construction - Longzhong Section No. 129-3, etc, 2 in total
Secured borrowings	Financial institution borrowings	0	50,000	50,000	2023/05/16- 2026/05/16	2.2438%	1,361,450	Buildings and land held for sale: King’s Town
Secured borrowings	Financial institution borrowings	0	627,300	627,300	2023/06/30- 2025/06/30	2.688985%	627,300	Buildings and land held for sale: Mei Shu Huang Ju
Secured borrowings	Financial institution borrowings	0	181,200	181,200	2022/12/11- 2027/07/31	2.602%	393,000	Land held for construction - Xinzhuang 12 Sub-section No. 1175
Secured borrowings	Financial institution borrowings	0	139,900	139,900	2023/03/01- 2027/09/30	3.002%	175,000	Land held for construction - Xinzhuang 12 Sub-section No. 1167
Secured borrowings	Financial institution borrowings	0	1,240,000	1,240,000	2020/03/12- 2025/03/12	2.270%	1,240,000	Land held for construction - Qinghai Section No. 126~128
Secured borrowings	Financial institution borrowings	0	598,000	598,000	2019/10/17- 2025/10/17	2.675%	598,000	Land held for construction - Xinmin Section No. 159, 160
Secured borrowings	Financial institution borrowings	0	191,550	191,550	2023/07/17- 2028/07/17	3.050%	239,500	Land held for construction - Shinkang Section No. 25, etc, 7 in total
Total		$146,936	$9,434,801	$9,581,737			$16,941,907

119

Statement XIV

King’s Town Construction Co., Ltd. Statement of lease liabilities December 31, 2023

Item	Amount	Amount		Contract period	Discount rate
	Due within one year	Due over one year	Total
Land	$1,282	$68,013	$69,295	Land leased from Kaohsiung City Finance Bureau for NT$2,466 thousand per year for the lease period of 2012/8/7 to 2062/6/7.	1.73%

120

Statement XV

King’s Town Construction Co., Ltd. Statement of operating revenue December 31, 2023

Item Construction Revenue Other operating revenue	Summary King’s Town King’s Town Hyatt Yiwen Court Ju Dan Shi Shang King’s Town Mei Shu Huang Ju King’s Town Garden Xiang King’s Town Fu + Others Subtotal Rental income	Land $306,829 480 142,824 84,816 14,100 119,697 147,933 7,579 234,633 42,620 $1,101,511	Building $265,039 3,543 230,320 53,851 13,429 118,650 192,769 5,906 223,460 0 $1,106,967	Total
				$571,868 4,023 373,144 138,667 27,529 238,347 340,702 13,485 458,093 42,620
				$2,208,478 82,920
				$2,291,398

121

Statement XVI

King’s Town Construction Co., Ltd. Statement of operating costs December 31, 2023

Subject name	Summary	Amount	Remark
Prepayment for land and buildings at the beginning of the period Purchase of land and buildings during the period Prepayment for land and buildings at the end of the period Transfer to land held for construction Land held for construction at the beginning of the period Add: Purchase of land held for construction in the current period Land held for construction at the end of the period Less: Cost of sales for construction land Construction in progress - Land held for construction Construction project Construction expenses Construction costs Construction in Progress at the beginning of the period Construction in Progress at the end of the period Add: Others Building costs Buildings and land held for sale at the beginning of the period Buildings and land held for sale at the end of the period Add: Increase in renovation work during the period Additional project funds and maintenance expenses for remaining properties Cost of sales for construction land Less: Reclassification of Renovation Project Construction costs Other operating costs Operating costs		$801,638 1,849,736 (786,044)
		$1,865,330 20,847,402 3,315 (21,900,303) (9,622)
		$806,122 831,074 314,042
		$1,951,238 4,953,479 (5,222,870) 4,344
		$1,686,191 6,060,504 (6,879,762) 101,969 116,903 9,622 (14,578)
		$1,080,849
		$78,859
		$1,159,708

122

Statement XVII

King’s Town Construction Co., Ltd. Statement of selling and marketing expenses December 31, 2023

Subject name Salary expenses Repairs and maintenance expense Advertising fee Utility fee Tax expense Miscellaneous expenses Others (Note) Total	Summary	Amount $7,019 8,005 84,526 5,762 47,822 35,765 2,167 $191,066	Remark

Note ： Amounts for each item did not reach NT$1,000 thousand.

123

Statement XVIII

King’s Town Construction Co., Ltd. Statement of general and administrative expenses December 31, 2023

Subject name Salary expenses Rental expenses Stationery Repairs and maintenance expense Insurance fee Entertainment expense Tax expense Employee benefits Service fees Retirement benefit Miscellaneous expenses Others (Note) Total	Summary	Amount $42,192 1,642 1,253 1,042 4,418 4,442 38,555 2,291 2,667 1,688 10,753 4,600 $115,543	Remark

Note ： Amounts for each item did not reach NT$1,000 thousand.

124