ky - Annual Report 2023 | FinancialReports.eu

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Financial Statements and Independent Auditor's Report 2023 and 2022 (Stock Code: 2505)

Company : 18F, No. 555, Section 4, Zhongxiao East Road, Address Taipei City, Republic of China (Taiwan) Telephone: : 02-25000808

~1~

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Financial Statements and Independent Auditor's Report for 2023 and 2022

Item I. Cover II. Table of Contents III. Statement IV. Independent Auditor's Report V. Consolidated Balance Sheet VI. Consolidated Statements of Comprehensive Income VII. Consolidated Statements of Changes in Equity VIII. Consolidated Cash Flow Statement IX. Notes to the Consolidated Financial Statements (I) Company history (II) Date and procedures of approval of the financial statements (III) Application of new standards, amendments and interpretations (IV) Summary of significant accounting policies (V) Significant accounting judgments, estimates and main uncertainty assumptions (VI) Details of significant accounts (VII) Related-party transactions (VIII) Pledged assets	Page Number
	1 2 ~ 3 4 5 ~ 9 10 ~ 11 12 ~ 13 14 15 ~ 16 17 ~ 62 17 17 17 ~ 18 18 ~ 29 29 29 ~ 49 49 ~ 53 53

Item
I.
Cover
II.
Table of Contents
III.
Statement
IV.
Independent Auditor's Report
V.
Consolidated Balance Sheet
VI.
Consolidated Statements of Comprehensive Income
VII.
Consolidated Statements of Changes in Equity
VIII.
Consolidated Cash Flow Statement
IX.
Notes to the Consolidated Financial Statements
(I)
Company history
(II)
Date and procedures of approval of the financial statements
(III)
Application of new standards, amendments and interpretations
(IV)
Summary of significant accounting policies
(V)
Significant accounting judgments, estimates and main uncertainty
assumptions
(VI)
Details of significant accounts
(VII) Related-party transactions
(VIII) Pledged assets

Page
Number

1
2 ~ 3
4
5 ~ 9
10 ~ 11
12 ~ 13
14
15 ~ 16
17 ~ 62
17
17
17 ~ 18
18 ~ 29
29
29 ~ 49
49 ~ 53
53

~2~

Item (IX) Significant contingent liabilities and unrecognized contractual commitments (X) Significant disaster loss (XI) Significant events after the balance sheet date (XII) Other (XIII) Supplementary disclosures (XIV) Segment information	Page Number
	53 54 54 54 ~ 60 60 ~ 61 61 ~ 62

~3~

Kuo Yang Construction Co., Ltd. Consolidated Financial Statement of Affiliates

Companies what should be included in the consolidated financial statement of affiliates as provided in “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliates” are all the same as what should be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standards (IFRS) 10 in 2023 (from January 1, 2023 to December 31, 2023) and the relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. The Company shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declared by

Company Name: Kuo Yang Construction Co., Ltd.

Legal Representative: Tzu-Kuan Lin

March 13, 2024

~4~

Independent Auditor's Report (2024) Cai-Shen-Bao-Zi No. 23004685

To Kuo Yang Construction Co., Ltd.:

Audit Opinions

The Consolidated Balance Sheet of Kuo Yang Construction Co., Ltd. and subsidiaries (hereinafter referred to as Kuo Yang Group) as of December 31, 2023 and 2022, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, Consolidated Cash Flow Statement, and Notes to the Consolidated Financial Statements (including a summary of material accounting policies) from January 1 to December 31, 2023 and 2022 have been audited by the CPA.

In our opinion, based on the results of the CPA's audit and the audit reports of other CPAs (refer to Other Supplementary Matters), the aforementioned Consolidated Financial Statements were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, and explanations/interpretations approved and promulgated to be effective by FSC in all material respects and are therefore sufficient in presenting the consolidated financial conditions of the Kuo Yang Group as of December 31, 2023 and 2022, and the consolidated financial performance and consolidated cash flow from January 1 to December 31, 2023 and 2022.

Basis of Audit Opinions

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Accounting (TWSA). Our responsibility based on these standards will be explained in greater detail in the section on our responsibilities for the review of the Consolidated Financial Statements. The personnel of the CPA firm who are governed by regulations on independence have acted according to the ROC CPA Code of Professional Ethics and remained independent of Kuo Yang Group when fulfilling other obligations set forth in the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

The key audit matters pertain to the most important items of Kuo Yang Group's 2023 Consolidated Financial Statements as per the professional judgment of the CPA. These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

~5~

Key audit matters of the Consolidated Financial Statements of Kuo Yang Group for 2023 are as follows:

Appropriateness of the period in which income from the sales of houses and land is recognized

Description

Refer to Note 4 (29) in the Consolidated Financial Statements for accounting policies on operating revenue from construction. Refer to Note 6 (18) of the Consolidated Financial Report for description of accounting items.

The revenue from the sales of houses and land in the construction business is recognized when the ownership of the real estate is transferred and the property handover certificate is delivered to the customer. As the houses and land of a construction business are sold to many customers, the CPA is required to review all information on the transfer of ownership before recognizing sales revenue. The process generally involves a high amount of manual labor to determine the accuracy of the timing for recognizing sales revenue. Therefore, the CPA regarded the appropriateness of the period in which income from the sales of houses and land is recognized as one of the most important items in the audit.

Corresponding auditing procedures

The CPA has compiled the following corresponding procedures that were executed for the specific levels described in the aforementioned key audit matters:

We interviewed the management level to understand and review the procedures for recognizing sales revenue from the sales of houses and land and verify whether the procedures have been consistently adopted in the period of the Financial Statements.
We assessed and tested the appropriateness of the period in which income from the sales of houses and land is recognized by the management within a certain period after the end of the period, including the information on the transfer of ownership of the land and houses and related dates to verify the accuracy of the timing for recognizing sales revenue.

Other matters - Reference to audits of other CPAs

We did not audit certain investments accounted for through the equity method in the financial statements of Kuo Yang Group for 2023 and 2022. Those financial statements were audited by other CPAs. As such, our opinions in the aforementioned Consolidated Financial Statements on the amounts included in the aforementioned financial statements and related information disclosed in Note 13 were based on audit reports of other CPAs. The investment on equity method totaling NT$1,234,734 thousand and NT$986,405 thousand as of December 31, 2023 and 2022 accounted for 6.66% and 5.88% of the total assets, respectively. The comprehensive income recognized for 2023 and 2022 was NT$348,379 thousand and NT$142,204 thousand, which accounted for 58.97% and 50.76% of the total comprehensive income for the period, respectively.

~6~

Other matters - Individual Financial Statements

Kuo Yang Construction Co., Ltd. has prepared Individual Financial Statements for 2023 and 2022, for which we have issued an audit report containing an unqualified opinion plus other matters for reference.

Responsibilities of the management and the governing bodies for the Consolidated Financial Statements

The responsibility of the management was to prepare the consolidated financial statements in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers", International Financial Reporting Standards, International Accounting Standards, and explanations/interpretations approved and promulgated to be effective by FSC to properly indicate the company's financial status and to maintain necessary internal control with regard to establishment of consolidated financial statements to ensure such financial statements did not contain any false contents as a result of fraudulence or mistakes.

When the Consolidated Financial Statements were in the process of preparation, the responsibility of the management also included assessment of the capacity of Kuo Yang Group to continue operation, disclosure of related matters and the accounting approaches to be adopted when the company continued to operate unless the management intended to liquidate or suspend the business of Kuo Yang Group if there was not any other option except liquidation or suspension of the company's business.

The governance units (including the Audit Committee) of Kuo Yang Group are responsible for overseeing the financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Statements as a whole are free from material misstatements, whether due to fraud or error, and to issue an independent auditor's report. Reasonably reliable means highly reliable. However, auditing work carried out in accordance with the Standards on Auditing (TWSA) cannot guarantee detection of significant misrepresentations in the Consolidated Financial Statements. 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.

When conducting the auditing work according to the Standards on Accounting (TWSA), we exercised our professional judgment and professional skepticism. We also execute the following tasks:

~7~

Identified and evaluated the risk of material misstatement due to fraud or error in the Consolidated Financial Statements; Designed and carried out appropriate countermeasures for the evaluated risks; Obtained sufficient and appropriate evidence as the basis for the audit opinion. As fraud may involve collusion, forgery, deliberate omissions, false statements, or violations of internal controls, the risks of material misstatements due to fraud are greater than those caused by errors.
Acquired necessary understanding about internal control which matters to audit and provide appropriate audit procedure under such circumstances. However, the purpose of such understanding is not for providing any opinion on the effectiveness of internal control of Kuo Yang Group.
Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
Concluded on the appropriateness of the management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Kuo Yang Group's ability to continue as a going concern. If we consider that material uncertainty exists in these matters or conditions, we are required to remind the users of the Consolidated Financial Statements to pay attention to relevant disclosure in the statements in their audit report, or revise the audit opinions when such disclosure is inappropriate. 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 Kuo Yang Group to cease to continue as a going concern.
Evaluated the overall expression, structure and content of the Consolidated Financial Statements (including related notes) and if these statements present fairly the related transactions and events.
Obtained sufficient and appropriate proof for audit on the finances of the individual entities in Kuo Yang Group to state our opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the consolidated audit. We remain solely responsible for the audit opinions of the Consolidated Financial Statements.

The CPAs' communications with the governance units include the planned scope and period of the audit and material finding in the audit (including significant defects identified in the internal control during auditing procedures).

~8~

We provided governance units with a statement assuring the personnel of our accounting firm who are subject to independent regulations had acted according to the ROC CPA Code of Professional Ethics to remain neutral and communicated with them about the all relations and other matters (including related preventive measures) that could affect the independence of the CPA.

From the matters communicated with those charged with governance, the CPA determines matters that were of most significance in the audit of the 2023 Consolidated Financial Statements of Kuo Yang Group for the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

PricewaterhouseCoopers Taiwan

Chun-Yuan Hsiao

CPA

Fang-Yu Wang

Former Securities and Futures Bureau, Financial Supervisory Commission No. of Approval Document: Jin-Guan-Zheng-6 No. 0960042326 Financial Supervisory Commission No. of Approval Document: Jin-Guan-Zheng-Shen No. 1030027246

March 13, 2024

~9~

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheet January 1 to December 31, 2023 and 2022

Assets	Notes 6 (1) 6 (2) 6 (3) 6 (18) 6 (4) 6 (4) and 7 7 6 (5) (6) and 8 8 6 (3) and 7 6 (7) and 7 6 (8) and 8 6 (9) 6 (10) and 8 7 8	December 31,2023 Amount % $ 2,117,455 11 17,365 - 310,777 2 39,006 - 116,389 1 53,882 - 15,394 - 1,148 - 12,767,060 69 118,771 1 333,559 2 262,987 1 16,153,793 87 566,373 3 1,235,302 7 81,671 - 27,762 - 251,254 1 109 - 109,826 1 99,335 1 23,274 - 2,394,906 13 $ 18,548,699 100	Unit: NT$ thousand December 31,2022 Amount % $ 2,221,552 13 16,964 - 433,514 3 18,434 - 79,058 - 22,130 - 21,248 - 376 - 11,659,894 70 91,258 1 37,347 - 39,847 - 14,641,622 87 504,966 3 987,423 6 73,731 - 40,053 - 252,641 2 439 - 104,859 1 89,455 1 80,948 - 2,134,515 13 $ 16,776,137 100
		Amount $ 2,117,455 17,365 310,777 39,006 116,389 53,882 15,394 1,148 12,767,060 118,771 333,559 262,987 16,153,793 566,373 1,235,302 81,671 27,762 251,254 109 109,826 99,335 23,274 2,394,906 $ 18,548,699	Amount $ 2,221,552 16,964 433,514 18,434 79,058 22,130 21,248 376 11,659,894 91,258 37,347 39,847 14,641,622 504,966 987,423 73,731 40,053 252,641 439 104,859 89,455 80,948 2,134,515 $ 16,776,137
Current assets 1100 Cash and cash equivalents 1110 Current financial assets at fair value through profit or loss 1120 Current financial assets at fair value through other comprehensive income 1140 Contract assets - current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories 1410 Prepayments 1476 Other Financial Assets - Current 1479 Other current assets - other 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments recognized under the equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment properties, net 1840 Deferred income tax assets 1920 Refundable deposits 1980 Other Financial Assets - Non Current 1990 Other non-current assets - other 15XX Total non-current assets 1XXX Total assets

(Continued)

~10~

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheet January 1 to December 31, 2023 and 2022

Liabilities and Equity	Notes 6 (11) 6 (12) 6 (18) 7 7 6 (14) 6 (15) 6 (16) 6 (17) 9 11	December 31,2023 Amount % $ 6,605,327 36 - - 1,090,893 6 244,314 1 127,524 1 133,910 1 25,240 - 22,403 - 81,564 - 8,331,175 45 1,216 - 2,021 - 9,051 - 12,288 - 8,343,463 45 3,800,000 20 627,683 3 1,040,789 6 138,232 1 4,340,439 23 152,533 1 ( 10,099,676 54 105,560 1 10,205,236 55 $ 18,548,699 100	December 31,2023 Amount % $ 6,605,327 36 - - 1,090,893 6 244,314 1 127,524 1 133,910 1 25,240 - 22,403 - 81,564 - 8,331,175 45 1,216 - 2,021 - 9,051 - 12,288 - 8,343,463 45 3,800,000 20 627,683 3 1,040,789 6 138,232 1 4,340,439 23 152,533 1 ( 10,099,676 54 105,560 1 10,205,236 55 $ 18,548,699 100	Unit: NT$ thousand December 31,2022 Amount % $ 5,465,517 33 527,672 3 208,411 1 73,925 1 224,527 1 471,703 3 72,091 1 22,151 - 71,395 - 7,137,392 43 21,707 - 2,312 - 1,247 - 25,266 - 7,162,658 43 3,800,000 23 627,683 4 999,950 6 10,017 - 4,210,159 25 138,232)( 1) 9,509,577 57 103,902 - 9,613,479 57 $ 16,776,137 100
		Amount $ 6,605,327 - 1,090,893 244,314 127,524 133,910 25,240 22,403 81,564 8,331,175 1,216 2,021 9,051 12,288 8,343,463 3,800,000 627,683 1,040,789 138,232 4,340,439 152,533 10,099,676 105,560 10,205,236 $ 18,548,699		Amount $ 5,465,517 527,672 208,411 73,925 224,527 471,703 72,091 22,151 71,395 7,137,392 21,707 2,312 1,247 25,266 7,162,658 3,800,000 627,683 999,950 10,017 4,210,159 138,232)( 9,509,577 103,902 9,613,479 $ 16,776,137
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2219 Other payables - other 2230 Current income tax liabilities 2280 Lease liabilities - current 2399 Other current liabilities - other 21XX Total current liabilities Non-current liabilities 2580 Lease liabilities - non-current 2645 Deposits received 2670 Other non-current liabilities - other 25XX Total non-current liabilities 2XXX Total liabilities Equity Equity attributable to owners of parent company Share capital 3110 Capital stock - common Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Undistributed earnings Other equity 3400 Other equity 31XX Total equity attributable to owners of parent company 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognized contractual commitments Significant events after the balance sheet date 3X2X Total liabilities and equity			36 - 6 1 1 1 - - - 45 - - - - 45 20 3 6 1 23 1 ( 54 1 55 100

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

~11~

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2023 and 2022

Unit: NT$ thousand (except earnings per share which is expressed in NT$)

Item	2023 2022 Notes Amount % Amount % 6 (18) and 7 $ 735,459 100 $ 3,954,516 100 6 (15) (23) (24) ( 443,914 ) ( 61 ) ( 3,169,639)( 80 ) 291,545 39 784,877 20 6 (23) (24) ( 37,818 ) ( 5 ) ( 176,846 ) ( 5 ) ( 242,992 ) ( 33 ) ( 328,814)( 8 ) ( 280,810 ) ( 38 ) ( 505,660)( 13 ) 10,735 1 279,217 7 6 (19) 13,479 2 6,056 - 6 (20) 101,182 14 113,713 3 6 (21) ( 9,101 ) ( 1 ) ( 9,287 ) - 6 (22) ( 19,753 ) ( 3 ) ( 30,519 ) ( 1 ) 6 (7) 237,169 32 194,219 5 322,976 44 274,182 7 333,711 45 553,399 14 6 (25) ( 28,835 ) ( 4 ) ( 67,481)( 2 ) $ 304,876 41 $ 485,918 12
4000 Operating revenue 5000 Operating costs 5900 Operating profit Operating expenses 6100 Promotion expenses 6200 Administrative expenses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other profits and losses 7050 Finance costs 7060 Share of profit or loss of affiliates and joint ventures recognized under the equity method 7000 Total non-operating income and expenses 7900 Pre-tax profit 7950 Income tax expenses 8200 Net profit of the term

Item

2023
2022
Notes
Amount
%
Amount
%
6 (18) and 7
$ 735,459
100 $ 3,954,516
100
6 (15) (23) (24) (
443,914 ) (
61 ) (
3,169,639)(
80 )
291,545
39
784,877
20
6 (23) (24)
(
37,818 ) (
5 ) (
176,846 ) (
5 )
(
242,992 ) (
33 ) (
328,814)(
8 )
(
280,810 ) (
38 ) (
505,660)(
13 )
10,735
1
279,217
7
6 (19)
13,479
2
6,056
-
6 (20)
101,182
14
113,713
3
6 (21)
(
9,101 ) (
1 ) (
9,287 )
-
6 (22)
(
19,753 ) (
3 ) (
30,519 ) (
1 )
6 (7)
237,169
32
194,219
5
322,976
44
274,182
7
333,711
45
553,399
14
6 (25)
(
28,835 ) (
4 ) (
67,481)(
2 )
$ 304,876
41 $ 485,918
12

4000
Operating revenue
5000
Operating costs
5900
Operating profit
Operating expenses
6100
Promotion expenses
6200
Administrative expenses
6000
Total operating expenses
6900
Operating profit
Non-operating income and
expenses
7100
Interest income
7010
Other income
7020
Other profits and losses
7050
Finance costs
7060
Share of profit or loss of
affiliates and joint ventures
recognized under the equity
method
7000
Total non-operating income
and expenses
7900
Pre-tax profit
7950
Income tax expenses
8200
Net profit of the term

(Continued)

~12~

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2023 and 2022

Unit: NT$ thousand (except earnings per share which is expressed in NT$)

2023	%	2022
Amount $ 781 285,073 285,854 14 33 47 $ 285,901 $ 590,777 $ 304,198 678 $ 304,876 $ 590,099 678 $ 590,777 $		Amount $ - 206,045)( 206,045)( 283 9 292 $ 205,753)( $ 280,165 $ 485,928 10) $ 485,918 $ 280,175 10) $ 280,165 $
	- 39 ( 39 ( - - - 39 ( 80 41 - ( 41 80 - ( 80 0.80 0.80
$		$

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

~13~

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Changes in Equity January 1 to December 31, 2023 and 2022

Unit: NT$ thousand

Notes			Equity attributable to	Equity attributable to	o	wners of parent company	wners of parent company					Non-controlling interest	Non-controlling interest		Total equity
	Capital stock - common	Capitalsurplus		Retained earnings			Other	equity			Total
			Legal reserve	Special reserve $ - - - - - 10,017 - - $ 10,017 $ 10,017 - - - - 128,215 - - $ 138,232		Undistributed earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
6 (17) 6 (16) 6 (17) 6 (17) 6 (16) 6 (17)	$ 3,800,000 - - - - - - - $ 3,800,000 $ 3,800,000 - - - - - - - $ 3,800,000	$ 627,683 - - - - - - - $ 627,683 $ 627,683 - - - - - - - $ 627,683	$ 988,010 - - - 11,940 - - - $ 999,950 $ 999,950 - - - 40,839 - - - $ 1,040,789		( ( ( ( ( (	$ 3,823,726 485,928 - 485,928 11,940 ) 10,017 ) 77,538 ) - $ 4,210,159 $ 4,210,159 304,198 781 304,979 40,839 ) 128,215 ) 5,645 ) - $ 4,340,439	$ 22,034 - 292 292 - - - - $ 22,326 $ 22,326 - 47 47 - - - - $ 22,373	( ( ( ( (	$ 32,051) - 206,045) 206,045) - - 77,538 - $ 160,558) $ 160,558) - 285,073 285,073 - - 5,645 - $ 130,160	(	$ 9,229,402 485,928 205,753) 280,175 - - - - $ 9,509,577 $ 9,509,577 304,198 285,901 590,099 - - - - $ 10,099,676	( (	$ 33,912 10 ) - 10 ) - - - 70,000 $ 103,902 $ 103,902 678 - 678 - - - 980 $ 105,560	(	$ 9,263,314 485,918 205,753) 280,165 - - - 70,000 $ 9,613,479 $ 9,613,479 304,876 285,901 590,777 - - - 980 $ 10,205,236

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

~14~

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Cash Flow Statement

January 1 to December 31, 2023 and 2022

Unit: NT$ thousand

Cash Flows from Operating Activities
Net profit before tax of the current period
Adjustments
Adjustments to reconcile profit (loss)
Depreciation
Amortization cost
Interest expenses
Interest income
Share of profit (loss) of affiliates and joint
ventures recognized under the equity
method
Dividend income
Losses on financial assets at fair value
through profit or loss
Changes in operating assets and liabilities
Changes in operating assets
Contract assets
Notes receivable, net
Accounts receivable, net
Other receivables
Inventories
Prepayments
Other current assets
Intangible assets
Other non-current assets
Changes in operating liabilities
Contract liabilities
Notes payable
Accounts payable
Other payables
Other current liabilities
Cash outflow from operations
Interest received
Interest paid
Income tax paid
Dividends received
Net cash outflow from operating
activities

Notes
2023
2022
$ 333,711
$ 553,399
6 (23)
31,763
29,924
6 (23)
661
542
6 (22)
19,753
30,519
6 (19)
(
13,479 )
(
6,056 )
6 (7)
(
237,169 )
(
194,219 )
6 (20)
(
37,127 )
(
75,629 )
6 (21)
(
401 )
3,460
(
20,572 )
(
18,434 )
(
37,331 )
(
8,440 )
(
31,752 )
432,365
5,854
283,958
(
960,838 )
(
912,280 )
(
33,212 )
126,748
(
223,140 )
34,098
(
625 )
-
57,638
18,231
882,482
(
790,036 )
170,389
(
171,423 )
(
97,003 )
(
169,810 )
(
345,845 )
220,595
10,169
(
24,689)
(
526,074 )
(
637,177 )
13,479
6,056
(
157,124 )
(
122,789 )
(
76,099 )
(
188,495 )
137,177
202,251
(
608,641 )
740,154

(Continued)

~15~

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Cash Flow Statement January 1 to December 31, 2023 and 2022

Cash Flows from Investing Activities
Acquisition of current financial assets at fair
value through other comprehensive income
Disposal of current financial assets at fair value
through other comprehensive income
Acquisition of non-current financial assets at
fair value through other comprehensive income
Increase of other financial assets
Increase in refundable deposits
Decrease in refundable deposits
Acquisition of property, plant and equipment
Net cash inflow (outflow) from
investing activities
Cash Flows from Financing Activities
Increase in short-term loans
Decrease in short-term borrowings
Increase in short-term bills payable
Decreases in short-term notes payable
Increase in guarantee deposits received
Decrease in guarantee deposits received
Repayments of lease liabilities
Changes in non-controlling interests
Cash inflow generated from financing
activities, net
Effect of exchange rate changes on cash and
cash equivalents
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Unit: NT$ thousand
Notes
2023
2022
( $ 406,896 )
( $ 507,851 )
643,355
645,796
7
-
(
59,548 )
(
306,092 )
(
66,135 )
(
63,784 )
(
225,262 )
58,817
284,405
6 (8)
(
10,459 )
(
1,967 )
(
85,059 )
(
69,438 )
6 (27)
2,372,380
4,259,650
6 (27)
(
1,232,570 )
(
3,465,484 )
6 (27)
871,555
3,161,310
6 (27)
(
1,400,055 )
(
3,771,900 )
6 (27)
4
961
6 (27)
(
295 )
(
1,502 )
6 (27)
(
22,378 )
(
22,542 )
980
70,000
589,621
230,493
(
18 )
250
(
104,097 )
(
439,973 )
2,221,552
2,661,525
$ 2,117,455
$ 2,221,552

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

~16~

Kuo Yang Construction Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

2023 and 2022

Unit: NT$ thousand (Unless specified otherwise)

I. Company history

Kuo Yang Construction Co., Ltd. (hereinafter referred to as the "Company") was established in June 1972. The Company and its subsidiaries (collectively referred herein as the "Group") are engaged in the construction of public housing and the lease and sales of commercial residential buildings, industrial plants, and commercial buildings. The Company has been listed on the Taiwan Stock Exchange since November 14, 1979.

II. Date and procedures of approval of the financial statements

The Consolidated Financial Report was released with the approval of the Board of Directors on March 13, 2024.

III. Application of new standards, amendments and interpretations

(I) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards as endorsed and promulgated to be effective by the Financial Supervisory Commission (hereinafter referred to as the "FSC").

New, revised, and amended standards, interpretations and amendments to the IFRS endorsed by the FSC and promulgated to be effective from 2023 are as follows:

New, Revised or Amended Standards and Interpretations Amendment to IAS 1, "Accounting Policy Disclosure" Amendments to IAS 8, "Definition of Accounting Estimates" Amendments to IAS 12, "Deferred Tax related to Assets and Liabilities arising from a Single Transaction" Amendments to IAS 12 "International Tax Reform - Pillar Two Model Rules"	Effective date by International Accounting Standards Board
	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

The above standards and interpretations have no significant impact to the Group’s financial position and financial performance based on the Group’s assessment.

~17~

(II) Effects of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New, revised, and amended standards, interpretations and amendments endorsed by the FSC effective from 2024 are as follows:

New, Revised or Amended Standards and Interpretations Amendments to IFRS 16, "Lease Liabilities in a Sale and Leaseback" Amendments to IAS 1, "Classification of Liabilities as Current or Non-current" Amendments to IAS 1, "Non-current Liabilities with Covenants" Amendments to IAS 7 and IFRS 7, “Supplier Finance Arrangements”	Effective date by International Accounting Standards Board
	January 1, 2024 January 1, 2024 January 1, 2024 January 1, 2024

The above standards and interpretations have no significant impact to the Group’s financial position and financial performance based on the Group’s assessment.

(III) IFRSs issued by International Accounting Standards Board (IASB) but not yet endorsed by the

FSC

New, revised, and amended IFRSs and interpretations issued by IASB but not yet endorsed by the FSC are as follows:

the FSC are as follows:
New, Revised or Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28, "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture" IFRS 17, "Insurance Contracts" Amendment to IFRS 17, "Insurance Contracts" Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS 9—Comparative Information" Amendment to IAS 21 “Lack of Exchangeability”	Effective date by International Accounting Standards Board
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2025

The above standards and interpretations have no significant impact to the Group’s financial position and financial performance based on the Group’s assessment.

IV. Summary of significant accounting policies

The material accounting policies applied in the preparation of the Consolidated Financial Report are summarized as follows: Except as stated otherwise, such policies have been consistently applied to all the periods presented.

(I) Statement of compliance

The consolidated financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, as well as the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC interpretations and SIC interpretations (collectively referred to as "IFRSs") endorsed and promulgated to be effective by the FSC.

~18~

(II) Basis of preparation

Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
(1) Financial assets at fair value through profit or loss.
(2) Financial assets at fair value through other comprehensive income.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The items involving a higher degree of judgment or complexity, or items where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(III) Basis of consolidation

Basis for preparation of financial statements
(1) All subsidiaries are included in the Group's consolidated financial statements. "Subsidiaries" are all entities controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(2) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(3) The profit or loss and each component of other comprehensive income shall be attributed to the owners of the parent and to the non-controlling interests, and total comprehensive income shall also be attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
(4) Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are equity transactions (i.e., transactions among owners in their capacity as owners). Difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received shall be recognized directly in equity.
(5) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. The fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the affiliate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. The amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the Group directly disposed of relevant assets or liabilities. It means that profit or loss previously recognized in other consolidated profit or loss shall be reclassified as profit or loss when related assets or liabilities are disposed of. When the Group loses control over this subsidiary, the profit and loss shall be transferred from equity and reclassified as profit or loss.

~19~

2. Subsidiaries included in the consolidated financial statements:

Ownership (%)

Name of investment company	Name of subsidiary	Main business activities	December 31, 2023	December 31, 2022
The Company The Company The Company The Company Shen Yang Construction Co., Ltd. Shen Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. Shang Yang International Asset Management Co., Ltd. Century Rainbow Limited. Century Rainbow Limited.	Shadwell Limited. Shang Yang International Asset Management Co., Ltd. Shen Yang Construction Co., Ltd. (Shen Yang Construction) Star Epoch International Co., Ltd. Che Yang Agricultural Technology Co., Ltd. Chi Yang Construction Co., Ltd. Pao Yue Landscape Co., Ltd. (Note) Century Rainbow Limited. Celestial Talent Limited. Charm Merit Limited.	Investment in real estate property Residence and buildings lease construction and development Residence and buildings lease construction and development Residence and buildings lease construction and development Horticulture services and afforestation Residence and buildings lease construction and development Landscape and interior design Professional investment Professional investment Professional investment	100% 100% 100% 80% 100% 80% 51% 100% 100% 100%	100% 100% 100% 80% 100% 80% - 100% 100% 100%

Note: This is a new subsidiary founded in the second quarter of 2023.

Subsidiaries not included in the consolidated financial statements: None.
Adjustments for subsidiaries with different balance sheet dates: None.
Material limitation on the acquisition or use of assets and capacity for debt repayment: None.
Subsidiaries that have non-controlling interests that are material to the Group: None.
(IV) Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (i.e., the "functional currency"). The Consolidated Financial Report is presented in NTD which is the Company's functional currency.

Foreign currency transactions and balances
(1) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at 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.
(2) Monetary assets and liabilities denominated in foreign currencies are re-translated at

~20~

the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss in the period in which they arise.

(3) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss in the period in which they arise. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(4) All other foreign exchange gains and losses are presented in the statement of comprehensive income within "other gains and losses" based on the nature of the transactions.
Translation of foreign operations
(1) The operating results and financial position of all the Group’s entities and affiliates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- A. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- B. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
- C. All resulting exchange differences are recognized in other comprehensive income.
(2) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(V) Classification of current and non-current items

The Group engages in commissioned construction of buildings or plants for sale and contracting for construction projects with business cycles which are generally more than 1 year. Assets and liabilities related to the construction business are classified as current or non-current based on the business cycle. The standards for the classification of current and non-current accounts are as follows:

Assets that meet one of the following criteria are classified as current assets:
(1) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
(2) Liabilities arising mainly from trading activities;
(3) Assets that are expected to be realized within twelve months from the balance sheet date; or

~21~

(4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

Assets not meeting the above criteria are classified by the Group as non-current assets.

Liabilities that meet one of the following criteria are classified as current liabilities:
(1) Liabilities that are expected to be paid off within the normal operating cycle;
(2) Liabilities arising mainly from trading activities;
(3) Liabilities that are to be paid off within twelve months from the balance sheet date; or
(4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Liabilities not meeting the above criteria are classified by the Group as non-current liabilities.

(VI) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. 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.

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

Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.
On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using transaction date accounting.
Financial assets at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently measured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss.
The Group recognizes the dividend income in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.

(VIII) Financial assets at fair value through other comprehensive income

The Company may make irrevocable election at initial recognition to recognize the changes in fair value in other comprehensive income for the investments in equity instruments that are not held for trading.
On a regular way purchase or sale basis, financial assets at fair value through other comprehensive profit or loss are recognized and derecognized using transaction date accounting.
At initial recognition, the Group measures the financial assets at fair value plus transaction

~22~

costs. The Group subsequently measures the financial assets at fair value:

The changes in fair value of equity instruments are recognized in other comprehensive income. The cumulative gain or loss previously recognized in other comprehensive income shall be recorded to retained earnings and not be reclassified to profit or loss upon the derecognition. The Group recognizes the dividend income in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.

(IX) Accounts and notes receivable

Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(X) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income and financial assets at amortized cost at each balance sheet date, the Company recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information (including forecasts). On the other hand, the Company recognizes the impairment provision for lifetime ECLs for accounts receivable or contract assets containing a significant financing component.

(XI) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(XII) Lease transaction as a lessor

Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term.

(XIII) Inventories

Inventories include construction land, houses and land under construction, and houses and land to be sold which are initially recorded at cost. Construction profit and loss is recognized based on the completed-contract method. Construction land is listed as houses and land under construction when they are under active development. The related interest expenses are capitalized in the period from active development or commencement of construction till the completion of construction.
Inventories at the end of the period is measured based on the cost and net realizable value, whichever is lower. The item-by-item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable expenses.

~23~

(XIV) Investments/affiliates recognized under the equity method

Affiliates are all entities over which the Group has significant influence but not control. In general, it is presumed that an investor has significant influence if the investor holds, directly or indirectly, 20% or more of the voting rights of the investee. Investments in affiliates are accounted for through the equity method and are initially recognized at cost.
The Group's share of its affiliates' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group's share of losses in an affiliate equals or exceeds its interest in the affiliate, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the affiliate.
When changes in an affiliate's equity do not arise from profit or loss or other comprehensive income of the affiliate and such changes do not affect the Group's ownership percentage of the affiliate, the Group recognizes change in ownership interests in the affiliate in "capital surplus" in proportion to its ownership.
Unrealized gains on transactions between the Group and its affiliates are eliminated to the extent of the Group's interest in the affiliates. Unrealized losses are also eliminated unless evidence of an impairment of the asset transferred in the transaction is provided. Accounting policies of affiliates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
When the Group disposes its investment in an affiliate and loses significant influence over this affiliate, the amounts previously recognized in other comprehensive income in relation to the affiliate are reclassified to profit or loss, on the same basis as would be required if the Group directly disposed of relevant assets or liabilities. It means that profit or loss previously recognized in other consolidated profit or loss shall be reclassified as profit or loss when related assets or liabilities are disposed of. When the Group loses material influence over this affiliate, the profit and loss shall be transferred from equity and reclassified as profit or loss. If it retains significant influence over this affiliate, the amounts previously recognized in other comprehensive income in relation to the affiliate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

(XV) Joint operations

With regard to equity in joint operations, the Group recognizes the direct rights (and its share) of the assets, liabilities, income, and expenses from joint operations, and has included them in the applicable accounts of the Financial Report.

(XVI) Property, plant and equipment

Property and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with

~24~

the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting policies, changes in accounting estimates and errors’, from the date of the change. The estimated useful life of real property is 50 years and the useful life of other assets is 3-5 years.

(XVII) Lease transaction as a lessee - right-of-use assets/lease liabilities

The Group recognizes lease assets as right-of-use assets and lease liabilities at the commencement date of the lease. For short-term leases or leases of low value assets, lease payments are recognized as expenses using the straight-line method during the lease term.
On the commencement date, the Group measures lease liabilities by the present value of outstanding lease payments, using the Group's incremental borrowing rate. Lease payments include
(1) Fixed payments less any lease incentives receivable; and
(2) Variable lease payments determined by changes in an index or rate.

In subsequent periods, the Company measures lease liabilities at amortized cost using the effective interest method and recognizes interest expense during the lease term. If the lease term or lease payment is changed due to reasons other than amendments to the lease contracts, the Company will remeasure the lease liabilities. The remeasurement amount is then recognized as an adjustment to the right-of-use assets.

Lease liabilities are recognized at cost on the starting date of the lease. The cost includes:
(1) the original measurement amount of the lease liabilities;
(2) any lease payments made on or before the commencement date;
(3) any original direct cost incurred; and
(4) Estimated cost for the dismantling and removal of the asset and the restoration of its location, or the estimated cost for the restoration of conditions specified in the lease criteria and conditions.

The right-of-use assets are subsequently measured by adopting the cost model. The Company depreciates the right-of-use assets at the earlier of the right-of-use assets' useful life or the end of lease term. When a lease liability is reassessed, the right-of-use asset is adjusted for any remeasurements of the lease liability.

(XVIII) Investment properties

~25~

An investment property is measured initially at its cost and subsequently measured under the cost approach. The depreciation is recognized on a straight-line basis over a useful life of 20 to 60 years.

(XIX) Intangible assets

Intangible assets include computer software which is recognized at acquisition cost and amortized on a straight-line basis over its estimated useful life of 3 years.

(XX) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there are any impairment indications. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

(XXI) Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

(XXII) Accounts and notes payable

Accounts payable are the liabilities for purchases of raw materials, goods, or services, and notes payable generated from operations and those not generated from operations.
The short-term accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XXIII) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract is discharged, canceled, or expired.

(XXIV) Financial guarantee contracts

Financial guarantee contracts are contracts for which the Group must pay specific benefits to reimburse the holder of debt instruments for losses incurred when a specific debtor is unable to repay its debts upon maturity in accordance with the terms of the original or modified debt instrument. At initial recognition, the Group measures the financial guarantee contracts at fair value. The Group subsequently measures them based on the impairment provision for the expected credit losses and recognized cumulative earnings, whichever is higher.

(XXV) Employee benefits

Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits

~26~

expected to be paid in exchange for that service, and shall be recognized as expenses when the employees have rendered service.

Pension

Defined contribution plans

For defined contribution plans, the contributions shall be recognized as pension expenses when they are due on an accrual basis. Prepaid contributions shall be recognized that excess as an asset to the extent that the prepayment will lead to a cash refund or a reduction in the future payments.

Employees’ remuneration and directors' remuneration
Employees’ remuneration and directors’ remuneration are recognized as expense and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employees' remuneration is distributed by shares, the Company calculates the number of shares based on the closing price at the previous day of the Board of Directors' resolution.

- (XXVI) Employee share based payment

The date on which the Group notifies the employees of the shares retained for employee subscription in the cash capital increase, and the parties agree on the quantity and price of subscription shall be graded as the grant date.

(XXVII) Income tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
The current income tax expense is calculated on the basis of the tax laws enacted as of the balance sheet date in the countries where the Group operates and generates taxable income. The tax is levied on the unappropriated retained earnings and is recorded as income tax expense for the year after the shareholders' meeting passes the earnings distribution proposal in the following year.
Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. The deferred income tax is not accounted if it arises from initial recognition of an asset or liability in a transaction (excluding business mergers) that at the time of the transaction affects neither accounting nor taxable profit or loss, and do not generate corresponding taxes payable or deductible temporary difference. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and affiliates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply

~27~

when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
Current income tax assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXVIII) Dividends

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.

(XXIX) Revenue recognition

Land development and real property sales

The Group's main business activities are land development and real property sales. Revenue is recognized when the control of the real property is transferred to customers. For contracts for the sale of residential properties, the real property has no other use to the Group due to contract restrictions. However, the Group has an enforceable right to the contract payments only when the legal title or use of the real estate is transferred to the customer. Therefore, revenue is recognized when the legal title or use is transferred to the customer.
Some of the Group 's sales contracts include variable consideration for price reduction and the Group uses the expected or most probable amount as the appropriate estimated value for variable consideration.
The Group has included customers' advance payments in the contracts for pre-sales houses, and the period between the advanced payment and the transfer of the control of the product is longer than one year. According to IFRS 15, if the Group determines that there are material financial compositions in the individual contracts for pre-sales houses, it is required to adjust the pledged consideration and recognize interest expenses. IFRS 15 also states that companies should consider the materiality of financial components only at the level of the contract and not at the level of the portfolio when determining whether a financial loan is material.

Business services

The Group provides consultancy services for planning, construction, and sales of construction development projects, and executes relevant services accordingly. Labor services are recognized as revenue when providing services to customers during the financial reporting

~28~

period. The customer is required to pay at the time specified in the payment schedule. A contract asset is recognized when the services provided exceed the payment, while a contract liability is recognized when the payments exceed the services provided by the Group.

(XXX) Operating segments

Operating segments are reported in a manner consistent with the internal management reports provided to the chief operating decision-maker, who is responsible for allocating resources to operating segments and evaluating their performance.

V. Significant accounting judgments, estimates and main uncertainty assumptions

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

(I) Critical judgments in applying accounting policies None.

(II) Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgments and estimates. The management of the Group mainly uses past experience and estimates of future market sales value as the basis for estimation. Therefore, there may be significant changes.

The Group's inventory information as of December 31, 2023 is detailed in Note 6 (5).

VI. Details of significant accounts

(I) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and working capital Demand deposits Cheque deposits Cash equivalents - time deposits	December 31, 2023 $ 4,845 2,110,725 988 897 $ 2,117,455	December 31, 2022
		$ 6,420 2,214,175 79 878
		$ 2,221,552

The Group transacts with a variety of financial institutions with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
The Group's revenue from pre-sales placed in a trust account and performance bond is limited in use and the limitations are recognized in "Other financial assets - current" and "Other financial assets - non-current". Please refer to Note 8.

~29~

(II) Current financial assets at fair value through profit or loss

Mandatory measurement of financial assets at fair value through profit or loss Beneficiary certificates Valuation adjustment (	December 31, 2023 $ 21,170 3,805 )( $ 17,365	December 31, 2022 $ 21,170 4,206 ) $ 16,964

The Group recognized net gain (loss) of $401 and ($3,460) within financial assets at fair value through profit or loss for 2023 and 2022 based on the financial assets at fair value through profit or loss.
The Group has no financial assets at fair value through profit or loss pledged to others.

(III) Financial assets at fair value through other comprehensive income

Current items Equity instruments Listed stocks Valuation adjustment ( Non-current items Equity instruments Stocks no listed on the TWSE, TPEx, or emerging stocks Valuation adjustment	December 31, 2023 $ 352,451 41,674 )( $ 310,777 December 31, 2023 $ 417,049 149,324 $ 566,373	December 31, 2022 $ 591,693 158,179 ) $ 433,514 December 31, 2022 $ 417,049 87,917 $ 504,966

The Group opted to classify strategic investments and investments in equity instruments with stable dividend payments as financial assets at fair value through profit or loss. The fair value of such investments as of December 31, 2023 and 2022 were $877,150 and $938,480, respectively.
Amounts recognized in other comprehensive income in relation to the financial assets at fair value in income and other comprehensive income are listed below:

Disposal of equity instruments in other comprehensive income measured at fair value through profit and loss Fair value gain (loss) recognized in other comprehensive income Cumulative gains (losses) converted to retained earnings due to derecognition (	2023 $ 175,129( $ 2,783) (	2022 $ 154,042 ) $ 59,346 )

~30~

The Group has no financial assets at fair value through other comprehensive profit or loss pledged to others.

(IV) Notes and accounts receivable

pledged to others. Notes and accounts receivable
Notes receivable Accounts receivable Accounts receivable due from related parties	December 31, 2023 $ 116,389 51,195 2,687 $ 170,271	December 31, 2022
		$ 79,058 21,492 638
		$ 101,188

The Group has no notes and accounts receivable pledged to others.
As of December 31, 2023, December 31, 2022 and January 1, 2022, the balance of the Group's accounts receivable (including notes receivable) were $167,005, $101,006, and $524,836, respectively.
If the collaterals held or other credit enhancement tools are disregarded, the amount that best represents the Group's maximum exposure to credit risk for notes and accounts receivable as of December 31, 2023 and 2022, respectively, is the carrying amount of the notes and accounts receivable in each period.
Notes and accounts receivable are notes and accounts that are not past due or impaired.
Please refer to Note 12 (2) for relevant credit risk information.

~31~

(V) Inventories

Houses and land held for sale Beautiful Tree Hall Kuo Yan Project Kuo Yang The Green Place Project (Ziwei, Ruhaku, Kanazawa) South Manor Project (Wenshan Gongxun Section Project) Smile Era Project (Qianzhen District Shengxing Section Project) Minus: Allowance for valuation losses ( Houses and land under construction Kuo Yang The Green Place Project (The Green World) Good morning, Kuo Yang Phase 2 (Keelung Tiaohe Section Project) Kuo Yang Intercontinental Project (formerly Neihu Jiuzong Project) Kuo Yang Jilin Project (formerly Jilin Urban Renewal Project) Shin Tokyo City (formerly Fengshan Shengli Project) Kuo Yang Digital Project (formerly Sanchong Project) Kaohsiung Gushan Project Land for construction and others Zhudong Project Minquan East Road Project Jingmei Section Kaohsiung Yunwen Section Tucheng Project Kuo Yang Digital Project (formerly Sanchong Project) Kaohsiung Gushan Project Guowang Xiwan Road Project Kaohsiung Qianjin District Minsheng Project Ascent Yuanchuang Project (formerly Zhonghe Plant and Office Project) Xindian Baoyuan Project Kaohsiung Special Trade Zone 3 Project Other Minus: Allowance for valuation losses ( Prepayments for houses and land and others Kuo Yang The Green Place Project (The Green World)	December 31, 2023 $ 910 1,019,057 306,625 - 20,901 1,347,493 197,862 )( 1,149,631 202,114 334,135 2,208,553 462,841 903,695 1,435,049 1,484,370 7,030,757 251,872 273,821 40,174 108,170 1,333,834 - - 1,127,733 289,688 530,750 286,684 55,554 105,286 4,403,566 170,970 )( 4,232,596 354,076 $ 12,767,060	December 31, 2022 $ 910 1,047,546 635,300 4,326 132,793 1,820,875 258,175 ) 1,562,700 33,246 327,135 1,913,082 179,595 684,118 - - 3,137,176 251,872 273,821 40,174 108,170 1,240,546 1,242,518 1,429,195 1,006,094 285,400 510,863 277,584 14,443 96,232 6,776,912 170,970 ) 6,605,942 354,076 $ 11,659,894

~32~

The Group recognized cost of inventories as expenses totaling $442,765 and $3,168,490 in 2023 and 2022, respectively. They included the gains on reversal recognized as a result of the recovery in net realizable value totaling $60,313 and $295,409, mostly attributable to the net realizable value rising as a result of the sales of certain inventories with a net realizable value lower than their costs.
In 2023 and 2022, the amount of inventory interest capitalization was $146,328 and $89,366, respectively. The interest capitalization rates ranged from 2.29% to 3.00% and 1.78% to 3.00%, respectively.
Please refer to Note 8 for detailed information on the Group's use of inventory as collateral.
(VI) Joint operations
The Group operates certain development projects through joint operations. With regard to equity in joint operations, the Group recognizes the direct rights (and its share) of the assets, liabilities, income, and expenses from joint operations, and has included them in the applicable accounts of the Consolidated Financial Report.
The information on the joint operations held by the Group is as follows:

Projectname Kuo Yang The Green Place Project Smile Era Project Good morning, Kuo Yang Project Kuo Yang Intercontinental Project (Formerly Neihu Jiuzong Project) Tucheng Project Kuo Yang Digital Project (Formerly Sanchong Project) Shin Tokyo City (formerly Kaohsiung Fengshan Project) Kaohsiung Gushan Project Guowang Xiwan Road Project Ascent Yuanchuang Project (formerly Zhonghe Plant and Office Project) Huangpu New Village Project	Percentage held	Landownerorjoint builder	Description
	65% 70% 55% 50% 50% 50% 50% 50% 50% 40% 50%	Five companies including Wei Li International Development Co., Ltd. Southern Region Branch, National Property Administration, Ministry of Finance, Shen Yang Construction Co., Ltd., Han Lin Development Co., Ltd. Chi Hsuan Development Co., Ltd., Tsang Shan Development Co., Ltd. Five companies including Wei Li International Development Co., Ltd. Four companies including Wei Li International Development Co., Ltd. Four companies including Wei Li International Development Co., Ltd. Tsang Hsin Construction Co., Ltd., Shen Yang Construction Co., Ltd. Six companies including Wei Li International Development Co., Ltd. Four companies including Wei Li International Development Co., Ltd. Three companies including Wei Li International Development Co., Ltd. Radeq Enterprise Co., Ltd.	Annan District, Tainan City Qianzhen District, Kaohsiung City Zhongzheng District, Keelung City Neihu District, Taipei City Tucheng District, New Taipei City Sanchong District, New Taipei City Fengshan District, Kaohsiung Gushan District, Kaoshiung Xizhi District, New Taipei City Zhonghe District, New Taipei City Songshan District, Taipei City

~33~

The information on the shares of joint operations held by the Group is compiled as follows:

	December 31, 2023	December 31, 2023
Kuo Yang Intercontinental Project $ 2,208,553 50,997 2,259,550 - $ 2,259,550 $ 1,351,858 - 21,098 286,496 1,659,452 - $ 1,659,452 $ - $ - $ 1,290	Smile Era Project The Green Place Project $ 20,901 $ 862,815 107,438 424,070 128,339 1,286,885 35,113 23,791 $ 163,452 $ 1,310,676 $ - $ - - - - 144,197 7,221 44,615 7,221 188,812 - - $ 7,221 $ 188,812 $ 153,541 $ 462,140 $ 115,742 $ 343,612 $ 11,541 $ 22,351 December 31, 2022		Other construction projects
			$ 7,076,503 971,023
			8,047,526
			18,642
			$ 8,066,168
			$ 4,285,319 - 740,901 78,353
			5,104,573
			430
			$ 5,105,003
			$ 20,194
			$ 17,973
			$ 6,315

Kuo Yang Intercontinental Project $ 1,913,082 47,661 1,960,743 99 $ 1,960,842 $ 1,305,890 - - 84,624 1,390,514 - $ 1,390,514 $ 1,429 $ - $ 1,277	Smile Era Project $ 132,793 133,818 266,611 33,283 $ 299,894 $ - - 68,979 36,365 105,344 - $ 105,344 $ 852,754 $ 685,566 $ 53,101	The Green Place Project $ 1,022,622 356,640 1,379,262 23,811 $ 1,403,073 $ 53,430 186,953 11,228 57,835 309,446 - $ 309,446 $ 703,195 $ 598,106 $ 39,603	Other construction projects
			$ 6,406,984 419,079
			6,826,063
			23,803
			$ 6,849,866
			$ 3,958,757 - 98,694 119,196
			4,176,647
			721
			$ 4,177,368
			$ 1,930,017
			$ 1,740,309
			$ 61,838

~34~

(VII) Investments recognized under the equity method

Hanshin Shopping Plaza Co., Ltd. Sweet Me Hot Spring Resort Co., Ltd. Good Fame Limited Chi Yang Construction Co., Ltd.	December 31, 2023 $ 1,187,647 12,571 568 34,516 $ 1,235,302	December 31, 2022 $ 940,755 11,212 1,018 34,438 $ 987,423	Shareholding ratio
			20% 20% 40% 45%

Please refer to Note 13 (2) basic information on the Group's affiliates.
The carrying amounts of the Group's individual insignificant affiliates as of December 31, 2023 and 2022 are shown in the table above, and the results of operations are as follows:

Net (loss) gain from continuing operations for the period Other comprehensive income (net income after tax) Total comprehensive income for the period	2023 $ 237,169 110,758( $ 347,927	2022 $ 194,219 51,995 ) $ 142,224

The Group's aforementioned investment targets have no public quotations on the market. The share of profit/loss on equity-accounted affiliated companies in 2023 and 2022 was evaluated and disclosed based on the audited financial statements of each investee company for the same periods.

(VIII) Property, plant and equipment

January 1 Cost Accumulated depreciation and impairment ( January 1 Addition Transfer Depreciation December 31 December 31 Cost Accumulated depreciation and impairment (			2023		Total $ 121,049 47,318 ) $ 73,731 $ 73,731 10,459 5,699 8,218 ) $ 81,671 $ 132,756 51,085 ) $ 81,671
	Land $ 40,906 4,699 )( $ 36,207 $ 36,207 - - - ( $ 36,207 $ 40,906 4,699 )( $ 36,207	Buildings and structures $ 31,040 13,798 )( $ 17,242 $ 17,242 7,685 5,699 1,149 )( $ 29,477 $ 40,273 10,796 )( $ 29,477	Leasehold improvements $ 36,332 18,116 )( $ 18,216 $ 18,216 - - 6,089 )( $ 12,127 $ 36,332 24,205 )( $ 12,127	Other $ 12,771 10,705 )( $ 2,066 $ 2,066 2,774 - 980 )( $ 3,860 $ 15,245 11,385 )( $ 3,860

~35~

January 1 Cost Accumulated depreciation and impairment ( January 1 Addition Depreciation December 31 December 31 Cost Accumulated depreciation and impairment (			2022
	Land $ 40,906 4,699 )( $ 36,207 $ 36,207 - - ( $ 36,207 $ 40,906 4,699 )( $ 36,207	Buildings and structures $ 31,040 13,228 )( $ 17,812 $ 17,812 - 570 )( $ 17,242 $ 31,040 13,798 )( $ 17,242

Please refer to Note 8 for detailed information on the Group's use of property, plant and equipment as collateral.

(IX) Lease transaction - lessee

The assets leased by the Group include buildings and office equipment and the lease term is generally between 1 and 6 years. The lease contracts are negotiated individually and contain various terms and conditions without other restrictions except for the leased assets restricted to pledge to others.
The information of the carrying amount of the right-of-use assets and the recognition of depreciation expense are as follows:

depreciation expense are as follows:
January 1, 2023 Cost Accumulated depreciation ( January 1 New addition/lease modification Depreciation ( December 31 December 31 Cost Accumulated depreciation (		2023	Total $ 125,118 85,065 ) $ 40,053 $ 40,053 9,867 22,158 ) $ 27,762 $ 134,985 107,223 ) $ 27,762
	Real estate rental and leasing $ 125,118 85,065 ) $ 40,053 $ 40,053 7,728 21,920 )( $ 25,861 $ 132,846 106,985 )( $ 25,861	Transportation equipment $ - - ( $ - $ - 2,139 238) ( $ 1,901 $ 2,139 238) ( $ 1,901

~36~

January 1, 2022 Cost Accumulated depreciation ( January 1 New addition/lease modification Depreciation ( December 31 December 31 Cost Accumulated depreciation (		2022	Total $ 125,118 63,706 ) $ 61,412 $ 61,412 - 21,359 ) $ 40,053 $ 125,118 85,065 ) $ 40,053
	Real estate rental and leasing $ 125,118 63,706 ) $ 61,412 $ 61,412 - 21,359 ) $ 40,053 $ 125,118 85,065 ) $ 40,053	Transportation equipment $ - - ( $ - $ - - - ( $ - $ - - ( $ -

The information on the lease contract affecting profit or loss is as follows:

Items affecting current profit or loss Interest expense from lease liabilities Rent expense of short-term leases Income from lease of right-of- use assets	2023 $ 689 10,095 -	2022 $ 1,136 9,452 269

The cash flows used in the lease payments of the Group in 2023 and 2022 amounted to $33,162 and $33,130, respectively.

~37~

(X) Investment properties

Investment properties
January 1 Cost Accumulated depreciation and impairment ( January 1 Depreciation December 31 December 31 Cost Accumulated depreciation and impairment ( January 1 Cost Accumulated depreciation and impairment ( January 1 Depreciation December 31 December 31 Cost Accumulated depreciation and impairment (		2023	Total $ 310,555 57,914 ) $ 252,641 $ 252,641 1,387 ) $ 251,254 $ 310,555 59,301 ) $ 251,254 Total $ 310,555 56,527 ) $ 254,028 $ 254,028 1,387 ) $ 252,641 $ 310,555 57,914 ) $ 252,641
	Land $ 255,631 28,643 )( $ 226,988 $ 226,988 - ( $ 226,988 $ 255,631 28,643 )( $ 226,988	Buildings and structures $ 54,924 29,271) ( $ 25,653 $ 25,653 1,387) ( $ 24,266 $ 54,924 30,658) ( $ 24,266 2022
	Land $ 255,631 28,643 )( $ 226,988 $ 226,988 - ( $ 226,988 $ 255,631 28,643 )( $ 226,988	Buildings and structures $ 54,924 27,884) ( $ 27,040 $ 27,040 1,387) ( $ 25,653 $ 54,924 29,271) ( $ 25,653

The Company's subsidiary Shang Yang International Asset Management Co., Ltd. purchased land and ancillary buildings on land with the plot number 3961 on Dongzhu Section, Fuli Township, Hualien County. The land is a site designated for forestry in a slopeland conservation area. The Company registered the aforementioned land and ancillary buildings under the name of Ms. Lin and signed a trust contract to ensure security.

~38~

Rent income and direct operating expenses from investment properties:

Rent income from investment properties Direct operating expenses incurred by investment properties that generate rent income in the current period ( Direct operating expenses incurred by investment properties that did not generate rent income in the current period (	2023 2022 $ 3,555 $ 2,948 $ 1,626) ($ 1,632 ) $ 244 )( $ 244)

The fair value of the investment properties held by the Group as of December 31, 2023 and 2022 was $432,193 and $427,650, respectively. They were determined based on the appraisal report prepared by external appraisal experts and comparisons with recent transaction prices of similar targets in the area of the investment properties. The fair value is determined based on property rights, regional factors, individual factors, current conditions of the real estate market, and the subject of the survey, and is evaluated based on the comparison approach and the income approach, which are level 2 and level 3 fair values, respectively.
Please refer to Note 8 for detailed information on the Group's use of investment properties as collateral.

(XI) Short-term borrowings

as collateral. rt-term borrowings
Type of borrowings Bank borrowings Secured loans Credit loans Type of borrowings Bank borrowings Secured loans Credit loans	December 31, 2023 $ 6,494,027 111,300 $ 6,605,327 December 31, 2022 $ 5,465,517 - $ 5,465,517	Interest rate range 2.35%~2.76% 2.69% Interest rate range 2.29%~2.89% -	Collateral
			Please refer to Note 8 None Collateral
			Please refer to Note 8 None

(XII) Short-term notes and bills payable

Commercial papers payable Minus: Discounted short-term notes and bills payable Net amount Interest rate range	December 31, 2023 $ - - ( $ - $ -	December 31, 2022 $ 528,500 828 ) $ 527,672 1.30%~1.66%

~39~

(XIII) Pension

Effective July 1, 2005, the Company and domestic subsidiaries have established a defined contribution pension plan (New Plan) under the Labor Pension Act, covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance for employees who opt for the pension system in the "Labor Pension Act". The contribution plan accrues dividends from an employee’s individual account and is paid monthly or in lump sum upon retirement of an employee. The pension costs recognized by the Group in accordance with the above pension plan were $3,874 and $3,482 in 2023 and 2022.

(XIV) Share capital

As at December 31, 2023 and 2022, the Company's authorized capital was $7,000,000 and the paid-in capital was both $3,800,000. The par value per share is $10. The payment for all issued shares of the Company has been collected. The beginning and the ending of the Company's ordinary shares outstanding in 2023 and 2022 were both 380,000 thousand shares.

(XV) Capital surplus

Capital surplus
Item Paid-in capital in excess of par value of common stock Changes in subsidiary's equity Gain on disposal of assets Donations Changes in net value of equity of affiliates and joint ventures recognized under the equity method	December 31, 2023 $ 596,116 1,724 3,323 17,652 8,868 $ 627,683	December 31, 2022
		$ 596,116 1,724 3,323 17,652 8,868
		$ 627,683

According to the Company Act, capital surplus can only be used to offset losses. However, capital surplus arising from shares issued at premium (including the issuance of common shares at premium, capital stock premiums as a result of stock issuance due to a merger, and treasury stock transactions) and donations received may be used, in part or in whole, for the distribution of new shares or cash based on the shareholders' original shareholding ratio in accordance with a resolution of the shareholders' meeting when the Company does not have deficits. The Company may use capital surplus to offset losses only when the legal reserve cannot fully cover capital losses. The capital surplus recognized as long-term equity investments under the equity method cannot not be used for any purpose.

(XVI) Retained earnings

According to the earnings distribution policy in the Articles of Incorporation of the Company, in the event of surplus earnings after closing of annual accounts, due taxes shall be paid in accordance with the law, and losses incurred in previous years shall be compensated. Upon completion of the preceding actions, 10% of the remainder surplus shall

~40~

be allocated as legal reserve. However, in the event that the accumulated legal reserve is equivalent to or exceeds the Company's total paid-in capital, such allocation may be exempted. In addition, the Board of Directors may, after allocating or reversing special reserve pursuant to the laws or regulations of the competent authority, retain parts of the earnings and prepare an earnings distribution proposal along with undistributed earnings at the beginning of the period. Where the Company intends to distribute earnings by issuing new shares, it shall file a proposal to the shareholders' meeting and obtain approval in a resolution before the distribution. Where dividends are distributed in cash, the Board of Directors shall be authorized to determine such distribution by a resolution adopted by a majority vote at a meeting attended by over two thirds of the Directors and it shall be reported at the shareholders' meeting.

The shareholders' meeting approved the amendment of the Articles of Incorporation in a resolution on Friday, June 17, 2022. According to the Company's earnings distribution policy in the Articles of Incorporation, the Company has deleted the Article stating that it may proceed with the distribution of earnings of making up for losses at the end of each quarter in accordance with the Company Act.
The legal reserve may only be used for offsetting deficits and the distribution of new shares or cash based on the shareholders' original shareholding ratio. However, when new shares or cash dividends are distributed, the distribution shall be restricted to the legal reserve in excess of 25% of the paid-in capital.
When the Company distributes earnings, it shall first appropriate funds for the special reserve from the balance of other equities of borrowers as of the balance sheet date of the current year in accordance with laws and regulations. Once the balance of other equities of borrowers has been reversed, the reversed amount may be calculated as distributable earnings.
The Company's dividend policy is set up in accordance with the Company Act and the Articles of Incorporation and determined by the Company's financial structure, earnings, and long-term business plans to meet the development and transformation needs. The ratio of stock dividends to cash dividends shall be determined each year based on the requirements for working capital, provided that the cash dividends shall not be less than 20%. When the paid-in capital has reached NT$10 billion, the cash dividends shall not be less than 50%.
The appropriations of 2022 and 2021 earnings were approved by the shareholders’ meeting on June 13, 2023 and June 17, 2022, respectively. Details are summarized as follows:

Legal reserve Special reserve Cash dividends	2022 Amount Dividends per share (NT$) $ 40,839 $ - 128,215 - - -	2021	2021
	Amount $ 40,839 128,215 -	Amount $ 125,878 10,017 380,000	Dividends per share (NT$)
			$ - - 1.0

~41~

The 2023 earnings distribution proposal was approved by the Board of Directors on March 13, 2024, and details are as follows:

Legal reserve Reversal of special reserve Cash dividends	2023	2023
	Amount $ 29,933 138,232 152,000	Dividends per share (NT$)
		$ - - 0.4

Please refer to Note 6 (24) for more information on employees' remuneration and Directors' remuneration.

(XVII) Other equity interests

January 1 Valuation adjustment Valuation adjustment transferred to retained earnings Currency translation differences December 31 January 1 Valuation adjustment Valuation adjustment transferred to retained earnings Currency translation differences December 31		2023	Total $ 138,232 ) 285,073 5,645 47 $ 152,533 Total $ 10,017 ) 206,045 ) 77,538 292 $ 138,232)
	Exchange differences on translation of foreign financial statements $ 22,326 ( - - 47 $ 22,373	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income $ 160,558 ) ( 285,073 5,645 - $ 130,160 2022
	Exchange differences on translation of foreign financial statements $ 22,034 ( - ( - 292 $ 22,326(	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income $ 32,051 ) ( 206,045 ) ( 77,538 - $ 160,558)) (

~42~

(XVIII) Operating revenue

I)Operating revenue
Revenue from contracts with customers Rental income	2023 $ 725,478 9,981 $ 735,459	2022
		$ 3,944,099 10,417
		$ 3,954,516

1. Detailed items of revenues from contracts with customers

The Group’s revenue is derived from the transfer of product and services at certain points in time or gradual transfer as time progresses. Revenue by operation is further divided as follows:

follows:
2023 Revenue recognition time - Revenue recognized at a certain point in time - Revenue transferred gradually as time progresses 2022 Revenue recognition time - Revenue recognized at a certain point in time - Revenue transferred gradually as time progresses	Sales of construction projects $ 673,910 - $ 673,910 Sales of construction projects $ 3,932,431 - $ 3,932,431	Other $ - 51,568 $ 51,568 Other $ - 11,668 $ 11,668	Total
			$ 673,910 51,568
			$ 725,478
			Total
			$ 3,932,431 11,668
			$ 3,944,099

The total amounts in the apportionment of the transactions and estimated year of revenue recognition for the Group's outstanding contract performance obligations for sales contracts signed as of December 31, 2023 are as follows:

signed as of December 31, 2023 are as follows:
Estimated year of revenue recognition 2024~2027	Amount in signed contracts
	$ 6,780,303

3. Contract assets and contract liabilities

The Group recognizes revenues generated by customer contracts, and the following contract assets and contract liabilities are as follows:

Contract assets - current: Labor services services Contract liabilities - current: - Advance receipt of land payment - Advance receipt of property payment	December 31, 2023 $ 39,006 $ 710,261 380,632 $ 1,090,893	December 31, 2022 $ 18,434 $ 125,188 83,223 $ 208,411	January 1, 2022
			$ -
			$ 552,437 446,010
			$ 998,447

~43~

(1) The Group has included customers' advance payments in the contracts for pre-sales houses, and the period between the advanced payment and the transfer of the control of the product is longer than one year. The Group recognizes contract liabilities related to the pre-sales house contracts in accordance with IFRS 15.
(2) Opening contract liabilities recognized as income in the current period

Opening balance of contract liabilities recognized as income in the current period Construction project sales contract	2023 $ 82,250	2022 $ 972,873

(3) Contract modifications and variable consideration In 2023 and 2022, as the contract price of the certain project development contracts for the operation and management service revenue was revised according to the partners' supplementary agreement, and the Group's contract obligations are labor services that cannot be separated, the Company has considered the most appropriate estimate and recognized an catch-up adjustment to revenue of $0 and $1,731, respectively, based on the amended contracts.

(XIX) Interest income

Interest from bank deposits Other interest income Other income Dividend income Other Other profits and losses Net gains (losses) on financial assets at fair value through profit or loss Other profits and losses ( ( )Finance costs Interest expenses: Bank borrowings Interest on short-term notes and bills payable Other Minus: Amount eligible for asset capitalization ( Finance costs	2023 2022 $ 13,020 $ 4,040 459 2,016 $ 13,479 $ 6,056 2023 2022 $ 37,127 $ 75,629 64,055 38,084 $ 101,182 $ 113,713 2023 2022 $ 401 ( $ 3,460 ) 9,502) ( 5,827 ) $ 9,101)( $ 9,287 ) 2023 2022 $ 153,613 $ 95,877 8,074 16,400 4,394 7,608 166,081 119,885 146,328) ( 89,366 ) $ 19,753 $ 30,519

(XX) Other income

(XXI) Other profits and losses

(XXII) Finance costs

~44~

(XXIII) Additional information on expenses

Construction cost in this period Employee benefit expenses Depreciation Amortization of intangible assets Tax expenses Professional service expenses Advertising expenses Commission expenses Management fees Other expenses Operating costs and expenses	2023 $ 442,765 118,254 31,763 661 15,214 29,402 4,188 22,296 7,839 52,342 $ 724,724	2022 $ 3,168,490 120,505 29,924 542 17,516 42,736 10,116 125,054 34,734 125,682 $ 3,675,299

(XXIV) Employee benefit expenses

Salary expenses Labor and health insurance fees Pension expenses Remuneration for Directors Other personnel expenses	2023 $ 92,074 7,655 3,874 12,879 1,772 $ 118,254	2022 $ 90,462 7,394 3,482 15,158 4,009 $ 120,505

According to the Articles of Incorporation, if the Company has earnings in the current year, the Company's remuneration for employees and Directors shall be 0.5% to 5% and no more than 5% of the earnings before tax of the year and before deducting remuneration for employees and Directors. However, in the event the Company has sustained cumulative losses, a proportion of profit shall be reserved in advance to make up for losses.
The Company's estimated amounts of employees' remuneration for 2023 and 2022 are $6,809 and $11,201, respectively. The estimated amounts of Directors' remuneration are $6,809 and $11,201, respectively. All amounts are recognized as salary expenses. The estimated amounts of employees' remuneration and Directors' remuneration based on the profitability in 2023 are 2% and 2%, respectively. The preceding employees' remuneration will be distributed in cash.

Employees' remuneration and Directors' remuneration in the Board of Directors' resolution for 2022 were equal to the amount recognized in the financial statements for 2022.

Information on employees’ remuneration and directors’ remuneration of the Company as resolved by the Board of Directors is posted in the "Market Observation Post System".

~45~

(XXV) Income tax

1. Income tax expenses

2023
2022
Current income tax
Income tax arising in the current
period
$ 6,498
$ 15,991
Surtax on undistributed earnings
11,967
56,144
Land value increment tax
included in current income
3,716
22,779
Adjustments in respect of prior
years
6,324(
27,740 )
Total current income tax
28,505
67,174
Deferred income tax
Origination and reversal
of temporary
differences
330
307
Income tax expenses
$ 28,835
$ 67,481
Relationship between income tax expenses and accounting profits
2023
2022
Income tax from net profit before tax
calculated at the statutory tax rate
$ 66,742
$ 110,680
Surtax on undistributed earnings
11,967
56,144
Income to be excluded based on tax
laws
3,304
15,353
Tax-exempt income based on tax laws
(
63,143 ) (
188,677 )
Temporary differences not recognized
in deferred income tax assets
4,616 (
13,272 )
Tax losses not recognized in deferred
income tax assets
(
9 )
91,907
Tax losses in previous years not
recognized in deferred income tax
assets
(
5,012 )
-
Origination and reversal of temporary
differences
330
307
Land value increment tax included in
income in the current period
3,716
22,779
Adjustments in respect of prior years
6,324(
27,740 )
Income tax expenses
$ 28,835
$ 67,481

~46~

3. The deferred income tax assets or liabilities from temporary differences are as follows:

Deferred income tax		2023
	January 1 Recognized in profit and loss Recognized in other comprehensive income $ 439 ( $ 330 ) $ - - - - $ 439 ( $ 330 ) $ - 2022		December 31 $ 109 - $ 109
assets Unrealized expenses Prepaid land value increment tax Deferred income tax
	January1 Recognized in profit andloss $ 746 ( $ 307 ) 12,991( 12,991 ) $ 13,737 ( $ 13,298 )	Recognized in other comprehensive income $ - - $ -	December31 $ 439 - $ 439
assets Unrealized expenses Prepaid land value increment tax

The effective periods of unused tax losses and related amounts of unrecognized deferred income tax assets are as follows:

	December 31, 2023	December 31, 2023	December 31, 2023
Year occurred 2022	Reported amount/approve d amount Amount not yet deducted Unrecognized deferred income tax assets 452,560 427,342 427,342 December 31, 2022			Final deductible year
				2032
Year occurred 2022	Reported amount/approve d amount 452,560	Amount not yet deducted 452,560	Unrecognized deferred income tax assets 452,560	Final deductible year
				2032

The Company's profit-seeking enterprise income tax returns have been approved by the tax authorities up to 2021.

~47~

(XXVI) EPS

	2023
Amount after tax $ 304,198 - $ 304,198	Number of ordinary shares outstanding (shares in thousands) 380,000 406 380,406 2022	EPS (NT$)
		$ 0.80
		$ 0.80

Amount after tax $ 485,928 - $ 485,928	Number of ordinary shares outstanding (shares in thousands) 380,000 680 380,680	EPS (NT$)
		$ 1.28
		$ 1.28

~48~

(XXVII) Changes in liabilities from financing activities

Short-term borrowings January 1 $ 5,465,517 Increase in current period 2,372,380 Decrease in current period ( 1,232,570)( Interest expenses paid (Note) - ( Other non-cash changes - December 31 $ 6,605,327 Short-term borrowings January 1 $ 4,671,351 Increase in current period 4,259,650 Decrease in current period ( 3,465,484)( Interest expenses paid (Note) - ( Other non-cash changes - December 31 $ 5,465,517			2023		Total $ 6,039,359 3,243,939 2,655,298 ) 3,435 ) 6,402 $ 6,630,967 Total $ 5,879,006 7,421,921 7,261,428 ) 6,156 ) 6,016 $ 6,039,359
		Short-term notes and bills payable $ 527,672 871,555 1,400,055 ) ( 2,746 ) ( 3,574 $ -	Lease liabilities $ 43,858 - 22,378 ) ( 689 ) 2,828 $ 23,619 2022	Deposits received $ 2,312 4 295 ) ( - ( - $ 2,021
		Short-term notes and bills payable $ 1,138,402 3,161,310 3,771,900 ) ( 5,020 ) ( 4,880 $ 527,672	Lease liabilities $ 66,400 - 22,542 ) ( 1,136 ) 1,136 $ 43,858	Deposits received $ 2,853 961 1,502 ) ( - ( - $ 2,312

Note: Recorded Cash flows from operating activities.

VII. Related-party transactions

(I) Name and relationship of related parties

Names of related parties Hanshin Asset Management Co., Ltd. (Hanshin Asset Management) Hanshin Department Store Co., Ltd. (Hanshin Department Store) Chi Hsuan Development Co., Ltd. (Chi Hsuan Development) Grand Hi-Lai Hotel Co., Ltd. (Grand Hi-Lai Hotel) Hi-Lai Foods Co., Ltd. (Hi-Lai Foods) Wei Li International Development Co., Ltd. (Wei Li) Hanshin Shopping Plaza Co., Ltd. (Hanshin Shopping Plaza) Grand Hi-Lai International Property Management Consulting Co., Ltd. (Grand Hi-Lai International Property) Kaohsiungaquas Co., Ltd. (AQUAS) Ascent Development Co., Ltd. (Ascent) Han Lin Development Co., Ltd. (Han Lin Development) Pao Teng Landscape Co., Ltd. 7 individuals including Shao-Ling Peng

Relationship with the Company Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party

Other related party Other related party Other related party Other related party Other related party

~49~

(II) Major transactions with related parties

Operating revenue

1.	Operating revenue
2. 3. 4. 5.	Income from management services Other related party - Wei Li Engineering revenue Other related party Rental income Other related party Promotion expenses Other related party Administrative expenses Other related party - Hi-Lai Foods Other related party - Hanshin Asset Management Other related party - AQUAS Other related party - Others Expenses for investments in construction	2023 $ 22,989 2023 $ 9,098 2023 $ 1,793 2023 $ 1,188 2023 $ 5,435 6,846 2,355 2,996 $ 17,632 2023 $ 4,863 December 31, 2023 $ 2,687	2022 $ - 2022 $ - 2022 $ 2,076 2022 $ 1,175 2022 $ 6,780 6,846 3,931 2,238 $ 19,795 2022 $ 6,887 December 31, 2022 $ 638
	Other related party Accounts receivable Other related party - Others

Acquisition of financial assets
(1) No financial assets were obtained from related parties from January 1 to December 31, 2023.
(2) The Group participated in the cash capital increase of related parties in 2022 and completed the registration of changes on June 10, 2022, and January 10, 2023, respectively. The information on the subscriptions of the Group is as follows:

Account Number of Object of transaction Acquisition shares price traded Non-current financial assets at 3,970 fair value through other thousand Grand Hi-Lai Hotel - comprehensive income shares stocks $ 59,548

~50~

7. Other credit and debt transactions

(1) Refundable deposits

8.	Other related party - Wei Li Other related party (2) Deposits received Other related party Related party financing Other related party - Hanshin Shopping Plaza	December 31, 2023 $ 23,262 2,191 $ 25,453 December 31, 2023 $ 458 December 31, 2023 $ -	December 31, 2022 $ 23,262 1,336 $ 24,598 December 31, 2022 $ 450 December 31, 2022 $ 250,432

The accounts payable - related party on December 31, 2022 was attributable to the joint operations construction project being developed by the Group having taken out loan from other related party - Hanshin Shopping Plaza Co., Ltd.. Total loan was $500,000, and the Group recognized 50% of which based on the investment ratio. The aforesaid amount is the principal and interests payable.

9. Endorsements and guarantees

Other related party - Wei Li - Chi Hsuan	December 31, 2023 $ 7,057,922 93,000 $ 7,150,922	December 31, 2022 $ 8,473,922 93,000 $ 8,566,922

10. Other

(1) The Company signed a joint investment and development contract with Wei Li International Development Co., Ltd., Han Lin Development Co., Ltd., Grand Hi-Lai Hotel Co., Ltd., and Hanshin Shopping Plaza Co., Ltd. for 29 plots of land including Plot 895 on Jiangbei Section in Xizhi District, New Taipei City with a total area of 5,551.35 pings on Monday, July 4, 2022. According to the contract, the Company serves as the manager of the Project. The investment ratio is 50% for the Company, 20% for Wei Li International Development Co., Ltd., 10% for Han Lin Development Co., Ltd., 10% for Grand Hi-Lai Hotel Co., Ltd., and 10% for Hanshin Department Store.
(2) The Company signed a joint investment and development contract with Wei Li International Development Co., Ltd., Goldshare Investment Corporation, Hanshin Asset Management Co., Ltd., Hanshin Shopping Plaza Co., Ltd., Hsueh-Yong Ltd., and Heng-Rui Development Co., Ltd. for 3 plots of land including Plot 194, 196, and 197 on Longzhong Section, Gushan District, Kaohsiung City with a total area of 4,905.25 pings on Monday, March 21, 2022. According to the contract, the Company serves as the manager of the Project. The investment ratio is 50% for the Company, 10% for Wei Li International Development Co., Ltd., 5% for Goldshare Investment

~51~

Corporation, 15% for Hanshin Asset Management Co., Ltd., 10% for Hanshin Shopping Plaza Co., Ltd, 5% for Hsueh-Yong Ltd., and 5% for Heng-Rui Development Co., Ltd.

(3) The Company signed a joint investment and development contract with Wei Li International Development Co., Ltd., Ascent Development Co., Ltd., Hanshin Asset Management Co., Ltd., and Grand Hi-Lai Hotel Co., Ltd. for 9 plots of land including Plot 28 on Zhongxing Section, Sanchong District, New Taipei City with a total area of 1,828.28 pings on July 15, 2021. According to the contract, the Company serves as the manager of the Project. The investment ratio is 50% for the Company, 10% for Wei Li International Development Co., Ltd., 15% for Ascent Development Co., Ltd., 10% for Hanshin Asset Management Co., Ltd., and 15% for Grand Hi-Lai Hotel Co., Ltd.
(4) The Company signed a joint investment and development contract with Wei Li International Development Co., Ltd., Ascent Development Co., Ltd., Hanshin Asset Management Co., Ltd., Li Yang Agricultural Technology Co., Ltd., and Grand Hi-Lai Hotel Co., Ltd. for 4 plots of land including plot 83-1 on Jiuzhong Section, Neihu District, Taipei City with a total area of 2,127.33 pings on November 23, 2020. According to the contract, the Company serves as the manager of the Project. The investment ratio is 50% for the Company and 10% for each of the other 5 companies.
(5) The Company signed a joint investment and development contract with Wei Li International Development Co., Ltd., Ascent Development Co., Ltd., Hanshin Asset Management Co., Ltd., Li Yang Agricultural Technology Co., Ltd., and Grand Hi-Lai Hotel Co., Ltd. for 19 plots of land including Plot 365 on Zhongyi Section, Tucheng District, New Taipei City with a total area of 5,344.27 pings on January 28, 2021. According to the contract, the Company serves as the manager of the Project. The investment ratio is 50% for the Company and 10% for each of the other 5 companies. "Grand Hi-Lai Hotel Co., Ltd." later withdrew from the project on June 29, 2021. The shares it previously held were transferred to Hanshin Asset Management Co., Ltd. The investment ratio change became effective on July 1, 2021.
(6) The Company signed a joint investment and development agreement with "Wei Li" land including plot 24 on Heguan Section, Annan District, Tainan City with a total area of 77,479.53 square meters on June 29, 2012 for joint construction of residential buildings. The parties later signed a letter of appointment for operating management which appointed the Company to take charge of overall development plans, building planning, and construction and sales of residential buildings. "Wei Li" represented the Project externally and executed the Project based on the contract signed with Taiwan Sugar Corporation. Wei Li became the main operator of the Project as well as the company responsible for selling the houses and land (the company issuing the sales invoice) and the company responsible for purchases products or services (the company with input documentary evidence). It is also responsible for the settlement of the project. The parties later signed the "Joint Development Supplementary Agreement" on March 15, 2016 for changing the investment ratio and settlement distribution to 60%, 6%, 1.5%, 4%, 13.5%, 10%, and 5%, respectively for the Company, "Wei Li", "Feminine", "Tsu Yan", "Hanshin Asset Management", "Crowell Development", and

~52~

"Han Lin Development". "Crowell Development" later withdrew from the project on July 15, 2019. "Wei Li" and the co-funders signed the "Joint Development Supplementary Agreement" for changing the investment ratio and settlement distribution to 65%, 6%, 1.5%, 4%, 13.5%, and 10%, respectively for the Company, "Wei Li", "Feminine", "Tsu Yan", "Hanshin Asset Management", and "Han Lin Development".

(7) The Company signed a joint investment and development contract with Chi Hsuan Development Co., Ltd., and Tsang Shan Development Co., Ltd. for 14 plots of land including Plot 1381-21 in Zhongzheng District, Keelung City with a total area of 12,520.95 pings, and 1 building No. 7256 in Tiaohe Section, Zhongzheng District, Keelung City with an area of 26.77 pings. According to the contract, the Company serves as the manager of the Project. The investment ratio is 55% for the Company, 30% for Chi Hsuan Development Co., Ltd., and 15% for Tsang Shan Development Co., Ltd.
(8) The Company's subsidiary Shen Yang Construction Co., Ltd. signed a joint investment and development contract with Wei Li International Development Co., Ltd., Han Lin Development Co., Ltd., and Ascent Development Co. Ltd., for 20 plots of land including Plot 258 on Zhongyuan Section in Zhonghe District, New Taipei City with a total area of 2,259.85 pings on Thursday, August 11, 2022. According to the contract, the Company serves as the manager of the Project. The investment ratio is 40% for Shen Yang Construction, 10% for Wei Li International Development Co., Ltd., 10% for Han Lin Development Co., Ltd., and 10% for Ascent Development Co., Ltd.
(III) Key management compensation

The Group's remuneration for Directors and key management:

Short-term employee benefits	2023 $ 27,459	2022
		$ 32,471

The remuneration to Directors and other key management is determined by the Remuneration Committee based on personal performance and market trends and submitted to the Board of Directors for resolution.

VIII. Pledged assets

The assets provided by the Group as collateral are as follows:

Assets Inventories Other financial assets - current (restricted deposits) Property, plant and equipment Investment properties Other Financial Assets - Non Current	Book value December 31, 2023 December 31, 2022 $ 10,832,974 $ 9,660,712 333,559 37,347 30,314 17,768 41,045 41,614 99,335 89,455 $ 11,337,227 $ 9,846,896	Purpose of collateral
	December 31, 2023 $ 10,832,974 333,559 30,314 41,045 99,335 $ 11,337,227
		Short-term borrowings and commercial papers Trusts and reserve accounts Commercial papers Commercial papers Performance guarantee

IX. Significant contingent liabilities and unrecognized contractual commitments

As of December 31, 2023, the total construction contract price between the Group and non-related parties was $4,450,368 and the amount that has yet not been included in the estimation was $3,205,989.

~53~

X. Significant disaster loss

None.

XI. Significant events after the balance sheet date

The appropriations of 2023 earnings were approved by the Board of Directors' meeting on March 13, 2024. Refer to Note 6 (16) for details.

XII. Other

(I) Capital management

The Group implements capital management to ensure sustainable development of the companies of the Group maximize the benefit for its shareholders by optimizing debts and equity. The Group's capital structure consists of equity attributable to owners of the Company (i.e., share capital, capital surplus, retained earnings, and other equity interests). In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares, or sell assets to reduce debts. The Group adjusts loan amounts based on the construction progress and the funding required for operations.

(II) Financial instruments

1. Financial instruments by category

Financial assets Current financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Financial assets at amortized cost Cash and cash equivalents Notes receivable, net Accounts receivable, net Other receivables Other Financial Assets - Current Refundable deposits Other Financial Assets - Non Current Financial liabilities Financial liabilities at amortized cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables - other Deposits received Lease liabilities	December 31, 2023 $ 17,365 310,777 566,373 $ 894,515 $ 2,117,455 116,389 53,882 15,394 333,559 109,826 99,335 $ 2,845,840 December 31, 2023 $ 6,605,327 - 244,314 127,524 133,910 2,021 $ 7,113,096 $ 23,619	December 31, 2022 $ 16,964 433,514 504,966 $ 955,444 $ 2,221,552 79,058 22,130 21,248 37,347 104,859 89,455 $ 2,575,649 December 31, 2022 $ 5,465,517 527,672 73,925 224,527 471,703 2,312 $ 6,765,656 $ 43,858

~54~

2. Risk management policy

The objective of the Group's financial risk management is to manage the market risks, credit risks, and liquidity risks related to operating activities. The Group conducts the identification, valuation, and management of the aforementioned risks based on its policies and risk preferences.

The Group has set up appropriate policies, procedures, and internal control for the aforementioned financial risk management based on relevant standards. Significant financing activities must be reviewed by the Board of Directors in accordance with relevant standards and the internal control system. During implementations of financial management activities, the Group shall strictly abide by the regulations established for financial risk management.

3. Significant financial risks and degree of financial risks

(1) Market risks

Foreign exchange risks

The Group's main operating activities are in Taiwan and the main currency is the NTD. The impact of exchange rate fluctuations is minimal and we therefore expect no significant exchange rate risks.

Price risks

A. The Group's equity instruments exposed to price risks are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage the price risks of investments in equity instruments, the Group diversifies its investment portfolio in accordance with the limits set by the Group.
B. The Group's main investments consist of equity instruments issued by domestic companies and open-ended funds. The prices of such equity instruments are affected by the uncertainty of the future value of underlying investments. If the price of such equity instruments rises or falls by 10% and all other factors remain constant, the net profit after tax as a result of the profit or loss in the equity tools measured at fair value in 2023 and 2022 will increase or decrease by $1,736 and $1,696, respectively. The gain or loss on equity investments classified as equity instruments in other comprehensive income measured at fair value through profit and loss will increase or decrease by $31,078 and $43,351, respectively.

Interest rate risk for cash flow and fair value

A. The Group's interest rate risks mainly arise from short-term borrowings and shortterm notes and bills payable. Borrowings at floating rates expose the Group to cash flow interest rate risks, which are partially offset by cash held at floating rates. Borrowings at fixed rates expose the Group to fair value interest rate risks. In 2023 and 2022, the Group's loans calculated based on floating interest rates were calculated in NTD.
B. The Group simulates various plans and analyzes interest rate risks, including considering plans for refinancing or renewal of existing positions and other available financing plans to calculate the impact of specific changes interest rates on profit or loss.
C. If all other factors remain constant, the maximum impact of a 1% change in interest rates on financial costs in 2023 and 2022 would result in an increase or decrease of $66,053 and $59,932, respectively.

~55~

(2) Credit risks
A. The Group's credit risks refer to the risks of financial loss to the Group arising from default by the clients or counterparties of financial instruments. The risks are mainly derived from the counterparty's failure to settle the accounts receivable based on payment collection terms.
B. The Group establishes credit risk management from the perspective of the Group. The Company has set a minimum independent credit rating of "A" for banks and financial institutions before they can be accepted as transaction counterparties.
C. The Group's main business activities are the lease and sales of residential buildings, industrial plants, and commercial buildings. Revenue from the sale of properties is recognized upon the full payment of the contract price, the completion of the transfer of ownership, and the actual delivery of the properties. Therefore, the amount of accounts receivable arising from the sale of properties is considered insignificant and the possibility of non-recovery is low. The Group manages receivables in special transactions on an individual basis and tracks such receivables on a regular basis. The amount of the Group's assessed credit impairment losses as of December 31, 2023 and 2022 was insignificant.
D. As of December 31, 2023 and 2022, there were no debts with recourse that were written off.
(3) Liquidity risks
A. Cash flow forecasting is performed by each operating department within the Group and aggregated by the Group treasury. The Group's Finance Department monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities.
B. The Group's non-derivative financial liabilities are analyzed based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are analyzed based on the fair value on the balance sheet date. The amount of undiscounted contract cash flows of other payables is approximately equal to their carrying amounts and is due within one year. The amount of undiscounted contractual cash flows for other financial liabilities is described in the following table:

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2023 Within 1 year Short-term borrowings $ 828,187 Accounts payable 53,863 Notes payable 26,939 Lease liabilities 22,669 Non-derivative financial liabilities: December 31, 2022 Within 1 year Short-term borrowings $ 639,211 Short-term notes and bills payable 528,500 Accounts payable 209,057 Lease liabilities 22,817	1 to 3 years $ 4,708,328 43,683 217,375 1,253 1 to 3 years $ 241,166 - - 21,917	3 years or above
		$ 1,490,944 29,978 - - 3 years or above
December 31, 2022 Short-term borrowings Short-term notes and bills payable Accounts payable Lease liabilities
		$ 5,205,800 - 15,470 -

~56~

     - C. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date will be significantly earlier, nor expect the actual cash flow amount would be significantly different.

(III) Fair value information
The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
- Level 1: Quotation (unadjusted) of the same asset or liability from an active market can be obtained on the measurement date. An active market refers to a market in which transactions in assets or liabilities occur with sufficient frequency and volume to provide pricing information on a continuous basis.
- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
- Level 3: Unobservable inputs for the assets or liabilities.
Please refer to Note 6 (10) for information on the fair value of investment properties carried at cost.
The carrying amount of financial instruments not carried at fair value, including cash and cash equivalents, notes and accounts receivable, other receivables, other financial assets - current, refundable deposits, short-term borrowings, short-term notes payable, notes payable, accounts payable, other payables, and deposit received, are reasonable approximations of the fair value.
The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

(1) The information on the Group's classification of assets by nature is as follows:

December 31, 2023 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income	Level 1 $ 17,365 $ 310,777 $ -	Level 2 $ - $ - $ -	Level 3 $ - $ - $ 566,373	Total $ 17,365 $ 310,777 $ 566,373

~57~

December 31, 2022 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income	Level 1 $ 16,964 $ 433,514 $ -	Level 2 $ - $ - $ -	Level3 $ - $ - $ 504,966	Total $ 16,964 $ 433,514 $ 504,966

(2) The methods and assumptions that the Group used to measure the fair value are as follows:
A. The instruments for which the Group used market quoted prices as their fair values
- (i.e., Level 1) are divided by the characteristics of the instruments as follows:

Listed stocks Open-end funds Market quoted price Closing price Net worth

B. Except for the financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes.
There was no transfer between Level 1 and Level 2 in the Group in 2023 and 2022.
The Level-3 movements for 2023 and 2022 were as follows:

January 1 Acquired in the current period Disposed in the current period Valuation adjustment December 31	2023 $ 504,966 - - 61,407 $ 566,373	2022 $ 426,132 59,548 - 19,286 $ 504,966

An independent appraiser appointed by the Group is in charge of valuation procedures for fair value measurements being categorized within Level 3. The appraiser submits a valuation report, or the Finance Department performs the fair value verification of financial instruments to ensure that the source of data is independent, reliable, and represented as the exercisable price.

~58~

The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Equity instruments: Non-listed stocks Equity instruments: Non-listed stocks	Fair value as of December 31, 2023 $ 517,043 49,330 $ 566,373 Fair value as of December 31, 2022 $ 458,680 46,286 $ 504,966	Valuation technique Comparable public company analysis Net asset value approach Valuation technique Comparable public company analysis Net asset value approach	Significant unobservable input Product of the number of shares multiplied by value Discount for lack of marketability Not applicable Significant unobservable input Product of the number of shares multiplied by value Discount for lack of marketability Not applicable	Range (Weighted average) 0.50~5.49 15.90% ~30.00% Not applicable Range (Weighted average) 0.44~8.06 13.62%~ 30.00% Not applicable	Relationship between inputs and fair value
					The higher the product of the number of shares multiplied by value, the higher the fair value The higher the discount for lack of marketability, the lower the fair value The higher the net asset value, the higher the fair value Relationship between inputs and fair value
					The higher the product of the number of shares multiplied by value, the higher the fair value The higher the discount for lack of marketability, the lower the fair value The higher the net asset value, the higher the fair value

~59~

The Group has carefully assessed the valuation models and inputs used to measure fair value. However, use of different valuation models or inputs may result in different measurement. The following is the effect on other comprehensive income from financial assets categorized within Level 3 if the inputs used in the valuation models have changed:

Financial assets Equity instruments	Input Liquidity	Change ±5%	December 31, 2023 Recognized in other comprehensive income Favorable change Unfavorable change $ 32,825 ( $ 32,825 )	December 31, 2023 Recognized in other comprehensive income Favorable change Unfavorable change $ 32,825 ( $ 32,825 )	December 31, 2022 Recognized in other comprehensive income Favorable change Unfavorable change $ 29,346 ( $ 29,346 )
			Favorable change $ 32,825 (		Favorable change $ 29,346 (
				$ 32,825 )

XIII. Supplementary disclosures

(I) Significant transactions information

Loans to others: None.
Provision of endorsements and guarantees to others: Please refer to Table 1.
Holding of marketable securities at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures): Please refer to Table 2.
Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of paid-in capital or more: None.
Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: Table 3.
Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Table 4.
Purchase or sale of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: None.
Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.
Trading in derivatives: None.
The business relationship and significant transactions between the parent company and its subsidiaries: Please refer to Table 5.

(II) Information on investees

Names, locations and other information of investee companies (excluding the investees in Mainland China): Please refer to Table 6.

(III) Information on investments in Mainland China

Basic information: Please refer to Table 7.
Significant transactions with the investees in Mainland China either directly or indirectly through other companies in the third areas: Please refer to Table 7.

~60~

(IV) Information on major shareholders

Information on major shareholders: Please refer to Table 8.

XIV. Segment information

(I) General information

The Group only engages in business operations in one industry and the Group uses the overall performance evaluation and resource distribution to provide chief operating decision-makers with information on resource distribution and department performance in the financial information of each individual company.

The Company: The Company's main businesses are the construction of public housing and the lease and sales of commercial residential buildings, industrial plants, and commercial buildings.
L1 companies: The main businesses are residential and buildings lease construction and development, public works construction and investment, and real estate rental and leasing.
L2 companies: The main businesses are residential and buildings lease construction and development, public works construction and investment, and real estate rental and leasing.

Other Summary of companies that have not reached the quantitative threshold. companies:

(II) Segment information measurement

The Group's operation decision-makers use the net income after taxes to evaluate the performance of segments. It is also used as the basis for performance evaluation.

(III) Segment information

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

						2023
				L1		L2		Other	Reconciliation
	The Company			companies		companies		companies		and offset	Total
Revenue from
external customers	$	571,021	$	9,098	$	155,915	$	-	( $	575 ) $	735,459
Revenue from inter-
segment sales		-		-		-		-		-	-
Total revenue	$	571,021	$	9,098	$	155,915	$	-	( $	575 ) $	735,459
Segment income
before tax	$	326,814	$	732	$	56,626 (	$	946 )	( $	49,515 ) $	333,711
Depreciation and
amortization	( $	27,811 )	( $	2,198)	( $	2,415)	$	-	$	- ( $	32,424)
Income tax expenses	( $	22,616 )	( $	424)	( $	5,768)(	$	27 )	$	- ( $	28,835)
Income (losses) from
equity investments
under the equity
method	$	290,809	( $	407)	$	-	$	-	( $	53,233 ) $	237,169
Segment assets	$	17,013,389	$	653,312	$	3,156,370	$	301,949	( $	2,576,321 ) $	18,548,699
Segment liabilities	$	6,913,713	$	3,233	$	1,456,836	$	468	( $	30,787 ) $	8,343,463

~61~

2022 The Company L1 companies L2 companies Revenue from external customers $ 3,111,563 $ - $ 854,276 Revenue from inter- segment sales - - - Total revenue $ 3,111,563 $ - $ 854,276 Segment income before tax $ 537,650 ( $ 490)$ 229,476 Depreciation and amortization ( $ 24,995 ) ( $ 2,167)( $ 3,304) Income tax expenses ( $ 51,722 ) $ - ( $ 15,759) Income (losses) from equity investments under the equity method $ 428,955 $ 10 $ - Segment assets $ 15,598,634 $ 649,158 $ 2,745,958 Segment liabilities $ 6,089,057 $ 1,997 $ 1,083,123			2022

(IV) Reconciliation of segment income

The revenue from external parties, segment profit or loss, and total assets provided to the chief operating decision-maker are measured in a manner consistent with the revenue, net income after tax, and total assets in the financial statements. Therefore, no reconciliation is required.

(V) Information by region

The Group's information by region in 2023 and 2022 is as follows:

Taiwan	2023 Revenue Non-current assets $ 735,459 $ 1,159,495	2022	2022
	Revenue $ 735,459	Revenue $ 3,954,516	Non-current assets
			$ 1,146,653

~62~

Kuo Yang Construction Co., Ltd. and Subsidiaries

Provision of endorsements and guarantees to others January 1 to December 31, 2023

				January 1 to December 31, 2023	January 1 to December 31, 2023	January 1 to December 31, 2023	January 1 to December 31, 2023
Table 1 No. (Note1)	Name of company providing endorsement or guarantee Company name	Entity for which the endorsement/guarantee is made		Limit on endorsements/guarantees to a single enterprise (Note 3) Maximum outstanding balance of endorsements/guarantees during the current period (Note4) Ending balance of endorsements/guarantees (Note 5) Actual amount drawn down (Note 6)				Endorsed/Guaranteed amount with property as collateral Cumulative endorsed/guaranteed amount as a percentage of the net value in the most recent financialstatements Maximum endorsed/guaranteed amount (Note 3)		Parent company to subsidiary (Note 7)	Unit: NT$ thousand (Unless specified otherwise) Subsidiary to parent company (Note 7) Endorsements and guarantees for entities in Mainland China (Note 7) Remarks
		Companyname	Relation (Note2)
0 0 0 0 1 1	Kuo Yang Construction Co., Ltd. ″ ″ ″ Shen Yang Construction Co., Ltd. ″	Wei Li International Development Co., Ltd. Tsang Shan Development Co., Ltd. Chi Hsuan Development Co., Ltd. Shen Yang Construction Co., Ltd. Chi Yang Construction Co., Ltd. Tsang Hsin Construction Co., Ltd.	5 5 5 2 2 5	$ 20,199,352 20,199,352 20,199,352 20,199,352 3,311,268 3,311,268	$ 9,431,252 93,000 186,000 529,000 2,282,500 949,450	$ 7,057,922 46,500 93,000 499,000 2,282,500 949,450	$ 6,152,959 46,500 93,000 199,000 111,300 501,000	$ - - - - - -	69.88% $ 40,398,704 0.46% 40,398,704 0.92% 40,398,704 4.94% 40,398,704 137.86% 6,622,536 57.35% 6,622,536	N N N Y N N	N N N N N N	N N N N N N

Note 1: The explanation for filling out numbers is as follows: 1. The issuer shall fill out numbers of 02. Investees are numbered in order starting from "1".
Note 2: Relationships between endorser/guarantor and the entity for which the endorsement/guarantee is made are classified into the following six categories (simply specify the respective category):
Companies in a business relationship with the Company.
Subsidiaries in which the Company directly holds more than 50% of its total outstanding ordinary shares.
Investees in which parent company and subsidiary hold more than 50% of total outstanding ordinary shares combined.
Parent company in which the Company directly or indirectly (along with subsidiary) holds more than 50% of its total outstanding ordinary shares.
Companies providing mutual endorsements/guarantees for industry peers for purposes of undertaking a construction project.
Companies where all capital-contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
Note 3: The procedures in which the Company provides endorsements/guarantees for others, the maximum endorsements/guarantees for each entity, and the total limit of endorsements/guarantees shall be filled in. The individual entity receiving endorsements/guarantees and the calculation method for the total limit amount shall be specified in the "Remarks" column.
The total endorsements and guarantees provided by the Company shall not exceed the net value of the Company's most recent financial statements; the endorsements and guarantees provided for an individual enterprise may not exceed 20% of the net value of the Company's most recent financial statements.
Where the Company fulfills its contractual obligations by providing mutual endorsements and guarantees for another company in the same industry or for joint builders for a construction project, where all capital contributing shareholders make endorsements and guarantees for their jointly invested company in proportion to their shareholding percentages, where companies in the same industry provide joint guarantee for contract performance for pre-sale property contracts in accordance with the Consumer Protection Act, or where the Company directly or indirectly holds 100% of the voting shares and provides endorsements and guarantees, the restrictions in the preceding paragraph shall not apply and the endorsements and guarantees can still be provided. However, such endorsements and guarantees shall not exceed 400% of the net value of the most recent financial statements; the total endorsements and guarantees provided for an individual enterprise may not exceed 200% of the net value of the most recent financial statements.
Where Shen Yang Construction fulfills its contractual obligations by providing mutual endorsements and guarantees for another company in the same industry or for joint builders for a construction project, where all capital contributing shareholders make endorsements and guarantees for their jointly invested company in proportion to their shareholding percentages, where companies in the same industry provide joint guarantee for contract performance for pre-sale property contracts in accordance with the Consumer Protection Act, or where the Company directly or indirectly holds 100% of the voting shares and provides endorsements and guarantees, such endorsements and guarantees shall not exceed 400% of the net value of the most recent financial statements; the total endorsements and guarantees provided for an individual enterprise may not exceed 200% of the net value of the most recent financial statements.
Note 4: Highest balance of endorsements/guarantees to others for the year.
Note 5: Endorsement/guarantee liabilities are assumed when the amount of the endorsement/guarantee contracts or bills signed with the bank by the Company is approved as of the end of the year. Other matters related to endorsements/guarantees shall be included in the endorsement/guarantee balance.
Note 6: Enter the actual amount drawn down by the companies for which the endorsements/guarantees are made within the range of endorsement/guarantee balance.
Note 7: Endorsements/guarantees made by TWSE/TPEx listed parent company for subsidiary, endorsements/guarantees made by subsidiary for TWSE/TPEx listed parent company, and endorsements/guarantees made in Mainland China are must be indicated with "Y".

Table 1 Page 1

Kuo Yang Construction Co., Ltd. and Subsidiaries

Holding of marketable securities at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures)

December 31, 2023

Table 2

Unit: NT$ thousand (Unless specified otherwise)

Securitiesheld by	Type andname of marketable securities	Relationship with securities issuer	General ledgeraccount		End ofperiod	End ofperiod
				Numberofshares	Carrying amount	Shareholding ratio	Fairvalue
Kuo Yang Construction Co., Ltd. ″ Shang Yang International Asset Management Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. ″ ″ Shen Yang Construction Co., Ltd. ″ ″ ″ ″ ″ ″ ″ ″ Kuo Yang Construction Co., Ltd. ″ ″ Shen Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. ″	Nomura Global High Yield Bond Fund TCB Global Healthcare M-A Income Fund O-Bank No. 1 Real Estate Investment Trust Non-listed stocks - Tai Ho Construction Co., Ltd. Listed stocks - Ascent Development Co., Ltd. Hi-Lai Foods Co., Ltd. Hsin Kuang Steel Co., Ltd. Listed stocks - Hi-Lai Foods Co., Ltd. Taiwan Cement Corporation United Microelectronics Corporation Unimicron Technology Corporation Nan Ya Printed Circuit Board Corporation GlobalWafers Co., Ltd ASE Technology Holding Co., Ltd. Chailease Holding Company Limited Tatung Company Unlisted stocks - United Real Estate Management Co., Ltd. Hanshin Asset Management Co., Ltd. Grand Hi-Lai Hotel Co., Ltd. Unlisted stocks - Han Chi Technology Co., Ltd. Unlisted stocks - Kaohsiung Arena Development Corporation SE Security Corp.	None None None None Note 4 ″ None Note 4 None None None None None None None None None Note 4 ″ ″ ″ None	Current financial assets at fair value through profit or loss ″ ″ Non-current financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ Non-current financial assets at fair value through other comprehensive income ″ ″ ″ ″ ″	689,047 1,000,000 617,000 2,400,000 3,108,000 332,237 280,000 22,149 500,000 300,000 20,000 150,000 30,000 200,000 102,000 600,000 1,494,794 4,946,472 4,960,081 450,000 12,500,000 1,526,170	$ 4,320 8,090 4,955	- - - 17.14% 3.38% 0.79% 0.09% 0.05% 0.01% 0.00% 0.00% 0.02% 0.01% 0.00% 0.01% 0.03% 4.43% 2.29% 16.53% 9.00% 5.00% 15.26%	$ 4,320 8,090 4,955
					$ 17,365		$ 17,365
					$ -		$ -
					$ 75,214 51,995 16,156 3,466 17,425 15,780 3,520 37,725 17,610 27,000 19,686 25,200		$ 75,214 51,995 16,156 3,466 17,425 15,780 3,520 37,725 17,610 27,000 19,686 25,200
					$ 310,777		$ 310,777
					$ 21,077 205,971 148,901 6,795 155,375 28,254		$ 21,077 205,971 148,901 6,795 155,375 28,254
					$ 566,373		$ 566,373

Note 1: Leave the column blank if the issuer of marketable securities is non-related party.

Note 2: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortized cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 3: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions. Note 4: The securities issuer is an affiliate of the Group.

Table 2 Page 1

Kuo Yang Construction Co., Ltd. and Subsidiaries

Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more

January 1 to December 31, 2023

Table 3

Unit: NT$ thousand (Unless specified otherwise)

Company that acquired realproperty	Name ofproperty	Transaction date	Transaction amount	Payment status	Transaction counterparty	Relationship	Priortransactionof	Priortransactionof	related counterparty	related counterparty	Basis of reference for price determination	Purpose of acquisition and status ofusage	Miscellaneous
							Owner	Relationship with issuer	Transferdate	Amount
Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Shen Yang Construction Co., Ltd.	Inventories - construction-in- progress (New construction project in Jiuzhong Section, Neihu District, Taipei City) Inventories - construction-in- progress (New construction project in Jilin Section, Zhongshan District, Taipei City) Inventories - construction-in- progress (New construction project in Zhongxing Section, Sanchong District, New Taipei City) Inventories - land awaiting construction (Land on Yuanzhong Section, Nanzi District, Kaoshiung City) (Note 2)	2022/11/15 2023/1/13 2023/11/07 2023/12/20	$ 891,850 $ 1,044,231 $ 1,142,175 $ 460,505	$ 147,075 (Note 1) $ 282,778 $ 140,522 $ -	Chin Hsieh Hsing Construction Co., Ltd. Continental Engineering Corporation Chun Chieh Construction Co., Ltd. Land Administration Bureau, Kaohsiung City Government	None None None None	Not applicable Not applicable Not applicable Not applicable	Not applicable Not applicable Not applicable Not applicable	Not applicable Not applicable Not applicable Not applicable	Not applicable Not applicable Not applicable Not applicable	Appraisal report from Hung Pang Real Estate Appraisers Firm and appraisal report from He Yang Real Estate Appraisers Firm Appraisal report from Hung Pang Real Estate Appraisers Firm and appraisal report from He Yang Real Estate Appraisers Firm Appraisal report from Hung Pang Real Estate Appraisers Firm and appraisal report from He Yang Real Estate Appraisers Firm Not applicable	Constructi on of factory and office building for sale Constructi on of residential buildings for sale Constructi on of factory and office building for sale Land for constructio n	Not applicable Not applicable Not applicable Not applicable

Note 1: The Group has paid $57,063 in 2022 and paid $90,012 in this period in accordance with contracts.

Note 2: The Group jointly tendered with Chun-Chieh Kuo for the project from Land Affairs Bureau of Kaohsiung City Government in 2023, and the relevant price was paid in 2024.

Note 3: Where an appraisal is required for an acquired asset, specify the appraisal results in the "reference for price determination".

Note 4: Paid-in capital refers to the paid-in capital of the parent company. If the issuer's shares are issued without face value or where the face value does not equal to NT$10, the 20% requirement on paid-up capital shall be calculated instead at 10% of equity attributable to parent company shareholders in the balance sheet.

Note 5: The date of occurrence refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of board meeting resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier;

Table 3 Page 1

Kuo Yang Construction Co., Ltd. and Subsidiaries

Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more

January 1 to December 31, 2023

Table 4

Unit: NT$ thousand (Unless specified otherwise)

Company that disposed of realproperty	Name of property	Transaction date	Acquisition date	Carrying amount	Transaction amount	Transaction amount	Payment collectionstatus	Gain (loss) ondisposal	Transaction counterparty	Relation ship	Purpose of disposal	Basis of reference for price determination	Miscellaneous
Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd.	Inventories - houses and land under construction Inventories - houses and land under construction Inventories - houses and land under construction Inventories - houses and land under construction Inventories - houses and land under construction	2023/05/19 2023/06/02 2023/06/09 2023/07/04 2023/09/25	Not applicable for pre- sale properties Not applicable for pre- sale properties Not applicable for pre- sale properties Not applicable for pre- sale properties Not applicable for pre- sale properties	Not applicable Not applicable Not applicable Not applicable Not applicable	$ $ $ $ $	461,180 458,320 815,500 262,500 265,650	$69,165 already collected in accordance with contracts $68,760 already collected in accordance with contracts $122,340 already collected in accordance with contracts $26,250 already collected in accordance with contracts $39,855 already collected in accordance with contracts	Not applicable Not applicable Not applicable Not applicable Not applicable	Hotai Finance Co., Ltd. Shi-Tai Yung-Fu Investment Co., Ltd. eCloudvalley Digital Technology Co., Ltd. Mesure Technology Co., Ltd. Tatung Atherton Co., Ltd.	None None None None None	Gains Gains Gains Gains Gains	Hung Pang Real Estate Appraisers Firm Hung Pang Real Estate Appraisers Firm Hung Pang Real Estate Appraisers Firm, Cheng Ta Real Estate Appraisers Firm Hung Pang Real Estate Appraisers Firm Hung Pang Real Estate Appraisers Firm	Not applicable Not applicable Not applicable Not applicable Not applicable

Note 1: The transaction amount and payment collection status shall be disclosed in accordance with the project shareholding ratio.

Note 2: Where an appraisal is required for a disposed asset, specify the appraisal results in the "reference for price determination".

Note 3: Paid-in capital refers to the paid-in capital of the parent company. If the issuer's shares are issued without face value or where the face value does not equal to NT$10, the 20% requirement on paid-up capital shall be calculated instead at 10% of equity attributable to parent company shareholders in the balance sheet.
Note 4: The date of occurrence refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of board meeting resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier;

Table 4 Page 1

Table 5

Kuo Yang Construction Co., Ltd. and Subsidiaries

The business relationship and significant transactions between the parent company and its subsidiaries

January 1 to December 31, 2023

Unit: NT$ thousand

(Unless specified otherwise)

No. (Note1)	Companyname	Counterparty	Relationship (Note2)		Transactionstat	us
				General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues or totalassets (Note 3)
0 0 0 0 1	Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd.	Shen Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. Che Yang Agricultural Technology Co., Ltd. Star Epoch International Co., Ltd. Shadwell Limited.	1 1 1 1 3	Rental/leasing revenue Rental/leasing revenue Rental/leasing revenue Contract liabilities - current Interest payable	203 186 186 30,169 471	Note 4 Note 4 Note 4 Note 4 Note 4	0.03% 0.03% 0.03% 0.16% 0.00%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:
Parent company is "0".
The subsidiaries are numbered in order starting from "1".
Note 2: Relationships are categorized into the following three types. Please specify the type:
Parent company to subsidiary.
Subsidiary to parent company.
Subsidiary to subsidiary.
Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is calculated based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.
Note 4: There is no major difference in transaction conditions between sales between parent company and subsidiaries and regular sales, other transaction conditions for other trades have no relevant examples to follow and the transaction conditions are determined in accordance with mutual agreements.

Table 5 Page 1

Kuo Yang Construction Co., Ltd. and Subsidiaries

Names, locations and other information of investee companies (excluding the investees in Mainland China)

January 1 to December 31, 2023

Table 6

Unit: NT$ thousand (Unless specified otherwise)

Name of investment company	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Holdings at the end of period	Holdings at the end of period	Holdings at the end of period	Net profit (loss) of investee for the current period	Investment income (loss) recognized by the Company for the current period	Remarks
				End of the period $ 1,600,000 631,098 240,000 4,742 480,000 22,000 2,500 176,000 1,020 31,500 114,438 (USD 3,727 thousand) 83,733 (USD 2,727 thousand) 30,705 (USD 1,000 thousand) 30,705 (USD 1,000 thousand)	End of last year	Number of shares	Percentage	Carrying amount
Kuo Yang Construction Co., Ltd. ″ ″ ″ ″ ″ Shen Yang Construction Co., Ltd. ″ Shang Yang International Asset Management Co., Ltd. ″ ″ Century Rainbow Limited Century Rainbow Limited Charm Merit Limited	Shen Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. Star Epoch International Co., Ltd. Shadwell Limited Hanshin Shopping Plaza Co., Ltd. Sweet Me Hot Spring Resort Co., Ltd. Che Yang Agricultural Technology Co., Ltd. Chi Yang Construction Co., Ltd. Pao Yue Landscape Co., Ltd. Chi Yang Construction Co., Ltd. Century Rainbow Limited Celestial Talent Limited Charm Merit Limited Good Fame Limited	Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Seychelles Seychelles Hong Kong Samoa	Real estate investment, development, and rental and leasing Residence and buildings lease construction and development Residence and buildings lease construction and development Investment in real estate property Department store General hotel industry and restaurant management Horticulture services and afforestation Residence and buildings lease construction and development Landscape and interior design Residence and buildings lease construction and development Investment company Investment company Investment company Investment company		$ 1,600,000 631,098 240,000 4,742 480,000 22,000 2,500 176,000 - 31,500 114,438 (USD 3,727 thousand) 83,733 (USD 2,727 thousand) 30,705 (USD 1,000 thousand) 30,705 (USD 1,000 thousand)	160,000,000 61,800,000 24,000,000 2 00,000 10,005,000 2,200,000 2 50,000 17,600,000 102,000 3,150,000 1,020,100 20,100 1,000,000 1,000,000	100% 100% 80% 100% 20% 20% 100% 80% 51% 45% 100% 100% 100% 40%	$ 1,654,912 648,268 239,391 2,356 1,187,647 12,571 1,039 175,603 1,886 34,516 309 ( 94) 485 568	$ 50,831 ( 524 ) ( 901 ) ( 70 ) 1,276,009 18,572 ( 216 ) 134 1,698 173 ( 468 ) 8 ( 482 ) ( 1,221 )	$ 54,534 Subsidiary (Note 2) ( 524 ) Subsidiary (Note 2) ( 707 ) Subsidiary (Note 2) ( 70 ) Subsidiary (Note 2) 236,217 Affiliate enterprise 1,359 Affiliate enterprise ( 168 ) Sub- subsidiary (Note 2) 107 Sub- subsidiary (Note 2) 866 Sub- subsidiary (Note 2) 78 Affiliate enterprise ( 464 ) Sub- subsidiary (Note 1, 2) 8 Sub- subsidiary (Note 1, 2) ( 482 ) Sub- subsidiary (Note 1, 2) ( 485 ) Affiliate enterprise (Note 1)

Note 1: Calculated based on the exchange rate of the foreign currency on December 31, 2023.

Note 2: All the transactions were consolidated and written off in the preparation of the consolidated financial statements.

Table 6 Page 1

Kuo Yang Construction Co., Ltd. and Subsidiaries

Information on investments in Mainland China - basic information January 1 to December 31, 2023

==> picture [25 x 7] intentionally omitted <==

----- Start of picture text -----

Table 7
----- End of picture text -----

Unit: NT$ thousand (Unless specified otherwise)

Amount remitted from Taiwan to Mainland Investment China/Amount remitted Investment revenue back to Taiwan for the Net profit income (loss) transferred current period (loss) of Ownership recognized by the back to Investment Opening balance of Remitted to Remitted Ending balance of investee for held directly or Company in the Ending Taiwan as of Investees in Mainland Main business method accumulated fund Mainland back to accumulated fund the current indirectly by current period investment book the end of China activities Paid-in capital (Note 1) transfer from Taiwan China Taiwan transfer from Taiwan period the Company (Note 2 (2). C) value the period Remarks Guopan Investment Business $ 92,115 (2) $ 30,705 $ - $ - $ 30,705 $ 1,016 40% ($ 491) $ 629 $ - Consultancy Co., Ltd. investment (USD 3,000 (USD 1,000 thousand) (USD 1,000 thousand) consulting and thousand) enterprise management consulting

Companyname	Accumulated investment remitted from Taiwan to Mainland China at the end of the period	Investment amount approved by the Investment Commission of the Ministry of EconomicAffairs (MOEA)	Upper limit on investment authorized byMOEAIC
The Company	$ 30,705 (USD 1,000 thousand)	$ 30,705	$ 6,123,141

Note 1: The methods for engaging in investment in Mainland China are categorized into the following three types. Please specify the type:

(1) The Company remits its own funds directly to the investee companies located in Mainland China.
(2) The Company invests in Mainland China through a company in a third region. The Company invests in Good Fame Limited which invests in Guopan Investment Consultancy Co., Ltd. (3) Other methods.

Note 2: Investment income (loss) recognized by the Company in the current period:

(1) If the company is in preparation status and no investment loss and profit has occurred, it shall be noted.
(2) The three types of recognition of income on investment are as follows shall be noted.
- A. Certified financial report audited by CPA firms in the Republic of China which have partnership with international CPA firms.
- B. Financial report audited by CPA firm of Taiwan's parent company.
- C. Others - Evaluations and disclosures of financial reports audited by the CPA.
Note 3: Related numbers in this table shall be expressed in NTD.

Table 7 Page 1

Kuo Yang Construction Co., Ltd.

Information on major shareholders

December 31, 2023

Table 8

Shareholder'sname	Shares	Shares
	Numberofsharesheld	Shareholdingratio
Han Shen Investment Co., Ltd. Chung Shen Development Co., Ltd. Morta Enterprise Co., Ltd. Cheng Chi Co., Ltd. Han Chung Global Investment Co., Ltd.	35,985,223 27,709,048 24,795,785 23,124,570 20,205,488	9.46% 7.29% 6.52% 6.08% 5.31%

Note: The preceding information is provided by Taiwan Depository & Clearing Corporation (TDCC).

Table 8 Page 1

Membership seal certificate from Taipei City chapter of CPA Associations R.O.C. (Taiwan)

Taipei Caizheng No. 1130104

(1) Chun-Yuan Hsiao
Member name: (2) Fang-Yu Wang

CPA firm name: PricewaterhouseCoopers Taiwan

CPA firm 27F., No. 333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei CPA firm Unified Business No.: address: City 03932533 CPA firm phone (02)27296666 Client Unified Business No.: number: 11603817

(1) Taipei City Membership ID No. 2942

Membership No.: (2) Taipei City Membership ID No. 3712

Purpose of seal For the purpose of conducting financial statement verification and audit certificate:

for Kuo Yang Construction Co., Ltd. in 2023 (from January 1, 2023 to December 31, 2023).

Signature format (1)	Chun-Yuan Hsiao	Seal on record at Association (1)
Signature format (2)	Fang-Yu Wang	Seal on record at Association (2)

Chairman:

Verified by:

January 04, 2024

AI assistant

ky — Annual Report 2023

52131_rns_2023-11-10_5bcd3356-9baa-4265-8ca4-c502a03b24d2.pdf

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Financial Statements and Independent Auditor's Report for 2023 and 2022

Table of Contents

Kuo Yang Construction Co., Ltd. Consolidated Financial Statement of Affiliates

Audit Opinions

Basis of Audit Opinions

Key Audit Matters

Appropriateness of the period in which income from the sales of houses and land is recognized

Description

Corresponding auditing procedures

Other matters - Reference to audits of other CPAs

Other matters - Individual Financial Statements

Responsibilities of the management and the governing bodies for the Consolidated Financial Statements

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

PricewaterhouseCoopers Taiwan

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheet January 1 to December 31, 2023 and 2022

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheet January 1 to December 31, 2023 and 2022

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2023 and 2022

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2023 and 2022

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Changes in Equity January 1 to December 31, 2023 and 2022

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Cash Flow Statement

January 1 to December 31, 2023 and 2022

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Cash Flow Statement January 1 to December 31, 2023 and 2022

Kuo Yang Construction Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

2023 and 2022

I. Company history

II. Date and procedures of approval of the financial statements

III. Application of new standards, amendments and interpretations

(II) Effects of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

IV. Summary of significant accounting policies

(I) Statement of compliance

(II) Basis of preparation

(III) Basis of consolidation

2. Subsidiaries included in the consolidated financial statements:

(V) Classification of current and non-current items

(VI) Cash equivalents

(VIII) Financial assets at fair value through other comprehensive income

(IX) Accounts and notes receivable

(X) Impairment of financial assets

(XI) Derecognition of financial assets

(XII) Lease transaction as a lessor

(XIII) Inventories

(XIV) Investments/affiliates recognized under the equity method

(XV) Joint operations

(XVI) Property, plant and equipment

(XIX) Intangible assets

(XX) Impairment of non-financial assets

(XXI) Borrowings

(XXII) Accounts and notes payable

(XXIII) Derecognition of financial liabilities

(XXIV) Financial guarantee contracts

(XXV) Employee benefits

- (XXVI) Employee share based payment

(XXVII) Income tax

(XXVIII) Dividends

(XXIX) Revenue recognition

Land development and real property sales

Business services

(XXX) Operating segments

V. Significant accounting judgments, estimates and main uncertainty assumptions

(I) Critical judgments in applying accounting policies None.

(II) Critical accounting estimates and assumptions

Evaluation of inventories

VI. Details of significant accounts

(I) Cash and cash equivalents

(II) Current financial assets at fair value through profit or loss

(III) Financial assets at fair value through other comprehensive income

(V) Inventories

(VII) Investments recognized under the equity method

(VIII) Property, plant and equipment

(IX) Lease transaction - lessee

(X) Investment properties

(XI) Short-term borrowings

(XII) Short-term notes and bills payable

(XIII) Pension

(XIV) Share capital

(XV) Capital surplus

(XVI) Retained earnings

ky Annual Report 2023