ky — Audit Report / Information 2020

Nov 13, 2020

Kuo Yang Construction Co., Ltd. Individual Financial Statements and Independent Auditor's Report 2020 and 2019 (Stock Code: 2505)

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

Telephone: 02-25000808

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Kuo Yang Construction Co., Ltd.

Individual Financial Statements and Independent Auditor's Report for 2020 and 2019

Table of Contents

Item I. Cover II. Table of Contents III. Independent Auditor's Report IV. Individual Balance Sheet V. Individual Statements of Comprehensive Income VI. Individual Statements of Changes in Equity VII. Individual Cash Flow Statement VIII. Notes to Individual 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 - 8 9 - 10 11 12 13 14 - 60 14 14 14 - 16 16 - 25 25 - 26 26 - 47 47 - 52 53

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Page Number

Item

	(IX)	Significant contingent liabilities and unrecognized contractual
		commitments	53
	(X)	Significant disaster loss	53
	(XI)	Significant events after the balance sheet date	53
	(XII)	Other	53 - 59
	(XIII)	Supplementary disclosures	60
	(XIV)	Segment information	60
IX.	Statement of Important Accounts		61 - 68

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Independent Auditor's Report (2021) Cai-Shen-Bao-Zi No. 20004774

To Kuo Yang Construction Co., Ltd.:

Audit Opinions

The Individual Balance Sheet of Kuo Yang Construction Co., Ltd. as of December 31, 2020 and 2019 and the Individual Statement of Comprehensive Income, Individual Statement of Changes in Equity, Individual Cash Flow Statement, and Notes to the Individual Financial Statements (including a summary of material accounting policies) from January 1 to December 31, 2020 and 2019 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 Individual Financial Statements were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers in all material respects and are therefore sufficient in presenting the individual financial conditions of Kuo Yang Construction Co., Ltd. as of December 31, 2020 and 2019, and the individual financial performance and individual cash flow from January 1 to December 31, 2020 and 2019.

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 Generally Accepted Auditing Standards in the Republic of China. Our responsibility based on these standards will be explained in greater detail in the section on our responsibilities for the review of the Individual 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 Construction 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 Construction's 2020 Individual Financial Statements as per the professional judgment of the CPA. These matters were addressed in the context of our audit of the Individual Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Key audit matters of the Individual Financial Statements of Kuo Yang Construction for 2020 are as follows:

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

Description

Refer to Note 4 (26) in the Individual Financial Statements for accounting policies on operating revenue from construction, and refer to Note 6 (17) for the explanation 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 inspection 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 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.

Inventories valuation - land for construction

Description

Refer to Note 4 (12) of the Individual Financial Statements for accounting policies on construction land valuation. Refer to Note 5 of the Individual Financial Report for accounting estimates and uncertainties of assumptions for inventory valuation. Refer to Note 6 (5) of the Individual Financial Report for description of accounting items.

The inventory valuation of Kuo Yang Construction is measured based on the cost and net realizable value (NRV), whichever is lower. The houses and land held for sale and houses and land under construction are compared with the most recent transaction prices in the vicinity of the sites or the Company's recent sales contracts. As it is difficult to obtain comparable sales prices for construction land, the valuation of the net realizable value of construction land requires the judgment or estimate of the management. Therefore, we consider the valuation of the net realizable value of a construction site as one of the most important items in the audit.

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Corresponding auditing procedures

• Understand and assess the internal operating procedures and accounting procedures for the valuation of land for construction by the Company's management.

• Obtain data for the assessment of the net realizable value, confirm the reasonableness of the data sources, assumptions, or methods employed, and test the content of the data to confirm the reasonableness of the construction land valuation.

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 Construction for 2020 and 2019. Those financial statements were audited by other CPAs. As such, our opinions in the aforementioned Individual 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$564,559 thousand and NT$202,017 thousand as of December 31, 2020 and 2019 accounted for 2.94% and 1.17% of the total assets, respectively. The comprehensive income recognized for 2020 and 2019 was NT$34,168 thousand and NT$(9,354) thousand, which accounted for 0.64% and (7.79%) of the total comprehensive income for the period, respectively.

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

The responsibility of the management was to prepare the individual financial statements in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" to properly indicate the company's financial status and to maintain necessary internal control with regard to establishment of individual financial statements to ensure such financial statements did not contain any false contents as a result of fraudulence or mistakes.

When the Individual Financial Statements were in the process of preparation, the responsibility of the management also included assessment of the capacity of Kuo Yang Construction 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 Construction 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 Construction are responsible for overseeing the financial reporting process.

Auditors' Responsibilities for the Audit of the Individual Financial Statements

Our objectives are to obtain reasonable assurance about whether the Individual 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 Generally Accepted Auditing Standards of the ROC cannot guarantee detection of significant misrepresentations in the Individual 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.

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When conducting the auditing work according to the Generally Accepted Auditing Standards of the ROC, we exercised our professional judgment and remained professionally skeptical. We also execute the following tasks:

1. Identified and evaluated the risk of material misstatement due to fraud or error in the Individual 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.

2. 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 Construction.

3. Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

4. 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 Construction'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 Individual 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 Construction to cease to continue as a going concern.

5. Evaluated the overall expression, structure and content of the Individual Financial Statements (including related notes) and if these statements present fairly the related transactions and events.

6. Obtained sufficient and appropriate proof for audit on the finances of the individual entities in Kuo Yang Construction to state our opinion on the Individual Financial Statements. We are responsible for the direction, supervision and performance of the individual audit. We remain solely responsible for the audit opinions of the Individual 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).

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.

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From the matters communicated with those charged with governance, the CPA determines matters that were of most significance in the audit of the 2020 Individual Financial Statements of Kuo Yang Construction 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

CPA

Chun-Yuan Hsiao Fang-Yu Wang

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

March 22, 2021

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Kuo Yang Construction Co., Ltd. Individual Balance Sheet December 31, 2020 and 2019

Assets	Notes 6 (1) 6 (2) 6 (3) 6 (4) 6 (4) 7 6 (23) 6 (5) (6) and 8 8 6 (3) 6 (7) 8 6 (8) 6 (9) and 8 6 (24) 6 (12) 8 6 (10) 6 (11) 6 (17) 6 (13) 6 (23) 6 (13)	December 31,2020 Amount % $ 4,611,385 24 20,608 - 378,534 2 41,072 - 224,982 1 424,171 2 154,395 1 332 - 8,807,578 46 516,132 3 187,750 1 67,428 - 15,434,367 80 800,164 4 2,584,005 14 34,250 - 78,330 - 62,821 - - - 79,938 1 - - 48,334 - 102,655 1 3,790,497 20 $ 19,224,864 100 $ 3,193,962 17 1,318,768 7 952,160 5 58,281 - 808,296 4 3,434,106 18 33,004 - 20,348 - 83,316 1 9,902,241 52 63,147 - 1,613 - 1,195 - 65,955 - 9,968,196 52 3,800,000 20	Unit: NT$1,000 December 31,2019 Amount % $ 1,154,077 7 25,053 - 91,414 1 61,748 - 15,808 - 351,806 2 164,192 1 161 - 12,640,041 73 274,837 2 301,343 2 67,107 - 15,147,587 88 134,499 1 1,520,571 9 34,808 - 97,912 - 63,970 - 5,784 - 108,518 1 6,276 - 48,334 - 106,467 1 2,127,139 12 $ 17,274,726 100 $ 5,329,714 31 2,030,124 12 987,302 6 58,851 - 466,152 3 74,918 - 5,076 - 20,781 - 23,841 - 8,996,759 52 82,076 1 3,260 - 1,170 - 86,506 1 9,083,265 53 6,965,825 40
		Amount $ 4,611,385 20,608 378,534 41,072 224,982 424,171 154,395 332 8,807,578 516,132 187,750 67,428 15,434,367 800,164 2,584,005 34,250 78,330 62,821 - 79,938 - 48,334 102,655 3,790,497 $ 19,224,864 $ 3,193,962 1,318,768 952,160 58,281 808,296 3,434,106 33,004 20,348 83,316 9,902,241 63,147 1,613 1,195 65,955 9,968,196 3,800,000	Amount $ 1,154,077 25,053 91,414 61,748 15,808 351,806 164,192 161 12,640,041 274,837 301,343 67,107 15,147,587 134,499 1,520,571 34,808 97,912 63,970 5,784 108,518 6,276 48,334 106,467 2,127,139 $ 17,274,726 $ 5,329,714 2,030,124 987,302 58,851 466,152 74,918 5,076 20,781 23,841 8,996,759 82,076 3,260 1,170 86,506 9,083,265 6,965,825
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 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1210 Other receivables - related parties 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 1975 Net defined benefit assets - non- current 1980 Other financial assets - non-current 1990 Other non-current assets - other 15XX Total non-current assets 1XXX Total assets Liabilities and Equity
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 Share capital 3110 Capital stock - common

(Continued)

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Kuo Yang Construction Co., Ltd. Individual Balance Sheet December 31, 2020 and 2019

Unit: NT$1,000

Liabilities and Equity	Notes 6 (14) 6 (15) 6 (16) 9 11	December 31,2020 Amount % $ 627,683 3 856,070 4 3,456,890 18 516,025 3 9,256,668 48 $ 19,224,864 100	December 31,2019	December 31,2019
		Amount $ 627,683 856,070 3,456,890 516,025 9,256,668 $ 19,224,864	Amount $ 627,683 372,395 130,048 95,510 8,191,461 $ 17,274,726	%
Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3350 Undistributed earnings Other equity 3400 Other equity 3XXX Total equity Commitment and contingencies Significant events after the balance sheet date 3X2X Total liabilities and equity				4 2 1 -
				47
				100

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

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Kuo Yang Construction Co., Ltd.

Individual Statements of Comprehensive Income January 1 to December 31, 2020 and 2019

Unit: NT$1,000

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

Item

2020 2019 Notes Amount % Amount % 6 (17) $ 13,789,342 100 $ 1,393,666 100 6 (22) (23) ( 8,155,708) ( 59)( 1,035,706 )( 74 ) 5,633,634 41 357,960 26 6 (22) (23) ( 149,249) ( 1) ( 74,348 ) ( 6 ) ( 289,919) ( 3)( 184,523 )( 13 ) ( 439,168) ( 4)( 258,871 )( 19 ) 5,194,466 37 99,089 7 6 (18) 54,577 - 15,460 1 6 (19) 59,362 1 7,586 1 6 (20) 743 - 741 - 6 (21) ( 41,767) - ( 62,674 ) ( 4 ) 6 (7) ( 107,719) ( 1) 3,275 - ( 34,804) - ( 35,612 )( 2 ) 5,159,662 37 63,477 5 6 (24) ( 216,523) ( 1)( 6,587 )( 1 ) $ 4,943,139 36 $ 56,890 4 6 (12) $ 578 - $ - - 445,523 3 17,810 2 ( 8,697) - 45,453 3 437,404 3 63,263 5 ( 156) - 24 - 6 - ( 29 ) - ( 150) - ( 5 ) - $ 5,380,393 39 $ 120,148 9 6 (25) $ 7.58 $ 0.08 6 (25) $ 7.57 $ 0.08

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 7070 Share of profit or loss of subsidiaries, 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 Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurements of defined benefit plan 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive profit or loss of subsidiaries, affiliates, and joint ventures recognized under the equity method - components that will not be reclassified to profit or loss 8310 Total components of other comprehensive income that will not be reclassified to profit or loss Components that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8380 Share of other comprehensive profit or loss of subsidiaries, affiliates, and joint ventures recognized under the equity method - components that may be reclassified to profit or loss 8360 Total components that may be reclassified to profit or loss 8500 Total comprehensive income Basic earnings per share 9750 Basic earnings per share Diluted earnings per share 9850 Diluted earnings per share

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

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Kuo Yang Construction Co., Ltd. Individual Statements of Changes in Equity January 1 to December 31, 2020 and 2019

Unit: NT$1,000

													Unit: NT$1,00
2019 Balance as at January 1, 2019 Net profit of the term Other comprehensive income for the period Total comprehensive income Earnings appropriation and distribution: Cash dividends Balance at December 31, 2019 2020 Balance as at January 1, 2020 Net profit of the term Other comprehensive income for the period Total comprehensive income Earnings appropriation and distribution: Allocation to legal reserve Cash dividends Cash refunded in capital reduction Disposal of equity instruments in other comprehensive income measured at fair value through profit and loss Balance at December 31, 2020	Notes		Capital stock - common		Capitalsurplus		Retained earnings			Other	equity		Totalequity
							Legal reserve		Undistributed earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensiveincome
	6 (16) 6 (15) 6 (16) 6 (15) 6 (13) 6 (3)	$ 6,965,825 - - - - $ 6,965,825 $ 6,965,825 - - - - - ( 3,165,825 ) - $ 3,800,000			$ 627,683 - - - - $ 627,683 $ 627,683 - - - - - - - $ 627,683		$ 372,395 - - - - $ 372,395 $ 372,395 - - - 483,675 - - - $ 856,070	$ 421,449 56,890 - 56,890 ( 348,291 ) $ 130,048 $ 130,048 4,943,139 578 4,943,717 ( 483,675 ) ( 1,149,361 ) - 16,161 $ 3,456,890		$ 22,271 - ( 5 ) ( 5 ) - $ 22,266 $ 22,266 - ( 150 ) ( 150 ) - - - - $ 22,116	$ 9,981 - 63,263 63,263 - $ 73,244 $ 73,244 - 436,826 436,826 - - - ( 16,161 ) $ 493,909	$ 8,419,604 56,890 63,258 120,148 ( 348,291 ) $ 8,191,461 $ 8,191,461 4,943,139 437,254 5,380,393 - ( 1,149,361 ) ( 3,165,825 ) - $ 9,256,668

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

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Kuo Yang Construction Co., Ltd.

Individual Cash Flow Statement

January 1 to December 31, 2020 and 2019

Unit: NT$1,000

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 Dividend income Share of profit (loss) of affiliates and joint ventures recognized under the equity method Net (gains) losses on financial assets at fair value through profit or loss Gains on disposal of investments Lease amendment benefits Changes in operating assets and liabilities Changes in operating assets Notes receivable, net Accounts receivable, net Other receivables Other receivables - related parties Inventories Prepayments Other current assets Intangible assets Net defined benefit assets Other non-current assets Changes in operating liabilities Contract liabilities Notes payable Other payables Accounts payable Other current liabilities Cash inflow (outflow) generated from operations Interest received Interest paid Income tax collected Dividends received Income tax paid Net cash inflow (outflow) from operating activities Cash Flows from Investing Activities Acquisition of current financial assets at fair value through profit or loss Disposal of current financial assets at fair value through profit or loss 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 Acquisition of payments for investments recognized under the equity method - subsidiaries Acquisition of payments for investments recognized under the equity method - affiliates Acquisition of property, plant and equipment Refundable deposits Net cash used in investing activities Cash Flows from Financing Activities Short-term borrowings Short-term notes and bills payable Repayments of lease liabilities Deposits received Cash dividends paid Net cash inflow (outflow) from financing activities Increase (decrease) in cash and cash equivalents for the current period Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Notes January1 to December 31,2020 January1 to December 31,2019 $ 5,159,662 $ 63,477 6 (22) 24,142 22,442 6 (22) 178 67 6 (21) 41,767 62,674 6 (19) ( 54,577 ) ( 15,460 ) 6 (19) ( 40,055 ) ( 4,713 ) 6 (7) 107,719 ( 3,275 ) 6 (20) ( 555 ) ( 2,288 ) 6 (20) ( 358 ) ( 465 ) - ( 202 ) 20,676 25,544 ( 209,174 ) 115,376 ( 72,205 ) ( 57,507 ) 9,798 ( 8,729 ) 3,917,914 ( 685,189 ) ( 241,295 ) ( 280,425 ) 113,272 ( 78,157 ) ( 177 ) ( 402 ) 6,854 - 3,810 8,228 ( 35,142 ) 178,786 ( 570 ) ( 28,149 ) 195,787 6,426 342,144 241,535 59,475 ( 9,604 ) 9,349,090 ( 450,010 ) 54,577 15,460 ( 129,617 ) ( 188,410 ) - 6,801 40,055 4,713 ( 183,141 ) ( 2,229 ) 9,130,964 ( 613,675 ) ( 10,000 ) - 15,358 5,465 ( 851,638 ) - 528,140 - 7 ( 183,765 ) ( 4,355 ) 7 ( 700,000 ) - 7 ( 480,000 ) - ( 2,853 ) ( 17,554 ) 28,580 ( 36,062 ) ( 1,656,178 ) ( 52,506 ) 6 (26) ( 2,135,752 ) ( 562,096 ) 6 (26) ( 711,356 ) 1,218,033 6 (26) ( 19,362 ) ( 13,352 ) 6 (26) ( 1,647 ) 1,378 6 (15) (26) ( 1,149,361 ) ( 348,291 ) ( 4,017,478 ) 295,672 3,457,308 ( 370,509 ) 1,154,077 1,524,586 $ 4,611,385 $ 1,154,077

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

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Kuo Yang Construction Co., Ltd. Notes to Individual Financial Statements

2020 and 2019

Unit: NT$1,000

(Unless specified otherwise)

I. Company history

Kuo Yang Construction Co., Ltd. (hereinafter referred to as the "Company") was established in June

1. The Company is 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 Individual Financial Report was released with the approval of the Board of Directors on March 22, 2021.

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 by the Financial Supervisory Commission (hereinafter referred to as the "FSC").

1. New, revised, and amended standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

New, Revised or Amended Standards and Interpretations Amendment to IAS 1 and IAS 8, "Disclosure Initiative - definition of material" Amendments to IFRS 3, "Definition of a business" Amendments to IFRS 9, IAS 39, and IAS 7, "Interest Rate Benchmark Reform" Amendments to IFRS 16 "COVID-19-Related Rent Concessions"	Effective date by International Accounting
	Standards Board January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Note: The FSC approved advanced adoption starting from January 1, 2020.

1. The above standards and interpretations have no significant impact to the Company's financial position and financial performance based on the Company's assessment.

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

1. New, revised, and amended standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

New, Revised or Amended Standards and Interpretations Amendments to IFRS 4 "Extension of the Temporary Exemption from Applying IFRS 9" Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IAS 16, "Interest Rate Benchmark Reform - Phase 2"	Effective date by International Accounting
	Standards Board January 1, 2021 January 1, 2021

1. The above standards and interpretations have no significant impact to the Company's financial position and financial performance based on the Company's assessment.

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

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

New, Revised or Amended Standards and Interpretations Amendments to IFRS 3, "Conceptual Framework" 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 IAS 1, "Classification of Liabilities as Current or Non- current" Amendment to IAS 1, "Accounting Policy Disclosure" Amendments to IAS 8, "Definition of Accounting Estimates" Amendments to IAS 16, "Property, Plant and Equipment — Proceeds before Intended Use" Amendments to IAS 37, "Onerous Contracts — Cost of Fulfilling a Contract" Annual Improvements to IFRSs 2018-2020 Cycle

Effective date by International Accounting

Standards Board January 1, 2022 To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022 January 1, 2022

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1. The above standards and interpretations have no significant impact to the Company's financial position and financial performance based on the Company's assessment.

IV. Summary of significant accounting policies

The material accounting policies applied in the preparation of the Individual 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 individual financial statements have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers".

• (II)Basis of preparation

• Except for the following items, these individual 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.

  • (3) Defined benefit liabilities recognized based on the net amount of pension fund assets minus present value of defined benefit obligation.

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

• (III)Foreign currency translation

• Items included in the individual financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (i.e., the "functional currency"). The Individual 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 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.

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  - (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.

1. Translation of foreign operations

   • (1) The operating results and financial position of the Company, subsidiaries, 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 Company 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.

2. (IV)Classification of current and non-current items

3. The Company engages in commissioned construction of buildings or plants for sale 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:

4. 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

~17~

• (4) Cash, 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 Company 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 Company as non-current assets.

• (V)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.

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

1. 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.

2. 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.

3. 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.

4. The Company 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 Company, and the amount of the dividend can be measured reliably.

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

1. 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.

2. 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.

3. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:

~18~

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 Company 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 Company, and the amount of the dividend can be measured reliably.

(VIII)Accounts and notes receivable

1. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

2. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(IX)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.

• (X)Derecognition of financial assets

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

(XI)Lease transaction as a lessor - rent receivable/operating leases

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.

(XII)Inventories

1. 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.

2. 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.

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(XIII)Investments/subsidiaries and affiliates recognized under the equity method

1. "Subsidiaries" are all entities controlled by the Company. The Company controls an entity when the Company 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.

2. Inter-company transactions, balances and unrealized gains or losses on transactions between the Company and subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

3. The Company'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 Company's share of losses of a subsidiary equals or exceeds its interest in that subsidiary, the Company shall continue to recognize losses based on the shareholding percentage.

4. Affiliates are all entities over which the Company 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.

5. The Company'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 Company's share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the affiliate.

6. 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 Company's ownership percentage of the affiliate, the Company recognizes change in ownership interests in the affiliate in "capital surplus" in proportion to its ownership.

7. Unrealized gains on transactions between the Company and its affiliates are eliminated to the extent of the Company'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 Company.

8. When the Company 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 Company 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 Company loses

~20~

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.

1. Pursuant to the "Regulations Governing the Preparation of Financial Reports by Securities Issuers", the current-period profit and loss and other consolidated profit or loss in the individual financial statements shall be the same as the current profit or loss in the individual financial statements and the amortized amount in the other consolidated profit or loss attributable to owners of parent company. The equity attributable to owners of the Company in the individual financial statements shall be equal to the equity attributable to owners of the parent company in the consolidated financial statements.

(XIV)Joint operations

With regard to equity in joint operations, the Company 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.

(XV)Property, plant and equipment

1. Property and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

2. 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 the item will flow to the Company 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.

3. 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.

4. 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.

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

1. The Company recognizes lease assets as right-of-use assets and lease liabilities at the

~21~

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.

1. On the commencement date, the Company measures lease liabilities by the present value of outstanding lease payments, using the Company's incremental borrowing rate. Lease payments include

2. (1) Fixed payments less any lease incentives receivable; and

3. (2) Variable lease payments determined by changes in an index or rate.

4. 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.

(XVII)Investment properties

An investment property is measured initially at its cost and subsequently measured under the cost approach. Except for land, the depreciation is recognized on a straight-line basis over a useful life of 30 to 60 years.

(XVIII)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.

(XIX)Impairment of non-financial assets

The Company 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

~22~

have been if the impairment had not been recognized.

(XX)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.

(XXI)Accounts and notes payable

1. 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.

2. The short-term accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XXII)Financial guarantee contracts

• Financial guarantee contracts are contracts for which the Company 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 Company measures the financial guarantee contracts at fair value. The Company subsequently measures them based on the impairment provision for the expected credit losses and recognized cumulative earnings, whichever is higher.

(XXIII)Employee benefits

1. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for that service, and shall be recognized as expenses when the employees have rendered service.

1. Pension

2. (1) 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.

• (2) Defined benefit plans

• A. Net obligation under a defined benefit plan is accrued from the present value of future benefits that employees have earned in return for their services in the current or prior periods. The Company recognized the present value of the defined benefit obligation deducting the fair value of plan assets at the balance sheet date. Net obligation of the defined benefit is calculated annually by independent actuaries using the projected unit credit method and is discounted by using the market yield on government bonds (at the balance sheet date) of

~23~

the same currency in the same the period on the balance sheet date and calculations of defined benefit obligations.

• B. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

• C. Expenses associated with past service costs are recognized immediately in profit or loss.

• 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.

(XXIV)Income tax

1. 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.

2. 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 Company operates and generates taxable income. The income 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.

3. 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 individual 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. 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 Company 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 when the related deferred income tax asset is realized or the deferred income tax liability is

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settled.

1. 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.

2. 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.

(XXV)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.

(XXVI)Revenue recognition

Land development and real property sales

1. The Company operates 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 Company due to contract restrictions. However, the Company 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.

2. The Company 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 Company 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.

3. 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 Company'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

~25~

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 Company must determine the net realizable value of inventories on balance sheet date using judgments and estimates. The management of the Company mainly uses past experience and estimates of future market sales value as the basis for estimation. Therefore, there may be significant changes. The Company's inventory information as of December 31, 2020 is detailed in Note 6 (5).

VI. Details of significant accounts

(I) Cash and cash equivalents

Cash on hand and working capital Demand deposits Cheque deposits	December 31, 2020 $ 66,581 4,544,725 79 $ 4,611,385	December 31, 2019 $ 5,038 1,148,874 165
		$ 1,154,077

1. The Company 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.

2. The Company's revenue from pre-sales placed in a trust account is limited in use and the limitations are recognized in "other financial assets". Please refer to Note 8.

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

	December 31, 2020	December 31, 2019
Mandatory measurement of financial assets at fair value through profit or loss
Beneficiary certificates	$ 20,000	$ 25,000
Valuation adjustment	608	53
	$ 20,608	$ 25,053

1. The Company recognized net gain (loss) of $913 and $2,753 within financial assets at fair value through profit or loss for 2020 and 2019 based on the financial assets at fair value through profit or loss.

2. The Company has no financial assets at fair value through profit or loss pledged to others.

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

Current items Listed stocks Valuation adjustment Non-current items Stocks no listed on the TWSE, TPEx, or emerging stocks Valuation adjustment	December 31, 2020 $ 425,638 ( 47,104) $ 378,534 $ 334,622 465,542 $ 800,164	December 31, 2019 $ 85,980 5,434 $ 91,414 $ 150,857 ( 16,358) $ 134,499

1. The Company 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, 2020 and 2019 were $1,178,698 and $225,913, respectively.

2. Based on the Company's financial plans, the Company sold shares of listed companies with a fair value of $528,140 in 2020. The cumulative gains from disposal totaled $16,161.

3. 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 Changes in fair value recognized in other comprehensive income Cumulative gains (losses) converted to retained earnings due to derecognition	2020 $ 445,523 $ 16,161	2019
		$ 17,810 $-

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

(IV)Notes and accounts receivable

Notes receivable Accounts receivable Minus: Allowance for doubtful accounts	December 31, 2020 $ 41,072 224,982 - $ 266,054	December 31, 2019 $ 61,748 15,808 -
		$ 77,556

1. The Company has no notes and accounts receivable pledged to others.

2. As of December 31, 2020, December 31, 2019 and January 1, 2019, the balance of the Company's accounts receivable (including notes receivable) were $266,027, $76,558, and $217,394, respectively.

3. If the collaterals held or other credit enhancement tools are disregarded, the amount that best represents the Company's maximum exposure to credit risk for notes and accounts receivable as of December 31, 2020 and 2019 is the carrying amount of the notes and accounts receivable in each period.

4. The aforementioned notes and accounts receivable are notes and accounts that are not past due or impaired.

5. Please refer to Note 12 (2) for relevant credit risk information.

6. (V)Inventories

Houses and land held for sale Beautiful Tree Hall Tien Chen Kuo Yan Project Kuo Yang The Green Place Project (Taiwan Sugar Annan Project) Zhongxiao Courtyard Project (Xizhi Jiancheng Section Project) South Manor Project (Wenshan Gongxun Section Project) Minus: Allowance for valuation losses Houses and land under construction Greater Nangang Project Kuo Yang The Green Place Project (Taiwan Sugar Annan Project) Good morning, Kuo Yang Project (Keelung Tiaohe Section Project) South Manor Project (Wenshan Gongxun Section Project)	December 31, 2020 $ 910 9,741 1,416,430 2,587,146 - 156,625	December 31, 2019 $ 910 9,741 1,512,564 1,607,215 502,522 -
	4,170,852 ( 573,205) 3,597,647 $ - 42,180 1,601,961 -	3,632,952 -
		3,632,952
		$ 3,629,013 532,530 1,200,505 1,145,838

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Kuo Yang Silicon Valley (Xizhi Gongjian Section Project) Neihu Jiuzong Section Minus: Allowance for valuation losses Land for construction and others Zhudong Project Beitou Guangming Section Minquan East Road Project Jilin Urban Renewal Project Jingmei Section Ren'ai Urban Renewal Project Guanghua Section Kaohsiung Yunwen Section Other Minus: Allowance for valuation losses Prepayments for houses and land and others Kuo Yang The Green Place Project (Taiwan Sugar Annan Project) South Manor Project (Wenshan Gongxun Section Project)	1,445,665 1,074,684 4,164,490 ( 1,267) 4,163,223 251,872 12,633 273,821 123,182 40,174 4,820 12,500 108,170 26,663	1,088,537 -
		7,596,423 ( 1,267) 7,595,156
		251,872 12,633 273,822 122,885 40,174 4,820 12,500 108,170 26,659
	853,835 ( 161,203) 692,632	853,535 ( 169,241) 684,294
	354,076 -	720,228 7,411
	354,076	727,639
	$ 8,807,578	$ 12,640,041

1. Greater Nangang Project

On April 9, 2020, the Company's Board of Directors passed a resolution to sell land on two sections on Yucheng Section, Nangang District, Taipei City with other landowners in a public auction. The bids in the auction were opened on May 7, 2020 and the winning bidder was Fubon Life Insurance Co., Ltd. The Company completed the transfer of ownership on June 4, 2020 and has collected all payments.

1. The Company recognized cost of inventories as expenses totaling $8,155,708 and $1,035,706 in 2020 and 2019, respectively. They included the cost of goods sold totaling $565,167 and $10,396 recognized after the cost was written down in the net realizable value.

2. In 2020 and 2019, the amount of inventory interest capitalization was $85,451 and $127,144, respectively. The interest capitalization rates ranged from 0.420% to 2.450% and 0.635% to 3.684%, respectively.

3. Please refer to Note 8 for detailed information on the Company's use of inventory as collateral.

(VI)Joint operations

1. The Company operates certain development projects through joint operations. With regard to equity in joint operations, the Company recognizes the direct rights (and its share) of the

~29~

assets, liabilities, income, and expenses from joint operations, and has included them in the applicable accounts of the Individual Financial Report.

1. The information on the joint operations held by the Company is as follows:

Project name Percentage held Greater Nangang Project 40% Kuo Yang The Green Place Project 65% Zhongxiao Courtyard Project 55% Good morning, Kuo Yang Project 55% South Manor Project 100% Kuo Yang Silicon Valley Project 35% Neihu Jiuzong Section Project 50%	Landowner or joint builder Six companies including Ho Hsin Cheng Co., Ltd. Five companies including Wei Li International Development Co., Ltd. Sin Wei Jie Construction Limited Liability Company, Han Lin Development Co., Ltd. Chi Hsuan Construction Co., Ltd., Tsang Shan Development Co., Ltd. Note Hanshin Asset Management Co., Ltd., Li Yang Agricultural Technology Co., Ltd., Heng Jui Development Co., Ltd. Five companies including Wei Li International Development Co., Ltd.	Description Nangang District, Taipei City Annan District, Tainan City Xizhi District, New Taipei City Zhongzheng District, Keelung City Wenshan District, Taipei City Xizhi District, New Taipei City Neihu District, Taipei City

Note: The Company and "Sin Wei Jie Construction" signed a joint investment and development agreement on December 13, 2013 for 59 plots of land including the short section numbered 210-2 located at the Gongxun Section of Wenshan District, Taipei City. The shares of investment were 60% for the Company and 40% for "Sin Wei Jie Construction". The parties signed the "Joint Development Supplementary Agreement" on July 1, 2020 and Sin Wei Jie Construction withdrew from the project. The project returned the capital originally invested by Sin Wei Jie Construction. The Company's share of the investment was changed to 100%.

~30~

1. The information on the shares of joint operations held by the Company is compiled as follows:

Balance Sheet Current assets Inventories Other current assets Non-current assets Total assets Current liabilities Short-term borrowings Contract liabilities Other current liabilities Non-current liabilities Total liabilities Statement of Comprehensive			December 31, 2020	December 31, 2020	December 31, 2020
	$	Greater Nangang Project - - - - - - - - - - - 9,634,552 3,643,392 2,277	The $	The	Green Place	Other joint construction operations $ 4,214,765 647,190 4,861,955 216,423 $ 5,078,378 $ 2,633,798 693,952 211,195 3,538,945 - $ 3,538,945 $ 587,581 $ 411,758 $ 53,804
					Project 2,629,321 577,885
					3,207,206 25,645
	$		$		3,232,851 1,348,636 220,906 276,572
	$		$
					1,846,114 201
	$		$		1,846,315 199,519
	$		$
Income Revenue Cost Fees
	$		$		178,637
	$		$		42,927

Balance Sheet Current assets Inventories Other current assets Non-current assets Total assets Current liabilities Short-term borrowings Contract liabilities Other current liabilities Non-current liabilities Total liabilities			December 31, 2019	December 31, 2019	December 31, 2019
	$	Greater Nangang Project 3,352,284 39,915 3,392,199 - 3,392,199 2,007,305 - 686,425 2,693,730 - 2,693,730	$	The	Green Place Project 2,139,740 828,516 2,968,256 - 2,968,256 340,938 87,384 1,207,296 1,635,618 390 1,636,008	Other joint construction operations $ 3,967,272 974,294 4,941,566 262,311 $ 5,203,877 $ 2,055,811 901,931 777,639 3,735,381 1,457 $ 3,736,838
	$		$
	$		$
	$		$

~31~

Statement of Comprehensive	$- $- $ 5,250	$ 91,141 $ 78,221 $ 25,671	$ 1,082,960 $ 704,776 $ 55,684
Income Revenue Cost Fees

(VII)Investments recognized under the equity method

Subsidiaries: Shen Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. SHADWELL LIMITIED Affiliate enterprises: Hanshin Shopping Plaza Co., Ltd. Sweet Me Hot Spring Resort Co., Ltd.	December 31, 2020 $ 1,384,417 664,003 2,309 520,343 12,933 $ 2,584,005	December 31, 2019 $ 778,833 725,569 2,522 - 13,647 $ 1,520,571	Shareholding ratio 100% 100% 100% 20% 20%

1. Refer to Note 4 (3) of the Consolidated Financial Statements for information on the Company's subsidiaries.

2. The carrying amounts of the Company's individual insignificant affiliates as of December 31, 2020 and 2019 are shown in the table above, and the results of operations are as follows:

Net loss from continuing operations for the period Other comprehensive income (net income after tax) Total comprehensive income	2020 $ 39,629 - $ 39,629	2019
		($ 716) - ($ 716)

1. The Company's aforementioned investment targets have no public quotations on the market. The share of profit/loss on equity-accounted investee companies in 2020 and 2019 was ($107,719) and $3,275, respectively. They were evaluated and disclosed based on the audited financial statements of each investee company for the same periods.

2. (VIII)Lease transaction - lessee

3. The assets leased by the Company 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.

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1. The information of the carrying amount of the right-of-use assets and the recognition of depreciation expense are as follows:

Real estate rental and leasing Cost Accumulated depreciation Real estate rental and leasing Cost Accumulated depreciation	January 1, 2020 $ 117,557 ( 19,645) $ 97,912 January 1, 2019 $ 118,241 - $ 118,241	Depreciation $ - ( 19,582) ($ 19,582) Depreciation $ - ( 19,645) ($ 19,645)	Disposal/outward transfer $ - - $- Disposal/outward transfer ($ 684) - ($ 684)	December 31, 2020 $ 117,557 ( 39,227)
				$ 78,330
				December 31, 2019 $ 117,557 ( 19,645)
				$ 97,912

1. 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	2020 $ 1,942 2,950 1,701	2019
		$ 1,721 5,599 1,276

1. The cash flows used in the lease payments of the Company in 2020 and 2019 amounted to $24,254 and $20,874, respectively.

(IX)Investment properties

Investment properties
January 1, 2020 Cost Accumulated depreciation and impairment 2020 January 1 Depreciation December 31	$ (	Land 65,657 28,643) 37,014 37,014 - 37,014	$ (	Buildings and structures 49,924 22,968) 26,956 26,956 1,149) 25,807	$ (	Total 115,581 51,611) 63,970 63,970 1,149) 62,821
	$		$		$
	$		$ (		$ (
	$		$		$

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December 31, 2020 Cost $ 65,657 $ 49,924 Accumulated depreciation and impairment ( 28,643) ( 24,117) $ 37,014 $ 25,807 Land Buildings and structures January 1, 2019 Cost $ 65,657 $ 49,924 Accumulated depreciation and impairment ( 28,643) ( 21,819) $ 37,014 $ 28,105 2019 January 1 $ 37,014 $ 28,105 Depreciation - ( 1,149) December 31 $ 37,014 $ 26,956 December 31, 2019 Cost $ 65,657 $ 49,924 Accumulated depreciation and impairment ( 28,643) ( 22,968) $ 37,014 $ 26,956 2. Rent income and direct operating expenses from investment properties: 2020 Rent income from investment properties $ 1,677 $ Direct operating expenses incurred by investment properties that generate rent income in the current period ($ 1,582) ($	December 31, 2020 Cost $ 65,657 $ 49,924 Accumulated depreciation and impairment ( 28,643) ( 24,117) $ 37,014 $ 25,807 Land Buildings and structures January 1, 2019 Cost $ 65,657 $ 49,924 Accumulated depreciation and impairment ( 28,643) ( 21,819) $ 37,014 $ 28,105 2019 January 1 $ 37,014 $ 28,105 Depreciation - ( 1,149) December 31 $ 37,014 $ 26,956 December 31, 2019 Cost $ 65,657 $ 49,924 Accumulated depreciation and impairment ( 28,643) ( 22,968) $ 37,014 $ 26,956 2. Rent income and direct operating expenses from investment properties: 2020 Rent income from investment properties $ 1,677 $ Direct operating expenses incurred by investment properties that generate rent income in the current period ($ 1,582) ($	$ 115,581 ( 52,760) $ 62,821 Total $ 115,581 ( 50,462) $ 65,119 $ 65,119 ( 1,149) $ 63,970 $ 115,581 ( 51,611) $ 63,970 2019 2,129 1,723)
	$
	($

1. The fair value of the investment properties held by the Company as of December 31, 2020 and 2019 was $116,918 and $116,845, respectively. They were determined based on 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, and current conditions of the real estate market.

2. Please refer to Note 8 for detailed information on the Company's use of investment properties as collateral.

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(X)Short-term borrowings

Type of borrowings Bank borrowings Secured loans Type of borrowings Bank borrowings Secured loans	December 31, 2020 $ 3,193,962 December 31, 2019 $ 5,329,714	Interest rate range 1.80%~2.25% Interest rate range 1.950%~2.881%	Collateral Please refer to Note 8 Collateral Please refer to Note 8

(XI)Short-term notes and bills payable

Commercial papers payable Minus: Discounted short-term notes and bills payable Net amount Interest rate range	December 31, 2020 $ 1,319,160 ( 392) $ 1,318,768 0.23%~1.162%	December 31, 2019 $ 2,032,010 ( 1,886) $ 2,030,124 0.5%~1.3%

(XII)Pension

1. The Company has a defined benefit pension plan in accordance with the "Labor Standards Act", covering all regular employees' service years prior to the enforcement of the "Labor Pension Act" on July 1, 2005 and service years thereafter of employees who chose to continue the pension mechanism under the "Labor Standards Act" after the enforcement of the "Labor Pension Act". Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The company contributes monthly an amount equal to 2% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent Supervisory Committee of Labor Retirement Reserve Fund (the "Fund"). Before the end of each year, the Company assesses the balance in the aforementioned Fund. If the balance in the Fund is inadequate to pay the retirement benefits of employees who are eligible for retirement in the following year by the aforementioned method, the Company is required to fund the deficit in one appropriation before the end of next March. The Company has settled accounts for the service years of employees under the old system, applied for the refund of the balance of the employee pension reserve fund, and closed the dedicated account on April 15, 2020.

2. (1) The amounts recognized in the balance sheet are as follows:

dedicated account on April 15, 2020. (1) The amounts recognized in the balance sheet are as follows:
Present value of defined benefit obligations Fair value of employee benefit plan assets Net defined benefit assets	December 31, 2019 ($ 3,869) 10,145
	$ 6,276

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(2) Changes to net defined benefit assets are as follows:

2019 Balance as at January 1 Interest fees (income) Service cost of the previous term Number of remeasurement: Return on plan assets (excluding amounts that are included in interest revenue or expenses) Effect of mortality assumptions Effect of financial assumptions Adjustments based on history Contribution to retirement fund Pension payment Balance as at December 31	($ (	Present value of defined benefit obligations 11,578) 86) 9,170 2,494) - 1) 71) 6 66) - - 2,560)	(	Fair value of employee benefit plan assets $ 17,854 137 9,361) 8,630 643 - - - 643 872 - $ 10,145	Net defined benefit	Net defined benefit
				$	$ (	assets 6,276 51 191) 6,136 643 1) 71) 6 577 872 - 7,585
	(
	( (				( (
	(
	($			$	$

(3) The assets of the Company's defined benefit pension plan are entrusted to the Bank of Taiwan in accordance with Article 6 of the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund (i.e., deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, and investment in domestic or foreign real estate and its securitization products) within the proportion and amount of the entrusted items set forth in the annual investment and utilization plan of the fund. The use of assets is supervised by the Labor Pension Fund Supervisory Committee. For the use of the fund, the minimum annual earnings to be distributed in the final accounts shall not be lower than the earnings calculated based on the interest rate of two-year time deposits in a local bank. Any shortfall shall be made up by the National Treasury with the approval of the competent authority. As the Company had no rights to participate in the operations and management of the Fund,

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the Company is unable to disclose the classification of the fair value of plan assets in accordance with Paragraph 142 of IAS 19. Please refer to the Labor Pension Fund Utilization Report published by the government for each year for the fair value of the total assets of the fund as of December 31, 2019.

• (4) The actuarial assumptions related to pensions are summarized as follows:

Discount rate Future salary increase rate	2019 0.65% 2.00%

The assumptions for future mortality are based on statistics published by each country and past data.

The present value of defined benefit obligations affected by the adoption of key actuarial assumptions is analyzed as follows:

Discount rate Increase by 0.25% December 31, 2019 Impact on the present value of defined benefit obligations ($ 21)	Decrease by 0.25% $ 21	Future salary increase rate Increase by 0.25% Decrease by 0.25% $ 21 ($ 21)
		Increase by 0.25% $ 21

The aforementioned sensitivity analysis is an analysis of the effect of a change in a single assumption while other assumptions remain unchanged. In actual practice, many changes in assumptions may be linked. The sensitivity analysis is consistent with the methodology used for calculating the net pension liabilities on the balance sheet.

• (5) The Company's expected contribution to the pension plan in 2021 is $0.

• Effective July 1, 2005, the Company has 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 contributes 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 Company in accordance with the above pension plan were $3,069 and $3,032 in 2020 and 2019.

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(XIII)Share capital

1. As at December 31, 2020 and 2019, the Company's authorized capital was $7,000,000 and the paid-in capital was $3,800,000 and $6,965,825, respective. The par value per share is $10. The payment for all issued shares of the Company has been collected. Reconciliation between the beginning and the ending of the Company's ordinary shares outstanding is as follows:

utstanding is as follows:
January 1 Cash refunded in capital reduction December 31	2020 696,582,479 ( 316,582,479) 380,000,000	2019
		696,582,479 -
		696,582,479

1. On August, 3, 2020, the Company's Board of Directors resolved to reduce capital and return cash of $3,165,825 totaling 316,582 thousand shares. It was passed in the extraordinary shareholders meeting on September 18, 2020 and became effective after the approval of the Financial Supervisory Commission on October 27, 2020. The Company has completed the registration of changes. As of December 31, 2020, the capital reduction payments were listed under "other accounts payable".

(XIV)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, 2020 $ 596,116 1,724 3,323 17,652 8,868 $ 627,683	December 31, 2019
		$ 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.

(XV)Retained earnings

1. 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 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

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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.

1. The shareholders' meeting approved the amendment of the Articles of Incorporation in a resolution on June 10, 2020. According to the Company's earnings distribution policy in the Articles of Incorporation, the Company may proceed with the distribution of earnings of making up for losses at the end of each quarter in accordance with the Company Act. Before distributing earnings, the Company shall estimate and retain payable taxes, make up for losses, and allocate funds to legal reserve. However, the allocation of legal reserve does not apply when the Company's legal surplus reserve has reached its paid-in capital. Where the earnings are distributed in cash, they shall be processed in accordance with a resolution of the meeting of the Board of Directors and reported in the shareholders' meeting. Where the Company intends to distribute dividends by issuing new shares, it shall be processed in accordance with Article 240 of the Company Act based on a resolution of the shareholders' meeting.

2. 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.

3. 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.

4. 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%.

5. The appropriations of 2019 and 2018 earnings were approved by the shareholders’ meeting on June 10, 2020 and June 18, 2019, respectively. Details are summarized as follows:

Legal reserve Cash dividends	2019	2019	2018	2018
	Amount $ 5,689 104,487	Dividends per share (NT$) $ - 0.15	Amount $ - 348,291	Dividends per share (NT$) $ - 0.50

1. The earnings distribution for the second quarter and third quarter of 2020 approved by the

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Board of Directors on August 3 and December 21, 2020 are summarized as follows:

Legal reserve Cash dividends	2020 Q2	2020 Q2	2020 Q3	2020 Q3
	Amount $ 454,824 1,044,874	Dividends per share (NT$) $ - 1.50	Amount $ 23,162 -	Dividends per share (NT$) $ - -

1. The 2020 earnings distribution proposal has not yet been approved by the Board of Directors as of March 22, 2021.

2. Please refer to Note 6 (22) for more information on employees' remuneration and Directors' remuneration.

(XVI)Other equity interests

2020 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total January 1 $ 22,266 $ 73,244 $ 95,510 Valuation adjustment - the Company - 445,523 445,523 Valuation adjustment - subsidiaries - ( 8,697) ( 8,697) Valuation adjustment transferred to retained earnings ( 16,161) Currency translation differences( 150) - ( 150) December 31 $ 22,116 $ 493,909 $ 516,025 2019 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total January 1 $ 22,271 $ 9,981 $ 32,252 Valuation adjustment - the Company - 17,810 17,810 Valuation adjustment - subsidiaries - 45,453 45,453 Valuation adjustment transferred to retained earnings - - - Currency translation differences ( 5) - ( 5) December 31 $ 22,266 $ 73,244 $ 95,510			2020 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total $ 73,244 $ 95,510 445,523 445,523 ( 8,697) ( 8,697) ( 16,161) - ( 150) $ 493,909 $ 516,025 2019
			$ 493,909
			2019
		Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total $ 22,271 $ 9,981 $ 32,252 - 17,810 17,810 - 45,453 45,453 - - - ( 5) - ( 5) $ 22,266 $ 73,244 $ 95,510

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(XVII)Operating revenue

Operating revenue
Revenue from contracts with customers Other	2020	2019
	$ 13,781,317 8,025 $ 13,789,342	$ 1,385,908 7,758
		$ 1,393,666

1. Detailed items of revenues from contracts with customers The Company’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:

2020 Revenue recognition time - Revenue recognized at a certain point in time - Revenue transferred gradually as time progresses 2019 Revenue recognition time - Revenue recognized at a certain point in time - Revenue transferred gradually as time progresses	Sales of construction projects $ 13,741,545 - $ 13,741,545 Sales of construction projects $ 1,277,723 - $ 1,277,723	$ $	$

1. The total amounts in the apportionment of the transactions and estimated year of revenue recognition for the Company's outstanding contract performance obligations for sales contracts signed as of December 31, 2020 are as follows:

contracts signed as of December 31, 2020 are as follows:
Estimated year of revenue recognition 2021	Amount in signed contracts
	$ 4,618,716

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1. Contract assets and contract liabilities

2. The Company recognizes the following contract liabilities from contract revenue from customers:

December 31, 2020 December 31, 2019 January 1, 2019

	December 31, 2020	December 31, 2019	January 1, 2019
Contract liabilities - current: Contract liabilities - advance receipt of land payment Contract liabilities - advance receipt of property payment	$ 436,101 516,059 $ 952,160	$ 421,242 566,060 $ 987,302	$ 411,293 397,223
			$ 808,516

• (1) The Company has included customers' advance payments in the contracts for presales houses, and the period between the advanced payment and the transfer of the control of the product is longer than one year. The Company 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	2020 $ 352,793	2019
		$ 138,832

(XVIII)Interest income

Interest from bank deposits Other interest income	2020 $ 3,954 50,623 $ 54,577	2019 $ 3,464 11,996 $ 15,460

(XIX)Other income

Dividend income Other	2020 $ 40,055 19,307 $ 59,362	2019
		$ 4,713 2,873 $ 7,586

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(XX)Other profits and losses

Gains on disposal of investments Net gains (losses) on financial assets at fair value through profit or loss Other	2020 $ 358 555 ( 170) $ 743	2019
		$ 465 2,288 ( 2,012) $ 741

(XXI)Finance costs

Interest expenses: Bank borrowings Interest on short-term notes and bills payable Other Minus: Amount eligible for asset capitalization Finance costs	2020 $ 96,616 25,834 4,768 127,218 ( 85,451) $ 41,767	2019
		$ 150,155 36,985 2,678 189,818 ( 127,144) $ 62,674

(XXII)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 expenditures Rent Management fees Other expenses Operating costs and expenses	2020 $ 8,154,559 160,187 24,142 178 18,716 12,530 41,802 87,124 2,950 2,866 89,822 $ 8,594,876	2019
		$ 1,034,557 87,650 22,442 67 20,878 12,326 20,321 38,718 5,599 10,391 41,628 $ 1,294,577

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(XXIII)Employee benefit expenses

Salary expenses Labor and health insurance fees Pension expenses Remuneration for Directors Other benefit expenses	2020 2019
	$ 129,225 $ 73,357 5,692 5,560 5,869 3,812 3,927 2,800 15,474 2,121
	$ 160,187 $ 87,650

1. According to the Articles of Incorporation in 2019, if the Company has earnings in the current year, the Company's remuneration for employees and Directors shall be 2% to 5% and under 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.

2. The shareholders' meeting passed an amendment of the Articles of Incorporation in a resolution on June 10, 2020, which stated that if the Company has earnings in the current year, the Company's remuneration for employees and Directors shall be 0.5% to 5% and under 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.

3. The Company's estimated amounts of employees' remuneration in 2020 and 2019 amounted to $26,059 and $1,322, respectively. The estimated amounts of Directors' remuneration are $26,059 and $1,322, respectively. All amounts are recognized as salary expenses.

4. The estimated amounts based on the profitability in 2020 are 0.5% and 0.5%, respectively. The estimated amounts and the method of distribution of employees' remuneration have not yet been approved by the Board of Directors. Employees' remuneration and Directors' remuneration in the Board of Directors' resolution for 2019 were equal to the amount recognized in the financial statements for 2019.

Information on employees’ remuneration and directors’ remuneration of the Company for 2019 as resolved by the Board of Directors is posted in the "Market Observation Post System".

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(XXIV)Income tax

1. Income tax expenses

(1) Components of income tax expenses:

Current income tax Income tax arising in the current period Land value increment tax included in current income tax Adjustments in respect of prior years Total current income tax Deferred income tax Origination and reversal of temporary differences Income tax (benefits) expenses	2020 $ 44,294 171,852 ( 5,407) 210,739 5,784 $ 216,523	2019
		$ 5,407 1,897 - 7,304 ( 717) $ 6,587

(2) The Company's income tax directly in other comprehensive income was $0 in both 2020 and 2019.

1. Relationship between income tax expenses and accounting profits:

2020 Income tax from net profit before tax calculated at the statutory tax rate $ 1,031,932 Expenses to be excluded based on tax laws - Tax-exempt income based on tax laws ( 1,112,818) Temporary differences not recognized in deferred income tax assets 125,450 Tax losses in previous years not recognized in deferred income tax assets - Origination and reversal of temporary differences 5,784 Adjustments in respect of prior years ( 5,407) Land value increment tax included in current income tax, etc. 171,582 Income tax (expenses) profit $ 216,523

2019

$ 12,696 - ( 1,320) ( 2,502) ( 3,467) ( 717) - 1,897 $ 6,587

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

Deferred income tax assets Unrealized expenses $ Deferred income tax assets Unrealized expenses $			2020	2020	2020
		January 1 5,784	Recognized in profit and loss Recognized in other comprehensive income ($ 5,784) $- 2019	Recognized in other		December 31 $-
				comprehensive income $-
		January 1 5,067	Recognized in profit and loss $ 717	Recognized in other		December 31 $ 5,784
				comprehensive income $-
Unrealized expenses

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

				December31,2019	December31,2019	December31,2019	December31,2019
Year occurred 2017			Reported amount/approved amount		Amount not yet deducted $-	Amount not yet		Unrecognized deferred income tax assets $-			Final deductible
							deducted -			tax assets -		year 2027
			$ 17,334

1. The Company's deductible temporary differences not recognized as deferred income tax assets as of December 31, 2020 and 2019 were both $0.

2. The Company’s profit-seeking enterprise income tax returns have been approved by the tax authorities up to 2018.

(XXV)EPS

the tax authorities up to 2018. S
Basic earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees' remuneration Diluted earnings per share Profit attributable to ordinary shareholders of the parent considering assumed conversion of all dilutive potential ordinary shares				2020
		Amount after tax $ 4,943,139 - $ 4,943,139	Weighted average number of ordinary shares outstanding (shares in thousands) 652,348 1,054 653,402		$	EPS (NT$) 7.58 7.57
					$

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2019

		2019	2019
Basic earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees' remuneration Diluted earnings per share Profit attributable to ordinary shareholders of the parent considering assumed conversion of all dilutive potential ordinary shares	Amount after tax $ 56,890 -	Weighted average number		$	EPS (NT$) 0.08
			of ordinary shares outstanding (shares in thousands) 696,582 79 696,661
				$	0.08
	$ 56,890

(XXVI)Changes in liabilities from financing activities

January 1, 2020 $ Changes in cash flows from financing activities ( Other non-cash changes December 31, 2020 $	January 1, 2020 $ Changes in cash flows from financing activities ( Other non-cash changes December 31, 2020 $	Short-term borrowings 5,329,714 2,135,752) - 3,193,962	(	Short-term notes and bills		Lease liabilities	Deposits received $ 3,260 ( 1,647) - $ 1,613	Deposits received	Dividends payable $ - ( 1,149,361) 1,149,361 $-	Total $ 7,465,955 ( 4,017,478) 1,149,361
				payable $ 2,030,124 711,356) - $ 1,318,768
	$									$ 4,597,838

Short-term borrowings January 1, 2019 $ 5,891,810 Changes in cash flows from financing activities ( 562,096) Other non-cash changes - December 31, 2019 $ 5,329,714	Short-term notes and bills payable $ 812,091 1,218,033 -	Short-term notes and bills payable $ 812,091 1,218,033 -		Lease liabilities		Deposits received	$ (	Dividends payable - 348,291 348,291) -	Total $ 6,822,878 990,533 ( 347,456) $ 7,465,955
		payable 812,091 1,218,033 -
						$ 1,882 1,378 - $ 3,260
	$ 2,030,124						$

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VII. Related-party transactions

(I)Name and relationship of related parties

Names of related parties

Shen Yang Construction Co., Ltd. (Shen Yang)

Shang Yang International Asset Management Co., Ltd. (Shang Yang)

Che Yang Agricultural Technology Co., Ltd. (Che Yang) Chi Yang Construction Co., Ltd. (Chi Yang)

Sweet Me Hot Spring Resort Co., Ltd. (Sweet Me) 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) 3 individuals including Shao-Hui Peng

Relationship with the Company

Subsidiary Subsidiary

Sub-subsidiary Sub-subsidiary

The Company's affiliate enterprises: Other related party Other related party

Other related party

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

Other related party

(II)Major transactions with related parties

1. Operating revenue - income from management services

Other related party - Wei Li 2.Operating revenue-rental income	2020 $ 1,773	2019
		$ 45,718

Subsidiary Sub-subsidiary Other related party	2020 $ 389 186 2,933 $ 3,508	2019
		$ 314 140 2,574 $ 3,028

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3. Promotion expenses

Other related party	2020 $ 1,207	2019
		$ 1,380

4. Administrative expenses

Other related party - Hi-Lai Foods Other related party - Others	2020 $ 5,390 68 $ 5,458	2019
		$ 3,942 1,872 $ 5,814

5. Interest income

Subsidiary - Shen Yang	2020 $-	2019
		$ 1,547

6. Other receivables

Other receivables
Subsidiary - Shen Yang Subsidiary - Shang Yang Other related party - Wei Li	December 31, 2020 December 31, 2019 $ 104,529 $ 110,359 - 5,830 49,866 48,003
	$ 154,395 $ 164,192

The aforementioned accounts receivable from related parties consist mainly of the operating management income receivable recognized based on the letter of appointment for operating management signed by the Company for joint development and operation projects.

7. Other expenses payable

Other related party	December 31, 2020 $ 319	December 31, 2019 $ 556

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8. Other credit and debt transactions

(1) Refundable deposits

Other related party (2) Deposits received Other related party	December 31, 2020 $ 24,597 December 31, 2020 $ 450	December 31, 2019 $ 24,597 December 31, 2019 $ 450

9. Acquisition of financial assets

The Company participated in the cash capital increase of related parties in 2020 and the information on the subscriptions of the Company is as follows:

Account Non-current financial assets at fair value through other comprehensive income Investments recognized under the equity method - subsidiaries - affiliate enterprise	Number of shares traded 6,851 thousand shares 5,400 thousand shares 70,000 thousand shares 8,000 thousand shares	Object of transaction Hanshin Department Store - stocks Grand Hi-Lai Hotel - stocks Shen Yang - stocks Hanshin Shopping Plaza - stocks	2020
			Acquisition price $ 102,765 81,000 $ 183,765 $ 700,000 $ 480,000

The Company has not acquired financial assets from related parties in 2019.

10. Endorsements and guarantees

Subsidiary - Shen Yang Other related party - Wei Li - Chi Hsuan - Hanshin Asset Management	December 31, 2020 $ 533,000 5,048,675 558,000 798,000 $ 6,937,675	December 31, 2019 $ 668,400 4,133,535 558,000 399,000 $ 5,758,935

1. Other

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• (1) The Company signed a joint investment and development contract with Wei Li International Development Co., Ltd., Chuwa Wool Industry Co., (Taiwan) 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.

• (2) The Company signed a joint investment and development agreement with Hanshin Asset Management Co., Ltd., Li Yang Agricultural Technology Co., Ltd., and Heng Jui Development Co., Ltd. for 19 plots of land including plot 162 on Gongjian Section, Xizhi District, New Taipei City with a total area of 17,051 square meters on November 25, 2016. According to the agreement, the Company serves as the manager of the Project. The investment ratio is 35% for the Company, 35% for Hanshin Asset Management Co., Ltd., 15% for Li Yang Agricultural Technology Co., Ltd., and 15% for Heng Jui Development Co., Ltd. The parties later signed the "Joint Development Supplementary Agreement" on December 29, 2017 for changing the investment ratio and settlement distribution to 35% for the Company, 35% for Hanshin Asset Management Co., Ltd., 25% for Li Yang Agricultural Technology Co., Ltd., and 5% for Heng Jui Development Co., Ltd.

• (3) 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 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 "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

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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".

(III)Key management compensation

The Company's remuneration for Directors and key management:

Short-term employee benefits	2020	2019
	$ 13,587	$ 12,095

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.

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VIII. Pledged assets

The following assets of the Company have been provided as collateral for bank loans, performance bond, and warranty bond:

Assets Inventories Other financial assets - current (restricted deposits) Property, plant and equipment Investment properties Other financial assets - non-current (time deposits)	Book value December 31, 2020 $ 7,181,399 187,750 18,285 42,750 48,334 $ 7,478,518	Book value December 31, 2019 $ 10,133,241 301,343 18,543 43,318 48,334 $ 10,544,779	Purpose of collateral 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, 2020, the total construction contract price between the Company and non-related parties was $5,603,515 and the amount that has yet not been included in the estimation was $1,322,077.

X. Significant disaster loss

None.

XI. Significant events after the balance sheet date

The Company plans to acquire 9 plots of land on Zhongyi Section, Tucheng District, New Taipei City based on a resolution of the Board of Directors on January 18, 2021. The project will be jointly developed with five companies with a total transaction amount of NT$1.856 billion. The Company's investment ratio is 50%.

XII. Other

(I) Capital management

The Company implements capital management to ensure sustainable development of the Company maximize the benefit for its shareholders by optimizing debts and equity. The Company'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 Company may adjust the amount of dividends paid to shareholders, issue new shares, or sell assets to reduce debts. The Company adjusts loan amounts based on the construction progress and the funding required for operations.

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(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 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 Lease liabilities	December 31, 2020 $ 20,608 378,534 800,164 $ 1,199,306 4,611,385 41,072 224,982 424,171 187,750 48,334 $ 5,537,694 $ 3,193,962 1,318,768 58,281 808,296 3,434,106 $ 8,813,413 $ 83,495	December 31, 2019 $ 25,053 91,414 134,499 $ 250,966 1,154,077 61,748 15,808 351,806 301,343 48,334 $ 1,933,116 $ 5,329,714 2,030,124 58,851 466,152 74,918 $ 7,959,759 $ 102,857

2. Risk management policy

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

The Company 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 Company shall strictly abide by the regulations established for financial risk management.

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3. Significant financial risks and degree of financial risks

• (1) Market risks

Foreign exchange risks

The Company'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 Company'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 Company diversifies its investment portfolio in accordance with the limits set by the Company.

• B. The Company'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 1% 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 2020 and 2019 will increase or decrease by $206 and $251, 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 $3,785 and $914, respectively.

Interest rate risk for cash flow and fair value

• A. The Company's interest rate risks mainly arise from short-term borrowings and short-term notes and bills payable. Borrowings at floating rates expose the Company to cash flow interest rate risks, which are partially offset by cash held at floating rates. Borrowings at fixed rates expose the Company to fair value interest rate risks. In 2020 and 2019, the Company's loans calculated based on floating interest rates were calculated in NTD.

• B. The Company 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 2020 and 2019 would result in an increase or decrease of $45,127 and $73,598, respectively.

• (2) Credit risks

• A. The Company's credit risks refer to the risks of financial loss to the Company 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 Company establishes credit risk management from the perspective of the Company. 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 Company'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.

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Therefore, the amount of accounts receivable arising from the sale of properties is considered insignificant and the possibility of non-recovery is low. The Company manages receivables in special transactions on an individual basis and tracks such receivables on a regular basis. The amount of the Company's assessed credit impairment losses as of December 31, 2020 and 2019 was insignificant.

• D. As of December 31, 2020 and 2019, there were no debts with recourse that were written off.

• (3) Liquidity risks

• A. Cash flow forecasting is performed by each Company department and aggregated by the Company treasury. The Company's Finance Department monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities.

• B. The Company's non-derivative financial liabilities are grouped in the table below based on the maturity date and analyzed based on the remaining period at the balance sheet date to the contractual maturity date. The amount of undiscounted contract cash flows of notes payable and 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:

December 31, 2020 Short-term borrowings $ Short-term notes and bills payable Accounts payable Lease liabilities	Within 1 year 2,459,936 $ 1,319,160 661,276 21,278	1 to 3 years 3 years or above 28,260 $ 797,659 - - 147,020 - 43,834 21,917

Non-derivative financial liabilities: December 31, 2019 Short-term borrowings $ Short-term notes and bills payable Accounts payable Lease liabilities	Within 1 year 3,745,458 $ 2,032,010 184,816 21,278	1 to 3 years 3 years or above 1,727,286 $ - - - 281,336 - 43,195 43,814

(III) Fair value information

1. 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

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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.

1. Please refer to Note 6 (9) for information on the fair value of investment properties carried at cost.

2. 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.

3. 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:

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

Level 1 December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss $ 20,608 Current financial assets at fair value through other comprehensive income $ 378,534 Non-current financial assets at fair value through other comprehensive income $- Level 1 December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss $ 25,053 Current financial assets at fair value through other comprehensive income $ 91,414	Level 1 December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss $ 20,608 Current financial assets at fair value through other comprehensive income $ 378,534 Non-current financial assets at fair value through other comprehensive income $- Level 1 December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss $ 25,053 Current financial assets at fair value through other comprehensive income $ 91,414	Level 2 $-	Level 3 $-	Total $ 20,608
		$-	$-	$ 378,534
		$-	$ 800,164 Level 3 $-	$ 800,164
	Level 1 $ 25,053 $ 91,414	Level 2 $-		Total $ 25,053
		$-	$-	$ 91,414

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Non-current financial assets at fair value through other comprehensive income $ - $ - $ 134,499 $ 134,499

• (2) The methods and assumptions that the Company used to measure the fair value are as follows:

• A. The instruments for which the Company used market quoted prices as their fair values (i.e., Level 1) are divided by the characteristics of the instruments as follows:

Market quoted price

Listed stocks Open-end funds 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 Company in 2020 and 2019.

• The Level-3 movements for 2020 and 2019 were as follows:

January 1 Acquired in the current period Disposed in the current period Valuation adjustment December 31	2020 $ 134,499 183,765 - 481,900 $ 800,164	2019
		$ 133,023 4,355 - ( 2,879) $ 134,499

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

2. 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:

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Equity instruments: Non-listed stocks Equity instruments: Non-listed stocks	December 31, 2020 Fair value Valuation technique $ 780,313 Comparable public company analysis $ 19,851 Net asset value approach December 31, 2019 Fair value Valuation technique $ 115,204 Comparable public company analysis $ 19,295 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) 0.54~5.46 30.00% Not applicable Range (Weighted average) 0.59~4.46 21.83% ~22.55% 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
	$ 19,295

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XIII. Supplementary disclosures

(I) Significant transactions information

1. Loans to others: None.

2. Provision of endorsements and guarantees to others: Please refer to Table 1.

3. Holding of marketable securities at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures): Please refer to Table 2.

4. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of paid-in capital or more: None.

5. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: Table 3.

6. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Table 4.

7. Purchase or sale of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: None.

8. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 5.

9. Trading in derivatives: None.

10. The business relationship and significant transactions between the parent company and its subsidiaries: Please refer to Table 6.

(II) Information on investees

Names, locations and other information of investee companies (excluding the investees in Mainland China): Please refer to Table 7.

(III) Information on investments in Mainland China

1. Basic information: Please refer to Table 8.

2. Significant transactions with the investees in Mainland China either directly or indirectly through other companies in the third areas: Please refer to Table 8.

(IV) Information on major shareholders

Information on major shareholders: Please refer to Table 9.

XIV. Segment information

Not applicable.

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Unit: NT$1,000

Kuo Yang Construction Co., Ltd. Statement of Inventories December 31, 2020

Item Houses and land held for sale Minus: Allowance for price decline Houses and land under construction Kuo Yang The Green Place Project (Taiwan Sugar Annan Project) Good morning, Kuo Yang Project (Keelung Tiaohe Section Project) Kuo Yang Silicon Valley (Xizhi Gongjian Section Project) Neihu Jiuzong Section Minus: Allowance for price decline Land for construction Zhudong Section Beitou Guangming Section Minquan East Road Project Jilin Urban Renewal Project Jingmei Section Ren'ai Urban Renewal Project Guanghua Section Kaohsiung Yunwen Section Other Minus: Allowance for price decline Prepayments for houses and land and others Kuo Yang The Green Place Project (Taiwan Sugar Annan Project) Total	Amount Cost $ 4,170,852 ( 573,205)	Market price (Note)	Remarks
		$ 4,546,016 42,180 1,601,961 1,444,398 1,074,684 4,163,223 136,217 - 246,820 123,182 34,260 4,820 12,500 108,170 26,663 692,632 354,076 $ 9,755,947
	$ 3,597,647
	42,180 1,601,961 1,445,665 1,074,684
	4,164,490 ( 1,267)
	4,163,223
	251,872 12,633 273,821 123,182 40,174 4,820 12,500 108,170 26,663
	853,835 ( 161,203)
	692,632
	354,076
	$ 8,807,578

Note: Due to the nature of the construction industry, the market value of land under construction and land awaiting construction specified as the cost or net realizable value, whichever is lower.

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Kuo Yang Construction Co., Ltd. Statement of Changes in Houses and Land under Construction From January 1, 2020 to December 31, 2020

Unit: NT$1,000

Project name Greater Nangang Project Kuo Yang The Green Place Project (Taiwan Sugar Annan Project) Good morning, Kuo Yang Project (Keelung Tiaohe Section Project) South Manor Project (Wenshan Gongxun Section Project) Kuo Yang Silicon Valley (Xizhi Gongjian Section Project) Neihu Jiuzong Section	Opening balance $ 3,629,013 532,530 1,200,505 1,145,838 1,088,537 - $ 7,596,423	Increase in current period Investment cost Capitalized interest $ 268,094 $ 29,603 301,171 1,943 384,909 16,547 1,956,289 20,643 340,692 16,436 1,074,405 279 $ 4,325,560 $ 85,451	Transfer in current period Inward transfer from land awaiting construction Sold in this period $ - ($ 3,926,710) - - - - - - - - - - $- ($ 3,926,710)	Outward transfer after construction completion - ( 793,464) - ( 3,122,770) - - ($ 3,916,234)	Ending balance $ - 42,180 1,601,961 - 1,445,665 1,074,684 $ 4,164,490	Remarks None Loan collateral already provided " None Loan collateral already provided "
			Inward transfer from land awaiting construction $ - - - - - - $-

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Kuo Yang Construction Co., Ltd. Statement of Changes in Investments Accounted for Using Equity Method From January 1, 2020 to December 31, 2020

Unit: NT$1,000

Increase in current period Number of shares Amount 70,000,000 $ 700,000 - - - - 8,000,000 520,343 - - $ 1,220,343	Decrease in current period Number of shares Amount - ($ 92,130) ( 8,200,000) ( 55,162) - ( 56) - - - ( 714) ($ 148,062)	Other adjustments Ending balance (Note) Number of shares Sharehol ding ratio Amount ($ 2,286) 160,000,000 100% $1,384,417 ( 6,404) 61,800,000 100% 664,003 ( 157) 200,000 100% 2,309 - 8,000,000 20% 520,343 - 2,200,000 20% 12,933 ($ 8,847) $2,584,005	Other adjustments Ending balance (Note) Number of shares Sharehol ding ratio Amount ($ 2,286) 160,000,000 100% $1,384,417 ( 6,404) 61,800,000 100% 664,003 ( 157) 200,000 100% 2,309 - 8,000,000 20% 520,343 - 2,200,000 20% 12,933 ($ 8,847) $2,584,005	Other adjustments Ending balance (Note) Number of shares Sharehol ding ratio Amount ($ 2,286) 160,000,000 100% $1,384,417 ( 6,404) 61,800,000 100% 664,003 ( 157) 200,000 100% 2,309 - 8,000,000 20% 520,343 - 2,200,000 20% 12,933 ($ 8,847) $2,584,005	Net equity Unit price (NTD) Total price $ 8.91 $1,426,079 10.75 664,266 11.30 2,260 34.86 278,909 5.88 12,933	Provision	Remarks
						of collateral
			ding ratio 100% 100% 100% 20% 20%
						or pledges
70,000,000 - - 8,000,000 -	- ( 8,200,000) - - -					None None None None None
		($		$2,584,005

Note: Other adjustments represent translation differences in the financial statements of foreign operations and valuation adjustments on financial assets at fair value through other comprehensive income.

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Kuo Yang Construction Co., Ltd. Statement of Short-term Notes and Bills Payable December 31, 2020

Unit: NT$1,000

Amount

Item Financial institution Commercial papers payable Mega Bills Finance China Bills Finance International Bills Finance International Bills Finance International Bills Finance	Contract period 2020/11/11~202 1/02/03 2020/11/13~202 1/01/21 2020/12/22~202 1/02/25 2020/12/30~202 1/01/29 2020/12/25~202 1/1/15	Coupon rate 1.262%~1. 300% 0.23%~0.2 8% 0.700% 0.420% 0.700%	Discounted unamortized short- term notes and bills payable Issuance amount $ 37,050 ($ 39) 638,010 ( 52) 119,600 ( 128) 474,500 ( 158) 50,000 ( 15) $ 1,319,160 ($ 392)	Book value $ 37,011 637,958 119,472 474,342 49,985 $ 1,318,768	Collateral Houses and land held for sale " " Unsecured Property, plant and equipment, investment property, and land for construction

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Kuo Yang Construction Co., Ltd. Statement of Operating Revenue From January 1, 2020 to December 31, 2020

Unit: NT$1,000

Item Revenue from sale of properties Revenue from land Revenue from houses Other Sales discount Rental income	Summary		Amount
			$ 12,119,896 1,665,126 39,772 ( 43,477) 13,781,317 8,025 $ 13,789,342

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Kuo Yang Construction Co., Ltd. Statement of Operating Cost From January 1, 2020 to December 31, 2020

Unit: NT$1,000

Item Opening inventory Houses and land held for sale Houses and land under construction Land for construction Prepayments for land and others Plus: Purchases in this period Expenses for investments in construction in the current period Interest capitalization Cost of leases Operation and management service fees Other Minus: Closing inventory Houses and land held for sale Houses and land under construction Land for construction Prepayments for houses and land and others Construction cost	$	Amount Subtotal Total 3,632,952 7,595,156 684,294 727,639 $ 12,640,041 3,531,677 684,782 85,451 1,149 6,126 14,060 3,597,647) 4,163,223) 692,632) 354,076) ( 8,807,578) $ 8,155,708
	( ( ( (

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Kuo Yang Construction Co., Ltd. Statement of Operating Expenses From January 1, 2020 to December 31, 2020

Unit: NT$1,000

Kuo Yang Construction Co., Ltd. Statement of Operating Expenses From January 1, 2020 to December 31, 2020	Unit: NT$1,000
Item	Amount Remarks
Promotion expenses Transferred deferred promotion expenses recognized based on full completion Advertising expenses Sales expenses Other expenses Administrative expenses Salary expenses Tax Rent expenditures Insurance premiums Professional service expenses Other expenses Total	$ 87,124 28,952 12,589 20,584 149,249 131,349 17,925 1,755 5,692 11,957 121,241 289,919 $ 439,168

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Kuo Yang Construction Co., Ltd. Summary Table of Employee Benefit, Depreciation, Depletion and Amortization Expenses for the Current Year

From January 1, 2020 to December 31, 2020

Unit: NT$1,000

Employee benefit expenses Salary expenses Labor and health insurance fees Pension expenses Remuneration for Directors Other employee benefit expenses Depreciation Deduction expenses Amortization cost				2020	2020				2019	2019
	Classified as operating costs Classified as operating expenses $ - $ 129,225 $ - 5,692 - 5,869 - 3,927 - 15,474 $- $ 160,187 $ $- $ 24,142 $ $- $- $ $- $ 178 $					Total 129,225 5,692 5,869 3,927 15,474	Classified as operating costs Classified as operating expenses $ - $ 73,357 - 5,560 - 3,812 - 2,800 - 2,121				Total $73,357 5,560 3,812 2,800 2,121
	$	costs - - - - - - - - -
			$ 129,225 5,692 5,869 3,927 15,474 $ 160,187 $ 24,142 $-
	$				$	160,187	$- $			87,650	$87,650
	$				$	24,142	$- $			22,442	$22,442
	$				$	-	$- $			-	$-
	$		$ 178		$	178	$- $			67	$ 67

1. As of December 31, 2020 and 2019, the Company's average number of employees were 70 and 70, respectively. There were 8 and 8 Directors who do not serve concurrently as employees.

2. The Company discloses the following information in accordance with the table above:

3. (1) The average employee benefit expenses in 2020 and 2019 amounted to $2,520 and $1,369, respectively.

4. (2) The average employee salary expenses in 2020 and 2019 amounted to $2,084 and $1,183, respectively.

5. (3) The adjustment of the average employee salary expenses in 2020 was 76.162%.

6. The Company’s salary policy is as follows:

7. (1) Remuneration for Directors: The Board of Directors is authorized to determine the remuneration paid to Directors based on their participation in the Company's operations, the value of their contributions, and prevailing rates in the industry.

8. (2) Manager: The Company pays reasonable compensation to the manager based on his/her rank, position, experience, local living standard, consumer price index, contribution to the Company, and team leadership skills.

9. (3) Employees: The remuneration for employees includes fixed salaries and bonuses. The fixed salary is paid each month and bonuses include the year-end bonuses, employees' remuneration, and bonuses for Dragon Boat Festival and Mid-Autumn Festival.

10. (a) Fixed salary: The fixed salary is based on the individual's key core competencies and professional skills, and is paid based on the rank, position, and experience specified in the "Rank and Salary Range Table".

11. (b) Year-end bonus: The year-end bonus is based on the Company's business operations and performance in the current year and is calculated on an annual basis.

12. (c) Employees' remuneration: In the event of profit in the year, the Company shall appropriate 0.5% to 5% of the pre-tax earnings (excluding remuneration for Directors and employees) as remuneration for employees. 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 remuneration for employees is determined by the Board of Directors which shall resolve to distribute the remuneration in stocks or cash.

13. The Company has established an Audit Committee and therefore does not pay remuneration to supervisors.

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Table 1

Kuo Yang Construction Co., Ltd. Provision of endorsements and guarantees to others January 1 to December 31, 2020

e 1 No. (Note 1) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	Name of company providing endorsement or guarantee Entity for which the endorsement/guarantee is made Company name Relationship (Note 2) Kuo Yang Construction Co., Ltd. Wei Li International Development Co., Ltd. 5 ″ Ho Hsin Cheng Co., Ltd. 5 ″ Yu Sheng Development Co., Ltd. 5 ″ Hong Hui Development Co., Ltd. 5 ″ Chan Pang Construction Co., Ltd. 5 ″ Ding Li Development Co., Ltd. 5 ″ Sin Wei Jie Construction Limited Liability Company 5 ″ Tsang Shan Development Co., Ltd. 5 ″ Chi Hsuan Development Co., Ltd. 5 ″ Shen Yang Construction Co., Ltd. 2 ″ Hanshin Asset Management Co., Ltd. 5 ″ Li Yang Agricultural Technology Co., Ltd. 5 ″ Heng Jui Development Co., Ltd. 5 ″ Ta Yuan Construction Co., Ltd. 5 ″ Tsu Yan International Development Co., Ltd. 5	Name of company providing endorsement or guarantee Entity for which the endorsement/guarantee is made Company name Relationship (Note 2) Kuo Yang Construction Co., Ltd. Wei Li International Development Co., Ltd. 5 ″ Ho Hsin Cheng Co., Ltd. 5 ″ Yu Sheng Development Co., Ltd. 5 ″ Hong Hui Development Co., Ltd. 5 ″ Chan Pang Construction Co., Ltd. 5 ″ Ding Li Development Co., Ltd. 5 ″ Sin Wei Jie Construction Limited Liability Company 5 ″ Tsang Shan Development Co., Ltd. 5 ″ Chi Hsuan Development Co., Ltd. 5 ″ Shen Yang Construction Co., Ltd. 2 ″ Hanshin Asset Management Co., Ltd. 5 ″ Li Yang Agricultural Technology Co., Ltd. 5 ″ Heng Jui Development Co., Ltd. 5 ″ Ta Yuan Construction Co., Ltd. 5 ″ Tsu Yan International Development Co., Ltd. 5	Name of company providing endorsement or guarantee Entity for which the endorsement/guarantee is made Company name Relationship (Note 2) Kuo Yang Construction Co., Ltd. Wei Li International Development Co., Ltd. 5 ″ Ho Hsin Cheng Co., Ltd. 5 ″ Yu Sheng Development Co., Ltd. 5 ″ Hong Hui Development Co., Ltd. 5 ″ Chan Pang Construction Co., Ltd. 5 ″ Ding Li Development Co., Ltd. 5 ″ Sin Wei Jie Construction Limited Liability Company 5 ″ Tsang Shan Development Co., Ltd. 5 ″ Chi Hsuan Development Co., Ltd. 5 ″ Shen Yang Construction Co., Ltd. 2 ″ Hanshin Asset Management Co., Ltd. 5 ″ Li Yang Agricultural Technology Co., Ltd. 5 ″ Heng Jui Development Co., Ltd. 5 ″ Ta Yuan Construction Co., Ltd. 5 ″ Tsu Yan International Development Co., Ltd. 5	Limit on endorsements/guarantee	Maximum outstanding balance of endorsements/guarantees	Maximum outstanding	Ending balance of endorsements/guarantees (Note 5) Actual amount drawn down (Note 6) Endorsed/Guaran teed amount with property as collateral $ 5,048,675 $4,618,235 $ - - - - - - - - - - - - - - - - - - - 279,000 236,250 - 558,000 472,500 - 533,000 233,000 - 798,000 399,000 - 665,000 332,500 - 266,000 133,000 - 320,000 203,940 - - - -	am	Actual ount drawn Endorsed/Guaran teed amount with	Endorsed/Guaran	Endorsed/Guaran	Cumulative endorsed/guaranteed	Cumulative endorsed/guaranteed	Maximum endorsed/guarante	Parent company	Parent	Unit: NT$1,000 (Unless specified otherwise) Subsidiar y to parent company (Note 7) Endorsement s and guarantees for entities in Mainland China (Note 7) Remark s N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N	Unit: NT$1,000 (Unless specified otherwise) Subsidiar y to parent company (Note 7) Endorsement s and guarantees for entities in Mainland China (Note 7) Remark s N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N	Unit: NT$1,000 (Unless specified otherwise) Subsidiar y to parent company (Note 7) Endorsement s and guarantees for entities in Mainland China (Note 7) Remark s N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N	Unit: NT$1,000 (Unless specified otherwise) Subsidiar y to parent company (Note 7) Endorsement s and guarantees for entities in Mainland China (Note 7) Remark s N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N	Unit: NT$1,000 (Unless specified otherwise) Subsidiar y to parent company (Note 7) Endorsement s and guarantees for entities in Mainland China (Note 7) Remark s N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N
																			s and guarantees for entities in Mainland
												amount as a percentage of the net
															to subsidiar		y to parent company	y to parent
													value in the most
				s to a single enterprise (Note 3) $ 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336 18,513,336	during the current period						property as collateral - - - - - - - - - - - - - - -		re		y (Note 7)					China (Note 7) N N N N N N N N N N N N N N N
			(Note 2) 5 5 5 5 5 5 5 5 5 2 5 5 5 5 5		(Note 4) $ 8,357,265 625,928 459,867 447,090 638,700 383,220 698,400 511,500 1,023,000 881,400 798,000 665,000 266,000 320,000 112,500												(Note 7)				s
															N N N N N N N N N Y N N N N N		N N N N N N N N N N N N N N N

Table1 Page 1

N

N

N

1 Shen Yang Chi Yang 2 2,852,158 2,415,000 2,415,000 130,300 - Construction Construction Co., Co., Ltd. Ltd.

169.35% 5,704,316

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): 1. 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".

Table1 Page 2

Kuo Yang Construction Co., Ltd.

Holding of marketable securities at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures) December 31, 2020

Table 2

Unit: NT$1,000 (Unless specified otherwise)

Securities held by Type and name of marketable securities Relationship with securities issuer General ledger account Number of shares Kuo Yang Construction Co., Ltd. Franklin Templeton SinoAm Multi-Asset Income Balanced Fund None Current financial assets at fair value through profit or loss 1,000,000 ″ First Bank Fidelity Funds - Asian High Yield Fund None ″ 1,000,000 Shang Yang International Asset Management Co., Ltd. O-Bank No. 1 Real Estate Investment Trust None ″ 1,000,000 ″ Asus 3-Year Maturity Emerging Market Bond Fund None ″ 200,000 Kuo Yang Construction Co., Ltd. Unlisted stocks - Tai Ho Construction Co., Ltd. None Non-current financial assets at fair value through profit or loss 2,400,000 Celestial Talent Limited Cultivate Wealth Limited None ″ 20.1 Kuo Yang Construction Co., Ltd. Listed stocks - Fu I Industrial Co., Ltd. None Current financial assets at fair value through other comprehensive income 1,755,429 ″ Asia Cement Corporation None ″ 1,760,000 ″ Taiwan Cement Corporation None ″ 2,900,048 ″ Chuwa Wool Industry Co., (Taiwan) Ltd. Note 4 ″ 2,500,000 ″ Hi-Lai Foods Co., Ltd. ″ ″ 300,000 Kuo Yang Construction Co., Ltd. Unlisted stocks - United Real Estate Management Co., Ltd. None Non-current financial assets at fair value through other comprehensive income 1,494,794 ″ Hanshin Department Store Co., Ltd. Note 4 ″ 7,218,000 ″ Hanshin Asset Management Co., Ltd. ″ ″ 4,946,472 ″ Grand Hi-Lai Hotel Co., Ltd. ″ ″ 5,401,471 Shen Yang Construction Co., Ltd. Unlisted stocks - Han Chi Technology Co., Ltd. None ″ 450,000 Shang Yang International Asset Management Co., Ltd. Unlisted stocks - Kaohsiung Arena Development Corporation Note 4 ″ 12,500,000 ″ SE Security Corp. None ″ 900,000	Number of	End of period Carrying amount Shareholdi ng ratio Fair value $ 10,130 - $ 10,130 10,478 - 10,478 9,700 - 9,700 1,967 - 1,967 $ 32,275 $ 32,275 $ - 17.14% $ - - 0.11% - $- $- $ 66,970 1.84% $ 66,970 76,032 0.05% 76,032 125,282 0.05% 125,282 71,250 2.72% 71,250 39,000 0.80% 39,000 $ 378,534 $ 378,534 $ 19,851 4.43% $ 19,851 438,854 18.00% 438,854 132,368 2.29% 132,368 209,091 18.00% 209,091 6,714 9.00% 6,714 202,875 5.00% 202,875 14,463 15.96% 14,463 $1,024,216 $1,024,216	End of period Carrying amount Shareholdi ng ratio Fair value $ 10,130 - $ 10,130 10,478 - 10,478 9,700 - 9,700 1,967 - 1,967 $ 32,275 $ 32,275 $ - 17.14% $ - - 0.11% - $- $- $ 66,970 1.84% $ 66,970 76,032 0.05% 76,032 125,282 0.05% 125,282 71,250 2.72% 71,250 39,000 0.80% 39,000 $ 378,534 $ 378,534 $ 19,851 4.43% $ 19,851 438,854 18.00% 438,854 132,368 2.29% 132,368 209,091 18.00% 209,091 6,714 9.00% 6,714 202,875 5.00% 202,875 14,463 15.96% 14,463 $1,024,216 $1,024,216	Remarks
		$ 10,130 10,478 9,700 1,967 $ 32,275 $ - - $- $ 66,970 76,032 125,282 71,250 39,000 $ 378,534 $ 19,851 438,854 132,368 209,091 6,714 202,875 14,463 $1,024,216

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.

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

January 1 to December 31, 2020

Table 3

Unit: NT$1,000

(Unless specified otherwise)

Company that acquired real property Name of property Kuo Yang Construction Co., Ltd. Inventories - Land under construction (land in Neihu Jiuzong Section) Shen Yang Construction Co., Ltd. Inventories - Land awaiting construction (land in Fengshan District, Kaohsiung)	Transaction date Transaction amount 2020/11/09 2020/12/30 $1,520,458 2020/12/16 566,190	Payment status Transaction counterparty Relationship Owner $1,050,595 10 individuals including A and Po Kai Development Co., Ltd. None Not applicable $ - Land Administration Bureau, Kaohsiung City Government None Not applicable	Prior transaction of related counterparty Basis of reference for price determination Relationship with issuer Transfer date Amount Not applicable Not applicable Not applicable Appraisal report from Zhe Yu Real Estate Appraisers Firm, appraisal report from Hung Pang Real Estate Appraisers Firm, and Chih Wei Real Estate Appraisers Firm Not applicable Not applicable Not applicable Not applicable	Basis of reference for	Basis of reference for
					status of usage
					Land for construction Land for construction

Note 1: Where an appraisal is required for an acquired asset, specify the appraisal results in the "reference for price determination".

Note 2: 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 3: 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.

Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more January 1 to December 31, 2020

Table 4

Unit: NT$1,000 (Unless specified otherwise)

Company that disposed of real property Name of property Kuo Yang Construction Co., Ltd. Inventories - houses and land under construction Kuo Yang Construction Co., Ltd. Inventories - houses and land under construction	Transaction date Acquisition date Carrying amount 2020/6/24 Not applicable for pre-sale properties Not applicable 2020/5/7 2009/6/25 $3,926,710	Transaction amount $ 325,529 $9,634,552	Payment collection status $55,340 already collected in accordance with contracts $9,634,552 already collected in accordance with contracts	Gain (loss) on disposal Transaction counterparty Not applicable A Gains on disposal $5,557,850 Fubon Life Insurance Co., Ltd.	Relationship	Purpose of disposal Basis of reference for price determination Gains $321,939 in appraisal report from Hung Pang Real Estate Appraisers Firm Gains Appraisal report from Zhan- Mao Real Estate Appraisers Firm and Hung Pang Real Estate Appraisers Firm	Miscellaneous Not applicable Not applicable
					None None

Note 1: Where an appraisal is required for a disposed asset, specify the appraisal results in the "reference for price determination".

Note 2: 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 3: 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

Kuo Yang Construction Co., Ltd.

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more January 1 to December 31, 2020

Table 5

Unit: NT$1,000

Overdue receivables from related parties Balance of receivables from related Turnover Amount collected subsequent Creditor Transaction counterparty Relationship parties rate Amount Action taken to the balance sheet date Allowance for doubtful accounts Kuo Yang Construction Co., Ltd.[Shen Yang Construction ] Parent company $ 104,529 - $ - - $ - $ - Co., Ltd. and subsidiary

Table 5 Page 1

Kuo Yang Construction Co., Ltd.

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

January 1 to December 31, 2020

Table 6

Unit: NT$1,000

Transaction status

No. (Note 1) Company name Counterparty 0 Kuo Yang Construction Co., Ltd. Shen Yang Construction Co., Ltd. 0 Kuo Yang Construction Co., Ltd. Shen Yang Construction Co., Ltd. 0 Kuo Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. 0 Kuo Yang Construction Co., Ltd. Che Yang Agricultural Technology Co., Ltd. 1 Shang Yang International Asset Management Co., Ltd. Shadwell Limited.	Relationship (Note 2) General ledger account 1 Other receivables - related parties $ 1 Rental/leasing revenue 1 Rental/leasing revenue 1 Rental/leasing revenue 3 Interest payable	Amount 104,529 203 186 186 437	Percentage of consolidated total operating revenues or total assets Transaction terms (Note 3) Note 4 0.51% Note 4 0.00% Note 4 0.00% Note 4 0.00% Note 4 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 6 Page 1

Kuo Yang Construction Co., Ltd.

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

January 1 to December 31, 2020

Table 7

Unit: NT$1,000

(Unless specified otherwise)

Name of investment company Investee Location Main business activities Kuo Yang Construction Co., Ltd. Sweet Me Hot Spring Resort Co., Ltd. Taiwan General hotel industry and restaurant management ″ Hanshin Shopping Plaza Co., Ltd. Taiwan Department store ″ Shadwell Limited British Virgin Islands Investment in real estate property ″ Shen Yang Construction Co., Ltd. Taiwan Real estate investment, development, and rental and leasing ″ Shang Yang International Asset Management Co., Ltd. Taiwan Residence and buildings lease construction and development Shen Yang Construction Co., Ltd. Li Yang Agricultural Technology Co., Ltd. Taiwan Horticulture services and afforestation ″ Che Yang Agricultural Technology Co., Ltd. Taiwan Horticulture services and afforestation ″ Chi Yang Construction Co., Ltd. Taiwan Residence and buildings lease construction and development Shang Yang International Asset Management Co., Ltd. Chi Yang Construction Co., Ltd. Taiwan Residence and buildings lease construction and development ″ Century Rainbow Seychelles Investment company Limited Century Rainbow Limited Celestial Talent Seychelles Investment company Limited Century Rainbow Limited Charm Merit Limited Hong Kong Investment company	Initial investment amount End of the period End of last year $ 22,000 $ 22,000 $ 480,000 $ - 4,742 4,742 1,600,000 900,000 631,098 631,098 - 177,954 2,500 2,500 136,000 104,000 31,500 31,500 106,145 106,145 (USD 3,727 thousand) (USD 3,727 thousand) 77,665 77,665 (USD 2,727 thousand) (USD 2,727 thousand) 28,480 28,480	Number of

Table 7 Page 1

subsidiary (USD 1,000 (USD 1,000 (Note 1 and thousand) thousand) 4) Charm Merit Limited Good Fame Limited Samoa Investment company 28,480 28,480 1,000,000 40% 1,053 245 ( 115) Affiliate enterprise (USD 1,000 (USD 1,000 (Note 1) thousand) thousand)

Note 1: Calculated based on the exchange rate of the foreign currency on December 31, 2020.

Note 2: The subsidiary Shen Yang organized a cash capital increase of $700,000 in August 2020. The Group has subscribed to shares in accordance with the shareholding ratio and completed all subscription payments. Note 3: A sub-subsidiary established by the Group in September 2019. The company organized a cash capital increase of $40,000 in the first half of 2020. The Group has subscribed to shares in accordance with the shareholding ratio and completed all subscription payments.

Note 4: All the transactions were consolidated and written off in the preparation of the consolidated financial statements. Note 5: The Group sold all its shares in the company in the third quarter of 2020. Please refer to the description in Note 7 (2) 8 in the 2020 Consolidated Financial Report for details. Note 6: The Board of Directors of subsidiary Shang Yang passed the capital reduction of $82,000 to make up for losses on November 9, 2020, and the Group has reduced its shares based on the capital reduction ratio.

Table 7 Page 2

Kuo Yang Construction Co., Ltd.

Information on investments in Mainland China - basic information

January 1 to December 31, 2020

Table 8

Unit: NT$1,000

(Unless specified otherwise)

Amount remitted from Taiwan to Mainland China/Amount Investment Investment remitted back to Taiwan for the income (loss) revenue Opening balance of current period Ending balance of Ownership held recognized by the transferred accumulated fund Remitted to accumulated fund Net profit (loss) directly or Company in the back to Taiwan Investees in Mainland Main business Investment method transfer from Mainland Remitted back transfer from of investee for the indirectly by current period Ending investment as of the end of China activities Paid-in capital (Note 1) Taiwan China to Taiwan Taiwan current period the Company (Note 2 (2). B) book value the period Remarks Guopan Investment Business investment $ 85,440 (2) $ 28,480 $ - $ - $ 28,480 $ 245 40% $ 98 $ 1,126 $ - Consultancy Co., Ltd. consulting and (USD 3,000 (USD 1,000 (USD 1,000 enterprise thousand) thousand) thousand) management consulting

Accumulated investment remitted from Investment amount approved by the Taiwan to Mainland China at the end of Investment Commission of the Ministry Upper limit on investment Company name the period of Economic Affairs (MOEA) authorized by MOEAIC The Company $ 105,604 (USD 3,708 thousand) $ 105,604 $ 5,574,356

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 not yet audited by the CPA.

Note 3: Related numbers in this table shall be expressed in NTD.

Note 4: The Company has applied for the cancellation of unimplemented investments totaling USD 2,292 thousand in its investee company in Mainland China, Xi'an Hanshin Department Store Co., Ltd., in which it directly holds 12.89% of shares (non-material influence) in this period and the application was approved.

The investment amount approved by the Investment Commission of the Ministry of Economic Affairs as of the end of the period included the Company's investee company in Mainland China, Xi'an Hanshin Department Store Co., Ltd., in which it invested NT$77,124 thousand (USD 2,708 thousand) and directly holds 12.89% of shares (non-material influence). The amount remitted at the end of the period was the same.

Table 8 Page 1

Kuo Yang Construction Co., Ltd. and Subsidiaries

Information on major shareholders

December 31, 2020

Table 9

Shareholder's name	Shares
	Number of shares held Shareholding ratio
Han Shen Investment Co., Ltd. Chung Shen Development Co., Ltd. Morta Enterprise Co., Ltd. Cheng Chi Co., Ltd.	65,964,933 9.46% 50,793,780 7.29% 45,453,444 6.52% 42,389,920 6.08%

Table 9 Page 1