ky - Audit Report / Information 2021

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Financial Statements and Independent Auditor's Report 2021 and 2020 (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. and Subsidiaries

Consolidated Financial Statements and Independent Auditor's Report for 2021 and 2020 Table of Contents

Item I. Cover II. Table of Contents III. Statement IV. Independent Auditor's Report V. Consolidated Balance Sheet VI. Consolidated Statements of Comprehensive Income VII. Consolidated Statements of Changes in Equity VIII. Consolidated Cash Flow Statement IX. Notes to the Consolidated Financial Statements (I) Company history (II) Date and procedures of approval of the financial statements (III) Application of new standards, amendments and interpretations (IV) Summary of significant accounting policies (V) Significant accounting judgments, estimates and main uncertainty assumptions (VI) Details of significant accounts (VII) Related-party transactions (VIII) Pledged assets (IX) Significant contingent liabilities and unrecognized contractual	Page Number
	1 2 ~ 3 4 5 ~ 9 10 ~ 11 12 ~ 13 14 16 ~ 17 18 ~ 65 18 18 18 ~ 19 19 ~ 30 30 30 ~ 51 51 ~ 55 55 56

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

Page
Number

1
2 ~ 3
4
5 ~ 9
10 ~ 11
12 ~ 13
14
16 ~ 17
18 ~ 65
18
18
18 ~ 19
19 ~ 30
30
30 ~ 51
51 ~ 55
55
56

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Item commitments (X) Significant disaster loss (XI) Significant events after the balance sheet date (XII) Other (XIII) Supplementary disclosures (XIV) Segment information	Page Number
	56 56 56 ~ 61 63 63 ~ 65

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

Companies what should be included in the consolidated financial statement of affiliates as provided in “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliates” are all the same as what should be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standards (IFRS) 10 in 2021 (from January 1, 2021 to December 31, 2021) and the relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. The Company shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declared by

Company Name: Kuo Yang Construction Co., Ltd.

Legal Representative: Tzu-Kuan Lin

March 21, 2022

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Independent Auditor's Report (2022) Cai-Shen-Bao-Zi No. 21004855

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To Kuo Yang Construction Co., Ltd.:

Audit Opinions

The Consolidated Balance Sheet of Kuo Yang Construction Co., Ltd. and subsidiaries (hereinafter referred to as Kuo Yang Group) as of December 31, 2021 and 2020, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, Consolidated Cash Flow Statement, and Notes to the Consolidated Financial Statements (including a summary of material accounting policies) from January 1 to December 31, 2021 and 2020 have been audited by the CPA.

In our opinion, based on the results of the CPA's audit and the audit reports of other CPAs (refer to Other Supplementary Matters), the aforementioned Consolidated Financial Statements were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, and explanations/interpretations approved by FSC in all material respects and are therefore sufficient in presenting the consolidated financial conditions of the Kuo Yang Group as of December 31, 2021 and 2020, and the consolidated financial performance and consolidated cash flow from January 1 to December 31, 2021 and 2020.

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 Consolidated Financial Statements. The personnel of the CPA firm who are governed by regulations on independence have acted according to the ROC CPA Code of Professional Ethics and remained independent of Kuo Yang Group when fulfilling other obligations set forth in the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

The key audit matters pertain to the most important items of Kuo Yang Group's 2021 Consolidated Financial Statements as per the professional judgment of the CPA. These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Key audit matters of the Consolidated Financial Statements of Kuo Yang Group for 2021 are as follows:

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

Description

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

The revenue from the sales of houses and land in the construction business is recognized when the ownership of the real estate is transferred and the property 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 (13) of the Consolidated Financial Statements for accounting policies on construction land valuation. Refer to Note 5 of the Consolidated Financial Statements for accounting estimates and uncertainties of assumptions for inventory valuation. Refer to Note 6 (5) of the Consolidated Financial Statements 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 Group for 2021 and 2020. Those financial statements were audited by other CPAs. As such, our opinions in the aforementioned Consolidated Financial Statements on the amounts included in the aforementioned financial statements and related information disclosed in Note 13 were based on audit reports of other CPAs. The investment on equity method totaling NT$970,823 thousand and NT$564,559 thousand as of December 31, 2021 and 2020 accounted for 5.60% and 2.78% of the total assets, respectively. The comprehensive income recognized for 2021 and 2020 was NT$168,898 thousand and NT$34,168 thousand, which accounted for 23.05% and 0.64% of the total comprehensive income for the period, respectively.

Other matters - Individual Financial Statements

Kuo Yang Construction Co., Ltd. has prepared Individual Financial Statements for 2021 and 2020, for which we have issued an audit report containing an unqualified opinion plus other matters for reference.

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

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

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

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

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Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Statements as a whole are free from material misstatements, whether due to fraud or error, and to issue an independent auditor's report. Reasonably reliable means highly reliable. However, auditing work carried out in accordance with the Generally Accepted Auditing Standards of the ROC cannot guarantee detection of significant misrepresentations in the Consolidated Financial Statements. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

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

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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.

From the matters communicated with those charged with governance, the CPA determines matters that were of most significance in the audit of the 2021 Consolidated Financial Statements of Kuo Yang Group for the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

PricewaterhouseCoopers Taiwan

Chun-Yuan Hsiao

CPA

Fang-Yu Wang

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

March 21, 2022

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Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheet December 31, 2021 and 2020

December 31,2021	Unit: NT$1,000 December 31,2020	Unit: NT$1,000 December 31,2020
Amount $ 2,661,525 20,424 744,787 70,618 454,495 305,206 11,848 10,658,248 240,506 1,230 73,945 15,242,832 426,132 971,832 78,942 61,412 254,028 13,737 164,002 59,437 77,221 2,106,743 $ 17,349,575	Amount $ 5,724,939 32,275 378,534 52,548 249,514 488,532 584 9,918,081 586,214 229,340 76,676 17,737,237 1,024,216 565,612 86,325 358,860 255,414 - 104,287 59,435 117,700 2,571,849 $ 20,309,086	%
		28 - 2 - 1 3 - 49 3 1 -
		87
		5 3 - 2 1 - 1 - 1
		13
		100

(Continued)

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Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheet December 31, 2021 and 2020

December 31,2021	Unit: NT$1,000 December 31,2020	Unit: NT$1,000 December 31,2020
Amount $ 4,671,351 1,138,402 998,447 245,348 394,337 253,898 217,920 22,308 96,084 8,038,095 44,092 2,853 1,221 48,166 8,086,261 3,800,000 627,683 988,010 3,823,726 10,017) 9,229,402 33,912 9,263,314 $ 17,349,575	Amount $ 3,518,839 1,883,373 1,012,044 107,188 829,033 3,456,579 33,005 21,991 89,102 10,951,154 63,147 2,996 1,195 67,338 11,018,492 3,800,000 627,683 856,070 3,456,890 516,025 9,256,668 33,926 9,290,594 $ 20,309,086	%
		17 9 5 1 4 17 - - 1
		54
		- - -
		_
		54
		19 3 4 17 3
		46
		-
		46
		100

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

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Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2021 and 2020

Unit: NT$1,000 (Except earnings per share which is expressed in NT$)

2021		2020
Amount $ 5,124,284 3,762,094 ) ( 1,362,190 169,106 ) ( 252,851 ) ( 421,957 ) ( 940,233 7,143 72,190 12,671 ) 46,674 ) ( 205,409 225,397 1,165,630 183,493 ) ( $ 982,137		Amount 14,277,915 8,752,481 ) ( 5,525,434 204,193 ) ( 317,412 ) ( 521,605 ) ( 5,003,829 55,593 91,727 44,829 70,441 ) 34,053 155,761 5,159,590 216,523 ) ( 4,943,067
	$





	$

(Continued)

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Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2021 and 2020

Unit: NT$1,000 (Except earnings per share which is expressed in NT$)

2021		2020
Amount $ - 249,335)( 249,335)( 108 ) 26 82) $ 249,417)( $ 732,720 $ 982,151 14) $ 982,137 $ 732,734 14) $ 732,720 $		Amount 578 436,826 437,404 136 ) 14) 150) 437,254 5,380,321 4,943,139 72) 4,943,067 5,380,393 72) 5,380,321	%
	$ $		- 3
			3
			- -
			-
			3
	$		38
	$		35 -
	$		35
	$		38 -
	$		38
	$		7.58
$	$		7.57

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

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Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Changes in Equity January 1 to December 31, 2021 and 2020

Unit: NT$1,000

Notes				Equityattributable to owners of	Equityattributable to owners of	Equityattributable to owners of	parent company
		Capital stock - common	Capital surplus	Retained earnings			Other	equity
				Legal reserve $372,395 - - - 483,675 - - - - $856,070		Undistributed earnings	Exchange differences on translation of foreign financial statements $ 22,266 - ( 150) ( 150) - - - - - $ 22,116		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
VI(XVII) VI(XVI)	(	$ 6,965,825 - - - - - - 3,165,825 ) - $ 3,800,000	$ 627,683 - - - - - - - - $ 627,683		$ 130,048 4,943,139 578 4,943,717 ( 483,675 ) ( 1,149,361 ) - - 16,161 $ 3,456,890		( (	(	$ 73,244 - 436,826 436,826 - - - - 16,161 ) $ 493,909

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2021
Balance as of January 1,
2021		$	3,800,000	$	627,683	$856,070		$	3,456,890		$	22,116		$	493,909		$	9,256,668		$	33,926		$	9,290,594
Net profit of the term			-		-	-			982,151			-			-			982.151	(		14 )			982,137
Other comprehensive	VI(XVII)
income for the period			-		-	-			-	(		82)	(		249,335 )	(		249,417)			-	(		249,417)
Total comprehensive
income			-		-	-			982,151	(		82)	(		249,335 )			732,734	(		14)			732,720
Earnings appropriation	VI(XVI)
and distribution:
Allocation to legal
reserve			-		-	131,940	(		131,940 )			-			-			-			-			-
Cash dividends			-		-	-	(		760,000 )			-			-	(		760,000 )			-	(		760,000 )
Disposal of equity	VI(XVII)
instruments in other
comprehensive income
measured at fair value
through profit and loss			-		-	-			276,625			-	(		276,625 )			-			-			-
Balance as of December
31, 2021		$	3,800,000	$	627,683	$988,010		$	3,823,726		$	22,034		($	32,051)		$	9,229,402		$	33,912		$	9,263,314

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

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

January 1 to December 31, 2021 and 2020

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 Share of profit (loss) of affiliates and joint ventures recognized under the equity method Dividend income Net gains on financial assets at fair value through profit or loss Disposal of gains from investments recognized under the equity method Gains on disposal of investments Changes in operating assets and liabilities Changes in operating assets Notes receivable, net Accounts receivable, net Other receivables Inventories Prepayments Other current assets Intangible assets Net defined benefit assets Other non-current assets Changes in operating liabilities Contract liabilities Notes payable Accounts payable Other payables Other current liabilities Cash inflow generated from operations Interest received Interest paid Income tax paid and refunded Income tax paid Dividends received Net cash from operating activities	Notes VI(XXIII) VI(XXIII) VI(XXII) VI(XIX) ( VI(VII) ( VI(XX) ( VI(XXI) ( ( ( ( ( ( ( ( ( ( (	2021 $ 1,165,630 29,882 234 46,674 7,143 ) ( 205,409 ) ( 51,934 ) ( 262 ) ( - ( - ( 18,070 ) 204,981 ) ( 192,725 ( 393,341 ) 334,192 ( 2,731 ( 245 ) ( - 40,490 ( 13,597 ) ( 138,160 434,696 ) 39,765 ) 6,982 588,257 2,256 ) 112,766 ) ( - 10,206 ) ( 116,094 579,123	2020 $ 5,159,590 34,013 178 70,441 55,593 ) 34,053 ) 46,352 ) 336 ) 52,460 ) 358 ) 9,200 211,714 ) 83,448 ) 4,277,390 219,227 ) 6,005 ) 177 ) 6,854 3,733 ) 23,970 ) 42,277 175,479 213,953 59,536 9,311,485 55,593 159,617 ) 161 182,847 ) 41,352 9,066,127

(Continued)

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

January 1 to December 31, 2021 and 2020

Unit: NT$1,000

Cash Flows from Investing Activities 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 Decrease in other financial assets Acquisition of payments for investments recognized under the equity method Disposal of payments for investments recognized under the equity method Decrease (or increase) in guarantee deposits Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Other non-current liabilities - other increases Net cash used in investing activities Cash Flows from Financing Activities Increase (decrease) in short-term loans Decrease in short-term notes and bills payable Repayments of lease liabilities Decrease in guarantee deposits received Cash dividends paid Cash refunded in capital reduction Changes in non-controlling interests Net cash outflow from financing activities Effect of exchange rate changes on cash and cash equivalents (Decrease) increase 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 ( VII ( VII ( VII ( ( VI(XXVII) VI(XXVII) ( VI(XXVII) ( VI(XXVII) ( VI(XVI)(XXVII) ( VI(XIV) ( ( ( (	2021 $ 12,113 2,624,129 ) ( 2,374,751 10,645 ) ( 228,108 22,456 ) ( - 59,715 ) - ( 108 26 101,839 ) ( 1,152,512 ( 744,971 ) ( 21,403 ) ( 143 ) ( 760,000 ) ( 3,165,825 ) - 3,539,830 ) ( 868 ) ( 3,063,414 ) 5,724,939 $ 2,661,525		2020 5,358 851,638 ) 528,140 192,765 ) 80,969 480,000 ) 204,086 18,580 20,272 ) - 25 707,517 ) 2,057,637 ) 916,262 ) 21,001 ) 1,647 ) 1,149,361 ) - 8,000 4,137,908 ) 689 ) 4,220,013 1,504,926 5,724,939
			$



			$

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

Chairman: Tzu-Kuan Lin

Manager: Shao-Ling Peng

Accounting Manager: Cheng-I Wang

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Kuo Yang Construction Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

2021 and 2020

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

II. Date and procedures of approval of the financial statements

The Consolidated Financial Report was released with the approval of the Board of Directors on March 21, 2022.

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").

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" Amendments to IFRS 16 "COVID-19-Related Rent Concessions beyond 30 June 2021"	Effective date by International Accounting Standards Board
	January 1, 2021 January 1, 2021 April 1, 2021 (Note)

Note: The FSC approved advanced adoption starting from , January 1, 2021.

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

New, revised, and amended standards, interpretations and amendments endorsed by the FSC effective from 2022 are as follows:

New,Revised or Amended Standards and Interpretations Amendments to IFRS 3, "Conceptual Framework" 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 January 1, 2022 January 1, 2022 January 1, 2022

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

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

FSC

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

New,Revised or Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28, "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture" IFRS 17, "Insurance Contracts" Amendment to IFRS 17, "Insurance Contracts" Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS 9—Comparative Information" 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 12, "Deferred Tax related to Assets and Liabilities arising from a Single Transaction"	Effective date by International Accounting Standards Board
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

New,Revised or Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28, "Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture"
IFRS 17, "Insurance Contracts"
Amendment to IFRS 17, "Insurance Contracts"
Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS
9—Comparative Information"
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 12, "Deferred Tax related to Assets and
Liabilities arising from a Single Transaction"

Effective date by
International
Accounting Standards
Board

To be determined by
IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

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

IV. Summary of significant accounting policies

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

(I) Statement of compliance

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

(II) Basis of preparation

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

(III) Basis of consolidation

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

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affiliate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. The amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the Group directly disposed of relevant assets or liabilities. It means that profit or loss previously recognized in other consolidated profit or loss shall be reclassified as profit or loss when related assets or liabilities are disposed of. When the Group loses control over this subsidiary, the profit and loss shall be transferred from equity and reclassified as profit or loss.

2. Subsidiaries included in the consolidated financial statements:

Name of investment company The Company The Company The Company Shen Yang Construction Co., Ltd. Shen Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. Century Rainbow Limited. Century Rainbow Limited.	Name of subsidiary Shadwell Limited. Shang Yang International Asset Management Co., Ltd. Shen Yang Construction Co., Ltd. (Shen Yang Construction) Che Yang Agricultural Technology Co., Ltd. Chi Yang Construction Co., Ltd. Century Rainbow Limited. Celestial Talent Limited. Charm Merit Limited.	Main business activities Investment in real estate property Residence and buildings lease construction and development Residence and buildings lease construction and development Horticulture services and afforestation Residence and buildings lease construction and development Professional investment Professional investment Professional investment	Ownership (%)	Ownership (%)
			December 31, 2021 100% 100% 100% 100% 80% 100% 100% 100%	December 31, 2020
				100% 100% 100% 100% 80% 100% 100% 100%

Subsidiaries not included in the consolidated financial statements: None.
Adjustments for subsidiaries with different balance sheet dates: None.
Material limitation on the acquisition or use of assets and capacity for debt repayment: None.

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Subsidiaries that have non-controlling interests that are material to the Group: None.
(IV) Foreign currency translation

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

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

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accounted for as disposal of all interest in the foreign operation.

(V) Classification of current and non-current items

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

Assets that meet one of the following criteria are classified as current assets:
(1) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
(2) Liabilities arising mainly from trading activities;
(3) Assets that are expected to be realized within twelve months from the balance sheet date; or
(4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

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

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

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

(VI) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.
On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using transaction date accounting.
Financial assets at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently measured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss.

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The Group recognizes the dividend income in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.

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

The Company may make irrevocable election at initial recognition to recognize the changes in fair value in other comprehensive income for the investments in equity instruments that are not held for trading.
On a regular way purchase or sale basis, financial assets at fair value through other comprehensive profit or loss are recognized and derecognized using transaction date accounting.
At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value: The changes in fair value of equity instruments are recognized in other comprehensive income. The cumulative gain or loss previously recognized in other comprehensive income shall be recorded to retained earnings and not be reclassified to profit or loss upon the derecognition. The Group recognizes the dividend income in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.

(IX) Accounts and notes receivable

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

(X) Impairment of financial assets

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

(XI) Derecognition of financial assets

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

(XII) Lease transaction as a lessor

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

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(XIII) Inventories

Inventories include construction land, houses and land under construction, and houses and land to be sold which are initially recorded at cost. Construction profit and loss is recognized based on the completed-contract method. Construction land is listed as houses and land under construction when they are under active development. The related interest expenses are capitalized in the period from active development or commencement of construction till the completion of construction.
Inventories at the end of the period is measured based on the cost and net realizable value, whichever is lower. The item-by-item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable expenses.
(XIV) Investments/affiliates recognized under the equity method
Affiliates are all entities over which the Group has significant influence but not control. In general, it is presumed that an investor has significant influence if the investor holds, directly or indirectly, 20% or more of the voting rights of the investee. Investments in affiliates are accounted for through the equity method and are initially recognized at cost.
The Group's share of its affiliates' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group's share of losses in an affiliate equals or exceeds its interest in the affiliate, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the affiliate.
When changes in an affiliate's equity do not arise from profit or loss or other comprehensive income of the affiliate and such changes do not affect the Group's ownership percentage of the affiliate, the Group recognizes change in ownership interests in the affiliate in "capital surplus" in proportion to its ownership.
Unrealized gains on transactions between the Group and its affiliates are eliminated to the extent of the Group's interest in the affiliates. Unrealized losses are also eliminated unless evidence of an impairment of the asset transferred in the transaction is provided. Accounting policies of affiliates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
When the Group disposes its investment in an affiliate and loses significant influence over this affiliate, the amounts previously recognized in other comprehensive income in relation to the affiliate are reclassified to profit or loss, on the same basis as would be required if the Group directly disposed of relevant assets or liabilities. It means that profit or loss previously recognized in other consolidated profit or loss shall be reclassified as profit or loss when related assets or liabilities are disposed of. When the Group loses material influence over this affiliate, the profit and loss shall be transferred from equity and reclassified as profit or loss. If it retains significant influence over this affiliate, the amounts previously recognized in other comprehensive income in relation to the affiliate are reclassified to profit or loss proportionately in accordance with the aforementioned

~25~

approach.

(XV) Joint operations

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

(XVI) Property, plant and equipment

Property and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting policies, changes in accounting estimates and errors’, from the date of the change. The estimated useful life of real property is 50 years and the useful life of other assets is 3-5 years.

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

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

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

Lease liabilities are recognized at cost on the starting date of the lease. The cost includes:

~26~

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

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

(XVIII) Investment properties

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

(XIX) Intangible assets

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

(XX) Impairment of non-financial assets

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

(XXI) Borrowings

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

(XXII) Accounts and notes payable

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

(XXIII) Derecognition of financial liabilities

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

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(XXIV)Financial guarantee contracts

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

(XXV) Employee benefits

Short-term employee benefits

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

Pension

Defined contribution plans

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

Employees’ remuneration and directors' remuneration

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

- (XXVI)Employee share based payment

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

(XXVII) Income tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
The current income tax expense is calculated on the basis of the tax laws enacted as of the balance sheet date in the countries where the Group operates and generates taxable income. The tax is levied on the unappropriated retained earnings and is recorded as income tax expense for the year after the shareholders' meeting passes the earnings distribution proposal in the following year.

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Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. The deferred income tax is not accounted if it arises from initial recognition of an asset or liability in a transaction (excluding business mergers) that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and affiliates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
Current income tax assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXVIII) Dividends

Dividends are recorded in the Company's financial statements in the period in which they are approved by the Company's shareholders. Cash dividends are recorded as liabilities.

(XXIX)Revenue recognition

Land development and real property sales

The Group's main business activities are land development and real property sales. Revenue is recognized when the control of the real property is transferred to customers. For contracts for the sale of residential properties, the real property has no other use to the Group due to contract restrictions. However, the Group has an enforceable right to the contract payments only when the legal title or use of the real estate is transferred to the customer. Therefore, revenue is recognized when the legal title or use is transferred to the customer.
Some of the Group 's sales contracts include variable consideration for price reduction and the Group uses the expected or most probable amount as the appropriate estimated value for variable consideration.
The Group has included customers' advance payments in the contracts for pre-sales houses, and the period between the advanced payment and the transfer of the control of

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the product is longer than one year. According to IFRS 15, if the Group determines that there are material financial compositions in the individual contracts for pre-sales houses, it is required to adjust the pledged consideration and recognize interest expenses. IFRS 15 also states that companies should consider the materiality of financial components only at the level of the contract and not at the level of the portfolio when determining whether a financial loan is material.

(XXX) Operating segments

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

V. Significant accounting judgments, estimates and main uncertainty assumptions

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

(I) Critical judgments in applying accounting policies

None.

(II) Critical accounting estimates and assumptions

Evaluation of inventories

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

The Group's inventory information as of , December 31, 2021 is detailed in Note 6 (5).

VI. Details of significant accounts

(I) Cash and cash equivalents

ash and cash equivalents
Cash on hand and working capital Demand deposits Cheque deposits Cash equivalents - time deposits	December 31, 2021 $ 6,039 2,649,675 79 5,732 $ 2,661,525	December 31, 2020
		$ 68,926 5,655,119 79 815
		$ 5,724,939

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

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

Mandatory measurement of financial assets at fair value through profit or loss Beneficiary certificates Valuation adjustment (	December 31, 2021 $ 21,170 746 ) $ 20,424	December 31, 2020 $ 32,000 275 $ 32,275

The Group recognized net gain (loss) of $262 and $694 within financial assets at fair value through profit or loss for 2021 and 2020 based on the financial assets at fair value through profit or loss.
The Group has no financial assets at fair value through profit or loss pledged to others.

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

Current items Equity instruments Listed stocks Valuation adjustment ( Non-current items Equity instruments Stocks no listed on the TWSE, TPEx, or emerging stocks Valuation adjustment	December 31, 2021 $ 788,984 44,197 ) ( $ 744,787 $ 357,501 68,631 $ 426,132	December 31, 2020
		$ 425,638 47,104)
		$ 378,534
		$ 483,202 541,014
		$ 1,024,216

The Group opted to classify strategic investments and investments in equity instruments with stable dividend payments as financial assets at fair value through profit or loss. The fair value of such investments as of December 31, 2021 and 2020 were $1,170,919 and $1,402,750, respectively.
The Group acquired the shares of Hanshin Department Store Co., Ltd. (hereinafter referred to as "Hanshin Department Store") from a related party in January 2021. As the Company's cumulative shareholding in the company has exceeded 20% and it gains significant influence over said company, the investment is recognized as an investment on equity method based on its fair value, and the cumulative profits are recognized as retained earnings. Please refer to Note 6 (7) and Note 7 (2) 7.
Amounts recognized in other comprehensive income in relation to the financial assets at fair value in income and other comprehensive income are listed below:

Disposal of equity instruments in other comprehensive income measured at fair value through profit and loss Fair value (loss) gain recognized in other comprehensive (	2021 $ 213,384 )	2020 $ 436,826

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income Cumulative gains (losses) converted to retained earnings due to derecognition	$ 256,092 $ 16,161

The Group has no financial assets at fair value through other comprehensive profit or loss pledged to others.
(IV) Notes and accounts receivable

to others. otes and accounts receivable
Notes receivable Accounts receivable Accounts receivable due from related parties Minus: Loss provisions	December 31, 2021 $ 70,618 453,192 1,303 - $ 525,113	December 31, 2020
		$ 52,548 227,803 21,711 -
		$ 302,062

The Group has no notes and accounts receivable pledged to others.
As of December 31, 2021, December 31, 2020 and January 1, 2020, the balance of the Group's accounts receivable (including notes receivable) were $524,836, $282,468, and $78,982, respectively.
If the collaterals held or other credit enhancement tools are disregarded, the amount that best represents the Group's maximum exposure to credit risk for notes and accounts receivable as of December 31, 2021 and 2020, respectively, is the carrying amount of the notes and accounts receivable in each period.
Notes and accounts receivable are notes and accounts that are not past due or impaired.
Please refer to Note 12 (2) for relevant credit risk information.

(V) Inventories

ventories
			December 31,	December 31, 2020
			2021
Houses and land held for sale
Beautiful Tree Hall		$	910	$	910
Tien Chen			-		9,741
Kuo Yan Project			1,291,935		1,416,430
Kuo Yang The Green Place Project (Taiwan Sugar Annan			1,351,048		2,587,146
Project)
South Manor Project (Wenshan Gongxun Section Project)			10,083		156,625
Kuo Yang Silicon Valley (Xizhi Gongjian Section Project)			1,262		-
Smile Era Project (Qianzhen District Shengxing Section			773,630		953,492
Project)
Good morning, Kuo Yang Phase 2 (Keelung Tiaohe Section			1,684,924		-
Project)
			5,113,792		5,124,344
Minus: Allowance for valuation losses	(		519,834 ) (		730,727)
			4,593,958		4,393,617
Houses and land under construction
Kuo Yang The Green Place Project (Taiwan Sugar Annan			43,940		42,180
Project)
Kuo Yang Silicon Valley (Xizhi Gongjian Section Project)			-		1,445,665
Good morning, Kuo Yang Phase 1 (Keelung Tiaohe Section			-		1,601,961
Project)
Good morning, Kuo Yang Phase 2 (Keelung Tiaohe Section			318,249		-
Project)

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Neihu Jiuzong Project 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 Tucheng Project Sanchong Project Kaohsiung Fengshan Project (Fengshan Shengli Project) Xindian Baoyuan Project Other Minus: Allowance for valuation losses ( Prepayments for houses and land and others Kuo Yang The Green Place Project (Taiwan Sugar Annan Project) $		1,596,699 1,958,888 - ( 1,958,888 251,872 12,633 273,821 148,180 40,174 9,844 12,500 108,170 1,216,210 963,175 571,245 262,267 85,955 3,956,046 204,720 ) ( 3,751,326 354,076 10,658,248 $		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 - - - 256,772 84,424 1,168,368 161,203) 1,007,165 354,076 9,918,081



	$		$

On April 9, 2020, the Group's Board of Directors passed a resolution to sell land on two sections on Yucheng Section, Nangang District, Taipei City (Greater Nangang Project) 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 Group completed the transfer of ownership on June 4, 2020 and has collected all payments.
The Group recognized cost of inventories as expenses totaling $3,762,094 and $8,752,481 in 2021 and 2020, respectively. They included the inventory loss and (gain on reversal) recognized as a result of the recovery in net realizable value totaling ($168,643) and $722,689. In 2021, certain inventories with a net realizable value of lower than the cost were sold and the net net realizable value rose again.
Please refer to Note 6 (9) 3 for a description of the transfer of right-of-use assets to inventories in this period.
In 2021 and 2020, the amount of inventory interest capitalization was $69,001 and $86,664, respectively. The interest capitalization rates ranged from 1.78% to 2.20% and 0.420% to 2.450%, respectively.
Please refer to Note 8 for detailed information on the Group's use of inventory as collateral.

(VI) Joint operations

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

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2. The information on the joint operations held by the Group is as follows:

Project name	Percentage held	Landowner orjoint builder	Description
Greater Nangang Project Kuo Yang The Green Place Project South Manor Project Kuo Yang Silicon Valley Project Smile Era Project Good morning, Kuo Yang Project Neihu Jiuzong Project Tucheng Project Sanchong Project Kaohsiung Fengshan Project	40% 65% 100% 35% 70% 55% 50% 50% 50% 50%	Six companies including Ho Hsin Cheng Co., Ltd. Five companies including Wei Li International Development Co., Ltd. Note Hanshin Asset Management Co., Ltd., Li Yang Agricultural Technology Co., Ltd., Heng Jui Development Co., Ltd. Southern Region Branch, National Property Administration, Ministry of Finance, Shen Yang Construction Co., Ltd., Han Lin Development Co., Ltd. Chi Hsuan Development Co., Ltd., Tsang Shan Development Co., Ltd. Five companies including Wei Li International Development Co., Ltd. Four companies including Wei Li International Development Co., Ltd. Four companies including Wei Li International Development Co., Ltd. Tsang Hsin Construction Co., Ltd.	Nangang District, Taipei City Annan District, Tainan City Wenshan District, Taipei City Xizhi District, New Taipei City Qianzhen District, Kaohsiung City Zhongzheng District, Keelung City Neihu District, Taipei City Tucheng District, New Taipei City Sanchong District, New Taipei City Fengshan District, Kaohsiung

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

December 31, 2021 Balance Sheet Greater Smile Era The Green Other joint

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Nangang Project $ - - - - $ - $ - - - - - - $ - $ - $ - $ -	Project Place Project $ 773,630 $ 1,394,983 182,491 699,449 956,121 2,094,432 48,054 23,684 $1,004,175$ 2,118,116 $ 103,935 $ 149,526 183,674 410,412 129,914 29,573 134,934 104,133 552,457 693,644 395 6 $ 552,852$ 693,650 $ 596,609 $1,490,917 $ 499,807$1,248,472 $ 49,264$ 58,137 December 31,2020	Project Place Project $ 773,630 $ 1,394,983 182,491 699,449 956,121 2,094,432 48,054 23,684 $1,004,175$ 2,118,116 $ 103,935 $ 149,526 183,674 410,412 129,914 29,573 134,934 104,133 552,457 693,644 395 6 $ 552,852$ 693,650 $ 596,609 $1,490,917 $ 499,807$1,248,472 $ 49,264$ 58,137 December 31,2020	construction operations
			$ 6,377,351 1,007,450
			7,384,801
			219,545
			$ 7,604,346
			$ 3,998,450 - 817,517 418,043
			5,234,010
			1,120
			$ 5,235,130
			$ 2,476,434
			$ 1,849,528
			$ 66,806

Greater Nangang Project $ - - - - $ - $ - - - - - - $ -	Smile Era Project $ 953,492 212,179 1,165,671 319,148 $1,484,819 $ 194,578 564,605 60,200 205,575 1,024,958 1,483 $1,026,441	The Green Place Project $ 2,629,321 577,885 3,207,206 25,645 $3,232,851 $ 271,024 1,077,612 220,906 276,572 1,846,114 201 $1,846,315	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

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	Comprehensive
	Income
	Revenue	$	9,634,552	$	474,530$	199,519	$	587,581
	Cost	$	3,643,392	$	385,445$	178,637	$	411,758
	Fees	$	2,277	$	54,945$	42,927	$	53,804
(VII)	Investments recognized under	the equity method
				December 31,		December	31,	Shareholding
					2021	2020		ratio
	Hanshin Shopping Plaza		$		898,024 $	520,343		20%
	Co., Ltd.
	Sweet Me Hot Spring				11,775	12,933		20%
	Resort Co., Ltd.
	Good Fame Limited				1,009		1,053	40%
	Chi Yang Construction				61,024	31,283		45%
	Co., Ltd.
			$		971,832$	565,612

Hanshin Shopping Plaza Co., Ltd. (hereinafter referred to as "Hanshin Shopping Plaza")
(1) The Group acquired the shares of Hanshin Department Store from a related party in January 2021. As the Group's cumulative shareholding in the company has exceeded 20%, the equity method is adopted for valuation. Please refer to Note 6 (3) and Note 7 (2) 7.
(2) Hanshin Shopping Plaza adopted September 9, 2021 as the baseline date for the stock conversion, and merged with Hanshin Department Store through a share conversion. According to the terms of the share conversion, the share exchange ratio was 1 common share of Hanshin Department Store exchanged to 0.25 common shares of Hanshin Shopping Plaza. After the share conversion, the Group holds 20% of the shares of Hanshin Shopping Plaza, and Hanshin Department Store became a wholly-owned subsidiary of Hanshin Shopping Plaza.
The Group sold all 42.38% of the shares in Li Yang Agricultural Technology Co., Ltd. it held to a related party on August 11, 2020. Please refer to the description in Note 7 (2) 8 for details.
Please refer to Note 13 (2) basic information on the Group's affiliates.
The carrying amounts of the Group's individual insignificant affiliates as of December 31, 2021 and 2020 are shown in the table above, and the results of operations are as follows:

Net profit (loss) from continuing operations for the period Other comprehensive income (net income after tax) ( Total comprehensive income for the period	2021 $ 205,409 36,526 ) ( $ 168,883	2020 $ 34,053 14 ) $ 34,039

The Group's aforementioned investment targets have no public quotations on the market. The share of profit/loss on equity-accounted affiliated companies in 2021 and 2020 was evaluated and disclosed based on the audited financial statements of each investee company for the same periods.

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(VIII) Property, plant and equipment

January 1 Cost Accumulated depreciation and impairment ( January 1 Addition Disposal Disposal (accumulated depreciation) Depreciation December 31 December 31 Cost Accumulated depreciation and impairment ( January 1 Cost Accumulated depreciation and impairment ( January 1 Addition Depreciation December 31 December 31 Cost Accumulated depreciation and impairment (			2021

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

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equipment as collateral.

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

Real estate rental and leasing Cost Accumulated depreciation ( Land use rights Cost Amortization ( Real estate rental and leasing Cost Accumulated depreciation ( Land use rights Cost Amortization (	January 1, 2021 $ 122,453 42,485 ) 79,968 324,960 46,068) 278,892 $ 358,860 January 1, 2020 $ 120,405 21,272) 99,133 408,420 40,780) 367,640 $ 466,773	Addition $ 2,665 - ( 2,665 ( - - - $ 2,665 ( Addition $ 2,048 - ( 2,048 ( - - - $ 2,048 (	Depreciation $ - 21,221 ) 21,221 ) - ( - - ( $ 21,221 ) ( Depreciation $ - 21,213 ) 21,213 ) - ( 5,288 5,288 ( $ 26,501 ) (	Disposal/out ward transfer $ - - ( - 324,960 ) 46,068 278,892 ) $ 278,892 ) Disposal/out ward transfer $ - - ( - 83,460 ) - ( 83,460 ) $ 83,460 )	December 31, 2021 $ 125,118 63,706 ) 61,412 - - - $ 61,412 December 31, 2020 $ 122,453 42,485) 79,968 324,960 46,068) 278,892 $ 358,860

Land use rights
(1) The subsidiary "Shen Yang Construction Co., Ltd." signed the "Establishment of Superficies on National Non-public Use Land Contract" with the Southern Region Branch, National Property Administration, Ministry of Finance for the land with the plot numbers 1492 to 1496 on Shengxing Section, Qianzhen District, Kaohsiung City on April 28, 2014. The term of the superficies was set as 70 years (from April 28, 2014 to April 27, 2084) with a royalty for superficies totaling $878,000. The Group commenced construction in 2015 (Smile Era Project) and the project was completed in 2018. The Company has begun the transfer of ownership and usage rights and recognized the revenue for parts sold. The Company shall also recognize the aforementioned royalty as cost of sales based on the percentage of sales.
(2) The competent authority published the "Explanation of Accounting Methods for Land

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and Superficies" IFRSs Q&A on April 28, 2021, and the Accounting Research and Development Foundation published the "Explanation of Accounting Methods for Land and Superficies" which became effective on January 1, 2021. Therefore, the royalties for the Group's aforementioned land use superficies are transferred to "inventories". Please refer to Note 6 (5).

(3) Please refer to Note 8 for detailed information on the use of land use rights as collateral.
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	2021 $ 1,545 9,651 1,110	2020 $ 1,959 9,796 1,126

The cash flows used in the lease payments of the Group in 2021 and 2020 amounted to $32,599 and $32,756, respectively.

(X) Investment properties

January 1 Cost Accumulated depreciation and impairment ( January 1 Depreciation December 31 December 31 Cost Accumulated depreciation and impairment ( January 1 Cost Accumulated depreciation and impairment ( January 1		2021

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Depreciation December 31 December 31 Cost Accumulated depreciation and impairment (	- ( 1,387 ) ( 1,387 $ 226,988 $ 28,426 $ 255,414 $ 255,631 $ 54,924 $ 310,555 28,643)( 26,498 ) ( 55,141 $ 226,988 $ 28,426 $ 255,414	- ( 1,387 ) ( 1,387 $ 226,988 $ 28,426 $ 255,414 $ 255,631 $ 54,924 $ 310,555 28,643)( 26,498 ) ( 55,141 $ 226,988 $ 28,426 $ 255,414
		$ 255,414

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

Rent income from investment properties Direct operating expenses incurred by investment properties that generate rent income in the current period ( Direct operating expenses incurred by investment properties that did not generate rent income in the current period (	2021 $ 1,989 $ 1,606 ) ( $ 245 ) (	2020 $ 1,677 $ 1,582) $ 245)

The fair value of the investment properties held by the Group as of December 31, 2021 and 2020 was $425,944 and $424,758, respectively. They were determined based on the appraisal report prepared by external appraisal experts and comparisons with recent transaction prices of similar targets in the area of the investment properties. The fair value is determined based on property rights, regional factors, individual factors, current conditions of the real estate market, and the subject of the survey, and is evaluated based on the comparison approach and the income approach, which are level 3 fair values.
Please refer to Note 8 for detailed information on the Group's use of investment properties as collateral.

(XI) Short-term borrowings

as collateral. hort-term borrowings
Type of borrowings Bank borrowings Secured loans Type of borrowings	December 31, 2021 $ 4,671,351 December 31, 2020	Interest rate range 1.80%~2.40% Interest rate range	Collateral
			Please refer to Note 8 Collateral

Bank borrowings

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$ 3,518,839

Secured loans

1.80%~2.40% Please refer to Note 8

(XII) Short-term notes and bills payable

Commercial papers payable Minus: Discounted short-term notes and bills payable ( Net amount Interest rate range	December 31, 2021 $ 1,139,090 688 ) ( $ 1,138,402 0.2%~0.9%	December 31, 2020 $ 1,883,850 477) $ 1,883,373 0.2%~1.162%

(XIII) Pension

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.
(1) 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) The pension costs recognized by the Group in accordance with the above pension plan were $0 and $2,800 in 2021 and 2020.
Effective July 1, 2005, the Company and domestic subsidiaries have established a defined contribution pension plan (New Plan) under the Labor Pension Act, covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance for employees who opt for the pension system in the "Labor Pension Act". The contribution plan accrues dividends from an employee’s individual account and is paid monthly or in lump sum upon retirement of an employee. The pension costs recognized by the Group in accordance with the above pension plan were $3,234 and $3,095 in 2021 and 2020.

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(XIV) Share capital

As at December 31, 2021 and 2020, the Company's authorized capital was $7,000,000 and the paid-in capital was both $3,800,000. The par value per share is $10. The payment for all issued shares of the Company has been collected. Reconciliation between the beginning and the ending of the Company's ordinary shares outstanding is as follows:

January 1 Cash refunded in capital reduction December 31	2021 380,000,000 - ( 380,000,000	2020 696,582,479 316,582,479 ) 380,000,000

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. The capital reduction payments were distributed on January 12, 2021.

(XV) Capital surplus

apital 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, 2021 $ 596,116 1,724 3,323 17,652 8,868 $ 627,683	December 31, 2020
		$ 596,116 1,724 3,323 17,652 8,868
		$ 627,683

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

(XVI) Retained earnings

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

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

The shareholders' meeting approved the amendment of the Articles of Incorporation in a resolution on 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.
The legal reserve may only be used for offsetting deficits and the distribution of new shares or cash based on the shareholders' original shareholding ratio. However, when new shares or cash dividends are distributed, the distribution shall be restricted to the legal reserve in excess of 25% of the paid-in capital.
When the Company distributes earnings, it shall first appropriate funds for the special reserve from the balance of other equities of borrowers as of the balance sheet date of the current year in accordance with laws and regulations. Once the balance of other equities of borrowers has been reversed, the reversed amount may be calculated as distributable earnings.
The Company's dividend policy is set up in accordance with the Company Act and the Articles of Incorporation and determined by the Company's financial structure, earnings, and long-term business plans to meet the development and transformation needs. The ratio of stock dividends to cash dividends shall be determined each year based on the requirements for working capital, provided that the cash dividends shall not be less than 20%. When the paid-in capital has reached NT$10 billion, the cash dividends shall not be less than 50%.
The cash dividends distribution for 2021 and 2020 approved by the Board of Directors are summarized as follows:

2021 Q3 2021 Q2

2021 Q1

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Date of board resolution Legal reserve Cash dividends Cash dividends per share Date of board resolution Legal reserve Cash dividends Cash dividends per share	November 8,2021 $ - - - 2020Q4 April 19,2021 $ 18,002 380,000 1.00	August 9,2021 $ 65,908 190,000 0.50 2020Q3 December 21, 2020 $ 23,162 - -	May10,2021
			$ 48,030 190,000 0.50 2020Q2
			August 3,2020
			$ 454,824 1,044,874 1.50

The appropriations of 2020 and 2019 earnings were approved by the shareholders’ meeting on August 19, 2021 and June 10, 2020, respectively. Details are summarized as follows:

follows:
Legal reserve Cash dividends	2020 Amount Dividend per share (NT$) $ 495,988 $ - 1,424,874 2.5	2019
	Amount $ 495,988 1,424,874	Amount $ 5,689 104,487	Dividend per share (NT$)
			$ - 0.15

The Group's 2021 earnings distribution proposal has not yet been approved by the Board of Directors as of March 21, 2022.
Please refer to Note 6 (24) for more information on employees' remuneration and Directors' remuneration.

(XVII) Other equity interests

Other equity interests
January 1 Valuation adjustment Valuation adjustment transferred to retained earnings Currency translation differences ( December 31		2021	Total $ 516,025 249,335 ) 276,625 ) 82) $ 10,017)
	Exchange differences on translation of foreign financial statements $ 22,116 - ( - ( 82) $ 22,034 (	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income $ 493,909 249,335 ) ( 276,625 ) ( - ( $ 32,051 ) (

2020 Exchange Unrealized differences on gains (losses) translation of from financial foreign assets measured Total

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(XVIII)	January 1 Valuation adjustment Valuation adjustment transferred to retained earnings Currency translation differences ( December 31 Operating revenue Revenue from contracts with customers Other	financial statements $ 22,266 - - ( 150) $ 22,116	at fair value through other comprehensive income $ 73,244 436,826 16,161 ) ( - ( $ 493,909 2021 $ 5,106,791 17,493 $ 5,124,284	$ 95,510 436,826 16,161 ) 150) $ 516,025 2020 $ 14,264,276 13,639 $ 14,277,915

Detailed items of revenues from contracts with customers

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

follows:
2021 Revenue recognition time - Revenue recognized at a certain point in time - Revenue transferred gradually as time progresses 2020 Revenue recognition time - Revenue recognized at a certain point in time - Revenue transferred gradually as time progresses	Sales of construction projects $ 4,935,543 - $ 4,935,543 Sales of construction projects $ 14,223,860 - $ 14,223,860	Other $ - 188,741 $ 188,741 Other $ - 54,055 $ 54,055	Total
			$ 4,935,543 188,741
			$ 5,124,284
			Total
			$ 14,223,860 54,055
			$ 14,277,915

The total amounts in the apportionment of the transactions and estimated year of revenue recognition for the Group's outstanding contract performance obligations for sales contracts signed as of , December 31, 2021 are as follows:

Estimated year of revenue recognition

	Amount in signed	Amount in signed
		contracts
	$	1,977,854

2022

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Contract assets and contract liabilities

The Group recognizes the following contract liabilities from contract revenue from customers:

customers:
Contract liabilities - current: - Advance receipt of land payment - Advance receipt of property payment	December 31, 2021 $ 552,437 446,010 $ 998,447	December 31, 2020 $ 436,101 575,943 $ 1,012,044	January1,2020
			$ 421,242 614,772
			$ 1,036,014

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

Opening balance of contract liabilities recognized as income in the current period Construction project sales contract	2021 $ 651,622	2020 $ 398,180

(3) Contract modifications and variable consideration
In 2021, as the contract price the certain project development contracts for the operation and management service revenue was revised according to the joint venture supplementary agreement, and the Group's contract obligations are labor services that cannot be separated, the Group has considered the most appropriate estimate and recognized an accumulated catch-up adjustment to revenue of $170,437 based on the amended contracts.

(XIX) Interest income

amended contracts. terest income
Interest from bank deposits Other interest income Net interest income from financial assets at fair value through profit or loss ther income Dividend income Income from default penalty		2021 1,993 4,916 234 7,143 2021		2020 4,668 50,925 - 55,593 2020 $ 46,352 -
	$		$
	$		$

(XX) Other income

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of buyers
Other			17,844		45,375
		$	72,190	$	91,727
(XXI) Other profits and losses
			2021		2020
Gains on disposal of
investments		$	-	$	52,818
Net gains on financial assets
at fair value through profit
or loss			262		336
Other profits and losses	(		12,933)(		8,325)
	(	$	12,671)	$	44,829
(XXII) Finance costs
			2021		2020
Interest expenses:
Bank borrowings		$	85,348	$	105,594
Interest on short-term notes
and bills payable			24,435		46,727
Other			5,892		4,784
			115,675		157,105
Minus: Amount eligible for
asset capitalization	(		69,001)(		86,664)
Finance costs		$	46,674	$	70,441
(XXIII) Additional information on expenses
			2021		2020
Construction cost in this
period		$	3,760,945	$	8,751,332
Employee benefit expenses			108,556		161,688
Depreciation			29,882		34,013
Amortization of intangible
assets			234		178
Tax expenses			21,713		27,550
Professional service expenses			45,091		16,498
Advertising expenses			13,803		42,402
Commission expenses			123,702		109,886
Rent			9,822		10,371
Property management fees			10,315		23,972
Other expenses			59,988		96,196
Operating costs and expenses		$	4,184,051	$	9,274,086
(XXIV) Employee benefit expenses
			2021		2020
Salary expenses		$	86,812	$	129,747
Labor and health
insurance fees			6,735		5,922
Pension expenses			3,234		5,895

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Remuneration for Directors Other personnel expenses	4,281 7,494 $ 108,556	4,607 15,517 $ 161,688

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.
The Company's estimated amounts of employees' remuneration for 2021 and 2020 are $5,843 and $26,059, respectively. The estimated amounts of Directors' remuneration are $5,843 and $26,059, respectively. All amounts are recognized as salary expenses.

The estimated amounts of employees' remuneration and Directors' remuneration based on the profitability in 2021 are 0.5% and 0.5%, respectively. The estimated amounts and the method of distribution of employees' remuneration were approved in a resolution of the Board of Directors on March 21, 2022.

Employees' remuneration and Directors' remuneration in the Board of Directors' resolution for 2020 were equal to the amount recognized in the financial statements for 2020. Information on employees’ remuneration and directors’ remuneration of the Company as resolved by the Board of Directors is posted in the "Market Observation Post System".

(XXV) Income tax

Income tax expenses

Current income tax Income tax arising in the current period Surtax on undistributed earnings 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 expenses	2021 $ 85,350 132,951 8,746 42,808 ) ( 184,239 746 ) $ 183,493	2020 $ 44,294 - 171,852 5,407) 210,739 5,784 $ 216,523

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Relationship between income tax expenses and accounting profits

			2021		2020
Income tax from net profit before tax
calculated at the statutory tax rate		$	233,126	$	1,031,932
Surtax on undistributed earnings			132,951		-
Tax-exempt income based on tax
laws	(		85,928 ) (		1,119,251 )
Temporary differences not
recognized in deferred income tax
assets	(		58,059 )		124,844
Tax losses not recognized in deferred
income tax assets			1,388		6,769
Tax losses in previous years not
recognized in deferred income tax
assets	(		12,497 )		5,784
Origination and reversal of
temporary differences	(		746 ) (		5,407 )
Land value increment tax included in
income in the current period			8,746		171,852
Income tax effect of the alternative
minimum tax			7,320		-
Adjustments in respect of prior years	(		42,808 )		-
Income tax expenses		$	183,493	$	216,523

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

follows:
Unrealized expenses Prepaid land value increment tax Unrealized expenses		2021
	January1 $ - - $ -	Recognized in profit and loss Recognized in other comprehensiv e income $ 746 $ - 12,991 - $ 13,737 $ - 2020		December 31 $ 746 12,991 $ 13,737
	January1 Recognized in profit and loss $ 5,784( $ 5,784)		Recognized in other comprehensiv e income $ -	December 31 $ -

The Company's deductible temporary differences not recognized as deferred income tax assets as of December 31, 2021 and 2020 were both $0.
The Company’s profit-seeking enterprise income tax returns have been approved by the tax authorities up to 2018.

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(XXVI)EPS

EPS
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares of employee remuneration Profit attributable to ordinary shareholders of the parent considering assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares of employee remuneration Profit attributable to ordinary shareholders of the parent considering assumed conversion of all dilutive potential ordinary shares		2021	EPS (NT$) $ 2.58 $ 2.58 EPS (NT$) $ 7.58 $ 7.57
	Amount after tax $ 982,151 - $ 982,151	Weighted average number of ordinary shares outstanding (shares in thousands) 380,000 440 380,440 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

(XXVII) Changes in liabilities from financing activities

January 1 Changes in cash flows from financing activities Other non-cash changes			2021			Total $ 5,490,346 374,005 ) 762,665
	Short-term borrowings $ 3,518,839 1,152,512 ( -	Short-term notes and bills payable $ 1,883,373 744,971 ) ( -	Lease liabilities $ 85,138 21,403 ) ( 2,665	Dividends payable $ - 760,000 ) ( 760,000	Deposits received $ 2,996 143 ) ( -

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December 31 January 1 Changes in cash flows from financing activities ( Other non-cash changes December 31	$ 4,671,351	$ 1,138,402	$ 66,400 2020	$ -	$ 2,853	$5,879,006 Total $ 8,484,845 4,145,908 ) 1,151,409 $5,490,346
	Short-term borrowings $ 5,576,476 2,057,637 ) ( - $ 3,518,839	Short-term notes and bills payable $ 2,799,635 916,262 ) ( - $ 1,883,373	Lease liabilities $ 104,091 21,001 ) ( 2,048 $ 85,138	Dividends payable $ - 1,149,361 ) ( 1,149,361 $ -	Deposits received $ 4,643 1,647 ) ( - $ 2,996

VII. Related-party transactions

(I) Name and relationship of related parties

Names of related parties Relationship with the Company Sweet Me Hot Spring Resort Co., Ltd. (Sweet Me) Affiliate enterprise Hanshin Asset Management Co., Ltd. (Hanshin Asset Other related party Management) Hanshin Department Store Co., Ltd. (Hanshin Department Other related party Store) Chi Hsuan Development Co., Ltd. (Chi Hsuan Other related party Development) Grand Hi-Lai Hotel Co., Ltd. (Grand Hi-Lai Hotel) Other related party Hi-Lai Foods Co., Ltd. (Hi-Lai Foods) Other related party Wei Li International Development Co., Ltd. (Wei Li) Other related party Han Lin Development Co., Ltd. (Han Lin Development) Other related party Hanshin Shopping Plaza Co., Ltd. (Hanshin Shopping Other related party Plaza)

Wei Chun International Development Co., Ltd. (Wei Chun) Grand Hi-Lai International Property Management Consulting Co., Ltd. (Grand Hi-Lai International Property) 9 individuals including Shao-Ling Peng

Other related party Other related party Other related party

(II) Major transactions with related parties

1. Operating revenue

Sales

The Group did not sell projects to related parties in 2021. The sales to related parties approved by the Board of Directors in resolutions in the first quarter of 2020 and the fourth quarter of 2019 amounted to $10,140 and $39,190, respectively. The Group completed the transfer of ownership on December 31, 2020 and recognized income from net sales totaling $31,495.

Income from management services

Other related party - Wei Li Rental income	2021 $ 591	2020 $ 1,773

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2. 3. 4. 5.	Other related party Promotion expenses Other related party Administrative expenses Other related party - Hi-Lai Foods Other related party - Hanshin Asset Management Other related party - Hanshin Department Store Other related party - Grand Hi-Lai International Property Other related party - Others Accounts receivable Wei Li Other related party - Others Other receivables Wei Li	2021 $ 2,933 2021 $ 1,395 2021 $ 4,268 6,846 1,288 1,371 634 $ 14,407 December 31, 2021 $ - 1,554 $ 1,554 December 31, 2021 $ -	2020
			$ 2,933
			2020
			$ 1,239
			2020
			$ 5,439 6,846 36 - 32
			$ 12,353
			December 31, 2020
			$ 19,568 2,143
			$ 21,711
			December 31, 2020
			$ 49,866

The accounts receivable from related parties as of December 31, 2020 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. The accounts receivable were recovered in 2021 Q3.

6. Other expenses payable

Other expenses payable
Other related party - Others	December 31, 2021 $ 846	December 31, 2020
		$ 319

7. Acquisition of financial assets

(1) The Group purchased shares from another related party, Wei Chun, on January 28, 2021. The Company has paid for the shares and completed stock transactions. Information on the Group's purchase is as follows:

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Account Investments recognized under the equity method	Number of shares traded 802 thousand shares	Object of transaction Hanshin Department Store - stocks	Acquisition price $ 22,456

Please refer to Note 6 (3) and Note 6 (7).

(2) The Group participated in the cash capital increase of related parties in 2020 and completed the registration of changes on July 15, 2020, August 19, 2020 and October 22, 2020, respectively. The information on the subscriptions of the Group is as follows:

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

8. Disposal of financial assets

2020

Account Investments recognized under the equity method	Other related party Wei Li	Number of shares traded 17,800 thousand shares	Object of transaction Li Yang Agricultural Technology - stocks	Proceeds from disposal $204,086	Gain (loss) on disposal $ 52,460

The Group did not disposed of financial assets to related parties in 2021.

Other credit and debt transactions
(1) Refundable deposits

Other related party Deposits received Other related party	December 31, 2021 $ 24,598 December 31, 2021 $ 450	December 31, 2020 $ 24,597 December 31, 2020 $ 450

(2) Deposits received

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10. Endorsements and guarantees

Other related party - Wei Li - Chi Hsuan - Hanshin Asset Management	December 31, 2021 $ 6,838,730 558,000 - $ 7,396,730	December 31, 2020 $ 5,048,675 558,000 798,000 $ 6,404,675

11. Other

(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., and Grand Hi-Lai Hotel Co., Ltd. for 9 plots of land including plot 28 on Zhongxing Section, Sanchong District, New Taipei City with a total area of 1,828.28 pings on July 15, 2021. According to the contract, the Company serves as the manager of the Project. The investment ratio is 50% for the Company, 10% for Wei Li International Development Co., Ltd., 15% for Chuwa Wool Industry Co., (Taiwan) Ltd., 10% for Hanshin Asset Management Co., Ltd., and 15% for Grand Hi-Lai Hotel Co., Ltd.
(2) 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.
(3) 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 19 plots of land including plot 365 on Zhongyi Section, Tucheng District, New Taipei City with a total area of 5,344.27 pings on January 28, 2021. According to the contract, the Company serves as the manager of the Project. The investment ratio is 50% for the Company and 10% for each of the other 5 companies. "Grand Hi-Lai Hotel Co., Ltd." later withdrew from the project on June 29, 2021. The shares it previously held were transferred to Hanshin Asset Management Co., Ltd. The investment ratio change became effective on July 1, 2021.
(4) 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

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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.

(5) The Company signed a joint investment and development agreement with "Wei Li" land including plot 24 on Heguan Section, Annan District, Tainan City with a total area of 77,479.53 square meters on June 29, 2012 for joint construction of residential buildings. The parties later signed a letter of appointment for operating management which appointed the Company to take charge of overall development plans, building planning, and construction and sales of residential buildings. "Wei Li" represented the Project externally and executed the Project based on the contract signed with Taiwan Sugar Corporation. Wei Li became the main operator of the Project as well as the company responsible for selling the houses and land (the company issuing the sales invoice) and the company responsible for purchases products or services (the company with input documentary evidence). It is also responsible for the settlement of the project. The parties later signed the "Joint Development Supplementary Agreement" on March 15, 2016 for changing the investment ratio and settlement distribution to 60%, 6%, 1.5%, 4%, 13.5%, 10%, and 5%, respectively for the Company, "Wei Li", "Feminine", "Tsu Yan", "Hanshin Asset Management", "Crowell Development", and "Han Lin Development". "Crowell Development" later withdrew from the project on July 15, 2019. "Wei Li" and the co-funders signed the "Joint Development Supplementary Agreement" for changing the investment ratio and settlement distribution to 65%, 6%, 1.5%, 4%, 13.5%, and 10%, respectively for the Company, "Wei Li", "Feminine", "Tsu Yan", "Hanshin Asset Management", and "Han Lin Development".

(III) Key management compensation

The Group's remuneration for Directors and key management:

Short-term employee benefits	2021 $ 14,811	2020
		$ 14,267

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

VIII. Pledged assets

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

Assets Inventories Other financial assets - current (restricted deposits) Property, plant and equipment	Book value December 31,2021 December 31,2020 $ 9,509,054 $ 8,176,554 1,230 229,340 18,026 18,284	Purpose of collateral
	December 31,2021 $ 9,509,054 1,230 18,026
		Short-term borrowings and commercial papers Trusts and reserve accounts Commercial papers

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Investment properties Other financial assets - non-current (time deposits) Right-of-use assets	42,182 59,437 - $ 9,629,929	42,750 Commercial papers 59,435 Performance guarantee 278,892 Short-term borrowings and commercial papers $ 8,805,255

IX. Significant contingent liabilities and unrecognized contractual commitments

As of , December 31, 2021, the total construction contract price between the Group and non-related parties was $91,470 and the amount that has yet not been included in the estimation was $90,595.

X. Significant disaster loss

None.

XI. Significant events after the balance sheet date

The Group plans to acquire three plots of land on Lot 194, 196, and 197, Longzhong Section, Gushan District, Kaohsiung City based on a resolution of the Board of Directors on March 21, 2022. The project will be jointly developed with six companies with a total transaction amount of NT$2.593 billion. The Company's investment ratio is 50%.

XII. Other

(I) Capital management

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

(II) Financial instruments

1. Financial instruments by category

Financial instruments by category
Financial assets Current financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Financial assets at amortized cost Cash and cash equivalents Notes receivable, net Accounts receivable, net Other receivables Other Financial Assets - Current Refundable deposits Other Financial Assets - Non Current	December31,2021 $ 20,424 744,787 426,132 $ 1,191,343 $ 2,661,525 70,618 454,495 305,206 1,230 164,002 59,437	December31,2020
		$ 32,275 378,534 1,024,216
		$ 1,435,025
		$ 5,724,939 52,548 249,514 488,532 229,340 104,287 59,435

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Financial liabilities Financial liabilities at amortized cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables - other Deposits received Lease liabilities	$ 3,716,513 December 31,2021 $ 4,671,351 1,138,402 245,348 394,337 253,898 2,853 66,400 $ 6,772,589	$ 6,908,595
		December 31,2020
		$ 3,518,839 1,883,373 107,188 829,033 3,456,579 2,996 85,138
		$ 9,883,146

2. Risk management policy

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

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

3. Significant financial risks and degree of financial risks

(1) Market risks

Foreign exchange risks

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

Price risks

A. The Group's equity instruments exposed to price risks are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage the price risks of investments in equity instruments, the Group diversifies its investment portfolio in accordance with the limits set by the Group.
B. The Group's main investments consist of equity instruments issued by domestic companies and open-ended funds. The prices of such equity instruments are affected by the uncertainty of the future value of underlying investments. If the price of such equity instruments rises or falls by 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 2021 and 2020 will increase or decrease by $204 and $323, 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 $7,448 and $3,785, respectively.

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Interest rate risk for cash flow and fair value

A. The Group's interest rate risks mainly arise from short-term borrowings and short-term notes and bills payable. Borrowings at floating rates expose the Group to cash flow interest rate risks, which are partially offset by cash held at floating rates. Borrowings at fixed rates expose the Group to fair value interest rate risks. In 2021 and 2020, the Group's loans calculated based on floating interest rates were calculated in NTD.
B. The Group simulates various plans and analyzes interest rate risks, including considering plans for refinancing or renewal of existing positions and other available financing plans to calculate the impact of specific changes interest rates on profit or loss.
C. If all other factors remain constant, the maximum impact of a 1% change in interest rates on financial costs in 2021 and 2020 would result in an increase or decrease of $58,098 and $54,022, respectively.
(2) Credit risks
A. The Group's credit risks refer to the risks of financial loss to the Group arising from default by the clients or counterparties of financial instruments. The risks are mainly derived from the counterparty's failure to settle the accounts receivable based on payment collection terms.
B. The Group establishes credit risk management from the perspective of the Group. The Company has set a minimum independent credit rating of "A" for banks and financial institutions before they can be accepted as transaction counterparties.
C. The Group's main business activities are the lease and sales of residential buildings, industrial plants, and commercial buildings. Revenue from the sale of properties is recognized upon the full payment of the contract price, the completion of the transfer of ownership, and the actual delivery of the properties. Therefore, the amount of accounts receivable arising from the sale of properties is considered insignificant and the possibility of non-recovery is low. The Group manages receivables in special transactions on an individual basis and tracks such receivables on a regular basis. The amount of the Group's assessed credit impairment losses as of December 31, 2021 and 2020 was insignificant.
D. As of December 31, 2021 and 2020, there were no debts with recourse that were written off.
(3) Liquidity risks
A. Cash flow forecasting is performed by each Group entity and aggregated by the Group treasury. The Group's Finance Department monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities.
B. The Group's non-derivative financial liabilities are analyzed based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are analyzed based on the fair value on the balance sheet date. The amount of undiscounted contract cash flows of notes payable and

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other payables is approximately equal to their carrying amounts and is due within one year. The amount of undiscounted contractual cash flows for other financial liabilities is described in the following table:

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2021 Within 1year Short-term borrowings $ 1,500,051 Short-term notes and bills payable 1,139,090 Accounts payable 394,337 Lease liabilities 23,867 Non-derivative financial liabilities: December 31, 2020 Within 1year Short-term borrowings $ 2,654,893 Short-term notes and bills payable 1,833,850 Accounts payable 682,011 Lease liabilities 22,796	1 to 3years $ 1,453,386 - - 44,583 1 to 3years $ 28,260 - 147,022 43,834	3 years or above
		$ 1,965,247 - - - 3 years or above
December 31, 2020 Short-term borrowings Short-term notes and bills payable Accounts payable Lease liabilities
		$ 797,659 - - 21,917

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

(III) Fair value information

The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quotation (unadjusted) of the same asset or liability from an active market can be obtained on the measurement date. An active market refers to a market in which transactions in assets or liabilities occur with sufficient frequency and volume to provide pricing information on a continuous basis.

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

Level 3: Unobservable inputs for the assets or liabilities.

Please refer to Note 6 (10) for information on the fair value of investment properties carried at cost.
The carrying amount of financial instruments not carried at fair value, including cash and cash equivalents, notes and accounts receivable, other receivables, other financial assets - current, refundable deposits, long-term prepaid rent, short-term borrowings, short-term notes payable, notes payable, accounts payable, other payables, and deposit received, are reasonable approximations of the fair value.
The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

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

December 31, 2021 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income	Level 1 $ 20,424 $ 744,787 $ - Level 1 $ 32,275 $ 378,534 $ -	Level 2 $ - $ - $ - Level 2 $ - $ - $ -	Level 3 $ - $ - $ 426,132 Level 3 $ - $ - $ 1,024,216	Total
				$ 20,424
				$ 744,787
				$ 426,132
				Total
				$ 32,275
				$ 378,534
				$1,024,216

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

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

B. Except for the financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes.
There was no transfer between Level 1 and Level 2 in the Group in 2021 and 2020.
The Level-3 movements for 2021 and 2020 were as follows:

The Level-3 movements for 2021 and 2020 were as follows:
2021 January 1 $ 1,024,216 Acquired in the current period 10,645 Disposed in the current period ( 322,667 )	2020
	$ 359,330 192,765 -

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Valuation adjustment ( 286,062) December 31 $ 426,132	472,121 $ 1,024,216

An independent appraiser appointed by the Group is in charge of valuation procedures for fair value measurements being categorized within Level 3. The appraiser submits a valuation report 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.
The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Equity instruments: Non-listed stocks Equity instruments: Non-listed stocks	Fair value as of December 31, 2021 $ 371,857 54,275 $ 426,132 Fair value as of December 31, 2020 $ 983,188 41,028 $ 1,024,216	Valuation technique Comparable public company analysis Net asset value approach Valuation technique Comparable public company analysis Net asset value approach	Significant unobservable input Product of the number of shares multiplied by value Discount for lack of marketability Not applicable Significant unobservable input Product of the number of shares multiplied by value Discount for lack of marketability Not applicable	Range (weighted average) 0.52~4.22 21.27%~30.0 0% Not applicable Range (weighted average) 0.54~5.46 25.75%~30.0 0% 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

(IV) Other matters

Due to the outbreak of the COVID-19 pandemic in 2021 Q4, the Group has supported multiple epidemic prevention measures implemented by the government. While the construction period and handover of certain projects were affected due to delays in government administrative operations, other projects that were completed or not yet completed were handed over normally or proceeding based on the schedule. As the Group has sufficient working capital and the payment collection of sold projects remained normal, the

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operations of the Group were also functioning normally. According to assessments, the outbreak of the COVID-19 pandemic did not have a significant impact to the Group's financial position and financial performance in 2021 Q4.

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XIII. Supplementary disclosures

(I) Significant transactions information

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

Basic information: Please refer to Table 8.
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

(I) General information

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

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The Company: The Company's main businesses are the construction of public housing and the lease and sales of commercial residential buildings, industrial plants, and commercial buildings.

L1 companies: The main businesses are residential and buildings lease construction and development, public works construction and investment, and real estate rental and leasing.
L2 companies: The main businesses are residential and buildings lease construction and development, public works construction and investment, and real estate rental and leasing.

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

(II) Segment information measurement

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

(III) Segment information

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

						2021
				L1		L2		Other	Reconciliatio
	The Company			companies		companies	companies		n	and offset		Total
Revenue from external
customers	$	4,527,439	$	-	$	597,420	$	-	( $	575 )	$	5,124,284
Revenue from
inter-segment sales		-		-		-		-		-		-
Total revenue	$	4,527,439	$	-	$	597,420	$	-	( $	575)	$	5,124,284
Segment income
before tax	$	1,156,833	$	29,375	$	81,489 (	$	57)	( $	102,010)	$	1,165,630
Depreciation and
amortization	( $	24,757 )	( $	3,165)	( $	2,194)	$	-	$	- ( $		30,116)
Income tax expenses	( $	174,682 )	$	-	( $	8,811)	$	-	$	- ( $		183,493)
Income (losses) from
equity investments
under the equity
method	$	293,759	$	29,702	$	-	$	-	( $	118,052)	$	205,409
Segment assets	$	16,365,998	$	651,078	$	2,605,393	$	2,168	( $	2,275,062)	$	17,349,575
Segment liabilities	$	7,136,596	$	1,631	$	1,009,692	$	27	( $	61,685)	$	8,086,261
						2020
				L1		L2		Other	Reconciliatio
	The Company			companies		companies	companies		n	and offset		Total
Revenue from external
customers	$	13,789,342	$	13,973	$	475,176	$	-	( $	576 )	$	14,277,915
Revenue from
inter-segment sales		-		-		-		-		-		-
Total revenue	$	13,789,342	$	13,973	$	475,176	$	-	( $	576)	$	14,277,915
Segment income
before tax	$	5,159,661	( $	54,936)	( $	104,470)(	$	56)	$	159,391	$	5,159,590

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Depreciation and amortization ( $ 24,320 ) ( $ 1,826)( $ 8,045) Income tax expenses ( $ 216,523 ) $ - $ - Income (losses) from equity investments under the equity method ( $ 107,719 ) $ 32 ( $ 5,394) Segment assets $ 19,224,864 $ 665,904 $ 2,613,600 Segment liabilities $ 9,968,196 $ 1,638 $ 1,153,595	$ - $ - ( $ 34,191) $ - $ - ( $ 216,523) $ - ( $ 147,134)$ 34,053 $ 2,289 ( $ 2,197,571)$ 20,309,086 $ 29 ( $ 104,966)$ 11,018,492

(IV) Reconciliation of segment income

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

(V) Information by region

The Group's information by region in 2021 and 2020 is as follows:

Taiwan	2021 Revenue Non-current assets $ 5,124,284$ 1,121,174	2020 Revenue Non-current assets $ 14,277,915 $ 2,006,237
	Revenue $ 5,124,284	Revenue $ 14,277,915

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Kuo Yang Construction Co., Ltd. and Subsidiaries Provision of endorsements and guarantees to others January 1 to December 31, 2021

				January 1 to December 31, 2021	January 1 to December 31, 2021	January 1 to December 31, 2021	January 1 to December 31, 2021
Table 1 No. (Note 1) Name of company providing endorsement or guarantee		Entity for which the endorsement/guarantee is made		Limit on endorsements/guarantees to a single enterprise (Note 3) Maximum outstanding balance of endorsements/guarantees during the current period (Note 4) Ending balance of endorsements/guarantees (Note 5) Actual amount drawn down (Note 6)				Endorsed/Guaranteed amount with property as collateral Cumulative endorsed/guaranteed amount as a percentage of the net value in the most recent financial statements Maximum endorsed/guaranteed amount (Note 3) Parent company to subsidiary (Note 7)			Unit: NT$1,000 (Unless specified otherwise) Subsidiary to parent company (Note 7) Endorsements and guarantees for entities in Mainland China (Note 7) Remarks
		Companyname	Relationship (Note 2)
0 0 0 0 0 0 0 0 1 1	Kuo Yang Construction Co., Ltd. ″ ″ ″ ″ ″ ″ ″ Shen Yang Construction Co., Ltd. ″	Wei Li International Development Co., Ltd. Tsang Shan Development Co., Ltd. Chi Hsuan Development Co., Ltd. Shen Yang Construction Co., Ltd. Hanshin Asset Management Co., Ltd. Li Yang Agricultural Technology Co., Ltd. Heng Jui Development Co., Ltd. Ta Yuan Construction Co., Ltd. Chi Yang Construction Co., Ltd. Tsang Hsin Construction Co., Ltd.	5 5 5 2 5 5 5 5 2 5	$ 18,458,804 18,458,804 18,458,804 18,458,804 18,458,804 18,458,804 18,458,804 18,458,804 3,123,576 3,123,576	$ 10,504,655 558,000 1,116,000 634,500 798,000 665,000 266,000 522,616 2,415,000 368,000	$ 6,838,730 279,000 558,000 634,500 - - - 202,616 2,282,500 368,000	$ 6,262,170 279,000 558,000 131,500 - - - 202,616 130,300 311,350	$ - - - - - - - - - -	74.10% $ 36,917,608 3.02% 36,917,608 6.05% 36,917,608 6.87% 36,917,608 0.00% 36,917,608 0.00% 36,917,608 0.00% 36,917,608 2.20% 36,917,608 146.15% 6,247,152 23.56% 6,247,152	N N N Y 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

Note 1: The explanation for filling out numbers is as follows: 1. The issuer shall fill out numbers of 02. Investees are numbered in order starting from "1".

Note 2: Relationships between endorser/guarantor and the entity for which the endorsement/guarantee is made are classified into the following six categories (simply specify the respective category):

Companies in a business relationship with the Company.
Subsidiaries in which the Company directly holds more than 50% of its total outstanding ordinary shares.
Investees in which parent company and subsidiary hold more than 50% of total outstanding ordinary shares combined.
Parent company in which the Company directly or indirectly (along with subsidiary) holds more than 50% of its total outstanding ordinary shares.
Companies providing mutual endorsements/guarantees for industry peers for purposes of undertaking a construction project.
Companies where all capital-contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
Note 3: The procedures in which the Company provides endorsements/guarantees for others, the maximum endorsements/guarantees for each entity, and the total limit of endorsements/guarantees shall be filled in. The individual entity receiving endorsements/guarantees and the calculation method for the total limit amount shall be specified in the "Remarks" column.
The total endorsements and guarantees provided by the Company shall not exceed the net value of the Company's most recent financial statements; the endorsements and guarantees provided for an individual enterprise may not exceed 20% of the net value of the Company's most recent financial statements.
Where the Company fulfills its contractual obligations by providing mutual endorsements and guarantees for another company in the same industry or for joint builders for a construction project, where all capital
- contributing shareholders make endorsements and guarantees for their jointly invested company in proportion to their shareholding percentages, where companies in the same industry provide joint guarantee for contract

Table 1 Page 1

performance for pre-sale property contracts in accordance with the Consumer Protection Act, or where the Company directly or indirectly holds 100% of the voting shares and provides endorsements and guarantees, the restrictions in the preceding paragraph shall not apply and the endorsements and guarantees can still be provided. However, such endorsements and guarantees shall not exceed 400% of the net value of the most recent financial statements; the total endorsements and guarantees provided for an individual enterprise may not exceed 200% of the net value of the most recent financial statements.

Where Shen Yang Construction fulfills its contractual obligations by providing mutual endorsements and guarantees for another company in the same industry or for joint builders for a construction project, where all capital contributing shareholders make endorsements and guarantees for their jointly invested company in proportion to their shareholding percentages, where companies in the same industry provide joint guarantee for contract performance for pre-sale property contracts in accordance with the Consumer Protection Act, or where the Company directly or indirectly holds 100% of the voting shares and provides endorsements and guarantees, such endorsements and guarantees shall not exceed 400% of the net value of the most recent financial statements; the total endorsements and guarantees provided for an individual enterprise may not exceed 200% of the net value of the most recent financial statements.

Note 4: Highest balance of endorsements/guarantees to others for the year.

Note 5: Endorsement/guarantee liabilities are assumed when the amount of the endorsement/guarantee contracts or bills signed with the bank by the Company is approved as of the end of the year. Other matters related to endorsements/guarantees shall be included in the endorsement/guarantee balance.

Note 6: Enter the actual amount drawn down by the companies for which the endorsements/guarantees are made within the range of endorsement/guarantee balance.

Note 7: Endorsements/guarantees made by TWSE/TPEx listed parent company for subsidiary, endorsements/guarantees made by subsidiary for TWSE/TPEx listed parent company, and endorsements/guarantees made in Mainland China are must be indicated with "Y".

Table 1 Page 2

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

Table 2

Kuo Yang Construction Co., Ltd. and Subsidiaries Holding of marketable securities at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures) December 31, 2021

Securities held by	Type and name of marketable securities	Relationship with securities issuer	General ledger account		End ofperiod	End ofperiod
				Number of shares	Carrying amount	Shareholding ratio	Fair value
Kuo Yang Construction Co., Ltd. ″ Shang Yang International Asset Management Co., Ltd. Kuo Yang Construction Co., Ltd. Celestial Talent Limited Kuo Yang Construction Co., Ltd. ″ ″ Shen Yang Construction Co., Ltd. ″ Kuo Yang Construction Co., Ltd. ″ ″ Shen Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. ″	Nomura Global High Yield Bond Fund TCB Global Healthcare M-A Income Fund O-Bank No. 1 Real Estate Investment Trust Non-listed stocks - Tai Ho Construction Co., Ltd. Cultivate Wealth Limited Listed stocks - Fu I Industrial Co., Ltd. Chuwa Wool Industry Co., (Taiwan) Ltd. Hi-Lai Foods Co., Ltd. Hsin Kuang Steel Co., Ltd. Evergreen Marine Corporation Listed stocks - Hi-Lai Foods Co., Ltd. China Development Financial Holding Co., Ltd. Taiwan Cement Corporation Winbond Electronics Corporation Hotron Precision Electronic Industrial Co., Ltd. Co-Tech Development Corp. Asia Cement Corporation Nan Ya Plastics Corporation Evergreen Marine Corporation Unlisted stocks - United Real Estate Management Co., Ltd. Hanshin Asset Management Co., Ltd. Grand Hi-Lai Hotel Co., Ltd. Unlisted stocks - Han Chi Technology Co., Ltd. Unlisted stocks - Kaohsiung Arena Development Corporation SE Security Corp.	None None None None None None Note 4 ″ None None Note 4 None None None None None None None None None Note 4 ″ None Note 4 None	Current financial assets at fair value through profit or loss ″ ″ Non-current financial assets at fair value through profit or loss ″ Current financial assets at fair value through other comprehensive income ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ Non-current financial assets at fair value through other comprehensive income ″ ″ ″ ″ ″	689,047 1,000,000 617,000 2,400,000 20.1 1,755,429 3,108,000 332,237 330,000 600,000 22,149 3,000,000 2,553,000 1,100,000 500,000 800,000 500,000 100,000 700,000 1,494,794 4,946,472 5,401,471 450,000 12,500,000 1,526,170	$ 4,843 9,960 5,621	- - - 17.14% 0.11% 1.83% 3.38% 0.78% 0.10% 0.01% 0.05% 0.02% 0.04% 0.03% 0.54% 0.32% 0.01% 0.00% 0.01% 4.43% 2.29% 18.00% 9.00% 5.00% 15.26%	$ 4,843 9,960 5,621
					$ 20,424		$ 20,424
					$ - -		$ - -
					$ -		$ -
					$ 94,792 72,883 37,211 19,206 85,500 2,481 52,500 122,544 37,400 28,150 61,680 22,150 8,540 99,750		$ 94,792 72,883 37,211 19,206 85,500 2,481 52,500 122,544 37,400 28,150 61,680 22,150 8,540 99,750
					$ 744,787		$ 744,787
					$ 20,278 140,975 73,132 7,961 157,750 26,036		$ 20,278 140,975 73,132 7,961 157,750 26,036
					$ 426,132		$ 426,132

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

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

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

Table 2 Page 1

Kuo Yang Construction Co., Ltd. and Subsidiaries

Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of paid-in capital or more:

January 1 to December 31, 2021

Table 3

Unit: NT$1,000

(Unless specified otherwise)

Buying/sellingcompany	Type and name of marketable securities (Note 1)	General ledger account	Transacti on counterp arty (Note 2)	Relation ship (Note 2)	Opening	Opening	Purchased (Note 3)	Purchased (Note 3)		Sold (Note 3)	Sold (Note 3)		End of period
					Num ber of share s	Amount	Number of shares	Amount	Number of shares	Selling price	Book cost	Gain (loss) on disposal	Num ber of share s Amou nt
Shen Yang Construction Co., Ltd.	Listed stocks - Yang Ming Marine Transport Corporation	Current financial assets at fair value through other comprehensive income	-	-	-	$ -	1,900,000	$ 285,172	1,900,000	$ 316,692	$ 285,172	$ 31,520	- $ -

Note 1: Securities in the Table refer to stocks, bonds, certificates of beneficial interest, and securities derived from such items. Note 2: The two fields are required for securities investments accounted for using equity method but exempted for others. Note 3: The cumulative purchase and sales amount shall be calculated separately based on the market price to determine whether it reaches NT$300 million or 20% of the paid-in capital. Note 4: Paid-in capital refers to the paid-in capital of the parent company. If the issuer's shares are issued without face value or where the face value does not equal to NT$10, the 20% requirement on paid-up capital shall be calculated instead at 10% of equity attributable to parent company shareholders in the balance sheet.

Table 3 Page 1

Kuo Yang Construction Co., Ltd. and Subsidiaries

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

Table 4

January 1 to December 31, 2021

Unit: NT$1,000

(Unless specified otherwise)

Company that acquired realproperty	Name ofproperty	Transaction date	Transaction amount	Payment status	Transaction counterparty	Relation ship		Prior transaction of related counterpart	Prior transaction of related counterpart	y	Basis of reference for price determination	Purpose of acquisition and status of usage	Miscellaneo us
							Owner	Relationship with issuer	Transfer date	Amount
Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Shen Yang Construction Co., Ltd.	Inventories - land awaiting construction (Land on Zhongxing Section, Sanchong) Inventories - land awaiting construction (Land on Zhongyi Section, Tucheng) Inventories - land under construction (Land on Jiuzong Section, Neihu) Inventories - land awaiting construction (Land in Fengshan District, Kaohsiung)	2021/7/12 2021/1/18 2021/7/12 2020/11/09 2020/12/30 2020/12/16	$ 944,338 $ 1,053,000 $ 1,520,458 $ 566,190	$ 944,132 $ 1,053,000 $ 1,520,458 (Note 1) $ 566,190 (Note 2)	Yung I Industrial Co., Ltd. and Hwa Yang International Distribution Co., Ltd. B and Chen Chang Industrial Co. 10 individuals including A and Po Kai Development Co., Ltd. Land Administration Bureau, Kaohsiung City Government	None None None None	Not applicable Not applicable Not applicable Not applicable	Not applicable Not applicable Not applicable Not applicable	Not applicable Not applicable Not applicable Not applicable	Not applicable Not applicable Not applicable Not applicable	Appraisal report from Hung Pang Real Estate Appraisers Firm and appraisal report from Zhe Yu Real Estate Appraisers Firm Appraisal report from Zhe Yu Real Estate Appraisers Firm and appraisal report from Ho Yang Real Estate Appraisers Firm 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	Land for construction Land for construction Land for construction Land for construction	Not applicable Not applicable Not applicable Not applicable

Note 1: The Group has paid $1,050,595 in 2020 and paid $469,863 in this period in accordance with contracts. All payments were completed. Note 2: The Group did not make payments in 2020 and paid $566,190 in this period. All payments were completed. Note 3: Where an appraisal is required for an acquired asset, specify the appraisal results in the "reference for price determination". Note 4: Paid-in capital refers to the paid-in capital of the parent company. If the issuer's shares are issued without face value or where the face value does not equal to NT$10, the 20% requirement on paid-up capital shall be calculated instead at 10% of equity attributable to parent company shareholders in the balance sheet.

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

Table 4 Page 1

Kuo Yang Construction Co., Ltd. and Subsidiaries

Table 5

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

January 1 to December 31, 2021

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

Company that disposed of realproperty	Name ofproperty	Transaction date	Acquisition date	Carrying amount	Transaction amount	Payment collection status	Gain (loss) on disposal	Transaction counterparty	Relations hip	Purpose of disposal	Basis of reference for price determination	Miscellaneous
Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd.	Inventories - houses and land held for sale Inventories - houses and land under construction	2021/1/12 2020/6/24	Not applicable for houses and land held for sale Not applicable for pre-sale properties	Not applicable Not applicable	$ 222,443 $ 113,935	$222,443 already collected in accordance with contracts $222,443 $113,935 already collected in accordance with contracts $113,935 (Note 1)	Not applicable Not applicable	Good Way Technology Co., Ltd. A	None None	Gains Gains	Appraisal report from Chih Wei Real Estate Appraisers Firm Appraisal report from Hung Pang Real Estate Appraisers Firm	Not applicable Not applicable

Note 1: The Group has collected $19,369 in 2020 and collected $94,566 in this period in accordance with contracts. All payment collections were completed. Note 2: The transaction amount and payment collection status shall be disclosed in accordance with the project shareholding ratio. Note 3: Where an appraisal is required for a disposed asset, specify the appraisal results in the "reference for price determination". Note 4: Paid-in capital refers to the paid-in capital of the parent company. If the issuer's shares are issued without face value or where the face value does not equal to NT$10, the 20% requirement on paid-up capital shall be calculated instead at 10% of equity attributable to parent company shareholders in the balance sheet.

Table 5 Page 1

Unit: NT$1,000

Table 6

Kuo Yang Construction Co., Ltd. and Subsidiaries

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

January 1 to December 31, 2021

No. (Note 1)	Companyname	Counterparty	Relationship (Note 2)		Transaction stat	us
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0 0 0 0 1	Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Kuo Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd.	Shen Yang Construction Co., Ltd. Shen Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. Che Yang Agricultural Technology Co., Ltd. Shadwell Limited.	1 1 1 1 3	Other receivables - related parties Rental/leasing revenue Rental/leasing revenue Rental/leasing revenue Interest payable	$ 60,975 203 186 186 425	Note 4 Note 4 Note 4 Note 4 Note 4	0.35% 0.00% 0.00% 0.00% 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. and Subsidiaries

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

January 1 to December 31, 2021

Table 7

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

Name of investment company	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Holdings at the end ofperiod	Holdings at the end ofperiod	Holdings at the end ofperiod	Net profit (loss) of investee for the currentperiod	Investment income (loss) recognized by the Company for the current period	Remarks
				End of theperiod End of lastyear $ 1,600,000 $ 1,600,000 631,098 631,098 4,742 4,742 480,000 480,000 22,000 22,000 300,926 - 2,500 2,500 136,000 136,000 31,500 31,500 103,163 (USD 3,727 thousand) 103,163 (USD 3,727 thousand) 75,483 (USD 2,727 thousand) 75,483 (USD 2,727 thousand) 27,680 (USD 1,000 thousand) 27,680 (USD 1,000 thousand) 27,680 (USD 1,000 thousand) 27,680 (USD 1,000 thousand)	End of lastyear	Number of shares	Percenta ge	Carryingamount
Kuo Yang Construction Co., Ltd. ″ ″ ″ ″ ″ Shen Yang Construction Co., Ltd. ″ Shang Yang International Asset Management Co., Ltd. ″ Century Rainbow Limited Century Rainbow Limited Charm Merit Limited	Shen Yang Construction Co., Ltd. Shang Yang International Asset Management Co., Ltd. Shadwell Limited Hanshin Shopping Plaza Co., Ltd. Sweet Me Hot Spring Resort Co., Ltd. Hanshin Department Store Co., Ltd. Che Yang Agricultural Technology Co., Ltd. Chi Yang Construction Co., Ltd. Chi Yang Construction Co., Ltd. Century Rainbow Limited Celestial Talent Limited Charm Merit Limited Good Fame Limited	Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Seychelles Seychelles Hong Kong Samoa	Real estate investment, development, and rental and leasing Residence and buildings lease construction and development Investment in real estate property Department store General hotel industry and restaurant management Department store Horticulture services and afforestation Residence and buildings lease construction and development Residence and buildings lease construction and development Investment company Investment company Investment company Investment company			160,000,000 61,800,000 200,000 10,005,000 2,200,000 - 250,000 13,600,000 3,150,000 2,718,138 1,988,828 1,000,000 1,000,000	100% 100% 100% 20% 20% - 100% 80% 45% 100% 100% 100% 40%	$ 1,535,932 649,447 2,140 898,024 11,775 - 1,462 135,649 61,024 756 ( 92) 941 1,009	$ 72,692 29,375 ( 57 ) 948,013 ( 5,553 ) 71,978 ( 226 ) ( 69 ) 66,092 ( 40 ) - ( 40 ) ( 100 )	$ 88,498 Subsidiary (Note 2) 29,610 Subsidiary (Note 2) ( 57 ) Subsidiary (Note 2) 170,156 Affiliate enterprise (Note 3) ( 1,158 ) Affiliate enterprise 6,710 Affiliate enterprise (Note 3) ( 226 ) Sub-subsidi ary (Note 2) ( 55 ) Sub-subsidi ary (Note 2) 29,742 Affiliate enterprise ( 40 ) Sub-subsidi ary (Note 1.2) - Sub-subsidi ary (Note 1.2) ( 40 ) Sub-subsidi ary (Note 1.2) ( 41 ) Affiliate enterprise (Note 1)

Table 7 Page 1

Note 1: Calculated based on the exchange rate of the foreign currency on , December 31, 2021. Note 2: All the transactions were consolidated and written off in the preparation of the consolidated financial statements. Note 3: Hanshin Shopping Plaza merged Hanshin Department Store through a share conversion on September 1, 2021 and acquired 100% of its shares. Refer to Note 6 (7).

Table 7 Page 2

Kuo Yang Construction Co., Ltd. and Subsidiaries

Information on investments in Mainland China - basic information January 1 to December 31, 2021

Table 8

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

Investees in Mainland China	Main business activities Paid-in capital	Investment method (Note 1) Opening balance of accumulated fund transfer from Taiwan	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the currentperiod	Ending balance of accumulated fund transfer from Taiwan	Net profit (loss) of investee for the current period	Ownership held directly or indirectly by the Company	Investment income (loss) recognized by the Company in the current period (Note 2(2). B)	Ending investment book value	Investment revenue transferred back to Taiwan as of the end of the period
			Remitted to Mainland China Remitted back to Taiwan
Guopan Investment Consultancy Co., Ltd. Companyname	Business investment consulting and enterprise management consulting $ 83,040 (USD 3,000 thousand) Accumulated investment remitted from Taiwan to Mainland China at the end of theperiod	(2) $ 27,680 (USD 1,000 thousand) Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	$ - $ - Upper limit on investment authorized byMOEAIC	$ 27,680 (USD 1,000 thousand)	($ 100)	40%	($ 40)	$ 1,079	$ -
The Company	$102,637 (USD 3,708 thousand)	$ 102,637	$ 5,557,988

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$74,957 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

December 31, 2021

Information on major shareholders

Table 9

Shareholder's name	Shares	Shares
	Number of shares held	Shareholdingratio
Han Shen Investment Co., Ltd. Chung Shen Development Co., Ltd. Morta Enterprise Co., Ltd. Cheng Chi Co., Ltd. Wei Li International Development Co., Ltd.	35,985,223 27,709,048 24,795,785 23,124,570 19,320,488	9.46% 7.29% 6.52% 6.08% 5.08%

Table 9 Page 1

AI assistant

ky — Audit Report / Information 2021

52131_rns_2021-11-11_86ea6531-6518-4109-aa3a-e2258bd754ff.pdf

Kuo Yang Construction Co., Ltd. and Subsidiaries

Consolidated Financial Statements and Independent Auditor's Report for 2021 and 2020 Table of Contents

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

Audit Opinions

Basis of Audit Opinions

Key Audit Matters

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

Description

Corresponding auditing procedures

Inventories valuation - land for construction

Description

Corresponding auditing procedures

Other matters - Reference to audits of other CPAs

Other matters - Individual Financial Statements

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheet December 31, 2021 and 2020

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Balance Sheet December 31, 2021 and 2020

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2021 and 2020

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2021 and 2020

Kuo Yang Construction Co., Ltd. and Subsidiaries Consolidated Statements of Changes in Equity January 1 to December 31, 2021 and 2020

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

January 1 to December 31, 2021 and 2020

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

January 1 to December 31, 2021 and 2020

Kuo Yang Construction Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

2021 and 2020

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

I. Company history

II. Date and procedures of approval of the financial statements

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").

Note: The FSC approved advanced adoption starting from , January 1, 2021.

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

FSC

IV. Summary of significant accounting policies

(I) Statement of compliance

(II) Basis of preparation

(III) Basis of consolidation

2. Subsidiaries included in the consolidated financial statements:

(V) Classification of current and non-current items

(VI) Cash equivalents

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

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

(IX) Accounts and notes receivable

(X) Impairment of financial assets

(XI) Derecognition of financial assets

(XII) Lease transaction as a lessor

(XIII) Inventories

(XV) Joint operations

(XVI) Property, plant and equipment

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

(XVIII) Investment properties

(XIX) Intangible assets

(XX) Impairment of non-financial assets

(XXI) Borrowings

(XXII) Accounts and notes payable

(XXIII) Derecognition of financial liabilities

(XXIV)Financial guarantee contracts

(XXV) Employee benefits

- (XXVI)Employee share based payment

(XXVII) Income tax

(XXVIII) Dividends

(XXIX)Revenue recognition

Land development and real property sales

(XXX) Operating segments

V. Significant accounting judgments, estimates and main uncertainty assumptions

(I) Critical judgments in applying accounting policies

(II) Critical accounting estimates and assumptions

VI. Details of significant accounts

(I) Cash and cash equivalents

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

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

(V) Inventories

(VI) Joint operations

2. The information on the joint operations held by the Group is as follows:

ky Audit Report / Information 2021