Stock Code: 2506

Pacific Construction Co., Ltd.

Parent Company Only Financial Statements

With Independent Auditors' Report
For the Years Ended December 31, 2025 and 2024

Address: No. 495, Guangfu South Road, Xinyi District, Taipei City 110, Taiwan
Telephone: +886 (2) 2722-5051

The reader is advised that these parent company only financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

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	Page
I · Cover	1
II · Table of Contents	2
III · Independent Auditor’s Report	3
IV · Balance Sheet	4
V · Statements of Comprehensive Income	5
VI · Statements of Changes in Equity	6
VII · Statements of Cash Flow	7
VIII · Notes to Financial Statements
1. Company History	8
2. Approval Date and Procedures of The Financial Statements	8
3. New Standards, Amendments and Interpretations Adopted	8~10
4. Summary of Significant Accounting Policies	10~24
5. Significant Accounting Assumptions and Judgments, and Major Sources of Estimation Uncertainty	24~25
6. Explanation of Significant Accounts	26~57
7. Related-Party Transactions	57~59
8. Pledged Assets	60
9. Commitments and Contingencies	60~61
10. Losses Due to Major Disasters	61
11. Subsequent Events	61
12. Other	61~62
13. Note to Disclosures
A. Information on Significant Transactions	62~65
B. Information on Investees	66
C. Information on Investments in China	67
D. Information of Main Shareholders	67
14. Segment Information	67
IX · List of Major Accounting Items	68~71

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Independent Auditor’s Report

To the Board of Directors of Pacific Construction Co., Ltd.:

Opinion

We have audited the financial statements of Pacific Construction Co., Ltd. (the “Company”), which comprise the balance sheet as of December 31, 2025 and 2024, the statements of comprehensive income, statements of changes in equity and statements of cash flow for the years ended December 31, 2025 and 2024, and notes to financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of the other auditors (see Other Matters), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and its financial performance and its cash flows for the years then ended December 31, 2025 and 2024, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audit of the financial statements as of in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Revenue recognition

Please refer to Note 4(15) for the accounting policy of revenue recognition. Information of revenue recognition are shown in Note 6(19) of the financial statements.

Description of Key Audit Matters:

The Company main operating revenue sources are income from department stores and rental income from investment properties. The risk of material misstatement is associated with the truthfulness of revenue recognition. While operating revenue involves the management’s operating performance, the management may fail to recognize revenue earlier or defer the recognition of revenue to achieve the expected net profit, resulting in a material misstatement of operating revenue. Accordingly, the revenue recognition test is one of the significant evaluations performed by us in our audit of the financial statement of the Company.

Auditing Procedures Performed:

Our principal audit procedures of the above key audit matters include:

Understand the process and internal controls of the Sales and Collection Cycle and assess the controls to prevent and detect errors and fraud in revenue recognition.

-Perform a cut-off test on Sale of the Properties and Lease Revenue to assess whether the former revenue is recognized in the appropriate period.
-Perform a verification test on revenue recognition by randomly reviewing relevant documents, Including Lease Contractual Terms, Real Estate Sales Contract and Real Estate Transfer Registration, etc. These will be verified with the general entry to assess whether the revenue recognition policy of the Company complies with applicable bulletins.

2. Inventory Valuation

Please refer to Note 4(7) and 5(2) for the accounting policy of inventory valuation, as well as the estimation and assumption uncertainty of the valuation of inventory, respectively. Information of estimation of the valuation of inventory are disclosed in Note 6(5) of the financial statements.

Description of Key Audit Matters:

The Construction Department's inventory is an important asset of the Company, accounting for approximately 41% of total assets. Inventory is valued in accordance with IAS 2 as the net realizable value of the Company's inventory of the Construction Department is based on management's estimates of future sales prices and construction costs and is likely to be affected by political and economic situations. Where the net realizable value is not properly assessed, it may result in a misstatement in the financial statements. Accordingly, the inventory valuation test is one of the significant evaluations performed by us in our audit of the financial statement of the Company.

Auditing Procedures Performed:

We obtained information on the net realizable value of the Company's inventory and reassessed the net realizable value of homes for sales by randomly reviewing sold contracts from previously disclosed information, with reference to the most recent property price registered by the Ministry of the Interior, or obtaining quotes from nearby transactions. In terms of the net realizable value of construction sites, land and buildings under construction, we acquired and randomly checked the Company's investment return analysis or appraisal report and compared the investment return analysis with market conditions to assess whether the net realizable value of inventories is fairly presented.

Other Matters

We did not audit certain investees' financial statements included in the financial statements of the Company's using the equity method; they were audited by the other auditors. Our audits, our opinion on the financial statements of the Company, are based solely on the other auditors' audit reports. The amount in investments in certain investees accounted for using the equity method for the years ended December 31, 2025 and 2024 accounted for 16% and 15% of the total assets, respectively. The shares of subsidiaries, affiliates and joint ventures accounted for using the equity method accounted for 37% and 96% of the net income before taxes for January 1 to December 31, 2025 and 2024, respectively.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the

going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company's financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management
Conclude on the appropriateness of 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 the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other

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matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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.

KPMG
Taipei, Taiwan (Republic of China)
March 10, 2026

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Pacific Construction Co., Ltd.
Balance Sheet
December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

Assets	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
Current assets:
1100	Cash and cash equivalents (Note 6(1))	$ 308,449	3	413,548	4
1170	Accounts receivable, net (Note 6(3), (19) and 7)	3,142	-	6,260	-
1200	Other receivables (Note 6(4) and 7)	24,044	-	19,069	-
1320	Inventory (applicable to the construction industry) (Note 6(5) and 8)	5,025,474	43	4,675,285	41
1476	Other current financial assets (Note 8)	287,758	2	245,858	2
1478	Refundable deposits for construction projects (Note 9)	970	-	970	-
1479	Other current assets, others	44,201	-	38,591	-
1480	Current assets recognized as incremental costs to obtain contract with customers (Note 7)	86,114	1	74,961	1
		5,780,152	49	5,474,542	48
Non-current assets:
1517	Non-current financial assets at FVTOCI (Note 6(2) and 8)	219,781	2	217,758	2
1550	Investments accounted for using equity method (Note 6(6) and 8)	3,814,672	33	3,585,749	32
1600	Property, plant and equipment (Note 6(7) and 8)	212,878	2	216,466	2
1755	Right-to-use assets (Note 6(8), (13) and 8)	103,628	1	116,502	1
1760	Investment property, net (Note 6(9) and 8)	1,500,963	13	1,529,035	14
1840	Deferred tax assets (Note 6(16))	3,800	-	307	-
1975	Non-current net defined benefit assets (Note 6(15))	30,488	-	27,042	-
1980	Non-current other financial assets (Note 8)	50,529	-	154,084	1
1990	Other non-current assets, others	1,668	-	2,955	-
		5,938,407	51	5,849,898	52
Total Assets		$ 11,718,559	100	11,324,440	100

(See accompanying notes to financial statements.)

Pacific Construction Co., Ltd.
Balance Sheet (Continued)
December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
Liabilities and Equity
Current liabilities:
2100	Short-term loans (Note 6(10))	$ 1,519,280	13	1,319,240	12
2130	Current contract liabilities (Note 6(19))	488,465	4	384,763	3
2150	Notes and accounts payable	302,420	2	283,437	3
2200	Other payables	210,813	2	225,917	2
2230	Current tax liabilities	138,680	1	110,663	1
2280	Current lease liabilities (Note 6(8) and (13))	17,016	-	14,423	-
2305	Other current financial liabilities	316,311	3	316,589	3
2321	Current portion of corporate bonds matured or recalled (Note 6(12))	284,500	2	34,500	-
2322	Current portion of long-term borrowings (Note 6(11))	62,204	1	61,112	1
2399	Other current liabilities, other	7,142	-	7,502	-
		3,346,831	28	2,758,146	25
Non-Current liabilities:
2530	Bonds payable (Note 6(12))	161,000	1	445,500	4
2540	Long-term loans (Note 6(11))	228,711	2	237,953	2
2580	Non-current lease liabilities (Note 6(8) and (13))	98,500	1	109,656	1
2570	Deferred tax liabilities (Note 6(16))	1,033	-	752	-
2645	Deposits received	68,836	1	60,310	-
2670	Other non-current liabilities, other	14,655	-	14,655	-
		572,735	5	868,826	7
Total liabilities		3,919,566	33	3,626,972	32
Equity (Note 6(2) and (17)):
3110	Ordinary share	3,870,000	33	3,870,000	34
3200	Capital surplus	409,909	4	399,732	4
3310	Legal reserve	1,372,775	12	1,296,436	11
3320	Special reserve	54,518	-	67,462	1
3350	Retained earnings-unappropriated	1,482,516	13	1,690,797	15
3410	Exchange differences resulting from translating the financial statements of foreign operations	292,494	3	289,171	3
3420	Unrealized gains (loss) from investments in financial assets measured at FVTOCI	509,988	4	277,077	2
3500	Treasury shares	(193,207)	(2)	(193,207)	(2)
	Total equity	7,798,993	67	7,697,468	68
	Total liabilities and equity	$ 11,718,559	100	11,324,440	100

(See accompanying notes to financial statements.)

Pacific Construction Co., Ltd.
Statements of Comprehensive Income
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

	2025		2024
		Amount	%	Amount	%
4000	Operating revenue (Note 6(13), (14), (19) and 7)	$ 615,259	100	934,563	100
5000	Operating costs (Note 6(5), (13), (14), (15) and (20))	361,884	59	689,048	74
	Gross profit from operations	253,375	41	245,515	26
5920	Add: Realized profit or loss of sales	1,795	-	1,795	-
5950	Gross profit from operations	255,170	41	247,310	26
	Operating expenses (Note 6(3), (13), (15), (21) and 7):
6100	Selling expenses	66,582	11	84,191	9
6200	Administrative expenses	159,293	26	186,143	20
6450	Expected credit loss (gain)	220	-	559	-
		226,095	37	270,893	29
6500	Net other income and expenses (Note 6(9))	586	-	4,153	-
	Net operating income (loss)	29,661	4	(19,430)	(3)
	Non-operating income and expenses:
7100	Interest revenue	5,564	1	6,324	1
7020	Other gains and losses (Note 6(2),(4) and (22))	20,600	3	14,770	2
7050	Finance costs (Note 6(13) and (22))	(71,444)	(12)	(73,856)	(8)
7370	Share of profit of subsidiaries, associates and joint ventures accounted for using equity method (Note 6(6))	91,684	15	955,624	102
		46,404	7	902,862	97
	Net income before tax from continuing operating department	76,065	11	883,432	94
7950	Less: Income tax expense (Note 6(16))	69,865	10	145,152	15
	Net income	6,200	1	738,280	79
8300	Other comprehensive income:
8310	Items that will not be reclassified subsequently to profit or loss
8311	Remeasurement of defined benefit plans	3,270	1	8,260	1
8316	Unrealized gains (losses) from equity instrument investments measured at FVTOCI	2,023	-	(1,167)	-
8330	Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, Items that will not be reclassified subsequently to profit or loss	231,332	38	58,153	6
	Total items that will not be reclassified subsequently to profit or loss	236,625	39	65,246	7

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Pacific Construction Co., Ltd.
Statements of Comprehensive Income (Continued)
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

	2025		2024
		Amount	%	Amount	%
8360	Items that may be reclassified subsequently to profit or loss
8361	Exchange differences resulting from translating the financial statements of foreign operations	3,323	1	74,773	8
	Total items that may be reclassified subsequently to profit or loss	3,323	1	74,773	8
8300	Other comprehensive income (Net after revenue)	239,948	40	140,019	15
	Total comprehensive income	$ 246,148	41	878,299	94
	Earnings per share (Note 6(18))
9750	Basic earnings per share (in NT$)	$	0.02		2.04
9850	Diluted earnings per share (in NT$)	$	0.02		2.03

(See accompanying notes to financial statements.)

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Pacific Construction Co., Ltd.
Statements of Changes in Equity
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

	Ordinary Share Capital	Capital Surplus	Retained Earnings			Total Other Equity Interest		Treasury shares	Total Equity
			Legal Reserve	Special Reserve	Unappropriated Retained Earnings	Exchange Differences Resulting from Translating the Financial Statements of Foreign Operations	Unrealized Gains (losses) from Financial Assets Measured at FVTOCI
Balance on January 1, 2024	$ 3,870,000	394,631	1,289,342	81,393	997,969	214,398	236,942	(193,207)	6,891,468
Net income	-	-	-	-	738,280	-	-	-	738,280
Other comprehensive income	-	-	-	-	10,069	74,773	55,177	-	140,019
Total comprehensive income	-	-	-	-	748,349	74,773	55,177	-	878,299
Appropriation and distribution of retained earnings:
Legal reserve appropriated	-	-	7,094	-	(7,094)	-	-	-	-
Reversal Special reserve appropriated	-	-	-	(13,931)	13,931	-	-	-	-
Cash dividends of ordinary share	-	-	-	-	(77,400)	-	-	-	(77,400)
Dividends distributed to subsidiaries to adjust capital surplus	-	5,089	-	-	-	-	-	-	5,089
Changes in ownership interests in subsidiaries	-	12	-	-	-	-	-	-	12
Dividends distributed to subsidiaries to adjust capital surplus	-	-	-	-	15,042	-	(15,042)	-	-
Balance on December 31, 2024	3,870,000	399,732	1,296,436	67,462	1,690,797	289,171	277,077	(193,207)	7,697,468
Net income	-	-	-	-	6,200	-	-	-	6,200
Other comprehensive income	-	-	-	-	3,714	3,323	232,911	-	239,948
Total comprehensive income	-	-	-	-	9,914	3,323	232,911	-	246,148
Appropriation and distribution of retained earnings:
Legal reserve appropriated	-	-	76,339	-	(76,339)	-	-	-	-
Reversal Special reserve appropriated	-	-	-	(12,944)	12,944	-	-	-	-
Cash dividends of ordinary share	-	-	-	-	(154,800)	-	-	-	(154,800)
Dividends distributed to subsidiaries to adjust capital surplus	-	10,177	-	-	-	-	-	-	10,177

Balance on December 31, 2025
$ 3,870,000 409,909 1,372,775 54,518 1,482,516 292,494 509,988 (193,207) 7,798,993

(See accompanying notes to financial statements.)

Pacific Construction Co., Ltd.

Statements of Cash Flow

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	2025	2024
Cash flows from operating activities:
Net before tax for the period	$ 76,065	883,432
Adjustment items:
Adjustments to reconcile profit (loss)
Depreciation expense	97,642	93,217
Amortization expense	444	1,133
Expected credit loss	220	559
Interest expense	71,444	73,856
Interest revenue	(5,564)	(6,324)
Dividend income	(13,803)	(22,899)
Share of profit of subsidiaries, associates and joint ventures
accounted for using equity method	(91,684)	(955,624)
Loss of disposal and scrapping of property, plant and equipment	71	2,047
Gains on disposals of investment property	(586)	(4,153)
Impairment Loss (Reversal benefit)	(1,166)	4,500
Deferred credit	(1,795)	(1,795)
Loss of lease modifications	-	594
Total adjustments to reconcile profit (loss)	55,223	(814,889)
Changes in operating assets and liabilities:
Changes in operating assets:
Notes & accounts receivable	2,898	12,522
Other receivables (related parties)	(3,809)	16,580
Inventories	(345,596)	221,480
Other current financial assets	(41,342)	(129,989)
Refundable deposits for construction projects	-	4,764
Other current assets	(5,610)	3,867
Incremental costs to obtaining a contract	(11,153)	(20,124)
Net defined benefit assets	(177)	119
Total changes in operating assets	(404,789)	109,219
Changes in operating liabilities:
Contract liabilities	103,702	56,920
Notes and accounts payable	18,983	(51,744)
Other payables	(14,974)	27,271
Other financial liabilities	(278)	(1,530)
Other current liabilities	(360)	917
Total changes in operating liabilities	107,073	31,834
Total changes in operating assets and liabilities	(297,716)	141,053
Cash inflow (outflow) generated from operations	(166,428)	209,596
Interest received	5,564	6,324
Interest paid	(76,167)	(76,607)
Income tax paid	(45,060)	(64,408)
Net cash flows from (used in) operating activities	(282,091)	74,905

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Pacific Construction Co., Ltd.
Statements of Cash Flow (Continued)
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

	2025	2024
Cash flows from (used in) investing activities:
Proceeds from disposal of equity instruments measured at FVTOCI	-	27,551
Investments accounted for using equity method	-	(50,699)
Capital reduction and refund using equity method investment	20,000	-
Acquisition of property, plant and equipment	(48,493)	(27,275)
Proceeds from disposal of property, plant and equipment	4	21
Acquisition of investment property	-	(2,821)
Proceeds from disposal of investment property	586	4,290
Other financial assets	102,997	(27,517)
Other non-current assets	844	1,721
Dividends received	99,868	76,796
Net cash flows from (used in) investing activities	175,806	2,067
Cash flows from (used in) financing activities:
Increase in short-term loans (Net change)	200,040	(77,983)
Repay corporate debt	(34,500)	-
Long-term loans	69,586	29,470
Decrease in long-term loans	(77,736)	(74,213)
Deposits received	8,526	7,551
Lease principal repayment	(15,328)	(13,588)
Cash dividends paid	(154,800)	(77,400)
Net cash flows from (used in) financing activities	(4,212)	(206,163)
Effect of exchange rate changes on cash and cash equivalents	5,398	5,842
Net decrease in cash and cash equivalents	(105,099)	(123,349)
Beginning cash and cash equivalents	413,548	536,897
Closing cash and cash equivalents	$ 308,449	413,548

(See accompanying notes to financial statements.)

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to the Parent Company Only Financial Statements

For the Years Ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

1. Company History

Pacific Construction Co., Ltd. (hereinafter referred to as “the Company”) was established on June 14, 1967. On February 2, 1980, the Company began listing and trading with approval of the Financial Supervisory Commission, Securities and Futures Bureau. Its primary businesses are contracting civil construction projects, land development and housing construction, housing and building development and rental, construction material manufacturing, precast housing, agency and trading of various construction materials and their export business.

2. Approval Date and Procedures of the Financial Statements

The accompanying parent-company-only financial statements were authorized for issuance by the Board of Directors and issued on March 10, 2026.

3. New Standards, Amendments and Interpretations Adopted

(1) The impact of the International Financial Reporting Standards ("IFRSs") endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Group has adopted below newly amended IFRSs and the Accounting Standards which does not have a material impact on the consolidated financial statements since January 1, 2025.

Amendments to IAS 21 "Lack of Exchangeability"

(2) Impact of not adopting the International Financial Reporting Standards (IFRSs) endorsed by the Financial Supervisory Commission

Based on the Group's own evaluation, adopting the newly revised international financial reporting standards listed below that take effect from January 1, 2026 onwards does not have material impact on the consolidated financial statements.

IFRS 17 "Insurance Contracts" and amendments to IFRS 17 "Insurance Contracts"
Amendments to IFRS 9 and IFRS 7 "Amendment to Classification and Measurement of Financial Instruments"
Annual Improvements to IFRS Accounting Standards
Amendments to IFRS 9 and IFRS 7 "Contracts Referencing Nature-dependent Electricity"

(3) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

New or amended standards	Major amendments	Effective Date Issued by IASB
IFRS 18
"Presentation and Disclosure in Financial Statements"	The new standard introduces three categories of income and expense, two subtotals of income statement and one single note on management's performance measurement. These three guidelines amend and enhance how information is segmented in financial statements as well as provide users with a foundation for better and more consistent information and will impact all companies.

• Income statements with more structuration: Companies use different formats to express their operating results under current standards, making it difficult for investors to compare financial performance across companies. The new standard adopts a more structured income statement and introduces a new definition of the "operating income" subtotal. In addition, it stipulates that all income and expenses shall be classified into three new different categories based on the Company's main business activities.

• Management Performance Measurement (MPMs): The new standard introduces the definition of management performance measurement. Also, it requires the company to provide useful information, i.e. how to calculate and reconcile the measures to the amounts recognized in accordance with IFRS accounting standards, to explain why each measure is included in a single note to the financial statements.

• More disaggregated information: The new standard includes guidance on how companies can enhance the grouping of information in their financial statements. It includes guidance on whether information should be included in the main financial statements or further broken down in the notes. | January 1, 2027
Note: The Financial Supervisory Commission issued a press release on September 25, 2025, announcing that Taiwan will adopt IFRS 18 for the 2028 fiscal year. If a company needs early adoption, it may choose to adopt early after obtaining approval from the Financial Supervisory Commission. |

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

The Group is in the process of evaluating the impact on its financial position and performance by adopting the standards and interpretations mentioned above, and will disclose relevant impacts when the evaluation is completed.

The Group does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture"
IFRS 19 "Subsidiaries without Public Accountability: Disclosures" and Amendments to IFRS 19
Amendments to IAS 21 "Converted to a highly inflated monetary expression"

4. Summary of Significant Accounting Policies

The significant accounting policies presented in the parent-company-only financial statements are summarized as follows. The following accounting policies were applied consistently throughout the periods presented in the parent-company-only financial statements.

(1) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as "the Regulations").

(2) Basis of preparation

(i) Basis of preparation

The parent company only financial statements have been prepared on the historical cost basis except for the financial instruments.

1) Fair value through other comprehensive income is measured at fair value; and
2) The defined benefit liability (asset) is recognized as the fair value of the plan asset less the present value of defined benefit obligation and the upper limit impact mentioned in note 4(16).

(ii) Functional and presentation currency

The functional currency of each Company entities is determined based on the primary economic environment in which the entities operate. The Company's parent company only financial statements are presented in New Taiwan Dollar, which is the Company's functional currency. All the financial information presented in New Taiwan Dollar has been rounded to the nearest thousands.

(3) Foreign currencies

(i) Currencies transaction

Transactions in foreign currencies are translated to the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. Monetary assets and

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Foreign currency differences arising on retranslation are recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

1) Fair value through other comprehensive income equity investment;
2) A financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
3) Qualifying cash flow hedges to the extent that the hedge is effective.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the Company's functional currency at exchange rates of the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to the Company's functional currency at average rate. Foreign currency differences are recognized in other comprehensive income, and presented in the foreign currency translation differences in equity.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Company disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign currency gains and losses arising from such items are considered to form part of a net investment in the foreign operation and are recognized in other comprehensive income, and presented in the translation reserve in equity.

(4) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

1) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
2) It holds the asset primarily for the purpose of trading;
3) It expects to realize the asset within twelve months after the reporting period; or
4) The asset is cash and cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

1) It expects to settle the liability in its normal operating cycle; (Construction industry is usually longer than one year) or intend to sell or consume it

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Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

2) It holds the liability primarily for the purpose of trading;
3) The liability is due to be settled within twelve months after the reporting period; or
4) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not impact its classification.

(5) Cash and cash equivalents

Cash comprises cash on hand, demand deposits, cash equivalents are highly liquid time deposits or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. They are reported as cash equivalents.

(6) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a delivery date basis.

Financial assets are classified as: amortized cost, fair value through other comprehensive income (FVTOCI) – equity investment. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL :

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income ("FVTOCI")

A debt investment is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL :

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

On initial recognition, the Company is able to make an irrevocable election to present subsequent changes in the fair value of investments in equity instruments that is not held for trading in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVTOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVTOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income from equity investments is recognized in profit or loss on the date when the Company’s right to receive payment is established, which in the case of quoted securities is normally company the ex-dividend date.

3) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and accounts receivable, other receivable, guarantee deposit paid and other financial assets).

The Company measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

debt securities that are determined to have low credit risk at the reporting date; and
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables is always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when the financial asset is more than a year past due or the borrower is unlikely to pay its credit obligations to the Company in full.

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of “investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings”.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12-month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVTOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data.

significant financial difficulty of the borrower or issuer;
a breach of contract such as a default or being more than a year past due;
the lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
it is probable that the borrower will enter bankruptcy or other financial reorganization; or
the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVTOCI, the loss allowance is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For individual accounts, the Company's policy is writing off the total carrying amount in financial assets when they are past due for more than a certain period based on the past recovery experience of similar assets. For corporate accounts, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedure for recovery of amounts due.

~15~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

4) Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire, or when the Company transfers substantially all the risks and rewards of ownership of the financial assets, or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

Financial liabilities and equity instruments

1) Classification of debt or equity

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

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

5) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

Financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(7) Inventory

The original cost of construction inventories is the expenditure necessary in bringing the inventories to a saleable or production-ready condition and location. When the cost of inventory exceeds the net realizable value, the cost must be written down to its net realizable value, and the amount in the write-down recognized as the cost of goods sold in the period in which it occurs. The net realizable value is determined as follows:

(i). Land for construction: The net realizable value is based on the estimated selling price (based on current market conditions) less costs to be incurred to completion and selling expenses.

(ii). Construction in process: The net realizable value is based on the estimated selling price (based on current market conditions) less costs to be incurred to completion and selling expenses.

(iii). Property for sale: Net realizable value is the estimated selling price (based on current market conditions) less selling expenses incurred in selling the premises.

(8) Investing subsidiaries

In preparing the parent company only financial statements of the Company, investee company that controlled by the Company is accounted for under the equity method. Under equity method, profit for the year and other comprehensive income for the year reported in an entity’s non-consolidated statement of comprehensive income, shall equal to profit for the year and other comprehensive income’ attributable to owners of the parent reported in that entity’s consolidated statement of comprehensive income. Total equity reported in an entity’s non-consolidated financial statements, shall equal to equity attributable to owners of parent reported in that entity’s consolidated financial statements.

The Company’s changes in equity interests in subsidiaries that did not lead to loss of control, deemed as equity transactions between owners.

(9) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition and subsequently at cost less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment. Cost includes costs directly attributable to the acquisition of investment property. The cost of self-constructed investment property includes raw materials and direct labor, any other costs directly attributable to bringing the investment property to be capable of operating, and borrowing capitalized costs.

When the purpose of investment properties is changed and reclassified as property, plant and equipment, the reclassification is based on the carrying amount at the time of the change of purpose.

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss. Rental income from investment property is recognized as operating revenue on a straight-line basis over the term of the lease.

(10) Property, plant and equipment

1) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses. Cost includes expenses that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes raw materials and direct labor, a directly attributable cost to bringing the asset to its intended location and use, the cost of dismantling and removal and site restoration, and the cost of borrowings to capitalize the eligible assets.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

2) Subsequent cost

Subsequent expenditure is capitalized only when it is probable that future economic benefits associated with the expenditure will flow to the Company.

3) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for the current and comparative periods are as follows:

Buildings	12~50 years
Machinery and equipment	3~10 years
Other equipment	3~10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(11) Lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

1) As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful lives of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments; including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

there is a change in future lease payments arising from the change in an index or rate; or
there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee; or
there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
there is a change of its assessment on whether it will exercise a extension or termination option; or
there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

For short-term leases or leases of low-value underlying assets for certain land, buildings and structures, office equipment and transportation equipment, The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Sale and leaseback transactions are assessed in accordance with IFRS 15 to determine whether the transfer of an asset by the seller-lessee satisfies the requirements of IFRS 15. If the asset is judged as a sale, the asset is derecognized, and the part of the right that has been transferred to the seller-lessee is recognized as profit or loss. The lessee accounting model is applied to the leaseback transaction and the right-to-use asset is measured at the original carrying amount in the leased back portion. If it is judged that the requirements for the disposal of sales are not met, it will be treated as financing.

2) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

The Company recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The lessor recognizes the interest income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor's net investment in the lease. The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of 'other income'.

(12) Intangible assets

1) Recognition and measurement

Other intangible assets including customer relations, patent rights and trademark rights, etc., that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

2) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

3) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

Computer software 1~3 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(13) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, deferred tax assets and assets from employee benefit) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are immediately included in the current profits and losses.

(14) Provision for Liabilities - Excise Duty

Provisions for liabilities are recognized when the Group has a present obligation as a result of a past event, and a transfer of economic benefits will probably be required to settle the obligation and the amount in the obligation can be reliably estimated. The provision for liabilities is discounted at a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the liabilities. The amortization of the discount is recognized as an interest expense.

When purchasing the asset, or using the asset for purposes other than the production of inventories during a specific period, the original estimated cost of dismantling and removing the asset and restoring the site arising from the acquisition of the asset or the use of the asset for purposes other than the production of inventory during a specific period should be recognized as interest expense annually at the original discount rate. The carrying amount should be increased until the asset is removed from service at the end of its useful life. At this time, the carrying amount is accumulated to the estimated cost of removal from service.

~20~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

(15) Revenue Recognition

1. Revenue from customer contracts

Revenue is measured as the consideration to which the Company expects to be entitled in exchange for the transfer of goods and services. The Company recognizes revenue when the performance obligation is satisfied by transferring control over a customer's good or service. The Company's major revenue items are described as follows:

1) Land development and property sale

The Company develops and sells residential real estate and often pre-sells real estate during or before construction. The Company recognizes revenue when the control of the real estate is transferred. Due to contractual restrictions, such real estate is not usually used for other purposes by The Company. However, after completion of delivery or transfer of legal title of the real estate to the customer, The Company has an enforceable right to payment for performance completed to date. Accordingly, The Company recognizes revenue at the point of completion of transferring the legal title of the property or real estate to the customer.

Revenue is measured based on the transaction price of a contractual agreement. Upon selling a completed house, in most cases, consideration may be received upon the transfer of legal title to real estate; in few cases, payment may be deferred in accordance with contractual agreements, but the deferral period should not exceed 12 months. Accordingly, the transaction price is not adjusted to reflect the impact of the significant financial components. In the case of pre-sale of real estate, payment is usually received between the signing of the contract and the transfer of the real estate to the customer in installments. Where the contract contains a significant financial component, the transaction price is adjusted during the period to reflect the effects of the time value of money according to the interest rate of the proposed project borrowing. The amounts received in advance are recognized as contract liabilities. When the effect of the time value of money adjustment is judged to be necessary, interest expense and contract liabilities are recognized. Accumulated contract liabilities are reclassified as income when a property is transferred to customers.

Some contracts contain multiple deliverables, such as the sale of residential real estate and decorating services - decorating services are deemed as a separate performance obligation, and the transaction price is apportioned on a stand-alone selling price basis. If there is no observable price, the stand-alone selling price is estimated based on the expected cost and profit. Decorating services are recognized as revenue at the point of completion of the service.

2) Lease income

Lease income generated from investment property is recognized over the lease term on a straight-line basis. Lease incentives given are considered part of the total lease income and are recognized as a reduction of lease income over the lease term on a straight-line basis. Revenue from a property sublease is recognized as lease income from investment properties under operating income.

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

3) Financial components

The Company expects that the time interval between the transfer of a good or service from all customer contracts to customers and when customers pay for the goods or services will not exceed one year. Therefore, The Company does not adjust the time value of money of the transaction price.

Cost of customer contracts

Incremental costs of obtaining a contract

The Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Company adopts the practical expedient method of the Standard. If the incremental cost of obtaining a contract is recognized as an asset and the asset is amortized over a period of one year or less, the incremental cost is recognized as an expense when incurred.

(16) Employee benefits

Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided in the periods during which services are rendered by employees.

Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

~22~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(17) Income Taxes

Income tax expenses include both current taxes and deferred taxes. Except for expenses that are related to business combinations, expenses recognized in equity or other comprehensive income directly, and other related expenses, all current and deferred taxes are recognized in profit or loss.

The Company has determined that the interest or penalty related to income taxes (including the tax treatment determined) does not meet the definition of income taxes and therefore has used the accounting treatment in accordance with IAS 37.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amounts reflect the best estimates of the amounts expected to be paid or received based on statutory or substantively enacted tax rates at the reporting date, after reflecting uncertainties related to income taxes, if any.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are not recognized for the following:

1) Assets and liabilities that are initially recognized from non-business combination transactions, with no effect on net income or taxable gains (losses).

2) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

3) taxable temporary differences arising on the initial recognition of goodwill.

A deferred tax asset is recognized for unused tax losses available for carry-forward, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profit will be available against which the unused tax losses, unused tax credits and deductible temporary differences can be utilized. Such unused tax losses, unused tax credits and deductible temporary differences are also re-evaluated every year on the financial reporting date, and adjusted based on the probability that future taxable profit will be available against which the unused tax losses, unused tax credits and deductible temporary differences can be utilized.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

~23~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Deferred tax assets and liabilities are offset if the following criteria are met:

1) if the entity has the legal right to settle tax assets and liabilities on a net basis; and
2) the taxing of deferred tax assets and liabilities fulfill one of the below scenarios:

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

(18) Earnings per share

Disclosures are made of basic and diluted earnings per share attributable to ordinary equity holders of the Company. The basic earnings per share is calculated based on the profit attributable to the ordinary shareholders of the Company divided by weighted average number of ordinary shares outstanding. The diluted earnings per share is calculated based on the profit attributable to ordinary shareholders of the Company, divided by weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares. Potential dilutive ordinary shares of the Company include stock dividends to employees.

(19) Operating segments

The company has disclosed departmental information in the consolidated financial report, so individual financial reports do not disclose departmental information.

5. Significant Accounting Assumptions and Judgments, and Major Sources of Estimation

Uncertainty

The preparation of the parent company only financial statements in conformity with endorsed by requires management (make judgments, estimates, and assumptions) to make judgments and estimates, that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Management continually reviews estimates and underlying assumptions, which are consistent with the Company's risk management and climate-related commitments. Changes in estimates are deferred for the period in which the changes are made and for future periods affected.

~24~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

The accounting policies involve significant judgment and have a material effect on the amounts recognized in the financial statements as follows:

(1) Judgment on whether it has a significant influence on the invested company

The company's subsidiary, Grand Pacific Holdings Co., Ltd. (hereinafter referred to as Grand Pacific Company), holds more than 20% of the shares of Beijing Tai-yun Building Co., Ltd. (hereinafter referred to as Beijing Tai-yun), but because other controlling shareholders dominate the operation of Beijing Tai-yun's board of directors, causing Grand Pacific Company to be unable to effectively exercise its board of directors' powers and actually participate in major business decisions. Therefore, in the fourth quarter of 2022, Grand Pacific Holdings Co., Ltd. reassessed whether it still had a significant influence and considered the opinions of external lawyers. According to the resolution of the board of directors of Grand Pacific Company and the company, Grand Pacific Company no longer has significant influence on Beijing Tai-yun. Influence, according to this, Grand Pacific Company will stop using the equity method from the resolution date of the board of directors, and adjust the corresponding subjects according to the accounting treatment of loss of significant influence. As of the fourth quarter of 2025, Grand Pacific Company still does not have significant influence or control over Beijing Tai-yun. Further evaluation will be conducted if any new evidence or information becomes available.

(2) Lease period

The decision on the lease term is the non-cancellable period of the lease and the lessee can reasonably determine the period covered by the option to exercise the lease extension, and the lessee can reasonably determine the period covered by the option to not exercise the lease termination option. When the company assesses whether the lessee exercises the aforementioned options, it considers all relevant facts and circumstances that will generate economic incentives for the lessee. And in the subsequent occurrence of the lessee's control scope and will affect whether it can reasonably determine whether to exercise or not exercise the option of major events or major changes in the situation, to be reassessed. When there is a change in the assessment during the lease period, the lease liability is re-evaluated and the right-of-use asset is adjusted. Please note 6 (8) and (13).

(3) Judgment on lease

The company leases land rights and houses. Since the contract involves the use of an identified asset, the right to obtain all economic benefits during the entire period of use; and the right to direct the use of the identified asset. Based on this, the company determined that the contract was a lease, and the company recognized the right-of-use assets and lease liabilities on the lease start date. Please note to 6 (8) and (13).

The following assumptions and estimated uncertainties have a significant risk of causing significant adjustments to the carrying amounts of assets and liabilities in the next financial year, and have reflected the impact of the new crown virus epidemic. The relevant information is as follows:

~25~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

1) Allowance for losses on accounts receivable

The allowance for losses on the Company's accounts receivable is estimated based on the assumption of default risk and expected loss rate. The Company considers historical experience, current market conditions and forward-looking estimates at each reporting date in determining assumptions and input selected when calculating impairments. For details associated with assumptions and inputs, please refer to Note 6(3).

2) Valuation of Inventory

As inventories are measured at the lower of cost or net realizable value, the evaluation of The Company's net realizable value of inventories at the reporting date is based on estimates of future market sales prices and constructions costs which are prone to be affected by changes in the political and economic environment, resulting in significant changes in net realizable value. For details of the valuation of inventory, please refer to Note 6(5).

Evaluation Process

The Company's accounting policies and disclosures include adopting fair value measurements for its financial and non-financial assets and liabilities. The Company has established an internal control system for fair value measurement. The internal control system includes establishing a valuation team responsible for reviewing all significant fair value measurements (including Level 3 fair values). The team reports directly to the CFO. The valuation team reviews significant unobservable inputs and makes adjustment regularly. If external third-party information (such as a broker or pricing service) is used to measure fair value inputs, the valuation team will evaluate the evidence provided by the third party to support the inputs to determine whether the valuation and its fair value hierarchy classification meet the requirements of IFRSs.

Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

Level 1: quoted prices (unadjusted) in active markets for identifiable assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the assets or liabilities that are not based on observable market data.

Further information on the assumptions used to measure fair value

For details associated with the assumptions used to measure fair value, please refer to Note 6(23) – Financial Instruments.

6. Explanation of Significant Accounts

(1) Cash and Cash Equivalents

	December 31, 2025	December 31, 2024
Petty cash	$ 9,011	3,836
Cash in banks	173,925	312,352
Deposit account	125,513	97,360
Cash and cash equivalents in the statements of cash flow	$ 308,449	413,548

For the disclosed information on the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Company's, please refer to Note 6(23).

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

(2) Financial Assets at Fair Value through Other Comprehensive Income (“FVTOCI”)

	December 31, 2025	December 31, 2024
Equity instruments measured at FVTOCI:
Unlisted (OTC) stocks - Domestic	219,781	217,758
Total	$ 219,781	217,758

1) The equity instrument investment held by the Company is a long-term strategic investment and not held for trading purposes, so it has been designated to be measured at FVTOCI.
2) The Company through the aforementioned investments in equity instruments designated as measured at FVTOCI, the Company’s recognized dividend income for 2025 and 2024 totaled NT$13,803 thousand and NT$22,899 thousand, respectively.
3) In addition, the Company sold part of equity instruments measured at FVTOCI in 2024. The fair value at the time of disposal was NT$27,551 thousand, and the accumulated disposal benefit was NT$15,042 thousand. Therefore, the accumulated disposal benefit has been transferred from other interests to retained earnings.
4) For market risk information, please refer to Note 6(23).
5) For details of the above financial assets pledged as collaterals for bank loans and financing guarantees pledged. Please refer to Note 8.

(3) Notes receivable and Account receivable

	December 31, 2025	December 31, 2024
Notes receivable - arising from operations	$ 46	43
Accounts receivable - measured at amortized cost	8,491	11,620
Less: Allowance for losses	(5,395)	(5,403)
	$ 3,142	6,260

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including general economic and related industry information. The expected credit losses of the note receivables and trade receivables were as followed:

	December 31, 2025
	Gross Carrying Amount	Weighted-Average Loss	Loss Allowance Provision
Current	$ 1,216	20%	243
Less than 30~360 days past due	5,844	64%	3,719
More than 720 days past due	1,477	97%	1,433
	$ 8,537		5,395

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

	December 31, 2024
	Gross Carrying Amount	Weighted-Average Loss	Loss Allowance Provision
Current	$ 6,573	19%	1,234
Less than 30~360 days past due	3,681	75%	2,761
Past due 361~720 days	9	89%	8
More than 720 days past due	1,400	100%	1,400
	$ 11,603		5,403

The changes of loss allowance of notes and accounts receivable of the Company is as follows:

	2025	2024
Balance at beginning of the year	$ 5,403	5,665
Impairment loss (reversal gain)	220	559
Amounts written off	-	(870)
Gains and losses from foreign currency translation	(228)	49
Balance at end of the year	$ 5,395	5,403

The above notes and accounts receivable the Company were not pledged or guaranteed for the years ended December 31, 2025 and 2024.

Other credit risk information, please refer to Note 6(23).

4) Other receivables

	December 31, 2025	December 31, 2024
Other receivables—related parties	$ 15,999	17,967
Other receivables	11,219	4,276
Long-Term Receivables	422,745	422,745
Less: Allowance for losses	(425,919)	(425,919)
	$ 24,044	19,069

The Company other accounts receivable allowance for losses debt changes for 2025 and 2024 are as follows:

	2025	2024
Balance at beginning of the year	$ 425,919	1,754,862
Mitigation of losses and reversal of benefits	(1,166)	-
Amounts written off	-	(1,328,943)
Recover the funds written off	(1,166)	-
Balance at end of the year	$ 425,919	425,919

Other credit risk information, please refer to Note 6(23).

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

(5) Inventory

	December 31, 2025	December 31, 2024
Buildings and land held for sale	$ 1,125,414	1,135,722
Construction land	3,327,199	3,206,099
Construction in progress	2,281,643	2,018,796
Prepayment for land	-	23,450
Total	6,734,256	6,384,067
Less: Allowance to reduce inventory to market	(1,708,782)	(1,708,782)
Net	$ 5,025,474	4,675,285
Inventory expected to be recovered in more than 12 months	$ 4,208,228	4,262,088

1) As of December 31, 2025 and 2024, the inventories of the Company had been pledged as collateral for bank borrowings, please refer to Note 8.
2) Some parts of Wanli UFO Village, Wanli Section, Erchong River, Lihe Section in Xinyi District and Yongping Section in Shilin District have already entered an appointment agreement and trust deed agreement with trustees and will be transferred to the Company at an appropriate time.
3) Agricultural land under the trust under a trust deed is the agricultural land be developed for construction. An appointment agreement and trust deed agreement have been entered into with trustees and transferred to the Company after the land title is changed.
4) For the years ended December 31, 2025 and 2024, the capitalization of interest on construction in progress by the Company, please refer to Note 6(22).
5) The Company changes in the allowance to reduce inventory to market for 2025 and 2024 are as follows:

	2025	2024
Balance on January 1	$ 1,708,782	1,722,331
Recognized inventory falling price loss (gain from price recovery)	-	(13,549)
Balance on December 31	$ 1,708,782	1,708,782

~29~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

For the years ended December 31, 2025 and 2024, inventory cost recognized as cost of operating costs amounted to NT$160,803 thousand and NT$528,767 thousand, respectively. In 2024, the Company sold part of its inventory, the factors that previously caused the net realizable value to be lower than the cost have disappeared, resulting in an increase in the net realizable value and a reduction in operating costs, please refer to Note6(20).

(6) Investments accounted for using equity method

The components of investments accounted for using the equity method at the reporting date were as follows:

	December 31, 2025	December 31, 2024
Subsidiaries	$ 3,814,672	3,585,749

Subsidiaries
Please refer to the 2025 Consolidated Financial Statements
Guarantees
As of December 31, 2025 and 2024, the investments accounted for using equity method had been pledged as collateral for bank borrowings, please refer to Note 8.

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

(7) Property, plant and equipment

The cost, depreciation, and impairment loss of the property, plant and equipment of the Company for the years ended December 31, 2025 and 2024, were as follows:

	Land	Buildings and Construction	Machinery Equipment	Other Equipment	Construction in Progress	Total
Cost or Deemed Cost:
Balance on January 1, 2025	$ 7,803	244,257	119,815	103,620	63,937	539,432
Addition	-	-	37,703	6,444	4,346	48,493
Disposal and Scrap	-	-	-	(394)	-	(394)
Reclassification from IP	-	-	-	-	(33,820)	(33,820)
Balance on December 31, 2025	$ 7,803	244,257	157,518	109,670	34,463	553,711
Balance on January 1, 2024	$ 7,803	229,639	119,333	123,038	38,749	518,562
Addition	-	-	663	1,424	25,188	27,275
Disposal and Scrap	-	-	(181)	(20,842)	-	(21,023)
Reclassification from IP	-	14,618	-	-	-	14,618
Balance on December 31, 2024	$ 7,803	244,257	119,815	103,620	63,937	539,432
Depreciation and Impairment Losses:
Balance on January 1, 2025	$ -	134,973	108,762	79,231	-	322,966
Depreciation	-	3,820	5,423	8,943	-	18,186
Disposal and Scrap	-	-	-	(319)	-	(319)
Balance on December 31, 2025	$ -	138,793	114,185	87,855	-	340,833
Balance on January 1, 2024	$ -	123,698	104,647	86,448	-	314,793
Depreciation		3,552	4,256	11,597	-	19,405
Disposal and Scrap	-	-	(141)	(18,814)	-	(18,955)
Reclassification from IP	-	7,723	-	-	-	7,723
Balance on December 31, 2024	$ -	134,973	108,762	79,231	-	322,966
Carrying Amount:
December 31, 2025	$ 7,803	105,464	43,333	21,815	34,463	212,878
December 31, 2024	$ 7,803	109,284	11,053	24,389	63,937	216,466
January 1, 2024	$ 7,803	105,941	14,686	36,590	38,749	203,769

For the years ended December 31, 2025 and 2024, the Company convert real estate factory buildings and equipment into rental properties and decided to convert the inventory and investment real estate into a building for self-use, and has reclassified the cost of such property as a property, plant and equipment at the cost of the change of use, please refer to Note 6(9).
For the years ended December 31, 2025 and 2024, details of bank loans and financing guarantees pledged, please refer to Note 8.

(8) Right-to-use assets

Details of changes in cost and depreciation of Land Surface Rights, Buildings and construction and transport equipment of the Company are as follows:

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

	Land Surface Rights	Buildings and Construction	Total
Cost of Right-of-use Assets:
Balance on January 1, 2025	$ 106,758	47,641	154,399
Changes in Future Lease Payment	-	4,690	4,690
Balance on December 31, 2025	$ 106,758	52,331	159,089
Balance on January 1, 2024	$ 98,698	47,641	146,339
Changes in Future Lease Payment	8,060	-	8,060
Balance on December 31, 2024	$ 106,758	47,641	154,399
Depreciation for Right-of-use Assets:
Balance on January 1, 2025	$ 25,922	11,975	37,897
Depreciation	4,899	12,665	17,564
Balance on December 31, 2025	$ 30,821	24,640	55,461
Balance on January 1, 2024	$ 21,260	2,161	23,421
Depreciation	4,662	9,814	14,476
Balance on December 31, 2024	$ 25,922	11,975	37,897
Book value:
December 31, 2025	$ 75,937	27,691	103,628
December 31, 2024	$ 80,836	35,666	116,502
January 1, 2024	$ 77,438	45,480	122,918

For the years ended December 31, 2025 and 2024 details of bank loans and financing guarantees pledged, please refer to Note 8.

(9) Investment Property

Investment properties include the Company self-owned assets and office buildings leased to third parties as operating leases. The initial non-cancellable period of the leased investment properties is 2 months to 21 years, while some lessees have the option to extend the period at the end of the lease. The details of the changes in the company's investment properties are as follows:

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

	Self-Owned Assets
	Land and Improvement	Buildings and Construction	Total
Cost or Deemed Cost:
Balance on January 1, 2025	$ 384,476	2,922,841	3,307,317
Transfer from real estate, factory buildings and equipment	-	33,820	33,820
Disposal	-	(42,345)	(42,345)
Balance on December 31, 2025	$ 384,476	2,914,316	3,298,792
Balance on January 1, 2024	$ 384,539	2,934,897	3,319,436
Subsequent expend is record as an increase in the book value of the asset	-	2,821	2,821
Disposal	(63)	(259)	(322)
Reclassification from PPE	-	(14,618)	(14,618)
Balance on December 31, 2024	$ 384,476	2,922,841	3,307,317
Depreciation and Impairment Losses:
Balance on January 1, 2025	$ -	1,778,282	1,778,282
Depreciation	-	61,892	61,892
Disposal	-	(42,345)	(42,345)
Balance on December 31, 2025	$ -	1,797,829	1,797,829
Balance on January 1, 2024	$ -	1,726,854	1,726,854
Depreciation	-	59,336	59,336
Disposal	-	(185)	(185)
Reclassification from PPE	-	(7,723)	(7,723)
Balance on December 31, 2024	$ -	1,778,282	1,778,282
Book value:
December 31, 2025	$ 384,476	1,116,487	1,500,963
December 31, 2024	$ 384,476	1,144,559	1,529,035
January 1, 2024	$ 384,539	1,208,043	1,592,582
Fair Value:
December 31, 2025			$ 6,037,940
December 31, 2024			$ 5,691,653

The fair value of investment properties is determined on the basis of a valuation of an independent appraiser (with relevant professional qualification and should have recent experience in the location and category of the investment property evaluated). The input value used in its fair value valuation technology belongs to the third level.

The valuation of fair values is performed with reference to MOI's Real Estate Actual Transaction Price Inquiry Service and real estate websites. Prices of recent transactions in similar areas and types are also used as the valuation basis and appraisal reports are obtained

~33~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

when necessary.

For the years ended December 31, 2025 and 2024, the Company entered into a trust contract with its employees due to participating in the land development project. The Company designated them as the nominees of the land and building ownership registration. In order to ensure the preservation of the Company assets, has registered the property rights in advance, and the ownership certificate is also kept by the company.
For the years ended December 31, 2025 and 2024, the Company convert real estate factory buildings and equipment into rental properties and decided to convert the inventory and investment real estate into a building for self-use, and has reclassified the cost of such property as a property, plant and equipment at the cost of the change of use, please refer to Note 6(7).
For the years ended December 31, 2025 and 2024, details of bank loans and financing guarantees pledged, please refer to Note 8.

(10) Short-term loans

The details of the Company's short-term loans as follows:

	December 31, 2025	December 31, 2024
Unsecured bank loans	$ -	57,463
Secured bank loan	1,519,280	1,261,777
	$ 1,519,280	$ 1,319,240
Unused credit lines	$ 170,450	$ 493,296
Range of interest rates	2.725%~3.498%	2.725%~3.35%

For the Company’s pledged assets as secured for bank loans, please refer to Note 8.

(11) Long-term loans

The Company’s Long-term loans details, conditions, and provisions were as follows:

	December 31, 2025
	Currency	Range of Interest Rates	Maturity	Amount
Secured bank loans	NTD	3.00%~3.501%	2026~2027	$ 275,502
〃	RM	4.25%~4.99%	2026~2034	15,413
				290,915
Less: current portion				(62,204)
Total				$ 228,711
Unused credit lines				$ -

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

December 31, 2024
	Currency	Range of Interest Rates	Maturity	Amount
Secured bank loans	NTD	3.00%~3.501%	2025~2027	$ 279,243
〃	RM	4.5%~4.82%	2025~2034	19,822
				299,065
Less: current portion				(61,112)
Total				$ 237,953
Unused credit lines				$ -

For the Company’s pledged assets as secured for bank loans, please refer to Note 8.

(12) Corporate bonds payable

The details of the Company bonds payable were as follows:

	December 31, 2025	December 31, 2024
Amount in the issuance of domestic ordinary corporate bonds	$ 445,500	480,000
Less: Due within one year or one operating cycle	(284,500)	(34,500)
Ending balance: Bonds payable	$ 161,000	445,500

In 2025, the company repaid 34,500 thousand of the first guaranteed ordinary corporate bond issued in 2022. The company did not issue, repurchase or repay corporate bonds payable in 2024.

The relevant details are as follows:

Item	The first secured ordinary corporate bonds in 2021
Total Issuance	NT$250,000 thousand
Date of Issue	June 4, 2021
Coupon Rate	0.63%
Issuance Period	June 4, 2021~June 4, 2026
Guarantee Agency	Taiwan Cooperative Bank
Trustee	Taipei Fubon Bank (former Jih Sun International Bank, Ltd.)
Repayment Method	The Company may repay the principal of the corporate bonds in one lump sum at the expiration of five years from the date of issuance.
Item	The first secured ordinary corporate bonds in 2022
---	---
Total Issuance	NT$230,000 thousand
Date of Issue	April 1, 2022
Coupon Rate	0.85%
Issuance Period	April 1, 2022~April 1, 2027
Guarantee Agency	Taiwan Cooperative Bank
Trustee	Taipei Fubon Bank (former Jih Sun International Bank, Ltd.)
Repayment Method	The Company may repay the principal of the corporate bonds in 15% at the expiration of third years, 15% at the expiration of fourth years and 70% at the expiration of fifth years from the date of issuance.

~35~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

13) Lease liabilities

The carrying amount in the Company’s lease liabilities:

	December 31, 2025	December 31, 2024
Current	$ 17,016	14,423
Non-Current	$ 98,500	109,656

For maturity analysis, please refer to Note 6(23) - Financial Instruments.

Amounts recognized in profit or loss are as follows:

	2025	2024
Interest expense on lease liabilities	$ 3,686	3,517
Gains on subleasing right-to-use assets	$ 40,853	35,850
Expenses of short-term leased	$ 1,443	1,426
Expenses to low-value leases assets (Low-value leases that do not include short-term leases)	$ -	11

Amounts recognized in the statements of cash flow are as follows:

	2025	2024
Total cash outflow from leases	$ 20,457	18,542

The Company leases land surface rights for a period of 50 years. The Company leases buildings and structures for department store operations for a period of 5 years. Lease payments for certain contracts are calculated based on changes in local price indices.

The period for some of the Company’s leased land, offices, employee dormitories, office equipment and transportation equipment are generally one to three years. These leases are short-term or low-value subject leases. The Company elects to apply for the recognition exemption and does not recognize its related right-of-use assets and lease liabilities.

(14) Operating leases

Lessor leases

The Company leases its investment properties and subsidiary machinery and equipment. These are classified as operating leases as nearly all the risks and rewards of ownership of the underlying assets have not been transferred. Please refer to Note 6(9) Investment Property.

An analysis of matured lease payments based on the total undiscounted lease payments to be received after the reporting date:

~36~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

	December 31, 2025	December 31, 2024
Under 1 year	$ 154,735	156,191
One to two years	95,092	109,591
Two to three years	67,596	68,763
Three to four years	54,080	63,155
Four to five years	46,877	53,126
	December 31, 2025	December 31, 2024
More than five years	49,932	131,749
Total undiscounted lease payments	$ 468,312	582,575

For lease income generated from investment property for 2025 and 2024, please refer to Note 6(19); expenses generated from maintenance and leasing totaled NT$193,615 thousand and NT$171,613 thousand, respectively.

(15) Employee benefits

1. Defined benefit plans

Reconciliation of defined benefit obligations at present value and plan assets at fair value were as follows:

	December 31, 2025	December 31, 2024
Present value of defined benefit obligations	$ 47,738	44,929
Fair value of plan assets	(78,226)	(71,971)
Net defined benefit net assets	$ (30,488)	(27,042)

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Labor Pension Fund Supervisory Committee. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with interest rates offered by local banks.

The balance of the Company labor pension reserve account in the Bank of Taiwan amounted to NT$78,226 thousand as of reporting date. For information on the utilization of the labor pension fund assets including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

2) Movements in the present value of the defined benefit obligations

The Company's movements in the present value of defined benefit obligations for 2025 and 2024 were as follows:

	2025	2024
Defined benefit obligations on January 1	$ (44,929)	(49,500)
Current service cost and interest	(928)	(887)
Net defined benefit liability (asset) remeasurement
-Actuarial gains and losses from experience adjustments	(1,261)	689
- Actuarial gains and losses from changes in financial assumptions	(620)	1,080
Benefits paid by plan	-	3,689
Defined benefit obligations on December 31	$ (47,738)	(44,929)

3) Movements of the fair value of defined benefit plan assets

The Company's movements in the fair value of the defined benefit plan assets for 2025 and 2024 were as follows:

	2025	2024
Fair value of plan assets on January 1	$ 71,971	68,401
Interest revenue	1,104	768
Net defined benefit liability (asset) remeasurement
- Return on plan assets (excluding current interest)	5,151	6,491
Benefits paid by plan	-	(3,689)
Fair value of plan assets on December 31	$ 78,226	71,971

4) Expenses recognized in profit or loss

The Company's expenses recognized in profit or loss for 2025 and 2024 were as follows:

	2025	2024
Service costs for the period	$ 243	336
Net interest of net liabilities (asset) for defined benefit obligations	(419)	(217)
	$ (176)	119
Administrative expenses	$ (176)	119

~37~

~38~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

5) Actuarial assumptions

The Company's determines the present value of defined benefit obligations at the end of the financial reporting date. The material actuarial assumptions are as follows:

	December 31, 2025	December 31, 2024
Discount rate	1.30%	1.55%
Future salary increase rate	2.00%	2.00%

In 2025, the expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is NT$0.

The weighted-average lifetime of the defined benefit plan is 5 years.

6) Sensitivity analysis

December 31, 2025 and 2024 adopting the main actuarial assumptions, the impact on determining the present value of welfare obligations is as follows:

	Defined Benefit Obligation
	Increased by 0.25%	Decreased by 0.25%
December 31, 2025
Discount rate (changed of 0.25%)	(621)	635
Future salary increase rate (changed of 0.25%)	629	(619)
December 31, 2024
Discount rate (changed of 0.25%)	(656)	671
Future salary increase rate (changed of 0.25%)	666	(655)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

The method and assumption used in the sensitivity analysis is consistent with prior period.

2. Defined contribution plan

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates the labor pension at a specific percentage to the Bureau of the Labor Insurance without additional legal or constructive obligations.

~39~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

According to the regulations of the Employees' social Security Act for the defined contribution plan for the Company's Malaysian branch, a rate of 13% of the employees' monthly wage is a contribution to the personal account of SOCSO. Under such a plan, after the Company contributes a fixed amount to the Bureau of Labor Insurance, there is no legal or constructive obligation for the Company to pay additional amounts.

For 2025 and 2024, the Company contributed NT$3,384 thousand and NT$3,265 thousand, respectively, to the Bureau of Labor Insurance under the Defined Contribution Pension expense.

(16) Income tax

1. Income tax expense

Details of the Company's income tax expenses for 2025 and 2024 are as follows:

	2025	2024
Current income tax expense
Incurred during the period	$ 29,059	129,806
Undistributed Earnings Levy	27,260	18
Adjustment for prior periods	1,392	(1,044)
Land value increment tax	15,366	16,783
	73,077	145,563
Deferred income tax expense
Occurrence and reversal of temporal differences	(3,212)	(411)
Income tax expense	$ 69,865	145,563

2. A reconciliation of the Company's income tax expenses and net income before tax for 2025 and 2024 is as follows:

	2025	2024
Net income before tax	$ 76,065	883,432
Income tax calculated using the domestic tax rate where the Company operates	$ 15,213	176,687
Effects on tax rate difference in foreign jurisdictions	4,117	3,460
Non-deductible expenses	9,353	8,820
Tax-free income	(8,772)	(7,089)
Investment gains or losses recognized under the equity method	(12,889)	(22,455)
Changes in unrecognized temporary differences	5,199	(61,604)
Early (high) underestimation	1,392	(1,044)
Undistributed Earnings Levy	27,260	18
Land value increment tax	15,366	16,783
Other	13,626	31,576
Total	$ 69,865	145,152

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

Deferred tax assets and liabilities

1) Unrecognized deferred tax liabilities

For the years ended December 31, 2025 and 2024, no-deferred tax liabilities were recognized for temporary differences associated with investments in subsidiaries as the Company could control the timing of the reversal of the temporary differences and is fairly confident that the temporary differences will not reverse in the foreseeable future. Its relevant amounts are as follows:

	December 31, 2025	December 31, 2024
Taxable temporary differences associated with investments in subsidiaries	$ 157,697	114,246

2) Unrecognized deferred tax assets

The Company unrecognized deferred tax assets are as follows:

	December 31, 2025	December 31, 2024
Deferred credit	$ 17,828	18,187
Bad debt disallowance	186,869	186,876
Unrealized impairment loss on assets	25,514	25,514
Unrealized inventory falling price loss	341,756	341,756
Tax losses	164,265	164,265
Other	19,905	19,905
	$ 756,137	756,503

Under the ROC tax laws, approved tax losses can be carried forward for 10 years to offset future taxable profits. These assets are not recognized as deferred income tax assets. It is not probable for The Company to have sufficient taxable income in the future to allow for these temporary differences.

As of December 31, 2024, the expiration period for abovementioned unrecognized deferred tax assets of unused tax losses carryforwards were as follows:

Year of Assessment	Unrecognized Deferred
	Tax Assets	Expiration in Year
2024 (Declare number)	$ 821,327	2034

3) Recognized deferred tax assets / liabilities

Changes in deferred tax assets (liabilities) for 2025 and 2024:

	Assets	Liabilities
January 1, 2025	$ 307	(752)
Debit (credit) on income statement	3,493	(281)
December 31, 2025	$ 3,800	(1,033)

~40~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

	Assets	Liabilities
January 1, 2024	$ 120	(976)
Debit (credit) on income statement	187	224
December 31, 2024	$ 307	(752)

4. Income tax verification

The Company’s income tax returns up to 2023 have been verified by the tax authorities.

(17) Capital and Other equity interests

As of December 31, 2025 and 2024, the Company’s authorized common stock consisting of 1,600,000 thousand shares with a par value of 10 New Taiwan dollar per share amounted to NT$16,000,000 thousand of which 387,000 thousand shares were issued. Among these, 86,500 thousand ordinary shares for each year were privately placed. All issued shares were paid up upon issuance.

1. Capital surplus

The Company's balance of capital surplus is as follows:

	December 31, 2025	December 31, 2024
Conversion premium for bonds payable	$ 350,720	350,720
Treasury shares transactions	57,183	47,006
Difference arising from subsidiary’s equity	211	211
Other	1,795	1,795
	$ 409,909	396,732

As required by the Company Act, the capital surplus must first be used to make up for losses before new shares or cash can be issued to shareholders in proportion to the realized capital surplus. The realized capital surplus referred to in the preceding paragraph includes the proceeds from the share issuance in excess of the par value of the proceeds from donations. In accordance with the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the capital surplus may be allocated from capital. The total allocation amount each year may not exceed 10% of the paid-in capital.

~41~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Retained earnings

In accordance with the Company's Articles of Incorporation, if there are any earnings in the final accounts, income taxes must be paid as required by the law. After previous losses have been made up, 10% of the legal reserve shall be set aside, and according to applicable regulations and competent authorities, distributable earnings are accumulated from the special reserve appropriated or reversed, and the accumulated distributable earnings of the previous year with the distributable earnings of the year.

The company stipulating that the distribution of surplus or loss allowance shall be made after the end of each half year. If there is any surplus in the semi-annual final accounts, it shall be distributed in accordance with the above procedures.

The above-mentioned cumulative distributable surplus shall be distributed by the board of directors. When new shares are issued, it shall be submitted to the shareholders meeting for distribution after a resolution. When cash is issued, it shall be in accordance with Article 240, Item 5 of the Company Law. Authorize the board of directors to distribute with more than two-thirds of the directors present and the resolutions approved by more than half of the present directors, and report to the shareholders meeting.

The distribution of cash and stock dividends shall be limited to 30% to 100%. However, the Company must also take into account the future business and major capital expenditure plans and shall reserve the necessary funds as a priority before the distribution of dividends.

Give the Company is in a mature and stable stage of its corporate life cycle. However, it is in a volatile industrial environment and able to cope with the economy and market changes. The Company adopts a residual dividend policy to distribute cash and stock dividends by taking into account its business plans, profitability and investment capital needs. The cash dividend ratio is limited to no less than 20% of the total cash and dividends distributed in the year. However, when the earnings distributed to shareholders for the year does not exceed NT$1 per share, when the debt ratio exceeds 50%, the earnings may be distributed entirely by stock dividends.

1) Statutory surplus

Where there is no loss in the Company, the shareholders' meeting may resolve to distribute new shares or cash from the legal reserve. However, only the portion of legal reserve which exceeds 25% of the paid-in capital may be distributed.

2) Special reserve

In accordance with FSC. Certificate. Issue. No. 1010012865 Letter issued on April 6, 2012, when the Company allocates distributable earnings, the difference between the net decrease in other stockholders' equity and the balance of the special reserve is added to the special reserve from profit or loss for the period and prior period's undistributed retained earnings. The decrease in other shareholders' equity accumulated in prior periods is not distributable from the special reserve from undistributed retained earnings of prior periods. If there is a reversal of the decrease in the amount in other shareholders' equity later, earnings may be distributed accordingly.

~42~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

In accordance with FSC. Certificate. Issue. No. 1010047490 Letter issued on November 21, 2012, the difference between the market value of a subsidiary's shares and the carrying amount in the parent's shares at the end of the period shall not be distributed as a special reserve based on the ratio of the shares being held. If the market price recovers later, the amount may be transferred to a special reserve in proportion to the number of shares being held.

The annual general meetings held on June 10, 2025 and June 14, 2024 resolved to special reserve (turn) appropriated of NT$(12,944) thousand and NT$(13,931) thousand, respectively, for the motion of earnings distribution for 2024 and offset losses for 2023.

3) Earnings distribution

The Company's interim and annual profit distribution proposals and cash dividends per share in 2024 and first half 2023 were resolved by the Board of Directors as follows:

	First Half of 2025	Second Half of 2024	First Half of 2024	Second Half of 2023
Board of Directors date	August 11 2025	March 11,2025	August 6,2024	March 12,2024
Cash Dividend	$ -	154,800	-	77,400
Amount Per Share (in NT$)	$ -	0.4	-	0.2

The actual distribution of the Company's earnings in 2024 and 2023 is the same as the amount recognized in the financial report and no adjustment is required. For information on the above distribution, please visit the web of MOPS.

The Board of Directors held on March 10, 2026 respectively, resolved the amount of cash dividends for 2025. The amounts of dividends distributed to owners are as follows:

	2025
	Amount Per Share (in NT$)	Amount
Cash	$ 0.20	77,400

3. Treasury shares

The situation of the subsidiary holding the company treasury shares for the years ended December 31, 2025 and 2024 are as follows:

	December 31, 2025	December 31, 2024
Number of the Company shares the subsidiaries hold	25,444	25,444
Carrying amount	$ 193,207	193,207
Stock market price	$ 237,647	286,245
Stock market price (Adjusting shareholding ratio)	$ 115,143	138,689

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

Other equity interests

	Exchange Differences on Translation of Financial Statements of Foreign Operations	Unrealized Gains (Loss) from Investments in Financial Assets Measured at FVTOCI	Total
Balance on January 1, 2025	$ 289,171	277,077	566,248
Exchange differences on foreign operations	3,323	-	3,323
Unrealized gains (loss) from investments in financial assets measured at FVTOCI	-	2,023	2,023
Share of unrealized gains (losses) of financial assets at FVTOCI of subsidiaries using the equity method accounted	-	230,888	230,888
Balance on December 31, 2025	$ 292,494	509,988	802,482
Balance on January 1, 2024	$ 214,398	236,942	451,340
Exchange differences on foreign operations	74,773	-	74,773
Unrealized gains (loss) from investments in financial assets measured at FVTOCI	-	(1,167)	(1,167)
Share of unrealized gains (losses) of financial assets at FVTOCI of subsidiaries using the equity method accounted	-	56,344	56,344
Disposal through other comprehensive profit and loss Fair value measurement of equity instruments	-	(15,042)	(15,042)
Balance on December 31, 2024	$ 289,171	277,077	566,248

~44~

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

(18) Earnings per share

As of 2025 and 2024, the Company basic and diluted earnings per share are calculated as follows:

	2025	2024
Basic earnings per share
Profit attributable to shareholders of the Company	$ 6,200	738,280
Weighted-average number of outstanding ordinary shares	361,556	361,556
	$ 0.02	2.04
Diluted earnings per share
Profit attributable to shareholders of the Company	$ 6,200	738,280
Weighted-average number of outstanding ordinary shares	361,556	361,556
Weighted-average number of outstanding ordinary shares of potential diluted ordinary shares
Employee compensation	356	1,291
Weighted-average number of ordinary shares (After adjusting for the impact of dilutive potential common shares)	361,912	362,847
	$ 0.02	2.03

(19) Revenue from contracts with customers

Disaggregation of revenue

	2025
	Construction Segment	Leasing Segment	Property Management Segment	Total
Primary geographical markets:
Taiwan	$ 264,911	73,620	3,722	342,253
Malaysia	-	-	273,006	273,006
	$ 264,911	73,620	276,728	615,259
Major products/Services lines:
Sales of real estate	$ 264,911	-	-	264,911
Lease revenue	-	73,620	273,006	346,626
Other revenue	-	-	3,722	3,722
	$ 264,911	73,620	276,728	615,259
	2024
	Construction Segment	Leasing Segment	Property Management Segment	Total
Primary geographical markets:
Taiwan	$ 624,860	67,011	3,635	695,506
Malaysia	-	-	239,057	239,057
	$ 624,860	67,011	242,692	934,563
Major products/Services lines:
Sales of real estate	$ 624,860	-	-	624,860
Lease revenue	-	67,011	239,057	306,068
Other revenue	-	-	3,635	3,635
	$ 624,860	67,011	242,692	934,563

~45~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

2. Contract balances

	December 31, 2025	December 31, 2024	January 1, 2024
Notes receivable	$ 46	43	-
Accounts receivable	8,491	11,620	25,006
Less: Allowance for losses	(5,395)	(5,403)	(5,665)
	$ 3,142	6,260	19,341
Contract liabilities – Sales of real estate	$ 488,465	384,763	327,843

For details on accounts receivable and allowance for impairment, please refer to note 6(3).

The amount of revenue recognized for the years ended December 31, 2025 and 2024 that was included in the contract liability balance at the beginning of the period were NT$49,186 thousand and NT$189,663 thousand, respectively. Contract liabilities are mainly due to the advance receipts arising from the signing of real estate sales contracts. The company will transfer the revenue when the products are delivered to customers.

The major change in the balance of Contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received. There were no other significant changes for the years ended December 31, 2025 and 2024.

(20) Costs

Details of the Company costs for 2025 and 2024 are as follows:

	2025	2024
Lease costs	$ 193,615	171,613
Construction costs	168,269	530,984
Inventory falling price (reversal benefit) loss	-	(13,549)
	$ 361,884	689,048

(21) Remuneration to Employees, Directors and Supervisors

June 10, 2025, the Company's shareholders resolved to amend the Articles of Incorporation. Pursuant to the amended Articles, if the Company reports a profit for the year, 1%~2% of pre-tax earnings shall be allocated as employee compensation (of which no less than 65% shall be distributed to rank-and-file employees). The distribution of remuneration in shares or cash is resolved by the board of directors' meeting, and these employees must be employees of the controlling or subordinate companies who meet certain requirements. No more than 2% of the annual profit shall be allocated in cash as remuneration to directors by resolving the Board of Directors. The motion of distribution of remuneration to employees and directors shall be proposed to the board of directors' meeting. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. Employee and director remuneration shall be allocated in accordance with the aforementioned proportion.

~46~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Before update the Articles of Incorporation, as stipulated in the Company's Articles of Incorporation, 1% to 2% of the annual profit shall be allocated as remuneration to employees. The distribution of remuneration in shares or cash is resolved by the board of directors' meeting, and these employees must be employees of the controlling or subordinate companies who meet certain requirements. No more than 2% of the annual profit shall be allocated in cash as remuneration to directors by resolving the Board of Directors. The motion of distribution of remuneration to employees and directors shall be proposed to the shareholders' meeting.

For the years ended December 31, 2025 and 2024, the Company estimated its employee remuneration amounting to NT$1,177 thousand (Of this, 765 thousand was for the remuneration of grassroots employees) and NT$14,106 thousand, and directors' remuneration amounting to NT$1,177 thousand and NT$14,106 thousand. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees and directors of each period, multiplied by the percentage of remuneration to employees, directors and supervisors as specified in the Company's Articles. These remunerations were expensed under operating costs or operating expenses. If there is a difference between the actual distribution amount in the next year and the estimated statement, it will be treated according to the change in accounting estimate, and the difference will be recognized as profit or loss in the next year.

There is no difference between the company's 2025 and 2024 employees and director's compensation amount and the actual distribution situation. Relevant information can be found on MOPS.

(22) Non-operating income and expenses

1. Other gains and losses

Details of the Company's other gains and losses for 2025 and 2024 are as follows:

	2025	2024
Foreign currency exchange gains (loss)	$ (1,607)	2,995
Loss of disposal of property, plant and equipment	(71)	(2,047)
Dividend income	13,803	22,899
Compensation	-	(6,830)
(Loss) reversal benefit	1,166	(4,500)
Other gains and losses	7,309	2,253
	$ 20,600	14,770

2. Finance costs

Details of the Company's financial costs for 2025 and 2024 are as follows:

	2025	2024
Interest expense	$ 72,351	72,991
Lease liabilities interest	3,686	3,517
Less: Capitalization of interests	(4,593)	(2,652)
	$ 71,444	73,856
Capitalization rate	1.895%~3.003%	1.895%~3.063%

~47~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

(23) Financial Instruments

1. Credit risk

1) Exposure of credit risk

The carrying amount of financial assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

Given the Company has a large customer group and does not have a significant concentration of transactions with a single customer. It has scattered sales regions, there is no concern of the credit risk of accounts receivable being significantly concentrated. In an effort to reduce the credit risk, the Company also assesses the financial situation of its customers regularly. The Company does not usually require customers to provide collaterals.

3) Credit risk of accounts receivable

For the credit risk exposure information on notes receivable and accounts receivable, please refer to Note 6(3). For other financial assets measured at amortized cost, including other receivables, please refer to the allowance for losses for the years ended December 31, 2025 and 2024 at Note 6(4).

Financial assets above are with low credit risk, therefore, allowances for losses are measured based on the expected credit loss amount for 12 months.

2. Liquidity risk

The following is a table showing expiration dates of contracts, including estimated interests but excluding the effects on netting agreements.

	Carrying Amounts	Contract Cash Flow	Within 1 Year	1-3 Years	3-5 Years	More Than 5 Years
December 31, 2025
Non-derivative finance liabilities
Floating rate instruments $	1,810,195	1,956,063	251,712	1,242,924	416,782	44,645
Fixed rate instruments	445,500	453,384	291,392	161,992	-	-
No interest-bearing liability	898,380	898,380	829,544	68,836	-	-
Lease liabilities	115,516	127,992	18,556	24,155	23,584	61,697
	$ 3,269,591	3,435,819	1,391,204	1,497,907	440,366	106,342

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

	Carrying Amounts	Contract Cash Flow	Within 1 Year	1-3 Years	3-5 Years	More Than 5 Years
December 31, 2024
Non-derivative finance liabilities
Floating rate instruments $	1,618,305	1,761,251	351,856	758,628	579,636	71,131
Fixed rate instruments	480,000	499,183	45,850	453,333	-	-
No interest-bearing liability	886,253	886,253	825,943	60,310	-	-
Lease liabilities	124,079	138,186	16,054	22,678	31,587	67,867
	$ 3,108,637	3,284,873	1,239,703	1,294,949	611,223	138,998

The Company is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

3. Currency risk

1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk was as follows:

	December 31, 2025			December 31, 2024
	Foreign Currency	Exchange Rate	NTD	Foreign Currency	Exchange Rate	NTD
Financial Assets
Monetary Items
USD	$ 1,080	31.43	33,953	1,349	32.79	44,234
JPY	12,432	0.200	2,486	12,431	0.210	2,611

2) Sensitivity analysis

The Company exchange rate risk is mainly due to foreign-currency-denominated cash and cash equivalents, other receivables and borrowings, which foreign exchange gains and losses arise upon translation. When NTD decreased or increased by 5% against the USD and JPY for the years ended December 31, 2025 and 2024 with all other factors held constant, the net income would have increased or decreased by NT$1,822 thousand and NT$2,342 thousand, respectively. The same basis was used for the analysis for both periods.

3) Exchange gains and losses of monetary items

As the Company deals with diverse foreign currencies, gains or losses on foreign exchange were summarized as a single amount. For the years ended December 31, 2025 and 2024, the foreign exchange profit and losses, including both realized and unrealized, amounted to NT$(1,607) thousand and NT$2,995 thousand, respectively.

~48~

~49~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

4. Interest rate analysis

The interest risk exposure from financial assets and liabilities has been disclosed in the note of liquidity risk management.

The following sensitivity analysis is based on the risk exposure to interest rate on the derivative and non-derivative financial instruments on the reporting date. Regarding the liabilities with variable interest rates, the analysis is on the basis of the assumption that the amount of liabilities outstanding at the reporting date were outstanding throughout the year. The rate of change is expressed as the interest rate increase or decrease by 0.5%, when reporting to management internally, which also represents the assessment of the Company’s management for the reasonably possible interval of interest rate change.

Assuming all other variable factors remaining constant, if the interest rate had increased or decreased by 0.5%, the impact to the Net profit would be as follows for the years ended December 31, 2025 and 2024 would have decreased or increased by NT$7,241 thousand and NT$6,473 thousand, mainly due to the Company floating-rate loans.

5. Other price risk

If there are changes in the prices of equity securities (The same basis was used for the analysis for both periods and other variable factors held constant was assumed), the effect on the comprehensive income items would have been as follows:

	2025		2024
Prices of Securities at the Reporting Date	Other Comprehensive Income (Loss) (Net of Tax)	Net Income (Loss) (Net of Tax)	Other Comprehensive Income (Loss) (Net of Tax)	Net Income (Loss) (Net of Tax)
Increase 1%	$ 2,198	-	2,178	-
Decrease 1%	$ (2,198)	-	(2,178)	-

6. Fair value information

1) The Company's financial assets measured at FVTOCI are measured at fair value on a recurring basis. The carrying amounts and fair values (including fair value hierarchy information, but information on reasonable approximation of fair value on the carrying amount in financial assets not carried at fair values and lease liabilities are not required to be disclosed by regulations) of all types of financial assets and financial liabilities are listed as follows:

	December 31, 2025
	Fair Value
	Carrying Amount	Level 1	Level 2	Level 3	Total
Financial assets at FVTOCI	$ 219,781	-	-	219,781	219,781

~50~

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

	December 31, 2024
	Carrying Amount	Fair Value
		Level 1	Level 2	Level 3	Total
Financial assets at FVTOCI	$ 217,758	-	-	217,758	217,758

2) Valuation techniques for financial instruments not measured at fair value

The Company’s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

2.1) Financial assets measured at amortized cost (debt investment that has no active markets) and financial liabilities measured at amortized cost.

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

3) Valuation techniques for financial instruments measured at fair value

3.1) Non-derivative financial instruments

If a quoted price is in an active market for a financial instrument, the quoted price is used as the fair value in an active market. Market prices announced by major exchanges and popular bonds judged by the TPEx are the basis for the fair value of listed equity instruments and debt instruments with active market quotations.

If quotations of financial instruments are regularly obtained from an exchange, broker, underwriter, industry association, pricing service or competent authority in a timely manner, and the prices represent actual and frequent fair market transactions. Such financial instruments have an active market for quotations. If the above criteria are not met, the market is deemed inactive. Generally, a large bid-ask spread, a significant increase in the bid-ask spread, or a low trading volume are all indicators of an inactive market.

If the financial instrument held by the Company has an active market (TWSE or TPEx listed companies whose financial assets have standard terms and conditions that are traded in an active market), its fair value is determined by taking reference from quoted market prices.

Except for the aforementioned financial instruments with active markets, the fair values of the remaining financial instruments are obtained using valuation techniques or by taking reference from quoted prices of counter-parties. A fair value obtained through a valuation technique may be calculated by taking reference from the current fair value of other financial instruments with substantially similar conditions and characteristics, discounted cash flow method or other valuation techniques, including model calculations based on market information available at the reporting date (e. g. TEPx’s yield curves and Reuters’ average quotations for the rate of promissory notes).

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

If the financial instrument held by the Company has no active markets, their types and characteristics are listed as follows:

Equity instruments without quoted prices: The fair value is estimated using a discounted cash flow model. The main assumption is measured by discounting the expected future cash flows of the investee at a return rate to reflect the time value of money and investment risk.
Equity instruments without quoted prices: The fair value is estimated using the market comparable company method. The main assumption is measured by the estimated earnings before interest, depreciation and amortization of the investees and the earnings multiplier derived from the quoted market prices of comparable listed (OTC) companies. These estimates have been adjusted for the discount effect of the lack of marketability of the equity securities.

4) Any transfers between Level 1 and Level 2: None.
5) Details of changes in Level 3

| | Measured at FVTOCI
Equity instruments
without public quotes |
| --- | --- |
| January 1, 2025 | $ 217,758 |
| Recognized in other comprehensive income | 2,023 |
| December 31, 2025 | $ 219,781 |
| January 1, 2024 | $ 216,235 |
| Recognized in other comprehensive income | 1,523 |
| December 31, 2024 | $ 217,758 |

The above stated total gains or losses are reported in "Unrealized valuation gains (losses) on financial assets at FVTOCI." Among these, assets still being held in 2025 and 2024 by:

	2025	2024
Total profit (losses) recognized
Recognized in other comprehensive income	$ 2,023	1,523
(reported in “Unrealized gain (loss) on valuation of financial assets measured at FVTOCI”)

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

6) Quantitative information on fair value measurements using significant unobservable inputs (Level 3)

The fair value measurements of the Company are classified as Level 3. It mainly includes financial assets measured at FVTOCI - equity securities investment.

Most of the Company's fair values are classified as Level 3 with one significant unobservable input. Only investments in equity instruments without an active market have more than one significant unobservable inputs. Significant unobservable inputs to investments in equity instruments without an active market are not correlated with each other as they are independent of each other.

The quantified information for significant unobservable inputs was as follows:

Item	Valuation Technique	Significant Unobservable Inputs
Financial Assets at FVTOCI—Equity Investment Without an Active Market	Discounted Cash Flow Method	·Long-term revenue growth rate (at 2.7% and 2.3% for the years ended December 31, 2025 and 2024, respectively.)
·Weighted average cost of funds rate (at 9.604% and 9.623% for the years ended December 31, 2025 and 2024, respectively)
·Lack-of-Marketability discount rate (both at 7% for the years ended December 31, 2025 and 2024)	·The higher the weighted average cost of capital, minority interest discounts and lack of marketability discounts, the lower the fair value
·The higher the long-term revenue growth rate, the higher the fair value
Financial Assets at FVTOCI—Equity Investment Without an Active Market	Net Assets Value Method	·Net Assets value
·Book Value per share(1.18 and 1.72 for the years ended December 31,2025 and 2024)
·Lack-of-Marketability discount rate (7% for the years ended December 31, 2025 and 2024)	·The higher the Net Assets value, the higher the Fair value.
·The higher the Book Value per share, the higher the Fair value.
·The higher the discount due to lack of market liquidity and control rights, the lower the fair value.

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

7) Sensitivity analysis for fair value of financial instruments using level 3 inputs

The Company’s fair value measurement on financial instruments is reasonable. However, the measurement would be different if different valuation models or valuation parameters are used. For financial instruments using level 3 inputs, if the valuation parameters changed, the impact on other comprehensive income or loss are as follows:

	Inputs	Changes Up or Down	Changes of fair value in other comprehensive income
			Favorable Change	Unfavorable Change
December 31, 2025
nancial assets at FVTOCI
Equity investment without an active market	Liquidity discount	1%	2,362	(2,362)
December 31, 2024
nancial assets at FVTOCI
Equity investment without an active market	Liquidity discount	1%	2,178	(2,178)

The favorable and unfavorable changes reflect the movement of the fair value, in which the fair value is calculated by using the different unobservable inputs in the valuation technique. The table above shows the effects of one unobservable input, without considering the interrelationships with another unobservable input for financial instrument, if there are one or more unobservable inputs.

(24) Financial risk management

Overview

The Company is exposed to the following risks arising from financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

In this note expressed the information on risk exposure and objectives, policies and procedures of risk measurement and management of the Company. For detailed information, please refer to the related notes of each risk.

Risk management structure

The board of directors takes full responsibility in setting up and supervising the Company’s risk management structure. The board of directors has given full authority to the management to develop and control the Company’s risk management policy. The management regularly reports its operations to the board of directors.

The Company’s risk management policy's establishment is to identify and analyze the risks faced by the Company and to further set appropriate risk limits and controls while monitoring compliance with risks and risk limits. The risk management policy and system are reviewed regularly to reflect changes in market conditions and Company’s operations. Through training,

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

management guidelines and operating procedures, the Company has developed a disciplined and constructive control environment so that all employees understand their roles and obligations.

The Company’s audit committee monitors how management monitors compliance with the Company’s risk management policy and procedures while also reviewing the appropriateness of related risk management structure for the Company's risks. Internal auditors assist the Company's audit committee in playing the monitoring role. These internal auditors perform regular and unscheduled reviews on risk management controls and procedures which also report the results to the board of directors and the audit committee.

3. Credit risk

Credit risk arises if a customer or other counterparty to a financial instrument fails to meet its contractual obligations. It arises mainly from accounts receivable from customers from the Company's operating activities and bank deposits and other financial instruments arising from investment activities. Operational credit risk and financial credit risk are managed separately.

1) Accounts receivable and other receivables

The Company's internal control system has established a credit policy. According to the policy, the Company must analyze each new customer's credit rating individually before granting the standard payment and delivery terms and conditions. The Company’s review and control mechanism include historic customer transactions, external rating bank’s notes. A procurement limit is established on a customer-by-customer basis, representing the maximum uncollected amounts not subject to management approval. This limit is reviewed regularly.

Given the Company has a large customer group and does not have a significant concentration of transactions with a single customer. It has scattered sales regions, there is no concern of the credit risk of accounts receivable being significantly concentrated. Also, the Company is engaged in the development and sale of properties to general individuals, and payments are primarily made by remittances, notes and bank financing, so the related credit risk is considerably low.

Additionally, the Company’s construction projects are carried out based on the operating measures of company construction projects. Construction counter-parties the Company constructs out to have a sound reputation with their construction capacities meeting the regulations; therefore, the Company is able to fully grasp the quality and progress of the construction project. Other receivables are mainly landlords and related parties and are assessed to be repayable by the debtors; therefore, the Company has no significant credit risk in other receivables.

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

2) Financial credit risk

The credit risk of bank deposits, fixed-income investments and other financial instruments are measured and supervised by the Company’s Finance Department. There are no major performance concerns as the counter-parties and the performing parties of the Company are banks and financial institutions, corporative organizations and government agencies with investment grade or above, so there are no major credit risks.

3) Guarantee

The Company’s policy stipulates that it can only provide financial guarantees to subsidiaries with at least 50% ownership with a certain amount set out. As of the years ended December 31, 2025 and 2024, the Company provided no endorsements/guarantees.

Liquidity risk

The Company's liquidity risk is that it is unable to deliver cash or other financial assets to settle financial liabilities and unable to perform related obligations. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The remaining contractual maturity analysis of the Company's financial liabilities during the agreed repayment period is prepared based on the earliest possible date on which the Company could be required to repay its financial liabilities and the undiscounted cash flows of the equivalent interest.

The Company's liquidity risk management does not consider the repayment of financial liabilities using investments in equity instruments. The number of floating-rate instruments for the above financial assets and liabilities may change due to the floating rate and the reporting period's end. In addition, the Company’s unused borrowings for the years ended December 31, 2025 and 2024, please refer to Note 6(10) and (11).

Market risk

Market risk affects the Company's earnings or the value of financial instruments due to changes in market prices, such as changes in exchange rates, interest rates, and prices of equity instruments. The objective of market risk management is to manage market risk to a tolerable level and to optimize investment returns.

1) Exchange rate risk

The Company is exposed to exchange rate risk arising from bank deposits that are not denominated in the functional currency of the Company. However, based on conservative and prudent principles, the Company does not use hedging instruments to hedge exchange rate risk.

The cash inflows and outflows of subsidiaries have a natural hedging effect.

For the sensitivity analysis of foreign currency exchange rate risks, please refer to Note 6(23).

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

2) Interest rate risk

The Company's policy is to review and control the optimal interest rate portfolios of financial liabilities by management to control the risk of interest rate fluctuations of the Company's finances.

The Company's interest rate risk mainly comes from its floating-rate loans. The Company assesses that the interest rate level in the environment where it operates has been stable in recent years and should not cause significant interest rate risks.

For the sensitivity analysis of interest rate risk, please refer to Note 6(23).

3) Other market price risk

The Company holds equity securities investments that generate equity price risk. The equity investment is not held for trading but is a strategic investment. The Company is not actively trading these investments, so they should not lead to a significant market rise.

For the sensitivity analysis of the price of equity instruments, please refer to Note 6(23).

(25) Capital management

The Company's objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return on shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the dividend payment to the shareholders, reduce the capital for redistribution to shareholders, issue new shares, or sell assets to settle any liabilities.

The Company and other entities in the same industry use the debt-to-capital ratio to manage capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity plus net debt.

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

The Company’s capital management strategy for 2025 and 2024 was consistent. By being consistent, it means maintaining a certain debt-to-capital ratio, ensuring that financing was available at a reasonable cost. The debt-to-capital ratios for the years ended December 31, 2025 and 2024 are as follows:

	December 31, 2025	December 31, 2024
Total liabilities	$ 3,919,566	3,626,972
Less: Cash and cash equivalents	(308,449)	(413,548)
Net liabilities	3,611,117	3,213,424
Total equity	7,798,993	7,697,468
Capital after adjustment	$ 11,410,110	10,910,892
Debt-to-equity ratio	31.98%	28.90%

7. Related-Party Transactions

(1) Names and relationship with related parties

The following are entities that have had transactions with the Company's subsidiaries and related-party during the periods covered in the parent company only financial statements.

Name of the Related-Party	Relationship with the Company
Pacific Construction Co., Ltd.	Company’s subsidiaries
Taitou Xingye Co., Ltd.	Company’s subsidiaries
Chon Tse Asset Management Co., Ltd.	Company’s Sub-subsidiaries
Pacific Realtor Co., Ltd.	Company’s subsidiaries
Pacific Department Stores Co., Ltd.	Company’s subsidiaries
Grand Pacific Holdings Limited	Company’s subsidiaries
Beijing Taikong Consulting Services Co., Ltd.	Company’s Sub-subsidiaries
Beijing Tai-Yun Building Co., Ltd.	Other Related-Party
Shabayan Co., Ltd	Other Related-Party
Pacific Urban Management Consulting Co., Ltd.	Corporate Representative Director of the company’s
Rongmei Biomedical Co., Ltd	Substantial Related-Party of the Company’s
Quanyuan International Development Co., Ltd	Corporate director of the company

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

(2) Significant transactions with related parties

1. Operating revenue

The Company’s significant sales to related parties are as follows:

Name of the Related-Party	Operating Revenue
	2025	2024
Subsidiaries (include Sub-subsidiary)	$ 14,945	14,689
Other Related-Party	1,286	1,392
Total	$ 16,231	16,081

Transaction prices are set based on the agreement of both parties; the collection terms are based on the contractual agreements, same as general transactions.

2. Accounts receivables related-party

Name of the Related-Party	Other receivables Related-Party
	December 31, 2025	December 31, 2024
Subsidiaries:
Grand Pacific Holdings Limited(Note)	$ 15,839	15,839
Taitou Xingye Co., Ltd.	2,722	1,968
Beijing Taikong Consulting Services Co., Ltd. (Note)	10	10
Other Related-Party:
Beijing Tai-Yun Building Co., Ltd. (Note)	150	150
	$ 18,721	17,967

Note: The aforesaid payment is the return of capital reduction and advances on behalf of the company.

3. Prepayments / Incremental costs to obtaining a contract

The company signs an entrusted sales agreement with a subsidiary, and pays the sales service fee of the subsidiary. As of December 31, 2025 and 2024, the incremental cost of obtaining the contract is accounted for NT$43,290 thousand and NT$45,944 thousand, respectively.

The terms of the above related party transactions are not significantly different from ordinary vendors.

4. Other

1) On December 31, 2025 and 2024, the company trusts part of its Lihe Section in Xinyi District land to Company's Sub-subsidiaries.
2) The company signed a management service contract with Company's Sub-subsidiaries in 2025 and will pay NT$9,143 thousand in accordance with the agreement in both 2025 and 2024.

(3) Key management personnel transactions

Remuneration to key management personnel includes:

	2025	2024
Short-term employee benefits	$ 13,909	26,054
Post-employment benefits	168	108
	$ 14,077	26,162

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

8. Pledged Assets

The carrying amount in the assets pledged as collateral by the Company is as follows:

Asset Name	Pledge Subject	December 31, 2025	December 31, 2024
Buildings and land held for sale	Long-term, Short-term loans	$ 653,406	646,975
Construction land	Long-term, Short-term loans and construction performance guarantee	793,783	801,104
Construction in progress	Long-term, Short-term loans	602,461	527,570
Other financial assets - current and non-current	Long-term, Short-term loans, Bonds payable and Persale trust	318,235	356,452
Long-term investments accounted for using equity method	Short-term loans	604,421	597,365
Non-current financial assets at FVTOCI	Long-term loans	54,123	53,341
Property, plant and equipment	Long-term, Short-term loans	148,310	114,816
Right-to-use assets	Long-term loans	75,937	80,836
Investment property, net	Long-term, Short-term loans	1,328,109	1,390,055
Total		$ 4,578,785	4,568,514

9. Commitments and Contingencies

(1) Material unrecognized contractual commitments:

For the years ended December 31, 2025 and 2024, the total purchase and sales contracts entered into between the Company and its customers for the pre-sale projects, residual housing, land held for construction and amounts received in accordance with the contracts are as follows:

	December 31, 2025	December 31, 2024
Total contract price	$ 2,171,253	1,749,368
Amounts received	$ 488,465	384,763

For the years ended December 31, 2025 and 2024, the details of amounts of land purchase contracts entered into by the Company and the amounts paid in accordance with the contracts and the allowance for losses listed are as follows:

	December 31, 2025	December 31, 2024
Total purchase contract price	$ 3,651,026	3,663,146
Price paid	$ 663,484	686,934
Allowance for losses	$ 663,484	663,484

The above allowance for loss failed due to the delay in completing the transfer process of the

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

land purchase transactions. The Company has resorted to legal proceedings and urged the counterparty of the contract to negotiate the follow-up performance of the contracts as soon as possible.

Details of the deposit guarantee notes submitted by the company are as follows:

	December 31, 2025	December 31, 2024
Borrowings and issuance of commercial promissory notes	$ 1,450,750	1,453,250
Performance bond under engineering for bank	381,780	381,780
Contracting project	69,000	69,000
Other	806,750	806,750
Total	$ 2,708,280	2,710,780

The Company paid the joint construction deposit to the construction entity as the Company entered into the joint construction:

	December 31, 2025	December 31, 2024
Engineering and joint construction deposit	$ 970	970

Losses Due to Major Disasters: None.
Subsequent Events: None.
Other

(1) Summary of employee benefits, depreciation, depletion and amortization expenses is as follows:

Function Nature	2025			2024
	Operating Cost	Operating Expense	Total	Operating Cost	Operating Expense	Total
Employee benefit expense
Salary expense	40,344	71,685	112,029	30,786	90,914	121,700
Labor and health expense	1,795	7,302	9,097	1,505	6,955	8,460
Pension expense	765	2,443	3,208	690	2,694	3,384
Remuneration of Directors	-	2,907	2,907	-	15,631	15,631
Other Employee benefit expense	3,329	6,293	9,622	2,757	8,515	11,272
Depreciation expense	92,368	5,274	97,642	86,466	6,751	93,217
Depletion expense	-	-	-	-	-	-
Amortization expense	-	444	444	-	1,133	1,133

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Additional information of employee head counts and benefit expenses for the years ended on December 31, 2025 and 2024 were as follows:

	2025	2024
Number of employees	218	215
Number of directors (non-employee)	7	7
Average employee benefit expense	$ 635	669
Average employee Salary expense	$ 531	585
Percentage of average employee Salary expense	(9.23)%	17.23%
Remuneration of Supervisor's	$ -	-

The company's salary and remuneration policies (including directors, supervisors, managers and employees) are as follows:

Director:
Directors’ remuneration is in accordance with the company’s articles of association and is processed after the approval of the board of directors and a report by the shareholders meeting. The actual payment must be recommended by the remuneration committee and submitted to the board for approval before implementation.
Managers and employees:
Company managers and Employee compensation are handled in accordance with personnel management regulations, which are divided into maintenance salary and incentive salary. Maintenance salary is regular payment, and incentive salary is based on dividends/year-end bonuses. It depends on the company's operating conditions and employees. Flexible payment for assessment results. The actual amount paid by the manager must be recommended by the Salary and Compensation Committee and submitted to the board of directors for approval before it can be implemented.

13. Notes to Disclosures

A. Information on Significant Transactions

In 2025, under Regulations Governing the Preparation of Financial Reports by Securities Issuers, information related to material transactions should be disclosed by the Company is as the following:

Loaning of fund to other parties:

(In Thousands of New Taiwan Dollars)

No.	Companies That Land Funds	Lending Object	Accounting Title	Whether or not a Related-Party	Highest Amount for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate Range	Nature for Financing	Business Transaction Amount	Reasons for Short-Term Financing	Allowance for Losses Amount	Collateral		Financing Limit for Each Borrower	Aggregate Financing Limit
													Name	Value
2	Grand Pacific Holdings Limited	Beijing Taikong Consulting Services Co., Ltd.	Long-Term Receivables	Yes	20,000	20,000	4,500	-%	2	-	Operational turnaround	-	None	-	1,899,963	1,899,963

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Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Note 1: Ceiling of loans are as follows:

(1) The aggregate amount in loans lent by a subsidiary shall not exceed 40% of the Company’s equity attributable to the parent.

(2) The restriction shall not apply to inter-company loans of funds between overseas companies in which the Company holds, directly or indirectly, 100% of the voting shares, nor to loans of a fund to the Company by any overseas company in which the Company holds, directly or indirectly, 100% of the voting shares. The aggregate amount in such loans to a single borrower shall not exceed 10% of the Company's most recent net worth of the financial statements or NT$30 million.

(3) The total amount of funds lent by Grand Pacific Holding company to others, excluding to its wholly-owned parent company and wholly-owned subsidiaries, shall not exceed 40% of Grand Pacific Holding company's net worth. Individual loans by Grand Pacific Holding company shall not exceed 10% of Grand Pacific Holding company's net worth, up to NT$3,000 thousand. The total amount of funds lent by Grand Pacific Holding company's wholly-owned parent company and its directly or indirectly wholly-owned subsidiaries shall not exceed Grand Pacific Holding company's net worth. The limit on individual loans by Grand Pacific Holding company to its wholly-owned parent company and its directly or indirectly wholly-owned subsidiaries shall be limited to the net worth of the lending company (Grand Pacific Holding company).

For companies or firms with short-term financing needs, the individual loan amount shall not exceed 10% of Grand Pacific Holding company's net worth, up to NT$30 million.

Note 2: The Company’s net worth mentioned above is based on the most recent review report audited by CPAs.

Note 3: Description of the nature of loaning of funds

(1) Fill in “1” for a company with which it does business.

(2) Fill in “2” for those in need of short-term financing.

Providing endorsements/guarantees to other parties: None.

Pacific Construction Co., Ltd.
Notes to Financial Statements (Continued)

Marketable securities (excluding equity investments in subsidiaries, associates and joint ventures) held at the reporting date:

(In Thousands of New Taiwan Dollars)

Held By	Types and Names of Securities	Relationship with the Securities Issuer	Account Titles in Book	End of the Period				Remark
				Shares (Thousand Shares)	Carrying Amount	Share-holding Ratio	Fair Value (Note 1)
Pacific Construction Co., Ltd.	Xin-Ye-Yong Development Co., Ltd.	Investment businesses valuated by fair values	Non-current financial assets at FVTOCI	2	-	18.17 %	-
„	Pacific Resources Corporation.	„	„	33	2,265	4.39 %	2,265
„	Pacific SOGO Department Store Co., Ltd.	„	„	9,519	217,516	1.15 %	217,516	Pledge of 2,369,000 shares
Pacific Department Stores Co., Ltd.	stock - Pacific Construction Co., Ltd.	The Company’s parent	„	24,836	208,853	6.42 %	208,853
„	stock - Taiwan High Speed Rail Corporation.	Investment businesses valuated by fair values	„	1,240	34,720	0.02 %	34,720
„	stock - Pacific SOGO Department Store Co., Ltd.	Investment businesses valuated by fair values	„	85,031	1,942,966	10.27 %	1,942,966
„	stock - SOGO Department Stores Co., Ltd.	„	„	2,542	-	12.08 %	-
„	stock - Pacific Life Development Co., Ltd.	„	„	505	-	3.30 %	-
„	VCOOL Inc.	„	„	27	-	0.27 %	-
Pacific Realtor Co., Ltd.	stock - Pacific Construction Co., Ltd.	The Company’s parent	„	608	5,677	0.15 %	5,677
„	stock - Hong Kong Xian-Hui Company.	Investment businesses valuated by fair values	„	5,700	-	10.00 %	-
„	stock - Mi-Jia-Le Construction Co., Ltd.	„	„	2,000	-	8.58 %	-
„	stock - Rakuya International Info. Co. Ltd.	„	„	860	15,864	6.82 %	15,864
Grand Pacific Holdings Limited	Beijing Tai-Yun Building Co., Ltd.	„	Current financial assets at FVTOCI	-	1,613,129	47.50 %	1,613,129
Taitou Xingye Co., Ltd.	stock - GOOD TV Broadcasting Corp.	„	Non-current financial assets at FVTOCI	1,500	16,594	17.65 %	16,594
„	stock - Mi-Jia-Le Construction Co., Ltd.	„	„	1,213	-	5.21 %	-

Note : Financial assets at FVTOCI are disclosed at the closing price of the open market, the most recent audited net financial statements or appraisal report.

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Pacific Construction Co., Ltd. Notes to Financial Statements (Continued)

Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.
Receivables from related parties with amounts exceeding NT$ 100 million or 20% of the paid-in capital:

(In Thousands of New Taiwan Dollars)

Companies with Accounts Receivable	Counterparty Name	Relationship	Balance of Receivables from Related-Parties	Turnover Rate	Amounts Due from Related Parties		Receivables Amount Collected from Related-Parties Subsequently	Provision Allowance for Loss
					Amount	Processing Method
Grand Pacific Holdings Limited	Beijing Taijong Consulting Service Co., Ltd.	The company's subsidiary	983,878	- %	-		-

Pacific Construction Co., Ltd. Notes to Financial Statements (Continued)

B. Information on Investees (excluding investments in China)

Information on the Company's investees for 2025 is as follows:

(In Thousands of New Taiwan Dollars)

Name of Investor	Name of Investor	Location	Principal Business	Sum of Initial Investment		Held at the End of Period			Net Income (Loss) of Investee	Share of Profits (Loss) of Investee	Remark
				End of the Period	End of the Previous Year	Shares	Ratio	Carrying Amounts
Pacific Construction Co., Ltd.	Pacific Realtor Co., Ltd.	Taiwan	Introduction of housing leases and sales, etc.	46,506	46,506	7,275	48.50%	63,999	29,363	5,253
n	Pacific Department Stores Co., Ltd.	n	Building lease and sales, supermarket operation, department store import and export, etc.	909,562	909,562	89,396	48.45%	1,636,573	154,412	64,883	Note 1
n	Grand Pacific Holdings Limited	HK	Investments, Trading	206,876	206,876	365,858	100.00%	1,899,963	27,875	27,875
n	Pacific Construction Co., Ltd.	n	Construction projects, or acts as an agency for civil engineering, construction, plumbing, electrical and air-conditioning, and decoration projects, etc.	34,016	34,016	8,163	100.00%	-	-	-
n	Taitou Xingye Co., Ltd.	Taiwan	Investment	236,000	256,000	23,600	100.00%	214,137	(6,327)	(6,327)
Taitou Xingye Co., Ltd.	Chon Tse Asset Management Co., Ltd.	n	Management Consulting Services - General Hotel Industry	180,000	180,000	18,000	100.00%	175,488	-	-
Pacific Department Stores Co., Ltd.	Pacific 88 Co., Ltd.	n	Wholesale, Retail and trading of restaurant business, Daily essential and department stores	8,459	8,459	846	48.98%	-	-	-
Pacific Realtor Co., Ltd.	Xinlian Development Co., Ltd.	n	Operation of the real estate brokerage transaction system	3,000	-	300	33.33%	2,996	(11)	(4)

Note 1: Among these, 33,016 thousand shares were pledged as collateral for bank loans.

Pacific Construction Co., Ltd. Notes to Financial Statements (Continued)

C. Information on Investments in Mainland China:

Information on investments in Mainland China:

Unit: NT$ thousand / USD thousand

Name of the Investment in China	Principal Item	Paid-In Shares Capital	Investment Method	Opening Cumulative Balance of Investment Capital Invested from Taiwan	Investment Capital Transferred or Recovered During the Current Period		Closing Cumulative Balance of Investment Capital Invested from Taiwan	Net Income (Loss) of Investee	The Company's Directly or Indirectly Invested Shareholding	Share of Profits (Losses) of Investee	Carrying Value of Investments at the End of the Period	Investment Income Remitted as of the End of the Year
					Outward Remittance	Recovered
Beijing Tai-Yan Building Co., Ltd.	Wholesale and retail commercial facilities within the planning area of development, construction, sales and leases	377,160 (USD12,000) (Note 2)	Note 1	179,151 (USD5,700) (Note 2)	-	-	179,151 (USD5,700) (Note 2)	-	47.50% (Note 4)	- (Note 4)	- (Note 4)	-
Beijing Taikong Consulting Services Co., Ltd.	Business management consulting	471 (USD15) (Note 2)	Note 1	471 (USD15) (Note 2)	-	-	471 (USD15) (Note 2)	585	100.00% (Note 3)	585	765	-
Hainan E-Tai Foods Co., Ltd.	Food production, sales, online sales, food import and export	4,500 (CNY1,000) (Note 2)	Note 1	-	4,500 (CNY1,000) (Note 2)	-	4,500 (CNY1,000) (Note 2)	(8)	100.00% (Note 3)	(8) (Note 4,452)	4,452	-

Note 1: Invested in China through a company in a third region, and the investment company is Grand Pacific Holding Limited.
Note 2: The actual amount in the original currency of investment multiplied by the closing exchange rate.
Note 3: The investment income recognized this for the period was based on the financial statements audited by CPAs of an international accounting firm with a cooperative relationship with the Taiwanese accounting firm.
Note 4: The Q4 of 2022 is transferred to financial assets at FVTOCI.

Limit for investing in China

Unit: NT$ thousand / USD thousand

Cumulative Investment Outflow from Taiwan as of December 31, 2024	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment Authorized by Investment Commission, MOEA
USD 6,966	USD 6,966	5,832,724

Note 5: Limit calculation: Net equity for the Group in the period × 60% = NTD9,721,207 thousand × 60% = NTD5,832,724 thousand.
Note 6: Shanghai Pacific Construction Co., Ltd. was liquidated on June 21, 2009. The liquidation balance was remitted to Pacific Construction Co., Ltd. and not yet remitted to Taiwan. As a result, the investment amount was not approved by the MOEAIC, less the capital of USD1,251 thousand.

Information on Significant Transactions: None.
Segment Information

Please refer to the Consolidated Financial Statements for the year ended on December 31, 2025.

Pacific Construction Co., Ltd.

Statement of Inventories

For the Year Ended December 31, 2025

Unit: NT$ thousand

Item	Description	Amount
		Costs	Net Realizable Value
Real estate for sale:	Pacific Business Center	$ 580,500	648,338
	Tian Jiao	20,489	14,407
	Pacific Forest	50,981	86,400
	Balenciaga C Area	110,861	131,850
	Dazhi Building A Area	71,524	89,701
	Dazhi Building B Area	97,979	85,607
	Other	193,080	1,095,420
	Less: Allowance to reduce inventory to market	(126,927)	-
	Net	998,487	2,151,723
Land for construction:	Xinan Section	170,185	38,018
	3th Subsection of Fulin Section	670,071	1,471,786
	Wanli Section and Feitsui Section	1,040,297	3,750,825
	Linza Section in Tamsui Dist	360,166	86,000
	Agricultural land under the trust deed	638,144	691,560
	Other	448,336	1,491,730
	Less: Allowance to reduce inventory to market	(951,825)	-
	Net	2,375,374	7,529,919
Construction in progress:	Green Bay	306,380	33,018
	Sunshine Seasons B、C、D	751,957	636,688
	Pacific ZhizhenReal Life	295,366	196,220
	Pacific Real Life	377,737	207,847
	Other	550,203	195,014
	Less: Allowance to reduce inventory to market	(630,030)	-
	Net	1,651,613	1,268,787
Prepayment for land	Other	-	23,450
	Total	$ 5,025,474	10,973,879

~68~

Pacific Construction Co., Ltd.

Statement of Changes in Investments Accounted for Using Equity Method

For the Year Ended December 31, 2025

Unit: NT$ thousand

Name	Beginning Balance(Revised)		Increase (Note 1)		Decrease (Note 2)		Ending Balance			Market Value or Net Equity
	Shares	Amounts	Shares	Amounts	Shares	Collateral	Shares	Shares Ratio	Amounts	Unit Price	Total Amount	Collateral
Pacific Realtor Co., Ltd.	7,275	$ 72,767	-	5,782	-	14,550	7,275	48.50%	63,999	13.01	94,651
Pacific Department Stores Co., Ltd.	89,396	1,617,467	-	90,633	-	71,527	89,396	48.45%	1,636,573	20.44	1,826,922	Note 3
Grand Pacific Holdings Limited	365,858	1,655,468	-	244,495	-	-	365,858	100.00%	1,899,963	5.19	1,899,963
Pacific Construction Co., Ltd.	8,163	-	-	-	-	-	8,163	100.00%	-	-	-
Taitou Xingye Co., Ltd.	25,600	240,047	-	417	2,000	26,327	23,600	100.00%	214,137	8.59	219,853
Subtotal	$ 3,585,749		341,327		112,404		3,814,672

Note 1: The increase in this period is NT$98,011 thousand for recognized investment benefits, NT$1,795 thousand for Deferred credit inter-company benefits, NT$230,899 thousand for Unrealized gains (losses) from equity instrument investments measured at FVTOCI and NT$10,177 thousand for Distribution of subsidiary' dividends to adjust capital reserve, Actuarial Profit and Loss NT$445 thousand.
Note 2: The reduction in the current period is the recognized investment loss of NT$6,327 thousand, cash dividends of NT$86,066 thousand, and losses and Unrealized gains (losses) from equity instrument investments measured at FVTOCI of NT$11 thousand, and Capital reduction of NT$20,000 thousand.
Note 3: The number of pledged shares is 33,016 thousand shares.

~70~

Pacific Construction Co., Ltd.

Statement of changes in Investment Property

For the Year Ended December 31, 2025

Unit: NT$ thousand

Refer to Note 6(9) for details.

Statement of Short-term Borrowings

For the Year Ended December 31, 2025

Unit: NT$ thousand

Lender	Loan Type	Ending Balance	Financing Period	Interest Rate	Credit Line	Mortgage Guarantee
The Shanghai Commercial & Savings Bank, Ltd.	Secured Borrowings	$ 66,310	2021.05.22~2025.06.15	2.725%~3.498%	88,000	Construction in progress
〃	〃	95,000	2025.07.01~2028.07.01	〃	95,000	Real estate for sale, Investment property
〃	〃	15,548	2021.10.21~2032.04.10	〃	30,000	Construction in progress
〃	〃	72,342	2021.11.30~2036.11.30	〃	330,000	Real estate for sale, Investment property
〃	〃	240,000	2022.09.16~2026.04.15	〃	240,000	Construction land, Investment property
Taipei Fubon Bank	〃	361,270	2025.01.18~2028.01.18	〃	470,000	Construction land, Construction in progress
HWATAI Bank	〃	31,300	2023.03.22~2026.03.22	〃	31,300	Real estate for sale
HWATAI Bank	〃	23,630	2024.06.21~2026.03.22	〃	25,730	Real estate for sale
King’s Town Bank Co., Ltd.	〃	310,500	2022.05.13~2027.05.13	〃	360,000	Real estate for sale, Investment property
Taiwan Cooperative Bank	〃	81,900	2021.12.16~2027.12.31	〃	81,900	Construction land
Taiwan Cooperative Bank	〃	58,280	2024.07.29~2027.12.31	〃	150,000	Construction land
Bank of Panhsin	〃	32,400	2024.07.09~2026.07.09	〃	77,400	Construction land
Bank of Panhsin	〃	130,800	2025.07.07~2028.07.10	〃	154,800	Construction land
Total		$1,519,280

Note: Total borrowing amount NT$100,000 thousand in The Shanghai Commercial & Savings Bank, Ltd.

Pacific Construction Co., Ltd.
Statement of Operating Revenue
For the Year Ended December 31, 2025
Unit: NT$ thousand

Item	Description	Amount
Lease revenue		$ 346,626
Construction income	Revenue from sale of land properties	197,939
	Revenue from sale of Buildings	66,972
	Subtotal	264,911
Other Operating revenue		3,722
Total		$ 615,259

Statement of Operating Costs

Item	Description	Amount
Lease costs		$ 193,615
Construction costs	Cost of sale of land	39,339
	Cost of sale of Buildings	121,463
	Miscellaneous engineering costs	7,467
	Subtotal	168,269
Total		$ 361,884

Statement of Operating Expenses

Item	Selling expenses	Administrative expenses	Total
Salary and Wages (Including pension)	$ 11,230	65,499	76,729
Advertisement	3,661	415	4,076
Employee benefits/welfare	-	6,746	6,746
Commission fees	8,632	-	8,632
Professional service fees	24,692	10,034	34,726
Taxes	2,602	39,977	42,579
Depreciation expense	166	5,108	5,274
Meal expense	576	1,725	2,301
Insurance expense	1,399	5,903	7,302
Repairs and maintenance expense	1,265	4,718	5,983
Other	12,359	19,168	31,527
Total	$ 66,582	159,293	225,875

~71~

AI assistant

PCC — Audit Report / Information 2025

52132_rns_2026-05-18_ba0df580-11f0-4fe7-911a-32ffcdec0d4b.pdf

Pacific Construction Co., Ltd.

Table of Contents

Opinion

Basis for Opinion

Key Audit Matters

1. Revenue recognition

2. Inventory Valuation

Description of Key Audit Matters:

Auditing Procedures Performed:

Other Matters

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

Auditor’s Responsibilities for the Audit of the Financial Statements

Pacific Construction Co., Ltd.

Statements of Cash Flow

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to the Parent Company Only Financial Statements

For the Years Ended December 31, 2025 and 2024

1. Company History

2. Approval Date and Procedures of the Financial Statements

3. New Standards, Amendments and Interpretations Adopted

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

4. Summary of Significant Accounting Policies

(1) Statement of compliance

(2) Basis of preparation

(i) Basis of preparation

(ii) Functional and presentation currency

(3) Foreign currencies

(i) Currencies transaction

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

3) Impairment of financial assets

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

(10) Property, plant and equipment

1) Recognition and measurement

2) Subsequent cost

3) Depreciation

(11) Lease

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

(15) Revenue Recognition

1. Revenue from customer contracts

1) Land development and property sale

2) Lease income

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

5. Significant Accounting Assumptions and Judgments, and Major Sources of Estimation

Uncertainty

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Pacific Construction Co., Ltd.

Notes to Financial Statements (Continued)

Evaluation Process

Further information on the assumptions used to measure fair value

6. Explanation of Significant Accounts

Pacific Construction Co., Ltd.

PCC Audit Report / Information 2025