CHUN YU — Annual Report 2021

Jul 7, 2022

®

Stock Code: 2012 Annual Report (Mops): http://mops.twse.com.tw Company Annual Report Website: http://www.chunyu.com.tw

2022 Annual Report

Published on May 26, 2022

Spokesperson and deputy spokesperson Spokesperson: Vice President CHOU, BO-WEI Deputy Spokesperson: Vice President Chen, Chun-Liang Tel: (07)621-4121 Email:ir@chunyu.com.tw

Headquarters, branches and plant Headquarters, branches and plant:NO.100, TAPAO ST., KANGSHAN DIST., KAOHSIUNG CITY 820, TAIWAN. Tel:(07)621-4121

Stock Transfer Agency

Name: The Share Transfer Agency of Yuanta Securities Co., Ltd. Address: B1, No. 210, Section 3, Chengde Road, Datong District, Taipei Website: www.yuanta.com.tw/eYuanta/ Tel:(02)2586-5859

CPAs certifying the latest financial statements

、 Name of CPA: Lin, Tzu-Yu Liu, Tzu-Meng Name of CPA Firm: PricewaterhouseCoopers Address: 12F,395 Linsen Rd.,Sec.1 Tainan, Taiwan Website: www.pwc.tw Tel: (06)234-3111

Name of exchanges in foreign countries where the Company is listed for securities trade and the means of access to information on overseas securities: None

Company website: http: //www.chunyu.com.tw

CHUN YU WORKS ＆ CO., LTD.

Table of Contents

I.Letter to Shareholders ............................................................................................................................ 5 1. Management Presentation ................................................................................................................ 5 2. 2021 Business Plan Overview ......................................................................................................... 8 II.Company Profile .................................................................................................................................. 11 III.Corporate Governance ...................................................................................................................... 15 1.Organization ................................................................................................................................... 15 2. Profiles of the directors, president, vice presidents, assistant vice presidents, departments, branches and subsidiaries heads ................................................................................................. 18 3.Corporate Governance Status ......................................................................................................... 37 4.Information of CPA audit fee ......................................................................................................... 62 5.Equity transfer or pledge under lien by the Directors, Supervisors, Managers, and shareholders holding more than 10% of the outstanding shares in the previous year to the date this report was printed: ........................................................................................................................................ 67 6.Information about the top 10 shareholders who are related parties ............................................... 68 7. Total comprehensive shareholding ratio for the number of shares held by the Company, the Company's directors, managers and the Company directly or indirectly controlled by the Company in the same investment business ................................................................................. 69 IV. Capital and Shares ............................................................................................................................ 70 1. Capital and shares .......................................................................................................................... 70 2. The issuance of corporate bonds (including overseas bonds) ....................................................... 75 3. Preferred Shares ............................................................................................................................ 77 4. Overseas Depository Receipts. ...................................................................................................... 77 5. Employee Stock Options. .............................................................................................................. 78 6.Issuance of New Shares for Merger, Acquisition or Exchange of Other Companies’ Shares. ....... 78 7. Financing Plans and Implementation ............................................................................................ 78 V. Operations Profile .............................................................................................................................. 78 1.Business Scope: .............................................................................................................................. 78 2. Market and Sales Overview .......................................................................................................... 83 3. Employee Information for the Past Two Years and as of the Publication of the Annual Report: . 88 4.Environmental Expenditure Information: ...................................................................................... 88 VI.Financial Profile .............................................................................................................................. 100 VII. Financial position and the review and analysis of financial performance and risk…..… 110 VIII.Special Remarks…………………………………………………………………………116 Appendix I Consolidated Financial Statements of Chun Yu Works & Co., Ltd. And Subsidiaries 2020 and Auditor’s Report………………………………………………………123 Appendix II: Separate Financial Statements of Chun Yu Works & Co., Ltd. 2020 and Auditor’s Report……………………………………………………………….208

CHUN YU WORKS ＆ CO., LTD.

I.Letter to Shareholders

Management Presentation

In 2021, economic activities will restart as the epidemic is under stable control, and the deferred consumer demand will return and customers will restock their inventories. In addition, the quantitative easing policies implemented in Europe and the U.S. during the epidemic caused a large amount of capital to be injected into the market and a surge in various investment activities, which led to a huge increase in overall steel demand and pushed up global steel prices. The rapid turn of the economy also caused a global shortage of ships, containers and port congestion, and chaos in maritime transportation. Thanks to Taiwan Steel Group's ability to provide a stable and sufficient supply of materials and overall transportation and shipping services, shipments were maintained at a certain level, resulting in record revenue and profitability for CHUN YU WORKS ＆ CO., LTD.

Looking ahead to 2022, the major steel countries are actively promoting carbon neutrality, with China taking the lead in steel production reduction and Korea and Japan also closing blast furnace plants to electric furnace plants, the cost of steel production is bound to rise. In addition to the U.S. $1.2 trillion infrastructure support demand, China's 1.46 trillion RMB infrastructure funds, is expected to be in place in 2022, with the huge demand for infrastructure injection, steel demand growth will gradually appear. In addition, the European Union has imposed anti-dumping duties on fasteners from China, which is favorable to the sales of fasteners to Europe. The management team will seize the opportunity to formulate a strategic direction in response to the situation and lead all employees to work diligently in order to achieve further success for the Company.

We are hereby pleased to report about the Company's business operations in the Year 2021 as enumerated below:

1. Performance in production and marketing

In the Year 2021, our Company's consolidated operating revenue came to NT$11,810,242,000, a decrease by 46.63% from NT$8,054,615,000 in 2020. In terms of consolidated gross profit, in the Year 2021 It came to NT$2,065,823,000, down by 79.75% as compared with NT$1,149,281,000

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in 2020. Out consolidated net profit after tax came to NT$874,177,000 in 2021, a decrease by 232.34% when compared with NT$263,036,000 in 2020.

2. Implementation of budget

Here at the Company, we did not work out a financial forecast for the Year 2021.

3. Analyses into the capability in financial revenues and expenditures

		Expressed in Thousand NT Dollars	Expressed in Thousand NT Dollars
Items	Year 2021	Year 2020	Annual increase/decrease rate(%)
Operatingrevenues	11,810,242	8,054,615	46.63
Netprofit before tax	1,119,072	345,965	233.46
Netprofit after tax	874,177	263,036	232.34
The netprofit is attributable to:
The Proprietor of the parent company	744,730	197,147	277.75
Non-controlled equity	129,447	65,889	96.46

4. Analysis of profitability

. Analysis ofprofitability
Items	Year 2021	Year 2020
Asset return rate(%)	8.13	3.23
Return rate on shareholder’s equity (%)	19.87	6.21
Percentage of net profit before tax to the paid-in capital(%)	38.89	12.02
Netprofit rate(%)	7.40	3.27
Earnings per share (EPS) (NT$)	2.81	0.75

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CHUN YU WORKS ＆ CO., LTD.

5. Performance in research & development

In fiscal 2021, we spent $84,250 thousand on research and development, mainly to continue to refine technology, develop new products, and research and develop new processes and materials to reduce production costs for each product. In addition, we have improved our remanufacturing equipment to increase the proportion of remanufactured acid used and reduce carbon emissions, which are important evaluation items for new equipment purchase or replacement, in order to implement ESG in practice.

Looking forward toward the future, we shall, continue as always, to cultivate the European and American markets amidst Chun Yu Works & Co., Ltd. in Taiwan and take advantage of the Indonesian Lion as the springboard into The Association of Southeast Asian Nations, (ASEAN) region. Meanwhile, we shall take two strongholds at Dongguan and Shanghai to integrate the entire markets of Mainland China and further up to the entire world. We continue to integrate our internal resources and adopt international division of labor to improve our management efficiency. At the same time, in line with the steel development strategy of Taiwan Steel Group, we will adjust the positioning of the Company to maximize the combined effect of production and sales. To realize the vision of "World-class construction fastener manufacturer", to re-polish CHUN YU's brand, and to become a long-lasting enterprise.

Chairman: LIN HUEI-JENG

General Manager: TSAI TUNG-SEN Accounting Manager: FANG PING-TIEN

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CHUN YU WORKS ＆ CO., LTD.

2. 2021 Business Plan Overview

(1) Business philosophy

Economic improvement is in place in 2022. According to the forecast of the International Monetary Fund (IMF), global economic growth is expected at 4.4% in this year. Likewise, the World Steel Association (WSA) projected that the global demand for iron and steel in 2022 will increase by 1.8% to 1,840 million metric tons as compared with the same period of 2021. The global economy and the demand for iron and steel are on the rise.

ESG has emerged as an international trend. Accordingly, Taiwan also proposed the substantive action plan of “Corporate Governance 3.0 - Sustainable Development Road Map” thereby Sustainability Report is required for the full disclosure of ESG related information. Environment (E) is the vital element of all. Accordingly, greenhouse gas inspection and the schedule for verification must be reported to the Board for supervising the implementation.

Owing to the quest for the reduced emission of greenhouse gas and advocacy of carbon neutrality in most countries, the cost of iron and steel is bound to rise further. The EU is the first of the whole world to launch the Carbon Border Adjustment Mechanism ( a.k.a carbon tariff) with pilot runs in place in 2023 in the earliest. In Taiwan, carbon duty is also planned to be levied on big carbon emission enterprises.

In responding to the thriving demand for iron and steel and the issues of environmental protection, the business policy for the future is specified as follows:

• 1.Positioning at core products and upgrading management efficiency.

• 2.Adjustment of market distribution and reduction of operating risks.

• 3.Advocacy of energy saving and carbon reduction and pursuit of cyclical economics.

• (2) Development strategy of the future:

• 1.Production:

Review the products for selling and position core items on the basis of the specific feature of the equipment and production capacity on hand and upgrade management efficiency. Under the levy of anti-dumping tax on the fasteners from China by the EU and the infrastructure building in the USA, purchase orders for the downstream fasteners enterprises increased, which in turn pulled up the

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demand for wire materials. If the production capacity is assessed as insufficient, related equipment will be added to upgrade the overall capacity and performance.

2.Sales:

Further to the continued expansion of the Company into different export markets for segmentation to diversify risk, the Company has its main market in the EU for the time being. In light of the US advocacy of infrastructure building, the Company plans to supply its subsidiary in the USA with competitive fasteners for construction to improve the sale in the USA. In addition, the Company has also been accredited by JIS on a few items, which will be helpful in penetrating the market of Japan.

3.Environmental Protection:

Switching from gas to electricity for heat supply to equipment of high energy consumption like the spheroid furnace and heat processing range will achieve carbon reduction. Waste acid and water generated from the production process will be subject to more efficient treatment for recuse in the production process. This could help to reduce the cost of production and is also the way that leads to cyclical economics.

Supporting banks in the launching of green time deposit financial products in order to participate in sustainability events for positive influence on the environment with long-term results.

(3) The influence from the macro-economic environment

COVID-19 has been kept under stable control in 2021 that helped to reactivate economic activities. The back flow of spending deferred at the high level of the pandemic and the refill of inventory by customers, as well as the quantitative easing policies in Europe and America at the time of the pandemic paved the way for the massive flow of capital into the market. As such, investment in different forms flourished that the demand for iron and steel was up at significant levels, in general. Accordingly, the prices for iron and steel also skyrocketed worldwide. The sudden and sizable economic recovery resulted in the shortage in supply of sea vessels for marine transport, container boxes and congestion at seaports. Marine transport turned chaotic. Benefitting from the extensive outsourcing of materials and the results of vertical integration of the Group, the supply of materials is stable and abundant. In addition, the overall transport and shipping service is also in place that

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shipment could be maintained at specific levels, which contributed to the unprecedented growth of revenue and profit for Chun Yu.

In the short run, 2022 was under the cloud of the escalation of the Russia-Ukraine Conflict, the decline of steel products worldwide and the skyrocketing of the price in the international steel market. The coal price has been driven up to significant levels due to the tension of the Russia and Ukraine conflict and the policy of Mainland China in production rationing in Winter. In addition, high inflation spread all over the world with the rising prices of raw materials that the price of iron and steel will unlikely fall. In the long run, major iron and steel producing countries are actively launching carbon neutrality such that the upward adjustment of the cost of iron and steel manufacturing will be inevitable. The USD1.2 trillion budget in the USA for infrastructure building will support demand. The budget of CNY$1.46 trillion for the same purpose in Mainland China will also be in in place this year. With the huge investment in infrastructure building, the demand for iron and steel will certainly be driven up incrementally. As such, steel price is expected to be bolstered by the rising cost of production and growth in demand.

The above is the business results of 2021 and the summary of the business plan in 2022. I wish for the continued support and assistance from all shareholders. I expect to create the best profit for the shareholders with the supervision of the Board and the effort of all in Chun Yu.

We wish all shareholders

Happiness and success.

Chairperson

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CHUN YU WORKS ＆ CO., LTD.

II.Company Profile

1. Date of Incorporation

Factory founding date: December, 1949

Date of Incorporation: March 27, 1965

2.Date of Incorporation

Year	Notes
1949	The late Chairman Lee Chun-Yu founded the “Chun Yu Factory.” at his own residence in Jiafeng Li of Gangshan Township. The firm was later relocated to No. 1-1 JiaXing Roade, Gangshan Township, a site occupied an area of 8,000 Pings. At the initial stage of operation, the firm was primarily engaged in the manufacturing of sewing machines and metrical instruments, and converted to the manufacturing of stampingironplate into screw nuts later.
1965	Renamed as “Chun Yu Works & “Co.,Ltd.”
1972	Founded the “PT. Moonlion Industries Indonesia” in Indonesia.
1974	Established subsidiary“Chun Zu MachineryIndustryCo.,Ltd.”
1980	Established subsidiary“Hi- Ace TradingCo.,Ltd.”
1983	Chairman Lee passed away due to prolonged exhaustion from work. Mr. Lee Chun-Tangassumed office as the Chairman in October.
1986	1. Introduced one set of the “Continuous Radiant Tubular spheroidizing thermal processing furnace” from Japan to produce various kinds of high quality spheroidizing annealed iron wire materials in conformity to international standard. 2. The plant at Gangshan was established performing 5 major functions of spheroidization, wire extension, acid wash, water and air pollutant treatment, and packing.
1988	Raised capital to NT$286,400,000 and officially pronounced as a publicly-traded company.
1989	Introduced the second set of continuous processing furnace from Japan at the end of 1988.
1991	The stocks issued by the Company was approved by the Securities and Futures Commission of Ministry of Finance for listing at TWSE for trading on July 27. The stock of the Companywas officiallylisted at TWSE for tradingon October 17.
1993	1. Established sale locations in the USA, and invested to found the “Chun Yu Works (U.S.A.)Inc.”

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	CHUN YU WORKS＆CO., LTD.
	2. Accredited with the ISO 9002 International Quality Assurance System by the Merchandise Inspection Bureau of the Ministryof Economic Affairs
1994	1. Completed the installation of the third set of continuous spheroidized thermal processing furnace and the-state-of-the-art acid wash equipment from Germany and launched to service. 2. Introduced the equipment for the recycling of sulfuric acid wastes to upgrade anti-pollution know-how in Taiwan.
1995	1. Invested to found the「SCHOLAR HOLDINGS LTD」at BVI. 2. Accredited with ISO 9002 by RWTUV of Germany. 3. CHUN ZU MACHINERY INDUSTRY CO., LTD. of the Group was accredited with ISO 9001.
1996	The proposal for investment in Dongguan, Guangdong, Mainland China, was officially approved by the Investment Commission of the Ministry of Economic Affairs.
1998	1. Invested to found the “Chun Yu (Dongguan) Metal Products Co., Ltd.” 2. The Company was accredited by the A2LA Lab of the USA in conformity to the FQA “ScrewQualityBill” requirement.
1999	Accredited with the QS 9000 Quality Assurance System, which helps the expansion of automobile screw business.
2000	Accredited with the ISO 14001 in environmental management system bySGS.
2003	Accredited with the ISO/TS 16949 and qualified as a supplier of automotive parts and component at international standard.
2004	In the Shareholders Meeting, former Chairman Lee Chun-Tang retired and was succeeded byMr. Sun Teh-Pin.
2006	PT. Moonlion Industries Indonesia of the Group was accredited with the ISO 9001-2000qualitysystem.
2007	Established subsidiary“Chun Yu Bio-Tech Co.,Ltd.”
2008	Chun Yu Works (U.S.A.) Inc. of the Group was accredited with the ISO 2000 quality system.
2009	1. The only firm of Taiwan accredited with the quality system of IRIS. 2. Invested jointly with Hi-Ace Trading to establish the『SUNNY CITY INTERNATIONAL LTD.』at Samoa. 3. “Chun Yu Bio-Tech Co., Ltd.” of the Group was granted the “Pharmaceutical ManufacturingLicense” “pharmaceutical manufacturinglicense”

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		CHUN YU WORKS＆CO., LTD.
	2010	1. After the Shareholders Meeting has elected a new Board of Directors and Supervisors, the Directors nominated Mr. Gan Chian-Fu as the Chairman. 2.The high-strength bolts and nuts manufactured by the Company passed the CE product inspection of the EU Construction Directive by TUV Rheinland. The shearing studs manufactured by the Company also passed the CE product inspection of the EU Construction Directive by TUV Taiwan 3. Established the “Shanghai Uchee Hardware Products Co., Ltd.” and “Chun Yu (Anshan) Metal Products Co., Ltd.” 4. Shanghai Uchee Hardware Products of the Group was accredited with the ISO 9001 - quality assurance system. 5. Chun Yu Bio-Tech Co., Ltd. of the Group was granted the “Class A Medical Devices Permit” bythe then Department of Health.
	2012	1.『Chun Yu (Dongguan) Metal Products Co., Ltd. of the Group』: （i）Accredited with the ISO 9001:2008, ISO/TS 16949:2009, ROHS, CE, and ISO 14001:2004 systems, and was also accredited as a CNAS Laboratory. In addition, it also passed the assessment of international big business groups— (a)Passed as the only qualified supply of railway fasteners in Asia-Pacific for Bombardier of Canada. (b)Qualified as a supplier of railway fasteners for Pandrol of the UK and the quality assurance system of HKMTR. （ii）Accredited with the ROHS system. 2. “Chun Zu Machinery Industry Co., Ltd.” of the Group was approved to list at the EmergingStock Market.
	2013	1. The previous registered company address: No. 1-1, JiaXing Road, Gangshan District, Kaohsiung City. New address effective April 5 2013: No. 100, DaBao Street, Gangshan District, Kaohsiung City. 2.The Shareholders Meeting elected a new Board of Directors and Supervisors. The Directors nominated Mr. Lin Huei-Cheng, the representative of Chin Chi Fu Asset Management Co.,Ltd.,as the Chairman
	2015	Accredited with the JIS Mark (JIS B 1176 Socket Screw and JIS B 1180 hexagonal screws)of Japan.
	2016	1. Granted the patent for the new model of “Thermal Tooth Shaping Machine”. 2. The Shareholders Meeting elected a new Board with 9 Directors (including 3 Independent Directors). the Directors nominated Mr.Lin Huei-Cheng,

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	representative of Taiwan Steel Corporation as the Chairman, and also established the Audit Committee. 3.Subsidiaries Chun Chan Investment Co., Ltd., Fu Deng Investment Co., Ltd., and Chiao Hsin Investment Co.,Ltd. merged to form the Chu Yu Investment Co.,Ltd.
2017	Accredited with high-strength bolts for windpower structure(M24~M36)byTUV
2018	The Group disposed 100% of the equity of Chun Yu (Anshan) Metal Products Co., Ltd. in December 2018 in consideration of the scale of operation.
2019	1. Chun Yu Group Adjusted its organizational structure thereby bought back the remainder shares of Scholar Holdings Ltd. And SUNNY CITY INTERNATIONAL LIMITED from Hi-Ace Trading for holding 100% of the equities of these companies. 2. The Company celebrated its 70th Anniversary and the completion ceremony of the Chun Yu Memorial Museum in December. The “Here Goes the Lion for a Hundred Years” was taken as the theme to achieve the goals of the two primary visions of “World-Class Construction Fasteners Giant” and “World-Class High-End Fasteners Giant”,and vowed to emerge as a centennial enterprise.
2020	Subsidiary Hi-Ace Trading Co., Ltd. has transformed from a trading company into a mold-makingcompanyand renamed Chun BangPrecision Co.,Ltd.

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Duties and functions of major departments

Strategy Development Room	analyze corporate competitiveness, the macro environment and the internal and external environment of the industry.
Technology Research and Development Room	design and develop new products.
Operations Management Room	analyze and managegroupoperations.
Audit Office	handle matters related to the internal control system and audit and report to the Audit Committee and Board of Directorsperiodically.
Maintenance Department	assess and purchase new equipment and maintain and service existingequipment.
Wire Manufacturing Department	engage in production and manufacturing including wire processing, surface treatment, and conversion coating.
Fastener Manufacturing Department	produce and manufacture screws, self-tapping screws, nuts and thermal treatment.
Market Development Department	develop new customer groups for existing products and understand emerging markets as instructed by the companyand make recommendations.
Fastener Sales Department	cultivate markets for and promote the domestic and export sales of fasteners and related marketingaffairs.
Wire Sales Department	cultivate markets for and promote the domestic and export sales of wires,and related marketingaffairs.
Quality Assurance Department	establish and implement quality control policies and objectives.
Materials Department	raw materials management, stock and warehousing management, finished product packaging, and shippingmanagement and control.
Production Control Department	schedule and monitor the machinery and workforce for wires and fasteners, and follow up and monitor service outsourcing (purchase).
Technology Department	improve existing products and processes and management molds.
IT Department	developand maintain IT systems.

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Procurement Department	plan and implement the procurement strategies of raw materials and various items,and equipment.
Management Department	manage personnel, environmental protection and safetyandgeneral affairs.
Financial Department	plan and implement capital affairs, stock service, and accounting.
EHS Office	audit the in-house environment and product and check various industrial safetyregulations.

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heads (1) Information of the Directors	Remarks		Note 1
	Other managers, Directors who is this person’s spouse or relative(s) within the second degree of kinshi	Relatio n	_		_		_	_		_
		Name	_		_		_	_		_
		Title	_		_		_	_		_
	Position s held concurr ently in the Compan y and other compani es		Note		Note		Note	Note		Note
	Education and/or experiences (Note3)		PhD, Graduate Institute of Naval Engineering, National Taiwan University		National Tainan Commercial Vocational Senior High School Department of Commerce		Department of Business Administration from Feng Chia University	Department of Law, NCHU		Mater Degree
	Shareholding by nominee arrangement	Ratio	_		_		_	_		_
		Number of shares	_		_		_	_		_
	Spouse and minor Shareholding	Ratio	_		_		0.31%	_		_
		Number of shares	_		_		880,595	_		_
	Current Shareholding	Ratio	0.16%	0.00%	27.87%	_	1.31%	0.16%	_	27.87%
		Number of shares	447,000	9,000	80,209,000	_	3,767,998	447,000	_	80,209,000
	Shareholding upon appointment	Ratio	0.09%	_	27.83%	_	1.31%	0.09%	_	27.83%
		Number of shares	256,000	_	80,085,000	_	3,767,998	256,000	_	80,085,000
	Date of first appointmen	(Note2)	2013.06.26		2013.06.26		1986.08.09	2013.06.26		2013.10.01
	Term (years)		3		3		3	3		3
	Date of appointment		2019.06.05		2019.06.05		2019.06.05	2019.06.05		2019.06.05
	Gender Age		Male 61~70		Male 71~80		Male 61~70	Male 51~60		Male
	Name		TAIWAN STEEL GROUP HOLDING COMPANY.	Representative: LIN HUEI-JENG	BAI JIA YUAN INVESTMENT Co., Ltd	Representative: CHEN, CHI-TAI	LEE, SHIH-HO	TAIWAN STEEL GROUP HOLDING COMPANY.	Representative: WANG CHIUNG FEN	BAI JIA YUAN
	Nation ality or registra tion area		R.O.C.		R.O.C.		R.O.C.	R.O.C.		R.O.C.
	Title (Note1)		Chairm an &CEO		Vice Chairm an		Director	Director		Director

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CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
Remarks							Note 1:The chairperson also takes up the CEO position to ensure the consistency between decision making and implementation and enhance operational efficiency. Through good communication between the chairperson and directors, business operations, plans, and policies are well implemented. Countermeasures are as follows: 1. To strengthen the supervision mechanism of the board of directors, the amendment of “no less than three independent directors” made to the company charter was approved by the board meeting on March 18, 2020. 2. Over one half of directors are not employees or officers of the Company concurrently.
Other managers, Directors who is this person’s spouse or relative(s) within the second degree of kinshi	Relatio n			_	_	_
	Name			_	_	_
	Title			_	_	_
Position s held concurr ently in the Compan y and other compani es				Note	Note	Note
Education and/or experiences (Note3)		on Department of Accounting at National Taiwan University		Tokyo University PhD, Department of Naval Engineering	Alliant International University (San Diego, USA) Doctorate of Business Management Doctor of Business Administration	LL.D., National Taiwan Normal University
Shareholding by nominee arrangement	Ratio			_	_	_
	Number of shares			_	_	_
Spouse and minor Shareholding	Ratio			_	_	_
	Number of shares			_	_	_
Current Shareholding	Ratio		_	_	_	_
	Number of shares		_	_	_	_
Shareholding upon appointment	Ratio		_	_	_	_
	Number of shares		_	_	_	_
Date of first appointmen	(Note2)			2016.06.29	2019.06.05	2019.06.05
Term (years)				3	3	3
Date of appointment				2019.06.05	2019.06.05	2019.06.05
Gender Age		61~70		Male 71~80	Female 41~50	Male 71~80
Name		INVESTMENT Co., Ltd	Representative: WONG, CHUNG-CHUN	LEE, YA-JUNG	WU, YI-CHING	LEE, CHIN-CHANG
Nation ality or registra tion area				R.O.C.	R.O.C.	R.O.C.
Title (Note1)				Indepen dent Director	Indepen dent Director	Indepen dent Director

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CHUN YU WORKS ＆ CO., LTD.

Chun Yu Investment (Shares) Company Director. PT MOON Lion Industries Indonesia. Supervisor Chun Zu Machinery Industry Co., Ltd. Director. Shanghai Chun Zu Machinery Industry Co., Ltd. Supervisor CSBC Corporation, Taiwan. Independent Director. S-TECH CORP. Director.	Chun Yu Works (USA) Inc. Director. Chun Yu (Dong Guan) Metal Products Co., Ltd Director. Shanghai Uchee Hardware Products Co., Ltd Director. PT MOON Lion Industries Indonesia Supervisor Quintain Steel Co., Ltd Director. Ofco Industrial Corporation Director. Taiwan Styrene Monomer Corporation. Director Tong Horng Metal Industrial Co., Ltd Supervisor Taigang Sports Marketing Co., Ltd. Supervisor	Chun Bang Precision Co., Ltd. Supervisor Chun Yu Bio-Tech Co., Ltd Supervisor Chun Yu Investment (Shares) Company Supervisor PT MOON Lion Industries Indonesia Supervisor		Game Fu Co., Ltd. Supervisor Chun Yu (Dong Guan) Metal Products Co., Ltd. Supervisor Shanghai Uchee Hardware Products Co., Ltd. Supervisor Shanghai Chun Zu Machinery Industry Co.,Ltd. Director Chairperson, Guangzhou Goldway Special Metal Corporation Chairperson, Tianjin Goldway Special Metal Corporation Chairperson, Xian Goldway Special Metal Corporation Chairperson, Jiaxing Goldway Special Metal Corporation
SCHOLAR HOLDINGS LTD. Chairman. SUNNY CITY INTERNATIONAL LIMITED. Chairman. Chun Yu (Dong Guan) Metal Products Co., Ltd. Director. Chun Yu Works (USA) Inc. Director. Shanghai Uchee Hardware Products Co., Ltd. Director. Chun Bang Precision Co., Ltd. Director. Chun Yu Bio-Tech Co., Ltd. Director.	Chun Zu Machinery Industry Co., Ltd Chairman. Shanghai Chun Zu Machinery Industry Co., Ltd Chairman. Bai Jia Yuan Investment Co., Ltd Chairman. BVI Lai MongCity Development Limited Company Chairman. Chun Bang Precision Co., Ltd Chairman. Chun Yu Bio-Tech Co., Ltd Chairman. Chun Yu Investment (Shares) Company Chairman. Jing Gang Investment (Shares) Company Chairman. Li-Chiao Investment Co., Ltd. Chairman.	Chun Yu (Dong Guan) Metal Products Co., Ltd. Chairman. Shanghai Uchee Hardware Products Co., Ltd. Chairman. Shanghai Tongseng Trading Co., Ltd. Chairman. Chun Yu Works (USA) Inc. Chairman.	Zenith Good Enterprise Co., Ltd. Supervisor Chun Zu Machinery Industry Co., Ltd Director	Chin Chi Fu Asset Management Co., Ltd. Chairman. Taiwan Steel Group United Co., Ltd. Chairman. Taiwan Network Communication Investment and Financial Holdings Co., Ltd. Chairman Gloria Material Technology Corp Chairman S-TECH CORP. Chairman. Ho Yang Investment Co., Ltd. Chairman Rong Yang Investment Co., Ltd. Chairman
LIN HUEI-JENG	CHEN, CHI-TAI	WONG, CHUNG-CHUN	LEE, SHIH-HO	WANG CHIUNG FEN

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CHUN YU WORKS ＆ CO., LTD.

Chairperson, Zhejiang Jiaxing Xiangyang Metal Materials Technology Co., Ltd. ALLOY TOOL STEEL INC. Chairman. GLORIA MATERIAL TECHNOLOGY JAPAN CO., LTD. Chairman G-YAO ENTERPRISES LTD. Chairman. ALL WIN ENTERPRISES LTD. Chairman. FAITH ENTERPRISES LTD. Chairman.	Professor Emeritus, National Taiwan University Part-time Consultant, CR Classification Society	Chairperson, Ho-He International Development Co., Ltd. Director, Yangmingshan Tien Lai Resort & Spa Gloria Material Technology Corp Director. Independent Director.	Director, National Tsing Hua University	Table 1: Major shareholders of the institutional shareholders April 23, 2022	Name of Institutional Shareholder Major shareholder BAI JIA YUAN INVESTMENT Co., Ltd PROMINENT SINO HOLDINGS LIMITED(100%) TAIWAN STEEL GROUP HOLDING COMPANY CHIN CHI FU ASSET MANAGEMENT CO., LTD. (100%) Note 1: If the Director is the representative of a corporate shareholder, please fill in the name of the corporate shareholder。 Note 2: Please fill in the name of the major shareholder of the corporate shareholder (top 10 in shareholding) and the shareholding ratio. If the major shareholder is a corporate shareholder, please also fill in Table 2
Yu Jing Limited Company Chairman Na Neng Co., Ltd. Chairman Chun Zu Machinery Industry Co., Ltd Vice Chairman. Huang Long Development Co., Ltd. Independent Director, Convenor Compensation Committee, Member, Audit Committee Soft-World International Corporation. Director. Taiwan Styrene Monomer Corporation. Director. D-LINK Corporation. Director. Cameo communications, Inc. Director. Chun Bang Precision Co., Ltd. Director. Chun Yu Bio-Tech Co., Ltd. Director. Chun Yu Investment (Shares) Company. Director.
	LEE, YA-JUNG	WU, YI-CHING	LEE, CHIN-CHANG

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CHUN YU WORKS ＆ CO., LTD.

April 23, 2022	Name of Institutional Shareholder Major shareholder PROMINENT SINO HOLDINGS LIMITED INNOVATIVE ADVISORS LTD. (100%) CHIN CHI FU ASSET MANAGEMENT CO., LTD. Chun-Yi Huang (45%)、WANG CHIUNG FEN (36%)、BAI JIA YUAN INVESTMENT Co., Ltd (19%) Note 1: If the major shareholder in Table 1 is a corporate shareholder, please fill in its name. Note 2: Please fill in the name of the corporate shareholder’s major shareholder (top 10 in shareholding) and the shareholding ratio. Disclosure of the Professional Designation of the Directors and Independence of the Independent Directors:	Number of other public companies where the Director concurrently serves as an Independent Director	Nil
		Independence status	Not an Independent Director, not applicable.
		Five or more years of experience or professional qualification	(1) PhD, Shipbuilding Engineering, National Taiwan University. Former President of National Penghu University of Science and Technology, Professor at National Taiwan University. Currently the Chairman and CEO of the Company and Representative of Institutional Director in a number of companies, or Independent Director of other companies. (2)Professional experience as university professor in business and the subjects related to corporate management. Seasoned with industry knowledge, international market, international view, judgement in competition of the global professional market and innovative leadership for more than 5 years. (3)Nothing in connection with Article 30 of the Company Act.
		Criteria Name	LIN HUEI-JENG

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CHUN YU WORKS ＆ CO., LTD.

Nil	Nil	1
Not an Independent Director, not applicable.	Not an Independent Director, not applicable.	Not an Independent Director, not applicable.
(1)Graduated from National Tainan Commercial Vocation Senior High School in business management. Currently the Vice Chairman of the Company, Chairman ofBai Jia Yuan Investment Co., Chairman of Chun Zu Machinery Ind. Co., Ltd.; Director and Supervisor of a number of companies listed at TWSE and TPEx. (2)With more than 10 years of experience in industry knowledge, leadership in operation, and well-seasoned in corporate planning, financial analysis and the practice of marketing. Specialized in market strategy and business promotion. (3)Nothing in connection with Article 30 of the Company Act.	(1)Graduated from Department of Business Administration, Feng Chia University; former Vice President of the Company, currently Supervisor of Zenith Good Enterprise Co., Ltd.; Director of Chun Zu Machinery Ind. Co., Ltd. (2) Concentration in screw manufacturing and related domains for many years and well-seasoned in industry knowledge and business promotion. (3)Nothing in connection with Article 30 of the Company Act.	(1)Graduated from Department of Law, National Chung Hsing University, currently Chairman or Director of Taiwan Steel Group, Gloria Material Technology Corp., and other companies listed at TWSE and TPEx. (2)A licensed practicing lawyer with expertise in law that could give advice in risk management and legal strategy, compliance and management decision. Expertise in law and finance. (3)Diversification in operation to different industries. The wealth of experience in corporate management will lead the Company to sustainable development. (4)Nothing in connection with Article 30 of the Company Act.
CHEN, CHI-TAI	LEE, SHIH-HO	WANG CHIUNG-FEN

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CHUN YU WORKS ＆ CO., LTD.

Nil	Nil
Not an Independent Director, not applicable.	Conformity to the status of independence: (1)The person, spouse and kindred within the 2ndtier has not held the position as Director, Supervisor or employee of the Company or its affiliates. (2)The person, spouse and kindred within the 2ndtier does not hold any shares issued by the Company. (3) The person does not hold any position as Director, Supervisor or employee of companies with special affiliation to the Company. (4)The person did not provide commercial, legal, financial and accounting service to the Company or its affiliates.
(1)Graduated from the Institute of Accounting, National Taiwan University, former Executive Vice President of the Company and Independent Director of OFCO Industrial Corp.; currently CEO of the overseas subsidiaries of the Company and Supervisor of a number of other companies. (2)With more than 5 years of experience pertinent to the operation of the Company, with analysis and management capacity in corporate governance, finance and accounting, and business, and requires the management team to map out business strategy for implementation. (3)Nothing in connection with Article 30 of the Company Act.	PhD, Marine Engineering, University of Tokyo, former professor at National Taiwan University and members of the Examination Board at Examination Yuan, currently Independent Director, member of the Audit Committee and Remuneration Committee of the Company, Professor emeritus of National Taiwan University, and adjunct consultant of CR Classification Society. (2) Professional experience as university professor in business and the subjects required for the operation of the Company, and good experience in practical work, with many good advice to the operation of the Company. (3)Nothing in connection with Article 30 of the Company Act.
WONG, CHUNG-CHUN	LEE, YA-JUNG

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CHUN YU WORKS ＆ CO., LTD.

	LEE, CHIN-CHANG (1)LLD, National Taiwan Normal University, former President of National Kinmen University, currently Independent Director and member of the Audit Committee and Remuneration Committee of the Company and Supervisor of National Tsing Hua University. (2)Professional experience as university professor in law and the subjects required for the operation of the Company, specialized in in the advocacy of industry-academe collaborative research and education, and able give professional advice in the launch of business at the Company. (3)Nothing in connection with Article 30 of the Company Act. Conformity to the status of independence: (1)The person, spouse and kindred within the 2ndtier has not held the position as Director, Supervisor or employee of the Company or its affiliates. (2)The person, spouse and kindred within the 2ndtier does not hold any shares issued by the Company. (3) The person does not hold any position as Director, Supervisor or employee of companies with special affiliation to the Company. (4)The person did not provide commercial, legal, financial and accounting service to the Company or its affiliates. Nil Board Member Diversity The Company has established 8 seats of Directors (including 3 seats for Independent Directors) on the basis of its scale of operations and development needs. The professional background of these Directors includes industry knowledge, legal risk, corporate management, finance and accounting for achieving the purpose of diversity of the members of the Board. The primary policy objectives include:
1	Nil
Conformity to the status of independence: (1)The person, spouse and kindred within the 2ndtier has not held the position as Director, Supervisor or employee of the Company or its affiliates. (2)The person, spouse and kindred within the 2ndtier does not hold any shares issued by the Company. (3) The person does not hold any position as Director, Supervisor or employee of companies with special affiliation to the Company. (4)The person did not provide commercial, legal, financial and accounting service to the Company or its affiliates.	Conformity to the status of independence: (1)The person, spouse and kindred within the 2ndtier has not held the position as Director, Supervisor or employee of the Company or its affiliates. (2)The person, spouse and kindred within the 2ndtier does not hold any shares issued by the Company. (3) The person does not hold any position as Director, Supervisor or employee of companies with special affiliation to the Company. (4)The person did not provide commercial, legal, financial and accounting service to the Company or its affiliates.
DBA, Alliant International University, former Chairman of Taiwan Styrene Monomer Corporation, currently Independent Director, member of the Audit Committee and Remuneration Committee of the Company, Chairman of Hehe International Development Co., Ltd., and Director of Tien Lai Resort & Spa. (2)Experienced in the practice of corporate governance and corporate planning, and related management capacity, able to upgrade the quality of Corporate governance of the Board and the supervisory function of the Audit Committee. (3)Nothing in connection with Article 30 of the Company Act.	(1)LLD, National Taiwan Normal University, former President of National Kinmen University, currently Independent Director and member of the Audit Committee and Remuneration Committee of the Company and Supervisor of National Tsing Hua University. (2)Professional experience as university professor in law and the subjects required for the operation of the Company, specialized in in the advocacy of industry-academe collaborative research and education, and able give professional advice in the launch of business at the Company. (3)Nothing in connection with Article 30 of the Company Act.
WU, YI-CHING	LEE, CHIN-CHANG

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CHUN YU WORKS ＆ CO., LTD.

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CHUN YU WORKS ＆ CO., LTD.

			CHUN	YU W	ORKS＆C	O., LTD.
Industrial experience and professional ompetencies	Legal				V				V
	Finance and account- ing		V			V		V
	Industry knowledge	V		V	V		V
	Leadership decision	V	V	V	V	V
	Business administra- tion	V	V	V	V	V
Term of independent directors (Year)	Over 9
	4-8						V
	Under 3							V	V
Age distribution	Over 70		V				V		V
	60- 69	V		V		V
	50- 59				V
	Under50							V
	Gender	Male	Male	Male	Male	Male	Male	Female	Male
Nationality or	registration area	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C
	Name	LIN HUEI-JENG	CHEN,CHI-TAI	LEE, SHIH-HO	WANG CHIUNG FEN	WONG, CHUNG-CHUN	LEE, YA-JUNG	WU, YI-CHING	LEE, CHIN-CHANG
Name of	Director/ Diversity Core Item	Chairman	Vice Chairman	Director	Director	Director	Independent Director	Independent Director	Independent Director

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CHUN YU WORKS ＆ CO., LTD.

April 23, 2022	Remarks
	Other managers, Directors who is this person’s spouse or relative(s) within the second degree of kinshi	Relation	-	-	-	-	-
		Name	-	-	-	-	-
		Title	-	-	-	-	-
	Positions held concurren tly in the Company and other companie s		Note	Note	Note	-	-
	Education and/or experiences (Note3)		PhD, Graduate Institute of Naval Engineering, National Taiwan University	Department of Commerce, National Tainan Commercial Vocational Senior High School	Mater Degree on Department of Accounting at National Taiwan University		Department of Mechanical Cultivation, Taiwan Provincial Pingtung Vocational School of Agriculture
	Shareholding by nominee arrangement	Ratio	-	-	-		-
		Number of shares	-	-	-		-
	Spouse and minor Shareholding	Ratio	-	-	-	0.00%	0.00%
		Number of shares	-	-	-	10,000	121
	Present Shareholding	Ratio	0.00%	-	-	0.00%	0.00%
		Number of shares	9,000	-	-	1,781	3,987
	Date of appointment		2020.11.11	2019.07.01	2019.07.01	2020.11.11	2003.03.01
	Gender		Male	Male	Male	Male	Male
	Name		LIN HUEI-JENG	CHEN, CHI-TAI	WONG, CHUNG-CHUN	TSAI TUNG-SEN	CHEN,JYUN-LIANG
	Nationa lity or registra tion area		R.O.C.	R.O.C.	R.O.C.	R.O.C.	R.O.C.
	Title (Note1)		CEO	CEO of domestic subsidiary business group	CEO of overseas subsidiary business group	General Manager	Vice President

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CHUN YU WORKS ＆ CO., LTD.

		CHUN YU WORKS＆C	O., LTD.
-	-	-	-
-	-	-	-
-	-	-	-
-	-	-	-
MA, Department of Finance, National Kaohsiung University of Science and Technology	MA, Department of High-Tech Management, University of South Australia	PhD, Engineering Science and Ocean Engineering, National Taiwan University	MA in Accounting, University of Missouri–Kansas City, USA
-	-	-	-
-	-	-	-
-	-	-	-
-	-	-	-
-	-	-	-
-	-	-	-
2017.02.16	2019.01.16	2019.11.01	2019.09.01
Male	Male	Male	Male
CHOU,BO-WEI	CHEN,SI-YU	LIAO,JIN-YI	FANG PING-TIEN
R.O.C.	R.O.C.	R.O.C.	R.O.C..
Vice President	Asst VP Manufacturing Division	Asst VP Technology Department	Accounting Manager

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CHUN YU WORKS ＆ CO., LTD.

Chun Yu Investment (Shares) Company Director. PT MOON Lion Industries Indonesia. Supervisor Chun Zu Machinery Industry Co., Ltd. Director. Shanghai Chun Zu Machinery Industry Co., Ltd. Supervisor CSBC Corporation, Taiwan. Independent Director. S-TECH CORP. Director.	Chun Yu Works (USA) Inc. Director. Chun Yu (Dong Guan) Metal Products Co., Ltd Director. Shanghai Uchee Hardware Products Co., Ltd Director. PT MOON Lion Industries Indonesia Supervisor Quintain Steel Co., Ltd Director. Ofco Industrial Corporation Director. Taiwan Styrene Monomer Corporation. Director Tong Horng Metal Industrial Co., Ltd Supervisor 台鋼運動行銷(股)公司 監察人	Chun Bang Precision Co., Ltd. Supervisor Chun Yu Bio-Tech Co., Ltd Supervisor Chun Yu Investment (Shares) Company Supervisor PT MOON Lion Industries Indonesia Supervisor
SCHOLAR HOLDINGS LTD. Chairman. SUNNY CITY INTERNATIONAL LIMITED. Chairman. Chun Yu (Dong Guan) Metal Products Co., Ltd. Director. Chun Yu Works (USA) Inc. Director. Shanghai Uchee Hardware Products Co., Ltd. Director. Chun Bang Precision Co., Ltd. Director. Chun Yu Bio-Tech Co., Ltd. Director.	Chun Zu Machinery Industry Co., Ltd Chairman. Shanghai Chun Zu Machinery Industry Co., Ltd Chairman. Bai Jia Yuan Investment Co., Ltd Chairman. BVI Lai MongCity Development Limited Company Chairman. Chun Bang Precision Co., Ltd Chairman. Chun Yu Bio-Tech Co., Ltd Chairman. Chun Yu Investment (Shares) Company Chairman. Jing Gang Investment (Shares) Company Chairman. Li-Chiao Investment Co., Ltd. Chairman.	Chun Yu (Dong Guan) Metal Products Co., Ltd. Chairman. Shanghai Uchee Hardware Products Co., Ltd. Chairman. Shanghai Tongseng Trading Co., Ltd. Chairman. Chun Yu Works (USA) Inc. Chairman.
LIN HUEI-JENG	CHEN, CHI-TAI	WONG, CHUNG-CHUN

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CHUN YU WORKS ＆ CO., LTD.

					CHUN Y	CHUN Y	U WORKS＆	U WORKS＆	CO., LTD.	CO., LTD.
Remuner ation from re-investe d businesse s other than subsidiari es									-
	The sum of A, B, C, D, E, F and G as a percentage of after-tax net profit	All companies in the consolidated financial statements							5.90
		The Company							4.76
Remuneration from other jobs	Employee remuneration (G)	All companies in the consolidated financial statements	Stock						-
			Cash						959
		The Company	Stock						-
			Cash						959
	Retirement pension (F)	All companies in the consolidated	financial statements						-
		The Company							-
	Remuneration, bonus and special fees (E)	All companies in the consolidated financial statements							13,900
		The Company							9,492
	The sum of A, B, C and D as a percentage of after-tax net profit	All companies in the consolidated financial statements							3.91
		The Company							3.35
Director remuneration	Business execution expenses (D)	All companies in the consolidated financial statements							7,298
		The Company							6,210
	Director remuneration (C)	All companies in the consolidated financial statements							16,981
		The Company							16,981
	Retirement pension (B)	All companies in the consolidated financial statements							-
		The Company							-
	Remuneration (A)	All companies in the consolidated financial statements							4,821
		The Company							1,774
	Name			TAIWAN STEEL GROUP HOLDING COMPANY.	Representative: LIN ,HUEI-JENG	BAI JIA YUAN INVESTMENT Co., Ltd	Representative: CHEN, CHI-TAI	TAIWAN STEEL GROUP HOLDING COMPANY.	Representative: WANG,CHIUNG- FEN	BAI JIA YUAN INVESTMENT Co., Ltd	Representative: WONG, CHUNG-CHUN	LEE, SHIH-HO	LEE, YA-JUNG	WU, YI-CHING	LEE, CHIN-CHANG
	Title			Chairman		Vice	Chairman		Director		Director	Director	Independent Director	Independent Director	Independent Director

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CHUN YU WORKS ＆ CO., LTD.

						CHUN YU WORKS＆CO.,	LTD.
Range of Remuneration	Director name	Total amount of the first seven remunerations (A+B+C+D+E+F+G)	Companies in the consolidated financial statements			LEE, SHIH-HO LEE, YA-JUNG WU, YI-CHING LEE, CHIN-CHANG	TAIWAN STEEL GROUP HOLDING COMPANY. WANG,CHIUNG- FEN	BAI JIA YUAN INVESTMENT Co., Ltd CHEN, CHI-TAI BAI JIA YUAN INVESTMENT Co., Ltd WONG, CHUNG-CHUN	TAIWAN STEEL GROUP HOLDING COMPANY. LIN ,HUEI-JENG					8
			The Company			BAI JIA YUAN INVESTMENT Co., Ltd WONG, CHUNG-CHUN LEE, SHIH-HO LEE, YA-JUNG WU, YI-CHING LEE, CHIN-CHANG	BAI JIA YUAN INVESTMENT Co., Ltd CHEN, CHI-TAI TAIWAN STEEL GROUP HOLDING COMPANY.:WANG,CHIUNG- FEN	TAIWAN STEEL GROUP HOLDING COMPANY. LIN ,HUEI-JENG�						8
		Total amount of the first four remunerations (A+B+C+D)	Companies in the consolidated financial statements			TAIWAN STEEL GROUP HOLDING COMPANY. WANG,CHIUNG- FEN LEE, SHIH-HO LEE, YA-JUNG WU, YI-CHING LEE, CHIN-CHANG	BAI JIA YUAN INVESTMENT Co., Ltd CHEN, CHI-TAI	BAI JIA YUAN INVESTMENT Co., Ltd WONG, CHUNG-CHUN	TAIWAN STEEL GROUP HOLDING COMPANY. LIN ,HUEI-JENG					8
			The Company			BAI JIA YUAN INVESTMENT Co., Ltd CHEN, CHI-TAI� TAIWAN STEEL GROUP HOLDING COMPANY WANG,CHIUNG- FEN� BAI JIA YUAN INVESTMENT Co., Ltd WONG, CHUNG-CHUN� LEE,SHIH-HO LEE,YA-JUNG WU, YI-CHING LEE, CHIN-CHANG	TAIWAN STEEL GROUP HOLDING COMPANY LIN ,HUEI-JENG�							8
		Range of Remuneration		Lower than 1,000,000	1,000,000 (inclusive)� 2,000,000 (exclusive)	2,000,000 (inclusive)� 3,500,000 (exclusive)	3,500,000 (inclusive)� 5,000,000 (exclusive)	5,000,000(inclusive)� 10,000,000 (exclusive)	10,000,000(inclusive)� 15,000,000 (exclusive)	15,000,000(inclusive� 30,000,000 (exclusive)	30,000,000(inclusive� 50,000,000 (exclusive)	50,000,000(inclusive) 100,000,000 (exclusive)	100,000,000 or more	Total

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CHUN YU WORKS ＆ CO., LTD.

				CHUN YU WORKS＆CO., LT	CHUN YU WORKS＆CO., LT	CHUN YU WORKS＆CO., LT	D.
Remuneration from re-invested businesses other than subsidiaries or parent company				-					Note:1. Quantity of newly issued restricted shares – None. 2. The remunerations to the General Manager and the Deputy General Managers will be calculated on the basis of the payment in their term of office.
The sum of A, B, C and D as a percentage of after-tax net profit(%)	Companies in the consolidated financial statements			2.24
	The Company			1.88
Employee remuneration (D)	Companies in the consolidated financial statements	Stock		-
		Cash		450
	The Company	Stock		-
		Cash		450
Bonus and special fees (C)	Companies in the consolidated financial statements			3,052
	The Company			2,603
Retirement pension (B)	Companies in the consolidated financial statements			-
	The Company			-
Salary (A)	Companies in the consolidated financial statements			16,109
	The Company			13,416
	Name		LIN, HUEI-JENG	CHEN, CHI-TAI	WONG, CHUNG-CHUN	TSAI, TUNG-SEN	CHEN, JYUN-LIANG	CHOU, BO-WEI
	Title		Chairman &CEO	CEO of domestic subsidiary business group	CEO of overseas subsidiary business group	General Manager	Vice President	Vice President

• 33 -

CHUN YU WORKS ＆ CO., LTD.

Name of President and Vice President	Companies in the consolidated financial statements		CHEN,JYUN-LIANG CHOU,BO-WEI	WONG, CHUNG-CHUN TSAI ,TUNG-SEN	CHEN, CHI-TAI	LIN HUEI-JENG						6	The contents of the remuneration disclosed in this table are different from those in the Income Tax Law. Therefore, this statement is for the purpose of disclosure but not for taxation.
	The Company		CHEN, CHI-TAI CHEN,JYUN-LIANG CHOU,BO-WEI	WONG, CHUNG-CHUN TSAI, TUNG-SEN		LIN, HUEI-JENG						6
	Range of Remuneration	Lower than 1,000,000	1,000,000 (inclusive)～2,000,000 (exclusive)	2,000,000 (inclusive)～3,500,000 (exclusive)	3,500,000 (inclusive)～5,000,000 (exclusive)	5,000,000 (inclusive)～10,000,000 (exclusive)	10,000,000 (inclusive)～15,000,000 (exclusive)	15,000,000 (inclusive)～30,000,000 (exclusive)	30,000,000 (inclusive)～50,000,000 (exclusive)	50,000,000 (inclusive)～100,000,000 (exclusive)	100,000,000 or more	Total

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CHUN YU WORKS ＆ CO., LTD.

3. Managers with Employee Remuneration Distribution

Unit: NT$ thousand ； %

Title	Name	Stock Bonus	Cash Bonus	Total	Ratio of Total Amount to Net Income (%)
Chairman and General Manage	LIN, HUEI-JENG	-	701	701	0.08
CEO of domestic subsidiary business group	CHEN, CHI-TAI
CEO of overseas subsidiary business group	WONG, HUNG-CHUN
Vice President	CHEN,JYUN-LIANG
	CHOU,BO-WEI
	WU,CHU-YEN (Removed on 2020.10.06)
	HUANG,MEI-LING (Removed on 2020.11.16)
Senior Manager	CHEN,XI-YU
	LIAO,JIN-YI
Accounting Manager	FANG, PING-TIEN

1. The analysis of the total remuneration to the Directors, Independent Director, General Manager, and Deputy General Manger of the Company in the last 2 years in proportion to the net income of the Company. Specify the association between the policy, standard and component of remuneration, the procedure of setting the remuneration and operation performance:

2. (i)The analysis of the total remuneration to the Directors, Independent Director, General Manager, and Deputy General Manger of the Company in the last 2 years in proportion to the net income of the Company:

Year	Total amount of remuneration to the Directors, Supervisors, General Manager, and Deputy General Manager(in NT$1,000)	Total amount of remuneration to the Directors, Supervisors, General Manager, and Deputy General Manager(in NT$1,000)	The total amount in proportion to the net income (%)	The total amount in proportion to the net income (%)
	The Company	Companies in the consolidated financial report	The Company	Companies in the consolidated financial report
2020	31,964	38,605	16.21%	19.58%
2021	41,434	48,711	4.74%	5.57%

• (ii)The policy and standard of remuneration of the Company:

• A. Directors, Supervisors: The Articles of Incorporation specified that Directors are entitled to travelling allowance regardless of the profit position of the Company.

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CHUN YU WORKS ＆ CO., LTD.

Remunerations to the Directors shall commensurate with their level of participation in the operation of the Company and contribution value to the Company with reference to industy standard, and determined by the Board under authorization.

• B. General Manager and Deputy General Manager: the remuneration to the General Manager and the Deputy General Manager shall be relevant with the duties they performed, the responsibilities undertaken, and the contribution to the Company with reference to industry standard.

• C. The association between the procedure for setting the remuneration and the operation performance: According to the Articles of Incorporation of the Company

• Article 39: The Company shall appropriate 2% of the earnings of the year, where applicable, as remuneration to the employees, and no more than 2% as the remuneration to the Directors. However, the Company shall appropriate for covering loss carried forward, where applicable.

• D. Risk in the future: The Company has taken liability insurance for the protection of the Directors and Supervisors from possible risks.

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CHUN YU WORKS ＆ CO., LTD.

3.Corporate Governance Status

(1) Operation of the Board of Directors

Seven board meetings were held in 2021, the attendance of Directors (including Independent Directors) is as follows:

Title	Name	Actual no. of meetings attended B	No. of meetings with entrusted attendance	Actual attendance rate (%) [B/A]	Remarks
Chairman	TAIWAN STEEL GROUP HOLDING COMPANY. Representative: LIN HUEI-JENG	7	0	100%
Vice Chairman	BAI JIA YUAN INVESTMENT Co., Ltd Representative: CHEN, CHI-TAI	7	0	100%
Director	LEE, SHIH-HO	7	0	100%
Director	TAIWAN STEEL GROUP HOLDING COMPANY. Representative: WANG CHIUNG FEN	5	2	71.43%
Director	BAI JIA YUAN INVESTMENT Co., Ltd Representative: WONG, CHUNG-CHUN	7	0	100%
Independent Director	LEE, YA-JUNG	7	0	100%
Independent Director	WU, YI-CHING	7	0	100%
Independent Director	LEE, CHIN-CHANG	7	0	100%

Board of Directors	Resolution Content	Opinions of independent directors	Response to the opinions of independent directors
2022/1/27 1st Board Meeting of 2022 2022/3/10 2nd Board Meeting of 2022	The chief audit appointment proposal	-	None
	Investment increase in subsidiary Chun Yu Bio-Tech	-	None
	Investment increase in subsidiary Chun Bang Precision Co., Ltd.	-	None
	Review of the business report, individual financial statements, and consolidated financial statements of 2020.	-	None
	2020 “Statement of Internal Control”	-	None
	Amendment of the “Shareholders’ Meeting Procedure Rules”	-	None

• 37 -

CHUN YU WORKS ＆ CO., LTD.

			CHUN YU WORKS＆CO., LTD.
			Amendment of the “Internal Significant			None
			Information Processing Operational Procedures”		-
			Passed the Company’s 2021Q1 Consolidated			None
			Financial Statement.		-
		2021/5/12 3rd Board Meeting of 2021 Approval of the 2021 annual CPA fees of Chun Yu and subsidiaries. Passed the motion for establishment of the position of Corporate Governance Officer.			- -	None None
			Amendment of the “Standard Operating Procedures			None
			for Handling Director Requests”		-
			Passed the Company’s 2021Q2 Consolidated			None
			Financial Statement.		-
		2021/8/12 5th Board Meeting of 2021 Passed the motion of offering the 1st issue of secured corporate bonds in 2021. Passed the amendment of the “Operating Procedures			-	None None
			and Behavioral Directions of Best- Practice
			Principles on Good Faith Management and		-
			Guidelines on Conducts”
		2021/10/7 6th Board Meeting of 2021 Passed the motion of offering The 1st, 2nd and 3rd ecured convertible bond.			-	None
			Passed the Company’s 2021Q3 Consolidated			None
		2021/11/3	Financial Statement.		-
		7th Board Meeting of 2021 Amendment of the “Statement of Internal Control”			-	None
			Passed the endorsements/guarantees for subsidiaries.		-	None
(2) Other than the aforementioned matters, the board resolutions which Independent Directors object to or have
	reservations about and there are records or written statements for them: The Company did not					encounter any
	of the circumstances.
2. For		the situation where a Director avoids a motion related to his/her own interests, please specify the director’s
names, the contents of the motion, the reasons for the avoidance of interests and the voting results:
		Resolution Content	Name of Director Reasons for the avoidance of		Voting Results
			interests
	Year-end bonus		Chairman LIN HUEI-JENG Discussion of the avoidance		Approved as
	payment case in 2020		Vice Chairman CHEN, of conflicts of interests as		proposed.
			CHI-TAI related parties of directors
			Director WONG, also taking other positions in
			CHUNG-CHUN the company.
	Manager Salary		Chairman LIN HUEI-JENG Three directors also taking		Approved as
	Adjustment Case		Vice Chairman CHEN, other positions in the		proposed.
			CHI-TAI company should avoid the
			Director WONG, conflicts of interests as
			CHUNG-CHUN related parties.
	the proposal on reward		Chairman LIN HUEI-JENG Three directors also taking		Approved as
	for employees in 2020.		Vice Chairman CHEN, other positions in the		proposed.
			CHI-TAI company should avoid the
			Director WONG, conflicts of interests as
			CHUNG-CHUN related parties.
4.	TWSE-listed or TPEx-listed companies shall disclose information on the frequency and duration of
	Self (peer)- Evaluation, the scope, means and content of evaluation, and fill in Form II (2) on							the
	pursuit of Self-Evaluation

• 38 -

CHUN YU WORKS ＆ CO., LTD.

		CHUN YU WOR	KS＆CO., LTD.
Evaluation cycle	Evaluation period	Evaluation scope	Evaluation method	Evaluation content
Once a yea	2021.01.01~ 2021.12.31	Performance evaluation of the board as a whole, individual directors, and functional committees	Board internal self-assessment and director self-assessment.	Based on the condition and needs of operations, the Company should establish the items for board performance evaluation covering at least the following five aspects: 1.Participation in Company operations 2.Improving the Board of Directors’ decision-making quality 3.Composition and structure of the Board of Directors 4.Appointment and continuing education of directors 5.Internal Control The items for the self-assessment of directors shall cover at least the following six aspects: 1. Alignment of the goals and missions of the Company 2. Awareness of the duties of a director 3. Participation in the operation of the Company 4. Management of internal relationship and communication 5. The director's professionalism and continuing education 6. Internal control. The items for the self-assessment of functional committees shall cover at least the following six aspects: 1. Participation in the operation of the Company 2. Awareness of the duties of the functional committee 3. Improvement of quality of decisions made by the functional committee 4. Makeup of the functional committee and election of its members 5 Internal control

• 39 -

CHUN YU WORKS ＆ CO., LTD.

• (2) Operation of the Audit Committee:

• 1.The Company’s Audit Committee is composed of three people.

• 2.Current member’s tenure: From June 25, 2019 to June 4, 2022. In 2021 the Audit Committee held six meetings (A), and the member qualifications and attendance are as follows:

Title	Name	Actual no. of meetings attended (B)	No. of meetings with entrusted attendance	Actual attendance rate (%) [B/A] (Note)	Remarks
Independent Director	LEE, YA-JUNG	6	0	100%	Audit Committee convenor
Independent Director	WU, YI-CHING	6	0	100%
Independent Director	LEE, CHIN-CHANG	6	0	100%
Annual work integration The Audit Committee is formed by three independent directors to assist the board of directors in supervising the quality and reliability of implementation of the accounting, audit, financial reporting procedures and financial controls. In 2021 the Audit Committee held six committee meetings to audit the following items: 1. Financial statements 2. The internal control system and related polies and procedures 3. Major loan and endorsement/guarantee projects 4. Appointment of and reward of CPAs Other items required for reporting I. If any of the following applies to the operations of the Audit Committee, specify the date, the session of the committee meeting, the content of the motion, the adverse opinion, qualified opinion of the Independent Directors, or the content of important recommendation, the resolution of the Audit Committee and the response of the Company to the opinion of the Audit Committee. (I) Items stated in Article 14-5 of the Securities and Exchange Act. Board meetings Proposal content and handling Resolutions unapproved by the Audit Committee but approved by over two thirds of the directors. 2022/1/27 1st Board Meeting of 2022 The chief audit appointment proposal None Investment increase in subsidiary Chun Yu Bio-Tech None Investment increase in subsidiary Chun Bang Precision Co., Ltd. None Review results of the Audit Committee meeting (2021/1/27): Approved by all Audit Committee members.

• 40 -

CHUN YU WORKS ＆ CO., LTD.

	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
	The Company’s response to the Audit Committee’s opinions: Approved by all present directors.
2022/3/10 2nd Board Meeting of 2022	Review of the business report, individual financial statements, and consolidated financial statements of 2020.	None
	2020 “Statement of Internal Control”	None
	Amendment of the “Internal Significant Information Processing Operational Procedures”	None
	Review results of the Audit Committee meeting (2021/3/10): Approved by all Audit Committee members.
	The Company’s response to the Audit Committee’s opinions: Approved by all present directors.
2021/5/12 3rd Board Meeting of 2021	Passed the Company’s 2021Q1 Consolidated Financial Statement.	None
	Approval of the 2021 annual CPA fees of Chun Yu and subsidiaries.	None
	Review results of the Audit Committee meeting (2021/5/12): Approved by all Audit Committee members.
	The Company’s response to the Audit Committee’s opinions: Approved by all present directors.
2021/8/12 5th Board Meeting of 2021	Passed the Company’s 2021Q2 Consolidated Financial Statement.	None
	Passed the amendment of the “Operating Procedures and Behavioral Directions of Best- Practice Principles on Good Faith Management and Guidelines on Conducts”	None
	Review results of the Audit Committee meeting (2021/8/12): Approved by all Audit Committee members.
	The Company’s response to the Audit Committee’s opinions: Approved by all present directors.
2021/10/7 6th Board Meeting of 2021	Passed the motion of offering The 1st, 2nd and 3rd ecured convertible bond.	None
	Review results of the Audit Committee meeting (2021/10/7): Approved by all Audit Committee members.
	The Company’s response to the Audit Committee’s opinions: Approved by all present directors.
2021/11/3 7th Board Meeting of 2021	Passed the Company’s 2021Q3 Consolidated Financial Statement.	None
	Amendment of the “Statement of Internal Control”	None
	Passed the endorsements/guarantees for subsidiaries.	None
	Review results of the Audit Committee meeting (2021/11/3): Approved by all Audit Committee members.
	The Company’s response to the Audit Committee’s opinions: Approved by all present directors.

• 41 -

CHUN YU WORKS ＆ CO., LTD.

	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
Reasons	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons		No significant difference from the requirements.	Steady efforts are made to practice the “Corporate Governance Best Practice Principles.”
	Implementation Status	Abstract Illustration	The Company has instituted the Corporate Governance Best Practice Principles and acted accordingly.	(1) The Company has established the parliamentary procedure for the Shareholders Meeting, and has established the system of spokesman and acting spokesman with the appointment of designated persons to handle investor relation, suggestions, queries, disputes, or litigations from the shareholders. A special section on investor relation has also been set up at the official website of the Company. Investors may liaise with the Company through this section or via E-mail. (2) The Company has commissioned an investor service agent to update the shareholders roster and the list of dominant shareholders at regular intervals of time for the proper control of the dominant shareholders of the Company and the ultimate controlling parties of these dominant shareholders. (3) The Company and its affiliates run the financial and business operation independent of one another with the institution of “Regulations Governing
		NO
		YES	V	V V V V
		Evaluation Item	1.Does the Company follow the Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies, and has the Company established and disclosed its own Corporate Governance Best Practice Principles?	2.The Company's shareholding structure and shareholders' equity (1) Has the Company set up internal operating procedures to handle shareholder proposals, doubts, disputes and litigation matters and followed the procedures? (2) Does the Company have a list of its major shareholders and the ultimate controllers of the major shareholders? (3) Has the Company established and implemented risk management and firewall mechanisms with its affiliates? (4) Has the Company set up an internal standard to prohibit the insiders’ use of private information to trade securities?

• 42 -

CHUN YU WORKS ＆ CO., LTD.

		CHUN	YU WORKS＆CO., LTD.
Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons			(I) No significant deviation from the principles
Implementation Status	Abstract Illustration	the Supervision of Subsidiaries”, “Regulations Governing the Control of Related Parties Transactions”, “Internal Control System”, and “Internal Audit System” for the establishment of risk control among the affiliates and the firewall mechanisms. (4) The Company has instituted the Ethic Code of Conduct and acted accordingly.	(1) 1.The Board of the Company has passed the motion for the establishment of the “Corporate Governance Best Practice Principles” on November 7 2018. Diversified policy has been made in Chapter III – “Strengthening the Functions of the Board”. The primary policy objective includes: (i) It is preferable that the members of the Board shall include without limitation to the following 2 standards in running the operation, the mode of operation and for development needs: A. Basic condition and value: gender, age, nationality and culture. B. Professional knowledge and skill: professional background (such as law, accounting, industry, finance, marketing or technology), professional skills and industry experience. (ii) The members of the Board generally have the kinds of knowledge, skills, and education necessary for the performance of duties. For achieving the ideal goal of corporate governance, the Board in general shall be disciplined with the following capacity: A Judgement of operation; B. Analytic skill in accounting and finance; C. capacity in corporate management; D. Industry knowledge; E. International market view; F. leadership capacity;
	NO
	YES		V
	Evaluation Item		3.The composition and duties of the Board of Directors (1) Has the Board mapped out its policy of diversity, substantive management objectives and properly pursued the policy and objective?

• 43 -

CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons		(I) Compliant with applicable laws. (II) No significant variations from the principles. (III) No significant variations from the principles�
Implementation Status	Abstract Illustration	G. Decision-making capacity. The Company duly observes the “Regulations Governing the Election of Directors” and “Corporate Governance Best Practice Principles” for assurance of diversity and independence of the Directors. 2. The list of Board members elected by the General Meeting of Shareholders in 2019 indicated that LIN HUEI-JENG, LI,SHIH-HO, LEE YA-JUNG are good in leadership, judgement of operation, and corporate management. WONG CHUNG-CHUN and LEE CHIN-CHANG are expertise in law, CHEN CHI-TAI, ONG CHUN-CHUN and WU YI-CHING are specialized in business and finance. 3. About 37.50% of the Directors who are also employees of the Company at present. Independent Directors accounted for 37.50% and female Directors accounted for 12.5% of the total. In addition, the Company values the equality of genders among the Board members where the objective of female Directors was set at more than 20% of the total. (2) None. (3) Yes, the Company has instituted the regulations governing the evaluation of Board performance and the method of evaluation. Performance evaluation was accomplished by the end of March in each year. (4) Yes, the evaluation of the independence of certified public accountants will
	NO	V
	YES	V V
	Evaluation Item	(2) Has the Company set up other types of functional committees voluntarily in addition to the Remuneration Committee and the Audit Committee according to law? (3) Has the Company set up a performance appraisal method and an assessment method for the Board of Directors, conducted performance appraisal on a regular basis every year, submit the results of performance assessments to the Board of Directors and use them as reference in determining compensation for individual directors, their nomination and additional office term? (4) Does the Company regularly evaluate the independence of its certifying accountants?

• 44 -

CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons			No significant deviation from the principles
Implementation Status	Abstract Illustration	be made before May of each year, and the report on the evaluation of the independence of certified public accountants will also be presented to the Board each year. The certified public accountants retained by the Group have not hold positions as Directors, Supervisors, or are not shareholders of the Company, and have duly observed the Certified Public Accountants Act and Ethic Code of Conduct No. 10.	The Board of the Company has passed the motion for the establishment of the “Corporate Governance Best Practice Principles” on November 7 2018. As mentioned in Article 3-1 of Chapter III, the Finance Department and the Business Administration (Room) Office perform the function of corporate governance on a part-time basis and charged with the duties of corporate governance under the supervision of the function heads. (1) Major function of the corporate governance body: 1. Handle company registration and changes in company registration. 2. Organize Board meetings and Shareholders Meetings, assist the Company in compliance with applicable laws governing the Board and the Shareholders Meeting. 3. Keep and compile the minutes of Board meeting and Shareholders Meeting on record. 4. Provide the Directors with the documented materials for the performance of their duties, and information on the latest development of the operation of the Company so as to assist the
	NO
	YES		V
	Evaluation Item		4.Has the TWSE/TPEx listed company have an adequate number of corporate governance personnel with appropriate qualifications, and appoint a chief corporate governance officer, responsible for corporate governance related matters (including but not limited to providing the directors and supervisors with required information to carry out their business, assisting directors and supervisors with legal compliance, handling corporate registration and change of corporate registration related matters and taking the minutes of board meetings and shareholders' meetings)?

• 45 -

CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons			No significant deviation from the principles	No significant deviation from
Implementation Status	Abstract Illustration	Directors in matters of compliance. (2) Performance of the Corporate Governance Body in 2021: 1. Organized meetings for the Board and related matters, and the compilation of the minutes of Board Meeting on record. 2. Assisted the Directors in continuing education (the state of continuing education of the Directors has been declared at MPOS). 3. Reviewed to assure the Company meet the standard of corporate governance indicators in scoring.	Disclosure of information. The Group has been listed at TWSE and the Emerging Stock Market, and has appointed a spokesman for communication with the stakeholders. A special section on stakeholder relation has also been set up at the official website of the Company and responds to any issues of vital corporate social responsibility to the concern of the stakeholders.	The Company has commissioned a professional investor service agent to handle matters related to the Shareholders Meeting.
	NO
	YES		V	V
	Evaluation Item		5.Has the Company established a communication channel with interested parties (including but not limited to shareholders, employees, customers and suppliers), set up an interested party page on the Company’s website, and responded appropriately to interested parties concerning important corporate social responsibility issues?	6.Does the Company appoint a professional stock agency to handle shareholders’ meeting related

• 46 -

CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons		the principles.	(1) No significant deviation from the principles. (2) No significant deviation from the principles. (3) Effort has been incrementall y made to materialize the Corporate Governance Best Practice Principles.	Effort has been incrementally made to
Implementation Status	Abstract Illustration		(1) The Company has installed its official website with disclosure of financial and business information as well as information on corporate governance. (2) The Company has appointed designated persons to collect and disclose information. The Company has been listed at TWSE and the Emerging Stock Market and has pursued the system of spokesman under as required by law. (3) The Company has made announced as required by law but has not made announcement in advance.	1. The Company holds Labor-Management Meetings as scheduled for proper communication and coordination of both sides. The Company also spares no effort in keeping labor-management harmony and assuring reasonable
	NO		V
	YES		V V	V
	Evaluation Item	affairs?	7.Information disclosure (1) Has the Company set up a website to disclose financial and corporate governance information? (2) Does the Company adopt other information disclosure methods (such as setting up an English website, appointing a dedicated person responsible for the collection and disclosure of company information, implementing the spokesman system, and posting the Company’s corporate briefing process on the website, etc.)? (3) Has the Company publish and report annual financial report within two months after the end of a fiscal year, and publish and report financial reports for the first, second and third quarters as well as its operating status for each month before the specified deadline?	8.Does the Company have any other important information (including but not limited to

• 47 -

CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons		materialize the Corporate Governance Best Practice Principles
Implementation Status	Abstract Illustration	organizational structure of the enterprise and people first management with the setup of an employee mail box to hear the vices of the employees. In addition, the Company values the opinions and concerns for the needs of the employees on the systems and policies of the Company through random sampling for survey so that the employees could have the channels for expression of opinions. Education and training has also been provided for the employees for nurturing a sense of corporate ethics and strengthening the skills at works. The Company observe the laws of the government at all times for the protection of the rights and privileges of the employees for the improvement of common good and prosperity as well as business development in joint effort. All other Group enterprises have practiced the same to provide benefits for the employees. 2. The Company seeks to upgrade the know-how for the prevention of pollution in Taiwan, and has made substantial capital investment to establish an acidic wastes recycling plant as early as in 1994. This practice helps to recycle and reuse resources and protect the environment properly. For long time, the Company has spared no effort in protecting the environment and performs the best of corporate social responsibility with conscience. In addition, the Company has cultivated and maintained positive relation with the local community and established industry-school collaborative education programs jointly with other enterprises in the community to provide favorable environment and opportunity for the students to learn. Group enterprises with production lines also duly observe applicable laws in the aspects of environmental protection, occupational safety, and employee welfare system, and have performed corporate social responsibility whole-heatedly.
	NO
	YES
	Evaluation Item	employees' rights, employee care, investor relations, supplier relationship, rights and interests of interested parties, training for directors and supervisors, V The summary is provided below: i. Employee rights and interests and employee care: The Company attaches great importance to the harmony of labor relations and the welfare and rights of employees. It continuously enhances the staff welfare system and the working environment and its quality, including employee meals, health No major difference 38 IIICorporate Governance Evaluation Item Implementation Status Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons YES NO Abstract Illustration implementation of risk management policies and risk measurement standards, implementation of customer policies, the Company’s purchase of liability insurance for directors and supervisors, etc.)?

• 48 -

CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Implementation Status	Abstract Illustration	3. The Company discloses financial statements and different kinds of information at regular intervals or at any time where necessary in accordance with applicable laws so that the investors could understand the state of operation of the Company. The Group has been listed at TWSE and TPEx and has established the system of spokesman for release of information and explanation in response to the call of the investors. 4. The Company has a history of more than 7 decades, and has been on good terms with the suppliers and customers for long time to allow for stable operation. The Company has also formed the “Chun Yu People Benevolent Association” for the former employees and the retired employees. This association holds speech giving, tourist trips and other benevolent events regularly to maintain ties with the former employees. The Group and its affiliates spare no effort in projecting a positive corporate image which triggers positive interaction internally and externally. 5. In the aspect of continuing education for the Directors and Supervisors, the Company provides information on continuing education at regular intervals or at any time where necessary for meeting actual needs in business operation. Directors and Supervisors who express intent of learning are invited to take part. The Company also voluntarily prepared documented materials pertinent to applicable laws for the convenience of the Directors and Supervisors for saving time. 6. All Group enterprises have instituted various forms of internal control rules and regulations for the management and assessment of risks of all kinds. They exercise internal control in accordance with the plans and take corrective actions addressing to the shortcomings. 7. The major production operation of the Group has made the best of effort in applying for various kinds of accreditation world-wide for the proper
	NO
	YES
	Evaluation Item

• 49 -

CHUN YU WORKS ＆ CO., LTD.

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons			9.Please state the improvements made to the items in the corporate governance evaluation results issued by the Corporate Governance Center of the Taiwan Stock Exchange Co., Ltd., and indicate the enhancement and improvement measures for the items not yet improved: The Company has established the seats for Independent Directors and the Auditing Committee after the election of the new Board by the General Meeting of Shareholders held on 2-16.06.29. Some counts of the defects have been addressed to by proper corrective action, which will help to bolster the evaluation of corporate governance with better result.
Implementation Status	Abstract Illustration	pursuit of different systems, control, and quality inspection to international manufacturing standard and for the protection of the consumers and serving the customers. 8. The Company has taken liability insurance for the protection of the Directors and Supervisors since December 1 2016.
	NO
	YES
	Evaluation Item

• 50 -

CHUN YU WORKS ＆ CO., LTD.

	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
	Independent Director Audit Committee convenor LEE, YA-JUNG An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors. An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors. - Independent Director WU, YI-CHING An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors. An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors. 1 Independent Director LEE, CHIN-CHAN G An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors. An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors. - 2. The function of the Remuneration Committee: (1)Establishment with routine review on the performance evaluation standard of the Directors and Managers, the annual and long-term performance objective and the policies, system, standard and structure of remuneration and disclosure of the content of the performance evaluation standard in the Annual Report. (2)Routine evaluation of the attainment of the Directors and Managers of the Company toward the objective, and determine the content and amount of the remuneration to individual Directors and Managers on the basis of the result of evaluation under the performance evaluation standards.
No. of other listed companies working as remuneration committee member for	-	1	-
Independence Criteria	An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors.	An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors.	An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors.
Professional Qualification and Work Experience	An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors.	An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors.	An Independent Director of the Company. For additional information, refer to p. 17 on disclosure of the professional designation and status of independence of Independent Directors.
Criteria Identity Name	LEE, YA-JUNG	WU, YI-CHING	LEE, CHIN-CHAN G
	Independent Director Audit Committee convenor	Independent Director	Independent Director

• 51 -

CHUN YU WORKS ＆ CO., LTD.

3. Remuneration Committee Operation Status:

• (1) The Company’s Remuneration Committee is composed of three people.

• (2) Current member’s tenure: From June 25, 2019 to June 4, 2022. In 2021 the

Remuneration Committee held four meetings (A), and the member qualifications and attendance are as follows:

		Actual no. of	No. of	Actual attendance
Title	Name	meetings attended (B)	meetings with entrusted attendance	rate (%) (B/A) (Note)	Remarks
Independent Director	LEE, YA-JUNG	4	0	100%	Compensation Committee
					convenor
Independent Director	WU, YI-CHING	4	0	100%
Independent	LEE,	4	0	100%
Director	CHIN-CHANG

A. If the Board of Directors did not adopt or amend the suggestion of the Remuneration Committee, please indicate the date and session number of the board meeting, the contents of the motion, the result of the resolution and the Company’s handling of the suggestion of the Remuneration Committee (if the remuneration passed by the board is better than the suggestion of the Remuneration Committee, please state the difference and the reasons): Nil. B. If any member had objections or reservations about the resolution of the Remuneration Committee and there is a record or a written statement, please indicate the date and session number of the Remuneration Committee meeting, the contents of the motion, all the opinions of the members and how the opinions were handled: Nil.

• 52 -

CHUN YU WORKS ＆ CO., LTD.

		CHUN YU WORKS＆CO	., LTD.
Variation from the Sustainable	Development Best Practice Principles of TWSE Listed and TPEx Listed Companies, and the reason	Will establish on due time.	In progress.
Status of implementation	Abstract Explanation	The Company will institute relevant rules and regulations to meet the needs of actual operation.	The Company has established the “The Sustainable Development Task Force”. This Task Force is headed by the Administration Department and staffed with members from all other related functional units such as environmental protection and occupational safety, finance, personnel administration, and quality assurance. The senior officers of the Company will report to the Board on the status of operation at regular intervals. The job functions and responsibilities of the CSR Task Force: 1. Make and pursue the CSR policy.
	No	V
	Yes		V
	Item of implementation	I.Has the Company built up a governance framework for the advocacy of sustainable development, and established a full-time (part-time) body for the advocacy of sustainable development led by a senior officer with the authorization of the Board and under the supervision of the Board?	II.Has the Company conducted assessment on the risks inherent to the operation environment, social context, and issues of corporate governance under the principle of materiality, and mapped out the risk management policy or strategy? (Note 2)

• 53 -

CHUN YU WORKS ＆ CO., LTD.

		CHUN YU WOR	KS＆CO., LTD.
Variation from the Sustainable	Development Best Practice Principles of TWSE Listed and TPEx Listed Companies, and the reason		(1)No significant difference from the principles. (2)No significant difference from the principles. (3)In progress. (4)No significant difference from the principles.
Status of implementation	Abstract Explanation	2. Review the operation of the CSR management system. 3. Review the objective, strategy and action plan of the CSR policy of the Company, and supervise and track the progress of the action plans and the improvement in performance. 4. Compile the CSR Report.	(1)The Company has been accredited with the ISO14001 & OHSAS 18001 system and has reviewed the impact on the environment and the risks to safety at regular intervals with proper adjustment of the management system. (2)The Company continues to enhance the efficient use of energy such as the recycling and reuse of waste water and acidic wastes. (3)The Company has not yet incorporated climate into ISO risk assessment . (4)The Company keeps track on the statistics of the emission of greenhouse gas, water consumption capacity,
	No		V
	Yes		V V V
	Item of implementation		3. Environmental issues (1) Has the Company established an appropriate environmental management system according to its industrial characteristics? (2) Has the Company made effort in upgrading energy efficiency and using regenerated materials for mitigating the impact on the environment? (3) Is the Company aware of the impact of climate change on its operations, and has it implemented greenhouse gas checking and developed a strategy for reduction of energy consumption and carbon emission as well as greenhouse gas reduction? (4) Has the Company kept statistical data on the

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		CHUN YU WORKS＆	CO., LTD.
				management policies and procedures in accordance with relevant laws and regulations and international human rights conventions? (2) Does the Company formulate and implement reasonable policies of staff welfare (including compensation, vacation and other welfares), and reflect the operating performance or achievement in the compensation of the employees properly? (3) Does the Company provide a safe and healthy working environment for employees and regularly V V labor force and respects the principles of basic human rights of labors internationally recognized thereby established and pursued related management systems and procedure for the protection of the legitimate rights and privileges of the employees and the nondiscriminatory employment policy. (2)The Company has established the Employee Welfare Committee as required by law and implemented the pension fund system, and also gives reward and bonus to the employees in line with the business performance of the Company. the principles. (2)No significant variation from the principles. (3)No significant variation from the principles.
Variation from the Sustainable	Development Best Practice Principles of TWSE Listed and TPEx Listed Companies, and the reason		(1)No significant variation from	the principles. (2)No significant variation from the principles. (3)No significant variation from the principles.
Status of implementation	Abstract Explanation	total weight of solid wastes at regular intervals in the year. The data in detail and related management policies are specified in 7. “Other vital information that helps to understand the pursuit of sustainable development”.	(1)The Company duly observes applicable laws governing	labor force and respects the principles of basic human rights of labors internationally recognized thereby established and pursued related management systems and procedure for the protection of the legitimate rights and privileges of the employees and the nondiscriminatory employment policy. (2)The Company has established the Employee Welfare Committee as required by law and implemented the pension fund system, and also gives reward and bonus to the employees in line with the business performance of the Company.
	No
	Yes		V	V V
	Item of implementation	greenhouse gas emission volume, water consumption capacity and weight of solid wastes and made policies on energy saving and carbon reduction, greenhouse gas reduction, efficient use of water or the management of solid wastes?	4. Social issues (1) Has the Company formulated relevant	management policies and procedures in accordance with relevant laws and regulations and international human rights conventions? (2) Does the Company formulate and implement reasonable policies of staff welfare (including compensation, vacation and other welfares), and reflect the operating performance or achievement in the compensation of the employees properly? (3) Does the Company provide a safe and healthy working environment for employees and regularly

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CHUN YU WORKS ＆ CO., LTD.

		CHUN YU WORKS＆CO., LTD.
Variation from the Sustainable	Development Best Practice Principles of TWSE Listed and TPEx Listed Companies, and the reason	(4)No significant variation from the principles. (5)No significant variation from the principles. (6)No significant variation from the principles.
Status of implementation	Abstract Explanation	(3)For many years, the Company based on the result of assessment of the impact on the environment and risk on safety to set up workplace in conformity to related legal requirements, and provide training on environmental protection, occupational health and safety at regular intervals and at any time where necessary, and provide the employees health inspection. (4)The Company conducts survey on employees of each department for assessing their working capacity at workplace and maps out related plans for training accordingly. (5)The Company markets its products and services in accordance with applicable laws and international standards. The Company does not directly sell to general consumers. The Sale Department of the Company provides post-delivery services and consultation to corporate customers and respond to customer complaints. (6)The Company has made policies for the management of suppliers for purpose of defining the requirements of the Company in business development for assurance of the continued improvement of suppliers (vendors) and avoidance quality problem from product production and delivery. This measure allows for the offering of first class
	No
	Yes	V V V
	Item of implementation	carry out safety and health education for employees? (4) Has the Company developed an effective training program for employees? (5) Regarding customer health and safety, customer privacy, marketing and labeling of product and services, has the Company complied with applicable legal rules and international standards and established the policies for the protection of consumers or customer rights and procedure for complaints? (6) Did the Company formulate supplier management policies and require suppliers to follow relevant standards on environmental protection, occupational safety and health, or labor rights, as well as specify the implementation process?

• 56 -

CHUN YU WORKS ＆ CO., LTD.

		CHUN YU WORKS＆C	O., LTD.
Variation from the Sustainable	Development Best Practice Principles of TWSE Listed and TPEx Listed Companies, and the reason		The Company will intensify the disclosure of its sustainable development in line with the establishment with its internal code.
Status of implementation	Abstract Explanation	service with minimum cost. Related rules and regulations governing the management of suppliers have been elaborated point by point. If specific supplier acts in defiance of the corporate social responsibility policy of the Company, the Company may terminate the cooperation relation at any time. For the preservation of public interest, the Company explicitly stated in the agreements with the suppliers of its right to terminate the agreements at any time and claim for the damage in case of cheating of the suppliers.	The Company complies its CSR Report in 2017 at the moment.
	No		V
	Yes
	Item of implementation		5.Did the Company follow internationally recognized guidelines in preparing and publishing reports; i.e., Sustainability Report to disclose non-financial information about the Company? Did the Company hire a third-party verification or assurance provider for such reports?

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CHUN YU WORKS ＆ CO., LTD.

• (7) If the Company has instituted the Corporate Governance Best Practice Principles and related rules and regulations, disclose the method for inquiry:

• The Corporate Governance Best Practice Principles are disclosed at the official website of the ，

• Company (at https://www.chunyu.com.tw/TW/index.aspx path: shareholders service/corporate governance/important rules and regulations ）

• (8) Other important information to enhance the understanding of the corporate governance of the Company:

• 1.Compliance with the internal control system, constant and effective implementation, enforcement of internal control and self-inspection, enhancement of audit and reporting to the board of directors for directors to understand and get aware of the situations for supervision.

• 2.Enforcement of the spokesperson system, enabling information transparency and full disclosure of related material information to achieve information symmetry for shareholders.

• 3.Constant arrangement of continuing education courses for directors to achieve corporate governance from directors.

• 4.To promote business integrity and ethics to directors and optimize corporate governance, the board of directors has established, passed, and implemented the “Code of Ethical Conduct.”

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CHUN YU WORKS ＆ CO., LTD.

• (9) Implementation of the internal control system

1. Internal Control Statement

CHUN YU WORKS AND CO., LTD

Statement of Internal Control System

Date:2022.03.10

With respect to the results of the 2021 self-assessment of the internal control system, we hereby declare as follows:

• I. We acknowledge and understand that it is the responsibility of our Board of Directors and officers to establish, implement and maintain an internal control system and we have already established such a system. The purpose is to fairly ensure the effect and efficiency of operations (including profitability, performance and security of assets); the reliability, timeliness and transparency of financial reporting; and the achievement of legal compliance.

• II. There is a limitation inherent to each internal control system, however perfect the design is. As such, an effective internal control system can only fairly ensure the achievement of the aforementioned goals. Furthermore, the effectiveness of an internal control system may vary as the macro environment and situation change. By equipping our internal control system with a self-monitoring mechanism, we can take immediate corrective actions against any defects once identified.

• III. Referring to the criteria for determining the effectiveness of an internal control system as specified in the “Regulations Governing Establishment of Internal Control Systems by Public Companies” (hereinafter referred to as the “Criteria”), we judge the effectiveness of design and implementation of our internal audit system. With respect to the management control process, the Criteria divide an internal control system into five elements: a) control environment, b) risk evaluation, c) control operation, d) information and communication and e) monitoring. Each element in turn contains certain audit items, and the Criteria shall be referred to for details.

• IV. We have assessed the effectiveness of design and implementation of our internal control system with such criteria.

• V. With respect to the findings from the above assessment, we hold that the design and implementation of our internal control system (including the supervision and management of subsidiaries) as of December 31, 2021 were effective to achieve the above goals in terms of the effect and efficiency of operations; the reliability, timeliness, and transparency of financial reporting; and the achievement of legal compliance.

• VI. This statement shall form an integral part of the Annual Report and the prospectus of this Company and will be disclosed to the public. If there is any fraud, concealment or unlawful practice found in the above contents, we shall be liable for the legal consequences under Article 20, Article 32, Article 171 and Article 174 of the Securities and Exchange Act.

• This statement of declaration was approved unanimously by the Board Meeting on March 10, 2022 with the presence of eight directors attending the meeting.

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS AND CO., LTD.

Chairman: LIN HUEI-JENG

General Manage: TSAI TUNG-SEN

1. If a CPA has been commissioned to conduct special audit of the internal control system, disclose the Auditor’s Report: Nil.

2. (10) The punishment to the Company and its employees in accordance with the law, the Company’s punishment to its employees for violation of the provisions of its internal control system, the major defects and the improvements made in the latest year and as of the date of publication of the annual report: Nil.

3. (11) Important resolutions of the shareholders’ meeting and the board meetings in the latest year and as of the date of publication of the annual report

2021 Until the date of report publication in 2022 1. Passed the chief audit appointment proposal 1. Passed the proposal on reward for employees, Status: Announcement was completed according to the directors, and supervisors in 2021. regulations. Status: submitted for report to the 2022 AGM.

1. Investment increase in subsidiary Chun Yu Bio-Tech 2. Passed the 2021 financial statements. Status: Completed. Status: submitted for ratification to the 2022 AGM.

2. Investment increase in subsidiary Chun Bang Precision 3. Passed the proposal for the distribution of earnings Co., Ltd. for the sencond half of 2021.

Status: Completed. Status: Released (Cash dividend of 1 per share) 4. Passed the proposal on reward for employees, directors, 4. Passed the motion of capitalization of retained and supervisors in 2020. earnings of the Company into new shares. Status: submitted for report to the 2020 AGM. State of execution: Present to the regular session of 5. Passed the 2020 financial statements. the 2022 Shareholders Meeting for discussion.

Status: submitted for ratification to the 2020 AGM. 5. Passed the “Statement of Internal Control” in 2021.

1. Passed the 2020 earnings distribution proposal 2021. Status: submitted for ratification to the 2020 AGM. Status: Reported according to the regulations.6. (Cash dividend of 0.6 per share) 6. Election of the Directors of the Company. 7. Passed the “Statement of Internal Control.” Status: Announcement was completed according to Status: Reported according to the regulations. the regulations. 8. Passed the amendment to part of the “Rules of Procedure for the Meetings of Shareholders” Status: Submitted for discussion to the 2020 AGM.

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CHUN YU WORKS ＆ CO., LTD.

2021

Until the date of report publication in 2022

9.Passed the Consolidated Financial Statements of 2021 Q1. Status: Announcement was completed according to the regulations. 10.Passed the motion for establishment of the position of Corporate Governance Officer. Status: Announcement was completed according to the regulations. 11.Passed the Consolidated Financial Statements of 2021 Q2. Status: Announcement was completed according to the regulations. 12. Passed the motion of offering the 1st issue of secured corporate bonds in 2021. Status: Completed. 13. Passed the motion of offering The 1st, 2nd and 3rd ecured convertible bond. Status: Completed. 14. Passed the Consolidated Financial Statements of 2021 Q3. Status: Announcement was completed according to the regulations. 15. Passed the proposal for the distribution of earnings for the first half of 2021. Status: Released (Cash dividend of 0.5 per share) 16. Passed the making of endorsements/guarantees for subsidiaries. Status: Implemented accordingto the regulations.

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CHUN YU WORKS ＆ CO., LTD.

• (12) If the directors or supervisors have different opinions about important resolutions adopted by the board in the latest year and as of the date of publication of the annual report, and there are records or written statements: Nil.

• (13) Table showing the relief of the Chairman, General Manager, Accounting Manager, Chief Financial Officer, Chief Internal Auditor, Chief Governance Officer and Chief R&D Officer from office in the previous year to the date this report was printed: Nil.

4.Information of CPA audit fee

					Unit: NT$thousand	Unit: NT$thousand
Accounting firm	CPA name	Audit period	Audit fee	Non-audit fee (Note)	Total	Remarks
Pricewaterhouse Coopers	Lin, Tzu-Yu Liu, Tzu-Meng	2021/1/1~ 2021/12/31	5,415	3,422	8,837

Note: special audit on internal control amounted to NT$1,400,000, tax audit and certification amounted to NT$1,020,000, service for the business in Ecuador amounted to NT$170,000, translation of financial statements amounted to NT$400,000, transfer pricing report amounted to NT$330,000, Annual Report review amounted to NT$30,000, con-current business owner certification amounted to NT$30, declaration and audit of full-time employee payroll amounted to NT$30,000, business registration amounted to NT$12,000.

• (1) If there is a change of the accounting firm, and in the year of the change the audit fee is lower than that in the previous year, please disclose the audit fees before and after the change and the reasons: Nil.

• (2) If the audit fee is reduced by more than 10% over that in the previous year, please disclose the amount of audit fee reduced, the proportion and reason for the reduction: Nil.

• 5.Change of Accountants: Nil.

• 6.The Employment of the Company’s Chairman, General Manager, Financial or Accounting Manager with the Firm of the Auditing CPA or Its Affiliated Businesses in the Past Year: Nil.

• 7.Evaluation of the independence of the CPAs:

The Auditing Committee of the Company assesses the independence of the CPAs with the following items at regular intervals and reports to the Board of the findings:

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CHUN YU WORKS ＆ CO., LTD.

• (1.) Declaration of the Independence of CPAs:

PWC

Letter

Attention: CHUN YU WORKS AND CO., LTD. Date: April 7, 2022. Reference No.: Zi-Hui-Zong-Zi No. 21019017

Subject: At the request of your Company and subsidiaries (hereinafter called the “Group”), this Firm assessed the integrity of the Group with respect to Article 47 of the Certified Public Accountant Act and Code of Ethics for Professional Accountants Bulletin NO. 10 “Integrity, Objectivity, and Independence” and published the results and statement as stated in the Description. Please be advised.

Description

• 1.With respect to Article 4 of the Code of Ethics for Professional Accountants Bulletin NO. 10 (hereinafter called the “Accountant Bulletin No. 10”), when auditing or reviewing financial statements, “Apart from maintaining substantial independence, formalist independence is relatively more important. Hence, the members, other collaborative practicing CPAs, firms, and the firms’ associates (hereinafter called the “Related Party to the Members and Firms of the Audit Service Team”) shall maintain independency toward their customers.” Article 7 of the Accountant Bulletin No. 10 also stipulates, “Independence may be affected by own interests, self-assessment, defense, familiarity, and extorsion.” Hence, this Firm hereby announces that our independence is unaffected by the said facts with respect to each potential factor affecting independence in Article 7.

• 2.Independence is unaffected by own interests

• This Firm hereby announces that the “Related Party to the Members and Firms of the Audit Service Team are free of (1) any direct and indirect financial interest; (2) any close business relationships; (3) potential employment relationships; and (4) financing or guarantee behaviors with the Group or its directors and supervisors.

• 3.Independence is unaffected by self-assessment

This Firm hereby announces that the Members and Firms of the Audit Service Team are not or were not within the last two years a director, supervisor, or officer of the Group or involved in any duty that will substantially affect the audit.

• 4.Independence is unaffected by defense

This Firm hereby announces that the Members and Firms of the Audit Service Team do not defend the standing or opinion for Group or represent the Group in conflict mediation with a third party.

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CHUN YU WORKS ＆ CO., LTD.

5.Independence is unaffected by familiarity

This Firm hereby announces that the Members and Firms of the Audit Service Team (1) are free of any relationship with the Group’s directors, supervisors, officers, or any staff having significant influence on the audit; (2) do not have partners who are directors, supervisors, officers, or any staff having significant influence on the audit of the Group within one year after resignation from the firm; and (3) do not accept valuable offerings or gifts from the Group or its directors, supervisors, or officers.

• 6.Independence is unaffected by extorsion

• This Firm hereby announces that the Members and Firms of the Audit Service Team do not receive of feel the improper requests regarding accounting policy selection or financial statement discloses from the Group’s management; or the request for reducing the necessary auditing work by lowering the accounting fee to affect the objectivity and professionalism of practice.

In addition to reviewing the independence of customers with respect to this Firm’s related operating procedures, this Firm has exercised the due professional care as a public accountant firm when making the statement as above.

Annexes:

• 1.List of the Members of the Audit Service Team as stated in Accountant Bulletin No. 10.

• 2.List of CPAs Resigned from the PWC in the Most Recent Year.

• 3.List of Associates of the PWC.

• 4.List of Non-Audit Services Provided by the PWC and Associates for CHUN YU WORKS AND CO., LTD.

PwC Taiwan

Chi-Yu LIN

CPA

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CHUN YU WORKS ＆ CO., LTD.

• (2.) The audit and non-audit services rendered by the CPAs have been reviewed by the Auditing Committee in advance for assurance no influence of the non-audit service on the audit findings.

• (3.) No single CPA has provided audit and certification service for more than 7 consecutive years.

• (4.) Evaluation of the independence of CPAs has been conducted annually on the basis of the CPA Independence Evaluation Sheet:

CHUN YU WORKS AND CO., LTD.

CPA Independency Evaluation Sheet

Year of financial statements: 2021 Name of firm: PricewaterhouseCoopers

==> picture [476 x 535] intentionally omitted <==

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

CPA: Lin, Tzu-Yu 、 Liu, Tzu-Meng Assessment date: 2022.05.12
Evaluation Item Yes Mo
1. CPAs are free of any direct and indirect financial interest with the V
Company.
2. CPAs are not in any borrowing or guarantee arrangement with the V
Company and directors/supervisors of the company.
3. CPAs remain unaffected by the risk of customer loss while performing V
audits.
4. CPAs are not in a close business or potential employment relationship V
with the company.
5. CPAs do not charge any contingent fee relating to the audit. V
6. CPAs or members of the audit team are not or were not within the last V
two years a director, supervisor or officer of this Company or involved
in any duty that will substantially affect the audit.
7. The non-audit service provided by CPAs does not contain important V
items with direct impact on the audit.
8. CPAs do not promote or sell the stock issued by this Company or other V
securities.
9. CPAs do not defend for this Company or represent this Company in V
conflict mediation with a third party.
10.CPAs are free of any relationship with the Company’s directors, V
supervisors, officers, or any staff having significant influence on the
----- End of picture text -----

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CHUN YU WORKS ＆ CO., LTD.

audit.
11.CPAs do not have partners who are directors, supervisors, officers, or any staff having significant influence on the audit of this Company within one year after resignation from the firm.	V
12.CPAs do not undertake regular work duty at the Company or receive fixed salary from the Company.	V
13.CPAs are not involved in the management of this Company’s decision-making.	V
14.CPAs are reappointed at least once every 7 years as of the most recent audit.	V
15.CPAs are free of penalties and occurrences that may compromise independence so far.	V

Evaluation results:■ Comply with / □Not comply with CPA independcy.

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CHUN YU WORKS ＆ CO., LTD.

8.Equity transfer or pledge under lien by the Directors, Supervisors, Managers, and shareholders holding more than 10% of the outstanding shares in the previous year to the date this report was printed:

(1) Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

Title	Name	2021	2021	April 23,2022	April 23,2022
		Shareholding Increase/ (Decrease)	Pledged share Increase/ (Decrease)	Shareholding Increase/ (Decrease)	Pledged share Increase/ (Decrease)
Chairman and CEO	TAIWAN STEEL GROUP HOLDING COMPANY.	-	-	-	-
	Representative: LIN HUEI-JENG	-	-	-	-
Vice Chairman	BAI JIA YUAN INVESTMENT Co.,Ltd	-	(10,000,000)	-	-
	Representative: CHEN,CHI-TAI	-	-	-	-
Director	LEE, SHIH-HO	-	-	-	-
Director	TAIWAN STEEL GROUP HOLDING COMPANY.	-	-	-	-
	Representative: WANG CHIUNG FEN	-	-	-	-
Director	BAI JIA YUAN INVESTMENT Co.,Ltd	-	(10,000,000)	-	-
	Representative: WONG,CHUNG-CHUN	-	-	-	-
Managers	TSAI TUNG-SEN	-	-	-	-
	CHEN,JYUN-LIANG	-	-	-	-
	CHOU,BO-WEI	-	-	-	-
	CHEN,SI-YU	-	-	-	-
	LIAO,JIN-YI	-	-	-	-
Accounting Manager	FANG PING-TIEN	-	-	-	-

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
Remarks
Company name/name and relationship of related parties, spouse, or relatives in the second degree to top ten shareholders. (Note3)	Relationship	Same representative	-	Same representative	Director/General Manager	Director	Supervisor	Director/General Manager	Relatives in the second degree
	Name	Chun Yu Investment (Shares) Company	-	BAI JIA YUAN INVESTMENT Co., Ltd	CHANG, CHING-CHI	CHEN, TSUNG-HSIN	HUANG, LI-RONG	YI TAI SHEN CO., LTD	CHANG, YU-CHI
Shareholding in other people’s names	Shareholding %	- -	- -	- -	- -			-
	Shareholding	- -	- -	- -	- -			-
Shareholdings of the spouse and minor children	Shareholding %	- -	- -	- -	- -			-
	Shareholding	- -	- -	- -	- -			-
Own shareholding	Shareholding %	27.87% -	9.28% -	7.75% -	4.89% 0.08%			2.37%
	Shareholding	80,209,000 -	26,717,000 -	22,314,450 -	14,086,000 226,000			6,830,000
Name (Note1)		BAI JIA YUAN INVESTMENT Co., Ltd Representative: CHEN, CHI-TAI	Chin Chi Fu Asset Management Co., Ltd Representative: WANG CHIUNG FEN	Chun Yu Investment (Shares) Company Representative: CHEN, CHI-TAI	YI TAI SHEN CO., LTD Representative: WANG, CHANG-PING			CHANG, CHING-CHI

• 68 -

CHUN YU WORKS ＆ CO., LTD.

										CHUN YU WORK	S＆CO.	, LTD.
CHANG, relatives in the	CHANG, YU-CHI 6,289,000 2.19% - - - - CHING-CHI second degree	CHEN, TSUNG-HSIN 3,900,000 1.36% - - - - YI TAI SHEN CO., LTD Director	LEE, SHIH-HO 3,767,998 1.31% 880,595 0.31% - - - -	YI TAI SHEN CO., Supervisor	LTD	HUANG, LI-RONG 3,728,000 1.30% - - - - Sheng shang Investment Chairman	(Shares)	Company	Sheng shang Investment (Shares) Company 3,690,000 1.28% - - - - HUANG, LI-RONG Chairman.	10. Total comprehensive shareholding ratio for the number of shares held by the Company, the Company's directors, managers and	the Company directly or indirectly controlled by the Company in the same investment business	April 16,2022 Unit: thousand share; %	Investment by directors,	Re-invested businesses The Company’s investment supervisors, managers or directly Total investment	or indirectly controlled businesses	Shareholding Shareholding % Shareholding Shareholding % Shareholding Shareholding %	CHUN ZU MACHINERY	INDUSTRY CO., LTD. 28,821,939 47.81% 163,093 0.27% 28,985,032 48.08%	Note: The investment of the Company based on the equity method
										- 69 -

CHUN YU WORKS ＆ CO., LTD.

									CH	UN	YU	WO	RKS	＆	CO.	, LT	D.
Remarks	Others															77.10.22(77) Tai-Tsai-Tzeng(1)No.09217	78.08.29(78) Tai-Tsai-Tzeng(1)No.01769	79.04.04(79) Tai-Tsai-Tzeng(1)No.00643	79.10.30(79) Tai-Tsai-Tzeng(1)No.02928	80.10.07(80)Tai-Tsai-Tzeng(1)No.02901	81.04.18(81) Tai-Tsai-Tzeng(1)No.00737	82.10.16(82) Tai-Tsai-Tzeng(1)No.36680	83.11.03(83) Tai-Tsai-Tzeng(1)No.40896	84.06.29(84) Tai-Tsai-Tzeng(1)No.38010	85.07.20(85) Tai-Tsai-Tzeng(1)No.40902	86.07.03(86) Tai-Tsai-Tzeng(1)No.52461	87.07.10(87) Tai-Tsai-Tzeng(1)No.58505	88.07.12(88) Tai-Tsai-Tzeng(1)No.63130
	Capital Increased by Assets Other than Cash		Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
	Source of Capital	Additional paid-in capital									7,535,250		24,000,000				11,169,600			53,856,800	92,902,980	147,000,000	141,120,000	136,896,000	191,654,400	236,118,230	293,646,000	109,637,040
		Increase of earnings			3,000,000	2,100,000	3,465,000	7,969,500	18,750,000	20,250,000	16,026,750	19,938,000	12,000,000	8,100,000		78,400,000	74,750,400		38,568,000	26,928,400	30,967,660	49,000,000	94,080,000	68,448,000	38,330,880	64,402,490		27,406,960
		Capital increase	3,000,000	15,000,000				2,965,500					6,000,000	6,900,000	19,000,000	12,000,000	13,360,000	114,320,000			236,776,160		300,000,000
Paid-in Capital		Amount	3,000,000	18,000,000	21,000,000	23,100,000	26,565,000	37,500,000	56,250,000	76,500,000	100,062,000	120,000,000	162,000,000	177,000,000	196,000,000	286,400,000	385,680,000	500,000,000	538,568,000	619,353,200	980,000,000	1,176,000,000	1,711,200,000	1,916,544,000	2,146,529,280	2,477,050,000	2,740,696,000	2,877,740,000
		Shares	300,000	1,800,000	2,100,000	2,300,000	2,656,500	3,750,000	5,625,000	7,650,000	10,006,200	12,000,000	16,200,000	17,700,000	19,600,000	28,640,000	38,568,000	50,000,000	53,856,800	61,935,320	98,000,000	117,600,000	171,120,000	191,654,400	214,652,928	247,705,000	274,069,600	287,774,000
Approved Capital		Amount	3,000,000	18,000,000	21,000,000	23,100,000	26,565,000	37,500,000	56,250,000	76,500,000	100,062,000	120,000,000	162,000,000	177,000,000	196,000,000	286,400,000	385,680,000	500,000,000	538,568,000	619,353,200	980,000,000	1,176,000,000	1,711,200,000	1,916,544,000	2,146,529,280	2,477,050,000	2,740,696,000	2,877,740,000
		Shares	300,000	1,800,000	2,100,000	2,300,000	2,656,500	3,750,000	5,625,000	7,650,000	10,006,200	12,000,000	16,200,000	17,700,000	19,600,000	28,640,000	38,568,000	50,000,000	53,856,800	61,935,320	98,000,000	117,600,000	171,120,000	191,654,400	214,652,928	247,705,000	274,069,600	287,774,000
	Par Value (NT$		10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10	10
	Year/ Month		1965/03	1966/03	1967/04	1970/05	1971/05	1973/05	1974/07	1975/07	1979/07	1980/07	1985/06	1986/06	1987/06	1988/11	1989/09	1990/05	1990/05	1991/12	1982/08	1983/12	1985/01	1985/07	1986/07	1987/07	1988/08	1989/07

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CHUN YU WORKS ＆ CO., LTD.

(2) Share Type

2)Share Type
Share Type	Authorized Capital			Remarks
	Issued Shares(Note)	Un-issued Shares	Total
Common Stock	287,774,000	104,295,600	392,069,600

Note: Common shares listed for trading at TWSE.

(3) Status of Shareholders

April 23 2022

					April 23 2022
Shareholder structure Holding	Government Agencies	Other Juridical Persons	Domestic Natural Persons	Foreign Institutions and Foreigners	Total
Number	0	43	26,123	63	26,229
Shareholding	0	154,473,608	126,761,539	6,538,853	287,774,000
%	0%	53.68%	44.04%	2.28%	100%

(4) Shareholding Distribution Status

Face value NT$10 per share

4)Shareholding Distribution Status	4)Shareholding Distribution Status	4)Shareholding Distribution Status	4)Shareholding Distribution Status
Face value NT$10per share April 23 2022
ShareholdingTiers	No.,of Shareholders	Shareholding	%
1 to 999	16,352	1,604,587	0.56%
1,000 to 5,000	8,212	15,919,792	5.53%
5,001 to 10,000	849	6,738,181	2.34%
10,001 to 15,000	216	2,729,637	0.95%
15,001 to 20,000	172	3,187,819	1.11%
20,001 to 30,000	137	3,502,742	1.22%
30,001 to 40,000	49	1,734,096	0.60%
40,001 to 50,000	27	1,254,926	0.44%
50,001 to 100,000	71	5,138,945	1.79%
100,001to 200,000	36	5,181,330	1.80%
200,001 to 400,000	39	11,495,216	3.99%
400,001 to 600,000	22	10,667,086	3.71%
600,001 to 800,000	10	7,130,500	2.48%
800,001 to 1,000,000	6	5,215,971	1.81%
1,000,001 or more	31	206,273,172	71.67%
Total	26,229	287,774,000	100.00%

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CHUN YU WORKS ＆ CO., LTD.

(5) Major Shareholders

)Major Shareholders
Shares Name	Shareholding	%
BAI JIA YUAN INVESTMENT Co., Ltd Chin Chi Fu Asset Management Co., Ltd Chun Yu Investment (Shares) Company YI TAI SHEN CO., LTD CHANG, CHING-CHI CHANG, YU-CHI CHEN, TSUNG-HSIN LEE, SHIH-HO LIN, DENG-HAI HUANG, LI-RONG	80,209,000 26,717,000 22,314,450 14,086,000 6,830,000 6,289,000 3,900,000 3,767,998 3,728,000 3,690,000	27.87% 9.28% 7.75% 4.89% 2.37% 2.19% 1.36% 1.31% 1.30% 1.28%

(6) Market price, net value, earnings, dividend per share and related information over the last 2 years

years
Item	Year		2020	2021	Current year as of March 31,2022
Market price per share	Highest		22.60	42.50	33.50
	Lowest		15.60	17.30	28.35
	Average		17.43	27.50	30.66
Net worth per share	Before distribution		13.20	14.86	15.51
	After distribution		12.60	12.86	-
Earnings per share	Weighted average number of shares		263,944	264,685	265,460
	Earningsper share		0.75	2.81	0.57
Dividend per share	Cash dividend		0.60	1.5	-
	Bonus shares	-	-	0.5(Note)	-
		-	-	-	-
	Accumulated undistributed dividends		-	-	-
Investment return analysis	Price / Earnings ratio		23.24	9.79	-
	Price / Dividend ratio		29.05	18.33	-
	Cash dividend yield rate		3.44%	5.45%	-

Note: The proposal for distribution of earnings in 2021 has been passed by the Board, the allotment of stock dividends is pending the resolution of the 111th Annual General Meeting of Shareholders.

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CHUN YU WORKS ＆ CO., LTD.

• (7) The dividend policy of the Company and the pursuit of the policy

• (I) Dividend policy:

• i. The Company may proceed to pay out its earnings or appropriate for covering loss carried forward after the end of each semi-annual fiscal period. The Company shall, at the time of paying out earnings, estimate and retain for the payment of applicable taxes, covering loss carried forward, and for legal reserve. The appropriation for legal reserve is no longer necessary if the amount is equivalent to the paid-in capital of the Company. If earnings is paid in cash, the resolution of the Board will be necessary. If earnings is paid by issuing new shares, the resolution of the General Meeting of Shareholders will be necessary.

The Company shall appropriate its earnings after account settlement for each fiscal year for the payment of applicable taxes and covering loss carried forward, followed by the appropriation of 10% as legal reserve and other reversals as required, or as special reserve. The undistributed earnings accumulated in the previous period shall be pooled up with the remainder of the earnings of current period as distributable income, which will be paid at the proposal of the Board and the resolution of the General Meeting of Shareholders.

Our dividend policy is made taking into account the earnings, funds required for current and future development, and the interests of shareholders. The dividends will not be lower than 50% of the distributable earnings, with cash dividends not lower than 50% of the total dividends. However, the board of directors any apply for adjustment to the AGM in response to changes in the industrial environment or the needs of business operations.

The dividend policy of the Company was made on the basis of its earnings and in consideration of the capital requirement for development at present and in the future, and also the interest of the shareholders. Cash dividend payable to the shareholders shall not fall below 50% of the total dividend for payment. In the event of changes in the industry environment or there is a need for corporate planning, the Board shall request the General Meeting of Shareholders for proper adjustment.

• ii. Legal reserve shall be utilized only for covering loss of the Company carried forward and paid out as new shares or cash dividend to the shareholders in accordance with the proportions of their shareholding. If new shares or cash was paid, only the portion of the legal reserve in excess of 25% of the amount of paid-in capital may be utilized for such purpose.

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CHUN YU WORKS ＆ CO., LTD.

• (II)The proposal for distribution of dividend to be resolved in this General Meeting of Shareholders:

• The 2021 earnings distribution proposal was approved at the board meeting on March 10, 2021. The amount of cash dividend paid NT$0.6 per share and stock dividends of NT$0.5 per share, pending resolution of shareholders meeting.

The chairperson is authorized to set the ex-dividends date and related matters.

• (III) No significant change in the dividend policy of the Company is anticipated.

• (8) The influence of paying stock dividend as discussed in this General Meeting of Shareholders on the operation performance and earnings per share of the Company: Nil.

• (9) Bonuses of Employees, Directors and Supervisors:

• (I)The percentage or scope of remunerations to the employees and the Directors as stated in the Articles of Incorporation:

• According to Article 39 of the Articles of Incorporation, the Company shall appropriate 2% of its earnings, where applicable, as remuneration to the employees, followed by the appropriation of no more than 2% as remuneration to the Directors. However, the

• Company shall appropriate for covering loss carried forward, where applicable.

• (II) The accounting of the difference between the estimation of the amount of remuneration to the employees, Directors and Supervisors and the basis of estimate, the basis for the payment of stock as remuneration to the employees and the actual amount of payment: In the event of discrepancy between the estimated amount and the actual amount of payment, the difference will be treated under change in accounting estimate and entered in book as adjustment of the year of payment.

• (III) Remuneration as resolved by the Board:

• i. Amount of reward for employees, directors and supervisors in cash or stock: The proposed amount of reward for employees for 2021 is NT$16,981,000 all payable in cash. The proposed amount of reward for directors for 2021 is NT$16,981,000.

• ii. The proportion of the amount of reward for employees distributed in stock in the net profit after tax this year and in the total amount of rewards for employees: NA.

• (IV)When there is a difference in the actual status of reward (including number of shares, amount and stock price) distributed to employees, directors, and supervisors in the previous year (2020), state the amount, causes, and settlement of such difference: With respect to the board resolution, the reward for both employees and directors were NT$$4,074,000, consistent with the amout ratified in the 2020 financial statements.

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CHUN YU WORKS ＆ CO., LTD.

(V)Status of stock buyback: NA

2. The issuance of corporate bonds (including overseas bonds):

Unit: NT$

				Unit: NT$
Tranche/Category	The 1st secured corporate bonds in 2021	The 1st, the domestic secured convertible bond	The 2nd domestic secured convertible bond	The 3rd domestic secured convertible bond
Date of Issuance	October 15, 2021	March 25, 2022	March 25, 2022	March 25, 2022
Face Value	1,000,000	100,000	100,000	100,000
Place of issuance and exchange	R.O.C	R.O.C	R.O.C	R.O.C
Issue Price	Issued at full face value	111.31% of the face value	111.51% of the face value	111.25% of the face value
Total Issuance Amount	3,000,000,000	700,000,000	500,000,000	400,000,000
Coupon Rate	(Fixed Rate)0.65%	0%	0%	0%
Duration	7 years，expiry date： October 15, 2028	3 years，expiry date： March 25, 2025	3 years，expiry date： March 25, 2025	3 years，expiry date： March 25, 2025
Corporate guarantors	First Commercial Bank Co., Ltd.	Chang Hwa Commercial Bank Co., Ltd.	Hua Nan Commercial Bank Co., Ltd.	The Shanghai Commercial & Savings Bank Ltd.
Trustee	Bank SinoPac	Bank SinoPac	Bank SinoPac	Bank SinoPac
Underwriter	First Securities Inc.	IBF Securities Co., Ltd.	IBF Securities Co., Ltd.	IBF Securities Co., Ltd.
Lawyer	Dinghe Law Firm	Hanchen law firm	Hanchen law firm	Hanchen law firm
CPAs	Pricewaterhouse- Coopers	Pricewaterhouse- Coopers	Pricewaterhouse- Coopers	Pricewaterhouse- Coopers
Principal Payment	Simple interest from at coupon rate from the day of offering at the calculated and payable annually. Repayment of principal and payment of interest at one time at maturity.	In accordance with Article 6 of the Regulations Governing the Issuance and Conversion of the Company's 1rst Domestic Secured Convertible Bonds	In accordance with Article 6 of the Regulations Governing the Issuance and Conversion of the Company's 2nd Domestic Secured Convertible Bonds	In accordance with Article 6 of the Regulations Governing the Issuance and Conversion of the Company's 3rd Domestic Secured Convertible Bonds
Outstandingbalance	3,000,000,000	700,000,000	500,000,000	400,000,000
Terms and conditions for early redemption or repayment	NA	In accordance with Article 17 and 18 of the Regulations Governing the Issuance and	In accordance with Article 17 and 18 of the Regulations Governing the Issuance and	In accordance with Article 17 and 18 of the Regulations Governing the Issuance and

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CHUN YU WORKS ＆ CO., LTD.

		C	HUN YU WORKS＆CO., L	TD.
			Conversion of the Company's 1rst Domestic Secured Convertible Bonds	Conversion of the Company's 2nd Domestic Secured Convertible Bonds	Conversion of the Company's 3rd Domestic Secured Convertible Bonds
Restrictive clauses		NA	NA	NA	NA
Name of credit rating agency, dates of rating, and ratings awarded		NA	NA	NA	NA
Attached with other rights	Amount of common stock, GDR/ADR or other securities already converted until the date of publication of the annual report (swapped or subscribed for)	NA	NA	NA	NA
	Regulations for Issuance and Conversion (Swap or Subscription)	NA	In accordance with the Regulations Governing the Issuance and Conversion of the Company's 1rst Domestic Secured Convertible Bonds	In accordance with the Regulations Governing the Issuance and Conversion of the Company's 2nd Domestic Secured Convertible Bonds	In accordance with the Regulations Governing the Issuance and Conversion of the Company's 3rd Domestic Secured Convertible Bonds
Status of potential dilution of equity by the Regulations for Issuance and Conversion, Swap or Subscription, and the issuing terms and conditions, and impact thereof on the existing shareholders’ equity.		NA	No significant influence so far.	No significant influence so far.	No significant influence so far.
Name of custody institute		NA	NA	NA	NA

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CHUN YU WORKS ＆ CO., LTD.

Information on convertible bonds:

CHUNYU 1

CHUNYU 1
Tranche/Category		The 1st,the domestic secured convertible bond
Item \ Year		2021	Currentyear as of April 30,2022
Market value of convertible bonds	Highest	Offered on March 25 2022. Not applicable.	108.80
	Minimum		108
	Average		108.22
Conversionprice			$36.20
Issue (transaction) date and conversionprice at the time of issue			March 25, 2022/ $37.50
Fulfillment of conversion obligations			Offeringnew shares

CHUNYU2

CHUNYU2
Tranche/Category
Item \ Year			Currentyear as of April 30,2022
Market value of convertible bonds	Highest	Offered on March 25 2022. Not applicable.	108.90
	Minimum		108
	Average		108.15
Conversionprice			$36.20
Issue (transaction) date and conversionprice at the time of issue			March 25, 2022/ $37.50
Fulfillment of conversion obligations			Offeringnew shares

CHUNYU3

CHUNYU3
Tranche/Category		The 3rd domestic secured convertible bond
Item \ Year		2021	Currentyear as of April 30,2022
Market value of convertible bonds	Highest	Offered on March 25 2022. Not applicable.	108.40
	Minimum		108.15
	Average		108.27
Conversionprice			$36.20
Issue (transaction) conversionprice at the	date and time of issue		March 25, 2022/ $37.50
Fulfillment of conversion obligations			Offeringnew shares

1. Preferred Shares: Nil.

2. Overseas Depository Receipts: Nil.

3. 77 -

CHUN YU WORKS ＆ CO., LTD.

5. Employee Stock Options: Nil.

• 6.Issuance of New Shares for Merger, Acquisition or Exchange of Other Companies’ Shares: Nil.

• Financing Plans and Implementation: Nil.

V. Operations Profile

1.Business Scope:

• (1)Business scope

• i.Main businesses:

• (i)Manufacturing and trading of various kinds of iron and steel, machinery, and tools.

• (ii)Manufacturing and trading of various kinds of screws, nuts, wood screws, polished steel bar, cold coils, spheroidized steel materials, and iron wire.

• (iii)Thermal processing and acid wash, surface treatment, and finishing of the products specified in (ⅰ)and(ⅱ)．

• (iv)Manufacturing and trading of automotive and bicycle parts and components.

• (v)The design, manufacturing, and undertaking of contracts for anti-pollution and water treatment work machine and equipment.

(vi)The removal and treatment of acidic wastes and solid wastes.

(vii)The manufacturing and trading of acidic wastes and oxidized iron.

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CHUN YU WORKS ＆ CO., LTD.

ii.Business weighting:

Unit: NT$ thousand; %

weighting:	Unit: NT$ thousand; %	Unit: NT$ thousand; %
Year Product	2021
	Amount	%
Screws	1,716,027	14.53%
Nuts	486,983	4.12%
Self-tappingscrews	3,347,245	28.34%
Polished wires	1,980,961	16.77%
Spheroidized annealing wire	2,631,691	22.29%
Others	1,647,335	13.95%
Total	11,810,242	100.00%

iii.The company’s current products (services) and new products to be developed:

• (i)Current products (services):

Spheroidized annealing wires, polished wire rods, hex-head screws, high-tensile bolts, torque-control high-strength bolts and nuts, shear studs, crews and nuts for construction, various anchor bolts, carriage bolts, hex-head cap screws, nuts, nylon screws, stainless steel nuts, self-tapping screws, hard wood screws, self-drill screws, stainless steel self-tapping screws, collated screws, railway fastener system and the design and undertaking of various pollution control and water treatment machinery and equipment.

• (ii)New products and services to be developed:

  • Development of specialty screws and nuts for various electric vehicles.

  • Development of various pollution control and heat treatment processing technologies.

  • Development of technologies to enhance annealing product quality.

  • Development of screws for green energy generation systems.

  • Development of specialty screws for the high-speed railway and rapid-transit railway systems.

  • Development of the surface treatment technology free of heavy metal pollution.

  • Precision machining parts.

  • Railway fastener and assembly systems.

  • Hot-forging assemblies and surface treatment.

• ��� Industry overview

• i.Industry overview and development

Screws and nuts are the parts of cars and motorcycles and the fasteners of machinery, home appliances, construction projects (building structures, bridges, and factory buildings), the

• military industry. Domestic economic development requires the investment in factory - 79 -

CHUN YU WORKS ＆ CO., LTD.

construction of different industries and the support of public construction projects, and screws and nuts are indispensable products to them.

ii.Industry chain relationship

Wires and wire rods are the principal materials for making screws and nuts. They are mostly supply by China Steel Corporation and world-leading manufacturers in Japan and South Korea. We have also signed long-term supply contracts with them to secure stable materials supply. Their products are indispensable parts or accessories to all industries and construction products and annealing wires provide suitable quality for processing.

iii.Product development trends

Taiwan earns the fame of the “kingdom of screws” for the advancement in the production equipment and technology of screws and nuts. In recent years, mainland China and Southeast Asian countries have also gradually purchased production equipment and molds from Taiwan to increase productivity and improve technology and even dented part of the market. For this reason, transformation to produce higher value-added screw and nut products is required. iv.Status of competition

As the kingdom of screw and nut production, Taiwan exports over 90% of the products, making a price war a hidden danger in the industry. In addition, the screw and nut production and materials processing technologies of mainland China and Southeast Asian countries have become mature to cause another hidden concern. Fortunately, we will win orders with products of more robust quality and high value product through product focus, mass production, cost reduction, and competitiveness enhancement. Alongside CE marking and JIS certification, stable operations will be maintained in 2022..

(3) Overview of Technology and R&D:

i.Amount of R&D funds in the previous year

Unit: NT$ thousand

			Unit: NT$ thousand
Year	2021	By March 2022	2022 projection
Amount	84,250	18,574	81,726

In 2022, we will focus on the R&D of screws for green energy generation systems, electric vehicles, railway systems; collated screws; and self-drill screws. Employees make constant technology optimization and active innovation and development to fulfill different customer demands, accelerate industry and technology upgrading, and develop cross-industry cooperation, in order to create high value-added products. We also spare no efforts in applying for global certification, hoping to promote R&D outcomes to the international market and enhance brand

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CHUN YU WORKS ＆ CO., LTD.

awareness and corporate competitiveness.

ii.R&D Expenditure and Outcomes

Item	Content
Product	1.The screw forming method was granted the invention patent certificate (No. I576180) by the Intellectual Property Office, Ministry of Economic Affairs. 2.Screw bolt has been recognized by the Intellectual Property Right Bureau of the PRC with the issuance of invention patent certificate no. CN 111120487 B. 3.The bolt was granted the invention patent certificate (No. I673438) by the Intellectual Property Office, Ministry of Economic Affairs. 4.The torque-control high-strength bolts and nuts were granted the certificate of compliance (Guo-Chan-Fa-Zi No. 7411-0112) by Taiwan Power Company. 5.Success in the R&D of high-strength heavy nuts The torque-control high-strength bolts and nuts are characterized by the breakthrough in quality control, quick precision processing, surface treatment and heat treatment difficulty. 6.Success in the R&D and mass-production of the arc-welded stud for shear and concrete connection 7.Completion and gradual delivery of the specialty screws for use on the Taiwan High Speed Railway and Kaohsiung Metro. 8.Development of fasteners for heavy machinery. 9.Specialty wall plugs/anchors. 10.Specialty screws, nuts and rivets for cars and motorcycles. 11.Collated screws. 12.Screws and nuts for car and motorcycle engines. 13.Precision machining parts 14.Stamping parts 15.Railway fastener system 16.Stainless steel self-drill screws. 17.Specialty screws for bicycle transmission mechanisms and brake systems. 18.Self-drill screws 19.Longself-tappingscrews.
Quality	1.Establish a viable quality assurance system and accredited with ISO 9001 quality management system. 2.Established and implemented the statistical process control (SPC) quality control system. 3.Established a product quality base to ensure stable product quality in production. 4. Recognized by the BSMI of Ministry of Economic Affairs in 5 products with the issuance of the brand-honored certificate (high strengthen bolt with torque control, hexagonal nuts and flat grommet set, arc welding shearing stud, hexagonal screws, hexagonal nuts, and bore screws). 5. Accredited with the A2LA 17025 of USA.

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CHUN YU WORKS ＆ CO., LTD.

	CHUN YU WORKS＆CO., LTD.
Item	Content
	6. Accredited with the IATF-16949, AS 9100 qualify systems. 7. Accredited with CE Making EN14399-1, 15048-1, 14566 and 14592 certifications. 8. Accredited with JIS Making JISB1176 ST12.9 hex socket head bolt, JIS B1180 ST4.8. ST8.8, ST10.9 hex socket head bolt, JISB1186 F10T high-strength hexagon bolts, JIS B1125 self-tapping screws certifications. 9. Accredited with the US ICC-ES (AWS D1.1/D1.1M for shearing studs.
Equipment	1. Success in the development of the screw quality auto-checker It is progressively equipped on production equipment to reduce labor expenses, lower quality costs and enhance work efficiency. 2. LPG steam equipment to reduce energy costs. 3. Purchase of optical screeners to ensure 100% yield of automotive screws. 4. 2D and 3D measuring instruments, materials spectrometer, computer tapping machine. 5. Purchase of head forming machines for long screws under gauge M6. 6. Purchase of screw die re-headers 7. Purchase of self-drilling screw tail forming machines 8. Purchase of screw high-speed tail cutters
Pollution Control	1. Renewal of wastewater and sludge equipment. 2. Completion of air pollution source change and smoothly acquired the operation permit. 3. Establishment of the complete environmental management system and pass the SGS evaluation Passed ISO14001 and ISO45001 certifications

iii.Future R&D plans

(i)Develop new products based on business and market demands to promote industry upgrading.

(ii)Improve existing machinery and equipment to reduce workload through automation.

(iii)Enhance technician development.

• (iv)Strengthen environmental protection to meet laws and regulations relating to environmental protection.

• (v)Improve high-strength bolt molds to reduce materials consumption and mold wearing.

(vi)Enhance the tapping speed of self-tapping screws.

iv.Although the fastener industry is a manufacturing industry, through active transformation,

channel re-deployment, and flexible production strategies started years ago, we have

transformed headquarters into an R&D center and overseas plants as market-oriented production bases to keep core technology in Taiwan.

In response to the market changes. we began to adjust the production strategies for headquarters

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CHUN YU WORKS ＆ CO., LTD.

in Taiwan and overseas plants. Currently, headquarters in Taiwan engage in the R&D of high value-added products, while plants in Indonesia and mainland China have become production bases through technology transfer. After years of ceaseless efforts, eventually after a storm comes a calm meaning. In the future, besides cultivating the OEM/ODM business, we will continue to develop EV screws, self-tapping screws, railway fasteners, fasteners and assemblies for green energy generation equipment, collated screws and assemblies, hot forging assemblies and surface treatment. We will implement e-operations and emphasize the improvement of employee literacy and product quality.

2. Market and Sales Overview:

(1) Market Analysis

i.Sales Regions and Proportion of Major Projects in 20217tut5t44tr

Region	Sales Amount	Proportion
Taiwan	4,767,068	40.36%
HongKongChina	3,012,597	25.51%
USA	622,376	5.27%
Other countries	3,408,201	28.86%
Total	11,810,242	100.00%

ii.Future market supply-demand and growth and industry chain relationship

In general, COVID-19 has been kept under control in 2022. Global economic recovery starts to pick up momentum. Yet, the Russia-Ukraine conflict affected the normal supply of iron and still. Also, the Biden Administration has stepped up investment in the infrastructure building in the USA that global demand for fastener will continue to grow.

（i） Fasteners:

Domestic sale: In general, COVID-19 has been kept under control in 2022. It is expected that public construction will be continued. Major public work project, big projects in the private sector, such as electronic firms, power plants, which demand for large quantity of construction use nuts and bolts. In addition, the Company has already transformed to the high added-value fastener OEM and ODM market and spared no effort in the development of the markets for nuts and bolts. Further to the existing customers in the country, the Company has already stretched out its tentacles to the OEM customers in Mainland China

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CHUN YU WORKS ＆ CO., LTD.

for product development.

• Export sale: The rebound in demand contributed to the ongoing increase of purchase orders from the CE accredited customers of EU for tapping products. The main market of these items includes partitioning and decoration, home appliances, automotive, electronics, and furniture. Most of the business partners of the Company in Europe are good quality and well-established business groups. The intensification of investment in infrastructure building in the USA will likely stimulate a higher level of demand for fasteners. The Company has also been accredited with the JIS standard of Japan, and will renew the accreditation for the ongoing development of the market of Japan in nuts and bolts used in steel structure construction.

• (ii) Wires: The price of iron ore and fuel continue to rise, and the global steel price continue to surge in 2022. Thanks to the enormous growth in fastener orders at home and aboard, the domestic wire demand escalated. In the future, besides securing the sales of large-gauge wires, we will increase the market share of small-gauge wires to increase the overall wire income.

iii.Long- and short-term business development plans

• （ i ） Short-term business development plan

• ①In response to the increasing demand, we will appropriately expand the bottlenecked production lines, actively enhance the self-content rate, and raise the utilization rate of the production lines in the tapping forming plant II, heat treatment plant, surface treatment plant, and wire coating plant.

• ② We will also actively develop railway screws, EV screws, collated screws, heavy screws, and screws for green energy generation equipment.

• （ ii ） Medium- and long-term business development plan

• ① We will integrate the resources of Taiwan Steel Group to provide customers with integrated process integration technology from materials to downstream products to tailor products for customers.

• ② We will also develop high value-added fasteners for use in the aerospace, energy, and military industries.

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• (2) Important applications and manufacturing processes of major products

• i.Wire (annealing and polished):

Wires are widely used for manufacturing screws, nuts, hand tools, steel wires, auto parts and electronic components.

==> picture [425 x 73] intentionally omitted <==

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

Wire IQC Pickling and Wire FQC
Packaging and
----- End of picture text -----

ii.Metal fittings (screws, nuts, tapping)

Metal fittings are widely used on automatic fasteners, railway system fasteners, construction fasteners, and electronic fasteners.

==> picture [425 x 82] intentionally omitted <==

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

Wire Heav Spher Pickli Fine Head Tread
Pack Scree Surface Heat
----- End of picture text -----

(3) Supply of major ingredients

The steel price was expected to be stable in the first half of 2022. Currently, most steel is purchased domestically. We will import materials when there is domestic supply shortage.

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i.Major Suppliers in the past two years: Unit: NT$ thousand	By Q1 in 2022	Relations with issuers	—	—	—	—	ii.Major Customers in the past two years:	By Q1 in 2022	Relations with issuers	—	—	—	—
									Percentage in annual net sale amount by the previous quarter(%)	12.21	—	87.79	100.00
		Percentage in annual net purchase amount by the previous quarter(%)	19.77	21.99	58.24	100.00
									Amount	373,018	—	2,682,651	3,055,669
		Amount	421,131	468,245	1,240,417	2,129,793
		Name	Company A	Company E	Other	Net purchase			Name	Company C	Company A	Other	Net purchase
	2021	Relations with issuers	—	—	—	—		2021	Relation s with issuers	—	—	—	—
									Annual net sale ratio (%)	—	—	100.00	100.00
		Annual net purchase ratio (%)	23.43	13.30	63.27	100.00
									Amount	—	—	11,810,242	11,810,242
		Amount	2,106,246	1,195,566	5,688,844	8,990,656
		Name	Company A	Company E	Other	Net purchase			Name	Company C	Company A	Other	Net purchase
	2020	Relations with issuers	—	—	—	—		2020	Relations with issuers	—	—	—	—
									Annual net sale ratio (%)	—	—	100.00	100.00
		Annual net purchase ratio (%)	32.10	—	67.90	100.00
									Amount	—	—	8,054,615	8,054,615
		Amount	1,603,333	—	3,391,576	4,994,909
		Name	Company A	—	Other	Net purchase			Name	Company A	Company B	Other	Net purchase
		No.	1	2					No.	1	2

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CHUN YU WORKS ＆ CO., LTD.

(5) Production value of the last two years﹕

Unit: MT/NT$1,000

				Unit: MT/NT$1,000	Unit: MT/NT$1,000	Unit: MT/NT$1,000
Annual production value Major commodity (orsector)	2020			2021
Major commodity	Capacity	Yield	Value	Capacity	Yield	Value
Screws	39,580	16,976	1,043,611	39,580	21,567	1,475,059
Nuts	11,960	3,402	373,745	11,960	5,125	459,193
Self-tapping screws	42,190	34,726	3,014,950	42,190	42,469	3,928,589
Polished wires	101,100	39,871	663,238	101,100	142,397	2,938,583
Spheroidized annealing wire	134,706	97,979	5,108,463	134,706	132,262	7,191,750
Machine	-	-	954,472	-	-	983,431
Other	-	-	191,186	-	-	336,573
Total	329,536	192,954	11,349,665	329,536	343.820	17,313,178

(6) Sales value of the last two years:

Unit: MT/NT$1,000

					Unit: MT/NT$1,000	Unit: MT/NT$1,000	Unit: MT/NT$1,000	Unit: MT/NT$1,000
Annual sales value Major commodities (orsectors))	2020				2021
	Import		Export		Import		Export
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Screws	27,577	1,270,124	1,888	140,480	28,941	1,553,541	2,006	162,486
Nuts	6,533	337,880	758	63,769	7,387	407,512	871	79,471
Self-tapping screws	21,287	1,756,436	14,301	1,002,275	29,698	2,050,104	15,509	1,297,141
Polished wires	26,469	579,517	914	22,512	46,728	1,938,683	1,526	42,278
Annealing wire	56,262	1,437,183	6,250	201,188	76,993	2,377,947	6,663	253,744
Machine (set)	89	237,113	362	705,123	129	311,070	368	1,003,075
Other	-	158,437	-	142,578	36,130	200,310	17,364	132,880
Total	138,217	5,776,690	24,473	2,277,925	262,641	8,839,167	44,307	2,971,075

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CHUN YU WORKS ＆ CO., LTD.

1. Employee Information for the Past Two Years and as of the Publication of the Annual Report:

Year	Year	2020	2021	2022 as of the date of publication of the Annual Report(April 30,2022)
Number of employees		434	450	452
Average age		41.25	40.81	41.05
Average serviceyear		10.77	10.48	10.50
Academic distribution	Ph.D.	0.98%	0.67%	0.67%
	Master’s degree	6.51%	5.33%	5.53%
	College	49.63%	52.00%	51.77%
	High school	34.85%	34.44%	34.51%
	Below high school	8.03%	7.56%	7.52%

4.Environmental Expenditure Information:

• (1) Any losses (including compensations and violations of environmental protection laws found in environmental audits with information regarding the date of punishment, ticket number, regulations breached, contents of breach and contents of punishment) due to pollution in the last two years and by the date of report publication and disclose the estimated amount at present and in the future and countermeasures or the reasons preventing estimation, if any

Date ofpunishment		Items ofpunishment	Amount
2021/2/23	Ticket number	Kao-Shi-Huan-Ju-Fei-Chu-Zi No. 40-110-060053	NT$6,000
	Regulations breached	Subparagraph 1 of paragraph 1 under Article 36 of the Solid Wastes CleanupAct
	Contents of breach	Not conforming to the location of dump site as stated in the Floor Plan of the Plant Site attached to the approved Industrial Waste Cleanup Plan, and is in violation of subparagraph 1 of paragraph 1 under Article 31 of the Solid Wastes Cleanup Act.
	Contents of punishment	Large quantities of industrial wastes were exposed in open air,includingdumped

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	CH	UN YU WORKS＆CO., LTD.
	(summary)	paper, dumped iron, plastic wastes and dumped tanks (baker barrels with leftover liquid inside), dumped pallet, dumped barrels and screws, which are not conforming to the location of dump site as shown in the floor plan of the plant site as stated in the approved industrial waste cleanup plan.
2021/2/23	Ticket number	Kao-Shi-Huan-Ju-Fei-Chu-Zi No. 40-110-060054	NT$6,000
	Regulations breached	Sub-paragraph 4 of paragraph 1 under Article 6, and subparagraph 1 of paragraph 1 under Article 10 of the Industrial Wastes Storage and Cleanup Method and Facility Standard and Paragraph 1 under Article 36 of the Solid Wastes CleanupAct
	Contents of breach	Large quantities of industrial wastes were exposed in open air, including dumped paper, dumped iron, plastic wastes and dumped tanks (baker barrels with leftover liquid inside), dumped pallet, dumped barrels and screws, without any measures and equipment for containing possible diffusion.
	Contents of punishment (summary)	The location, container and facility of storage are not clearly labeled with the name of the waste matters in Chinese and nothing has been done to prevent the inflow of ground surface water, rain water and underground water,diffusion.
2020/11/11	Ticket number	Kao-Shi-Huan-Ju-Fei-Chu-Zi No. 40-110-060052	NT$60,000
	Regulations breached	Paragraph 1 under Article 36 of the Solid Wastes CleanupAct,and subparagraph 2

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	CH	UN YU WORKS＆CO., LTD.
		of paragraph 1 under Article 7, and subparagraph 1 of paragraph 1 under Article 10 of the Industrial Wastes Storage and Cleanup Method and Facility Standard.
	Contents of breach	No labeling of the name, date of storage, quantity, ingredients and differentiation of the properties of toxic industrial waste of the waste matter on 2 storage tanks for dumped sulfuric acid and 1 storage tank for dumped rinsingacid.
	Contents of punishment (summary)	No clear labeling of the name, date of storage, quantity, ingredients and differentiation of the properties of toxic industrial waste.
2020/11/11	Ticket number	Kao-Shi-Huan-Ju-Fei-Chu-Zi No. 40-110-060051	NT$6,000
	Regulations breached	Subparagraph 1 of paragraph 1 under Article 31 of the Solid Wastes CleanupAct
	Contents of breach	Inorganic sludge was packed in bulk bags and exposed at open air location, which is non-conforming to the location of dump sites as shown in the Industrial Waste CleanupPlan.
	Contents of punishment (summary)	Non-conforming to the Industrial Waste Cleanup Plan.
2020/11/10	Ticket number	Kao-Shi-Huan-Ju-Kung-Chu-Zi No. 20-109-110009	NT$100,000
	Regulations breached	Article 24, paragraph 2, Air Pollution Control Act
	Contents of breach	Inconsistency between the approved range of pressure difference in the permit and the value measured in the on-site audit,

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	CH	UN YU WORKS＆CO., LTD.
		violating Article 24, paragraph 2, Air Pollution Control Act.
	Contents of punishment (summary)	Hold the permit (Kao-Shi-Huan-Ju-Kung-Cao-Zheng-Zi No. E0986-03) for Stationary Pollution Source HCl Recovery Procedure (M3). In the on-site audit on October 12, 2020, the staff of this bureau found that during 02:00 on October 6, 2020 to 14:00 on October 10, 2020, the pressure different record of the Venturi scrubber (A302) was 10mmHg, which was inconsistent with the approved range of 30-100mmHgin thepermit.
2020/2/7	Ticket No.	Kao-Shi-Huan-Ju-Shui-Chu-Zi No. 30-109-020010	NT$10,000
	Regulations breached	Article 18, Water Pollution Control Act
	Contents of breach	On November 29, 2019, the company reported the “Annual Calibration of the Reclaimed Water Volume of the Waste Treatment Plant on November 22, 2019” of the company’s Gangshan Plant within the jurisdiction of this Bureau. Investigation showed that Gangshan Plant completed the calibration on November 22, 2019, but the recording method of water volume during the calibration period was unapproved by this Bureau in advance.
	Contents of punishment (summary)	Violation of the Article 65, paragraph 3, Water Pollution Control Measures and Test Reporting Management Regulations: “When an enterprise or sewage system performs calibration and maintenance of

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	CH	UN YU WORKS＆CO., LTD.
		cumulative water measurement facilities, the date of calibration and maintenance, water quantity during the calibration and maintenance and the results of calibration and maintenance shall be recorded and kept for five years. The recording of the water quantity during the calibration and maintenance shall be performed in the way approved by the competent authority” established under the authorization of Article 18,Water Pollution Control Act.
2020/1/3	Ticket No.	Kao-Shi-Huan-Ju-Kung-Chu-Zi No. 20-109-010008	NT$300,000
	Regulations breached	Article 8, paragraph 3, Air Pollution Control Act
	Contents of breach	Failure to reduce the designated “NOx” emissions, violating Article 8, paragraph 3, Air Pollution Control Act.
	Contents of punishment (summary)	This Bureau granted the approval for pollutant emissions of existing stationary pollution sources (Application No.: S1601203-01) in Letter Kao-Shi-Huan-Ju-Kung-Zi No. 10542010600 on November 8, 2016. Accordingly, the standard annual emissions in phase I are: particulate matters 3,341kg/year, SOx 563kg/year, NOx 9,591kg/year, and VOCs 4,174kg/year; and designated reduction is: NOx 505kg/year. However, before the end of phase I of the total volume control plan for the existing stationary pollution sources as stated above, the actual emissions in the last four seasons(e.g.,

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July 1, 2017-June 30, 2018): NOx 16,847kg/year, exceeding the target NOx emissions of 6,964kg/year, that is, your company failed to reduce the emissions of designated pollutant “NOx.”

(2) Countermeasures

（ i ） Items with corrective actions

• ①Correction Plan

• A.Waste: Perform various waste tests and establish the temporary waste storage by law.

• B.Wastewater: Make corrections according to various tests.

• C.Air pollution: Reduce designated air pollutants according to the Kaoping Air

Pollution Total Volume Control and plan and construct air pollution control equipment.

• D.Extend and apply for related certificates.

• ②Projected capital expenditure on environmental protection in the next three years

Air pollution control equipment to be purchased or contents of expenditure Actual performance Amount	2022 Enhance the performance of air pollution control equipment Project in progress NT$10,000,000	2023 Enhance the performance of air pollution control equipment NT$8,000,000	2024
			Better performance of the Waste water recycling equipment NT$8,000,000

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�Effects after improvement

�Effects on net income �Effects on competitive position	2022 2023 2024 Not significant effect. Not significant effect. Not significant effect. Ensuring environmental quality is the shared social responsibility of enterprises and the basis of sustainable business development.	2024

• ii � Items without corrective actions

In in-house environmental protection, related countermeasures have been adopted to make continual improvement in air pollution treatment, water pollution treatment and waste disposal to ensure the integrity of the environmental protection policy.

�Reasons for no corrective actions �Environmental Pollution �Amount of potential losses and compensation	2022 NA NA NA	2023 NA NA NA	2024
			NA NA NA

• ��� Compliance with the RoHS

• i � Products sold to the EU comply with the RoHS. Product inspections are implemented as the customer’s request, and related reports are provided.

• ii � Although compliance with RoHS will increase production cost, as this will eliminate some competitors, this will not bring unfavorable effect to the company’s finance.

• ��� Reports of International Material Data System (IMDS) are issued for export products at the customer’s request to enhance the competitiveness of export products.

• ��� Protective measures for the work environment and employee personal safety

• i � Safety and health management for important tasks

• Occupational Health and Safety (OH&S) Committee

We hold the OH&S Committee meeting every three months. The meeting is chaired by senior officers with participants including the head of all units, section chiefs, labor representatives, and OH&S management personnel. The committee meeting reviews, coordinates and makes recommendations for the Company’s OH&S policies, OH&S proposals, and other matters relating to OH&S.

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• ② Periodic follow-up of the EHS management system

• In 2008, we passed the OHSAS 18001 certification by the SGS. In 2019, we passed the OHSAS 18001 periodic review of the SGS. We have established corresponding targets and implemented solutions to comply with OHSAS 18001.

• ③ OH&S education and training

• Training is the foundation of safety. Through training, we enable workers to understand the related safety knowledge and awareness and avoid accidents caused by ignorance. Besides asking business units to enhance personnel education and training in low season, we arrange recurrent training for OH&S management personnel according to the Occupational Safety and Health Act and organize OH&S-related training courses.

• ④ Health management

We arranged general and special health checkups according to the “Labor Health Protection Rules.” Both general and special health checkups are arranged once a year.

• ⑤ Work environment monitoring

  • We hire qualified work environment monitoring agency to perform the work environment monitoring for physical factors and determine whether or not the monitoring results comply with the laws and regulations Besides reporting to the committee meeting, we can strengthen the personal protective equipment for abnormalities found in the environmental monitoring.

• （ ii ） Labor and equipment management audit

• ①Operating controls

The permit system is applied to high-risk work.

• ②Hazardous machines and equipment inspection

Hazardous machines and equipment are inspected periodically by law. Operators must acquire operating licenses and receive recurrent training periodically.

• ③Amendment to safe operating procedures

The safe operation procedures are amended through the discussion between frontline workers led by section chiefs and coordinators. Through continual full-scale review, we ensure the safe operation procedures are effectively implemented by frontline workers.

• ④Plant safety patrol

Members of the committee and Industrial Safety and Health Section patrol the plant from time to time to enhance operation safety.

• ⑤Emergency response drilling

Every year we organize fire drills in the first and second half of the year. Through emergency response drilling, we enable personnel to make quick response to emergencies and accidents, recuse, and lower the risk and damage.

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5. Labor-management relationship

• （ i ） The company’s various employee welfare measures, further education, training, retirement system and their implementation, as well as labor-management agreements and the measures to maintain the rights and interests of employees:

• 1.Employee benefits

• (1) Group insurance.

• (2) Bonuses or gifts on Labor Day, Dragon Boat Festival, Mid-Autumn Festival and birthday.

• (3) Quality and production incentives.

• (4) In-house and external education and training.

• (5) Year-end bonus and employee profit-sharing.

• (6) Free uniform, safety shoes and helmet.

• (7) Scholarship for employees’ children with outstanding academic performance.

• (8) Employee meals.

• (9) Various recreational activities and employee tours organized through the staff welfare committee.

• (10) Company cars and mobiles.

• (11) Employee health checkup.

• (12) Gold medal reward for senior employees.

• (13) Year-end party lucky draw and bonuses.

2.Further education

• (1)Plan training courses according to the operational strategies and annual targets to equip employees with the required knowledge and skills every year.

• (2)Arrange labor education and training periodically to guide employees demonstrate good professional ethics.

• (3)Arrange practical training for new employees to help them adapt to the work environment and get familiar with their jobs.

• (4)Statistics of Employee Further Training Courses in 2021

Training Type	Actual Number of Courses	Total Training Hours	Number of Trainees
New Employee Training	94	720.5	181
Document Control	29	306	313
QualityControl	12	1,841.5	1,093
Production,Materials	22	715	393

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	CHUN YU WORKS＆CO.,	LTD.
Manufacturing	33	2,253.5	575
Marketing	4	190	61
EHS	21	968.5	341
IT, Management, Procurement	6	71	35
Finance,Accounting	6	84	20
Audit, Internal Control	7	41.5	7
Technology,R&D	3	54	28
Total	237	7,245.5	3,047

• 3.Retirement system and its performance

• In the “Work Rules,” we have stipulated regulations governing the appointment, service, evaluation, reward and punishment, promotion and transfer, retirement and benefits for employees. By law we have established the Supervisory Committee of Labor Retirement Reserve and contribute the retirement fund to the account designated by the government. The committee also holds committee meetings regularly to review the appropriation and utilization of the retirement fund to fully protect the pension rights and benefits of employees.

• In addition, for employees selecting the scheme under the Labor Pension Act, we contribute the pension to their personal account at the Bureau of Labor Insurance every month according to their pay grade to maintain their rights and interests.

• 4.Other labor-management negotiations

• (1) We hold the labor-management meeting regularly to fully communicate and coordinate with employees to ensure a reasonable organization and humanized management to achieve mutual trust and understanding and fusion with employees.

• (2) We have also established the “Employee Service Station” and “Suggestion Box” and senior officers often discuss with employees or union representatives face to face to understand the doubts and difficulties of employees at any time.

• (3) Our labor union was established in 1972. Besides maintaining mutual trust, mutual understanding and mutual respect with the union in a rational and harmonious attitude, we have established the “collective bargaining agreement” to state the rights obligations between labor and management, protect the rights and interests of labor, promote labor-management co-prosperity, and pursue business development together.

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• （ ii ） Losses arising from labor-management disputes (including the violation of the Labor Standards Act found in the labor inspection, with information regarding the date of punishment, ticket number, regulations breached, contents of breach and contents of punishment) in the last year up and by the date of annual report publication; and the estimated amounts that may occurred at present and in the future and countermeasures. 1. Violation of the Labor Standards Act found in the labor inspection: Nil.

• Countermeasures: we have handled related matters by law.

6.

• (i)Information security risk assessment:

Potential risks

1. Hackers and computer viruses.

2. Hardware damage and system anomalies.

3. Abnormal power supply.

4. (ii)Countermeasures:

5. 1.Beside establishing a mechanism for detecting, monitoring, and reporting information security events and the Information Security Management SOP, we team up with external information security services to constantly monitor outgoing network traffic and packages and give automatic alert and handling immediate after a warning, and install antivirus software at the user end.

6. 2.Every day the IT Department makes online and offline and alternate site backup copies of the core system and implement disaster recovery drill.

7. 3.The IT equipment room is equipped with the UPS and connection to backup power generation system to maintain normal IT operations.

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7. Major Agreements:

Nature of the agreement	Parties concerned	Perpetuity of the agreement	Summary of content	Restriction clause
Mid to long-term syndicated loans agreements	The First Bank and others, a total of 10 financial institutions.	2010.03.30～ 2025.03.30	Retirement of old financial liabilities and pooling up as mid-term working capital	Nil

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VI. Financial Profile

1. Condensed Balance Sheet and Consolidated Income statement for the Past Five Years

• (1) Concise Consolidated Balance Sheet – Adopting International Reporting Standards.

) Concise Consolidated Balance Sheet – Adopting International Reporting Standards.	) Concise Consolidated Balance Sheet – Adopting International Reporting Standards.	) Concise Consolidated Balance Sheet – Adopting International Reporting Standards.	) Concise Consolidated Balance Sheet – Adopting International Reporting Standards.	) Concise Consolidated Balance Sheet – Adopting International Reporting Standards.	) Concise Consolidated Balance Sheet – Adopting International Reporting Standards.	) Concise Consolidated Balance Sheet – Adopting International Reporting Standards.	) Concise Consolidated Balance Sheet – Adopting International Reporting Standards.
Unit: NT$ thousand
Year Item		Financial analysis for the past five years					Financial data March 31, 2022
		2017	2018	2019	2020	2021
Current assets		6,642,679	6,565,864	6,456,492	6,355,790	8,479,764	9,291,270
Property, plant and equipment		3,222,265	3,261,759	3,232,528	3,146,059	3,090,561	3,112,266
Intangible assets		8,378	9,052	10,626	10,646	7,855	7,531
Other assets		563,233	860,204	1,266,680	1,232,978	1,113,325	1,049,947
Total assets		10,436,555	10,696,879	10,966,326	10,745,473	12,691,505	13,461,014
Current liabilities	Before distribution	4,783,818	3,396,605	3,373,664	3,723,194	3,789,447	3,442,645
	After distribution	4,999,649	3,770,711	3,718,993	3,895,858	4,077,221	-
Non-current liabilities		1,579,077	3,006,824	3,257,541	2,890,822	4,234,147	5,169,288
Total liabilities	Before distribution	6,362,895	6,403,429	6,631,205	6,614,016	8,023,594	8,611,933
	After distribution	6,578,726	6,777,535	6,976,534	6,786,680	8,311,368	-
Interests attributable to parent company owner		3,497,600	3,682,650	3,684,062	3,484,420	3,943,477	4,117,359
Capital stock		2,877,740	2,877,740	2,877,740	2,877,740	2,877,740	2,877,740
Capital reserve		75,001	92,820	129,373	157,969	222,103	466,207
Retained earnings	Before distribution	770,933	1,008,117	1,061,417	900,268	1,318,785	1,182,950
	After distribution	555,102	634,011	716,088	727,604	1,031,011	-
Other interests		62,836	(7,117)	(95,558)	(162,647)	(207,956)	(142,343)
Treasury stock		(288,910)	(288,910)	(288,910)	(288,910)	(267,195)	(267,195)
Non-controlling interests		576,060	610,800	651,059	647,037	724,434	731,722
Total equity	Before distribution	4,073,660	4,293,450	4,335,121	4,131,457	4,667,911	4,849,081

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	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
		After distribution	3,857,829	3,919,344	3,989,792		3,958,793	4,380,137	-

Note 1: The 2021 earnings distribution proposal was approved by the board meeting on 2022.3.10. Note 2: The information above was certified by the CPAs.

Concise Individual Balance Sheet - Adopting International Financial Reporting Standards

Unit: NT$ thousand

		Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
Year Item		Financial analysis for the past five years
		2017	2018	2019	2020	2021
Current assets		3,377,874	2,653,464	2,561,517	2,383,801	4,135,421
Property, plant and equipment		2,035,079	1,966,447	1,944,904	1,862,787	1,850,334
Intangible assets		4,152	3,519	3,219	3,284	2,731
Other assets		1,431,089	2,775,230	3,080,427	3,236,402	3,629,942
Total assets		6,848,194	7,398,660	7,590,067	7,486,274	9,618,428
Current liabilities	Before distribution	1,901,191	1,070,499	1,120,607	1,550,040	1,723,154
	After distribution	2,117,022	1,444,605	1,465,936	1,722,704	2,010,928
Non-current liabilities		1,449,403	2,645,511	2,785,398	2,451,814	3,951,797
Total liabilities	Before distribution	3,350,594	3,716,010	3,906,005	4,001,854	5,674,951
	After distribution	3,566,425	4,090,116	4,251,334	4,174,518	5,962,725
Interests attributable to parent company owner		_	_	_	_	_
Capital stock		2,877,740	2,877,740	2,877,740	2,877,740	2,877,740
Capital reserve		75,001	92,820	129,373	157,969	222,103
Retained earnings	Before distribution	770,933	1,008,117	1,061,417	900,268	1,318,785
	After distribution	555,102	634,011	716,088	727,604	1,031,011
Other interests		62,836	(7,117)	(95,558)	(162,647)	(207,956)
Treasury stock		(288,910)	(288,910)	(288,910)	(288,910)	(267,195)

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			CHUN YU WO	RKS＆CO., LTD.
Non-controlling interests		_	_	_	_	_
Total equity	Before distribution	3,497,600	3,682,650	3,684,062	3,484,420	3,943,477
	After distribution	3,281,769	3,308,544	3,338,733	3,311,756	3,655,703

Note 1: The 2021 earnings distribution proposal was approved by the board meeting on 2022.3.10. Note 2: The information above was certified by the CPAs.

(2) Concise Consolidated Income Statement - Adopting International Financial Reporting Standards

Unit: NT$ thousand

Year Item	Financial analysis for the past five years	Financial analysis for the past five years	Financial analysis for the past five years	Financial analysis for the past five years		Financial data March 31, 2022
	2017	2018	2019	2020	2021
Operating revenue	8,997,470	9,839,602	9,333,591	8,054,615	11,810,242	3,055,669
Gross profit	1,510,979	1,694,646	1,500,379	1,149,281	2,065,823	465,265
Operating gains/losses	544,092	696,271	595,666	350,461	1,101,333	241,328
Non-operating incomeand expenses	(159,209)	(55,336)	(16,937)	(4,496)	17,739	(8,698)
Income beforetax	384,883	640,935	578,729	345,965	1,119,072	232,630
Net income of continuing operations	315,342	565,571	533,743	263,036	874,177	183,538
Losses of discontinued operations	-	-	-	-	-	-
Net income (loss)	315,342	565,571	533,743	263,036	874,177	183,538
Other comprehensive income (net after tax)	4,797	(86,039)	(93,617)	(91,014)	(61,730)	75,906
Total comprehensive income	320,139	479,532	440,126	172,022	812,447	259,444
Net income attributed to owners of the parent owners of theparent	233,357	460,500	423,111	197,147	744,730	151,939
Net profit attributed to non-controlling interests	81,985	105,071	110,632	65,889	129,447	31.599
Total profit and loss attributed to the owners of the parent	247,085	383,062	338,965	117,091	689,759	217,552

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CHUN YU WORKS ＆ CO., LTD.

		CHUN Y	U WORKS＆CO., L	TD.
Total profit and loss attributed to non-controlling interests	73,054	96,470	101,161	54,931	122,688	41,892
EPS	0.88	1.74	1.60	0.75	2.81	0.57

Note: The above financial data has been audited (reviewed) by an accountant.

Condensed Statement of Financial Position-IFRS (Individual)

Unit: NT$ thousand

	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
Year Item	Financial Information of the Last Five Years
	2017	2018	2019	2020	2021
Operating revenue	4,160,140	4,229,332	3,889,527	3,352,716	5,978,369
Gross profit	465,617	456,212	344,887	168,144	691,681
Operating gains/losses	151,252	168,084	73,614	(61,642)	377,347
Non-operating income and expenses	76,808	260,175	311,591	257,215	437,755
Income before tax	228,060	428,259	385,205	195,573	815,102
Net income of continuing operations	233,357	460,500	423,111	197,147	744,730
Losses of discontinued operations	_	_	_	_	_
Net income (loss)	233,357	460,500	423,111	197,147	744,730
Other comprehensive income(net after tax)	13,728	(77,438)	(84,146)	(80,056)	(54,971)
Total comprehensive income	247,085	383,062	338,965	117,091	689,759
Net income attributed to owners of the parent owners of theparent	_	_	_	_	_
Net profit attributed to non-controlling interests	_	_	_	_	_
Total profit and loss attributed to the owners of theparent	_	_	_	_	_
Total profit and loss attributed to non-controlling interests	_	_	_	_	_
EPS	0.88	1.74	1.60	0.75	2.81

Note: The above financial data has been audited by an accountant. Capitalized interest: NA

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CHUN YU WORKS ＆ CO., LTD.

(3)Names and Audit Opinions of CPAs of the Last Five Years

Year	Names of CPAs	Audit opinions of CPAs
2017	Lin, Tzu-Yu、Liu, Tzu-Meng	Unqualified Opinion plus the audit report of the other matterparagraph byother CPAs
2018	Lin, Tzu-Yu、Liu, Tzu-Meng	Unqualified Opinion plus the audit report of the other matterparagraph byother CPAs
2019	Lin, Tzu-Yu、Liu, Tzu-Meng	Unqualified Opinion plus the audit report of the other matterparagraph byother CPAs
2020	Lin, Tzu-Yu、Liu, Tzu-Meng	Unqualified Opinion plus the audit report of the other matterparagraph byother CPAs
2021	Lin, Tzu-Yu、Liu, Tzu-Meng	Unqualified Opinion plus the audit report of the other matterparagraph byother CPAs

2.Financial Analysis in the Past Five Years-IFRS

Year Analysis Item	Year Analysis Item	Financial Information of the Last Five Years	Financial Information of the Last Five Years	Financial Information of the Last Five Years	Financial Information of the Last Five Years	Financial Information of the Last Five Years	Financial data March 31, 2022
		2017	2018	2019	2020	2021
Financial Structure (%)	Liabilities to Assets Ratio	60.97	7 59.86	60.47	61.55	63.22	63.98
	Long-term Capital to PP&E Ratio	175.43	223.81	234.88	223.21	288.04	321.90
Solvency (%)	Current Ratio	138.86	193.31	191.38	170.71	223.77	269.89
	Quick Ratio	75.83	85.39	81.58	78.19	101.12	130.65
	Debt Service Coverage Ratio	4.86	7.71	5.87	4.12	12.99	11.30
Utility	Average Collection Turnover(times)	4.07	4.45	4.28	3.75	4.77	4.56
	Average Collection Days	89.68	82.02	85.28	97.33	76.52	80.04
	Average Inventory Turnover(times)	2.58	2.52	2.19	1.95	2.41	2.20
	Average Payable Turnover(times)	9.30	8.76	9.54	9.89	11.29	9.70
	Average Day(s) of Sales	141.47	144.84	166.66	187.18	151.45	165.91
	PP&E Turnover (times)	2.74	3.04	2.87	2.53	3.79	3.96
	Total Assets Turnover (times)	0.85	0.93	0.86	0.74	1.01	0.92
Profitability	Return on Assets (%)	3.79	6.10	5.83	3.23	8.13	1.57

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CHUN YU WORKS ＆ CO., LTD.

		CHU	N YU WORKS＆	CO., LTD.
	Return on Equity (%)	7.81	13.52	12.37	6.21	19.87	3.86
	Profit Before Tax to Capital Stock (%)	13.37	22.27	20.11	12.02	38.89	8.08
	Profit Margin (%)	3.50	5.75	5.72	3.27	7.40	6.01
	EPS	0.88	1.74	1.60	0.75	2.81	0.57
Cash Flow	Cash Flow Ratio (%)	16.95	-	5.88	19.69	5.64	7.86
	Cash Flow Adequacy Ratio(%)	183.11	109.58	85.40	71.36	44.19	33.66
	Cash Re-investment Ratio(%)	5.53	-	-	3.37	-	1.73
Degree of Leverage	Degree of Operating Leverage	3.49	3.14	3.61	5.20	2.50	2.71
	Degree of Financial Leverage	1.23	1.16	1.26	1.45	1.10	1.13
Account for changes in financial ratio in the last two years: 1.The ratio of long-term capital to property, plant and equipment was up: mainly because of the addition of corporate bonds in 2021. 2. The current ratio was up: mainly because of the increase of current assets as compared with 2020. 3. Debt service coverage ratio was up: mainly because of the increase of earnings before taxation in 2021. 4.Account receivable turnover (time) was up: mainly because of the increase of net sale in 2021 that the average days of account receivable collection fell. 5. Inventory turnover was up: mainly because of the increase in the cost of goods sold in 2021. 6. Property, plant and equipment turnover rate was up: mainly because of the increase of net sale in 2021. 7. Total assets turnover was up: mainly because of the increase of net sale in 2021. 8. Profitability was up: mainly because of the increase of net income in 2021. 9. Cash flow ratio was down: mainly because of the decrease of net cash inflow to operation. 10.Leverage was down: mainlybecause of the increase of operatingincome in 2021.

Financial Analysis-IFRS (Individual)

Year Analysis Item	Year Analysis Item	Financial Information of the Last Five Years	Financial Information of the Last Five Years	Financial Information of the Last Five Years	Financial Information of the Last Five Years	Financial Information of the Last Five Years
		2017	2018	2019	2020	2021
Financial Structure (%)	Liabilities to Assets Ratio	48.93	50.23	51.46	53.46	59.00
	Long-term Capital to PP&E Ratio	243.09	321.81	332.64	318.67	426.69
Solvency (%)	Current Ratio	177.67	247.87	228.58	153.79	239.99
	Quick Ratio	109.89	99.03	85.06	55.13	99.56
	Debt Service Coverage Ratio	7.55	13.69	8.85	5.50	15.86
Utility	Average Collection Turnover (times)	5.34	5.77	6.13	5.82	5.99
	Average Collection Days	68.35	63.26	59.54	62.71	60.93

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CHUN YU WORKS ＆ CO., LTD.

	C	HUN YU WORKS	＆CO., LTD.
	Average Inventory Turnover (times)	2.95	2.66	2.24	2.05	2.70
	Average Payable Turnover (times)	22.69	16.26	19.46	26.33	17.59
	Average Day(s) of Sales	123.73	137.22	162.95	178.05	135.19
	PP&E Turnover (times)	2.01	2.11	1.99	1.76	3.22
	Total Assets Turnover (times)	0.61	0.59	0.52	0.44	0.70
Profitability	Return on Assets (%)	3.85	6.84	6.17	3.08	9.26
	Return on Equity (%)	6.72	12.83	11.49	5.50	20.05
	Profit Before Tax to Capital Stock(%)	7.92	14.88	13.39	6.80	28.32
	Profit Margin (%)	5.61	10.89	10.88	5.88	12.46
	EPS	0.88	1.74	1.60	0.75	2.81
Cash Flow	Cash Flow Ratio (%)	9.53	9.46	12.32	17.13	(30.38)
	Cash Flow Adequacy Ratio (%)	118.12	96.13	58.88	36.89	22.11
	Cash Re-investment Ratio (%)	-	-	-	-	-
Degree of Leverage	Degree of Operating Leverage	4.36	4.24	9.09	-	2.68
	Degree of Financial Leverage	1.31	1.25	3.01	-	1.18
Account for changes in financial ratio in the last two years: 1.The ratio of long-term capital to property, plant and equipment was up: mainly because of the addition of corporate bonds in 2021. 2.The current ratio and quick ratio was up: mainly because of the increase of current assets as compared with 2020. 3.Debt service coverage ratio was up: mainly because of the increase of earnings before taxation in 2021. 4.Inventory turnover was up: mainly because of the increase in the cost of goods sold in 2021. 5. The turnover rate of real estate, plant and equipment increased: mainly due to the increase in net sales in 2011, resulting in the improvement of asset utilization efficiency. 6.Account payable turnover was down: mainly because of the increase in the cost of goods sold in 2021. 7.Profitability was up: mainly because of the increase of net income in 2021. 8.Leverage was down: mainlybecause of the increase of operatingincome in 2021.

Account for changes in financial ratio in the last two years:

1.The ratio of long-term capital to property, plant and equipment was up: mainly because of the addition of corporate bonds in 2021.

2.The current ratio and quick ratio was up: mainly because of the increase of current assets as compared with 2020.

3.Debt service coverage ratio was up: mainly because of the increase of earnings before taxation in 2021.

4.Inventory turnover was up: mainly because of the increase in the cost of goods sold in 2021.

1. The turnover rate of real estate, plant and equipment increased: mainly due to the increase in net sales in 2011, resulting in the improvement of asset utilization efficiency.

6.Account payable turnover was down: mainly because of the increase in the cost of goods sold in 2021.

7.Profitability was up: mainly because of the increase of net income in 2021.

8.Leverage was down: mainly because of the increase of operating income in 2021.

1.Financial structure

• (1) Liabilities to assets ratio = Total Liabilities/Total Assets

• (2) Long-term capital to PP&E ratio = (Total Equity + Non-Current Liabilities) /Net PP&E

• 2.Solvency

• (1) Current ratio = Current Assets/ Current Liabilities

• (2) Quick ratio = (Current Assets – Inventory – Pre-paid Expenses) / Current Liabilities

• (3) Interest coverage ratio = Net Income Before Income Tax and Interest Expense / Interest Expenses

3.Utility

• (1) Balance of Receivables (including accounts receivable and notes receivable due to business)

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CHUN YU WORKS ＆ CO., LTD.

Turnover = net sales/average receivables for each period (including accounts receivable and notes receivable due to business).

• (2) Average Collection Days = 365/receivables turnover.

• (3) Inventory Turnover = cost of goods sold/average inventory amount.

• (4) Balance of Payables (including accounts payable and notes payable due to business) Turnover = cost of goods sold/average payables for each period (including accounts payable and notes payable due to business).

• (5) Average Sales Days = 365/inventory turnover.

• (6) PP&E Turnover = net sales/ net average PP&E

• (7) Total Asset Turnover = net sales/average total assets.

• 4.Profitability

• (1) Return on Assets = [after-tax profit (loss) + interest expense × (1 - tax rate)]/average total assets.

• (2) Return on Equity = after-tax profit (loss)/average equity.

• (3) Net Profit Rate = after-tax profit (loss)/net sales.

• (4) EPS = (Equity attributable to owners of the parent – dividend from preferred

  • shares)/weighted average number of outstanding shares.

• 5.Cash Flow

• (1) Cash Flow Ratio = net cash flow from operation– current liabilities

• (2) Net Cash Flow Adequacy Ratio = net cash flow from operation over the past five years/(capital expense +addition to inventory + cash dividend) over the past five years.

• (3) Cash Reinvestment Ratio = (net cash flow from operation – cash dividend)/(gross PP&E + long-term investment + other non-current assets + working capital).

• 6.Leverage

• (1) Degree of operating leverage = (net income – variable cost and expenses from operation)/operating profit.

• (2) Financial Leverage = operating income/(operating income-interest expenses).

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CHUN YU WORKS ＆ CO., LTD.

3.Audit Committee’s review report on financial statements in the previous year

Audit Committee Review Report

The Board of Directors have prepared the Business Report, Financial Statements (including consolidated and separate financial statements), and the proposal for the distribution of earnings for the year 2021. The said financial statements have been audited by PwC Taiwan with the issuance of Auditors’ Report. We have reviewed the said Business Report, Financial Statements, and Proposal for the Distribution of Earnings, which are appropriately prepared. We hereby present this report in accordance with the Securities and Exchange Act for your attention.

Chun Yu Works & Co., Ltd.

Convener of Audit Committee: Ya-Rong Lee

March 10 2022

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CHUN YU WORKS ＆ CO., LTD.

1. Financial statements of the previous year certified by a CPA. Please refer to Appendix I.

2. Individual financial statement of the previous year certified by a CPA. Please refer to Appendix II.

3. Insolvency that occurs in the Company and affiliates in the previous year and by the date of annual report publication: NA.

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CHUN YU WORKS ＆ CO., LTD.

I. Financial position and the review and analysis of financial performance and risk

(i)Analysis and Comparison of Financial Position

Unit: NT$ thousand

			Unit: NT$ thousand	Unit: NT$ thousand
Year Item	2021	2020	Difference
			Amount	%
Current assets	8,479,764	6,355,790	2,123,974	33.42
Property, plant, and equipment(PP&E)	3,090,561	3,146,059	(55,498)	(1.76)
Intangible assets	7,855	10,646	(2,791)	(26.22)
Other assets	1,113,325	1,232,978	(119,653)	(9.70)
Total assets	12,691,505	10,745,473	1,946,032	18.11
Current liabilities	3,789,447	3,723,194	66,253	1.78
Non- current liabilities	4,234,147	2,890,822	1,343,325	46.47
Total liabilities	8,023,594	6,614,016	1,409,578	21.31
Capital	2,877,740	2,877,740	-	-
Capital reserve	222,103	157,969	64,134	40.60
Retained earnings	1,318,785	900,268	418,517	46.49
Other equities	(207,956)	(162,647)	(45,309)	27.86
Treasury stock	(267,195)	(288,910)	21,715	(7.52)
non-controlling interest	724,434	647,037	77,397	11.96
Total equity	4,667,911	4,131,457	536,454	12.98

Account for changes in two periods are up to 20% and the amount of changes is up to NT$10 million:

1.Current assets: mainly because of the increase of cash and cash equivalents, receivables and inventory.

2.Increase of non-current liabilities and total liabilities: mainly because of the increase of payable corporate bonds.

3.Additional capital reserve: capital reserve increased from the previous period mainly because the holding of shares issued by the parent company by subsidiaries with payment of stock dividend to the subsidiaries and the subsidiaries disposed the shares issued by the parent company that resulted in the adjustment of capital reserve.

4.Retained earnings: mainly because of the increase of net income as compared with 2020.

5.Other equities: other equities decreased from the previous period mainly because exchange difference from the financial statements of overseas operations and adjustment of unrealized exchange loss.

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CHUN YU WORKS ＆ CO., LTD.

(ii) Financial Performance

Unit: NT$ thousand

Year Item	2021	2020	Amount Difference	Change Ratio%
Operatingrevenue	11,810,242	8,054,615	3,755,627	46.63
OperatingCost	(9,744,419)	(6,905,334)	(2,839,085)	41.11
Grossprofit	2,065,823	1,149,281	916,542	79.75
OperatingExpense	(964,490)	(798,820)	(165,670)	20.74
OperatingIncome	1,101,333	350,461	750,872	214.25
Non-operating income and expenses	17,739	(4,496)	22,235	(494.55)
Income (loss) before tax	1,119,072	345,965	773,107	223.46
Income tax expense	(244,895)	(82,929)	(161,966)	195.31
Net income(loss)	874,177	263,036	611,141	232.34
Profit attributable to owners of theparent	744,730	197,147	547,583	277.75
EPS	2.81	0.75	2.06	274.67
The changes between the 2 periods accounted for 20% and amounted to NT$10,000,000, and the causal analysis: 1. Revenue, cost and gross profit: increase in current period mainly because of the amelioration of the influence of COVID-19, echoed with the rise in steel prices that contributed to the increase of revenue and the consequential increase of cost of operations and gross profits. 2. Operating expense: mainly because of the sizable growth of revenue, that drove up the service expense, freight, export fee, and other operating expenses. 3. Operating income: same as the explanation for revenue, cost and gross profit. 4. Non-operating income and expense: the increase of net income mainly because of the increase of income from the disposal of financial assets. 5. Earnings (loss) before taxation: the same explanation as in revenue, cost, and gross profit. 6. Income tax expense: mainly because of the decrease of deductible for loss. 7. Net income (loss), net income attributable to the shareholders of parent company: the same explanation as in revenue, cost, andgrossprofit.

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CHUN YU WORKS ＆ CO., LTD.

(iii) Cash flow analysis

(1) Analysis of liquidity in the past two years

Year Item	2021	2020	Increase/reduction ratio
Cash flow ratio	5.64%	19.69%	-71.36%
Cash flow adequacy ratio	44.19%	71.36%	-38.07%
Cash reinvestment ratio	-	3.37%	-
Ratio change analysis (1)Cash flow ratio: mainly because of the decrease of net cash inflow from operations that resulted in the rise of cash flow ratio. (2)Cash flow adequacy ratio: this ratio is the influence in 25 years and the main reason for the decline is the substantial decrease of inventory in 2020 under the influence of the pandemic and the refill of inventoryin 2021.

• 112 -

CHUN YU WORKS ＆ CO., LTD.

Unit: NT$ thousand	Remedy for cash shortage	Financial Management Plans	－	Analysis of cash flow in the year (1) Business activities: In 2022, there is little change in the receivables and the terms of payment for materials procurement and payables. It is expected that business activities will produce income from net cash flow at NT$500,000,000. (2) Investment activities: In 2022, the projected net cash outflow of NT$150,000,000 will be produced from the payment for fixed asset procurement and other investment activities (3) Fundraisers: In 2022, the projected net cash outflow of NT$350,000,000 will be produced from the repayment of loans and distribution of cash dividend. 2. Remedy for project cash insufficiency and liquidity analysis: NA.
		Investment Plans	－
		Cash balance< (1)+(2)-(3)	1,026,237
	Annual net cash outflow (3)		(500,000)
	Annual net cash flow from own business activities		500,000
	Beginning cash balance(1)		1,026,237

• 113 -

CHUN YU WORKS ＆ CO., LTD.

• (vi) Analysis and Assessment of Risk Issues in the Past Year and as of the Date of Publication of the Annual Report:

• (1) The impact of interest and exchange rate changes and inflation on the Company's profit and loss and future counter measures:

pact of interest and exchange r d future counter measures:	ate changes and inflation o
Item	2021(NT$thousand)
Interest expense	98,569
Loss on foreign exchange	6,648

We periodically assess the bank’s loan interest rate and keep close contact with banks for lower loan interest rate. We have also established explicit foreign exchange strategies and strict control processes to monitor the volatility in foreign exchange rates.

• (2) Policies of engagement in high-risk and highly leveraged investments, loans to others, endorsements and guarantees and derivative trading, main reasons for profit or loss and future counter measures:

In 2021, we did not engage in high-risk, high-leverage investments, loan funds to others, or

trade derivatives. However, we did provide guarantee for financing for subsidiaries of which we hold over 50% of the shares in accordance with the “Procedures for Loaning Funds to Others and Making Endorsements/Guarantees for Others.”

• (3) Future R&D projects and estimated R&D expenses:

• 1.In 2022, we will invest NT$81,726,000 in R&D.

2.Future R&D plans:

• (a) Support business operation and market need in the development of new products and prompt for industrial upgrading.

• (b) Improve the machinery and equipment in service for saving manual labor through automation.

• (c) Intensify the training of technical personnel.

• (d) Fortify the protection of the work environment in conformity to rules and regulations governing environmental protection.

• (e) Improve the mold for high performance screw bolts for reducing the loss of materials and the mold.

• (f) Improve the speed for tapping screws.

• (4) The impact of important domestic and overseas policy and regulation changes on the financial status of the Company and counter measures: Nil.

• (5) Effect on the company's financial operations of developments in science and technology as well as industrial change, and measures to be taken in response in the current fiscal year up to the date of publication of the Annual Report: None.

• (6) The impact of corporate image change on the Company’s crisis management and counter measures: Nil.

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CHUN YU WORKS ＆ CO., LTD.

• (7) Expected benefits and possible risks of plant expansion: Nil.

• (8) Expected benefits and possible risks of plant expansion: Nil.

• (9) The impact of concentration of purchase or sales and counter measures:

• Although most raw materials are purchased from domestic steel companies, we sign a long-term supply contract with them to maintain steady materials supply. Product sales are adjusted in accordance with the operating conditions of customers, and transactions with customers remain stable.

• (10) The impact of mass share transfer of or change of Directors, Supervisors or shareholders holding more than 10% of the Company's shares, the risks and counter measures: Nil.

• (11) The impact of the change of management on the Company, the risks and counter measures: Nil.

• (12) If there is any litigation or non-litigation, please list the significant litigation, non-litigation or administrative litigation with its judgment already made or pending which is related to the Company or the Company’s Directors, Supervisors, General Manager, actual person in charge, shareholders holding more than 10% of the Company's shares or affiliates. If the result may have a significant impact on the shareholders' equity or the price of the Company’s shares, please disclose the fact of the dispute, the claim amount, the date of commencement of the litigation, the principal litigants and the handling of the situation as of the date of publication of the annual report: Nil.

(13) Other important risks and counter measures: Nil.

(vii) Other important matters: Nil

• 115 -

CHUN YU WORKS ＆ CO., LTD.

			CHUN YU WORKS＆CO., LTD.	CHUN YU WORKS＆CO., LTD.
i.Information of affiliates (1) 2021 consolidated financial statements of affiliates: a statement of the consolidated financial statements of affiliates was issued to testify that the companies producing the consolidated financial statement of affiliates are the same as the companies in the consolidated financial statements of the company and affiliates. (2) 2021 Consolidated Financial Statements of Affiliates Organizational Chart of Affiliates CHUN YU WORKS & CO., LTD. CHUN YU WORKS & CO., LTD.			100% CHUN ZU MACHINERY INDUSTRY CO.,LTD BVI LAI MONGCITY DEVELOPMENT LIMITED COMPANY 47.81% SAMOA SUNNY CITY INTERNATIO NAL LIMITED 100% SHANGHAI UCHEE HARDWARE PRODUCTS CO., LTD 100% CHUN BANG PRECISION CO.,LTD 100% CHUN YU BIO-TECH CO.,LTD 100% CHUN YU INVESTME NT (SHARES) COMPANY 100% BVI SCHOLAR HOLDINGS LTD. 100% CHUN YU WORKS (USA) LNC. 100% CHUN YU (DONG GUAN) METAL PRODUCTS CO., LTD 100% PT MOON LION INDUSTRIES INDONESIA 71.85%		Produced 2021.12.31 SHANGHAI CHUN ZU MACHINERY INDUSTRY CO.,LTD 100% SHANGHAI TONGSENG TRADING CO.,LTD 100%
	CHUN YU WORKS & CO., LTD.
				BVI LAI MONGCITY DEVELOPMENT LIMITED COMPANY
						SHANGHAI CHUN ZU MACHINERY INDUSTRY CO.,LTD

• 116 -

CHUN YU WORKS ＆ CO., LTD.

							CHUN	YU WOR	KS＆C	O., LTD.
Unit: NT$ thousand	Major scope of business	Manufacturing and sales of machinery	Mould making and trading	Manufacturing and sales of screws and nuts	Import and export trade of metal products	Reinvestment and import and export trade	Manufacturing and sales of screws and nuts	Professional investment	Powder metallurgy	Reinvestment and import and export trade	Sales of screws and nuts	Sales of screws and nuts	Professional investment	Manufacturing and sales of machinery
	Paid-in Capital	602,900	150,000	39,600	105,184	918,511	1,784,862	563,068	100,000	27,680	27,680	8,692	55,360	235,280
	Address	No.50, Tapao St., Kangshan Dist., Kaohsiung City 820, Taiwan.	No.28, Tapao St., Kangshan Dist., Kaohsiung City 820, Taiwan.	Jl.Rawa Bali 1/No.8 Industrial Estate Pulogadung Jakarta, Indonesia.	1037 Walnut Avenue Pomona,Ca 91766, USA.	Palm Grove House, P.O.BOX 438 Road Town, Tortola, British Virgin Islands.	Songmushan Administration Zone, Dalang, Dongguan City 523795, Guangdong Province, China.	No.100, Tapao St., Kangshan Dist., Kaohsiung City 820, Taiwan.	No. 269, Jiahua Road, Gangshan Dist., Kaohsiung City 820, Taiwan.	Offshore Chambers, P.O.Box 217,Apia Samoa.	No. 5, Mingying Road, Luojing Town, Baoshan District, Shanghai City, China.	No. 5, Mingying Road, Luojing Town, Baoshan District, Shanghai City, China.	P.O. Box 438 Road Town Tortola British Vigrin Island.	No. 6639, Jihe Highway, Bahe Town, Qingpu District, Shanghia City, China.
	Establishment Date	1974/06/01	1980/08/22	1972/02/23	1993/01	1995/07/24	1995/09/10	1998/11/13	2008/01/10	2010/03/23	2010/03/23	1998/07/24	1998/01/05	1998/05/11
	Name of Enterprise	Chun Zu Machinery Industry Co.,Ltd.	Chun Bang Precision Co., Ltd.	PT Moon Lion Industries Indonesia	Chun Yu Works (USA) Lnc.	Scholar Holdings Ltd.	ChunYu (Dong Guan) Metal Products Co., Ltd.	Chun Yu Investment (Shares) Company	Chun Yu Bio-Tech Co., Ltd.	Sunny City International Limited.	Shanghai Uchee Hardware Products Co., Ltd.	Shanghai Tongseng Trading Co., Ltd.	Bvilaimongcity Development Limited Company	Shanghai Chun Zu Machinery Industry Co., Ltd.

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2021 Unit: NT$ thousand	EPS	1.39	0.23	15.31	11.62	1.35	0.70	4.61	2.56	35.78	35.82	0.08	43.29	10.19
	Current profit/loss	83,778	3,422	306,215	44,141	44,749	44,894	259,356	25,612	35,781	35,819	151	86,590	86,581
	Operating Income	(31,075)	1,563	401,518	49,793	(146)	92,362	(370)	32,248	(51)	45,189	(552)	(2)	98,206
	Operating revenue	658,184	135,147	1,518,607	438,911	-	2,064,414	-	178,080	-	851,759	-	-	821,711
	Net Worth	1,026,014	197,748	803,470	285,680	1,004,750	1,028,940	830,866	136,072	256,893	254,813	(4,018)	627,761	617,670
	Total liabilities	614,766	91,143	373,160	105,702	24,905	696,372	2,247	81,619	-	110,276	34,706	-	428,029
	Total assets	1,640,780	288,891	1,176,630	391,382	1,029,655	1,725,312	833,113	217,691	256,893	365,089	30,688	627,761	1,045,699
	Authorized Capital	602,900	150,000	39,600	105,184	918,511	1,784,862	563,068	100,000	27,680	27,680	8,692	55,360	235,280
	Name of Enterprise	Chun Zu Machinery Industry Co.,Ltd.	Chun Bang Precision Co., Ltd.	Chun Yu Bio-Tech Co., Ltd.	Chun Yu Works (USA) Lnc.	PT Moon Lion Industries Indonesia	Scholar Holdings Ltd.	ChunYu (Dong Guan) Metal Products Co., Ltd.	Chun Yu Investment (Shares) Company	Sunny City International Limited.	Shanghai Uchee Hardware Products Co., Ltd.	Shanghai Tongseng Trading Co., Ltd.	Bvilaimongcity Development Limited Company	Shanghai Chun Zu Machinery Industry Co., Ltd.

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Directors, supervisors and the president of Affiliated Companies

(As of December 31,2021)

Unit: shares/%

Name of Enterprise	Job Title	Name or Representative	Shareholding	Shareholding
			Number of shares
Chun Zu Machinery Industry Co.,Ltd.	Chairperson Vice President Director Director Director Director Independent Directors Independent Directors Independent Directors President	Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co.,,Ltd. SPOT Inc Chi-Tai, Chen Chiung- Fen, Wang Huei-Jeng, Lin Shi-He Li Ming-Shen, Sun Chung-Hsien, Li Yi-Lang, Lin Chang-Hong, Feng Yi-Han, Wu Cheng-Yao,Sun	28,821,939 28,821,939 28,821,939 28,821,939 859,377 317,538 - - - 68,323	47.81% 47.81% 47.81% 47.81% 1.43% 0.53% - - - 0.11%
Bvilaimongcity Development Limited Company	Chairperson	Chun Zu Machinery Industrial Co., Ltd. Chi-Tai, Chen	USD 2,000,000	100%
Shanghai Chun Zu Machinery Industry Co., Ltd.	Chairperson Director Director Director Director Director Supervisor Supervisor President	Laiwangcheng Development Co., Ltd. Laiwangcheng Development Co., Ltd. Laiwangcheng Development Co., Ltd. Laiwangcheng Development Co., Ltd. Laiwangcheng Development Co., Ltd. Laiwangcheng Development Co., Ltd. Laiwangcheng Development Co., Ltd. Laiwangcheng Development Co., Ltd. Chi-Tai, Chen Chiung-Fen, Wang Shi-He, Li Chung-Hsien, Li Cheng-Yao, Sun Chan-Fei, Hu Huei-Jeng, Lin Ming-Shen, Sun Chan-Fei,Hu	USD8,500,000 USD8,500,000 USD8,500,000 USD8,500,000 USD8,500,000 USD8,500,000 USD8,500,000 USD8,500,000 -	100% 100% 100% 100% 100% 100% 100% 100% -
Chun Bang Precision Co., Ltd.	Chairperson Director Director Supervisor President	Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co.,,Ltd. Chi-Tai, Chen Huei-Jeng, Lin Chiung-Fen, Wang Chung-Chun, Wong Hsing-Ya,Cheng	4,500,000 4,500,000 4,500,000 4,500,000 -	100% 100% 100% 100% -
PT Moon Lion Industries Indonesia	Chairperson and CEO Director Director Chairman of the Board Director Director Director Director	Chun Yu Works & Co., Ltd. Chun Yu Works & Co.,,Ltd. Tjoe Kie Koen Rahman Tamin Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co.,,Ltd. Mintarto Halim Lien-Tuei, Lin Xin-Jie, Cheng Huei-Jeng, Lin Chen Chi-Ta Chung-Chun, Wong	14,370,000 14,370,000 - 960,667 14,370,000 14,370,000 14,370,000 600,000	71.85% 71.85% - 4.80% 71.85% 71.85% 71.85% 3.00%
Chun Yu Works (USA) Lnc.	Chairperson Director Director	Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co.,,Ltd. Chung-Chun, Wong Huei-Jeng, Lin Chi-Tai,Chen	3,800,000 3,800,000 3,800,000	100% 100% 100%
Scholar Holdings Ltd.	Chairperson	Chun Yu Works Co.,Ltd. Huei-Jeng,Lin	33,183,211	100%
ChunYu (Dong Guan) Metal Products Co., Ltd.	Chairperson Director Director Supervisor President	Scholar Holdings Ltd. Scholar Holdings Ltd. Scholar Holdings Ltd. Scholar Holdings Ltd. Chung-Chun, Wong Huei-Jeng, Lin Chi-Tai, Chen Chiung-Fen, Wang Shun-Yi,Guo	USD64,482,000 USD64,482,000 USD64,482,000 USD64,482,000 -	100% 100% 100% 100% -
Chun Yu Investment (Shares) Company	Chairperson Director Director Supervisor	Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co.,,Ltd. Chi-Tai, Chen Huei-Jeng, Lin Chiung-Fen, Wang Chung-Chun,Wong	50,184,306 50,184,306 50,184,306 50,184,306	100% 100% 100% 100%
Chun Yu Bio-Tech Co., Ltd.	Chairperson Director Director Supervisor President	Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co.,,Ltd. Chi-Tai, Chen Huei-Jeng, Lin Chiung-Fen, Wang Chung-Chun, Wong Ting-Yuen,Cheng	6,996,000 6,960,000 6,960,000 6,960,000 -	100% 100% 100% 100%- -
Sunny City International Limited.	Chairperson	Chun Yu Works & Co.,,Ltd. Huei-Jeng, Lin	USD 1,000,000	100%

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Name of Enterprise	Job Title	Name or Representative	Shareholding	Shareholding
			Number of shares
Shanghai Uchee Hardware Products Co., Ltd.	Chairperson Director Director Supervisor	Sunny City International Limited. Sunny City International Limited. Sunny City International Limited. Sunny City International Limited. Chung-Chun, Wong Huei-Jeng, Lin Chi-Tai, Chen Chiung-Fen, Wang	USD1,000,000 USD1,000,000 USD1,000,000 USD1,000,000	100% 100% 100% 100%
Shanghai Tongseng TradingCo.,Ltd.	Chairperson Supervisor	Shanghai Uchee Hardware Products Co.,Ltd. Chung-Chun, Wong Wu-Chien,Chia	RMB 2,000,000 RMB 2,000,000	100% 100%

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ii.Private placement of securities in the previous fiscal year and by the date of annual report publication: NA iii.Stocks of this Company held and disposed by subsidiaries in the previous fiscal year and by the date of annual report publication Stocks of this Company held and disposed of by subsidiaries in the previous fiscal year and by the date of annual report publication April 30, 2022 Unit: NT$ thousand; shares	Amount of loan for subsidiarie s	NA	Note: no significant influence on the Company’s financial performance and financial status. IV. Other required supplementary notes: NA. V. Events with material impacts on equity or stock price as specified in Item 2, Paragraph 2, Article 36 of the Securities and Exchange Act in the previous year and by the date of report publication: NA.
	Amount of endorsement/ guarantee for subsidiaries	NA
	and by the date of annual report publicatio n	NA
	Pledge creation in the previous fiscal year	22 314 450 shares 668,318 thousand
	Investment profit/loss	-
	Number of shares and amount Disposed acquired	1,516,000 shares 60,394 thousand -
	Number of shares and amount acquired	23,830,450 shares 288,910 thousand
	(1) Acquisition or (2) Disposition date	(1)88.05�96.10 (2)110.07
	Sharehold ing Of this Company	100.00%
	Fund sources	Shareholder investment
	Paid-in Capital	563,068
	Subsidiary Name	Chun Yu Investment (Shares) Company

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CHUN YU WORKS & CO., LTD.

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2021, pursuant to Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises, the entities that are required to be included in the consolidated financial statements of affiliates, are the same as the entities required to be included in the consolidated financial statements under International Financial Reporting Standard No. 10. Also, if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare consolidated financial statements of affiliates.

Hereby declare,

Chun Yu Works & Co., Ltd.

March 10, 2022

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Chun Yu Works & Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Chun Yu Works & Co., Ltd. and subsidiaries (the “Group”) as at December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the Other matter section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 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 Group’s 2021 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2021 consolidated financial statements are stated as follows:

Cut-off of revenue from export sales

Description

Refer to Note 4(28) for accounting policy on revenue recognition and Note 6(21) for details of operating

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revenue.

The Group derives its revenues from the sales of screws, nuts, wire rods and fastener forming machines, etc., and revenues from export sales account for a high percentage of total revenue. Export sales are recognized as revenues when control of the goods has been transferred according to the terms specified in the contracts. The revenue recognition requires that the products are delivered to the customer, the customer has full discretion over the products, and there is no unfulfilled obligation that could affect the customer’s acceptance over the products, but delivery time may vary for each sales transaction. The determination as to when products are transferred to customers involves manual process and judgement. Given that there is a risk of material misstatement from improper revenue recognition for transactions that occur near the balance sheet date and the transaction amounts are usually material to the financial statements, we considered the cut-off of revenue from export sales a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Obtained an understanding and assessed the accounting policies of revenue recognition on export sales.

2. Obtained an understanding and assessed the internal controls over revenue recognition on export sales, and tested the effectiveness of internal controls including the delivery process and the timing of revenue recognition.

3. Performed cut-off tests on export sales transactions that took place during a certain period before and after the balance sheet date to ascertain whether sales revenues were recognized when control of goods has been transferred to the customer and revenues were recorded in the proper period.

Valuation of inventories

Description

Refer to Note 4(10) for accounting policy on inventory valuation, Note 5(2) for uncertainty of accounting estimates and assumptions in relation to inventory valuation, and Note 6(4) for details of inventories. As of December 31, 2021, the inventories and allowance for inventory valuation losses amounted NT$4,621,155 thousand and NT$146,848 thousand, respectively.

The Group is primarily engaged in the manufacture and sales of screws, nuts, wire rods and fastener forming machines, etc. Due to the market demand, technology innovation and other factors, there is a risk of inventories losing value or becoming obsolete. The inventories are measured at the lower of cost and net realisable value. For inventory over a certain age and individually identified as obsolete or slowmoving, the net realisable values are determined by management based on periodic inventory clearance information. Given that the net realisable value used when assessing the inventories individually identified as obsolete or slow-moving involves subjective judgement, we considered the valuation of inventories a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Assessed the reasonableness of policies and procedures in relation to the provision of allowance for

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inventory valuation losses based on the accounting principles and our understanding of the nature of the business and the industry.

1. Obtained an understanding of the warehouse management processes, reviewed the annual physical inventory count plan and participated in the annual inventory count in order to evaluate the effectiveness of procedures used by the management to identify and control obsolete inventories.

2. Verified the appropriateness of net realisable value used in inventory valuation and the logic used in the inventory aging report to ascertain the adequacy of allowance for inventory valuation losses.

Other matter - Reference to the reports of other auditors

We did not audit the financial statements of the consolidated subsidiaries, Chun Yu Works (USA) Inc. and Pt Moon Lion Industries Indonesia, which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts included in respect of these subsidiaries, is based solely on the reports of the other auditors. Total assets of these subsidiaries amounted to NT$1,568,012 thousand and NT$1,472,430 thousand, constituting 12% and 14% of the consolidated total assets as at December 31, 2021 and 2020, respectively, and the operating revenue amounted to NT$1,957,518 thousand and NT$1,678,066 thousand, constituting 17% and 21% of the consolidated total operating revenue for the years then ended, respectively.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion with an other matter paragraph on the parent company only financial statements of Chun Yu Works & Co., Ltd. as at and for the years ended December 31, 2021 and 2020.

Responsibilities of management and those charged with governance for the consolidated financial statements

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

In preparing the consolidated financial statements, management is responsible for assessing the Group’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 Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the

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Group’s financial reporting process.

Auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted 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 consolidated financial statements.

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

1. Identify and assess the risks of material misstatement of the consolidated 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 for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

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

4. 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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated 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 auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion on the consolidated financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope

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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 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 consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Lin, Tzu-Shu

Independent Accountants

Liu, Tzu-Meng

PricewaterhouseCoopers, Taiwan

Republic of China March 10, 2022

---

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) and 7 6(3) and 7 6(28) 5, 6(4) and 8 6(1) and 8 6(5) and 8 6(1) 6(6)(10) and 8 6(7) and 8 6(8) 6(28) 6(6)(8) 6(3)(9) 6(1) and 8	December 31, 2021 AMOUNT % � ��������� � ������ � ������� � ��������� �� ������ � ������ � ��������� �� ������� � ����� � ��������� �� ������� � ������ � ��������� �� ������� � ����� � ������� � ������ � ������ � ������ � ����� � ����� � ��������� �� � ���������� ���	December 31, 2020	December 31, 2020
		AMOUNT � ��������� ������ ������� ��������� ������ ������ ��������� ������� ����� ��������� ������� ������ ��������� ������� ����� ������� ������ ������ ������ ����� ����� ��������� � ����������	AMOUNT � ������� ������� ������� ��������� ������ ����� ��������� ������� ����� ��������� ������� � ��������� ������� ������ ������� ������ ������ ������ ������ ����� ��������� � ����������	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories 1410 Prepayments 1476 Other current financial assets 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non- current 1535 Non-current financial assets at amortised cost 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1915 Prepayments for business facilities 1920 Guarantee deposits paid 1930 Long-term notes and accounts receivable 1980 Other non-current financial assets 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets				� � � �� � � �� � �
				��
				� � �� � � � � � � � �
				��
				���

(Continued)

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2021 December 31, 2020 Notes AMOUNT % AMOUNT % 6(11) and 8 � ��������� �� � ��������� �� 6(12) � � ������ � 6(21) and 7 ������� � ������� � 7 ����� � ����� � 7 ��������� � ������� � 7 ������� � ������� � 6(28) ������ � ������ � 6(14) ����� � ����� � 6(7) ������ � ������ � 6(15) and 8 ������ � ������� � ��������� �� ��������� �� 6(13) and 8 ��������� �� � � 6(15) and 8 ������� � ��������� �� 6(28) ������� � ������� � 6(7) ������ � ������ � 6(16) ������� � ������� � ��� � ��� � ��������� �� ��������� �� ��������� �� ��������� �� 6(17) ��������� �� ��������� �� 6(17)(18) ������� � ������� � 6(19) ������� � ������� � ������� � ������� � ������� � ������� � 6(5)(20) � ��������� �� ��������� � 6(17) and 8 � ��������� �� ��������� � ��������� �� ��������� �� 4(3) ������� � ������� � ��������� �� ��������� �� 9 ���������� ��� ���������� ���	December 31, 2020	December 31, 2020
			%
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Current contract liabilities 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2250 Provisions for liabilities - current 2280 Current lease liabilities 2320 Long-term liabilities, current portion 21XX Total current liabilities Non-current liabilities 2530 Bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Net defined benefit liabilities - non- current 2645 Guarantee deposits received 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury stocks 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant Contingent Liabilities and Unrecognized Contract Commitments 3X2X Total liabilities and equity			�� � � � � � � � � �
			��
			� �� � � � �
			��
			��
			�� �
			��
			���

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

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(21) and 7 � ���������� ���� ��������� ��� 6(4)(8)(16)(26)(2 7) and 7 � ����������� ��� ����������� ��� ��������� �� ��������� �� 6(8)(16)(26)(27), 7 and 12 � ��������� ��� ��������� �� � ��������� ��� ��������� �� � �������� ��� �������� �� ����� �� ������ � � ��������� ��� ��������� ��� ��������� � ������� � 6(3)(9)(22) ������ � ������ � 6(2)(5)(23) and 7 ������ � ������� � 6(2)(7)(24) and 12 ������ �� ������� � 6(7)(25) � �������� ��� ��������� �� ������ �� ������ � ��������� � ������� � 6(28) � ��������� ��� �������� �� � ������� � � ������� �

4000 Operating revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit gains (losses) 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year

(Continued)

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(16) �� ������� ��� ������� � 6(5)(20) � ������� �� �������� �� 6(28) ����� �� ��� � � ������� �� ������� � 6(28) ��� �� ������ � �� ������� ��� �������� �� � ������� � � ������� � � ������� � � ������� � ������� � ������ � � ������� � � ������� � � ������� � � ������� � ������� � ������ � � ������� � � ������� � 6(29) � ����� ���� � ����� ����

Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Actuarial losses on defined benefit plans 8316 Unrealised loss on valuation of investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8399 Aggregated income tax relating to components of other comprehensive income (loss) 8300 Total other comprehensive loss for the year 8500 Total comprehensive income for the year Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Earnings per share (in dollars) 9750 Basic 9850 Diluted

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

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CHUN YU WORKS ＆ CO., LTD.

																										CH	U	N	YU	W	OR		KS	＆	CO	.,	LT	D.
																Total equity				����������	�������	�������	�������		�	��������		������	�������	����������			����������	�������	�������	�������		�	��������			�	��������	������		������	�������	����������
																						�				�			�						�				�				�				�
															Non-controlling	interest				� �������	������	� �������	������		�	�		�	� �������	� �������			� �������	�������	� ������	�������		�	�			�	�	�		�	� �������	� �������
																Total				����������	�������	�������	�������		�	��������		������	�	����������			����������	�������	�������	�������		�	��������			�	��������	������		������	�	����������
																						�				�									�				�				�
																Treasury stocks				�� ��������	�	�	�		�	�		�	�	�� ��������			�� ��������	�	�	�		�	�			�	�	������		�	�	�� ��������
CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES		CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY		YEARS ENDED DECEMBER 31, 2021 AND 2020		(Expressed in thousands of New Taiwan dollars)	Equity attributable to owners of the parent	Retained Earnings Other Equity Interest	Unrealised gains	(losses) from	financial assets	Financial measured at fair	statements value through	translation other	Unappropriated differences of comprehensive	Legal reserve Special reserve retained earnings foreign operations income				� ������� � ������� � ������� �� �������� � ������	� � ������� � �	� � � ������� � ������� � �������	� � ������� � ������� � �������		������ � � ������� � �	� � � �������� � �		� � � � �	� � � � �	� ������� � ������� � ������� �� �������� � ������			� ������� � ������� � ������� �� �������� � ������	� � ������� � �	� � � ������ � ������� � �������	� � ������� � ������� � �������		������ � � ������� � �	� � � �������� � �			������ � � ������� � �	� � � �������� � �	� � � � �		� � � � �	� � � � �	� ������� � ������� � ������� �� �������� � �����
															Treasury stock	transactions				� �������	�	�	�		�	�		������	�	� �������			� �������	�	�	�		�	�			�	�	������		������	�	� �������
															Share capital -	common stock				����������	�	�	�		�	�		�	�	����������			����������	�	�	�		�	�			�	�	�		�	�	����������
																Notes						6(5)(20)				6(19)	6(17)(18)								6(5)(20)				6(19)				6(19)	6(17)(18)	6(17)(18)
																	Year ended December 31, 2020			Balance at January 1, 2020	Profit for the year	Other conprehensive loss for the year	Total comprehensive income (loss)	Distribution of 2019 net income:	Legal reserve	Cash dividends	The Company's dividends received by	subsidiaries	Decrease in non-controlling interest	Balance at December 31, 2020	Year ended December 31, 2021		Balance at January 1, 2021	Profit for the year	Other conprehensive loss for the year	Total comprehensive income (loss)	Distribution of 2020 net income:	Legal reserve	Cash dividends	Distribution of first half of 2021 net	income:	Legal reserve	Cash dividends	Disposal of treasury stocks	The Company's dividends received by	subsidiaries	Decrease in non-controlling interest	Balance at December 31, 2021

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Net (gains) losses on financial assets and liabilities at fair value through profit or loss Expected credit (gains) losses (Reversal of allowance) provision for inventory market price decline Depreciation Losses (gains) on disposal of property, plant and equipment Gain from lease modification Amortization Interest income Dividend income Interest expense Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss - current Notes receivable Accounts receivable Other receivables Inventories Prepayments Long-term notes and accounts receivable Changes in operating liabilities Current contract liabilities Notes payable Accounts payable Other payables Provisions for liabilities - current Net defined benefit liabilities - non-current Cash inflow generated from operations Interest received Dividends received Income tax refund Interest paid Income tax paid Net cash flows from operating activities

Year ended December 31 Notes 2021 2020 � ��������� � ������� � ������ ������ 12 � ������ ����� 6(4) � ������� ������ 6(6)(7)(26) ������� ������� 6(24) ����� � ���� 6(7)(24) � ���� � 6(8)(26) ����� ����� 6(22) � �������� ������� 6(23) � �������� ������� 6(25) ������ ������� ������ ������� ������ � �������� � �������� ������ � ������� ������ � ���������� ������ � �������� ������� ������ ����� ������� ������ ����� � ������ ������� � ������ ������� ����� ����� � ������ � ������� ��� ������� ������� ������ ������ ������ ������ ����� ����� � �������� �������� � ��������� ������� ������� �������

(Continued)

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Decrease (increase) in other financial asset - current Return of capital from financial assets at fair value through other comprehensive income Increase in financial assts measured at amortized cost�non current Cash paid for acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of right-of-use assets Acquisition of intangible assets Increase in prepayments for business facilities Decrease in guarantee deposits paid Decrease in other non-current financial assets (Increase) decrease in other non-current assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term borrowings (Decrease) increase in short-term notes and bills payable Payments of lease liabilities Increase in bonds payable Increase in long-term borrowings Decrease in long-term borrowings (Decrease) increase in guarantee deposits received Payments of cash dividends Disposal of treasury stocks Decrease in non-controlling interest Net cash flows from (used in) financing activities Effect of foreign exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2021 2020 � ��� �� ������ 6(5) ��� ����� � ������� � 6(30) � ��������� �������� ����� ������ � � ������� 6(8) � ������� ������ � �������� ������� ����� ����� ����� ����� � ������ ����� � ��������� �������� 6(31) � �������� ������ 6(31) � ������� ������ 6(31) � �������� ������� ��������� � 6(31) ��������� ��������� 6(31) � ������������ ���������� 6(31) � ���� ��� 6(30) � ��������� �������� 6(17) ������ � � �������� ������� ������� � �������� � �������� ������ ������� ������ 6(1) ������� ������� 6(1) � ��������� � �������

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

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. History and Organization

• (1) Chun Yu Works & Co., Ltd. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) and other related regulations in March 1965. The Company is primarily engaged in the manufacture and heat treatment of screws, nuts and polished steel bars as well as design of pollution prevention equipment and undertaking related services. The information on main business activities of the Company’s subsidiaries is provided in Note 4(3).

• (2) The Company’s shares have been listed on the Taiwan Stock Exchange since October 1991.

• The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

• These consolidated financial statements were authorised for issuance by the Board of Directors on March 10, 2022.

3. Application of New Standards, Amendments and Interpretations

• (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘ InterestRate Benchmark Reform�Phase 2’ Amendment to IFRS 16, ‘Covid-19-related rent concessions beyond 30 June 2021’ Note:Earlier application from January 1, 2021 is allowed by the FSC.	January 1, 2021 January 1, 2021 April 1, 2021 (Note)

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

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

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CHUN YU WORKS ＆ CO., LTD.

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

New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts�cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

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

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

New Standards,Interpretations andAmendments

Effective date by International Accounting StandardsBoard

Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, 'Insurance contracts' Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 – comparative information' Amendments to IAS 1, ‘Classification of liabilities as current or non- Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’

To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

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

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CHUN YU WORKS ＆ CO., LTD.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

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

• (b) Financial assets at fair value through other comprehensive income.

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

• B. The preparation of consolidated financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5, � Critical accounting judgements, estimates and key sources of assumption uncertainty’.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

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CHUN YU WORKS ＆ CO., LTD.

• (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

• B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Main business activities	December 31,2021 December 31,2020 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 71.85 71.85 47.82 47.82 100.00 100.00 Ownership (%)	Description
			December 31,2021 100.00 100.00 100.00 100.00 100.00 100.00 71.85 47.82 100.00
Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Chun Yu Works & Co., Ltd. Scholar Holdings Ltd.	Chun Bang Precision Co., Ltd. Chun Yu Works (USA) Inc. Chun Yu Investment Co., Ltd. Chun Yu Bio-tech Corp. Scholar Holdings Ltd. Sunny City International Limited Pt Moon Lion Industries Indonesia Chun Zu Machinery Industry Co., Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd.	Manufacture and sales of moulds Import and export of hardware products Professional investment Powder metallurgy Reinvestment and import and export sales Reinvestment and import and export sales Manufacture and sales of screws and nuts Manufacture and sales of machinery Manufacture and sales of screws and nuts		(Note 1) � � � � � � (Note 2) (Note 3) �

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CHUN YU WORKS ＆ CO., LTD.

Name of investor	Name of subsidiary	Main business activities	December 31,2021 December 31,2020 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Ownership (%)	Description
			December 31,2021 100.00 100.00 100.00 100.00
Sunny City International Limited Shanghai Uchee Hardware Products Ltd. Chun Zu Machinery Industry Co., Ltd. Lion City Management Ltd.	Shanghai Uchee Hardware Products Ltd. Chunyu Group Shanghai Tongsheng Trade Co., Ltd. Lion City Management Ltd. Shanghai Chun Zu Machinery Industry Ltd.	Sales of screws and nuts Sales of screws and nuts Professional investment Manufacture and sales of machinery		� � � �

• (Note 1) The name was changed from Hi-Ace Trading Co., Ltd. to Chun Bang Precision Co., Ltd. on May 20, 2020, and main business activities was changed to moulds manufacturing and selling.

(Note 2) It represents the consolidated ownership held by the Group.

• (Note 3) A representative appointed by the Company was elected as the chairman of the investee, and the general manager of the investee had to report to the Board of Directors of the Company. Thus, the Company had substantial control over the investee and its subsidiaries.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group:

• As of December 31, 2021 and 2020, the non-controlling interest amounted to $724,434 and $647,037, respectively. The information on non-controlling interest and respective subsidiaries is as follows:

as follows:
Name of subsidiary	Principal place ofbusiness Taiwan	Amount Ownership (%) Amount Ownership (%) 498,258 $ 52.18% 480,947 $ 52.18% December31,2021 December31,2020 Non-controllinginterest
		Amount Ownership (%) 498,258 $ 52.18% December31,2021
		Amount 498,258 $	Amount 480,947 $
Chun Zu Machinery Industry Co., d				52.18%

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CHUN YU WORKS ＆ CO., LTD.

Summarised financial information of the subsidiaries:

Consolidated balance sheet	Chun ZuMachineryIndustry Co.,Ltd.	Chun ZuMachineryIndustry Co.,Ltd.	Chun ZuMachineryIndustry Co.,Ltd.	Chun ZuMachineryIndustry Co.,Ltd.	and subsidiaries	and subsidiaries
		December	31,2021 December31,			2020
Current assets	$		1,401,368 $		1,321,183
Non-current assets			647,208			650,266
Current liabilities	(		840,724) (			804,891)
Non-current liabilities	(		181,840) (			174,613)
Total net assets	$		1,026,012 $			991,945
			Years endedDecember31
Consolidated statement of comprehensive income			2021		2020
Revenue		$	1,460,987	$	1,221,097
Profit for the year		$	83,778	$		56,931
Other comprehensive (loss) income		(	4,493)			8,236
Total comprehensive income		$	79,285	$		65,167
Comprehensive income attributable to
non-controlling interest		$	40,905	$		26,226
Dividends paid to non-controlling interest		$	23,594	$		53,480
			Years ended	December31
Consolidated statements of cash flows			2021		2020
Net cash provided by operating		$	476,233	$		51,784
activities
Net cash used in investing activities		(	92,552)	(		32,075)
Net cash used in financing activities		(	248,602)	(		5,162)
Effect of exchange rate changes on cash and
cash equivalents		(	2,294)			4,714
Increase in cash and cash equivalents			132,785			19,261
Cash and cash equivalents, beginning of year			164,700			145,439
Cash and cash equivalents, end of year		$	297,485	$		164,700

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

A. Foreign currency transactions and balances

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

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CHUN YU WORKS ＆ CO., LTD.

  - (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

  - (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

  - (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

  • (a) The operating results and financial position of all the group entities and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

    • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

    • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

    • iii. All resulting exchange differences are recognized in other comprehensive income.

  • (b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

• (5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

  • (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

  • (b) Assets held mainly for trading purposes;

  • (c) Assets that are expected to be realised within twelve months from the balance sheet date;

  • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet

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date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

  • (a) Liabilities that are expected to be settled within the normal operating cycle;

  • (b) Liabilities arising mainly from trading activities;

  • (c) Liabilities that are to be settled within twelve months from the balance sheet date;

  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

• (6) Cash equivalents

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

• B. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

• D. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (8) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

  • (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (9) Accounts and notes receivable

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

• B. The Group initially measures accounts and notes receivable at fair value and subsequently recognizes the amortised interest income over the period of circulation using the effective interest

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method and the impairment loss. A gain or loss is recognized in profit or loss.

• (10) Inventories

• Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

• The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(12) Impairment of financial assets

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

(13) Derecognition of financial assets

The Group derecognizes a financial asset when one of the following conditions is met:

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• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Group has not retained control of the financial asset.

• (14) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Errors’, from the date of the change. The are as follows:	estimated useful lives of
Assets Buildings and structures: Main building of plant Others Machinery and equipment Utilities equipment Transportation equipment Office equipment Other equipment	Useful lives
	3 ~ 51 years 4 ~ 36 years 2 ~ 22 years 5 ~ 20 years 2 ~ 9 years 2 ~ 13 years 2 ~ 15 years

(15) Leasing arrangements (lessee) - right-of-use assets / lease liabilities

• A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

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• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable; and

• (b) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The Group subsequently measures the lease liability at amortised cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

• (b) Any lease payments made at or before the commencement date; and

• (c) Any initial direct costs incurred by the lessee.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(16) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3 to 10 years.

(17) Impairment of non-financial assets

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

(18) Borrowings

• A. Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to

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the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(19) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

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

(20) Bonds payable

Ordinary corporate bonds issued by the Group are initially recognized at fair value less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is presented as an addition to or deduction from bonds payable, which is amortised to profit or loss over the period of bond circulation using the effective interest method as an adjustment to ‘finance costs’.

(21) Derecognition of financial liabilities

• A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires.

• (22) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

• (23) Provisions

Provisions (the estimated warranties) are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses.

(24) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expense in that period when the employees render service.

• B. Pensions

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  - (a) Defined contribution plans

     - For defined contribution plans, the contributions are recognized as pension expense when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

  - (b) Defined benefit plans

     - i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.

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

     - iii. Past service costs are recognized immediately in profit or loss.

• C. Termination benefits

  • Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognizes expense as it can no longer withdraw an offer of termination benefits or it recognizes relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

• D. Employees’ compensation and directors’ remuneration

  • Employees’ compensation and directors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

• (25) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or

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items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings of the Company and its domestic subsidiaries and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

• (26) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are

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subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(27) Dividends

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

(28) Revenue recognition

Sales of goods

• A. Sales are recognized when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

• B. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated output tax as well as sales returns and allowances, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. The credit terms for general sales are 2 months, for machinery equipment sales are based on the terms specified in the contracts, some of which are sold on installment over a period of 1 ~ 3 years, and for spare parts sales are 3 ~ 4 months.

• C. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(29) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes expenses for the related costs for which the grants are intended to compensate.

• (30) Operating segments

  • Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Group’s chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments.

• Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets

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and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

• None.

• (2) Critical accounting estimates and assumptions

• Valuation of inventories

• A. As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the market demand and technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such valuation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the valuation.

• B. As of December 31, 2021, the carrying amount of inventories was $4,474,307.

6. Details Of Significant Accounts

(1) Cash and cash equivalents

tails Of Significant Accounts Cash and cash equivalents
Cash: Cash on hand Checking accounts Demand deposits Cash equivalents: Time deposits		December31,2021 31,855 $ 178,158 800,541 1,010,554 15,683 1,026,237 $	December31,2020
			2,573 $ 1,637 620,968
			625,178
			5,896
			631,074 $

• A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The Group's time deposits maturing in excess of one year amounting to $86,915 and $0 as of December 31, 2021 and 2020, respectively, were classified as financial assets at amortized costcurrent.

• C. As of December 31, 2021 and 2020, the Group’s demand deposits amounting to $8,787 and $17,870, respectively, were pledged to others as collateral (Shown as ‘Other current financial assets’ and ‘Other non-current financial assets’). Details are provided in Note 8, ‘Pledged assets’.

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

Items Financial assets mandatorily measured at fair value through profit or loss Listed stocks Beneficiary certificates Valuation adjustment		December31,2021 30,203 $ 8,000 38,203 13,301 51,504 $	December31,2020
			88,664 $ 5,000
			93,664 7,796
			101,460 $

• A. The Group recognized net profit amounting to $53,409 and $3,626 (shown as ‘Other income’ and ‘Other gains and losses’) on financial assets at fair value through profit or loss for the years ended December 31, 2021 and 2020, respectively.

• B. As of December 31, 2021 and 2020, the Group had no financial assets at fair value through profit or loss pledged to others as collateral.

• C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2), ‘Financial instruments’.

(3) Notes and accounts receivable, net

Notes and accounts receivable, net
		December		31,2021		December		31,2020
Notes receivable		$		332,412		$		422,345
Installment notes receivable				95,202				89,183
				427,614				511,528
Less: Unrealised interest income	(			5,709)	(			5,807)
Allowance for uncollectible accounts	(			252)	(			3,507)
		$		421,653		$		502,214
Accounts receivable		$	2,288,249			$	1,655,557
Installment accounts receivable				31,755				35,890
			2,320,004				1,691,447
Less: Unrealised interest income	(			1,047)	(			970)
Allowance for uncollectible accounts	(			29,118)	(			29,138)
		$	2,289,839			$	1,661,339

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• A. The ageing analysis of notes receivable and accounts receivable that were past due but not impaired is as follows:

Not past due Up to 30 days past due 31~90 days past due 91~180 days past due Over 180 days		December	31,2021		December	31,2020
		Notes receivable 420,727 $ 3,915 2,964 8 - 427,614 $	Accounts receivable 2,062,123 $ 189,109 42,235 5,097 21,440 2,320,004 $		Notes receivable 505,108 $ 3,421 2,999 - - 511,528 $	Accounts receivable 1,495,521 $ 122,592 41,049 9,407 22,878 1,691,447 $

The above ageing analysis was based on past due date.

• B. As of December 31, 2021 and 2020, notes receivable and accounts receivable were all from contracts with customers. Also, as of January 1, 2020, the balance of receivables from contracts with customers amounted to $2,090,854.

• C. For the years ended December 31, 2021 and 2020, the interest income (including installment notes receivable, installment accounts receivable and long-term notes and accounts receivable) recognized in profit or loss amounted to $12,222 and $8,795 (shown as ‘Interest income’), respectively.

• D. As of December 31, 2021 and 2020, the Group did not hold any collateral as security for accounts receivable.

• E. As at December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the notes or accounts receivable held by the Group was their carrying amount.

• F. Information relating to credit risk of notes receivable and accounts receivable is provided in Note 12(2), ‘Financial instruments’.

• G. As of December 31, 2021 and 2020, the Group had no notes receivable and accounts receivable pledged to others.

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(4) Inventories

Inventories
Raw materials Supplies Work in progress Finished goods Raw materials Supplies Work in progress Finished goods			December31,2021
		Allowance for inventory Cost valuation loss 1,398,784 $ 27,661) ($ 352,072 13,513) ( 1,312,135 25,561) ( 1,558,164 80,113) ( 4,621,155 $ 146,848) ($ December31,2020		Bookvalue 1,371,123 $ 338,559 1,286,574 1,478,051 4,474,307 $ Bookvalue 544,536 $ 331,842 1,060,845 1,380,223 3,317,446 $
		Allowance for inventory Cost valuation loss 571,048 $ 26,512) ($ 344,723 12,881) ( 1,092,223 31,378) ( 1,467,754 87,531) ( 3,475,748 $ 158,302) ($

A.The cost of inventories recognized as expense for the year:

			Years ended	December	31
			2021		2020
Cost of goods sold		$	9,824,252	$	6,932,529
(Gain on reversal of) loss on decline	(		11,454)		17,622
in market value (Note)
Loss on scrapping inventory			-		502
Loss on physical inventory			1,840		1,608
Revenue from sales of scraps	(		70,219)	(	46,927)
		$	9,744,419	$	6,905,334

(Note) The Group reversed a previous inventory write-down which was accounted for as reduction of cost of goods sold because certain inventories which were previously provided with allowance for decline in value were subsequently sold or scrapped.

B.Details of the Group’s inventories pledged to others as collateral as of December 31, 2021 and 2020 are provided in Note 8, ‘Pledged assets’.

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(5) Non-current financial assets at fair value through other comprehensive income

Items		December31,2021 621,308 $ 722 622,080 6,765 628,845 $	December31,2020
Equity instruments Listed stocks Unlisted stocks Valuation adjustment			621,309 $ 913
			622,222 22,361
			644,583 $

• A. The Group has elected to classify equity investments that are considered to be steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $628,845 and $644,583 as at December 31, 2021 and 2020, respectively.

• B. The Group received proceeds from capital reduction of the Group’s stock investment - Ascentek Venture Capital Corporation, classified as financial asset measured at fair value through other comprehensive income, in the amount of $2,681 for the year ended December 31, 2021. The Group reduced the investment cost in proportion to the capital reduction ratio. The Group received remaining proceeds from settlement in the amount of $141 for the year ended December 31, 2021.

• C. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income (shown as ‘Other equity’) Dividend income recognised in profit or loss (shown as ‘Other income’)
		2021
	15,597) ($ 19,824 $		54,901) ($ 31,467 $

• D. As at December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was the carrying amount.

• E. Information relating to credit risk of non-current financial assets at fair value through other comprehensive income is provided in Note 12(2), ‘Financial instruments’.

• F. Details of the Group’s non-current financial assets at fair value through other comprehensive income pledged to others as collateral are provided in Note 8, ‘Pledged assets’.

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			Total			8,951,292 $	5,805,191) (	42) (		3,146,059 $		3,146,059 $	115,831	-	49,983	49,095	252,028) (	59,848) (	54,221	12,752) (	3,090,561 $		8,949,533 $	5,858,930) (	42) (	3,090,561 $
Equipment under	acceptance and	construction in	progress			9,930 $	-	-		9,930 $		9,930 $	58,605	38,719) (	-	4,840	-	-	-	17) (	34,639 $		34,639 $	-	-	34,639 $
		Other	equipment			638,638 $	492,761) (	-		145,877 $		145,877 $	21,336	3,522	-	8,533	41,496) (	7,174) (	6,847	760) (	136,685 $		662,581 $	525,896) (	-	136,685 $
		Office	equipment			117,927 $	100,357) (	-		17,570 $		17,570 $	3,009	2,193	-	401	7,143) (	3,366) (	3,287	58) (	15,893 $		120,228 $	104,335) (	-	15,893 $
		Transportation	equipment			98,464 $	73,137) (	-		25,327 $		25,327 $	6,366	464	-	151	8,945) (	6,807) (	6,066	70) (	22,552 $		99,541 $	76,989) (	-	22,552 $
		Utilities	equipment			95,270	69,963)	-		25,307		25,307	960	-	-	-	3,845)	1,373)	1,373	-	22,422		94,858	72,436)	-	22,422
						$	(			$		$					(	(			$		$	(		$
		Machinery and	equipment			4,491,495 $	3,690,654) (	42) (		800,799 $		800,799 $	18,035	20,857	49,983	34,000	146,078) (	34,214) (	29,752	7,506) (	765,628 $		4,431,854 $	3,666,184) (	42) (	765,628 $
		Buildings and	structures			1,923,586 $	1,378,319) (	-		545,267 $		545,267 $	7,520	11,683	-	1,170	44,521) (	6,914) (	6,896	1,956) (	519,145 $		1,932,235 $	1,413,090) (	-	519,145 $
			Land			1,575,982	-	-		1,575,982		1,575,982	-	-	-	-	-	-	-	2,385)	1,573,597		1,573,597	-	-	1,573,597
				uary 1, 2021		st $	cumulated depreciation	cumulated impairment		$	2021	January 1 $	ditions	nsfers after acceptance	nsfers from inventories	nsfers from prepayments for usiness facilities	preciation charge	posals - Cost	- Accumulated depreciation	exchange differences (	December 31 $	cember 31, 2021	t $	umulated depreciation	umulated impairment	$

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			Total			8,692,547 $	5,459,580) (	439) (		3,232,528 $		3,232,528 $	115,136	-	85,836	18,009	277,019) (	109,461) (	98,467	397	17,834) (		3,146,059 $		8,951,292 $	5,805,191) (	42) (		3,146,059 $
Equipment under	acceptance and	construction in	progress			49,696 $	-	-		49,696 $		49,696 $	29,581	101,675) (	28,822	3,445	-	-	-	-	61		9,930 $		9,930 $	-	-		9,930 $
		Other	equipment			630,610	450,608)	-		180,002		180,002	8,108	5,080	-	2,043	50,575)	8,430)	8,345	-	1,304		145,877		638,638	492,761)	-		145,877
						$	(			$		$					(	(					$		$	(			$
		Office	equipment			115,166 $	99,037) (	-		16,129 $		16,129 $	4,069	1,340	-	1,963	5,731) (	4,655) (	4,492	-	37) (		17,570 $		117,927 $	100,357) (	-		17,570 $
		Transportation	equipment			101,740 $	71,170) (	-		30,570 $		30,570 $	3,596	-	-	1,218	9,012) (	8,024) (	7,067	-	88) (		25,327 $		98,464 $	73,137) (	-		25,327 $
		Utilities	equipment			87,132 $	66,494) (	-		20,638 $		20,638 $	-	7,712	-	449	3,494) (	25) (	25	-	2		25,307 $		95,270 $	69,963) (	-		25,307 $
		Machinery and	equipment			4,258,634 $	3,445,510) (	439) (		812,685 $		812,685 $	59,443	46,340	57,014	8,891	162,918) (	87,915) (	78,133	397	11,271) (		800,799 $		4,491,495 $	3,690,654) (	42) (		800,799 $
		Buildings and	structures			1,866,432 $	1,326,761) (	-		539,671 $		539,671 $	10,339	41,203	-	-	45,289) (	412) (	405	-	650) (		545,267 $		1,923,586 $	1,378,319) (	-		545,267 $
			Land			1,583,137	-	-		1,583,137		1,583,137	-	-	-	-	-	-	-		7,155)		1,575,982		1,575,982	-	-		1,575,982
						$				$		$									(		$		$				$
				uary 1, 2020		st	cumulated depreciation	cumulated impairment			2020	January 1	ditions	ansfers after acceptance	ansfers from inventories	nsfers from prepayments for business facilities	preciation charge	sposals - Cost	- Accumulated depreciation	- Accumulated impairment	t exchange differences		December 31	cember 31, 2020	st	cumulated depreciation	cumulated impairment

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CHUN YU WORKS ＆ CO., LTD.

• A. The Group’s property, plant and equipment as of December 31, 2021 and 2020 are for its own use.

• B. No interest expense was capitalised in property, plant and equipment for the years ended December 31, 2021 and 2020.

• C. Impairment information about the property, plant and equipment is provided in Note 6(10), ‘Impairment of non–financial assets’.

• D. Information about the property, plant and equipment that were pledged to others as collateral as of December 31, 2021 and 2020 is provided in Note 8. ‘Pledged assets’.

• (7) Lease transactions lessee

• A. The Group leases various assets including land (including the land located in Dayong Section, Gangshan District, Kaohsiung City and the land use right in Songmushan management area, Dalang Town, Dongguan City and Baihe Town, Shanghai City under the contracts signed with the People’s Republic of China), buildings, and business vehicles. Rental contracts are typically made for periods of 1 to 50 year(s). Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings and structures Transportation equipment Land Buildings and structures Transportation equipment	December31,2021 December31,2020 Carrying amount Carrying amount 103,987 $ 109,963 $ 18,650 77,536 598 1,534 123,235 $ 189,033 $ Years endedDecember31	December31,2020
		Carrying amount
		109,963 $ 77,536 1,534
		189,033 $
	2021 Depreciationcharge 5,536 $ 20,033 937 26,506 $	2020
		Depreciationcharge
		4,826 $ 23,494 1,283
		29,603 $

• C. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $3,379 and $67,143, respectively.

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• D. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term leases Gain on lease modification	Years ended December31	Years ended December31
	2021 1,657 $ 15,915 213	2020
		2,683 $ 7,741 -

• E. For the years ended December 31, 2021 and 2020, the Group’s total cash outflow for leases were $40,190 and $34,270, respectively.

• F. Details of the Group’s right-of-use assets pledged to others as collateral as of December 31, 2021 and 2020 are provided in Note 8, ‘Pledged assets’.

(8) Intangible assets

Intangible assets
			Computersoftware
			Years endedDecember		31
			2021		2020
At January 1
Cost		$	30,881	$		27,244
Accumulated amortisation	(		20,235)	(		16,618)
		$	10,646	$		10,626
Period from January to December
At January 1		$	10,646	$		10,626
Additions - acquired separately			1,663			4,288
Transfers from prepayments for business
facilities			264			-
Amortisation charge	(		4,689)	(		4,325)
Write-offs - cost	(		8,255)	(		827)
- accumulated amortisation			8,255			827
Net exchange differences	(		29)			57
At December 31		$	7,855	$		10,646
At December 31
Cost		$	24,489	$		30,881
Accumulated amortisation	(		16,634)	(		20,235)
		$	7,855	$		10,646

A. No interest expense was capitalised for the years ended December 31, 2021 and 2020.

B. Details of amortisation expenses on intangible assets are as follows:

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Operating costs Selling expenses Administrative expenses Research and development expenses	Years endedDecember31	Years endedDecember31
	2021 501 $ 433 1,721 2,034 4,689 $	2020
		221 $ 209 2,425 1,470
		4,325 $

• C. As of December 31, 2021 and 2020, the Group had no intangible assets pledged to others.

• (9) Long-term notes and accounts receivable

			December31,2021			December31,2020
Long-term notes receivable		$	15,094		$	49,179
Long-term installment receivables			2,733			8,171
			17,827			57,350
Less: Unrealised interest income	(		2,605)	(		6,290)
		$	15,222		$	51,060

• A. The Group’s long-term accounts receivable are fully performing in line with the credit standards prescribed based on counterparties’ industrial characteristics, scale of business and profitability.

• B. As of December 31, 2021 and 2020, the Group had no long-term notes receivable and long-term installment receivables past due.

• C. As of December 31, 2021 and 2020, long-term notes and accounts receivable were all from contracts with customers. Also, as of January 1, 2020, the balance of long-term notes and accounts receivable from contracts with customers amounted to $66,525.

• D. As at December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the long-term notes receivable and long-term installment receivables held by the Group was their carrying amount.

• E. Details of the interest income recognized in profit or loss for the years ended December 31, 2021 and 2020 are provided in Note 6(3), ‘Notes and accounts receivable, net’.

• F. As of December 31, 2021 and 2020, the Group did not hold any collateral as security for long-term accounts receivable.

• G. As of December 31, 2021 and 2020, the Group had no long-term notes and accounts receivable pledged to others.

• H. Information relating to credit risk of long-term notes and accounts receivable is provided in Note 12(2), ‘Financial instruments’.

(10) Impairment of non-financial assets

• A. The Group did not recognise impairment loss for the years ended December 31, 2021 and 2020.

• B. As of December 31, 2021 and 2020, the accumulated impairment loss of property, plant and equipment both amounted to $42, after recognising or reversing any impairment loss.

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(11) Short-term borrowings

Short-term borrowings
Type of borrowings Bank borrowings Unsecured borrowings Secured borrowings Type of borrowings Bank borrowings Unsecured borrowings Secured borrowings	December31,2021 1,080,549 $ 561,822 1,642,371 $ December31,2020 1,307,398 $ 688,255 1,995,653 $	Interest rate range 0.52%�1.71% 15.0%�9.75% Interest rate range 0.77%�1.71% 2.00%�10.75%	Collateral
			None Note Collateral
			None Note

(Note) Details of the collateral provided for short-term borrowings are provided in Note 8, ‘Pledged assets’.

Details of interest expense recognized in profit or loss for the years ended December 31, 2021 and 2020 are provided in Note 6(25), ‘Finance Costs’.

(12) Short-term notes and bills payable

Short-term notes and bills payable
December31,2020 Commercial papers payable 40,000 $ Less: Unamortised discounts 43) ( 39,957 $ Interest rate at issuance 1.04%	Collateral
	None

A. There was no such transaction for the year ended December 31, 2021.

• B. The aforementioned commercial papers payable were issued and guaranteed by financial institutions for short-term funds.

• C. Details of interest expense recognized in profit or loss for the years ended December 31, 2020 are provided in Note 6(25), ‘Finance costs’.

(13) Bonds payable

Bonds payable
Guaranteed bonds payable	December31,2021 3,000,000 $	Collateral
		(Note)

(Note) Details of the collateral provided for bonds payable are provided in Note 8, ‘Pledged assets’.

• A. The Company was approved by the competent authority to raise and issue the first domestic guaranteed bonds payable for a total amount of $3,000,000, at a coupon rate of 0.65% and a maturity period of 7 years from October 15, 2021 to October 15, 2028. The bonds are repayable in cash at the face value of the bonds upon maturity.

• B. First Commercial Bank Co., Ltd. was appointed as the guarantor bank for the bonds. The guarantee period is from the date of full collection of the bonds to the date of full payment of the

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principal and interest payable under the Plan, and the guarantee covers the outstanding principal and interest compensation payable under the Plan, which are subordinate to the principal debt.

• C. The principal and simple interest will be paid every year based on the coupon rate since the day the bonds have been approved for issuance. If the local financial institutions are closed on a payment date, the principal and interest will be paid on the next operating day without extra interest.

• D. Interest expense recognized in profit or loss for the year ended December 31, 2021 is described in Note 6, (25), Financial costs.

(14) Provisions for liabilities - current

Provisions for liabilities-current
			Warranty
			Years ended	December31
			2021	2020
January 1		$	6,722	$	8,344
Additional provisions			11,876		5,179
Used during the year	(		9,317)	(	1,449)
Unused amounts reversed	(		1,006)	(	5,352)
December 31	$		8,275	$	6,722

The Group provides warranties on machinery products sold. Provision for warranty is estimated based on historical warranty data of such products.

- (15) Long term borrowings

Type ofborrowings Long-term bank borrowings Secured borrowings Less: Current portion Type of borrowings Long-term bank borrowings Secured borrowings Less: Current portion	Borrowing period 2017.9.22� 2025.3.30 Borrowing period 2017.9.22� 2025.3.30	Interest raterange Collateral December31,2021 1.65%�10.73% Refer to Note 8 624,826 $ 22,997) ( 601,829 $ Interest rate range Collateral December31,2020 1.10%�10.73% Refer to Note 8 2,460,615 $ 261,492) ( 2,199,123 $

Details of interest expense recognized in profit or loss for the years ended December 31, 2021 and

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CHUN YU WORKS ＆ CO., LTD.

2020 are provided in Note 6(25), ‘Finance costs’.

• (16) Pensions

A. The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the R.O.C. Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the R.O.C. Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the R.O.C. Labor Pension Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 4% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March. The information on defined benefit pension plans of the Company and its subsidiary, Pt Moon Lion Industries Indonesia, is as follows:

(a) The amounts recognized in the balance sheet are as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability	December31,2021	December31,2020
	332,981) ($ 162,756 170,225) ($	360,002) ($ 179,349 180,653) ($

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(b) Movements in net defined benefit liabilities - non-current are as follows:

		Present value of	Present value of
		defined benefit		Fair	value of	plan			Net defined
2021			obligation		assets			benefit liability
Balance at January 1	($		360,002)	$	179,349		($		180,653)
Current service cost	(		5,780)			-	(		5,780)
Past service cost	(		7,293)			-	(		7,293)
Interest (expense) income			-			901			901
Effect of plan curtailment			20,409			-			20,409
	(		352,666)		180,250		(		172,416)
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)			-		2,590				2,590
Change in demographic assumptions	(		1,654)			-	(		1,654)
Changes in financial assumptions	(		5,378)			-	(		5,378)
Experience adjustments	(		8,867)			-	(		8,867)
	(		15,899)		2,590		(		13,309)
Pension fund contribution			-		3,240				3,240
Paid pension			32,610	(	23,324)				9,286
Exchange difference			2,974			-			2,974
Balance at December 31	($		332,981)	$	162,756		($		170,225)

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CHUN YU WORKS ＆ CO., LTD.

Present value of

		defined benefit	defined benefit	Fair	value of plan			Net defined
2020			obligation		assets		benefitliability
Balance at January 1	($		385,282)	$	221,445	($		163,837)
Current service cost	(		4,810)		-	(		4,810)
Past service cost	(		1,636)		-	(		1,636)
Interest (expense) income	(		8,644)		1,680	(		6,964)
	(		400,372)		223,125	(		177,247)
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)			-		7,528			7,528
Change in demographic assumptions	(		1,792)		-	(		1,792)
Changes in financial assumptions	(		19,400)		-	(		19,400)
Experience adjustments	(		2,982)		-	(		2,982)
	(		24,174)		7,528	(		16,646)
Pension fund contribution			-		3,863			3,863
Paid pension			62,741	(	55,167)			7,574
Exchange difference			1,803		-			1,803
Balance at December 31	($		360,002)	$	179,349	($		180,653)

(c)The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from twoyear time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

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(d) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Years ended December 31	Years ended December 31
	2021 0.50%�7.55% 1.75%�5.00%	2020
		0.50%�7.83%
		1.75%�5.00%

Future mortality rate was estimated based on the 6th and 5th Taiwan Standard Ordinary Experience Mortality Table for the years ended December 31, 2021 and 2020, respectively. Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

is affected. The analysis was	as follows:	as follows:	as follows:
December 31, 2021 Effect on present value of defined benefit obligation December 31, 2020 Effect on present value of defined benefit obligation	Discount rate			Future salaryincrease rate
	Increase0.25%	Decrease0.25%		Increase0.25%		Decrease0.25%
	6,872) ($ 7,711) ($		7,147 $ 8,108 $		7,021 $ 7,914 $	6,747) ($ 7,581) ($

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (e) Expected contributions to the defined benefit pension plans of the Group for the following year amount to $3,161.

• (f) As of December 31, 2021, the weighted average duration of the retirement plan is 9.5 � 9.6 years. The analysis of timing of the future pension payment was as follows:

Within 1 year Within 2 ~ 5 years Over 6 years	20,204 $ 108,986 357,621
	486,811 $

• B. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the R.O.C. Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor

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CHUN YU WORKS ＆ CO., LTD.

Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The Group’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China are based on certain percentage of employees’ monthly salaries and wages (Note). The fund is managed by the government. Other than the monthly contributions, the subsidiaries have no further obligations. The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2021 and 2020 were $56,573 and $23,233, respectively.

(Note) Due to the impact of COVID-19 pandemic, some subsidiaries are exempted from pension contributions during the period from February 2020 to December 2020 from the local government.

• (17) Share capital

• A. Movements in the number of the Company’s ordinary shares outstanding are as follows (Unit: Shares in thousands):

Shares in thousands):
Number of shares at the beginning and end of the year	Years endedDecember31
	2021 287,774	2020
		287,774

• B. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows (Unit: Shares in thousands):

shares are as follows (Unit: Shares in thousands):	shares are as follows (Unit: Shares in thousands):	shares are as follows (Unit: Shares in thousands):
Number of shares at the beginning Reason for reacquisition ofthe year Addition Acquisition of the parent company’s shares by subsidiaries transferred to treasury share from long -term investments 23,830 - YearendedDecember31,2021
	Number of shares at the beginning ofthe year 23,830	Addition -	Decrease (1,516)	Number of shares at the end ofthe year
				22,314

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CHUN YU WORKS ＆ CO., LTD.

Number of shares at the beginning Reason for reacquisition ofthe year Addition Acquisition of the parent company’s share by subsidiaries transferred to treasury share from long -term investments 23,830 - YearendedDecember31,2020	Number of shares at the beginning Reason for reacquisition ofthe year Addition Acquisition of the parent company’s share by subsidiaries transferred to treasury share from long -term investments 23,830 - YearendedDecember31,2020	Number of shares at the beginning Reason for reacquisition ofthe year Addition Acquisition of the parent company’s share by subsidiaries transferred to treasury share from long -term investments 23,830 - YearendedDecember31,2020
	Number of shares at the beginning ofthe year 23,830	Addition -	Decrease -	Number of shares at the end ofthe year
				23,830

• (b) The subsidiary sold 1,516 thousand shares of the company in July, 2021. The selling price and book value (cost) were $60,394 and $21,715 respectively, and the recognized gain of disposal was $38,679 (listed "Capital Reserve-Treasury Stock Transaction"). As of December 31, 2021 and 2020, the book value (cost) was $267,195 and $288,910, the fair value was $691,748 and $518,312, respectively. The shares of the parent company held by subsidiaries are recognized as treasury shares and are entitled to dividends, recorded under ‘Capital surplus, treasury share transactions’. The cash dividends paid to the subsidiaries for the years ended December 31, 2021 and 2020 amounted to $25,455 and $28,596, respectively.

• (c) Reason for share reacquisition and the number of the Company’s treasury shares changed as of December 31, 2021 and 2020. Details are as follows:

of December 31, 2021 and 2020. Details are as follows:
Name of company Reason for holding the shares reacquisition Chun Yu Investment Co., Ltd. Acquisition of the parent company’s shares by subsidiaries transferred to treasury share from long-term investments Name of company Reason for holdingthe shares reacquisition Chun Yu Investment Co., Ltd. Acquisition of the parent company’s share by subsidiaries transferred to treasury share from long-term investments	December31,2021
	Number of shares Carrying (inthousands) amount 22,314 267,195 $ December31,2020	Carrying amount
		267,195 $
	Number of shares (in thousands) 23,830	Carrying amount
		288,910 $

• C. As of December 31, 2021, the Company’s authorised capital was $3,920,696, and the paid-in capital was $2,877,740, consisting of 287,774 thousand ordinary shares, with a par value of $10 (in dollars) per share which were issued in several installments. All proceeds from shares issued

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CHUN YU WORKS ＆ CO., LTD.

have been collected.

(18) Capital surplus

• A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient. Movements in capital surplus are as follows:

ollows:
Year ended December31,2021 Balance at the beginning of year Transfers to capital surplus for the Company’s dividends received by subsidiaries Disposal of treasury stocks Balance at the end of year YearendedDecember31,2020 Balance at the beginning of year Transfers to capital surplus for the Company’s dividends Balance at the end of year	Difference between consideration and carrying amount of subsidiaries acquired or disposed 26,901 $ - - 26,901 $ Difference between consideration and carrying amount of subsidiaries acquired ordisposed 26,901 $ - 26,901 $	Treasury share transactions 131,068 $ 25,455 38,679 195,202 $ Treasury share transactions 102,472 $ 28,596 131,068 $	Total
			157,969 $ 25,455 38,679
			222,103 $
			Total
			129,373 $ 28,596
			157,969 $

• B. Details of ‘Capital surplus, treasury share transactions’ are provided in Note 6(17), ‘Share capital’.

(19) Retained earnings

• A. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• B. Under the Company’s Articles of Incorporation, the Company may distribute earnings or offset

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CHUN YU WORKS ＆ CO., LTD.

losses at the end of each half fiscal year in accordance with the Company Act. When distributing earnings, the Company shall estimate and reserve for taxes payable, offset losses and set aside as legal reserve until the legal reserve equals the paid-in capital in accordance with the regulations. Where dividends are distributed in the form of cash, it shall be approved by the Board of Directors. Where dividends are distributed by issuing new shares, it shall be approved by the stockholders in accordance with the regulations.

The current year’s earnings, if any, shall first be used to pay all taxes, offset prior years’ operating losses, set aside 10% of the remaining amount as legal reserve and then reverse or set aside as special reserve in accordance with relevant regulations. The remaining earnings along with accumulated unappropriated earnings from prior years will be the accumulated distributable earnings, and the Board of Directors will present a proposal of the earnings distribution for the approval of the shareholders. Where dividends and bonus, capital surplus and legal reserve, in whole or in part, are distributed in the form of cash, the Board of Directors is authorised make the distribution by approval of more than half of the directors present at the meeting, where more than two-thirds of the directors are present, and the report of such distribution shall be submitted to the shareholders’ meeting. The regulation in relation to approval from the shareholders is not applicable. In principal, at least 50% of earnings, after considering the capital needs for current and future development and the interest of shareholders, shall be distributed as dividends according to the dividend policy. However, if there is a need due to changes in the industry’s environment or operational plans, the Board of Directors may present a proposal to adjust the ratio for the approval of the shareholders.

• C. Special reserve:

• (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• (b) The amount of $430,610 previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-SecuritiesCorporate-1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently.

• D. The Company recognized cash dividends distributed to owners amounting to $316,551 ($1.1 (in dollars) per share) and $345,329 ($1.2 (in dollars) per share) for the years ended December 31, 2021 and 2020, respectively. On March 10, 2022, the Board of Directors approved the distribution of cash dividends from 2021 earnings in the amount of $287,774 ($1.0 (in dollars) per share). On March 10, 2022, the Board of Directors proposed for the distribution of share dividends from 2021 earnings in the amount of $143,887 ($0.5 (in dollars) per share), and to be determined by the stockholders.

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(20) Other equity

Other equity
		YearendedDecember31,2021
					Unrealised
		Currency			gains (losses)
		translation			onvaluation		Total
At January 1	($	185,009)		$	22,362	($	162,647)
Revaluation - currency translation	(	29,712)			-	(	29,712)
Revaluation - unrealised gains (losses)
on valuation		-	(		15,597)	(	15,597)
At December 31	($	214,721)		$	6,765	($	207,956)
		YearendedDecember31,2020
					Unrealised
		Currency			gains (losses)
		translation			onvaluation		Total
At January 1	($	172,821)		$	77,263	($	95,558)
Revaluation - currency translation	(	12,188)			-	(	12,188)
Revaluation - unrealised gains (losses)
on valuation		-	(		54,901)	(	54,901)
At December 31	($	185,009)		$	22,362	($	162,647)
Operating revenue
					Years endedDecember31
					2021		2020
Revenue from contracts with customers		$			11,810,242	$	8,054,615

(21) Operating revenue

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods at a point in time in the following major product lines:

product lines:
Major product lines Screws and nuts Wire rods Machinery and equipment Others	Screw segment Machinery segment Total 5,550,255 $ - $ 5,550,255 $ 4,612,652 - 4,612,652 - 1,314,145 1,314,145 252,033 81,157 333,190 10,414,940 $ 1,395,302 $ 11,810,242 $ YearendedDecember31,2021
		Machinery segment - $ - 1,314,145 81,157 1,395,302 $	Total
			5,550,255 $ 4,612,652 1,314,145 333,190
			11,810,242 $

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Major product lines Screws and nuts Wire rods Machinery and equipment Others	YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
	Screwsegment 4,571,056 $ 2,240,400 - 159,827 6,971,283 $	Machinerysegment - $ - 975,138 108,194 1,083,332 $	Total
			4,571,056 $ 2,240,400 975,138 268,021
			8,054,615 $

B. Contract liabilities

• (a) As of December 31, 2021 and 2020, the Group has recognized revenue-related contract liabilities of $407,343 and $243,739, respectively.

• (b) Revenue recognized for the years ended December 31, 2021 and 2020, which was included

in the contract liabilities of $243,739 and $159,259 as at January 1, 2021 and 2020, respectively, amounted to $195,474 and $107,586, respectively.

(22) Interest income

Interest income
Other income Interest income from bank deposits Other interest Rent income Dividend income Government grants Other income	2021 2020 2,639 $ 1,598 $ 12,383 9,616 15,022 $ 11,214 $ Years ended December31 Years endedDecember31
	2021 1,496 $ 22,647 23,639 15,026 62,808 $	2020
		1,885 $ 34,270 58,215 20,137
		114,507 $

(23) Other income

The Group recognized government grant income of $7,103 and $54,738 for the year ended December 31, 2021 and 2020 for salary and working capital subsidies from the Ministry of Economic Affairs under the ‘Relief and Revitalisation Measures for Industries and Enterprises Experiencing Operational Difficulties Due To the Impact of Severe Pneumonia with Novel Pathogens (COVID-19)’. The Group must comply with the application rules of aforementioned government subsidies. In the following circumstances, the Ministry of Economic Affairs of the Republic of China may revoke or abolish the subsidies and retrieve the funds:

A. Any action that would impair the rights of employees, such as reduction of working hours (unpaid leave), layoffs or pay cuts.

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• B. Any dissolution, or termination of the operation.

• C. More than one receipt for the same salary and working capital subsidies.

• D. A landowner on the list of industrial idle land announced in accordance with the Article 46-1 of Statute for Industrial Innovation.

• E. Not applying for factory registration in accordance with the Factory Management Act.

• F. Any severe violation of laws relating to environmental protection, labour and food safety and sanitation in the past three years.

• G. Any severe violation of other relevant laws and regulations.

• H. Not cooperating with audits requested from the handling units and execution units.

• (24) Other gains and losses

			Years ended	December	December	31
			2021			2020
Gains on financial assets at fair value		$	51,199		$		823
through profit or loss
(Losses) gains on disposal of property, plant	(		3,555)				937
and equipment
Net foreign exchange losses	(		6,648)	(			19,307)
Gain from lease modification			213				-
Miscellaneous disbursements	(		2,731)	(			3,619)
		$	38,478	($			21,166)

(25) Finance costs

Finance costs
Interest expense: Bank borrowings Ordinary bonds payable Interest on lease liabilities	Years endedDecember31
	2021 92,745 $ 4,167 1,657 98,569 $	2020
		106,368 $ - 2,683
		109,051 $

(26) Expenses by nature

Expenses by nature
Employee benefit expense Depreciation Amortisation	YearendedDecember31,2021
	Classified as operating costs 910,710 $ 219,897 501 1,131,108 $	Classified as operating expenses 445,367 $ 58,637 4,188 508,192 $	Total
			1,356,077 $ 278,534 4,689
			1,639,300 $

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Year ended December 31, 2020

Employee benefit expense Depreciation Amortisation	Classified as operating costs 765,074 $ 247,836 221 1,013,131 $	Classified as operating expenses 396,496 $ 58,786 4,104 459,386 $	Total
			1,161,570 $ 306,622 4,325
			1,472,517 $

(27) Employee benefit expense

Wages and salaries Labour and health insurance fees Pension costs Other personnel expenses Wages and salaries Labour and health insurance fees Pension costs Other personnel expenses	Year ended December31,2021	Year ended December31,2021	Year ended December31,2021
	Classified as Classified as operating costs operating expenses Total 802,979 $ 392,242 $ 1,195,221 $ 51,561 19,673 71,234 31,128 17,208 48,336 25,042 16,244 41,286 910,710 $ 445,367 $ 1,356,077 $ Year ended December31,2020		Total
			1,195,221 $ 71,234 48,336 41,286
			1,356,077 $
	Classified as operatingcosts 653,600 $ 48,628 23,545 39,301 765,074 $	Classified as operating expenses 326,906 $ 21,700 13,098 34,792 396,496 $	Total
			980,506 $ 70,328 36,643 74,093
			1,161,570 $

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 2% for employees’ compensation and shall not be higher than 2% for directors’ remuneration. However, if the Company has accumulated deficit, the earnings shall be reserved to offset losses.

• B. For the years ended December 31, 2021 and 2020, employees’ compensation was accrued at $16,981 and $4,074, respectively; while directors’ remuneration was accrued at $16,981 and $4,074, respectively. The aforementioned amounts were recognized in salary expenses and were accrued based on the earnings of current year and the percentage prescribed by the Company’s Articles of Incorporation. The employees’ compensation and directors’ remuneration resolved by the Board of Directors on March 10, 2022 were both $16,981, and the employees’ compensation will be distributed in the form of cash. Employees’ compensation and directors’ remuneration for

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2020 both amounting to $4,074 as resolved at the meeting of Board of Directors were in agreement with those amounts recognized in the 2020 financial statements.

Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(28) Income tax

• A. Components of income tax expense:

• (a) Components of income tax expense:

Current tax: Current tax on profits for the year Tax on undistributed earnings Prior year income tax under estimation Total current tax Deferred tax: Origination and reversal of temporary differences Impact of change in tax rate Total deferred tax Income tax expenses	2021 2020 137,368 $ 84,711 $ 243 985 1,197 6,935 138,808 92,631 106,087 5,951) ( - 3,751) ( 106,087 9,702) ( 244,895 $ 82,929 $ Years endedDecember31

(b)The income tax (charge)/credit relating to components of other comprehensive income is as follows:

follows:
		Years ended	December31
		2021	2020
Remeasurement of defined benefit obligations	($	2,856)	$	83
Currency translation differences	(	594)		1,542
	($	3,450)	$	1,625

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B. Reconciliation between income tax expense and accounting profit:

Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:
Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows: 2021 2020 Tax calculated based on profit before tax and statutory tax rate 396,809 $ 137,410 $ Effects from items disallowed by tax regulation 85,755) ( 78,366) ( Tax on undistributed earnings 243 985 Prior year income tax under estimation 1,197 6,935 Separate taxation 355 1,571 Change in assessment of realisation of deferred tax assets 148,789) ( 11,363 Effect from tax loss 80,835 3,031 Income tax expense 244,895 $ 82,929 $ Years endedDecember31 Recognised Recognised in other in comprehensive January1 profit or loss income December31 Deferred tax assets Temporary differences: Allowance for bad debts in excess of tax limits 3,261 $ 182 $ - $ 3,443 $ Pensions 27,907 5,413) ( - 22,494 Loss on decline in inventory market value 15,135 482) ( - 14,653 Unrealised losses on disposal of assets 726 604) ( - 122 Unrealised foreign exchange loss 609 543) ( - 66 Other deferred revenue and unrealised expenses 22,211 11,728) ( - 10,483 Currency translation differences 4,450 - - 4,450 Remeasurements of defined benefit plans 12,368 - 2,856 15,224 Tax losses 204,177 80,892) ( - 123,285 290,844 $ 99,480) ($ 2,856 $ 194,220 $ YearendedDecember31,2021
	Recognised Recognised in other in comprehensive January1 profit or loss income 3,261 $ 182 $ - $ 27,907 5,413) ( - 15,135 482) ( - 726 604) ( - 609 543) ( - 22,211 11,728) ( - 4,450 - - 12,368 - 2,856 204,177 80,892) ( - 290,844 $ 99,480) ($ 2,856 $	December31
		3,443 $ 22,494 14,653 122 66 10,483 4,450 15,224 123,285
		194,220 $

C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

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CHUN YU WORKS ＆ CO., LTD.

Year ended December 31, 2021

									Recognised	Recognised	Recognised
						Recognised				in other
							in	comprehensive
			January1		profit or loss					income		December31
Deferred tax liabilities
Temporary differences:
Gain on investments accounted for	($			91,630)	($		7,702)		$	594		($		98,738)
using the equity method
Pensions	(			1,949)			4				-	(		1,945)
Reserve for land value increment	(			335,417)			-				-	(		335,417)
tax
Others	(			10,430)			1,091				-	(		9,339)
	($			439,426)	($		6,607)		$	594		($		445,439)
	($			148,582)	($		106,087)		$	3,450		($		251,219)
					Year		endedDecember31,				2020
									Recognised
						Recognised				in other
							in	comprehensive
			January1		profit or loss					income		December31
Deferred tax assets
Temporary differences:
Allowance for bad debts in		$		1,856		$	1,405		$		-	$		3,261
excess of tax limits
Pensions				27,239			668				-			27,907
Loss on decline in inventory				12,199			2,936				-			15,135
market value
Loss on investments accounted				-			-				-			-
for using the equity method
Unrealised losses on disposal of				1,330	(		604)				-			726
assets
Unrealised foreign exchange loss				738	(		129)				-			609
Other deferred revenue and				12,492			9,719				-			22,211
unrealised expenses
Currency translation differences				4,450			-				-			4,450
Remeasurements of defined				12,451			-	(			83)			12,368
benefit plans
Tax losses				207,208	(		3,031)				-			204,177
			$	279,963		$	10,964	($			83)		$	290,844

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CHUN YU WORKS ＆ CO., LTD.

				Year	Year	endedDecember31,	endedDecember31,	endedDecember31,	2020	2020
							Recognised
					Recognised			in other
						in	comprehensive
		January1		profit or loss				income		December31
Deferred tax liabilities
Temporary differences:
Gain on investments accounted for	($		91,642)		$	1,554	($	1,542)		($	91,630)
using the equity method
Pensions	(		2,262)			313			-	(	1,949)
Reserve for land value increment	(		335,417)			-			-	(	335,417)
tax
Others	(		7,301)	(		3,129)			-	(	10,430)
	($		436,622)	($		1,262)	($	1,542)		($	439,426)
	($		156,659)		$	9,702	($	1,625)		($	148,582)

• D. Expiration dates of unused tax losses and amounts of unrecognized deferred tax assets are as follows:

follows:
		December31,2021
Year incurred 2017 2019	Amount filed /assessed 580,599 $ 516,191 1,096,790 $	Unrecognised deferred Unused amount income taxassets 208,037 $ 107,804 516,191 - 724,228 $ 107,804 $ December 31, 2020		Expiry year
				2027 2029
Year incurred 2016 2017 2018 2019 2019	Amount filed /assessed 1,017 $ 580,599 11,402 21,196 516,191 1,130,405 $	Unused amount 1,017 $ 580,599 11,402 21,196 516,191 1,130,405 $	Unrecognised deferred income taxassets - $ 112,969 - - - 112,969 $	Expiry year
				2021 2027 2023 2024 2029

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CHUN YU WORKS ＆ CO., LTD.

• E. The amounts of deductible temporary differences that were not recognized as deferred tax assets are as follows:

Deductible temporary differences Loss on investments accounted for using the equity method Allowance for bad debts in excess of tax limits Unrealised loss from inventory valuation Unrealised loss from bad debts Unused compensated absences	December31,2021 - $ 453 66,948 30,591 4,179 102,171 $	December31,2020
		33,700 $ 2,220 72,679 45,272 4,198
		158,069 $

• F. The Group did not recognise deferred tax liabilities related to taxable temporary differences of investment in subsidiaries. The unrecognized deferred tax liabilities as of December 31, 2021 and 2020 were $1,073,233 and $762,298, respectively.

• G. The Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority. The Company did not have any administrative remedy as of March 10, 2022.

• H. The Group’s subsidiary, Shanghai Chun Zu Machinery Industry Ltd., is eligible for a preferential tax rate as a qualified High and New Technology Enterprise under the Enterprise Income Tax Law of the People’s Republic of China, and the applicable tax rate for the Profit-seeking Enterprise Income Tax decreased from 25% to 15% effective from 2020. The Group has assessed the impact of the change in income tax rate.

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(29) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year	ended December31,2021	ended December31,2021
	Amount aftertax 744,730 $ 744,730 $ - 744,730 $ Year	Weighted average number of ordinary Earnings shares outstanding per share (sharesinthousands) (indollars) 264,685 2.81 $ 264,685 587 265,272 2.81 $ ended December31,2020	Earnings per share (indollars)
			2.81 $
			2.81 $
	Amount aftertax 197,147 $ 197,147 $ - 197,147 $	Weighted average number of ordinary shares outstanding (sharesinthousands) 263,944 263,944 285 264,229	Earnings per share (indollars)
			0.75 $
			0.75 $

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CHUN YU WORKS ＆ CO., LTD.

(30) Supplemental cash flow information

A. Investing and financing activities with partial cash payments:

		Years ended	December31	December31
		2021		2020
(a) Purchase of property, plant and equipment	$	115,831	$	115,136
Add: Opening balance of payable on
equipment (shown as ‘Notes payables’)		4,200		-
Opening balance of payable on
equipment (shown as ‘Other payables’)		25,545		28,493
Less: Ending balance of payable on equipment
(shown as ‘Notes payable’)		-	(	4,200)
Ending balance of payable on equipment
(shown as ‘Other payables’)	(	22,043)	(	25,545)
Cash paid for acquisition of property, plant and
equipment	$	123,533	$	113,884
		Years ended	December31
		2021		2020
(b) Cash dividends declared	$	316,551	$	345,329
Less: Dividends received by subsidiaries for
holding the parent company’s shares	(	25,455)	(	28,596)
Cash dividends paid	$	291,096	$	316,733
Operating and investing activities with no cash flow	effects:
		Years ended	December31
		2021		2020
(a) Write-offs of uncollectible receivables	$	162	$	485
(b) Inventories transferred to property, plant and
equipment	$	49,983	$	85,836
(c) Prepayments for business facilities transferred
to property, plant and equipment	$	49,095	$	18,009
(d) Prepayments for business facilities transferred
to intangible assets	$	264	$	-

B. Operating and investing activities with no cash flow effects:

• (d) Prepayments for business facilities transferred to intangible assets

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CHUN YU WORKS ＆ CO., LTD.

Liabilities from	financing activities -gross	4,595,139 $	748,204	40,850) (	610		5,303,103 $	Liabilities from	financing activities -gross	4,696,965 $	148,380) (	48,738	2,184) (		4,595,139 $
Guarantee	deposits received	564 $	107) (	-	-		457 $	Guarantee	deposits received	457 $	107	-	-		564 $
Long-term borrowings	(including current portion)	2,460,615 $	1,835,789) (	-	-		624,826 $	Long-term borrowings	(including current portion)	2,695,756 $	235,141) (	-	-		2,460,615 $
Lease	liability	98,350	22,618)	40,893)	610		35,449	Lease	liability	75,602	23,846)	48,778	2,184)		98,350
		$	(	(			$			$	(		(		$
Bonds	payable	-	3,000,000	-	-		3,000,000	Bonds	payable	-	-	-	-		-
		$					$			$					$
Short-term notes	and bills payable	39,957 $	40,000) (	43	-		- $	Short-term notes	and bills payable	9,997 $	30,000	40) (	-		39,957 $
Short-term	borrowings	1,995,653 $	353,282) (	-	-		1,642,371 $	Short-term	borrowings	1,915,153 $	80,500	-	-		1,995,653 $
		nuary 1, 2021	hanges in cash flow from financing activities	hanges in other non-cash items	mpact of changes in foreign exchange rate		ecember 31, 2021			nuary 1, 2020	hanges in cash flow from financing activities	hanges in other non-cash items	mpact of changes in foreign exchange rate		ecember 31, 2020

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7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties Relationship with the Group Ofco Industrial Corp. Other related party Gloria Material Technology Corp. Other related party Homkom Precision Industry Corp. Other related party TSG Transportation Corp. Other related party China Ecotek Corp. Other related party (Note)

(Note) The Company served as supervisor in the board of directors of China Ecotek Corp. However, it was discharged after the election during the shareholders’ meeting, consequently, it became a non-related party since the third quarter of 2020.

(2) Significant related party transactions

A. Operating revenue

nificant related party transactions Operating revenue
Sales of goods: Other related parties	Years endedDecember31
	2021 630,488 $	2020
		289,593 $

Goods are sold to related parties based on the terms that would be available to third parties and the average credit term is 2 months. The credit terms for machinery equipment sales are based on the terms specified in the contracts, some of which are sold on installment over a period of 1 ~ 3 years, and for spare parts sales are 3 ~ 4 months.

B. Purchases

Purchases
Sales of goods: Other related parties	Years endedDecember31
	2021 11,324 $	2020
		13,191 $

Goods are purchased from related parties based on the prices and terms that would be available to third parties and the average payment terms are 1 ~ 2 months. However, both parties may negotiate to extend payment terms according to the funds available.

C. Other expenses

Other expenses
Other related parties	Years ended December31
	2021 57,122 $	2020
		37,512 $

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D. Other income

Other related parties

E. Receivables from related parties

Notes receivable Other related parties Accounts receivable Other related parties

F. Contract liabilities- current

Other related parties

G. Payables to related parties

Notes payable Other related parties Accounts payable Other related parties Other payables Other related parties

(3) Key management compensation

Wages and salaries and other short-term benefits

Years endedDecember31	Years endedDecember31
2021 2020 - $ 1,203 $ December31,2021 December31,2020 25,892 $ - $ 149,227 $ 67,052 $ December31,2021 December31,2020 1,800 $ 6,690 $ December31,2021 December31,2020 1,575 $ - $ - $ 4,036 $ 18,093 $ 9,426 $ Years endedDecember31	2020
	1,203 $
	December31,2020
	- $
	67,052 $
	December31,2020
	6,690 $
	December31,2020
	- $
	4,036 $
	9,426 $
2021 69,472 $	2020
	58,003 $

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CHUN YU WORKS ＆ CO., LTD.

8. Pledged Assets

The Group’s assets pledged as collateral are as follows:

Assets	December	31,2021	December31,2020	December31,2020	Purpose
Pledged demand deposits (Note 1)	$	8,787	$	17,870	Guarantee, collateral for
					short-term and long-term
					borrowings and bonds
					payable
Inventories		79,200		81,200	Collateral for short-term
					and long-term borrowings
Listed stocks (Note 2)		112,056		244,466	Collateral for long-term
					borrowings
Land (Note 3)		453,275		836,662	Collateral for short-term
					and long-term borrowings
					and bonds payable
Buildings and structures, net		121,994		194,316	Collateral for short-term
(Note 3)					and long-term borrowings
					and bonds payable
Machinery and equipment,		48,499		50,949	Collateral for short-term
net (Note 3)					and long-term borrowings
Right-of-use assets		14,906		15,551	Collateral for short-term
					borrowings
The Company’s stocks (Note 4)					Collateral for long-term
		-		32,625	borrowings
	$	838,717	$	1,473,639

(Note 1) Shown as ‘Other current financial assets’ and ‘Other non-current financial assets’.

(Note 2) Shown as ‘Non-current financial assets at fair value through other comprehensive income’. (Note 3) Shown as ‘Property, plant and equipment’.

(Note 4) The Company’s stocks were pledged as collateral by its subsidiary, shown as ‘Treasury stocks’.

9. Significant Contingent Liabilities and Unrecognized Contract Commitments

• (1) As of December 31, 2021 and 2020, the Group’s capital expenditures contracted for at the balance sheet date but not yet incurred were $17,383 and $8,075, respectively.

• (2) As of December 31, 2021 and 2020, the Group’s line of credit issued but not yet negotiated were $688,706 and $136,968, respectively.

• (3) Information on provision of endorsements and guarantees to others is provided in Note 13(1)B.

(4) On October 5, 2019, the Company entered into a mid-term secured syndicated loan agreement with 10 banks including First Commercial Bank for a credit facility of $1,790,000 (including Tranche A facility amount of $590,000, Tranche B facility amount of $1,200,000 and Tranche C facility amount of $720,000, among which the total amount drawdown under Tranche B and Tranche C shall not exceed the Tranche B facility amount). The term for each tranche is 5 years. The Company’s

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commitments to banking syndicate during the terms of syndicated loan are as follows:

• i. During the terms of the syndicated loan, the financial covenants stated in the Company’s consolidated financial statements audited by independent auditors shall comply with the following financial covenants and will be assessed once a year:

  • (a) Current ratio: The ratio of current assets to current liabilities shall not be lower than 100%.

  • (b) Debt ratio: The ratio of total liabilities to tangible equity shall not be higher than 200%.

  • (c) Interest coverage ratio: The ratio of total amount of income before tax, interest expense, depreciation and amortisation to interest expense shall not be lower than 200%.

  • (d) Tangible equity: The amount of net assets less intangible assets shall not be lower than $3,000,000.

• ii. If the Company fails to comply with the aforementioned financial covenants, the Company is required to pay additional interest rate of 0.10% per annum over the interest rate applicable to this agreement during the period from the date of notification sent by the managing bank to the date that consolidated financial statements, which meet all requirements, are provided. The aforesaid failure to comply with financial covenants will not be regarded as an event of default if additional interest is paid.

• As of December 31, 2021 and 2020, the Group did not breach commitments on aforementioned financial covenants.

• (5) On December 15, 2017, the Company entered into a mid-term secured syndicated loan agreement with 7 banks including First Commercial Bank for a credit facility of $3,000,000 (including Tranche A facility amount of $1,200,000 and Tranche B facility amount of $1,800,000). The term for each tranche is 5 years. The Company’s commitments to banking syndicate during the terms of syndicated loan are as follows:

• i. During the terms of the syndicated loan, the financial covenants stated in the Company’s consolidated financial statements audited by independent auditors shall comply with the following financial covenants and will be assessed once a year:

  • (a) Current ratio: The ratio of current assets to current liabilities shall not be lower than 100%.

  • (b) Debt ratio: The ratio of total liabilities to tangible equity shall not be higher than 200%.

  • (c) Interest coverage ratio: The ratio of total amount of income before tax, interest expense, depreciation and amortisation to interest expense shall not be lower than 200%.

  • (d) Tangible equity: The amount of net assets less intangible assets shall not be lower than $3,000,000.

• ii. If the Company fails to comply with the aforementioned financial covenants, the Company is required to pay additional interest rate of 0.10% per annum over the interest rate applicable to this agreement during the period from the date of notification sent by the managing bank to the date that consolidated financial statements, which meet al requirements, are provided. The aforesaid failure to comply with financial covenants will not be regarded as an event of default if additional interest is paid.

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As of December 31, 2021 and 2020, the Group did not breach any commitments on aforementioned financial covenants.

• (6) The Company is involved in a lawsuit filed by Mr. Li, Shi-Ren in 2012 relating to whether an employment relationship existed between both parties. Mr. Li, Shi-Ren claimed that he served in an investee of the Company for 26 years and 8 months and requested the Company to pay pension for a total amount of USD 642 thousand. On February 27, 2014, the Taiwan Kaohsiung District Court rendered a decision that the Company is liable for the USD 642 thousand pension payment. The Company disagreed with the decision and appealed during the legal period. On April 29, 2016, the Taiwan High Court Kaohsiung Branch Court revoked the original decision rendered on February 27, 2014 and rendered a decision that the litigation expenses incurred thereby shall be borne by the appellant (Li, Shi-Ren). Subsequently, Li, Shi-Ren appealed to the Supreme Court. On August 2, 2018, the Supreme Court, after reviewing the case, revoked the decision except for the provisional execution and remanded the case to the Taiwan High Court Kaohsiung Branch Court. On April 15, 2020, following the first decision by the Supreme Court, the Taiwan High Court Kaohsiung Branch Court rendered a decision on the case no. 2018-Zhong-Lao-Shang-Geng-Yi-Zi-1, in which both of the appellant’s (Li, Shi-Ren) appeal with the first instance court and motion for provisional execution are dismissed, and the appellant shall bear the relevant litigation expenses. Li, Shi-Ren continued to appeal, but the case is now pending with the Supreme Court.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

• None.

12. Others

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

(2) Financial instruments

• A. Financial instruments by category

Details of the Group’s financial instruments by category are provided in Note 6.

• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and financial performance.

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• (b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written principles for over all risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

  • i. Foreign exchange risk

  • (i) The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the RMB, USD and IDR. Foreign exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

  • (ii) Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. The Group treasury uses forward foreign exchange contracts to manage the foreign exchange risk arising from future commercial transactions and recognized assets and liabilities. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency.

  • (iii)The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD, RMB and IDR). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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(Foreign currency: functional currency) Financial assets Monetary items USD:NTD USD:RMB EUR:NTD EUR:RMB RMB:NTD Financial liabilities Monetary items USD:NTD USD:RMB USD:IDR EUR:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD USD:RMB EUR:NTD EUR:RMB RMB:NTD Financial liabilities Monetary items USD:NTD USD:RMB USD:IDR EUR:NTD	Foreign currency amount (In thousands) Exchange rate Book Value 11,599 $ 27.68 321,086 $ 3,778 6.3680 104,522 1,199 31.32 37,541 1,095 7.220 34,346 3,259 4.346 14,159 9,325 27.68 258,124 3,540 6.3680 97,928 2,977 13,980 82,411 767 31.32 24,016 December 31,2021 Foreign currency amount (In thousands) Exchange rate Book Value 11,338 $ 28.48 322,901 $ 4,346 6.5249 123,797 237 35.02 8,315 116 8.025 4,058 8716 4.366 38,055 7,916 28.48 225,454 538 6.5249 15,325 3,111 14,200 89,690 262 35.02 9,183 December31,2020	Foreign currency amount (In thousands) Exchange rate Book Value 11,599 $ 27.68 321,086 $ 3,778 6.3680 104,522 1,199 31.32 37,541 1,095 7.220 34,346 3,259 4.346 14,159 9,325 27.68 258,124 3,540 6.3680 97,928 2,977 13,980 82,411 767 31.32 24,016 December 31,2021 Foreign currency amount (In thousands) Exchange rate Book Value 11,338 $ 28.48 322,901 $ 4,346 6.5249 123,797 237 35.02 8,315 116 8.025 4,058 8716 4.366 38,055 7,916 28.48 225,454 538 6.5249 15,325 3,111 14,200 89,690 262 35.02 9,183 December31,2020	Foreign currency amount (In thousands) Exchange rate Book Value 11,599 $ 27.68 321,086 $ 3,778 6.3680 104,522 1,199 31.32 37,541 1,095 7.220 34,346 3,259 4.346 14,159 9,325 27.68 258,124 3,540 6.3680 97,928 2,977 13,980 82,411 767 31.32 24,016 December 31,2021 Foreign currency amount (In thousands) Exchange rate Book Value 11,338 $ 28.48 322,901 $ 4,346 6.5249 123,797 237 35.02 8,315 116 8.025 4,058 8716 4.366 38,055 7,916 28.48 225,454 538 6.5249 15,325 3,111 14,200 89,690 262 35.02 9,183 December31,2020
	$
		Exchange rate 28.48 6.5249 35.02 8.025 4.366 28.48 6.5249 14,200 35.02	Book Value
			322,901 $ 123,797 8,315 4,058 38,055 225,454 15,325 89,690 9,183

The sensitivity analysis of foreign exchange risk mainly focuses on the foreign currency monetary items at the end of the financial reporting period. If the exchange rate of NTD to all foreign currencies had appreciated/depreciated by 1%, the Group’s net income for the years ended December 31, 2021 and 2020 would have decreased/increased by 414 and $1,248, respectively.

The total exchange loss, including realised and unrealised, arising from significant

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foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2021 and 2020, amounted to $6,648 and $19,307, respectively.

ii. Price risk

• (i) The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• (ii) The Group’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2021 and 2020 would have increased/decreased by $515 and $1,015, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $6,288 and $6,446, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

iii. Cash flow and fair value interest rate risk

• (i) The Group’s main interest rate risk arises from some borrowings with variable rates, which expose the Group to cash flow interest rate risk. During 2021 and 2020, the Group’s borrowings at variable rate were mainly denominated in NTD, USD, RMB and IDR.

• (ii) The Group’s borrowings are measured at amortised cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

• (iii) If the borrowing interest rate had increased/decreased by 1% with all other variables held constant, profit, net of tax for the years ended December 31, 2020 and 2019 would have decreased/increased by $690 and $846, respectively. The main factor is that changes in interest expense result from floating rate borrowings.

(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the

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agreed terms.

• ii. The Group manages its credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a certain rating are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

• If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. If the credit rating grade of an investment target degrades two scales, there has been a significant increase in credit risk on that instrument since initial recognition.

• v. If the default rate of an investment target exceeds 10%, there has been a significant increase in credit risk on that instrument since initial recognition.

• vi. The Group adopts the assumptions under IFRS 9, that is, the default occurs when the contract payments are past due over 90 days.

• vii. The Group classifies customer’s accounts receivable in accordance with credit risk on trade. The Group applies the modified approach using a provision matrix to estimate the expected credit loss and uses the historical and timely information to establish loss rate for assessing the default possibility of accounts receivable. Movements in relation to the Group applying the modified approach to provide loss allowance for notes and accounts receivable are as follows:

Year ended December 31, 2021

			Notes			Accounts
			receivable			receivable			Total
Balance at January 1		$	3,507		$	29,138		$	32,645
Expected credit (gain) loss	(		3,242)			310	(		2,932)
Write-offs			-			(162)			(162)
Effect of foreign exchange	(		13)	(		168)	(		181)
Balance at December 31		$	252		$	29,118		$	29,370

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		YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
		Notes		Accounts
		receivable		receivable		Total
Balance at January 1	$	95	$	26,633	$	26,728
Expected credit loss		3,413		2,788		6,201
Write-offs		-	(	485)	(	485)
Effect of foreign exchange	(	1)		202		201
Balance at December 31	$	3,507	$	29,138	$	32,645

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

• ii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows:

December31,2021 Non-derivative financial liabilities: Short-term borrowings Notes payable Accounts payable Other payables Lease liability Bonds payable Long-term borrowings (including current portion) Guarantee deposits received	Less than 1year 1,660,455 $ 3,287 1,030,237 579,731 19,582 1,950 35,527 457	Between 1 and 2year(s) - $ - - - 3,029 1,950 138,992 -	Between 2 and5 years - $ - - - 8,064 5,850 482,176 -	More than 5 years
				- $ - - - 5,849 3,003,900 - -

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December31,2020 Non-derivative financial liabilities: Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liability Long-term borrowings (including current portion) Guarantee deposits received	Less than 1year 2,023,684 $ 40,000 4,241 687,916 409,649 27,587 290,331 564	Between 1 and 2year(s) - $ - - - - 23,133 1,911,045 -	Between 2 and5 years - $ - - - - 23,526 322,253 -	More than 5 years
				- $ - - - - 30,913 - -

• iii. For non-derivative financial liabilities, the Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis to be significantly earlier, nor expect the actual cash flow amount to be significantly different.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

  • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates is included in Level 1.

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

  • Level 3: Unobservable inputs for the asset or liability.

• B. The carrying amounts of the Group’s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, other current financial assets, guarantee deposits paid, long-term notes and accounts receivable, other non-current financial assets, short-term borrowings, short-term notes and bills payable, notes payable, accounts payable, other payables, lease liabilities, long-term borrowings (including current portion) and guarantee deposits received) are approximate to their fair values.

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• C. The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2021 and 2020 are as follows:

December31,2021 Assets: Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities December 31, 2020 Assets: Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Recurring fair value measurements Recurring fair value measurements	Level 1 41,325 $ 10,179 51,504 628,845 680,349 $ Level 1 95,215 $ 6,245 101,460 644,583 746,043 $	Level 2 - $ - - - - $ Level 2 - $ - - - - $	Level3 - $ - - - - $ Level3 - $ - - - - $	Total
				41,325 $ 10,179
				51,504
				628,845
				680,349 $
				Total
				95,215 $ 6,245
				101,460
				644,583
				746,043 $

• D. The methods and assumptions the Group used to measure fair value are as follows:

• (a) The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed shares Open-end fund Market quoted price Closing price Net asset value

• (b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and

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characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters).

• E. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

• F. For the years ended December 31, 2021 and 2020, there was no transfer between Level 1 and Level 2.

• G. For the years ended December 31, 2021 and 2020, there was no transfer into or out from Level 3.

(4) Others

In response to the Covid-19 pandemic, the Group has complied with various preventive measures imposed by the government in accordance with the “Guidelines for the Continued Operation of Enterprises in Response to Severe and Special Infectious Pneumonia Epidemics”. The factory operates in a way of diversion and warehousing, and there is no significant adverse effect on all operations.

13. Supplementary Disclosures

(According to the current regulatory requirements, the Company is only required to disclose the information for the year ended December 31, 2021)

(1) Significant transactions information

A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

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(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 8.

• B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas: Purchases and sales between the Company and investees in Mainland China are eliminated when preparing consolidated financial statements. Information on significant transactions, such as purchases and sales, receivables and payables, provision of endorsements and guarantees and financing, between the Company and investees in Mainland China is provided in Note 13(1)A, B and J.

(4) Major shareholders information

Major shareholders information: Please refer to table 9.

14. Segment Information

(1) General information

• A. Management has determined the reportable operating segments based on the reports reviewed by the chief operating decision-maker that are used to make strategic decisions. The Group’s reportable segments are as follows:

• (a) Screw segment: Primarily engaging in the manufacture, process and trade of screws and nuts, etc.

• (b) Machinery segment: Primarily engaging in the manufacture, assemble and trade of machine tools and chemical machinery, etc.

• (c) Investment segment: Primarily engaging in the general investment.

• B. There is no material change in the basis for formation of entities and division of segments in the Group or in the measurement basis for segment information during this period.

• C. The Group’s chief operating decision-maker assesses the performance based on the segment’s net operating profit. The accounting policies of the operating segments are in agreement with the significant accounting policies summarised in Note 4 in the consolidated financial statements.

(2) Information about segment profit or loss, assets and liabilities

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

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					YearendedDecember31,2021	YearendedDecember31,2021	YearendedDecember31,2021	YearendedDecember31,2021
			Screw			Machinery		Investment
			segment			segment		segment			Total
Segment revenue		$	11,165,287		$	1,460,987	$	-		$	12,626,274
Inter-segment revenue	(		750,347)	(		65,685)		-	(		816,032)
Revenue from external
customers, net			10,414,940			1,395,302		-			11,810,242
Segment income before tax			1,416,325			114,780		261,573			1,792,678
Segment assets			10,613,490			1,936,650		141,365			12,691,505
Segment liabilities			7,010,471			1,010,876		2,247			8,023,594
					Year ended December 31, 2020
			Screw			Machinery		Investment
			segment			segment		segment			Total
Segment revenue		$	7,651,429		$	1,221,097	$	-		$	8,872,526
Inter-segment revenue	(		680,146)	(		137,765)		-	(		817,911)
Revenue from external
customers, net			6,971,283			1,083,332		-			8,054,615
Segment income before tax			522,495			72,279		67,728			662,502
Segment assets			8,801,310			1,818,063		126,100			10,745,473
Segment liabilities			5,589,397			961,184		63,435			6,614,016

(3) Reconciliation for segment profit or loss, assets and liabilities

• A. Sales between segments are carried out at arm’s length. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that in the consolidated statement of comprehensive income. A reconciliation of reportable segment income or loss before tax to the income/(loss) before tax is provided as follows:

Years ended December 31

			2021			2020
Reportable operating segments income		$	1,792,678		$		662,502
before tax
Elimination of inter-segment income (loss)	(		673,606)	(			316,537)
Profit before income tax		$	1,119,072		$		345,965

• B. The amounts provided to the chief operating decision maker with respect to total assets and liabilities are measured in a manner consistent with that of the financial statements. Therefore, such reconciliation is not required.

(4) Information on products and services

The Group classified the operating segments based on the category of products. Thus, information

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on products is not disclosed separately.

(5) Geographical information

Geographical information for the years ended December 31, 2021 and 2020 is as follows:

Years ended December 31

Taiwan Mainland China and Hong Kong U.S.A. Other countries	Non-current Revenue (Note) assets 4,767,068 $ 2,358,692 $ 3,012,597 612,257 622,376 18,919 3,408,201 270,726 11,810,242 $ 3,260,594 $ 2021	2020	2020
	Revenue (Note) 4,767,068 $ 3,012,597 622,376 3,408,201 11,810,242 $	Revenue (Note) 2,400,016 $ 2,385,267 531,171 2,738,161 8,054,615 $	Non-current assets
			2,362,109 $ 647,101 35,835 317,781
			3,362,826 $

(Note) The revenue is classified by the country where the customer is located.

(6) Major customer information

Major customer information for the years ended December 31, 2021 and 2020 is as follows:

customer E-SHENG STEEL CO., LTD.	Years endedDecember31	Years endedDecember31
	2021 SalesRevenue 1,471,608 $	2020
		SalesRevenue
		73 $

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Maximum outstanding Amount of Allowance Limit on loans Ceiling on General Is a balance during Balance at Nature of transactions Reason for granted to total loans ledger related the year ended December 31, Actual amount Interest loan with the for short-term uncollectible a single party granted No. Creditor Borrower account party 2021 2021 drawn down rate �Note 1� borrower financing accounts Item Value �Note 2� �Note 3� Footnote Collateral Year ended December 31, 2021 Table 1 Expressed in thousands of NTD

0 Chun Yu Works & Co., Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. Other receivables - related parties Y 307,401 $ - $ - $ - 2 - $ Additional operating capital - $ - - $ 1,577,391 $ 1,577,391 $ - (Note 1) The numbers filled in for the nature of loan are as follows: 1. Trading Partner 2. Short-term financing. (Note 2) Limit on loans granted to a single party is as follows: 1. For business transaction: Limit is the higher of purchase or sales with the Company during the most recent year or the current year as of the date of financing. 2. For short-term financing: Amount granted by the Company: Limit is 40% of the Company’s current net assets. (Note 3) Ceiling on total loans granted is as follows: Amount granted by the Company: Ceiling is 40% of the Company’s current net assets. (Note 4) Foreign currencies are translated into New Taiwan dollars. Exchange rate of foreign currencies indicated as of report date were as follow: RMB:NTD 1:4.3458.

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Ratio of accumulated Maximum endorsement/ outstanding Outstanding guarantee Provision of Provision of Provision of Relationship Limit on endorsement/ endorsement/ Amount of amount to net Ceiling on endorsements/ endorsements/ endorsements/ with the endorsements/ guarantee guarantee endorsements/ asset value of total amount of guarantees by guarantees by guarantees to endorser/ guarantees amount as of amount at guarantees the endorser/ endorsements/ parent subsidiary to the party in Endorser/ guarantor provided for a December 31, December 31, Actual amount secured with guarantor guarantees company to parent Mainland Number guarantor Company name �Note 1� single party 2021 2021 drawn down collateral company provided subsidiary company China Footnote Party being endorsed/guaranteed Table 2 Expressed in thousands of NTD

0 Chun Yu Works & Co., Ltd. Chun Yu Works (USA) Inc. 2 2,366,086 $ 199,745 $ $ 193,760 $ - $ - 4.91% 3,154,782 $ Y N N (Note 2) 0 Chun Yu Works & Co., Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. 2 2,366,086 998,725 968,800 497,371 - 24.57% 3,154,782 Y N Y (Note 2) 0 Chun Yu Works & Co., Ltd. Shanghai Uchee Hardware Products Ltd. 2 2,366,086 43,863 43,458 - - 1.11% 3,154,782 Y N Y (Note 2) 1 Chun Zu Machinery Industry Co., Ltd. Shanghai Chun Zu Machinery Industry Ltd. 2 410,405 - - - - - 513,006 Y N Y (Note 3) (Note 1) The numbers filled in for the relationship with the Company are as follows: 1. Having business relationship. 2. The Company direct and indirect owns over 50% ownership of the investee company. (Note 2) The total amount of transactions of endorsement equals to 80% of the Company's net worth, the limit of endorsement for any single entity is 60% of the Company's net worth, and all of the related transactions are to be submitted to the stockholders' meeting for reference. (Note 3) The total amount of transactions of endorsement equals to 50% of its net worth for Chun Zu Machinery Industry Co., Ltd., the limit of endorsement for any single entity is 40% of its net worth, and all of the related transactions are to be submitted to the stockholders' meeting for reference. (Note 4) Foreign currencies are translated into New Taiwan dollars. Exchange rate of foreign currencies indicated as of report date were as follow: USD:NTD 1:27.68, RMB:NTD 1:4.3458.

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General Number of shares Relationship with the ledger account (In thousands of Securities held by Marketable securities securities issuer (Note 1) shares or units) Book value Ownership (%) Fair value Footnote Chun Yu Works & Co., Ltd. and subsidiaries Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) Year ended December 31, 2021 Table 3 Expressed in thousands of NTD As of December 31, 2021

Chun Yu Works & Co., Ltd. Stocks - Gloria Material Technology Corporation Other related party 1 1,876 41,179 $ 0.41 41,179 $ - Stocks - Taiwan Styrene Monomer Corporation � 2 11,678 203,198 2.21 203,198 - Stocks - China Ecotek Corporation � 2 4,333 173,114 3.50 173,114 - Stocks - King Kong Iron Works, Ltd. � 2 304 772 0.55 772 - Stocks - Pacific Electric Wire & Cable Co., Ltd. � 2 14 - - - - Beneficiary certificates - Yuanta Taiwan High-yield Leading Company Fund � 1 500 7,140 - 7,140 - Beneficiary certificates - PGIM USD High Yield Bond Fund-USD � 1 300 3,039 - 3,039 - Chun Bang Precision Co., Ltd. Stocks - The First Insurance Co., Ltd. � 1 10 146 - 146 - Stocks - Taiwan Styrene Monomer Corporation � 2 6,440 112,056 1.22 112,056 - Chun Yu Investment Corp. Stocks - Chun Yu Works & Co., Ltd. The Company 1 22,314 691,748 7.75 691,748 (Note 2) (Note 3) Stocks - Taiwan Styrene Monomer Corporation � 2 6,529 113,605 1.24 113,605 - Chun Yu Bio-tech Corp. Stocks - Chun Zu Machinery Industry Co., Ltd. Subsidiary 2 9 191 0.01 191 - Stocks - Taiwan Styrene Monomer Corporation � 2 1,500 26,100 0.28 26,100 - (Note 1) The code number explanation is as follows: 1. Financial assets at fair value through profit or loss - current. 2. Financial assets at fair value through other comprehensive profit or loss- non-current. (Note 2) The Company’s stocks held by Chun Yu Investment Corporation, shown as ‘Financial assets at fair value through profit or loss - Current’, were measured at fair value. The fair value changes were recognised in profit or loss for the current year. (Note 3) The cost of $267,195 was recognised by the Company under ‘Treasury shares’.

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Percentage of Percentage of Relationship with the Purchases total purchases total notes/accounts Purchaser/seller Counterparty counterparty (sales) Amount (sales) Credit term Unit price Credit term Balance receivable (payable) Footnote Transaction transactions Table 4 Expressed in thousands of NTD Differences in transaction terms compared to third party Notes/accounts receivable (payable)

Chun Yu Works & Co., Ltd. Ofco Industrial Corporation Other related party (Sales) 542,899) ($ ���� 1 month - 3 ~ 5 months $ 133,381 ��� - Chun Yu (Dongguan) Metal Products Co., Ltd. Shanghai Uchee Hardware Products Ltd. Subsidiary (Sales) ( 377,824) ����� 3 months - (Note 1) - - - Shanghai Uchee Hardware Products Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. Subsidiary (Sales) ( 203,484) ����� 3 months - (Note 1) 505 �� - Chun Yu (Dongguan) Metal Products Co., Ltd. Shanghai Uchee Hardware Products Ltd. Subsidiary Purchases 203,484 ��� 3 months - (Note 2) 505 �� - Shanghai Uchee Hardware Products Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. Subsidiary Purchases 377,824 ��� 3 months - (Note 2) - - - (Note 1) The credit terms to third parties are 1 ~ 3 months after the sale. (Note 2) The payment terms to third parties are 3 ~ 6 months after the acceptance. (Note 3) Foreign currencies are translated into New Taiwan Dollars using the following exchanges: Ending balance of receivable and payable are translated using the exchange rates as of report date (USD:NTD 1:27.68, RMB:NTD 1:4.3458), and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2021 (USD:NTD 1:28.0088, RMB:NTD 1:4.3414).

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Action taken Turnover for overdue Subsequent Allowance for Company Name Name of the counterparty Relationship General ledger account Amount rate Amount accounts collections doubtful accounts Receivables from related party Overdue receivables Chun Yu Works & Co., Ltd. and subsidiaries Receivables from related parties reaching $100 million or 20% of the Company's paid-in capital Year ended December 31, 2021 Table 5 Expressed in thousands of NTD

Chun Yu Works & Co., Ltd. Ofco Industrial Corporation Other related party Accounts receivable 133,381 $ 5.53 - $ - $ 69,671 $ -

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						Expressed in thousands of NTD		Percentage of	consolidated total	operating revenue or	total assets (Note 4)	1%	-	2%	8%	-	-	-	-	-	-	-	-	-	-	-	4%	-	2%
											Transaction terms	4 months	-	-	-	-	3 months	-	3 months	3 months	3 months	-	3 months	-	3 months	-	5 months	-	3 months
Chun Yu Works & Co., Ltd. and subsidiaries		Significant inter-company transactions during the reporting period		Year ended December 31, 2021		Table 6	Transaction			Number Relationship	General ledger account Amount (Note2) Company name Counterparty (Note 3)	0 Chun Yu Works & Co., Ltd. Chun Yu Works (USA) Inc. 1 Sales 89,967 $	1 Accounts receivable 32,927	1 Provision of endorsements and guarantees 193,760	Chun Yu (Dongguan) Metal Products Co., Ltd. 1 Provision of endorsements and guarantees 968,800	Shanghai Uchee Hardware Products Ltd. 1 Provision of endorsements and guarantees 43,458	1 Chun Bang Precision Co., Ltd. Chun Yu Works & Co., Ltd. 2 Sales 51,365	2 Accounts receivable 11,872	Chun Zu Machinery Industry Co., Ltd. 3 Sales 12,457	2 Chun Zu Machinery Industry Co., Ltd. Chun Yu Works & Co., Ltd. 2 Sales 21,624	Chun Yu (Dongguan) Metal Products Co., Ltd. 3 Sales 29,634	3 Accounts receivable 18,009	Pt Moon Lion Industries Indonesia 3 Sales 12,757	Shanghai Chun Zu Machinery Industry Ltd. 3 Other receivables 13,032	3 Shanghai Chun Zu Machinery Industry Ltd. Chun Zu Machinery Industry Co., Ltd. 3 Sales 18,632	4 Chun Yu (Dongguan) Metal Products Co., Ltd. Scholar Holdings Ltd. 3 Other receivables 20,994	Shanghai Uchee Hardware Products Ltd. 3 Sales 377,824	3 Other receivables 34,706	5 Shanghai Uchee Hardware Products Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. 3 Sales 203,484	(Note 1) Transactions among the company and subsidiaries with amount over NT$10 million and one side of them are disclosed.	(Note 2) The transaction information of the Company and the consolidated subsidiaries should be noted in column "Number". The number means:	1. Number 0 presents the Company.	2. The consolidated subsidiaries are in order from number 1.	(Note 3) The relationships among the transation parties are as follows:	1. The Company to the consolidated subsidiary.	2. The consolidated subsidiary to the Company.	3. The consolidated subsidiaryto another consolidated subsidiary.	(Note 4) The percentage of transaction amount over consolidated total revenues or total assets is as follows: Assets and liabilities are calculated using the ending balance over the consolidated total assets at period end; Sales is	calculated using the amount of the period over the consolidated total revenue of the period.	(Note 5) For the amounts denominated in foreign currencies, the balances of notes/accounts receivable (payable) are translated into New Taiwan dollars at the exchange rate (USD 1 : NTD 27.68; RMB 1 : NTD 4.3458)	prevailing at the financial reporting date, and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2021 (USD 1 : NTD 28.0088; RMB 1 : NTD 4.3414).

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Net profit (loss) Investment income (loss) Balance as at Balance as at of the investee for the recognised by the Company Main business December 31, December 31, year ended for the year ended Investor Investee Location activities 2021 2020 Number of shares Ownership (%) Book value December 31, 2021 December 31, 2021 Footnote Initial investment amount Shares held as at December 31, 2021

Chun Yu Works & Co., Ltd. Chun Bang Precision Co., Ltd. Taiwan Manufacture and trade of moulds 125,344 $ 20,344 $ 15,000,000 100.00 199,514 $ 3,422 $ 6,004 $ A subsidiary (Note 1) Chun Yu Works (U.S.A.) Inc. U.S.A. Import and export of hardware products 114,728 114,728 3,800,000 100.00 283,422 44,141 44,060 A subsidiary Chun Yu Investment Corporation Taiwan Professional investment 267,652 267,652 56,306,791 100.00 139,118 259,356 70 A subsidiary Chun Yu Bio-tech Corporation Taiwan Powder metallurgy 90,260 60,220 10,000,000 100.00 136,172 25,606 25,612 A subsidiary Scholar Holdings Ltd. Virgin Islands Reinvestment and import and export trade 2,581,891 2,581,891 33,183,211 100.00 1,000,185 44,749 47,800 A subsidiary Sunny City International Ltd Samoa Reinvestment and import and export trade 84,824 84,824 1,000,000 100.00 256,443 35,781 35,781 A subsidiary Pt Moon Lion Industries Indonesia Indonesia Manufacture and trade of screws and nuts 154,760 154,760 14,370,000 71.85 577,294 306,215 220,016 A subsidiary Chun Zu Machinery Industry Co., Ltd. Taiwan Manufacture and trade of machinery 52,598 52,598 28,821,939 47.81 455,418 83,778 38,994 A subsidiary Chun Zu Machinery Industry Co., Ltd. Lion City Management Ltd. Virgin Islands Professional investment 55,360 55,360 - 100.00 627,761 86,590 - A subsidiary (Note 2) (Note 1) It changed its name from Hi-Ace Tranding Co., Ltd. to Chun Bang Precision Co., Ltd. on May 20, 2020. (Note 2) According to the related regulations, it is not required to disclose income (loss) recognized by the Company. (Note 3) Foreign currencies are translated into New Taiwan Dollars using the following exchanges: Ending balance of receivable and payable are translated using the exchange rates as of report date (USD:NTD 1:27.68, RMB:NTD 1:4.3458), and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2021 (USD:NTD 1:28.0088, RMB:NTD 1:4.3414).

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Accumulated Accumulated Accumulated amount amount of amount Ownership Investment income of investment remittance from of remittance held by (loss) recognised Book value of income Taiwan to from Taiwan to Net income of the by the Company investments in remitted back to Investee in Main business Investment Mainland China as of January 1, Remitted to Mainland Remitted back Mainland China as of December 31, investee for the year ended Company (direct or for the year ended December Mainland China as of December 31, Taiwan as of December 31, Mainland China activities Paid-in capital method 2021 China to Taiwan 2021 December 31, 2021 indirect) 31, 2021 2021 2021 Footnote ended December 31, 2021 Amount remitted back to Taiwan for the year Chun Yu Works & Co., Ltd. and subsidiaries Information on investments in Mainland China Year ended December 31, 2021 Table 8 Expressed in thousands of NTD Amount remitted from Taiwan to Mainland China/

Chun Yu (Dongguan) Metal Products Co., Ltd. Manufacture and trade of screws and nuts $ 1,784,834 (Note 1) (Note 3) 1,333,982 $ - $ - $ 1,333,982 $ 44,895 $ 100% 44,895 $ 1,028,950 $ - $ (Note 9) Shanghai Uchee Hardware Products Ltd. Trade of screws and nuts 27,680 (Note 4) 27,680 - - 27,680 35,820 100% 35,820 254,813 48,468 (Note 7) (Note 9) Chunyu Group Shanghai Tongsheng Trade Co., Ltd. Trade of screws and nuts 7,363 (Note 5) - - - - 151 100% 151 4,018) ( - (Note 9) Shanghai Chun Zu Machinery Industry Ltd. Manufacture and trade of machinery 235,280 (Note 2) (Note 6) 55,360 - - 55,360 86,581 47.82% 41,403 295,373 340,842 (Note 8) (Note 9) Accumulated Investment amount of amount approved Ceiling on remittance by the investments in from Taiwan Investment Mainland China to Mainland Commission of imposed by the China the Ministry of Investment as of December 31, Economic Commission of Company name 2021 Affairs (MOEA) MOEA (Note 10) Chun Yu Works & Co., Ltd. $ 1,564,280 $ 1,564,280 $ 2,800,747 Chun Zu Machinery Industry Co., Ltd. 55,360 179,920 615,607 (Note 1) The investment in Chun Yu (Dongguan) Metal Products Co., Ltd. amounted to US$64,481 thousand, consisting of US$48,193 thousand that has been reported to the Investment Commission and US$16,288 thousand from an investment loan from Scholar Holdings Ltd. (Note 2) The paid-in capital of Shanghai Chun Zu Machinery Industry Ltd. amounted to UD$8,500 thousand, consisting of UD$4,000 thousand from remittance from Chun Zu Machinery Industry Co., Ltd. through its subsidiary, Lion City Management Ltd. and US$4,500 thousand from capitalisation of retained earnings of Shanghai Chun Zu Machinery Industry Ltd., which were reported to the Investment Commission. In addition, proceeds from capital reduction of Lion City Management Ltd. in 2008 amounting to US$2,000 thousand were reported to the Investment Commission. (Note 3) Indirect investment in PRC through the existing company (Scholar Holdings Ltd.) located in the third area. (Note 4) Indirect investment in PRC through the existing company (Sunny City International Ltd.) located in the third area. (Note 5) Indirect investment in PRC through the existing company (Shanghai Uchee Hardware Products Ltd.) located in PRC. (Note 6) Indirect investment in PRC through the existing company (Lion City Management Ltd.) located in the third area. (Note 7) It is the cash dividends totaling US$1,751 thousand distributed by Shanghai Uchee Hardware Products Ltd. to Sunny City International Ltd., which then remitted to the Company and Chun Bang Precision Co., Ltd. (Note 8) It is the cash dividends amounting to US$25,700 thousand distributed by Shanghai Chun Zu Machinery Industry Ltd. to Lion City Management Ltd., which then remitted to Chun Zu Machinery Industry Co., Ltd. (Note 9) Investment gains or losses were recognised based on audited financial statements. (Note 10) The ceiling is calculated based on the 60% of the investor’s net assets or consolidated net assets (whichever is higher). (Note 11) For the amounts denominated in foreign currencies, the paid-in capital, amount of remittance from Taiwan and book value as of December 31, 2021 are translated into New Taiwan dollars at the exchange rate (USD 1 : NTD 27.68; RMB 1 : NTD 4.3458) prevailing at the financial reporting date, and the net profit (loss) of the investee and investment income (loss) recognised by the Group for the year ended December 31, 2021 are translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2021 (USD 1 : NTD 28.0088; RMB 1 : NTD 4.3414).

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Unit: shares Name of major shareholders Mumber of shares held Ownership (%) Table 9 Shares Chun Yu Works & Co., Ltd. and subsidiaries Major shareholders information Year ended December 31, 2021

Bai Jia Yuan Investment Co., Ltd. 80,209,000 27.87% Jin Jhih Fu Assets Management Co., Ltd. 26,717,000 9.28% Chun Yu Investment Co., Ltd. 22,314,450 7.75% (Note) The major shareholders information was derived from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation. The share capital which was recorded in the financial statements may be different from the actual number of shares issued in dematerialised form due to the different calculation basis.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Chun Yu Works & Co., Ltd.

Opinion

We have audited the accompanying parent company only balance sheets of Chun Yu Works & Co., Ltd. (the “Company”) as at December 31, 2021 and 2020, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the Other matter section), the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 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 Company’s 2021 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company’s 2021 parent company only financial statements are stated as follows:

Cut-off of revenue from export sales

Description

Refer to Note 4(27) for accounting policy on revenue recognition and Note 6(19) for details of operating revenue.

The Company derives its revenues from the sales of screws, nuts and wire rods, etc., and revenues from

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export sales account for a high percentage of total revenue. Export sales are recognized as revenues when control of the goods has been transferred according to the terms specified in the contracts. The revenue recognition requires that the products are delivered to the customer, the customer has full discretion over the products, and there is no unfulfilled obligation that could affect the customer’s acceptance over the products, but delivery time may vary for each sales transaction. The determination as to when products are transferred to customers involves manual process and judgement. Given that there is a risk of material misstatement from improper revenue recognition for transactions that occur near the balance sheet date and the transaction amounts are usually material to the financial statements, we considered the cut-off of revenue from export sales a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Obtained an understanding and assessed the accounting policies on revenue recognition of export sales.

2. Obtained an understanding and assessed the internal controls over revenue recognition of export sales, and tested the effectiveness of internal controls including the delivery process and the timing of revenue recognition.

3. Performed cut-off tests on export sales transactions that took place during a certain period before and after the balance sheet date to ascertain whether sales revenues were recognized when control of goods has been transferred to the customer and revenues were recorded in the proper period.

Valuation of inventories

Description

Refer to Note 4(7) for accounting policy on inventory valuation, Note 5(2) for uncertainty of accounting estimates and assumptions in relation to inventory valuation, and Note 6(4) for details of inventories. As of December 31, 2021, the inventories and allowance for inventory valuation losses amounted NT$2,396,718 thousand and NT$15,946 thousand, respectively.

The Company is primarily engaged in the manufacture and sales of screws, nuts and wire rods, etc. Due to the market demand, technology innovation and other factors, there is a risk of inventories losing value or becoming obsolete. The inventories are measured at the lower of cost and net realisable value. For inventory over a certain age and individually identified as obsolete or slow-moving, the net realisable values are determined by management based on periodic inventory clearance information. Given that the net realisable value used when assessing the inventories individually identified as obsolete or slowmoving involves subjective judgement, we considered the valuation of inventories a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Assessed the reasonableness of policies and procedures in relation to the provision of allowance for inventory valuation losses based on the accounting principles and our understanding of the nature of the business and the industry.

2. Obtained an understanding of the warehouse management processes, reviewed the annual physical

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inventory count plan and participated in the annual inventory count in order to evaluate the effectiveness of procedures used by the management to identify and control obsolete inventories.

1. Verified the appropriateness of net realisable value used in inventory valuation and the logic used in the inventory aging report to ascertain the reasonableness of allowance for inventory valuation losses.

Other matter - Reference to the reports of other auditors

We did not audit the financial statements of the investments accounted for using the equity method, Chun Yu Works (USA) Inc. and Pt Moon Lion Industries Indonesia, which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts included in respect of these associates, is based solely on the reports of the other auditors. The balance of these investments accounted for using the equity method amounted to NT$860,716 thousand and NT$670,804 thousand, both constituting 9% of the total assets as at December 31, 2021 and 2020, respectively, and the share of profit recognized from subsidiaries, associates and joint ventures accounted for using the equity method amounted to NT$264,076 thousand and NT$147,174 thousand, constituting 38% and 126% of the total comprehensive income for the years then ended, respectively.

Responsibilities of management and those charged with governance for the parent company only financial statements

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

In preparing the parent company only 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 the audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards in the

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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 parent company only financial statements.

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

1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive 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 for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

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

4. 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 auditors’ report to the related disclosures in the parent company only 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 auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion on the parent company only financial statements.

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

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safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Lin, Tzu-Shu

Independent Accountants

Liu, Tzu-Meng

PricewaterhouseCoopers, Taiwan

Republic of China March 10, 2022

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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CHUN YU WORKS & CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(3) 6(3) and 7 7 6(26) 5(2) and 6(4) 6(5) 6(6) and 7 6(7), 7 and 8 6(8) 6(9) and 8 6(10) 6(26) 6(7) and 7 6(1) and 8	December 31, 2021 AMOUNT % � ������� � ������ � ������� � ��������� �� ������� � ������ � ����� � ����� � ��������� �� ������ � ��������� �� ������� � ��������� �� ��������� �� ��� � ������ � ����� � ������� � ����� � ����� � ����� � ��� � ��������� �� � ��������� ���	December 31, 2020	December 31, 2020
		AMOUNT � ������� ������ ������� ��������� ������� ������ ����� ����� ��������� ������ ��������� ������� ��������� ��������� ��� ������ ����� ������� ����� ����� ����� ��� ��������� � ���������	AMOUNT � ������� ������� ������ ������� ������ ����� ����� �� ��������� ������ ��������� ������� ��������� ��������� ����� ������ ����� ������� ����� ����� ������ ��� ��������� � ���������	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 1220 Current income tax assets 130X Inventory 1410 Prepayments 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1780 Intangible assets 1840 Deferred income tax assets 1915 Prepayments for business facilities 1920 Guarantee deposits paid 1980 Other non-current financial assets 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets				� � � � � � � � �� �
				��
				� �� �� � � � � � � � �
				��
				���

(Continued)

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2021 December 31, 2020 Notes AMOUNT % AMOUNT % 6(11) � ������� �� � ������� �� 6(19) ������ � ������ � ������� � ������� � 7 ������ � ������ � 7 ������� � ������� � 6(8) ��� � ��� � 6(13) and 8 � � ������� � ��������� �� ��������� �� 6(12) and 8 ��������� �� � � 6(13) and 8 ������� � ��������� �� 6(26) ������� � ������� � 6(8) � � ��� � 6(14) ������ � ������ � ��� � ��� � ��������� �� ��������� �� ��������� �� ��������� �� 6(15) ��������� �� ��������� �� 6(6)(15)(16) ������� � ������� � 6(17) ������� � ������� � ������� � ������� � ������� � ������� � 6(5)(18) � ��������� �� ��������� � 6(15)(16) � ��������� �� ��������� � ��������� �� ��������� �� 9 � ��������� ��� � ��������� ���	December 31, 2020	December 31, 2020
			%
Total current liabilities 2100 Short-term borrowings 2130 Current contract liabilities 2170 Accounts payable 2180 Accounts payable to related parties 2200 Other payables 2280 Current lease liabilities 2320 Long-term liabilities, current portion 21XX Total current Liabilities Total non-current liabilities 2530 Bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Accrued pension liabilities 2645 Guarantee deposits received 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity Significant Contingent Liabilities and Unrecognized Contract Commitments 3X2X Total liabilities and equity			�� � � � � � �
			��
			� �� � � � �
			��
			��
			��
			���

The accompanying notes are an integral part of these parent company only financial statements.

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(19) and 7 � ��������� ��� � ��������� ��� 6(4)(10)(14)(24)(25) and 7 � ����������� ���� ����������� ��� ������� �� ������� � 6(6) � � ����� � ������� �� ������� � 6(10)(14)(24)(25), 7 and 12 � ��������� �� �������� �� � ��������� �� ��������� �� � ������� � � ������� � � ������ � � ���� � � ��������� �� ��������� �� ������� �� �������� �� 6(20) �� � ��� � 6(2)(5)(9)(21) and 7 ������ � ������ � 6(2)(22) and 12 ������ �� ������ � 6(8)(23) � �������� �� �������� �� 6(6) ������� � ������� � ������� � ������� � ������� �� ������� � 6(26) � �������� � ����� � � ������� �� � ������� � 6(14) �� ������� � �� ������ � 6(5) ����� � � �������� �� 6(6) � ������� � � �������� �� 6(26) ����� � ��� � 6(6)(18) � �������� �� �������� �� �� �������� ��� �������� �� � ������� �� � ������� � 6(27) � ���� � ���� � ���� � ����

4000 Sales revenue 5000 Operating costs 5900 Net operating margin 5920 Realized profit from sales 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Impairment loss determined in accordance with IFRS 9 6000 Total operating expenses 6900 Operating profit (loss) Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method, net 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax (expense) benefit 8200 Profit for the year Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Actuarial losses on defined benefit plans 8316 Unrealised gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive loss of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation 8300 Other comprehensive loss for the year, net of tax 8500 Total comprehensive income for the year Earnings per share(in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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CHUN YU WORKS ＆ CO., LTD.

													Total eauity			����������	�������	�������	�������		�	��������		������	����������		����������	�������	�������	�������		�	��������		�	��������	������		������	����������
																		�				�							�				�			�
													Treasury stocks			����������	�	�	�		�	�		�	����������		����������	�	�	�		�	�		�	�	������		�	����������
CHUN YU WORKS & CO., LTD.	PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY		YEARS ENDED DECEMBER 31, 2021 AND 2020	(Expressed in thousands of New Taiwan dollars)	Retained Earnings Other Equity Interest	Unrealised	gains (losses)	Financial from financial	statements assets measured	translation at fair value	Capital from Unappropriated differences of through other	Share capital - retained retained foreign comprehensive	common stock earnings Legal reserve Special reserve earnings operations income			���������� �������� �������� �������� �������� ���������� � ������	� � � � ������� � �	� � � � � �������� �������� �������	� � � � ������� � �������� �������		� � ������ � � ������� � �	� � � � � �������� � �		� ������ � � � � �	���������� �������� �������� �������� �������� ���������� � ������		���������� �������� �������� �������� �������� ���������� � ������	� � � � ������� � �	� � � � � ������� �������� �������	� � � � ������� � �������� �������		� � ������ � � ������� � �	� � � � � �������� � �		� � ������ � � ������� � �	� � � � � �������� � �	� ������ � � � � �		� ������ � � � � �	���������� �������� �������� �������� �������� ���������� � �����
													Notes					6(6)(18)				6(17)	6(6)(15)(1	6)					6(6)(18)				6(17)				6(15)(16)	6(6)(15)(1	6)
														Year ended December 31, 2020		Balance at January 1, 2020	Profit for the year	Other conprehensive loss for the year	Total comprehensive income (loss)	Distribution of 2019 net income:	Legal reserve	Cash dividends	The Company's dividends received by subsidiaries		Balance at December 31, 2020	Year ended December 31, 2021	Balance at January 1, 2021	Profit for the year	Other comprehensive loss for the year	Total comprehensive income (loss)	Distribution of 2020 net income:	Legal reserve	Cash dividends	Distribution of first half of 2021 net income:	Legal reserve	Cash dividends	Disposal of treasury stocks	The Company's dividends received by subsidiaries		Balance at December 31, 2021

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Net (gain) loss on financial assets and liabilities at fair value through profit or loss Expected credit losses Allowance for (reversal of ) inventory market price decline Share of profit of subsidiaries, associates and joint ventures accounted for using the equity method Realized profit from sales Depreciation Loss on disposal of property, plant and equipment Amortization Interest income Dividends income Interest expense Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss - current Notes receivable Accounts receivable Accounts receivable from related parties Other receivables Other receivables from related parties Inventories Prepayments Changes in operating liabilities Current contract liabilities Accounts payable Accounts payable to related parties Other payables Net defined benefit liabilities - non-current Cash (outflow) inflow generated from operations Interest received Dividend received Interest paid Income tax paid Net cash flows (used in) from operating activities

Year ended December31 Notes 2021 2020 � ������� � ������� � ������ ������ 12 ����� ��� 6(4) � ������ ����� 6(6) � ��������� �������� 6(6) � � ������ 6(7)(8)(9) ������� ������� 6(22) ����� ����� 6(10)(24) ����� ����� 6(20) � ���� ���� 6(21) � �������� ������� 6(23) ������ ������ ������ ������� � �������� ������� � ��������� ������� � �������� ������� � �������� ���� � ������� ���� � �������� ������ � ������� ����� � ������� ������ ������� ������ � ������ ����� ������� � ������ � ��� ����� � �������� ������� �� ��� ������� ������ � �������� ������� � ������� ������ � �������� �������

(Continued)

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Return of capital from financial assets at fair value through other comprehensive income Acquisition of investment accounted for using the equity method-subsidiaries Cash paid for acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in prepayments for business facilities Decrease (increase) in guarantee deposits paid Decrease in other non-current financial assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term borrowings Increase in ordinary bonds payable Payments of lease liabilities Increase in long-term borrowings Decrease in long-term borrowings (Decrease) increase in guarantee deposits received Payments of cash dividends Net cash flows from (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December31 Notes 2021 2020 6(5) � ��� � ����� 6(6) � ��������� ������� 6(28) � �������� ������� � ��� 6(10) � ����� ������ � �������� ������� ����� � ������ ����� ����� � ��������� ������� 6(29) � ������� ������� 6(29) ��������� � 6(29) � ����� ������ 6(29) ��������� ��������� 6(29) � ������������ ���������� 6(29) � ���� ��� 6(17) � ��������� �������� ������� � �������� ������� � ������� 6(1) ������� ������� 6(1) � ������� � �������

The accompanying notes are an integral part of these parent company only financial statements.

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CHUN YU WORKS ＆ CO., LTD.

CHUN YU WORKS & CO., LTD.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. History and Organization

(1) Chun Yu Works & Co., Ltd. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act and other related regulations in March 1965. The Company is primarily engaged in the manufacture and heat treatment of screws, nuts and polished steel bars as well as design of pollution prevention equipment and undertaking related services.

(2) The Company’s shares have been listed on the Taiwan Stock Exchange since October 1991.

1. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These parent company only financial statements were authorised for issuance by the Board of Directors on March 10, 2022.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform— Phase 2’ Amendment to IFRS 16, ‘Covid-19-related rent concessions beyond 30 June 2021’	January 1, 2021 January 1, 2021 April 1, 2021 (Note)

Note: Earlier application from January 1, 2021 is allowed by the FSC.

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

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

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

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CHUN YU WORKS ＆ CO., LTD.

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts— cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

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

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 – comparative information' Amendments to IAS 1, ‘Classification of liabilities as current or Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’	To be determined by International Accounting Standards Borad January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

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

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance

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CHUN YU WORKS ＆ CO., LTD.

with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

• (2) Basis of preparation

• A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:

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

  • (b) Financial assets at fair value through other comprehensive income

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

• B. The preparation of parent company only financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5, � Critical accounting judgements, estimates and key sources of assumption uncertainty’.

• (3) Foreign currency translation

The Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional and presentation currency. Foreign currency transactions and balances

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

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

• C. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are retranslated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• D. All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

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CHUN YU WORKS ＆ CO., LTD.

• (4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

  • (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

  • (b) Assets held mainly for trading purposes;

  • (c) Assets that are expected to be realised within twelve months from the balance sheet date;

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

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

  • (a) Liabilities that are expected to be settled within the normal operating cycle;

  • (b) Liabilities arising mainly from trading activities;

  • (c) Liabilities that are to be settled within twelve months from the balance sheet date;

  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

• D. The Company recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(6) Accounts and notes receivable

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

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

(7) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials,

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CHUN YU WORKS ＆ CO., LTD.

direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

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

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

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

  • The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

• (9) Impairment of financial assets

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

(10) Derecognition of financial assets

The Company derecognizes a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Company has not retained control of the financial asset.

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CHUN YU WORKS ＆ CO., LTD.

(11) Investments accounted for using the equity method / subsidiaries

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

• B. Unrealised profit (loss) from the transactions between the Company and subsidiaries have been offset. The accounting policies of the subsidiaries have been adjusted to be consistent with the Company’s accounting policies.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognize losses proportionate to its ownership.

• D. If changes in the Company’s shares in subsidiaries do not result in loss in control (transactions with non-controlling interest), transactions shall be considered as equity transactions, which are transactions between owners. Difference of adjustment of non-controlling interest and fair value of consideration paid or received is recognized in equity.

• E. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall be equal to the amount attributable to owners of the parent in the consolidated financial statements. Owners’ equity in the parent company only financial statements shall be equal to equity attributable to owners of the parent in the consolidated financial statements.

• (12) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a

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change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Assets Useful lives Buildings and structures: Main building of plant 15 ~ 51 years Others 4 ~ 25 years Machinery and equipment 3 ~ 22 years Utilities equipment 5 ~ 18 years Transportation equipment 3 ~ 9 years Office equipment 3 ~ 13 years Other equipment 2 ~ 15 years

(13) Leasing arrangements (lessee) - right-of-use assets / lease liabilities

• A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable;

• (b) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The Company subsequently measures the lease liability at amortised cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

• (b) Any lease payments made at or before the commencement date;

• (c) Any initial direct costs incurred by the lessee.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(14) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model.

Except for land, investment property is depreciated on a straight-line basis over its estimated useful

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life of 10 ~ 40 years.

(15) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3 to 5 years.

(16) Impairment of non-financial assets

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

(17) Borrowings

• A. Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(18) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

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

(19) Bonds payable

• Ordinary corporate bonds issued by the Group are initially recognized at fair value less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is presented as an addition to or deduction from bonds payable, which is amortised to profit or loss over the period of bond circulation using the effective interest method as an adjustment to ‘finance costs’.

(20) Derecognition of financial liabilities

A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires.

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(21) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

• (22) Provisions

Provisions (the estimated warranties) are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses.

(23) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plan

For defined contribution plan, the contributions are recognized as pension expense when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plan

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognized in the balance sheet in respect of the defined benefit pension plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead.

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

• iii. Past service costs are recognized immediately in profit or loss.

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C. Termination benefits

  - Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Company recognizes expense when it can no longer withdraw an offer of termination benefits or when it recognizes related restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

• D. Employees’ compensation and directors’ remuneration

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

• (24) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings of the Company and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit

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will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

(25) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(26) Dividends

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

(27) Revenue recognition

Sales of goods

• A. Sales are recognized when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

• B. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated output tax as well as sales returns and allowances, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. The credit terms for general sales are 2 months.

• C. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(28) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Company will comply with any conditions attached to the grants and the grants will be received.

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Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes expenses for the related costs for which the grants are intended to compensate.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Company’s accounting policies

• None.

(2) Critical accounting estimates and assumptions

• Valuation of inventories

• A. As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the market demand and technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such valuation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the valuation.

• B. As of December 31, 2021, the carrying amount of inventories was $2,380,772.

• Details of Significant Accounts

(1) Cash and cash equivalents

tails of Significant Accounts Cash and cash equivalents
Cash: Cash on hand Checking accounts Demand deposits	December31,2021 50 $ 123 248,059 248,232 $	December31,2020
		89 $ 645 119,989
		120,723 $

• A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. As of December 31, 2021 and 2020, the Company’s demand deposits amounting to $7,361 and $15,900, respectively, were pledged to others as collateral (Shown as ‘Other non-current financial assets’). Details are provided in Note 8, ‘Pledged assets’.

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

Items Financial assets mandatorily measured at fair value through profit or loss Listed stocks Beneficiary certificates Valuation adjustment	December31,2021 30,033 $ 8,000 38,033 13,325 51,358 $	December31,2020
		88,494 $ 5,000
		93,494 7,832
		101,326 $

• A. The Company recognized net profit amounting to $53,396 and $3,831 (shown as ‘Other income’ and ‘Other gains and losses’) on financial assets at fair value through profit or loss for the years ended December 31, 2021 and 2020, respectively.

• B. As of December 31, 2021 and 2020, the Company had no financial assets at fair value through profit or loss pledged to others as collateral.

• C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2) , ‘Financial instruments’.

(3) Notes and accounts receivable, net

	December 31,2021	December 31,2021	December	31,2020
Notes receivable	$	103,956	$	51,746
Accounts receivable	$	1,101,525	$	473,281
Less: Allowance for uncollectible accounts	(	2,840)	(	1,323)
	$	1,098,685	$	471,958

• A. The ageing analysis of notes receivable and accounts receivable (including related parties) that were past due but not impaired is as follows:

Not past due Up to 30 days past due 31~90 days past due 91~180 days past due Over 181 days	December	Accounts receivable 1,184,191 $ 80,039 5,670 - 932 1,270,832 $ 31,2021	December	31,2020
	Notes receivable 103,956 $ - - - - 103,956 $		Notes receivable 51,746 $ - - - - 51,746 $	Accounts receivable
				561,591 $ 4,421 534 730 1,242
				568,518 $

The above ageing analysis was based on past due date.

• B. As of December 31, 2021 and 2020, notes receivable and accounts receivable were all from contracts with customers. Also, as of January 1, 2020, the balance of receivables (including related

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parties) from contracts with customers amounted to $531,356.

• C. As of December 31, 2021 and 2020, the Company did not hold any collateral as security for accounts receivable.

• D. As at December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the notes or accounts receivable held by the Company was their carrying amount.

• E .Information relating to credit risk of notes receivable and accounts receivable is provided in Note 12(2) , ‘Financial instruments’.

• F. As of December 31, 2021 and 2020, the Company had no notes receivable and accounts receivable pledged to others.

(4) Inventories

pledged to others. nventories
Raw materials Supplies Work in progress Finished goods Raw materials Supplies Work in progress Finished goods		December31,2021
	Allowance for inventory Cost valuation loss 1,058,726 $ 34) ($ 162,187 1,080) ( 527,848 169) ( 647,957 14,663) ( 2,396,718 $ 15,946) ($ December31,2020		Bookvalue
			1,058,692 $ 161,107 527,679 633,294
			2,380,772 $
	Allowance for inventory Cost valuation loss 304,292 $ 58) ($ 156,156 1,419) ( 436,692 - 623,640 18,792) ( 1,520,780 $ 20,269) ($		Bookvalue
			304,234 $ 154,737 436,692 604,848
			1,500,511 $

The cost of inventories recognized as expense for the year:

			Years ended	December	31
			2021		2020
Cost of goods sold		$	5,327,089	$	3,203,517
(Gain on reversal of) loss on decline	(		4,323)		5,995
in market value (Note)
Revenue from sales of scraps	(		36,078)	(	24,940)
		$	5,286,688	$	3,184,572

(Note) The Company reversed a previous inventory write-down which was accounted for as reduction

of cost of goods sold because of sale and scrap of inventories written down during the previous years.

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As of December 31, 2021 and 2020, the Company had no inventories pledged to others.

(5) Non-current financial assets at fair value through other comprehensive income

Items Equity instruments Listed stocks Unlisted stocks Valuation adjustment	December 31,2021 288,106 $ 772 288,878 88,206 377,084 $	December 31,2020
		288,106 $ 913
		289,019 82,822
		371,841 $

• A. The Company has elected to classify equity investments that are considered to be steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $377,084 and $371,841 as at December 31, 2021 and 2020, respectively.

• B. The Company received proceeds from capital reduction of the Company’s stock investment - Ascentek Venture Capital Corporation, classified as financial asset measured at fair value through other comprehensive income, in the amount of $2,681 for the year ended December 31, 2020. The Company reduced the investment cost in proportion to the capital reduction ratio. The Group received remaining proceeds from settlement in the amount of $141 for the year ended December 31, 2021.

• C. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive income (shown as ‘Other equity’) Dividend income recognized in profit or loss (shown as ‘Other income’)		2021 2020 5,384 $ 25,240) ($ 12,586 $ 16,989 $ Years endedDecember31	2021 2020 5,384 $ 25,240) ($ 12,586 $ 16,989 $ Years endedDecember31
		2021
		5,384 $ 12,586 $	25,240) ($ 16,989 $

• D. As at December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Company was the carrying amount.

• E. Information relating to credit risk of non-current financial assets at fair value through other comprehensive income is provided in Note 12(2), ‘Financial instruments’.

• F. The Company had no financial assets at fair value through other comprehensive income pledged

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to others.

(6) Investments accounted for using the equity method

A. Movements in investments accounted for using the equity method are as follows:

Investments accounted for using the equity method A. Movements in investments accounted for using the equity method are as follows:	equity method are as follows:	equity method are as follows:	equity method are as follows:
B. The debit balance of investments accounted for using the equity method are listed below: 2021 2020 At January 1 2,577,933 $ 2,395,773 $ Addition of investments accounted for using the equity method 135,040 27,112 Share of profit of subsidiaries, associates and joint ventures accounted for using the equity method 418,337 239,504 Cash dividends from investments accounted for using the equity method 118,622) ( 62,966) ( Adjustments of capital surplus for the Company’s cash dividends received by subsidiaries 25,455 28,596 Disposal of treasury stocks held by subsidiaries 60,394 - Realized profit from sales - 3,066 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using the equity method 21,259) ( 40,964) ( Exchange differences on translation of foreign financial statements 29,712) ( 12,188) ( At December 31 3,047,566 $ 2,577,933 $ Years ended December31 December31,2021 December31,2020 Chun Bang Precision Co., Ltd. (Note) 199,514 $ 97,848 $ Chun Yu Works (USA) Inc. 283,422 246,876 Chun Yu Investment Co., Ltd. 139,118 62,665 Chun Yu Bio-Tech Corp. 136,172 89,692 Scholar Holdings Ltd. 1,000,185 956,222 Sunny City International Limited 256,443 260,514 Pt Moon Lion Industries Indonesia 577,294 423,928 Chun Zu Machinery Industry Co., Ltd. 455,418 440,188 3,047,566 $ 2,577,933 $	Years ended December31
	2021	2020
			97,848 $ 246,876 62,665 89,692 956,222 260,514 423,928 440,188
			2,577,933 $

(Note) The investee changed its name from Hi-Ace Trading Co., Ltd. to Chun Bang Precision Co., Ltd. on May 20, 2020.

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• C. Details of the Company’s subsidiaries are provided in Note 4(3) of the Company’s 2021 consolidated financial statements.

• D. For the year ended December 31, 2021 , the Company increased its investments in the subsidiaries, Chun Bang Precision Co., Ltd. and Chun Yu Bio-Tech Corp., in the amounts of $105,000 and $30,040, respectively. For the year ended December 31, 2020, the Company increased its investment in the subsidiary, Scholar Holdings Ltd., in the amount of $27,112.

• E. As of December 31, 2021 and 2020, the Company had no investments accounted for using the equity method pledged to others.

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			Total			4,949,175	3,086,388)		1,862,787		1,862,787	62,110	-	36,673		108,168)	16,687)	13,619	1,850,334		5,031,271	3,180,937)		1,850,334
						$	(		$		$					(	(		$		$	(		$
Equipment under	acceptance and	construction in	progress			8,411 $	-		8,411 $		8,411 $	27,405	26,527) (	4,840		-	-	-	14,129 $		14,129 $	-		14,129 $
		Other	equipment			155,748 $	144,698) (		11,050 $		11,050 $	13,409	-	7,436		5,586) (	332) (	332	26,309 $		176,261 $	149,952) (		26,309 $
		Office	equipment			71,717 $	64,251) (		7,466 $		7,466 $	195	1,480	370		3,395) (	731) (	731	6,116 $		73,031 $	66,915) (		6,116 $
		Transportation	equipment			47,063 $	33,634) (		13,429 $		13,429 $	351	-	-		4,558) (	-	-	9,222 $		47,414 $	38,192) (		9,222 $
		Utilities	equipment			72,963	56,773)		16,190		16,190	960	-	-		2,770)	-	-	14,380		73,923	59,543)		14,380
						$	(		$		$					(			$		$	(		$
		Machinery and	equipment			2,373,898 $	2,055,672) (		318,226 $		318,226 $	17,884	13,364	22,857		66,671) (	15,434) (	12,384	302,610 $		2,412,569 $	2,109,959) (		302,610 $
		Buildings and	structures			953,130 $	731,360) (		221,770 $		221,770 $	1,906	11,683	1,170		25,188) (	190) (	172	211,323 $		967,699 $	756,376) (		211,323 $
			Land	January 1, 2021		Cost 1,266,245 $	Accumulated depreciation -		1,266,245 $	2021	At January 1 1,266,245 $	Additions -	Transfers after acceptance -	Transfers from prepayments for -	business facilities	Depreciation charge -	Disposals - Cost -	- Accumulated depreciation -	At December 31 1,266,245 $	December 31, 2021	Cost 1,266,245 $	Accumulated depreciation -		1,266,245 $

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			Total			4,953,739	3,008,835)		1,944,904		1,944,904	28,553	-	10,603		119,105)	43,720)	41,552		1,862,787				4,949,175	3,086,388)		1,862,787
						$	(		$		$					(	(			$				$	(		$
Equipment under	acceptance and	construction in	progress			20,228 $	-		20,228 $		20,228 $	3,712	17,774) (	2,245		-	-	-		8,411 $				8,411 $	-		8,411 $
		Other	equipment			156,244	135,576)		20,668		20,668	757	-	-		10,375)	1,253)	1,253		11,050				155,748	144,698)		11,050
						$	(		$		$					(	(			$				$	(		$
		Office	equipment			71,909	65,074)		6,835		6,835	1,193	140	2,660		3,225)	4,185)	4,048		7,466				71,717	64,251)		7,466
						$	(		$		$					(	(			$				$	(		$
		Transportation	equipment			46,875 $	29,217) (		17,658 $		17,658 $	-	-	1,218		4,978) (	1,030) (	561		13,429 $				47,063 $	33,634) (		13,429 $
		Utilities	equipment			72,513	54,145)		18,368		18,368	-	-	450		2,628)	-	-		16,190				72,963	56,773)		16,190
						$	(		$		$					(				$				$	(		$
		Machinery and	equipment			2,381,057 $	2,018,323) (		362,734 $		362,734 $	22,263	3,800	4,030		73,039) (	37,252) (	35,690		318,226 $				2,373,898 $	2,055,672) (		318,226 $
		Buildings and	structures			938,668 $	706,500) (		232,168 $		232,168 $	628	13,834	-		24,860) (	-	-		221,770 $				953,130 $	731,360) (		221,770 $
			Land			1,266,245	-		1,266,245		1,266,245	-	-	-		-	-	-		1,266,245				1,266,245	-		1,266,245
						$			$		$									$				$			$
				January 1, 2020		Cost	Accumulated depreciation			2020	At January 1	Additions	Transfers after acceptance	Transfers from prepayments for	business facilities	Transfers to expenses	Depreciation charge	Disposals - Cost		- Accumulated depreciation		At December 31	December 31, 2020	Cost	Accumulated depreciation

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CHUN YU WORKS ＆ CO., LTD.

• A. The Company’s property, plant and equipment as of December 31, 2021 and 2020 are for its own use.

• B. No interest expense was capitalised in property, plant and equipment for the years ended December 31, 2021 and 2020.

• C. Information about the property, plant and equipment that were pledged to others as collateral as of December 31, 2021 and 2020 is provided in Note 8, ‘Pledged assets’.

• (8) Lease transactions lessee

• A. The Company leases various assets including business vehicles. Rental contracts are typically made for periods of 1 to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Transportation equipment Transportation equipment	December31,2021 December31,2020 Carryingamount Carryingamount 597 $ 1,534 $ Years endedDecember31	December31,2020
		Carryingamount
		1,534 $
	2021 Depreciationcharge 937 $	2020
		Depreciationcharge
		1,283 $

• C. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $ and $855, respectively.

• D. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on leases of low-value assets	Years endedDecember31	Years endedDecember31
	2021 19 $ 1,124	2020
		25 $ 1,068

• E. For the years ended December 31, 2021 and 2020, the Company’s total cash outflow for leases were $2,083 and $2,416, respectively.

• F. As of December 31, 2021 and 2020, the Company had no right-of-use assets pledged to others.

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(9) Investment property, net

2021 At January 1 Cost Accumulated depreciation Net book value At January 1 Depreciation charge At December 31 At December 31 Cost Accumulated depreciation Net book value 2020 At January 1 Cost Accumulated depreciation Net book value At January 1 Depreciation charge At December 31 At December 31 Cost Accumulated depreciation Net book value

Land Buildings and structures Total 19,303 $ 24,411 $ 43,714 $ - 20,235) ( 20,235) ( 19,303 $ 4,176 $ 23,479 $ 19,303 $ 4,176 $ 23,479 $ - 764) ( 764) ( 19,303 $ 3,412 $ 22,715 $ 19,303 $ 24,411 $ 43,714 $ - 20,999) ( 20,999) ( 19,303 $ 3,412 $ 22,715 $ Land Buildings and structures Total 19,303 $ 24,411 $ 43,714 $ - 19,283) ( 19,283) ( 19,303 $ 5,128 $ 24,431 $ 19,303 $ 5,128 $ 24,431 $ - 952) ( 952) ( 19,303 $ 4,176 $ 23,479 $ 19,303 $ 24,411 $ 43,714 $ - 20,235) ( 20,235) ( 19,303 $ 4,176 $ 23,479 $

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property

(shown as ‘Other income’)

Direct operating expenses arising from the investment property that generated rental income during the year

Years endedDecember31	Years endedDecember31
2021 4,917 $ 764 $	2020
	3,349 $
	952 $

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• B. The fair value of the investment property held by the Company as at December 31, 2021 and 2020 was $115,561 and $115,345, respectively, which was valued based on current land value, quoted prices in the neighboring area by real estate agents and actual price registration information posted in the official search system. Valuation is categorised within Level 2 in the fair value hierarchy.

• C. For the years ended December 31, 2021 and 2020, the Company had no borrowing costs capitalised as investment property.

• D. Details of the Company’s investment property pledged to others as collateral as of December 31, 2021 and 2020 are provided in Note 8.

(10) Intangible assets

2021 and 2020 are provided in Note 8. Intangible assets
			Computer software
			Years endedDecember31
			2021	2020
At January 1
Cost		$	7,460	$	6,801
Accumulated amortisation	(		4,176)	(	3,582)
		$	3,284	$	3,219
At January 1		$	3,284	$	3,219
Acquired separately			919		1,486
Amortisation charge	(		1,472)	(	1,421)
Write-offs - cost	(		723)	(	827)
- accumulated amortisation			723		827
At December 31		$	2,731	$	3,284
At December 31
Cost		$	7,656	$	7,460
Accumulated amortisation	(		4,925)	(	4,176)
		$	2,731	$	3,284

• A. No interest expense was capitalised for the years ended December 31, 2021 and 2020.

• B. Details of amortisation expenses on intangible assets are as follows:

Details of amortisation expenses on intangible	assets are as follows:	assets are as follows:
Operating costs Administrative expenses Research and development expenses	2021 2020 64 $ 5 $ 793 1,308 615 108 1,472 $ 1,421 $ Years ended December 31
		2020
		5 $ 1,308 108
		1,421 $

As of December 31, 2021 and 2020, the Company had no intangible assets pledged to others.

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(11) Short-term borrowings

Type of borrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings	December31,2021 932,549 $ December31,2020 994,398 $	Interest rate range ����������� Interest rate range ����%�����%	Collateral
			None Collateral
			None

Details of interest expense recognized in profit or loss for the years ended December 31, 2021 and 2020 are provided in Note 6(23), ‘Finance Costs’.

(12) Bonds payable

Guaranteed bonds payable

December 31, 2021 Collateral $ 3,000,000 (Note)

(Note) Details of the collateral provided for bonds payable are provided in Note 8, ‘Pledged assets’. There was no such transaction for the year ended December 31, 2020.

• A. The Company was approved by the competent authority to raise and issue the first domestic guaranteed bonds payable with a total amount of $3,000,000, with a coupon rate of 0.65% and a maturity period of 7 years from October 15, 2021 to October 15, 2028. The bonds are repayable in cash at the face value of the bonds upon maturity.

• B. First Commercial Bank Co., Ltd. was appointed as the guarantor bank for the bonds. The guarantee period is from the date of full collection of the bonds to the date of full payment of the principal and interest payable under the Plan, and the guarantee covers the outstanding principal and interest compensation payable under the Plan, which are subordinate to the principal debt.

• C. The principal and simple interest will be paid every year by coupon rate from the day it was approved for issue. If the local financial institutions are closed on a payment date, the principal and interest will be paid on the next operating day without extra interest.

• D. Interest expense recognized in profit or loss for the year ended December 31, 2021 is described in Note 6 (23), Financial costs.

- (13) Long term borrowings

Long-term borrowings
Type ofborrowings Long-term bank borrowings Secured borrowings	Borrowing period 2020.12.25� 2025.3.30	Interest raterange 1.80%	Collateral Refer to Note 8	December31,2021
				590,000 $

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Type of borrowings Long-term bank borrowings Secured borrowings Less: Current portion	Borrowing period 2017.12.15� 2025.3.30	Interest rate range Collateral December31,2020 1.16%�1.80% Refer to Note 8 2,340,000 $ 240,000) ( 2,100,000 $

Details of interest expense recognized in profit or loss for the years ended December 31, 2021 and 2020 are provided in Note 6(23), ‘Finance Costs’.

(14) Pensions

• A. The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Pension Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 4% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March. The information on the defined benefit pension plan of the Company is as follows:

• (a) The amounts recognized in the balance sheet are as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability	December31,2021	December31,2020
	187,100) ($ 131,234 55,866) ($	181,446) ($ 137,290 44,156) ($

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(b) Movements in net defined benefit liabilities - non-current are as follows:

		Present value of	Present value of	Present value of
			defined benefit		Fair	value of plan			Net defined
2021				obligation		assets		benefitliability
Balance at January 1	($			181,446)	$	137,290	($		44,156)
Current service cost	(			1,756)		-	(		1,756)
Interest (expense) income	(			907)		692	(		215)
	(			184,109)		137,982	(		46,127)
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)				-		1,968			1,968
Changes in demographic assumptions	(			4,831)		-	(		4,831)
Experience adjustments	(			8,867)		-	(		8,867)
	(			13,698)		1,968	(		11,730)
Pension fund contribution				-		1,991			1,991
Paid pension				10,707	(	10,707)			-
Balance at December 31	($			187,100)	$	131,234	($		55,866)
			Present value of
			defined benefit		Fair	value of plan			Net defined
2020				obligation		assets		benefitliability
Balance at January 1	($			199,428)	$	158,928	($		40,500)
Current service cost	(			1,920)		-	(		1,920)
Interest (expense) income	(			1,496)		1,204	(		292)
Past service cost	(			1,636)		-	(		1,636)
	(			204,480)		160,132	(		44,348)
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)				-		5,515			5,515
Changes in demographic assumptions	(			124)		-	(		124)
Changes in financial assumptions	(			4,488)		-	(		4,488)
Experience adjustments	(			2,982)		-	(		2,982)
	(			7,594)		5,515	(		2,079)
Pension fund contribution				-		2,271			2,271
Paid pension				30,628	(	30,628)			-
Balance at December 31	($			181,446)	$	137,290	($		44,156)

(c) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement

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CHUN YU WORKS ＆ CO., LTD.

Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its 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 the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

(d) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Years endedDecember31	Years endedDecember31
	2021 0.50% 2.00%	2020
		0.50%
		2.00%

Future mortality rate was estimated based on the 6th and 5th Taiwan Standard Ordinary Experience Mortality Table for the years ended December 31, 2021 and 2020, respectively. Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

is affected. The analysis was	as follows:	as follows:	as follows:
December 31, 2021 Effect on present value of defined benefit obligation December 31, 2020 Effect on present value of defined benefit obligation	Discount rate			Increase0.25% Decrease0.25% 4,344 $ 4,218) ($ 4,506 $ 4,369) ($ Future salaryincrease rate
	Increase0.25%	Decrease0.25%				Decrease0.25%
	4,333) ($ 4,489) ($		4,487 $ 4,654 $		4,344 $ 4,506 $	4,218) ($ 4,369) ($

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

(e) Expected contributions to the defined benefit pension plan of the Company for the following

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year amount to $2,010.

• (f) As of December 31, 2021, the weighted average duration of the retirement plan is 9.5 years. The analysis of timing of the future pension payment was as follows:

Within 1 year Next 2 ~ 5 years Over 5 years	6,434 $ 48,799 138,196 193,429 $

• B. Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2021 and 2020 were $10,489 and $11,738, respectively.

(15) Share capital

• A. Movements in the number of the Company’s ordinary shares outstanding are as follows: (Unit: Shares in thousands)

Shares in thousands)
Number of shares at the beginning and end of the year	Years endedDecember31
	2021 287,774	2020
		287,774

• B. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows: (Unit: Shares in thousands)

Reason for reacquisition Acquisition of the parent company’s shares by subsidiaries transferred to treasury shares from long -term investments	YearendedDecember31,2021	YearendedDecember31,2021
	Number of shares at the beginning ofthe year 23,830	Addition Decrease - 1,516) (	Number of shares at the end ofthe year
			22,314

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Reason for reacquisition Acquisition of the parent company’s shares by subsidiaries transferred to treasury shares from long -term investments	YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
	Number of shares at the beginning ofthe year 23,830	Addition -	Decrease -	Number of shares at the end ofthe year
				23,830

• (b) The subsidiary sold 1,516 thousand shares of the Company in July, 2021. The selling price and book value (cost) were $60,394 and $21,715 respectively, and the recognized gain on disposal was $38,679 (listed " capital reserve – treasury stock trading "). The book value (cost) for the years ended December 31, 2021 and 2020 were $267,195 and $288,910, respectively; the fair values were $691,748 and $518,312, respectively. The parent company’s shares held by subsidiaries are treated as treasury stocks; they still enjoy the right to dividend distribution, and are included in the “capital reserve – treasury stock trading” item. The cash dividends paid to subsidiaries for the years ended December 31, 2021 and 2020 were $25,455 and $28,596, respectively.

• (c) Reason for share reacquisition and the number of the Company’s treasury shares remained unchanged as of December 31, 2021 and 2020. Details are as follows:

Name of company Reason for holding the shares reacquisition Chun Yu Investment Co., Ltd. Acquisition of the parent company’s shares by subsidiaries transferred to treasury shares from long-term investments Name of company Reason for holdingthe shares reacquisition Chun Yu Investment Co., Ltd. Acquisition of the parent company’s shares by subsidiaries transferred to treasury shares from long-term investments		December31,2021	December31,2021
			Carrying amount
			267,195 $
	Number of shares (in thousands) 23,830

• C. As of December 31, 2021, the Company’s authorised capital was $3,920,696, and the paid-in capital was $2,877,740, consisting of 287,774 thousand ordinary shares, with a par value of $10 (in dollars) per share which were issued in several installments. All proceeds from shares issued have been collected.

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(16) Capital surplus

• A. Pursuant to the Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient. Movements in capital surplus are as follows:

YearendedDecember31,2021 Balance at the beginning of year Transfers to capital surplus for the Company’s dividends received by subsidiaries Disposal of treasury stock Balance at the end of year YearendedDecember31,2020 Balance at the beginning of year Transfers to capital surplus for the Company’s dividends received by subsidiaries Balance at the end of year	Difference between consideration and carrying amount of subsidiaries acquired ordisposed 26,901 $ - - 26,901 $ Difference between consideration and carrying amount of subsidiaries acquired ordisposed 26,901 $ - 26,901 $	Treasury share transactions 131,068 $ 25,455 38,679 195,202 $ Treasury share transactions 102,472 $ 28,596 131,068 $	Total
			157,969 $ 25,455 38,679
			222,103 $
			Total 129,373 $ 28,596 157,969 $

B. Details of ‘Capital surplus, treasury share transactions’ are provided in Note 6(15), ‘Share capital’.

(17) Retained earnings

• A. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• B. Under the Company’s Articles of Incorporation, the Company may distribute earnings or offset losses at the end of each half fiscal year in accordance with the Company Act. When distributing earnings, the Company shall estimate and reserve for taxes payable, offset losses and set aside as legal reserve until the legal reserve equals the paid-in capital in accordance with the regulations.

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Where dividends are distributed in the form of cash, it shall be approved by the Board of Directors. Where dividends are distributed by issuing new shares, it shall be approved by the stockholders in accordance with the regulations.

The current year’s earnings, if any, shall first be used to pay all taxes, offset prior years’ operating losses, set aside 10% of the remaining amount as legal reserve and then reverse or set aside as special reserve in accordance with relevant regulations. The remaining earnings along with accumulated unappropriated earnings from prior years will be the accumulated distributable earnings, and the Board of Directors will present a proposal of the earnings distribution for the approval of the shareholders. Where dividends and bonus, capital surplus and legal reserve, in whole or in part, are distributed in the form of cash, the Board of Directors is authorised make the distribution by approval of more than half of the directors present at the meeting, where more than two-thirds of the directors are present, and the report of such distribution shall be submitted to the shareholders during their meeting. The regulation in relation to approval from the shareholders is not applicable. In principal, at least 50% of earnings, after considering the capital needs for current and future development and the interest of shareholders, shall be distributed as dividends according to the dividend policy. However, if there is a need due to changes in the industry’s environment or operational plans, the Board of Directors may present a proposal to adjust the ratio for the approval of the shareholders.

• C. Special reserve:

• (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• (b) The amount of $430,610 previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-SecuritiesCorporate-1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently.

• D. The Company recognized cash dividends distributed to owners amounting to $316,551 ($1.1 (in dollars) per share) and $345,329 ($1.2 (in dollars) per share) for the years ended December 31, 2021 and 2020, respectively. On March 10, 2022, the Board of Directors approved the distribution of cash dividends from 2021 earnings amounting to $287,774 ($1.0 (in dollars) per share).On March 10, 2022, the Board of Directors proposed for the distribution of share dividends from 2021 earnings amounting to $143,887 ($0.5 (in dollars) per share), and to be determined by the stockholders .

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(18) Other equity

Other equity
Unrealised Currency gains (losses) translation onvaluation Total At January 1 185,009) ($ 22,362 $ 162,647) ($ Revaluation - currency translation 29,712) ( - 29,712) ( Revaluation - unrealised gains (losses) on valuation - 15,597) ( 15,597) ( At December 31 214,721) ($ 6,765 $ 207,956) ($ YearendedDecember31,2021	YearendedDecember31,	2021
		Total

Operating revenue At January 1 ($ Revaluation - currency translation ( Revaluation - unrealised gains (losses) on valuation At December 31 ($ Revenue from contracts with customers		YearendedDecember31,
		2021 5,978,369 $

(19) Operating revenue

A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods at a point in time in the following major product lines:

major product lines:
Major product lines Wire rods Screws and nuts Others	Years ended December31
	2021 3,004,660 $ 2,259,471 714,238 5,978,369 $	2020
		1,549,840 $ 1,790,653 12,223
		3,352,716 $

B. Contract liabilities

As of December 31, 2021 and 2020, the Company has recognized revenue-related contract liabilities of $10,786 and $13,702, respectively. Revenue recognized for the years ended December 31, 2021 and 2020, which was included in the contract liabilities at the beginning of the year, amounted to $7,857 and $11,152, respectively.

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(20) Interest income

Years ended December 31

Interest income	Years ended December31	Years ended December31
Other income Interest income from bank deposits Other interest Rent income Dividend income Government grants Other income	2021 2020 82 $ 126 $ 9 18 91 $ 144 $ Years endedDecember31
	2021 5,814 $ 14,798 - 14,507 35,119 $	2020
		5,280 $ 19,791 29,943 13,439
		68,453 $

(21) Other income

The Company recognized government grant income of $29,943 for the year ended December 31, 2020 for salary and working capital subsidies from the Ministry of Economic Affairs under the ‘Relief and Revitalisation Measures for Industries and Enterprises Experiencing Operational Difficulties Due To the Impact of Severe Pneumonia with Novel Pathogens (COVID-19)’. The Company must comply with the application rules of aforementioned government subsidies. In the following circumstances, the Ministry of Economic Affairs may revoke or abolish the subsidies and retrieve the funds:

• A. Any action that would impair the rights of employees, such as reduction of working hours (unpaid leave), layoffs or pay cuts.

• B. Any dissolution, or termination of the operations.

• C. More than one receipt for the same salary and working capital subsidies.

• D. A landowner on the list of industrial idle land announced in accordance with the Article 46-1 of Statute for Industrial Innovation.

• E. Not applying for factory registration in accordance with the Factory Management Act.

• F. Any severe violation of laws relating to environmental protection, labour and food safety and sanitation in the past three years.

• G. Any severe violation of other relevant laws and regulations.

• H. Not cooperating with audits requested from the handling units and execution units.

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(22) Other gains and losses

Years ended December 31

Gains on financial assets at fair value through profit or loss Net foreign exchange losses Losses on disposal of property, plant and equipment Miscellaneous disbursements

		2021				2020
	$		51,185		$		1,029
(			3,991)	(			3,386)
(			3,068)	(			1,499)
(			1,372)	(			3,265)
	$		42,754	($			7,121)

(23) Finance costs

Interest expense: Bank borrowings Bonds payable Interest on lease liabilities

Years endedDecember31	Years endedDecember31
2021 54,360 $ 4,167 19 58,546 $	2020
	43,740 $ - 25
	43,765 $

(24) Expenses by nature

Year ended December 31, 2021

Employee benefit expense Depreciation Amortisation	Classified as operating costs 391,032 $ 98,021 64 489,117 $	Classified as operating expenses 131,400 $ 11,084 1,408 143,892 $	Total
			522,432 $ 109,105 1,472
			633,009 $

Employee benefit expense Depreciation Amortisation	YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
	Classified as operatingcosts 322,770 $ 108,614 5 431,389 $	Classified as operatingexpenses 111,424 $ 11,774 1,416 124,614 $	Total
			434,194 $ 120,388 1,421
			556,003 $

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(25) Employee benefit expense

Employee benefit expense
Wages and salaries Labour and health insurance fees Pension costs Directors’ remuneration Other personnel expenses Wages and salaries Labour and health insurance fees Pension costs Directors’ remuneration Other personnel expenses	Year ended December31,2021
	Classified as Classified as operating costs operating expenses Total 345,345 $ 94,025 $ 439,370 $ 28,912 7,981 36,893 8,697 3,763 12,460 - 23,191 23,191 8,078 2,440 10,518 391,032 $ 131,400 $ 522,432 $ YearendedDecember31,2020		Total
			439,370 $ 36,893 12,460 23,191 10,518
			522,432 $
	Classified as operatingcosts 277,865 $ 28,824 9,634 - 6,447 322,770 $	Classified as operatingexpenses 84,514 $ 8,477 5,952 10,299 2,182 111,424 $	Total
			362,379 $ 37,301 15,586 10,299 8,629
			434,194 $

A.As at December 31, 2021 and 2020, the Company had 587 and 649 employees, both including 6 non-employee directors, respectively. Average employee benefit expense and average employee salaries for the years ended December 31, 2021 and 2020 were $860 and $659, $757 and $564, respectively. Adjustment of average employee salaries for the year ended December 31, 2021 was a reduction of 34.22%.

• B. The Company has set up the Audit Committee and therefore it had no supervisors’ remuneration for the current and previous years.

C. The Company provides remuneration to directors for their services based on the Company’s internal management policy and the general pay levels. Management follows the order of the Board of Directors to handle the business and is remunerated based on the Company’s internal management policy and the general pay levels. The employee compensation policy of the Company is established based on the employee’s ability, contribution to the Company, performance, and the market value of the position, which has a positive correlation with the Company’s operating performance. Employee compensation packages are set based on the market value for the positions. Bonuses are linked to the achievement of the employee and department targets. The Company designs a well-thought-out benefits measures in accordance with the laws and regulations and by taking into consideration the needs of employees.

D. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 2% for employees’

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compensation and shall not be higher than 2% for directors’ remuneration. However, if the Company has accumulated deficit, the earnings shall be reserved to offset losses.

E. For the years ended December 31, 2021 and 2020, employees’ compensation was accrued at $16,981 and $4,074, respectively; while directors’ remuneration was accrued at $16,981 and $4,074, respectively. The aforementioned amounts were recognized in salary expenses and were accrued based on the earnings of current year and the percentage prescribed by the Company’s Articles of Incorporation. The employees’ compensation and directors’ remuneration resolved by the Board of Directors on March 10, 2022 were both $16,981; The employees’ compensation and directors’ remuneration resolved by the Board of Directors on March 10, 2021 were both $4,074, and the employees’ compensation will be distributed in the form of cash, consistent with the amount recognized on the financial statements for the year ended December 31, 2020.

Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(26) Income tax

• A. Components of income tax expense (benefit):

• (a) Components of income tax expense (benefit):

		Years ended	December31	December31
		2021		2020
Current tax:
Current tax on profits for the year	($	3,847)		$	1,571
Prior year income tax under estimation		7			850
Total current tax	(	3,840)			2,421
Deferred tax:
Origination and reversal of temporary
differences		74,212	(		3,995)
Income tax expense (benefit)	$	70,372	($		1,574)

• (b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

follows:
		Years ended	December 31
		2021	2020
Remeasurement of defined benefit obligations	($	2,346)	($	415)

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B. Reconciliation between income tax expense (benefit) and accounting profit:

		Years ended	December 31
		2021	2020
Tax calculated based on profit before tax and	$	163,020	$	39,115
statutory tax rate
Effects from items disallowed by tax regulation	(	19,531)	(	36,894)
Separate taxation		355		1,571
Prior year income tax under estimation		7		850
Effect from tax loss	(	73,479)	(	6,216)
Income tax benefit	$	70,372	($	1,574)

C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

Deferred tax assets Temporary differences: Allowance for bad debts in excess of tax limits Loss on decline in inventory market value Unrealised losses on disposal of assets Unrealised foreign exchange loss Other deferred revenue and unrealised expenses Currency translation differences Remeasurements of defined benefit plan Tax losses	Year ended December31,2021	Year ended December31,2021
	Recognized Recognized in other in comprehensive January1 profit or loss income 1,212 $ - $ - $ 4,054 865) ( - 726 604) ( - 570 570) ( - 12,148 98 - 4,450 - - 10,782 - 2,346 196,764 73,365) ( - 230,706 $ 75,306) ($ 2,346 $	December31
		1,212 $ 3,189 122 - 12,246 4,450 13,128 123,399
		157,746 $

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Year ended December 31, 2021

						Recognized	Recognized
				Recognized			in other
					in	comprehensive
		January1		profit or loss			income	December31
Deferred tax liabilities
Temporary differences:
Pensions	($		1,949)	$	4	$	-	($	1,945)
Reserve for land value increment	(		293,140)		-		-	(	293,140)
tax
Currency translation differences	(		1,050)		-		-	(	1,050)
Others	(		10,429)		1,090		-	(	9,339)
	($		306,568)	$	1,094	$	-	($	305,474)
	($		75,862)	($	74,212)	$	2,346	($	147,728)

Deferred tax assets Temporary differences: Allowance for bad debts in excess of tax limits Loss on decline in inventory market value Unrealised losses on disposal of assets Unrealised foreign exchange loss Other deferred revenue and unrealised expenses Currency translation differences Remeasurements of defined benefit plan Tax losses	Year ended December31,2020	Year ended December31,2020
	Recognized Recognized in other in comprehensive January1 profit or loss income 1,212 $ - $ - $ 2,854 1,200 - 1,330 604) ( - 492 78 - 12,227 79) ( - 4,450 - - 10,367 - 415 190,548 6,216 - 223,480 $ 6,811 $ 415 $	December31
		1,212 $ 4,054 726 570 12,148 4,450 10,782 196,764
		230,706 $

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Year ended December 31, 2020

							Recognized	Recognized
					Recognized			in other
						in	comprehensive
		January1		profit or loss				income	December31
Deferred tax liabilities
Temporary differences:
Pensions	($		2,262)		$	313	$	-	($	1,949)
Reserve for land value increment	(		293,140)			-		-	(	293,140)
tax
Currency translation differences	(		1,050)			-		-	(	1,050)
Others	(		7,300)	(		3,129)		-	(	10,429)
	($		303,752)	($		2,816)	$	-	($	306,568)
	($		80,272)		$	3,995	$	415	($	75,862)

• D. Expiration dates of unused tax losses and amounts of unrecognized deferred tax assets are as follows:

follows:
		December 31,2021
Year incurred ���� ����	Amount filed /assessed 580,599 $ 516,191 1,096,790 $	Unrecognised deferred Unused amount income tax assets 208,607 $ 107,804 $ 516,191 - 724,798 $ 107,804 $ December 31,2020		Expiry year
				2027 2029
Year incurred ���� ����	Amount filed /assessed 580,599 $ 516,191 1,096,790 $	Unused amount 580,599 $ 516,191 1,096,790 $	Unrecognised deferred income tax assets 112,969 $ - 112,969 $	Expiry year
				2027 2029

• E. The amounts of deductible temporary differences that were not recognized as deferred tax assets are as follows:

are as follows:
Loss on investments accounted for using the equity method	December 31,2021 - $	December 31,2020
		33,700 $

• F. The Company did not recognise deferred tax liabilities related to taxable temporary difference of investment on subsidiaries. The unrecognized deferred tax liabilities as of December 31, 2021 and 2020 were $1,073,233 and $762,298, respectively.

• G � The Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority. The Company did not have any administrative remedy as of March 10, 2022.

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(27) Earnings per share

Year ended December 31, 2021

	Year	endedDecember31,2021	021
Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares	Amount aftertax 744,730 $ 744,730 $ - 744,730 $ Year	Weighted average number of ordinary Earnings shares outstanding per share (sharesinthousands) (indollars) 264,685 2.81 $ 264,685 587 265,272 2.81 $ endedDecember31,2020	Earnings per share (indollars)
			2.81 $
			2.81 $
	Amount aftertax 197,147 $ 197,147 $ - 197,147 $	Weighted average number of ordinary shares outstanding (sharesinthousands) 263,944 263,944 285 264,229	Earnings per share (indollars)
			0.75 $
			0.75 $

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(28) Supplemental cash flow information

A. Investing activities with partial cash payments:

Purchase of property, plant and equipment Add: Opening balance of payable on equipment (shown as ‘Other payables’) Less: Ending balance of payable on equipment (shown as ‘Other payables’) Cash paid for acquisition of property, plant and equipment

B. Investing activities with no cash flow effects:

Prepayments for business facilities transferred to property, plant and equipment

		Years ended	December 31	December 31
		2021		2020
	$	62,110		$	28,553
		3,726			5,982
(		12,142)	(		3,726)
	$	53,694		$	30,809
		Years ended	December31
		2021		2020
	$	36,673		$	10,603

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Liabilities from	financing activities - gross	3,336,428 $	1,187,104		4,523,532 $	Liabilities from	financing activities - gross	3,255,339 $	80,034	855		3,336,228 $
Guarantee	deposits received	564 $	107) (		457 $	Guarantee	deposits received	457 $	107	-		564 $
Long-term borrowings	(including current portion)	2,340,000 $	1,750,000) (		590,000 $	Long-term borrowings	(including current portion)	2,500,000 $	160,000) (	-		2,340,000 $
	Bonds payable	- $	3,000,000		3,000,000 $		Bonds payable	- $	-	-		- $
	Lease liability	1,466 $	940) (		526 $		Lease liability	1,934 $	1,323) (	855		1,466 $
Short-term	borrowings	994,398 $	61,849) (		932,549 $	Short-term	borrowings	752,948 $	241,250	-		994,198 $
		January 1, 2021	Changes in cash flow from financing activities		December 31, 2021			January 1, 2020	Changes in cash flow from financing activities	Changes in other non-cash items		December 31, 2020

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7. Related Party Transactions

(1) Names of related parties and relationship

Names of relatedparties

Relationshipwith the Group

Chun Bang Precision Co., Ltd. (Note 1) Chun Yu Works (USA) Inc. Chun Yu Bio-Tech Corp. Scholar Holdings Ltd. Pt Moon Lion Industries Indonesia Chun Zu Machinery Industry Co., Ltd. Chun Yu (Dongguan) Metal Proucts Co., Ltd. Shanghai Uchee Hardware Proucts Ltd. Chunyu Group Shanghai Tongsheng Trade Co., Ltd. Shanghai Chun Zu Machinery Industry Ltd. Ofco Industrial Corp. TSG Transportation Corp. Gloria Material Technology Corp. China Ecotek Corp.

Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Other related party Other related party Other related party Other related party (Note 2)

(Note 1) The subsidiary changed its name from Hi-Ace Trading Co., Ltd. to Chun Bang Precision Co., Ltd. on May 20, 2020.

(Note 2) The Company previously served as supervisor in the board of directors of China Ecotek

Corp. However, it was discharged after the election during the shareholders’ meeting. Accordingly, it became a non-related party since the third quarter of 2020.

(2) Significant related party transactions

A. Operating revenue

nificant related party transactions Operating revenue
Sales of goods: Other related parties Subsidiaries	Years ended December 31
	2021 546,981 $ 91,892 638,873 $	2020
		281,931 $ 102,105
		384,036 $

Goods are sold to related parties based on the terms that would be available to third parties, except for Chun Yu Works (USA) Inc. and Scholar Holdings Ltd., for which the goods are sold based on agreed prices as there are no similar transactions available for comparison. The average credit terms for related parties are 1 � 3 months which would be available to third parties, except for Chun Yu Works (USA) Inc. and Scholar Holdings Ltd. with credit terms of 4 � 6 months.

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B. Purchases

Purchases
Sales of goods: Subsidiaries Other related parties	Years ended December 31
	2021 46,949 $ 9,817 56,766 $	2020
		34,112 $ 10,340
		44,452 $

Goods are purchased from related parties based on the prices and terms that would be available � to third parties and the average payment terms are 1 2 months. However, both parties may negotiate to extend payment terms according to the funds available.

C. Property transaction

• (a) Acquisition of assets:

) Acquisition of assets:	) Acquisition of assets:	) Acquisition of assets:
Equity transactions: Objects 2021 2020 Subsidiaries Machinery and equipment as well as prepayments for business facilities 21,533 $ 18,506 $ Years ended December 31 Year ended No. of shares December31,2021 Accounts (inthousands) Objects Consideration Investments accounted for 10,500 Capital increase - 105,000 $ using the equity method Chun Bang Precision Co., Ltd. Investments accounted for 3,004 Capital increase - using the equity method Chun Yu Bio-Tech Corp. 30,040 135,040 $ Year ended No. of shares December31,2020 Accounts (inthousands) Objects Consideration Investments accounted for 2,720 Capital increase - using the equity method Scholar Holdings Ltd. 27,112 $			Years ended December 31
						2020
						18,506 $
					Consideration
Investments accounted for using the equity method Investments accounted for using the equity method Accounts	10,500 3,004 No. of shares (inthousands)	Capital increase - Chun Bang Precision Co., Ltd. Capital increase - Chun Yu Bio-Tech Corp. Objects			105,000 $ 30,040 135,040 $ Year ended December31,2020
					Consideration
Investments accounted for using the equity method	2,720	Capital increase - Scholar Holdings Ltd.			27,112 $

(b) Equity transactions:

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D. Other expenses

E. F. G. H. I.	Other income Accounts receivable Other receivables Accounts payable Other payables Other related parties Subsidiaries Management service income Subsidiaries Other income Subsidiaries Other related parties Other related parties Subsidiaries Subsidiaries Subsidiaries Other related parties Other related parties Subsidiaries	Years ended December 31	Years ended December 31
		2021 2020 57,046 $ 37,484 $ 8,929 4,777 65,975 $ 42,261 $ Years ended December 31	2020
			37,484 $ 4,777
			42,261 $
		2021 6,178 $ 11,051 - 17,229 $ December 31,2021 135,236 $ 34,071 169,307 $ December31,2021 8,551 $ December 31,2021 11,666 $ - 11,666 $ December31,2021 18,066 $ 3,430 21,496 $	2020
			5,669 $ 8,981 1,203
			15,853 $
			December 31,2020
			62,974 $ 32,263
			95,237 $
			December31,2020
			5,602 $
			December 31,2020
			12,243 $ 2,434
			14,677 $
			December31,2020
			9,426 $ 1,165
			10,591 $

J. Endorsements and guarantees provided to related parties: Please refer to Note13(1)B.

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(3) Key management compensation

Wages and salaries and other short-term benefits	2021 2020 20,326 $ 21,853 $ Years ended December 31	2021 2020 20,326 $ 21,853 $ Years ended December 31
		2020
		21,853 $

8. Pledged Assets

The Company’s assets pledged as collateral are as follows:

Assets	December	31,2021	December	31,2020	Purpose
Pledged demand deposits (Note 1)	$	7,361	$	15,900	Guarantee and collateral
					for long-term borrowings
Land (Note 2)		358,824		739,826	Collateral for long-term
					borrowings and bonds
					payable
Buildings and structures, net		64,771		133,929	Collateral for long-term
(Note 2)					borrowings and bonds
					payable
	$	430,956	$	889,655

(Note 1) Shown as ‘Other non-current financial assets’.

(Note 2) Shown as ‘Property, plant and equipment’ and ‘Investment property, net’.

9. Significant Contingent Liabilities and Unrecognized Contract Commitments

• (1) As of December 31, 2021 and 2020, the Company’s capital expenditures contracted for at the balance sheet date but not yet incurred were $28,362 and $16,453, respectively.

• (2) As of December 31, 2021 and 2020, the Company’s line of credit issued but not yet negotiated were $688,706 and $136,968, respectively.

• (3) Information on provision of endorsements and guarantees to others is provided in Note 13(1)B.

• (4) On October 5, 2019, the Company entered into a mid-term secured syndicated loan agreement with 10 banks including First Commercial Bank for a credit facility of $1,790,000 (including Tranche A facility amount of $590,000, Tranche B facility amount of $1,200,000 and Tranche C facility amount of $720,000, among which the total amount drawdown under Tranche B and Tranche C shall not exceed the Tranche B facility amount). The term for each tranche is 5 years. The Company’s commitments to banking syndicate during the terms of syndicated loan are as follows:

• i. During the terms of the syndicated loan, the financial covenants stated in the Company’s consolidated financial statements audited by independent auditors shall comply with the following financial covenants and will be assessed once a year:

  • (a) Current ratio: The ratio of current assets to current liabilities shall not be lower than 100%.

  • (b) Debt ratio: The ratio of total liabilities to tangible equity shall not be higher than 200%.

  • (c) Interest coverage ratio: The ratio of total amount of income before tax, interest expense, depreciation and amortisation to interest expense shall not be lower than 200%.

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  - (d) Tangible equity: The amount of net assets less intangible assets shall not be lower than $3,000,000.

• ii. If the Company fails to comply with the aforementioned financial covenants, the Company is required to pay additional interest at the rate of 0.10% per annum over the interest rate applicable under this agreement during the period from the date of notification sent by the managing bank to the date that consolidated financial statements, which meet all the requirements, are provided. The aforesaid failure to comply with financial covenants will not be regarded as an event of default if additional interest is paid.

• As of December 31, 2021 and 2020, the Company did not breach the aforementioned financial covenants.

• (5) On December 15, 2017, the Company entered into a mid-term secured syndicated loan agreement with 7 banks including First Commercial Bank for a credit facility of $3,000,000 (including Tranche A facility amount of $1,200,000 and Tranche B facility amount of $1,800,000). The term for each tranche is 5 years. The Company’s commitments to banking syndicate during the terms of syndicated loan are as follows:

• i. During the terms of the syndicated loan, the financial covenants stated in the Company’s consolidated financial statements audited by independent auditors shall comply with the following financial covenants and will be assessed once a year:

  • (a) Current ratio: The ratio of current assets to current liabilities shall not be lower than 100%.

  • (b) Debt ratio: The ratio of total liabilities to tangible equity shall not be higher than 200%.

  • (c) Interest coverage ratio: The ratio of total amount of income before tax, interest expense, depreciation and amortisation to interest expense shall not be lower than 200%.

  • (d) Tangible equity: The amount of net assets less intangible assets shall not be lower than $3,000,000.

• ii. If the Company fails to comply with the aforementioned financial covenants, the Company is required to pay additional interest at a rate of 0.10% per annum over the interest rate applicable under this agreement during the period from the date of notification sent by the managing bank to the date that consolidated financial statements, which meet all requirements, are provided. The aforesaid failure to comply with financial covenants will not be regarded as an event of default if additional interest is paid.

• As of December 31, 2021 and 2020, the Company did not breach the aforementioned financial covenants.

• (6) The Company is involved in a lawsuit filed by Mr. Li, Shi-Ren in 2012 relating to whether an employment relationship existed between both parties. Mr. Li, Shi-Ren claimed that he served in an investee of the Company for 26 years and 8 months and requested the Company to pay pension totaling USD 642 thousand. On February 27, 2014, the Taiwan Kaohsiung District Court rendered a decision that the Company is liable for the USD 642 thousand pension payment. The Company disagreed with the decision and appealed during the legal period. On April 29, 2016, the Taiwan High

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Court Kaohsiung Branch Court revoked the original decision rendered on February 27, 2014 and rendered a decision that the litigation expenses incurred thereby shall be borne by the appellant (Li, Shi-Ren). Subsequently, Li, Shi-Ren appealed to the Supreme Court. On August 2, 2018, the Supreme Court, after reviewing the case, revoked the decision except for the provisional execution and remanded the case to the Taiwan High Court Kaohsiung Branch Court. On April 15, 2020, following the first order by the Supreme Court, the Taiwan High Court Kaohsiung Branch Court rendered a decision on the case no. 2018-Zhong-Lao-Shang-Geng-Yi-Zi-1, in which both of the appellant’s (Li, Shi-Ren) appeal with the first instance court and motion for provisional execution are dismissed, and the appellant shall bear the relevant litigation expenses. Li, Shi-Ren continued to appeal, but the case is now pending with the Supreme Court.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

None.

12. Others

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders 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 amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

(2) Financial instruments

• A. Financial instruments by category

• Details of the Company’s financial instruments by category are provided in Note 6.

• B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial position and financial performance.

• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

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• C. Significant financial risks and degrees of financial risks

• (a) Market risk

  • i. Foreign exchange risk

  • (i) The Company operates internationally and is exposed to exchange rate risk arising from various functional currency, primarily with respect to the USD, EUR, RMB and IDR. Foreign exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

  • (ii) Management has set up a policy to manage its foreign exchange risk against the functional currency. The Company’s treasury is responsible for hedging its entire foreign exchange risk exposure. The Company’s treasury uses forward foreign exchange contracts to manage the foreign exchange risk arising from future commercial transactions and recognized assets and liabilities. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency.

  • (iii) The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD;). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD EUR:NTD Investments accounted for using the equity method USD:NTD IDR:NTD Financial liabilities Monetary items USD:NTD EUR:NTD	December 31,2021	December 31,2021	December 31,2021
	Foreign currency amount (In thousands) 8,055 $ 1,005 55,724 291,562,448 8,895 752	Exchange rate 27.68 31.32 27.68 0.00198 27.68 31.32	Book Value
			222,962 $ 31,477 1,542,440 577,294 246,214 23,553

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December 31, 2020

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD EUR:NTD RMB:NTD Investments accounted for using the equity method USD:NTD IDR:NTD Financial liabilities Monetary items USD:NTD EUR:NTD	Foreign currency amount (In thousands) 6,715 $ 174 273 51,751 290,649,211 7,752 229	Exchange rate 28.48 35.02 4.3660 28.48 0.00203 28.48 35.02	Book Value
			191,243 $ 6,093 1,192 1,473,868 590,018 220,777 8,020

The sensitivity analysis of foreign exchange risk mainly focuses on the foreign currency monetary items at the end of the financial reporting period. If the exchange rate of NTD to all foreign currencies had appreciated/depreciated by 1%, the Company’s net income for the years ended December 31, 2021 and 2020 would have decreased/increased by $123 and $242, respectively.

The total exchange loss, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2021 and 2020, amounted to $3,991 and $3,386, respectively.

ii. Price risk

• (i) The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• (ii) The Company’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2021 and 2020 would have increased/decreased by

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$514 and $1,013, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $3,771 and $3,718, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

iii. Cash flow and fair value interest rate risk

  - (i) The Company’s main interest rate risk arises from borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 2021 and 2020, the Company borrowings at variable rate were mainly denominated in NTD and USD.

  - (ii) The Company’s borrowings are measured at amortised cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

  - (iii) If the borrowing interest rate had increased/decreased by 1% with all other variables held constant, profit, net of tax for the years ended December 31, 2021 and 2020 would have decreased/increased by $468 and $350, respectively. The main factor is that changes in interest expense result from floating rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.

• ii. The Company manages its credit risk taking into consideration the entire company’s concern. For banks and financial institutions, only independently rated parties with a certain rating are accepted. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. The Company adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

• If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. If the credit rating grade of an investment target degrades two scales, there has been a

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significant increase in credit risk on that instrument since initial recognition.

• v. If the default rate of an investment target exceeds 10%, there has been a significant increase in credit risk on that instrument since initial recognition.

• vi. The Company adopts the assumptions under IFRS 9, that is the default occurs when the contract payments are past due over 90 days.

• vii. The Company classifies customer’s accounts receivable in accordance with credit risk on trade. The Company applies the modified approach using a provision matrix to estimate the expected credit loss and uses the historical and timely information to establish loss rate for assessing the default possibility of accounts receivable. Movements in relation to the Company applying the modified approach to provide loss allowance for notes and accounts receivable are as follows:

Balance at January 1 Expected credit loss Balance at December 31 Balance at January 1 Expected credit loss Balance at December 31	Year ended December 31,2021	Year ended December 31,2021	Year ended December 31,2021
	Notes Accounts receivable receivable Total - $ 1,323 $ 1,323 $ - 1,517 1,517 - $ 2,840 $ 2,840 $ Year ended December 31,2020		Total
			1,323 $ 1,517
			2,840 $
	Notes receivable - $ - - $	Accounts receivable 390 $ 933 1,323 $	Total
			390 $ 933
			1,323 $

• (c) Liquidity risk

• i. Cash flow forecasting is performed and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

• ii. The table below analyses the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows:

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December 31, 2021 Non-derivative financial liabilities: Short-term borrowings Accounts payable (including current portion) Other payables Lease liability Bonds payable Long-term borrowings (including current portion) Guarantee deposits received December 31,2020 Non-derivative financial liabilities: Short-term borrowings Accounts payable (including current portion) Other payables Lease liability Long-term borrowings (including current portion) Guarantee deposits received	Less than 1year 934,295 $ 471,935 307,358 527 1,950 10,602 457 Less than 1year 996,534 $ 129,302 171,698 959 264,469 564	Between 1 and 2year(s) - $ - - - 1,950 127,807 - Between 1 and 2year(s) - $ - - 530 1,819,947 -	Between 2 and 5years - $ - - - 5,850 481,277 - Between 2 and 5years - $ - - - 309,704 -	More than 5years
				- $ - - - 3,003,900 - - More than 5years
				- $ - - - - -

iii. For non-derivative financial liabilities, the Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis to be significantly earlier, nor expect the actual cash flow amount to be significantly different.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and beneficiary certificates is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the

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asset or liability, either directly or indirectly.

• Level 3: Unobservable inputs for the asset or liability.

• B. The carrying amounts of the Company’s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable (including related parties), other receivables (including related parties), guarantee deposits paid, other non-current financial assets, short-term borrowings, accounts payable (including related parties), other payables, lease liabilities, long-term borrowings (including current portion) and guarantee deposits received) are approximate to their fair values.

• C. The related information on financial and non-financial instruments measured at fair value by level on the basis on the nature, characteristics and risks of the assets and liabilities at December 31, 2021 and 2020 are as follows:

December31,2021 Assets: Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities December31,2020 Assets: Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Recurring fair value measurements Recurring fair value measurements	Level 1 41,179 $ 10,179 51,358 377,084 428,442 $ Level 1 95,081 $ 6,245 101,326 371,841 473,167 $	Level 2 - $ - - - - $ Level 2 - $ - - - - $	Level3 - $ - - - - $ Level3 - $ - - - - $	Total
				41,179 $ 10,179
				51,358
				377,084
				428,442 $
				Total
				95,081 $ 6,245
				101,326
				371,841
				473,167 $

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

• (a) The instruments the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

  • Listed shares Open-end fund

  • Market quoted price Closing price Net asset value

• (b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters).

• E. The Company takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Company’s credit quality.

• F. For the years ended December 31, 2021 and 2020, there was no transfer between Level 1 and Level 2.

• G. For the years ended December 31, 2021 and 2020, there was no transfer into or out from Level 3.

(4) Other

In response to the Covid-19 pandemic, the Group has complied with various preventive measures imposed by the government in accordance with the “Guidelines for the Continued Operation of Enterprises in Response to Severe and Special Infectious Pneumonia Epidemics”. The factory operates in a way of diversion and warehousing, and there is no significant adverse effect on all operations.

13. Supplementary Disclosures

(According to the current regulatory requirements, the Company is only required to disclose the information for the year ended December 31, 2021)

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: None.

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• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 8.

• B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas: Purchases and sales between the Company and investees in Mainland China are eliminated when preparing consolidated financial statements. Information on significant transactions, such as purchases and sales, receivables and payables, provision of endorsements and guarantees and financing, between the Company and investees in Mainland China is provided in Note 13(1)A, B and J.

(4) Major shareholders information

Major shareholders information: Please refer to table 9.

14. Segment Information

Not applicable.

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Maximum outstanding Amount of Allowance Limit on loans Ceiling on General Is a balance during Balance at Nature of transactions Reason for granted to total loans ledger related the year ended December 31, Actual amount Interest loan with the for short-term uncollectible a single party granted No. Creditor Borrower account party 2021 2021 drawn down rate �Note 1� borrower financing accounts Item Value �Note 2� �Note 3� Footnote Collateral Chun Yu Works & Co., Ltd. Loans to others Year ended December 31, 2021 Table 1 Expressed in thousands of NTD

0 Chun Yu Works & Co., Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. Other receivables - related parties Y 307,401 $ - $ - $ - 2 - $ Additional operating capital - $ - - $ 1,577,391 $ 1,577,391 $ - (Note 1) The numbers filled in for the nature of loan are as follows: 1. Trading Partner 2. Short-term financing. (Note 2) Limit on loans granted to a single party is as follows: 1. For business transaction: Limit is the higher of purchase or sales with the Company during the most recent year or the current year as of the date of financing. 2. For short-term financing: Amount granted by the Company: Limit is 40% of the Company’s current net assets. (Note 3) Ceiling on total loans granted is as follows: Amount granted by the Company: Ceiling is 40% of the Company’s current net assets. (Note 4) Foreign currencies are translated into New Taiwan dollars. Exchange rate of foreign currencies indicated as of report date were as follow: RMB:NTD 1:4.3458.

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Ratio of accumulated Maximum endorsement/ outstanding Outstanding guarantee Provision of Provision of Provision of Relationship Limit on endorsement/ endorsement/ Amount of amount to net Ceiling on endorsements/ endorsements/ endorsements/ with the endorsements/ guarantee guarantee endorsements/ asset value of total amount of guarantees by guarantees by guarantees to endorser/ guarantees amount as of amount at guarantees the endorser/ endorsements/ parent subsidiary to the party in Endorser/ guarantor provided for a December 31, December 31, Actual amount secured with guarantor guarantees company to parent Mainland Number guarantor Company name �Note 1� single party 2021 2021 drawn down collateral company provided subsidiary company China Footnote Party being endorsed/guaranteed Chun Yu Works & Co., Ltd. Provision of endorsements and guarantees to others Year ended December 31, 2021 Table 2 Expressed in thousands of NTD

0 Chun Yu Works & Co., Ltd. Chun Yu Works (USA) Inc. 2 2,366,086 $ 199,745 $ $ 193,760 $ - $ - 4.91% 3,154,782 $ Y N N (Note 2) 0 Chun Yu Works & Co., Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. 2 2,366,086 998,725 968,800 497,371 - 24.57% 3,154,782 Y N Y (Note 2) 0 Chun Yu Works & Co., Ltd. Shanghai Uchee Hardware Products Ltd. 2 2,366,086 43,863 43,458 - - 1.11% 3,154,782 Y N Y (Note 2) 1 Chun Zu Machinery Industry Co., Ltd. Shanghai Chun Zu Machinery Industry Ltd. 2 410,405 - - - - - 513,006 Y N Y (Note 3) (Note 1) The numbers filled in for the relationship with the Company are as follows: 1. Having business relationship. 2. The Company direct and indirect owns over 50% ownership of the investee company. (Note 2) The total amount of transactions of endorsement equals to 80% of the Company's net worth, the limit of endorsement for any single entity is 60% of the Company's net worth, and all of the related transactions are to be submitted to the stockholders' meeting for reference. (Note 3) The total amount of transactions of endorsement equals to 50% of its net worth for Chun Zu Machinery Industry Co., Ltd., the limit of endorsement for any single entity is 40% of its net worth, and all of the related transactions are to be submitted to the stockholders' meeting for reference. (Note 4) Foreign currencies are translated into New Taiwan dollars. Exchange rate of foreign currencies indicated as of report date were as follow: USD:NTD 1:27.68, RMB:NTD 1:4.3458.

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General Number of shares Relationship with the ledger account (In thousands of Securities held by Marketable securities securities issuer (Note 1) shares or units) Book value Ownership (%) Fair value Footnote Chun Yu Works & Co., Ltd. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) Year ended December 31, 2021 Table 3 Expressed in thousands of NTD As of December 31, 2021

Chun Yu Works & Co., Ltd. Stocks - Gloria Material Technology Corporation Other related party 1 1,876 41,179 $ 0.41 41,179 $ - Stocks - Taiwan Styrene Monomer Corporation � 2 11,678 203,198 2.21 203,198 - Stocks - China Ecotek Corporation � 2 4,333 173,114 3.50 173,114 - Stocks - King Kong Iron Works, Ltd. � 2 304 772 0.55 772 - Stocks - Pacific Electric Wire & Cable Co., Ltd. � 2 14 - - - - Beneficiary certificates - Yuanta Taiwan High-yield Leading Company Fund � 1 500 7,140 - 7,140 - Beneficiary certificates - PGIM USD High Yield Bond Fund-USD � 1 300 3,039 - 3,039 - Chun Bang Precision Co., Ltd. Stocks - The First Insurance Co., Ltd. � 1 10 146 - 146 - Stocks - Taiwan Styrene Monomer Corporation � 2 6,440 112,056 1.22 112,056 - Chun Yu Investment Corp. Stocks - Chun Yu Works & Co., Ltd. The Company 1 22,314 691,748 7.75 691,748 (Note 2) (Note 3) Stocks - Taiwan Styrene Monomer Corporation � 2 6,529 113,605 1.24 113,605 - Chun Yu Bio-tech Corp. Stocks - Chun Zu Machinery Industry Co., Ltd. Subsidiary 2 9 191 0.01 191 - Stocks - Taiwan Styrene Monomer Corporation � 2 1,500 26,100 0.28 26,100 - (Note 1) The code number explanation is as follows: 1. Financial assets at fair value through profit or loss - current. 2. Financial assets at fair value through other comprehensive profit or loss- non-current. (Note 2) The Company’s stocks held by Chun Yu Investment Corporation, shown as ‘Financial assets at fair value through profit or loss - Current’, were measured at fair value. The fair value changes were recognised in profit or loss for the current year. (Note 3) The cost of $267,195 was recognised by the Company under ‘Treasury shares’.

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Percentage of Percentage of Relationship with the Purchases total purchases total notes/accounts Purchaser/seller Counterparty counterparty (sales) Amount (sales) Credit term Unit price Credit term Balance receivable (payable) Footnote Transaction transactions Chun Yu Works & Co., Ltd. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2021 Table 4 Expressed in thousands of NTD Differences in transaction terms compared to third party Notes/accounts receivable (payable)

Chun Yu Works & Co., Ltd. Ofco Industrial Corporation Other related party (Sales) 542,899) ($ ���� 1 month - 3 ~ 5 months $ 133,381 ��� - Chun Yu (Dongguan) Metal Products Co., Ltd. Shanghai Uchee Hardware Products Ltd. Subsidiary (Sales) ( 377,824) ����� 3 months - (Note 1) - - - Shanghai Uchee Hardware Products Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. Subsidiary (Sales) ( 203,484) ����� 3 months - (Note 1) 505 �� - Chun Yu (Dongguan) Metal Products Co., Ltd. Shanghai Uchee Hardware Products Ltd. Subsidiary Purchases 203,484 ��� 3 months - (Note 2) 505 �� - Shanghai Uchee Hardware Products Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. Subsidiary Purchases 377,824 ��� 3 months - (Note 2) - - - (Note 1) The credit terms to third parties are 1 ~ 3 months after the sale. (Note 2) The payment terms to third parties are 3 ~ 6 months after the acceptance. (Note 3) Foreign currencies are translated into New Taiwan Dollars using the following exchanges: Ending balance of receivable and payable are translated using the exchange rates as of report date (USD:NTD 1:27.68, RMB:NTD 1:4.3458), and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2021 (USD:NTD 1:28.0088, RMB:NTD 1:4.3414).

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Action taken Turnover for overdue Subsequent Allowance for Company Name Name of the counterparty Relationship General ledger account Amount rate Amount accounts collections doubtful accounts Receivables from related party Overdue receivables Chun Yu Works & Co., Ltd. Receivables from related parties reaching $100 million or 20% of the Company's paid-in capital Year ended December 31, 2021 Table 5 Expressed in thousands of NTD

Chun Yu Works & Co., Ltd. Ofco Industrial Corporation Other related party Accounts receivable 133,381 $ 5.53 - $ - $ 69,671 $ -

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						Expressed in thousands of NTD		Percentage of	consolidated total	operating revenue or	total assets (Note 4)	1%	-	2%	8%	-	-	-	-	-	-	-	-	-	-	-	4%	-	2%
											Transaction terms	4 months	-	-	-	-	3 months	-	3 months	3 months	3 months	-	3 months	-	3 months	-	5 months	-	3 months
Chun Yu Works & Co., Ltd.		Significant inter-company transactions during the reporting period		Year ended December 31, 2021		Table 6	Transaction			Number Relationship	General ledger account Amount (Note 2) Company name Counterparty (Note 3)	0 Chun Yu Works & Co., Ltd. Chun Yu Works (USA) Inc. 1 Sales 89,967 $	1 Accounts receivable 32,927	1 Provision of endorsements and guarantees 193,760	Chun Yu (Dongguan) Metal Products Co., Ltd. 1 Provision of endorsements and guarantees 968,800	Shanghai Uchee Hardware Products Ltd. 1 Provision of endorsements and guarantees 43,458	1 Chun Bang Precision Co., Ltd. Chun Yu Works & Co., Ltd. 2 Sales 51,365	2 Accounts receivable 11,872	Chun Zu Machinery Industry Co., Ltd. 3 Sales 12,457	2 Chun Zu Machinery Industry Co., Ltd. Chun Yu Works & Co., Ltd. 2 Sales 21,624	Chun Yu (Dongguan) Metal Products Co., Ltd. 3 Sales 29,634	3 Accounts receivable 18,009	Pt Moon Lion Industries Indonesia 3 Sales 12,757	Shanghai Chun Zu Machinery Industry Ltd. 3 Other receivables 13,032	3 Shanghai Chun Zu Machinery Industry Ltd. Chun Zu Machinery Industry Co., Ltd. 3 Sales 18,632	4 Chun Yu (Dongguan) Metal Products Co., Ltd. Scholar Holdings Ltd. 3 Other receivables 20,994	Shanghai Uchee Hardware Products Ltd. 3 Sales 377,824	3 Other receivables 34,706	5 Shanghai Uchee Hardware Products Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. 3 Sales 203,484	(Note 1) Transactions among the company and subsidiaries with amount over NT$10 million and one side of them are disclosed.	(Note 2) The transaction information of the Company and the consolidated subsidiaries should be noted in column "Number". The number means:	1. Number 0 presents the Company.	2. The consolidated subsidiaries are in order from number 1.	(Note 3) The relationships among the transation parties are as follows:	1. The Company to the consolidated subsidiary.	2. The consolidated subsidiary to the Company.	3. The consolidated subsidiaryto another consolidated subsidiary.	(Note 4) The percentage of transaction amount over consolidated total revenues or total assets is as follows: Assets and liabilities are calculated using the ending balance over the consolidated total assets at period end; Sales is	calculated using the amount of the period over the consolidated total revenue of the period.	(Note 5) For the amounts denominated in foreign currencies, the balances of notes/accounts receivable (payable) are translated into New Taiwan dollars at the exchange rate (USD 1 : NTD 27.68; RMB 1 : NTD 4.3458)	prevailing at the financial reporting date, and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2021 (USD 1 : NTD 28.0088; RMB 1 : NTD 4.3414).

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Net profit (loss) Investment income (loss) Balance as at Balance as at of the investee for the recognised by the Company Main business December 31, December 31, year ended for the year ended Investor Investee Location activities 2021 2020 Number of shares Ownership (%) Book value December 31, 2021 December 31, 2021 Footnote Initial investment amount Shares held as at December 31, 2021

Chun Yu Works & Co., Ltd. Chun Bang Precision Co., Ltd. Taiwan Manufacture and trade of moulds 125,344 $ 20,344 $ 15,000,000 100.00 199,514 $ 3,422 $ 6,004 $ A subsidiary (Note 1) Chun Yu Works (U.S.A.) Inc. U.S.A. Import and export of hardware products 114,728 114,728 3,800,000 100.00 283,422 44,141 44,060 A subsidiary Chun Yu Investment Corporation Taiwan Professional investment 267,652 267,652 56,306,791 100.00 139,118 259,356 70 A subsidiary Chun Yu Bio-tech Corporation Taiwan Powder metallurgy 90,260 60,220 10,000,000 100.00 136,172 25,606 25,612 A subsidiary Scholar Holdings Ltd. Virgin Islands Reinvestment and import and export trade 2,581,891 2,581,891 33,183,211 100.00 1,000,185 44,749 47,800 A subsidiary Sunny City International Ltd Samoa Reinvestment and import and export trade 84,824 84,824 1,000,000 100.00 256,443 35,781 35,781 A subsidiary Pt Moon Lion Industries Indonesia Indonesia Manufacture and trade of screws and nuts 154,760 154,760 14,370,000 71.85 577,294 306,215 220,016 A subsidiary Chun Zu Machinery Industry Co., Ltd. Taiwan Manufacture and trade of machinery 52,598 52,598 28,821,939 47.81 455,418 83,778 38,994 A subsidiary Chun Zu Machinery Industry Co., Ltd. Lion City Management Ltd. Virgin Islands Professional investment 55,360 55,360 - 100.00 627,761 86,590 - A subsidiary (Note 2) (Note 1) It changed its name from Hi-Ace Tranding Co., Ltd. to Chun Bang Precision Co., Ltd. on May 20, 2020. (Note 2) According to the related regulations, it is not required to disclose income (loss) recognized by the Company. (Note 3) Foreign currencies are translated into New Taiwan Dollars using the following exchanges: Ending balance of receivable and payable are translated using the exchange rates as of report date (USD:NTD 1:27.68, RMB:NTD 1:4.3458), and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2021 (USD:NTD 1:28.0088, RMB:NTD 1:4.3414).

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Accumulated Accumulated Accumulated amount amount of amount Ownership Investment income of investment remittance from of remittance held by (loss) recognised Book value of income Taiwan to from Taiwan to Net income of the by the Company investments in remitted back to Investee in Main business Investment Mainland China as of January 1, Remitted to Mainland Remitted back Mainland China as of December 31, investee for the year ended Company (direct or for the year ended December Mainland China as of December 31, Taiwan as of December 31, Mainland China activities Paid-in capital method 2020 China to Taiwan 2021 December 31, 2021 indirect) 31, 2021 2021 2021 Footnote ended December 31, 2021 Amount remitted back to Taiwan for the year Chun Yu Works & Co., Ltd. Information on investments in Mainland China Year ended December 31, 2021 Table 8 Expressed in thousands of NTD Amount remitted from Taiwan to Mainland China/

Chun Yu (Dongguan) Metal Products Co., Ltd. Manufacture and trade of screws and nuts $ 1,784,834 (Note 1) (Note 3) 1,333,982 $ - $ - $ 1,333,982 $ 44,895 $ 100% 44,895 $ 1,028,950 $ - $ (Note 9) Shanghai Uchee Hardware Products Ltd. Trade of screws and nuts 27,680 (Note 4) 27,680 - - 27,680 35,820 100% 35,820 254,813 48,468 (Note 7) (Note 9) Chunyu Group Shanghai Tongsheng Trade Co., Ltd. Trade of screws and nuts 7,363 (Note 5) - - - - 151 100% 151 4,018) ( - (Note 9) Shanghai Chun Zu Machinery Industry Ltd. Manufacture and trade of machinery 235,280 (Note 2) (Note 6) 55,360 - - 55,360 86,581 47.82% 41,403 295,373 340,842 (Note 8) (Note 9) Accumulated Investment amount of amount approved Ceiling on remittance by the investments in from Taiwan Investment Mainland China to Mainland Commission of imposed by the China the Ministry of Investment as of December 31, Economic Commission of Company name 2021 Affairs (MOEA) MOEA (Note 10) Chun Yu Works & Co., Ltd. $ 1,564,280 $ 1,564,280 $ 2,800,747 Chun Zu Machinery Industry Co., Ltd. 55,360 179,920 615,607 (Note 1) The investment in Chun Yu (Dongguan) Metal Products Co., Ltd. amounted to US$64,481 thousand, consisting of US$48,193 thousand that has been reported to the Investment Commission and US$16,288 thousand from an investment loan from Scholar Holdings Ltd. (Note 2) The paid-in capital of Shanghai Chun Zu Machinery Industry Ltd. amounted to UD$8,500 thousand, consisting of UD$4,000 thousand from remittance from Chun Zu Machinery Industry Co., Ltd. through its subsidiary, Lion City Management Ltd. and US$4,500 thousand from capitalisation of retained earnings of Shanghai Chun Zu Machinery Industry Ltd., which were reported to the Investment Commission. In addition, proceeds from capital reduction of Lion City Management Ltd. in 2008 amounting to US$2,000 thousand were reported to the Investment Commission. (Note 3) Indirect investment in PRC through the existing company (Scholar Holdings Ltd.) located in the third area. (Note 4) Indirect investment in PRC through the existing company (Sunny City International Ltd.) located in the third area. (Note 5) Indirect investment in PRC through the existing company (Shanghai Uchee Hardware Products Ltd.) located in PRC. (Note 6) Indirect investment in PRC through the existing company (Lion City Management Ltd.) located in the third area. (Note 7) It is the cash dividends totaling US$1,751 thousand distributed by Shanghai Uchee Hardware Products Ltd. to Sunny City International Ltd., which then remitted to the Company and Chun Bang Precision Co., Ltd. (Note 8) It is the cash dividends amounting to US$25,700 thousand distributed by Shanghai Chun Zu Machinery Industry Ltd. to Lion City Management Ltd., which then remitted to Chun Zu Machinery Industry Co., Ltd. (Note 9) Investment gains or losses were recognised based on audited financial statements. (Note 10) The ceiling is calculated based on the 60% of the investor’s net assets or consolidated net assets (whichever is higher). (Note 11) For the amounts denominated in foreign currencies, the paid-in capital, amount of remittance from Taiwan and book value as of December 31, 2021 are translated into New Taiwan dollars at the exchange rate (USD 1 : NTD 27.68; RMB 1 : NTD 4.3458) prevailing at the financial reporting date, and the net profit (loss) of the investee and investment income (loss) recognised by the Group for the year ended December 31, 2021 are translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2021 (USD 1 : NTD 28.0088; RMB 1 : NTD 4.3414).

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Unit: shares Name of major shareholders Mumber of shares held Ownership (%) Table 9 Shares Chun Yu Works & Co., Ltd. Major shareholders information December 31, 2021

Bai Jia Yuan Investment Co., Ltd. 80,209,000 27.87% Jin Jhih Fu Assets Management Co., Ltd. 26,717,000 9.28% Chun Yu Investment Co., Ltd. 22,314,450 7.75% (Note) The major shareholders information was derived from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation. The share capital which was recorded in the financial statements may be different from the actual number of shares issued in dematerialised form due to the different calculation basis.

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Chairperson Huei-Cheng Lin

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