CHUN YU — Interim / Quarterly Report 2021

Nov 8, 2021

Chun Yu Works & Co., Ltd. and Subsidiaries Consolidated Financial Report and Independent Auditors’ Review Report Three Months Ended March 31,2021 and 2020

--------------------------------------------------------------------------------------------------------------For the convenience of readers and for information purpose only, the auditors’ review report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ review report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REVIEW REPORT TRANSLATED FROM CHINESE

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

Introduction

We have reviewed the consolidated balance sheets of Chun Yu Works & Co., Ltd. and its subsidiaries (the “Group”) as of March 31, 2021 and 2020 and the related consolidated statements of comprehensive income, of changes in equity and of cash flow statements for three months ended March 31, 2021 and 2020, and notes to the consolidated financial statements, including the summary of significant accounting policies. The management is responsible for the preparing 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 Accounting Standards No. 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission. Our responsibility is to express a conclusion on the financial statements based on the result of reviews.

Scope

Except basis of qualified conclusion, we conducted our reviews in accordance with Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making of inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical procedures and other review procedures. A review work is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in audit. Accordingly, we do not express an audit opinion.

Basis of Qualified Conclusion

As stated in note 4(3) to the consolidated financial statements, certain the non-significant subsidiaries’ financial statements which are included in the consolidated financial statements mentioned above, and the relevant information disclosed in note 13 were not reviewed. These subsidiaries’ total assets were NT$1,952,570 thousand and NT$1,483,219 thousand respectively, accounting for 18% and 14% of the total consolidated assets respectively; the total

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liabilities were NT$532,705 thousand and NT$489,717 thousand respectively, accounting for 8% and 7% of the total consolidated liabilities as of March 31, 2021 and 2020, respectively; the total comprehensive income were NT$6,436 thousand and NT$(161,307) thousand respectively, accounting for 4% and 55% of the total consolidated comprehensive income for three months ended March 31, 2021 and 2020,respectively.

Qualified Conclusion

According to our reviews and the review report of other accountants (please refer to Miscellaneous), except that the financial statements of some of the non-significant subsidiaries and the relevant information disclosed in note 13 as mentioned in Basis of Qualified Conclusion, if reviewed by us, may lead to adjustments to the consolidated financial statements, it is not found that the consolidated financial statements above have not been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” approved and promulgated by the Financial Supervisory Commission which may lead to the inability to properly express the consolidated financial status of Chun Yu Group as of March 31, 2021 and 2020 and the consolidated financial performance and consolidated cash flow or three months ended March 31, 2021 and 2020.

Miscellaneous

The financial statements of PT. Moon Lion Industries Indonesia three months ended March 31, 2021 and 2020 and the relevant information disclosed in note 13 were not reviewed by us, but by other accountants. Therefore, the amounts listed in the financial statements of the subsidiary and the relevant information disclosed in note 13 of the review report issued by us on the consolidated financial statements above are based on the review reports of other accountants. Total assets on March 31, 2021 and 2020 were NT$1,082,993 thousand and NT$1,090,674 thousand respectively, both accounting for 10% of the total consolidated assets; net operating income were NT$364,311 thousand and NT$398,791 thousand respectively, accounting for 16% and 21% of the total consolidated comprehensive income for three months ended March 31, 2021 and 2020, respectively.

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                       Lin, Tzu-Shu
Independent Accountants
                       Liu, Tzu-Meng

PricewaterhouseCoopers, Taiwan
Republic of China
May 12, 2021

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Chun Yu Works & Co., Ltd. and Subsidiaries Consolidated Balance Sheet March 31, 2021, December 31, 2020 and March 31, 2020

(the consolidated balance sheets on March 31, 2021 and 2020 have been reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Assets	note	March 31,2021, Amount % $ 802,971 7 106,330 1 549,388 5 1,618,032 15 25,657 - 1,518 - 3,507,385 31 198,027 2 1,970 - 6,811,278 61 678,882 6 3,080,440 28 181,590 2 10,068 - 273,325 3 13,424 - 23,410 - 41,015 - 16,320 - 3,239 - 4,321,713 39 $ 11,132,991 100	December 31,2020 and Amount % $ 631,074 6 101,460 1 502,214 5 1,661,339 15 13,784 - 1,419 - 3,317,446 31 125,084 1 1,970 - 6,355,790 59 644,583 6 3,146,059 29 189,033 2 10,646 - 290,844 3 13,404 - 24,470 - 51,060 1 15,900 - 3,684 - 4,389,683 41 $ 10,745,473 100	Unit: NT$ thousand March 31,2020 Amount % $ 743,183 7 181,622 2 392,123 4 1,520,886 14 27,817 - 6,853 - 3,318,928 32 148,240 1 - - 6,339,652 60 479,240 5 3,161,369 30 144,770 1 9,988 - 280,854 3 8,008 - 28,935 - 71,404 1 15,500 - 5,365 - 4,205,433 40 $ 10,545,085 100
		Amount $ 802,971 106,330 549,388 1,618,032 25,657 1,518 3,507,385 198,027 1,970 6,811,278 678,882 3,080,440 181,590 10,068 273,325 13,424 23,410 41,015 16,320 3,239 4,321,713 $ 11,132,991	Amount $ 631,074 101,460 502,214 1,661,339 13,784 1,419 3,317,446 125,084 1,970 6,355,790 644,583 3,146,059 189,033 10,646 290,844 13,404 24,470 51,060 15,900 3,684 4,389,683 $ 10,745,473	Amount $ 743,183 181,622 392,123 1,520,886 27,817 6,853 3,318,928 148,240 - 6,339,652 479,240 3,161,369 144,770 9,988 280,854 8,008 28,935 71,404 15,500 5,365 4,205,433 $ 10,545,085
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 financial assets – current 11XX Total Current Assets Non-current Assets 1517 Financial assets at fair value through other comprehensive income - non-current 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	6(1) 6(2) 6(3) 6(3) and 7 6(27) 5, 6(4) and (6) and 8 6(1) and 8 6(5) and 8 6(6) and (10) and 8 6(7) and 8 6(8) 6(27) 6(6) 6(3) and (9) 6(1) and 8

(continued)

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Chun Yu Works & Co., Ltd. and Subsidiaries Consolidated Balance Sheet March 31, 2021, December 31, 2020 and March 31, 2020

(the consolidated balance sheets on March 31, 2021 and 2020 have been reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Unit: NT$ thousand

Liabilities and Equity 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 Provision for liabilities – current 2280 Lease liabilities – current 2320 Long-term liabilities, current portion 21XX Total Current Liabilities Non-current Liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Lease liabilities – non-current 2640 Net defined benefit liabilities – non- current 2645 Guarantee deposits received 25XX Total Non-current Liabilities 2XXX Total Liabilities Equity attributable to owners of the 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 stock 31XX Total equity attributable to owners of the parent 36XX Non-controlling interests 3XXX Total Equity Significant Contingent Liabilities and Unrecognized Contract Commitments 3X2X Total Liabilities and Equity

March 31,2021, December 31,2020 and March 31,2020 note Amount % Amount % Amount % 6(11) and 8 $ 2,059,575 19 $ 1,995,653 19 $ 2,162,638 21 6(12) 39,966 - 39,957 - 9,989 - 6(20) and 7 311,537 3 243,739 2 130,723 1 1,147 - 4,241 - 5,422 - 7 708,835 6 687,916 6 569,719 6 6(18) and 7 533,396 5 409,649 4 667,356 6 6(27) 56,632 1 46,531 1 61,283 1 6(13) 6,590 - 6,722 - 7,675 - 25,147 - 27,294 - 22,203 - 6(14) and 8 272,396 2 261,492 3 247,395 2 4,015,221 36 3,723,194 35 3,884,403 37 6(14) and 8 2,321,794 21 2,199,123 20 2,329,208 22 6(27) 439,672 4 439,426 4 435,445 4 67,814 - 71,056 1 47,971 1 6(15) 178,793 2 180,653 2 152,562 1 564 - 564 - 457 - 3,008,637 27 2,890,822 27 2,965,643 28 7,023,858 63 6,614,016 62 6,850,046 65 6(16) 2,877,740 26 2,877,740 27 2,877,740 27 6(16) (17) 172,267 1 157,969 1 129,373 1 6(18) 179,531 2 179,531 2 137,220 1 430,610 4 430,610 4 430,610 4 240,932 2 290,127 3 149,903 2 6(5) and (19) ( 147,020) ( 1) ( 162,647) ( 2) ( 383,476) ( 3) 6(16) and 8 ( 288,910) ( 3) ( 288,910) ( 3) ( 288,910) ( 3) 3,465,150 31 3,484,420 32 3,052,460 29 4(3) 643,983 6 647,037 6 642,579 6 4,109,133 37 4,131,457 38 3,695,039 35 9 $ 11,132,991 100 $ 10,745,473 100 $ 10,545,085 100

The attached notes are part of the consolidated financial statements; please refer together.

Manager: Dong-Sen Tsai

Chairman: Hui-Cheng Lin

Accounting Supervisor: Ping-Tian Fang

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Chun Yu Works & Co., Ltd. and Subsidiaries Consolidated Statement of Comprehensive Income Three months ended March 31, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Item

Unit: NT$ thousand (earnings per share is NT$1) January 1 to March 31, 2021 and January 1 to March 31, 2020 note Amount % Amount % 6(20) and 7 $ 2,316,921 100 $ 1,936,692 100 6(4)(8) (15)(25) (26) and 7 ( 1,897,477 ) ( 82)( 1,631,088 )( 84) 419,444 18 305,604 16 6(8)(15) (25) (26), 7 and 12 ( 86,080 ) ( 3) ( 67,792 ) ( 4 ) ( 114,906 ) ( 5) ( 106,390 ) ( 5 ) ( 19,919 ) ( 1) ( 17,496 ) ( 1 ) 1,649 - ( 2,856 ) - ( 219,256 ) ( 9)( 194,534)( 10 ) 200,188 9 111,070 6 6(3)(21) 3,399 - 2,083 - 6(22) 14,935 1 9,849 1 6(2)(23) and 12 ( 5,504 ) - ( 60,511 ) ( 3 ) 6(7)(24) ( 21,827 ) ( 1)( 31,186 )( 2) ( 8,997 ) - ( 79,765 )( 4 ) 191,191 9 31,305 2 6(27) ( 41,432) ( 2)( 15,638 )( 1) $ 149,759 7 $ 15,667 1 6(5) and (19) $ 34,299 1 ($ 222,925 ) ( 11 ) ( 25,043 ) ( 1) ( 88,192 ) ( 5 ) 6(27) 621 - 697 - $ 9,877 - ($ 310,420 )( 16 ) $ 159,636 7 ($ 294,753 )( 15 ) $ 123,469 6 $ 1,645 - 26,290 1 14,022 1 $ 149,759 7 $ 15,667 1 $ 139,096 6 ($ 286,273 ) ( 15 ) 20,540 1 ( 8,480 ) - $ 159,636 7 ($ 294,753 )( 15 ) 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 (losses) gains 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Financial cost 7000 Total non-operating income and expenses 7900Profit before income tax 7950Income tax expense 8200Profit for the year Other comprehensive income(loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8316 Unrealized loss on valuation of investments in equity instruments measured at fair value through other comprehensive income 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 (loss) income 8300Total other comprehensive loss for the year 8500Total comprehensive income for the year Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interests Total comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interests Earnings per share (in dollars)

The attached notes are part of the consolidated financial statements; please refer together.

Chairman: Hui-Cheng Lin

Manager: Dong-Sen Tsai

Accounting Supervisor: Ping-Tian Fang

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Chun Yu Works & Co., Ltd. and Subsidiaries Consolidated Statement of Comprehensive Income Three months ended March 31, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

9750 Basic 9850 Diluted	Unit: NT$ thousand (earnings per share is NT$1) $ 0.47 $ 0.01 $ 0.47 $ 0.01

The attached notes are part of the consolidated financial statements; please refer together.

Manager: Dong-Sen Tsai

Chairman: Hui-Cheng Lin

Accounting Supervisor: Ping-Tian Fang

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Chun Yu Works &es

Consolidated Statement of Changes in Equity

Three months ended March 31, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Unit: NT$ thousand

January 1 to March 31, 2020 Balance on January 1, 2020 Profit from the three months ended March 31, 2020 Other comprehensive loss from three months ended March 31, 2020 Total comprehensive income (loss) from three months ended March 31, 2020 Distribution of 2019 net income Cash dividend Balance on March 31, 2020 January 1 to March 31, 2021 Balance on January 1, 2021 Profit from three months ended March 31, 2021 Other comprehensive loss from three months ended March 31, 2021 Total comprehensive income (loss) from three months ended March 31, 2021 Distribution of 2020 net income Cash dividend The Company’s dividends received by subsidiaries Decrease in non-controlling interest Balance on March 31, 2021	note								Equityattribu	ta	ble to owners of the	pa	rent company							Non-controlling interests		Total Equity
		Capital of ordinary shares			Capital from retained earnings				Retained earnings				Other	equity		Treasury stock		Total
							Legal reserve		Special reserve		Undistributed Co., Ltd. and Subsidiaries earnings	f	Conversion difference from inancial statements of foreign operating organizations		Unrealized gains and losses of financial assets measured at fair value through income statement
	6(5) and (19) 6(18) 6(5) and (19) 6(18) 6(16)(17) 4(3)		$ 2,877,740 - - - - $ 2,877,740 $ 2,877,740 - - - - - - $ 2,877,740		$ 129,373 - - - - $ 129,373 $ 157,969 - - - - 14,298 - $ 172,267		$ 137,220 - - - - $ 137,220 $ 179,531 - - - - - - $ 179,531		$ 430,610 - - - - $ 430,610 $ 430,610 - - - - - - $ 430,610	$ 493,587 1,645 - 1,645 ( 345,329 ) $ 149,903 $ 290,127 123,469 - 123,469 ( 172,664 ) - - $ 240,932			($ 172,821 ) - ( 64,993 ) ( 64,993 ) - ($ 237,814 ) ($ 185,009 ) - ( 18,672 ) ( 18,672 ) - - - ($ 203,681 )	$ 77,263 - ( 222,925 ) ( 222,925 ) - ($ 145,662 ) $ 22,362 - 34,299 34,299 - - - $ 56,661		($ 288,910 ) - - - - ($ 288,910 ) ($ 288,910 ) - - - - - - ($ 288,910 )	$ 3,684,062 1,645 ( 287,918 ) ( 286,273 ) ( 345,329 ) $ 3,052,460 $ 3,484,420 123,469 15,627 139,096 ( 172,664 ) 14,298 - $ 3,465,150			$ 651,059 14,022 ( 22,502 ) ( 8,480 ) - $ 642,579 $ 647,037 26,290 ( 5,750 ) 20,540 - - ( 23,594 ) $ 643,983	$ 4,335,121 15,667 ( 310,420 ) ( 294,753 ) ( 345,329 ) $ 3,695,039 $ 4,131,457 149,759 9,877 159,636 ( 172,664 ) 14,298 ( 23,594 ) $ 4,109,133

The attached notes are part of the consolidated financial statements; please refer together.

Chairman: Hui-Cheng Lin

Manager: Dong-Sen Tsai

Accounting Supervisor: Ping-Tian Fang

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Chun Yu Works & Co., Ltd. and Subsidiaries Consolidate Cash Flow Statement

Three months ended March 31, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Unit: NT$ thousand

Cash flows from operating activities Profit before tax Adjustment Adjustments to reconcile profit (loss) Net loss (gain) on financial assets and liabilities at fair value through profit or loss Expected credit losses (gains) Allowance for (reversal of) inventory market price decline Depreciation expense (Gain) loss on disposal of property, plant and equipment Amortization Interest 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 Provision for liabilities – current Net defined benefit liabilities – non-current Cash inflow from operations Interest received Interest paid Income tax paid Net cash inflow from business activities

note Three months ended March 31, 2021 Three months ended March 31, 2020 $ 191,191 $ 31,305 190 47,711 12 ( 1,649 ) 2,856 6(4) ( 3,752 ) 8,484 6(6)(7) (25) 76,112 74,825 6(23) 224 110 6(8)(25) 1,185 1,031 6(21) ( 3,399 ) ( 2,083 ) 6(24) 21,827 31,186 ( 5,060 ) 1,674 ( 46,046 ) ( 8,232 ) 44,014 152,328 ( 11,873 ) 16,227 ( 188,000 ) 106,510 ( 72,943 ) ( 41,579 ) 10,045 ( 10,784 ) 67,798 ( 28,536 ) 1,106 ( 819 ) 20,919 ( 127,653 ) ( 30,363 ) ( 83,784 ) ( 132 ) ( 669 ) ( 1,860 ) ( 11,275 ) 69,534 158,833 3,399 2,083 ( 22,118 ) ( 30,169 ) ( 13,044 ) ( 4,043 ) 37,771 126,704

(continued)

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Chun Yu Works & Co., Ltd. and Subsidiaries Consolidate Cash Flow Statement

Three months ended March 31, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Unit: NT$ thousand

Cash flow from investment activities Cash paid for purchase 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 Other financial assets – (increase) decrease of non- current Decrease in other non-current assets Net cash flows used in investing activities Cash flow from financing activities Increase in short-term borrowings Payments of lease liabilities Increase in long-term borrowings Decrease in long-term borrowings Decrease in non-controlling interest Net cash flows (used in) from financing activities Effect of foreign exchange rate changes on cash and cash equivalents Increase in current cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end

note Three months ended March 31, 2021 Three months ended March 31, 2020 6(29) ( $ 15,285 ) ( $ 29,849 ) 104 - 6(8) ( 634 ) ( 429 ) ( 6,378 ) - 1,060 ( 363 ) ( 420 ) 8,000 445 1,423 ( 21,108 ) ( 21,218 ) 6(30) 63,922 247,485 6(30) ( 6,406 ) ( 5,732 ) 6(30) 1,299,320 1,200,000 6(30) ( 1,165,745 ) ( 1,319,153 ) ( 23,594 ) - 167,497 122,600 ( 12,263 ) ( 36,356 ) 171,897 191,730 6(1) 631,074 551,453 6(1) $ 802,971$ 743,183

The attached notes are part of the consolidated financial statements; please refer together.

Chairman: Hui-Cheng Lin

Manager: Dong-Sen Tsai

Accounting Supervisor: Ping-Tian Fang

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Chun Yu Works & Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements Three Months Ended March 31, 2021 and 2020

(reviewed only, not audited in accordance with the Generally Accepted Auditing Standards)

Unit: NT$ thousand (unless specified)

I. Company History

• (1) Chun Yu Works & Co., Ltd. (hereinafter referred to as the “Company”) was approved to be established in March 1965 in accordance with the provisions of the Company Act of the Republic of China and other relevant laws and regulations. The main business items are the manufacturing and heat treatment of various screws, nuts and polished steel bars, and design and contracting of various pollution prevention machinery and equipment. For the main business items of the Company’s subsidiaries, please refer to note 4(3) Description of the basis of the merger.

• (2) The Company’s stock has been listed and traded on the Taiwan Stock Exchange since October 1991.

II. Date and Procedure of Adoption of the Financial Report

This consolidated financial report was issued on May 12, 2021 after submission to the board of directors.

III. Application of New and Revised Standards and Interpretations

• (1) Impact of Newly Issued and Amended International Financial Reporting Standards Recognized by the Financial Supervisory Commission (hereinafter referred to as the “FSC”) and Already Adopted

The following is a summary of the newly Issued/amended/revised standards and interpretations of International Financial Reporting Standards recognized by the FSC which are applicable in 2021:

2021:
NewlyIssued/Amended/Revised Standards and Interpretations Amendment to IFRS 4 “Temporary Exemption from Application of IFRS 9 Extension” IFRS 9, IAS 39, IFRS 7, IFRS 4, and the second phase of amendment to “Interest Rate Indicator Changes” of IFRS 16 Amendment to IFRS No. 16 “New Coronavirus Pneumonia- Related Rent Reduction After June 30, 2021”	Effective date of the Release by the International Accounting Standards Board
	January 1, 2021 January 1, 2021 April 1, 110 (note)

Note: The FSC allows it to be applied in advance on January 1, 2021.

The Group has assessed that the standards and interpretations above have no significant impact on the financial position and financial performance of the Group.

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• (2) Impact of Newly Issued and Amended International Financial Reporting Standards Recognized by the FSC But Not Yet Adopted

no.

• (3) Impact of International Financial Reporting Standards Already Issued But Not Yet Recognized by the FSC

The following is a summary of the newly Issued/amended/revised standards and interpretations of International Financial Reporting Standards already issued but not yet recognized by the FSC:

Effective date of the Release by the International Accounting Standards Newly Issued/Amended/Revised Standards and Interpretations Board Amendment to IFRS No. 3 “Index to Conceptual Framework” January 1, 2022 Amendments to IFRS No. 10 and IAS No. 28 “Sales of or Pending the decision Investment in Assets Between Investors and Their Affiliates of the International or Joint Ventures” Accounting Standards Board IFRS No. 17 “Insurance Contracts” January 1, 2023 Amendment to IFRS No. 17 “Insurance Contracts” January 1, 2023 Amendment to IAS No. 1 “Classification of Current or NonJanuary 1, 2023 current Liabilities” Amendment IAS No. 1 “Disclosure of Accounting Policies” January 1, 2023 Amendment to IAS No. 8 “Definition of Accounting Estimates” January 1, 2023 Amendments to IAS No. 12 “Deferred Income Taxes Related to January 1, 2023 Assets and Liabilities Generated by a Single Transaction” Amendment to IAS No. 16 “Property, Plant and Equipment: January 1, 2022 Price Before Reaching the Intended State of Use” Amendments to IAS 37 “Loss Contracts – Costs of Performance January 1, 2022 of Contracts” Annual improvement in the 2018 – 2020 cycle January 1, 2022

The Group has assessed that the standards and interpretations above have no significant impact on the financial position and financial performance of the Group.

IV. Summary of Significant Accounting Policies

The main accounting policies used in the preparation of this consolidated financial report are explained below. Unless otherwise stated, these policies apply consistently throughout all reporting periods.

(1) Declaration of Compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” approved and issued by the FSC.

(2) Basis of Preparation

1. The consolidated financial report is prepared based on historical cost, except the following significant items:

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  - (1)  Financial assets measured at fair value through income statement.

  - (2)  Financial assets measured at fair value through other comprehensive income.

  - (3)  Defined welfare liabilities recognized as the net amount of pension fund assets minus the present value of defined welfare obligations.

1. The preparation of the consolidated financial report that complies with the International Financial Reporting Standards, International Accounting Standards, Interpretations and Interpretation Announcements (hereinafter referred to as “IFRSs”) recognized by the FSC requires the use of some important accounting estimates. The accounting policy process also requires the management to use its judgments, items involving high judgment or complexity, or items involving major assumptions and estimates in the consolidated financial report. Please refer to note 5 for explanations of the major accounting judgments, estimates, assumptions and main sources of uncertainties.

2. (3) Consolidation Basis

3. Principles for preparing the consolidated financial report

   • (1) The Group includes all subsidiaries as individual entities for the preparation of the consolidated financial report. Subsidiaries refer to individual entities controlled by the Group (including structured individuals). The Group controls the individual entities when the Group is exposed to variable remunerations from the participation of such individual entities or has rights to such variable remunerations, and has the ability to influence the power of the individual entities when such remunerations are made. Subsidiaries are included in the consolidated financial report from the day when the Group obtains their control, and the consolidation is terminated on the day when such control is lost.

   • (2) Transactions, balances, and unrealized gains and losses between companies within the Group have been eliminated. The accounting policies of the subsidiaries have been adjusted as necessary and are consistent with the policies adopted by the Group.

   • (3) Each component of income and other comprehensive income are attributable to the owners of the parent company and non-controlling interests; the total comprehensive income is also attributable to the owners of the parent company and non-controlling interests, even if it results in a loss of non-controlling interests.

   • (4) If the change in the shareholding of a subsidiary does not result in the loss of control (transaction with non-controlling interests), it is treated as an equity transaction, that is, as a transaction with the owner. The difference between the adjustment amount of noncontrolling interests and the fair value of the consideration paid or received is directly recognized as equity.

   • (5) When the Group loses control of the subsidiary, the remaining investment in the former subsidiary is remeasured at fair value and used as the fair value of the originally recognized financial asset or the cost of the originally recognized investment in an affiliate or joint venture. The difference between the fair value and the book amount is recognized as the current profit and loss. For all amounts previously recognized in other comprehensive income related to the subsidiary, the accounting treatment is the same as if the Group directly disposes of related assets or liabilities; that is, when disposing of related assets or liabilities, the profits or losses previously recognized as other comprehensive income will be reclassified as profit or loss, and when the control of the subsidiary is lost, the gain or loss will be reclassified from equity to profit or loss.

4. Subsidiaries included in this consolidated financial report

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			Percentage of equityheld	Percentage of equityheld	Percentage of equityheld
Investment	Subsidiary	Business		December 31, 2020		Descrip
companyname	name	nature	March 31,2021,	and	March 31,2020	tion
Chun Yu Works	Chun Bang	Mold	100.00	100.00	100.00	(note 1)
& Co., Ltd.	Precision	manufacturi				(note 2)
	Co., Ltd.	ng and
		trading
Chun Yu Works	American	Import and	100.00	100.00	100.00	(note 1)
& Co., Ltd.	Chun Yu	export of
	Works &	metal
	Co., Ltd.	products
Chun Yu Works	Chun Yu	Professional	100.00	100.00	100.00	(note 1)
& Co., Ltd.	Investment	investment
	Co., Ltd.
Chun Yu Works	Chun Yu Bio-	Powder	100.00	100.00	100.00	(note 1)
& Co., Ltd.	tech	metallurgy
Chun Yu Works	Scholar	Reinvestment	100.00	100.00	100.00
& Co., Ltd.	Holdings	and import
	Ltd.	and export
Chun Yu Works	Sunny City	Reinvestment	100.00	100.00	100.00	(note 1)
& Co., Ltd.	International	and import
	Limited	and export
Chun Yu Works	PT. Moon lion	Manufacturing	71.85	71.85	71.85	(note 1)
& Co., Ltd.	Industries	and trading
	Indonesia	of screws
		and nuts
Chun Yu Works	Chun Zu	Machinery	47.82	47.82	47.82	(note 3)
& Co., Ltd.	Machinery	manufacturi				(note 4)
	Industry	ng and
		trading

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				Percentage of equityheld
Investment				December 31, 2020		Descript
companyname	Subsidiaryname	Business nature	March 31,2021,	and	March 31,2020	ion
Scholar Holdings	Chun Yu	Manufacturing	100.00	100.00	100.00
Ltd.	(Dongguan)	and trading of
	Hardware	screws and
	Products Co.,	nuts
	Ltd.
Sunny City	Shanghai Youju	Trading of	100.00	100.00	100.00	(note 1)
International	Hardware	screws and
Limited	Products Co.,	nuts
	Ltd.
Shanghai Youju	Shanghai	Trading of	100.00	100.00	100.00	(note 1)
Hardware	Tongsheng	screws and
Products	Trading Co.,	nuts
Company	Ltd.
Chun Zu	Laiwang City	Professional	100.00	100.00	100.00
Machinery	Development	investment
Industry	Co., Ltd.
Laiwang City	Shanghai Chun	Machinery	100.00	100.00	100.00
Development	Zu Machinery	manufacturing
Co., Ltd.	Industry	and trading

• (Note 1) For these companies, except for the relevant information of PT. Moon lion Industries Indonesia disclosed in the financial statements for the first quarter of 2021 and 2020 and note 13 which were reviewed by other accountants, the relevant information of the remaining companies disclosed in the financial statements for the first quarter of 2021 and 2020 and note 13 has not been reviewed by us. Their total assets as of March 31, 2021 and 2020 were NT$1,952,570 and NT$1,483,219 respectively, the total liabilities were NT$532,705 and NT$489,717 respectively, and the total consolidated income for three months ended March 31, 2021 and 2020 were NT$6,436 and NT$(161,307) respectively.

• (Note 2) It was formerly known as Chun Bang Trading Co., Ltd., and renamed Chun Bang Precision Co., Ltd. on May 20, 2020.

(Note 3) It is the comprehensive shareholding of the Group.

• (Note 4) The Company has a substantive control over the company and its subsidiaries because the Company’s designated person is elected as the chairman of the company, and the nomination of the president of the company needs to be reported to the Company’s board of directors for approval.

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

• Different adjustments and treatment methods of subsidiary accounting period: None.

• Major restrictions: None.

• Subsidiaries with significant non-controlling interests by the Group:

The total non-controlling interests of the Group as of March 31, 2021, December 31, 2020, and March 31, 2020 were NT$643,983, NT$647,037 and NT$642,579, respectively. Information on non-controlling interests and subsidiaries that are significant to the Group as follows:

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Main place of business Subsidiaryname		March 31,2021,	December 31,2020 and
		Amount Percentage of shareholding	Amount Percentage of shareholding
Chun Zu Taiwan		$ 461,634 52.18%	$ 480,947 52.18%
Machinery Industry
			March 31,2020
Main place of business Subsidiaryname			Amount Percentage of shareholding
Chun Zu Taiwan			$ 509,339 52.18%
Machinery Industry

Summary financial information of subsidiaries:

	Chun Zu MachineryIndustryand Subsidiaries	Chun Zu MachineryIndustryand Subsidiaries	Chun Zu MachineryIndustryand Subsidiaries	Chun Zu MachineryIndustryand Subsidiaries	Chun Zu MachineryIndustryand Subsidiaries
	March 31, 2021,	December 31, 2020
			and	March 31,2020
Current Assets $	1,443,845	$	1,321,183	$	1,234,346
Non-current Assets	619,814		650,266		690,199
Current Liabilities (	934,525)	(	804,891)	(	708,591)
Non-current Liabilities (	177,179)	(	174,613)	(	178,502)
Total net assets $	951,955	$	991,945	$	1,037,452
Consolidated Statement of Comprehensive		January to March of		January to March
Income			2021		of 2020
Income		$	261,311	$	319,450
Profit for the year		$	7,818	$	10,969
Other comprehensive income	(net)	(	2,590)	(	2,787)
Total comprehensive income	for theyear	$	5,228	$	8,182
Total comprehensive income	attributable to non-	$		$
controllinginterests			4,281		1,137
Dividends paid to non-controlling interests		$	23,594	$	—
Consolidated Cash Flow Statement		January to March of		January to March
			2021		of 2020
Net cash inflow (outflow) from business activities		$	81,929	$	1,145)
Net cash outflow from investment activities		(	1,040)	(	22,105)
Net cash inflow from financing activities			9,498		79,295
Impact of exchange rate changes on cash and			1,433		442
cash equivalents
Increase in current cash and cash equivalents			91,820		56,487
Beginning cash and cash equivalent balance			164,700		145,439

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$ 256,520 $ 201,926

Ending cash and cash equivalent balance

• (4) Foreign currency conversion

The items listed in the financial report of each individual entity of the Group are measured in the currency of the main economic environment in which the entity operates (i.e. functional currency). This consolidated financial report is presented in the Company’s functional currency “New Taiwan dollar” as the expression currency.

1. Foreign currency transactions and balances

2. (1) Foreign currency transactions are converted into the functional currency at the spot exchange rate on the transaction date or measurement date, and the conversion difference arising from the conversion of these transactions is recognized as the current profit and loss.

3. (2) The balance of foreign currency monetary assets and liabilities shall be evaluated and adjusted according to the spot exchange rate on the balance sheet date, and the conversion difference arising from the adjustment shall be recognized as the current profit and loss.

4. (3) The balance of foreign currency non-monetary assets and liabilities is measured at fair value through income statement, and is evaluated and adjusted at the spot exchange rate on the balance sheet date, and the conversion difference arising from the adjustment is recognized as the current profit and loss; those measured at fair value through other comprehensive income are evaluated and adjusted at the spot exchange rate on the balance sheet date, and the conversion difference arising from the adjustment is recognized in other comprehensive income; those not measured at fair value are measured based on the historical exchange rate on the initial transaction date.

5. (4) All exchange gains and losses are reported in the “Other Gains and Losses” of the comprehensive consolidated income statement.

6. Conversion of foreign operating organizations

7. (1) For all the Group’s individual affiliated companies whose functional currency is different from the expression currency, their business results and financial status shall be converted into the expression currency in the following ways:

8. A. The assets and liabilities expressed on each balance sheet are converted at the closing exchange rate on the balance sheet date;

9. B. The income and expenses expressed in each comprehensive income statement are converted at the average exchange rate of the current period; and

10. C. All exchange differences arising from conversion are recognized as other comprehensive income.

11. (2) When a foreign operating organization that is partially disposed of or sold is a subsidiary, the accumulated conversion difference recognized as other comprehensive income is reattributed to the foreign operating organization’s non-controlling interests on a pro-rata basis. However, even if the Group still retains part of the equity of the former subsidiary, but has lost control of the foreign operating organization under the subsidiary, it shall be treated as a disposal of all the equity of the foreign operating organization.

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(5) Classification criteria for distinguishing between current and non-current assets and liabilities

1. Assets that meet any of the following conditions are classified as current assets:

2. (1) The asset is expected to be realized in the normal business cycle, or intended to be sold or consumed.

3. (2) The asset is held mainly for trading purposes.

4. (3) The asset is expected to be realized within 12 months after the balance sheet date.

5. (4) The asset is cash or cash equivalents, except for those to be swapped or used to settle liabilities at least 12 months after the balance sheet date.

The Group classifies all assets that do not meet the conditions above as non-current.

1. Liabilities that meet any of the following conditions are classified as current liabilities:

2. (1) The liability is expected to be settled in the normal business cycle.

3. (2) The asset is held mainly for trading purposes.

4. (3) The liability is expected to be settled within 12 months after the balance sheet date.

5. (4) The settlement period of the liability cannot be unconditionally deferred to at least 12 months after the balance sheet date. The terms of the liability, which states that it may be settled by the issuance of equity instruments based on the choice of the counterparty, do not affect its classification.

The Group classifies all liabilities that do not meet the conditions above as non-current.

• (6) Cash equivalents

• Cash equivalents refer to short-term and highly liquid investments that can be converted into fixed cash amounts at any time and the risk of value changes is very small.

• Time deposits that meet the aforementioned definition and whose purpose is to satisfy shortterm cash commitments in operations are classified as cash equivalents.

(7) Financial assets measured at fair value through income statement

1. These refer to financial assets that are not measured at amortized cost or at fair value through other comprehensive income.

2. The Group adopts transaction day accounting for financial assets measured at fair value through income statement which meet the requirements of customary transactions.

3. The Group measures the related transaction costs at fair value at the time of initial recognition, and recognize them in profit or loss; they are subsequently measured at fair value and the gains or losses are recognized in profit or loss.

4. The Group recognizes dividend income in profit and loss when the right to receive dividends is established, the economic benefits related to dividends are likely to flow in, and the amount of dividends can be reliably measured.

(8) Accounts and notes receivable

1. These refer to accounts and notes of which the right to the amount of consideration can be unconditionally received due to the transfer of goods or services as agreed in the contract.

2. The Group measures them at fair value at the time of initial recognition, and subsequently adopts the effective interest method to recognize interest income and impairment losses

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during the outstanding period according to the amortization procedure, and recognizes the gains or losses in profit or loss.

(9) Inventories

Inventories are measured at the lower of the cost and net realizable value, and the cost is determined by the weighted average method. The cost of finished products and work-inprogress includes raw materials, direct labor, other direct costs and production-related manufacturing expenses (allocated according to normal production capacity), but does not include borrowing costs. The item-by-item comparison method is adopted when determining the lower of the cost and net realizable value. The net realizable value refers to the balance of the estimated selling price in the normal course of business minus the estimated cost and related variable sales expenses that have to be invested before completion.

(10) Financial assets measured at fair value through other comprehensive income

1. These refer to an irrevocable choice at the time of initial recognition to report changes in the fair value of equity instrument investments that are not held for trading in other comprehensive income, or debt instrument investments that meet the following conditions at the same time:

2. (1) The financial assets are held under the business model for the purpose of collecting contractual cash flow and selling.

3. (2) The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal outstanding.

4. The Group adopts transaction day accounting for financial assets measured at fair value through other comprehensive income which meet the requirements of customary transactions.

5. The Group measures them at fair value plus transaction costs at the time of initial recognition, and subsequently measures them at fair value:

For changes in the fair value of equity instruments which are recognized in other comprehensive income, when excluded, the accumulated gains or losses previously recognized in other comprehensive income shall not be subsequently reclassified as profit or loss and transferred to retained earnings. When the right to receive dividends is established, economic benefits related to dividends are likely to flow in, and the amount of dividends can be reliably measured; the Group will then recognize the dividend income as profit or loss.

(11) Impairment of financial assets

On each balance sheet date, the Group will review all reasonable and supportable information (including forward-looking ones) for debt instrument investments measured at fair value through other comprehensive income and financial assets measured at amortized cost; for those with no significant increase in credit risk since initial recognition, the allowance for loss is measured by the amount of 12-month expected credit losses; for those with a significant increase in credit risk since initial recognition, the allowance for loss is measured by the amount of expected credit losses in the duration; for accounts receivable or contract assets that do not include significant financial components, the allowance for loss is measured according to the amount of expected credit loss in the duration.

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(12) Exclusion of financial assets

The Group will exclude financial assets when any of the following conditions is met:

1. The contractual right to receive cash flows from financial assets lapses.

2. The contractual right to receive the cash flow of financial assets is transferred, and almost all the risks and rewards of the ownership of the financial assets have been transferred.

3. The contractual right to receive the cash flow of financial assets is transferred, but the control over the financial assets is not retained.

(13) Property, plant and equipment

1. Property, plant and equipment are recorded on the basis of acquisition cost, and the relevant interest during the purchase and construction period is capitalized.

2. Subsequent costs are included in the book amount of the asset or recognized as a separate asset only when the future economic benefits related to the project are likely to flow into the Group and the cost of the item can be reliably measured. The booked amount of reclassified items shall be excluded. All other maintenance costs are recognized as current profit and loss when incurred.

3. The cost model is adopted for subsequent measurement of property, plant and equipment. Except for land that is not depreciated, the other items are depreciate by the straight-line method based on the estimated service life. If the components of property, plant and equipment are significant, they shall be separately depreciated.

4. The Group reviews the residual value, service life and depreciation method of each asset at the end of each fiscal year. If the expected residual value and service life are different from the previous estimates, or if the expected consumption pattern of the future economic benefits contained in the asset has undergone significant changes, it shall be dealt with in accordance with IAS No. 8 “Accounting Policies and Changes and Errors of Accounting Estimates.” The service life of each asset is as follows:

Assets name	Durability
Houses and construction:
Main buildings of plants	3 years to 51 years
Other	4 years to 36 years
Machines and equipment	2 years to 22 years
Utility equipment	2 years to 18 years
Transportation equipment	2 years to 9 years
Office equipment	2 years to 13 years
Other devices	2 years to 15 years

(14) Lessee’s lease transaction – right-of-use assets/lease liabilities

1. Lease assets are recognized as right-of-use assets and lease liabilities on the date they are available for use by the Group. When the lease contract is a short-term lease or of a lowvalue target asset, the lease payment shall be recognized as an expense during the lease period by the straight-line method.

2. Lease liabilities are recognized at the present value of the lease payments that have not been made on the lease start date at the discounted interest rate of the Group’s incremental borrowings. The lease payments include:

3. (1) Fixed payments, excluding any lease incentives that can be collected;

~21~

• (2) For the fines to be paid for the termination of the lease, if the lease period reflects the option that the lessee will exercise for termination of the lease.

The interest method is adopted subsequently, and interest expenses are provided during the lease period by the amortized cost method. When the lease term or lease payment changes due to non-contract related revision, the lease liability will be reevaluated and the right-of-use asset will be adjusted by the remeasurement.

1. Right-of-use assets are recognized at cost on the lease start date, and the cost includes:

2. (1) The original measured amount of lease liabilities;

3. (2) Any lease payments paid on or before the start date;

4. (3) Any original direct costs incurred.

The cost method is adopted subsequently, and the depreciation expense is provided when the service life of the right-of-use asset lapses or the lease term expires, whichever is earlier. When the lease liability is reevaluated, the right-of-use asset will be adjusted by any remeasurement of the lease liability.

(15) Intangible assets

It refers to computer software which is recognized at the acquisition cost and amortized based on the estimated service life of 3 to 10 years by the straight-line method.

(16) Impairment of non-financial assets

The Group estimates the recoverable amount of assets with signs of impairment on the balance sheet date, and an impairment loss is recognized when the recoverable amount is lower than its book value. The recoverable amount refers to the fair value of an asset minus the cost of disposal or its value of use, whichever is higher. When there is no impairment or reduction in the assets recognized in the previous year, the impairment loss will be reversed, but the book value of the asset increased by the reversal of the impairment loss shall not exceed the book amount of the asset minus the depreciation or amortization if the impairment loss is not recognized.

(17) Borrowings

1. These refer to the long-term and short-term money borrowed from banks. The Group measures their fair value minus transaction costs at the time of initial recognition, and subsequently, for any difference between the price after deducting transaction costs and the redemption value, the effective interest method is adopted to recognize interest expenses during the outstanding period as profit and loss according to the amortization procedure.

2. For the expenses paid when the loan quota is established, if it is possible to draw down part or all of the quota, the expenses shall be recognized as the transaction cost of the borrowing, and shall be deferred to the time the drawdown is incurred to be recognized as an adjustment to the effective interest rate; when it is not possible to draw down part or all of the quota, then the expenses shall be recognized as an Prepayments and amortized in the period relevant to the quota.

(18) Accounts and notes payable

1. These refer to debts arising from the purchase of raw materials, commodities or labor services on credit and notes payable arising from business and non-business.

~22~

1. The short-term accounts and notes payable that are unpaid interest are not affected by discounting. Therefore, the Group uses the original invoice amount to measure them.

(19) Exclusion of financial liabilities

The Group excludes financial liabilities when the obligations specified in the contract are fulfilled, cancelled or expired.

(20) Offset of financial assets and liabilities

When there is a legally enforceable right to offset the recognized amounts of financial assets and liabilities, and the intention is to settle on a net basis or to realize assets and pay off liabilities at the same time, the financial assets and financial liabilities can offset each other and be expressed as a net amount in the balance sheet.

(21) Debt provision

The liability provision (warrantee estimate) is a current statutory or constructive obligation due to past events, and it is likely that economically effective resources will be required to pay off the obligation, and the amount of the obligation can be recognized when it can be reliably estimated. The liability reserve is measured by the best estimated present value of the expenditure required to settle the obligation on the balance sheet date. The discount rate is the pre-tax discount rate that reflects the current market’s assessment of the time value of money and the specific risks of the liability. The amortization is recognized as an interest expense. Future operating losses shall not be recognized as liability provisions.

(22) Employee benefits

1. Short-term employee benefits

These are measured by the expected non-discounted amount of cash paid, and recognized as expenses when the relevant service is provided.

2. Pension

• (1) Defined allocation plans

For defined allocation plans, the amount of the retirement fund that should be allocated is recognized as the current pension cost on the basis of accrual. The Prepayments is recognized as an asset within the scope of refundable cash or reduced future payments.

• (2) Defined welfare plans

• A. The net obligation under the defined benefit plan is calculated by discounting the amount of future welfare earned by the employee in the current or past services, and the current value of the defined welfare obligation on the balance sheet date minus the fair value of the planned assets. The net obligation of defined welfare is calculated annually by actuaries using the projected unit welfare method, and the discount rate is determined by referring to the market yield rate of high-quality corporate bonds on the balance sheet date whose currency and period are consistent with those of the defined welfare plan; for countries without a deep market of high-quality corporate bonds, the market yield rate of government bonds (on the balance sheet date) is used.

• B. The remeasurement amount generated by the defined welfare plan is recognized in the period of occurrence as other comprehensive income, and expressed in retained earnings.

~23~

  - C. The related expenses of the up-front service cost are immediately recognized as profit and loss.

  - D. The pension cost in the interim period is calculated on the basis of the pension cost rate determined by actuarial calculation at the end of the previous fiscal year, and from the beginning to the end of the current period. If there are major market changes and major reductions, settlements or other major secondary matters after the end of the date, adjustments will be made and relevant information will be disclosed in accordance with the aforementioned policies.

1. Resignation benefits

2. Resignation benefits are benefits provided when the employee’s employment is terminated before the normal retirement date or when the employee decides to accept the company’s welfare invitation in exchange for termination of employment. The Group recognizes them as expenses when it is no longer able to withdraw the offer of resignation benefits or when the relevant restructuring costs are recognized, whichever is earlier. Benefits not expected to be paid in full in 12 months after the balance sheet date should be discounted.

3. Employees’ remuneration and directors’ remuneration

The employees’ remuneration and directors’ remuneration are recognized as expenses and liabilities when there are legal or constructive obligations involved and the amounts can be reasonably estimated. If there is a difference between the actual distribution amount in the subsequent resolution and the estimated amount, it shall be treated as a change in accounting estimates. In addition, if the employees’ remuneration is paid in stocks, the basis for calculating the number of shares is the closing price on the day before the board meeting’s resolution.

(23) Income tax

1. Income tax expenses include current and deferred income taxes. Except for income tax related to items included in other comprehensive income or directly included in equity, income taxes are recognized in profit and loss.

2. The Group calculates the current income tax based on the tax rate that has been legislated or substantively legislated as of the balance sheet date in the country where it operates and generates taxable income. The management regularly evaluates the status of income tax declarations with respect to applicable income tax regulations and, where applicable, estimates the income tax liabilities based on the expected taxes to be paid to the taxation authority. The Unappropriated retained earnings of the Company and its domestic subsidiaries are subject to the income tax imposed in accordance with the Income Tax Act. In the subsequent year following the generation of the earnings, the income tax expense for Unappropriated retained earnings will be recognized based on the actual earnings distributed after the shareholders’ meeting approves the earnings distribution proposal.

3. The balance sheet method is adopted for deferred income tax, and is recognized based on the temporary difference between the tax base of assets and liabilities and their book amounts in the consolidated balance sheet. The deferred income tax will not be recognized if it originates from the original recognition of assets or liabilities of the transaction (excluding business mergers), and does not affect accounting profits or taxable income (or losses) at the time of the transaction. If the temporary difference is caused by investing in a subsidiary company, the Group may control the timing of

~24~

the reversion of the temporary difference, and the temporary difference will not be recognized if it is likely that it will not be reversed in the foreseeable future. For deferred income tax, the applicable tax rate and tax law are those that have been legislated or substantively legislated on the balance sheet date, and are expected to apply when the relevant deferred income tax assets are realized or the deferred income tax liabilities are settled.

1. Deferred tax assets are recognized within the scope where temporary differences are likely to be used to offset future taxable income, and unrecognized and recognized deferred tax assets are reevaluated on each balance sheet date.

2. The current income tax assets and current income tax liabilities can offset each other when the Company has a legal enforcement right to offset the recognized current income tax assets and liabilities, and intends to pay off on a net basis or to realize assets and liabilities at the same time. The deferred income tax assets and liabilities can offset each other when there is statutory enforcement power to offset the current income tax assets and current income tax liabilities, and the deferred income tax assets and liabilities are generated by the same taxpayer who is taxed by the same tax authority, or generated by different taxpayers but each entity intends to pay off on a net basis or to realize assets and liabilities at the same time.

3. The income tax expenses in the interim period are calculated based on the estimated annual average effective tax rate applied to the pre-tax profits and losses of the interim period, and relevant information shall be disclosed in accordance with the aforementioned policies.

(24) Share capital

1. Ordinary shares are classified as equity. The incremental cost directly attributable to the issuance of new shares or stock options is included in equity as a deduction from the price after deducting the income tax.

2. When the Company buys back its issued shares, the consideration paid, including any directly attributable incremental costs, is recognized based on its net amount after tax as a deduction of shareholders’ equity. When the shares bought back are subsequently reissued, the difference between the consideration received and the book value after deducting any directly attributable incremental costs and the impact of income tax is recognized as an adjustment to shareholders’ equity.

(25) Dividend distribution

Dividends distributed to shareholders of the Company shall be recognized in the financial report when the Company’s general shareholders’ meeting decides to distribute dividends; dividends distributed in stocks shall be recognized as stock dividends to be distributed, and shall be transferred to ordinary share capital on the ex-date of issuance of new shares. Subsequent cash dividends from earnings after 2019 are recognized as liabilities in the financial report after the board meeting’s resolution.

(26) Income recognition

Product sales

1. Sales revenue is recognized when the control of the product is transferred to the customer; that is, when the product is delivered to the customer, the customer has the discretion to the product, and the Group has no outstanding performance obligations

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which may affect the customer’s acceptance of the product.

1. Sales revenue is recognized as the contract price minus estimated sales taxes, sales returns and discounts. The amount of income recognized is limited to the part where it is highly likely that there will be no significant reversal in the future, and the estimate is updated on each balance sheet date. The payment terms for sales transactions are that the general sales payment period is 2 months, and the sales of machinery and equipment are handled in accordance with the contract; part of installment sales are 1 to 3 years, and parts and accessories are 3 to 4 months.

2. Accounts receivable are recognized when the goods are delivered to the customer, because the Group has an unconditional right to the contract price from that point in time, and the consideration can be collected from the customer after that point in time.

3. (27) Government subsidy

Government subsidies are recognized at fair value when it is reasonably certain that the Company will comply with the conditions attached to the government subsidy and will receive the subsidy for sure. If the nature of the government subsidy is to compensate the expenses incurred by the Group, the government subsidy shall be recognized as the current income on a systematic basis during the period of the relevant expenses.

• (28) Operation Department

The information of the Group’s Operation Department is reported in a consistent manner with the internal management report provided to the chief operating decision maker. The chief operating decision maker is responsible for allocating resources to the Operation Department and evaluating its performance.

V. Major sources of uncertainty in significant accounting judgments, estimates and assumptions

When the Group prepared this consolidated financial report, the management used its judgment to determine the accounting policies to be adopted, and made accounting estimates and assumptions based on reasonable expectations of future events based on the conditions on the balance sheet date. The significant accounting estimates and assumptions made may differ from the actual results, and will be continuously evaluated and adjusted based on historical experience and other factors. These estimates and assumptions have the risk of causing significant adjustments to the book values of assets and liabilities in the next fiscal year. Please provide the following explanations of the uncertainties of major accounting judgments, estimates and assumptions:

(1) Important judgments used in accounting policies

no.

(2) Important accounting estimates and assumptions

Inventory evaluation

• (1) Since inventory must be priced at the lower of cost and net realizable value, the Group must use judgment and estimation to determine the net realizable value of inventory on the balance sheet date. Due to factors such as market demand and technological changes, the Group assesses the amount of inventory on the balance sheet date due to normal wear and tear, obsolescence or no market sales value, and offsets the inventory cost to the net realizable value. This inventory evaluation is mainly based on the estimated product demand in a specific period in the future, so significant changes may occur.

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• (2) On March 31, 2021, the book value of the Group’s inventory was NT$3,507,385.

VI. Explanation of important accounting items

(29) Cash and cash equivalents

ash and cash equivalents
	March 31, 2021,	December 31,
		2020 and March 31,2020
Cash:
Cash in stock	$ 9,257	$ 2,573 $ 3,352
Checking deposit	855	1,637 2,792
Demand deposit	786,949	620,968 730,811
	797,061	625,178 736,955
Cash equivalent:
Time deposit	5,910	5,896 6,228
	$ 802,971	$ 631,074 $ 743,183

1. The credit quality of the financial institutions with which the Group interacts is good, and the Group interacts with a number of financial institutions to diversify credit risks; therefore, the probability of default is very low.

2. The Group’s demand deposits for the purpose of the special provision account established by the Group on March 31, 2021, December 31, 2020, and March 31, 2020 was restricted due to long-term borrowings have the balance of NT$18,290, NT$17,870 and NT$15,500, respectively (listed under “Other financial assets – current” and “Other non-current financial assets”). Please refer to note 8 “Explanation of pledged assets.”

(30) Financial assets at fair value through profit or loss - current

Item	March 31, 2021,	December 31, 2020
		and March 31,2020
Financial assets measured
at fair value
compulsorily through
income statement
Listed and OTC stocks	$ 88,664	$ 88,664 $ 191.332
Beneficiarycertificates	10,060	5,000 5,000
	98,724	93,664 196.332
Reevaluation adjustment	7,606	7,796 ( 14,710)
	$ 106,330	$ 101,460 $ 181,622

1. The Group’s financial assets measured at fair value through income statement accounted for a net loss of NT$190 and NT$48,145 for three months ended March 31, 2021 and 2020, respectively (listed under “Other gains and losses”).

2. The Group did not pledge any financial assets measured at fair value through income statement on March 31, 2021, December 31, 2020 or March 31, 2020.

3. For information on the credit risk of financial assets measured by fair value through income statement, please refer to note 12(2) “Explanation of financial instruments.”

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(31) Net notes and accounts receivable

et notes and accounts receivable	et notes and accounts receivable	et notes and accounts receivable	et notes and accounts receivable
March 31, 2021, December 31, 2020
and March 31,2020
Notes receivable $ 449,223 $ 422,345 $ 307,753
Notes receivable on instalments 108,762 89,183 88,918
557,985 511,528 396,671
Less: Unrealized interest ( 6,218) ( 5,807) ( 4,471)
income
Allowance for loss ( 2,379) ( 3,507) ( 77)
	$ 549,388	$ 502,214	$ 392,123
Accounts receivable	$ 1,623,432	$ 1,655,557	$ 1,524,135
Accounts receivable on	23,204	35,890	27,216
instalments
	1,646,636	1,691,447	1,551,351
Less: Unrealized interest ( 173) ( 970) ( 1,392)
income
Allowance for loss ( 28,431) ( 29,138) ( 29,073)
	1,618,032	1,661,339 1,520,886

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1. The aging analysis of notes and accounts receivable is as follows:

Not overdue Overdue for less than 30 days Overdue for 31–90 days Overdue for 91–180 days Overdue for more than 181 days Not overdue Overdue for less than 30 days Overdue for 31–90 days Overdue for 91–180 days Overdue for more than 181 days	March 31,2021, Notes receivable Accounts receivable $ 557,985 $ 1,457,879 - 124,936 - 36,074 - 2,501 - 25,246 $ 557,985 $ 1,646,636	December 31,2020 and	December 31,2020 and
	Notes receivable $ 557,985 - - - - $ 557,985	Notes receivable Accounts receivable $ 505,108 $ 1,495,521 3,421 122,592 2,999 41,049 - 9,407 - 22,878 $ 511,528 $ 1,691,447 March 31,2020	Accounts receivable
			$ 1,495,521 122,592 41,049 9,407 22,878
			$ 1,691,447
		Notes receivable $ 396,671 - - - - $ 396,671	Accounts receivable
			$ 964,337 496,569 52,788 19,031 18,626
			$ 1,551,351

The above is an aging analysis based on the number of overdue days.

1. The balances of notes and accounts receivable on March 31, 2021, December 31, 2020 and March 31, 2020 were all generated from customer contracts. In addition, the receivable balance of customer contracts on January 1, 2020 is NT$2,090,854.

2. The interest income (including notes receivable on installments, accounts receivable on installments and long-term notes and accounts receivable) recognized in profit and loss for three months ended March 31, 2021 and 2020 were NT$2,859 and NT$1,805, respectively (listed under “interest income”).

3. The Group did not hold collateral as guarantee for accounts receivable as of March 31, 2021, December 31, 2020 and March 31, 2020.

4. Regardless of the collateral or other credit enhancements held, the maximum amounts of credit risk exposure of the Group’s notes or accounts receivable on March 31, 2021, December 31, 2020 and March 31, 2020 can be best represented by their book values.

5. For information on credit risk of relevant notes and accounts receivable, please refer to note 12(2) “Explanation of financial instruments.”

6. The Group did not pledge notes and accounts receivable as guarantee on March 31, 2021, December 31, 2020 and March 31, 2020.

~29~

(32) Inventories

nventories
	March 31,2021,
	Cost Allowance for loss from
	inventorydepreciation Book value
Raw material	$ 730,026 ( $ 27,828) $ 702,198
Materials	343,618 ( 13,274) 330,344
Work in progress	1,183,610 ( 30,135) 1,153,475
Finishedproducts	1,404,681 ( 83,313) 1,321,368
	$ 3,661,935 ( $ 154,550) $ 3,507,385

	December 31,2020 and
	Cost Allowance for loss from
	inventorydepreciation Book value
Raw material	$ 571,048 ( $ 26,512) $ 544,536
Materials	344,723 ( 12,881) 331,842
Work in progress	1,092,223 ( 31,378) 1,060,845
Finishedproducts	1,467,754 ( 87,531) 1,380,223
	$ 3,475,748 ( $ 158,302) $ 3,317,446

	March 31,2020
	Cost Allowance for loss from
	inventorydepreciation Book value
Raw material	$ 615,353 ( $ 26,215) $ 589,138
Materials	321,634 ( 13,134) 308,500
Work in progress	1,084,407 ( 28,788) 1,055,619
Finishedproducts	1,446,696 ( 81,025) 1,365,671
	$ 3,468,090 ( $ 149,162) $ 3,318,928

~30~

The Group’s current inventory costs recognized as expense impairments:

he Group’s current inventory costs recognized as expense impairments:	he Group’s current inventory costs recognized as expense impairments:
January to March of January to March
2021 of 2020
Cost of inventory sold 1,914,564 $ 1,631,689
Inventory depreciation loss (appreciation gain) (
(note) 3,752) 8,484
Inventory loss 390 249
Income from sale of scrapped inventories ( 13,725) ( 9,334)
	1,897,477 $ 1,631,088

• (Note) The Group sold and scrapped inventories for three months ended March 31, 2021 for which depreciation losses had been provided in previous years, and resulted in a gain of inventory depreciation recovery which was recognized as a deduction of cost of goods sold.

For the Group’s inventories pledged as guarantee on March 31, 2021, December 31, 2020 and March 31, 2020, please refer to note 8 “Explanation of pledged assets.”

(33) Financial assets at fair value through other comprehensive income - non-current

Item	March 31, 2021,	December 31, 2020
		and March 31,2020
Equity instruments
Listed and OTC stocks	621,309	$ 621,309 $ 621,309
Unlisted, non-OTC and	913	913 3,594
non-emerging market stocks
	622,222	622,222 624,903
Reevaluation adjustment	56,660	22,361 ( 145,663)
	678,882	$ 644,583 $ 479,240

1. The Group chose to classify equity investments that receive stable dividends as financial assets measured at fair value through other comprehensive income. The fair values of these investments on March 31, 2021, December 31, 2020 and March 31, 2020 were NT$678,882, NT$644,583 and NT$479,240, respectively.

2. The details of the Group’s financial assets measured at fair value through other comprehensive income which are recognized in profit and loss and comprehensive income are as follows:

are as follows:
	January to March of January to March
	2021 of 2020
Equity instruments measured at fair value
through other
comprehensive income
Changes in fair value recognized in other comprehensive income (listed under “Other equity interest”)	34,299 ( 222,925)

1. Regardless of the collateral or other credit enhancements held, the maximum amounts of credit risk exposure of the Group’s financial assets measured at fair value through other comprehensive income on March 31, 2021, December 31, 2020 and March 31, 2020 can

~31~

be best represented by their book values.

1. For information on financial assets at fair value through other comprehensive income - noncurrent credit risk information, please refer to note 12(2) “Explanation of financial instruments.”

2. Regarding the Group’s Financial assets at fair value through other comprehensive income - non-current pledges as guarantee, please refer to note 8 “Explanation of pledged assets.”

~32~

(34) Property, plant and equipment

(34) Pro	perty, plant and equipment	perty, plant and equipment	perty, plant and equipment	perty, plant and equipment	perty, plant and equipment	perty, plant and equipment	perty, plant and equipment
	Land Houses and construction Machines and equipment Utility equipment Transportation equipment Office equipment Other devices							Equipment pending inspection and construction in progress Total
Three months ended March 31,2021 Cost
	1,575,982 $ 1,923,586 $ 4,491,495 $ 95,270 $ 98,464 $ 117,927 $ 638,638							$ 9,930 $ 8,951,292
Cumulative	- ( 1,378,319) ( 3,690,654) ( 69,963) ( 73,137) ( 100,357) ( 492,761)							- ( 5,805,191)
depreciation
Cumulative	-	- ( 42)		-	-	-	-	- ( 42)
impairment
	1,575,982	$ 545,267	$ 800,799	$ 25,307	$ 25,327	$ 17,570	$ 145,877	$ 9,930	$ 3,146,059
Three months ended
March 31,2021
January 1	1,575,982	$ 545,267	$ 800,799	$ 25,307	$ 25,327	$ 17,570	$ 145,877	$ 9,930	$ 3,146,059
Addition	-	725 ( 346)		-	-	1,059	2,108	3,583	7,129
Acceptance and	-	- 2,139		-	-	713	- ( 2,852)		-
transfer in
Transfer in from	-	- 1,813		-	-	-	- -		1,813
inventories
Transfer in from	-	- 1,266		-	151	31	70 4,840		6,358
prepaid equipment expenses
Depreciation	- ( 11,480) ( 40,241) ( 950) ( 2,357) ( 1,827) ( 11,297) - ( 68,152)
expenses
Disposal – cost	- ( 95) ( 7,608)			- ( 2,196) ( 1,146) ( 309) - ( 11,354)
- cumulative	- 88 7,350			- 2,133 1,145 310 - 11,026
depreciation
Net exchange (	2,385) ( 2,009) ( 7,375)			- ( 54) ( 53) ( 544) ( 19) ( 12,439)
difference
March31	1,573,597	$ 532,496	$ 757,797	$ 24,357	$ 23,004	$ 17,492	$ 136,215	$ 15,482	$ 3,080,440
March 31, 2021,
Cost	1,573,597	$ 1,919,036	$ 4,473,825	$ 95,270	$ 96,120	$ 118,258	$ 643,249	$ 15,482	$ 8,934,837
Cumulative	- ( 1,386,540) ( 3,715,986) ( 70,913) ( 73,116) ( 100,766) ( 507,034)							- ( 5,854,355)
depreciation
Cumulative	-	- ( 42)		-	-	-	-	- ( 42)
impairment
	1,573,597	$ 532,496	$ 757,797	$ 24,357	$ 23,004	$ 17,492	$ 136,215	$ 15,482	$ 3,080,440
	Land	Houses and	Machines and	Utility	Transportation	Office	Otherdevices	Equipment	Total

~33~

	construction equipment equipment equipment equipment	construction equipment equipment equipment equipment	construction equipment equipment equipment equipment	construction equipment equipment equipment equipment	construction equipment equipment equipment equipment	construction equipment equipment equipment equipment	construction equipment equipment equipment equipment	pending inspection and construction in progress	pending inspection and construction in progress
Three months ended March 31,2020,
Cost	1,583,137 $ 1,866,432 $ 4,258,634 $ 87,132 $ 101,740 $ 115,166 $ 630,610							$ 49,696 $ 8,692,547
Cumulative	- ( 1,326,761) ( 3,445,510) ( 66,494) ( 71,170) ( 99,037) ( 450,608)							- ( 5,459,580)
depreciation
Cumulative	-	- ( 439)		-	-	-	-	- ( 439)
impairment
	1,583,137	$ 539,671	$ 812,685	$ 20,638	$ 30,570	$ 16,129	$ 180,002	$ 49,696	$ 3,232,528
Three months ended
March 31,2020
January 1	1,583,137	$ 539,671	$ 812,685	$ 20,638	$ 30,570	$ 16,129	$ 180,002	$ 49,696	$ 3,232,528
Addition	-	525	8,714	-	1,325	355	1,561	10,031	22,511
Acceptance and	-	26,730	-	4,749	-	140	- ( 31,619)		-
transfer in
Transfer in from	-	-	23,122	-	-	-	- -		23,122
inventories
Transfer in from	-	-	800	-	-	13	364 3,127		4,304
prepaid equipment expenses
Depreciation	- ( 11,005) ( 39,346) ( 772) ( 2,302) ( 1,240) ( 13,257) - ( 67,922)
expenses
Disposal – cost	- - ( 13,711)			- ( 1,187) ( 807) ( 1,116) - ( 16,821)
— cumulative	- - 13,643			- 1,172 780 1,116 - 16,711
depreciation
Net exchange (	14,310) ( 7,710) ( 29,575)			- ( 307) ( 263) ( 870) ( 29) ( 53,064)
difference
March 31	1,568,827	$ 548,211	$ 776,332	$ 24,615	$ 29,271	$ 15,107	$ 167,800	$ 31,206	$ 3,161,369
March 31, 2020
Cost	1,568,827	$ 1,879,730	$ 4,237,806	$ 91,881	$ 98,336	$ 113,723	$ 623,611	$ 31,206	$ 8,645,120
Cumulative	- ( 1,331,519) ( 3,461,035) ( 67,266) ( 69,065) ( 98,616) ( 455,811)							- ( 5,483,312)
depreciation
Cumulative	-	- ( 439)		-	-	-	-	- ( 439)
impairment
	1,568,827	$ 548,211	$ 776,332	$ 24,615	$ 29,271	$ 15,107	$ 167,800	$ 31,206 $ 3,161,369

~34~

1. The property, plant and equipment of the Group as of March 31, 2021, December 31, 2020 and March 31, 2020 were assets for self-use.

2. From January to March 2021 and 2020, there was no interest capitalization of property, plant and equipment.

3. For the impairment of property, plant and equipment, please refer to note 6(10) “Explanation of impairment of non-financial assets.”

4. For information on guarantees provided by the Group with property, plant and equipment on March 31, 2021, December 31, 2020 and March 31, 2020, please refer to note 8 “Explanation of pledged assets.”

5. (35) Lease transaction – lessee

6. The underlying assets leased by the Group include land (including the land in Dayong Section of Gangshan District, Kaohsiung and the set right-of-use of land of Songmushan Management District, Dalang Town, Dongguan City and Baihe Town, Shanghai signed with the People’s Republic of China), buildings and cars for business purpose, and the lease contract period usually ranges from 1 to 50 years. The lease contract is negotiated individually and contains various terms and conditions, without other restrictions imposed.

7. Information on the book value of right-of-use assets and the recognized depreciation expenses is as follows:

expenses is as follows:
	March 31, 2021,	December 31, 2020 and March 31,2020 Book value Book value $ 109,963 $ 93,463 77,536 49,666 1,534 1,641 $ 189,033 $ 144,770 January to March of 2021 January to March of 2020 Depreciation expense Depreciation expense 1,392 $ 1,197 6,247 5,385 321 321 7,960 $ 6,903
	Book value
Land	108,083
Houses and	72,294
construction
Transportation	1,213
equipment
	181,590
Land
Houses and construction
Transportation equipment

1. The increase of the Group’s right-of-use assets for three months ended March 31, 2021 and 2020 was NT$1,002 and NT$-, respectively.

~35~

1. Information about profit and loss items related to lease contracts is as follows:

		January to March of	January to March
		2021	of 2020
Items that affect current profit and loss
Interest expenses on lease liabilities		651	643
Expenses for short-term leases		5,863	1,934

1. The Group’s total lease related cash outflows for three months ended March 31, 2021 and 2020 were NT$12,920 and NT$8,309, respectively.

2. For the Group’s right-of-use assets pledged as of March 31, 2021, December 31, 2020, and March 31, 2020, please refer to note 8 “Explanation of pledged assets.”

3. (36) Intangible assets

5. The Group’s total lease related cash outflows for three months ended March 31, 2021 and 2020 were NT$12,920 and NT$8,309, respectively. 6. For the Group’s right-of-use assets pledged as of March 31, 2021, December 31, 2020, and March 31, 2020, please refer to note 8 “Explanation of pledged assets.” Intangible assets	5. The Group’s total lease related cash outflows for three months ended March 31, 2021 and 2020 were NT$12,920 and NT$8,309, respectively. 6. For the Group’s right-of-use assets pledged as of March 31, 2021, December 31, 2020, and March 31, 2020, please refer to note 8 “Explanation of pledged assets.” Intangible assets	5. The Group’s total lease related cash outflows for three months ended March 31, 2021 and 2020 were NT$12,920 and NT$8,309, respectively. 6. For the Group’s right-of-use assets pledged as of March 31, 2021, December 31, 2020, and March 31, 2020, please refer to note 8 “Explanation of pledged assets.” Intangible assets
Computer software
January to March of January to March
2021 of 2020
January 1
Original cost 30,881 $ 27,244
Cumulative amortization ( 20,235) ( 16,618)
	10,646	$ 10,626
January to March
January 1	10,646	$ 10,626
Addition – from a separate acquisition	634	429
Amortization fee ( 1,185) ( 1,031)
Resale – cost ( 723) ( 827)
- Cumulative amortization 723 827
Net exchange difference ( 27) ( 36)
March 31	10,068	$ 9,988
March 31
Original cost	30,724	$ 26,768
Cumulative amortization ( 20,656) ( 16,780)
	10,068 $ 9,988

1. There was no interest capitalization for three months ended March 31, 2021 and 2020.

2. The details of the amortization expenses of intangible assets are as follows:

	January to March of January to March
	2021 of 2020
Operating costs	115 $ 24
Selling expenses	109 48
General and administrative expenses	449 629
Research and development expenses	512 330
	1,185 $ 1,031

1. The Group did not pledge intangible assets as guarantee on March 31, 2021, December 31, 2020 and March 31, 2020.

~36~

- (9) Long term notes and accounts receivable

ong-term notes and accounts receivable	ong-term notes and accounts receivable
March 31, 2021, December 31, 2020 and March 31,2020 Long-term notes receivable 46,600 $ 49,179 $ 36,558 Long-term installment accounts receivable - 8,171 40,818 46,600 57,350 77,376 Less: Unrealized interest income ( 5,585) ( 6,290) ( 5,972) 41,015 $ 51,060 $ 71,404
income
	41,015

1. The Group’s long-term accounts receivable meet the credit standards set according to the industry characteristics, business scale and profitability of the counterparty.

2. There were no overdue long-term notes receivable and long-term instalment accounts receivable of the Group as of March 31, 2021, December 31, 2020, and March 31, 1991.

3. The balances of long-term notes and accounts receivable on March 31, 2021, December 31, 2020 and March 31, 2020 were all generated by customer contracts. In addition, the balance of long-term notes and accounts receivable related to customer contracts on January 1, 2020 is NT$66,525.

4. Regardless of the collateral or other credit enhancements held, the maximum amounts of credit risk exposure of the Group’s long-term notes receivable and long-term instalment accounts receivable on March 31, 2021, December 31, 2020 and March 31, 2020 can be best represented by their book values.

5. For the interest income recognized in profit and loss for three months ended March 31, 2021 and 2020, please refer to note 6(3) “Explanation of the net amount of notes and accounts receivable.”

6. The Group did not hold collateral as guarantee for long-term accounts receivable as of March 31, 2021, December 31, 2020 and March 31, 2020.

7. The Group did not pledge long-term notes and accounts receivable as guarantee on March 31, 2021, December 31, 2020 and March 31, 2020.

8. For the credit risk information of long-term notes and accounts receivable, please refer to note 12(2) “Explanation of financial instruments.”

9. (10) Impairment of non-financial assets

10. The Group did not recognize any impairment loss for three months ended March 31, 2021 and 2020.

11. (11) 2. As of March 31, 2021, December 31, 2020 and March 31, 2020, the cumulative impairment loss of property, plant and equipment after recognition and disposal and reversal was NT$42, $42, and NT$439, respectively. Short term borrowings

	Nature of borrowing	March 31,2021,	Interest rate range	Guarantees
Bank loans
	Unsecured loans	1,460,545	0.76%～1.71%	None
	Secured loans	599,030	1.65%～10.75%	note

~37~

2,059,575

Nature of borrowing	December 31, 2020 Interest rate range
	and Guarantees
Bank loans
Unsecured loans	1,307,398 0.77%～1.71% None
Secured loans	688,255 2.00%～10.75% note
	1,995,653
Nature of borrowing	March 31,2020 Interest rate range Guarantees
Bank loans
Unsecured loans	1,191,923 0.88%～3.70% None
Secured loans	970,715 2.00%～10.75% note
	2,162,638

(Note) For the collateral for the above-mentioned short-term loans, please refer to note 8 “Explanation of pledged assets.”

For the interest expenses recognized in the profit and loss for three months ended March 31, the Republic of China 110 and 109, please refer to Note VI. (24) Explanation of Financial Costs.

(12) Short-term notes and bills payable

“Explanation of pledged assets.” For the interest expenses recognized in the profit and loss for three months ended March 31, the Republic of China 110 and 109, please refer to Note VI. (24) Explanation of Financial Costs. hort-term notes and bills payable	“Explanation of pledged assets.” For the interest expenses recognized in the profit and loss for three months ended March 31, the Republic of China 110 and 109, please refer to Note VI. (24) Explanation of Financial Costs. hort-term notes and bills payable	“Explanation of pledged assets.” For the interest expenses recognized in the profit and loss for three months ended March 31, the Republic of China 110 and 109, please refer to Note VI. (24) Explanation of Financial Costs. hort-term notes and bills payable	“Explanation of pledged assets.” For the interest expenses recognized in the profit and loss for three months ended March 31, the Republic of China 110 and 109, please refer to Note VI. (24) Explanation of Financial Costs. hort-term notes and bills payable	“Explanation of pledged assets.” For the interest expenses recognized in the profit and loss for three months ended March 31, the Republic of China 110 and 109, please refer to Note VI. (24) Explanation of Financial Costs. hort-term notes and bills payable
March 31, 2021, December 31, 2020 Mortgage or
and March 31,2020 guarantee
Payable commercial promissory note 40,000 $ 40,000 $ 10,000 None
Less: ( 34) ( 43) ( 11)
unamortized discount
	39,966	$ 39,957	$ 9,989
Issuing interest	1.04%	1.04%	1.05%
rate range

1. The above-mentioned commercial promissory notes payable are issued under the guarantee of the bill company for short-term capital turnover.

2. For the interest expenses recognized in the profit and loss for three months ended March 31, the Republic of China in 2010 and 1991, please refer to Note VI. (24) Explanation of Financial Costs.

(13) Provision for liabilities – current

		Warranty preparation	Warranty preparation
		January to March of	January to March
		2021	of 2020
Opening Balance		6,722	$ 8,344

~38~

New liability provision		1,111		970
Liability provision used	(	298)	(	231)
Unused amount of reversal	(	945)	(	1,408)
Ending balance		6,590	$	7,675

The Group’s warranty liability provision is mainly related to the sales of mechanical products, and the warranty liability provision is estimated based on the historical warranty information of the product.

(14) Long term borrowings

Nature of	Loan period	Interest rate	Collateral		March 31, 2021,
borrowing		range
Long-term bank
loans
Guaranteed	106.9.22–	0.97%–10.73%	Please refer to		2,594,190
bank loans	114.3.30		note 8
			“Explanation
			of pledged
			assets.”
Less: long-term	loans due within one	year or one business	cycle	(	272,396)
					2,321,794
Nature of	Loan period	Interest rate	Collateral		December 31, 2020
borrowing		range			and
Long-term bank
loans
Guaranteed	106.9.22–	1.10%–10.73%	Please refer to		2,460,615
bank loans	114.3.30		note 8
			“Explanation
			of pledged
			assets.”
Less: long-term	loans due within one	year or one business	cycle	(	261,492)
					2,199,123
Nature of	Loan period	Interest rate	Collateral		March 31, 2020
borrowing		range
Long-term bank
loans
Guaranteed	106.9.22–	0.60%–10.73%	Please refer to		2,576,603
bank loans	113.8.28		note 8
			“Explanation
			of pledged
			assets.”
Less: long-term	loans due within one	year or one business	cycle	(	247,395)
					2,329,208

For the interest expenses recognized in the profit and loss for three months ended March 31, the Republic of China 110 and 109, please refer to Note VI. (24) Explanation of Financial Costs.

(15) Pension

1. In accordance with the provisions of the “Labor Standards Act” of the Republic of China,

~39~

the Company and its domestic subsidiaries have established retirement measures with defined benefits applicable to various service years of all regular employees before the implementation of the “Labor Pension Act” of the Republic of China on July 1, 2015, as well as the subsequent years of service of employees who choose to continue to apply the Labor Standards Act after the implementation of the “Labor Pension Act” of the Republic of China. For employees who meet the requirements for retirement, the pension payment is calculated based on the years of service and the average salary of the 6 months before retirement. Two base points are given for each year of service under 15 years (inclusive), and for each year of service over 15 years, one base point is given for one full year, but the cumulative maximum is limited to 45 base points. The Company allocates 4% of the total salary to a retirement fund on a monthly basis and deposits it in a special account at the Bank of Taiwan in the name of the Labor Retirement Reserve Supervisory Committee. In addition, before the end of each year, the Company estimates the balance of the labor retirement reserve fund in the preceding paragraph. If the balance is insufficient to pay the pension amount of the forecasted eligible employees in the next year in accordance with the foregoing calculation, the Company will allocate the difference in one go before the end of the month. The relevant information about the above-mentioned defined welfare pension measures and the fact that the defined welfare pension measures apply to the subsidiary PT. Moonlion Industries Indonesia is disclosed as follows:

• (1) Retirement costs recognized by the Group in accordance with the above-mentioned pension measures for three months ended March 31, 2021 and 2020 were NT$2,667 and NT$4,226, respectively.

• (2) The estimated contribution of the Group to the retirement plan in the next year is NT$3,713.

• Since July 1, 2005, the Company and its domestic subsidiaries have established defined retirement measures in accordance with the “Labor Pension Act” of the Republic of China applicable to employees of the ROC nationality. The employees of the Company and its domestic subsidiaries who choose to apply the labor pension system stipulated in the “Labor Pension Act” of the Republic of China, 6% of their salaries is allocated to the individual accounts of the employees at the Labor Insurance Bureau. The payment is based on the employee’s individual retirement pension account and the amount of accumulated income, and is received by the employee in the form of monthly pension or lump-sum pension. In accordance with the pension insurance system prescribed by the government of the People’s Republic of China, the subsidiaries of the Group allocate pension insurance funds (note) at a certain rate of the total salary of local employees every month, and the retirement pension of each employee is managed and arranged by the local government. Subsidiaries have no further obligations except for monthly allocations. The cost of pensions recognized in accordance with the above-mentioned pension measures for three months ended March 31, 2021 and 2020 were NT$11,765 and NT$9,237, respectively.

• (Note) Affected by the severe COVID-19 epidemic, the local governments of some subsidiaries have preferentially exempted pension insurance from February to December of 2020.

(16) Share capital

1. The adjustment of the number of the Company’s ordinary shares outstanding at the beginning and end of the period is as follows: (Unit: thousand shares)

~40~

	January to March January to March
	of 2021 of 2020
Beginning and ending share numbers	287,774 287,774

1. Treasury stocks

2. (1) The reasons for the Company’s share buyback and the changes in its quantity are as follows: (Unit: thousand shares)

follows: (Unit: thousand shares)	follows: (Unit: thousand shares)	follows: (Unit: thousand shares)
Januaryto March of 2021
Reason for buyback Number of shares at the beginning of the period Increase in the period Shares of parent company held by subsidiaries which are transferred from long- term investment to treasury stocks 23,830 - Januaryto March of 2020			Decrease in the period -	Number of shares at the end of the period
				23,830
Reason for buyback Shares of parent company held by subsidiaries which are transferred from long- term investment to treasury stocks	Number of shares at the beginning of the period 23,830	Increase in the period -	Decrease in the period -	Number of shares at the end of the period
				23,830

• (2) The subsidiaries did not sell their holdings of shares in the Company for three months ended March 31, 2021 and 2020, and the book value (cost) at the end of the period was both NT$288,910. On March 31, 2021, December 31, 2020 and March 31, 2020, the market prices were NT$475,417, NT$518,312 and NT$397,969, 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 three months ended March 31, 2021 and 2020 were NT$14,298 and NT$-, respectively.

• (3) The reasons and the number of shares bought back on March 31, 2021, December 31, 2020 and March 31, 2020 remained unchanged, and the details are as follows:

Name of share holding Reason for buyback Number of Book company shares value

~41~

Chun Yu Investment Co., Ltd.	Shares of parent company held by subsidiaries which are transferred from long-term investment to treasury stocks	(thousand shares) 23,830
			$ 288,910

1. As of March 31, 2021, the total rated capital of the Company was NT$3,920,696, and the total paid-in capital was NT$2,877,740, divided into 287,774 thousand shares, with an amount of NT$10 each and issued in installments. The payment for the issued shares of the Company has been received in full.

2. (17) Capital surplus

3. In accordance with the provisions of the Company Act of the Republic of China, the excess proceeds of shares issued above par value and the capital reserve from donations can be used to make up for losses. When the Company has no cumulative loss, they shall be distributed in the form of new shares or cash based on the shareholders’ original shareholding ratios. In addition, in accordance with the relevant provisions of the Securities and Exchange Act of the Republic of China, when the capital reserve above is allocated for capitalization, the total amount shall not exceed 10% of the paid-in capital each year. The Company shall not use the capital reserve to compensate the capital loss unless the reserve of earnings is insufficient to compensate the capital loss. The changes in the capital reserves for three months ended March 31, 2021 and 2020 are as follows:

as follows:
Januaryto March of 2021	Acquisition or disposal of the difference between the equity price of the subsidiary company and the book value	Treasury stock trading Total
Opening Balance	26,901	$ 131,068 $ 157,969
The Company’s dividends	-	14,298 14,298
received bysubsidiaries
Ending balance	26,901	$ 145,366 $ 172,267

~42~

Januaryto March of 2020	Acquisition or disposal of the difference between the equity price of the subsidiary company and the book value	Treasury stock trading Total
Beginning and ending	26,901	$ 102,472 $ 129,373
balance

1. Regarding capital reserve – treasury stock trading, please refer to note 6(16) “Explanation of share capital.”

(18) Retained earnings

1. The legal reserve shall not be used except for compensating the Company’s losses and distribution of new shares or cash in proportion to the shareholders’ original shareholdings. However, if the legal reserve is for the distribution of new shares or cash, the reserve shall be limited to the part exceeding 25% of the paid-in capital.

2. According to the provisions of the Company’s articles of association, the Company may, in accordance with the provisions of the Company Act, distribute earnings or make up for losses after the end of each semi-accounting year. When distributing earnings, it is necessary to estimate and retain taxes payable, make up for losses in accordance with the law, and set aside the legal reserve. However, this is not applicable when the legal reserve has reached the paid-in capital amount. If the earnings are distributed in cash, it shall be processed based on the resolution of the board meeting; if new shares are issued, it shall be processed by the resolution of the shareholders’ meeting in accordance with regulations.

In addition to paying all taxes and making up previous years’ losses in accordance with the law, 10% of the balance of the earnings shall first be appropriated as the legal reserve, and other special earnings reserves shall be reversed or appropriated in accordance with regulations; the balance plus the annual cumulative Unappropriated retained earnings is the cumulative distributable earnings, and an earnings distribution proposal shall be proposed by the board meeting and submitted to the shareholders’ meeting for resolution. The Company authorizes the board of directors to distribute dividends and bonuses, and all or part of the capital reserve or legal reserve in cash based on a majority resolution made in a board meeting attended by more than two-thirds of the directors; the resolution shall be reported to the shareholders’ meeting, and not subject to the resolution by the shareholders’ meeting. The Company’s dividend policy shall be based on its earnings, while considering factors such as capital requirements for current and future development and shareholders’ interests, and in principle the dividend ratio shall not be less than 50%. However, if due to industrial environment changes or the requirement of the Company’s operating plan, the board of directors may submit a proposal of adjustment to the shareholders’ meeting for resolution.

1. Special earnings reserve:

2. (1) When the Company distributes earnings, the debit balance of Other equity interest items on the balance sheet date of the current year shall be allocated to the special earnings reserve before the earnings can be distributed. When the debit balance of Other equity interest items is subsequently reversed, the reversal amount may be

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included in distributable earnings.

  - (2)  When the Company first adopted IFRSs, the special earnings reserve appropriated in accordance with the letter referenced Jin-Guan-Cheng-Fa No. 1010012865 dated April 6, 2012 was NT$430,610. When the Company subsequently uses, disposes of or reclassifies related assets, the proportion of the special earnings reserve originally appropriated shall be reversed.

1. The cash dividend recognized by the Company as distributed to the owner in 2020 was NT$345,329 (NT$1.2 per share). On March 10, 2021, the board meeting decided that the cash dividend for 2020 was NT$172,664 (NT$0.6 per share), and the dividend has not yet been distributed (listed under “other payables”).

2. (19) Other equity interest

4. The cash dividend recognized by the Company as distributed to the owner in 2020 was NT$345,329 (NT$1.2 per share).On March 10, 2021, the board meeting decided that the cash dividend for 2020 was NT$172,664 (NT$0.6 per share),and the dividend has not yet been distributed (listed under “other payables”). her equity interest	4. The cash dividend recognized by the Company as distributed to the owner in 2020 was NT$345,329 (NT$1.2 per share).On March 10, 2021, the board meeting decided that the cash dividend for 2020 was NT$172,664 (NT$0.6 per share),and the dividend has not yet been distributed (listed under “other payables”). her equity interest	4. The cash dividend recognized by the Company as distributed to the owner in 2020 was NT$345,329 (NT$1.2 per share).On March 10, 2021, the board meeting decided that the cash dividend for 2020 was NT$172,664 (NT$0.6 per share),and the dividend has not yet been distributed (listed under “other payables”). her equity interest
Januaryto March of 2021
Foreign currency conversion		Unrealized evaluation gains and losses Total
January 1 to March 31, ( 185,009)		$ 22,362 ( $ 162,647)
Evaluation adjustment – foreign currency conversion ( 18,672)		- ( 18,672)
Evaluation adjustment – unrealized evaluation gains and losses -		34,299 34,299
March 31, 2021, ( 203,681)		$ 56,661 ( $ 147,020)
	Januaryto March of 2020
	Foreign currency conversion Unrealized evaluation gains and losses Total
January 1 to March 31, ( 172,821) $ 77,263 ( $ 95,558)
Evaluation adjustment – foreign currency conversion ( 64,993) - ( 64,993)
Evaluation adjustment – unrealized evaluation gains and losses - ( 222,925) ( 222,925)
March 31, 2020 ( 237,814) ( $ 145,662) ( $ 383,476)

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(20) Operating revenue

erating revenue
	January to March January to March
	of 2021 of 2020
Income from customer contracts	2,316,921 $ 1,936,692

1. Details of customer contractual income

The Group’s income is derived from the provision of goods transferred at a certain point in time. The income can be divided into the following main product lines:

	Januaryto March of 2021	Januaryto March of 2021
Mainproduct line	Screw Department	Machinery Department Total
Screws and nuts	1,314,746	$ - $ 1,314,746
Wire	693,059	- 693,059
Machinery equipment	-	244,570 244,570
Other	54,099	10,447 64,546
	2,061,904	$ 255,017 $ 2,316,921
	Januaryto March of 2020
Mainproduct line	Screw Department	Machinery Department Total
Screws and nuts	1,156,407	$ - $ 1,156,407
Wire	463,188	- 463,188
Machinery equipment	-	258,540 258,540
Other	33,810	24,747 58,557
	1,653,405	$ 283,287 $ 1,936,692

2. Contractual liabilities

• (1) The balances of contract liabilities related to customer contractual income recognized by the Group on March 31, 2021, December 31, 2020 and March 31, 2020 were NT$311,537, NT$243,739 and NT$130,723, respectively.

• (2) The contractual liabilities of the Group as of January 1, 2021 and 2020 were NT$243,739 and NT$159,259, respectively, and the revenue recognized for three months ended March 31, 2021 and 2020 were NT$81,071 and NT$56,011, respectively.

(21) Interest income

respectively. erest income
	January to March January to March
	of 2021 of 2020
Interest on bank deposits	540 $ 278
Other interests	2,859 1,805
	3,399 $ 2,083

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(22) Other income

her income
	January to March January to March
	of 2021 of 2020
Rental income	441 $ 476
Other income	14,494 9,373
	14,935 $ 9,849
her gains and losses
	January to March January to March
	of 2021 of 2020
Appraisal loss of financial assets ( 190) ( $ 48,145)
measured at fair value through income statement
Loss from disposal of property, plant and ( 224) ( 110)
equipment
Net foreign currency exchange loss ( 2,806) ( 10,631)
Miscellaneous expenditure ( 2,284) ( 1,625)
( 5,504) ( $ 60,511)
nancial cost
	January to March January to March
	of 2021 of 2020
Interest expenses:
Bank loans	21,176 $ 30,543
Interest on lease liabilities	651 643
	21,827 $ 31,186

(23) Other gains and losses

(24) Financial cost

(25) Additional information on the nature of the cost

	January to March of 2021	January to March of 2021
	Attributable to operating costs	Attributable to operating expenses Total
Employee benefits	216,450	$ 107,847 $ 324,297
Depreciation expense	60,588	15,524 76,112
Amortization fee	115	1,070 1,185
	277,153	$ 124,441 $ 401,594
	Januaryto March of 2020
	Attributable to operatingcosts	Attributable to operating expenses Total
Employee benefits	188,126	$ 89,784 $ 277,910
Depreciation expense	60,248	14,577 74,825
Amortization fee	24	1,007 1,031
	248,398	$ 105,368 $ 353,766

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(26) Employee benefits

ployee benefits
	Januaryto March of 2021
	Attributable to operatingcosts	Attributable to operating expenses Total
Salary expenses	186,325	$ 93,085 $ 279,410
Labor and health insurance	14,704	5,509 20,213
expenses
Pension expenses	9,767	4,665 14,432
Other employment expenses	5,654	4,588 10,242
	216,450	$ 107,847 $ 324,297
	Januaryto March of 2020
	Attributable to operatingcosts	Attributable to operating expenses Total
Salary expenses	154,370	$ 74,167 $ 228,537
Labor and health insurance	14,332	5,807 20,139
expenses
Pension expenses	9,097	4,366 13,463
Other employment expenses	10,327	5,444 15,771
	188,126	$ 89,784 $ 277,910

1. According to the Company’s articles of association, if the Company makes a profit in the year, it shall allocate 2% of the profit for the year as employees’ remuneration, and may allocate 2% as directors’ remuneration. However, when the Company still has a cumulative loss, it shall reserve the compensation amount in advance.

2. The Company’s estimated amounts of employees’ remuneration for three months ended March 31, 2021 and 2020 were NT$2,097 and NT$900, respectively; the estimated amounts of directors’ remuneration are NT$2,250 and NT$900, respectively. The aforementioned amount of salary and expense items are estimated based on the profitability of each period and the percentage set in the articles of association. The employees’ remuneration and directors’ remuneration of 2020 approved by the board meeting are both NT$4,074, consistent with the amounts recognized in the 2020 financial report. Information on employees’ remuneration and directors’ remuneration approved by the Company’s board meeting can be found on the MOPS.

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(27) Income tax

1. Components of income tax expenses:

• (1) Components of income tax expenses:

mponents of income tax expenses: Components of income tax expenses:	mponents of income tax expenses: Components of income tax expenses:
January to March January to March
of 2021 of 2020
Current income tax
Income tax on current income 23,245 $ 17,009
Overestimation of income tax in ( 199) -
previousyears
Total current income tax	23,046 17,009
Deferred income tax:
The original generation and	18,386 ( 1,371)
reversal of temporarydifferences
Income tax expense	41,432 $ 15,638

• (2) The amount of income tax related to other comprehensive income:

	January to March January to March
	of 2021 of 2020
Financial statements translation	621 $ 697
differences of foreign operations

1. The profit-seeking business income tax of the Company was approved by the tax collection agency up to the year of 2019, and there was no administrative relief as of May 12, 2021.

(28) Earnings per share

May 12, 2021. rnings per share
	Januaryto March of 2021
	Amount after tax	Weighted average number of outstanding shares (thousand shares)	Earnings per
			share
			(New Taiwan
			dollar)
Basic earnings per share
Net profit for the period attributable to	123,469	263,944	$ 0.47
ordinary shareholders of the parent company
Diluted earnings per share
Net profit for the period attributable to	123,469 -	263,944 269
ordinary shareholders of the parent company
Impact of potential ordinary shares
with a diluting effect on employees’ remuneration
Impact of current net profit	123,469	264,213	$ 0.47
attributable to ordinary shareholders of the parent company plus potential ordinary shares

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(29)	Basic earnings per share Net profit for the period attributable to ordinary shareholders of the parent company Diluted earnings per share Net profit for the period attributable to ordinary shareholders of the parent company Impact of potential ordinary shares with a diluting effect on employees’ remuneration Impact of current net profit attributable to ordinary shareholders of the parent company plus potential ordinary shares Supplementary cash flow information
			Amount after tax	Weighted average number of outstanding shares (thousand shares)
		Basic earnings per share
		Net profit for the period	1,645	263,944
		attributable to ordinary shareholders of the parent company
		Diluted earnings per share
		Net profit for the period	1,645 -	263,944 452
		attributable to ordinary shareholders of the parent company
		Impact of potential ordinary
		shares with a diluting effect on employees’ remuneration
		Impact of current net profit		264,396

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January to March of January to	January to March of January to
2021 March of 2020
(2) Number of declared cash dividends 172,664 $ 345,329
Less: number of dividends received by ( 14,298) -
subsidiaries from the holdings of the parent company’s shares
Cash dividend payable at the end of the
period (listed under “other payables”)
Less: equipment payable at the end of the period (listed under “other payables”) ( 158,366) ( 345,329)
Cash dividends	- $ -

2. Business and investment activities that do not affect cash flow:

	January to March	January to March
	of 2021	of 2020
(1) Write-off of uncollectible amounts	-	$ 2
(2) Inventory transferred to property, plant	1,813	$ 23,122
and equipment
(3) Advance equipment payments	6,358	$ 4,304
transferred to property, plant and equipment

(30) Changes in liabilities from financing activities

January 1 to March 31, Changes in financing cash flow Other non-cash changes Impact of exchange rate changes March 31, 2021, January 1 to March 31, Changes in financing cash flow Other non-cash changes Impact of exchange rate changes March 31, 2020	Short term borrowings Short-term notes and billspayable Lease liability Long-term loans (including the part due within oneyear) 1,995,653 $ 39,957 $ 98,350 $ 2,460,615 63,922 - ( 6,406) 133,575 - 9 1,002 - - - 15 - 2,059,575 $ 39,966 $ 92,961 $ 2,594,190 Short term borrowings Short-term notes and billspayable Lease liability Long-term loans (including the part due within oneyear) 1,915,153 $ 9,997 $ 75,602 $ 2,695,756 247,485 - ( 5,732) ( 119,153) - ( 8) - - - - 304 - 2,162,638 $ 9,989 $ 70,174 $ 2,576,603	Guarantee deposits received Total liabilities from financing activities $ 564 $ 4,595,139 - 191,091 - 1,011 - 15 $ 564$ 4,787,256 Guarantee deposits received Total liabilities from financing activities $ 457 $ 4,696,965 - 122,600 - ( 8) - 304 $ 457$ 4,819,861	Total liabilities from financing activities
			$ 4,595,139 191,091 1,011 15
			$ 4,787,256
			Total liabilities from financing activities
			$ 4,819,861

~50~

VII. Related party transactions

(1) Name and relationship of related party

Name of related party Relationship with the Group OFCO Industrial Corp. Other related parties Gloria Material Technology Corp. Other related parties S-Tech Corp. Other related parties Taiwan Steel Transportation Co., Other related parties Ltd. China Ecotek Corporation Other related parties (note)

(Note) The Company was originally the supervisor of the company, but after the reelection of the company’s shareholders’ meeting, the Company has retired and become a non-related party since the third quarter of 2020.

(2) Major transactions with related parties

1. Operating revenue

party since the third quarter of 2020. or transactions with related parties Operating revenue
	January to March January to March
	of 2021 of 2020
Sale of goods:
Other related parties	105,216 $ 56,177

The sales transactions between the Group and related parties are handled in accordance with the general sales conditions, and the payment period has an average of 2 months. The sales of machinery and equipment are handled in accordance with the contract and some are sold in installments with a period of 1 to 3 years, and 3 to 4 months for spare parts.

2. Purchase

Purchase
	January to March January to March
	of 2021 of 2020
Purchase of goods:
Other related parties	3,320 $ 4,904

The purchase price and purchase conditions of the Group from related parties are roughly the same as those for general suppliers. The average payment period is 1 to 2 months, but the payment period may be extended by the parties’ agreement based on the funding situation.

3. Other expenses

situation. Other expenses
	January to March January to March
	of 2021 of 2020
Other related parties	10,617 $ -

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4. Amounts receivable from related parties

Amounts receivable from related parties	lated parties
March 31,2021, Accounts receivable Other related parties 75,883 Less: Unrealized interest income - 75,883 Current contract liabilities March 31,2021, Other related parties 6,690 Amounts due to related parties March 31,2021, Accounts payable Other relatedparties 2,632 Other payables Other related parties 10,430	March 31,2021,	December 31, 2020 and March 31,2020
	75,883	$ 67,052 $ 26,995
	-	- ( 15)
	75,883	$ 67,052	$ 26,980
	March 31,2021,	December 31, 2020 and
			March 31,2020
	6,690	$ -	$ -
		December 31, 2020 and
Accounts payable Other relatedparties Other payables Other related parties
			March 31,2020
	2,632	$ 4,036	$ 1,922
	10,430	$ 9,426	$ -

5. Current contract liabilities

6. Amounts due to related parties

(3) Key management salary information

ey management salary information
	January to March January to March
	of 2021 of 2020
Salary and other short-term employee benefits	15,884 $ 14,547

VIII. Pledged assets

The details of the guarantees provided with the Group’s assets are as follows:

Asset name Pledged demand deposits (note 1) Stocks of listed and OTC companies (note 2) Land (note 3) Houses and construction – net (note 3) Machinery and equipment – net (note 3) Right-of-use assets The Company’s shares (note 4)	March 31, 2021, 18,290 79,200 250,302 834,277 189,800 50,720 15,326 29,925 1,467,840	December 31, 2020 and $ 17,870 81,200 244,466 836,662 194,316 50,949 15,551 32,625 $ 1,473,639	March 31, 2020 $ 15,500 75,200 97,325 829,507 194,483 54,505 15,612 75,150 $ 1,357,282	Guarantee purpose
				Performance bonds and guarantees with short-term loans and long-term loans Short-term loan and long-term loan guarantees Long-term loan guarantee Short-term loan and long-term loan guarantees Short-term loan and long-term loan guarantees Short-term loan and long-term loan guarantees Short-term loan guarantee Long-term loan guarantee

~52~

(Note 1) Listed under “other financial assets – current” and “Other non-current financial assets.”

(Note 2) Listed under “financial assets measured at fair value through other comprehensive income -non-current.”

(Note 3) Listed under “property, plant and equipment.”

(Note 4) The subsidiary pledged the Company’s shares which are listed under “treasury stocks.”

IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

• (1) As of March 31, 2021, December 31, 2020 and March 31, 2020, the capital expenditures that the Group has signed but not yet incurred were NT$5,049, NT$8,075 and NT$3,946, respectively.

• (2) As of March 31, 2021, December 31, 2020 and March 31, 2020, the Group’s letters of credit that have been issued without bill negotiation yet are NT$223,592, NT$136,968 and NT$113,877, respectively.

• (3) For situations where the Group endorses/guarantees for others, please refer to note 13(1) 2. Explanation of endorsements/guarantees for others.

• (4) The company signed a medium-term secured syndication loan contract with 10 financial institutions including First Commercial Bank on October 5, 2019, , with a total credit line of NT$1,790,000 (including a credit line of NT$590,000 for item A, a credit line of NT$1,200,000 for item B, and a credit line of NT$720,000 for item C), of which the total drawdown balance of item B and item C shall not exceed the credit line of item B. The credit period is 5 years for each credit item, and the following items are committed to the credit bank syndicate during the credit period:

• During the credit period, the Company must maintain the following financial ratios in accordance with the audited consolidated financial statements by the certified public accountant, and be inspected once a year:

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

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

  • (3) Times interest earned: The ratio of the total amount of pre-tax net income, interest expenses, depreciation expenses and amortization expenses to interest expenses shall not be less than two times.

  • (4) Tangible rights and interests: The amount of net value minus intangible assets shall not be less than $3,000,000.

• If the Company is unable to meet the financial ratios and standards above, for the period from the date of notification by the management bank to the date of submitting a conforming consolidated financial report, the interest rate of this credit extension shall be increased by 0.10% per annum. Non-compliance with the aforementioned financial ratios shall not be regarded as a breach of contract.

As of March 31, 2021, December 31, 2020 and March 31, 2020, the Group did not breach the commitments to the aforementioned financial ratios.

• (5) On December 15, 2017, the Company signed a medium-term secured syndication loan contract with seven financial institutions including First Commercial Bank on December 15, 2017, with a total credit line of NT$3,000,000 (including a credit line of NT$1,200,000 for item A and a credit line of NT$1,800,000 for item B). The credit period is 5 years for each credit item, and

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the following items are committed to the credit bank syndicate during the credit period:

1. During the credit period, the Company must maintain the following financial ratios in accordance with the audited consolidated financial statements by the certified public accountant, and be inspected once a year:

2. (1) Current ratio: The ratio of current assets to current liabilities shall not be less than 100%.

3. (2) Debt ratio: The ratio of total debt to tangible equity shall not be higher than 200%.

4. (3) Times interest earned: The ratio of the total amount of pre-tax net income, interest expenses, depreciation expenses and amortization expenses to interest expenses shall not be less than two times.

5. (4) Tangible rights and interests: The amount of net value minus intangible assets shall not be less than $3,000,000.

6. If the Company is unable to meet the financial ratios and standards above, for the period from the date of notification by the management bank to the date of submitting a conforming consolidated financial report, the interest rate of this credit extension shall be increased by 0.10% per annum. Non-compliance with the aforementioned financial ratios shall not be regarded as a breach of contract.

As of March 31, 2021, December 31, 2020 and March 31, 2020, the Group did not breach the commitments to the aforementioned financial ratios.

• (6) Regarding whether the Company had a lawsuit with Mr. Shi-Ren at the end of 2012 regarding whether there was an employment relationship between the two parties. Mr. Shi-Ren claimed that he had worked in the Company’s reinvestment company for 26 years and 8 months, and requested the Company to pay a pension of US$642 thousand. The Kaohsiung District Court of Taiwan ruled on February 27, 2014 that the Company should pay a pension of US$642 thousand. The Company refused to accept the judgment and filed an appeal within the statutory period. On April 29, 2016, the Kaohsiung Branch of the Taiwan High Court ruled that the original judgment on February 27, 2014 was abolished, and the relevant appeal costs shall be borne by the appellee (Shi-Ren Li). Later, Shi-Ren Li filed an appeal. After the review by the Supreme Court, on August 2, 2018, the Kaohsiung Branch of the Taiwan High Court abolished the judgment except the provisional enforcement part and returned it to the Kaohsiung Branch of the Taiwan High Court for review. After the case was returned for the first time for a retrial by the Supreme Court, on April 15, 2020 the Kaohsiung Branch of the High Court of Taiwan rejected all provisional enforcement claims in the first trial by the appellant (Shi-Ren Li) via its judgment referenced 107 Chong-Lao-Shang-Geng No. 1, and the relevant litigation costs were to be borne by the appellant (Shi-Ren Li). Mr. Shi-Ren Li has continued to file an appeal which is currently under the review by the Supreme Court.

X. Major disaster loss

None.

XI. Significant subsequent events

None.

XII. Other

(1) Capital management

The Group’s capital management objectives are to ensure that the Group can continue to

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operate, maintain the best capital structure to reduce capital costs, and provide remuneration to shareholders. 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 debts.

• (2) Financial instruments

• Types of financial instruments

Please refer to note 6 “Explanation of financial assets and liabilities” for the types of financial instruments of the Group.

1. Risk management policy

2. (1) The daily operations of the Group are affected by a number of financial risks, including the market risk (including the exchange rate risk, price risk and interest rate risk), credit risk and liquidity risk. The overall risk management policy of the Group focuses on unpredictable events in the financial market, and seeks to reduce the potential adverse effects on the financial condition and financial performance of the Group.

3. (2) Risk management is carried out by the Group’s Finance Department in accordance with the policies approved by the board of directors. The Group’s Finance Department is responsible for identifying, evaluating and avoiding financial risks through close cooperation with various operating units within the Group. The board of directors has established principles for the overall risk management, and also provides written policies on specific areas and matters, such as the exchange rate risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments, and investment of remaining working capital.

4. Nature and extent of major financial risks

5. (1) Market risk

6. A. Exchange rate risk

   • (A) The Group operates transnationally, so it is subject to exchange rate risks arising from transactions that are quoted in different functional currencies of the Company and its subsidiaries which are mainly renminbi, US dollars and Indonesian rupiah. Related exchange rate risks arise from future commercial transactions and assets and liabilities already recognized.

   • (B) The management of the Group has established policies that require each company in the Group to manage exchange rate risk relative to its functional currency. Each company shall hedge their overall exchange rate risk through the Group’s Finance Department. In order to manage the exchange rate risk from future commercial transactions and assets and liabilities already recognized, companies in the Group shall use forward foreign exchange contracts through the Group’s Finance Department. Exchange rate risk will arise when future commercial transactions and assets and liabilities already recognized are denominated in a foreign currency other than the functional currency of the entity.

   • (C) The business of the Group involves certain non-functional currencies (the functional currency of the Company and some subsidiaries is New Taiwan dollars, and the functional currencies of some subsidiaries are US dollars,

~55~

renminbi and Indonesian rupiah), so it is affected by exchange rate fluctuations. Information about foreign currency assets and liabilities with significant exchange rate fluctuations is as follows:

		March 31,2021,	March 31,2021,
	(Foreign currency:	Foreign currency	Exchange
	functional currency)	(NT$thousand)	rate		Book value
Monetary assets
	Monetary items
	USD: NTD	13,933	28.54	$	397,574
	USD: RMB	3,872	6.5713		110,507
	EUR: NTD	175	33.48		5,853
	EUR: RMB	469	7.703		15,680
	RMB: NTD	8,254	4.343		35,847
	JPY: NTD	17,657	0.2577		4,557
Financial liabilities
	Monetary items
	USD: NTD	7,975	28.54		227,555
	USD: RMB	2,983	6.5713		85,134
	USF: IDR	1,810	14.525		52,053
	EUR: RMB	207	7.703		6,929
		December 31,2020		and
	(Foreign currency:	Foreign currency	Exchange
	functional currency)	(NT$thousand)	rate		Book value
Monetary assets
	Monetary items
	USD: NTD	11,338	28,48	$	322,901
	USD: RMB	4,346	6,5249		123,797
	EUR: NTD	237	35,02		8,315
	EUR: RMB	116	8,025		4,058
	RMB: NTD	8,716	4,366		38,055
Financial liabilities
	Monetary items
	USD: NTD	7,916	28,48		225,454
	USD: RMB	538	6,5249		15,325
	USF: IDR	3,111	14,200		89,690
	EUR: NTD	262	35,02		9,183

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March 31,2020	March 31,2020
(Foreign currency: functional currency) Foreign currency (NT$thousand) Exchange rate Book value
Monetary assets
	Monetary items
	USD: NTD 13,690 30,23 $ 413,785
	USD: RMB 7,374 7,0851 222,815
	EUR: NTD 1,268 33,24 42,143
	EUR: RMB 343 7,8088 11,424
	RMB: NTD 9,759 4,2647 41,621
Financial liabilities
	Monetary items
	USD: RMB 6,965 30,23 210,507
	USD: NTD 6,568 7,0851 198,472
	USF: IDR 2,648 16,310,00 81,181
	EUR: NTD 346 33,24 11,491

Sensitivity analysis of foreign-currency exchange rate risk is mainly calculated based on foreign currency items at the end of the financial reporting period. When the New Taiwan dollar appreciates/depreciates by 1% against each foreign currency, the net profit of the Group in the period of 2021 and January to March of 2020 will decrease or increase by NT$1,592 and NT$2,473.

The aggregate amounts of the Group’s monetary items recognized for three months ended March 31, 2021 and 2020 (both realized and unrealized) that have a significant impact due to exchange rate fluctuations are NT$2,806 and NT$10,631, respectively.

B. Price risk

• (A) The Group’s equity instruments exposed to price risk are financial assets measured at fair value through income statement and financial assets measured at fair value through other comprehensive income held by the Group. In order to manage the price risk of equity instrument investment, the Group diversified its investment portfolio, and the method of diversification was carried out in compliance with the limits set by the Group.

• (B) The Group mainly invests in equity instruments issued by domestic companies. The prices of these equity instruments will be affected by the uncertainty of the future values of the investment targets. If the prices of these equity instruments rise or fall by 1% while all other factors remain unchanged, the net profit after tax for the period for three months ended March 31, 2021 and 2020 due to the gain or loss of equity instruments measured at fair value through income statement will increase or decrease by NT$1,063 or NT$1,816, respectively; the net profit after tax due to the gain or loss of equity instruments measured at fair value through other comprehensive income will increase or decrease by NT$6,789 or NT$4,792, respectively.

C. Cash flow and fair value interest rate risk

• (A) The interest rate risk of the Group mainly comes from loans issued at floating interest rates which expose the Group to cash-flow interest rate risk. For three

~57~

months ended March 31, 2021 and 2020, the Group’s loans issued at floating interest rates were mainly denominated in New Taiwan dollars, US dollars, renminbi and Indonesian rupiah.

• (B) The Group’s loans are measured by amortized cost, and the prices will be adjusted according to the contractual interest rates each year. Therefore, the Group is exposed to the risk of future market interest rate changes.

• (C) When the loan interest rate rises or falls by 1% while all other factors remain unchanged, the net profit after tax for three months ended March 31, 2012 and 2020 will decrease or increase by NT$170 or NT$241 respectively, mainly due to floating Interest rate loans which result in changes in interest expenses.

(2) Credit risk

• A. The credit risk of the Group is the risk of the failure of customers or counterparties of financial instruments to fulfill their contractual obligations, thus resulting in the Group’s financial losses. The risk mainly comes from the failure of counterparties to settle accounts receivable to be paid in accordance with the terms of fund collection.

• B. The Group established the credit risk management mechanism from the perspective of the Group. For banks and financial institutions, it is set that only those with a certain independent credit rating or above can be accepted as transaction counterparties. In accordance with the internally specified credit policy, management and credit risk analysis must be conducted for each operating entity within the Group and each new customer before the setting of payment and delivery terms and conditions. The internal risk control system is used to evaluate the credit quality of customers by considering their financial status, past experience and other factors. Individual risk limits are set by the board of directors based on internal or external ratings, and the use of credit lines is regularly monitored.

• C. The Group adopts IFRS 9 on the following assumptions as the basis for judging whether the credit risk of financial instruments has increased significantly since the initial recognition:

When the contract payment is overdue for more than 30 days according to the agreed payment terms, it is deemed that the credit risk of the financial asset has increased significantly since the initial recognition.

• D. When the investment target with an independent credit rating is reduced by two levels, the Group judges that the credit risk of the investment target has increased significantly.

• E. When the default rate of the investment target exceeds 10%, the Group judges that the credit risk of the investment target has increased significantly.

• F. The Group adopts IFRS 9 on premise assumptions. When the contractual payment is overdue for more than 90 days according to the agreed payment terms, it is deemed that there has been a breach of contract.

• G. The Group classifies customers’ accounts receivable according to the characteristics of the trade credit risk, adopts a simplified approach to estimate expected credit losses with a preparation matrix, and estimates the allowance for losses of accounts receivable based on the loss rate established based on

~58~

historical and current information in a specific period. The changes in allowance for losses of notes receivable and accounts receivable based on the Group’s simplified method are as follows:

historical and current information in a specific period. The changes in allowance for losses of notes receivable and accounts receivable based on the Group’s simplified method are as follows:	historical and current information in a specific period. The changes in allowance for losses of notes receivable and accounts receivable based on the Group’s simplified method are as follows:	historical and current information in a specific period. The changes in allowance for losses of notes receivable and accounts receivable based on the Group’s simplified method are as follows:	historical and current information in a specific period. The changes in allowance for losses of notes receivable and accounts receivable based on the Group’s simplified method are as follows:
Januaryto March of 2021 Notes receivable Accounts receivable Total Balance on January 1 3,507 $ 29,138 $ 32,645 Gains from expected credit impairment ( 1,122) ( 527) ( 1,649) Exchange rate impact ( 6) ( 180) ( 186) Balance on March 31 2,379 $ 28,431 $ 30,810
Balance on March 31	2,379
	Januaryto March of 2020
	Notes receivable Accounts receivable Total
Balance on January 1	95 $ 26,633 $ 26,728
Expected credit	( 18) 2,874 2,856
impairment loss
Write-off of		- ( 2) ( 2)
uncollectible amounts
Exchange rate impact		- ( 432) ( 432)
Balance on March 31		77	$ 29,073 $ 29,150

(3) Liquidity risk

• A. The cash flow forecast is executed by the various operating entities of the Group and is summarized by the Group’s Finance Department which monitors the forecast of the Company’s liquidity needs to ensure that it has sufficient funds to meet the operating needs, and sufficient outstanding committed loan limits are maintained at any time, so that the Group will not breach the relevant loan limits or terms.

• B. The following table shows the Group’s non-derivative financial liabilities grouped according to their maturity dates, and the non-derivative financial liabilities are analyzed based on their remaining periods from the balance sheet date to the contract maturity dates. The contractual cash flow amounts disclosed in the following table are the undiscounted amounts:

~59~

March 31, 2021, Non-derivative financial liabilities Short term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liability Long-term loans (including the part due within one year) Guarantee deposits received December 31, 2020 and Non-derivative financial liabilities Short term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liability Long-term loans (including the part due within one year) Guarantee deposits received March 31, 2020 Non-derivative financial liabilities Short term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liability Long-term loans (including the part due within one year) Guarantee deposits received	Less than 1 year 2,076,959 40,000 1,147 708,835 533,396 27,191 305,145 564 Less than 1 year 2,023,684 40,000 4,241 687,916 409,649 27,587 290,331 564 Less than 1 year 2,191,502 10,000 5,422 569,719 667,356 24,247 275,872 457	1 to 2 years $ - - - - - 19,344 1,779,765 - 1 to 2 years $ - - - - - 23,133 1,911,045 - 1 to 2 years $ - - - - - 22,487 1,485,815 -	2 to 5 years $ - - - - - 23,754 582,867 - 2 to 5 years $ - - - - - 23,526 322,253 - 2 to 5 years $ - - - - - 17,966 880,494 -	More than 5 years
				$ - - - - - 28,897 - - More than 5 years
				$ - - - - - 30,913 - - More than 5 years
				$ - - - - - 9,461 - -

C. It is not expected that the time points of cash flows analyzed for the Group’s non-derivative financial liabilities will occur significantly earlier, or the actual amount will be significantly different.

• (3) Fair value information

• The various levels of evaluation techniques used to measure the fair value of financial

~60~

and non-financial instruments are defined as follows:

• Level I: The quoted price (unadjusted) of the same assets or liabilities that the enterprise can obtain in the active market on the measurement date. An active market refers to a market in which asset or liability transactions occur with sufficient frequency and quantity to provide pricing information on a continuous basis. The fair value of listed and OTC stock investments and beneficiary certificates invested by the Group belong to this category.

• Level II: The directly or indirectly observable input value of an asset or liability, except for those included in the quotation of level I.

Level III: Unobservable input value of an asset or liability.

1. For financial instruments of the Group that are not measured by fair value (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, other financial assets – current, Guarantee deposits paid, long-term notes and accounts receivable, Other non-current financial assets, short-term borrowings, short-term notes payable, notes and accounts payable, other payables, lease liabilities, long-term borrowings (including the part due within one year or one business cycle) and guarantee deposits received, the book value is a reasonable approximation of the fair value.

2. Financial and non-financial instruments measured at fair value are classified based on the nature, characteristics and risks of the assets and liabilities and the level of fair value. The relevant information is as follows:

March 31, 2021, Assets: Repeatable fair value Financial assets measured at fair value through income statement Equity securities Beneficiary certificates Financial assets measured at fair value through other comprehensive income Equity securities	Level I 94,385 11,945 106,330 678,882 785,212	Level II $ - - - - $ -	Level IIII $ - - - - $ -	Total
				$ 94,385 11,945
				106,330
				678,882
				$ 785,212

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December 31, 2020 and Assets: Repeatable fair value Financial assets measured at fair value through income statement Equity securities Beneficiary certificates Financial assets measured at fair value through other comprehensive income Equity securities March 31, 2020 Assets: Repeatable fair value Financial assets measured at fair value through income statement Equity securities Beneficiary certificates Financial assets measured at fair value through other comprehensive income Equity securities	Level I 95,215 6,245 101,460 644,583 746,043 Level I 176,622 5,000 181,622 479,240 660,862	Level II $ - - - - $ - Level II $ - - - - $ -	Level IIII $ - - - - $ - Level IIII $ - - - - $ -	Total
				$ 95,215 6,245
				101,460
				644,583
				$ 746,043
				Total
				$ 176,622 5,000
				181,622
				479,240
				$ 660,862

1. The methods and assumptions used by the Group to measure fair value are explained as follows:

2. (1) If the Group uses market quotations as the input value of the fair value (i.e. level I), the breakdown is as follows according to the characteristics of the instrument:

	Listed(OTC)stocks	Open-end fund
Market price	Closing price	Fund net worth

• (2) Except for the above-mentioned financial instruments with active markets, the fair value of the remaining financial instruments is obtained by evaluation technologies or by referring to the quotations of counterparties. For the fair value obtained through the evaluation technology, the current fair value of other financial instruments with similar substantive conditions and characteristics, the discounted cash flow method or other evaluation techniques can be referred to, including the value calculated with a model based on the market information available on the consolidated balance sheet date (for example, the OTC market’s reference yield

~62~

curve and the average quoted price of Reuters commercial promissory notes).

1. The Group incorporates credit risk evaluation into the calculation of the fair value of financial and non-financial instruments, in order to respectively reflect the counterparty credit risk and the credit quality of the Group.

2. There was no transfer between level I and level II for three months ended March 31, 2021 and 2020.

3. For three months ended March 31, 2021 and 2020, there were no transfers in and out of level III.

XIII. Notes of Disclosure

(according to the regulations, only the information of January to March of 2021 is disclosed)

(1) Information About Major Transactions

1. Extension of loans to others: Please refer to the attached Table 1.

2. Endorsements/guarantees for others: Please refer to the attached Table 2.

3. Holdings of marketable securities at the end of the period (excluding investments in subsidiaries, affiliated enterprises and joint ventures): Please refer to the attached Table 3.

4. The cumulative amount of buying or selling the same securities reaches NT$300 million or more than 20% of the paid-in capital: None.

5. The amount of property acquired reaches NT$300 million or more than 20% of the paid-in capital: None.

6. The amount of disposal of property reaches NT300 million or more than 20% of the paid-in capital: None.

7. The amount of goods purchased or sold with related parties reaches NT$100 million or more than 20% of the paid-in capital: None.

8. The amount due from a related party reaches NT$100 million or more than 20% of the paid-in capital: None.

9. Engagement in derivative trading: None.

10. The business relationship and important transactions and amounts between the parent company and its subsidiaries and among subsidiaries: Please refer to the attached Table 4.

(2) Reinvestment Business Related Information

Relevant information such as the name and location of the investee company (excluding the mainland investee company): Please refer to the attached Table 5.

(3) Mainland Investment Information

1. Basic information: Please refer to the attached Table 6.

2. Significant transactions that occur directly or indirectly through businesses in third regions with investee companies in mainland China: The purchase and sales transactions between the Company and the reinvested mainland company have been completely offset in the consolidated statement. For major transactions such as

~63~

purchases and sales, receivables and payments, endorsements and financing between the Company and the mainland investee company, please refer to notes 13(1) 1, 2 and 10.

(4) Major Shareholder Information

Major shareholder information: Please refer to the attached Table 7.

XIV. Department Information

(1) General information

1. The management of the Group has identified the departments to be reported based on the reporting information used by the operational decision-makers for their decision making. The departments of the Group to be reported are as follows:

2. (1) Screw Department: Mainly engaged in the manufacturing, processing and trading of screws and nuts.

3. (2) Machinery Department: Mainly engaged in the manufacturing, assembling and trading of machine tools and chemical machinery.

4. (3) Investment Department: Mainly engaged in general investment.

5. The Group’s corporate composition, the basis for division of departments, and the basis for measurement of departmental information have not changed significantly during the current period.

6. The Group’s operational decision-makers mainly evaluate the performance of the operating departments based on the department’s Operating profit. The accounting policies of the operating departments are the same as in the summary description of the important accounting policies described in note 4 of the consolidated financial statements.

(2) Information on Departmental Profit and Loss, Assets and Liabilities

The information of departments to be reported as provided to the chief operational decisionmakers is as follows:

akers is as follows:
Departmental revenue Internal department revenue ( Net external income Departmental pre-tax earnings Departmental assets Departmental liabilities		Januaryto March of 2021
	Screw Department Machinery Department Investment Department Total 2,238,294 $ 261,311 $ - $ 2,499,605 176,390) ( 6,294) - ( 182,684) 2,061,904 255,017 - 2,316,921 286,236 7,043 ( 28,930) 264,349 9,046,390 1,943,311 143,290 11,132,991 5,878,835 1,081,300 63,723 7,023,858		Total

January to March of 2020

~64~

Departmental revenue Internal department revenue ( Net external income Departmental pre-tax earnings Departmental assets Departmental liabilities	Screw Department Machinery Department Investment Department Total 1,768,085 $ 319,450 $ - $ 2,087,535 114,680) ( 36,163) - ( 150,843) 1,653,405 283,287 - 1,936,692 73,569 15,527 ( 86,324) 2,772 8,648,991 1,796,770 99,324 10,545,085 5,872,766 873,228 104,052 6,850,046	Total

(3) Reconciliation Information of Departmental Profit and Loss, Assets and Liabilities

1. Sales between departments are carried out in accordance with the fair-trade principle. The external income reported to the chief operational decision-makers is measured in the same way as the income in the consolidated comprehensive income statement. The departmental pre-tax profit and loss and adjustments to pre-tax profit and loss are as follows:

follows:	follows:
January to March January to March
of 2021 of 2020
Pre-tax profit and loss of operating departments to be reported 264,349 $ 2,772 Offset of inter-departmental profits and losses ( 73,158) 28,533
losses
Profit before income tax	191,191 $ 31,305

1. The same measurement method is adopted for the total assets and total liabilities provided to the chief operational decision-makers and the assets and liabilities in the Group’s consolidated financial report, so no adjustment is required.

~65~

Chun Yu Work & Co., Ltd. and Subsidiaries

							Chun Yu Work & Co., Ltd. and Subsidiaries	Chun Yu Work & Co., Ltd. and Subsidiaries	Chun Yu Work & Co., Ltd. and Subsidiaries
Table 1 No.		Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended 2021	Loans to others Three Months Ended March 31, 2021 Balance at March 31, Actual amount Interest 2021 drawn down rate			Nature of loan （Note 1）	Amount of transactions with the borrower	Reason for short-term financing	Allowance for uncollectible Collateral accounts Item Value			Limit on loans granted to a single party （Note 2）	Expressed in thousands of NTD Ceiling on total loans granted （Note 3） Footnote
								Actual amount drawn down
														Item	Value
	0	Chun Yu Works & Co., Ltd.	Chun Yu (Dongguan) Metal Products Co., Ltd.	Other receivables - related parties	Y	$ 307,041	$ 304,010 $	-	-	2	$	- Additional $ operating capital - $		-	$ -	1,386,060	$ 1,386,060	-

(Note 1) The numbers filled in for the nature of loan are as follows:

1. Trading Partner

2. Short-term financing.

3. (Note 2) Limit on loans granted to a single party is as follows:

4. 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.

5. 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 1:4.3430.

Table 1 Page1

Chun Yu Work & Co., Ltd. and Subsidiaries Provision of endorsements and guarantees to others Three Months ended March 31, 2021

Table 2

Expressed in thousands of NTD

Endorser/ Number guarantor

Ratio of accumulated Party being Maximum endorsement/ endorsed/guaranteed 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 guarantor provided for a March 31, March 31, Actual amount secured with guarantor guarantees company to parent Mainland Companyname （Note 1） singleparty 2021 2021 drawn down collateral company provided subsidiary company China Footnote

0 Chun Yu Works & Co., Ltd. 0 Chun Yu Works & Co., Ltd. 0 Chun Yu Works & Co., Ltd.

Chun Yu Works (USA) 2 $ 2,079,090 $ 199,745 $ 199,745 $ - $ - 5.76% $ 2,772,120 Y N N (Note 2) Inc. Chun Yu (Dongguan) Metal 2 2,079,090 998,725 998,725 551,738 - 28.82% 2,772,120 Y N Y (Note 2) Products Co., Ltd. Shanghai Uchee Hardware 2 2,079,090 43,863 43,430 8,686 - 1.25% 2,772,120 Y N Y (Note 2) Products Ltd.

(Note 1) The numbers filled in for the relationship with the Company are as follows:

1. Having business relationship.

1. 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) Foreign currencies are translated into New Taiwan dollars. Exchange rate of foreign currencies indicated as of report date were as follow: RMB:NTD 1:4.366

T able 2 Page1

Chun Yu Work & Co., Ltd. and Subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) March 31, 2021

Table 3

Expressed in thousands of NTD

Table 3	Expressed in thousands of NTD
General Relationship with the ledger account Securities held by Marketable securities securities issuer (Note 1)	As of March 31, 2021 Number of shares (In thousands of shares or units) Book value Ownership (%) Fair value Footnote
Chun Yu Works & Co., Ltd. Stocks - Gloria Material Technology Corporation Other related party 1 Stocks - Taiwan Styrene Monomer Corporation － 2 Stocks - China Ecotek Corporation － 2 Stocks - Ascentek Venture Capital Corporation － 2 Stocks - King Kong Iron Works, Ltd. － 2 Stocks - Pacific Electric Wire & Cable Co., Ltd. Beneficiary certificates - Yuanta Taiwan High-yield Leading Company Fund － － 2 1 Beneficiary certificates - First Gold Global AI Precision Medical Fund － 1 Chun Bang Precision Co., Ltd. Stocks - The First Insurance Co., Ltd. － 1 Stocks - Taiwan Styrene Monomer Corporation － 2 Chun Yu Investment Corp. Stocks - Chun Yu Works & Co., Ltd. The Company 1 Stocks - Taiwan Styrene Monomer Corporation － 2 Chun Yu Bio-tech Corp. Stocks - Chun Zu Machinery Industry Co., Ltd. Subsidiary 2 Stocks - Taiwan Styrene Monomer Corporation － 2	$ 5,528 $ 94,252 1.18 $ 94,252 - 11,678 225,386 2.21 225,386 - 4,333 173,331 3.50 173,331 - 14 141 1.07 141 - 304 772 0.55 772 - 14 500 6,820 - 6,820- - 347 5,125 - 5,125 - 10 133 - 133 - 6,440 124,292 1.22 124,292 - 23,830 475,417 8.28 475,417 (Note 2) (Note 3) 6,529 126,010 1.24 126,010 - 9 209 0.01 209 - 1,500 28,950 0.28 28,950 -

(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 $288,910 was recognised by the Company under ‘Treasury shares’.

Table 3 Page1

inter-company transactions during the reporting periods

Three Months Ended March 31,2021

Table 4

Expressed in thousands of NTD

Chun Yu Work & Co., Ltd. and Subsidiaries Significant

Table4			Expressed in thousands of NTD
Number (Note2) Companyname Counterparty Relationship (Note 3)		Transaction
	General ledger account Sales Accounts receivable Provision of endorsements and guarantees Provision of endorsements and guarantees Provision of endorsements and guarantees Sales Other receivable Sales Accounts receivable Sales Accounts receivable Long-term accounts receivables Other receivables Sales Accounts receivable Other receivables Sales Sales Accounts receivable Other receivables Sales Accounts receivable Sales	Amount $ 100,985 29,537 199,360 996,800 43,660 23,207 13,131 26,210 11,639 77,358 39,105 12,591 35,569 320,784 71,621 34,867 41,566 171,914 42,165 26,711 28,992 10,789 14,076	Percentage of consolidated total operating revenue or Transaction terms total assets (Note 4)
0 Chun Yu Works & Co., Ltd. Chun Yu Works (USA) Inc. 1 1 1 Chun Yu (Dongguan) Metal Products Co., Ltd. 1 Shanghai Uchee Hardware Products Ltd. 1 1 Chun Zu Machinery Industry Co., Ltd. Chun Yu Works & Co., Ltd. 2 Shanghai Chun Zu Machinery Industry Ltd. 3 Chun Yu (Dongguan) Metal Products Co., Ltd. 3 3 Pt Moon Lion Industries Indonesia 3 3 3 2 Chun Yu (Dongguan) Metal Products Co., Ltd. Scholoar Holdings Ltd. 3 Shanghai Uchee Hardware Products Ltd. 3 3 Chunyu Group Shanghai Tongsheng Trade Co., Ltd. 3 Pt Moon Lion Industries Indonesia 3 3 Shanghai Uchee Hardware Products Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. 3 3 4 Chun Yu Works (USA) Inc. Scholoar Holdings Ltd. 3 5 Chun Bang Precision Co., Ltd. Chun Yu Works & Co., Ltd. 2 2 Chun Zu Machinery Industry Co., Ltd. 3			4 months 1% - - - 2% - 9% - - 3 months - - - 3 months - - - 3 months 1% - - - - - - 3 months 4% - 1% - - 3 months 1% 3 months 2% - - - - 3 months - - - 3 months -

(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 28.48; RMB 1 : NTD 4.3660)

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, 2020 (USD 1 : NTD 29.5491; RMB 1 : NTD 4.2846).

Table 4 Page 1

Information on investees

Year ended March 31, 2021

Table 5

Chun Yu Work & Co., Ltd. and Subsidiaries

Investor Investee Location Main business activities

Initial investment amount Shares held as at December 31, 2020 Net profit (loss) Investment income (loss) Balance as at March 31, 2021 Balance as at December 31, 2020 Number of shares Ownership (%) Book value of the investee for the year ended March 31, 2021 recognised by the Company for the year ended March 31, 2021 Footnote

Chun Yu Works & Co., Ltd. Chun Bang Precision Co., Ltd. Taiwan Manufacture and trade of moulds Chun Yu Works (U.S.A.) Inc. U.S.A. Import and export of hardware products Chun Yu Investment Corporation Taiwan Professional investment Chun Yu Bio-tech Corporation Taiwan Powder metallurgy Scholoar Holdings Ltd. British Virgin Islands Reinvestment and import and export trade Sunny City International Ltd Samoa Reinvestment and import and export trade Pt Moon Lion Industries Indonesia Indonesia Manufacture and trade of screws and nuts Chun Zu Machinery Industry Co., Ltd. Taiwan Manufacture and trade of machinery Chun Zu Machinery Industry Co., Ltd. Lion City Management Ltd. Virgin Islands Professional investment

$ 125,344 $ 20,344 15,000,000 100.00 $ 205,111 $ 189 ($ 634) A subsidiary (Note 1) 114,728 114,728 3,800,000 100.00 267,858 18,712 20,389 A subsidiary 267,652 267,652 50,184,306 100.00 79,567 ( 2 8,931) ( 334) A subsidiary 90,260 60,220 10,000,000 100.00 123,629 3,227 3,222 A subsidiary 2,581,891 2,581,891 33,183,211 100.00 972,977 18,318 22,144 A subsidiary 84,824 84,824 1,000,000 100.00 265,833 6,727 6,727 A subsidiary 154,760 154,760 14,370,000 71.85 465,427 73,387 52,728 A subsidiary 52,598 52,598 28,821,939 47.81 422,316 7,818 4,982 A subsidiary 57,070 57,070 - 100.00 612,359 548,34- A subsidiary (Note 1)

(Note 1) According to regulations, the amount of investment (profit) recognized by the company is exempt from

isclosure.

(Note 2) If the amount in this table involves foreign currencies, the ending balance and book amount are converted into New Taiwan dollars at the exchange rate of the financial report date (USD: New Taiwan Dollar 1:28.535; Renminbi: New Taiwan Dollar 1: 4.343); transaction situation is based on the Republic of China Average exchange rate from January to March in 110 Republic of China Average exchange rate from January to March in 110

(U.S. Dollar: New Taiwan Dollar 1: 28.3662; Renminbi: New Taiwan Dollar 1: 4.3769) is converted to New Taiwan Dollar.

Table 5 Page 1

Chun Yu Work & Co., Ltd. and Subsidiaries Information on investments in Mainland China Three Months Ended March 31,2021

Table 6

Table 6																								Expressed in thousands of NTD
							Amount remitted from Taiwan																Accumulated
					Accumulated			to Mainland China/				Accumulated												amount
					amount of			Amount remitted back				amount				Ownership	Investment income						of	investment
					remittance from			to Taiwan	for three months			of remittance				held by	(loss) recognised				Book value of			income
					Taiwan to		ended March 31, 2021				from Taiwan to			Net income	of	the	by the Company				investments in		remitted back to
					Mainland China			Remitted to			Mainland China			investee for		Company	for three months				Mainland China		Taiwan as of
Investee in	Main business			Investment	as of March	31,	Mainland		Remitted back		as of March 31,			three months		(direct or	ended March			as of March		31,	March 31,
Mainland China	activities	Paid-in capital		method	2021			China	to Taiwan			2021		March 31,	2021	indirect)	31,2021				2021			2021	Footnote
Chun Yu (Dongguan) Metal Products Co., Ltd.	Manufacture and trade of screws and nuts	$	1,839,965	(Note 3)	$ 1,375,187		$	-	$	-	$	1,375,187	$	18,366		100%	$	18,366		$	1,001,599		$	-	(Note 9)
			(Note 1)
Shanghai Uchee Hardware Products Ltd.	Trade of screws and nuts		28,535	(Note 4)	28,535			-		-		28,535		6,727		100%		6,727			264,095			14,667	(Note 10)
																								(Note 7)
Chunyu Group Shanghai Tongsheng Trade	Trade of screws and nuts		7,590	(Note 5)		-		-		-		-			(	100%		(	(			4,206)		-	(Note 10)
															40)			40)
Co., Ltd.
Shanghai Chun Zu Machinery Industry Ltd.	Manufacture and trade of machinery		242,548	(Note 6)	57,070			-		-		57,070		19,329		47.82%		9,243			287,857			325,498	(Note 9)
			(Note 2)																					(Note 8)

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 March 31, Economic Commission of Company name 2021 Aff airs (MOEA) MOEA (Note 12) Chun Yu Works & Co., Ltd. $ 1,612,598 $ 1,612,598 (Note 11) Chun Zu Machinery Industry Co., Ltd. 57,070 185,478 571,173

(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$514 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$23,854 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 profit and loss recognized in the current period is based on the evaluation and recognition of the financial statements prepared by each investee company during the same period that have not been reviewed by accountants.

(Note 11) The MOEA approved that the operation headquarter is not subjected to the restrictions on investment to Mainland China.

(Note 12) The ceiling is calculated based on the 60% of the investor’s net assets or consolidated net assets (whichever is higher).

(Note 13) For the amounts denominated in foreign currencies, the paid-in capital, amount of remittance from Taiwan and book value as of March 31, 2021 are translated into New Taiwan dollars at the exchange rate (USD 1 : NTD 28.535; RMB 1 : NTD 4.343) 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 March 31, 2021 are translated into New Taiwan dollars at the average exchange rate for the year ended March 31, 2021 (USD 1 : NTD 28.3662; RMB 1 : NTD 4.3769).

Table 6 Page 1

Table 7	Chun	Yu Works & Co., Ltd. And subsidiaries Major shareholders information March 31,2021 Unit:shares Shares Mumber of shares held Ownership(%) 80,209,000 27,717,000 23,830,450 27.87% 9.63% 8.28%
Name of major shareholders.
Bai Jia Yuan Construction Co., Ltd. Jin Jhih Fu Assets Management Co.,Ltd. Chun Yu Investment Co,Ltd.

(Note)The major shareholders information as 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.

Table 7 Page 1