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CHUN YU Interim / Quarterly Report 2023

Nov 13, 2023

51943_rns_2023-11-13_84b2c7d4-c6e1-49c4-a224-2756bbc8ab1d.pdf

Interim / Quarterly Report

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CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT MARCH 31,2023 AND 2022

--------------------------------------------------------------------------------------------------------------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. 

~1~

INDEPENDENT AUDITORS’ REVIEW REPORT TRANSLATED FROM CHINESE

To the 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, 2023 and 2022 and the related consolidated statements of comprehensive income, of changes in equity and of cash flow statements for the three-month periods then ended, 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 of Review

Except as discussed in the following paragraph, we conducted our reviews in accordance with the Standard on Review Engagements 2410, “Review of Financial Information Performed by the Independent Auditor of the Entity” of the Republic of China. A review of financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review 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 an audit. Accordingly, we do not express an audit opinion.

Basis of Qualified Conclusion

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$2,037,240 thousand and NT$2,200,916 thousand respectively, accounting for 16% of the total consolidated assets respectively; the total liabilities were NT$394,650 thousand and NT$467,735 thousand respectively, accounting for 5% of the total consolidated liabilities as of March 31, 2023 and 2022, respectively; the total comprehensive income were NT$63,288 thousand and NT$16,664 thousand respectively, accounting for 51% and 6% of the total consolidated comprehensive income for the three-month periods ended March 31, 2023 and 2022,respectively. 

~2~

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, 2023 and 2022 and the consolidated financial performance and consolidated cash flow for the three-month periods ended March 31, 2023 and 2022.

Other Matter

The financial statements of PT. Moon Lion Industries Indonesia for the three-month periods ended March 31, 2023 and 2022 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, 2023 and 2022 were NT$1,373,315 thousand and NT$1,236,294 thousand respectively, accounting for 11% and 9% of the total consolidated assets; net operating income were NT$424,457 thousand and NT$468,555 thousand respectively, accounting for 21% and 15% of the total consolidated comprehensive income for the three-month periods ended March 31, 2023 and 2022, respectively.

Chung-Yu, Tien Independent Accountants

Fang-Ting, Yeh PricewaterhouseCoopers, Taiwan Republic of China May 11, 2023 

~3~

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of March 31, 2023 and 2022 are reviewed, not audited)

Assets
Current Assets
1100
Cash and cash equivalents
1110
Financial assets at fair value
through profit or loss – current
1136
Financial assets at amortised
cost – current
1150
Notes receivable, net
1170
Accounts receivable, net
1200
Other receivables
1220
Current income tax assets
130X
Inventories
1410
Prepayments
1476
Other current financial assets
11XX
Total current assets
Non-current assets
1510
Financial assets at fair value
through profit or loss –
non-current
1517
Financial assets at fair value
through other comprehensive
income – non-current
1535
Financial assets at amortised
cost –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		 Notes March 31,2023
Amount
%
$ 3,037,872
24
15,319
-
-
-
315,460
2
1,471,245
12
7,451
-
3100
-
3,847,978
31
117,275
1
-
-
8,815,700
70
-
-
364,141
3
-
-
3,029,192
24
148,341
1
8,050
-
161,235
2
23,252
-
18,079
-
3,480
-
-
-
5,363
-
3,761,133
30
$ 12,576,833
100
(Continued)		 December 31,2022
Amount
%
$ 2,436,550
19
50,411
1
-
-
420,299
3
1,665,188
13
6,889
-
2,623
-
3,997,588
32
116,626
1
11,775
-
8,707,949
69
-
-
439,249
4
44,100
1
3,055,795
24
137,409
1
7,343
-
164,086
1
23,088
-
21,957
-
3,317
-
-
-
6,780
-
3,903,124
31
$ 12,611,073
100		 March 31,2022
Amount
%
$ 1,824,670
14
55,940
-
12,038
-
352,085
3
2,220,198
17
21,958
-
10,969
-
4,626,224
34
165,788
1
1,400
-
9,291,270
69
3,189
-
626,589
5
45,084
-
3,112,266
23
120,992
1
7,531
-
190,331
2
27,735
-
19,095
-
8,174
-
5,011
-
7,421
-
4,173,418
31
$ 13,464,688
100
Amount
$ 3,037,872
15,319
-
315,460
1,471,245
7,451
3100
3,847,978
117,275
-
8,815,700
-
364,141
-
3,029,192
148,341
8,050
161,235
23,252
18,079
3,480
-
5,363
3,761,133
$ 12,576,833
(Continued)		 Amount

$ 2,436,550
50,411
-
420,299
1,665,188
6,889
2,623
3,997,588
116,626
11,775
8,707,949
-
439,249
44,100
3,055,795
137,409
7,343
164,086
23,088
21,957
3,317
-
6,780
3,903,124
$ 12,611,073		 Amount

$ 1,824,670
55,940
12,038
352,085
2,220,198
21,958
10,969
4,626,224
165,788
1,400
9,291,270
3,189
626,589
45,084
3,112,266
120,992
7,531
190,331
27,735
19,095
8,174
5,011
7,421
4,173,418
$ 13,464,688
6(1)
6(2)
6(1)
6(3) and 7
6(3) and 7
6(28)
6(4) (7) and
8
6(1) and 8
6(5) (13)
6(6)
6(1)
6(7)(11),
7 and 8
6(8) and 8
6(9)
6(28)
6(7) (9)
6(10)
6(1) and 8		 
~4~

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of March 31, 2023 and 2022 are reviewed, not audited)

Liabilities and Equity
Current Liabilities
2100
Short-term borrowings
2130
Current contract liabilities
2150
Notes payable
2170
Accounts payable
2200
Other payables
2230
Current income tax liabilities
2250
Provisions for liabilities - current
2280
Current lease liabilities
2320
Long-term liabilities, current
portion
21XX
Total current liabilities
Non-current liabilities
2530
Bonds payable
2540
Long-term borrowings
2570
Deferred income tax liabilities
2580
Non-current lease liabilities
2640
Net defined benefit liabilities –
non-current
2645
Guarantee deposits received
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity attributable to owners of
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 stocks
31XX
Equity attributable to owners
of the parent
36XX Non-controlling interest
3XXX
Total equity
Significant Contingent Liabilities and
Unrecognized Contract
Commitments
3X2X
Total liabilities and equity		 March 31,2023
December 31,2022
March 31,2022
Notes
AMOUNT
%
AMOUNT
%
AMOUNT
%
6(12) and
8
$ 792,691
6
$ 780,846
6
$ 991,281
8
6(21) and
7
445,988
4
470,653
4
443,415
3
169
-
388
-
1,448
-
7
474,319
4
558,651
5
1,101,390
8
6(19) and
7
672,506
5
440,435
4
757,571
6
6(28)
91,492
1
45,169
-
97,944
1
6(14)
6,412
-
6,265
-
7,698
-
6(8)
23,821
-
24,728
-
18,424
-
6(15) and
8
6,526
-
16,121
-
23,474
-
2,513,924
20
2,343,256
19
3,442,645
26
6(13) and
8
4,567,280
36
4,563,605
36
4,552,420
34
6(15) and
8
21,283
-
22,915
-
5,779
-
6(28)
461,539
4
467,513
4
430,550
3
6(8)
40,417
-
27,534
-
12,186
-
6(16)
105,214
1
116,863
1
171,570
1
457
-
457
-
457
-
5,196,190
41
5,198,887
41
5,172,962
38
7,710,114
61
7,542,143
60
8,615,607
64
6(17)(19)
3,021,627
24
3,021,627
24
2,877,740
21
6(13)(18)
501,353
4
477,923
4
466,207
4
6(6)(17)
(19)
302,397
2
302,397
2
233,702
2
430,610
4
430,610
3
430,610
3
485,172
4
653,326
5
518,638
4
6(6)(20)
(
374,524) (
3)
(
331,076)
(
2)
(
142,343) (
1)
6(17)
(
267,195)(
2)
(
267,195)
(
2)
(
267,195)(
2)
4,099,440
33
4,287,612
34
4,117,359
31
4(3)
767,279
6
781,318
6
731,722
5
4,866,719
39
5,068,930
40
4,849,081
36
9
$ 12,576,833
100
$ 12,611,073
100
$ 13,464,688
100

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

~5~

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount) (Reviewed, not audited)

Item For the three-month periods ended March31,
2023
2022
Notes
AMOUNT
%
AMOUNT
%
6(21) and 7
$ 2,045,709
100
$ 3,055,669
100
6(4)(8)(9)(16)
(26)(27) and 7
(
1,702,104 )(
83)(
2,590,404)(
85 )
343,605
17
465,265
15
6(8)(9)(16)(26)
(27) ,7 and 12
(
75,125 ) (
4) (
93,834) (
3 )
(
120,067 ) (
6) (
111,696) (
4 )
(
14,676 ) (
1) (
18,574)
-
(
485 )
-
167
-
(
210,353 )(
11)(
223,937)(
7 )
133,252
6
241,328
8
6(3)(22)
9,941
1
3,338
-
6(2)(23) and 7
10,319
1
5,188
-
6(2)(5)(24) and 12
6,655
-
10,116
1
6(8)(25)
(
32,039 )(
2)(
27,340)(
1 )
(
5,124 )
-
(
8,698)
-
128,128
6
232,630
8
6(28)
(
42,576 )(
2)(
49,092)(
2 )
$ 85,552
4
$ 183,538
6
6(6) (20)
$ 11,150
1
($ 2,065)
-
31,179
1
82,789
2
6(28)
(
4,170 )
-
(
4,818)
-
$ 38,159
2
$ 75,906
2
$ 123,711
6
$ 259,444
8
$ 60,879
3
$ 151,939
5
24,673
1
31,599
1
$ 85,552
4
$ 183,538
6
$ 90,561
4
$ 217,552
7
33,150
2
41,892
1
$ 123,711
6
$ 259,444
8
6(29)
$ 0.22
$ 0.55
$ 0.20
$ 0.54
4000 Operating revenue
5000 Operating costs
5900 Net operating margin
Operating expenses
6100 Selling expenses
6200 General and administrative expenses
6300 Research and development expenses
6450 Expected credit gains (losses)
6000 Total operating expenses
6900 Operating profit
Non-operating income and expenses
7100 Interest income
7010 Other income
7020 Other gains and losses
7050 Finance costs
7000 Total non-operating income and expenses
7900Profit before income tax
7950 Income tax expense
8200Profitfor the period
Other comprehensive income(loss)
Components of other comprehensive
income (loss) that will not be
reclassified to profit or loss
8316 Unrealized gain (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
income (loss)
8300Total othercomprehensive income
for the period
8500Total comprehensive income for the
period
Profit attributable to:
8610 Owners of the parent
8620 Non-controlling interests
TComprehensive income attributable to:
8710 Owners of the parent
8720 Non-controlling interests
Earnings per share (in dollars)
9750 Basic
9850 Diluted

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

~6~

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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

For the three-month periods ended March 31, 2022
Balance at January 1, 2022
Consolidated net income
Other comprehensive (loss) income
Total comprehensive income (loss)
Distribution of first half of 2021 net income
Cash dividends
Proceeds from issuing convertible bonds
The Company’s dividends received by subsidiaries
Dividends paid to non-controlling interest
Balance at March 31, 2022
For the three-month periods ended March 31, 2023
Balance at January 1, 2023
Consolidated net income
Other comprehensive (loss) income
Total comprehensive income (loss)
Distribution of second half of 2022 net income
Cash dividends
Disposal of financial assets at fair value through other
comprehensive income
The Company’s dividends received by subsidiaries
Dividends paid to non-controlling interest
Balance at March 31, 2023		 Notes Equityat tri butableto owners o f the parent f the parent f the parent f the parent Non-controlling
interest		 Total equity
Share capital -
common stock		 Treasury stock
transactions		 Retained Earnings Other EquityInterest Treasurystocks Total
Legal reserve Special reserve Unappropriated
retained earning		 Financial
statements
translation
differences of
foreign operations		 Unrealised gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income
6(20)
6(19)
6(13)
6(17)(18)
4(3)
6(20)
6(19)
6(6)(20)
6(17)(18)
4(3)		 $ 2,877,740
-
-
-
-
-
-
-
$ 2,877,740
$ 3,021,627
-
-
-
-
-
-
-
$ 3,021,627		 $ 222,103
-
-
-
-
221,790
22,314
-
$ 466,207
$ 477,923
-
-
-
-
-
23,430
-
$ 501,353		 $ 233,702
-
-
-
-
-
-
-
$ 233,702
$ 302,397
-
-
-
-
-
-
-
$ 302,397		 $ 430,610
-
-
-
-
-
-
-		 $ 654,473
151,939
-
151,939
(
287,774 )
-
-
-
$ 518,638
$ 653,326
60,879
-
60,879
(
302,163 )
73,130
-
-
$ 485,172		 ($ 214,721)
-
67,678
67,678
-
-
-
-
($ 147,043)
($ 163,091)
-
18,532
18,532
-
-
-
-
($ 144,559)		 $ 6,765
-
(
2.065 )
(
2.065 )
-
-
-
-
$ 4,700
($ 167,985 )
-
11,150
11,150
-
(
73,130 )
-
-
($ 229,965 )		 ($ 267,195)
-
-
-
-
-
-
-
($ 267,195)
($ 267,195)
-
-
-
-
-
-
-
($ 267,195)		 $ 3,943,477
151,939
65,613
217,552
(
287,774 )
221,790
22,314
-
$ 4.117.359
$ 4,287.612
60.879
29.682
90.561
(
302,163 )
-
23.430
-
$ 4,099,440		 $ 724,434
31.599
10.293
41,892
-
-
-
(
34,604)
$ 731,722
$ 781,318
24,673
8,477
33,150
-
-
-
(
47,189 )
$ 767,279		 $ 4,667,911
183,538
75,906
259,444
(
287,774 )
221,790
22,314
(
34,604)
$ 4,849,081
$ 5,068,930
85,552
38,159
123,711
(
302,163 )
-
23.430
(
47,189 )
$ 4,866,719
$ 430,610
$ 430,610
-
-
-
-
-
-
-
$ 430,610

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

~7~

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

(Reviewed , not audited)

CASH FLOWS FROM OPERATING DECREASE
ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Net (gains) losses on financial assets at fair
value through profit or loss
Expected credit (gains) losses

Provision for inventory market price decline
Depreciation

Gains on disposal of property, plant and
equipment

Reclassification of property, plant and
equipment to expense

Amortization

Interest income

Dividend income

Interest expense

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit
or loss - current
Notes receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Long-term notes and accounts receivable
Changes in operating liabilities
Current contract liabilities
Notes payable
Accounts payable
Other payables
Provision for liabilities – current
Net defined benefit liabilities –non-current
Cash inflow generated from operations
Interest received
Interest paid
Income tax paid
Net cash flows from operating activities		 Notes
For the three-month periods ended March 31
2023
2022
$ 128,128 $ 232,630
(
1,812 ) (
4,276 )
12
485 (
167 )
6(4)
1,210
6,486
6(7)(8)(26)
71,087
67,268
6(24)
(
391 ) (
9 )
6(7)
-
466
6(9) (26)
859
1,044
6(22)
(
9,941 ) (
3,338 )
6(23)
- (
2,627 )
6(25)
32,039
27,340
36,904
-
104,875
69,594
193,336
72,031
(
562 )
11,120
138,841 (
173,898 )
(
649 )
2,393
(
163 )
7,048
(
24,665 )
36,072
(
219 ) (
1,839 )
(
84,332 )
71,153
(
51,371 ) (
85,535 )
147 (
577 )

(
11,649 )
1,345
522,157
333,724
9,941
3,338
(
22,788 ) (
23,011 )
(
4,023 ) (
43,452 )

505,287
270,599

(Continued) 

~8~

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

(Reviewed , not audited)

CASH FLOWS FROM INVESTMENT
ACTIVITIES
Increase in financial assets measured at amortized
cost– current
Decrease in other financial asset - current
Acquisition of financial assets at fair value
through other comprehensive income - non-
current
Proceeds from financial assets at fair value
through other comprehensive income

Decrease in financial assets measured at amortized
cost–non-current
Cash paid for acquisition of property, plant and
equipment

Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets

Increase in prepayments for business facilities
Decrease (increase) in guarantee deposits paid
Decrease in other non-current financial assets
Decrease in other non-current assets
Net cash flows used in investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings

Payments of lease liabilities

Issuance of convertible bonds

Decrease in long-term borrowings

Cash dividend in non-controlling interest

Net cash flows from (used in) financing
activities
Effect of foreign exchange rate changes on cash and
cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period
 Notes
For the three-month periods ended March 31
2023
2022
$ - ( $ 12,038 )
11,775
26
(
133 )
-
6(6)
86,391
191
44,100
41,831
6(30)
(
13,371 ) (
35,471 )
739
368
6(9)
(
1,544 ) (
294 )
(
2,850 ) (
18,241 )
3,878 (
512 )
-
2,350
1,417
708
130,402 (
21,082 )
6(31)
11,845 (
651,090 )
6(31)
(
6,343 ) (
5,547 )
6(31)
-
1,775,874
6(31)
(
11,227 ) (
595,573 )
4(3)
(
47,189 ) (
34,604 )
(
52,914 )
489,060
18,547
59,856

601,322
798,433
6(1)
2,436,550
1,026,237
6(1)
$ 3,037,872$ 1,824,670

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

~9~

Chun Yu Works & Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements Three Months Ended March 31, 2023 and 2022

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

Unit: NT$ thousand (unless specified)

1. History and Organization

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

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

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

This consolidated financial report was issued on May 11, 2023 after submission to the board of directors.

3. Application of New and Revised Standards and Interpretations

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

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

New standards, interpretations and amendments endorsed by the FSC
as follows:		 effective from 2023 are
New Standards, Interpretations and Amendments
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 12, ‘Deferred tax related to assets and
liabilities arising from a single transaction		 Effective date by
International
Accounting Standards
Board
January 1, 2023
January 1, 2023
January 1, 2023

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

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

None.

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

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

~10~
Effective date by
International
Accounting Standards
New Standards, Interpretations and Amendments Board
Amendments to IFS 10 and IAS 28, ‘Sale or contribution of To be determined by
assets between an investor and its associate or joint venture’ IASB
Amendments to IFRS 16, ‘Lease liability in a sale and January 1, 2024
leaseback’
IFS 17, ‘Insurance contracts’ January 1, 2023
Amendment to IFRS No. 17 , ‘Insurance contracts’ January 1, 2023
Amendment to IFS 17, ‘Initial application of IFRS 17 and IFRS January 1, 2023
9 - comparative information’
Amendments to IAS 1, ‘Classification of liabilities as current or January 1, 2024
non-current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’ January 1, 2024
The above standards and interpretations have no significant impact to the Group’s financial
condition and financial performance based on the Group’s assessment.

4. 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) Compliance statement

  • A. The financial statements of the Company have been prepared in accordance with the

  • Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, Interim financial reporting' as endorsed by the FSC.

  • B. The financial statements should be read together with the financial statements for the year ended December 31, 2022.

(2) Basis of Preparation

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

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

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

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

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

  • (3) Basis of consolidation

  • A. The preparation principles of this consolidated financial report are the same as those of the 2022 consolidated financial report.

  • B. Subsidiaries included in this consolidated financial report 

~11~
Percentage of equity held Percentage of equity held Percentage of equity held
Investment March 31, December 31, March 31, Descrip
company name
Subsidiary name		 Business nature 2023 2022 2022 tion
Chun Yu Works
Chun Bang Precision
Manufacture and sales		 100.00 100.00 100.00 (note 1)
& Co., Ltd. Co., Ltd. of moulds
Chun Yu Works
Chun Yu		 Import and export of 100.00 100.00 100.00 (note 1)
& Co., Ltd. Works(USA) Inc. hardware products
Chun Yu Works
Chun Yu Investment		 Professional 100.00 100.00 100.00 (note 1)
& Co., Ltd. Co., Ltd. investment
Chun Yu Works
Chun Yu Bio-tech		 Powder metallurgy 100.00 100.00 100.00 (note 1)
& Co., Ltd. Corp.
Chun Yu Works
Scholar Holdings		 Reinvestment and 100.00 100.00 100.00 -
& Co., Ltd. Ltd. import and export
sales
Chun Yu Works
Sunny City		 Reinvestment and 100.00 100.00 100.00 (note 1)
& Co., Ltd. International import and export
Limited sales
Chun Yu Works
PT. Moon Lion		 Manufacture and sales 71.85 71.85 71.85 (note 1)
& Co., Ltd. Industries of screws and nuts
Indonesia
Chun Yu Works
Chun Zu Machinery		 Manufacture and sales 47.82 47.82 47.82 (note 2)
& Co., Ltd. Industry co., Ltd. of machinery (note 3)
Scholar Holdings
Chun Yu (Dongguan)		 Manufacture and sales of 100.00 100.00 100.00 -
Ltd. Metal Products Co., screws and nuts
Ltd.
Sunny City Shanghai Uchee Sales of screws and nuts 100.00 100.00 100.00 (note 1)
International Hardware Products
Limited Ltd.
Shanghai Uchee Chunyu Group Sales of screws and nuts 100.00 100.00 100.00 (note 1)
Hardware Shanghai Tongsheng
Products Ltd.
Trade Co., Ltd.
Chun Zu Lion City Management Professional investment 100.00 100.00 100.00 -
Machinery Ltd.
Industry Co.,
Ltd.
Lion City Shanghai Chun Zu Manufacture and sales of 100.00 100.00 100.00 -
Management Machinery Industry machinery
Ltd. Ltd.
  • (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 2023 and 2022 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 2023 and 2022 and Note 13 has not been reviewed by us.

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

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

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

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

  • E. Significant restrictions: None.

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

As of March 31, 2023, December 31, 2022, and March 31, 2022 were NT$767,279, NT$781,318 and NT$731,722, respectively. Information on non-controlling interests and subsidiaries that are significant to the Group as follows: 

~12~
Non-controlling interest
March 31, 2023
December 31, 2022
Amount
Ownership
(%)
Amount
Ownership (%)
$ 490,312
52.18%
$ 529,806
52.18%
Non-controlling interest
March 31, 2022
Amount
Ownership (%)
$ 481,013
52.18%
Principal March 31, 2023

place of
business
Name of
subsidiary		 Amount
Ownership
(%)
Chun Zu
Taiwan		 $ 490,312
52.18%
Machinery
Industry
Principal

place of
business
Name of
subsidiary
Chun Zu
Taiwan
Machinery
Industry Co., Ltd

Summary financial information of subsidiaries:

Chun Zu
Machinery
Industry Co., Ltd
Taiwan
$ 481,013
52.18%
Summary financial information of subsidiaries:		 Chun Zu
Machinery
Industry Co., Ltd
Taiwan
$ 481,013
52.18%
Summary financial information of subsidiaries:		 Chun Zu
Machinery
Industry Co., Ltd
Taiwan
$ 481,013
52.18%
Summary financial information of subsidiaries:
Consolidated balance sheet
Chun Zu Machinery Industry and Subsidiaries
March 31, 2023
December 31, 2022
March 31, 2022
Current Assets
$ 1,443,042
$ 1,408,949
$ 1,454,713
Non-current Assets
522,199
575,844
600,063
Current Liabilities
(
815,602
) (
742,551
) (
900,784
)
Non-current Liabilities
(
135,060
) (
154,418
) (
161,407
)
Total net assets $ 1,014,579 $ 1,087,824
$ 992,585
Consolidated statement of comprehensive For the three-month periods ended March 31, For the three-month periods ended March 31,
Income 2023 2022
Income $ 229,029 $ 253,006
Profit for the year $ 13,656 $ 19,239
Other comprehensive income (net) 12,911
(
5,623
)
Total comprehensive income for theyear $ 26,567 $ 13,616
Comprehensive income attributable to non- $ 17,351

controllinginterest		 $ 7,696
Dividends paid to non-controlling interest $ 47,189 $ 34,604
Consolidated statements of cash flows For the three-month periods ended March 31,
2023
2022
Net cash provided by operating activities $ 86,245
(
$ 35,220
)
Net cash used in investing activities 50,636
25,398
Net cash used in financing activities 19,605
(
10,391
)

Effect of exchange rate changes on cash and
3,596
16,154

cash equivalents
Increase in cash and cash equivalents 160,082
(
4,059
)
Cash and cash equivalents, beginning of year
214,542
297,485
Cash and cash equivalents, end of year $ 374,624
$ 293,426		 
~13~

(4) Employee benefits

Defined benefit plan pension costs for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed accordingly.

(5) Income tax

The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pre-tax income of the interim period, and the related information is disclosed accordingly.

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

No major changes in this period, Please refer to the five notes to the 2022 consolidated financial statements.

6. Explanation of important accounting items

(1) Cash and cash equivalents

ash and cash equivalents
March 31, December 31,
2022
March 31,
2022
$ 1,005
$ 23,747
107,114
153,435
992,024
1,491,702
1,100,143
1,668,884
1,336,407
155,786
$ 2,436,550
$ 1,824,670
2023
Cash:
Cash in stock $ 6,204
Checking deposit 637
Demand deposit 974,633
981,474
Cash equivalent:
Time deposit 2,056,398
$ 3,037,872

  • A. 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.

  • B. The Group’s classified time deposits maturing in excess of three month as financial assets at amortized current in amount of $12,038. There was no such transaction for the year ended December 31, 2022 and three months ended March 31, 2023, classified time deposits maturing in excess of one year as financial assets at amortized non-current in —

  • amount of $ , $44,100 and $45,084 for three months ended March 31, 2023, the year ended December 31, 2022 and three months ended March 31, 2022.

  • C. As of three months ended March 31, 2023, December 31, 2022 and three months ended —

  • March 31, 2022, the Group’s demand deposits amounting to $ , $11,775 and $6,411, respectively, were pledged to others as collateral (Shown as ‘Other current financial assets’ and ‘Other non-current financial assets’). Details are provided in Note 8, ‘Pledged assets’. 

~14~

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

Item March 31, 2023 December 31, 2022
March 31, 2022
Financial assets measured
at fair value
compulsorily through
income statement
Listed and OTC stocks $ 7,115 $ 39,019
$ 30,203
Beneficiary certificates 8,000 13,000
8,000
15,115 52,019
38,203
Reevaluation adjustment 204 (
1,608
)
17,737
$ 15,319 $ 50,411
$ 55,940

  • A. The Group’s financial assets measured at fair value through income statement accounted for a net loss of NT$8,667 and NT$7,063 for three months ended March 31, 2023 and 2022, respectively (shown as ‘Other income’ and ‘Other gains and losses’).

  • B. The Group had no financial assets at fair value through profit or loss pledged to others as collateral on March 31, 2023, December 31, 2022 and March 31, 2022.

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

  • (3) Notes and accounts receivable,net

income statement, please refer to note 12(2) “Financial instruments.”
otes and accounts receivable,net		 income statement, please refer to note 12(2) “Financial instruments.”
otes and accounts receivable,net		 income statement, please refer to note 12(2) “Financial instruments.”
otes and accounts receivable,net		 income statement, please refer to note 12(2) “Financial instruments.”
otes and accounts receivable,net
March 31, 2023
December 31, 2022
March 31, 2022
Notes receivable
$ 263,182
$ 352,225
$ 260,332
Installment notes receivable
55,427
71,609
97,515
318,609
423,834
357,847
Less: Unrealized interest
(
2,917
)
(
3,267
(
5,536
)
income
Allowance for
(
232
)
(
268
)
(
226
)
uncollectible accounts
$ 315,460 $ 420,299 $ 352,085
Accounts receivable $ 1,495,327 $ 1,689,191 $ 2,234,296
Installment accounts - 148 13,298
receivable
1,495,327 1,689,339 2,247,594
Less: Unrealized interest -
(
148
)
(
668
)
income
Allowance for
(
24,082
)
(
24,003
)
(
26,728
)
uncollectible accounts
$ 1,471,245 $ 1,665,188
$ 2,220,198		 
~15~

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

Not past due
Up to 30 days past due
31~90 days past due
91~180 days past due
Over 181 days
Not past due
Up to 30 days past due
31~90 days past due
91~180 days past due
Over 181 days		 March 31, 2023
Notes
receivable
Accounts
receivable
$ 318,609
$ 1,300,090
-
114,123
-
52,353
-
2,127
-
26,634
$ 318,609
$ 1,495,327		 December 31, 2022 December 31, 2022
Notes
receivable
$ 318,609
-
-
-
-
$ 318,609		 Notes
receivable
Accounts
receivable
$ 420,394
$ 1,461,430
2,131
170,419
1,309
36,055
-
808
-
20,627
$ 423,834 $ 1,689,339
March 31, 2022		 Accounts
receivable
$ 1,461,430
170,419
36,055
808
20,627
$ 1,689,339
Notes
receivable
$ 357,847
-
-
-
-
$ 357,847		 Accounts
receivable
$ 2,045,152
133,625
42,296
3,554
22,967
$ 2,247,594

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

  • B. The balances of notes and accounts receivable on March 31, 2023, December 31, 2022 and March 31, 2022 were all generated from customer contracts. In addition, the receivable balance of customer contracts on January 1, 2022 is NT$2,747,618.

  • C. 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, 2023 and 2022 were NT$1,144 and NT$2,381, respectively (listed under “interest income”).

  • D. The Group did not hold collateral as guarantee for accounts receivable as of March 31, 2023, December 31, 2022 and March 31, 2022.

  • E. 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, 2023, December 31, 2022 and March 31, 2022 can be best represented by their book values.

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

  • G. The Group did not pledge notes and accounts receivable as guarantee on March 31, 2023, December 31, 2022 and March 31, 2022. 

~16~

(4) Inventories

nventories
March 31, 2023
Allowance for inventory
Cost

valuation loss
Book value
Raw material $ 644,054
(
$ 37,957
)
$ 606,097
Supplies 406,655
(
17,066
)
389,589
Work in progress 1,244,176
(
36,840
)
1,207,336
Finished goods 1,743,532
(
98,576
)
1,644,956
$ 4,038,417
 (
$ 190,439
)
$ 3,847,978
December 31, 2022 December 31, 2022
Allowance for inventory
Cost

valuation loss
Book value
Raw material $ 769,992
(
$ 33,338
)
$ 736,654
Supplies 408,366
(
15,568
)
392,798
Work in progress 1,472,413
(
42,939
)
1,429,474
Finished goods 1,536,046
(
97,384
)
1,438,662
$ 4,186,817
 (
$ 189,229
)
$ 3,997,588
March 31, 2022 March 31, 2022
Allowance for inventory
Cost

valuation loss
Book value
Raw material $ 1,410,252
(
$ 26,522
)
$ 1,383,730
Supplies 373,713
(
13,738
)
359,975
Work in progress 1,391,122
(
28,073
)
1,363,049
Finished goods 1,604,471
(
85,001
)
1,519,470
$ 4,779,558
 (
$ 153,334
)
$ 4,626,224		 
~17~
  • A. The cost of inventories recognized as expense for the period:
. The cost of inventories recognized as expense for the period: . The cost of inventories recognized as expense for the period:
For the three-month periods ended March,31,
2023
2022
Cost of goods sold
$ 1,713,925
$ 2,600,504
Loss on decline in market value
1,210
6,486
Loss on physical inventory
(
369
)
(
3
)
Revenue from sales of scraps
(
12,662
)
(
16,583
)
$ 1,702,104
$ 2,590,404
  • B. For the Group’s inventories pledged as guarantee on March 31, 2023, December 31, 2022

and March 31, 2022, please refer to note 8 “Explanation of pledged assets.”

  • (5) Non-current financial assets at fair value through profit or loss
on-current financial assets at fair value through profit or loss
Item March 31, 2022
Repurchase Right of Corporate Bonds $ 3,189

  • A. There was no such transaction for three months ended March 31, 2023 and the year ended December 31, 2022.

  • B. The Group recognised net loss of $ and $160 (shown as ‘Other gains and losses’) on the non-current financial assets at fair value through profit or loss for three month ended March 31, 2022 and 2023.

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

the non-current financial assets at fair value through profit or loss for three month
ended March 31, 2022 and 2023.
inancial assets at fair value through other comprehensive income-non-current		 the non-current financial assets at fair value through profit or loss for three month
ended March 31, 2022 and 2023.
inancial assets at fair value through other comprehensive income-non-current		 the non-current financial assets at fair value through profit or loss for three month
ended March 31, 2022 and 2023.
inancial assets at fair value through other comprehensive income-non-current
Item
March 31, 2023
December 31, 2022
March 31, 2022
Equity instruments
Listed and OTC stocks
$ 593,334
$ 606,462
$ 621,308
Unlisted, non-OTC and
non-emerging market
stocks
772
772
772
594,106
607,234
622,080
Reevaluation adjustment
(
229,965
)
(
167,985
)
4,509
$ 364,141 $ 439,249
$ 626,589

  • A. 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, 2023, December 31, 2022 and March 31, 、

  • 2022 were NT$364,141 NT$439,249 and NT$626,589, respectively.

  • B. The Group needed capital expenditures disposed financial assets at fair value through other comprehensive income – equity instrument in the amount of $86,391 and $191 for the three-month periods ended March 31, 2023 and 2022, respectively. This resulted in cumulative gain on disposal amounting to $73,130 and $ — .

  • C. 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: 

~18~
For the three-month periods ended March,31,
2023
2022
Fair value change recognised in other $ 11,150
(
$ 2,065
)

comprehensive income(shown as’
Other equity’)

Cumulative gains or losses
reclassified to retained earnings due to
derecognition
 (
$ 73,130
)
$ -

D. 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, 2023, December 31, 2022 and March 31, 2022 can be best represented by their book values.

  • E. Information relating to credit risk is provided in Note 12(2), ‘Financial instruments’. 
~19~

(7) Property, plant and equipment

Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment
January 1, 2023

Cost		 $ 1,573,597
$ 1,951,356
$ 4,522,990
$ 89,494
$ 93,331
$ 122,331
$ 712,327		 $
Accumulated -
(
1,468,433)
(
3,742,346)
(
70,666)
(
75,981)
(
85,179)
(
568,679)
depreciation







Accumulated		 - -
(
42)		 - - - -
impairment
$ 1,573,597 $ 482,923 $ 780,602 $ 18,828 $ 17,350 $ 37,152 $ 143,648 $
1,695
For the three-month
periods ended
March 31, 2023
At January 1 $ 1,573,597 $ 482,923 $ 780,602 $ 18,828 $ 17,350 $ 37,152 $ 143,648 $
1,695

Additions		 - 4,260 3,887 - 314 1,919 778 1,346
Transfers after - - 10,473 - - - 175
(		 10,648)
acceptance

Transfers from		 - - - - - - - 9,559
inventories
Transfers from - - - - 2,219 213 254 -
prepayments for
business facilities
Depreciation charge -
(
11,656)
(
37,225)
(
956)
(
2,001)
(
1,489)
(
10,253)

Disposals– Cost




-
(
155)
(
10,007)







-
(
1,906)
(
365)
(
17,908)

–Accumulated
-


155

10,007		 -

1,582		 365 17,884 -
depreciation

Net exchange		 2,385 1,806 7,358 - 88 596 343 -

differences
At March 31 $ 1,575,982 $ 477,333 $ 765,095 $ 17,872 $ 17,646 $ 38,391 $ 134,921 $
1,952
March 31, 2023,
Cost $ 1,575,982 $ 1,960,390 $ 4,587,806 $ 89,494 $ 94,266 $ 123,891 $ 697,585 $
1,952
Accumulated -
(
1,483,057)
(
3,822,669)
(
71,622)
(
76,621)
(
85,499)
(
562,664)
depreciation







Accumulated		 - -
(
42)		 - - - -
impairment
$ 1,575,982 $ 477,333 $ 765,095 $ 17,872 $ 17,645 $ 38,392 $ 134,921 $
1,952		 
~20~
Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Land
Buildings and
structures
Machinery and
equipment
Utilities
equipment
Transportation
equipment
Office
equipment
Other
equipment		 Equipment
under
acceptance
and
construction
in progress
Total		 Equipment
under
acceptance
and
construction
in progress
Total
January 1, 2022

Cost		 $ 1,573,597
$ 1,932,235
$ 4,431,854
$ 94,858
$ 99,541
$ 120,228
$ 662,581		 $ 34,639
$ 8,949,533
Accumulated -
(
1,413,090)
(
3,666,184)
(
72,436)
(
76,989)
(
104,335)
(
525,896)		 -
(
5,858,930)
depreciation







Accumulated		 - -
(
42)		 - - - - -
(
42)
impairment
$ 1,573,597 $ 519,145 $ 765,628 $ 22,422 $ 22,552 $ 15,893 $ 136,685 $ 34,639 $ 3,090,561
For the three-month
periods ended

March 31, 2022
At January 1 $ 1,573,597 $ 519,145 $ 765,628 $ 22,422 $ 22,552 $ 15,893 $ 136,685 $ 34,639 $ 3,090,561

Additions		 - 4,797 10,137 - 359 931 4,367 8,735 29,326
Transfers after - 760 19,613 - - - -
(
20,373)		 -
acceptance

Transfers from		 - - 15,495 - - - -
-		 15,495
inventories
Transfers from - 451 4,774 - - - 6,790
9,031		 21,046
prepayments for

business facilities
Depreciation charge -
(
11,588)
(
34,805)
(
972)
(
2,113)
(
1,470)
(
10,176)
-
(
61,124)

Disposals– Cost
-




-
(
12,619)









-
(
2,656)
(
977)
(
1,025)
-
(
17,277)

–Accumulated		 -
-

12,418		 -

2,556		 955
989
-
16,918
depreciation
Transfer fee - - - - - - (
466)
(
466)
Net exchange - 5,831 7,862 - 311 243 3,513 27
17,787

differences
At March 31 $ 1,573,597 $ 519,396 $ 788,503 $ 21,450 $ 21,009 $ 15,575 $ 141,143 $ 31,593 $ 3,112,266
March 31, 2022,
Cost $ 1,573,597 $ 1,963,265 $ 4,509,794 $ 94,857 $ 98,279 $ 121,446 $ 688,905 $ 31,593 $ 9,081,736
Accumulated -
(
1,443,869)
(
3,721,249)
(
73,407)
(
77,270)
(
105,871)
(
547,762)		 -
(
5,969,428)
depreciation







Accumulated		 - -
(
42)		 - - - - -
(
42)
impairment
$ 1,573,597 $ 519,396 $ 788,503 $ 21,450 $ 21,009 $ 15,575 $ 141,143 $ 31,593
$ 3,112,266		 
~21~

  • A. The property, plant and equipment of the Group as of March 31, 2023, December 31, 2022 and March 31, 2022 were for its own use.

  • B. No interest expense was capitalised as part of property, plant and equipment for the three-month periods ended March 31,2023 and 2022.

  • C. Impairment information about the property, plant and equipment is provided in Note 6(11), ‘Impairment of non-financial assets’.

  • D. Information about the property, plant and equipment that were pledged to others as collateral as of March 31,2023, December 31,2022 and March 31,2022, is provided in Note 8. ‘Pledged assets’.

  • (8) Lease transaction – lessee

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

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

March 31, 2023 December 31, 2022
March 31, 2022
Carrying amount Carrying amount
Carrying amount
Land $ 98,707 $ 99,707
$ 105,933
Buildings and 49,402 37,417
14,696
structures
Transportation 232 285
363
equipment
$ 148,341 $ 137,409
$ 120,992
For the three-month periods
ended March 31,
2023
2022
$ 1,409
$ 1,402
6,045
4,508
53
234
$ 7,507
$ 6,144
Land
Buildings and structures
Transportation equipment

  • C. The increase of the Group’s right-of-use assets for three months ended March 31, 2023 －

  • and 2022 was NT$18,480 and NT$ , respectively.

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

For the three-month periods For the three-month periods
ended March 31,
2023 2022
Items that affect current profit and loss
Interest expenses on lease liabilities $
486
$		 250
Expenses for short-term leases 2,052 1,005

  • E. For the three-month periods ended March 31,2023 and 2022, the Group’s total cash outflow for leases were $ 8,881 and $ 6,802, respectively.

  • F. For the Group’s right-of-use assets pledged as of March 31, 2023, December 31, 2021, and March 31, 2022, please refer to note 8 “Pledged assets.” 

~22~

(9) Intangible assets

Intangible assets Intangible assets Intangible assets
Computer software
For the three-month periods
ended March 31,
At January 1
2023
2022
Cost
$ 25,343
$ 24,489
Accumulated amortisation
(
18,000)
(
16,634)
$ 7,343 $ 7,855
Period from January to March

At January 1		 $ 7,343 $ 7,855
Additions – acquired separately 1,544 294
Amortisation charge - 275
Amortization fee
(
859)
(
1,044)
Write-offs – cost
(
3,411)
(
2,073)
- accumulated amortisation 3,411 2,073
Net exchange differences 22 151
At March 31 $ 8,050 $ 7,531
At March 31
Cost $ 23,555 $ 23,498
Accumulated amortisation
(
15,505)
(
15,967)
$ 8,050
$ 7,531

  • A. No interest expense was capitalised for the three-month periods ended March 31, 2023 and 2022.

  • B. Details of the amortization expenses on intangible assets are as follows:

For the three-month periods
ended March 31,
2023 2022
$ 130
$ 106
113
109
399
419
217
410
$ 859
$ 1,044
Operating costs
Selling expenses
Administrative expenses
Research and development expenses

  • C. As of March 31, 2023, December 31, 2022 and March 31, 2022, the Group had no intangible assets pledged to others.

  • (10) Long-term notes and accounts receivable

Research and development expenses
217
41
$ 859
$ 1,04
C.
As of March 31, 2023, December 31, 2022 and March 31, 2022, the Group had no
intangible assets pledged to others.
Long-term notes and accounts receivable		 Research and development expenses
217
41
$ 859
$ 1,04
C.
As of March 31, 2023, December 31, 2022 and March 31, 2022, the Group had no
intangible assets pledged to others.
Long-term notes and accounts receivable		 Research and development expenses
217
41
$ 859
$ 1,04
C.
As of March 31, 2023, December 31, 2022 and March 31, 2022, the Group had no
intangible assets pledged to others.
Long-term notes and accounts receivable
March 31, 2023
December 31, 2022
March 31, 2022
Long-term notes
$ 4,131
$ 4,180
$ 9,985
receivable
Less: Unrealized interest
(
651)
(
863)
(
1,811)
income
$ 3,480 $ 3,317
$ 8,174

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

  • B. As of March 31,2023, December 31,2022 and March 31,2022, the Group had no long-term 

~23~

notes receivable and long-term installment receivables past due.

  • C. As of March 31,2023, December 31,2022 and March 31,2022, long-term notes and accounts receivable were all from contracts with customers. Also, as of January 1, 2021, the balance of long-term notes and accounts receivable from contracts with customers amounted to $17,827.

  • D. As of March 31,2023, December 31,2022 and March 31,2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the long-term notes receivable and long-term installment receivables held by the Group was their carrying amount.

  • E. Details of the interest income recognized in profit or loss for the three-month periods ended March 31,2023 and 2022 are provided in Note 6(3), ‘Notes and accounts receivable, net’.

  • F. As of March 31,2023, December 31,2022 and March 31,2022, the Group did not hold any collateral as security for long-term accounts receivable.

  • G. As of March 31,2023, December 31,2022 and March 31,2022, the Group had no longterm notes and accounts receivable pledged to others.

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

(11) Impairment of non-financial assets

  • A. The Group did not recognize any impairment loss for three-month period ended March 31, 2023 and 2022.

  • B. As of March 31,2023, December 31,2022 and March 31,2022, the accumulated impairment loss of property, plant and equipment both amounted to $42, after recognising or reversing any impairment loss.

  • (12) Short term borrowings

hort term borrowings
Type of borrowings March 31, 2023
Interest rate range
Collateral
Bank borrowings

Unsecured borrowings		 $ 626,319
1.56%～6.42%
Note 1
Secured borrowings 166,372
9.00%
Note 1、Note 2
$ 792,791
Type of borrowings December 31, 2022
Interest rate range
Collateral
Bank borrowings

Unsecured borrowings		 572,946
1.56%～5.63%
Note 1
Secured borrowings 207,900
9.00%
Note 1、Note 2
780,846
Type of borrowings March 31, 2022
Interest rate range
Collateral
Bank borrowings

Unsecured borrowings		 $ 392,933
0.70%～1.71%
Note 1
Secured borrowings 598,348
1.65%～10.75%
Note 1、Note 2
$ 991,281 
~24~

Note 1: As of March 31, 2023, December 31, 2022 and March 31, 2022,the interest rate of loans from Indonesia were 9.00% 、 9.00% and 10.75%, respectively, and the interest rate of loans from other countries were 1.56%~6.42% 、 1.56%~5.63% and 0.70%~4.80%, respectively.

Note 2: Please refer to note 8 “Explanation of pledged assets.”

For the interest expenses recognized in profit and loss for three months ended March 31, 、 2023 and 2022, please refer to note 6 (25) ‘Explanation of Financial Costs.’

  • (13) Bonds payable
nds payable
March 31,
2023		 December 31,
2022
March 31,
2022
Collateral
Guaranteed ordinary $ 3,000,000 $ 3,000,000
$ 3,000,000
(Note)
bonds payable

Guaranteed convertible		 1,600,000 1,600,000
1,600,000
-
bonds payable
$ 4,600,000 $ 4,600,000
$4,600,000
Less: Discount on ( 32,720
)		 ( 36,395
)
( 47,580)
bonds payable
$ 4,567,280 $ 4,563,605
$4,552,420

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

  • A. The Company was issued the first domestic guaranteed bonds payable from October 2021, the main issuance conditions are as follows:

  • (a) The Company was approved by the competent authority to raise and issue the first domestic guaranteed bonds payable with a total amount of $3,000,000 (related issue costs of $5,650), with a coupon rate of 0.65% and a maturity period of 7 years from October 15, 2021 to October 15, 2028. The bonds are repayable in cash at the face value of the bonds upon maturity.

  • (b) First Commercial Bank Co., Ltd. was appointed as the guarantor bank for the bonds. The guarantee period is from the date of full collection of the bonds to the date of full payment of the principal and interest payable under the Plan, and the guarantee covers the outstanding principal and interest compensation payable under the Plan, which are subordinate to the principal debt.

  • (c) The principal and simple interest will be paid every year by coupon rate since the day approved to issue. If the local financial institutions are closed on a payment day, the principal and interest will be paid on the next operating day without extra interest.

  • B. The Company was issued the first, second and third domestic guaranteed convertible bonds payable from March 2022, the main issuance conditions are as follows:

  • (a) The Company was approved by the competent authority to raise and issue the first, second and third domestic guaranteed convertible bonds payable with a total amount of $700,000 (related issue costs of $2,432), $500,000 (related issue costs of $2,006), $400,000 (related issue costs of $1,417), respectively. Issuance prices were $779,162, $557,563 and $445,004, respectively with a coupon rate of 0% and a maturity period of 3 years from March 25,2022 to March 25, 2025. The bonds are repayable in cash at the face value of the convertible bonds upon maturity.

  • (b) The first, second and third convertible bonds were respectively entrusted by 

~25~

Changhua Bank Co., Ltd., Huanan Bank Co., Ltd. and Shanghai Commercial Savings Bank Co., Ltd. as guarantor banks. The guarantee period is from the date of full collection of the convertible bonds to the date of full payment of the principal and interest payable under the Plan, and the guarantee covers the outstanding principal and interest compensation payable under the Plan, which are subordinate to the principal debt.

  • (c) Convertible bonds for bondholders will start from the day following the expiration of three months after the issuance date of each bond (June 26, 2022) and end on the maturity date (March 25, 2025), unless it is suspended according to regulations or laws. Outside the transfer period, the Company may request the conversion of the bonds into ordinary shares of the Company at any time, and the rights of ordinary shares after conversion are the same as those of the original issued ordinary shares.

  • (d) The conversion price for the conversion of corporate bonds is determined by the pricing model stipulated in each conversion method. In the event that the company has an antidilution clause in the subsequent conversion price, it will be adjusted according to the pricing model specified in the conversion method. On the base date, the conversion price will be re-determined in accordance with the pricing model stipulated in the conversion regulations. If it is higher than the conversion price before the re-determination in the current year, no adjustment will be made.

  • (e) From the day following the three-month issuance date of each convertible bond (June 26,2022) to the 40th day of the issuance period (February 13, 2025), if the closing price of the Company's ordinary shares for 30 consecutive business days exceeds the current conversion price by more than 30%, the Company may, within the next 30 business days, recover all its bonds in cash according to the denomination of the bonds; or the day following the 3 months after the issuance of the convertible bonds (Jane 26, 2022) from the 40th day to the expiry of the issuance period (February 13, 2025), when the outstanding amount of the convertible bonds in circulation is less than 10% of the original issuance amount, the Company may recover all bonds in cash at any time thereafter according to the denomination of the bonds.

  • (f) According to the provisions of the conversion method, all the company's repossession (including the repurchase by the business office of the securities firm). The convertible bonds that have been repaid or converted will be cancelled, and all rights and obligations still attached to the corporate bonds will also be extinguished and no longer issued.

  • C. When the Company issues convertible corporate bonds, in accordance with the provisions of Amendments to IAS 32 "Financial Instruments: Expression", the conversion right which is of the nature of equity is separated from each liability component, and the account is "Capital reserve-share options" $221,790. Another embedded repurchase option, in accordance with Amendments IFRS No. 9 "Financial Instruments", is separated and accounted for on a net basis because it is not closely related to the economic characteristics and risks of the main contract debt commodity. In the column "Financial assets at fair value through profit and loss -noncurrent", the effective interest rates of the main contract debt after the first, second and third convertible corporate bonds are separated are 0.90%, 0.90% and 0.91%, respectively.

  • D. Details of interest expense recognized in profit or loss for the three-month periods ended March 31,2023 and 2022 provided in Note 6, (25), Financial costs. 

~26~

(14) Provision for liabilities – current

rovision for liabilities–current
)
)
2023
January 1 $ 6,265 $ 8,275
Additional provisions 1,267 342
Used during the year ( 876
 ) (
296)
Unused amounts reversed ( 244
 ) (
623)
March 31 $ 6,412 $ 7,698

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

(15) Long term borrowings

ong term borrowings
Type of
borrowings
Borrowing period
Long-term bank
borrowings
Secured
borrowings
2019.08.28~
2029.06.15
Less: Current portion
Type of
borrowings
Borrowing period
Long-term bank
borrowings
Secured
borrowings
2019.08.28~
2029.06.15
Less: Current portion
Type of
borrowings
Borrowing period
Long-term bank
borrowings
Secured
borrowings
2018.05.14~
2023.05.14
Less: Current portion		 Interest rate
range
1.52%~
2.40%
Interest rate
range
1.43%~
2.28%
Interest rate
range
8.75%~
10.73%		 Collateral March 31,
2023
$ 27,809
(
6,526 )
$ 21,283
December 31,
2022
$ 39,036
(
16,121 )
$ 22,915
March 31,
2022

29,253
(
23,474 )		 March 31,
2023
$ 27,809
(
6,526 )
Refer to Note 8
Collateral
$ 21,283
December 31,
2022
$ 39,036
(
16,121 )
Refer to Note 8
Collateral
$ 22,915
Refer to Note 8
$ 5,779

Information about interest expenses recognized in profit or loss for the three-month periods ended March 31,2023 and 2022 provided in Note 6(25), ‘Finance costs’.

(16) Pensions

  • A. The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the R.O.C. Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the R.O.C. Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the R.O.C. Labor Pension Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each 
~27~

additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 4% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March. The information on defined benefit pension plans of the Company and its subsidiary, Pt Moon Lion Industries Indonesia, is as follows:

  • (a)The pension costs under the defined contribution pension plans of the Group for the three-month periods ended March 31, 2023 and 2022 were $2,542 and $2,523, respectively

  • (b)Expected contributions to the defined benefit pension plans of the Group for the following year amount to $2,531.

  • B. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the R.O.C. Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The Group’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China are based on certain percentage of employees’ monthly salaries and wages (Note). The fund is managed by the government. Other than the monthly contributions, the subsidiaries have no further obligations. The pension costs under the defined contribution pension plans of the Group for the three-month periods ended March 31, 2023 and 2022 were $13,551 and $15,566, respectively.

(17) Share capital

  • A. Movements in the number of the Company’s ordinary shares outstanding are as follows:

  • (Unit: Shares in thousands)

nit: Shares in thousands)
For the three-month periods ended
March 31,
2023
2022
Number of shares at the beginning and

end of the year		 302,163
287,774

  • B. On June 22, 2022, the Company increased its capital by issuing new shares through capitalization of unappropriated retained earnings of $143,887 as resolved by the shareholder’s meeting. The issuance of new shares was approved by the Securities and Futures Bureau, Financial Supervisory Commission. The effective date was set on September 17, 2022.

  • C. As of March 31, 2023, the Company’s authorized capital was $3,920,696, and the paid-in 

~28~

capital was $3,021,627, consisting of 302,163 thousand ordinary shares, with a par value of $10 (in dollars) per share which were issued in several installments. All proceeds from shares issued have been collected.

  • D. Treasury shares

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

For the three-month periods ended March 31,2023

For the three-month periods ended March 31,2023 three-month periods ended March 31,2023 three-month periods ended March 31,2023
Reason for
reacquisition		 three-month periods ended March 31,2022
Number of shares
at the beginning
of the year
Addition
Decrease

23,430
-
-
For the
Acquisition of the
parent company’s
share by subsidiaries
transferred to treasury
share from long-term
investments
Reason for
reacquisition
Acquisition of the
parent company’s
share by subsidiaries
transferred to treasury
share from long-term
investments		 Number of
shares at the
beginning of
the year
22,314		 Addition

-		 Decrease
-

  • (b)As of March 31,2023, December 31, 2022, and March 31 2022, the book value (cost) was all $267,195, and the fair values were $578,725, $562,324 and $676,128, respectively. The shares of the parent company held by subsidiaries are recognized as treasury shares and are entitled to dividends, recorded under ‘Capital reserve-treasury stock transaction’. The cash dividends and stock dividends paid to the subsidiaries for the three-month periods ended March 31, 2023 and 2022 amounted to $23,430 and $22,314 respectively

  • (c) Reason for share reacquisition and the number of the Company’s treasury shares changed as of March 31, 2023, December 31,2022 and March 31 2022. Details are as follows: 

~29~
Name of company
holding the shares
Reason for reacquisition		 March 31, 2023 March 31, 2023
Number of
shares
(in thousands)
23,430
December		 Carrying
amount
Chun Yu Investment
Co., Ltd.
Name of company
holding the shares		 Acquisition of the parent
company's share by
subsidiaries transferred
to treasury share from
long-term investments

Reason for reacquisition		 $ 267,195
31, 2022
Number of
shares
(in thousands)
Carrying
amount
23,430 $ 267,195
March 31, 2021		 Carrying
amount
Chun Yu Investment
Co., Ltd.
Name of company
holding the shares		 Acquisition of the parent
company's share by
subsidiaries transferred
to treasury share from
long-term investments

Reason for reacquisition		 $ 267,195
Number of
shares
(in thousands)
22,314		 Carrying
amount
Chun Yu Investment
Co., Ltd.		 Acquisition of the parent
company's share by
subsidiaries transferred
to treasury share from
long-term investments		 $ 267,195

(18) Capital surplus

  • A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient. Movements in capital surplus are as follows: 
~30~
For the three-month
periods ended March
31, 2023		 Share
options		 consideration and
carrying amount of
subsidiaries
acquired or
disposed		 Total
Treasury

share
transactions
Balance at the $ 221,790
-		 $ 26,901
-		 $ 229,232
23,430		 $ 477,923
23,430
beginning of year
Transfers to capital
surplus for the
Company’s dividends
received by subsidiaries
Balance at the end of $ 221,790 $ 26,901 $ 252,662 $ 501,353
year
For the three-month
periods ended March
31, 2022		 Stock
options		 consideration and
carrying amount of
subsidiaries
acquired or
disposed		 Total
Treasury

share
transactions
Balance at the $ -
221,790
-		 $ 26,901
-
-		 $ 195,202
-
22,314		 $ 222,103
221,790
22,314
beginning of year
Issued convertible
bonds
Transfers to capital
surplus for the
Company’s dividends
received by subsidiaries
Balance at the end of $ 221,790 $ 26,901 $ 217,516 $ 466,207
year

  • B. Details of ‘Capital reserve-share options’ are provided in Note 6(13), ‘Bonds payable’.

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

(19) Retained earnings

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

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

The current year’s earnings, if any, shall first be used to pay all taxes, offset prior years’ operating losses, set aside 10% of the remaining amount as legal reserve and then reverse 

~31~

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

  • C. Special reserve:

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

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

  • D. The Company recognized cash dividends and stock dividends distributed to owners amounting to $438,885 and $143,887 for the years ended December 31, 2022 respectively. It includes cash dividends of $151,081 ($0.5 (in dollars) per share) in the first half of 2022 earnings, cash dividends of $287,774 ($1.0 (in dollars) per share) and share dividends $143,887 ($0.5 (in dollars) per share) in the second half of 2021 earnings; On March 9, 2023, the Board of Directors proposed for the distribution of cash dividends from second half of 2022 earnings amounting to $302,163 ($1.0 (in dollars) per share) and the dividend has not yet been distributed (shown as “Other payables”). 

~32~

(20) Other equity

her equity her equity her equity her equity
For the three-month periods ended March 31,2023
Currency
translation
Unrealized
gains(losses) on
valuation
Total
At January 1
(
$ 163,091
)(
$ 167,895
)(
$ 331,076
)


Revaluation – currency

18,532
-

18,532
translation
Revaluation – unrealized -
11,150
-
(
73,130
)(		 11,150
gains (losses) on valuation
Valuation adjustment transfer

out to retained earnings
73,130
)
At March 31
(		 $ 144,559
)(
$ 229,965
)(
$ 374,524
)
For the three-month periods ended March 31,2022
Currency
translation		 Unrealized
gains(losses) on
valuation
Total
At January 1
(
$ 214,721
)
$ 6,765
(
$ 207,956
)


Revaluation – currency
67,678


-
67,678
translation
Revaluation – unrealized -
(
2,065
)(
2,065
)
gains (losses) on valuation
At March 31
(		 $ 147,043
)		 $ 4,700
(
$ 142,343
)

(21) Operating revenue

erating revenue
For the three-month periods ended
March 31,
2023
2022
$ 2,045,709
$ 3,055,669
Revenue from contracts with customers
  • A. The Group derives revenue from the transfer of goods at a point in time in the following major product lines:
The Group derives revenue from
major product lines:		 the transfer of goods at a point in time in the following the transfer of goods at a point in time in the following
For the three-month periods ended March 31,2023
Major product line Screw segment Machinery
segment
Total
Screws and nuts $ 1,307,755 $ -
$ 1,307,755
Wire rods 488,538 -
488,538
Machinery and equipment - 187,571
187,571
Other 43,967 17,878
61,845
$ 1,840,260 $ 205,449
$ 2,045,709		 
~33~
For the three-month periods ended March 31,2022 For the three-month periods ended March 31,2022
Main product line Screw segment Machinery
segment
Total
Screws and nuts $ 1,405,923 $ -
$ 1,405,923
Wire rods 900,465 -
900,465
Machinery and equipment - 232,448
232,448
Billet 373,018 -
373,018
Other 119,196 24,619
143,815
$ 2,798,602 $ 257,067
$ 3,055,669

B. Contract liabilities

  • (a)AS of March 31, 2023, December 31, 2022 and March 31, 2022, the Group has recognized revenue-related contract liabilities of $445,988 ,$470,653 and $443,415,respectively.

(b)Revenue recognized for the three-months ended March 31, 2023 and 2022, which was included in the contract liabilities of $470,653 and $407,343 as at January 1, 2023 and 2022, respectively, amounted to $170,142 and $150,737, respectively.

(22) Interest income

Interest income
For the three-month periods ended March 31,
2023
2022
Interest income from bank deposits $ 5,973
$ 957
Other interest 3,968
2,381
$ 9,941
$ 3,338
  • (23) Other income
Other income
For the three-month periods ended March 31,
2023
2022
Rent income $ 488
$ 370
Dividend income -
2,627
Government grants 941
626
Other income 8,890
1,565
$ 10,319
$ 5,188

(24) Other gains and losses

Other gains and losses Other gains and losses
For the three-month periods ended March 31,
2023
2022
Gains on financial assets at fair value
$ 8,667
$ 4,276
through profit or loss
Gains on disposal of property, plant and
391
9
equipment
Net foreign exchange (losses) gains
(
1,778
)
6,630
Miscellaneous disbursements
(
625
)
(
799
)
$ 6,655
$ 10,116		 
~34~

(25) Finance costs

Finance costs
For the three-month per iods ended March 31,
2023 2022
Interest expenses:
Bank borrowings $ 12,369 $ 18,496
Ordinary bonds payable 11,945 7,054
Convertible bonds payable 7,239 1,540
Interest on lease liabilities 486 250
$ 32,039 $ 27,340

(26) Expenses by nature

Expenses by nature
For the three-month periods ended March 31,2023
Classified as
operating costs		 Classified as
operating expenses
Total
Employee benefit expense $ 197,829 $ 111,360
$ 309,189

Depreciation		 55,750 15,337
71,087
Amortization 130 729
859
$ 253,709 $ 127,426
$ 381,135
For the three-month periods ended March 31,2022
Classified as
operating costs		 Classified as
operating expenses
Total
Employee benefit expense $ 219,765 $ 122,909
$ 342,674

Depreciation		 53,058 14,210
67,268

Amortization		 106 938
1,044
$ 272,929 $ 138,057
$ 410,986

(27) Employee benefit expense

Employee benefit expense
$ Depreciation
Amortization
$ Employee benefit expense		 219,765
$ 122,909
$ 342,674
53,058
14,210
67,268
106
938
1,044
272,929
$ 138,057
$ 410,986		 219,765
$ 122,909
$ 342,674
53,058
14,210
67,268
106
938
1,044
272,929
$ 138,057
$ 410,986
For the three-month periods ended March 31,2023
Classified as
operating costs		 Classified as
operating expenses
Total
Wages and salaries $ 164,924 $ 95,045
$ 259,969
Labour and health insurance fees 16,339 6,345
22,684
Pension costs 10,821 5,272
16,093
Other personnel expenses 5,745 4,698
10,443
$ 197,829 $ 111,360
$ 309,189
For the three-month periods ended March 31,2022 For the three-month periods ended March 31,2022
Classified as
operating costs		 Classified as
operating expenses
Total
Wages and salaries $ 185,666 $ 95,457
$ 281,123
Labour and health insurance fees 15,607 7,617
23,224
Pension costs 11,828 6,261
18,089
Other personnel expenses 6,664 13,574
20,238
$ 219,765 $ 122,909
$ 342,674		 
~35~

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

  • B. For the three-month periods ended March 31, 2023 and 2022, employees’ compensation was accrued at $1,540 and $2,708, respectively; while directors’ remuneration was accrued at $1,540 and $2,800, respectively. The employees’ compensation and directors’ remuneration resolved by the Board of Directors on March 9, 2023 were both $13,100, and the employees’ compensation will be distributed in the form of cash, consistent with the amount recognized on the financial statements for the year ended December 31, 2022.The aforementioned amounts were recognized in salary expenses and were accrued based on the earnings of current year and the percentage prescribed by the Company’s Articles of Incorporation.

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

  • (28) Income tax

  • A. Components of income tax expenses:

    • (a)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:
For the three-month periods ended
March 31,
2023
2022
Current tax:
Current tax on profits for the year
$ 52,308
$ 64,910
Prior year income tax under estimation
(
2,439
)
-
Total current tax
49,869
64,910
Deferred tax:
Origination and reversal of temporary
(
7,293
)
15,818
)
differences (
Income tax expense $ 42,576
$ 49,092
  • (b)The income tax (charge)/credit relating to components of other comprehensive income is as follows:
as follows:
For the three-month periods ended March 31,
2023 2022
Exchange differences on $ 4,170
$ 4,818
translation of foreign
financial statements
  • B. The Company’s income tax returns through 2020 and 2021 have been assessed and approved by the Tax Authority. The Company does not have any administrative remedy as of May 11, 2023. 
~36~

(29) Earnings per share

Earnings per share
Forthe three-monthperiods endedMarch31,2023
Amount after
tax		 Weighted average
number of ordinary
shares outstanding
(sharesinthousands)
Earnings per
share
(indollars)
Basic earnings per share

Profit attributable to ordinary shareholders		 $ 60,879 278,733 $ 0.22

of theparent
Diluted earnings per share

Profit attributable to ordinary shareholders		 $ 60,879
-		 278,733
464

of the parent
Assumed conversion of all dilutive
potential ordinary
shares Employees’ compensation
Convertible bonds 2,781 42,667
Profit attributable to ordinary shareholders $ 63,660 321,864 $ 0.20
of the parent
plus assumed conversion of all dilutive
potential
ordinary shares
Forthe three-monthperiods endedMarch31,2022
Amount after
tax		 Weighted average
number of ordinary
shares outstanding
(sharesinthousands)
Earnings per
share
(indollars)
Basic earnings per share
Profit attributable to ordinary shareholders
of theparent		 $ 151,939 278,733 $ 0.55
Diluted earnings per share
Profit attributable to ordinary shareholders
of the parent
Assumed conversion of all dilutive
potential ordinary
shares Employees’compensation		 $ 151,939
-		 278,733
512
Profit attributable to ordinary shareholders
of the parent
plus assumed conversion of all dilutive
potential ordinary shares		 $ 151,939 279,245 $ 0.54

T he above mentioned weighted average number of outstanding shares was retrospectively adjusted proportionately to the capitalised amount of unappropriated retained earnings for the year ended December 31, 2021. 

~37~

(30) Supplementary cash flow information

A. Investment and financing activities with partial cash payments:

. Investment and financing activities with partial cash payments: . Investment and financing activities with partial cash payments: . Investment and financing activities with partial cash payments:
For the three-month periods ended
March 31,
2023
2022
(a) Purchase of property, plant and equipment
$ 12,504
$ 29,326
Add: Opening balance of payable on
equipment (shown as ‘Notes
payables’)
8,191
22,043
Less: Ending balance of payable on
equipment (shown as ‘Other
payables’)
(
7,324)
(
15,898
)
Cash paid for acquisition of property, plant
and equipment
$ 13,371
$ 35,471
Cash paid for acquisition of property, plant

and equipment
For the three-month periods ended
March 31,
2023
2022
(b)Cash dividends declared $ 302,163
$ 287,774
Less: Dividends received by subsidiaries (
23,430)
(
22,314
)
(
278,733)
(
265,460
)

for holding the parent company’s shares
Ending balance of payable on cash

dividends (shown as‘Other payables’)
Cash dividends paid $ -
$ -

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

For the three-month periods ended
March 31,
2023
2022
$ -
$ 2,627
$ 528
$ 3,022
$ 9,559
$ 15,495
$ 2,686
$ 21,046
$ -
$ 275
2023
(a) Dividends
receivable
(shown
as
‘Other		 $ -

receivables’)
(b) Write-offs of uncollectible receivables $ 528
(c) Inventories transferred to property, plant and $ 9,559

equipment
(d) Prepayments for business facilities transferred to $ 2,686
property,
plant and equipment
(e) Prepayments for business facilities transferred to $ -

intangible assets		 
~38~

(31) Changes in liabilities from financing activities

Long-term borrowings Long-term borrowings Guarantee Guarantee Liabilities from
Short-term Lease Bonds (including current Deposits Financing
borrowings liability payable portion) received activities-gross
January 1, 2023 $
780,846		 $
52,262		 $ 4,563,605 $ 39,036 $
457 $
5,436,206
Changes in cash flow from 11,845
( 6,343 ) - ( 11,227 ) - (
5,725 )
financing activities
Changes in unamortized - -
3,675		 - -
3,675
discount
Changes in other non-cash items - 18,480 - - -
18,480
Impact of changes in foreign -
( 161 ) - - - (
161 )
exchange rate
March 31, 2023 $
792,691		 $
64,238		 $ 4,567,280 $ 27,809 $
457 $
5,452,475
Long-term borrowings Guarantee Liabilities from
Short-term Lease Bonds (including current Deposits Financing
borrowings liability payable portion) received activities-gross
January 1, 2022 $
1,642,371 $		 35,449 $ 3,000,000 $
624,826		 $
457 $		 5,303,103
Changes in cash flow from (
651,090 )(		 5,547 )) 1,775,874 ( 595,573 ) - 523,664
financing activities
Changes in unamortized - -
269		 - 269
discount
Changes in other non-cash items - - (
223,723 )		 - - ( 223,723)
Impact of changes in foreign - 708 - - - 708
exchange rate
March 31, 2022 $
991,281 $		 30,610 $ 4,552,420 $
29,253		 $
457 $		 5,604,021 
~39~

7. Related party transactions

(1)Name and relationship of related party

ame and relationship of related party
Name of related party
OFCO Industrial Corp.
Gloria Material Technology Corp.
TSG Transportation Corp.
TSG Environmental Technology Corp
TSG Power Corp		 Relationship with the Group
Other related parties
Other related parties
Other related parties
Other related parties
Other related parties

(2) Major transactions with related parties

A. Operating revenue

r transactions with related parties
Operating revenue
For the three-month periods ended March 31,

2023
2022
Sale of goods:
Other related parties $ 132,315
$ 186,860

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

B. Purchase

Purchase
For the three-month periods ended March 31,

2023
2022
Purchase of goods:
Other related parties $ 169
$ 1,861

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

C. Property transaction

Acquisition of assets:

Property transaction
Acquisition of assets:

Objects		 For the three-month periods ended March 31,
2023
2022
Other related parties Machinery and

equipment

The Group purchases property, plant and equipment from related parties at a negotiated price.

D. Other expenses

price.
Other expenses
For the three-month periods ended March 31,

2023
2022
Other related parties $ 11,407 $ 15,057 
~40~

E. Other income

E. Other income Other income Other income
For the three-month periods ended March 31,
2023
2022
Other related parties
$ 315
$ -
F. Amounts receivable from related parties
March 31, 2023
December 31, 2022
March 31, 2022
Notes receivable
Other related parties
$ 35,322
$ 48,966
$ 34,874
Accounts Receivable
Other related parties
$ 64,407
$ 39,106
$ 101,793
G. Contract liabilities-current
March 31, 2023
December 31, 2022
March 31, 2022
Other related parties
$ 7,611
$ 10,416
$ -
H. Payables to related parties
March 31, 2023
December 31, 2022
March 31, 2022
Accounts payable
Other related parties
$ -
$ -
$ 1,101
Other payables
Other related parties
$ 7,800
$ 8,348
$ 15,416
ey management compensation
2023
Other related parties $ 315
December 31, 2022
Amounts receivable from related parties
Notes receivable $ 35,322 $ 48,966
Other related parties
Accounts Receivable $ 39,106
March 31, 2023 December 31, 2022
March 31, 2022
Other related parties $ 7,611 $ 10,416 $ -
Payables to related partie s
March 31, 2023		 December 31, 2022
March 31, 2022
Accounts payable

Other related parties		 $ - $ - $ 1,101
Other payables

Other related parties		 $ 8,348 $ 15,416
For the three-month periods ended March 31,
2023
2022
Wages and salaries and other $ 16,409
$ 14,619

short-term benefits

F. Amounts receivable from related parties

G. Contract liabilities-current

H. Payables to related parties

(3) Key management compensation

8. Pledged assets

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

Assets
Pledged demand deposits
(note 1)
Inventories
Land (note 2)		 March 31,
2023

$ -
79,200
453,275		 December 31,
2022
$ 11,775
79,200
453,275		 March 31,
2022
$ 6,411
79,200
453,275		 Purpose
Guarantee, collateral for short-
term and long-term borrowings
and bonds payable
Collateral for short-term and
long-term borrowings
Collateral for short-term and
long-term borrowings and
bonds payable		 
~41~
Assets
Buildings and structures,
net (note 2)
Machinery and equipment,
net (note 2)
Right-of-use assets		 March 31,
2023
123,267
51,482
14,466
$ 721,690		 December 31,
2022		 March 31,
2022
122,382
49,605
15,315
$ 726,188		 Purpose
125,747
51,794
14,544
$ 736,335		 Collateral for short-term
and long-term borrowings and
bonds payable
Collateral for short-term and
long-term borrowings
Collateral for short-term
borrowings

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

(Note 2) Shown as ‘Property, plant and equipment’.

9.Significant Contingent Liabilities and Unrecognised Contract Commitments

  • (1)As of March 31, 2023, December 31, 2022 and March 31, 2022, the Group’s capital expenditures contracted for at the balance sheet date but not yet incurred were NT$705, NT$705 and NT$20,642, respectively.

  • (2)As of March 31, 2023, December 31, 2022 and March 31, 2022, the Group’s line of credit issued but not yet negotiated were NT$27,034, NT$36,751 and NT$318,700, 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)On October 5, 2019, the Company entered into a mid-term secured syndicated loan agreement with 10 banks including First Commercial Bank for a credit facility of $1,790,000 (including Tranche A facility amount of $590,000, Tranche B facility amount of $1,200,000 and Tranche C facility amount of $720,000, among which the total amount drawdown under Tranche B and Tranche C shall not exceed the Tranche B facility amount). The term for each tranche is 5 years. The Company’s commitments to banking syndicate during the terms of syndicated loan are as follows:

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

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

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

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

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

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

As of March 31, 2023, the Group did not breach commitments on aforementioned financial 

~42~

covenants. There was no such transaction for the year ended December 31, 2022 and the threemonth periods ended March 31, 2023.

  • (5)The Company is involved in a lawsuit filed by Mr. Li, Shi-Ren in 2012 relating to whether an employment relationship existed between both parties. Mr. Li, Shi-Ren claimed that he served in an investee of the Company for 26 years and 8 months and requested the Company to pay pension for a total amount of USD 642 thousand. On February 27, 2014, the Taiwan Kaohsiung District Court rendered a decision that the Company is liable for the USD 642 thousand pension payment. The Company disagreed with the decision and appealed during the legal period. On April 29, 2016, the Taiwan High Court Kaohsiung Branch Court revoked the original decision rendered on February 27, 2014 and rendered a decision that the litigation expenses incurred thereby shall be borne by the appellant (Li, Shi-Ren). Subsequently, Li, Shi-Ren appealed to the Supreme Court. On August 2, 2018, the Supreme Court, after reviewing the case, revoked the decision except for the provisional execution and remanded the case to the Taiwan High Court Kaohsiung Branch Court. On April 15, 2020, following the first decision by the Supreme Court, the Taiwan High Court Kaohsiung Branch Court rendered a decision on the case no. 2018-Zhong-Lao-ShangGeng-Yi-Zi-1, in which both of the appellant’s (Li, Shi-Ren) appeal with the first instance court and motion for provisional execution are dismissed, and the appellant shall bear the relevant litigation expenses. Subsequently, Li, Shi-Ren appealed to the Supreme Court. On April 28, 2022, the Supreme Court, after reviewing the case, revoked the decision except for the provisional execution and remanded the case to the Taiwan High Court Kaohsiung Branch Court. The judgment was remanded by the Supreme Court for the second time. The appeal was dismissed on December 14, 2022, and the relevant litigation expenses incurred shall be borne by the (the Company).

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

None.

12. Others

(1)Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

(2)Financial instruments

  • A.Financial instruments by category

Details of the Group’s financial instruments by category are provided in Note 6.

  • B.Financial risk management policies

  • (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and 

~43~

financial performance.

  • (b)Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written principles for over all risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

  • C.Significant financial risks and degrees of financial risks

  • (a) Market risk

    • i.Foreign exchange risk

    • (i)The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the RMB, USD and IDR. Foreign exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

    • (ii)Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. The Group treasury uses forward foreign exchange contracts to manage the foreign exchange risk arising from future commercial transactions and recognised assets and liabilities. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.

    • (iii)The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD, RMB and IDR). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

up’s businesses involve some non-functional currency operations (the
’s and certain subsidiaries’ functional currency: NTD; other certain
es’ functional currency: USD, RMB and IDR). The information on assets and
denominated in foreign currencies whose values would be materially affected
change rate fluctuations is as follows:		 up’s businesses involve some non-functional currency operations (the
’s and certain subsidiaries’ functional currency: NTD; other certain
es’ functional currency: USD, RMB and IDR). The information on assets and
denominated in foreign currencies whose values would be materially affected
change rate fluctuations is as follows:
March 31, 2023
(Foreign currency:
functional currency)
Foreign currency
amount
(In thousands)
Exchange
rate
Book value
Financial assets
Monetary items

USD: NTD
$ 27,138
30.45
$ 826,353
RMB:NTD
13,686
4.431
60,644
USD: RMB
1,307
6.8717
39,785
EUR: NTD
1,128
33.15
37,406
Financial liabilities
Monetary items

USD: NTD
6,921
30.45
210,745
USD: IDR
2,230
15,000
67,900		 
~44~
December 31, 2022 December 31, 2022
(Foreign currency:
functional currency)
Foreign currency
amount
(In thousands)
Exchange
rate
Book value
Financial assets
Monetary items

USD: NTD
$ 8,400
30.71
$ 257,973
USD: RMB
3,217
6.9646
98,760
EUR: NTD
1,231
32.72
40,293
RMB: NTD
7,057
4.410
31,109
JPY: NTD
56,869
0.2324
13,216
Financial liabilities
Monetary items

USD: NTD
5,260
30.71
161,526
USD: RMB
3,535
6.9646
108,514
USD: IDR
2,230
15,510
68,479
EUR: NTD
834
32.72
27,288
March 31, 2022 March 31, 2022
(Foreign currency:
functional currency)
Foreign currency
amount
(In thousands)
Exchange
rate
Book value
Financial assets
Monetary items

USD: NTD
$ 17,770
28.63
$ 508,675
USD: RMB
2,627
6.3482
75,194
EUR: NTD
1,256
31.92
40,100
EUR: RMB
394
6.348
11,269
RMB: NTD
32,565
4.508
146,816
Financial liabilities
Monetary items

USD: NTD
2,011
28.63
57,552
USD: RMB
2,440
6.3482
69,834

The sensitivity analysis of foreign exchange risk mainly focuses on the foreign currency monetary items at the end of the financial reporting period. If the exchange rate of NTD to all foreign currencies had appreciated/depreciated by 1%, the Group’s net income for the three month periods ended March 31, 2023, and 2022 would have decreased/increased by $5,498 and $5,228, respectively.

The total exchange gains (losses), including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the three month periods ended March 31, 2023, and 2022, amounted to ($1,778) and $6,630, respectively.

ii.Price risk

  • (i)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 
~45~

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.

  • (ii)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, 2023 and 2022 due to the gain or loss of equity instruments measured at fair value through income statement will increase or decrease by NT$153 or NT$559, 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$3,641 or NT$6,266, respectively.

  • iii.Cash flow and fair value interest rate risk

  • (i) The Group’s main interest rate risk arises from some borrowings with variable rates, which expose the Group to cash flow interest rate risk. During the three month periods ended March 31, 2023, and 2022, the Group’s borrowings at variable rate were mainly denominated in NTD, USD, RMB and IDR.

  • (ii) The Group’s borrowings are measured at amortised cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

  • (iii) With regard to sensitivity analysis of interest rate risk, if interest rate on borrowing increased/decreased by 1% with all other variables held constant, post-tax profit for the three-month periods ended March 31, 2023 and 2022 would have decreased/increased by $48 and $35, respectively, mainly as a result of higher/lower interest expense on floating rate borrowings.

  • (b)Credit risk

  • i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.

  • ii. The Group manages its credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a certain rating are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

  • iii. The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

  • iv. If the credit rating grade of an investment target degrades two scales, there has been a significant increase in credit risk on that instrument since initial recognition. 

~46~

  • v. If the default rate of an investment target exceeds 10%, there has been a significant increase in credit risk on that instrument since initial recognition.

  • vi. The Group adopts the assumption under IFRS 9, that is, the default occurs when the contract payments are past due over 90 days.

  • vii. The Group classifies customer’s accounts receivable in accordance with credit risk on trade. The Group applies the modified approach using a provision matrix to estimate the expected credit loss and uses the historical and timely information to establish loss rate for assessing the default possibility of accounts receivable. Movements in relation to the Group applying the modified approach to provide loss allowance for notes and accounts receivable are as follows:

vable are as follows:
For the three-month periods ended March 31,2023
Notes
receivable
Accounts
receivable
Total
$ 268
$ 24,003
$ 24,271
(
40)
525
485
-
(
528)
(
528)
4
82
86
$ 232
$ 24,082
$ 24,314
Notes
receivable
Balance at January 1 $ 268
Expected credit loss (gain) (
40)
Write-offs -
Effect of foreign exchange 4
Balance on March 31 $ 232
For the three-month periods ended March 31,2022
Notes
receivable		 Accounts
receivable
Total
Balance on January 1 $ 252 $ 29,118
$ 29,370
Expected credit loss (
32)		 (
135)
(
167)
Write-offs - (
3,022)
(
3,022)
Effect of foreign exchange 6 767
773
Balance on March 31 $ 226 $ 26,728
$ 26,954

(c) Liquidity risk

  • i.Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

  • ii.The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows: 

~47~
March 31, 2023
Non-derivative financial
liabilities
Short-term borrowings
Notes payable
Accounts payable
Other payables
Lease liability
Bonds payable
Long-term borrowings
(including current
portion)
Guarantee deposits
received
December 31, 2022
Non-derivative financial
liabilities
Short-term borrowings
Notes payable
Accounts payable
Other payables
Lease liability
Bonds payable
Long-term borrowings
(including current
portion)
Guarantee deposits
received
March 31, 2022
Non-derivative financial
liabilities
Short-term borrowings
Notes payable
Accounts payable
Other payables
Lease liability
Bonds payable
Long-term borrowings
(including current
portion)
Guarantee deposits
received		 Less than
1 year
$ 803,611
169
474,319
672,506
25,461
1,950
6,890
457
Less than
1 year
$ 801,682
388
558,651
440,435
25,654
1,950
16,723
457
Less than
1 year
$ 1,103,761
1,448
1,101,390
757,571
20,194
1,950
24,920
457		 Between
1 to 2 year(s)
$ -
-
-
-
13,026
1,950
6,009
-
Between
1 to 2 year(s)
$ -
-
-
-
10,484
1,950
6,367
-
Between
1 to 2 year(s)
$ -
-
-
-
7,672
1,950
5,284
-		 Between
2 to 5 years
$ -
-
-
-
26,287
5,850
13,164
-
Between
2 to 5 years
$ -
-
-
-
14,363
5,850
13,962
-
Between
2 to 5 years
$ -
-
-
-
25,621
5,850
561
-		 More than
5 years
$ -
-
-
-
3,268
4,601,950
2,758
-
More than
5 years
$ -
-
-
-
3,785
4,601,950
3,316
-
More than
5 years
$ -
-
-
-
20,833
4,603,900
-
-

iii.For non-derivative financial liabilities, the Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis to be significantly earlier, nor expect the actual cash flow amount to be significantly different.

(3)Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

Level I: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the 

~48~

entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates is included in Level 1.

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

Level III: Unobservable inputs for the asset or liability.

  • B. The carrying amounts of the Group’s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, other current financial assets, guarantee deposits paid, long-term notes and accounts receivable, non-current financial assets at amortised cost, short-term borrowings, short-term notes and bills payable, notes payable, accounts payable, other payables, bonds payable, longterm borrowings (including current portion) and guarantee deposits received) are approximate to their fair values.

  • C. The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets are as follows:

March 31, 2023
Assets:
Recurring fair value
measurements
Financial assets at fair
value through profit or
loss Equity securities
Beneficiary certificates
through other
comprehensive
income Equity
securities
December 31, 2022
Assets:
Recurring fair value
measurements
Financial assets at fair
value through profit
or loss
Equity securities
Beneficiary
certificates
Financial assets at fair
value through other
comprehensive
income
Equity securities		 Level I
$ 8,095
7,224
15,319
364,141
$ 379,460
Level I
$ 39,232
11,179
50,411
439,249
$ 489,660		 Level II
$ -
-
-
-
$ -
Level II
$ -
-
-
-
$ -		 Level IIII
$ -
-
-
-
$ -
Level IIII
$ -
-
-
-
$ -		 Total
$ 8,095
7,224
15,319
364,141
$ 379,460
Total
$ 39,232
11,179
50,411
439,249
$ 489,660 
~49~
March 31, 2022
Assets:
Recurring fair value
measurements
Financial assets at fair
value through profit
or loss
Equity securities
Beneficiary
certificates
Financial assets at fair
value through other
comprehensive
income
Equity securities		 Level I
$ 47,629
8,311
55,940
626,589
$ 682,529		 Level II
$ -
-
-
-
$ -		 Level IIII
$ -
-
-
-
$ -		 Total
$ 47,629
8,311
55,940
626,589
$ 682,529

  • D. The methods and assumptions the Group used to measure fair value are as follows:

  • (a)The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

ted below by characteristics:
Listed shares Open-end fund
Market quoted price Closing price Net asset value

  • (b)Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters).

  • E. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

  • F. For the three-month periods ended March 31, 2023 and 2022, there was no transfer between Level 1 and Level 2.

  • G. For the three-month periods ended March 31, 2023 and 2022, there was no transfer into or out from Level 3.

13. Supplementary Disclosures

(According to the current regulatory requirements, the Company is only required to disclose the information for the three-month periods ended March 31, 2023 )

(1)Significant transactions information

  • A. Loans to others: None.

  • B. Provision of endorsements and guarantees to others: Please refer to table 1.

  • C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2. 

~50~

  • D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: None.

  • E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

  • F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

  • G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paidin capital or more: Please refer to table 3.

  • H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.

  • I. Trading in derivative instruments undertaken during the reporting periods: None.

  • J. Significant inter-company transactions during the reporting periods: Please refer to the attached Table 4.

(2)Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 5.

(3)Information on investments in Mainland China

  • A. Basic information: Please refer to table 6.

  • B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas: Purchases and sales between the Company and investees in Mainland China are eliminated when preparing consolidated financial statements. Information on significant transactions, such as purchases and sales, receivables and payables, provision of endorsements and guarantees and financing, between the Company and investees in Mainland China is provided in Note 13(1)A, B and J.

(4)Major shareholders information

Major shareholders information: Please refer to table 7.

14. Segment Information

(1)General information

  • A. Management has determined the reportable operating segments based on the reports reviewed by the chief operating decision-maker that are used to make strategic decisions. The Group’s reportable segments are as follows:

  • (a)Screw segment: Primarily engaging in the manufacture, process and trade of screws and nuts, etc.

  • (b)Machinery segment: Primarily engaging in the manufacture, assemble and trade of machine tools and chemical machinery, etc.

  • (c)Investment segment: Primarily engaging in the general investment.

  • B. There is no material change in the basis for formation of entities and division of segments in the Group or in the measurement basis for segment information during this period.

  • C. The Group’s chief operating decision-maker assesses the performance based on the segment’s net operating profit. The accounting policies of the operating segments are in agreement with the significant accounting policies summarised in Note 4 in the consolidated financial statements. 

~51~

(2)Information about segment profit or loss, assets and liabilities

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

nts is as follows:
Segment revenue
Inter-segment revenue
Revenue from
external customers,
net
Segment income
before tax
Segment assets
Segment liabilities		 For the three-month periods ended March 31, 2023
Screw
segment
$ 1,959,223
(
118,963)
1,840,260
174,806
10,584,410
6,810,330		 Machinery
segment
$ 229,029
(
23,580)
205,449
16,617
1,888,922
899,774		 Investment
segment
$ -
-
-
16,377
103,501
10		 Total
$ 2,188,252
(
142,543)
2,045,709
207,800
12,576,833
7,710,114
Segment revenue
Inter-segment revenue
Revenue from
external customers,
net
Segment income
before tax
Segment assets
Segment liabilities		 For the three-month periods For the three-month periods ended March 31, 2023 ended March 31, 2023
Screw
segment
$ 2,946,322
(
147,720)
2,798,602
301,328
11,513,506
7,633,755		 Machinery
segment
$ 263,006
(
5,939)
257,067
19,239
1,791,464
979,625		 Investment
segment
$ -
-
-
6,670
159,718
2,227		 Total
$ 3,209,328
(
153,659)
3,055,669
327,237
13,464,688
8,615,607

(3)Reconciliation for segment profit or loss, assets and liabilities

  • A. Sales between segments are carried out at arm’s length. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that in the consolidated statement of comprehensive income. A reconciliation of reportable segment income or loss before tax to the income/(loss) before tax is provided as follows:
For the three-month periods ended March 31,
2023
2022
Reportable operating segments $ 207,800
$ 327,237
(
79,672)
(
94,607)

income before tax
Elimination of inter-segment income

(loss)
Profit before income tax $ 128,128
$ 232,630
  • B. The amounts provided to the chief operating decision maker with respect to total assets and liabilities are measured in a manner consistent with that of the financial statements. Therefore, such reconciliation is not required. 
~52~

Table 1

Expressed in thousands of NTD

Chun Yu Works & Co., Ltd. and subsidiaries Provision of endorsements and guarantees to others For the three-month periods ended March 31, 2023

Number Endorser/
guarantor		 Party being
endorsed/guaranteed		 Party being
endorsed/guaranteed		 Limit on
endorsements/
guarantees
provided for a
singleparty		 Maximum
outstanding
endorsement/
guarantee
amount as of
March 31,
2023		 Outstanding
endorsement/
guarantee
amount at
March 31,
2023		 Actual amount
drawn down		 Amount of
endorsements/
guarantees
secured with
collateral		 Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company		 Ceiling on
total amount of
endorsements/
guarantees
provided		 Provision of
endorsements/
guarantees by
parent
company to
subsidiary		 Provision of
endorsements/
guarantees by
subsidiary to
parent
company		 Provision of
endorsements/
guarantees to
the party in
Mainland
China		 Footnote
Companyname Relationship
with the
endorser/
guarantor
（Note 1）
0 Chun Yu Works & Co.,
Ltd.		 Chun Yu Works (USA)
Inc.
Chun Yu (Dongguan) Metal
Products Co., Ltd.
Shanghai Uchee Hardware
Products Ltd.		 2
2
2		 2,459,664
$ 2,459,664
2,459,664		 -
$ 614,200
-		 $ -
609,000
-		 $ -
268,076
-		 $ -
-
-		 0.00%
14.86%
0.00%		 3,279,552
$ 3,279,552
3,279,552		 Y
Y
Y		 N
N
N		 N
Y
Y		 (Note 2)
(Note 2)
(Note 2)

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

  • Having business relationship.

  • 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( USD ： NTD 1 ： 30.45 ， RMB ： NTD 1 ： 4.4305). 

Table 1 Page 1

Chun Yu Works & Co., Ltd. and subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) March 31, 2023

March 31, 2023
Relationship
General
with the securities
ledger account
Securities held by
Marketable securities
issuer
(Note 1)
Table 2		 As of March 31,2023 Fair value
Footnote
Expressed in thousands of NTD
Number of
shares
(In thousands of
shares or units)		 Book value Ownership Fair value
Chun Yu Works & Co., Ltd.
Stocks - D-Link Corporation
Other related party
1
Stocks - OFCO Industrial Corporation
Other related party
1
Stocks - Taiwan Styrene Monomer Corporation
－
2
Stocks - King Kong Iron Works, Ltd.
－
2
Beneficiary certificates - Yuanta Taiwan High-yield Leading Company Fund
－
1
Beneficiary certificates - PGIM USD High Yield Bond Fund-USD
－
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
(Note 2)
Stocks - Taiwan Styrene Monomer Corporation
－
2
Chun Yu Bio-tech Corp.
Stocks - Chun Zu Machinery Industry Co., Ltd.
Subsidiary
(Note 3)
Stocks - Taiwan Styrene Monomer Corporation
－
2		 82
234
11,678
304
500
300
10
6,440
23,430
6,618
9
1,500		 1,492
$ 6,447
161,740
773
4,400
2,824
156
89,194
578,725
91,659
184
20,775		 0.01
0.24
2.21
0.55
-
-
-
1.22
7.75
1.25
0.01
0.28		 1,492
$ 6,447
161,740
773
4,400
2,824
156
89,194
578,725
91,659
184
20,775		 -
-
-
-
-
-
-
-
-
-
-
-

(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.

  3. (Note 2) Please refer to Note 6, (17) explanation of share capital.

  4. (Note 3) The Company is listed 'Financial assets at fair value through other comprehensive profit or loss- non-current’,

however the consolidated financial statements will be transferred to the' Long-term investments at equity ' and write off in full. 

Table 2 Page 1

Chun Yu Works & Co., Ltd. and subsidiaries

  • Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid in capital or more For the three-month periods ended March 31, 2023

Table 3

Expressed in thousands of NTD

Purchaser/seller Counterparty Relationship with the
counterparty		 Transaction transactions
Differences in transaction terms
compared to third party		 transactions
Differences in transaction terms
compared to third party		 Notes/accounts r eceivable (payable) Footnote
Purchases
(sales)		 Amount Percentage of
total
purchases
(sales)		 Credit term Unitprice Credit term Balance Percentage of
total
notes/accounts
receivable
Chun Yu Works & Co., Ltd. Ofco Industrial Corporation Other related party (Sales) 120,154)
($		 ( 14% ) 1 month $ - 3 ~ 5 months $ 60,330 10% -

(Note 1) Foreign currencies are translated into New Taiwan Dollars using the following exchanges: Ending balance of receivable and payable are translated using the exchange rates as of report date (USD ： NTD 1 ： 30.45, RMB ： NTD 1 ： 4.4305), and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the three-month periods ended March 31, 2023 (USD ： NTD 1 ： 30.4021, RMB ： NTD 1 ： 4.4387). 

Table 3 Page 1

Table 4

Expressed in thousands of NTD

Chun Yu Works & Co., Ltd. and subsidiaries

- Significant inter company transactions during the reporting period For the three-month periods ended March 31, 2023

Transaction

Number
(Note2)		 Companyname Counterparty Relationship
(Note 3)		 General ledgeraccount Amount Transactionterms Percentage of
consolidated total
operating revenue or
totalassets (Note4)
0
1
2
3
4
5
7
6		 Chun Yu Works & Co., Ltd.
Chun Bang Precision Co., Ltd.
Chun Yu Investment Corporation
Chun Zu Machinery Industry Co., Ltd.
Chun Yu (Dongguan) Metal Products Co., Ltd.
Shanghai Uchee Hardware Products Ltd.
Lion City Management Ltd.
Sunny City International Limited.		 Chun Yu Works (USA) Inc.
Chun Yu Works (USA) Inc.
Chun Yu (Dongguan) Metal Products Co., Ltd.
Chun Zu Machinery Industry Co., Ltd.
Chun Yu Works & Co., Ltd.
Chun Yu Works & Co., Ltd.
Chun Yu Works & Co., Ltd.
Lion City Management Ltd.
Chun Yu (Dongguan) Metal Products Co., Ltd.
Scholar Holdings Ltd.
Shanghai Uchee Hardware Products Ltd.
Shanghai Uchee Hardware Products Ltd.
Chun Yu (Dongguan) Metal Products Co., Ltd.
Shanghai Chun Zu Machinery Industry Ltd.
Shanghai Uchee Hardware Products Ltd.		 1
1
1
1
2
2
2
3
3
3
3
3
3
3
3		 Sales
Accounts receivable
Provision of endorsements and guarantees
Other receivables
Sales
Accounts receivable
Other receivables
Other receivables
Sales
Other receivables
Sales
Other receivables
Sales
Other receivables
Other receivables		 20,068
$ 29,737
609,000
43,233
15,375
11,379
23,430
112,604
12,791
18,435
57,365
35,383
33,965
112,604
25,598		 4 months
-
-
-
3 months
-
-
-
3 months
-
3 months
-
3 months
-
-		 1%
-
5%
-
1%
-
-
1%
1%
-
3%
-
2%
1%
-

  • (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:

  • Number 0 presents the Company.

  • The consolidated subsidiaries are in order from number 1.

  • (Note 3) The relationships among the transation parties are as follows:

  • The Company to the consolidated subsidiary.

  • The consolidated subsidiary to the Company.

  • 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 ： NTD 1 ： 30.45 ； RMB ： NTD 1 ： 4.4305) ; prevailing at the financial reporting date, and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the three-month periods ended March 31, 2023 (USD ： NTD 1 ： 30.4021 ； RMB ： NTD 1 ： 4.4387). 

Table 4 Page 1

For the three-month period ended March 31, 2023

Table 5

Chun Yu Works & Co., Ltd. and subsidiaries Information on investees

Main business
Investor
Investee
Location
activities		 Initial investment amount Shares held as at March 31,2023 Net profit (loss)
Investment income (loss)
of the investee for the
recognised by the Company
three-month periods ended
ended
March 31,2023
March 31,2023
Footnote		 Net profit (loss)
Investment income (loss)
of the investee for the
recognised by the Company
three-month periods ended
ended
March 31,2023
March 31,2023
Footnote
Balance as at
Balance as at
March 31,
December 31,
2023
2022		 Numberofshares
Ownership (%)
Bookvalue
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
Scholar Holdings Ltd.
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
$ 125,344
$ 114,728
114,728
267,652
267,652
90,260
90,260
2,581,891
2,581,891
84,824
84,824
154,760
154,760
52,597
52,597
60,900
60,900		 15,000,000
100.00
184,894
$ 3,800,000
100.00
376,770
74,888,032
100.00
103,491
10,000,000
100.00
124,375
33,183,211
100.00
1,016,676
1,000,000
100.00
260,907
14,370,000
71.85
706,930
28,821,939
47.81
448,152
-
100.00
490,978		 19
$ 1,779
$ 15,058
16,238
39,807
25)
(
3,259)
(
3,267)
(
10,935)
(
8,224)
(
6,567
6,608
66,860
48,039
13,657
5,362
14,677
-		 A subsidiary
A subsidiary
A subsidiary
A subsidiary
A subsidiary
A subsidiary
A subsidiary
A subsidiary
A subsidiary (Note 1)

(Note 1) According to the related regulations, it is not required to disclose income (loss) recognized by the Company.

(Note 2) Foreign currencies are translated into New Taiwan Dollars using the following exchanges:

Ending balance of receivable and payable are translated using the exchange rates as of report date:( USD ： NTD 1 ： 30.45 ； RMB ： NTD 1 ： 4.4305).

and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the three-month periods ended March 31, 2023 as follows: (USD ： NTD 1 ： 30.4021 ； RMB ： NTD 1 ： 4 .4387). 

Table 5 Page 1

Chun Yu Works & Co., Ltd. and subsidiaries Information on investments in Mainland China For the three-month periods ended March 31, 2023

Table 6

Investee in
Mainland China
Table 6		 Main business
activities		 Paid-incapital Accumulated
amount of
remittance from
Taiwan to
Investment
Mainland China
as of January 1,
method
2023		 periods ended
Amount r
to Taiwan for
Amount remit
to Main		 March 31,2023
emitted back
the three-month
ted from Taiwan
land China/		 Accumulated
amount
of remittance
from Taiwan to
Mainland China
as of March 31,
2023		 Net income of
investee for the
three-month periods
March31,2023		 Ownership
held by
the
Company
(direct or
indirect)		 Investment income
(loss) recognised
by the Company
for the three-month
periods ended
March31,2023		 Accumulated
amount
of investment
Book value of
income
investments in
to
Mainland China
as of March 31,
Taiwan as of
March 31,
2023
2023
1,043,446
$ -
$ 233,448
53,318
(Note 7)
3,999)
(
-
232,353
443,228
(Note 8)
Expresse		 Footnote
d in thousands of NTD
Remitted to
Mainland
China		 Remitted back
toTaiwan
Chun Yu (Dongguan) Metal Products Co., Ltd.
Shanghai Uchee Hardware Products Ltd.
Chunyu Group Shanghai Tongsheng Trade
Co., Ltd.
Shanghai Chun Zu Machinery Industry Ltd.
Companyname		 Manufacture and trade of screws and nuts
Trade of screws and nuts
Trade of screws and nuts
Manufacture and trade of machinery
Accumulated
amount of
remittance
from Taiwan
to Mainland
China
as of March 31,
2023		 $ 1,963,446
(Note 1)
30,450
8,100
258,825
(Note 2)
Investment
amount approved
by the
Investment
Commission of
the Ministry of
Economic
Affairs (MOEA)		 (Note 3)
1,467,477
$ (Note 4)
30,450
(Note 5)
-
(Note 6)
60,900
Ceiling on
investments in
Mainland China
imposed by the
Investment
Commission of
MOEA(Note10)
$ 2,920,031
608,749		 -
$ -
-
-		 -
$ -
-
-		 1,467,477
$ 30,450
-
60,900		 10,905)
($ 6,567
12)
(
14,628		 100%
100%
100%
47.82%		 10,905)
($ 6,567
12)
(
6,995		 (Note 9)
-
-
(Note 9)
Chun Yu Works & Co., Ltd.
Chun Zu Machinery Industry Co., Ltd.		 1,720,821
$ 60,900		 $ 1,720,821
197,925

  • (Note 1) The investment in Chun Yu (Dongguan) Metal Products Co., Ltd. amounted to US$64,482 thousand, consisting of US$48,193 thousand that has been reported to the Investment Commission and US$16,289 thousand from an investment loan from Scholar Holdings Ltd.

  • (Note 2) The paid-in capital of Shanghai Chun Zu Machinery Industry Ltd. amounted to UD$8,500 thousand, consisting of UD$4,000 thousand from remittance from Chun Zu Machinery Industry Co., Ltd. through its subsidiary, Lion City Management Ltd.

and US$4,500 thousand from capitalisation of retained earnings of Shanghai Chun Zu Machinery Industry Ltd., which were reported to the Investment Commission. In addition, proceeds from capital reduction of Lion City Management Ltd. in 2008 amounting to US$2,000 thousand were reported to the Investment Commission.

  • (Note 3) Indirect investment in PRC through the existing company (Scholar Holdings Ltd.) located in the third area.

  • (Note 4) Indirect investment in PRC through the existing company (Sunny City International Ltd.) located in the third area.

  • (Note 5) Indirect investment in PRC through the existing company (Shanghai Uchee Hardware Products Ltd.) located in PRC.

  • (Note 6) Indirect investment in PRC through the existing company (Lion City Management Ltd.) located in the third area.

  • (Note 7) It is the cash dividends totaling US$1,751 thousand distributed by Shanghai Uchee Hardware Products Ltd. to Sunny City International Ltd., which then remitted to the Company and Chun Bang Precision Co., Ltd.

  • (Note 8) It is the cash dividends amounting to US$30,439 thousand distributed by Shanghai Chun Zu Machinery Industry Ltd. to Lion City Management Ltd., which then remitted to Chun Zu Machinery Industry Co., Ltd.

  • (Note 9) Investment gains or losses were recognised based on audited financial statements.

  • (Note 10) The ceiling is calculated based on the 60% of the investor’s net assets or consolidated net assets (whichever is higher).

  • (Note 11) For the amounts denominated in foreign currencies, the paid-in capital, amount of remittance from Taiwan and book value as of March 31, 2023 are translated into New Taiwan dollars at the exchange rate (USD ： NTD 1 ： 30.45 ； RMB ： NTD 1 ： 4.4305) prevailing at the financial reporting date, and the net profit (loss) of the investee and investment income (loss) recognised by the Group are translated into New Taiwan dollars at the average

exchange rate for the three-month periods ended March 31, 2023 (USD ： NTD 1 ： 30.4021 ； RMB ： NTD 1 ： 4.4387). 

Table 6 Page 1

Chun Yu Works & Co., Ltd. and subsidiaries Major shareholders information March 31, 2023

Table 7

Unit ： shares

Name of major shareholders Shares
Number of shares held Ownership (%)
Bai Jia Yuan Investment Co., Ltd.
Jin Jhih Fu Assets Management Co., Ltd.
Chun Yu Investment Co., Ltd.		 84,219,450
28,491,850
23,430,172		 27.87%
9.42%
7.75%
  • (Note) The major shareholders information was derived from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation.The share capital which was recorded in the financial statements may be different from the actual number of shares issued in dematerialised form due to the different calculation basis. 
Table 7 Page 1

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