CHUN YU - Interim / Quarterly Report 2023

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT JUNE 30,2023 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.

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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 June 30, 2023 and 2022 a nd the related consolidated statements of comprehensive income for the three-month and six-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the six-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$2,114,223 thousand and NT$2,060,347 thousand respectively, accounting for 17% and 16% of the total consolidated assets respectively; the total liabilities were NT$387,212 thousand and NT$504,987 thousand respectively, accounting for 5% and 6% of the total consolidated liabilities as of June 30, 2023 and 2022, respectively; the total comprehensive income were NT$114,736 thousand, NT($133,047) thousand, NT$178,024 thousand and NT($116,383) thousand respectively, accounting for 111% ,(138%) ,78% and (33%) of the total consolidated comprehensive income

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for the three-month and six-month periods ended June 30, 2023 and 2022,respectively.

Qualified Conclusion

According to our reviews and the review report of other accountants (please refer to Miscellaneous), except that the financial statements of some of the non-significant subsidiaries and the relevant information disclosed in note 13 as mentioned in Basis of Qualified Conclusion, if reviewed by us, may lead to adjustments to the consolidated financial statements, it is not found that the consolidated financial statements above have not been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” approved and promulgated by the Financial Supervisory Commission which may lead to the inability to properly express the consolidated financial status of Chun Yu Group as of June 30, 2023 and 2022 and the consolidated financial performance for the three-month and six-month periods ended and consolidated cash flow for the six-month periods ended June 30, 2023 and 2022.

Other Matter

The financial statements of PT. Moon Lion Industries Indonesia for the three-month periods ended June 30, 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 June 30, 2023 and 2022 were NT$1,374,250 thousand and NT$1,227,925 thousand respectively, accounting for 11% and 9% of the total consolidated assets; net operating income were NT$338,237 thousand, NT$358,114 thousand, NT$762,694 thousand and NT$826,669 thousand respectively, accounting for 17%, 13%, 19% and 14% of the total consolidated comprehensive income for the three-month and six-month periods ended June 30, 2023 and 2022, respectively.

Chung-Yu, Tien Independent Accountants Huei-Yu, Hsu PricewaterhouseCoopers, Taiwan Republic of China August 10, 2023

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

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of June 30, 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 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets	Notes	June 30,2023 AMOUNT % $ 3,179,154 26 17,016 - 3,008 - 269,091 2 1,412,496 11 14,477 - 3,820 - 3,686,530 30 110,521 1 522 - 8,696,635 70 - - 434,978 4 - - 2,992,361 24 139,227 1 7,919 - 165,514 1 16,072 - 17,650 - 922 - 8,112 - 3,782,755 30 $ 12,479,390 100 (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 - 154,732 1 23,088 - 21,957 - 3,317 - 6,780 - 3,893,770 31 $ 12,601,719 100	June 30,2022 AMOUNT % $ 1,441,788 11 11,979 - 11,824 - 258,313 2 1,987,947 15 28,783 - - - 4,640,636 36 655,440 5 1,400 - 9,038,110 69 629 - 556,763 4 44,283 1 3,088,637 24 131,997 1 8,847 - 173,254 1 27,845 - 18,689 - 6,031 - 6,706 - 4,063,681 31 $ 13,101,791 100
		AMOUNT $ 3,179,154 17,016 3,008 269,091 1,412,496 14,477 3,820 3,686,530 110,521 522 8,696,635 - 434,978 - 2,992,361 139,227 7,919 165,514 16,072 17,650 922 8,112 3,782,755 $ 12,479,390 (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 7,343 154,732 23,088 21,957 3,317 6,780 3,893,770 $ 12,601,719	AMOUNT $ 1,441,788 11,979 11,824 258,313 1,987,947 28,783 - 4,640,636 655,440 1,400 9,038,110 629 556,763 44,283 3,088,637 131,997 8,847 173,254 27,845 18,689 6,031 6,706 4,063,681 $ 13,101,791
	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)

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

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of June 30, 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
3150
Stock dividends to be distributed
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

June 30,2023
December 31,2022
June 30,2022
Notes
AMOUNT
%
AMOUNT
%
AMOUNT
%
6(12) and 8
$ 618,536
5
$ 780,846
6
$ 1,070,142
8
6(21) and 7
474,549
4
470,653
4
418,007
3
428
-
388
-
1,622
-
7
469,165
4
558,651
5
913,429
7
6(19) and 7
701,931
6
440,435
4
466,333
4
6(28)
49,982
-
45,169
-
45,168
1
6(14)
6,375
-
6,265
-
6,640
-
6(8)
20,747
-
24,728
-
19,301
-
6(15) and 8
6,583
-
16,121
-
25,800
-
2,348,296
19
2,343,256
19
2,966,442
23
6(13) and 8
4,571,004
36
4,563,605
36
4,556,113
35
6(15) and 8
26,415
-
22,915
-
17,863
-
6(28)
454,917
4
458,159
4
426,535
3
6(8)
37,663
-
27,534
-
24,871
-
6(16)
105,744
1
116,863
1
164,039
1
457
-
457
-
457
-
5,196,200
41
5,189,533
41
5,189,878
39
7,544,496
60
7,532,789
60
8,156,320
62
6(17)(19)
3,021,627
24
3,021,627
24
2,877,740
22
-
-
-
-
143,887
1
6(13)(18)
501,353
4
477,923
4
466,207
4
6(6)(17)
(19)
336,485
3
302,397
2
271,456
2
430,610
3
430,610
3
430,610
3
485,290
4
653,326
5
494,468
4
6(6)(20)
(
322,185 ) (
2)
(
331,076 )
(
2)
(
228,459) (
2 )
6(17)
(
267,195)(
2)
(
267,195 )
(
2)
(
267,195)(
2)
4,185,985
34
4,287,612
34
4,188,714
32
4(3)
748,909
6
781,318
6
756,757
6
4,934,894
40
5,068,930
40
4,945,471
38
9
$ 12,479,390
100
$ 12,601,719
100
$ 13,101,791
100

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

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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)

		For three-monthperiods ended June 30, 2023 2022	For three-monthperiods ended June 30, 2023 2022	For three-monthperiods ended June 30, 2023 2022	For three-monthperiods ended June 30, 2023 2022	For three-monthperiods ended June 30, 2023 2022	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,
							2023 2022
	Items Notes	AMOUNT		% AMOUNT %			AMOUNT		%		AMOUNT		%
4000	Operating revenue 6(21) and 7	$ 2,027,093 100 $ 2,725,987 100					$ 4,072,802 100 $ 5,781,656 100
5000	Operating costs 6(4)(8)(9) (16)(26)
	(27) and 7 ( 1,731,800		) (	86 ) ( 2,220,021 ) ( 81		) (	3,433,904	) (	85	) (	4,810,425	) (	83 )
5900	Net operating margin 295,293			14 505,966 19			638,898		15		971,231		17
	Operating expenses 6(8)(9) (16)(26) (27),7 and 12
6100	Selling expenses ( 70,220 ) ( 3 ) ( 87,168 ) ( 3 ) ( 145,345 ) ( 3 ) ( 181,002 ) ( 3 )
6200	General and administrative expenses ( 120,582 ) ( 6 ) ( 134,787 ) ( 5 ) ( 240,649 ) ( 6 ) ( 246,483 ) ( 4 )
6300	Research and development expenses ( 15,691 ) ( 1 ) ( 19,550 ) ( 1 ) ( 30,367 ) ( 1 ) ( 38,124 ) ( 1 )
6450	Expected credit gains (losses) ( 746 ) - ( 2,104 ) - ( 1,231 ) - ( 1,937 ) -
6000	Total operating expenses ( 207,239 ) ( 10 ) ( 243,609 ) ( 9 ) ( 417,592 ) ( 10 ) ( 467,546 ) ( 8 )
6900	Operating profit 88,054 4 262,357 10 221,306 5 503,685 9
	Non-operating income and expenses
7100	Interest income 6(3) (22) 9,229 1 3,175 - 19,170 1 6,513 -
7010	Other income 6(2) (23) and 7 3,620 - 1,831 - 13,939 - 7,019 -
7020	Other gains and losses 6(2)(5)(8) (24)and 12 3,887 - 12,995 - 10,542 - 23,111 -
7050	Financial cost 6(8) (25) ( 31,475 ) ( 2 ) ( 30,140 ) ( 1 ) ( 63,514 ) ( 1 ) ( 57,480 ) ( 1 )
7000	Total non-operating income and expenses ( 14,739 ) ( 1 ) ( 12,139 ) ( 1 ) ( 19,863 ) - ( 20,837 ) ( 1 )
7900	Profit before income tax 73,315 3 250,218 9 201,443 5 482,848 8
7950	Income tax expense 6(28) ( 22,489 ) ( 1 ) ( 63,072 ) ( 2 ) ( 65,065 ) ( 1 ) ( 112,164 ) ( 2 )
8200	Profit for the period	$ 50,826 2			$ 187,146 7		$ 136,378 4				$ 370,684 6

==> picture [526 x 58] intentionally omitted <==

(Continued)

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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)

	For three-monthperiods ended June 30,	For three-monthperiods ended June 30,	For three-monthperiods ended June 30,	For three-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,	For six-monthperiods ended June 30,
	2023 2022				2023 2022
Items Notes	AMOUNT	% AMOUNT %			AMOUNT		%		AMOUNT		%
Other comprehensive income(loss)	$ 70,837 4 ( $ 69,826 ) ( 2 ) 19,562 ) ( 1 ) ( 22,840 ) ( 1 )				$ 81,987 2 ( $ 71,891 ) ( 1 ) 11,617 - 59,949 1
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 6(6)(20)
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 6(28)
income(loss)	1,205	-	1,910 -	(	2,965	)	-	(	2,908	)	-
8300 Total other comprehensive
income for the period	$ 52,480	3 (	$ 90,756 ) ( 3	)	$ 90,639		2	(	$ 14,850	) -
8500 Total comprehensive income
for the period	$ 103,306	5	$ 96,390 4		$ 227,017		6		$ 355,834 6
Profit attributable to:
8610 Owners of the parent	$ 34,206	1	$ 157,471 6		$ 95,085		3		$ 309,410		5
8620 Non-controlling interests	16,620	1	29,675 1		41,293		1		61,274		1
	$ 50,826	2	$ 187,146 7		$ 136,378		4		$ 370,684		6
Total comprehensive income
attributable to:
8710 Owners of the parent	$ 86,545	4	$ 71,355 3		$ 177,106		5		$ 288,907 5
8720 Non-controllinginterests	16,761	1	25,035 1		49,911		1		66,927		1
	$ 103,306	5	$ 96,390 4		$ 227,017		6		$ 355,834 6

Earnings per share (in dollars) 6(29)
9750 Basic	$ 0.12		$ 0.56		$ 0.34				$ 1.11
9850 Diluted	$ 0.12		$ 0.56		$ 0.31				$ 1.11

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

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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)

Share capital - common stock					Equityattributable to owners o	Equityattributable to owners o	f theparent	f theparent	f theparent	f theparent
	Stock dividends to be distributed $ - - - - - - 143,887 - - - $ 143,887 $ - - - - - - - - - $ -	Treasury stock transactions $222,103 - - - - - - 221,790 22,314 - $ 466,207 $ 477,923 - - - - - - 23,430 - $ 501,353			RetainedEarnings		Other EquityInterest Financial statements translation differences of foreign operations Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income ( $ 214,721 ) $ 6,765 ( $ - - 51,388 ( 71,891 ) 51,388 ( 71,891 ) - - - - - - - - - - - - ( $ 163,333 ) ( $ 65,126 ) ( $ ( $ 163,091 ) ( $ 167,985 ) ( $ - - 34 81,987 34 81,987 - - - - - ( 73,130 ) - - - - ( $ 163,057 ) ( $ 159,128 ) ( $				Treasurystock	s $
				Legal reserve 233,702 - - - 37,754 - - - - - 271,456 302,397 - - - 34,088 - - - - 336,485	Special reserve	Unappropriated retained earning	Financial statements translation differences of foreign operations
$ 2,877,740 - - - - - - - - - $ 2,877,740 $ 3,021,627 - - - - - - - - $ 3,021,627			$		$ 430,610 - - - - - - - - -	$ 654,473 309,410 - 309,410 ( 37,754) ( 287,774) ( 143,887) - - - $ 494,468 $ 653,326 95,085 - 95,085 ( 34,088) ( 302,163) 73,130 - - $ 485,290	( $ ( $ ( $ ( $	214,721 ) - 51,388 51,388 - - - - - - 163,333 ) 163,091 ) - 34 34 - - - - - 163,057 )	$ 6,765 - ( 71,891 ) ( 71,891 ) - - - - - - ( $ 65,126 ) ( $ 167,985 ) - 81,987 81,987 - - ( 73,130 ) - - ( $ 159,128 )		267,195) - - - - - - - - - 267,195) 267,195) - - - - - - - - 267,195)
												(

												(
			$		$ 430,610					( $		$
			$		$ 430,610 - - - - - - - - $ 430,610					( $		$


												(
			$							( $		$

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

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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

Allowance for (reversal of ) inventory market
price decline
Depreciation

Gains on disposal of property, plant and
equipment
Losses from lease modification

Amortization

Interest income

Dividend income

Interest expense

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit
or loss - current
Notes receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Long-term notes and accounts receivable
Changes in operating liabilities
Current contract liabilities
Notes payable
Accounts payable
Other payables
Provision for liabilities – current
Net defined benefit liabilities –non-current
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash flows from operating activities

Notes
For the six-month periods ended June 30,
2023
2022
$ 201,443 $ 482,848
(
1,998 ) (
10,493 )
12
1,231
1,937
6(4)
(
6,151 )
18,588
6(7)(8)(26)
142,891
135,968
6(24)
(
585 ) (
97 )
6(8)(24)
-
32
6(9) (26)
1,745
1,947
6(22)
(
19,170 ) (
6,513 )
6(23)
- (
2,627 )
6(25)
63,514
57,480
35,393
52,738
151,436
163,359
251,680
302,533
(
7,588 )
1,668
304,628 (
200,412 )
6,105 (
487,259 )
2,395
9,191
3,896
10,664
40 (
1,665 )
(
89,486 ) (
116,808 )
(
86,066 ) (
104,776 )
110 (
1,635 )

(
11,119 ) (
6,186 )
944,344
300,482
19,170
6,513
-
2,627
(
45,352 ) (
43,709 )
(
78,438 ) (
133,441 )

839,724
132,472

(Continued)

~9~

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
Decrease (increase) in short-term borrowings

Payments of lease liabilities

Issuance of convertible bonds

Increase in long-term borrowings

Decrease in long-term borrowings

Payment of cash dividends

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 six-month periods ended June 30,
2023
2022
( $ 3,008 ) ( $ 11,824 )
11,253
26
(
133 )
-
86,391
191
44,100
42,632
6(30)
(
32,617 ) (
89,638 )
966
458
6(9)
(
2,402 ) (
2,579 )
(
1,073 ) (
22,142 )
4,307 (
106 )
-
7,361
(
1,332 )
1,881
106,452 (
73,740 )
6(31)
(
162,310 ) (
572,229 )
6(31)
(
13,219 ) (
12,185 )
6(31)
-
1,775,874
6(31)
8,500
20,600
6(31)
(
14,538 ) (
601,763 )
6(30)
- (
265,460 )
4(3)
(
47,189 ) (
34,604 )
(
228,756 )
310,233
25,184
46,586

742,604
415,551
6(1)
2,436,550
1,026,237
6(1)
$ 3,179,154$ 1,441,788

~10~

Chun Yu Works & Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements For The Six Month Periods Ended June 30, 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 August 10, 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:

ollows:
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:

~ 11 ~

Effective date by International Accounting Standards New Standards, Interpretations and Amendments Board Amendments to IFRS 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 leaseback’ January 1, 2024 IFS 17, ‘Insurance contracts’ January 1, 2023 Amendment to IFRS 17 , ‘Insurance contracts’ January 1, 2023 Amendment to IFRS 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 Amendments to IAS 7 and IFRS 7 ‘Supplier finance January 1, 2024 arrangements’ Amendments to IAS 12 ‘International tax reform-pillar two model May 23, 2023 rules’

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. Basis for preparation of consolidated financial statements:
The basis for the preparation of these consolidated financial statements is consistent with the basis applied in the preparation of the consolidated financial statements for the year ended

~ 12 ~

December 31, 2022.

B. Subsidiaries included in this consolidated financial statements `：`

			Percentage ofequityheld	Percentage ofequityheld	Percentage ofequityheld
Investment			June 30,	December 31,	June 30,	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 three-month periods ended June 30, 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 three-month periods ended June 30, 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 June 30, 2023, December 31, 2022, and June 30, 2022 were NT$748,909, NT$781,318 and NT$756,757, respectively. Information on non-controlling interests and subsidiaries that are significant to the Group as follows:

~ 13 ~

	Non-controlling interest	Non-controlling interest
Principal	June 30, 2023	December 31, 2022
place of business Name of subsidiary	Amount Ownership (%)	Amount Ownership (%)
Chun Zu Taiwan	$ 487,965 52.18%	$ 529,806 52.18%
Machinery Industry Co., Ltd
		Non-controlling interest
Principal		June 30, 2022
place of business Name of subsidiary		Amount Ownership (%)
Chun Zu Taiwan		$ 489,410 52.18%
Machinery Industry Co., Ltd

Summary financial information of subsidiaries:

business subsidiary Amount (%) Chun Zu Machinery Industry Co., Ltd Taiwan $ 489,410 52.18% Summary financial information of subsidiaries:	business subsidiary Amount (%) Chun Zu Machinery Industry Co., Ltd Taiwan $ 489,410 52.18% Summary financial information of subsidiaries:	business subsidiary Amount (%) Chun Zu Machinery Industry Co., Ltd Taiwan $ 489,410 52.18% Summary financial information of subsidiaries:
Consolidated balance sheet Chun Zu Machinery Industry and Subsidiaries
June 30, 2023 December 31, 2022 June 30, 2022
Current Assets $ 1,373,416 $ 1,408,949 $ 1,394,778
Non-current Assets 510,777 575,844 588,604
Current Liabilities ( 740,817 ) ( 742,551 ) ( 822,142 )
Non-current Liabilities ( 133,930 ) ( 154,418 ) ( 154,279 )
Total net assets	$ 1,009,446	$ 1,087,824 $ 1,006,961

Consolidated statement of comprehensive	For the three-month periods ended June 30,	For the three-month periods ended June 30,
Income	2023	2022
Income	$ 276,607	$ 278,887
Profit for the year	$ 7,406	$ 16,393
Other comprehensive income (net) ( 21,916 )		17,259
Total comprehensive income for theyear	( $ 14,510 )	$ 33,652
Comprehensive income attributable to non-		$ 8,406
controllinginterest	( $ 2,361 )
Dividends paid to non-controlling interest	$ -	$ -

Consolidated statement of comprehensive		For the six-month periods ended June 30,	For the six-month periods ended June 30,
Income		2023	2022
Income		$ 505,636	$ 531,893
Profit for the year		$ 21,062	$ 35,632
Other comprehensive income (net)	( 9,005 )		11,636
Total comprehensive income for theyear		$ 12,057	$ 47,268
Comprehensive income attributable to non-			$ 25,757
controllinginterest		$ 5,335
Dividendspaid to non-controllinginterest		$ 47,189	$ 34,604

==> picture [445 x 43] intentionally omitted <==

~ 14 ~

Consolidated statements of cash flows	For the six-month periods ended June 30,
	2023 2022
Net cash provided by operating activities	$ 175,368 $ 43,997
Net cash used in investing activities	46,115 20,573
Net cash used in financing activities ( 20,791 ) ( 77,102 )
Effect of exchange rate changes on cash and cash equivalents ( 7,725 ) 11,471
Increase in cash and cash equivalents	192,967 ( 1,061 )
Cash and cash equivalents, beginning of
year	214,542 297,485
Cash and cash equivalents, end of year	$ 407,509 $ 296,424

(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

and cash equivalents
	June 30,	December 31, 2022 June 30, 2022 $ 1,005 $ 1,889 107,114 154,370 992,024 1,226,586 1,100,143 1,382,845 1,336,407 58,943 $ 2,436,550 $ 1,441,788
	2023
Cash:
Cash in stock	$ 1,882
Checking deposit	182,369
Demand deposit	794,903
	979,154
Cash equivalent:
Time deposit	2,200,000
	$ 3,179,154

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 $3,008 and $11,824 as of June 30,2023 and 2022. There was no such transaction for the year ended December 31, 2022, classified time deposits maturing in excess of one year as financial assets at amortized non-current in amount of $44,100 and

~ 15 ~

$44,283 for the year ended December 31, 2022 and six months ended June 30, 2022. There was no such transaction for six months ended June 30, 2023.

C. As of six months ended June 30, 2023, December 31, 2022 and six months ended June 30, 2022, the Group’s demand deposits amounting to $522, $11,775 and $1,400, respectively, were pledged to others as collateral (Shown as ‘Other current financial assets’). Details are provided in Note 8, ‘Pledged assets’.
(2) Financial assets at fair value through profit or loss - current

Item	June 30, 2023 December 31, 2022 June 30, 2022	June 30, 2023 December 31, 2022 June 30, 2022
Financial assets measured
at fair value
compulsorily through
income statement
Listed and OTC stocks	$ 8,626 $ 39,019 $ 170
Beneficiary certificates	8,000 13,000 13,000
	16,626 52,019 13,170
Reevaluation adjustment	390 ( 1,608 ) ( 1,191)
	$ 17,016	$ 50,411 $ 11,979

A. The Group’s financial assets measured at fair value through income statement accounted for a net loss of NT$525 ,NT$8,777, NT$9,192 and NT$15,840 for the three months and six months periods ended June 30, 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 June 30, 2023, December 31, 2022 and June 30, 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

statement, please refer to note 12(2) “Financial instruments.” ) Notes and accounts receivable,net	statement, please refer to note 12(2) “Financial instruments.” ) Notes and accounts receivable,net	statement, please refer to note 12(2) “Financial instruments.” ) Notes and accounts receivable,net	statement, please refer to note 12(2) “Financial instruments.” ) Notes and accounts receivable,net
June 30, 2023 December 31, 2022 June 30, 2022
Notes receivable $ 212,243 $ 352,225 $ 197,243
Installment notes receivable 60,019 71,609 65,496
272,262 423,834 262,739
Less: Unrealized interest income ( 3,131 ) ( 3,267 ( 4,193 )
Allowance for uncollectible ( 40 ) ( 268 ) ( 233 )
accounts
	$ 269,091	$ 420,299	$ 258,313
Accounts receivable	$ 1,436,842	$ 1,689,191	$ 2,008,475
Installment accounts receivable	-	148	8,446
	1,436,842	1,689,339	2,016,921
Less: Unrealized interest income	- ( 148 ) ( 497 )
Allowance for uncollectible ( 24,346 ) ( 24,003 ) ( 28,477 )
accounts
	$ 1,412,496	$ 1,665,188 $ 1,987,947

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

~ 16 ~

June 30, 2023 Notes receivable Accounts receivable $ 272,262 $ 1,207,214 - 143,179 - 48,858 - 10,111 - 27,480 $ 272,262 $ 1,436,842	December 31, 2022	December 31, 2022
Notes receivable $ 272,262 - - - - $ 272,262	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 June 30, 2022	Accounts receivable
		$ 1,461,430 170,419 36,055 808 20,627
		$ 1,689,339
	Notes receivable $ 262,739 - - - - $ 262,739	Accounts receivable
		$ 1,741,283 190,748 55,188 5,896 23,806
		$ 2,016,921

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

B. The balances of notes and accounts receivable on June 30, 2023, December 31, 2022 and June 30, 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 the three months and the six months periods ended June 30, 2023 and 2022 were NT$763 and NT$2,135 and NT$1,907 and NT$4,516, respectively (listed under “interest income”).
D. The Group did not hold collateral as guarantee for accounts receivable as of June 30, 2023, December 31, 2022 and June 30, 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 June 30, 2023, December 31, 2022 and June 30, 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 June 30, 2023, December 31, 2022 and June 30, 2022.

(4) Inventories

ntories
	June 30, 2023
	Allowance for inventory
	Cost valuation loss Book value
Raw material	$ 728,681 ( $ 36,740 ) $ 691,941
Supplies	443,245 ( 17,686 ) 425,559
Work in progress	1,048,297 ( 33,235 ) 1,015,062
Finished goods	1,649,385 ( 95,417 ) 1,553,968
	$ 3,869,608	( $ 183,078 ) $ 3,686,530

~ 17 ~

	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
		June 30, 2022
		Allowance for inventory
	Cost	valuation loss	Book value
Raw material	$ 1,219,079 ( $ 26,510 )		$ 1,192,569
Supplies	410,745 ( 14,239 )		396,506
Work in progress	1,455,954 ( 34,129 )		1,421,825
Finished goods	1,720,294 ( 90,558 )		1,629,736
	$ 4,806,072 (	$ 165,436 )	$ 4,640,636

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

e	$ 4,806,072 ( $ 165,436 ) $ 4,640,636 cost of inventories recognized as expense for the period:	$ 4,806,072 ( $ 165,436 ) $ 4,640,636 cost of inventories recognized as expense for the period:
	For the three-month periods ended June 30,
	2023 2022
	Cost of goods sold $ 1,748,716 $ 2,226,896
	Loss on decline in market value(Gain on reversal of)(Note) ( 7,361 ) 12,102
	Loss on physical inventory 44 5
	Revenue from sales of scraps ( 9,599 ) ( 18,982 )
		$ 1,731,800 $ 2,220,021

(Note) The Group reversed a previous inventory write-down which was accounted for as reduction of cost of goods sold because certain inventories which were previously provided with allowance for decline in value were subsequently sold or scrapped for the three months and six months periods ended June 30, 2023.

B. For the Group’s inventories pledged as guarantee on June 30, 2023, December 31, 2022

and June 30, 2022, please refer to Note 8 “Explanation of pledged assets.”

(5) Non-current financial assets at fair value through profit or loss

d June 30, 2022, please refer to Note 8 “Explanation of pledged assets.” current financial assets at fair value through profit or loss
Item	June 30, 2022
Repurchase Right of Corporate Bonds	$ 629

A. There was no such transaction for six-month periods ended June 30, 2023 and the years ended December 31, 2022.

~ 18 ~

B. The Group recognised net loss of $2,560 and $2,720 (shown as ‘Other gains and losses’) on the non-current financial assets at fair value through profit or loss for the three months and sixmonth periods ended June 30, 2022 and 2023. There was no such transaction for the six-month periods ended June 30, 2023.

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

riods ended June 30, 2023. cial assets at fair value through other comprehensive income-non-current	riods ended June 30, 2023. cial assets at fair value through other comprehensive income-non-current	riods ended June 30, 2023. cial assets at fair value through other comprehensive income-non-current
Item June 30, 2023 December 31, 2022 June 30, 2022
Equity instruments
Listed and OTC stocks $ 593,333 $ 606,462 $ 621,308
Unlisted, non-OTC and
non-emerging market stocks 772 772 772
594,105 607,234 622,080
Reevaluation adjustment ( 159,127 ) ( 167,985 ) ( 65,317 )
	$ 434,978	$ 439,249 $ 556,763

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 June 30, 2023, December 31, 2022 and June 30, 2022 were NT$434,978 NT$439,249 and NT$556,763, 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 six month periods ended June 30, 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:

	For the three-month periods ended June 30,	For the three-month periods ended June 30,
	2023 2022
Fair value change recognized in other
comprehensive income (shown as’ Other equity’)	$ 70,837 ( $ 69,826 )

	For the six-month periods ended June 30,
	2023 2022
Fair value change recognized in other
comprehensive income (shown as’ Other equity’)	$ 81,987 ( $ 71,891 )
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 June 30, 2023, December 31, 2022 and June 30, 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	Equipment under acceptance and construction in progress Total	Equipment under acceptance and construction in progress Total

January 1, 2023
Cost	$ 1,573,597 $ 1,951,356 $ 4,522,990 $ 89,494 $ 93,331 $ 122,331 $ 712,327							$ 1,695 $ 9,067,121
Accumulated depreciation	- ( 1,468,433) ( 3,742,346) ( 70,666) ( 75,981) ( 85,179) ( 568,679)							- ( 6,011,284)
Accumulated impairment	-	- ( 42)		-	-	-	-	- ( 42)
	$ 1,573,597	$ 482,923	$ 780,602	$ 18,828	$ 17,350	$ 37,152	$ 143,648	$ 1,695	$ 3,055,795

For the six-month periods
ended June 30, 2023
At January 1	$ 1,573,597	$ 482,923	$ 780,602	$ 18,828	$ 17,350	$ 37,152	$ 143,648	$ 1,695	$ 3,055,795
Additions	-	5,010	12,730	482	5,445	2,487	1,822	4,146	32,122
Transfers after acceptance	-	707	10,708	-	-	-	266 ( 11,681)		-
Transfers from inventories	-	-	-	-	-	-	-	12,581	12,581
Transfers from prepayments	-	-	200	206	2,219	207	531	4,726	8,089
for business facilities
Depreciation charge	- ( 23,275) ( 76,078) ( 1,924) ( 4,008) ( 3,038) ( 19,371)							- ( 127,694)
Disposals – Cost	- ( 650) ( 11,013)			- ( 3,970) ( 417) ( 18,000)				- ( 34,050)
–Accumulated	-	650	11,013	-	3,619	417	17,970	-	33,669
depreciation
Net exchange differences	4,770	( 1,076)	8,780	-	( 34)	937	( 1,528)	-	11,849
At June 30	$ 1,578,367	$ 464,289	$ 736,942	$ 17,592	$ 20,621	$ 37,745	$ 125,338	$ 11,467	$ 2,992,361


June 30, 2023,
Cost	$ 1,578,367	$ 1,944,469	$ 4,563,768	$ 90,182	$ 96,867	$ 124,156	$ 687,083	$ 11,467	$ 9,096,359
Accumulated depreciation	- ( 1,480,180) ( 3,826,784) ( 72,590) ( 76,246) ( 86,411) ( 561,745)							- ( 6,103,956)
Accumulated impairment	-	- ( 42)		-	-	-	-	- ( 42)
	$ 1,578,367	$ 464,289	$ 736,942	$ 17,592	$ 20,621	$ 37,745	$ 125,338	$ 11,467 $ 2,992,361

~ 20 ~

	Land Houses and construction Machines and equipment Utility equipment Transportation equipment Office equipment Other devices	Land Houses and construction Machines and equipment Utility equipment Transportation equipment Office equipment Other devices	Land Houses and construction Machines and equipment Utility equipment Transportation equipment Office equipment Other devices	Land Houses and construction Machines and equipment Utility equipment Transportation equipment Office equipment Other devices	Land Houses and construction Machines and equipment Utility equipment Transportation equipment Office equipment Other devices	Land Houses and construction Machines and equipment Utility equipment Transportation equipment Office equipment Other devices	Land Houses and construction Machines and equipment Utility equipment Transportation equipment Office equipment Other devices	Equipment pending inspection and construction in progress Total	Equipment pending inspection 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 depreciation	- ( 1,413,090) ( 3,666,184) ( 72,436) ( 76,989) ( 104,335) ( 525,896)							- ( 5,858,930)
Accumulated impairment	-	- ( 42)		-	-	-	-	- ( 42)

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

For the six-month periods ended June 30, 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	-	6,029	40,665	-	1,653	3,440	7,724	11,696	71,207
Transfers after acceptance	-	760	22,656	-	-	-	1,136 ( 24,552)		-
Transfers from inventories	-	-	15,495	-	-	-	- -		15,495
Transfers from prepayments	-	451	6,209	-	-	-	7,919 10,258		24,837
for business facilities
Depreciation charge	- ( 23,189) ( 69,940) ( 1,926) ( 4,207) ( 2,938) ( 20,297) - ( 122,497)
Disposals – Cost	- ( 2,144) ( 27,383) ( 5,600) ( 5,466) ( 24,069) ( 1,551) - ( 66,213)
–Accumulated	-	2144	27,181	5,600	5,365	24,047	1,515 - 65,852
depreciation
Reclassification (Note) Net exchange differences	-	-	-	-	-	-	- ( 458) ( 458)

	-	3,034	4,326	-	186	133	2,161	13	9,853
At June 30
	$ 1,573,597	$ 506,230	$ 784,837	$ 20,496	$ 20,083	$ 16,506	$ 135,292	$ 31,596	$ 3,088,637


June 30, 2022
Cost	$ 1,573,597	$ 1,950,107	$ 4,920,314	$ 89,256	$ 96,286	$ 100,266	$ 686,592	$ 31,596	$ 9,448,014
Accumulated depreciation	- ( 1,443,877) ( 4,135,435) ( 68,760) ( 76,203) ( 83,760) ( 551,300)							- ( 6,359,335)
Accumulated impairment	-	- ( 42)		-	-	-	-	- ( 42)

	$ 1,573,597	$ 506,230	$ 784,837	$ 20,496	$ 20,083	$ 16,506	$ 135,292	$ 31,596 $ 3,088,637

(Note) Transferred to「Other non-current assets」

~ 21 ~

A. The Group’s property, plant and equipment as of June 30, 2023, December 31, 2022 and June 30, 2022 are for its own use.
B. No interest expenses were capitalized in property, plant and equipment for the six-month periods ended June 30, 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 June 30, 2023, December 31, 2022 and June 30, 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 aretypically made for periods of 1 to 50 year(s). Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants.
B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

		December 31, 2022 June 30, 2022
	June 30, 2023

	Carrying	Carrying amount
	amount	Carrying amount
Land	$ 94,957	$ 99,707 $ 102,883
Buildings and structures	44,092	37,417 28,722
Transportation equipment	178	285 392
	$ 139,227	$ 137,409 $ 131,997

	For the three-month periods ended June 30,
	2023 2022
	Depreciation charge Depreciation charge
Land	$ 1,397 $ 1,410
Buildings and structures	6,239 5,803
Transportation equipment	54 114
	$ 7,690 $ 7,327


	For the six-month periods ended June 30,
	2023 2022
	Depreciation charge Depreciation charge
Land	$ 2,806 $ 2,812
Buildings and structures	12,284 10,311
Transportation equipment	107 348
	$ 15,197 $ 13,471

C. For the three-month and six-month periods ended June 30, 2023 and 2022, the additions to right-of-use assets were $810, $19,568, $19,290 and $19,568, respectively.
D. Information on profit or loss in relation to lease contracts is as follows:

~22~

		For the three-month	periods ended June 30,	periods ended June 30,
		2023	2022
Items affecting profit or loss
Interest expenses on lease liabilities	$	511	$	409
Expense on short-term leases		1,698		6,357
Loss on lease modification		-		32
		For the six-month periods ended June		30,
		2023	2022
Items affecting profit or loss
Interest expenses on lease liabilities	$	997	$	659
Expense on short-term leases		3,750		7,362
Loss on lease modification		-		32

E. For the six-month periods ended June 30, 2023 and 2022, the Company’s total cash outflow for leases were $17,966 and $20,206, respectively.
F. Details of the Group’s right-of-use assets pledged to others as collateral as of June 30, 2023, December 31, 2022 and June 30, 2022 are provided in Note 8, ‘Pledged assets’.

(9) Intangible assets

tangible assets	tangible assets
		Computer Software
For the six-month periods ended June 30,
2023 2022
At January 1
Cost $ 25,343 $ 24,489
Accumulated amortization ( 18,000 ) ( 16,634 )
	$ 7,343		$ 7,855
Period from January to June
At January 1	$ 7,343		$ 7,855
Additions – acquired separately	2,402		2,579
Transfers from prepayments for business	-		275
facilities
Amortization charge ( 1,745 ) ( 1,947 )
Write-offs - cost ( 3,411 ) ( 2,653 )
- accumulated amortization	3,411		2,653
Net exchange differences	( 81 )		85
At June 30	$ 7,919		$ 8,847

At June 30
Cost	$ 23,977		$ 25,058
Accumulated amortization ( 16,058 ) ( 16,211 )
	$ 7,919 $ 8,847

A. No interest expense was capitalized for the three-month and six-month periods ended June 30, 2023 and 2022.
B. Details of amortization expenses on intangible assets are as follows:

~23~

	For the three-month periods ended June 30,	For the three-month periods ended June 30,
	2023	2022
Operating costs	$ 169	$ 103
Selling expenses	63	110
Administrative expenses	448	407
Research and development expenses	206	283
	$ 886	$ 903
	For the six-month periods ended June 30,
	2023 2022
Operating costs	$ 299 $ 209
Selling expenses	176 219
Administrative expenses	847 826
Research and development expenses	423 693
	$ 1,745 $ 1,947

C. As of June 30, 2023, December 31, 2022 and June 30, 2022, the Group had no intangible assets pledged to others.

(10) Long-term notes and accounts receivable

Research and development expenses 423 693 $ 1,745 $ 1,947 s of June 30, 2023, December 31, 2022 and June 30, 2022, the Group had no intangible assets ledged to others. ng-term notes and accounts receivable	Research and development expenses 423 693 $ 1,745 $ 1,947 s of June 30, 2023, December 31, 2022 and June 30, 2022, the Group had no intangible assets ledged to others. ng-term notes and accounts receivable	Research and development expenses 423 693 $ 1,745 $ 1,947 s of June 30, 2023, December 31, 2022 and June 30, 2022, the Group had no intangible assets ledged to others. ng-term notes and accounts receivable
June 30, 2023 December 31, 2022 June 30, 2022
Long-term notes receivable $ 1,180 $ 4,180 $ 7,467
Less: Unrealized interest income ( 258 ) ( 863 ) ( 1,436 )
	$ 922	$ 3,317 $ 6,031

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 June 30, 2023, December 31, 2022 and June 30, 2022, the Group had no long-term notes receivable past due.
C. As of June 30, 2023, December 31, 2022 and June 30, 2022, long-term notes and accounts receivable were all from contracts with customers. Also, as of January 1, 2022, the balance of long-term notes and accounts receivable from contracts with customers amounted to $17,827.
D. As of June 30, 2023, December 31, 2022 and June 30, 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 held by the Group was their carrying amount.
E. Details of the interest income recognized in profit or loss for the three-month and sixmonth periods ended June 30, 2023 and 2022, are provided in Note 6(3), ‘Notes and accounts receivable, net’.
F. As of June 30, 2023, December 31, 2022 and June 30, 2022, the Group did not hold any collateral as security for long-term accounts receivable.
G. As of June 30, 2023, December 31, 2022 and June 30, 2022, the Group had no long-term notes and accounts receivable pledged to others.
H. Information relating to credit risk of long-term notes and accounts receivable is provided in Note 12(2), ‘Financial instruments’.

(11) Impairment of non-financial assets

A. The Group did not recognize impairment loss for the six-month periods ended June 30, 2023 and 2022.
B. As of June 30, 2023, December 31, 2022 and June 30, 2022, the accumulated impairment loss

~24~

of property, plant and equipment both amounted to $42, after recognizing or reversing any impairment loss.

(12) Short-term borrowings

impairment loss. Short-term borrowings
Type of borrowings	June 30, 2023 Interest rate range Collateral
Bank borrowings
Unsecured borrowings	$ 493,736 1.83%`～`6.69% None
Secured borrowings	124,800 9.00% Note
	$ 618,536
Type of borrowings	December 31, 2022	Interest rate range Collateral
Bank borrowings
Unsecured borrowings	572,946 1.56%`～`5.63% None
Secured borrowings	207,900 9.00% Note
	780,846
Type of borrowings	June 30, 2022	Interest rate range Collateral
Bank borrowings
Unsecured borrowings	$ 561,410 0.52%`～`3.63% None
Secured borrowings	508,732 2.10%`～`9.00% Note
	$ 1,070,142

(Note) Please refer to Note 8 “Explanation of pledged assets.”

A. As of June 30, 2023, December 31, 2022 and June 30, 2022,the interest rate of loans from 、
Indonesia were 9.00%, and the interest rate of loans from other countries were 1.83%~6.69% 1.56%~5.63% and 1.58%~4.80%, respectively.
B. For the interest expenses recognized in profit and loss for the three-month and six-month ‘
、
periods ended June 30, 2023 and 2022,please refer to Note 6 (25) Explanation of Financial Costs. ’

(13) Bonds payable

Costs.`’` Bonds payable
	June 30, 2023	December 31, 2022 June 30, 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
	( 28,996 )	( 36,395 ) ( 43,887)
Less: Discount on bonds payable
	$ 4,571,004	$ 4,563,605 $4,556,113

(Note) Please refer to Note 8 “Explanation of pledged assets.”
A. The Company was issued the first domestic guaranteed bonds payable from October 2021, its 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 $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

~25~

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 in 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, its 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 $2,432), $500,000(Related issue costs $2,006), $400,000(Related issue costs $1,417), respectively. Issuance price 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 Changhua Bank Co., Ltd., Huanan Bank Co., Ltd. and Shanghai Commercial Savings Bank Co., Ltd. as guarantee 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 to be converted 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 according to 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 is for 30 consecutive business days If it 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 (June 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

~26~

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 - non-current", the effective interest rates of the main contract debt after the first, second and third convertible corporate bonds are 0.90%, 0.90% and 0.90%, respectively.

D. Details of interest expense recognized in profit or loss for the three-month and six-month periods ended June 30, 2023 and 2022 provided in Note 6, (25), Financial costs.

– (14) Provisions for liabilities current

	Warranty
	For the six-month periods ended June 30,
	2023 2022
January 1	$ 6,265 $ 8,275
Additional provisions	3,926 276
Used during the year	( 3,572 ) ( 1,355 )
Unused amounts reversed	( 244 ) ( 556 )
June 30	$ 6,375 $ 6,640

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

(15) Long term borrowings

Type of	Borrowing	Interest				June 30,
borrowings	period	rate range	Collateral			2023
Long-term bank
borrowings
Secured	2022.5.15~	1.55%~	Refer to		$	32,998
borrowings	2029.8.15	2.10%	Note 8
Less: Current portion				(		6,583)
of long-term borrowings
					$	26,415
Type of	Borrowing	Interest				December 31,
borrowings	period	rate range	Collateral			2021
Long-term bank
borrowings
Secured borrowings	2019.8.28~	1.43%~	Refer to		$	39,036
	2029.6.15	2.28%	Note 8
Less: Current portion				(		16,121)
of long-term borrowings
					$	22,915

~27~

Type of borrowings	Borrowing period 2018.5.14~ 2029.6.15 borrowings	Interest rate range 1.18%~ 10.73%	Collateral	June 30, 2022 43,663 ( 25,800)
Long-term bank borrowings Secured borrowings Less: Current portion of long-term			Refer to Note 8
				$ 17,863

Details of interest expense recognized in profit or loss for the three-month and six-month periods ended June 30, 2023 and 2022 are provided in Note 6(25), ‘Finance costs’.

(16) Pensions

A. The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the R.O.C. Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the R.O.C. Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the R.O.C. Labor Pension Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 4% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March. The information on defined benefit pension plans of the Company and its subsidiary, Pt Moon Lion Industries Indonesia, is as follows:
(a) Retirement costs recognized by the Group in accordance with the abovementioned pension measures for the three-month and six-month periods ended June 30, 2023 and 2022 were $2,529, $2,596, $5,071 and $5,119, respectively.
(b) The estimated contribution of the Group to the retirement plan in the next year is $2,531.
B. Since July 1, 2005, the Company and its domestic subsidiaries have established defined retirement measures in accordance with the “Labor Pension Act” of the Republic of China applicable to employees of the ROC nationality. The employees of the Company and its domestic subsidiaries who choose to apply the labor pension system stipulated in the “Labor Pension Act” of the Republic of China, 6% of their salaries is allocated to the individual accounts of the employees at the Labor Insurance Bureau. The payment is based on the employee’s individual retirement pension account and the amount of accumulated income, and is received by the employee in the form of monthly pension or lump-sum pension. In accordance with the pension insurance system prescribed by the government of the People’s Republic of China, the subsidiaries of the Group allocate pension insurance funds at a certain rate of the total salary of local employees every month, and the retirement pension of each employee is managed and arranged by the local government. Subsidiaries have no further obligations except for monthly allocations. The

~28~

cost of pensions recognized in accordance with the above-mentioned pension measures for the three-month and six-month periods ended June 30, 2023 and 2022 were $13,088, $13,281, $26,639 and $28,847, respectively.

(17) Share capital

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

it: Shares in thousands)
	For the six-month periods ended
	June 30,
	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 June 30, 2023, the Company’s authorized capital was $3,920,696, and the paid-in 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 six-month periods ended June 30,2023

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 23,430	Addition -	Decrease -	Number of shares at the end of the year
				23,430

For the six-month periods ended June 30,2022	For the six-month periods ended June 30,2022	For the six-month periods ended June 30,2022	For the six-month periods ended June 30,2022
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 -	Number of shares at the end of the year
				22,314

~29~

(b) As of June 30,2023, December 31, 2022, and June 30 2022, the book value (cost) was all $267,195, and the fair values were $633,786, $562,324 and $547,820, 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 six-month periods ended June 30, 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 June 30, 2023, December 31,2022 and June 30 2022. Details are as follows:

ollows:
Name of company holding the shares	Reason for reacquisition	June 30, 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 June 30, 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 six-month periods ended June 30, 2023	Share options	Consideration and carrying amount of subsidiaries acquired or disposed
			Treasury
			share
			transactions	Total
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 six-month periods ended June 30, 2022	Stock options	Consideration and carrying amount of subsidiaries acquired or disposed
			Treasury
			share
			transactions	Total
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 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

~31~

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

C. Special reserve:
(a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
(b) The amount of $430,610 previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-SecuritiesCorporate-1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently.
D. The Company recognized cash dividends 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 May 26, 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

		June 30,2023

		Total
		$ 331,076 )
34 -		34
- 81,987 - ( 73,130 )(		81,987

		73,130 )
( $ 163,057 )(	$ 159,128 )(	$ 322,185 )
For the six-month periods ended		June 30,2022
Currency translation	Unrealized gains(losses) on valuation
		Total
	$ 6,765 ( $ 207,956 )
51,388	- 51,388
- (	71,891 )( 71,891 )
( $ 163,333 )	$ 65,126 ( $ 228,459 )

(21) Operating revenue

Operating revenue
	For the three-month periods ended June 30, 2023 2022 $ 2,027,093 $ 2,725,987 For the six-month periods ended June 30, 2023 2022 $ 4,072,802 $ 5,781,656


Revenue from contracts with customers




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:

major product lines:
	For the three-month periods ended June 30,2023
Major product line	Screw segment	Machinery segment Total
Screws and nuts	$ 1,199,554	$ - $ 1,199,554
Wire rods	518,630	- 518,630
Machinery and equipment	-	221,416 221,416
Other	65,308	22,185 87,493
	$ 1,783,492	$ 243,601 $ 2,027,093

~33~

	For the three-month periods ended June 30,2022	For the three-month periods ended June 30,2022
Main product line	Screw segment	Machinery segment Total
Screws and nuts	$ 1,540,465	$ - $ 1,540,465
Wire rods	903,727	- 903,727
Machinery and equipment	-	238,865 238,865
Other	32,193	10,737 42,930
	$ 2,476,385	$ 249,602 $ 2,725,987

	For the six-month periods ended June 30,2023
Major product line	Screw segment	Machinery segment Total
Screws and nuts	$ 2,507,309	$ - $ 2,507,309
Wire rods	1,007,168	- 1,007,168
Machinery and equipment	-	408,987 408,987
Other	109,275	40,063 149,338
	$ 3,623,752	$ 449,050 $ 4,072,802

	For the six-month periods ended June 30,2022
Main product line	Screw segment	Machinery segment Total
Screws and nuts	$ 2,946,388	$ - $ 2,946,388
Wire rods	1,804,192	- 1,804,192
Machinery and equipment	-	471,313 471,313
Billet	373,018	373,018
Other	151,389	35,356 186,745
	$ 5,274,987	$ 506,669 $ 5,781,656

B. Contract liabilities

(a) As of June 30, 2023, December 31, 2022 and June 30, 2022, the Group has recognized revenue-related contract liabilities of $474,549,$470,653 and $418,007,respectively.

(b) Revenue recognized for the six-month periods ended June 30, 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 $272,677 and $187,072, respectively.

(22) Interest income

and 2022, respectively, amounted Interest income	to $272,677 and $187,072, respectively.
	For the three-month periods ended June 30,
	2023 2022
Interest income from bank deposits	$ 8,483 $ 1,040
Other interest	746 2,135
	$ 9,229 $ 3,175

~34~

	For the six-month periods ended June 30,
	2023 2022
Interest income from bank deposits	$ 14,456 $ 1,997
Other interest	4,714 4,516
	$ 19,170 $ 6,513

(23) Other income

Other income
	For the three-month periods ended June 30, 2023 2022 $ 510 $ 923 92 342 3,018 566 $ 3,620 $ 1,831 For the six-month periods ended June 30, 2023 2022 $ 998 $ 1,293 - 2,627 1,033 968 11,908 2,131 $ 13,939 $ 7,019

Rent income
Government grants
Other income




Rent income
Dividend income
Government grants
Other income

Other gains and losses
	For the three-month periods ended June 30,
	2023 2022
Gains on financial assets at fair value	$ 525 $ 6,217
through profit or loss
Gains on disposal of property, plant and 194 88
equipment
Net foreign exchange gains 3,355 6,804
Loss from lease modification - ( 32 )
Miscellaneous disbursements ( 187 ) ( 82 )
		$ 3,887 $ 12,995

		For the six-month periods ended June 30,
		2023 2022
Gains on financial assets at fair value		$ 9,192 $ 10,493
through profit or loss
Gains on disposal of property, plant and		585 97
equipment
Net foreign exchange gains		1,577 13,434
Loss from lease modification		- ( 32 )
Miscellaneous disbursements ( 812 ) ( 881 )
		$ 10,542 $ 23,111

(24) Other gains and losses

~35~

(25) Finance costs

Finance costs
		For the three-month periods ended June 30,
		2023		2022
Interest expenses:
Bank borrowings		$ 11,634		$ 5,711
Ordinary bonds payable		11,994		16,966
Convertible bonds payable		7,336		7,054
Interest on lease liabilities		511		409
		$ 31,475		$ 30,140

		For the six-month periods ended June 30,
		2023		2022
Interest expenses:
Bank borrowings		$ 24,003		$ 24,207
Ordinary bonds payable		23,939		24,020
Convertible bonds payable		14,575		8,594
Interest on lease liabilities		997		659
		$ 63,514		$ 57,480
Expenses by nature

	Classified as operating costs
Employee benefit expense	$ 187,267
Depreciation	56,868
Amortization	169
	$ 244,304


	Classified as operating costs		Classified as operating expenses

Employee benefit expense	$ 242,129		$ 108,982
Depreciation	53,629		15,071
Amortization	103		800
	$ 295,861		$ 124,853


	Classified as operating costs
Employee benefit expense	$ 385,096
Depreciation	112,618
Amortization	299
	$ 498,013

(26) Expenses by nature

~36~

	For the six-month periods ended June 30,2022	For the six-month periods ended June 30,2022
	Classified as operating costs	Classified as operating expenses Total
Employee benefit expense	$ 461,894	$ 231,891 $ 693,785
Depreciation	106,687	29,281 135,968
Amortization	209	1,738 1,947
	$ 568,790	$ 262,910 $ 831,700

(27) Employee benefit expense

Employee benefit expense
	For the three-month periods ended June 30,2023
	Classified as operating costs		Classified as operating expenses Total
Wages and salaries	$ 156,231		$ 87,845 $ 244,076
Labour and health insurance fees	14,481		5,957 20,438
Pension costs	10,595		5,022 15,617
Other personnel expenses	5,960		3,949 9,909
	$ 187,267		$ 102,773 $ 290,040

	For the three-month periods ended June 30,2022
	Classified as operating costs	Classified as operating expenses Total
Wages and salaries	$ 209,074	$ 96,224 $ 305,298
Labour and health insurance fees	14,785	5,049 19,834
Pension costs	11,690	4,187 15,877
Other personnel expenses	6,580	3,522 10,102
	$ 242,129	$ 108,982 $ 351,111

	For the six-month periods ended June 30,2023
	Classified as operating costs		Classified as operating expenses Total
Wages and salaries	$ 321,155		$ 182,890 $ 504,045
Labour and health insurance fees	30,820		12,302 43,122
Pension costs	21,416		10,294 31,710
Other personnel expenses	11,705		8,647 20,352
	$ 385,096		$ 214,133 $ 599,229

	For the six-month periods ended June 30,2022
	Classified as operating costs	Classified as operating expenses Total
Wages and salaries	$ 394,740	$ 191,681 $ 586,421
Labour and health insurance fees	30,392	12,666 43,058
Pension costs	23,518	10,448 33,966
Other personnel expenses	13,244	17,096 30,340
	$ 461,894	$ 231,891 $ 693,785

~37~

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 and the six-month periods ended June 30, 2023 and 2022, employees’ compensation was accrued at $820,$4,392 $2,360 and $7,100 respectively; while directors’ remuneration were accrued at $820, $4,300,$2,360 and $7,100, respectively.The aforementioned amounts were recognized in salary expenses that were estimated and accrued based on the distributable net profit of current year calculated by the percentage prescribed under the Company’s Articles of Incorporation. The actual amount approved at the Board of Directors’ meeting on March 9, 2023 for employees’ compensation and directors’ remuneration for 2022 were both $13,100 respectively, which were the same as the estimated amount recognized in the 2022 financial statements,and the employees’ compensation will be distributed un the form of cash. 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
June 30,
2023 2022
Current tax:
Current tax on profits for the year $ 17,927 $ 32,046
Tax on undistributed surplus earnings 791 362 Prior year income tax under estimation 13,467 15,692
Total current tax 32,185 48,100
Deferred tax:
Origination and reversal of temporary differences ( 9,696 ) 14,972
Income tax expense	$ 22,489 $ 63,072

~38~

For the six-month periods ended	For the six-month periods ended
June 30,
2023 2022
Current tax:
Current tax on profits for the year $ 70,235 $ 96,956
Tax on undistributed surplus earnings 791 362 Prior year income tax under estimation 11,028 15,692
Total current tax 82,054 113,010
Deferred tax:
Origination and reversal of temporary differences ( 16,989 ) ( 846 )
Income tax expense	$ 65,065 $ 112,164

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

is as follows:
	For the three-month periods ended June 30,
	2023		2022
Exchange differences on	($ 1,205 ) ($ 1,910 )
translation of foreign financial statements
		For the six-month periods ended June 30, 2023 2022 $ 2,965 $ 2,908

		2023	2022
Exchange differences on
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 August 10, 2023.

~39~

(29) Earnings per share

Earnings per share
	For the three-month periods ended		June 30,2023
	Amount after tax	Weighted average number of ordinary shares outstanding (sharesinthousands)
			Earnings per
			share
			(indollars)
Basic earnings per share
Profit attributable to ordinary shareholders	$ 34,206	278,733	$ 0.12
of theparent
Diluted earnings per share
Profit attributable to ordinary shareholders	$ 34,206 -	278,733 92
of the parent
Assumed conversion of all dilutive
potential ordinary shares Employees’ compensation
Convertible bonds	2,818	42,667
Profit attributable to ordinary shareholders	$ 37,024	321,492	$ 0.12
of the parent plus assumed conversion of all dilutive potential ordinary shares

	For the three-month periods ended June 30,2022
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)
			Earnings per
			share
			(in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders of theparent	$ 157,471	278,733	$ 0.56
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’compensation	$ 157,471 -	278,733 308
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	$ 157,471	279,041	$ 0.56

~40~

	For the six-month periods ended June 30,2023	For the six-month periods ended June 30,2023	For the six-month periods ended June 30,2023
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)
			Earnings per
			share
			(in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders	$ 95,085	278,733	$ 0.34
of theparent
Diluted earnings per share
Profit attributable to ordinary shareholders	$ 95,085 -	278,733 290
of the parent
Assumed conversion of all dilutive
potential ordinary shares Employees’ compensation
Convertible bonds	5,599	42,667
Profit attributable to ordinary shareholders	$ 100,684	321,690	$ 0.31
of the parent plus assumed conversion of all dilutive potential ordinary shares

	Forthe six-monthperiods ended June 30,2022
	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	$ 309,410	278,733	$ 1.11
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’compensation	$ 309,410 -	278,733 517
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	$ 309,410	279,250	$ 1.11

~41~

(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:
For the six-month periods ended June 30, 2023 2022 (a) Purchase of property, plant and equipment $ 32,122 $ 71,207 Add: Opening balance of payable on equipment (shown as ‘Notes payables’) 8,191 22,043 Less: Ending balance of payable on equipment(shown as ‘Otherpayables’) ( 7,696) ( 3,612 ) Cash paid for acquisition of property, plant and equipment $ 32,617 $ 89,638 For the six-month periods ended June 30, 2023 2022 (b)Cash dividends declared $ - $ 287,774 Less: Dividends received by subsidiaries for holding the parent company’s shares - ( 22,314 ) Ending balance of payable on cash dividends (shown as‘Other payables’) - - Cash dividends paid $ - $ 265,460 . Operating and investing activities with no cash flow effects: For the six-month periods ended June 30, 2023 2022 (a) Write-offs of uncollectible receivables $ 669 $ 3,022 (b) Inventories transferred to property, plant and equipment $ 12,581 $ 15,495 (c) Prepayments for business facilities transferred to property, plant and equipment $ 8,089 $ 24,837 (d) Real estate, plant and equipment transferred to other non-current assets - other $ - $ 458 (e) Prepayments for business facilities transferred to intangible assets - 275 (f) Cash dividends declared $ 302,163 $ - Less: Dividends received by subsidiaries for holding the parent company’s shares ( 23,430 ) - Ending balance of payable on cash dividends (shown as‘Other payables’) ( 278,733 ) - Cash dividendspaid $ - $ - (g) Cash dividends declared but not paid $ 35,131 $ -
Cash dividendspaid	$ -
(g) Cash dividends declared but not paid	$ 35,131

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

~42~

(31) Changes in liabilities from financing activities

) Changes in liabilities from financing activities
Short-term borrowings Lease liability January 1, 2023 $ 780,846 $ 52,262 Changes in cash flow from financing activities ( 162,310 ) ( 13,219 ) Changes in unamortized discount - - Changes in other non-cash items - 19,290 Impact of changes in foreign exchange rate - 77 June 30, 2023 $ 618,536 $ 58,410 Short-term borrowings Lease liability January 1, 2022 $ 1,642,371 $ 35,449 Changes in cash flow from financing activities ( 572,229 )( 12,185 Changes in unamortized discount - - Changes in other non-cash items - 19,600 Impact of changes in foreign exchange rate - 1,308 June 30, 2022 $ 1,070,142 $ 44,172	Lease liability $ 52,262 ( 13,219 ) - 19,290 77 $ 58,410 Lease liability		Bonds payable	Long-term borrowings (including current portion)		Guarantee Deposits received Liabilities from Financing activities-gross $ 457 $ 5,436,206 - ( 181,567 ) - 7,399 - 19,290 - 77 $ 457 $ 5,281,405 Guarantee Deposits received Liabilities from Financing activities-gross $ 457 $ 5,303,103 - 610,297 - 3,962 - ( 204,123) - 1,308 $ 457 $ 5,714,547

			$ 4,571,004	$	32,998
			Bonds payable
		35,449 12,185 - 19,600 1,308			$ 624,826 ( 581,163 ) - - - $ 43,663	$ 457 - - - -
	$	44,172				$ 457

~43~

7. Related party transactions

(1)Name and relationship of related party

lated party transactions Name 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

. Operating revenue
	For the three-monthperiods ended June 30,
Sales ofgoods:	2023	2022
Other relatedparties	$ 132,843	$ 198,720

	For the six-month periods ended June 30,
Sales ofgoods:	2023 2022
Other related parties	$ 265,158 $ 385,580

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

~ 3 years, and for spare parts sales .Purchase	are 3 ~ 4 months.	are 3 ~ 4 months.
	For the three-monthperiods ended June 30,
Purchases ofgoods:	2023	2022
Other relatedparties	$ 839	$ 580
	Forthe six-monthperiods ended June 30,
Purchases ofgoods:	2023 2022
Other related parties	$ 1,008 $ 2,441

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:
		For the six-month periods ended June 30,
Objects
		2023 2022

Other related parties Machinery	$	- $ 500
and equipment

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

~44~

D.Other expenses

	D. Other expenses	. Other expenses	. Other expenses
(3	For the three-monthperiods ended June 30, Other related parties $ $ 2023 11,880 $ $ 2022 14,931 For the six-month periods ended June 30, Other related parties $ 2023 23,287 $ 2022 29,988 E. Other income For the three-monthperiods ended June 30, Other related parties $ 2023 789 $ 2022 - For the six-month periods ended June 30, Other related parties $ 2023 1,104 $ 2022 - F.Amounts receivable from related parties June 30, 2023 December 31, 2022 June 30, 2022 Notes receivable Other related parties $ 42,701 $ 48,966 $ 28,702 Accounts Receivable Other related parties $ 33,083 $ 39,106 $ 141,899 G. Contract liabilities-current June 30, 2023 December 31, 2022 June 30, 2022 Other related parties $ 7,611 $ 10,416 $ 10,306 H. Payables to related parties June 30, 2023 December 31, 2022 June 30, 2022 Accounts payable Other relatedparties $ 881 $ - $ 132 Other payables Other related parties $ 6,266 $ 8,348 $ 19,121 ) Key management compensation For the three-monthperiods ended June 30, 2023 2022 Wages and salaries and other short-term benefits $ 17,292 $ 19,362 Forthe six-monthperiods ended June 30, 2023 2022 Wages and salaries and other short-term benefits $ 33,701 $ 33,981				For the three-monthperiods ended June 30, 2023 11,880 $ $ 2022 14,931 For the six-month periods ended June 30, 2023 2022
		Other related parties		$	2023 11,880
				$

		Other related parties			2023
				$	23,287 $			29,988 ended June 30, 2022

					For the three-monthperiods
		Other related parties			2023 789
				$			$

		Other related parties			2023
				$		1,104 $

						December 31,
						2022
		Notes receivable	$ 42,701
		Other related parties
		Accounts Receivable	$ 33,083 June 30, 2023
		Other related parties


		Other related parties	$ 7,611 June 30, 2023


						December 31,
						2022
		Accounts payable
		Other relatedparties	$	881		$
		Other payables
		Other related parties	$	6,266


				2023
	Wages and salaries and			$ 17,292
	other short-term benefits



	Wages and salaries and
	other short-term benefits

~45~

8. Pledged assets

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

Assets Pledged demand deposits (note 1) Inventories Land (note 2) Buildings and structures, net (note 2) Machinery and equipment, net (note 2) Right-of-use assets	June 30, 2023 $ 522 79,200 453,275 121,706 51,169 13,929 $ 719,801	December 31, 2022 $ 11,775 79,200 453,275 125,747 51,794 14,544 $ 736,335	June 30, 2022 $ 1,400 79,200 453,275 121,277 50,934 14,897 $ 720,983	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 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’.

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

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

(1)As of June 30, 2023, December 31, 2022 and June 30, 2022, the Group’s capital expenditures contracted for at the balance sheet date but not yet incurred were NT$10,573, NT$705 and NT$6,667, respectively.
(2)As of June 30, 2023, December 31, 2022 and June 30, 2022, the Group’s line of credit issued but not yet negotiated were NT$66,841, NT$36,751 and NT$120,253, 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.

~46~

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 June 30, 2022, the Group did not breach commitments on aforementioned financial covenants. There was no such transaction for the year ended December 31, 2022 and the sixmonth periods ended June 30, 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-Shang-Geng-Yi-Zi-1, in which both of the appellant’s (Li, Shi-Ren) appeal with the first instance court and motion for provisional execution are dismissed, and the appellant shall bear the relevant litigation expenses. 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). Later, Mr. Li, Shi-Ren appealed again. After hearing by the Supreme Court, on June 8, 2012, the judgment of the Kaohsiung Branch of the Taiwan High Court was annulled except for the executory part, and was sent back to the Kaohsiung Branch of the Taiwan High Court for trial.

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
Financial instruments by category

~47~

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

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

June 30, 2023	June 30, 2023
(Foreign currency: functional currency) Foreign currency amount (In thousands) Exchange rate Book value
Financial assets
	Monetary items
	USD：NTD $ 19,325 31.14 $ 601,774 RMB：NTD 28,114 4.31 121,168

~48~

USD：RMB		1,892	7.2258		58,927
EUR：NTD		1,324	33.81		44,781
JPY：NTD		50,984	0.215		10,962
Financial liabilities
Monetary items
USD：NTD		5,305	31.14		165,212
EUR：NTD		300	33.81		10,143
		December 31, 2022
	Foreign currency
(Foreign currency: functional		amount	Exchange
currency)	(In thousands)		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	4.41		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
		June 30, 2022
	Foreign currency
(Foreign currency: functional		amount	Exchange
currency)	(In thousands)		rate		Book value
Financial assets
Monetary items
USD：NTD	$	23,697	29.72	$	704,266
USD：RMB		5,300	6.7114		157,527
EUR：NTD		3,502	31.05		108,725
EUR：RMB		1,104	6.711		32,812
RMB：NTD		9,330	4.428		41,318
Financial liabilities
Monetary items
USD：NTD		9,047	29.72		268,891
EUR：NTD		2,576	31.05		79,989

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 six-month periods ended June 30, 2023, and 2022 would have decreased/increased by $5,269 and $5,471, respectively.

~49~

The total exchange benefit, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the six-month periods ended June 30, 2023 and 2022, amounted to $3,355, $6,804, $1,577 and $13,434, 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 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 six-month periods ended June 30, 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$170 or NT$120, 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$4,350 or NT$5,568, 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 six-month periods ended June 30, 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 six-month periods ended June 30, 2023 and 2022 would have decreased/increased by $503 and $455, 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

~50~

on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

iii. The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
iv. If the credit rating grade of an investment target degrades two scales, there has been a significant increase in credit risk on that instrument since initial recognition.
v. If the default rate of an investment target exceeds 10%, there has been a significant increase in credit risk on that instrument since initial recognition.
vi. The Group adopts the 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:

	For the six-month periods ended June 30,2023 Notes receivable Accounts receivable Total $ 268 $ 24,003 $ 24,271 ( 223) 1,454 1,231 - ( 669) ( 669) ( 5) ( 442) ( 447) $ 40 $ 24,346 $ 24,386	For the six-month periods ended June 30,2023 Notes receivable Accounts receivable Total $ 268 $ 24,003 $ 24,271 ( 223) 1,454 1,231 - ( 669) ( 669) ( 5) ( 442) ( 447) $ 40 $ 24,346 $ 24,386
	Notes receivable
Balance at January 1	$ 268

Expected credit loss (gain)	( 223)
Write-offs	-
Effect of foreign exchange	( 5)
Balance on June 30	$ 40


	For the six-month periods ended June 30,2022
	Notes receivable	Accounts receivable Total
Balance on January 1	$ 252	$ 29,118 $ 29,370
Expected credit loss	( 22)	1,959 1,937
Write-offs	-	( 3,022) ( 3,022)
Effect of foreign exchange	3	422 425
Balance on June 30	$ 233	$ 28,477 $ 28,710

(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

~51~

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:

June 30, 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 June 30, 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 $ 618,536 428 469,165 701,931 22,192 1,950 7,046 457 Less than 1 year $ 801,682 388 558,651 440,435 25,654 1,950 16,723 457 Less than 1 year $ 1,084,162 1,622 913,429 466,333 22,205 1,950 26,950 457	Between 1 to 2 year(s) $ - - - - 12,054 1,950 6,952 - Between 1 to 2 year(s) $ - - - - 10,484 1,950 6,367 - Between 1 to 2 year(s) $ - - - - 13,014 1,950 5,314 -	Between 2 to 5 years $ - - - - 24,773 5,850 16,693 - Between 2 to 5 years $ - - - - 14,363 5,850 13,962 - Between 2 to 5 years $ - - - - 34,160 5,850 11,414 -	More than 5 years $ - - - - 2,752 4,601,950 3,740 - More than 5 years
				$ - - - - 3,785 4,601,950 3,316 - More than 5 years
				$ - - - - - 4,603,900 1,600 -

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

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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 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, long-term borrowings (including current portion) and guarantee deposits received) are approximate to their fair values.
C. The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets are as follows:

June 30, 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	`~53~` Level I $ 9,211 7,805 17,016 434,978 $ 451,994 Level I $ 39,232 11,179 50,411 439,249 $ 489,660	Level II $ - - - - $ - Level II $ - - - - $ -	Level IIII $ - - - - $ - Level IIII $ - - - - $ -	Total
				$ 9,211 7,805
				17,016
				434,978
				$ 451,994
				Total
				$ 39,232 11,179

				50,411
				439,249
				$ 489,660

June 30, 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 $ 157 11,822 11,979 556,763 $ 568,742	Level II $ - - - - $ -	Level IIII $ - - - - $ -	Total
				$ 157 11,822

				11,979
				556,763
				$ 568,742

D. The methods and assumptions the Group used to measure fair value are as follows:
(1) The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

	Listed shares	Open-end fund
Market quoted price	Closing price	Net asset value

(2) 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 six-month periods ended June 30, 2023 and 2022, there was no transfer between Level 1 and Level 2.
G. For the six-month periods ended June 30, 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 six-month periods ended June 30, 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.

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D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: None.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 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), B and J.

(4)Major shareholders information

Major shareholders information: Please refer to table 7.

14. Segment Information

(5)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.

~55~

(6)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:

egments is as follows:
Segment revenue Inter-segment revenue Revenue from external customers, net Segment income before tax Segment assets Segment liabilities Segment revenue Inter-segment revenue Revenue from external customers, net Segment income before tax Segment assets Segment liabilities	For the six-month periods ended June 30, 2023
	Screw segment Machinery segment Investment segment Total $ 3,877,485 $ 505,636 $ - $ 4,383,121 ( 253,733) ( 56,586 ) - ( 310,319) 3,623,752 449,050 - 4,072,802 284,355 28,834 94,868 408,057 10,524,918 1,809,682 144,790 12,479,390 6,720,639 823,857 - 7,544,496 For the six-month periods ended June 30, 2022			Total
	Screw segment $ 5,652,886 ( 377,899) 5,274,987 606,589 11,165,032 7,235,737	Machinery segment $ 531,893 ( 25,224 ) 506,669 48,390 1,842,607 920,583	Investment segment $ - - - ( 121,684) 94,152 -	Total
				$ 6,184,779 ( 403,123) 5,781,656 533,295 13,101,791 8,156,320

(7)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 six-month periods ended June 30, 2023 2022 $ 408,057 $ 533,295 ( 206,614) ( 50,447) $ 201,443 $ 482,848

Reportable operating segments income
before tax
Elimination of inter-segment income(loss)
Profit before income tax

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.

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Chun Yu Works & Co., Ltd. and subsidiaries Provision of endorsements and guarantees to others

Table 1

Expressed in thousands of NTD

For the six-month periods ended June 30, 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 June 30, 2023	Outstanding endorsement/ guarantee amount at June 30, 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 (Dongguan) Metal Products Co., Ltd.	2	2,511,591 $	622,800 $	$ 622,800	$ 202,561	$ -	14.88%	3,348,788 $	Y	N	Y	(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 ： 31.14 ， RMB ： NTD 1 ： 4.3098).

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) June 30, 2023

June 30, 2023
Relationship General with the securities ledger account Securities held by Marketable securities issuer (Note 1) Table 2		As of June 30,2023		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 - 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	337 11,678 304 500 300 10 6,440 23,430 6,618 9 1,500	9,048 $ 193,270 773 4,930 2,875 163 106,582 633,786 109,528 203 24,825	0.34 2.21 0.55 - - - 1.22 7.75 1.25 0.01 0.28	9,048 $ 193,270 773 4,930 2,875 163 106,582 633,786 109,528 203 24,825	- - - - - - - - - - -

(Note 1) The code number explanation is as follows:

Financial assets at fair value through profit or loss - current.
Financial assets at fair value through other comprehensive profit or loss- non-current.
(Note 2) Please refer to Note 6, (17) explanation of share capital.
(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

Expressed in thousands of NTD

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 six-month periods ended June 30, 2023

Table 3

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. Chun Yu (Dongguan) Metal Products Co., Ltd.	Ofco Industrial Corporation Shanghai Uchee Hardware Products Ltd.	Other related party Subsidiary	(Sales) (Sales)	224,936) ($ 125,208) (	( 13% ) ( 19% )	1 month 3 month	$ - -	3 ~ 5 months (Note 1)	$ 31,525 -	5% -	- -

(Note 1) The credit terms to third parties are 1 ~ 3 months after the sale.

(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 ： 31.14, RMB ： NTD 1 ： 4.3098), and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the six-month periods ended June 30, 2023 (USD ： NTD 1 ： 30.5584, RMB ： NTD 1 ： 4.4126).

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 six-month periods ended June 30, 2023

Number (Note2)	Companyname	Counterparty	Relationship (Note 3)		Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenue or total assets (Note4)
0 1 2 3 4 5 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. Sunny City International Limited.	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. Lion City Management Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. Scholar Holdings Ltd. Shanghai Uchee Hardware Products Ltd. Chun Yu (Dongguan) Metal Products Co., Ltd. Shanghai Uchee Hardware Products Ltd.	1 1 1 1 2 2 2 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	35,970 $ 24,165 622,800 43,233 39,440 17,850 23,430 12,855 15,995 18,857 125,208 34,419 76,562 26,178	4 months - - - 3 months - - - 3 months - 3 months - 3 months -	1% - 5% - 1% - - - - - 3% - 2% -

(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 ： 31.14 ； RMB ： NTD 1 ： 4.3098) ;

prevailing at the financial reporting date, and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the six-month periods ended June 30, 2023 ： NTD 1 ： 30.5584 ； RMB ： NTD 1 ： 4.4126).

Table 4 Page 1

For the six-month period ended June 30, 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 June 30,2023	Net profit (loss) Investment income (loss) of the investee for the recognised by the Company six-month periods ended ended June 30,2023 June 30,2023 Footnote	Net profit (loss) Investment income (loss) of the investee for the recognised by the Company six-month periods ended ended June 30,2023 June 30,2023 Footnote
	Balance as at Balance as at June 30, 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 62,280 62,280	15,000,000 100.00 205,699 $ 3,800,000 100.00 398,582 74,888,032 100.00 144,790 10,000,000 100.00 118,628 33,183,211 100.00 980,452 1,000,000 100.00 235,748 14,370,000 71.85 630,903 28,821,939 47.81 445,989 - 100.00 488,423	3,444 $ 5,196 $ 27,855 29,332 94,868 24) ( 5,992) ( 6,062) ( 17,780) ( 15,512) ( 13,445 13,481 111,006 79,758 21,062 9,193 826,751 -	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 ： 31.14 ； RMB ： NTD 1 ： 4.3098).

and the transactions amounts are translated into New Taiwan dollars at the average exchange rate for the six-month periods ended June 30, 2023 as follows: (USD ： NTD 1 ： 30.5584 ； RMB ： NTD 1 ： 4 .4126).

Table 5 Page 1

Chun Yu Works & Co., Ltd. and subsidiaries Information on investments in Mainland China For the six-month periods ended June 30, 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 ende Amount r to Taiwan fo Amount remit to Main	d June 30,2023 emitted back r the six-month ted from Taiwan land China/	Accumulated amount of remittance from Taiwan to Mainland China as of June 30, 2023	Net income of investee for the six-month periods ended June 30,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the six-month periods ended June 30,2023	Book value of investments in Mainland China as of June 30, 2023	Accumulated amount of investment income to Taiwan as of June 30, 2023 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 June 30, 2023	$ 2,007,938 (Note 1) 31,140 8,283 264,690 (Note 2) Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	(Note 3) 1,500,730 $ (Note 4) 31,140 (Note 5) - (Note 6) 62,280 Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA(Note10) $ 2,960,936 605,668	- $ - - -	- $ - - -	1,500,730 $ 31,140 - 62,280	17,754) ($ 13,477 75 25,128	100% 100% 100% 47.82%	17,754) ($ 13,477 75 12,016	1,008,268 $ 233,875 3,806) ( 230,967	- $ 80,715 (Note 7) - 506,731 (Note 8)	(Note 9) - - (Note 9)
Chun Yu Works & Co., Ltd. Chun Zu Machinery Industry Co., Ltd.	1,759,815 $ 62,280	$ 1,759,815 202,410

(Note 1) The investment in Chun Yu (Dongguan) Metal Products Co., Ltd. amounted to US$64,481 thousand, consisting of US$48,193 thousand that has been reported to the Investment Commission and US$16,289 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$2,592 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$34,029 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 June 30, 2023 are translated into New Taiwan dollars at the exchange rate (USD ： NTD 1 ： 31.14 ； RMB ： NTD 1 ： 4.3098) 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 six-month periods ended June 30, 2023 (USD ： NTD 1 ： 30.5584 ； RMB ： NTD 1 ： 4.4126).

Table 6 Page 1

Chun Yu Works & Co., Ltd. and subsidiaries Major shareholders information June 30, 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

AI assistant

CHUN YU — Interim / Quarterly Report 2023

51943_rns_2023-11-13_ee0b7ca7-82b6-4633-b784-fb028e4e4118.pdf

CHUN YU WORKS & CO., LTD. AND SUBSIDIARIES

INDEPENDENT AUDITORS’ REVIEW REPORT TRANSLATED FROM CHINESE

Introduction

Scope of Review

Basis of Qualified Conclusion

Qualified Conclusion

Other Matter

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

(Expressed in thousands of New Taiwan dollars)

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

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

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

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

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

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

Chun Yu Works & Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements For The Six Month Periods Ended June 30, 2023 and 2022

1. History and Organization

3. Application of New and Revised Standards and Interpretations

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

4. Summary of Significant Accounting Policies

(2) Basis of Preparation

(3) Basis of consolidation

December 31, 2022.

B. Subsidiaries included in this consolidated financial statements ：

(4) Employee benefits

(5) Income tax

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

6. Explanation of important accounting items

(1) Cash and cash equivalents

(4) Inventories

(7) Property, plant and equipment

– (8) Lease transaction lessee

(9) Intangible assets

(10) Long-term notes and accounts receivable

(11) Impairment of non-financial assets

(12) Short-term borrowings

(13) Bonds payable

– (14) Provisions for liabilities current

(15) Long term borrowings

(16) Pensions

(17) Share capital

(18) Capital surplus

(19) Retained earnings

(20) Other equity

(21) Operating revenue

B. Contract liabilities

(22) Interest income

(23) Other income

(24) Other gains and losses

(25) Finance costs

(26) Expenses by nature

(27) Employee benefit expense

(28) Income tax

(29) Earnings per share

(30) Supplementary cash flow information

A. Investment and financing activities with partial cash payments:

(31) Changes in liabilities from financing activities

7. Related party transactions

(1)Name and relationship of related party

(2)Major transactions with related parties

A.Operating revenue

B.Purchase

C.Property transaction

D.Other expenses

8. Pledged assets

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

10. Significant Disaster Loss

11. Significant Events after the Balance Sheet Date

12. Others

ii. Price risk

iii. Cash flow and fair value interest rate risk

(b)Credit risk

(c)Liquidity risk

13. Supplementary Disclosures

(1)Significant transactions information

(2)Information on investees

(3)Information on investments in Mainland China

CHUN YU Interim / Quarterly Report 2023

B. Subsidiaries included in this consolidated financial statements `：`