CHUNG HUNG — Interim / Quarterly Report 2021

Dec 30, 2021

Chung Hung Steel Corporation and Subsidiaries

Consolidated Financial Statements for the Three Months Ended March 31, 2021 and 2020 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

Chung Hung Steel Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of Chung Hung Steel Corporation (the Corporation) and its subsidiaries as of March 31, 2021 and 2020, and the consolidated statements of comprehensive income, changes in equity and cash flows for the three months then ended March 31, 2021 and 2020, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the consolidated financial statements). Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making 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.

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the financial position of the Corporation and its subsidiaries as of March 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the FSC.

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The engagement partners on the reviews resulting in this independent auditor’s review report are Yu-Hsiang Liu and Jia-Ling Chiang.

Deloitte & Touche Taipei, Taiwan Republic of China

May 3, 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ review report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ review report and consolidated financial statements shall prevail.

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CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars)
ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at fair value through other comprehensive income - current (Note 8) Accounts receivable (Notes 9 and 23) Accounts receivable from related parties (Notes 9, 23and 29) Other receivables (Note 9) Other receivables from related parties (Notes 9 and 29) Current tax assets Inventories (Note 10) Prepayments (Note 11) Other financial assets - current (Notes 12 and 30) Other current assets Total current assets NONCURRENT ASSETS Financial assets at fair value through other comprehensive income - noncurrent (Note 8) Investments accounted for using equity method (Note 13) Property, plant and equipment (Notes 14 and 31) Right-of-use assets (Note 15) Investment properties (Note 16) Prepayments for equipment (Note 31) Refundable deposits Total noncurrent assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 17, 29 and 30) Short-term bills payable (Note 17) Contract liabilities – current (Note 23) Accounts payable (Note 19) Accounts payable to related parties (Notes 19 and 29) Other payables (Notes 20 and 29) Current tax liabilities Lease liabilities – current (Note 15) Current portion of long-term borrowings (Note 17) Refund liabilities Other current liabilities Total current liabilities NONCURRENT LIABILITIES Bonds payable (Note 18) Long-term borrowings (Note 17) Long-term bills payable (Note 17) Deferred tax liabilities Lease liabilities - noncurrent (Note 15) Net defined benefit liabilities (Notes 4 and 21) Guarantee deposits received (Note 16) Total noncurrent liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 22) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL	March 31, 2021 (Reviewed) Amount % $ 482,037 2 160,093 1 857,529 3 970,377 3 146,313 1 8,380 - 53,266 - 514 - 4,976,459 18 143,937 - 302,800 1 142 - 8,101,847 29 75,572 - 2,998,665 11 11,133,675 39 74,467 - 5,982,963 21 32,753 - 5,918 - 20,304,013 71 $ 28,405,860 100 $ 679,001 2 1,999,805 7 147,945 1 945,534 3 353,445 1 587,723 3 138 - 15,274 - - - 134,872 - 27,416 - 4,891,153 17 2,995,323 11 1,700,000 6 1,139,299 4 182,222 1 60,075 - 294,010 1 35,000 - 6,405,929 23 11,297,082 40 14,355,444 51 903 - 90,568 - 549,578 2 2,363,709 8 3,003,855 10 (251,424) (1) 17,108,778 60 $ 28,405,860100	December 31, 2020 (Audited) Amount % $ 287,373 1 242,410 1 819,454 3 830,087 3 117,238 - 19,321 - 26,672 - 514 - 4,236,420 16 150,961 1 301,700 1 3,961 - 7,036,111 26 68,193 - 2,669,716 10 11,162,643 41 78,330 - 5,983,185 22 95,659 1 6,220 - 20,063,946 74 $ 27,100,057 100 $ 404,630 2 3,599,577 13 57,283 - 27,500 - 313,224 1 580,264 2 5 - 15,230 - - - 153,756 1 15,764 - 5,167,233 19 2,995,039 11 2,000,000 8 1,109,674 4 182,222 1 63,898 - 313,717 1 35,000 - 6,699,550 25 11,866,783 44 14,355,444 53 903 - 90,568 - 549,578 2 662,620 3 1,302,766 5 (425,839) (2) 15,233,274 56 $ 27,100,057100	March 31, 2020 (Reviewed)
			Amount % $ 124,346 - 161,305 1 627,420 2 578,404 2 54,571 - 86,000 - 210,756 1 661 - 6,782,694 23 232,215 1 301,700 1 1,070 - 9,161,142 31 71,666 - 1,975,443 7 12,339,053 42 89,829 - 5,983,851 20 15,913 - 5,731 - 20,481,486 69 $ 29,642,628 100 $ 5,433,222 18 1,899,573 6 50,597 - 27,652 - 127,472 - 422,463 2 - - 15,087 - 480,000 2 163,716 1 21,780 - 8,641,562 29 1,996,897 7 2,710,000 9 1,909,407 7 182,222 1 75,286 - 358,848 1 35,000 - 7,267,723 25 15,909,285 54 14,355,444 48 903 - 90,450 - 497,607 2 48,776 - 636,833 2 (1,259,837) (4) 13,733,343 46 $29,642,628100

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

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CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

(Reviewed, Not Audited)
OPERATING REVENUE (Notes 23 and 29) Sales Service revenue Other operating revenue Total operating revenue OPERATING COSTS (Notes 10, 24 and 29) GROSS PROFIT OPERATING EXPENSES (Note 24) Selling and marketing expenses General and administrative expenses Total operating expenses PROFIT (LOSS) FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 13, 16, 24 and 29) Interest income Other income Other gains and losses Finance costs Share of the profit of associates Total non-operating income and expenses PROFIT (LOSS) BEFORE INCOME TAX INCOME TAX (Notes 4 and 25) NET PROFIT (LOSS) FOR THE PERIOD OTHER COMPREHENSIVE INCOME (LOSS) (Note 22) Items that will not be reclassified subsequently to profit or loss Unrealized gains and losses on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of associates TOTAL COMPREHENSIVE INCOME FOR THE PERIOD NET PROFIT (LOSS) ATTRIBUTABLE TO: Owners of the Corporation TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation EARNINGS (DEFICIT) PER SHARE (Note 26) Basic Diluted	For the Three Months Ended March 31
	2021 Amount % $ 10,656,836 98 154,684 2 19,002- 10,830,522 100 8,882,388 82 1,948,134 18 122,692 1 89,993 1 212,6852 1,735,44916 36 - 27,346 - (50,012) - (11,585) - (1,083)- (35,298)- 1,700,151 16 133- 1,700,01816 45,454 - 130,032 1 175,4861 $1,875,504 17 $ 1,700,018 16 $1,875,504 17 $ 1.18 $ 1.18	2020
		Amount % $ 9,967,463 99 115,561 1 15,869- 10,098,893 100 9,816,496 97 282,397 3 306,462 3 81,168 1 387,6304 (105,233) (1) 106 - 36,661 - (29,830) - (25,416) - (1,583)- (20,062)- (125,295) (1) - - (125,295) (1) (161,063) (2) (549,196) (5) (710,259) (7) $ (835,554) (8) $ (125,295) (1) $ (835,554) (8) $ (0.09) $ (0.09)

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

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

BALANCE AT JANUARY 1, 2021 Net profit for the three months ended March 31, 2021 Other comprehensive income for the three months ended March 31, 2021, net of income tax Total comprehensive income for the three months ended March 31, 2021 Disposal of investments in equity instruments at fair value through other comprehensive income BALANCE AT MARCH 31, 2021 BALANCE AT JANUARY 1, 2020 Net loss for the three months ended March 31, 2020 Other comprehensive income for the three months ended March 31, 2020, net of income tax Total comprehensive income for the three months ended March 31, 2020 BALANCE AT MARCH 31, 2020	Issued and Outstanding Ordinary Shares $ 14,355,444 - - - - $ 14,355,444 $ 14,355,444 - - - $ 14,355,444	Capital Surplus $ 903 - - - - $ 903 $ 903 - - - $ 903		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 90,568 $ 549,578 $ 662,620 - - 1,700,018 - - - - - 1,700,018 - - 1,071 $ 90,568 $ 549,578 $ 2,363,709 $ 90,450 $ 497,607 $ 174,071 - - ( 125,295 ) - - - - - ( 125,295 ) $ 90,450 $ 497,607 $ 48,776	Other Equity Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income ($ 425,839) - 175,486 175,486 ( 1,071 ) ($ 251,424 ) ($ 549,578 ) - ( ( 710,259 ) ( ( 710,259 ) ( ($ 1,259,837)	Total Equity $ 15,233,274 1,700,018 175,486 1,875,504 - $ 17,108,778 $ 14,568,897 125,295 ) 710,259) 835,554) $ 13,733,343
				Legal Reserve $ 90,568 - - - - $ 90,568 $ 90,450 - - - $ 90,450

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

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CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM OPERATING ACTIVITIES Profit (loss) before income tax Adjustments for: Depreciation expense Net loss on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividends income Share of the profit of associates Loss on disposal of property, plant and equipment Reversal of inventories Others Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Accounts receivable Accounts receivable from related parties Other receivables Other receivables from related parities Inventories Prepayments Other current assets Contract liabilities Accounts payable Accounts payable to related parties Other payables Other current liabilities Net defined benefit liabilities Refund liabilities Cash generated from (used in) operations Net cash generated from (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Decrease (increase) in refundable deposits Increase in other financial assets Interest received Dividends received from others Net cash used in investing activities

For the Three Months **Ended March 31 **

2021 2020 $ 1,700,151 ($ 125,295) 189,048 300,904 55,381 20,046 11,585 25,416 ( 36) ( 106) - ( 8,146) 1,083 1,583 - 11,545 ( 23,459) ( 144,626) 284 53 26,936 - ( 140,290) ( 112,387) ( 29,075) ( 8,838) 10,941 ( 79,969) ( 26,594) 330,658 ( 716,580) ( 60,431) 7,024 ( 3,684) 3,819 620 90,662 ( 234,455) 918,034 ( 2,020) 40,221 61,875 ( 4,728) ( 92,524) 11,652 5,346 ( 19,707) ( 15,012) ( 18,884) 10,104 2,087,468 ( 119,343) 2,087,468 ( 119,343) ( 200,000) - ( 70,297) ( 57,192) 302 ( 99) ( 1,100) - 36 106 - 8,146 ( 271,059) ( 49,039) (Continued)

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CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from short-term bills payable Repayments of short-term bills payable Issuance of bonds payable Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from long-term bills payable Repayments of long-term bills payable Repayments of principal of lease liabilities Interest paid Net cash generated from (used in) financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		For the Three Months **Ended March 31 **	For the Three Months **Ended March 31 **
		2021 $ 16,372,977 ( 16,098,606) 400,228 ( 2,000,000) - 300,000 ( 600,000) 239,625 ( 210,000) ( 3,779) ( 22,190) ( 1,621,745) 194,664 287,373 $ 482,037	2020 $ 32,034,269 ( 31,755,914) 2,800,023 ( 2,700,000) 1,996,844 1,150,000 ( 2,570,000) 200,332 ( 900,000) ( 3,733) ( 26,121) 225,700 57,318 67,028 $ 124,346 (Concluded)

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

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CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

Chung Hung Steel Corporation (the Corporation) was incorporated in September 1983 and started operations in September 1985. It mainly manufactures and sells steel products, such as cold and hot rolled coils and steel pipes.

The Corporation’s shares have been listed on the Taiwan Stock Exchange since February 1992.

As of March 31, 2021, and 2020, China Steel Corporation (“CSC”), the Corporation’s parent and major shareholder (40.60%), controls the Corporation’s management and operations.

The consolidated financial statements are presented in the Corporation’s functional currency, the New Taiwan Dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were reported to the Corporation’s board of directors and approved for issue on May 3, 2021.

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

• a. Initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Corporation and its subsidiaries’ (the Group) accounting policies.

• b. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond 30 June 2021” IFRS 17 “Insurance Contracts”	Effective Date Announced by IASB (Note 1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) To be determined by IASB April 1, 2021 (Note 8) January 1, 2023 (Continued)

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New IFRSs Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts-Cost of Fulfilling a Contract”	Effective Date Announced by IASB (Note 1)
	January 1, 2023 January 1, 2023 January 1, 2023 (Note 6) January 1, 2023 (Note 7) January 1, 2022 (Note 4) January 1, 2022 (Note 5) (Concluded)

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” are applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2022.

• Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

• Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note 8: A lessee should apply the amendment for annual reporting periods beginning on or after April 1, 2021, recognizing the cumulative effect of initial application at the beginning of the annual reporting period.

As of the date the consolidated financial statements were reported to the board of directors for issue, the Group is in the process of assessing the impact of the impending initial application of the aforementioned and other standards and the amendments to interpretations on their financial position and results of operations. Disclosures will be provided after a detailed review of the impact has been completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICY

For readers’ convenience, the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the ROC. If inconsistencies arise between

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the English version and the Chinese version or if differences arise in the interpretations between the two versions, the Chinese version of the consolidated financial statements shall prevail.

• a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. The consolidated financial statements do not present full disclosures required for a complete set of IFRSs annual financial statements.

b. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Corporation and the entities controlled by the Corporation (i.e. its subsidiaries). All intra-Group transactions, balances, income and expenses are eliminated in full upon consolidation.

The consolidated entities were as follows:

Investor Investee Main Businesses Chung Hung Steel Corporation Ltd. Hung Kao Investment Corporation General investment	Percentage of Ownership (%)
	March 31, 2021 December 31, 2020 March 31, 2020 100 100 100

• c. Other significant accounting policies

Except for the following, refer to the summary of significant accounting policy in the consolidated financial statements for the year ended December 31, 2020.

1) Retirement benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

• 2) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated on an interim period’s pre-tax income by applying to the tax rate that would be applicable to expected total annual earnings.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The same critical accounting judgments and key sources of estimation uncertainty of consolidated financial statements have been followed in these consolidated financial statements as those applied in the preparation of the consolidated financial statements for the year ended December 31, 2020.

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6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits	March 31, 2021 $ 640 481,397 $ 482,037	December 31, 2020 $ 640 286,733 $ 287,373	March 31, 2020 $ 640 123,706 $ 124,346

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT

Financial assets mandatorily classified as at FVTPL Emerging market shares	March 31, 2021 December 31, 2020 $ 160,093 $ 242,410	March 31, 2020 $ 161,305

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Current Domestic Listed shares Noncurrent Domestic listed shares Domestic unlisted shares	March 31, 2021 $ 857,529 $ 26,003 49,569 $ 75,572	December 31, 2020 $ 819,454 $ 24,848 43,345 $ 68,193	March 31, 2020 $ 627,420
			$ 19,025 52,641
			$ 71,666

RisLink Venture Capital Corp. conducted capital reduction and refunded NT$1,934 thousand in September 2020.

9. ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

Accountsreceivable Accounts receivable – non-related parties Accounts receivable – related parties	March 31, 2021 $ 970,377 $ 146,313	December 31, 2020 $ 830,087 $ 117,238	March 31, 2020 $ 578,404 $ 54,571 (Continued)

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Other receivables (including related parties) Receivables from disposal of scrap Discount receivable Income tax refund receivable Others	March 31, 2021 $ 44,861 14,855 - 1,930 $ 61,646	December 31, 2020 $ 32,961 886 - 12,146 $ 45,993	March 31, 2020 $ 30,075 185,280 79,545 1,856 $ 296,756

(Concluded)

• a. Accounts receivable

The Group allows an average credit period of 30 days (the aging of receivables from sales of goods is based upon the date of examination and acceptance of the goods settlement is monthly or 60 days after shipment date). Refer to Note 28 for credit risk management policies.

The expected credit losses on accounts receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status rather than distinguishing each different customer group

The following table details the loss allowance of accounts receivable based on the Group’s provision matrix.

March 31, 2021

Expected credit loss rate (%) Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost December 31, 2020 Expected credit loss rate (%) Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost March 31, 2020 Expected credit loss rate (%) Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Not Past Due - $ 1,116,690 - $ 1,116,690 Not Past Due - $ 947,325 - $ 947,325 Not Past Due - $ 632,975 - $ 632,975	1 to 30 Days - $ - - $ - 1 to 30 Days - $ - - $ - 1 to 30 Days - $ - - $ -	31 to 60 Days 6 - $ - - $ - 31 to 60 Days 6 - $ - - $ - 31 to 60 Days 6 - $ - - $ -	1 to 180 Days 1 - $ - - $ - 1 to 180 Days 1 - $ - - $ - 1 to 180 Days 1 - $ - - $ -	81 to 365 Days O - $ - - $ - 81 to 365 Days O - $ - - $ - 81 to 365 Days O - $ - - $ -	ver 365 Days 100 $ - - $ - ver 365 Days 100 $ - - $ - ver 365 Days 100 $ - - $ -	Total $ 1,116,690 -
							$ 1,116,690
							Total $ 947,325 -
							$ 947,325
							Total $ 632,975 -
							$ 632,975

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The amounts of accounts receivable from single customer that exceed 10% of total accounts receivable were as follows:

A company B company C company D company E company F company G company	March 31, 2021 $ 170,642 110,587 106,617 98,952 82,733 9,134 - $ 578,665	December 31, 2020 $ 186,520 - - 95,493 88,499 147,430 - $ 517,942	March 31, 2020 $ 17,653 - - 23,156 216,204 8,363 170,100 $ 435,476

The Corporation entered into accounts receivable factoring contract (without recourse). Under the contract, the Corporation is authorized to sell accounts receivable to Bank upon the delivery of products to customers and is required to complete related formalities on the next banking day. Under this contract, the Corporation does not bear the risk of the uncollectability of the accounts receivable.

Receivables sold for the three months ended March 31, 2021 and 2020 were as follows:

Buyer of Accounts Receivable For the Three Months EndedMarch31,2021 Mega Bank Bank of Taiwan Bank of Taiwan For the Three Months Ended March 31, 2020 Mega Bank Bank of Taiwan Bank of Taiwan	Advances Received at Period - Beginning $ 601,245 67,274 14,577 $ 683,096 $ 926,731 - 124,214 $ 1,050,945	Receivables Sold $ 242,645 54,635 2,270 $ 299,550 $ 735,455 72,821 133,314 $ 941,590	Amounts Collected Advances Received at Period - End Interest Rates on Advances Received (%) Credit Line $ 265,367 $ 578,523 1.03 NT$817 million 48,612 73,297 1.03 NT$200 million 14,577 2,270 1.49 USD20 million $ 328,556 $ 654,090 $ 704,517 $ 957,669 1.16 NT$3 billion - 72,821 1.16 NT$200 million 64,486 193,042 3.08 USD20 million $ 769,003 $ 1,223,532

b. Other receivables

The Group applies the approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for other receivable. The expected credit losses on other receivables are estimated using expected credit loss rate based on the other receivables overdue days. As of March 31, 2021, December 31, 2020 and March 31, 2020, there was no allowance for doubtful accounts.

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10. INVENTORIES

Raw materials Supplies Work in progress Finished goods Others Raw materials and supplies in transit	March 31, 2021 $ 1,686,494 376,289 698,055 1,949,197 6,171 260,253 $ 4,976,459	December 31, 2020 $ 1,608,738 368,565 488,875 1,764,310 3,872 2,060 $ 4,236,420	March 31, 2020 $ 4,686,347 459,384 571,973 2,061,949 782 2,259
			$ 6,782,694

The cost of inventories recognized as operating costs for the three months ended March 31, 2021 and 2020 was NT$8,758,274 thousand and NT$9,697,841 thousand, respectively, including reversal of loss of NT$23,459 thousand and NT$144,626 thousand, respectively. Reversal of inventory was mainly due to the increase in steel prices.

11. PREPAYMENTS

Input tax Prepayments for purchases Others	March 31, 2021 $ 91,149 44,305 8,483 $ 143,937	December 31, 2020 $ 104,098 41,340 5,523 $ 150,961	March 31, 2020 $ 170,994 54,097 7,124 $ 232,215

12. OTHER FINANCIAL ASSETS

Current Pledged time deposits (Note 30) One-year time deposits	March 31, 2021 $ 300,000 2,800 $ 302,800	December 31, 2020 $ 300,000 1,700 $ 301,700	March 31, 2020 $ 300,000 1,700 $ 301,700

13. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Material associates Transglory Investment Corp. (TIC) Associates that are not individually material	March 31, 2021 $ 2,796,130 202,535 $ 2,998,665	December 31, 2020 $ 2,669,716 - $ 2,669,716	March 31, 2020 $ 1,975,443 - $ 1,975,443

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a. Material associates

Name of Associate Nature of Activities Principal Place of Business TIC General investment Taiwan	Percentage of Ownership and Voting Rights (%) March 31, 2021 December 31, 2020 March 31, 2020 40.91 40.91 40.91

The summarized financial information below represents amounts shown in the associates’ financial statements prepared in accordance with IFRSs adjusted by the Group for equity accounting purposes.

TIC

Current assets Noncurrent assets Current liabilities Equity Proportion of the Group’s ownership (%) Equity attributable to the Group Carrying amount Operating revenue Net loss for the period Other comprehensive income (loss) Total comprehensive income for the period Comprehensive income attributable to the Group	March 31, 2021 $ 2,905 6,909,938 ( 78,012) $ 6,834,831 40.91 $ 2,796,130 $ 2,796,130	December 31, 2020 March 31, 2020 $ 2,470 $ 1,314 6,598,420 5,030,940 ( 75,063) ( 203,500) $ 6,525,827 $ 4,828,754 40.91 40.91 $ 2,669,716 $ 1,975,443 $ 2,669,716 $ 1,975,443 For the Three Months Ended March 31
		2021 2020 $ - $ - ($ 2,877) ($ 3,869) 311,882 (1,342,449) $ 309,005 ($ 1,346,318) $ 126,414 ($ 550,779)

b. Information about associates that are not individually material was as follows:

The Corporation and its subsidiaries’ share of Net profit for the period Other comprehensive income Total comprehensive income		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 93 1,370 $ 1,463	2020 $ - - $ -

Refer to Table 3 “Information on Investments” for the nature of main business, principle of business and countries of incorporation of associates that are not individually material.

• 15 -

14. PROPERTY, PLANT AND EQUIPMENT

For the Three Months Ended March 31, 2021

Cost Balance at January 1, 2021 Additions Disposals Balance at March 31, 2021 Accumulated depreciation Balance at January 1, 2021 Depreciation expense Disposals Balance at March 31, 2021 Carrying amount at December 31, 2020 Carrying amount at March 31, 2021	Land $ 3,988,983 - - $ 3,988,983 $ - - - $ - $ 3,988,983 $ 3,988,983	Buildings Machinery and Equipment $ 5,001,703 $ 22,862,804 1 196,250 - - $ 5,001,704 $ 23,059,054 $ 2,008,941 $ 19,637,206 32,892 87,324 - - $ 2,041,833 $ 19,724,530 $ 2,992,762 $ 3,225,598 $ 2,959,871 $ 3,334,524	Other Equipment $ 4,483,434 7,108 ( 9,838) $ 4,480,704 $ 4,050,064 24,199 ( 9,838) $ 4,064,425 $ 433,370 $ 416,279	Spare Parts $ 1,291,199 48,472 ( 2,234) $ 1,337,437 $ 894,626 40,548 ( 2,234) $ 932,940 $ 396,573 $ 404,497	Construction in Progress and Equipment to be Inspected $ 125,357 ( 95,836 ) - $ 29,521 $ - - - $ - $ 125,357 $ 29,521	Total $ 37,753,480 155,995 ( 12,072) $ 37,897,403 $ 26,590,837 184,963 ( 12,072) $ 26,763,728 $ 11,162,643 $ 11,133,675

For the Three Months Ended March 31, 2020

Cost Balance at January 1, 2020 Additions Disposals Balance at March 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expense Disposals Balance at March 31, 2020 Carrying amount at March 31, 2020	Land $ 3,988,983 - - $ 3,988,983 $ - - - $ - $ 3,988,983	Buildings Machinery and Equipment $ 4,993,389 $ 22,734,037 - 77,476 - ( 13,377) $ 4,993,389 $ 22,798,136 $ 1,877,331 $ 18,539,349 32,859 175,067 - ( 1,832) $ 1,910,190 $ 18,712,584 $ 3,083,199 $ 4,085,552	Other Equipment $ 4,419,879 24,223 ( 4,217) $ 4,439,885 $ 3,938,749 33,365 ( 4,217) $ 3,967,897 $ 471,988	Spare Parts $ 1,428,295 12,289 ( 31,164) $ 1,409,420 $ 773,196 55,530 ( 31,164) $ 797,562 $ 611,858	Construction in Progress and Equipment to be Inspected $ 116,329 ( 18,856 ) - $ 97,473 $ - - - $ - $ 97,473	Total $ 37,680,912 95,132 ( 48,758) $ 37,727,286 $ 25,128,625 296,821 ( 37,213) $ 25,388,233 $ 12,339,053

Depreciation of the rollers that belong to the cold-rolling departments, the hot rolling department and the skin pass mill of the pickling & galvanizing mill department is calculated based on their level of wear; depreciation of other assets is recognized based on the following useful lives:

Buildings Facility 5-50 years Main structure 31-60 years Machinery and equipment Power equipment 3-30 years High-temperature equipment 5-18 years Other equipment Computer equipment 3-10 years Office, air condition and extinguishment equipment 3-20 years Transportation equipment 5-16 years Others 3-18 years Tank 10 years

• 16 -

The Corporation bought farmlands for warehouse at the Jia Xing Section and Quing Shui Section of the Gangshan District in Kaohsiung City. However, certain regulations prohibit the Corporation from registering the title of these farmlands in the Corporation’s name; thus, the registration was made in the name of an individual person. The individual person consented to fully cooperate with the Corporation in changing the land title in the future and pledged the land to the Corporation as collateral. As of March 31, 2021, December 31, 2020 and March 31, 2020, the book value of those remaining farmlands recognized as land were NT$55,433 thousand, respectively.

15. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Land Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Transportation equipment	March 31, 2021 $ 65,127 9,340 $ 74,467	December 31, 2020 March 31, 2020 $ 68,233 $ 77,460 10,097 12,369 $ 78,330 $ 89,829 For the Three Months Ended March 31	December 31, 2020 March 31, 2020 $ 68,233 $ 77,460 10,097 12,369 $ 78,330 $ 89,829 For the Three Months Ended March 31	December 31, 2020 March 31, 2020 $ 68,233 $ 77,460 10,097 12,369 $ 78,330 $ 89,829 For the Three Months Ended March 31
		$
			2021 $ - $ 3,106 757 $ 3,863	2020 $ 18,789 $ 3,104 757 $ 3,861

Except for the above-mentioned additions and depreciation expenses, there were no material subleases and impairment for the three months ended March 31, 2021 and 2020.

• b. Lease liabilities

Carrying amounts Current Non-current Range of discount rate for lease liabilities was as Land(%) Transportation equipment(%)	March 31, 2021 $ 15,274 $ 60,075 follows: March 31, 2021 0.85-1.31 0.76	December 31, 2020 $ 15,230 $ 63,898 December 31, 2020 0.85-1.31 0.76	March 31, 2020 $ 15,087 $ 75,286 March 31, 2020 1.10-1.31 0.76

• 17 -

• c. Material lease activities and terms

The Corporation leases land for the use of steel products storing with lease terms of 5-10 years. The Corporation does not have bargain purchase options to acquire the leasehold land at the end of the lease terms.

d. Other lease information

Lease arrangements under operating leases for the leasing out of investment properties are set out in Note 16.

Expenses relating to short-term leases Expenses relating to low-value assets leases Total cash outflow for leases		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 2,631 $ 361 ($ 7,001)	2020 $ 5,729 $ 306 ($ 10,045)

For transportation equipment which qualify as short-term leases and other equipment which qualify as low-value asset leases, the Group has elected to apply the recognition exemption and thus did not recognize right-of-use assets and lease liabilities for these leases.

16. INVESTMENT PROPERTIES

For the three months ended March 31, 2021

Cost Balance at January 1 and March 31, 2021 Accumulated depreciation Balance at January 1, 2021 Depreciation expense Balance at March 31, 2021 Carrying amount at December 31, 2020 Carrying amount at March 31, 2021 For the three months ended March 31, 2020 Cost Balance at January 1 and March 31, 2020	Land $ 5,959,074 $ - - $ - $ 5,959,074 $ 5,959,074 Land $ 5,959,074	Buildings $ 41,067 $ 16,956 222 $ 17,178 $ 24,111 $ 23,889 Buildings $ 41,067	Total $ 6,000,141 $ 16,956 222 $ 17,178 $ 5,983,185 $ 5,982,963 Total $ 6,000,141 (Continued)

• 18 -

Accumulated depreciation Balance at January 1, 2020 Depreciation expense Balance at March 31, 2020 Carrying amount at March 31, 2020	Land $ - - $ - $ 5,959,074	Buildings $ 16,068 222 $ 16,290 $ 24,777	Total $ 16,068 222 $ 16,290 $ 5,983,851 (Concluded)

The Corporation signed a land lease contract of Long-Dong Block in Kaohsiung with non-related parties in June 30, 2010 and operating terms 20 years and according to the contract rent is charged monthly. The rent revenue recognized as other income for the three months ended March 31, 2021 and 2020 were NT$20,716 thousand, NT$20,329 thousand, respectively. As of March 31, 2021, December 31, 2020 and March 31, 2020, according to the contract, the Corporation received guarantee from the lessee were all NT$35,000 thousand.

As of March 31, 2021, December 31, 2020 and March 31, 2020, accounting to the abovementioned lease contract, the Corporation had received the amount of notes receivable and recognized as unearned rent revenue as follows:

Notes receivable received Less: unearned rent revenue Carrying amount		March 31, 2021 $ 28,907 28,907 $ -	December 31, 2020 $ 50,587 50,587 $ -		March 31, 2020 $ 28,340 28,340 $ -

The maturity analysis of lease payments receivable under operating leases of investment properties was as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Later than 5 years	March 31, 2021 December 31, 2020 $ 90,247 $ 87,569 85,379 84,956 87,009 86,618 88,670 88,232 90,443 89,996 522,027 544,824 $ 963,775 $ 982,195	March 31, 2020 $ 88,613 83,707 85,379 87,009 88,670 612,470 $ 1,045,848

The land and buildings of investment properties are depreciated on a straight-line basis over 31-55 years useful lives.

The fair value of the investment properties was arrived at on the basis of valuations carried out in March and December 2017 and November 2019 by real estate appraiser and on the basis of information at the Ministry of the Interior’s real estate transaction database website. Appraised lands and buildings were evaluated using Level 3 inputs under market approach, cost approach, income approach, and land development analysis approach. The important assumptions and fair value were as follows:

• 19 -

Fair value Expense rate (%) Depreciation rate (%)	March 31, 2021 $ 9,996,358 25.14 1.90-2.57	December 31, 2020 $ 9,996,358 25.14 1.90-2.57	March 31, 2020 $ 9,996,358
			25.14 1.90-2.57

All investment properties are owned by the Group and had not been pledged to secure borrowings.

17. BORROWINGS

a. Short-term borrowings and bank overdrafts

		March 31,	March 31,	December 31,	December 31,	March 31,
			2021		2020	2020
	Letters of credit	$	304,657	$	50,000	$ 1,716,481
	Bank overdrafts (Note 30)		274,344		154,630	266,741
	Unsecured loans		100,000		200,000	1,000,000
	Loans from related parties (Note 29)		-		-	2,450,000
		$	679,001	$	404,630	$ 5,433,222
	Interest rate (%)		0.32-0.75		0.32-0.75	0.32-0.95
b.	Short-term bills payable
		March 31,		December 31,		March 31,
			2021		2020	2020
	Commercial paper	$	2,000,000	$	3,600,000	$ 1,900,000
	Less: Unamortized discounts		195		423	427
		$	1,999,805	$	3,599,577	$ 1,899,573
	Interest rate (%)		0.30-0.31		0.35-0.36	0.66-0.68
	On March 31, 2021, December 31, 2020 and		March 31,	2020, all commercial papers were
	non-guarantee commercial paper.

• c. Long-term borrowings

Credit bank loans Due on various dates through December 2024 Less: Current portion Interest rate (%)	March 31, 2021 December 31, 2020 $ 1,700,000 $ 2,000,000 - - $ 1,700,000 $ 2,000,000 0.75-0.93 0.75-0.92	March 31, 2020 $ 3,190,000 480,000 $ 480,000 0.79-1.22

• 20 -

d. Long-term bills payable

Commercial papers Less: Unamortized discount Interest rate (%)	March 31, 2021 December 31, 2020 $ 1,140,000 $ 1,110,000 701 326 $ 1,139,299 $ 1,109,674 0.62-0.73 0.73-0.91	March 31, 2020 $ 1,910,000 530 $ 1,909,470 0.78-1.05

Commercial papers have revolving credit lines within the payment terms according to the contracts and need to be utilized to some extent. As of March 31, 2021 and December 31, 2020, all commercial papers were non-guarantee commercial paper. The borrowing from International Bills Financial Corporation was secured by Bangkok Bank as of March 31, 2020.

18. BONDS PAYABLE

Unsecured domestic bonds Less: Issuance cost of bonds payable		March 31, 2021 $ 3,000,000 4,677 $ 2,995,323	December 31, 2020 $ 3,000,000 4,961 $ 2,995,039		March 31, 2020 $ 2,000,000 3,103 $ 1,996,897

The major terms of unsecured domestic bonds are as follows:

			Coupon
Issuance Period	Total Amount		Rate (%)	Repayment and Interest Payment
March 2020 to March 2025	$	2,000,000	0.78	Repayable in March 2025; interest payable
				annually.
September 2020 to September		1,000,000	0.65	Repayable in September 2025; interest
2025				payable annually.

19. ACCOUNTS PAYABLE

Accounts payable Operating – non-related parties Operating - related parties	March 31, 2021 December 31, 2020 $ 945,534 $ 27,500 $ 353,445 $ 313,224	March 31, 2020 $ 27,652 $ 127,472

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

• 21 -

20. OTHER PAYABLES

Salaries and incentive bonus Employees’ compensation and remuneration and transportation allowances of directors Utilities Freight Outsourced repair and construction Export fees Processing fee Others	March 31, 2021 December 31, 2020 $ 166,256 $ 289,532 131,159 36,469 61,407 59,229 34,209 27,497 32,492 34,572 31,996 26,007 22,566 23,367 107,638 83,591 $ 587,723 $ 580,264	March 31, 2020 $ 94,286 1,511 60,751 34,381 37,751 50,327 23,795 119,661 $ 422,463

21. RETIREMENT BENEFIT PLANS

Employee benefit expenses in respect of the Corporation and its subsidiaries’ defined benefit retirement plans were calculated using the actuarially determined pension cost discount rate as of December 31, 2020 and 2019, and the amounts were NT$4,999 thousand and NT$5,653 thousand for the three months ended March 31, 2021 and 2020, respectively.

22. EQUITY

• a. Ordinary shares

Numbers of shares authorized (in thousands) Shares authorized Numbers of shares issued and fully paid (in thousands) Shares issued	March 31, 2021 2,043,160 $ 20,431,600 1,435,544 $ 14,355,444	December 31, 2020 2,043,160 $ 20,431,600 1,435,544 $ 14,355,444	March 31, 2020 2,043,160
			$ 20,431,600
			1,435,544
			$ 14,355,444

In June 2009, the Corporation revised the number of its authorized shares to 3,000,000 thousand shares upon obtaining the approval in the shareholders’ meeting. The number of the authorized shares, which is approved by Department of Commerce, is 2,043,160 thousand shares at present.

Fully paid ordinary shares, which have a par value NT$10, carry one vote per share and the right to dividends.

• b. Capital surplus

		March 31,	December 31,	March 31,
		2021	2020	2020
Additional paid-in	capital	$ 903	$ 903	$ 903

• 22 -

In 2009, CSC had transferred its treasury stocks to its employees and subsidiaries. The Corporation recognized a compensation cost and capital surplus of NT$743 thousand. In July 2011, CSC issued ordinary shares for cash capital. Under the Company Law, CSC should reserve 10% of the stocks for its employees and subsidiaries. The Corporation recognized NT$160 thousand of compensation cost and capital surplus.

Such capital surplus may be used only to offset deficits.

• c. Retained earnings and dividend policy

The Corporation’s Articles of Incorporation provide that 10% of the annual net income less any deficit should be appropriated as a legal reserve; a certain percentage should be appropriated as special reserve; the remainder may be declared as dividends or retained as proposed by the Corporation’s board of directors and approved in the shareholders’ meetings.

In June 2020, the shareholders’ meeting approved a resolution to allocate no less than 30% of the distributable surplus every year to distribute dividends. However, if the cumulative distributable surplus is less than 3% of the paid-in capital, it may not be distributed.

The Corporation is in a mature steel industry. Thus, dividends will be appropriated in cash or in stock at an appropriate ratio, with cash dividends to be at least 50% of total dividends.

Under the Company Law, legal reserve should be appropriated from retained earnings until its balance equals the Corporation’s paid-in capital. Legal reserve may be used to offset a deficit. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of earnings for 2020 and 2019 had been proposed by the board of directors in February 2021 and approved in the shareholders’ meeting in June 2020, respectively. The appropriations and dividends per share were as follows:

Legal reserve Special reserve Cash dividends	Appropriation of Earnings 2020 2019 $ 54,064 $ 118 123,739 51,971 430,663 -		Dividend Per Share (NT$)	Dividend Per Share (NT$)
			2020 $ 0.3	2019 $ -

The appropriations of earnings for 2020 are subject to the resolution of the shareholders’ meeting to be held in June 2021.

• d. Unrealized gains and losses on financial assets at fair value through other comprehensive income

Balance, beginning of period Recognized during the period Unrealized gains and losses - equity instruments Share from associates accounted for using the equity method Other comprehensive income recognized in the period			For the Three Months Ended March 31
		(	2021 2020 $ 425,839) ($ 549,578) 45,454 ( 161,063) 130,032 (549,196) 175,486 (710,259) (Continued)

• 23 -

Transfer the accumulated profits and losses of disposal of equity instruments to retained earnings Balance, end of period		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021	2020
		( 1,071) ($ 251,424)	- ($1,259,837)

23. OPERATING REVENUES

• a. Contract balances

b.	March 31, 2021 Accounts receivable $ 1,116,690 Contract liabilities Sale of goods $ 147,945 Disaggregation of revenue For the Three Months Ended March 31, 2021 Type ofgoods orservices Sale of goods Rendering of services Others	March 31, 2021 $ 1,116,690	March 31, 2021 $ 1,116,690	December 31, 2020 March 31, 2020 $ 947,325 $ 632,975 $ 57,283 $ 50,597 Reportable segments	December 31, 2020 March 31, 2020 $ 947,325 $ 632,975 $ 57,283 $ 50,597 Reportable segments		January 1, 2020 $ 511,750 $ 285,052
		$ 147,945
				Chung Hung $ 10,656,836 153,648 19,002 $ 10,829,486	Others $ - 1,036 - $ 1,036	Total $ 10,656,836 154,684 19,002 $ 10,830,522

For the Three Months Ended March 31, 2020

Type of goods or services Sale of goods Rendering of services Others		Reportable segments	Reportable segments
		Chung Hung $ 9,967,463 115,561 15,869 $ 10,098,893	Others $ - - - $ -	Total $ 9,967,463 115,561 15,869 $ 10,098,893

24. PROFIT (LOSS) BEFORE INCOME TAX

Profit (Loss) before income tax consisted of following items:

• 24 -

a. Other income

Rental income Government grants income Dividend income Others		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 21,522 1,476 - 4,348 $ 27,346	2020 $ 21,117 3,255 8,146 4,143 $ 36,661

b. Other gains and losses

Net foreign exchange gain Loss on disposal of property, plant and equipment Loss arising from financial assets at fair value through profit or loss Fees Others	For the Three Months Ended March 31
	2021 2020 $ 9,043 $ 5,092 - ( 11,545) ( 55,381) ( 20,046) ( 3,105) ( 3,194) ( 569) ( 137) ($ 50,012) ($ 29,830)

The components of net foreign exchange gain were as follows:

Foreign exchange gain Foreign exchange loss Net exchange gain		For the Three Months Ended March 31	For the Three Months Ended March 31
	(	2021 $ 16,160 7,117) ( $ 9,043	2020 $ 20,429 15,337) $ 5,092

c. Finance costs

Interest on bank overdrafts and loans Interest on loans from related parties (Note 29) Interest on lease liabilities Total interest expense financial liabilities measured at amortized cost Less: Amounts included in the cost of qualifying assets		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 11,632 - 230 11,862 277 $ 11,585	2020 $ 21,201 4,234 277 25,712 296 $ 25,416

• 25 -

Information about capitalized interest was as follows:

Capitalized amounts Capitalized annual rates (%) Depreciation Property, plant and equipment Investment properties Right-of-use assets Analysis of depreciation by function Operating costs Operating expenses Deduction of other income		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 2020 $ 277 $ 296 0.59-0.64 0.81-0.83 For the Three Months Ended March 31
		2021 $ 184,963 222 3,863 $ 189,048 $ 187,031 1,795 222 $ 189,048	2020 $ 296,821 222 3,861 $ 300,904 $ 279,891 20,791 222 $ 300,904

• d. Depreciation

• e. Operating expenses directly related to investment properties

Direct operating expenses of investment properties that generated rental income Direct operating expenses of investment properties that did not generate rental income		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 2,869 1,816 $ 4,685	2020 $ 2,818 1,715 $ 4,533

• f. Employee benefits

Short-term employee benefits Salaries Labor and health insurance Others		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 420,039 23,805 43,966 487,810	2020 $ 253,435 21,124 34,710 309,269 (Continued)

• 26 -

		For the Three Months	For the Three Months	For the Three Months
		**Ended **	March 31
		2021		2020
Post-employment benefits
Defined contribution plans	$	6,427	$	6,389
Defined benefit plans (Note 21)		4,999		5,653
		11,426		12,042
	$	499,236	$	321,311
Analysis of employee benefits expense by function
Operating costs	$	402,791	$	269,257
Operating expenses		96,445		52,054
	$	499,236	$	321,311
				(Concluded)

• g. Employees’ compensation and remuneration of directors

In accordance with the Corporation’s Articles of Incorporation, the Corporation distributes employees’ compensation and remuneration of directors at rates no less than 1‰ and no higher than 1%, respectively, of the pre-tax profit to deducting, employees’ compensation, and remuneration of directors less any deficit. There was no bonus to employees and remuneration to directors on March 31, 2020 because the Corporation had accumulated deficits.

For the three months ended March 31, 2021, the employees’ compensation and remuneration of directors were as follows:

Amount Employees’ compensation Remuneration of directors Accrual rate Employees’ compensation (%) Remuneration of directors (%)	For the Three Months ended March 31
	2021 $ 78,665 15,750 4.38 0.88

The appropriations of employees’ compensation and remuneration of directors for the year ended December 31, 2020 and 2019, which were approved by the board of directors in February 2021 and 2020, respectively, were as follows:

Amount Employees’ compensation Remuneration of directors	For the Year Ended December 31
	2020 2019 $ 29,897 $ 11 5,638 - (Continued)

• 27 -

Accrual rate Employees’ compensation (%) Remuneration of directors (%)	For the Year Ended December 31
	2020 2019 5.30 0.10 1.00 - (Concluded)

If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the difference is recorded as a change in accounting estimate and recognized in the next year.

There was no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2020 and 2019.

Information on employees’ compensation and remuneration of directors resolved by the Corporation’s board of directors are available on the Market Observation Post System website of the Taiwan Stock Exchange.

25. INCOME TAX

• a. Income tax recognized in profit or loss

The major components of income tax expense were as follows:

Current tax In respect of the current period		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 133	2020 $ -

• b. No income tax was recognized in equity or other comprehensive loss.

• c. Income tax assessments

The Group’s income tax returns through 2018 have been assessed by the tax authorities.

26. EARNINGS (DEFICIT) PER SHARE

Basic earnings (deficit) per share Diluted earnings (deficit) per share		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 1.18 $ 1.18	2020 ($ 0.09) ($ 0.09)

The net profit (loss) and weighted average number of ordinary shares outstanding in the computation of earnings (deficit) per share were as follows:

• 28 -

Net profit (loss) for the period

Attributable to owners of the Corporation	For the Three Months Ended March 31	For the Three Months Ended March 31
	2021 $ 1,700,018	2020 ($ 125,295)

Weighted average number of ordinary shares outstanding (in thousand shares)

Weighted average number of ordinary shares in computation of basic earnings per share Effect of dilutive potential ordinary shares: Employees’ compensation Weighted average number of ordinary shares used in computation of diluted earnings per share		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 1,435,544 5,077 1,440,621	2020 1,435,544 - 1,435,544

Since the Corporation offered to settle the compensation paid to employees in cash or shares, the Corporation assumed the entire amount of the compensation will be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

Net loss for the three months ended March 31, 2020 was not included in the calculation of diluted earnings per share because of the anti-dilutive effect.

27. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue their operations while maximizing the return to shareholders through the optimization of the debt and equity balance.

28. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments not carried at fair value

Management of the Group considers the carrying amount of financial assets and liabilities not carried at fair value approximates fair value.

• b. Fair value of financial instruments that are measured at fair value on a recurring basis.

• 1) Fair value hierarchy

March 31, 2021 Financial assets at fair value through profit or loss Emerging market shares	Level 1 $ -	Level 2 $ -	Level 3 $ 160,093	Total $ 160,093 (Continued)

• 29 -

March 31, 2021 Financial assets at FVOCI Domestic listed shares Domestic unlisted shares December31,2020 Financial assets at fair value through profit or loss Emerging market shares Financial assets at FVOCI Domestic listed shares Domestic unlisted shares March31,2020 Financial assets at fair value through profit or loss Emerging market shares Financial assets at FVOCI Domestic listed shares Domestic unlisted shares	Level 1 $ 883,532 - $ 883,532 $ - $ 844,302 - $ 844,302 $ - $ 646,445 - $ 646,445	Level 2 $ - - $ - $ - $ - - $ - $ - $ - - $ -	Level 3 $ - 49,569 $ 49,569 $ 242,410 $ - 43,345 $ 43,345 $ 161,305 $ - 52,641 $ 52,641	Total $ 883,532 49,569 $ 933,101 $ 242,410 $ 844,302 43,345 $ 887,647 $ 161,305 $ 646,445 52,641 $ 699,086 (Concluded)

There was no transfer between Level 1 and Level 2 for the three months ended March 31, 2021 and 2020.

2) Reconciliation of Level 3 fair value measurements of financial assets

	Financial Assets	Financial Assets	Financial Assets	Financial Assets
	at	Fair Value	at	Fair value
		Through	through Other
	Profit or Loss -		Comprehensive
		Equity	Income - Equity
	Instruments		Instruments			Total
For the three months ended
March31,2021
Balance, beginning of period	$	242,410	$	43,345	$	285,755
Total profit or loss
Recognized in profit or loss	(	55,381)		-	(	55,381)
Recognized in other comprehensive
income		-		6,224		6,224
Disposal	(	26,936)		-	(	26,936)
						(Continued)

• 30 -

	Financial Assets	Financial Assets	Financial Assets	Financial Assets
	at	Fair Value	at	Fair value
		Through	through Other
	Profit or Loss -		Comprehensive
		Equity	Income - Equity
	Instruments		Instruments				Total
For the three months ended
March31,2021
Balance, end of period	$	160,093	$	49,569		$	209,662
Unrealized gains and losses recognized in
other profit or loss	($	59,286)	$	-	($		59,286)
For the three months ended
March31,2020
Balance, beginning of period	$	181,351	$	44,843	$		226,194
Total profit or loss
Recognized in profit or loss	(	20,046)		-	(		20,046)
Recognized in other comprehensive
income		-		7,798			7,798
Balance, end of period	$	161,305	$	52,641	$		213,946
Unrealized gains and losses recognized in
other profit or loss
	($	20,046)	$	-	($		20,046)

(Concluded)

• 3) Valuation techniques and inputs applied for the purpose of measuring Level 3 fair value measurement

  • a) The fair value of emerging stocks was based on the closing price adjusted for liquidity risk premium.

  • b) The fair value of unlisted stocks was based on the current net value.

• c. Categories of financial instruments

		March 31,	December 31,	December 31,	March 31,
		2021		2020	2020
Financial assets
Fair value through profit or loss
Mandatorily at fair value through profit or
loss	$	160,093	$	240,410 $	161,305
Measured at amortized cost (see 1 below)		1,969,091		1,588,611	1,281,963
Financial assets at fair value through other
comprehensive income
Equity instruments		933,101		887,647	699,086
Financial liabilities
Measured at amortized cost (see 2 below)		10,570,002		11,218,664	15,205,465

• 31 -

• 1) The balances included financial assets measured at amortized cost, which comprise cash, accounts receivable (including related parties), other receivables (including related parties but not tax refund receivable), other financial assets and refundable deposits.

• 2) The balances included financial liabilities measured at amortized cost, which comprise short-term borrowings, short-term bills payable, accounts payable (including related parties), other payables, refund liability, bonds payable, long-term borrowings (including current portion), long-term bills payable, and guarantee deposits received.

• d. Financial risk management objectives and policies

The Group’s major financial instruments include accounts receivable, investments accounted for using equity method, other financial assets, accounts payable, short-term borrowings, short-term bills payable, bonds payable, long-term borrowings (including current portion of long-term bank borrowings) and long-term bills payable. The Group’s financial management department provides service to the business units, coordinates domestic and international financial operations, prepares and analyzes internal risk reports to monitor and manage financial risks related to the operation of the Group. These risks include market risk (including exchange rate risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Group sought to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives was governed by the Group’s policies approved by the board of directors, which provided written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits was reviewed by the internal auditors on a continuous basis. The Group did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

1) Market risk

The main financial risks arising from operating activities are to the risk of change in foreign exchange rates (see (a) below), the risk of changes in interest rates (see (b) below) and the risk of other price (see (c) below).

There had been no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured.

a) Foreign currency risk

The Group was exposed to foreign currency risk due to sales and purchases, denominated in foreign currencies. Exchange rate exposures were managed within approved policy parameters utilizing the same currency for accounts receivable and payable.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities and of the derivatives exposed foreign currency risk at the end of the reporting period are set out in Note 32.

Sensitivity analysis

The Group was mainly exposed to the USD. The following table details the Group’s sensitivity to a 1% increase and decrease in the New Taiwan dollars (the functional currency) against the relevant foreign currencies. The sensitivity rate of 1% is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates.

• 32 -

The sensitivity analysis included only the outstanding foreign currency denominated monetary items, refer to Note 32. A positive number below indicates an increase in profit or loss when the New Taiwan dollars strengthens by 1% against the relevant currency.

Profit before income tax	USD Impact (Note)
	For the Three months ended **March 31 **
	2021 2020 ($ 876) $ 2,963

Note: This was mainly attributable to the exposure of outstanding USD cash, accounts receivables, accounts payable and other payables, which were not hedged at the balance sheet date.

b) Interest rate risk

The Group was exposed to interest rate risk because the Group borrowed funds at both fixed and floating interest rates.

The carrying amounts of the Group’s financial assets and liabilities with exposure to interest rates at the balance sheet date were as follows:

		March 31,	December 31,	December 31,		March 31,
		2021		2020		2020
Fair value interest rate risk
Financial liabilities	$	3,070,672	$	3,074,167	$	2,087,270
Cash flow interest rate risk
Financial assets		772,965		567,017		421,851
Financial liabilities		2,839,299		3,109,674		5,099,470

If interest rates had been 0.25% higher/lower all other variables were held constant, the Group’s pre-tax profit for the three months ended March 31, 2021 and 2020 would have been lower/higher by NT$1,291 thousand and NT$2,924 thousand, respectively.

c) Other price risk

The Group was exposed to equity price risk through their investments in domestic listed shares.

The equity price of the Group was evaluated by the closing price of the equity securities on a monthly basis.

Sensitivity analysis

If equity price of fair value through other comprehensive income financial assets had been lower by one dollar, the pre-tax-other comprehensive income, for the three months ended March 31, 2021 and 2020 would have both been lower by NT$34,113 thousand, respectively.

• 33 -

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. As at the balance sheet date, the Group’s maximum exposure to credit risk is the carrying amount of the financial assets on the consolidated balance sheets.

The Group made transactions only with the parties with good credit. The goods were delivered after the cash or L/C was received, and the Group did not provide financial guarantee to any company. Accounts receivable were due to time differences of L/C negotiation and there was no bad debt in the recent years; therefore, the credit risk is very low.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The Group relies on bank borrowings as a significant source of liquidity. The management monitors the utilization of bank borrowings and ensures compliance with loan covenants. As of March 31, 2021, the unutilized credit facility of the Group was NT$40.3 billion; therefore, there is no liquidity risk or incapacity of financing capital to meet contractual obligations.

The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments:

March 31, 2021 Short-term borrowings Short-term bills payable Accounts payable (including related parties) Other payables Refund liabilities Lease liabilities Bonds payables Long-term bank borrowings Long-term bills payable Guarantee deposits received December 31, 2020 Short-term borrowings Short-term bills payable Accounts payable (including related parties) Other payables Refund liabilities Lease liabilities Bonds payables Long-term bank borrowings Long-term bills payable Guarantee deposits received	Less Than 1 Year $ 682,633 2,000,000 1,298,979 587,723 134,872 16,086 22,100 13,770 - - $ 4,756,163 $ 406,794 3,600,000 340,724 580,264 153,756 16,086 22,100 16,500 - - $ 5,136,224	1-5 Years $ - - - - - 43,073 3,072,800 1,724,830 1,140,000 - $ 5,980,703 $ - - - - - 45,564 3,088,400 2,034,430 1,110,000 - $ 6,278,394	Over 5 Years $ - - - - - 19,127 - - - 35,000 $ 54,127 $ - - - - - 20,646 - - - 35,000 $ 55,646	Total $ 682,633 2,000,000 1,298,979 587,723 134,872 78,286 3,094,900 1,738,600 1,140,000 35,000 $ 10,790,993 $ 406,794 3,600,000 340,724 580,264 153,756 82,296 3,110,500 2,050,930 1,110,000 35,000 $ 11,470,264 (Continued)

• 34 -

March 31, 2020 Short-term borrowings Short-term bills payable Accounts payable (including related parties) Other payables Refund liabilities Lease liabilities Bonds payables Long-term bank borrowings Long-term bills payable Guarantee deposits received	Less Than 1 Year $ 5,467,723 1,900,000 155,124 422,463 163,716 16,086 15,600 496,253 - - $ 8,636,965	1-5 Years $ - - - - - 52,877 2,062,400 2,739,330 1,910,000 - $ 6,764,607	Over 5 Years $ - - - - - 25,409 - - - 35,000 $ 60,409	Total $ 5,467,723 1,900,000 155,124 422,463 163,716 94,372 2,078,000 3,235,583 1,910,000 35,000 $ 15,461,981 (Concluded)

29. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Corporation and its subsidiaries, which are related parties of the Corporation, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

a. The name of the company and its relationship with the Group

Company Relationship China Steel Corporation Parent entity Dragon Steel Corporation (DSC) Fellow subsidiaries CHC Resources Corporation (CHC) Fellow subsidiaries Info Champ Systems Corporation (ICSC) Fellow subsidiaries CSC Steel SDN. BHD. (CSSB) Fellow subsidiaries Himag Magnetic Corporation (HMC) Fellow subsidiaries China Steel Machinery Corporation Fellow subsidiaries China Steel Global Trading Corporation Fellow subsidiaries China Ecotek Corporation Fellow subsidiaries China Steel Security Corporation Fellow subsidiaries Steel Castle Technology Corporation Fellow subsidiaries China Steel Express Corporation Fellow subsidiaries China Steel Structure Co., Ltd Fellow subsidiaries Universal Exchange Inc. Fellow subsidiaries China Steel Management Consulting Corp. Fellow subsidiaries China Steel Chemical Corporation Fellow subsidiaries Wabo Global Trading Corporation Fellow subsidiaries CSC Solar Corporation Fellow subsidiaries Kaohsiung Rapid Transit Corporation Fellow subsidiaries Sing Da Marine Structure Fellow subsidiaries Pro-Ascentek Investment Corporation Associates Pacific Harbour Stevedoring Corporation Other related parties

• 35 -

b. Sale of goods

Related Parties/Name Account Items Types Sales Parent entity Fellow subsidiaries related to others CSSB Others Service Revenue Parent entity		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 574 603,768 18,552 622,320 $ 622,894 $ 151,731	2020 $ 4,469 435,312 4,830 440,142 $ 444,611 $ 114,436

The parent entity and some fellow subsidiaries related to others paid by telegraphic transfers (T/T) within 7 days from product shipment, T/T within 60 days from product shipment, monthly billing by T/T after acceptance sale of, steel pipe products collected at the beginning of next month; these payment terms differed from those for third parties, from whom payments were negotiated to be on Tuesday and Friday. The price of iron oxide that the Corporation sells to fellow subsidiaries related to others does not have comparable price because the Corporation does not sell iron oxide to third parties and the collection term for selling iron oxide is negotiated to be on Tuesday and Friday.

The abovementioned service revenue is from the agreements that the Corporation entered into with parent entity in which the Corporation has to do certain processing work and charged based on the formula stated in the agreements. The Corporation bills the parent entity within one month after approval of delivery.

The Corporation entered into an agreement with fellow subsidiaries related to others under which the Corporation sells waste acid and the price is charged based on the formula stated in the agreement. The Corporation bills the fellow subsidiaries related to others within a month after acceptance by T/T based on the monthly amount of processing.

Related Parties/Name Account Items Types Other operating revenue Fellow subsidiaries related to others DSC HMC		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 13,640 3,445 $ 17,085	2020 $ 11,351 3,093 $ 14,444

There is no significant profit or loss from the sale of the materials of the Company to fellow subsidiaries.

• 36 -

c. Purchase of goods

Related Parties/Name Parent entity Fellow subsidiaries related to others DSC Others		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 2,504,306 2,762,737 406,477 3,169,214 $ 5,673,520	2020 $ 7,002,567 1,546,052 135,885 1,681,937 $ 8,684,504

Purchases from related parties, mainly slabs and hot rolling coil. Purchase from related parties were made under normal term for the three months ended March 31, 2021; There were not comparable for the three months ended March 31, 2020 because there was no transaction with non-related parties and were made under normal terms for the three months ended March 31, 2020.

• d. Accounts receivable from related parties

Account Items Related Parties Types/Name Accounts receivable from Parent entity related parties Fellow subsidiaries related to others CSSB Others Other receivables from Parent entity related parties Fellow subsidiaries related to others CHC Others	March 31, 2021 December 31, 2020 $ 47,405 $ 52,905 92,704 53,331 6,204 11,002 98,908 64,333 $ 146,313 $ 117,238 $ 16,041 $ 1,035 36,852 25,389 373 248 37,225 25,637 $ 53,266 $ 26,672	March 31, 2020 $ 49,582 - 4,989 4,989 $ 54,571 $ 186,732 23,478 546 24,024 $ 210,756

No guarantee had been received for accounts receivable and other receivable from related parties. No expense had been recognized for the three months ended March 31, 2021 and 2020 for allowance for impairment of accounts receivable in respect of the amounts owed by related parties.

• e. Accounts payable to related parties (excluding loans from related parties)

Account Items Related Parties Types Accounts payable to Parent entity related parties Others Fellow subsidiaries related to others	March 31, 2021 December 31, 2020 March 31, 2020 $ 344,064 $ 267,429 $ 115,568 6,999 3,979 8,152 2,382 41,816 3,752 $ 353,445 $ 313,224 $ 127,472 (Continued)

• 37 -

Account Items Related Parties Types Other payable Parent entity Fellow subsidiaries related to others ICSC Others Other related parties	March 31, 2021 December 31, 2020 March 31, 2020 $ 23,249 $ 7,459 $ 10,872 21,397 464 2,518 12,553 8,723 4,235 33,950 9,187 6,753 1,683 3,023 - $ 58,882 $ 19,669 $ 17,625 (Concluded)

The outstanding accounts payable to related parties were unsecured.

• f. Loans from related parties

Related Parties Types Parent entity	March 31, 2021 $ -	December 31, 2020 $ -	March 31, 2020 $ 2,450,000

The Corporation borrowed money from the parent entity because of the need for short-term fund. The interest rate of the loan was based on average daily short-term interest the parent entity financed for the same currency from financial institutions in the last 30 days and adjusted monthly.

As of March 31, 2020, the loans from the parent entity were unsecured loans with interest expense of NT$4,234 thousand.

• g. Other transactions with related parties

• 1) Authorization fees

In May 2003, CSC, Sumitomo Metal Industries, Ltd. (SMI, renamed to Nippon Steel Corporation in April, 2019) and Sumitomo Corporation (SC) entered into a joint venture agreement and established a holding company named East Asia United Steel Corporation (EAUS) in July 2003. CSC will have a stable supply of good quality slab through this joint venture. CSC then signed a contract with the Corporation, transferring to the Corporation the right to buy slab from EAUS. The Corporation should pay authorization fees to CSC under the contract. These fees (included in the purchase cost of materials) were NT$17,943 thousand and NT$38,387 thousand for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, December 31, 2020 and March 31, 2020, authorization fees payable (included in payables to related parties) were NT$14,388 thousand, NT$15,697 thousand and NT$40,176 thousand, respectively. The calculation of slab purchase prices was based on the formula stated in the agreement.

2) Leases

• a) The Corporation entered into a contract with fellow subsidiaries related to others on the lease of the Corporation’s part of the land, roof and warehouse. The rental revenue for the three months ended March 31, 2021 and 2020 were NT$979 thousand and NT$984 thousand, respectively.

• b) The Corporation entered into a contract with parent entity on the lease of the Corporation’s part of the land. The rental revenue for the three months ended March 31, 2021 and 2020 were both NT$1,328 thousand.

• 38 -

• 3) Construction in progress and other expenditures

Other expenditures include import and export transportation fees, export agency fees, rent expenses, remuneration and transportation allowances of directors and supervisors, etc., were as follows:

a) Other expenditures Parent entity Others Fellow subsidiaries related to others b) Capital expenditure Parent entity Fellow subsidiaries related to others ICSC		For the Three Months **Ended March 31 **	For the Three Months **Ended March 31 **
		2021 $ 51,020 29,649 13,741 $ 94,410 $ - 20,152 $ 20,152	2020 $ 25,912 39,688 23,719 $ 89,319 $ 7,600 6,740 $ 14,340

• 4) Income from supplies and scrap (included in deductions of cost of goods sold)

Fellow subsidiaries related to others CHC Others		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 102,188 3,018 $ 105,206	2020 $ 77,232 3,618 $ 80,850

• h. Compensation of key management personnel

Short-term employee benefits Post-employment benefits		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 26,114 353 $ 26,467	2020 $ 4,973 545 $ 5,518

30. ASSETS PLEDGED AS COLLATERAL OR SECURITY

The Group’s assets mortgaged or pledged as collateral for bank overdrafts was as follows (listed based on their carrying amounts):

• 39 -

Time deposits (included in other financial assets - current)	March 31, 2021 December 31, 2020 $ 300,000 $ 300,000	March 31, 2020 $ 300,000

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of March 31, 2021 were as follows:

• a. Unused letters of credit for purchases of raw materials and machinery and equipment amounted to about NT$4,542,861 thousand.

• b. The Group had signed agreements to buy equipment for NT$321,289 thousand, of which NT$36,574 thousand had been paid (included in construction-in-progress and prepayments for equipment).

32. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Group and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

				Carrying	Carrying
		Foreign			Amount
	Currencies			(In	Thousands
		(In		of New Taiwan
	Thousands)		Exchange Rate		Dollars)
March 31, 2021
Monetary financial assets
USD	$	30,205	28.535 (USD:NTD)	$	861,895
Monetary financial liabilities
USD		33,274	28.535 (USD:NTD)		949,469
December 31, 2020
Monetary financial assets
USD		19,476	28.480 (USD:NTD)		554,666
Monetary financial liabilities
USD		901	28.480 (USD:NTD)		25,659
March 31, 2021
Monetary financial assets
USD		11,351	30.225 (USD:NTD)		343,069
Monetary financial liabilities
USD		1,549	30.225 (USD:NTD)		46,807

For the three months ended March 31, 2021 and 2020, realized and unrealized net foreign exchange gain or

• 40 -

loss were gain of NT$9,043 thousand and gain of NT$5,092 thousand, respectively. It is impractical to disclose net foreign exchange gains and losses by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of each entity.

33. SEPARATELY DISCLOSED ITEMS

• a. For the three months ended March 31, 2021, information about significant transactions and b. investees:

• 1) Financing provided to others (None)

• 2) Endorsements/guarantees provided (None)

• 3) Marketable securities held (excluding investments in subsidiaries and associates) (Table 1)

• 4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (None)

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None)

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None)

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 2)

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (None)

• 9) Trading in derivative instruments (None)

• 10) Intercompany relationships and significant intercompany transactions (None)

• 11) Information on investees (Table 3)

• c. Information on investments in mainland China (None)

• d. Information of major shareholders (Table 4)

34. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Reportable segments of the Group were as follows:

• The Corporation - manufacture, process and sell steel products.

• Other corporations - Hung Kao Investment Corporation engaged in general investment.

• a. Segment revenues and operating results

• 41 -

The following is an analysis of the Group revenues and results of operations by reportable segment.

The Corporation For the three months ended March 31, 2021 Revenues from external customers $ 10,829,486 Segment profit $ 1,734,729 Interest income 31 Other income 27,406 Other income and expenses ( 50,012) Finance costs ( 11,585) Share of the profit of associates ( 551) Profit before income tax for the period 1,700,018 Income tax expense - Net profit for the period $ 1,700,018 Identifiable assets $ 25,376,593 Investments accounted for using equity method 3,028,680 Total assets $ 28,405,273 Total liabilities $ 11,296,495 For the three months ended March 31, 2020 Revenues from external customers $ 10,098,893 Segment loss ($ 104,917) Interest income 102 Other income 36,721 Other income and expenses ( 29,830) Finance costs ( 25,416) Share of the profit of associates ( 1,955) Net loss for the period ($ 125,295) Identifiable assets $ 27,643,853 Investments accounted for using equity method 1,997,275 Total assets $ 29,641,128 Total liabilities $ 15,907,785	Others $ 1,036 $ 660 5 - - - - 665 ( 133 $ 532 ( $ 30,602 - $ 30,602 $ 587 $ - ($ 376) 4 - - - - ($ 372) $ 23,332 - $ 23,332 $ 1,500	Adjustment and Elimination $ - $ 60 - ( 60) - - ( 532) 532) - $ 532) $ - ( 30,015) ($ 30,015) $ - $ - $ 60 - ( 60) - - 372 $ 372 $ - ( 21,832) ($ 21,832) $ -	Total $ 10,830,522 $ 1,735,449 36 27,346 ( 50,012) ( 11,585) ( 1,083) 1,700,151 133 $ 1,700,018 $ 25,407,195 2,998,665 $ 28,405,860 $ 11,297,082 $ 10,098,893 ($ 105,233) 106 36,661 ( 29,830) ( 25,416) ( 1,583) ($ 125,295) $ 27,667,185 1,975,443 $ 29,642,628 $ 15,909,285

• 42 -

Segment profit represented the profit before tax earned by each segment without allocation of central administration costs and directors’ salaries, rental revenue, interest income, gain or loss on disposal of property, plant and equipment, exchange gain or loss, finance costs and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

• 43 -

TABLE 1

CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD MARCH 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Held Company Name	Type and Name of Marketable Securities	Relationship with The Company	Financial Statement Account		MARCH 31, 2021	MARCH 31, 2021	MARCH 31, 2021			Note
				Shares/Units	Carrying Value		Percentage of Ownership (%)	Fair Value
Chung Hung Steel Corporation Hung Kao Investment Corporation	Common Stock Yieh United Steel Corp. Shouh Hwang Enterprise Co., Ltd. Common Stock China Steel Corporation Common Stock Taiwan Ves-Power Co., Ltd. Riselink Venture Capital Corp. Pacific Harbour Stevedoring Corp. Common Stock China Steel Corporation	Parent company The company as its supervisor The ultimate parent of the Company	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - noncurrent Financial assets at fair value through other comprehensive income - noncurrent Financial assets at fair value through other comprehensive income - noncurrent Financial assets at fair value through other comprehensive income - noncurrent	32,859,800 730,000 33,109,239 958,333 3,948 250,000 1,003,980		$ 160,093 - $ 160,093 $ 857,529 $ 43,173 561 5,835 $ 49,569 $ 26,003	1 15 - 2 3 5 -		$ 160,093 - $ 160,093 $ 857,259 $ 43,173 561 5,835 $ 49,569 $ 26,003	Note1 Note2 2021.2.28 net value 2021.2.28 net value 2020.12.31 net value

Note 1: The fair value of emerging stock was based on the closing price adjusted for liquidity risk premium on March 31, 2021.

Note 2: The impairment loss has been recognized that resulted in zero book value.

• 44 -

TABLE 2

CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE PERIOD ENDED MARCH 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Buyer	Related Party	Relationship	Relationship	Relationship	Relationship	Relationship	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
Chung Hung Steel Corporation	CSC Steel Sdn. Bhd. China Steel Corporation Dragon Steel Corporation China Steel Corporation China Steel Global Trading Corporation	Fellow subsidiary Parent company Fellow subsidiary Parent company Fellow subsidiary	Revenue from sale of goods Service revenue Purchase of goods Purchase of goods Purchase of goods	($ 603,768 ) ( 150,694 ) 2,762,737 2,504,306 386,421	( 6 ) ( 1 ) 33 30 5	T/T within 7 business days after lading date(not included) T/T as the end of the month of after final acceptance Letter of credit at sight Letter of credit at sight/Payment after final acceptance Letter of credit at sight/Payment after final acceptance	$- - - - -	NO MATERIAL DIFFERENCE NO THIRD-PARTY COULD BE COMPARED NO MATERIAL DIFFERENCE NO MATERIAL DIFFERENCE NO MATERIAL DIFFERENCE	$92,704 47,405 - ( 344,064 ) ( 807 )	8 4 - ( 26 ) -

• 45 -

TABLE 3

CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE PERIOD ENDED MARCH 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of March 31, 2021	As of March 31, 2021	As of March 31, 2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
						Number of Shares	%	Carrying Amount
				March 31, 2021	December 31, 2020
Chung Hung Steel Corporation Chung Hung Steel Corporation Chung Hung Steel Corporation	Hung Kao Investment Corporation Transglory Investment Corporation Pro-Ascentek Investment Corporation	Republic of China Republic of China Republic of China	General investment General investment General investment	$ 26,000 2,001,152 200,000	$ 26,000 2,001,152 -	2,600,000 306,824,279 20,000,000	100.00 40.91 16.67	$ 30,015 2,796,130 202,535	$ 532 ( 2,877 ) 561	$ 532 ( 1,176 ) 93	Subsidiaries (Note) Associates Associates

Note: Amount was eliminated in the consolidated financial statements.

• 46 -

TABLE 4

CHUNG HUNG STEEL CORPORATION

INFORMATION OF MAJOR SHAREHOLDERS MARCH 31, 2021

Name of The Shareholder	Shares	Shares
	Number of Shares Owned	Percentage of Ownership (%)
China Steel Corporation	582,673,153	40.58

Note 1: Major shareholders in the Table above are shareholders owning 5% or more of the Corporation’s common and preferred stocks (only ones that have completed dematerialized registration and delivery, and include treasury stocks) based on calculations performed by the Taiwan Depository & Clearing Corporation using data as of the last business date at the end of each quarter. The amount of capital in the financial statements may differ from the Corporation’s actual number of stocks that have completed dematerialized registration and delivery due to different calculation bases.

Note 2: Where the stocks are entrusted by shareholders, information is disclosed by the individual account of settlor who has segregated trust accounts opened by trustees. As for shareholders filing shareholdings of insiders with 10% or more of the Corporation’s stocks pursuant to the securities and exchange laws and regulations, the number of stocks owned shall be ones owned by the persons plus ones entrusted where the shareholders have the power to decide how to utilize the trust property. Please access the Market Observation Post System website for information on insiders’ shareholding filings.

• 47 -