CHUNG HUNG — Interim / Quarterly Report 2021

Dec 30, 2021

Chung Hung Steel Corporation and Subsidiaries

Consolidated Financial Statements for the Nine Months Ended September 30, 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 September 30, 2021 and 2020, and the consolidated statements of comprehensive income for the three months and nine months ended September 30, 2021 and 2020, and the consolidated statements of changes in equity and of cash flows for the nine months ended September 30, 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 September 30, 2021 and 2020, and its consolidated financial performance for the three months and the nine months ended September 30, 2021 and 2020, and its consolidated cash flows for the nine months ended September 30, 2021 and 2020 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

November 2, 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) 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 (Accumulated deficit) Total retained earnings Other equity Total equity TOTAL	September 30, 2021 (Reviewed) Amount % $ 340,592 1 - - 1,201,865 3 1,776,651 5 364,313 1 33,138 - 188,081 1 - - 9,467,891 27 178,538 1 302,800 1 638 - 13,854,507 40 98,197 - 4,137,937 12 10,403,749 30 66,785 - 5,982,519 18 21,822 - 5,652 - 20,716,661 60 $ 34,571,168 100 $ 2,992,267 9 - - 85,874 - 1,572,122 5 1,025,425 3 1,165,443 3 395,539 1 15,365 - 397,389 1 18,246 - 7,667,670 22 2,995,890 9 1,200,000 3 239,914 1 182,222 1 52,425 - 259,162 1 35,000 - 4,964,613 15 12,632,283 37 14,355,444 42 903 - 144,632 - 425,839 1 5,755,249 17 6,325,720 18 1,256,818 3 21,938,885 63 $ 34,571,168 100	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	September 30, 2020 (Reviewed)
	Amount $ 340,592 - 1,201,865 1,776,651 364,313 33,138 188,081 - 9,467,891 178,538 302,800 638 13,854,507 98,197 4,137,937 10,403,749 66,785 5,982,519 21,822 5,652 20,716,661 $ 34,571,168 $ 2,992,267 - 85,874 1,572,122 1,025,425 1,165,443 395,539 15,365 397,389 18,246 7,667,670 2,995,890 1,200,000 239,914 182,222 52,425 259,162 35,000 4,964,613 12,632,283 14,355,444 903 144,632 425,839 5,755,249 6,325,720 1,256,818 21,938,885 $ 34,571,168		Amount % $ 645,440 2 155,354 1 677,084 2 991,727 4 13,168 - 25,324 - 146,589 1 477 - 4,553,822 16 122,802 - 301,700 1 949 - 7,634,436 27 60,832 - 2,194,135 8 11,710,206 42 82,107 - 5,983,407 22 95,508 1 6,071 - 20,132,266 73 $ 27,766,702 100 $ 3,281,692 12 2,349,462 8 57,065 - 25,106 - 467,693 2 457,461 2 - - 15,173 - 233,100 1 24,230 - 6,910,982 25 2,994,965 11 1,700,000 6 1,709,076 6 182,222 1 67,704 - 339,901 1 35,000 - 7,028,868 25 13,939,850 50 14,355,444 52 903 - 90,568 - 549,578 2 ( 116,991) - 523,155 2 ( 1,052,650) (4) 13,826,852 50 $ 27,766,702 100

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 (Loss) Per Share) (Reviewed, Not Audited)

			For the Three	Months	Months	Ended September	Ended September	30				For the Nine	Months	Months	Ended September 30	Ended September 30	Ended September 30
			2021				2020					2021					2020
			Amount	%			Amount		%			Amount	%				Amount	%
OPERATING REVENUES (Notes
23 and 29)
Sales		$	15,414,198	99		$	9,222,121		100		$	39,310,579	99			$	26,943,324	99
Investment revenue			301		-		502		-			301		-			502		-
Service revenue			197,895		1		7,564		-			487,368		1			206,219		1
Other operating revenue			22,875		-		13,353		-			64,906		-			42,800		-
Total operating revenue			15,635,269	100			9,243,540		100			39,863,154	100				27,192,845	100
OPERATING COSTS (Notes 10,
14, 24 and 29)			13,642,631	87			8,887,757		96			33,807,002	85				26,648,747	98
GROSS PROFIT			1,992,638	13			355,783		4			6,056,152	15				544,098		2
OPERATING EXPENSES (Note
24)
Selling and marketing expenses			106,992		1		150,847		1			339,608		1			653,128		2
General and administrative
expenses			97,046		-		74,261		1			325,761		1			226,229		1
Total operating expenses			204,038		1		225,108		2			665,369		2			879,357		3
PROFIT (LOSS) FROM
OPERATIONS			1,788,600	12			130,675		2			5,390,783	13		(		335,259 )	(	1)
NON-OPERATING INCOME
AND EXPENSES (Notes 16, 24
and 29)
Interest income			36		-		35		-			311		-			513		-
Other income			50,401		-		122,582		1			105,589		-			186,116		-
Other gains and losses	(		1,111 )		-	(	36,565 )		-			350,655		1	(		70,987 )		-
Finance costs	(		10,524 )		-	(	20,642 )			(		32,578 )		-	(		70,042 )		-
Share of the loss of associates			34,383		-		53,845		-			33,092		-			50,686		-
Total non-operating income
and expenses			73,185		-		119,255		1			457,069		1			96,286		-
PROFIT (LOSS) BEFORE
INCOME TAX			1,861,785	12			249,930		3			5,847,852	14		(		238,973 )	(	1)
INCOME TAX (Notes 4 and 25)			398,170		3		-		-			403,393		1			-		-
NET PROFIT (LOSS) FOR THE
PERIOD			1,463,615		9		249,930		3			5,444,459	13		(		238,973 )	(	1)
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	(		100,123 )	(	1)	(	9,530 )		-			412,416		2	(		120,299 )	(	1)
Share of the other
comprehensive income of
associates	(		370,749 )	(	2)	(	27,737 )	(	1)			1,279,532		3	(		382,773 )	(	1)
Items that may be reclassified
subsequently to profit or loss
Exchange differences on
translating foreign operations	(		78)		-		-		-	(		133 )		-			-		-
	(		470,950)	(	3)	(	37,267 )	(	1)			1,691,815		5	(		503,072 )	(	2)
TOTAL COMPREHENSIVE
INCOME FOR THE
PERIOD		$	992,665		6	$	212,663		2		$	7,136,274	18		(	$	742,045 )	(	3)
																	(Continued)

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CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

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

NET PROFIT (LOSS) ATTRIBUTABLE TO: Owners of the Corporation TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation EARNINGS (LOSS) PER SHARE (Note 26) Basic Diluted		For the Three Months Ended September 30 2021 2020 Amount % Amount % $ 1,463,615 9 $ 249,930 3 $ 992,665 6 $ 212,663 2 $ 1.02 $ 0.17 $ 1.02 $ 0.17	For the Three Months Ended September 30 2021 2020 Amount % Amount % $ 1,463,615 9 $ 249,930 3 $ 992,665 6 $ 212,663 2 $ 1.02 $ 0.17 $ 1.02 $ 0.17	For the Three Months Ended September 30 2021 2020 Amount % Amount % $ 1,463,615 9 $ 249,930 3 $ 992,665 6 $ 212,663 2 $ 1.02 $ 0.17 $ 1.02 $ 0.17		For the Nine Months	Ended September 30 2020 Amount % ($ 238,973 ) ( 1) ($ 742,045 ) ( 3) ($ 0.17 ) ($ 0.17 ) (Concluded)	Ended September 30 2020 Amount % ($ 238,973 ) ( 1) ($ 742,045 ) ( 3) ($ 0.17 ) ($ 0.17 ) (Concluded)
		2021 Amount % $ 1,463,615 9 $ 992,665 6 $ 1.02 $ 1.02				2021 Amount % $ 5,444,459 13 $ 7,136,274 18 $ 3.79 $ 3.78
		$		$		$		($

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

Issued and Outstanding Ordinary Shares Capital Surplus BALANCE AT JANUARY 1, 2021 $ 14,355,444 $ 903 Appropriation of 2020 earnings (Note 22) Legal reserve - - Cash dividends - - Reversal of special reserve - - Net profit for the nine months ended September 30, 2021 - - Other comprehensive income for the nine months ended September 30, 2021, net of income tax - - Total comprehensive income for the nine months ended September 30, 2021 - - Disposal of investments in equity instruments at fair value through other comprehensive income - - BALANCE AT SEPTEMBER 30, 2021 $ 14,355,444 $ 903 BALANCE AT JANUARY 1, 2020 $ 14,355,444 $ 903 Appropriation of 2019 earnings (Note 22) Legal reserve - - Special reserve - - Net loss for the nine months ended September 30, 2020 - - Other comprehensive income for the nine months ended September 30, 2020, net of income tax - - Total comprehensive income for the nine months ended September 30, 2020 - - BALANCE AT SEPTEMBER 30, 2020 $ 14,355,444 $ 903		Retained Earnings Unappropriated Earnings (Accumulated Legal Reserve Special Reserve Deficit) $ 90,568 $ 549,578 $ 662,620 54,064 - ( 54,064) - - ( 430,663) - ( 123,739) 123,739 - - 5,444,459 - - - - - 5,444,459 - - 9,158 $ 144,632 $ 425,839 $ 5,755,249 $ 90,450 $ 497,607 $ 174,071 118 - ( 118) - 51,971 ( 51,971) - - ( 238,973) - - - - - ( 238,973) $ 90,568 $ 549,578 ($ 116,991)	Other Equity Exchange Unrealized Gain (Loss) on Financial Differences on Assets at Fair Value Translating Through Other Foreign Comprehensive Operations Income Total Equity $ - ($ 425,839) $ 15,233,274 - - - - - ( 430,663) - - - - - 5,444,459 ( 133) 1,691,948 1,691,815 ( 133) 1,691,948 7,136,274 - ( 9,158) - ($ 133) $ 1,256,951 $ 21,938,885 $ - ($ 549,578) $ 14,568,897 - - - - - - - - ( 238,973) - ( 503,072) ( 503,072) - ( 503,072) ( 742,045) $ - ($ 1,052,650) $ 13,826,852

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 Impairment loss recognized on property, plant and equipment 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 operations Income taxes refund (paid) Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the capital reduction on financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Increase in refundable deposits

For the Nine Months Ended September 30

2021 2020 $ 5,847,852 ($ 238,973) 571,546 886,275 ( 318,331) 25,997 32,578 70,042 ( 311) ( 513) ( 10,684) ( 26,094) ( 33,092) ( 50,686) - 11,545 ( 1,435) ( 211,184) 535,465 231,711 813 427 560,741 - ( 946,564) ( 525,710) ( 247,075) 32,565 ( 13,817) ( 19,293) ( 161,409) 394,825 ( 5,230,036) 2,234,999 ( 27,577) 105,729 3,323 741 28,591 ( 227,987) 1,544,622 ( 4,566) 712,201 402,096 593,207 ( 49,729) 2,482 7,796 ( 54,555) ( 33,959) 243,633 79,488 3,632,168 3,095,542 ( 7,345) 184 3,624,823 3,095,726 - 1,934 ( 200,000) - ( 263,639) ( 329,701) 568 ( 439) (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)

Increase in other financial assets Interest received Dividends received from others Net cash used in investing activities 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 Dividends paid to owner of the company Interest paid Net cash used in financing activities NET INCREASE (DECREASE) 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 Nine Months Ended September 30	For the Nine Months Ended September 30
	2021 ($ 1,100) 311 54,955 ( 408,905) 72,749,848 ( 70,162,211) 2,600,423 ( 6,200,000) - 300,000 ( 1,100,000) 240,240 ( 1,110,000) ( 11,369) ( 430,663) ( 38,967) ( 3,162,699) 53,219 287,373 $ 340,592	2020 $ - 513 26,094 ( 301,599) 81,865,024 ( 83,738,199) 9,099,912 ( 8,550,000) 2,994,538 2,550,000 ( 5,460,000) 199,938 ( 1,100,000) ( 11,229) - ( 65,699) ( 2,215,715) 578,412 67,028 $ 645,440 (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 NINE MONTHS ENDED SEPTEMBER 30, 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. Within these notes to the consolidated financial statement, the Corporation and its subsidiaries are hereto forth referred to as the “Group”.

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

As of September 30, 2021, and 2020, China Steel Corporation (“CSC”), the Corporation’s parent and major shareholder (40.58%), 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 November 2, 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 application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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. The IFRSs endorsed by the FSC for application starting from 2022

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts-Cost of Fulfilling a Contract”	Effective Date Announced by IASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

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• Note 1: 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 IFRS 1 “First-time Adoptions of IFRSs” are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 3: 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 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

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.

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

New IFRSs Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IAS 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 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

Effective Date Announced by IASB (Note1)

To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

• 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 will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 3: 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 4: Except for deferred taxes that will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

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.

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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 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 (%)
	September 30, 2021 December 31, 2020 September 30, 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

September 30, 2021 Cash on hand $ 640 Checking accounts and demand deposits 339,952 $ 340,592	December 31, 2020 September 30, 2020 $ 640 $ 640 286,733 644,800 $ 287,373 $ 645,440

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

	September	30,	December 31,	December 31,	September 30,	September 30,
	2021			2020		2020
Financial assets mandatorily classified as at
FVTPL
Emerging market shares	$	-	$	242,410	$	155,354

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

September 30, 2021 Current Domestic Listed shares $ 1,201,865 Noncurrent Domestic listed shares $ 36,444 Domestic unlisted shares 61,753 $ 98,197	December 31, 2020 September 30, 2020 $ 819,454 $ 677,084 $ 24,848 $ 20,531 43,345 40,301 $ 68,193 $ 60,832

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

9. ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

September 30, 2021 Accounts receivable Accounts receivable – non-related parties $ 1,776,651 Accounts receivable – related parties $ 364,313	December 31, 2020 September 30, 2020 $ 830,087 $ 991,727 $ 117,238 $ 13,168 (Continued)

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September 30, 2021 Other receivables (including related parties) Settlement price receivables $ 130,388 Receivables from disposal of scrap 62,245 Income tax refund receivable 19,968 Dividend receivable - Others 8,618 $ 221,219	December 31, 2020 September 30, 2020 $ 886 $ 120,773 32,961 31,473 - 19,292 11,912 - 234 375 $ 45,993 $ 171,913

(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 Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for accounts receivables. 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 is not further distinguished according to the Group’s different customer base.

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

September 30, 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 September 30, 2020 Expected credit loss rate (%) Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Not Past Due - $ 2,140,964 - $ 2,140,964 Not Past Due - $ 947,325 - $ 947,325 Not Past Due - $ 1,004,895 - $ 1,004,895	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 $ 2,140,964 -
							$ 2,140,964
							Total $ 947,325 -
							$ 947,325
							Total $ 1,004,895 -
							$ 1,004,895

• 13 -

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

September 30, 2021 A company $ 513,381 B company 292,368 C company 276,220 D company 236,659 E company - F company - G company - H company - $ 1,318,628	December 31, 2020 September 30, 2020 $ 88,499 $ 89,751 95,493 67,746 53,331 - 186,520 98,790 147,430 - - 192,278 - 135,080 - 112,055 $ 571,273 $ 695,700

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 nine months ended September 30, 2021 and 2020 were as follows:

Buyer of Accounts Receivable For the Nine Months Ended September 30, 2021 Mega Bank Bank of Taiwan Bank of Taiwan For the Nine Months Ended September 30, 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 $ 1,374,818 154,624 38,734 $ 1,568,176 $ 1,740,559 146,293 185,198 $ 2,072,050	Amounts Collected Advances Received at Period - End Interest Rates on Advances Received (%) Credit Line $ 1,296,472 $ 679,591 1.03 NT$817 million 144,629 77,269 1.03 NT$200 million 36,673 16,638 1.44 USD20 million(Note) $ 1,477,774 $ 773,498 $ 1,880,927 $ 786,363 1.1 NT$3 billion 90,395 55,898 1.1 NT$200 million 261,604 47,808 2.25 USD20 million $ 2,232,926 $ 890,069

Note: The renewal of the contract is still in process as of September 30, 2021.

The above credit lines are revolving.

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 September 30, 2021, December 31, 2020 and September 30, 2020, there was no allowance

• 14 -

for doubtful accounts.

10. INVENTORIES

Raw materials Finished goods Supplies Work in progress Others Raw materials and supplies in transit	September 30, 2021 $ 2,862,672 3,734,680 342,221 917,298 5,653 1,605,367 $ 9,467,891	December 31, 2020 $ 1,608,738 1,764,310 368,565 488,875 3,872 2,060 $ 4,236,420	September 30, 2020 $ 2,071,141 1,543,533 470,493 462,308 3,299 3,048 $ 4,553,822

The cost of inventories recognized as operating costs for the three months and nine months ended September 30, 2021 and 2020 was NT$13,001,793 thousand, NT$8,631,613 thousand, NT$32,906,116 thousand and NT$26,180,709 thousand, respectively, including loss on inventory value decline of NT$19,030 thousand, reversal of loss of NT$95,997 thousand, reversal of loss of NT$1,435 thousand and reversal of loss of NT$211,184 thousand, respectively.

11. PREPAYMENTS

September 30, 2021 Input tax $ 142,134 Prepayments for purchases 27,935 Others 8,469 $ 178,538	December 31, 2020 September 30, 2020 $ 104,098 $ 85,750 41,340 28,956 5,523 8,096 $ 150,961 $ 122,802

12. OTHER FINANCIAL ASSETS

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

• 15 -

13. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

		September 30,	September 30,	December	December	31,	September 30,	September 30,
			2021		2020			2020
Material associates
Transglory Investment Corp. (TIC)		$	3,936,500	$	2,669,716		$	2,194,135
Associates that are not individually material			201,437			-		-
		$	4,137,937	$	2,669,716		$	2,194,135
a. Material associates
					Percentage of Ownership and
						Voting Rights		(%)
					September		December	September
Name of Associate	Nature of Activities	Principal Place of Business			30, 2021		31, 2020	30, 2020
TIC	General investment	Taiwan			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 profit for the period Other comprehensive income Total comprehensive income for the period Comprehensive income attributable to the Group	September 30, 2021 $ 8,669 9,728,250 ( 115,020) $ 9,621,899 (%) 40.91 $ 3,936,500 $ 3,936,500 For the Three Months Ended September 30	September 30, 2021 $ 8,669 9,728,250 ( 115,020) $ 9,621,899 (%) 40.91 $ 3,936,500 $ 3,936,500 For the Three Months Ended September 30	September 30, 2021 $ 8,669 9,728,250 ( 115,020) $ 9,621,899 (%) 40.91 $ 3,936,500 $ 3,936,500 For the Three Months Ended September 30	December 31, 2020 September 30, 2020 $ 2,470 $ 20,780 6,598,420 5,432,626 ( 75,063) ( 90,085) $ 6,525,827 $ 5,363,321 40.91 40.91 $ 2,669,716 $ 2,194,135 $ 2,669,716 $ 2,194,135 For the Nine Months Ended September 30 2021 2020 $ 80,247 $ 134,437 $ 72,557 $ 123,896 3,131,600 ( 935,647) $ 3,204,157 ($ 811,751) $ 1,311,055 ($ 332,087)	December 31, 2020 September 30, 2020 $ 2,470 $ 20,780 6,598,420 5,432,626 ( 75,063) ( 90,085) $ 6,525,827 $ 5,363,321 40.91 40.91 $ 2,669,716 $ 2,194,135 $ 2,669,716 $ 2,194,135 For the Nine Months Ended September 30 2021 2020 $ 80,247 $ 134,437 $ 72,557 $ 123,896 3,131,600 ( 935,647) $ 3,204,157 ($ 811,751) $ 1,311,055 ($ 332,087)	December 31, 2020 September 30, 2020 $ 2,470 $ 20,780 6,598,420 5,432,626 ( 75,063) ( 90,085) $ 6,525,827 $ 5,363,321 40.91 40.91 $ 2,669,716 $ 2,194,135 $ 2,669,716 $ 2,194,135 For the Nine Months Ended September 30 2021 2020 $ 80,247 $ 134,437 $ 72,557 $ 123,896 3,131,600 ( 935,647) $ 3,204,157 ($ 811,751) $ 1,311,055 ($ 332,087)
				$
				$
		2021 $ 80,247 $ 78,311 ( 894,729) ($ 816,418) ($ 334,011)	2020 $ 134,437 $ 131,618 ( 67,801) $ 63,817 $ 26,108		2021 $ 80,247 $ 72,557 3,131,600 $ 3,204,157 $ 1,311,055	2020 $ 134,437 $ 123,896 ( 935,647) ($ 811,751) ($ 332,087)

• 16 -

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

Net profit for the period Other comprehensive income Total comprehensive income		For the Three Months Ended September 30 2021 2020 $ 2,344 $ - ( 4,776) - ($ 2,432) $ -		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 2,344 ( 4,776) ($ 2,432)		2021 $ 3,258 ( 1,821) $ 1,437	2020 $ - - $ -

The whole shareholding of the Group, parent entity and fellow subsidiaries in above-mentioned investee companies is more than 20%; therefore, the investments are evaluated by using the equity method.

Refer to Table 5 “Information on Investments” for the nature of main business, principle of business and countries of incorporation of associates that are not individually material.

14. PROPERTY, PLANT AND EQUIPMENT

For the Nine Months Ended September 30, 2021

Cost Balance at January 1, 2021 Additions Disposals Balance at September 30, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Disposals Impairment loss Balance at September 30, 2021 Carrying amount at December 31, 2020 Carrying amount at September 30, 2021	Land $ 3,988,983 - - $ 3,988,983 $ - - - - $ - $ 3,988,983 $ 3,988,983	Buildings Machinery and Equipment $ 5,001,703 $ 22,862,804 10,378 210,281 - - $ 5,012,081 $ 23,073,085 $ 2,008,941 $ 19,637,206 99,419 264,347 - - - 535,465 $ 2,108,360 $ 20,437,018 $ 2,992,762 $ 3,225,598 $ 2,903,721 $ 2,636,067	Other Equipment $ 4,483,434 38,480 ( 9,838) $ 4,512,076 $ 4,050,064 73,503 ( 9,838 ) - $ 4,113,729 $ 433,370 $ 398,347	Spare Parts $ 1,291,199 139,609 ( 124,519) $ 1,306,289 $ 894,626 121,997 ( 124,519 ) - $ 892,104 $ 396,573 $ 414,185	Construction in Progress and Equipment to be Inspected $ 125,357 ( 62,911 ) - $ 62,446 $ - - - - $ - $ 125,357 $ 62,446	Total $ 37,753,480 335,837 ( 134,357) $ 37,954,960 $ 26,590,837 559,266 ( 134,357 ) 535,465 $ 27,551,211 $ 11,162,643 $ 10,403,749

For the Nine Months Ended September 30, 2020

Cost Balance at January 1, 2020 Additions Disposals Balance at September 30, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expense Disposals Impairment loss Balance at September 30, 2020 Carrying amount at September 30, 2020	Land $ 3,988,983 - - $ 3,988,983 $ - - - - $ - $ 3,988,983	Buildings Machinery and Equipment $ 4,993,389 $ 22,734,037 6,071 116,409 - ( 13,377) $ 4,999,460 $ 22,837,069 $ 1,877,331 $ 18,539,349 98,676 519,697 - ( 1,832 ) - 231,711 $ 1,976,007 $ 19,288,925 $ 3,023,453 $ 3,548,144	Other Equipment $ 4,419,879 74,481 ( 12,422) $ 4,481,938 $ 3,938,749 93,359 ( 12,422 ) - $ 4,019,686 $ 462,252	Spare Parts $ 1,428,295 69,444 ( 119,539) $ 1,378,200 $ 773,196 162,294 ( 119,539 ) - $ 815,951 $ 562,249	Construction in Progress and Equipment to be Inspected $ 116,329 8,796 - $ 125,125 $ - - - - $ - $ 125,125	Total $ 37,680,912 275,201 ( 145,338) $ 37,810,775 $ 25,128,625 874,026 ( 133,793 ) 231,711 $ 26,100,569 $ 11,710,206

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:

• 17 -

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

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 September 30, 2021, December 31, 2020 and September 30, 2020, the book value of those remaining farmlands recognized as land were NT$55,433 thousand, respectively.

The Corporation's tandem cold-rolling line in pickling and galvanizing department was idle. The management assessed there was no future recoverable amount. Thus, the Corporation recognized an impairment loss of NT$231,711 thousand in September 2020. Such impairment loss was recognized in operating costs.

After considering the condition of the future market and the current capacity planning, the Corporation carried out a review of the recoverable amount of part of steel pipe production lines and determined that the carrying amount exceeded the recoverable amount and thus recognized an impairment loss of NT$535,465 thousand in September 2021. Such impairment loss was recognized in operating costs. The recoverable amount of the relevant assets was determined based on their value in use, and the discount rate used in measuring the value in use was 7.19% per annum.

15. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts	September 30, 2021 $ 58,960 7,825 $ 66,785 For the Three Months Ended September 30	December 31, 2020 September 30, 2020 $ 68,233 $ 71,252 10,097 10,855 $ 78,330 $ 82,107 For the Nine Months Ended September 30 2021 2020 $ 69 $ 18,789 (Continued)	December 31, 2020 September 30, 2020 $ 68,233 $ 71,252 10,097 10,855 $ 78,330 $ 82,107 For the Nine Months Ended September 30 2021 2020 $ 69 $ 18,789 (Continued)	December 31, 2020 September 30, 2020 $ 68,233 $ 71,252 10,097 10,855 $ 78,330 $ 82,107 For the Nine Months Ended September 30 2021 2020 $ 69 $ 18,789 (Continued)	December 31, 2020 September 30, 2020 $ 68,233 $ 71,252 10,097 10,855 $ 78,330 $ 82,107 For the Nine Months Ended September 30 2021 2020 $ 69 $ 18,789 (Continued)
Land Transportation equipment Additions to right-of-use assets
		$
	2021 2020			2021 $ 69	2020 $ 18,789 (Continued)

• 18 -

Depreciation charge for right-of-use assets Land Transportation equipment		For the Three Months Ended September 30 2021 2020 $ 3,130 $ 3,104 758 757 $ 3,888 $ 3,861		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 3,130 758 $ 3,888		2021 $ 9,342 2,272 $ 11,614	2020 $ 9,311 2,272 $ 11,583 (Concluded)

Except for the above-mentioned additions and depreciation expenses, there were no material subleases and impairment for the nine months ended September 30, 2021 and 2020.

• b. Lease liabilities

September 30, 2021 Carrying amounts Current $ 15,365 Non-current $ 52,425	December 31, 2020 September 30, 2020 $ 15,230 $ 15,173 $ 63,898 $ 67,704

Range of discount rate for lease liabilities was as follows:

	September 30,	December 31,	September 30,
	2021	2020	2020
Land(%)	0.647-1.31	0.85-1.31	1.10-1.31
Transportation equipment(%)	0.76	0.76	0.76

• c. Material lease activities and terms

The Corporation leases land for the use of steel products storing with lease terms of 3-10 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 September 30 2021 2020 $ 4,163 $ 6,286 $ 374 $ 333		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 4,163 $ 374		2021 $ 9,212 $ 1,041 ($ 22,279)	2020 $ 17,737 $ 973 ($ 30,737)

• 19 -

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 nine months ended September 30, 2021

Cost Balance at January 1 and September 30, 2021 Accumulated depreciation Balance at January 1, 2021 Depreciation expense Balance at September 30, 2021 Carrying amount at December 31, 2020 Carrying amount at September 30, 2021 For the nine months ended September 30, 2020 Cost Balance at January 1 and September 30, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expense Balance at September 30, 2020 Carrying amount at September 30, 2020	Land $ 5,959,074 $ - - $ - $ 5,959,074 $ 5,959,074 Land $ 5,959,074 $ - - $ - $ 5,959,074	Buildings $ 41,067 $ 16,956 666 $ 17,622 $ 24,111 $ 23,445 Buildings $ 41,067 $ 16,068 666 $ 16,734 $ 24,333	Total $ 6,000,141 $ 16,956 666 $ 17,622 $ 5,983,185 $ 5,982,519 Total $ 6,000,141 $ 16,068 666 $ 16,734 $ 5,983,407

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 September 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020 were NT$20,885 thousand, NT$20,496 thousand, NT$62,317 thousand and NT$61,155 thousand, respectively. As of September 30, 2021, December 31, 2020 and September 30, 2020, according to the contract, the Corporation received guarantee from the lessee were all NT$35,000 thousand.

As of September 30, 2021, December 31, 2020 and September 30, 2020, accounting to the abovementioned lease contract, the Corporation had received the amount of notes receivable and recognized as unearned rent revenue as follows:

• 20 -

Notes receivable received Less: unearned rent revenue Carrying amount	September 30, 2021 $ 73,712 73,712 $ -	December 31, 2020 $ 50,587 50,587 $ -	September 30, 2020 $ 72,267 72,267 $ -

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

				September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
					2021		2020		2020
Year	1			$	92,590	$	87,569	$	90,562
Year	2				86,227		84,956		84,533
Year	3				87,794		86,618		86,227
Year	4				89,549		88,232		87,794
Year	5				91,340		89,996		89,549
Later	than	5	years		476,281		544,824		567,621
				$	923,781	$	982,195	$	1,006,286

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 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:

September 30, 2021 Fair value $ 9,996,358 Expense rate (%) 25.14 Depreciation rate (%) 1.90-2.57	December 31, 2020 September 30, 2020 $ 9,996,358 $ 9,996,358 25.14 25.14 1.90-2.57 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

	September 30,	December 31,	December 31,	September 30,	September 30,
	2021		2020		2020
Unsecured loans	$ 2,760,000	$	200,000	$	550,000
Letters of credit	232,267		50,000		360,380
Bank overdrafts (Note 30)	-		154,630		271,312
Loans from related parties (Note 29)	-		-		2,100,000
	$ 2,992,267	$	404,630	$	3,281,692
Interest rate (%)	0.32-0.75		0.32-0.75		0.32-0.80

• 21 -

b. Short-term bills payable

	September	30,	December 31,	September 30,
	2021		2020	2020
Commercial paper	$	-	$ 3,600,000	$ 2,350,000
Less: Unamortized discounts		-	423	538
	$	-	$ 3,599,577	$ 2,349,462
Interest rate (%)	-		0.35-0.36	0.42-0.43

On September 30, 2021, December 31, 2020 and September 30, 2020, all commercial papers were non-guarantee commercial paper.

c. Long-term borrowings

	September	September	30,	December 31,	September 30,
		2021		2020	2020
Credit bank loans
Due on various dates through December
2024	$	1,200,000		$ 2,000,000	$ 1,700,000
Interest rate (%)		0.79		0.75-0.92	0.75-0.93
Long-term bills payable
	September		30,	December 31,	September 30,
		2021		2020	2020
Commercial papers	$	240,000		$ 1,110,000	$ 1,710,000
Less: Unamortized discount			86	326	924
	$	239,914		$ 1,109,674	$ 1,709,076
Interest rate (%)		0.62		0.73-0.91	0.75-0.96

d. Long-term bills payable

Commercial papers have revolving credit lines within the payment terms according to the contracts and need to be utilized to some extent. As of September 30, 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 September 30, 2020.

18. BONDS PAYABLE

	September 30,	December 31,	September 30,
	2021	2020	2020
Unsecured domestic bonds	$ 3,000,000	$ 3,000,000	$ 3,000,000
Less: Issuance cost of bonds payable	4,110	4,961	5,035
	$ 2,995,890	$ 2,995,039	$ 2,994,965

• 22 -

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

		September 30,	December 31,	December 31,	September 30,	September 30,
		2021		2020		2020
	Accounts payable
Operating	- non related parties	$ 1,572,122	$	27,500	$	25,106
Operating	- related parties	$ 1,025,425	$	313,224	$	467,693

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

20. OTHER PAYABLES

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2021		2020		2020
Salaries and incentive bonus	$	546,953	$	289,532	$	157,632
Employees’ compensation and remuneration of
directors		297,674		36,469		342
Utilities		70,990		59,229		78,286
Freight		36,712		27,497		28,366
Outsourced repair and construction		27,602		34,572		33,344
Export fees		37,793		26,007		37,821
Processing fee		12,103		23,367		21,342
Others		135,616		83,591		100,328
	$	1,165,443	$	580,264	$	457,461

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, NT$5,653 thousand, NT$14,998 thousand and NT$16,959 thousand for the three months ended September 30, 2021 and 2020, and for the nine months ended September 30, 2021 and 2020, respectively.

• 23 -

22. EQUITY

a. Ordinary shares

September 30, 2021 Numbers of shares authorized (in thousands) 2,043,160 Shares authorized $ 20,431,600 Numbers of shares issued and fully paid (in thousands) 1,435,544 Shares issued $ 14,355,444	December 31, 2020 September 30, 2020 2,043,160 2,043,160 $ 20,431,600 $ 20,431,600 1,435,544 1,435,544 $ 14,355,444 $ 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

		September 30,	December 31,	September 30,
		2021	2020	2020
Additional paid-in	capital	$ 903	$ 903	$ 903

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.

• 24 -

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

Legal reserve Special reserve (reversal) 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 $ -

Information about the appropriation of earnings and offsetting deficits, proposed by the shareholders’ meetings and the Corporation’s board of directors, is available on the Market Observation Post System website of the Taiwan Stock Exchange.

• d. Exchange differences on translating foreign operations

Balance, beginning of period Recognized during the period Share from associates accounted for using the equity method Balance, end of period	For the Nine Months Ended September 30	For the Nine Months Ended September 30
	2021 $ - ( 133) ($ 133)	2020 $ - - $ -

• e. 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 Cumulative unrealized gains and losses of equity instruments transferred to retained earnings due to disposal Balance, end of period		For the Nine Months Ended September 30
		2021 2020 ($ 425,839) ($ 549,578) 412,416 ( 120,299) 1,279,532 (382,773) 1,691,948 (503,072) ( 9,158) - $1,256,951 ($1,052,650)

• 25 -

23. OPERATING REVENUES

• a. Contract balances

September 30, 2021 December 31, 2020 September 30, 2020 Accounts receivable $ 2,140,964 $ 947,325 $ 1,004,895 Contract liabilities - current Sale of goods $ 85,874 $ 57,283 $ 57,065	January 1, 2020 $ 511,750 $ 285,052

b. Disaggregation of revenue

For the Nine Months Ended September 30, 2021

Type of goods or services Sale of goods Rendering of services Others		Reportable segments	Reportable segments
		Chung Hung $ 39,310,579 479,843 64,906 $ 39,855,328	Others $ - 7,525 301 $ 7,826	Total $ 39,310,579 487,368 65,207 $ 39,863,154

For the Nine Months Ended September 30, 2020

Type ofgoods orservices Sale of goods Rendering of services Others		Reportable segments
		Chung Hung Others $ 26,943,324 $ - 206,234 ( 15) 42,800 502 $ 27,192,358 $ 487	Total $ 26,943,324 206,219 43,302 $ 27,192,845

24. PROFIT (LOSS) BEFORE INCOME TAX

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

a. Other income

Rental income Government grants income Dividend income Others		For the Three Months Ended September 30	For the Three Months Ended September 30		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 21,964 17,841 9,933 933 $ 50,401	2020 $ 21,558 78,534 16,821 5,669 $ 122,582		2021 $ 64,863 22,628 10,383 7,715 $ 105,589	2020 $ 63,934 86,101 25,592 10,489 $ 186,116

• 26 -

b. Other gains and losses

Net foreign exchange gain(loss) Loss on disposal of property, plant and equipment Gain (loss) arising on financial assets at fair value through profit or loss Fees Others	For the Three Months Ended September 30 2021 2020 $ 27,167 ($ 28,653) - - ( 26,466) ( 4,385) ( 1,480) ( 3,077) ( 332) ( 450) ($ 1,111) ($ 36,565)		For the Nine Months Ended September 30
			2021 2020 $ 40,506 ($ 22,610) - ( 11,545) 318,331 ( 25,997) ( 6,807) ( 9,146) ( 1,375) ( 1,689) $ 350,655 ($ 70,987)

The components of net foreign exchange gain (loss) were as follows:

For the Three Months Ended September 30 2021 2020 Foreign exchange gain $ 38,032 $ 3,087 Foreign exchange loss ( 10,865) ( 31,740) Net exchange gain $ 27,167 ($ 28,653) Finance costs For the Three Months Ended September 30 2021 2020 Interest on bank overdrafts and loans $ 10,442 $ 17,450 Interest on loans from related parties (Note 29) - 3,359 Interest on lease liabilities 208 255 Total interest expense financial liabilities measured at amortized cost 10,650 21,064 Less: Amounts included in the cost of qualifying assets 126 422 $ 10,524 $ 20,642 Information about capitalized interest was as follows: For the Three Months Ended September 30 2021 2020 Capitalized amounts $ 126 $ 422 Capitalized annual rates (%) 0.60-0.72 0.64-0.66		For the Nine Months Ended September 30
		2021 2020 $ 83,608 $ 37,776 ( 43,102) ( 60,386) $ 40,506 ($ 22,610) For the Nine Months Ended September 30
		2021 2020 $ 32,440 $ 59,014 - 11,328 657 798 33,097 71,140 519 1,098 $ 32,578 $ 70,042 For the Nine Months Ended September 30
		2021 2020 $ 519 $ 1,098 0.59-0.72 0.64-0.83

c. Finance costs

• 27 -

d. 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 September 30 2021 2020 $ 184,943 $ 292,620 222 222 3,888 3,861 $ 189,053 $ 296,703 $ 186,997 $ 275,041 1,834 21,440 222 222 $ 189,053 $ 296,703		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 184,943 222 3,888 $ 189,053 $ 186,997 1,834 222 $ 189,053		2021 $ 559,266 666 11,614 $ 571,546 $ 565,452 5,428 666 $ 571,546	2020 $ 874,026 666 11,583 $ 886,275 $ 822,169 63,440 666 $ 886,275

e. Operating expenses directly related to investment properties

		For the Three Months	For the Three Months	For the Three Months		For the Nine	Months	Months
		Ended September 30				Ended September 30
		2021		2020		2021		2020
Direct operating expenses of
investment properties that
generated rental income	$	2,871	$	2,818	$	8,530	$	8,362
Direct operating expenses of
investment properties that
did not generate rental
income		1,816		1,714		5,449		5,144
	$	4,687	$	4,532	$	13,979	$	13,506
Employee benefits
		For the Three Months				For the Nine	Months
		Ended September 30				Ended September 30
		2021		2020		2021		2020
Short-term employee benefits
Salaries	$	454,304	$	259,369	$	1,384,813	$	718,327
Labor and health insurance		23,246		21,322		69,465		63,440
Others		63,317		27,885		162,228		89,135
		540,867		308,576		1,616,506		870,902
Post-employment benefits
Defined contribution plans		6,669		6,599		19,603		19,386
Defined benefit plans (Note
21)		4,999		5,653		14,998		16,959
		11,668		12,252		34,601		36,345
	$	552,535	$	320,828	$	1,651,107	$	907,247
							(Continued)

f. Employee benefits

• 28 -

Analysis of employee benefits expense by function Operating costs Operating expenses		For the Three Months Ended September 30 2021 2020 $ 448,554 $ 269,214 103,981 51,614 $ 552,535 $ 320,828		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 448,554 103,981 $ 552,535		2021 $ 1,334,710 316,397 $ 1,651,107	2020 $ 760,096 147,151 $ 907,247 (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 September 30, 2020 because the Corporation had accumulated deficits.

For the three months ended September 30, 2021 and for the nine months ended September 30, 2021, the employees’ compensation and remuneration of directors were as follows:

Amount	For the Three Months Ended September 30, 2021 $ 68,546 13,810	For the Nine Months Ended September 30, 2021
		$ 246,435 49,360 4.01 0.80
Employees’ compensation Remuneration of directors Accrual rate
Employees’ compensation (%) Remuneration of directors (%)

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 Accrual rate Employees’ compensation (%) Remuneration of directors (%)	For the Year Ended December 31
	2020 2019 $ 29,897 $ 11 5,638 - 5.30 0.10 1.00 -

• 29 -

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 Income tax on unappropriated earnings		For the Three Months Ended September 30 2021 2020 $ 398,104 $ - 66 - $ 398,170 $ -		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 398,104 66 $ 398,170		2021 $ 398,856 4,537 $ 403,393	2020 $ - - $ -

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

• c. Income tax assessments

The Group’s income tax returns through 2019 have been assessed by the tax authorities.

26. EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share Diluted earnings (loss) per share		For the Three Months Ended September 30 2021 2020 $ 1.02 $ 0.17 $ 1.02 $ 0.17		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 1.02 $ 1.02		2021 $ 3.79 $ 3.78	2020 ($ 0.17) ($ 0.17)

• 30 -

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

Net profit (loss) for the period

Attributable to owners of the Corporation		For the Three Months Ended September 30 2021 2020 $ 1,463,615 $ 249,930		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 1,463,615		2021 $ 5,444,459	2020 ($ 238,973)

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

Weighted average number of ordinary shares in computation of basic earnings (loss) per share Effect of dilutive potential ordinary shares: Employees’ compensation Weighted average number of ordinary shares used in computation of diluted earnings (loss) per share		For the Three Months Ended September 30 2021 2020 1,435,544 1,435,544 5,896 - 1,441,440 1,435,544		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 1,435,544 5,896 1,441,440		2021 1,435,544 6,240 1,441,784	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 nine months ended September 30, 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.

• 31 -

1) Fair value hierarchy

September30,2021 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 September 30, 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 $1,238,309 - $1,238,309 $ - $ 844,302 - $ 844,302 $ - $ 697,615 - $ 697,615	Level 2 $ - - $ - $ - $ - - $ - $ - $ - - $ -	Level 3 $ - 61,753 $ 61,753 $ 242,410 $ - 43,345 $ 43,345 $ 155,354 $ - 40,301 $ 40,301	Total $1,238,309 61,753 $1,300,062 $ 242,410 $ 844,302 43,345 $ 887,647 $ 155,354 $ 697,615 40,301 $ 737,916

There was no transfer between Level 1 and Level 2 for the nine months ended September 30, 2021 and 2020.

2) Reconciliation of Level 3 fair value measurements of 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 nine months ended September 30, 2021 Balance, beginning of period $ 242,410 $ 43,345 $ 285,755 (Continued)

• 32 -

	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 nine months ended September 30,
2021
Total profit or loss
Recognized in profit or loss		$	318,331	$	-		$	318,331
Recognized in other comprehensive
income			-		18,408			18,408
Diposal	(		560,741)		-	(		560,741)
Balance, end of period	$		-	$	61,753	$		61,753
For the nine months ended September 30,
2020
Balance, beginning of period	$		181,351	$	44,843	$		226,194
Total profit or loss
Recognized in profit or loss	(		25,997)		-	(		25,997)
Recognized in other comprehensive
income			-	(	2,608)	(		2,608)
Capital reduction refunded			-	(	1,934)	(		1,934)
Balance, end of period	$		155,354	$	40,301	$		195,655
Unrealized gains and losses recognized in
other profit or loss	($		25,997)	$	-	($		25,997)

(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

	September	30,	December 31,	December 31,	September 30,	September 30,
	2021			2020		2020
Financial assets
Fair value through profit or loss
Mandatorily at fair value through profit or
loss	$	-	$	242,410	$	155,354
Measured at amortized cost (see 1 below)	2,991,259			1,588,611		2,110,727
Financial assets at fair value through other
comprehensive income
Equity instruments	1,300,062			887,647		737,916
						(Continued)

• 33 -

	September 30,	December 31,	September 30,
	2021	2020	2020
Financial liabilities
Measured at amortized cost (see 2 below)	$ 11,623,450	$ 11,218,664	$ 13,253,555
			(Concluded)

• 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 (excluding dividends payable), refund liability, bonds payable, long-term borrowings, 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 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.

• 34 -

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.

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 (loss) before income tax

USD Impact (Note)
For the Nine Months Ended
September 30
2021 2020
($ 12,669) $ 11,186

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:

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2021		2020		2020
Fair value interest rate risk
Financial liabilities	$	3,063,680	$	3,074,167	$	3,077,842
Cash flow interest rate risk
Financial assets		560,532		567,017		932,608
Financial liabilities		1,439,914		3,109,674		3,409,076
Sensitivity analysis

If interest rates had been 0.25% higher/lower all other variables were held constant, the Group’s pre-tax profit for the nine months ended September 30, 2021 and 2020 would have been lower/higher by NT$1,649 thousand and NT$4,643 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.

• 35 -

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 nine months ended September 30, 2021 and 2020 would have both been lower by NT$34,113 thousand, respectively.

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 September 30, 2021, the unutilized credit facility of the Group was NT$44.5 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:

September 30, 2021 Short-term borrowings 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	Less Than 1 Year $ 3,008,275 2,597,547 1,165,443 397,389 16,086 22,100 9,480 - - $ 7,216,320 $ 406,794 3,600,000 340,724 580,264 153,756 16,086 22,100	1-5 Years $ - - - - 38,221 3,066,300 1,217,628 240,000 - $ 4,562,149 $ - - - - - 45,564 3,088,400	Over 5 Years $ - - - - 15,986 - - - 35,000 $ 50,986 $ - - - - - 20,646 -	Total $ 3,008,275 2,597,547 1,165,443 397,389 70,293 3,088,400 1,227,108 240,000 35,000 $ 11,829,455 $ 406,794 3,600,000 340,724 580,264 153,756 82,296 3,110,500 (Continued)

• 36 -

December 31, 2020 Long-term bank borrowings Long-term bills payable Guarantee deposits received September 30, 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 $ 16,500 - - $ 5,136,224 $ 3,300,069 2,350,000 492,799 457,461 233,100 16,086 22,100 13,770 - - $ 6,885,385	1-5 Years $ 2,034,430 1,110,000 - $ 6,278,394 $ - - - - - 48,001 3,088,400 1,731,715 1,710,000 - $ 6,578,116	Over 5 Years $ - - 35,000 $ 55,646 $ - - - - - 22,268 - - - 35,000 $ 57,268	Total $ 2,050,930 1,110,000 35,000
				$ 11,470,264
				$ 3,300,069 2,350,000 492,799 457,461 233,100 86,355 3,110,500 1,745,485 1,710,000 35,000
				$ 13,520,769

(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 China Steel Corporation Dragon Steel Corporation (DSC) CHC Resources Corporation (CHC) Info Champ Systems Corporation (ICSC) CSC Steel SDN. BHD. (CSSB) China Steel Global Trading Corporation (CSGT) Himag Magnetic Corporation (HMC) China Steel Machinery Corporation China Ecotek Corporation China Steel Security Corporation Steel Castle Technology Corporation China Steel Express Corporation China Steel Structure Co., Ltd Universal Exchange Inc. China Steel Management Consulting Corp. China Steel Chemical Corporation Yu Cheng Lime Corporation Wabo Global Trading Corporation CSC Solar Corporation Kaohsiung Rapid Transit Corporation

Relationship

Parent entity Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries Fellow subsidiaries

(Continued)

• 37 -

Company Relationship Sing Da Marine Structure Fellow subsidiaries CSGT Japan Co., Ltd. Fellow subsidiaries China Steel Precision Metals Kunshan Co., Ltd. Fellow subsidiaries CSE Transport Corporation Fellow subsidiaries CSGT Metals Vietnam Joint Stock Company Fellow subsidiaries Pacific Harbour Stevedoring Corporation Other related parties as supervisors of the Corporation (Concluded)

b. Sale of goods

Related Parties Account Items Types Sales Parent entity Fellow subsidiaries related to others CSSB Others Service Revenue Parent entity Fellow subsidiaries related to others		For the Three Months Ended September 30 2021 2020 $ 31 $ 394 376,724 376,585 31,131 8,849 407,855 385,434 $ 407,886 $ 385,828 $ 154,429 $ 5,962 36,876 7 $ 191,305 $ 5,969		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 31 376,724 31,131 407,855 $ 407,886 $ 154,429 36,876 $ 191,305		2021 $ 1,399 1,388,300 68,304 1,456,604 $ 1,458,003 $ 435,730 36,884 $ 472,614	2020 $ 7,918 911,839 22,708 934,547 $ 942,465 $ 202,465 18 $ 202,483

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 Others		For the Three Months Ended September 30 2021 2020 $ 14,274 $ 10,702 4,049 1,176 103 - $ 18,426 $ 11,878		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 14,274 4,049 103 $ 18,426		2021 $ 44,242 10,610 103 $ 54,955	2020 $ 32,049 6,653 - $ 38,702

• 38 -

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

• c. Purchase of goods

Related Parties Types/Name Parent entity Fellow subsidiaries related to others DSC CSGT Others		For the Three Months Ended September 30 2021 2020 $ 1,192,965 $ 4,221,341 5,605,770 2,352,375 2,954,348 144,507 15,716 15,596 8,575,834 2,512,478 $ 9,768,799 $ 6,733,819		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 1,192,965 5,605,770 2,954,348 15,716 8,575,834 $ 9,768,799		2021 $ 4,711,724 13,013,838 4,780,538 54,247 17,848,623 $ 22,560,347	2020 $ 13,795,206 6,306,934 322,363 50,426 6,679,723 $ 20,474,929

Purchases from related parties, mainly slabs and hot rolling coil. Purchase from related parties were made under normal term for the nine months ended September 30, 2021; There were not comparable for the nine months ended September 30, 2020 because there was no transaction with non-related parties.

• d. Accounts receivable from related parties

		September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
Account Items	Related Parties Types/Name		2021		2020		2020
Accounts receivable from	Parent entity	$	66,401	$	52,905	$	6,111
related parties
	Fellow subsidiaries related to others
	CSSB		276,220		53,331		-
	Others		21,692		11,002		7,057
			297,912		64,333		7,057
		$	364,313	$	117,238	$	13,168
Other receivables from	Parent entity	$	137,870	$	1,035	$	120,643
related parties
	Fellow subsidiaries related to others
	CHC		49,840	$	25,389	$	25,297
	Others		371		248		649
			50,211		25,637		25,946
		$	188,081	$	26,672	$	146,589

No guarantee had been received for accounts receivable and other receivable from related parties. No expense had been recognized for the nine months ended September 30, 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)

		September 30,	September 30,	December 31,	December 31,	September 30,
Account Items	Related Parties Types		2021		2020	2020
Accounts payable to related	Parent entity	$	842,862	$	267,429	$ 386,432
parties
						(Continued)

• 39 -

		September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
Account Items	Related Parties Types		2021		2020		2020
Accounts payable to related	Fellow subsidiaries related to others
parties	CSGT	$	158,766	$	41,210	$	77,171
	Others		12,955		606		131
			171,721		41,816		77,302
	Others		10,842		3,979		3,959
		$	1,025,425	$	313,224	$	467,693
Other payable	Parent entity	$	50,503	$	7,459	$	7,532
	Fellow subsidiaries related to others		3,975		9,187		5,617
	Others		2,666		3,023		2,247
		$	57,144	$	19,669	$	15,396
						(Concluded)

The outstanding accounts payable to related parties were unsecured.

• f. Loans from related parties

Related Parties Types September 30, 2021 Parent entity $ -	December 31, 2020 September 30, 2020 $ - $ 2,100,000

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 September 30, 2020, the loans from the parent entity were unsecured loans with interest expense of NT$3,359 thousand and NT$11,328 thousand for the three months ended September 30, 2020 and for the nine months ended September 30, 2020, respectively.

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$16,176 thousand, NT$22,116 thousand, NT$52,215 thousand and NT$71,516 thousand for the three months ended September 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, December 31, 2020 and September 30, 2020, authorization fees payable (included in payables to related parties) were NT$14,543 thousand, NT$15,697 thousand and NT$20,643 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 September 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020 were NT$955 thousand, NT$959 thousand, NT$2,966 thousand and NT$2,978 thousand, respectively.

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• 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 September 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020 were NT$1,327 thousand, NT$1,327 thousand, NT$3,982 thousand and NT$3,982 thousand, respectively.

• 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 Others		For the Three Months Ended September 30 2021 2020 $ 43,434 $ 9,915 32,344 29,075 62,095 12,682 $ 137,873 $ 51,672 $ - $ - 506 1,662 - 1,004 506 2,666 $ 506 $ 2,666		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 43,434 32,344 62,095 $ 137,873 $ - 506 - 506 $ 506		2021 $ 145,137 95,995 109,480 $ 350,612 $ - 34,671 - 34,671 $ 34,671	2020 $ 56,034 103,707 67,819 $ 227,560 $ 7,600 103,487 1,383 104,870 $ 112,470

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

For the Three Months Ended September 30 2021 2020 Fellow subsidiaries related to others CHC $ 136,998 $ 61,973 Others - 4,996 $ 136,998 $ 66,969 Compensation of key management personnel For the Three Months Ended September 30 2021 2020 Short-term employee benefits $ 25,208 $ 5,322		For the Nine Months Ended September 30
		2021 2020 $ 357,084 $ 196,279 3,018 11,762 $ 360,102 $ 208,041 For the Nine Months Ended September 30
		2021 2020 $ 83,074 $ 16,977 (Continued)

• h. Compensation of key management personnel

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Post-employment benefits		For the Three Months Ended September 30	For the Three Months Ended September 30		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2021 $ 353 $ 25,561	2020 $ 544 $ 5,866		2021 $ 1,058 $ 84,132	2020 $ 1,634 $ 18,611 (Concluded)

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):

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2021		2020		2020
Time deposits (included in other financial assets -
current)	$	300,000	$	300,000	$	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 September 30, 2021 were as follows:

• a. Unused letters of credit for purchases of raw materials and machinery and equipment amounted to about NT$5,719,891 thousand.

• b. The Group had signed agreements to buy equipment for NT$312,236 thousand, of which NT$77,559 thousand had been paid (included in construction-in-progress and prepayments for equipment).

• c. The Group provided letters of credits for NT$144,129 thousand guaranteed by financial institutions for several constructions, purchase agreements and import and export goods. Guarantee notes for NT$31,313,175 thousand were provided to bank for credit line.

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)
September 30, 2021
Monetary financial assets
USD	$	16,370	27.85 (USD:NTD)	$	455,892
					(Continued)

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				Carrying
		Foreign		Amount
	Currencies			(In Thousands
		(In		of New Taiwan
	Thousands)		Exchange Rate	Dollars)
September 30, 2021
Monetary financial liabilities
USD	$	61,860	27.85 (USD:NTD)	$ 1,722,812
December 31, 2020
Monetary financial assets
USD		19,476	28.48 (USD:NTD)	554,666
Monetary financial liabilities
USD		901	28.48 (USD:NTD)	25,659
September 30, 2020
Monetary financial assets
USD		40,117	29.10 (USD:NTD)	1,167,418
Monetary financial liabilities
USD		1,676	29.10 (USD:NTD)	48,784
				(Concluded)

For the three months ended September 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020, realized and unrealized net foreign exchange gains or loss were gain of NT$27,167 thousand, loss of NT$28,653 thousand, gain of NT$40,506 thousand and loss of NT$22,610 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 nine months ended September 30, 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 (Table 2)

• 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)

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• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 3)

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 4)

• 9) Trading in derivative instruments (None)

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

• 11) Information on investees (Table 5)

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

• d. Information of major shareholders (Table 6)

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.

Segment revenues and operating results

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

For the nine months ended September 30, 2021 Revenues from external customers Segment profit Interest income Other income Other income and expenses Finance costs Share of the profit of associates Profit before income tax for the period Income tax expense Net profit for the period	The Corporation $ 39,855,328 $ 5,383,925 295 105,709 350,655 ( 32,578) 38,547 5,846,553 402,094 $ 5,444,459	Others Adjustment and Elimination $ 7,826 $ - $ 6,738 $ 120 16 - - ( 120) - - - - - ( 5,455) 6,754 ( 5,455) 1,299 - $ 5,455 ($ 5,455)	Total $ 39,863,154 $ 5,390,783 311 105,589 350,655 ( 32,578) 33,092 5,847,852 ( 403,393) $ 5,444,459 (Continued)

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The Corporation Others Adjustment and Elimination For the nine months ended September 30, 2021 Identifiable assets $ 30,385,661 $ 47,776 ($ 206) Investments accounted for using equity method 4,183,111 - ( 45,174) Total assets $ 34,568,772 $ 47,776 ($ 45,380) Total liabilities $ 12,629,887 $ 2,602 ($ 206) For the nine months ended September 30, 2020 Revenues from external customers $ 27,192,358 $ 487 $ - Segment profit (loss) ($ 335,670) $ 291 $ 120 Interest income 500 13 - Other income 186,236 - ( 120) Other income and expenses ( 70,987) - - Finance costs ( 70,042) - - Share of the profit of associates 50,990 - ( 304) Net profit (loss) for the period ($ 238,973) $ 304 ($ 304) Identifiable assets $ 25,548,531 $ 24,036 $ - Investments accounted for using equity method 2,218,148 - ( 24,013) Total assets $ 27,766,679 $ 24,036 ($ 24,013) Total liabilities $ 13,939,827 $ 23 $ -

Total $ 30,433,231 4,137,937 $ 34,571,168 $ 12,632,283 $ 27,192,845 ($ 335,259) 513 186,116 ( 70,987) ( 70,042) 50,686 ($ 238,973) $ 25,572,567 2,194,135 $ 27,766,702 $ 13,939,850 (Concluded)

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.

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TABLE 1

CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD SEPTEMBER 30, 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		September 30, 2021	September 30, 2021	September 30, 2021			Note
				Shares/Units	Carrying Value		Percentage of Ownership (%)		Fair Value
Chung Hung Steel Corporation Hung Kao Investment Corporation	Common Stock 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 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	730,000 33,109,239 958,333 3,948 250,000 1,003,980		$ - $ 1,201,865 55,622 391 5,740 $ 61,753 $ 36,444	15 - 2 3 5 -		$ - $ 1,201,865 55,622 391 5,740 $ 61,753 $ 36,444	Note1 2021.8.31 net value 2021.8.31 net value 2021.5.31 net value

Note 1: The impairment loss has been recognized that resulted in zero book value.

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TABLE 2

CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL SEPTEMBER 30, 2021

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

Company	Type of Marketable Securities	Name of Marketable Securities	Financial Statement Account	Counter-party	Nature of Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending Balance	Ending Balance
						Shares/Units	Amount	Shares/Units	Amount	Shares/Units	Amount	Carrying Value	Gain/Loss on **Disposal **	Shares/Units	Amount
Chung Hung Steel Corporation	Common stock	Yieh United Steel Corp.	Financial assets at fair value through profit or loss - current	-	-	36,728,800	$ 242,410	-	$ -	36,728,800	$ 560,741	$ 242,410	$ 318,331	-	$ -

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TABLE 3

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 SEPTEMBER 30, 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	Dragon Steel Corporation China Steel Global Trading Corporation China Steel Corporation CSC Steel Sdn. Bhd. China Steel Corporation	Fellow subsidiary Fellow subsidiary Parent company Fellow subsidiary Parent company	Purchase of goods Purchase of goods Purchase of goods Revenue from sale of goods Service revenue	$13,013,838 4,780,538 4,711,724 (1,388,300 ) (428,205 )	39 14 14 (3 ) (1 )	Letter of credit at sight Letter of credit at sight/Payment after final acceptance Letter of credit at sight/Payment after final acceptance T/T within 7 business days after lading date(not included) T/T as the end of the month of after final acceptance	$- - - - -	NO MATERIAL DIFFERENCE NO MATERIAL DIFFERENCE NO MATERIAL DIFFERENCE NO MATERIAL DIFFERENCE NO THIRD-PARTY COULD BE COMPARED	$- (158,766 ) (842,862 ) 276,220 66,401	- (6 ) (32 ) 13 3

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TABLE 4

CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL SEPTEMBER 30, 2021

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period (Note2)	Allowance for Impairment Loss
					Amount	Actions Taken
Chung Hung Steel Corporation	CSC Steel Sdn. Bhd. China Steel Corporation	Fellow subsidiary Parent company	$ 276,220 130,388	11 (Note 1)	$ - -	- -	$ 276,220 -	$ - -

Note 1: Discount receivable (included in other receivables to related parties).

Note 2: At the report date, amounts were received.

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TABLE 5

CHUNG HUNG STEEL CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE PERIOD ENDED SEPTEMBER 30, 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	September 30, 2021	September 30, 2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
						Number of Shares	%	Carrying Amount
				September 30, 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	$ 45,174 3,936,500 201,437	$ 5,455 72,557 19,550	$ 5,455 29,834 3,258	Subsidiaries (Note) Associates Associates

Note: Amount was eliminated in the consolidated financial statements.

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TABLE 6

CHUNG HUNG STEEL CORPORATION

INFORMATION OF MAJOR SHAREHOLDERS SEPTEMBER 30, 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.

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