CMP - Annual Report 2023 | FinancialReports.eu

Stock Code:1532

CHINA METAL PRODUCTS CO., LTD.

FINANCIAL STATEMENTS

with Independent Auditors’ Report For the Years Ended December 31, 2023 and 2022

Address: 4F, NO.85, SEC. 4, REN' AI RD. TAIPEI, TAIWAN, R.O.C. Telephone: 886-2-2711-2831

The independent auditors’ report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and financial statements, the Chinese version shall prevail.

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Financial Statements
(1)
Company history
(2)
Approval date and procedures of the financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of material accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Significant commitments and contingencies
(10) Losses Due to Major Disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Information on major shareholders
(14) Segment information
9. List of major account titles Page

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Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of material accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Significant commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Information on major shareholders (14) Segment information 9. List of major account titles	Page
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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 電話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網址 Web kpmg.com/tw

Independent Auditors’ Report

To the Board of Directors of China Metal Products Co., Ltd.:

Opinion

We have audited the financial statements of China Metal Products Co., Ltd.(“the Company”), which comprise the balance sheet as of December 31, 2023 and 2022, the statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of material accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the balance sheets of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years ended December 31, 2023 and 2022 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statements Audit and Attestation engagement of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Account of Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Based on our professional judgment, key audit matters pertain to the most important matters in the audit of financial statements for the year ended December 31, 2023 of the Company. Those matters have been addressed in our audit opinion on the said financial statements and during the formation of our audit opinion. However, we do not express an opinion on these matters individually. The key audit matters that, in our professional judgment, should be communicated are as follows:

Revenue recognition of the matal manufacturing segment

For the segment revenue recognition account policy, please refer to Note 4(q); for the details of the revenue recognition during the years, please refer to Note 6(v).

Description of key audit matter:

China Metal Products Co., Ltd.’s revenue from the sale of the steel products is recognized when the control of the goods has been transferred to the customer and there is no continuing management involvement and effective control with the goods. The revenue is recognized when the control of the goods has been transferred which is deemed by transaction terms in each sales contract stipulated by the customer and China Metal Products Co., Ltd.. The operating revenue from the sale of the steel products is easily affected by the law of supply and demand principal and other factors in the market. Therefore, the revenue recognition is considered as one of the key audit matters.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

3-1

Corresponding audit procedure:

Our main audit procedures for the above key audit matters include: understanding and evaluating the design, operation and implantation of the effectiveness of internal control on revenue recognition of China Metal Products Co., Ltd.; understanding the major types of revenue, contract terms and transaction terms to determine the appropriateness timing of revenue recognition, also sampling the major customers and reviewing the contracts and sales orders to evaluate the revenue recognition; sampling the transaction records of sales around the balance sheet date and obtaining the transaction documents to evaluate the appropriateness timing of revenue recognition; understanding if there is significant allowance for sales return and discount for the days before and after the reporting date.

2. Impairment assessment of investments accounted for using equity method

For the accounting policy of investments accounted for using equity method’s impairment assessment please refer to the Note 4(h) Investment in associates and Note 4(i) subsidiaries ; for the details of investments accounted for using equity method’s impairment assessment, please refer to Note 6(e) Investments accounted for using equity method.

Description of key audit matter:

The estimation of litigation contingent liabilities is based on the management's assessment of the result of litigation which is likely to be unfavorable to the Company. However, there are significant uncertainties in the litigation. Therefore, the litigation provision estimation is considered as one of the key audit matters.

Corresponding audit procedure:

Our main audit procedures for the above key audit matters include: interviewing the Company's management to understand the method of assessment; obtaining management's major litigation memorandum and its provision assessment documents, and reviewing the latest court verdict documents of the major litigation to assess the reasonableness of their estimates; obtaining auditors' legal confirmation letters from external lawyers to verify the progress of pending litigation; assessing whether the Company’ s pending litigation cases and contingent liabilities have been properly disclosed.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing China Metal Products Co., Ltd.’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate China Metal Products Co., Ltd. or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing China Metal Products Co., Ltd.'s financial reporting process.

3-2

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of China Metal Products Co., Ltd.’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on China Metal Products Co., Ltd.’ s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause China Metal Products Co., Ltd. to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within China Metal Products Co., Ltd. to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

3-3

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Tseng, Kuo-Yang and Chih, Shih-Chin.

KPMG

Taipei, Taiwan (Republic of China) March 14, 2024

Notes to Readers

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

The independent auditors’ audit report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and financial statements, the Chinese version shall prevail.

(English Translation of Financial Statements Originally Issued in Chinese) CHINA METAL PRODUCTS CO., LTD.

Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (Notes 6(a) and (y)) 1170 Notes and accounts receivable, net (Notes 6(c), (v) and (y)) 1180 Accounts receivable due from related parties, net (Notes 6(y) and 7) 1200 Other receivables (Note 6(y)) 1210 Other receivables due from related parties (Notes 6(y) and 7) 130X Inventories (Note 6(d)) 1410 Prepayments (Note 7) 1470 Other current assets 1476 Other current financial assets (Note 8) Total current assets Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Notes 6(b) and (y)) 1510 Total non-current financial assets at fair value through profit or loss (Notes 6(n) and (y)) 1550 Investments accounted for using equity method (Notes 6(e), (f) and 8) 1600 Property, plant and equipment (Notes 6(g), 8 and 9) 1755 Right-of-use assets (Notes 6(h) and 9) 1760 Investment property, net (Notes 6(i) and 8) 1780 Intangible assets 1840 Deferred tax assets (Note 6(s)) 1900 Other non-current assets (Notes 6(j), 7 and 9) 1980 Other non-current financial assets (Notes 6(k), 7 and 9) Total non-current assets Total assets	December 31, 2023 Amount % $ 434,510 2 200,772 1 14,971 - 26,090 - 2,672 - 87,371 - 23,388 - 79,305 - 59 - 869,138 3 142,751 1 156 - 16,737,559 63 725,728 3 1,411,936 5 2,892,174 11 17,885 - 132,487 - 3,065,317 11 685,457 3 25,811,450 97 $ 26,680,588 100	December 31, 2022 Amount % 2,031,113 8 248,461 1 33,894 - 27,364 - 13,146 - 146,390 1 31,316 - 78,460 - 382,144 1 2,992,288 11 149,363 1 - - 15,374,107 57 741,921 3 1,594,440 6 2,816,333 10 12,180 - 132,487 - 2,684,302 10 682,118 2 24,187,251 89 27,179,539 100 Liabilities and equity Current liabilities: 2100 Short-term borrowings (Notes 6(l), (y) and 8) 2130 Current contract liabilities (Note 6(v)) 2170 Notes and accounts payable (Notes 6(y) and 7) 2200 Other payables (Notes 6(y) and 7) 2230 Current income tax liabilities 2280 Current lease liabilities (Notes 6(o) and (y)) 2300 Other current liabilities 2310 Advance receipts 2322 Long-term borrowings, current portion (Note 6(m)) Total current liabilities Non-current liabilities: 2500 Non-current financial liabilities at fair value through profit or loss (Notes 6(n) and (y)) 2530 Bonds payable (Notes 6(n) and (y)) 2541 Long-term bank loans (Notes 6(m), (y) and 8) 2580 Non-current lease liabilities (Notes 6(o) and (y)) 2640 Non-current net defined benefit liabilities (Note 6(r)) 2570 Deferred tax liabilities (Note 6(s)) 2600 Other non-current liabilities (Note 6(p)) Total non-current liabilities Total liabilities Equity attributable to owners of parent (Note 6(t)): 3100 Ordinary share 3200 Capital surplus 3300 Retained earnings 3400 Other equity Total equity Total liabilities and equity	December 31, 2023	December 31, 2023		December 31, 2022
			Amount	%		Amount % 2,279,820 8 6,021 - 335,642 1 296,384 1 13,448 - 178,337 1 4,604 - 1,836 - 250,000 1 3,366,092 12 8,253 - 1,560,633 6 7,354,135 27 1,471,026 6 5,920 - 360,824 1 195,715 1 10,956,506 41 14,322,598 53 3,761,221 14 1,542,440 6 7,492,071 27 61,209 - 12,856,941 47 27,179,539 100

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese) CHINA METAL PRODUCTS CO., LTD.

Statements of Comprehensive Income

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

4000 Operating revenues (Notes 6(v) and 7) 5000 Operating costs (Notes 6(d) and 7) Gross profit from operations Operating expenses (Note 7): 6100 Selling expenses 6200 Administrative expenses 6450 Expected credit (losses) gains (Note 6(c)) Total operating expenses Net operating loss Non-operating income and expenses: 7100 Interest income (Notes 6(x) and 7) 7010 Other income (Note 6(x)) 7020 Other gains and losses (Note 6(x)) 7050 Finance costs (Note 6(x)) 7070 Share of profit of subsidiaries, associates and joint ventures accounted for using equity method (Note 6(e)) Total non-operating income and expenses 7900 Profit from continuing operations before tax 7950 Add: Tax income (Note 6(s)) 8000 Profit from continuing operations Profit 8300 Other comprehensive income: 8310 Items that may not be reclassified subsequently to profit or loss 8311 Gains on remeasurements of defined benefit plans (Note 6(r)) 8316 Unrealized losses from investments in equity instruments measured at fair value through other comprehensive income (Note 6(y)) 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method Total items that may not be reclassified subsequently to profit or loss 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation of foreign financial statements Total items that may be reclassified subsequently to profit or loss 8300 Other comprehensive income (after tax) 8500 Comprehensive income Earnings per share (Note 6(u)) 9750 Basic earnings per share 9850 Diluted earnings per share	2023 Amount % $ 1,243,369 100 (744,422) (60) 498,947 40 (38,331) (3) (686,198) (55) (68) - (724,597) (58) (225,650) (18) 16,989 1 132,740 11 10,578 1 (135,626) (11) 1,151,145 93 1,175,826 95 950,176 77 15,051 1 965,227 78 965,227 78 - - (3,112) - 498 - (2,614) - (170,285) (14) (170,285) (14) (172,899) (14) $ 792,328 64 $ 2.56 $ 2.20	2022 Amount % 1,450,791 100 (870,389) (60) 580,402 40 (35,394) (3) (629,627) (43) 338 - (664,683) (46) (84,281) (6) 16,568 1 89,125 6 37,717 3 (91,459) (6) 707,155 48 759,106 52 674,825 46 130,300 9 805,125 55 805,125 55 4,048 - (20,744) (1) 3,377 - (13,319) (1) 35,488 3 35,488 3 22,169 2 827,294 57 2.14 1.85

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese) CHINA METAL PRODUCTS CO., LTD.

Statements of Changes in Equity

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Share Capital	Capital Surplus		Retained Earnings	Retained Earnings	Retained Earnings
							Exchange Differences on Translation of Foreign Financial Statements
Ordinary Share		Legal Reserve	Special Reserve	Unappropriated Retained Earnings		Total Retained Earnings
	1,488,270	1,844,008	49,081		5,579,250	7,472,339
	- -	- -	- -		805,125 7,425	805,125 7,425
	-	-	-		812,550	812,550
	- - 5,608 - 48,562 -	120,840 - - - - -	- - - - - -
	1,542,440 - -	1,964,848 - -	49,081 - -
	-	-	-
	- - 57,933 -	81,335 - - -	- - - -
	1,600,373	2,046,183	49,081

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese) CHINA METAL PRODUCTS CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Net (gains) losses on financial assets or liabilities at fair value through profit or loss Interest expense Expected credit losses (gains) Interest income Dividend income Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Losses (gains) on disposal of property, plant and equipment Property, plant and equipment transferred to expenses Lease modification gains Defferred credits recognized as other income Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Notes and accounts receivable, net Accounts receivable due from related parties, net Other receivables Inventories Prepayments Other current assets Net defined benefit assets Total changes in operating assets Changes in operating liabilities: Notes and accounts payable (including related parties), net Other payables Contract liabilities Other current liabilities Advance receipts Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes refund Net cash flows generated from operating activities Cash flows from investing activities: Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Acquisition of investment properties Decrease in other financial assets Increase in other non-current assets Net cash flows used in investing activities Cash flows from financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term notes and bills payable Proceeds from issuing bonds Proceeds from long-term borrowings Repayments of long-term borrowings Increase in other non-current liabilities Cash dividends paid Payment of lease liabilities Net cash flows (used in) generated from financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year	2023 $ 950,176 287,105 4,897 (8,409) 135,626 68 (16,989) (14,609) (1,151,145) 2,292 447 (21) (56,484) (817,222) 47,621 18,923 11,748 58,826 7,942 (1,083) - 143,977 (15,492) 31,215 (2,368) (386) (1,515) 11,454 155,431 (661,791) 288,385 5,370 361,710 (166,805) 5,222 493,882 3,500 (620,000) (88,068) 443 (10,602) (75,841) 378,746 (381,015) (792,837) 3,990,000 (4,657,500) (753) - 8,509,800 (8,508,800) 738 (451,347) (179,786) (1,297,648) (1,596,603) 2,031,113 $ 434,510	2022 674,825 281,112 5,136 3,961 91,459 (338) (16,568) (16,423) (707,155) (85) 1,014 (59) - (357,946) 104,789 (3,696) (13,061) (42,174) 11,503 (19,114) 22,620 60,867 13,646 (24,984) (4,449) (1,501) (407) (17,695) 43,172 (314,774) 360,051 2,483 697,787 (118,489) 43,853 985,685 8,000 (404,930) (100,748) 220 (1,890) (171,523) 59,695 (719,459) (1,330,635) 5,080,000 (4,200,000) 50,006 1,644,717 7,375,000 (7,935,582) 1,726 (793,618) (175,778) 1,046,471 701,521 1,329,592 2,031,113

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese) CHINA METAL PRODUCTS CO., LTD.

Notes to the Financial Statements

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, unless otherwise specified)

(1) Company history

CHINA METAL PRODUCTS CO., LTD. (the “ Company”) was established on September 9, 1972, via Ministry of Economic Affairs’ authorization. The registered office is located at 4F, No. 85, Section 4, Ren’ ai Road, Da’ an District, Taipei. The major business activities of the Company are iron hardware manufacturing and casting, residents and commercial buildings' developing, leasing and selling, acquisition of the financial claims of financial institutions, and department store retailing.

(2) Approval date and procedures of the financial statements:

The financial statements were authorized for issue by the Board of Directors on March 14, 2024.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2023:

●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”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its financial statements:

●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
●Amendments to IAS 1 “Non-current Liabilities with Covenants”
●Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
●Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Company does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information”
●Amendments to IAS21 “Lack of Exchangeability”

(4) Summary of material accounting policies

The financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language financial statements, the Chinese version shall prevail.

The material accounting policies presented in the financial statements are summarized as follows. The accounting policies have been applied consistently to all periods presented in these financial statements, unless otherwise specified in Note 3.

(a) Statement of compliance

The financial statements have been prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(b) Basis of preparation
(i) Basis of measurement

The financial statements have been prepared on the historical cost basis, except for the following material items in the statement of financial position:

1) Financial assets at fair value through other comprehensive income are measured at fair value;
2) The defined benefit liabilities (assets) are recognized as the present value of the defined obligation less the fair value of the plan assets, which is limited as explained in Note 4(s).
(ii) Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the entity operates. The Company’s financial statements are presented in New Taiwan dollar, which is the Company’s functional currency. All financial information presented in New Taiwan dollar has been rounded to the nearest thousand.

(c) Foreign currencies
(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period (hereinafter referred to as the reporting date) are retranslated to the functional currency at the exchange rate at that date.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of the translation.

Exchange differences are generally recognized in profit or loss, except for the following differences which are recognized in other comprehensive income arising on the retranslation:

An investment in equity securities designated as at fair value through other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to New Taiwan dollar at exchange rates at the reporting date. The income and expenses of foreign operations are translated to the New Taiwan dollar at average rate. Exchange differences are recognized in other comprehensive income and presented in the foreign currency translation differences in equity.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planed nor likely to occur in the foreseeable future, exchange differences arising from such monetary items are considered to form part of a net investment in the foreign operation and are recognized in other comprehensive income.

(d) Classification of current and non-current assets and liabilities

An asset is classified as current under following criteria, and all other assets are classified as noncurrent. The entity shall classify an asset as current when:

(i) It is expected to be realized the asset, or intended to be sold or consumed, during the normal operating cycle ；
(ii) It is held primarily for the purpose of trading ；
(iii) It is expected to be realized within twelve months after the reporting period ； or
(iv) The asset is cash and cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under following criteria, and all other liabilities are classified as non-current. The entity shall classify a liability as current when:

(i) It is expected to be settled within the Company’s normal operating cycle ；
(ii) It is held primarily for the purpose of trading ；
(iii) The liability is due to be settled within twelve months after the reporting period ； or

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(iv) The Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits meet aforementioned definitions that are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes, and that are subject to an insignificant risk of changes in their fair value are recognized as cash and cash equivalents.

(f) Financial instruments

Account receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is an account receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. An account receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

Financial assets which are trade as regular purchases or sales are recognized and derecognized on a trade date basis.

On initial recognition, financial assets are classified as measured at: amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL).

The Company shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

These assets are subsequently measured at amortized cost, which is the initial recognition amount deduct the cumulative amortization using the effective interest method and adjusted for any loss allowance. Interest income, foreign exchange gains and losses, and impairment loss, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI )

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income derived from equity investments is recognized on the date that the Company’s right to receive payment is established, which in the case of quoted securities is normally the ex-dividend date.

3)
Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

4) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, financial assets measured at amortized costs, notes and accounts receivable, other receivable, guarantee deposit paid and other financial assets).

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivable and contract assets are always measured at an amount equal to lifetime ECL.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment as well as forwardlooking information.

The time deposits held by the Company was determined as low credit risk since the trading and performing parties are the financial institutions above the investment grade.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls, i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive. ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

Significant financial difficulty of the borrower or issuer;

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

A breach of contract such as a default;
The lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
It is probable that the borrower will enter bankruptcy or other financial reorganization; or
The disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of assets.

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

5) Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire, or when the Company transfers substantially all the risks and rewards of ownership, or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial assets.

When the Company enters into transactions whereby it transfers assets but retains either all or substantially all of the risks and rewards of the assets, the transferred assets are not derecognized from statement of balance sheet.

(ii) Financial liabilities and equity instruments
1) Classification of debt or equity instruments

Debt or equity instruments issued by the Company are classified as financial liabilities or equity instruments in accordance with the substance of the contractual agreement.

2) Equity instrument

Equity instruments refer to surplus equities of the assets after the deduction of all the debts for any contracts. Equity instruments issued is recognized as the amount of consideration received less the direct cost of issuing.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

3) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified under FVTPL if it is recognized as held-for-trading, derivative or designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

4) Derecognition of financial liabilities

A financial liability is derecognized when its contractual obligation has been discharged or cancelled or expired. When the terms of a financial liability are modified and the cash flows of the modified liability are substantially different, the Company derecognizes the original financial liability and recognized a new financial liability at fair value based on the modified terms.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

5) Offsetting of financial assets and liabilities

Financial assets and liabilities are presented on a net basis only when the Company has the legally enforceable rights to offset, and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

6) Financial guarantee contract

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder of a loss it incurs because a specified debtor fails to pay on due date in accordance with the original or modified terms of a debt instrument.

At initial recognition, a financial guarantee contracts not designated as financial liabilities at fair value through profit or loss by the Company is recognized at fair value, plus, any directly attributable transaction cost. Subsequent to initial recognition, they are measured at the higher of (a) the amount of the loss allowance determined in accordance with IFRS 9; and (b) the amount recognized initially less, where appropriate, cumulative amortization recognized in accordance with the revenue recognition policies set out below.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. The weighted-average costing method is adopted for inventory costing and the difference between standard cost and actual cost is allocated proportionately to finished goods and work in progress.

Net realizable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses at the end of the period.

(h) Investment in associates

Associates are those entities in which the Company has significant influence, but not control or join control over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill which is arising from the acquisition less any accumulated impairment losses.

The financial statements include the Company’s share of the profit or loss and other comprehensive income of equity accounted investees, after adjustments to align the accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual controlling power.

Gains and losses resulting from transactions between the Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

When the Company’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i)

Subsidiaries

The subsidiaries in which the Company holds controlling interest are accounted for under equity method in the non-consolidated financial statements. Under equity method, the net income, other comprehensive income and equity in the non-consolidated financial statement are the same as those attributable to the owners of parent in the consolidated financial statements.

The changes in ownership of the subsidiaries are recognized as equity transaction.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(j) Joint Arrangements

Joint arrangement is the arrangement of two or multiple parties with joint controls over a delegated entity. Joint arrangement includes joint operation and joint venture, its traits are as follows:

(i) The participants are bound by a contractual arrangement; and
(ii) The contractual arrangement gives two or more of the parties joint control of the arrangement.

IFRS 11"Joint Arrangements" defines joint control as the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities (activities that significantly affect the return of the arrangement) require the unanimous consent of the parties sharing control.

A joint venture is a joint arrangement whereby the Company has joint control of the arrangement (i.e. joint venturers) in which the Company has rights to the net assets of the arrangement , rather than rights to its assets and obligations for its liabilities. The Company recognizes its interest in a joint venture as an investment and accounts for that investment using the equity method in accordance with IAS 28 “ Investments in Associates and Joint Ventures” , unless the Company qualifies for exemption from that Standard. Please refer to Note 4(h) for the application of the equity method.

When assessing the classification of a joint arrangement, the Company considers the structure and legal form of the arrangement, the terms in the contractual arrangement, and other facts and circumstances. When the facts and circumstances change, the Company reevaluates whether the classification of the joint arrangement has changed.

(k) Investment property

Investment property is the property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

(l) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straightline basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

1)	Buildings	3~60 years
2)	Machinery	3~20 years
3)	Transportation equipment	3~8 years
4)	Office and other equipment	2~25 years

Depreciation methods, useful lives, and residual values are reviewed at least at each reporting date and adjusted if appropriate.

(iv) Reclassification to investment property

When changing the usage purpose of self-use properties, the self-use properties shall be reclassified to investment properties.

(m) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a leasee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

1) fixed payments, including in-substance fixed payments;
2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
3) amounts expected to be payable under a residual value guarantee; and
4) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

1) there is a change in future lease payments arising from the change in an index or rate; or
2) there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or
3) there is a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
4) there is a change of its assessment of lease period on whether it will exercise a extension or termination option; or
5) there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the balance sheet.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

If an arrangement contains lease and non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Company has elected not to recognize right-of-use assets and lease liabilities for shortterm leases that have a lease term of 12 months or less and leases of low-value assets, including partial offices, office facilities, dormitory and company cars. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

As a practical expedient, the Company elects not to assess whether eligible rent concessions that meets all the following conditions for lease modifications:

1) the rent concessions occurring as a direct consequence of the covid19 pandemic;
2) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
3) any reduction in lease payments affects only payments originally due on, or before, June 30, 2022; and
4) there is no substantive change to other terms and conditions of the lease.

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

(ii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

The lessor recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The lessor recognizes the interest income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor’ s net investment in the lease. The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as rental revenue.

(n) Intangible assets
(i) Recognition and measurement

Intangible assets that are acquired by the Company are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

1) Computer software 2~10 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(o) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’ s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(p) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and an outflow of economic benefits is possibly required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

(q) Revenue

(i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’ s main types of revenue are explained below.

1) Sale of goods

The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

2) Customer loyalty program

The Company operates a customer loyalty program to its retail customers. Retail customers obtain points for purchases made, which entitle them to discount on future purchases. The Company considers that the points provide a material right to customers that they would not receive without entering into a contract. Therefore, the promise to provide points to the customer is a separate performance obligation. The transaction price is allocated to the product and the points on a relative stand-alone selling price basis. Management estimates the stand-alone selling price per point on the basis of the discount granted when the points are redeemed and on the basis of the likelihood of redemption, based on past experience. The stand-alone selling price of the product sold is estimated on the basis of the retail price. The Company has recognized contract liability at the time of sale on the basis of the principle mentioned above. Revenue from the award points is recognized when the points are redeemed or when they expire.

3) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. For those contracts which are over one year, the effects of the transaction prices for the time value of money are not significant after the assessment.

(r) Contract costs

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 “Inventories”, IAS 16 “ Property, Plant and Equipment” or IAS 38 “Intangible Assets”), the Company recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

(i) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify;
(ii) the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and
(iii) the costs are expected to be recovered.

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations (or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(s) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(t) Income taxes

Income taxes comprise both current taxes and deferred taxes. Except for expenses that are related to business combinations, expenses recognized in equity or other comprehensive income directly, and other related expenses, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction (i) affects neither accounting nor taxable profits (losses) and (ii) does not give rise to equal taxable and deductible temporary differences.
(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Company has a legally enforceable right to set off currenttax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(u) Earnings per share

The Company discloses the basic and diluted earnings per share attributable to ordinary equity holders of the Company. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholder of the Company divided by weighted average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company, divided by weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares.

(v) Operating segments

The related information on the operating segments is disclosed in the consolidated financial statements.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is as follows:

(a) Judgment regarding acting as a principal or as an agent on commission

In respect of commissions, the Company concludes that the following indicators provide further evidence that it does not control the specified goods before they are transferred to the customer, and therefore it acts as an agent.

The Company does not obtained the ownership of the goods and not obligated to the sale of the goods.
The revenue is received by the Company, but the credit risk of the goods is undertaken by the supplier.
The Company cannot vary the selling prices set by the supplier.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows:

(a) The loss allowance of accounts receivable

The Company has estimated the loss allowance of trade receivable that is based on the risk of a default occurring and the rate of expected credit loss. The Company has considered historical experience, current economic conditions and forward-looking information at the reporting date to determine the assumptions to be used in calculating the impairments and the selected inputs. The information on impairment loss, please refer to Note 6(c).

(b) Inventory valuation

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Refer to Note 6(d) for further description of the valuation of inventories.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(c) Impairment of goodwill

The assessment of impairment of goodwill is based on the estimated growth rate, gross profit margin and the income under cash basis, which requires the Company’ s management to determine the valuation method, major assumption and to calculate the equity value. In addition, impairment of goodwill depends on the Company to make subjective judgments which involved highly estimation uncertainty. Please refer to the consolidated financial statements for the year ended December 31, 2023 for the impairment of goodwill.

(d) Recognition and measurement of provisions and contingent liabilities

Provision for unsettled litigation and claims is recognized when it is probable that it will result in an outflow of the Company’s resources and the amount can be reasonably estimated. Since the ultimate resolution of litigation and claims cannot be predicted with certainty, the final outcome or the actual cash outflow may be materially different from the estimated liability. Please refer to the consolidated financial statements for the year ended December 31, 2023 for further description of provisions and contingent liabilities.

(e) Measurement of defined benefit obligations

Accrued pension liabilities (assets) and resulting pension expenses under defined benefit pension plans are calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate, rate of employee turnover, future salary increase rate, etc. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability. Refer to Note 6(r) for further description of the actuarial assumptions and sensitivity analysis.

The Company’ s accounting policies and disclosures included financial and non-financial assets and liabilities measured at fair value. If there is market observable inputs, it will be considered as fair value.

The Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

Level 1: quoted prices (unadjusted) in active markets for identifiable assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the assets or liability that are not based on observable market data.

For any transfer within the fair value hierarchy, the impact of the transfer is recognized on the reporting date. Please refer to notes listed as below for assumptions used in measuring fair value.

(i) Note 6(y), Financial instruments

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash and cash equivalents
Cash on hand Cash in banks Time deposits Cash and cash equivalents	December 31, 2023 $ 1,380 387,065 46,065 $ 434,510	December 31, 2022
		1,340 1,118,353 911,420
		2,031,113

For the sensitivity analysis of financial assets, please refer to Note 6(y).

(b) Non-current financial assets at fair value through other comprehensive income

Equity investments at fair value through other comprehensive income Stocks unlisted on domestic markets—MEITA Industrial Co., Ltd. Stocks unlisted on domestic markets—GUANGYUAN Investment Co., Ltd. Stocks unlisted on domestic markets—DEVELOPMENT Venture Capital Co., Ltd. Total	December 31, 2023 $ 99,955 31,134 11,662 $ 142,751	December 31, 2022
		103,188 30,418 15,757 149,363

(i) The Company intends to hold the equity investments for long-term strategic purposes, rather than transaction purposes. Therefore, the investments are measured at FVOCI.

(ii) The Company had strategic investments in YUHUA Venture Capital Co., Ltd. and FUHUA Venture Capital Co., Ltd., whose liquidation registration procedures had been completed in 2023, resulting in the investment amounts, which had been remitted back to the Company, to be reclassified from FVOCI to other receivables, and the accumulated losses of $1,803 thousand to be reclassified from other comprehensive income to retained earings.
(iii) Please refer to Note 6(y) for the information on credit risk (including the impairment of debt instrument investments) and market risk.
(iv) As of December 31, 2023 and 2022, the financial assets were not pledged as collateral.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(c) Notes and accounts receivable

Notes receivable from operating activities Accounts receivable-measured as amortized cost Subtotal Less: Loss allowance Total	December 31, 2023 $ 16,027 184,814 200,841 (69) $ 200,772	December 31, 2022 22,419 226,553 248,972 (511) 248,461

The Company applies the simplified approach to provide for the loss allowance used for expected credit losses, which permit the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivable have been grouped based on shared credit risk characteristics and the days past due, as well as forward-looking information, including the information on macroeconomic and the relative industries information. The loss allowance provision is determined as follows:

December 31, 2023	December 31, 2023
Gross Carrying Amount Weighted Average Loss Rate $ 189,623 0% 5,473 0% 3,388 0% 2,256 0% 101 68.26% $ 200,841 December 31, 2022		Loss Allowance Provision
		- - - - 69
		69

Gross Carrying Amount $ 224,393 5,734 18,070 264 1 510 $ 248,972	Weighted Average Loss Rate 0% 0% 0% 0% 49.96% 100%	Loss Allowance Provision
		- - - - 1 510
		511

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

The movements in the allowance for notes and accounts receivable is as follows:

Balance on January 1 Impairment losses recognized (recovery) Amounts written off Balance on December 31	For the Years Ended December 31	For the Years Ended December 31
	2023 $ 511 68 (510) $ 69	2022
		849 (338 -
		511

The financial assets mentioned above were not pledged as collateral.

(d) Inventories

Raw materials Materials Work in process Semi-finished goods Finished goods Merchandise	December 31, 2023 $ 5,230 11,137 17,141 11,715 37,225 4,923 $ 87,371	December 31, 2022 7,243 10,113 50,094 36,210 35,181 7,549 146,390

For the years ended December 31, 2023 and 2022, the cost of goods sold and expenses were amounted to $744,422 thousand and $870,389 thousand, respectively. For the years ended December 31, 2023 and 2022, the reversal gain (loss for inventory obsolescence) from the increase (decrease) in inventories' net realizable value amounted to $496 thousand and $(15,413) thousand, respectively.

The inventories were not pledged as collateral, as of December 31, 2023 and 2022.

(e) Investments accounted for using equity method

The components of investments accounted for using the equity method at the reporting date is as follows:

Subsidiaries Associates Joint ventures	December 31, 2023 $ 16,410,703 (21,760) 348,616 $ 16,737,559	December 31, 2022 15,084,004 (21,760) 311,863 15,374,107

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(i) Subsidiaries

Please refer to the consolidated financial statement for the year ended December 31, 2023.

Sunflower Investment Co., Ltd., the subsidiary of the Company, had sought administrative remedies for the administrative penalties arose from enterprise income tax, value-added tax, and undistributed earning tax of the Daguangsan non-performing receivable case, the total amount of tax and penalties amounted to $564,452 thousand. As of the reporting date, the Company has paid $46,174 thousand and estimated the regarding litigation provision at $236,052 thousand. The administrative litigation was filed against Taipei High Administrative Court on December 24, 2013. In accordance with the Article 177 of the Administrative Regulation Section 1 and 2, Taipei High Administrative Court suspended the proceeding of the lawsuit on July 25, 2016. Considering the risk of losing the lawsuit in the future, the Company assessed the aforementioned possible losses based on the conservative principle and estimated the contingent liabilities.

(ii) Associates

The Company’s financial information for investments accounted for using the equity method that were individually insignificant is as follows:

that were individually insignificant is as follows:
Carry amount of individually insignificant associates' equity	December 31, 2023 $ (21,760)	December 31, 2022
		(21,760)

Net loss from continuing operations and other comprehensive income attributed to the Company were amounted to $0 thousand.

Due to the fact that the Company does not have the obligation of assuming the excess losses, it ceased the recognition of the losses from the investment of Amida Trustlink Assets Management Co., Ltd. For the years ended December 31, 2023 and 2022, the unrealized investment losses were amounted to $299 thousand and $265 thousand, respectively; and the accumulated unrealized investment losses amounted to $35,517 thousand and $35,218 thousand, respectively.

(iii) Joint ventures

The Company’s financial information for joint ventures accounted for using the equity method that are individually insignificant is as follows:

Carry amount of individually insignificant joint ventures' equity	December 31, 2023 $ 348,616	December 31, 2022
		311,863

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Attributable to the Company: Net loss from continuing operations Other comprehensive income Comprehensive income	For the Years Ended December 31 2023 2022 $ (15,958) (48,734) - - $ (15,958) (48,734)

(iv) Pledge to secure

For the information on the investments accounted for using equity, as of December 31, 2023 and 2022, please refer to Note 8.

(f) Changes in a parent's ownership interest in a subsidiary
(i) Acquisition of subsidiary

In 2022, the Company obtained Sunflower Investment additional equity $96 thousand, increasing the percentage ownership from 99.00% to 99.01%, respectively.

The information on the influence of subsidiaries’ equities variation to the Company’s equity is as follows:

Acquisition of non-controlling interests Payments to non-controlling interests Difference between consideration and carrying amount of subsidiaries acquired or disposed of	For the Year Ended December 31 2022 Sunflower Investment $ 331 (96) $ 235

(g) Property, plant and equipment

The cost and accumulated depreciation of the property, plant and equipment of the Company for the years ended December 31, 2023 and 2022 are as follows:

Cost: Balance on January 1, 2023 Additions Disposals Reclassification Balance on December 31, 2023		Land		Buildings	Machinery 842,127 5,797 (16,574) 32,866 864,216	Office Equipment 25,766 120 (5,227) - 20,659	Transportation Equipment 10,023 81 (2,022) - 8,082	Other Equipment 198,236 16,059 (60) 49,515 263,750		Construction in Progress	Total 1,522,019 88,068 (24,053) 4,971 1,591,005
				281,689 1,655 (170) 7,891 291,065						50,511 64,356 - (85,301) 29,566

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Buildings	Transportation Equipment 7,837 105 - 2,081	Construction in Progress	Total 1,432,257 100,748 (14,569) 3,583
279,358 1,981 - 350 281,689 136,227 10,910 (170) - 146,967 124,844 11,383 - - 136,227 144,098 154,514 145,462		29,643 81,354 - (60,486) 50,511 - - - - - - - - - - 29,566 29,643 50,511
	10,023		1,522,019
	8,765 456 (2,017) -		780,098 101,511 (21,318) 4,986
	7,204		865,277
	6,194 490 - 2,081		695,327 95,187 (14,434) 4,018
	8,765		780,098
	878		725,728
	1,643		736,930
	1,258		741,921

As of December 31, 2023 and 2022, please refer to Note 8 for the details of plant, property and equipment pledged as collateral for the Company’s long-term loan and financing guarantee.

(h) Right-of-use assets

The Company leases many assets including land, buildings, machinery and transportation equipment. Information about leases for which the Company as a lessee is presented below:

Cost: Balance on January 1, 2023 Additions Reduction for expiration Balance on December 31, 2023 Balance on January 1, 2022 Additions Reduction for expiration Balance on December 31, 2022 Accumulated depreciation: Balance on January 1, 2023 Depreciation Reduction for expiration Balance on December 31, 2023 Balance on January 1, 2022 Depreciation Reduction for expiration Balance on December 31, 2022 Carrying value:	Land $ 666,672 - - $ 666,672 $ 666,672 - - $ 666,672 $ 104,168 16,666 - $ 120,834 $ 87,501 16,667 - $ 104,168	Buildings 2,391,699 703 (1,159) 2,391,243 2,392,303 2,522 (3,126) 2,391,699 1,474,207 160,564 (1,159) 1,633,612 1,316,523 160,564 (2,880) 1,474,207	Machinery 6,789 - (4,985) 1,804 6,789 - - 6,789 5,631 527 (4,985) 1,173 4,273 1,358 - 5,631	Transportation Equipment 16,067 4,064 (3,833) 16,298 17,060 2,291 (3,284) 16,067 5,132 4,462 (2,036) 7,558 4,753 3,663 (3,284) 5,132	Office Equipment 1,153 - - 1,153 1,153 - - 1,153 499 231 - 730 269 230 - 499	Other Equipment 120,670 120 (64) 120,726 122,674 - (2,004) 120,670 18,973 3,144 (64) 22,053 17,467 3,443 (1,937) 18,973	Total 3,203,050 4,887 (10,041) 3,197,896 3,206,651 4,813 (8,414) 3,203,050 1,608,610 185,594 (8,244) 1,785,960 1,430,786 185,925 (8,101) 1,608,610

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Balance on December 31, 2023 Balance on January 1, 2022 Balance on December 31, 2022	Land $ 545,838 $ 579,171 $ 562,504	Buildings 757,631 1,075,780 917,492	Machinery 631 2,516 1,158	Transportation Equipment 8,740 12,307 10,935	Office Equipment 423 884 654	Other Equipment 98,673 105,207 101,697	Total 1,411,936
							1,775,865
							1,594,440

(i) Investment property

Cost or deemed cost: Balance on January 1, 2023 Additions Balance on December 31, 2023 Balance on January 1, 2022 Additions Balance on December 31, 2022 Carrying amounts: Balance on December 31, 2023 Balance on January 1, 2022 Balance on December 31, 2022 Fair value: Balance on December 31, 2023 Balance on January 1, 2022 Balance on December 31, 2022	Land
	$ 2,816,333 75,841 $ 2,892,174 $ 2,644,810 171,523 $ 2,816,333 $ 2,892,174 $ 2,644,810 $ 2,816,333 $ 3,301,148 $ 2,644,810 $ 3,301,148

The fair value of investment properties is based on recent transaction price of similar location and areas on the website of Department of Land Administration M.O.I. and the website of real estate trading. Under the valuation techniques for financial instruments measured at fair value, the inputs are categorized at level 3.

To optimize the use of assets of the Company by expanding its land for future development, the Company resolved to acquire 2 pieces of land located in Changchun Section of Taichung City on March 30, 2022. The total price of $171,065 thousand. It had been fully paid-up as of December 31, 2022.

As of December 31, 2023 and 2022, the details of investment properties pledged as collateral, please refer to Note 8.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(j) Other non-current assets

The details of the other non-current assets is as follows:

Construction in progress Land Other	December 31, 2023 $ 3,062,212 22 3,083 $ 3,065,317	December 31, 2022
		2,681,197 22 3,083
		2,684,302

(i) The construction in progress is the development of land and shopping mall of the Company, please refer to Note 9(a),(ii) for details.
(ii) The land held by the Company is located at Xihfeng Township Kengzikou. According to the laws and regulations, companies cannot be registered as landowner, due to the usage of the land is registered for farming. Therefore, the ownership of the land was passed to individuals and was registered as private personal property. For obtaining the right of land, the group held the land certificate and entered into an agreement with the registered owner, which specified that the Company retain all rights and obligations of the land and pledged the land as collateral for the Company.
(iii) For the years ended December 31, 2023 and 2022, the capitalized interest expence amounted to $32,828 thousand and $17,797 thousand, respectively. The interest capitalization rates are 2.38%~2.50% and 1.90%~2.38%, respectively.

(k) Other non-current financial assets

Refundable deposit Debt obligation receivable`－`The Splendor Hospitality International Co., Ltd. Debt obligation receivable`－`Chin Ling Steel Co., Ltd. `－`non-guarantee Less: Accumulated impairment`－`Debt obligation receivable- Chin Ling Steel Co., Ltd.	December 31, 2023 $ 110,457 575,000 - - $ 685,457	December 31, 2022 107,118 575,000 23,250 (23,250) 682,118

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(i) In June, 2006, the Company and Prince Housing and Development Co., Ltd. (Prince Housing and Development) entered into assignment of debt agreement with Amida Trustlink Assets which the Company and Prince Housing and Development each owned half of the obligation. The Company and Prince Housing and Development each injected 50% and obtained the major mortgages, collaterals and the appurtenant rights of Taichung Port Splendor Hospitality International Co., Ltd (Taichung Port Splendor). The Group and Prince Housing and Development agreed to pay Amida Trustlink Assets the residual debt in the agreement, the related costs and returns when the real right of the underlying is completed. The Company and Prince Housing and Development each injected 50% and cofounded The Splendor Hospitality International Co., Ltd.. In November 2006, The Splendor Hospitality International and Taichung Port Splendor entered into specific asset transfer agreement and obtained the specific assets of Taichung Port Splendor by assuming its debts. The Company’s right of receivables transferred from Taichung Port Splendor to The Splendor Hospitality International. In December 2006, the Company and Prince Housing and Development signed supplementary agreement with Amida Trustlink Assets which increased the selling price of all debt obligations and canceled the payment of the related cost and return. The verdinglichung obligatorischer rechte was assumed by the Company and Prince Housing and Development equally. The details of total debt obligation receivable and obligation cost after deducted the received amount in 2007 are as follows:

December 31, 2023

				December 31, 2023
Underlying	Obligation Cost		Obligation Principal	Valuation Assessment Collateral According to the assessment of Colliers International Real Estate Appraiser Joint Office, the valuation of mortgage is $8,453,706 thousand. After deducting the 1stsecurity, which was amounted to $3,960,000 thousand, the residual mortgage attributed to the Company was amounted to $2,246,853 thousand. The building of The Splendor Hospitality International (the 2ndsecurity)
The Splendor Hospitality International	$ 575,000		796,845

December 31, 2022

				December 31, 2022
Underlying	Obligation Cost		Obligation Principal	Valuation Assessment Collateral According to the assessment of Zhonglian Real Estate Appraiser Joint Office, the valuation of mortgage is $8,132,816 thousand. After deducting the 1stsecurity, which was amounted to $3,960,000 thousand, the residual mortgage attributed to the Company was amounted to $2,086,408 thousand. The building of The Splendor Hospitality International (the 2ndsecurity)
The Splendor Hospitality International	$ 575,000		796,845

(ii) As of December 31, 2022, the costs and principal of debt obligation from Chin Ling Steel were $23,250 thousand and $118,561 thousand, respectively. Chin Ling Steel had been liquidated, wherein the accounts receivable has been written off in 2023.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(l) Short-term borrowings

Unsecured bank borrowings Notes and bills payable Total Unused credit limit Range of interest rates	December 31, 2023 $ 1,162,500 449,067 $ 1,611,567 $ 780,000 1.75%~2.2%	December 31, 2022
		1,830,000 449,820
		2,279,820
		250,000
		1.64%~2.50%

Please refer to Note 8 for details of the related assets pledged as collateral.

(m) Long-term borrowings

The details and terms of the long-term borrowings are as follows:

Unsecured bank borrowings Secured bank borrowings Less: Current portion Unamortized long-term borrowings costs Total Unused credit limit Unsecured bank borrowings Secured bank borrowings Less: Current portion Unamortized long-term borrowings costs Total Unused credit limit		December 31, 2023 Range of Interest Rates Term Amount 1.75%~2.01% 2025 $ 2,350,000 1.88%~2.55% 2024~2026 5,255,164 (1,884,800) (14) $ 5,720,350 $ 871,269 December 31, 2022 Range of Interest Rates Term Amount 1.40%~3.00% 2023~2025 $ 2,600,000 1.68%~2.43% 2024~2025 5,004,164 (250,000) (29) $ 7,354,135 $ 570,007
	Currency	Range of Interest Rates
	NTD NTD
	Currency	Range of Interest Rates
	NTD NTD	1.40%~3.00% 1.68%~2.43%

(i) Borrowing covenants

The Company entered into a borrowing contract in a total credit of $3,150,000 thousand with financial institutions on April 23, 2019. According to the contract, during the borrowing repayment periods the Company should file annual and semi-annual consolidated financial statements which were audited and reviewed by CPA and must comply with certain financial covenants, such as the current ratio shall be greater than or equal to 100%, the financial debt ratio shall be less than or equal to 180%, the interest coverage ratio shall be greater than or equal to 5 times, and the tangible net value shall be greater than or equal to $14,000,000 thousand. The compliance with the aforementioned covenants will be examined semi-annually. As of December 31, 2023, the Company was in compliance with the above borrowing covenants.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(ii) Please refer to Note 8 for details of the related assets pledged as collateral.

(n) Bonds payable

The details of the bonds payable is as follows:

Unsecured convertible bonds Unamortized premium on bonds payable Embedded derivative-call option (which is listed under "non- current financial assets at FVTPL") Embedded derivative-put option (which is listed under "non- current financial liabilities at FVTPL") Equity component-convertible option (which is listed under "capital surplus-stock option") Embedded derivative-losses on remeasurements through fair value (which is listed under "other gains and losses") Interest expense	December 31, 2023 December 31, 2022 $ 1,417,400 1,500,000 28,363 60,633 $ 1,445,763 1,560,633 $ 156 - $ - 8,253 $ 45,888 48,562 For the Years Ended December 31 2023 2022 $ 8,409 (3,961) $ (30,294) (31,229)
	2023 $ 8,409 $ (30,294)

Unsecured convertible bonds

Unamortized premium on bonds payable

Embedded derivative-call option (which is listed under "non-
current financial assets at FVTPL")

Embedded derivative-put option (which is listed under "non-
current financial liabilities at FVTPL")

Equity component-convertible option (which is listed under
"capital surplus-stock option")

Embedded derivative-losses on remeasurements through fair
value (which is listed under "other gains and losses")

Interest expense

December 31,
2023
December 31,
2022
$ 1,417,400
1,500,000
28,363
60,633
$
1,445,763
1,560,633
$
156
-
$
-
8,253
$
45,888
48,562
For the Years Ended December 31
2023
2022
$
8,409
(3,961)
$
(30,294)
(31,229)

2023
$
8,409
$
(30,294)

On January 24,2022, the Company issued the fourth domestic unsecured convertible corporate bonds amounting to $1.5 billion with the following conditions:

(i) Coupon rate: 0%
(ii) Issuance period: Three years (maturing on January 24,2025)
(iii) Repayment: Unless the bonds had been redeemed before maturity, repurchased and converted, the bonds will be redeemed by the Company upon maturity at par value.
(iv) Redemption: The Company will redeem the bonds from its creditors under the following circumstances:
1) The Company would repurchase the bond at par value if the close price of the Company’ s ordinary share listed on the Taiwan Stock Exchange exceeds or equals 30% of the conversion price for 30 consecutive days from the day after the bonds have been issued for three months to 40 days before maturity.
2) The Company would repurchase the bond at par value if the outstanding balance of bonds is less than 10% of the original issuance value from the day after the bonds have been issued for three months to 40 days before maturity.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(v) Repurchase:

The holders can require the Company to repurchase the bonds at 100.5% of the par value from the day after the bonds have been issued for two years.

(vi) Conversion:

1) The holders can convert the bonds into ordinary shares according to the conversion method from the day after the bonds have been issued for three months to the expiry.
2) The conversion price is $34.2 per share, which is the average close price on the first day, as well as the first three and five operating days, before the base date of the Company’s ordinary share listed on the Taiwan Stock Exchange, which was on January 4, 2022, multiply by 104%. To cooperate with the ex-dividend work in 2023, the conversion price had been adjusted from $32.0 per share in 2022 to $31.0 per share on July 23, 2023 (exdividends date).
(vii) For the year ended December 31, 2023, the holders had converted their bonds into 3,125 and 2,661,267 ordinary shares of the Company, with the face value of $100 thousand and $82,500 thousand, and the conversion prices of $32.0 and $31.0 per share, respectively. Howerver, the relevant statutory registration procedures of 1,238,700 ordinary shares have yet to be completed as the date of report.

(o) Lease liabilities

The details of the lease liabilities is as follows:

The details of the lease liabilities is as follows:
Current Non-current For the maturing analysis, please refer to Note 6 (y).	December 31, 2023 $ 187,589 $ 1,285,057	December 31, 2022
		178,337
		1,471,026

The amounts recognized in profit or loss is as follows:

Interest on lease liabilities Expenses relating to leases short-term assets	For the Years Ended December 31	For the Years Ended December 31
	2023 $ 19,741 $ 13,383	2022
		21,901
		12,360

The amounts recognized in the statement of cash flows is as follows:

Total cash outflow for leases	For the Years Ended December 31	For the Years Ended December 31
	2023 $ 212,910	2022
		210,039

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(i) Real estate leases

The Company leases land and buildings for its offices, retail stores and future project development. The leases of offices, typically run for a period of 2 years, retail stores for a period of 15 years, and the land use rights leased for future project development for 40 to 50 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Some leases provide for additional rent payments that are based on changes in local price indices, or sales that the Company makes at the leased store in the period. Some also require the Company to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

Some leases of equipment contain extension or cancellation options exercisable by the Company up to one year before the end of the non-cancellable contract period. These leases are negotiated and monitored by local management, and accordingly, contain a wide range of different terms and conditions. The extension options held are exercisable only by the Company and not by the lessors. In which leasee is not reasonably certain to use an optional extended lease term, payments associated with the optional period are not included within lease liabilities.

(ii) Other leases

The Company leases equipment and transportation, with lease terms of 2 to 6 years. In some cases, the Company has options to purchase the assets at the end of the contract term; in other cases, it guarantees the residual value of the leased assets at the end of the contract term.

The Company also leases equipment and machinery, dormitory and company cars with contract terms of one year. These leases are short-term or low-value items which the Company has elected not to recognize right-of-use assets and lease liabilities.

(p) Provisions

Balance on January 1, 2023 Provision Unwinding of discount Balance on December 31, 2023 Balance on January 1, 2022 Provision Unwinding of discount Balance on December 31, 2022	Financial Guarantee Contracts $ 9,112 52,711 (11,620) $ 50,203 $ 21,289 1,908 (14,085) $ 9,112

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Financial guarantee contract is the endorsement guarantee of credit limit borrowing from the financial institutions which the Company assisted the joint venture to obtain. According to IFRS 39 “ Financial Instruments: Recognition and Measurement” , the financial guarantee contracts are measured at fair value.

(q) Operating leases

The Company leases out investment properties under operating lease which was classified based on not transferring substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset to the lessee. Please refer to Note 6(i) for the regarding information on investment properties.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

Less than one year One to two years Two to three years Total undiscounted lease payments	December 31, 2023 $ 12,541 12,045 - $ 24,586	December 31, 2022
		12,600 12,541 12,045
		37,186

For the years ended December 31, 2023 and 2022, rental revenues from investment properties amounted to $12,536 thousand and $12,493 thousand, respectively. The equipment and maintenance costs arising from the investment properties (recognized under "operating costs") are $0 thousand.

(r) Employee benefits

(i) Defined benefit plans

The reconciliation of fair value of defined benefit plans and plan assets are as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability	December 31, 2023 $ 5,920 - $ 5,920	December 31, 2022 5,920 - 5,920

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pension benefits for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for six months prior to retirement.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

1) Composition of plan assets

The Company sets aside pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. Under these regulations, the minimum earnings from these pension funds shall not be less than the earnings from two-year time deposits with the interest rates offered by local banks.

In 2022, according to the Labor Standards Law and the Labor Pension Regulations, the company has settled the old seniority with the laborers. The settlement amount is withdrawn from the special account, and the balance has been returned to the Company.

2) Movements in present value of the defined benefit obligations

The movements in the present value of the defined benefit obligations for the years ended December 31, 2023 and 2022 are as follows:

Defined benefit obligations on January 1 Current service costs and interest Remeasurements of the net defined benefit liability (asset) `－`Return on plan assets (not including current interest cost) Prior service cost and gain or loss from the settlement Defined benefit obligation on December 31	For the Years Ended December 31 2023 2022 $ 5,920 50,848 - 523 - 717 - (46,168) $ 5,920 5,920
	2023 $ 5,920 - - - $ 5,920

3) Movements of defined benefit plan assets

The movements in the fair value of the defined benefit plan assets for the years ended December 31, 2023 and 2022 are as follows:

Fair value of plan assets on January 1 Interest revenue Remeasurements of the net defined benefit liability (asset) `－`Return on plan assets (not including current interest cost) Contributed amount Benefits paid by the plan Cash returned from the pension fund Fair value of plan assets on December 31	For the Years Ended December 31 2023 2022 $ - 63,499 - 393 - 4,765 - 605 - (45,863) - (23,399) $ - -
	2023 $ - - - - - - $ -

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

4) Changes in the effect of the asset ceilings: None.
5) Expenses recognized in profit and loss

The Company’ s pension expenses recognized in profit or loss for the years ended December 31, 2023 and 2022 are as follows:

Current service cost Net interest on net defined benefit asset Prior service cost and gain or loss from the settlement	For the Years Ended December 31 2023 2022 $ - 216 - (86) - (305) $ - (175)
	2023 $ - - - $ -

6) Remeasurement of net defined benefit liability (asset) recognized in other comprehensive income

The Company’s net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2023 and 2022, are as follows:

Cumulative amount on January 1 Recognized during the year Cumulative amount on December 31	For the Year Ended December 31 2022 $ 25,760 (4,048) $ 21,712

(ii) Defined contribution plans

The Company contributes an amount at the rate of 6% of the employees’ monthly wages to the Labor Pension personal account with the Bureau of the Labor Insurance and Council of Labor Affairs in R.O.C. in accordance with the provisions of the Labor Pension Act. The Company’s contributions to the Bureau of Labor Insurance and Social Security Bureau for the employees’ pension benefits require no further payment of additional legal or constructive obligations.

The cost of the pension contributions to the Bureau of Labor Insurance for the years ended December 31, 2023 and 2022 amounted to $8,801 thousand and $8,153 thousand, respectively.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(s) Income taxes

(i) The income taxes benefit for the years ended December 31, 2023 and 2022 are as follows:

Current income taxes benefit Current period incurred Surtax on undistributed earnings Adjustment for prior periods Deferred benefit gains Losses on foreign exchange Gains from overseas investment Gains from sales leaseback Tax losses Income tax benefit	For the Years Ended December 31 2023 2022 $ - - 14,309 14,697 (20,792) (50,992) (6,483) (36,295) 262 381 4,254 41,979 (13,084) (13,084) - (123,281) (8,568) (94,005) $ (15,051) (130,300)
	2023 $ - 14,309 (20,792) (6,483) 262 4,254 (13,084) - (8,568) $ (15,051)

Income tax on pre-tax financial income was reconciled with income tax benefit for the years ended December 31, 2023 and 2022 are as follows:

Profit before income tax Income tax expense at domestic statutory tax rate Investment gains accounted for using equity method Domestic investment incomes under Article 42 of Income Tax Act Change on unrecognized temporary differences Recognition of previously unrecognized tax losses 5% surtax on undistributed earnings Prior overestimate/underestimate income tax Use tax losses Others Income tax benefit	For the Years Ended December 31 2023 2022 $ 950,176 674,825 190,035 134,965 (195,223) (88,847) (2,922) (3,285) 6,327 (11,956) - (123,281) 14,309 14,697 (20,792) (50,992) - (35,732) (6,785) 34,131 $ (15,051) (130,300)
	2023 $ 950,176 190,035 (195,223) (2,922) 6,327 - 14,309 (20,792) - (6,785) $ (15,051)

Profit before income tax
Income tax expense at domestic statutory tax rate
Investment gains accounted for using equity method
Domestic investment incomes under Article 42 of Income
Tax Act
Change on unrecognized temporary differences
Recognition of previously unrecognized tax losses
5% surtax on undistributed earnings
Prior overestimate/underestimate income tax
Use tax losses
Others
Income tax benefit

For the Years Ended December 31
2023
2022
$ 950,176
674,825
190,035
134,965
(195,223)
(88,847)
(2,922)
(3,285)
6,327
(11,956)
-
(123,281)
14,309
14,697
(20,792)
(50,992)
-
(35,732)
(6,785)
34,131
$
(15,051)
(130,300)

2023
$ 950,176
190,035
(195,223)
(2,922)
6,327
-
14,309
(20,792)
-
(6,785)
$
(15,051)

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(ii) Deferred tax assets and liabilities

1) Unrecognized deferred tax assets

The unrecognized deferred tax assets are as follows:

Tax losses Deductible temporary differences	December 31, 2023 $ 90,566 5,003 $ 95,569	December 31, 2022
		84,656 4,587
		89,243

2) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2023 and 2022 are as follows:

Deferred tax assets:

Gain on Non- performing Loan Balance on January 1, 2023 $ 9,206 Balance on December 31, 2023 $ 9,206 Balance on January 1, 2022 $ 9,206 Credit on income statement - Balance on December 31, 2022 $ 9,206	Tax losses 123,281 123,281 - 123,281 123,281	Total
		132,487
		132,487
		9,206 123,281
		132,487

The ROC Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of years for local tax reporting purposes.

Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can utilize as temporary difference.

As of December 31, 2023, the information of the Company's unused tax losses for which no deferred tax assets were recognized are as follows:

Year of loss 2021	Unused tax loss Expiry date $ 452,832 2031

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Deferred tax liabilities:

Balance on January 1, 2023 Debit (credit) on income statement Balance on December 31, 2023 Balance on January 1, 2022 Debit (credit) on income statement Balance on December 31, 2022	Land Value Increment $ 28,979 - $ 28,979 $ 28,979 - $ 28,979	Foreign Exchange Gains (Losses) (262) 262 - (643) 381 (262)	Gains from Overseas Investment 256,871 4,254 261,125 214,892 41,979 256,871	Gains from Sale Leaseback 75,236 (13,084) 62,152 88,320 (13,084) 75,236	Total 360,824 (8,568)
					352,256
					331,548 29,276
					360,824

3) The income tax returns of the Company through 2021 had been assessed and approved by the Tax Authority.

(t) Share capital and other interests

(i) Ordinary shares

As of December 31, 2023 and 2022, the authorized capital of the Company are 5,000,000 thousand shares, with par value of $10 per share. The outstanding shares were amounted to $3,787,865 thousand and $3,761,221 thousand, respectively and the capital that arose from the shares had all been retrieved. However, the relevant statutory registration procedures of 1,238,700 ordinary shares have yet to be completed as the date of report.

(ii) Capital surplus

The components of the capital surplus are as follows:

From issuance of share capital Employee stock option of subsidiaries Stock option of convertible bonds From conversion of convertible bonds Difference between consideration and carrying amount of subsidiaries acquired or disposed of	December 31, 2023 $ 671,879 33,352 45,888 843,035 6,219 $ 1,600,373	December 31, 2022
		611,272 33,352 48,562 843,035 6,219
		1,542,440

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(iii) Retained earnings

The Company’s Articles of Incorporation require that after-tax earnings shall first be offset against any deficit, and 10% of the balance shall be set aside as legal reserve. The appropriation for legal reserve is discontinued when the balance of the legal reserve equals the total authorized capital. Aside from the aforesaid legal reserve, the Company may, under its Articles of Incorporation or as required by the government, appropriate for special reserve. The remaining balance of the earnings, if any, may be appropriated according to the distribution plan proposed by the Board of Directors and submitted to the shareholders’ meeting for approval. If all or part of the aforementioned employees’ compensation is distributed in cash, the resolution will be approved by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, and the distribution shall be submitted to the shareholders’ meeting.

The Company is in the growth stage of business cycle and the annual earnings and future cash flow is maintained stable. Considering the Company’ s significant investment plan for the future, the Company applied “ Residual dividend policy” for long-term operating plan and funding needs. The dividend distribution of cash and stock is correlated with annual earning. The Company’s stock dividends cannot be higher than 70% of the total dividend.

1) Legal reserve

When a company incurs no loss for the year, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Special reserve

The Company chose to apply the exemption under IFRS 1 at its initial adoption of IFRSs. Any unrealized revaluation surplus, accumulated translation adjustment, and increasing amount incurred from adopting the fair value as cost for the assets classified as investment property at the transition date, are classified to retained earnings at the amount of $49,081 thousand. The Company shall allocate the same amount in special reserve in accordance with the requirements issued by the Financial Supervisory Commission. When there is any subsequent use, disposal, or reclassification of the relevant assets, the Company may reverse and proportionately appropriate the earnings distribution originally allocated to special reserve. The amount of special reserve as of December 31, 2023 and 2022 were $49,081 thousand.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

In accordance with the requirements issued by the FSC, a portion of earnings shall be allocated as special reserve during earnings distribution. If the Company has already reclassified a portion of earnings to special reserve under the preceding subparagraph, it shall make supplemental allocation of special reserve for any difference between the amount it has already allocated and the amount of the current-period total net reduction of other shareholders’ equity. An equivalent amount of special reserve shall be allocated from the after-tax net profit in the period, plus items other than after-tax net profit in the period, that are included in the undistributed current-period earnings and the undistributed prior-period earnings. When the Company distributes its 2021 earnings in 2022, a portion of its current-period earnings and undistributed prior-period earnings shall be reclassified to special earnings reserve. When the Company distributes its 2022 earnings in 2023, the after-tax net profit in the period, plus items other than the after-tax net profit in the period, that are included in the undistributed current-period earnings and undistributed prior-period earnings, shall be reclassified to special earnings reserve. A portion of undistributed prior-period earnings shall be reclassified to special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to the net reduction of other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

3) Earnings distribution

The amount of cash dividends of appropriations of the Company’ s 2022 and 2021 earnings was based on the resolutions decided during the meetings of the Board of Directors held on March 16, 2023 and March 30, 2022, respectively. The appropriations of other earnings for 2022 and 2021 had been approved in the shareholders' meeting on June 15, 2023 and June 24, 2022 respectively. These earnings are appropriated as follows:

follows:
Common stock dividends per share Cash	For the Years Ended December 31
	2022 Allotment (NTD) Amount $ 1.20 451,347	2021
	Allotment (NTD) $ 1.20	Allotment (NTD) 2.11	Amount
			793,618

The amount of cash dividends of appropriations of the Company's 2023 earnings was based on the resolution decided during the meetings of the Board of Directors held on March 14, 2024.

Common stock dividends per share Cash	For the Year Ended December 31	For the Year Ended December 31
	2023
	Allotment (NTD) $ 1.51	Amount
		571,968

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(iv) Other equity (net of tax)

Balance on January 1, 2023 Exchange differences on foreign operations Unrealized losses on financial assets measured at FVOCI Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance on December 31, 2023 Balance on January 1, 2022 Exchange differences on foreign operations Unrealized losses on financial assets measured at FVOCI Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance on December 31, 2022	Exchange Differences on Translation of Foreign Financial Statements $ 10,196 (170,285) - - $ (160,089) $ (25,292) 35,488 - - $ 10,196	Unrealized Gains (Losses) from Financial Assets Measured at FVOCI 51,013 - (3,112) 1,803 49,704 78,077 - (20,744) (6,320) 51,013	Total 61,209 (170,285) (3,112) 1,803 (110,385) 52,785 35,488 (20,744) (6,320) 61,209

(u) Earnings per share

The Company’s earnings per share are calculated as follows:

Basic earnings per share Profit attributable to owners of the parent Weighted average number of ordinary shares Basic earnings per share Diluted earnings per share Profit from continuing operation attributable to the Company Convertible bonds Profit attributable to owners of the parent (after the adjustment of diluted ordinary shares) Weighted average number of ordinary shares Effect of potential diluted ordinary shares Employee stock option Convertible bonds Weighted average number of ordinary shares (after the adjustment of diluted ordinary shares) Diluted earnings per share	For the Years Ended December 31 2023 2022 $ 965,227 805,125 376,666 376,122 $ 2.56 2.14 $ 965,227 805,125 (32,644) (21,022) $ 932,583 784,103 376,666 376,122 788 1,019 45,723 46,490 423,177 423,631 $ 2.20 1.85
	2023 $ 965,227 376,666 $ 2.56 $ 965,227 (32,644) $ 932,583 376,666 788 45,723 423,177 $ 2.20

Basic earnings per share
Profit attributable to owners of the parent
Weighted average number of ordinary shares
Basic earnings per share
Diluted earnings per share
Profit from continuing operation attributable to the Company
Convertible bonds
Profit attributable to owners of the parent (after the
adjustment of diluted ordinary shares)
Weighted average number of ordinary shares
Effect of potential diluted ordinary shares
Employee stock option
Convertible bonds
Weighted average number of ordinary shares (after the
adjustment of diluted ordinary shares)
Diluted earnings per share

For the Years Ended December 31
2023
2022
$
965,227
805,125
376,666
376,122
$
2.56
2.14
$ 965,227
805,125
(32,644)
(21,022)
$
932,583
784,103
376,666
376,122
788
1,019
45,723
46,490
423,177
423,631
$
2.20
1.85

2023
$
965,227
376,666
$
2.56
$ 965,227
(32,644)
$
932,583
376,666
788
45,723
423,177
$
2.20

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(v) Revenue from contracts with customers

(i) Disaggregation of revenue

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2023
	2022	Total 926,826 77,699 271,952 32,766 9,446 99,384 1,677 31,041 1,450,791
Metal Manufacturing Segment $ 527,094 77,699 271,952 32,766 9,446 99,384 1,677 31,041 $ 1,051,059	Lifestyle Hospitality Segment 399,732 - - - - - - - 399,732

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Major product/service lines: Iron casting hardware Construction Other	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022	Total 1,044,125 330,943 75,723 1,450,791
	Metal Manufacturing Segment $ 1,044,125 - 6,934 $ 1,051,059	Lifestyle Hospitality Segment - 330,943 68,789 399,732

(ii) Contract balances

Notes and accounts receivable Less: Loss allowance Total Contract assets Contract liabilities –Advanced receipts	December 31, 2023 $ 200,841 (69) $ 200,772 $ - $ 3,653	December 31, 2022 248,972 (511) 248,461 - 6,021	January 1, 2022 353,760 (849) 352,911 -
			10,470

For details of accounts receivable and allowance for impairment, please refer to Note 6(c).

The amount of revenue recognized for the years ended December 31, 2023 and 2022 that were included in the contract liabilities balance at the beginning of the period were $3,058 thousand and $5,268 thousand, respectively.

The major change in the balance of contract assets and contract liabilities is the difference between the time frame in the performance obligation to be satisfied by transferring ownership to the customer and the payment to be received.

(w) Employees' compensation and remuneration of directors

Based on the amended Company's Articles of Incorporation, employees’ compensation is appropriated at the rate of at least 2.5% and remuneration of directors is appropriated no more than 2.5% of profit before tax, respectively. Prior years’ accumulated deficit is first offset before any appropriation of profit, then calculate the employees’ compensation and remuneration of directors by the appropriate ratio stipulated in the bylaws. The employees to whom the Company distributes employees’ compensation, or issued new restricted employee shares, employee stock option certificates, preemptive right of new shares, and transfer of shares include the employees of subsidiaries which are qualified with the requirements stipulated by the Board of Directors.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

For the years ended December 31, 2023 and 2022, appropriated employees’ compensation by $28,094 thousand and $19,953 thousand, respectively, and appropriated remuneration of directors by $25,084 thousand and $17,815 thousand, respectively, which were estimated on the basis of the Company’ s net profit before tax, excluding employees’ compensation and the remuneration of directors of each period, then multiplied by the percentage of remuneration of employees and directors as specified in the Company's Articles of Incorporation. Such amounts were recognized as operating cost or operating expense for the years ended December 31, 2023 and 2022. The number of shares to be distributed were calculated based on the closing price of the Company’ s ordinary shares, one day prior to Board of Directors meeting. Management is expecting that the differences, if any, between the actual distributed amounts and estimated amounts will be treated as changes in accounting estimates and charged to profit or loss.

There was no difference between employees' compensation and remuneration of directors approved by the Board of Directors meeting and the estimated amount for the year of 2022.

Information on the employees' compensation and remuneration of directors approved by the Board of Directors meeting is available on the Market Observation Post System website of the Taiwan Stock Exchange.

(x) Non-operating income and expenses

(i) Interest income

The information on interest income is listed as follows:

Interest income from bank deposits Interest income from financial guarantee contracts Interest income from loans to related parties Others Total interest income	For the Years ended December 31	For the Years ended December 31
	2023 $ 3,729 11,620 - 1,640 $ 16,989	2022
		1,704 14,085 2 777
		16,568

(ii) Other income

The information on other income is listed as follows:

Dividend income Rental revenue Others Total other income	For the Years Ended December 31 2023 2022 $ 14,609 16,423 14,975 14,291 103,156 58,411 $ 132,740 89,125	For the Years Ended December 31 2023 2022 $ 14,609 16,423 14,975 14,291 103,156 58,411 $ 132,740 89,125
		2022 16,423 14,291 58,411
		89,125

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(iii) Other gains and losses

Gains (losses) on Financial assets at FVTPL (Losses) gains on disposals of property, plant and equipment Foreign exchange gains Lease modification gains Net amount of other gains and losses	For the Years Ended December 31 2023 2022 $ 8,409 (3,961) (2,292) 85 4,440 41,534 21 59 $ 10,578 37,717
	2023 $ 8,409 (2,292) 4,440 21 $ 10,578

(iv) Finance costs

Borrowing interest expense Bonds interest expense Capitalized interest expense Lease liability interest expense Bank borrowing costs	For the Years Ended December 31 2023 2022 $ 177,771 116,189 (30,294) (31,229) (32,828) (17,797) 19,741 21,901 1,236 2,395 $ 135,626 91,459
	2023 $ 177,771 (30,294) (32,828) 19,741 1,236 $ 135,626

(y) Financial instruments

(i) Credit risk
1) Credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

Since the Company had a large number of unrelated customers, the concentration of the credit risk is limited.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments, but not the impact of netting agreements.

Contractual Cash Flow December 31, 2023 Non-derivative financial liabilities Bank borrowings $ 9,523,693 Bonds payable 1,417,400 Lease liabilities 1,657,498 Notes and account payables (including related parties) 320,150 Other payables (including related parties) 500,845 $ 13,419,586 December 31, 2022 Non-derivative financial liabilities Bank borrowings $ 10,204,661 Bonds payable 1,500,000 Lease liabilities 1,853,865 Notes and accounts payables (including related parties) 335,642 Other payables (including related parties) 296,384 $ 14,190,552	Within 1 year 3,602,872 - 204,993 320,150 500,845 4,628,860 2,707,948 - 198,040 335,642 296,384 3,538,014	Within 1-2 years 3,055,119 1,417,400 203,487 - - 4,676,006 4,814,641 - 204,156 - - 5,018,797	Within 2-5 years 2,865,702 - 554,780 - - 3,420,482 2,682,072 1,500,000 603,206 - - 4,785,278	Over 5 Years
				- - 694,238 - -
				694,238
				- - 848,463 - -
				848,463

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Currency risk

1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk are as follows:

December 31, 2023 Foreign Currency Exchange Rate NTD $ 3,015 30.71 92,579 476 33.98 16,187 43,805 0.2172 9,514 9,003 3.93 35,382 36 30.71 1,117 10 33.98 327 71 4.33 310	December 31, 2023 Foreign Currency Exchange Rate NTD $ 3,015 30.71 92,579 476 33.98 16,187 43,805 0.2172 9,514 9,003 3.93 35,382 36 30.71 1,117 10 33.98 327 71 4.33 310	December 31, 2022	December 31, 2022
Foreign Currency	Exchange Rate 30.71 33.98 0.2172 3.93 30.71 33.98 4.33	Foreign Currency 8,226 1,027 53,723 - 16 1 45	Exchange Rate NTD 30.71 252,605 32.72 33,590 0.2324 12,485 3.94 - 30.71 505 32.72 19 4.41 200
$ 3,015 476 43,805 9,003 36 10 71

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, borrowings, accounts payable and other payables that are denominated in foreign currency. A 1% of appreciation or depreciation of each major foreign currency against the Company’s functional currency as of December 31, 2023 and 2022 would have increased (decreased) the after-tax net income for the years ended December 31, 2023 and 2022 by $1,215 thousand and $2,384 thousand, respectively. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for both periods.

As the Company deals in diverse foreign currencies, gains or losses on foreign exchange were summarized as a single amount. For the years ended December 31, 2023 and 2022, the foreign exchange (losses) gains, including both realized and unrealized, were amounted to $4,440 thousand and $41,534 thousand, respectively.

(iv) Interest rate analysis

The interest risk exposure from financial assets and liabilities has been disclosed in the note of liquidity risk management.

The following sensitivity analysis is based on the risk exposure to interest rates on the derivative and non-derivative financial instruments at the reporting date. For variable rate instruments, the sensitivity analysis assumes the variable rate liabilities are outstanding for the whole year at the reporting date.

If the interest rate increases or decreases by 1% the Company’ s net income will decrease /increase by $87,677 thousand and $94,341 thousand for the years ended December 31, 2023 and 2022, respectively, assuming all other variable factors remain constant. This is mainly due to the Company’s variable rate borrowing.

(v) Other market price risk

If the equity price changes, the impact of equity price change to other comprehensive income will be as follows, assuming the analysis were based on the same and other variables considered in the analysis remain the same:

Increase 10% Decrease 10%	For the Years Ended December 31 2023 2022 Other Comprehensive Income (Loss) (net of tax) Net Income (Loss) (net of tax) Other Comprehensive Income (Loss) (net of tax) Net Income (Loss) (net of tax) $ 14,275 16 14,936 (825) $ (14,275) (16) (14,936) 825	For the Years Ended December 31 2023 2022 Other Comprehensive Income (Loss) (net of tax) Net Income (Loss) (net of tax) Other Comprehensive Income (Loss) (net of tax) Net Income (Loss) (net of tax) $ 14,275 16 14,936 (825) $ (14,275) (16) (14,936) 825	For the Years Ended December 31 2023 2022 Other Comprehensive Income (Loss) (net of tax) Net Income (Loss) (net of tax) Other Comprehensive Income (Loss) (net of tax) Net Income (Loss) (net of tax) $ 14,275 16 14,936 (825) $ (14,275) (16) (14,936) 825
	2023
	Other Comprehensive Income (Loss) (net of tax) $ 14,275 $ (14,275)	Net Income (Loss) (net of tax)
		16

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(vi) Fair value of financial instruments

1) Fair value hierarchy

The Company measured its financial assets at FVOCI on a recurring basis. The carrying amount and fair value of the Company’ s financial assets and liabilities, including the information on fair value hierarchy are as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	December 31, 2023	December 31, 2023	December 31, 2023
Book Value $ 142,751 $ 156 $ 1,364,531 $ 12,969,329		Fair Value
	Level 1 Level 2 Level 3 - - 142,751 - - 156 - - - - - - December 31, 2022			Total
				142,751
				156
				-
				-

Book Value $ 149,363 $ 8,253 $ 3,418,240 $ 13,912,580		Fair Value
	Level 1 - - - -	Level 2 - - - -	Level 3 149,363 8,253 - -	Total
				149,363
				8,253
				-
				-

2) Valuation techniques for financial instruments measured at fair value

Financial instruments traded in active markets are based on quoted market prices. Market prices quoted from main exchanges and over-the-counter are the basis of fair value of equity instruments and credit instrument traded in active markets.

If the quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have a quoted price in an active market. If a financial instrument does not accord with the definition aforementioned, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of non-active market.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

If the financial instruments held by the Company have active market, the measurements of fair value are categorized as follows:

The listed redeemable bonds, listed stocks, drafts and bonds are recognized as financial assets and liabilities traded in active markets by the standards and nature. The fair value is measured at the market quoted price.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data at the reporting date.

If the financial instruments held by the Company have no active market, the measurements of fair value are categorized as follows:

Equity instruments without quoted price: The fair value is measured at discounted cash flow model. The assumption is discounted investees’ expected future cash flows by using the discounting rate which reflects the time value of money and the return of the investment.
3) Transfers between Level 1 and Level 2

There were no transfers in either direction for the years ended December 31, 2023 and 2022.

4) Reconciliation of Level 3 instruments

Reconciliation of Level 3 instruments
		Noncurrent Financial
		Assets at FVOCI
		Equity Instrument
		without Quoted Price
Balance on January 1, 2023	$	149,363
Total gains or losses
Recognized as other comprehensive income		(3,112)
Receipts from capital reduction		(3,500)
Balance on December 31, 2023	$	142,751
Balance on January 1, 2022	$	178,394
Total gains or losses
Recognized as other comprehensive income		(21,031)
Receipts from capital reduction		(8,000)
Balance on December 31, 2022	$	149,363

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

The total gains or losses is listed under “unrealized gains and losses on financial assets at FVOCI”. The information on assets held as of December 31, 2023 and 2022 and is as follows:

follows:
		For the Years Ended	December 31
		2023	2022
Total gains or losses
Recognized as other comprehensive income (which is	$	(3,112)	(20,744)
listed under "unrealized losses on financial assets
of FVOCI")

5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Company’s financial instruments that use Level 3 inputs to measure fair value is “financial assets measured at fair value through profit or loss – equity investments” .

Most of the Company’ s financial assets in Level 3 have only one significant unobservable input, while its equity investments without an active market have more than one significant unobservable inputs. The significant unobservable inputs of equity investments without an active market are individually independent, and there is no correlation between them.

Quantified information on significant unobservable inputs is as follows:

Item Financial assets at FVOCI - equity investments without active market	Valuation Technique Dividend discount model	Significant Unobservable Inputs
		`•`Average expected future dividend income of 5 years (As of December 31, 2023 and 2022, were $251`~`18,916 thousand and $251`~`23,510 thousand, respectively.)

Weighted average capital cost (As of December 31, 2023 and 2022, were 2.73% and 4.68%, respectively.)
Discounting rate without market liquidity (As of December 31, 2023 and 2022, were both 15%)

Inter-relationship between Significant Unobservable Inputs and Fair Value Measurement

The estimated fair value would increase, if the 5-year average expected future dividend income is increased.
The estimated fair value would decrease, if the weighted average capital cost is increased.
The estimated fair value would decrease, if the discounting rate without market liquidity is increased.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

6) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The Company’ s measurement on the fair value of financial instruments is deemed reasonable despite different valuation models or assumptions may lead to different results. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on profit or loss and other comprehensive income:

December 31, 2023 Financial assets at FVOCI Equity investments without an active market December 31, 2022 Financial assets at FVOCI Equity investments without an active market	Inputs % 2.73 % 4.68	Fluctuation in Inputs 1% 1%	Other Comprehensive Income Favourable Unfavourable 5,335 (5,062) 5,427 (5,158)

The favourable and unfavourable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

(z) Financial risk management

(i) Overview

The Company have exposures to the following risks from its financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

The following likewise discusses the Company’ s exposure information, objectives, policies and processes for measuring and managing the above mentioned risks

(ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Company has assigned the manager of the relating department for assessing, controlling and monitoring the strategic, financial and operating risks. The manager reports risk status to the management and regularly report to the Board of Directors on its activities.

(iii) Credit risk

Credit risk means the potential loss of the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt securities.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

1) Accounts and other receivable

The exposure of the credit risk is depend on each customer. The Company assesses the customers’ credit risk based on their basic information, which comprises of the default risk in their industry and country. For the years ended December 31, 2023 and 2022, there were no geographical concentration of credit risk.

The Risk Management Committee has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered.

The allowance for bad debts is reflected the losses incurred in the accounts and other receivables, which is mainly comprised of specific loss from significant individual exposure and incurred, but unidentified portfolio loss from group assets. The assessment of portfolio loss is based on the historical statistics of payment.

2) Investment

The exposure to credit risk for the bank deposits and financial instruments is measured and monitored by the Company’ s finance department. The Company only deals with counterparties with good credit rating. The Company does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties. The Company has assessed the counterparties’ credit rating when invested in financial assets measured at cost, therefore, does not expect any significant credit risk.

3) Guarantees

As of December 31, 2023 and 2022, please refer to Note 7 and 13 (a)(ii) for the details of financial guarantees of subsidiaries and joint venture provided by the Company.

(iv) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’ s reputation.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Company’ s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Company is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities, primarily the EUR, USD, JPY and CNY.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

The Company held the accounts receivable denominated in foreign currencies other than the respective functional currencies of the Company’s entities. The exchange gain or loss from the exchange rates change can be offsetted by exchange gain or loss from shortterm loan denominated in foreign currencies, which would mitigate the exposure of currency risk.

The borrowing interest is denominated by the principal’ s currency. The borrowing currency are the same as the Company’s operating cash flow which mainly are NTD and USD.

Other monetary assets and liabilities denominated in foreign currencies are using the current exchange rates to maintain the net currency risk at the acceptable level.

2)

Interest rate risk

The Company uses the floating interest rates for the long-term and short-term loans which the effective interest rates float with the market change. The Company’s financial department is measuring and monitoring the market change.

3) Other market price risk

The Company does not enter into a contract, except for the expected use and sales. The contract is not under the net settlement basis.

(aa) Capital management

The objectives of the Board’ s policy are to maintain an optimal capital structure to keep the investors, creditors, the market faith, and the future operation.

The Company and other entities in the same industry use the debt-to-equity ratio to manage capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity plus net debt.

As of December 31, 2023, the Company’s capital management strategy is consistent with the prior year as of December 31, 2022. The Company’s debt-to-equity ratio at the end of the reporting period as of December 31, 2023 and 2022, is as follows:

Total liabilities Less: Cash and cash equivalents Net debt Total equity Total capital Debt-to-capital ratio	December 31, 2023 $ 13,398,089 (434,510) 12,963,579 13,282,499 $ 26,246,078 % 49.39	December 31, 2022 14,322,598 (2,031,113) 12,291,485 12,856,941 25,148,426 % 48.88

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(7) Related-party transactions:

(a) The ultimate parent company

The company is the ultimate controlling party of the Company and its subsidiaries.

(b) Names and relationship with related parties

The followings are entities that have had transactions with the Company’s subsidiaries and related parties during the periods covered in the consolidated financial statements.

Name of Related Party	Relationship with the Company
United Elite Agents Limited (UEA)	Subsidiaries
Atrans Precision Industries Co., Ltd. (Atrans Precision)	Subsidiaries
Sunflower Investment Co., Ltd. (Sunflower Investment)	Subsidiaries
The Hotel National Co., Ltd. (The Hotel National)	Subsidiaries
CMAI CO., LIMITED (CMAI)	Subsidiaries
CMJ Co., Ltd. (CMJ)	Subsidiaries
National Management Co., Ltd. (National Management)	Subsidiaries
PUJEN Land Development Co., Ltd. (PUJEN Land Development)	Subsidiaries
Shangrila Tourism Co., Ltd. (Shangrila Tourism)	Subsidiaries
Taichung CMP Hospitality Management Consulting Co., Ltd.	Subsidiaries
(Taichang CMP Hospitality)
Calligraphy Greenway Plaza Co., Ltd. (Calligraphy Greenway Plaza)	Subsidiaries
China Metal International Holdings Inc. (CMI)	Subsidiaries
China Metal International (BVI) Limited (CMI (BVI))	Subsidiaries
CMW (Cayman Islands) Co., Ltd. (CMW (C.I.))	Subsidiaries
CMB (H.K.) Co., Ltd. (CMB (H.K.))	Subsidiaries
Suzhou CMB Machinery Co., Ltd. (Suzhou CMB)	Subsidiaries
CMP (H.K.) Industry Co., Ltd. (CMP (H.K.))	Subsidiaries
Tianjin CMT Industry Co., Ltd. (Tianjin CMT)	Subsidiaries
Suzhou CMS Machinery Co., Ltd. (Suzhou CMS)	Subsidiaries
CMW (Tianjin) Industry Co., Ltd. (CMW (Tianjin))	Subsidiaries
CMI (Wu Han) Precision Machinery Co., Ltd. (CMH)	Subsidiaries
Qingdao Sourcing Specialists Trading Co., Ltd. (Qingdao Sourcing	Subsidiaries
Specialists)
FAR HSING (SAMOA) ENTERPRISE CO., LTD. (FAR HSING	Subsidiaries
(SAMOA))
CHINGENG Land Development Co., Ltd. (CHINGENG Land	Subsidiaries
Development)
PUJEN CHENGMEI Land Development Co., Ltd. (PUJEN	Subsidiaries
CHENGMEI Land Development)
PUCHIA Land Development Co., Ltd. (PUCHIA Land Development)	Subsidiaries
PUZHI Construction Co, Ltd. (PUZHI Construction)	Subsidiaries

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Name of Related Party CMAI Holding, Inc. (CMAI Holding) Pilot Drive, LLC. (Pilot) CMAI INDUSTRIES, INC. (CMAI N.A.) Great Naturalistic Block Co., Ltd. (Great Naturalistic Block) The Splendor Hospitality International Co., Ltd. (The Splendor Hospitality)

CMAAN Health Co. Ltd. (CMAAN Health) Amida Trustlink Assets Management Co., Ltd. (Amida Trustlink Assets) Advancision Corporation (Advancision) Mr. Ting Fung, Lin Chain-Yuan Investment Co., Ltd. (Chain-Yuan Investment) Kemitek Industrial Corp. (Kemitek Industrial) CMP PUJEN Foundation for Arts and Culture (Foundation) Mr. Ming Shiann, Ho Gee Lien Resource Development Corp. (Gee Lien Resource) San Lien Educational Foundation (San Lien Foundation)

Relationship with the Company Subsidiaries Subsidiaries Subsidiaries Subsidiaries Joint ventures

Joint ventures Associates Subsidiaries of subsidiaries' associates Key management Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties

(c) Significant transactions with related parties
(i) Sales to related parties

The amounts of significant sales transactions between the Company and related parties are as follows:

follows:
Subsidiaries Joint ventures Other related parties	For the Years Ended December 31
	2023 $ 66,595 247 273 $ 67,115	2022
		92,328 270 102
		92,700

The sales between the Company and related parties approximated the market price.

(ii) Purchases from related parties

The amounts of significant purchases transactions between the Company and related parties are as follows:

Subsidiaries	For the Years Ended December 31	For the Years Ended December 31
	2023 $ -	2022
		4

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

The purchases mentioned above could not compare to the market because the Company did not purchase same items from non-related parties. The payment terms with related parties are not significantly different from those with third parties.

(iii) Receivables due from related parties

The information on receivables due from related parties is as follows:

Accounts Categories Accounts receivables Subsidiaries Accounts receivables Other related parties Total Other receivables Subsidiaries Other receivables Associates Other receivables Joint ventures Total	December 31, 2023 $ 14,809 162 $ 14,971 $ 2,467 23 182 $ 2,672	December 31, 2022
		33,836 58
		33,894
		12,075 23 1,048
		13,146

(iv) Payables due to related parties

The information on payables due to related parties is as follows:

Accounts Categories Accounts payable Subsidiaries Other payables Subsidiaries Other payables Joint ventures Other payables Other related parties Other payables Key management Total	December 31, 2023 $ - 13,464 267 350 217 $ 14,298	December 31, 2022
		86
		14,009 489 192 4
		14,694

(v) Prepayments

The information on prepayments is as follows:

The information on prepayments is as follows:
Subsidiaries	December 31, 2023 $ -	December 31, 2022
		100

(vi) Loans to Related Parties

The loans to related parties is as follows:

The loans to related parties is as follows:
Subsidiaries	December 31, 2023 $ -	December 31, 2022
		-

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Interest income

Subsidiaries	December 31, 2023 $ -	December 31, 2022 2

The interest charged by the Company to its related parties is based on the average interest rate charged by financial institutions on the Company's borrowings. The loans to related parties were unsecured. There are no provisions for doubtful debt required after the management’s assessment.

(vii) Guarantees and endorsements

The Company guaranteed and endorsed for subsidiaries' and joint ventures' bank loaning. The ending balance of endorsement guarantee was $2,644,000 thousand and $2,785,000 thousand and the actual borrowing amount was $1,957,000 thousand and $1,937,448 thousand, respectively, as of December 31, 2023 and 2022.

(viii) Non-performing receivables

Joint ventures Joint ventures	Total Claims	Total Claims
	December 31, 2023 December 31, 2022 $ 796,845 796,845 Costs of Claims	December 31, 2022
		796,845
		December 31, 2022
		575,000

(ix) Property transaction

The information on acquisitions of assets is as follows:

Other related parties	For the Years Ended December 31	For the Years Ended December 31
	2023 $ 160	2022
		-

(x) Other transactions

1) The information on office leased by the Company is as follows:

Subsidiaries Other related parties	For the Years Ended December 31	For the Years Ended December 31
	2023 $ 4,748 2,372 $ 7,120	2022
		4,708 2,751
		7,459
		(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

2) The information on office leased to related parties is as follows:

Subsidiaries Associates of subsidiaries	For the Years Ended December 31	For the Years Ended December 31
	2023 $ 7 262 $ 269	2022
		- 262
		262

3) The information on providing management consulting service to related parties is as follows:

Subsidiaries Joint ventures	For the Years Ended December 31	For the Years Ended December 31
	2023 $ 8,861 5,545 $ 14,406	2022
		19,770 4,020
		23,790

4) The information on providing guarantees and endorsements to related parties is as follows:

Joint ventures: The Splendor Hospitality Others	For the Years Ended December 31	For the Years Ended December 31
	2023 $ 11,483 137 $ 11,620	2022
		13,925 160
		14,085

5) The information on management consulting service provided by related parties is as follows:

follows:
Subsidiaries	For the Years Ended December 31
	2023 $ 92,919	2022
		79,129

6) The information on entertainment and travel expense arose from catering and accommodation provided by related parties is as follows:

Subsidiaries Joint ventures	For the Years Ended December 31	For the Years Ended December 31
	2023 $ 108 171 $ 279	2022
		211 460
		671

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

7) The information on other services or transactions provied by related parties is as follows:

Subsidiaries Other related parties 8) The information on donation to related parties is as Other related parties: Foundation	For the Years Ended December 31	For the Years Ended December 31
	2023 2022 $ 3,678 5,610 - 7 $ 3,678 5,617 follows: For the Years Ended December 31	2022
	2023 $ 5,925	2022
		5,400

9) The information on contruction and engineering service for Taichung development project provided by subsidiary (recognized under other non-current assets) is as follows:

Subsidiaries Other related party Subsidiaries Other related parties	December 31, 2023 December 31, 2022 $ 189,072 185,102 4,606 3,273 $ 193,678 188,375 For the Years Ended December 31	December 31, 2023 December 31, 2022 $ 189,072 185,102 4,606 3,273 $ 193,678 188,375 For the Years Ended December 31
	2023 $ 3,970 1,333 $ 5,303	2022
		5,509 - 5,509

10) The information on construction in retention for Taichung development projects to be paid by the Company is as follows:

paid by the Company is as follows:
Other related parties	December 31, 2023 $ 360	December 31, 2022
		344

11) The Company entered into a joint-construction agreement with its subsidiary, PUJEN Construction, and The Hotel National, wherein a residential building will be erected on the 19 parcels of land located in Houlongzi Section, West District, Taichung City. Upon completion of the construction, the three parties will jointly sell the said building, in which the total amount sold will be allocated on a ratio of 40.5:59.5 between the landowner and the builder, respectively, based on a resolution approved during the Company’s board meeting held on November 7, 2023.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(d) Key management transactions

The compensation of key management is as follows:

Short-term employee benefits Post-employment benefits	For the Years Ended December 31 2023 2022 $ 79,242 62,384 801 2,737 $ 80,043 65,121
	2023 $ 79,242 801 $ 80,043

(8) Pledged assets

The information on pledged assets' carrying value is as follows:

Pledged Assets	Object	December 31, 2023 $ 13,319 2,844 3,633,810 2,616,852 59 $ 6,266,884	December 31 2022
Land (including other non-current assets) Buildings Investments accounted for using equity method Investments properties—Land Other current financial assets	The credit limits of long-term and short-term bank borrowings `〃` The credit limits of long-term bank borrowings `〃` Long-term bank borrowings		13,319 2,970 3,242,349 2,544,164 382,144
			6,184,946

(9) Significant commitments and contingencies

(a) The Company’s unrecognized contractual commitments are as follows:
(i) The unrecognized contractual commitments from contracts for selling and purchasing of equipment and engineering constructioin entered into by the Company is as follows:

Total contract price Total amounts paid under contracts	December 31, 2023 $ 2,747,663 $ 2,551,653	December 31, 2022
		2,780,610
		2,259,953

(ii) 1) The Company and The Presbyterian Church in Taiwan entered into an real estate leasing contract, with the contract term of 40 years, commencing the day after the signing date, September 30, 2016. For the development of the leasing real estates, the Company agreed to pay development royalty amounted to $126,000 thousand. As of December 31, 2023 and 2022, the accumulated royalty payments amounted to $126,000 thousand, respectively, which was recognized under right-of-use assets.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

  - 2) The Company leased a parcel of land to construct several buildings for its shopping malls and hotels. The Company agreed that the ownership of the buildings would still be under the title deed of the Presbyterian Church in Taiwan even after the completion of the construction. Upon maturity of the lease period, the Company shall dismantle the buildings and related facilities, and return the land to the Presbyterian Church in Taiwan.

  - 3) The security deposits paid by the Company for land development and leased land and buildings for operating use amounted to $106,110 thousand and $101,460 thousand, as of December 31, 2023 and 2022, respectively.

(iii) The Company entered into various services agreement with InterContinental Hotels Group for its hotel operation, including planning, constructing and building, as well as during the pre opening phase, and from the pre opening phase to the opening day and fifteen years afterwards. According to the contract, the fees shall be paid either based on the services rendered, or be calculated in accordance with certain ratio of the gross revenue for the fiscal year or each accounting period.
(b) Contingencies
(i) Please refer to Note 7 for the Company’s lending and guarantees and endorsements for related parties for the years ended December 31, 2023 and 2022.
(ii) The stages of Daguangsan petition for real estate transaction and the regarding tax investigation is as follows:

Litigant
The
Company

Issue
Current Status
Filing a petition for the
administrative penalty of the
value-added tax in the
Daguangsan real estate
transaction which was
approved by National
Taxation Bureau of Taipei
National Taxation Bureau of Taipei has approved the
additional value-added tax and the regarding penalty
amounted to $38,497 thousand, which the Company had
paid $25,665 thousand in 2012. The Company was
dissatisfied with the verdict from the original authority,
which has filed the administrative petition. According to
the ruling of the Taipei High Administrative Court, the
lawsuit has now been suspended.

(10) Losses Due to Major Disasters:None

(11) Subsequent Events:None

(12) Other:

(a) The Securities and Futures Investors Protection Center (SFIPC) filed a criminal incidental civil action on behalf of the Company against the former chairman of the Company, Mr. Ming Shiann, Ho. The appeal was handed back over to the High Court for reconsideration on August 22, 2019, which is in trial in the Tainan Branch of Taiwan High Court.
(b) The SFIPC filed a lawsuit against the Company, its directors and supervisors, and certain employees of the Company. On January 2, 2020, Taiwan High Court dismissed the appeal filed by the SFIPC for the second time. On February 5, 2020, the SFIPC filed an appeal to the Supreme Court against the aforementioned conviction. On september 7, 2022, the Supereme Court remanded the original decision, which is in trial in the Taiwan High Court. On January 17, 2024, Taiwan High Court dismissed the appeal filed by SFIPC for third time. On February 17, 2024, the SFIPC filed an appeal to the Supreme Court against the aforementioned conviction.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(c) Employee benefits, depreciation, and amortization are summarized as follows:

By function By item		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2023		2022
	Operating Costs	Operating Expenses	Total	Operating Costs	Operating Expenses		Total
Employee benefits
Salary	118,868	159,590	278,458	108,075	138,879		246,954
Labor and health insurance	11,900	12,859	24,759	11,021	11,853		22,874
Pension	3,142	5,659	8,801	2,930	5,048		7,978
Remuneration of directors	-	42,861	42,861	-	37,572		37,572
Others	6,107	6,323	12,430	6,814	6,504		13,318
Depreciation	79,299	207,806	287,105	74,446	206,666		281,112
Amortization	1,419	3,478	4,897	1,319	3,817		5,136
For the years ended December 31, 2023 and 2022, the average numbers of Company employees were as follows: 2023 2022 Number of employees 327 323 Number of directors (non-employee) 8 6 Average employee benefit expense $ 1,017 918 Average employee salary expense $ 873 779 Percentage of average employee salary expense % 12.07 % (3.95) Remuneration for supervisors $ - -
						323
						6
						918
						779
						% (3.95)
						-

The Company’ s salary and remuneration policy (including directors, supervisors, managers and employees) is as follows:

(i) Directors:

The Company’ s current remuneration package to directors is salary, compensation and transportation allowance, etc., all in accordance with The Company’s articles. According to Article 27-1 of the Articles of Incorporation, if the Company makes a profit of the year, the remuneration of directors is not more than 2.5% of the profit. The Company also stipulats “ Remuneration Policy for Directors, Remuneration Committee, Audit Committee and Managers”, considering the Company’s business performance, as well as the value of their participation in and contribution to the Company’ s operations to provide reasonable remuneration. The reasonableness of the related remuneration has been reviewed by the Salary and Compensation Committee and the Board of Directors. The Company setup the Audit Committee on June 19, 2017, and abolished the Supervisor system.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(ii) Managers and employees:

According to Article 27-1 of the Articles of Incorporation, if the Company makes a profit of the year, employees’ compensation is appropriated at the rate of not less than 2.5% of the profit. The Company also stipulates "Remuneration Policy for Directors, Remuneration Committee, Audit Committee and Managers" and “ Remuneration Management Measures” . Remuneration includes salary and bonuses; the former is determined according to their working years and job value and the latter include employee remuneration and budget achievement bonuses and year-end bonuses, etc.. Employee compensation is allocated based on the Company’ s annual earnings status, taking into account their duties, responsibilities, seniority and special contributions to the Company, and standards beneficial to the Company’s long-term development. Budget achievement bonus and year-end bonus are based on the performance of each department, financial performance (target revenue and profit, budget goal achievement, growth and new markets, effective financial operation and risk management), talent cultivation (elite talent cultivation, retention rate), quality and risk (compliance with laws and regulations) to provide reasonable remuneration. The usual level of payment in the industry, the reasonable distribution of personal performance, operating performance and future risk are also considered. The remuneration system is reviewed in a timely manner, based on the actual state of operation and the relevant laws and regulations, so as to strike a balance between the Company's sustainable operation and risk control.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions for the years ended December 31, 2023, required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

(i) Loans to other parties:

(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:
													(In Thousands of NTD)
No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance During the Period	Ending Balance (Note 1)	Actual Borrowing Amount	Interest Rate	Nature for Financing (Note 2)	Transaction Amount for Business	Reasons for Short-term Financing	Allowance for Doubtful Accounts	Collateral		Financing Limit for Each Borrower (Note 3)	Aggregate Financing Limit (Note 4)
													Item	Value
0	The Company	Taichung CMP Hospitality	Accounts receivable due from related parties	Yes	1,260,000	1,260,000	-	2.5%	2	-	Operation requirements	-		-	3,984,749	5,312,999
0	The Company	UEA	Accounts receivable due from related parties	Yes	32,430	-	-	4.00%	2	-	Operation requirements	-		-	3,984,749	5,312,999
1	Tianjin CMT	Suzhou CMB	Accounts receivable due from related parties	Yes	111,250	-	-	0.75%	2	-	Operation requirements	-		-	321,617	428,823
1	Tianjin CMT	CMH	Accounts receivable due from related parties	Yes	311,500	303,100	303,100	0.75%	2	-	Operation requirements	-		-	321,617	428,823
2	Suzhou CMS	CMH	Accounts receivable due from related parties	Yes	934,500	671,150	671,150	0.75%	2	-	Operation requirements	-		-	1,368,940	1,825,254
3	CMAI	Pilot	Accounts receivable due from related parties	Yes	39,975	33,781	33,781	5.12%	2	-	Operation requirements	-	Land, buildings and improvement	68,732	53,081	70,775
4	CMW(C.I.)	CMI	Accounts receivable due from related parties	Yes	445,000	433,000	-	-	2	-	Operation requirements	-		-	1,722,815	2,297,087
5	CMW (Tianjin)	CMH	Accounts receivable due from related parties	Yes	221,000	216,500	216,500	0.75%	2	-	Operation requirements	-		-	1,727,095	2,302,794

Note 1: Balance of loan as of the reporting date was within the credit limits approved by the Board of Directors.

Note 2: 1. For business transactions.

For the necessity of short-term financing.

Note 3: The lender’s total amount available for lending shall not exceed 30% of its net worth.

Note 4: The lender’s total amount available for lending shall not exceed 40% of its net worth.

(ii) Guarantees and endorsements for other parties:

(In Thousands of NTD)

No.	Name of Guarantor/ Endorse	Counter-party of Guarantee and Endorsement	Counter-party of Guarantee and Endorsement	Limitation on Amount of Guarantees and Endorsements for a Specific Enterprise (Note 4)	Highest Balance for Guarantees and Endorsements During the Period	Ending Balance (Note 2)	Actual Borrowing Amount	Property Pledged for Guarantees and Endorsements	Ratio of Accumulated Amounts of Guarantees and Endorsements to Net Worth of the Latest Financial Statements	Maximum Amount for Guarantees and Endorsements (Note 5)	Parent Company Endorsements/ Guarantees to Third Parties on Behalf of Subsidiary (Note 3)	Subsidiary Endorsements/ Guarantees to Third Parties on Behalf of Parent Company (Note 3)	Endorsements/ Guarantees to Third Parties on Behalf of Companies in Mainland China (Note 3)
		Name	Relationship with the Company (Note 1)
0	The Company	Sunflower Investment	1	5,312,999	160,000	160,000	91,000	-	% 1.20	6,641,249	Y	N	N
0	The Company	The Hotel National	1	5,312,999	50,000	50,000	-	-	% 0.38	6,641,249	Y	N	N
0	The Company	Shangrila Tourism	1	5,312,999	1,226,500	624,000	406,000	-	% 4.70	6,641,249	Y	N	N

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

No.	Name of Guarantor/ Endorse	Counter-party of Guarantee and Endorsement	Counter-party of Guarantee and Endorsement	Limitation on Amount of Guarantees and Endorsements for a Specific Enterprise (Note 4)	Highest Balance for Guarantees and Endorsements During the Period	Ending Balance (Note 2)	Actual Borrowing Amount	Property Pledged for Guarantees and Endorsements	Ratio of Accumulated Amounts of Guarantees and Endorsements to Net Worth of the Latest Financial Statements	Maximum Amount for Guarantees and Endorsements (Note 5)	Parent Company Endorsements/ Guarantees to Third Parties on Behalf of Subsidiary (Note 3)	Subsidiary Endorsements/ Guarantees to Third Parties on Behalf of Parent Company (Note 3)	Endorsements/ Guarantees to Third Parties on Behalf of Companies in Mainland China (Note 3)
		Name	Relationship with the Company (Note 1)
0	The Company	The Splendor Hospitality	2	5,312,999	3,400,000	1,800,000	1,450,000	-	% 13.55	6,641,249	N	N	N
0	The Company	CMAAN Health	2	5,312,999	32,500	10,000	10,000	-	% 0.08	6,641,249	N	N	N
1	CMI	UEA	3	3,566,919	864,940	-	-	-	% -	4,458,649	N	N	N

Note 1: 1.The Company held directly or indirectly more than 50% of the shares with voting rights.
2.Due to the joint investment relationship, all of the shareholders of the Group endorse the company in accordance with their investment ratio.
3.The company held directly or indirectly more than 50% of the shares with voting rights.
4.The company held directly or indirectly more than 90% of the shares with voting rights.
Note 2: Balance of guarantees and endorsements as of the reporting date was within the credit limit approved by the Board of Directors.
Note 3: The following three situations are filled in Y: the endorsement of the subsidiary by the Company; the endorsement of the Company by the subsidiary and the endorsement to the company located in Mainland China.
Note 4: The guarantor’s total amount available for guarantee and endorsement shall not exceed the percentage mentioned below of its net worth: The Company 40% and CMI 40%.
Note 5: The guarantor’s total amount available for guarantee and endorsement shall not exceed the percentage mentioned below of its net worth: The Company 50% and CMI 50%.

(iii) Securities held as of December 31, 2023 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of NTD)

				(In Thousands	(In Thousands	(In Thousands	(In Thousands	of NTD)
Name of Holder	Category and Name of Security	Relationship with Issued Company	Account	Ending Balance				Note
				Shares/Units	Carrying Value	Percentage of Ownership (%)	Fair Value
The Company	MEITA Industrial Co., Ltd.	The Company is the legal person	Non-current financial assets at FVOCI	1,351,164	99,955	% 3.12	99,955
The Company	GUANGYUAN Investment Co., Ltd.	-	Non-current financial assets at FVOCI	3,750,000	31,134	% 3.91	31,134
The Company	DEVELOPMENT Venture Capital Co., Ltd.	The Company is the legal person	Non-current financial assets at FVOCI	3,260,000	11,662	% 4.00	11,662
The Company	Pacific Electric Wire & Cable Co., Ltd.	-	Current financial assets at FVTPL	81,666	-	% 0.01	-
Sunflower Investment	Fantasystory Inc.	-	Non-current financial assets at FVOCI	653,530	-	% 19.80	-
Sunflower Investment	il. COM, INC	-	Non-current financial assets at FVOCI	100,000	-	% 0.52	-
Sunflower Investment	Asia World Engineering & Construction CO., Ltd.	-	Non-current financial assets at FVOCI	4,644,000	30,000	% 6.63	41,340
Sunflower Investment	Masada Technology Limited Co., Ltd.	-	Non-current financial assets at FVOCI	2,000,000	20,000	% 5.95	20,000
The Hotel National	Century National Technology Co., Ltd.	-	Non-current financial assets at FVOCI	35,600	-	% 2.34	-
Atrans Precision	Acore Material Technology Co., Ltd.	-	Non-current financial assets at FVOCI	42,466	-	% 2.12	-

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(iv) Individual securities acquired or disposed of with accumulated amount exceeding NT$300 million or 20% of the share capital:

(In Thousands of New Taiwan Dollars)

Name of company	Category and name of security	Account name	Name of counter- party	Relationship with the company	Beginning Balance	Beginning Balance	Purchases	Purchases	Sales	Sales	Sales	Sales	Ending Balance	Ending Balance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
The Company	Shares	Investments accounted for using equity method	Taichung CMP Hosipitality	Subsidiaries	33,880	338,800	60,000	600,000	-	-	-	-	93,880	938,800

(v) Information on the acquisition of real estate exceeding NT$300 million or 20% of the share capital: None.
(vi) Information on the disposal of real estate exceeding of NT$300 million or 20% of the share capital: None.
(vii) Information regarding related-party transactions for purchases and sales exceeding NT$100 million or 20% of the share capital:

(In Thousands of NTD)

									(In Thousands of	(In Thousands of	NTD)
Name of Company	Related Party	Nature of Relationship	Transaction Details				Transactions with Terms Different from Others		Notes/Accounts Receivable (Payable)		Note
			Purchase/Sale	Amount	Percentage of Total Purchases/Sale	s Payment Terms	Unit Price	Payment Terms	Ending Balance	Percentage of Total Notes/Accounts Receivable (Payable)
Suzhou CMS	CMI	Subsidiaries	Sale	831,575	% 36.81	180 days	-	-	1,775,953	78.05%
Suzhou CMB	CMI	Subsidiaries	Sale	251,685	% 15.18	180 days	-	-	195,926	26.54%
CMW (Tianjin)	CMW (C.I.)	Subsidiaries	Sale	1,039,752	% 24.64	180 days	-	-	1,627,089	49.16%
CMH	CMW(Tianjin)	Affiliates	Sale	115,199	% 56.25	90 days	-	-	16,648	26.39%

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the share capital:

(In Thousands of NTD/In CNY)

Name of Company	Counter-party	Nature of Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Bad Debts
					Amount	Action Taken
CMW (Tianjin)	CMW (C.I.)	Subsidiaries	Accounts receivable due from related parties 1,627,089	0.63	-	-	CNY 15,467,902	-
Tianjin CMT	CMI	Subsidiaries	Accounts receivable due from related parties 288,525	-	-	-	-	-
CMB	CMI	Subsidiaries	Accounts receivable due from related parties 195,926	0.99	-	-	CNY 9,272,453	-
Suzhou CMS	CMI	Subsidiaries	Accounts receivable due from related parties 1,775,953	0.46	-	-	CNY 12,396,948	-
CMW (Tianjin)	CMH	Affiliates	Accounts receivable due from related parties, other 216,500	Note2	-	-	-	-
Tianjin CMT	CMH	Affiliates	Accounts receivable due from related parties, other 303,100	Note2	-	-	-	-
Suzhou CMS	CMH	Affiliates	Accounts receivable due from related parties, other 671,150	Note2	-	-	-	-

Note1: Intra-group transactions have been eliminated in the consolidated financial statements.

Note2: Balance of loans to other parties.

(ix) Trading in derivative instruments: None.

(b) Information on investees:

The following is the information on investees for the year ended December 31, 2023 (excluding information on investees in Mainland China):

(In Thousands of NTD/In USD and CNY)

Name of Investo	r Name of Investee	Location	Main Businesses	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Net Income (Losses) of Investee	Share of Profits/Losses of Investee	Note
				December 31, 2023	December 31, 2022	Shares	Percentage of Ownership	Carrying Value
The Company	UEA	British Virgin Islands	Investing in CMI	865,286	865,286	667,820	% 100.00	7,582,213	274,035	274,035	Subsidiaries
The Company	Sunflower Investment	Taiwan	Investing	99,096	99,096	67,013,057	% 99.01	990,085	147,747	146,284	Subsidiaries
The Company	Atrans Precision	Taiwan	Vehicle parts processing	247,218	247,218	25,782,134	% 72.24	441,494	65,500	48,672	Subsidiaries
The Company	CMJ	Japan	Cast iron product retailing	4,887	4,887	500	% 83.33	117,963	24,611	20,509	Subsidiaries
The Company	CMAI	Hong Kong	Vehicle parts retailing	24,036	24,036	1,000,000	% 100.00	176,938	32,886	32,886	Subsidiaries

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

Name of Investor	Name of Investee	Location	Main Businesses	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Net Income (Losses) of Investee	Share of Profits/Losses of Investee	Note
				December 31, 2023	December 31, 2022	Shares	Percentage of Ownership	Carrying Value
The Company	PUJEN Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	2,003,067	2,003,067	158,877,643	% 56.65	4,579,730	930,930	532,802	Subsidiaries
The Company	Amida Trustlink Assets	Taiwan	Real estate developing, leasing and financial claims acquiring from financial institutions	44,576	44,576	16,763,726	% 35.21	(21,760)	(849)	-	Investees accounted for using equity method
The Company	The Hotel National	Taiwan	International tourist hotel services	1,515,952	1,515,952	5,000,000	% 100.00	1,138,704	186,185	184,256	Subsidiaries
The Company	National Management	Taiwan	Management and consulting services	10,000	10,000	1,000,000	% 100.00	25,564	9,827	9,827	Subsidiaries
The Company	The Splendor Hospitality	Taiwan	International tourist hotel services	1,125,000	1,125,000	32,500,000	% 50.00	302,227	(15,349)	(19,157)	Joint ventures accounted for using equity method
The Company	Shangrila Tourism	Taiwan	Amusement park and hotel services	564,303	564,303	22,664,800	% 100.00	369,860	(53,391)	(51,905)	Subsidiaries
The Company	CMAAN Health	Taiwan	Management and consulting services	50,000	50,000	5,000,000	% 50.00	46,389	6,671	3,199	Joint ventures accounted for using equity method
The Company	Taichung CMP Hospitality	Taiwan	International tourist hotel services	938,800	338,800	93,880,000	% 100.00	904,230	(34,466)	(34,466)	Subsidiaries
The Company	Calligraphy Greenway Plaza Co., Ltd	Taiwan	Management and consulting services	59,000	59,000	5,900,000	% 100.00	67,579	7,860	7,860	Subsidiaries
The Company	Great Naturalistic Block	Taiwan	Management and consulting services	20,000	-	2,000,000	% 100.00	16,343	(3,657)	(3,657)	Subsidiaries
Sunflower Investment	PUJEN Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	288,437	288,437	42,568,300	% 15.18	1,192,392	930,930	Exempt from disclosure	Subsidiaries of the Company
Sunflower Investment	Atrans Precision	Taiwan	Vehicle parts processing	77,836	77,836	4,737,380	% 13.27	80,468	65,500	Exempt from disclosure	Subsidiaries of the Company
Sunflower Investment	Amida Trustlink Assets	Taiwan	Real estate developing, leasing and financial claims acquiring from financial institutions	-	-	5,951,619	% 12.50	(7,726)	(849)	Exempt from disclosure	Investees accounted for using equity method
Sunflower Investment	ADVANCISION (CAYMAN)	Cayman Islands	Investing and cast iron product retailing	23,457	29,154	1,871,288	% 4.46	11,346	(2,253)	Exempt from disclosure	Investee accounted for using equity method
UEA	CMI	Cayman Islands	Investing in CMI (BVI) and cast iron product retailing	USD 136,536,250	USD 136,536,250	823,281,475	% 83.27	USD 246,185,159	USD 12,261,196	Exempt from disclosure	Subsidiaries of UEA
CMI	CMI (BVI)	British Virgin Islands	Investing in CMP (H.K.)	USD 280,426	USD 280,426	161	% 100.00	CNY 1,301,536,498	CNY 39,188,387	Exempt from disclosure	Subsidiaries of CMI
CMI	CMW (C.I.)	Cayman Islands	Investing in CMW (Tianjin) and CMH	USD 75,156,500	USD 75,156,500	50,000,000	% 100.00	CNY 1,379,512,566	CNY 57,790,262	Exempt from disclosure	Subsidiaries of CMI
CMI	CMB (H.K.)	Hong Kong	Investing in Suzhou CMB	USD 92,970,000	USD 85,820,000	151,120,350	% 100.00	CNY 590,702,188	CNY (6,669,609)	Exempt from disclosure	Subsidiaries of CMI
CMI(BVI)	CMP (H.K.)	Hong Kong	Investing in Tianjin CMT and Suzhou CMS	USD 21,000,000	USD 21,000,000	21,000,000	% 100.00	CNY 1,303,444,275	CNY 39,188,387	Exempt from disclosure	Subsidiaries of CMI(BVI)
CMAI	CMAI Holding	USA	Investing	USD 8,328,644	USD 8,328,644	10,000	% 100.00	USD 2,783,107	USD 204,356	Exempt from disclosure	Subsidiaries of CMAI
CMAI Holding	Pilot	USA	Assets leasing	USD 8,328,644	USD 8,328,644	-	% 100.00	USD 2,783,107	USD 204,356	Exempt from disclosure	Subsidiaries of CMAI Holding
Pilot	CMAI N.A.	USA	Vehicle parts retailing	USD 7,792,972	USD 7,792,972	10,000	% 100.00	USD 1,631,225	USD 129,376	Exempt from disclosure	Subsidiaries of Pilot
Atrans Precision	FAR HSING (SAMOA)	SAMOA	Investing	USD 1,272,055	USD 2,422,055	1,272,055	% 100.00	28,976	158	Exempt from disclosure	Subsidiaries of Atrans Precision
FAR HSING (SAMOA)	ADVANCISION (CAYMAN)	Cayman Islands	Investing and cast iron product retailing	USD 4,052,188	USD 4,959,029	9,068,414	% 21.59	USD 932,761	USD (72,410)	Exempt from disclosure	Investees of FAR HSING (SAMOA) accounted for using equity method
PUJEN Land Development	Keng-Hsin Urban Renewal	Taiwan	Residents, commercial buildings and factories leasing and developing	234,496	234,496	31,220,979	% 30.00	317,612	(82,058)	Exempt from disclosure	Investees of PUJEN Land Development accounted for using equity method
PUJEN Land Development	CHINGENG Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	1,500	1,500	150,000	% 50.00	5,345	(130)	Exempt from disclosure	Subsidiaries of PUJEN Land Development
PUJEN Land Development	PUJEN CHENGMEI Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	199,500	129,500	19,950,000	% 70.00	173,842	(10)	Exempt from disclosure	Subsidiaries of PUJEN Land Development
PUJEN Land Development	PUCHIA Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	-	50	-	% -	-	3	Exempt from disclosure	Subsidiaries of PUJEN Land Development
PUJEN Land Development	PUZHI Construction	Taiwan	Residents, commercial buildings and factories leasing and developing	34,800	34,800	22,500	% 100.00	30,801	(3,587)	Exempt from disclosure	Subsidiaries of PUJEN Land Development
PUJEN Land Development	Hua-Pu Development	Taiwan	Residents, commercial buildings and factories leasing and developing	5,000	5,000	500,000	% 50.00	5,397	664	Exempt from disclosure	Joint ventures of PUJEN Land Development accounted for using equity method
PUJEN Land Development	Beyond Fitness	Taiwan	Sport training and other consulting service	4,050	4,050	494,333	% 36.82	3,594	3,447	Exempt from disclosure	Investees of PUJEN Land Development accounted for using equity method

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of NTD, CNY, USD and JPY)

Name of Investee	Main Businesses	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2023	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Net Income (Losses) of the Investee	Percentage of Ownership	Investment Income (Losses) (Notes 2,3)	Book Value (Note 3)	Accumulated Remittance of Earnings in Current Period (Note 5)
					Outflow	Inflow
Tianjin CMT	Cast iron products, machine parts and vehicle parts designing, developing, manufacturing and selling	921,300 (USD30,000)	2	388,238	-	-	388,238	(4,798) (CNY(1,090))	83.27%	(3,995) (CNY(908))	1,072,059 (CNY247,589)	82,542
Suzhou CMS	Cast iron products, machine parts and vehicle parts designing, developing, manufacturing and selling	737,040 (USD24,000)	2	423,406	-	-	423,406	172,092 (CNY39,112)	83.27%	143,191 (CNY32,543)	4,563,608 (CNY1,053,951)	14,601
Suzhou CMB	Cast iron product designing, manufacturingand retailing	2,518,220 (USD82,000)	2	-	-	-	-	(18,306) (CNY(4,160))	83.27%	(15,244) (CNY(3,464))	2,563,323 (CNY591,991)	-
CMW (Tianjin)	Vehicle parts, E&M as- casting and finished product developing, manufacturing and selling	982,720 (USD32,000)	2	-	-	-	-	364,449 (CNY82,829)	83.27%	309,196 (CNY70,272)	5,733,312 (CNY1,324,091)	-
CMH	Vehicle parts, farm wagon parts, industrial wagon parts household appliances parts and E&M as-casting and molds developing, manufacturing, selling and after sales services	982,720 (USD32,000)	2	-	-	-	-	(145,520) (CNY(33,073))	83.27%	(121,175) (CNY(27,540))	668,396 (CNY154,364)	-
Qingdao Sourcing Specialists	Cast iron product retailing	3,071 (USD100)	2	-	-	-	-	4,034 (JPY18,163)	83.33%	3,362 (JPY15,135)	51,924 (JPY239,059)	-

(ii) Limitation on investment in Mainland China:

(In Thousands of NTD and USD)

		(In Thousands of NTD and USD)
Accumulated Investment in Mainland China as of December 31, 2023	Investment Amount Authorized by the Investment Commission, MOEA (Note 6)	Upper Limit on Investment (Note 4)
811,644	6,406,750 (USD 208,621 )	-

Note 1: Method of investment is classified into three types:

  1. Directly invested in Mainland China.

  2. Indirectly invested in Mainland China through the third region.

  3. Other methods.

Note 2: The recognition basis of the investment income and losses is the financial report audited by an international accounting firm which is in partnership with the accounting firm in the R.O.C.
Note 3: The amount stated is the investment income and losses and the book value of the investment at the end of the period which is recognized by the subsidiaries established through the investment in the third region.
Note 4: The Company complies with the amended Permit 9704604680 ‘Investment or technical cooperation review principal in China’, which obtained the certified documents of the operational scope of the headquarters from the Industrial Development Bureau, Ministry of Economic Affairs, with the valid period from March 3, 2023 to March 1, 2026. The restriction on the cumulative investment amount or proportion in China is not applicable.
Note 5: As of December 31, 2023, the company had obtained a surplus of $3,256,084 thousand (USD108,140 thousand) from the investment companies set up in the third region. The surplus was remitted to the companies by the subsidiaries which was invested indirectly in China and then was remitted to Taiwan. It was impossible to distinguish the remittance from the company in China.
Note 6: The amount in the table is translated by the spot rate on the financial reporting date.
(iii) Significant transactions: None.

(Continued)

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Chain-Yuan Investment Co., Ltd.	56,739,965	% 14.97
Mr. Ming Shiann, Ho	26,312,540	% 6.94

(14) Segment information:

The segment information please refer to the consolidated financial statement for the year ended December 31, 2023.

CHINA METAL PRODUCTS CO., LTD.

Statement of Cash and Cash Equivalents

December 31, 2023

(In Thousands of New Taiwan Dollars)

Item			Description	Description		Amount
Cash on hand					$	1,380
Cash in transit						7,024
Cash in banks	Checking	accounts deposits				1,216
Demand deposits						337,878
	Foreign currency deposits USD94 thousand					2,899
			EUR13 thousand			444
			JPY9,966 thousand			2,165
			THB9,003 thousand			35,382
			CNY13 thousand			57
	Foreign currency time deposits			USD1,500 thousand		46,065
					$	434,510
		Statement of Inventories
				Amount
					Net Realizable
	Item			Cost	Value	Note
Raw materials			$	6,955	5,230	NRV
Materials				11,771	11,137	`〃`
Work in process				17,141	17,141	`〃`
Semi-finished goods				15,035	11,715	`〃`
Finished goods (including inventories in transit)				42,045	37,225	`〃`
Merchandise				4,923	4,923	`〃`
Less: Allowance for	inventory write-down			(10,499)	-
Total			$	87,371	87,371

CHINA METAL PRODUCTS CO., LTD.

Statement of Changes in Investments Accounted for Using the Equity Method

December 31, 2023

(In Thousands of New Taiwan Dollars)

Beginning Balance Shares Amount 667,820 $ 7,570,963 67,013,057 877,566 25,782,134 457,275 500 120,101 16,763,726 (21,760) 1,000,000 169,085 158,877,643 4,142,009 5,000,000 897,964 32,500,000 268,778 1,000,000 22,398 22,664,800 421,765 5,000,000 43,085 33,880,000 338,696 5,900,000 66,182 - - $ 15,374,107	Addition Shares Amount (Note 1) - - - - - - - - - - - - - - - - - 52,606 - - - - - 105 60,000,000 600,000 - - 2,000,000 20,000 672,711	Share of Profit (Loss) of Investments Accounted for Exchange Difference on Translation of Foreign Deduction Using Equity Financial Shares Amount (Note 2) Method Statements - 97,942 274,035 (164,843) - 33,507 146,284 (352) - 64,455 48,672 (156) - 16,867 20,509 (5,780) - - - - - 25,879 32,886 846 - 95,327 532,802 - - - 184,256 - - - (19,157) - - 6,661 9,827 - - - (51,905) - - - 3,199 - - - (34,466) - - 6,463 7,860 - - - (3,657) - 347,101 1,151,145 (170,285)	Ending Balance	Ending Balance	Market Value or Net Assets Value Total Unit price amount 11,322.36 7,561,297 14.77 990,085 16.99 438,109 235,926.61 117,963 0.57 9,627 176.94 176,938 28.38 4,508,960 34.10 170,481 7.76 252,083 25.56 25,564 6.26 141,778 9.28 46,389 9.63 904,231 11.45 67,579 8.17 16,343	Collateral
			Shares 667,820 67,013,057 25,782,134 500 16,763,726 1,000,000 158,877,643 5,000,000 32,500,000 1,000,000 22,664,800 5,000,000 93,880,000 5,900,000 2,000,000	Percentage of Ownership 100.00 99.01 72.24 83.33 35.21 100.00 56.65 100.00 50.00 100.00 100.00 50.00 100.00 100.00 100.00	Unit price 11,322.36 14.77 16.99 235,926.61 0.57 176.94 28.38 34.10 7.76 25.56 6.26 9.28 9.63 11.45 8.17
Shares 667,820 67,013,057 25,782,134 500 16,763,726 1,000,000 158,877,643 5,000,000 32,500,000 1,000,000 22,664,800 5,000,000 33,880,000 5,900,000 -	Shares - - - - - - - - - - - - 60,000,000 - 2,000,000	Shares - - - - - - - - - - - - - - -
						None `〞` `〞` `〞` `〞` `〞` Note 4 Note 5 None `〞` `〞` `〞` `〞` `〞`

Note 1: The increasing amounts of this period are the additional guarantee provision amounted to $52,711 thousand, capital increase by cash amounted to $620,000 thousand. Note 2: The decreasing amounts of this period are the cash dividend amounted to $347,101 thousand. Note 3: Defferred credits recognized as other income.

Note 4: 76,180,771 shares of the Company were pledged as collateral for obtaining credit limits.

Note 5: 5,000,000 shares of the Company were pledged as collateral for obtaining credit limits.

CHINA METAL PRODUCTS CO., LTD.

Statement of Property, Plant and Equipment For the Year Ended December 31, 2023 (In Thousands of New Taiwan Dollars)

Please refer to Note 6(g), for the regarding information.

Statement of Short-term Borrowings

December 31, 2023

Loan Type	Lender Shin Kong Bank First Bank Chang Hwa Bank Taiwan Cooperative Bank Hua Nan Bank O-Bank The Export-Import Bank of the Republic of China Chang Hwa Bank	Amount $ 200,000 100,000 200,000 100,000 100,000 200,000 150,000 112,500 $ 1,162,500	Financing Period 2023.12.25~2024.01.25 2023.10.11~2024.04.11 2023.12.29~2024.02.27 2023.11.14~2024.02.14 2023.11.24~2024.01.24 2023.12.22~2024.03.22 2023.02.15~2024.02.15 2023.08.07~2024.08.07	Interest Rates 1.95% 1.95% 1.75% 1.91% 1.90% 1.99% 1.79% 2.20%	Mortgage Guarantee Note - - - - - - -
Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured

Statement of Short-term Bills Payable

Item Short-term Bills Payable `〞` `〞` `〞`	Guarantee or Acceptance Institution International Bills Taiwan Bills China Bills Dah Chung Bills	Financing Period 2024.02.07 2024.02.07 2024.02.19 2024.02.01	Interest Rates 1.900% 1.978% 1.948% 1.978%			Amount	Carrying Amount Note 99,800 99,799 149,608 99,860 449,067
				Total Amount		Unamortized Discount
				$ 100,000 100,000 150,000 100,000 $ 450,000		(200) (201) (392) (140) (933)

CHINA METAL PRODUCTS CO., LTD.

Statement of Long-term Borrowings

December 31, 2023

(In Thousands of New Taiwan Dollars)

Creditor Mega Bank CTBC Bank CTBC Bank CTBC Bank CTBC Bank Bank SinoPac Shin Kong Bank Taishin International Bank En Tie Commercial Bank Cathay United Bank Land Bank of Taiwan Bank of East Aisa Yuanta Bank Bank of Panhsin Bank of Taiwan KGI Bank Bank SinoPac Bank SinoPac Bank SinoPac Bank SinoPac Less: Issuance Cost	Description Secured Borrowings Secured Borrowings Unsecured Borrowings Secured Borrowings Secured Borrowings Secured Borrowings Secured Borrowings Unsecured Borrowings Unsecured Borrowings Unsecured Borrowings Unsecured Borrowings Unsecured Borrowings Unsecured Borrowings Unsecured Borrowings Unsecured Borrowings Unsecured Borrowings Unsecured Borrowings Unsecured Borrowings Land Loan Syndicated Loan	Financing Period 2023.07.27~2025.07.26 2023.10.31~2025.10.31 2023.10.31~2025.10.31 2023.10.31~2025.10.31 2023.10.31~2025.10.31 2023.04.30~2025.04.30 2023.12.15~2026.12.15 2023.10.31~2025.10.31 2023.10.13~2025.10.13 2023.12.30~2025.12.30 2023.12.12~2025.12.12 2023.12.20~2025.12.20 2023.12.25~2025.12.25 2023.06.08~2025.06.07 2023.12.30~2025.12.30 2023.03.24~2025.03.24 2022.06.30~2025.05.30 2022.10.04~2025.05.30 2019.12.04~2026.12.04 2019.10.15~2024.10.14			Amount	Due over one year 100,000 250,000 100,000 300,000 50,000 1,300,000 300,000 500,000 300,000 200,000 150,000 200,000 150,000 100,000 100,000 300,000 50,000 50,000 1,220,364 (14) 5,720,350	Collateral Note 2 Note 1 Note 1 Note 1 Note 1, Notes 2 and 3 Note 1 - - - - - - - - - - Note 4 Note 1
				Interest Rates % 1.98 % 1.95 % 1.95 % 1.95 % 1.98 % 1.88 % 1.95 % 1.95 % 1.95 % 1.81 % 1.75 % 1.98 % 1.89 % 1.95 % 1.93 % 1.88 % 1.92 % 2.01 % 2.55 % 2.50	Due within one year - - - - - - - - - - - - - - - - 100,000 50,000 - 1,734,800 - $ 1,884,800

Note 1: The collateral is the shares of long-term investments accounted for using equity method. Note 2: The collateral is the land and buildings in Taipei. Note 3: The collateral is the land and buildings in Hsinchu. Note 4: The collateral is the land in Taichung.

CHINA METAL PRODUCTS CO., LTD.

Statement of Operating Revenue

For the Year Ended December 31, 2023

(In Thousands of New Taiwan Dollars)

Item Manufacturing: Cast iron products Department Store: Rental revenue Counter commissions Subtotal Other operating revenue Net operating revenue	Amount
	$ 799,883 35,411 371,007 406,418 37,068 $ 1,243,369

Note: The above amount had been deducted the allowance of sales return and discount amounted to $20,609 thousand.

CHINA METAL PRODUCTS CO., LTD.

Statement of Operating Costs

For the Year Ended December 31, 2023

(In Thousands of New Taiwan Dollars)

Item
Raw Material
Balance on January 1
Add: Purchases
Less: Loss on physical inventory count of raw material
Balance on December 31
Transfer to expenses
Raw material used in this period
Material
Balance on January 1
Add: Purchases
Gain on physical inventory count of material
Less: Balance on December 31
Transfer to expenses
Material used in this period
Direct labor
Manufacturing overhead
Manufacturing costs
Add: Balance of work in process on January 1
Less: Balance of work in process on December 31
Add: Balance of semi-finished goods on January 1
Purchases
Less: Loss on physical inventory count of semi-finished goods
Balance of semi-finished goods on December 31
Transfer to expenses
Cost of finished goods
Add: Balance of finished goods on January 1
Less: Loss on physical inventory count of finished goods
Balance of finished goods on December 31
Cost of goods sold－Finished goods
Balance of merchandise on January 1
Add: Purchases
Less: Balance of merchandise on December 31
Transfer to expenses
Transfer to other prepayments
Cost of goods sold－Merchandise
Add: Raw material and mold cost
Loss for inventory obsolescence
Less: Gain from reversal of write-down
Others
Income from sale of scraps and others
Operating costs Amount

$ 8,969
118,532
(387)
(6,955)
(517)
119,642
11,252
120,027
10
(11,771)
(35,043)
84,475
79,661
355,744
639,522
50,094
(17,141)
40,770
5,997
(379)
(15,035)
(15,070)
688,758
38,751
(26)
(42,045)
685,438
7,549
8,883
(4,923)
(497)
(1,324)
9,688
48,436
782
(496)
2,624
(2,050)
$
744,422

CHINA METAL PRODUCTS CO., LTD.

Statement of Operating Expenses

For the Year Ended December 31, 2023

(In Thousands of New Taiwan Dollars)

Item Salary expense Freight charges Export expense Administrating expense Depreciation Advertisement Fee Other (Each of the items was less than 5% of the total account balance)	Selling Expenses $ 11,201 5,625 15,511 - 238 - 5,756 $ 38,331		Administrative Expenses 185,361 52 - 146,866 207,568 37,031 109,320 686,198	Research and Development Expenses
				- - - - - - -
				-

AI assistant

CMP — Annual Report 2023

51855_rns_2023-11-13_8839ee77-b904-4eca-b18b-f913ad37c88b.pdf

CHINA METAL PRODUCTS CO., LTD.

FINANCIAL STATEMENTS

Table of contents

KPMG

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Corresponding audit procedure:

2. Impairment assessment of investments accounted for using equity method

Description of key audit matter:

Corresponding audit procedure:

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditor’s Responsibilities for the Audit of the Financial Statements

KPMG

Notes to Readers

(English Translation of Financial Statements Originally Issued in Chinese) CHINA METAL PRODUCTS CO., LTD.

Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Financial Statements Originally Issued in Chinese) CHINA METAL PRODUCTS CO., LTD.

Statements of Comprehensive Income

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

(English Translation of Financial Statements Originally Issued in Chinese) CHINA METAL PRODUCTS CO., LTD.

Statements of Changes in Equity

For the years ended December 31, 2023 and 2022

(English Translation of Financial Statements Originally Issued in Chinese) CHINA METAL PRODUCTS CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Notes to the Financial Statements

For the years ended December 31, 2023 and 2022

(1) Company history

(2) Approval date and procedures of the financial statements:

(3) New standards, amendments and interpretations adopted:

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(4) Summary of material accounting policies

(a) Statement of compliance

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(ii) Foreign operations

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(e) Cash and cash equivalents

(f) Financial instruments

(i) Financial assets

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

3) Financial liabilities

4) Derecognition of financial liabilities

5) Offsetting of financial assets and liabilities

6) Financial guarantee contract

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(g) Inventories

(h) Investment in associates

(i)

Subsidiaries

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(j) Joint Arrangements

(k) Investment property

(i) Recognition and measurement

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(m) Leases

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(ii) Subsequent expenditure

(o) Impairment of non-financial assets

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

(p) Provisions

(q) Revenue

1) Sale of goods

CHINA METAL PRODUCTS CO., LTD. Notes to the Financial Statements

2) Customer loyalty program

3) Financing components

(r) Contract costs

CMP Annual Report 2023