CSSSC - Annual Report 2022 | FinancialReports.eu

Stock Code ： 2025

Chien Shing Stainless Steel Co., Ltd. Individual Financial Statements For the Years Ended December 31, 2022 and 2021 (Independent auditor’s report included)

Company address: No.222 Industry Road, Hsiao Pyi Li, Madou Dist., Tainan City Company telephone: (06)570-3271

Individual Financial Statements Table of Contents

Individual Financial Statements Table of Contents
Item	Page
I. Cover	1
II. Table of Contents	2
III. Independent auditor’s report	3－7
IV. Individual Balance Sheet	8
V. Individual Statement of Comprehensive Income	9
VI. Individual Statement of Changes in Equity	10
VII. Individual Cash Flow Statements	11
VIII. Notes to Individual Financial Statements
(I) History of Company	12
(II) The Authorization of Financial Statements	12
(III) Application of New and Revised International Financial Reporting Standards	12－13
(IV) Summary of Significant Accounting Policies	13－22
(V) Critical Accounting Judgements and Key Sources of Estimation and Uncertainty	22－23
(VI) Summary of Significant Accounting Items	23－43
(VII) Related party transaction	43－44
(VIII) Pledged Assets	44－45
(IX) Significant Contingent Liabilities and Unrecognized Commitments	45
(X) Loss on Material Disaster	45
(XI) Material Events after the Period	45
(XII) Others	45－52
(XIII) Additional Disclosures
1. Information about significant transactions	52 and 55-56
2. Information about investees	52
3. Information on investments in mainland China	52
4. Information on main investors	52, 57
(XIV) Segments Information	52－57
IX. Details of Significant Accounting Items	58－79

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CPAs’ Audit Report

To Chien Shing Stainless Steel Co., Ltd.:

Audit opinion

We have audited the accompanying individual balance sheet of Chien Shing Stainless Steel Co., Ltd. (the “Company”) as of December 31, 2022 and 2021, and the individual statements of comprehensive income, individual changes in equity and individual cash flows from January 1 to December 31, 2022 and 2021, and the notes to the individual financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying individual financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022 and 2021, and its individual financial performance and its individual cash flows from January 1 to December 31, 2022 and 2021 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (“FSC”).

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the individual financial statements of the Company for the year 2022. These matters were addressed in the context of our audit of the individual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We decided the key audit matters are the followings:

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I. Impairment of Property, Plant and Equipment

Please refer to Note IV.8(2) of the individual financial statements for the accounting policy for property, plant and equipment; for the material estimations and the major sources of assumed uncertainties, please refer to Note V.2(5) to the individual financial statements

Property, plant and equipment are the major assets of the Company, as of December 31, 2022, their carrying amount was NTD 392,032 thousand, accounted fro 26% of the total assets. When evaluating any impairment sign by the management, they have to estimate the recoverable amount of such asset. When evaluating the impairment of assets, the value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit. The application of value in use must estimate the future cash inflow and outflow derived from continuous use and final disposal of such asset, and the proper discount rate shall be applied to such future cash flow. Since the judgement and assumption involved in evaluating impairment of assets, including identification of cash-generating unit, future sales forecast, estimated profit of products, remaining economic life of the asset, and the current time value of money; the management shall make the best estimation. Therefore we consider the impairment of property, plant and equipment is one of the most material matters when auditing the Company’s individual forecast statements.

The related audit procedure undertaken by us including assessing if the management has clear identified the information from internal and external sources for signs of impaired asset; reviewing the reasonableness of the estimation basis of future cash flow applied by the management; reviewing the discount rate applied by the management reflecting the ratio of the current market assessment to the time value of money and certain risks of the asset; assessing the reasonableness of the cash generating unit to which the asset attributed to identified by the management; and calculating the estimation of the recoverable amount of the asset.

II. Valuation of Inventories

Please refer to Note IV.9 of the individual financial statements for the accounting policy for valuation of inventories; for the material estimations and the major sources of assumed uncertainties, please refer to Note V.2(4) of the individual financial statements

As of December 31, 2022, the Company’s carrying amount of inventories was NTD 259,871 thousand, accounted fro 17% of the total assets. The Company mainly produces and sells coldrolled stainless coil products; its production and marketing policy is affected by the changes of market demands. When an inventory is damaged, all or part obsolete or selling price depreciated, the cost of such inventory may not be recovered. When the estimated costs to be input until completion and the estimated costs required for sales increased, the cost of such inventory may not be recovered, either. The use and value of inventories mainly depend on the inventory management policy of the management, and the future sales forecast of the products. However, forecast is

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uncertain, and thus we consider valuation of inventories is one of the most material matters when auditing the Company’s individual forecast statements.

Key determining factors for valuation of inventories, mainly is the estimates of net realizable value, which is based on the most reliable evidence of the expected realizable value of inventories at the time of estimation. In this regard, the related audit procedure undertaken by us including reviewing if the policy of the Company to determine the net realizable value of inventories reasonably reflects the future sales forecast of the inventories; the historical experience and other certain conditions; analyzing and testing the ages of inventories to identify if certain obsolete inventories have been appropriated for inventory depreciation loss reasonably based on the historical experience; and assessing the matters after the period within the proved extent of the conditions at the end of period, and how the fluctuation of prices or costs directly related to the matters after the period impact the net realizable value of inventories.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

While preparing the individual financial statements, management is responsible for assessing the Company’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 the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Individual Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 auditing standards 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

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influence the economic decisions of users taken on the basis of these individual financial statements.

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

I. Identify and assess the risks of material misstatement of the consolidated 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.
II. 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 the Company’s internal control.
III. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
IV. 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 the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated 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 auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
V. Evaluate the overall presentation, structure and content of the individual financial statements, including the disclosures, and whether the individual financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the individual financial statements for the year ended December 31, 2022 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.

Diwan & Company The Financial Supervisory Commission R.O.C. Approval No. for the Certification: Jing Guang Zheng Shen Zhi No. 1000047855 Jing Guang Zheng Shen Zhi No. 0990071790

Jui-Wen Lu

CPA:

Rui-Yan Tseng

March 14, 2023

Chien Shing Stainless Steel Co., Ltd. Individual Balance Sheet December 31, 2022 and 2021

(All amounts in NTD thousand)

Assets	Assets	Note	December 31, 2	022	December 31, 2021	December 31, 2021	Liabilities and equity	Liabilities and equity	December 31, 2022	December 31, 2022	December 31, 2021	December 31, 2021
Code	Accounting items		Amount	%	Amount	%	Code	Accounting items	Amount	%	Amount	%
11xx 1100 1110 1200 130x 1410 1470 15xx 1517 1600 1760 1780 1840 1915 1920 1xxx	Current asset Cash and cash equivalents Financial assets measured at FVTPL - current Other receivables Inventories Prepayments Other current assets Total current assets non-current assets Financial assets measured at FVTOCI - non-current Property, plant and equipment Net investment property Intangible assets Deferred tax assets Prepayments for equipment Refundable deposits Total non-current assets Total assets	IV and VI.1 IV and VI.2 IV IV, V and VI.3 IV and VI.4 IV, V, VI.5, VIII, IX and XI IV, V, VI.5, VI.6 and VI.20 VII, VIII and XI IV and VI.7 IV, V and VI.19 IV	$ 479,294 105,090 587 259,871 111,250 171	32 7 - 17 7 -	$ 373,575 70,517 773 313,541 386,969 99	19 4 - 16 20 -	21xx 2150 2170 2200 2230 2250 2300 2322 2365 25xx 2540 2570 2640 2xxx 31xx 3100 3110 3300 3350 3400 3420 3xxx	Current liabilities Note payable IV Accounts payable IV Other payables IV Income tax liabilities for the period IV and VI.19 Provision for liabilities - current IV, V and VI.8 Advance receipts and other current liabilities Long-term borrowings due within a year IV, VI.9 and VIII Refund liabilities - current IV Total current liabilities non-current liabilities Long-term borrowings IV, VI.9 and VIII Deferred tax liabilities IV and VI.19 Net defined benefit liabilities - non-current IV, V and VI.10 Total non-current liabilities Total liabilities Equity Share capital IV and VI.11 Ordinary share capital Retained earnings Deficit to be compensated VI.12 Other equity Unrealized valuation loss on financial assets measured at FVTOCI IV, VI.4, VI.13 and VI.18 Total equity Total liabilities and equities	$ 6,031 204 37,467 - - 217 - 104	- - 3 - - - - -	$ 13,362 4,712 37,175 135 370,420 266 512,174 22,256	1 - 2 - 19 - 26 1
			956,263	63	1,145,474	59
			41,715 392,032 118,501 93 2,270 5,555 2	3 26 8 - - - -	55,574 487,264 256,328 145 2,551 6,169 2	3 25 13 - - - -
									44,023	3	960,500	49
									- 16 5,470	- - -	286,949 - 7,058	15 - -
									5,486	-	294,007	15
									49,509	3	1,254,507	64
									2,811,673 (1,312,771) (31,980)	185 (86) (2)	2,811,673 (2,094,552) (18,121)	144 (107) (1)
			560,168	37	808,033	41
			$ 1,516,431	100	$ 1,953,507	100
									1,466,922	97	699,000	36
									$ 1,516,431	100	$ 1,953,507	100

(Please refer to the notes to individual financial statements)

Chairman: Shuo-Tang Yeh

Managerial Officer: Shuo-Tang Yeh

Head of Accounting: Ching-Wen Huang

Chien Shing Stainless Steel Co., Ltd.

Individual Statement of Comprehensive Income

For the Years Ended December 31, 2022

and 2021

(Unit: NTD thousand; but EPS in NTD)

Code	Accounting items	Note	2022		2021
			Amount	%	Amount	%
4000 5000 5900 6000 6100 6200 6500 6900 7000 7100 7010 7020 7050 7900 7950 8200 8300 8310 8311 8316 8349 8500 9750	Net operating revenue Operating cost Gross profit (loss) Operating expenses Selling and marketing expenses Administrative expenses Total operating expenses Net other income and expenses Operating profit (loss) Non-operating income and expenses Interest income Other income Other gains or losses Financial costs Total non-operating income and expenses Net income before tax of continuing operations income tax expense Net income for this period Other comprehensive income Items that will not be reclassified subsequently to profit or loss: Re-measurement of the defined benefit plan Unrealized valuation losses on investments in equity instruments as at fair value through other comprehensive income Income tax relating to items that will not be reclassified subsequently to profit or loss Total items that will not be reclassified subsequently to profit or loss Other comprehensive income (net after tax) Total comprehensive income for this period Earnings per share (NTD) Basic earnings per share (after tax)	IV and VI.14 IV, VI.3, VI.10 and VI.15 IV, VI.10 and VI.15 IV, VI.6, VI.16 and VII VI.17 VI.2, VI.5 and VI.17 IV, V, VI.2, VI.6, VI.8 and VI.17 IV, VI.17 and VII IV, VI.6 and VI.19 IV, VI.4, VI.10, VI.13, VI.18 and VI.19 IV and VI.21	$ 1,231,007 (1,340,478)	100 (109)	$ 2,470,941 (2,166,542)	100 (88)
			(109,471)	(9)	304,399	12
			(6,285) (28,364)	(1) (2)	(8,946) (28,245)	- (1)
			(34,649)	(3)	(37,191)	(1)
			(1,715)	-	(1,687)	-
			(145,835)	(12)	265,521	11
			1,012 8,565 953,621 (7,366)	- 1 78 (1)	81 8,001 16,512 (13,653)	- - 1 (1)
			955,832	78	10,941	-
			809,997 (29,340)	66 (3)	276,462 (138)	11 -
			780,657	63	276,324	11
			1,405 (13,859) (281)	- (1) -	1,481 (12,617) (296)	- - -
			(12,735)	(1)	(11,432)	-
			(12,735)	(1)	(11,432)	-
			$ 767,922	62	$ 264,892	11
			$ 2.78		$ 0.98

(Please refer to the notes to individual financial statements)

Chairman：Shuo-Tang Yeh Managerial Officer: Shuo-Tang Yeh Head of Accounting: Ching-Wen Huang

Chien Shing Stainless Steel Co., Ltd.

Individual Statement of Changes in Equity

For the Years Ended December 31, 2022

and 2021

(All amounts in NTD thousand)

Item	Ordinaryshare capital	Retained earnings	Other items of equity	Total equity
		Deficit to be compensated	Unrealized valuation loss on financial assets measured at FVTOCI
Balance on January 1, 2021 Net loss of 2021 Other comprehensive income of 2021 Total comprehensive income of 2021 Balance on December 31, 2021 Net income of 2022 Other comprehensive income of 2022 Total comprehensive income of 2022 Balance on December 31, 2022	$ 2,811,673 - - - 2,811,673 - - - $ 2,811,673	$ (2,372,061) 276,324 1,185 277,509 -2,094,552 780,657 1,124 781,781 $ (1,312,771)	$ (5,504) - (12,617) (12,617) (18,121) - (13,859) (13,859) $ (31,980)	$ 434,108 276,324 (11,432) 264,892 699,000 780,657 (12,735) 767,922 $ 1,466,922

(Please refer to the notes to individual financial statements)

Chairman：Shuo-Tang Yeh Managerial Officer: Shuo-Tang Yeh Head of Accounting: Ching-Wen Huang

10 -

Chien Shing Stainless Steel Co., Ltd. Individual Cash Flow Statements

For the Years Ended December 31, 2022

and 2021

(All amounts in NTD thousand)

Item	2022	`2021`
Cash flow from operating activities Net income before tax of continuing operations Adjusted item: Adjustments for: depreciation expense Amortization expenses Net loss on financial assets measured at FVTPL Interest expense Interest income Dividend revenue Gain on disposal of investment property Unrealized net foreign currency exchange gain Gain on reversal of provisions for disposal of business waste buried in the plants Gain on reversal provisions for penalty for violating the Waste Disposal Act Assets related to operating activities/Changes in liabilities Financial assets measured at FVTPL Trade receivable Other receivables Inventories Prepayments Other current assets Note payable Accounts payable Other payables Provision Advance receipts and other current liabilities Refund liabilities - current Defined benefit liability Cash inflow from operations Interest paid Income tax paid Interest received Net cash inflow from operating activities Cash flow from investing activities Acquisition of financial assets measured at FVTOCI Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of intangible assets Disposal of investment property Increase in prepayments for equipment Dividends received Net cash inflows (outflows) from investing activities Cash flows from financing activities Decrease other payables - related parties -financing Repayment of long-term borrowings Net cash outflow from financing activities Effect of exchange rate changes on cash and cash equivalents Increase in cash and cash equivalents during this period Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year	$ 809,997 106,623 52 11,948 7,366 (1,012) (1,311) (607,524) (81) (355,025) (3,000) (46,521) - 186 53,670 275,719 (72) (7,331) (4,508) 1,544 (12,395) (49) (22,152) (183)	$ 276,462 120,732 162 (23,621) 13,653 (81) (415) - (37) - - 5,514 18,139 73 122,200 (92,220) 2,504 5,954 (207) 9,946 (13,350) (1,435) 22,039 (4,994)
	205,941 (8,284) (29,459) 1,012	461,018 (13,653) (3) 81
	169,210	447,443
	- (5,262) - - 743,607 (4,105) 1,311	(223) (7,181) 186 (181) - (4,509) 415
	735,551	(11,493)
	- (799,123)	(83,000) -
	(799,123)	(83,000)
	81	37
	105,719 373,575	352,987 20,588
	$ 479,294	$ 373,575

(Please refer to the notes to individual financial statements)

Chairman：Shuo-Tang Yeh Managerial Officer: Shuo-Tang Yeh Head of Accounting: Ching-Wen Huang

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Chien Shing Stainless Steel Co., Ltd. Notes to Individual Financial Statements For the Years Ended December 31, 2022 and 2021

(In NTD thousand, unless stated otherwise)

I. Company history:

Chien Shing Stainless Steel Co., Ltd. (the “Company hereafter) was approved to be incorporated on May 8, 1972. The registered address and major business location is No.222 Industry Road, Hsiao Pyi Li, Madou Dist., Tainan City. The major business is processing, production, and trading various stainless products. The shares of the Company have be listed for trading in Taiwan Stock Exchange Company limited by shares from February 1996.

Due to operational needs, on October 12, 2017, the Board of Directors resolved to approve the proposal of simple merger among the Company, wholly-owned subsidiary, Molimei Technology Co., Ltd, Chien Yi Investment Co., Ltd, and Chien Ying Investment Co., Ltd. The Company was the survival company and such subsidiaries were dissolved. After the merger, the name was remained as “Chien Shing Stainless Steel Co., Ltd.,” and the merger base date was November 27, 2017.

The merged subsidiaries, Molimei Technology Co., Ltd, Chien Yi Investment Co., Ltd, and Chien Ying Investment Co., Ltd were approved to be incorporated on March 1, 1999; May 29, 1998, and June 12, 1996, respectively. The major business included the wholesale, retail of electric scooters and batteries thereof, and transaction of negotiable securities.

II. The Authorization of Financial Statements

The 2022 and 2021 individual finance statements were approved by the Board of Directors on March 14, 2023 to be disclosed.

III. Application of New and Revised International Financial Reporting Standards 1. The standards and interpretations recognized and issued as effective by the Financial Supervisory Commission (FSC)

From January 1, 2022, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), interpretations and interpretation announcement thereof to be applied from 2022 announced on the website of Securities and Futures Bureau, FSC, started to be applied. As the Company started to apply the abovementioned standards and interpretations recognized and issued as effective by FSC from January 1, 2022, there is no material impact on the Company’s individual finance statements.

The new/revised/amended standards and interpretations issued by International Accounting Standards Board (IASB), that are recognized and issued by FSC, to be applied from 2023

New, Revised or Amended Standards and Interpretations	Maincontents	EffectiveDateIssued byIASB
IAS 1 (amendment) IAS 8 (amendment) IAS 12 (amendment)	Disclosure of Accounting Policies Definition of Accounting Estimates Deferred Income Taxes Related to Assets and Liabilities Arising from a Single Transaction	January 1, 2023 January 1, 2023 January 1, 2023

After assessment, the management believes that applying the abovementioned standards revision recognized and issued as effective by FSC in 2023 will not materially impact the Company’s individual finance statements.

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Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

New/revised/amended standards and interpretations that issued by IASB but not recognized by FSC

New, Revised or Amended Standards and Interpretations	Maincontents	EffectiveDateIssued byIASB
Amendments to IFRS 10 and IAS 28 IFRS 17 IFRS 17 (amendment) IFRS 17 (amendment) IAS 1 (amendment) IAS 1 (amendment) IFRS 16 (amendment)	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Insurance Contracts Amendment to IFRS 17 Initial application of IFRS 17 and IFRS 9 - Comparative information “Classification of Liabilities as Current or Non-current” “Non-current Liabilities with Covenants” “Lease Liability in a Sale and Leaseback”	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2024 January 1, 2024 January 1, 2024

The management currently is assessing the potential impacts of abovementioned standards or amendments; therefore their impacts on the Company’s individual financial statements cannot be reasonably estimated temporarily.

IV. Summary of Significant Accounting Policies

The significant accounting policies applied for preparing the individual financial statements are described as the following. Unless otherwise specified, such accounting policies are consistently applied to all the presentation period.

Basis of Preparation and Measurement of Financial Statements
(1) Statement of compliance

The accompanying individual financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IFRS, IAS, interpretations and interpretation announcement thereof recognized and issued as effective by FSC.

(2) Measurement bases

The accompanying individual financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values. For assets, a historical cost is generally based on the fair value of the consideration given in exchange for the assets. For liabilities, it refers to the amount received when assuming obligations, or the amount expected to pay for repaying a liability

(3) Functional and presentation currency

Functional currency is the currency of the primary economic environment in which the entity operates. The individual financial statements of the Company are presented in the Company’s functional currency, the New Taiwan dollar (NTD). Unless specified otherwise, all financial data presented in NTD shall use NTD thousand as the unit

2. Criteria for Classification of Assets and Liabilities as Current or Non-current

(1) Current assets include cash and cash equivalents (not including these under restriction for exchange of assets or liability repayment within 12 months after the reporting period); assets held primarily for the purpose of trading; assets expected to be realised within 12 months after the reporting period; assets expected to be realised, sold, or consumed in the entity's normal operating cycle. All other assets are non-current.
(2) Current liabilities include liabilities held for purpose of trading; liabilities expected to be settled within 12 months after the reporting period or within the entity's normal operating cycle, and liabilities for which the entity does not have the right at the end of the reporting period to defer settlement beyond 12 months. Other liabilities are non-current.
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Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

3. Foreign currency transaction

The New Taiwan dollar (NTD) is the Company’s functional currency, and the presentation currency for the individual financial statements. The Company’s foreign currency transaction shall be recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the reporting date, foreign currency monetary items shall be translated using the closing rate; non‑monetary items that are measured in terms of historical cost in a foreign currency shall be translated using the exchange rate at the date of the transaction; and non‑monetary items that are measured at fair value in a foreign currency shall be translated using the exchange rates at the date when the fair value was measured. Exchange differences of monetary shall be recognised in profit or loss in the period in which they arise; When a gain or loss on a non‑monetary item is recognised in other comprehensive income, any exchange component of that gain or loss shall be recognised in other comprehensive income. Conversely, when a gain or loss on a non‑monetary item is recognised in profit or loss, any exchange component of that gain or loss shall be recognised in profit or loss.

Cash and cash equivalents

comprises cash on hand and demand deposits, and short‑term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, held for the purpose of meeting short‑term cash commitments rather than for investment or other purposes.

Financial instruments
(1) When becoming a party in financial instrument contract, recognize financial asset or financial liability in the balance sheet. In s regular way purchase or sale of financial assets, an equity instrument applies trade date accounting; liability instrument, beneficiary instrument, and derivative instrument applies settlement date accounting.
(2) When initially recognizing a financial asset or financial liability, it is measured at fair value; but these are not measured at FVTPL, shall plus or less the transaction cost for acquisition or issuance.
(3) When initially recognizing a financial instrument, the Company classify the components as financial liability, financial asset or equity instrument based on the nature of contractual arrangement, and the definitions of financial liability, financial asset and equity instrument
(4) A financial asset and a financial liability shall be offset when, and only when the Company currently has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In the balance sheet, it is presented in net amount.
(5) The Company’s financial instruments include the following:
A. Financial assets measured at amortized cost
A financial asset shall be measured at amortized cost if both of the following conditions are met, and not assigned as the financial asset measured at FVTPL, including cash and cash equivalents and other receivables listed in the balance sheet:
(A) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
(B) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After the financial assets measured at amortised cost initially recognized, it is measured at amortised cost by deducting impairment losses from the total carrying amount determined with effective interest method; when derecognition, through amortisation procedure, or recognizing the impairment gain or loss, such gain or loss is recognized in profit or loss.

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Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

B. Financial assets measured at FVTOCI

A financial asset shall be measured at fair value through other comprehensive income if both of the following conditions are met, and not assigned as the financial assets measured FVTPL; or at initial recognition, an entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is neither held for trading:

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

Afterward it is measured at fair value; other than impairment loss of debt instrument investment, foreign exchange gains and losses on monetary financial assets, and interest calculated with effective interest method, the dividend not clearly represents a recovery of part of the cost of the investment of equity investment, the value changes are recognized in other comprehensive income before derecognition or reclassification. When derecognizing, for the accumulated profit or loss recognized in other comprehensive income previously, the debt instrument investment is reclassified from equity to profit or loss; the equity instrument investment is transferred to retained earnings. The dividends of equity instrument investment are recognized when acquiring the right to receive dividends.

C. Financial assets measured at FVTPL

A financial asset not measured at amortised cost or at fair value through other comprehensive income; or financial asset irrevocable elected at initial recognition to be measured at fair value through profit or loss to eliminate or materially reduce accounting mismatch . Subsequent measurement is at fair value, and the changes o fair value are recognized in profit or loss.

D. Financial liability measured at amortised cost

A financial liability not measured at FVTPL is the financial liability measured at amortized cost, including notes payable, payables, other payables, and long-term borrowings; these are measured at the amortized cost by the effective interest method. But the short term payables with no interest attached, is measured at the original transaction amount if the discounting impacts negligible.

E. Derivatives

The initial recognition and subsequent measurement of the Company’s derivatives are based on the fair value. If not meeting the conditions of hedge accounting, the changes of fair value of derivatives are recognized as profit or loss; the derivatives assigned as the effective hedging instrument, the timing to recognize its profit or loss depends on the nature of the hedging relationship. If the fair value is positive, it is recognized as the financial asset; if negative, it is ecognized as the financial liability.

6. Fair value measurement

(1) The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The framework of fair value measurement takes into account the characteristics of a specific asset or liability, including the condition and location of the asset, and restrictions on the sale or use of the asset, while assuming that the transaction of the sale of assets or transfer of liabilities occurs in the major market for such asset or liability, or if there is no major market, the most favorable market for the asset or liability. The major or most favorable market must be the one accessible to the Company; and it is assumed that these market participants are pricing in their best interest of the economy.

The fair value measurement of non-financial assets takes into account that market participants use the asset at its highest and best use or sell the asset to another market participant who will use the asset for its highest and best use, In order to generate economic benefits

(2) The fair value measured at value technique is to apply the value technique that is suitable under these circumstances with sufficient information available, and uses the maximum observable input value that is relevant and maximize the use of relevant observable inputs and minimize the use of unobservable inputs.
15 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

7. Derecognition of financial assets and liabilities

(1) Financial asset

For the termination of contractual rights from the cash flow of financial assets, or the financial asset has been transferred and almost all the risks and rewards of the ownership of the asset have been transferred, or almost all the risks and rewards of the ownership of the financial asset have not been transferred nor retained and the control over the said financial asset has not been retained, the financial asset is derecognized, and any rights and obligations arising from or retained by the transfer are individually recognized as assets or liabilities. On the derecognition day, the difference between the carrying amount of the financial assets measured at the amortised cost and the consideration received is recognized as profit or loss; The difference between the derecognized carrying amount of equity instrument investment measured at fair value through other comprehensive income, and the consideration received plus the cumulative sum of profit or loss recognized as other comprehensive profit or loss is recognized as retained earnings, and the debt instrument investment is recognized as profit and loss. Financial assets that are not derecognized as a whole are allocated on the basis of the relative fair value of the continuously recognized part of their respective carrying amounts. If the transfer of financial asset does not qualify as derecognition, the entire transferred asset shall be continuously recognized and the consideration received shall be recognized as a financial liability.

(2) Financial liability

Financial liabilities are only derecognized all or in part only when the obligation specified in the contract is discharged or cancelled or expires. An exchange between an existing borrower and lender of debt instruments with substantially different terms shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non‑cash assets transferred or liabilities assumed, shall be recognised in profit or loss.

8. Impairment of Assets

(1) Impairment of financial assets
A. The Company recognizes loss allowance for expected credit losses on a financial asset measured at amortized cost (including cash and cash equivalents and other receivables).
B. The Company measures expected credit losses of a financial instrument in a way that reflects an unbiased and probability‑weighted amount that is determined by evaluating a range of possible outcomes; the time value of money; and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions. For other receivables, the simplified method is applied to measure the loss allowance based on the expected credit loss amount of the duration on the reporting date; other than that, if the credit risk of cash and cash equivalents is low on the reporting date or no significant increase after initial recognition, the loss allowance is measured based on the 12-month expected credit loss amount; if the aforementioned financial asset’s credit risk has increased significantly since the initial recognition on the reporting date, the loss allowance is measured based on the duration.
C. The carrying amount of the above-mentioned financial assets are reduced by means of loss allowance, and the listed and reversed amount of loss allowance is recognized in profit and loss.
16 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

(2) Impairment of non-financial assets

For the assets applicable to IAS 36 "Impairment of Assets," except for goodwill, intangible assets with nondetermined useful life, intangible assets with indefinite useful lives, and intangible asset not yet available for use, the impairment test is conducted annually or if any indication of impairment, the Company assess whether there are any indication that the asset may have been impaired on each reporting day. If there are indications of impairment, the recoverable amount of the asset is estimated. The recoverable amount refers to the higher of the fair value of the asset or cash-generating unit minus the cost of sale and its value in use. If the recoverable amount of the asset is lower than its carrying amount, the carrying amount is reduced to the recoverable amount. This reduction is the impairment loss and is recognized as profit or loss; afterwards, on the reporting date, if there is any indication showing that the impairment loss of assets other than goodwill has been recognized in the previous periods may no longer exist or has decreased, the recoverable amount of the asset shall be re-estimated. If the estimate of the recoverable amount of the asset changes and increases, the impairment loss shall be reversed; provided that, the carrying amount of the asset increased by the reversal of the impairment loss shall not exceed the carrying amount of the asset after deducting the amortisation or depreciation if the impairment loss was not recognized in the previous year.

For the cash-generating unit of amortised goodwill, the impairment test of the unit is performed by comparing the carrying amount of the unit containing goodwill with its recoverable amount. If the carrying amount of the unit exceeds its recoverable amount, the impairment loss must be recognized. When the impairment loss is recognized, the carrying amount of the unit’s amortised goodwill is deducted first, and the deducted amount is then reduced in proportion to the carrying amount of the other assets in the unit. The recognized impairment loss of goodwill shall not be reversed in the subsequent period.

9. Inventories

Inventory cost includes all purchase costs, processing costs and other costs incurred to bring the inventory to the current location and state. The calculation of the cost uses the weighted average cost formula to allocate the inventory cost. The inventories at the end of period is measured at the lower of cost and net realisable value. When comparing the cost and net realisable value, not only the inventories under the same category, individual items shall be compared one by one Net realisable value refers to the estimated selling price in the normal course of business after deducting the estimated cost required to be completed, and the estimated cost required to complete the sale.

Property, Plant and Equipment
(1) They are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes. Its recognition and subsequent measurement adopt the cost model, and the amount after the cost deducting accumulated depreciation and accumulated impairment losses is shown. Cost amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction, as well as the costs of dismantling and removing the item and restoring the site on which it is located When the useful life of the major components of property, plant and equipment are different, it is treated as a separate item of property, plant and equipment.
(2) The property, plant and equipment is depreciated by the straight-line method except that the land is not depreciated. It is apportioned based on the following useful life. At the end day of each year, the residual value of the asset, the useful life, and the depreciation method used are reviewed. When the expected value is different from the previous estimate, or the expected consumption pattern of the future economic benefits contained in the asset has changed significantly, and thus the depreciation method needs to be changed to reflect the changed pattern, the change is treated as a change in accounting estimates. If property, plant and equipment have recognized asset impairment losses, the depreciation expense of the asset in the future period will be adjusted based on the revised carrying amount of the asset lessing its residual value, and will be adjusted with the straight-line method within the remaining useful life:

Buildings	20-35 Years
Attachment to buildings	2-35 Years
Machinery Equipment	2-20 Years
Transport equipment	2-6 Years
Office equipment	5-8 Years
Other equipment	2-15 Years

17 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

(3) Replacement and major inspection costs are recognized in the carrying amount of real estate, plant and equipment items; routine maintenance costs are recognized as profit or loss when incurred. The borrowing cost of acquiring, constructing, or producing qualified assets is capitalized and listed as part of the cost of the asset.
(4) When disposing or the expected future economic benefits cannot be generated from the use or disposal, the carrying amount of the real estate, plant and equipment items shall be derecognized, the profits or losses arising from derecognition shall be recognized as profit and loss, and the benefits shall not be classified as income.

11. Lease

(1) The Company is the lessor

When the lease clause transfers almost all the risks and rewards attached to the ownership of the asset to the lessee, it is classified as a financial lease; leases other than financing leases are classified as operating leases.

When the company subleases the right-of-use asset, it uses the right-of-use asset (not the underlying asset) to determine the classification of sublease. However, if the main lease is a short-term lease for which the recognition exemption applies, the sublease is classified as an operating lease.

A. Under a financing lease, the net lease investment is measured by the sum of the current value of amount to be collected from the lessee and the unguaranteed residual value plus the original direct cost, and is expressed as the financing lease receivable. The recognition of financing lease income is based on the fixed rate of return that reflects the Company's unexpired net lease investment during each lease period.
B. The rental income of operating leases is recognized as revenue during the lease period on a straight-line basis. If the lease contract provides incentives to the lessee to facilitate the signing of the lease contract, the total cost of the incentives is recognized during the lease period using the straight-line method, as a deduction of rental income. The original direct costs incurred by negotiating and arranging operating leases are added to the carrying amount of the underlying assets and recognized as expenses during the lease period on a straight-line basis.

If there is a variable rent in the lease agreement that does not depend on the index or rate, it is recognized as income in the current period when incurring.

(2) The Company is the lessee

Except for short-term leases and lease payments for low-value underlying assets that are recognized as expenses during the lease period on a straight-line basis, other leases are recognized as right-of-use assets and lease liabilities on the lease start date.

A. The initial recognition and subsequent measurement of the right-of-use asset is based on a cost model, where the cost minus the accumulated depreciation and accumulated impairment loss, and the amount after adjusting the remeasurement of the lease liability is presented. The depreciation of the right-of-use asset is based on the straight-line method. The depreciation is calculated based on the earlier of the lease start date to the end of the useful life of the right-of-use asset or the expiration of the lease term.
B. The initial recognition of lease liabilities is measured by the current value of the lease payments not yet paid on the lease start date. If the implicit interest rate of the lease is easy to determine, the lease payment is discounted at that interest rate. If the interest rate is not easy to determine, the lessee’s incremental borrowing interest rate is used to discount. The subsequent measurement is measured at the amortised cost with the effective interest method. The remeasurement of the lease liability is used as an adjustment of the right-of-use asset, but if the carrying amount of the right-of-use asset has been reduced to zero, the remaining remeasured amount is recognized in the profit and loss.

If there is a variable rent in the lease agreement that does not depend on the index or rate, it is recognized as an expense in the current period.

18 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

12. Investment Property

(1) Refers to real estate held for earning rentals or for capital appreciation or both, and not used in the production or supply of goods or services or for administrative purposes, or for sale in the ordinary course of business. Investment property is initially measured at its cost (including transaction cost). After initial recognition, investment property is also measured by the cost model. The depreciation method, useful life and residual value adopted are treated based on the cost model of property, plant and equipment. Investment property is derecognized when it is disposed of, or is no longer in use forever and is not expected to produce future economic benefits from the disposal, and the benefits or losses arising from derecognition are recognized as profit and loss.
(2) Investment property can only be converted into reclassification of the carrying amount of real estate only when the purpose is changed and there is evidence to prove it.

13. Intangible assets

(1) Such as computer software, which are individually acquired and have finite useful lives, are initially measured at cost and amortized on a straight-line basis over three years over their useful lives, and the amortization period and method of amortization for intangible assets with finite useful lives are reviewed at each reporting date. If the expected useful life of the asset differs from the previous estimate, the amortization period is changed accordingly. If the expected consumption pattern of future economic benefits contained in the asset has changed, the amortization method is changed to reflect the changed pattern, and the change is accounted for as a change in accounting estimate. If intangible assets with finite useful life have recognized asset impairment losses, the amortization expense of the asset in the future period will be adjusted based on the revised carrying amount of the asset, and will be adjusted with the straight-line method within the remaining useful life:
(2) When disposing or the expected future economic benefits of an intangible asset cannot be generated from the use or disposal, the carrying amount of the intangible asset item shall be derecognized, the profits or losses arising from derecognition shall be recognized as profit and loss, and the benefits shall not be classified as income.

14. Provision for liabilities

(1) The Company has current obligations due to past events and is likely to need to outflow economically effective resources to pay off the obligations, and when the amount of the obligations can be reliably estimated, the provision shall be recognized. The provision is the best estimate of the expenditure required to repay current obligations on the balance sheet date and is measured on a pre-tax basis. When obtaining the best estimate of the provision, it is inevitable to take the risks and uncertainties related to many events and circumstances into consideration. When the time value of money has a significant impact, the amount of provisions is the present value of the expected expenditure required to repay the obligation. For future events that may affect the amount of payment required to repay the obligation, if there is sufficient objective evidence to show that it will happen, it will be reflected in the amount of provisions. In addition, the expected benefits of disposing of assets are not taken into consideration when measuring the provision.
(2) The Company reviews the provision on each balance sheet date and adjusts it to reflect the current best estimate. If it is no longer probable that the outflow of economically effective resources will be required to pay off the obligation, the provision shall be reversed.
(3) The Company's current provision recognition items are as follows: A. Estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Waste Disposal Act
- The Company was suspected of landfilling industrial wastes in the plant area, and thus violating the Waste Disposal Act. The Company estimates the removal and treatment costs of the landfilled industrial wastes based on the expert’s appraisal outcomes and supplemented by the quotations of relevant vendor. With the estimate of the possible fines based on expert opinions, the sum is the Company’s management’s best estimate for the expenditure required to settle this obligation.
B. Provisions for onerous purchase contracts

The decline in raw material prices has resulted in onerous purchase contracts for the Company. The Company adopts the fines incurred for the failure to perform such contracts as management’s best estimate to settle such obligations.

19 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

15. Equity instrument:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

16. Revenue recognization

Revenue is measured at the consideration that is expected to be entitled when transferring goods or services. The Company recognizes revenue when the control of goods or services is transferred to the customer and the performance obligations are satisfied. The main revenue items of the Company are explained as follows:

Sales of goods

The Company mainly manufactures and sells cold-rolled stainless steel coil products, and recognizes revenue when transferring control of the products to customers, and at the same time an enforceable right to obtain consideration is generated. Therefore, the Company usually recognizes revenue when the goods have been delivered and the legal ownership has been transferred. If the discount or future returns can be reliably estimated and the refund liability can be recognized based on past experience and other relevant factors, it will be listed as a deduction of sales revenue when recognizing the sales.

The Company recognizes the accounts receivable when the control of goods is transferred with the right to unconditionally receive the consideration; if the goods have been transferred to the customer but still do not have the right to unconditionally receive the consideration, the sales are recognized as contract assets; if, before transferring the goods to the customer, because the consideration has been received from the customer or the consideration is available to be received from the customer, and thus the obligation of the goods is required to be transferred to the customer, it shall be recognized as the contract liability

If the payment timing of the contract agreement clearly or implicitly provides the customer or the Company with significant financial benefits for the transaction of the transferred goods, the Company adjusts the promised consideration amount to reflect the time value of money; for sales contract where the time between when transfer of goods is expected at the beginning of the contract, and when the customer's payment for the product is made less than one year, the Company does not adjust the promised amount of consideration.

17. Borrowing costs

Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset (an asset that necessarily takes a substantial period of time to get ready for its intended use or sale) form part of the cost of that asset shall be capitalized. Other borrowing costs are recognized as an expense in the period in which it incurs them. For particular borrowings, before the expenditure of a qualified asset is incurred, the investment income on the temporary investment of those borrowings is deducted from the actual borrowing cost. When substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are completed, the borrowing costs shall be ceased capitalizing. If the qualifying asset is suspended from active development for longer period of time, the capitalization is suspended during this period.

18. Employee benefits

(1) Short-term employee benefits

are employee benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service. The undiscounted amount of short‑term employee benefits expected to be paid in exchange for that service shall be recognized as expense and liability. For the expected cost of profit‑sharing and bonus payments, the entity has a present legal or constructive obligation to make such payments as a result of past events; and a reliable estimate of the obligation can be made. Such cost is recognized as expense and liability as required in the preceding paragraph.

(2) Post-employment benefits

A. The Company’s employee retirement procedures are applicable to all employees who are officially hired. The employee pension fund is fully contributed for the management of the Labor Pension Reserve Supervision Committee, and deposited into a special pension fund account. Because the above-mentioned pension funds are deposited in the name of the Labor Pension Reserve Supervision Committee, It is completely separated from the Company, so it is not included in the aforesaid individual financial statements.
20 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

B. For post-employment benefits plans that are definite allocation plans, the company’s monthly employee pension allocation rate shall not be less than 6% of the employee’s monthly salary, and the amount allocated shall be recognized as the current expense
C. For post-employment benefits plans that are defined benefit plans, they are listed under the other comprehensive income, based on actuarial report on the annual reporting date by the projected unit credit method; the re-measured is included in other comprehensive income when it occurs, and immediately recognized in the retained earnings.

19. Income tax

(1) Income tax expense included the current deferred income tax. Except for those related to mergers, directly recognized in equity or other comprehensive income items, current income tax and deferred income tax expenses are recognized in profit and loss.
(2) Current income tax expenses are the estimated income tax payable or tax refund receivable calculated on the taxable income or loss of the current year based on the tax rate that has been legislated or substantively legislated on the reporting date, and any adjustments to the income tax payable or refundable in previous years.
(3) Deferred income tax expenses are calculated and recognized for the temporary difference between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes.
(4) Deferred income tax assets and liabilities are measured at the tax rate applicable when the temporary difference is expected to reverse, and are based on the tax rate that has been legislated or substantively legislated on the reporting date. Deferred income tax assets and liabilities are offset only if the entity has a legally enforceable right to set off the recognized amounts, with only these assets and liabilities under the same tax entity and levied by the same tax authority; or although under different tax authority, but the entity intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
(5) For unused taxable losses, income tax deductions, and deductible temporary differences, they are recognized as deferred tax assets to the extent that future taxable income is likely to be available for use, and on each reporting day Assess and reduce the relevant income tax benefits to the extent that they are not likely to be realized
(6) For the Company's undistributed earnings for the current year plus the income tax portion of profit-seeking enterprise income tax, after the earnings distribution proposal is approved by the shareholders meeting in the following year, the actual earning distribution situation will be recognized and the income tax expense of the undistributed earnings will be recognized.
Government grants
(1) Government grants are recognized until there is reasonable assurance that the Company will comply with the conditions attaching to them; and the grants will be received.
(2) Asset-related government grants are recognized in profit and loss on a systematic basis during the period when the cost of related assets that it intends to subsidize is recognized as an expense by the Company. If it is used as compensation for the expense or loss that has already occurred, it shall be recognized in the profit and loss during the period when it can be collected.
(3) The expression of government grants in individual financial reports is as follows: unrealized ones (that is, the benefits of deferred government grants) are listed as liabilities in individual balance sheets; those realized are listed as other income in individual comprehensive income statements.

21. Earnings per Share

The Company lists the basic and diluted earnings per share of holders of the Company’s common equity for the current period. Basic earnings per share is calculated by dividing the profit and loss of the company’s common share equity holders by the weighted average number of ordinary shares outstanding in the current period; for diluted earnings per share, the effect of all dilutive potential ordinary shares is adjusted with the profit or loss of the Company's common share equity holders, and divided by the effect of all dilutive potential common shares to adjust the weighted average number of outstanding shares in the current period.

21 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

22. Operating Segment Report

An operating segment is a component of the Company, that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Company), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

V. Critical Accounting Judgements and Key Sources of Estimation and Uncertainty

When the Company prepares individual financial statements, the management must make judgments, estimates and assumptions, which will affect the reported amount of income, expenses, assets and liabilities. The uncertainties of these critical assumptions and estimates have the risk of resulting in significant adjustments to the carrying amounts of assets and liabilities in the future, ie. actual results may differ from estimates.

In the process of adopting accounting policies, the management has made judgments that have a significant impact on the amount recognized in individual financial statements:

Please also refer to Note 6.6 of the individual financial statements for the classification of investment properties.

The assumptions made about the future and other major sources of estimated uncertainties on the reporting date will cause significant adjustments to the carrying amounts of assets and liabilities in the next financial year, as explained below:

(1) Employee benefit: measurement to determine benefit obligations

As stated in Note 6.10 of individual financial statements, the measurement of defined benefits obligations and expenses are based on actuarial assumptions, including demographic assumptions and financial assumptions about the future characteristics of employees who are eligible for benefits. Any change in actuarial assumptions may result in actuarial gains and losses, and affect the amount of net determined welfare liabilities.

The carrying amount of the net defined benefit liability was NTD 5,470 thousand as of December 31, 2022. If the discount rate used by the Company’s actuarial assumptions and the expected salary increase rate increase or decrease by 0.25%, the carrying amount of the net definite benefit liability will decrease by NTD 284 thousand or increase by NTD 295 thousand, and increase by NTD 265 thousand or decrease by NTD 257 thousand.

The above only analyzes the impact of a single assumption change under the condition that other assumptions remain unchanged; however, the impact of the actual actuarial assumption changes are interrelated. The method used in the sensitivity analysis is the same as that used to measure the net definite benefit liability, and the method and assumptions used are the same as in the previous period.

(2) Estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Waste Disposal Act

As stated in Note 4.14, 6.8, and 6.17 to the individual financial statements, the Company estimates the removal and disposal costs of landfilled industrial waste based on expert appraisal outcomes while supplemented by relevant vendor’s quotations, and estimates the possible fines based on expert opinions as the best estimate of the Company’s management for the expenditure required to settle this obligation. The management of the Company will regularly review the reasonableness of the estimates.

The Company recognized the estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Waste Disposal Act on December 31, 2021, was NTD 355,420 thousand and NTD 15,000 thousand respectively, and total NTD 370,420 thousand. In March 2022, the Company’s management assessed the waste cleanup progress and estimated that there would be no major expense required to settle such an obligation in the future, so the provision of NTD 355,025 thousand was reversed. Later, in November 2022, the Taiwan Tainan District Prosecutor's Office transferred the security deposit of NTD 12,000 thousand paid by the Company in July 2022 in accordance with the criminal ruling by the Tainan Branch Court, Taiwan High Court, to the penalty imposed on the Company for violating the Waste Disposal Act, so the provision of NTD 12,000 thousand was written off, and the overestimate of NTD 3,000 thousand was reversed. Please also refer to Notes 6.5(5) and 6. 6(9) to the individual financial statements for more details.

22 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

(3) Estimation of provisions for onerous purchase contracts

As stated in Notes 4.14 and 6.8 to the individual financial statements, the decline in raw material prices has resulted in onerous purchase contracts for the Company. The Company adopts the fines incurred for the failure to perform such contracts as management’s best estimate to settle such obligations. The management of the Company will regularly review the reasonableness of the estimates.

The Company initially recognized the provisions for onerous purchase contracts of NTD 45,548 thousand for 2022 Q2. Then, on September 6, 2022, the Company and the suppliers agreed to adjust the purchase prices, and the Company already perform the revised purchase contracts in September 2022. After evaluation by the Company’s management, the provisions for onerous purchase contracts initially recognized were all reversed in Q3 2022.

(4) Valuation of inventories

As mentioned in Note 4.9 of the individual financial statements, the inventories at the end of period is valued at the lower of cost and net realisable value. When comparing the cost and net realisable value, not only the inventories under the sam category, individual items shall be compared one by one. Net realisable value refers to the estimated selling price in the normal course of business after deducting the estimated cost required to be completed, and the estimated cost required to complete the sale. These estimates are based on the current market conditions and historical sales experience of similar products. Changes in market conditions may significantly affect the results of these estimates.

The carrying amount of the inventories was NTD 259,871 thousand as of December 31, 2022; the allowance of inventory depreciation losses of NTD 66,458 thousand was deducted.

(5) Evaluation of non-financial assets (other than goodwill) impairment

As mentioned in Note 4.8 of individual financial statements, in the process of asset impairment assessment, the Company has to rely on subjective judgments, and determine the independent cash flow, asset useful life, and possible income and expenses generated in the future of certain group of assets based on use model of the asset and industrial characteristics. Any estimated changes brought about by changes in economic conditions or the Company strategies may cause significant impairment in the future or reverse the recognized impairment losses.

For the impairment of non-financial assets on December 31, 2022, please refer to Note 6.20 of the individual financial statements.

(6) Realizability of deferred income tax assets

As mentioned in Note 4.19 of the individual financial statements, deferred income tax assets only recognized when it is likely that enough taxable income is available to deduct the temporary difference. Assessing the realizability of deferred income tax assets must involve significant accounting judgments and estimates of the management, including assumptions such as expected future growth in operating income and profitability, available loss deductions, and tax planning. Any changes in the global economic environment, industrial environment and laws and regulations may cause major adjustments to deferred income tax assets.

The deferred income tax assets recognized on December 31, 2022 was NTD 2,270 thousand. For the amounts not recognized as deferred income tax assets, please refer to Note 6.19(7) to the individual financial statements.

VI. Summary of Significant Accounting Items

1. Cash and cash equivalents

mary of Significant Accounting Items Cash and cash equivalents
Cash and petty cash Check and demand (current) deposit Time deposit Total	2022.12.31 $1,356 27,938 450,000 $479,294	2021.12.31
		$1,418 372,157 -
		$373,575

(1) The above time deposit is a one-month registered negotiable certificate of deposit that can be converted into a fixed amount of cash at any time with an insignificant risk of change in value.

23 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

(2) The said cash in banks are not provided as collateral or pledge.

2. Financial assets measured at FVTPL - current

Financial assets measured at FVTPL-current
Financial assets measured at FVTOCI TWSE/TPEx listed shares: Valuation adjustment for financial assets mandatorily measured at FVTOCI TWSE/TPEx listed shares: Total	2022.12.31 $121,793 (16,703) $105,090	2021.12.31
		$75,272 (4,755)
		$70,517

The said financial assets measured at FVTPL are not provided as collateral or pledge.

3. Inventories

Inventories
Raw materials Supplies Work in process Finished goods Total		2022.12.31
	Cost $1,081 13,257 7,112 304,879 $326,329	Allowance of inventory depreciation losses $(1,081) (7) (998) (64,372) $(66,458)	Carrying amount
			$- 13,250 6,114 240,507
			$259,871

2021.12.31	2021.12.31
Allowance of inventory depreciation losses $(1,081) (9) (287) (2,808) $(4,185) 2022 $1,278,205 - 62,273 - $1,340,478		Carrying amount
		$- 12,896 7,775 292,870
		$313,541
		2021
	$1,278,205 - 62,273 -	$2,190,848 561 - (24,867)
	$1,340,478	$2,166,542

(1) Cost of sales related to inventories:

(2) In 2021, the net realizable value of some inventories was lower than the cost and disappeared due to the sale, resulting in a rebound in the net realizable value of the inventories, thus the cost of goods sold reduced by NTD 24,867 thousand.

(3) The said inventories are not provided as collateral or pledge.

24 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

4. Financial assets measured at FVTOCI - non-current

Equity instrument Acquisition cost TWSE/TPEx listed shares: TWSE/TPEx unlisted shares Subtotal Adjustment of valuation: TWSE/TPEx listed shares: TWSE/TPEx unlisted shares Subtotal Total	2022.12.31 $65,438 8,257 73,695 (23,723) (8,257) (31,980) $41,715	2021.12.31 $65,438 8,257 73,695 (9,864) (8,257) (18,121) $55,574

(1) The equity instrument investment measured at fair value through other comprehensive income is not an investment held for trading, so the Company elected to designate it as measured at fair value through other comprehensive income.
(2) The dividend income recognized by the Company in 2022 and 2021 as a result of investment in equity instruments measured at fair value through other comprehensive income was NTD 0 for both years.
(3) The Company did not have accumulated profits or losses transferred within the equity in both 2022 and 2021.
(4) The said financial assets measured at FVTOCI are not provided as collateral or pledge.
(5) For the disclosure of market risk and credit risk information of financial assets measured at fair value through other comprehensive income by the Company, please refer to Note 12.2(3) A and B of individual financial statements.

5. Property, Plant and Equipment

(1) The changes of property, plant and equipment are as following:

Land	Buildings	Machinery Equipment	Transport equipment	Office equipment	Unfinished construction and equipment to be inspected	Total
$182,341 - - -	$367,901 - - 1,412	$3,930,358 - - 11,289	$11,891 - - 228	$9,428 - - -	$50,320 4,928 - (8,210)	$4,586,040 4,928 (480) 4,719
182,341	369,313	3,941,647	12,119	9,428	47,038	4,595,207
- - -	361,221 1,315 -	3,686,539 101,822 -	9,167 1,379 -	9,390 16 -	- - -	4,098,776 104,879 (480)
-	362,536	3,788,361	10,546	9,406	-	4,203,175
$182,341	$6,777	$153,286	$1,573	$22	$47,038	$392,032

25 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

Land	Buildings	Machinery Equipment	Transport equipment	Office equipment	Other equipment	Unfinished construction and equipment to be inspected	Total
$312,736 - (186) - (130,209)	$367,411 - - - 490	$3,927,665 - - - 2,693	$11,891 - - - -	$9,428 - - - -	$33,401 - - - 400	$46,339 7,564 - - (3,583)	$4,708,871 7,564 (186) - (130,209)
182,341	367,901	3,930,358	11,891	9,428	33,801	50,320	4,586,040
- - -	359,895 1,326 -	3,570,590 115,949 -	7,813 1,354 -	9,356 34 -	32,134 325 -	- - -	3,979,788 118,988 -
-	361,221	3,686,539	9,167	9,390	32,459	-	4,098,776
$182,341	$6,680	$243,819	$2,724	$38	$1,342	$50,320	$487,264

(2) The Company has conducted asset revaluation pursuant the Land Act, the Equalization of Land Rights Act, and other relevant laws and regulations over the years. The total revaluation increase amounted to NTD 1,187 thousand, which was originally listed as unrealized revaluation increase under shareholders’ equity, but on January 1, 2012 (the date when the company switched to IFRS), the Company elected to apply the revaluation value as the cost of the revaluation date. The Company wrote off the above land revaluation increment in October 2022 due to the disposal of the land (asset) with the value revaluated. Please refer to Notes 6.5(7), 6(2), and 6(11) to the individual financial statements for more details.
(3) The Company did not capitalize borrowing costs due to acquisition of property, plant and equipment in both 2022 and 2021.
(4) There was no impairment of property, plant and equipment of the Company in both 2022 and 2021.
(5) Pleaser refer to Note 8 of the individual financial statements for the property, plant and equipment provided as collateral or pledge. For property, plant and equipment, as Tainan District Prosecutors Office issued a letter request to the registration agency to prohibit the Company’s properties to apply for the disposal registration on August 16, 2018, due to violation of Waste Disposal Act, the carrying amounts on December 31, 2022 and 2021 were NTD 0 and NTD 312,826 thousand, respectively (including the transfer from property, plant and equipment - land to investment property - land of $130,209 thousand in December 2021). However, the Company paid the security deposit of NTD 12,000 thousand in July 2022 in accordance with the criminal ruling by the Tainan Branch Court, Taiwan High Court. On July 26, 2022, the Company received a letter from the court to revoke the aforementioned prohibition of disposal of property, plant and equipment. On September 21, 2018, the Company received an order from the prosecutor of the Tainan District Prosecutors Office to seize the relevant property, plant and equipment-transportation equipment due to the crime in the aforementioned case, and an appraisal auction, and the price in custody were conducted. It was sold on October 22, 2018 The auctioned price and disposal loss were NTD 590,000 and NTD 501,000, respectively. Please also refer to Note 4.14, 5, and 6.8 to the individual financial statements for the description.
(6) Acquired property, plant and equipment listed in the individual cash flow statement:

Please refer to Note 6.5(1) to the individual financial statements for related information Additions to Property, Plant and Equipment in the period Plus: Other payables at the beginning of the period Less Other payables at the end of the period Add: Unrealized foreign currency exchange gain (loss) Cash outflow from acquisition of property, plant and equipment	2022 $4,928 6,336 (5,953) (49) $5,262	2021 $7,564 5,953 (6,521) 185 $7,181

26 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

(7) On December 29, 2021, the Board of Directors resolved to dispose of six parcels of land held by the Company, including the Magong Section, Madou District, Tainan City, in order to revitalize the land assets and improve the financial structure of the Company. Therefore, the carrying amount of property, plant and equipment - land was transferred to investment property - land in the amount of $130,209 thousand.
(8) The Company signed a rooftop lease contract with another company in July, 2017. The lease period is from the date of commercial operation of the solar power system up to the expiration after 20 years. The rent calculation method is based on a floating system, and for the percentage of power actually generated by the solar power system, and collected on a monthly basis. The Company’s rent income incurred in the 2022 and 2021 as a result of the aforementioned leases was NTD 1,474 thousand and NTD 1,566 thousand, respectively.
(9) The Board of Directors, on February 6, 2023, approved by resolution to revitalize the land and improve the Company's financial structure. It is planned to dispose of the land and buildings held by the Company at land lot 491, Pitou Section, Madou District, Tainan City, and delegate the Chairman to adopt the property appraisal reports as the basis for the sale price and sign the sales contract and other relevant documents on behalf of the Company and handle subsequent business. Moreover, the Company has transferred the carrying amount of the above property of NTD 4,104 thousand to investment property.

6. Investment Property

(1) The changes of Investment property are as following:

	2022
Land $279,566 - (136,083) 143,483 - - - - 38,047 - - 38,047 $105,436	Buildings $87,203 - - 87,203 38,026 1,744 - 39,770 34,368 - - 34,368 $13,065	Total
		$366,769 - (136,083)
		230,686
		38,026 1,744 -
		39,770
		72,415 - -
		72,415
		$118,501

27 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

	2021
Land $149,357 - 130,209 - 279,566 - - - - 38,047 - - 38,047 $241,519	Buildings $87,203 - - 87,203 36,282 1,744 - 38,026 34,368 - - 34,368 $14,809	Total
		$236,560 - 130,209 -
		366,769
		36,282 1,744 -
		38,026
		72,415 - -
		72,415
		$256,328

(2) Please refer to Note VI.5(7) to the individual financial statements for a description of the Company's reclassification from property, plant and equipment-land to investment property-land.
(3) The Company leased part of the investment property to other related parties as offices in the form of operating lease for a lease term from March 1, 2017 through February 28, 2022. The lease term was renewed at the end of the term. The renewed one is from March 1, 2022 through February 28, 2027. Due to a change of business on August 31, 2022, both parties agreed to terminate the lease contract early on September 1, 2022. Please also refer to Note VII.2(1) to the individual financial statements for the description.
(4) The maturity analysis for the receivable undiscounted lease payment (tax included) under operating lease on December 31, 2022 and 2021:

December 31, 2022 and 2021:
Period 2022.12.31 Year 1 $- he fair values of the investment properties held by the Company are as following: 2022.12.31 Fair value of investment property $467,974	2021.12.31
	$10
	2021.12.31
	$1,978,460

(5) The fair values of the investment properties held by the Company are as following:

The fair value of the aforesaid investment properties is the result of the evaluation based on the announced market price by inquiring the actual price registration information.

28 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

(6) The income and expenses generated by the Company's investment properties are as follows:

Rent income from investment properties Direct operating expenses (including repair or maintenance) incurred from investment property that generate rental income Direct operating expenses (including repair or maintenance) incurred from investment property that generate rental income	2022 $29 $333 $1,411	2021
		$57
		$501
		$1,243

(7) On November 11, 2021, the Board of Directors resolved to sell the investment property - land and buildings in Beiyuan Section, North District, Tainan City, with the carrying amounts of NT$49,378 thousand and NT$51,122 thousand recognized as of December 31, 2022 and 2021, and authorized the Chairman of the Board of Directors to dispose of them at his sole discretion, as described in Note 7.2(3) to the individual financial statements.
(8) Pleaser refer to Note 6.20 to the individual financial statements for the investment properties impairment.
(9) Pleaser refer to Note 8 of the individual financial statements for the investment properties provided as collateral or pledge. For investment property, as Tainan District Prosecutors Office issued a letter requesting the registration agency to register the prohibition of the Company’s investment property disposal on July 9, 2018 due to violation of Waste Disposal Act or applying to the Taiwan Tainan District Court for a ruling on seizure. The carrying amounts of investment property on December 31, 2022 and 2021 were NTD 0 and NTD 126,119 thousand, respectively. However, the Company paid the security deposit of NTD 12,000 thousand in July 2022 in accordance with the criminal ruling by the Tainan Branch Court, Taiwan High Court. On July 26, 2022, the Company received a letter from the court to revoke the aforementioned prohibition of investment property disposal. Please also refer to Note IV.14, V, VI.5(5) and VI.8 to the individual financial statements for the description. On August 27, 2018, the Company received the judgement from Taiwan Tainan District Court that favored the application from the Company’s bank creditor for provisional seizure some of the Company’s investment properties. The reason of this application was that to secure the credit, the creditor took the Company’s Chairman, Shuo-Tang Yeh as the joint guarantor of the Company’s borrowing; and as Mr. Yeh was detained by the court, the bank creditor, pursuant to the contract, claimed that all the borrowings to the Company shall be deemed due. The carrying amounts on December 31, 2022 and 2021 were NTD 0 and NTD 51,122 thousand, respectively. However, after the Company repaid all the loans from the bank creditor in July 2022, it received a letter from the Civil Execution Department, Taiwan Tainan District Court on July 20, 2022, stating that the bank creditor had withdrawn the execution of the above provisional seizure. Please also refer to Note VI.9(1) to the individual financial statements for the description.
(10) The Company did not capitalize borrowing costs due to the acquisition of investment properties in both 2022 and 2021.
(11) On March 3, 2022, the Company entered into a land sale and purchase agreement with the buyer to sell two parcels of land, No. 26 and No. 27, Magong Section, Madou District, Tainan City, for a total consideration of $251,234 thousand. However, the land has been secured for bank borrowings and is subject to a registration ban. According to the provisions of the sale and purchase agreement, the Company must complete the release of the land subject to the sale and purchase from the Environmental Protection Administration of the Executive Yuan, apply for the cancellation of the mortgage, the release of the registration ban and the registration of the transfer of property rights before the sale price can be transferred to the Company from the property trust account. If the Company fails to complete the aforementioned release of possession and prohibition of disposition within 180 days of signing the contract, the purchaser may cancel the land sale and purchase agreement or extend it for another 180 days. In October 2022, the Company completed the transfer of land ownership and received the above proceed from the transaction, while recognizing a gain on the disposal of investment property of NTD 187,676 thousand and income tax expenses - land value increment tax of NTD 1,691 thousand.
29 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

(12) On March 3, 2022, the Company entered into a land lease agreement with a lessee to lease land at a monthly rent of $500 thousand for the period from March 3 to July 2, 2022, in Magong Section, Madou District, Tainan City, Cadastral Number 5. After the lessee confirms that it has passed the procedures for applying for the land for the installation of grid-connected energy storage equipment within the lease term and the Company has followed the procedures for acquiring or disposing of the assets, the lessee may sign a land sale and purchase contract with the lessee. However, if the lessee does not complete the application procedures within the aforementioned period, the aforementioned lease shall be terminated after the expiration date. For this, the Company, on May 11, 2022, delegated the Chairman to adopt the property appraisal reports as the basis for the sale price and sign the sales contract and other relevant documents on behalf of the Company and handle subsequent business. Only after the lessee completed the relevant application procedures before the above deadline could the Company sign a land sale contract with the lessee. However, the Company still needs to wait for the Environmental Protection Administration, Executive Yuan, to lift its control over the land to be traded and needs to complete the lien cancellation and the removal of disposal prohibition to transfer property rights and have it registered. On July 3, 2022, August 31, 2022, and November 3, 2022, the Company agreed to the lessee to extend the land lease term to September 2, 2022, November 2, 2022, and January 2, 2023, respectively, and terminated the lease on January 2, 2023 after the end of the term.
(13) On May 11, 2022, the Board of Directors adopted a resolution to revitalize the land (asset) and improve the Company's financial structure. It is planned to dispose of the investment property (land) in Land in Caohu Section, Annan District, Tainan City and delegate the Chairman to adopt the property appraisal reports as the basis for the sale price and sign the sales contract and other relevant documents on behalf of the Company and handle subsequent business. However, the Company still needs to complete the lien cancellation and the removal of disposal prohibition to transfer property rights and have it registered. On June 1, 2022, the Company signed a property sale contract with the buyer to sell the above land at a total price of NTD 500,000 thousand and received a signing bonus of NTD 50,000 thousand in accordance with the contract. However, the Company should revoke the above disposal prohibition within 60 days after signing the contract. If the prohibition is not revoked in time, the Company should notify the buyer 15 days before the deadline, and the buyer may notify the Company in writing of terminating the sales contract or postponing 60 days before the deadline. The Company should cooperate with the buyer to sign all necessary documents. Later, in August 2022, the Company completed the transfer of land ownership and received the above proceed from the transaction of NTD 450,000 thousand, while recognizing a gain on the disposal of investment property of NTD 419,848 thousand (under non-operating income and expenses - other gains and losses) and income tax expenses - land value increment tax of NTD 27,633 thousand.
(14) On January 18, 2023, the Company entered into a land lease agreement with a lessee to lease land lot 5-1 divided from the land at land lot 5, Magong Section, Madou District, Tainan City, at a monthly rent of $500 thousand over a lease term from January 18 through March 17, 2023. If the lessee fails to complete the optoelectronics industry application procedures within the above lease term, the lessee must not claim any compensation from the Company for the damage caused by the termination of the above land lease. If the lessee intends to purchase the leased land within the lease term, it may sign a land sale contract with the Company. After the Board of Directors, on February 6, 2023, approved by resolution to sell the above land for NTD 419,176 thousand (with a carrying amount of NTD 24,068 thousand), the Company signed a property sale contract on February 10, 2023 for a total price of NTD 419,176 thousand, and entrusted a bank to be the trustee for the payment. Up to the date of publication of the individual financial statements, the aforementioned transaction is still in progress.
30 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

7. Intangible assets

(1) The changes in the Company's intangible assets - computer software are as follows:

Original cost Beginning retained earnings Increase in the period Decrease in the period - derecognized when due Balance at the end of the period Accumulated amortization: Beginning retained earnings Amortization in the period Decrease in the period - derecognized when due Balance at the end of the period Carrying amount at the end of period	2022 $181 - - 181 (36) (52) - (88) $93	2021
		$- 181 -
		181
		- (36) -
		(36)
		$145

(2) There was no impairment of intangible assets of the Company in both 2022 and 2021.

Provisions - current

Provisions-current
Estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Waste Disposal Act	2022.12.31 $-	2021.12.31
		$370,420

(1) Changes of the Company’s provision is as the following:

2022 Carrying amount at the beginning of period Newly added provision in the period Used in the period Reversal in the period Carrying amount at the end of period 2021 Carrying amount at the beginning of period Used in the period Carrying amount at the end of period	Estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the WasteDisposal Act $370,420 - (12,395) (358,025) $- $383,770 (13,350) $370,420	Provisions for onerous purchase contracts $- 45,548 - (45,548) $- $- - $-	Total $370,420 45,548 (12,395) (403,573) $- $383,770 (13,350) $370,420

31 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

(2) On July 9, 2018, the Company was suspected of landfilling industrial wastes in the plant area, and thus violating the Waste Disposal Act, and was searched by the Tainan District Prosecutors Office (Prosecutors Office hereafter) in conjunction with relevant authorities. In addition, some of the property, plant and equipment and investment properties held by the Company will be seized for recovery. On July 26, 2022, the Company received a letter from the Tainan Branch Court, Taiwan High Court, to revoke the aforementioned prohibition of property disposal. Please refer to the explanations under Notes VI.5(5) and VI.6(9) to individual financial statements. On April 8, 2019, the Company received an indictment of a violating the Waste Disposal Act by the Prosecutor’s Office. Twelve people including the company and the Chairman, Mr. Yeh Shuotang, were listed as defendants. The cleaning costs were estimated to be NTD 1,224,404 thousand (tax included), and the fines was set a maximum amount of NTD 15,000 thousand. As of the release date of individual financial statements, the case is under trial at Tainan District Court. Based on the results of experts and the price quoted by the relevant vendor, the Company estimated a disposal and handling expense of NT$436,395 thousand for the buried business waste and NT$15,000 thousand for the possible fines with reference to the expert opinion. The disposal and disposal expense difference between the Company's estimate and the estimated amount in the indictment is primarily due to the difference in the weight of the waste converted and the difference in the quotation from the relevant vendors. However, the Company has provided its best estimate of the expenses required to settle this obligation and will review its reasonableness on a regular basis. The said provision for liabilities is expected to be paid in accordance with the waste disposal progress of the vendor after the competent authorities approves the Company's waste disposal plan and claim for release of evidence of preservation from the court.

The fines are expected to be paid after the competent authorities determines the fines. The difference between the estimated amount of fines and the Company's fines will be treated as a change in accounting estimate. On September 17, 2019, the Company received a letter of consent principle from the competent authorities for the said waste disposal plan. Aside from the removal of the buried waste area in the rezoning project of Tainan City Government, which is due to be completed within one month, the remaining removal shall be completed within 36 months from September 12, 2019. After completion, the competent authorities shall be notified to conduct on-site verification. The Company uses the waste removal deadline determined by the competent authorities and the estimated progress of waste removal by the vendor as the basis for distinguishing between current and non-current liabilities. On July 6, 2021, the Company received a letter from the competent authority in which the authorities generally gave their consent to the Company's waste cleanup report. On July 7, 2021, the competent authority sent its staff to conduct a soil and groundwater inspection at the Company's factory. On October 1, 2021, December 28, and February 11, 2022, the Environmental Protection Administration (“EPA”), Executive Yuan, conducted inspections and reviews for the aforesaid inspections respectively. The Company’s management assessed the waste cleanup progress and estimated that there would be no major expense required to settle such an obligation in the future, so the provision of NTD 355,025 thousand was reversed in March 2022. Please also refer to Notes 4.14, 5, and 6.17 to the individual financial statements. Furthermore, the Company received a reply from the competent authority on May 10, 2022 that the supporting documents submitted by the Company regarding the digging have been checked and it is confirmed that the waste in this case has been cleaned up and that the data of the tested imported soil was lower than the standards for soil pollution. It was approved based on the review principles and reported to the EPA for review on May 2, 2022. After the case was approved by the EPA, it was removed from the control of the Waste Disposal Case Management System on May 3, 2022.

(3) On July 9, 2021, the Company received a judgment from the Taiwan Tainan District Court, which imposed a fine of NT$12,000,000 on the Company for violating the Waste Disposal Act, and Mr. Shuo-Tang Yeh, the Chairman of the Company, was sentenced to five years and four months in prison. The Company refused to accept the criminal judgment of the first instance by the Taiwan Tainan District Court and filed an appeal according to the law. On September 5, 2022, the Company received the criminal judgment by the Tainan Branch Court, Taiwan High Court, that the Company’s penalty of NT$12,000 thousand for violating the Waste Disposal Act remained the same and that Chairman Shuo-Tang Yeh was sentenced to five years and four months in jail and should be in jail for five years. Chairman Shuo-Tang Yeh refused to accept the criminal judgment of the second instance by the Tainan Branch Court, Taiwan High Court, and filed an appeal in accordance with the law. On December 19, 2022, the criminal judgment by the Supreme Court rejected the appeal. In response, Chairman Shuo-Tang Yeh has filed an extraordinary appeal in accordance with the law. Up to the date of publication of the individual financial statements, it is still in court. Later, in November 2022, the Taiwan Tainan District Prosecutor's Office transferred the security deposit of NTD 12,000 thousand paid by the Company in July 2022 in accordance with the criminal ruling by the Tainan Branch Court, Taiwan High Court, to the penalty imposed on the Company for violating the Waste Disposal Act, so the provision of NTD 12,000 thousand was written off, and the overestimate of NTD 3,000 thousand
32 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

was reversed. Please also refer to Note IV.14, V, VI.5(5), VI.6(9), and VI.17 to the individual financial statements for the description.

(4) The provisions for onerous purchase contracts were made as the decline in raw material prices has resulted in onerous purchase contracts for the Company in 2022 Q2. The Company adopts the fines incurred for the failure to perform such contracts as management’s best estimate to settle such obligations. On September 6, 2022, the Company and the suppliers agreed to adjust the purchase prices, and the Company already perform the revised purchase contracts in September 2022. After evaluation by the Company’s management, the provisions for onerous purchase contracts initially recognized were all reversed in Q3 2022. Please also refer to Notes IV.14 and V to the individual financial statements.

9. Long-term borrowings

Long-term borrowings
Creditors Nature of borrowing 2022.12.31:None 2021.12.31 Taiwan Business Bank Guaranteed borrowing Less: long-term borrowings due within a year Long-term borrowings due after a year	Contractual period 2018.05.04–2023.02.02	Interest rate 1.70%	amount $799,123 (512,174) $286,949	Repayment method
				(Note)

Note: Repay interest monthly, and repay the principal when it is due.

(1) As stated in Note 6.6(9) of individual financial statements, the Company’s original short-term borrowings of NTD 799,123 thousand was deemed overdue and default, but the Company had signed an agreement with the creditor bank on October 25, 2018 to alter the credit conditions as stopping the use of the original credit facility, and extending the original maturity date of each of the aforementioned borrowing for another year. Interests are paid monthly, and the principal is paid at the maturity. Therefore, the company reclassified the aforementioned short-term borrowings as long-term loans. On September 9, 2019, the Company and the creditor bank entered into a modification agreement to extend the original maturity date of each of the aforementioned loans for another year, with interest payable monthly and principal repaid on maturity. On September 22, 2020, the Company and the creditor bank entered into a further modification agreement to extend the original maturity date of each of the aforementioned loans for another year, with interest payable monthly and principal repaid on maturity. On November 10, 2021, the Company and the creditor bank entered into a modification agreement to extend the original maturity date of each of the aforementioned loans for another year, with interest payable monthly and principal repaid on maturity. The Company repaid the loans in full early on July 1, 2022 and July 4, 2022.
(2) For the collateral provided by the Company for long-term loans, please refer to Note 8 of individual financial statements.

10. Post-employment benefits

(1) Defined benefit plan

A. The Company has established employee retirement procedures on the basis of employees’ years of service and expected wages before retirement. Pursuant to the "Labor Standards Act,"a certain percentage of the total monthly wage is contributed for pension reserves, which are allocated to the Labor Pension Reserve Supervision Committee for depositing in the special account and disbursement. Since this pension reserve is completely separated from the Company, it is not included in the individual financial statements.
33 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

B. The remeasurement of net defined benefit liabilities is recognized in other comprehensive income and the cumulative amount is as follows:

the cumulative amount is as follows:
	2022	2021
Amount at the beginning of the period	$4,680	$3,199
Net re-measurement of the defined benefit
plan	1,405	1,481
Amount at the end of period	$6,085	$4,680
C. Adjustment of the current value of defined benefit obligation and fair value of		planned assets
	2022.12.31	2021.12.31
Current value of a defined benefit obligation	$9,842	$13,305
Fair value of planned assets	(4,372)	(6,247)
Defined benefit liability	$5,470	$7,058
D. Changes of the current value of a defined benefit obligation
	2022	2021
Carrying amount at the beginning of period	$13,305	$15,072
Interest expense	93	60
Net re-measurement of the defined benefit
liability
Actuarial loss generated from the changes
of financial assumption	-	18
Actuarial loss (gain) generated from the
changes of financial assumption	232	(533)
Actuarial gains generated from the
experience adjustment	(1,478)	(752)
Benefit paid	(2,310)	(560)
Carrying amount at the end of period	$9,842	$13,305
E. Changes of fair value of planned assets are as following
	2022	2021
Carrying amount at the beginning of period	$6,247	$1,539
Interest income	44	6
Remeasurement of defined benefit assets, net
Return on plan assets (excluding current	159	214
interest)
Contribution from employer	232	5,048
Benefit paid	(2,310)	(560)
Carrying amount at the end of period	$4,372	$6,247

(A) Pursuant to the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund,” the competent authority, in conjunction with the Ministry of Finance, shall commission the Bank of Taiwan to manage the revenues, expenditures, safeguard, and utilization of the Fund, where the safeguard and utilization of the Fund may be commissioned to another financial institution. The scope of Fund utilization shall be as follows: deposit in domestic or foreign financial institutions; borrowing to government agencies in various levels or state-owned enterprises for undertaking economic construction or capital expenditure with compensation or repayable by budgeting on a year-by-year basis; investment in domestic or foreign listed, over-thecounter, or private placement equity securities; investment in domestic or foreign debt securities; investment in publicly or privately placing beneficiary certificates issued by domestic securities investment trust funds, futures trust fund, mutual trust funds or collective trust products; investment in beneficiary certificates, fund shares or investment unit securities issued or managed by foreign fund management institutions; investment in domestic or foreign real estate and its

34 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

securitization products; investment in domestic or foreign spot commodities; engaging in domestic or foreign financial derivatives transactions; engaging in securities lending. With regard to utilization of the Fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Information on the asset utilization of the Labor Retirement Fund, includes the fund contributions and the rate of return provided by Bank of Taiwan, and the fund asset allocation announced on the website of the Bureau of Labor Funds (BLF), Ministry of Labor, Executive Yuan. Please refer to the website of BLF.

(B) As of December 31, 2022 and 2021, the balances of Company’s dedicated account in Bank of Taiwan for depositing pension reserve, was NTD 4,372 thousand and NTD 6,247 thousand, respectively.
(C) As of December 31, 2022, the defined benefit plan expected to contribute NTD 201 thousand for 2023.
F. The amount of pension expenses recognized as profit and loss and the accounting status are as follows:

Interest expense Interest income Total Operating cost Selling and marketing expenses Administrative expenses Total	2022 $93 (44) $49 2022 $42 2 5 $49	2021
		$60 (6)
		$54
		2021
		$47 4 3
		$54

G. The main actuarial assumptions used in determining the current value of defined benefit obligation are as follows:

follows:
Discount rate Expected wage increase rate	2022.12.31 1.40% 3.00%	2021.12.31
		0.70% 2.00%

Please refer to Note 5.2(1) of individual financial statements for the sensitivity analysis of the Company's actuarial assumptions if there is a reasonably possible change that affects the amount of net defined benefit liabilities.

H. The overview of the maturity of the defined benefit obligation is as following:

Weighted average duration Maturity analysis of future benefit payment Within a year 2-5 years 6 years or more Total undiscounted cash amount	2022.12.31 12 years $112 1,112 10,421 $11,645	2021.12.31
		13 years
		$139 818 13,588
		$14,545

35 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

(2) Defined contribution plans

A. After the implementation of the "Labor Pension Act" in July 2005, the Company adopted a definite contribution plan. After the implementation, employees may choose to apply the relevant pension provisions of the "Labor Standards Act", or apply the pension system of the Labor Pension Act, while retaining the service years before the Act are applied. For employees subject to this Act, the Company’s monthly contribution rate for the employee pension shall not be less than 6% of the employee’s monthly wage, and the monthly pension contributions will be deposited in the individual dedicated labor pension account of the employee, set up by the Bureau of Labor Insurance. The Company is not liable for the statutory and assumed obligations of paying additional contributions after the monthly contributions are made.
B. The amount of pension expenses recognized by the Company as a result of the definite contribution plan is as follows:

Operating cost Selling and marketing expenses Administrative expenses Total	2022 $1,007 51 491 $1,549	2021 $1,313 35 476 $1,824

11. Share capital

Share capital
Balance on January 1, 2021 Balance on December 31, 2021 Balance on January 1, 2022 Balance on December 31, 2022	Registered authorized capital (thousand shares) (note)	Issued commonshares,face value pershare NTD 10 Number of shares (in thousands) Share capital 281,167 $2,811,673 281,167 $2,811,673 281,167 $2,811,673 281,167 $2,811,673
			Share capital
	378,800		$2,811,673
	378,800		$2,811,673
	378,800		$2,811,673
	500,000		$2,811,673

Note: The Company adopted the resolution of the AGM on March 23, 2012, to increase the total amount of the authorized share capital to NTD 5,000,000 thousand, divided into 500,000 thousand shares, each with a face value of NTD 10, and issuance in installments. The aforementioned amendment to the authorized share capital could not be registered for such change with the Company Act before the amendment. As the Company Act was amended on August 1, 2018, and enforced on November 1, 2018, the change can be directly registered and the change registration procedure was completed on June 28, 2022.

The rights, priorities and restrictions of the common shares issued by the Company are as follows

(1) Each shareholder has one vote per share.
(2) Distribution of the dividends and bonuses shall be effected in proportion to the number of shares held by each shareholder accordingly.
(3) After paying off the debts, the remaining property shall be distributed in proportion to the shares of each shareholder.
36 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

12. Earnings distribution and dividend policy

(1) Pursuant to the Articles of Incorporation, the annual surpluses concluded by the Company are first subject to taxation and reimbursement of previous losses, followed by a 10% provision for legal reserve and provision or reversal of special reserve as the laws may require. Any surpluses remaining will be added to unappropriated earnings accumulated from previous years, for which the board of directors will propose an earnings appropriation plan and seek resolution in a shareholder meeting before distribution.
(2) The Company’s dividend policy is that the Company shall devise earnings appropriation plans for the amount of distributable earnings calculated above after taking into consideration prospects of the economic environment, future capital requirements, long-term financial plans, and shareholders' needs for cash inflow, and present the proposal for resolution at shareholder meeting. At least 10% of total shareholders' dividends shall be paid in cash, but the Company may choose to pay dividends in shares instead if cash dividends amount to less than NT$0.5 per share.
(3) As of the end of 2022 and 2021, the Company only accumulated loss, and thus no earnings to be distributed.

13. Other equity (net amount after tax)

Other equity(net amount after tax)
Unrealized valuation loss on financial assets measured at FVTOCI Beginning retained earnings Occurred in the period Balance at the end of the period	2022 $(18,121) (13,859) $(31,980)	2021
		$(5,504) (12,617)
		$(18,121)

14. Net operating revenue

Net operating revenue
Income from product sales Other operating revenue Total Less: sales returns Sales discounts and allowances Net operating revenue	2022 $1,202,552 28,945 1,231,497 (129) (361) $1,231,007	2021
		$2,465,872 27,371
		2,493,243 (21,205) (1,097)
		$2,470,941

The Company’s revenue mainly comes from goods transferred at a certain point of time. The relevant revenue is detailed as follows

(1) Major product/service lines

2022 2021 Steel coil $1,202,062 $2,443,570 Other 28,945 27,371 Total $1,231,007 $2,470,941

(2) Major regional market

Regions where customersmersersrss are locatedre locatede located locatedocated

customersmersersrss are locatedre locatede located locatedocated 2022 2021 Taiwan $1,231,007 $2,470,941

37 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

15. Operating costs and expenses

Employee benefit expense, depreciations, and amortisation expenses are aggregated by function as following:

By function By nature		2022			2021
	As operating costs	As operating expenses	Total	As operating costs	As operating expenses	Total
Employee benefits expense
Wage expense (Note 1)	$18,407	$10,858	$29,265	$24,428	$9,747	$34,175
Labor and health insurance expense	2,144	1,284	3,428	2,881	1,167	4,048
Pension expense	1,049	549	1,598	1,360	518	1,878
Remuneration to directors (Note1)	-	1,231	1,231	-	1,117	1,117
Other employee benefits expense	1,392	808	2,200	4,244	1,927	6,171
Depreciation expense (Note2)	103,096	1,783	104,879	117,288	1,700	118,988
Amortization expenses	14	38	52	132	30	162

Note 1: (1) Pursuant to the Articles of Incorporation, annual profits concluded by the Company are subject to employee remuneration of 2%-3%, which the board of directors may decide to distribute in cash or in shares. Employees of subsidiaries who meet certain criteria are also entitled to receive this remuneration. Up to 1% of the aforementioned profit may be distributed as directors' remuneration at the discretion of the board of directors. Employees’ and directors’ remuneration distribution proposals shall be submitted to the shareholders' meeting for reporting. If, however, the Company has accumulated losses, profit shall first be used to offset accumulated losses and then to set aside employees’ and directors’ remuneration according to the aforementioned percentages. The said annual profit mentioned shall refer to pre-tax profit before employees’ and directors’ remuneration in the current year. As of the end of 2022 and 2021, the Company only accumulated loss, and thus no employee or director remuneration is estimated.
(2) As of the end of 2022 and 2021, the Company only accumulated loss, and thus no employee or director remuneration is distributed.
(3) Regarding the information related to the employee or director remuneration approved by the Board of Directors, please inquiry at the MOPS
Note 2: The depreciation expenses provided by the Company for 2022 and 2021 were NTD 106,623 thousand and NTD 120,732 thousand, respectively. Of which the depreciation expenses for investment properties-leased assets were both NTD 1,744 thousand, and listed in net other income and expenses.
Note 3: (1) The average number of employees at the end of each month of the Company during 2022 and 2021 was 62 and 72, respectively; of which the number of directors who were not currently serving employees were five and six, respectively.
(2) The Company's average employee benefit expenses in 2022 and 2021 were NTD 640 thousand and NTD 701 thousand, respectively.
(3) The Company's average employee wage costs in the 2022 and 2021 were NTD 513 thousand and NTD 518 thousand, respectively; the average employee wage costs in 2022 were 0.97% less than that in 2021.
(4) The Company has established the Audit Committee to replace the functions of supervisors, as required, and thus no remuneration to supervisor.
38 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

(5) The company's remuneration policy (including directors, managerial officers and employees): The Company's policy for remuneration to directors and managerial officers is based on the “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange”, and is determined by the Company’s Remuneration Committee with reference to the standard payment of peer industries with consideration of personal performances, the Company's operational performance and future risks.

For the Company’s policy on remuneration to employees, the wage (basic wage, various subsidies, job allowances, overtime pay and various bonuses) is set based on the common wage levels in the industry, job categories, ranks, academic and industrial background, professional capabilities and responsibilities. The bonuses and wage adjustments depend on the Company’s annual operating profitability and the achievement of the goals set by departments and individuals.

Regarding the remuneration of employees and directors of the Company, please refer to the explanation under Note 1(1).

16. Other income and expenses, net

16.	Other income and expenses, net
17.	Investment property- leasing assets Rent income depreciation expense Net other income and expenses Non-operating income and expense (1)Interest income Interest on bank deposits (2)Other income Rent income Dividend revenue Other income Total (3)Other gains or losses Gain (loss) on financial assets measured at FVTPL Gain on disposal of investment property Net foreign exchange gains Gain on reversal of provisions for disposal of business waste buried in the plants Gain on reversal provisions for penalty for violating the Waste Disposal Act Other losses - return of gains from government subsidies (Note) Other losses Total	2022 $29 (1,744) $(1,715) 2022 $1,012 2022 $6,236 1,311 1,018 $8,565 2022 $(11,948) 607,524 24 355,025 3,000 - (4) $953,621	2021
			$57 (1,744)
			$(1,687)
			2021
	(1) (2) (3)
			$81
			2021
			$1,566 415 6,020
			$8,001
			2021
			$23,621 - 37 - - (6,885) (261)
			$16,512

39 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

Note: On August 4, 2021, the Company received a letter from the Industrial Development Bureau of the Ministry of Economic Affairs (MOEA), which concluded that the Company did not meet the requirement of the “Instruction for applications to MOEA for salary and working capital subsidies for manufacturing and technical service industries affected by severe special infectious pneumonia” and should pay back the subsidy amounting to NT$7,795 thousand from the second quarter to the fourth quarter of 2020, of which the subsidy amount of NT$910 thousand for December 2020 was received in March 2021. The Company already paid back said subsidy in March 2022.

Please refer to Notes 4.14, 5, and 6.8 to the individual financial statements for the details of the cleanup and disposal of business waste buried in the plants and the gain on reversal provisions for penalty for violating the Waste Disposal Act.

(4) Financial costs

inancial costs
Interest on bank borrowings Interest on borrowings from related parties Total	2022 $(7,366) - $(7,366)	2021
		$(13,585) (68)
		$(13,653)

18. Other comprehensive income

Composition Items of Other ComprehensiveIncome	Recognized during the period	Reclassification adjustments of the period	Other comprehensive income	income tax expense	After-tax amount
2022 Items that will not be reclassified subsequently to profit or loss: Re-measurement of the defined benefit plan Unrealized valuation losses on investments in equity instruments as at fair value through other comprehensive income Total 2021 Items that will not be reclassified subsequently to profit or loss: Re-measurement of the defined benefit plan Unrealized valuation losses on investments in equity instruments as at fair value through other comprehensive income Total	$1,405 (13,859)	$- -	$1,405 (13,859)	$(281) -	$1,124 (13,859)
	$(12,454)	$-	$(12,454)	$(281)	$(12,735)
	$1,481 (12,617)	$- -	$1,481 (12,617)	$(296) -	$1,185 (12,617)
	$(11,136)	$-	$(11,136)	$(296)	$(11,432)

19. Income tax

(1) The Company's profit-seeking enterprise income tax settlement and report cases before the 2020 (inclusive) have been approved by the tax collection agency.

(2) Major components of income tax expense were as follows:

40 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

A. Income tax recognized in profit or loss

Income tax recognized in profit or loss
Income tax expense of the period Income tax expense to be borne for the period Land value increment tax Deferred income tax expense income tax expense	2022 $- 29,324 16 $29,340	2021
		$138 - -
		$138

B. Income tax related to other comprehensive income components

B. Income tax related to other comprehensive income components	B. Income tax related to other comprehensive income components
2022 Deferred income tax expense related to initially generated temporary difference and reversal $281 he relationship between income tax expenses and accounting profits: 2022 Accounting profit Net income before tax of continuing operations $809,997 Tax amount based on the tax rate applicable to the Company $162,000 Excess of basic income tax over ordinary income tax - Adjusted item The effects of income tax from unrecognizable items on the tax return (119,848) Income tax effects of temporary differences (42,152) Income tax effect of loss carryforwards - Income tax expense to be borne for the period - Adjustment of income tax of previous years recognized in current period - Income tax expense of the period - Land value increment tax 29,324 Deferred income tax expense 16 income tax expense $29,340		2021
		$296
		2021
	$809,997	$276,462
	$162,000 - (119,848) (42,152) -	$55,292 138 (3,281) (8,711) (43,300)
	- -	138 -
	- 29,324 16	138 - -
	$29,340	$138

(3) The relationship between income tax expenses and accounting profits:

41 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

(4) The information of unused tax credit for loss

Yearofoccurrence 2012 2013 2014 2015 2016 2018 2019 2010 2022 (estimated) Total	Amountnot credited 2022.12.31 2021.12.31 $- $407,770 268,611 268,611 86,078 86,078 332,570 332,570 21,430 21,430 44,293 44,293 193,592 193,592 317,827 317,827 80,426 - $1,344,827 $1,672,171	Last Last year forcredit
	2022.12.31 $- 268,611 86,078 332,570 21,430 44,293 193,592 317,827 80,426 $1,344,827
		2022 2023 2024 2025 2026 2028 2029 2030 2032

(5) There was no income taxes related to direct credit or debt of equity for 2022 and 2021.
(6) The analysis of the deferred tax assets and liabilities is as following:

Beginning retained earnings	Recognized in comprehensive income	Recognized in other comprehensive income	Balance at the end ofthe period
$2,551	$-	$(281)	$2,270
$-	$16	$-	$16
$2,847	$-	$(296)	$2,551

(7) Unrecognized deferred tax assets

As of December 31, 2022 and 2021, the amount of income that are not likely taxable not recognized as deferred income tax assets was NTD 296,706 thousand and NTD 420,935 thousand, respectively.

Non-financial asset impairments
(1) The Company treats the regulated assets based on IAS 36 “Impairment of Assets.” December 31, 2022 and 2021, the accumulated impairment balance are detailed as following:

Investment Property

iled as following:
2022.12.31 $72,415	2021.12.31
	$72,415

42 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

(2) In Q4 2004, the Company used the net fair value in the evaluation of investment properties-land and houses as the recoverable amount. After appraisal and evaluation, the estimated recoverable amount is lower than the carrying amount, and the difference of NTD 24,997 thousand is recognized as an impairment loss. Also in Q2, 2014, the aforementioned investment properties-land and houses were evaluated based on the actual price registration information inquired with the announced market price. After the evaluation, the estimated recoverable amount of the land was higher than the carrying amount, and the difference of NTD 5,997 thousand was reversed. Later, on November 27, 2017, due to the merger of the Company and the subsidiary, this was transferred to the accumulated impairment of the investment properties for NTD 53,415 thousand.
Earnings per Share Basic earnings per share

Basic earnings per share is calculated by dividing the profit and loss of the Company’s common share equity holders divided by the weighted average number of outstanding common shares in the current period. The calculation is as follows:

Earnings per Share Basic earnings per share Basic earnings per share is calculated by dividing the profit and loss of the Company’s common share equity holders divided by the weighted average number of outstanding common shares in the current period. The calculation is as follows:	Earnings per Share Basic earnings per share Basic earnings per share is calculated by dividing the profit and loss of the Company’s common share equity holders divided by the weighted average number of outstanding common shares in the current period. The calculation is as follows:	ommon share equity urrent period. The	ommon share equity urrent period. The
2022 2021 Net income for the holders of the Company’s common share equity $780,657 $276,324 Weighted-average shares 281,167 thousand shares 281,167 thousand shares Basic earnings per share (after tax) (NTD) $2.78 $0.98 Adjustment to liabilities from financing activities Non-cashchange Beginning retained earnings Cash flows Acquisition Change of exchangerate Balance at the end ofthe period 2022 Long-term borrowings (due within a year included) $799,123 $(799,123) $- $- $- 2021 Long-term borrowings (due within a year included) $799,123 $- $- $- $799,123 Other payables-related parties (financial accommodation) 83,000 (83,000) - - - Total $882,123 $(83,000) $- $- $799,123		2021
		$276,324
		281,167 thousand shares
			$0.98
			Balance at the end ofthe period
2022 Long-term borrowings (due within a year included) 2021 Long-term borrowings (due within a year included) Other payables-related parties (financial accommodation) Total	Beginning retained earnings $799,123 $799,123 83,000 $882,123
			$-
			$799,123 -
			$799,123

22. Adjustment to liabilities from financing activities

VII. Related party transaction

1. Name of related parties and the relationship

Related Party Name

Chien Shing Construction Co., Ltd. (Chien Shing Construction) Chien Shing Investment Co., Ltd. (Chien Shing Investment)

Relationship to the Company

The two companies share the same chairman.

43 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

2. Material transaction matters with related parties

(1) Rent income

The Company leases some investment properties to the other related parties, Chien Shing Construction for its use, and thus rent income incurs (the rent is paid semi-annually). Please also refer to Note 6.6 to the individual financial statements for the description.

Other incomes and expense- rent income

2022 2021 $29 $57

(2) Financial accommodation

The Company has borrowed funds fro the related parties as following:

Balance at the end of the Interest rate Type/name of related parties Highest balance period range Total interest expense - Other payables related parties

2022: None.

2021

Other related party Chien Shing Investment $83,000 $- 1.2% $68

(3) Others

On November 23, 2021, the Company fully authorized Chien Shing Construction, another related party, to handle the sale of the land and buildings in Beiyuan Section, North District, Tainan City, which are investment properties held by the Company, including the appointment of a third party to conduct a public tender and commission sale, negotiation of commercial terms, lease modification and review, negotiation of contracts, appraisal, receipt of notices and documents, attendance of meetings, and all other matters related to the disposal of the aforementioned investment properties. The Company has authorized the disposal of the aforementioned investment properties until June 30, 2022. Please also refer to Note 6.6(7) to the individual financial statements for the description.

(4) Information of the total remunerations of major management

The aggregated information of the total remunerations paid to major management such as directors, the president, and vice presidents is as following:

president, and vice presidents is as following:
Item Short-term benefit	2022 $1,531	2021
		$1,117

VIII. Pledged Assets

Among the assets as of December 31, 2022 and 2021, the assets provided by the Company as the collaterals for financing to the financial institutions are the followings:

Item inthe accounting book Property, plant and equipment Land Buildings Investment Property Land Total	2022.12.31	2021.12.31	Institution forpledge	Description of guaranteed debt
	$182,341 (Note) 126 (Note) 69,123 (Note)	$182,341 276 205,206	Taiwan Business Bank Taiwan Business Bank Taiwan Business Bank	Long-term borrowings Long-term borrowings Long-term borrowings
	$251,590	$387,823

44 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

Note: The Company has settled the loan from the Taiwan Business Bank in July 2022 but, as of December 31, 2022, the property mortgaged has not yet been cancelled.
As of December 31, 2022 and 2021, the amount of Company’s investment properties provisionally seized by the course upon the application of the bank creditor was NTD 0 and NTD 51,122 thousand, respectively. Please also refer to Note 6.6(9) to the individual financial statements for the description.

IX. Significant Contingent Liabilities and Unrecognized Commitments

As of December 31, 2022, the Company still have the following significant contingent liabilities and unrecognized commitments not listed in the abovementioned individual financial statements:

The amount of material contract for constructing plants and procuring equipment is NTD 40,906 thousand, and NTD 24,091 thousand was paid (included the accounted payables); NTD 16,815 thousand must be paid in the future.

X. Loss on Material Disaster

None.

XI. Material Events after the Period

Please refer to Note 6.5(9) and 6.6(14) to the individual financial statements for the property, plant and equipment and investment property - land planned to be sold in February 2023.

XII. Other

Capital management.
(1) The goal of the Company’s capital management is to ensure the Company’s ability to continue to operate, to continue to provide shareholder returns and other stakeholder benefits, while maintaining the best capital structure to reduce capital costs, and pricing products or services based on relative risk levels, to provide shareholders with sufficient remuneration
(2) The Company sets the amount of capital based on the risk ratio, and conducts capital structure management and appropriate adjustments based on changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may adjust the dividends paid to shareholders, reduce capital to refund shareholders with share payments, issue new shares or sell assets to settle debts.
(3) The Company conducts capital control based on the ratio of net debt to total capital. The ratio is calculated by dividing net debt by total capital. Net debt is total liabilities minus cash and cash equivalents; total capital is all components of equity (i.e. equity, capital reserve, retained earnings and other equity) plus net liabilities.
(4) The Company has no external capital regulations to be observed. The ratio of net debt to total capital of the Company for each period is listed as follows:

Company for each period is listed as follows:
Total liabilities Less: cash and cash equivalents Net liabilities Total equity Total capital Ratio of net liabilities to total capital	2022.12.31 $49,509 (479,294) - 1,466,922 1,466,922 -%	2021.12.31
		$1,254,507 (373,575)
		880,932 699,000
		$1,579,932
		55.76%

45 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

2. Financial risk management

(1) The Company's main financial instruments include cash and cash equivalents, financial assets measured at fair value through profit and loss, financial assets measured at fair value through other comprehensive income, long-term borrowings, and receivables and payables arising from operating activities. By using these financial instruments the Company adjusts operating capital requirements, and thus the Company’s operations are subject to a number of financial risks, including market risks (including exchange rate risks, interest rate risks and other price risks), credit risks and liquidity risks . The purpose of the Company's overall financial risk management is to reduce the potential adverse effects of the Company's exposure to financial risks due to changes in the financial market.

(2) The Company’s financial management department is responsible for identifying, evaluating and avoiding financial risks through close communications with the Company’s business units, coordinating access to domestic and international financial markets, and analyzing the risk of risk to manage the company’s operations. Financial risks are supervised and managed by the Board of Directors
(3) Major risks of the Company’s financial instruments are described as following:
A. Market risk

The Company's main market risk is the exchange rate risk arising from operating activities such as sales or purchases denominated in non-functional currencies, and the interest rate risk or price risk arising from the transaction of financial instruments.

(A) Exchange rate risk

The Company evaluates and analyzes the overall exchange rate risk, and uses foreign exchange forward contracts for risk management when the recognized assets and liabilities and future commercial transactions are exposed to significant exchange rate risks, within the scope permitted by the policy.

The Company’s non-functional currency-denominated financial assets and liabilities with significant risk of exchange rate fluctuations at the reporting date and sensitivity analysis information are as following. The sensitivity analysis is that for the Company’s non-functional currency-denominated financial assets and liabilities at the reporting date, if NTD appreciates 5% of the relevant foreign currencies, its impact on the net profit before tax or equity, or if it depreciates by 5%, the impact on the net profit before tax or equity in the opposite direction:

46 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

Sensitivity analysis	Sensitivity analysis	Sensitivity analysis
Change 5% 5% 5% 5%	Increase/ decrease of net profit before tax $146 $120 $625 $108	Decrease of equity
		$- $- $- $-

47 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

The amounts of foreign exchange net gain or loss of the currency item (Including realized and unrealized) converted into functional currency, and the information of exchange rate converted into the currency expressed in individual financial statements are as follows:

functional currency NTD	2022 Foreign exchange net gain(loss) Average exchange rate $24 -	2021	2021
	Foreign exchange net gain(loss) $24	Foreign exchange net gain(loss) $37	Average exchange rate
			-

(B) Interest rate risk

The Company's interest rate risks include the fair value interest rate risk of financial instruments with fixed interest rate, and the cash flow interest rate risk of financial instruments with floating interest rate. Fixed interest rate financial instruments are time deposits made by the Company; floating interest rate financial instruments are demand deposits and loans from banks. The Company evaluates and analyzes interest rate risk on a dynamic basis. It maintains an appropriate mix of fixed and floating interest rates to control the exposure of interest rate risk. If the interest rate risk in the future arises significant exposure, within the extent permitted by the policy, it is expected to carry out risk management through forward interest rate agreements.

a.The financial assets and liabilities with fixed and floating interest rates

Fixed interest rate Financial asset Financial liability Net Amount floating interest rate Financial asset Financial liability Net Amount	2022.12.31 $450,000 - $450,000 $27,899 - $27,899	2021.12.31
		$- -
		$-
		$372,109 (799,123)
		$(427,014)

b. Sensitivity analysis

For the Company’s financial assets with floating interest rates, if the market deposit interest rate increases by 0.5% on the reporting date, and maintains for a whole fiscal year, when all other factors remain unchanged, the Company will have the net profit before tax for 2022 and 2021 increased by NTD 139 thousand and NTD 1,861 thousand, respectively. Furthermore, for the Company’s financial liabilities with floating interest rates, if the market loan interest rate increases by 0.5% on the reporting date, and maintains for a whole fiscal year, when all other factors remain unchanged, the Company will have the net profit before tax for 2022 and 2021 decreased by NTD 0 and NTD 3,996 thousand, respectively.

(C) Other price risk

The Company possesses the equity securities including financial assets measured at fair value through profit and loss, and financial assets measured at fair value through other comprehensive income, and thus the equity price risk is generated. The Company diversifies such risks by means of investment portfolios, so it is still exposed to equity price risks.

Sensitivity analysis

When the equity price of financial assets measured at fair value through profit and loss and financial assets measured at fair value through other comprehensive income held by the Company increases by 5% on the reporting date, the impact on net profit after tax or equity is as following. If the equity price falls at 5%, the net profit or equity after tax will be impacted in the opposite direction:

48 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

Profit after tax increased Financial assets measured at FVTPL Increased equity Financial assets measured at FVTOCI	2022.12.31 $5,255 $2,086	2021.12.31
		$3,526
		$2,779

B. Credit risk

(A) The Company's credit risks mainly are that the financial assets are impacted from the defaults of counterparty or other party. The impacts include the credit risk concentration, components, contractual amount and other receivables of the Company's financial assets In order to reduce credit risks, the Company’s financial assets, such as bank deposits, financial assets measured at fair value through profit and loss, and financial assets measured at fair value through other comprehensive income are all traded with well-known domestic or international financial or securities institutions. It is a low level of credit risk. For receivables, the Company continues to evaluate the the financial positions, historical experience and other factors of the transaction counterparties, and revises the transaction limit and method with individual clients in a timely manner to improve the Company's credit quality to clients. As the Company’s receivables have not exceeded the credit period on the balance sheet date, and the Company mainly trades with bank’s letters of credit, there is no significant credit risk. Meanwhile, after evaluation and analysis, there is no circumstances where the allowance accounts for receivable impairment are required to be provided.
(B) The expected credit loss analysis of the Company's accounts receivable is as following:

Carrying amount of accountsreceivable	Reserve matrix (loss)	Allowance for loss (Expected credit losses during the period of continuation)

2022.12.31: None 2021.12.31: None

Weight of receivables from top ten clients	2022.12.31 -%	2021.12.31
		-%

C. Liquidity risk

The Company manages and maintains sufficient cash and cash equivalents to meet all contractual obligations of operations and reduce the impact of cash flow fluctuations. Bank financing is an important source of liquidity for the Company. The management uses capital structure management, supervision of the use of bank financing limits, and compliance with borrowing contract terms, to ensure the reacquisition of bank financing and thereby reduce liquidity risks.

(A) Credit available from banks’facilities Bank borrowing	2022.12.31 $-	2021.12.31
		$-

49 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

(B) Maturity analysis of undiscounted financial liabilities

2022.12.31 Non-derivative financial liabilities Note payable Accounts payable Other payables Total	Under 1year	1 year to 2 years $- - - $-	2 years to 5 years $- - - $-	More than five years $- - - $-	Total
	$6,031 204 37,467				$6,031 204 37,467
	$43,702				$43,702

Non-derivative financial liabilities: none

2021.12.31 Non-derivative financial liabilities Note payable Accounts payable Other payables Long-term borrowings (due within a year included) Total	$13,362 4,712 37,175 512,174	$- - - 286,949 $286,949	$- - - - $-	$- - - - $-	$13,362 4,712 37,175 799,123
	$567,423				$854,372

Non-derivative financial liabilities: none

(4) Fair value of financial instruments

The carrying amounts of the Company’s financial instruments are the reasonable approximation of fair values

A. The methods used for the fair value of financial instruments and the assumptions used when using evaluation techniques

(A) The fair value of short-term financial instruments is estimated based on their carrying amount on the balance sheet. As the maturity date of such financial instruments is very short, if the current value of future cash flows is discounted at the market interest rate, it is similar to the carrying amount, and thus the carrying amount of it should be a reasonable basis for estimating the fair value. This method applies to cash and cash equivalents, other receivables, notes payable, accounts payable and other payables.
(B) For financial assets measured at fair value through profit and loss and financial assets measured at fair value through other comprehensive income, if there are public quotations from active markets, the market price is the fair value; if there is no public quotation from active markets, other evaluation techniques are used to determine Its fair value.
(C) The interest on the Company's long-term borrowings is accrued at floating rates, and the fair value thereof is measured at its carrying amount on the balance sheet, which has been adjusted with reference to market conditions. Thus, the interest rates for the Company's borrowings should be close to the market interest rates.

B. Fair value hierarchy

All assets and liabilities measured or disclosed at fair value, are classified to their respective fair value hierarchy level based on the lowest level inputs of importance to the overall fair value measurement. Input of each level are as the following:

50 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.

For assets and liabilities that were originally measured at fair value on a repetitive basis and recognized on the balance sheet, the classification is reassessed at the end of each reporting period to determine whether there is a transfer between the levels of the fair value hierarchy.

(A) Hierarchy of financial instruments measured at fair value and recognized in the balance sheet The Company does not have assets and liabilities measured at fair value on a non-repetitive basis. The fair value level information of assets and liabilities measured at fair value on a repetitive basis is listed below:

2022.12.31 Asset Financial assets measured at FVTPL Equity securities Financial assets measured at FVTOCI Equity securities Liability: none	Level 1: $105,090 41,715	Level 2: $- -	Level3: $- -	Total
				$105,090 41,715

2021.12.31
Asset
Financial assets measured at
FVTPL
Equity securities	$70,517	$-	$-	$70,517
Financial assets measured at
FVTOCI
Equity securities	55,574	-	-	55,574
Liability: none

(B) The Company did not have any significant transfers between the level 1 and the level 2 in the fair value hierarchy during 2022 and 2021.

(C) The Company has no change in the fair value measurement at level 3 in 2022 and 2021, nor recognized any profit or loss or other total profit or loss under the comprehensive income due to changes in level 3 fair value for the current period.

51 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

(D) Evaluation techniques and assumptions used to measure the fair value of financial assets:
a. The fair value of financial assets with standard terms and conditions that are traded in an active market is determined by reference to market quotes.
b. Other evaluation techniques, to determine the fair value of other financial instruments, such as discounted cash flow analysis.

XIII. Disclosures in Notes

1. Information about significant transactions

The supplementary of the Company’s information for 2022 as following:

(1) Lending of fund to others: none
(2) Endorsements/guarantees provided to others: none
(3) Holdings of marketable securities at the end of the period (excluding investment in subsidiaries, affiliates and joint venture equity): detailed attached table 1.
(4) Marketable securities acquired and disposed at costs or prices at least NTD300 million or 20% of the paid-in capital: none
(5) Acquisition of individual real estate at costs of at least NTD 300 million or 20% of the paid-in capital: none
(6) Disposal of individual real estate at costs of at least NTD 300 million or 20% of the paid-in capital: Table 2.
(7) Purchase or sales with related parties for at least NTD 100 million or 20% of the paid-in capital: none
(8) Receivable from related parties for at least NTD 100 million or 20% of the paid-in capital: none
(9) Derivatives transaction: none.
(10) Business relationship and significant transactions between the Company and its subsidiaries: none.

2. Information about investees

Supplementary disclosure of relevant information about these who that directly or indirectly has significant influence, control, or joint venture equity on the Company’s invested company in a non-mainland China area in 2022: None.

3. Information on investments in mainland China

None.

Information on main investors

List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: Table 3.

XIV. Segments Information

The Company only operates on single industry, and the operation decision-makers of the Company assesses and allocate resources based on the overall Company. It is identified that the Company is the only segment shall report. This segment is the processing, manufacturing and trading of stainless steel products. Its technology and marketing strategies are the same, and no separate management is required. Reportable segment profit and loss is measured at the pre-tax operating profit and loss (excluding non-operating income and expenses and income tax expenses) and used as the basis for evaluating performance. This measurement amount is used by the operating decision-maker to determine the allocation of resources for the segment, and to evaluate the performance of the segment. The accounting policies of the operating segment are the same as the summary description of the critical accounting policies described in Note 4 of the individual financial statements.
52 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

Segments Information Revenue Income from external clients Inter-segment income Total income Segment profit (loss) Non-operating income and expenses Net income before tax of continuing operations Depreciation and amortisation income tax expense Non-current assets capital expenditure of segments	2022 $1,231,007 - $1,231,007 $(145,835) 955,832 $809,997 $106,675 $29,340 $9,367	2021
		$2,470,941 -
		$2,470,941
		$265,521 10,941
		$276,462
		$120,894
		$138
		$11,871

Note: The non-current assets capital expenditure of segments excludes the deferred income tax assets and financial instruments.

2.	2022.12.31 Asset Segment assets $1,367,356 Deferred tax assets 2,270 Investment- non investment segment 146,805 Total asset $1,516,431 Liability Segment liabilities $44,023 Income tax liabilities for the period - Deferred tax liabilities 16 Defined benefit liability 5,470 Total liabilities $49,509 Disclosure of the holistic enterprise information (1)Information by product and service The analysis of the Company’s major product and service: 2022 Steel coil $1,202,062 Other 28,945 Total $1,231,007	2021.12.31
		$1,824,865 2,551 126,091
		$1,953,507
		$1,247,314 135 - 7,058
		$1,254,507
		2021
	(1)
		$2,443,570 27,371
		$2,470,941

53 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

(2) Information by region

A. The revenue from domestic and overseas external clients:

Regions where customers are located Taiwan Other countries Total	2022 $1,231,007 - $1,231,007	2021
		$2,470,941 -
		$2,470,941

B. The Company’s non-current assets capital expenditure excludes the deferred income tax assets and financial instruments.

financial instruments.
Location of non-current assets Taiwan Asia (ex-Taiwan) Total	2022.12.31 $516,183 - $516,183	2021.12.31
		$749,908 -
		$749,908

(3) Information on major customers

nformation on major customers
List of single clients from which the income accounted for 10% of net operating r Customer 2022 A $371,840 B 275,987 C 202,499 D (Note) E 136,874	evenue: 2021
	$744,229 493,187 237,057 299,982 283,851

Note: The net sales revenue to customer D for 2022 is not disclosed because it did not reach more than 10% of the net operating revenue.

54 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

Table 1: Marketable securities held (excluding investment in subsidiaries, associates and jointly controlled equities).

Holding Company Name	Type of Marketable Securities	Name of Marketable Securities	Relationship with the issuer of marketable securities	Line Item		End of theperiod(December 31,2022)	End of theperiod(December 31,2022)	Fair value/net worth Remarks $ 46,543 - 24,623 - 22,899 - 3,956 - 3,120 - 2,057 - 909 - 429 - 554 - 39,981 - 1,734 - - - - - - - - -
					Number of shares/Number of units (Thousands of shares or thousands of units)	Carrying amount	Shareholding ratio (%)
Chien Shing Stainless Steel Co., Ltd	Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock	Eastern Media International Corporation Yieh Phui Enterprise Co., Ltd. Taiwan Business Bank Co., Ltd. YFC-BonEagle Electric Co., Ltd. Cal-Comp Electronics (Thailand) Public Company Limited OSE Corp. RITEK Corporation AVID Electronics Corp. Hiyes International Co., Ltd. Asia Pacific Telecom Co., Ltd. TRK Corporation Shin Yen Textile Co., Ltd Chien Tai Cement Co., Ltd. Ya Hsin Industrial Co., Ltd. Taiwan Fluorescent Lamp Co., Ltd.	None None None None None None None None None None None None None None None	Financial assets measured at FVTPL - current Financial assets measured at FVTPL - current Financial assets measured at FVTPL - current Financial assets measured at FVTPL - current Financial assets measured at FVTPL - current Financial assets measured at FVTPL - current Financial assets measured at FVTPL - current Financial assets measured at FVTPL - current Financial assets measured at FVTPL - current Financial assets measured at FVTOCI - non-current Financial assets measured at FVTOCI - non-current Financial assets measured at FVTOCI - non-current Financial assets measured at FVTOCI - non-current Financial assets measured at FVTOCI - non-current Financial assets measured at FVTOCI - non-current	1,993 1,539 1,768 151 817 117 119 66 9 6,554 145 203 - 595 100	$ 46,543 24,623 22,899 3,956 3,120 2,057 909 429 554 39,981 1,734 - - - -	0.42% 0.08% 0.02% 0.10% 0.02% 0.02% 0.02% 0.49% 0.01% 0.15% 0.16% 0.07% 0.00% 0.06% 0.03%

55 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

Table 2: Disposal of individual real estate at costs of at least NTD 300 million or 20% of the paid-in capital:

Company disposing of real estate	Name of asset	Date of event	Initial acquisition date	Carrying amount	Transaction amount	Payment collection status	Disposal gain (loss)	Transaction counterparty	Non-related party Relations	Purpose of disposal	Appraisal report (Note) Other agreed matters Basis for price determination
Chien Shing Stainless Steel Co., Ltd	Investment property - land in Caohu Section	2022.06.01	1990.12–1991.7	$74,997	$500,000	Payment received	$419,848	Zhongyu Energy Co., Ltd.		To revitalize the land and improve the Company's financial structure

Note: Please also refer to Note 6.6(13) to the individual financial statements for the description.

56 -

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

Table 3: Information on major shareholders

Share Name of major shareholder	Number of shares held(shares)	Shareholdingratio(%)
Shuo-Tang Yeh Tsu-Rong Dai	20,046,540 18,543,000	7.12 6.59

Note 1: The table discloses shareholding information of shareholders whose shareholding percentage is more than 5%. The Taiwan Depository & Clearing Corporation (TDCC) calculates the total number of ordinary shares and special shares (including treasury shares) that have completed the dematerialized registration and delivery on the last business day of each quarter. The share capital reported in the financial statements and the actual number of shares that have completed the dematerialized registration and delivery may be different due to differences in the basis of calculation. Note 2: The aforementioned information will be disclosed by the trustors’ personal accounts settled by the trustees If the shareholders put the shares into a trust. As for the insider declaration of the ownership percentage over 10%, including the shares on hand and those being put in the trust and may be able to decide the usage of the trust assets, please refer to the declaration information on Market Observation Post System (MOPS).

57 -

Chien Shing Stainless Steel Co., Ltd.

1. Details of cash and cash equivalents

December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Cash and petty cash Check and demand (current) deposit Time deposit Total		$ 1,356 27,938 450,000	1 USD = NT 30.66 1 RMB = NT 4.383 1 HKD = NT 3.908 1 EUR = NT 32.52 1 JPY = NT 0.2304 USD $95,347 RMB $25 HKD $18,495 EUR $0.04 JPY $532,003 2. Including foreign currencies: 1. Exchange rate on December 31, 2022
		$479,294

58 -

Chien Shing Stainless Steel Co., Ltd.

2. Details of financial assets measured at FVTPL - current

December 31, 2022

						Unit: NT$ Thousand	Unit: NT$ Thousand	Unit: NT$ Thousand	Unit: NT$ Thousand
Name of financial instrument	Number of shares/lots/units	Unit cost / face value ($)	Total amount	Interest rate	Acquisition cost	Fair value		Changes of fair value attributed to credit risk changes	Remark
						Unit price (NTD)	Total amount
Shares Eastern Media International Corporation Yieh Phui Enterprise Co., Ltd. Taiwan Business Bank Co., Ltd. YFC-BonEagle Electric Co., Ltd. Cal-Comp Electronics (Thailand) Public Company Limited OSE Corp. RITEK Corporation AVID Electronics Corp. Hiyes International Co., Ltd. Total	1,993,277 1,538,904 1,768,243 151,000 816,773 117,212 119,465 66,172 8,704	$ 24.14 9.54 8.12 26.13 4.61 44.21 32.39 348.43 554.46	$ 48,116 14,681 14,351 3,945 3,767 5,182 3,869 23,056 4,826	- - - - - - - - -	$ 48,116 14,681 14,351 3,945 3,767 5,182 3,869 23,056 4,826	23.35 16.00 12.95 26.20 3.82 17.55 7.61 6.49 63.60	$ 46,543 24,623 22,899 3,956 3,120 2,057 909 429 554 $105,090	- - - - - - - - -
			$121,793		$121,793

59 -

Chien Shing Stainless Steel Co., Ltd.

3.Details of other receivables

December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Other		$ 587

60 -

Chien Shing Stainless Steel Co., Ltd.

4. Details of inventories

December 31, 2022

Unit: NT$ Thousand

				Unit: NT$ Thousand
Item	Summary	Amount		Remark
		Cost	Net realisable value
Raw materials Supplies Work in process Finished goods Total Less: Allowance for loss on decline in value of inventories Net Amount		$1,081 13,257 7,112 304,879 326,329 (66,458) $259,871	$- 14,196 6,167 242,138 $262,501	1. The inventories listed at left are not provided as collateral or pledge. 2. The inventories at the end of period is valued at the lower of cost and net realisable value. When comparing the cost and net realisable value, not only the inventories under the sam category, individual items shall be compared one by one

61 -

Chien Shing Stainless Steel Co., Ltd.

5. Details of prepayments

December 31, 2022

		Unit: NT$ Thousand	Unit: NT$ Thousand
Item	Summary	Amount	Remark
Office supplies Prepayment for purchases Offset against value-added tax payable Other Total		$ 95,721 1,285 12,062 2,182 $111,250

62 -

Chien Shing Stainless Steel Co., Ltd.

6. Details of other current assets

December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Temporary payment Other Total		$ 166 5 $171

63 -

Chien Shing Stainless Steel Co., Ltd.

Details of changes in financial assets measured at FVTOCI - non-current

For the Years Ended December 31, 2022

Unit: NT$ Thousand

													Unit: NT$ Thousand
Title	Opening		Increase in	theperiod	Decrease in	theperiod	Adjustment of fin	ancial valuation	March 31,2020		Accumulated impairment	Collateral or pledge	Remarks
	Shares or thousand shares	Fair value	Shares or thousand shares	amount	Shares or thousand shares	amount	Shares or thousand shares	amount	Shares or thousand shares	Fair value
Equity instrument: Shares of TWSE/TPEx listed companies Asia Pacific Telecom Co., Ltd. TRK Corporation Subtotal Shares of non-TWSE/TPEx listed companies Shin Yen Textile Co., Ltd Chien Tai Cement Co., Ltd. Ya Hsin Industrial Co., Ltd. Taiwan Fluorescent Lamp Co., Ltd. Subtotal Total	6,554,314 144,505 203,000 44 595,337 100,000	$ 53,876 1,698 55,574 - - - - - $ 55,574	- - - - - -	$ - - - - - - - - $ -	- - - - - -	$ - - - - - - - - $ -	- - - - - -	$ (13,895) 36 (13,859) - - - - - $ (13,859)	6,554,314 144,505 203,000 44 595,337 100,000	$ 39,981 1,734 41,715 - - - - - $ 41,715	Not applicable. Not applicable. Not applicable. Not applicable. Not applicable. Not applicable.	None None None None None None

64 -

Chien Shing Stainless Steel Co., Ltd.

Details of changes in cost of property, plant and equipment For the Years Ended December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6. 5(1) to the individual financial statements for related information

Details of changes in accumulated depreciation of property, plant and equipment For the Years Ended December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6. 5(1) to the individual financial statements for related information

Details of change in cost of investment property For the Years Ended December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6. 6(1) to the individual financial statements for related information

Details of changes in accumulated depreciation of investment properties For the Years Ended December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6. 6(1) to the individual financial statements for related information

Details of changes in accumulated impairments of investment properties For the Years Ended December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6. 6(1) to the individual financial statements for related information

Details of changes in intangible assets For the Years Ended December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6. 7(1) to the individual financial statements for related information

Details of deferred income tax assets December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6. 19(6) to the individual financial statements for related information

65 -

Chien Shing Stainless Steel Co., Ltd.

Details of prepayments for equipment

December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Prepayments for equipment		$ 5,555

66 -

Chien Shing Stainless Steel Co., Ltd.

Details of refundable deposits

December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Refundable deposits - other		$2

67 -

Chien Shing Stainless Steel Co., Ltd.

Details of notes payable

December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Name of supplier	Summary	Amount	Remark
Note payable Taian Insurance Company, Ltd. Kaoroll Heat Treatment Ind., Co., Ltd. Metro-Everest Enterprise Co., Ltd. LIN-HO CHEMICAL CO., LTD. Suda Chemical Co., Ltd. Xue-Sheng Transportation Limited Other Total	None of the account balance is with an amount	$ 1,507 819 631 619 576 450 1,429	The notes payable listed at left are incurred from operation
		$ 6,031

68 -

Chien Shing Stainless Steel Co., Ltd.

18. Details of accounts payable

December 31, 2022

		Unit: NT$ Thousand	Unit: NT$ Thousand
Name of supplier	Summary	Amount	Remark
Accounts payable Sheng Gao Co., Ltd. Zimmite Taiwan Ltd. Total		$ 109 95 $204	The notes payable listed at left are incurred from operation.

69 -

Chien Shing Stainless Steel Co., Ltd.

19. Details of other payables

December 31, 2022

		Unit: NT$ Thousand	Unit: NT$ Thousand
Item	Summary	Amount	Remark
Amounts payable for acquisition of financial assets at FVTPL Wages and salaries payable Utility fees payable Payable for equipment Other Total		$ 21,441 5,422 1,418 6,002 3,184
		$ 37,467

70 -

Chien Shing Stainless Steel Co., Ltd.

20. Details of advance receipts and other current liabilities

December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Receipts under custody		$ 217

71 -

Chien Shing Stainless Steel Co., Ltd.

21. Details of refund liabilities - current

December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Liability of refund	Estimated sales discounts and allowances	$104

72 -

Chien Shing Stainless Steel Co., Ltd.

22. Details of deferred income tax liabilities

December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6. 19(6) to the individual financial statements for related information

23. Details of net defined benefit liabilities - non-current

December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6.10(1)C to the individual financial statements for related information.

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Chien Shing Stainless Steel Co., Ltd.

24. Details of net operating revenue

For the Years Ended December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Quantity	Amount	Remark
Total operating revenue Sale revenue Sales revenue - steel coils Other operating revenue Total Less: sales returns Less: sales discounts and allowances Net Amount	14,426 tons	$ 1,202,552 28,945 1,231,497 (129) (361) $1,231,007

74 -

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Self-made: Direct raw materials Inventories at the beginning of the period Plus: net cost of raw materials purchased Less: inventories at the end of the period Consumption of the period Direct labour Production overheads Less: re-recorded as other operating costs Manufacturing costs Plus: work in progress at the beginning of the period Less: work in progress at the eng of the period Cost of finished goods Plus: finished goods at the beginning of the period Less finished goods at the eng of the period Costs of sales for the self-made goods Other operating costs Inventories cost offset up to the net realisable value Other operating costs Total operating costs		$ 1,081 1,070,157 (1,081) 1,070,157 5,373 210,926 (56,081) 1,230,375 8,062 (7,112) 1,231,325 295,678 (304,879) 1,222,124 62,273 56,081 $1,340,478

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Chien Shing Stainless Steel Co., Ltd.

26. Details of overheads

For the Years Ended December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Depreciations Utilities Consumables Wages and salaries Feuls Repair fees Insurance fees Employee benefits Other overheads Total		$ 103,096 31,090 23,573 14,083 13,973 12,725 4,389 1,342 6,655 $210,926

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Chien Shing Stainless Steel Co., Ltd.

Details of selling and marketing expenses

For the Years Ended December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Freights Wages and salaries Other overheads Total		$ 4,881 1,119 285 $ 6,285

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Chien Shing Stainless Steel Co., Ltd.

28. Details of administrative expenses

For the Years Ended December 31, 2022

Unit: NT$ Thousand

			Unit: NT$ Thousand
Item	Summary	Amount	Remark
Wages and salaries Tax Service fees Depreciations Insurance fees Utilities Employee benefits Other overheads Total		$ 11,519 3,520 2,493 1,783 1,508 854 728 5,959 $28,364

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Chien Shing Stainless Steel Co., Ltd.

Details of other income and expenses

For the Years Ended December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6.16 to the individual financial statements for related information

Details of non-operating income and expenses

For the Years Ended December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6.17 to the individual financial statements for related information

Aggregate of employee benefits, depreciations, depletions, and amortization expenses for this period by function

For the Years Ended December 31, 2022

Unit: NT$ Thousand

Please refer to Note 6.15 to the individual financial statements for related information.

79 -

AI assistant

CSSSC — Annual Report 2022

51952_rns_2022-11-14_1044066b-50f2-4871-9a76-23d4e0c23721.pdf

Individual Financial Statements Table of Contents

CPAs’ Audit Report

Audit opinion

Basis for Opinion

Key Audit Matters

I. Impairment of Property, Plant and Equipment

II. Valuation of Inventories

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

Auditors’ Responsibilities for the Audit of the Individual Financial Statements

Chien Shing Stainless Steel Co., Ltd. Individual Balance Sheet December 31, 2022 and 2021

and 2021

Chien Shing Stainless Steel Co., Ltd.

Individual Statement of Changes in Equity

and 2021

(All amounts in NTD thousand)

Chien Shing Stainless Steel Co., Ltd. Individual Cash Flow Statements

For the Years Ended December 31, 2022

and 2021

I. Company history:

II. The Authorization of Financial Statements

IV. Summary of Significant Accounting Policies

(2) Measurement bases

(3) Functional and presentation currency

2. Criteria for Classification of Assets and Liabilities as Current or Non-current

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

3. Foreign currency transaction

(In NTD thousand, unless stated otherwise)

B. Financial assets measured at FVTOCI

C. Financial assets measured at FVTPL

E. Derivatives

6. Fair value measurement

7. Derecognition of financial assets and liabilities

(2) Financial liability

8. Impairment of Assets

9. Inventories

11. Lease

(2) The Company is the lessee

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

12. Investment Property

13. Intangible assets

14. Provision for liabilities

15. Equity instrument:

16. Revenue recognization

Sales of goods

17. Borrowing costs

18. Employee benefits

(1) Short-term employee benefits

(2) Post-employment benefits

(In NTD thousand, unless stated otherwise)

19. Income tax

21. Earnings per Share

(In NTD thousand, unless stated otherwise)

22. Operating Segment Report

(1) Employee benefit: measurement to determine benefit obligations

(3) Estimation of provisions for onerous purchase contracts

(4) Valuation of inventories

(5) Evaluation of non-financial assets (other than goodwill) impairment

(6) Realizability of deferred income tax assets

VI. Summary of Significant Accounting Items

1. Cash and cash equivalents

2. Financial assets measured at FVTPL - current

3. Inventories

4. Financial assets measured at FVTOCI - non-current

5. Property, Plant and Equipment

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d) (In NTD thousand, unless stated otherwise)

(In NTD thousand, unless stated otherwise)

6. Investment Property

(In NTD thousand, unless stated otherwise)

7. Intangible assets

(In NTD thousand, unless stated otherwise)

9. Long-term borrowings

10. Post-employment benefits

(1) Defined benefit plan

(In NTD thousand, unless stated otherwise)

Notes of individual finance statements of Chien Shing Stainless Steel Co., Ltd. (cont’d)

(In NTD thousand, unless stated otherwise)

CSSSC Annual Report 2022